Concept Financial report 2013

of the MasterPeace Foundation

Utrecht

Page 2

Contents

Annual report of the Board and management 3-11

Annual accounts

Balance sheet as at December 31, 2013 (after proposed appropriation of result) 13

Statement of revenue and expenditure 2013 14

Notes to the balance sheet and statement of revenue and expenditure 15-29

Other information

Appropriation of result and other information

Explanation fee founder MasterPeace

30

30

Auditor’s Report 31

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Annual report of the Board and management

“Peace is one of humanity’s most precious needs, and our highest calling”

(General Ban Ki-moon, UN Secretary)

“We grow the movement by growing its people”

(Philip Kpakiwa, MasterPeace Club leader of Guinea)

1.1 General

OUR VISION MasterPeace wants to inspire everyone to use his or her talent and energy for building peace and togetherness. This

will lead to a more sustainable world with less armed conflict.

INSPIRE EVERYONE Peace needs more active supporters; more people, organizations, media and companies to stand up and make the need for peace tangible and positive results visible. With our open and inviting activities we will inspire millions of people to create a new global movement of active participants, because peace building is a verb.

“I believe in MasterPeace. World leaders cannot push back armed conflict alone. We need the whole world to make this happen.” Desmond Tutu

TALENT AND ENERGY The world has seven billion inhabitants. We view them as seven billion sources of talent and energy. With global and local events, innovative campaigning, the International Day of Peace, our 2.0 platform, social media, local MasterPeace clubs and especially art, music and play we invite men and women from all continents and all cultural backgrounds to show leadership and use their talent and energy for building peace. Mahatma Gandhi: “Be the change you wish to see in the world.” PEACE BUILDING We acknowledge that there is always more than one truth. Being an impartial organization, we aim to bring together all sides to help end conflicts at the community, national and international level and to prevent future violence. That’s why we encourage dialogue, peace education, cultural understanding, disarmament and other non-violent solutions to armed conflict.

“There’s no way to peace. Peace is the way.” A.J. Muste TOGETHERNESS Whatever your identity, colour, religion or walk of life, we’re all united through music; in this case music can be seen as a metaphor for creation and positivity. We all need unity. We actually exist because of ‘the other’. This African ‘Ubuntu’ spirit is reflected in our logo and in all our activities. Also in the leadership of MasterPeace; within MasterPeace East and West equally co-create. INVOLVEMENT Social change requires the active participation of civil society in large numbers. Involvement in building peace is the best possible answer to indifference. People can learn, grow and inspire by doing. That’s why we often call Master-Peace the ‘Just do it’-campaign for peace.

Yehuda Bauer 1998 (professor on Holocaust studies: "I come from a people who gave the Ten Commandments to the world. Time has come to strengthen them by three additional ones, which we ought to adopt and commit ourselves to: thou shall not be a perpetrator; thou shall not be a victim; and thou shall never, but never, be a bystander."

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1.2 Partners of MasterPeace

MasterPeace works together with many partners and distinguishes founding partners, funding partners, collaborative

partners, business partners, media partners and friends.

Founding partners are co-owner of the concept of MasterPeace, they share the brand for to achieve commonly

shared goals with. Founding partners work together with the management on the content and the goals of

MasterPeace. In 2013 MasterPeace had the following founding partners: Corio, Pax, Triodos Foundation, Vrede van

Utrecht, Search for Common Ground and vfonds. vfonds is supported by the Dutch Postcode Lottery, BankGiro

Lottery and the Lotto.

Funding partners support MasterPeace with subsidies and donations. In 2013 these included the Netherlands

Ministry of Foreign Affairs with a grant for MasterPeace concert in Congo as well as the Dutch Postcode Lottery,

through Pax . Furthermore we were supported by vfonds specifically for our education project and for a TV

programme on the International Day of Peace. vfonds is able to support us because they receive funds from the

Dutch Postcode Lottery, BankGiro Lottery and the Lotto. This year MasterPeace also received a donation from War

Child, through the European Union for MasterPeace in Congo, and a donation from &samhoud. Lastly we are

fortunate to be supported financially by a private family foundation.

Collaborative partners are supporting MasterPeace with network, organizational support, knowledge and content.

They have an important co-creating role within the MasterPeace concept. In turn they will profit from the global

scale, the social media/platform and the branding of MasterPeace. The Collaborative Partners have different themes

on which they focus: conflict reduction, trauma help, civil society development, peacekeeping, education, music, art,

etc. In 2013 the collaborative partners were:

1% Club, Alliance of Civilizations, Centrum voor Conflicthantering, Critical Mass, de Basis, EDU, Enviu, Festival

Mundial, Flare, Global Partnership for the prevention of armed conflict, Hogeschool Utrecht, Hope XXL, Humanity

House, Mayors for Peace, Nahdet El Mahrousa, PCDN, Peace One Day, TEDx Baghdad, TEDx Youth @ Amsterdam, The

Desmond Tutu Peace Centre, Thieme Meulenhoff, Upact, Verbeter de Wereld, Veteraneninstituut, War Child Holland,

War Trauma Foundation, We Want Peace, World Day of Interconnectedness, World Peace is Possible.

Media partners are supporting MasterPeace in networking and media coverage. In2013 the media partners were:

newbeTV, Xite, Zuiver Media, Van de Jong Media, Tuvalu Media, het PR Bureau, Post Office, Sublime FM, WE Film,

Tribe of Noise, Charline Goud Photography, Cairo 360, Cartoon Movement, Zentido, Amsterdam FM, Authenticity

Radio, Ahram Online, Alamia, Consus Result Media, De Issuemakers, ICON &CO, MM, Mortierbrigade, Phol

Netherlands, Sound of Sakia, VJ Movement, Wesley van der Waal.

Business partners believe in MasterPeace and support MasterPeace with donation (as payment for e/e leadership

and dialogue training) and in-kind sponsoring like HR / administrative work and accountancy, public affairs, branding,

ICT, legal advice or other services. Business partners are mentioned in note 15 with a description of their sponsoring.

En DA.

Business4 Peace Members of the Business4Peace advisory board support the vision and ambition of MasterPeace.

They promote MasterPeace and actively open up their network to mobilize their talents, and the talents of others.

Members share our values and are widely known and recognized as authentic leaders in profit and non-profit.

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In 2013 the Business4Peace advisory board consisted of:

Alexander Rinnooy Kan - Professor of Economics and Business Studies at the University of Amsterdam

Herman Wijffels – Professor Sustainable Development and Social Change at the University of Utrecht and co-

chairman of Worldconnectors

Peter Bakker - President World Business Council for Sustainable Development (WBCSD), Chair War Child, UN

Ambassador against hunger

Pieter Aalbers - CEO of Regardz Hospitality Group

Kai Pattipilohy – Creative director Diversion, organisation for social innovation

1.3 Operations

1.3.1. MasterPeace activities in 2013

In 2013, MasterPeace focused on empowering its people, which included the MasterPeace teams, MasterPeace club

members, and MasterPeace fans, while successfully expanding MasterPeace into new continents and countries. If we

can summarize the past phase of MasterPeace journey, it would be: Growth and Empowerment.

We ended the last quarter of 2013 with the remarkable achievement of receiving an official U.N. Certificate of

Recognition “Innovation in Peace-building”, awarded to MasterPeace by the United Nations Correspondents

Association (UNCA), presented by U.N. Secretary General Ban Ki moon.

We could not have hoped for a better way to end 2013 than with Ban Ki Moon, Stevie Wonder and Michael Douglas

holding up MasterPeace flag and swaying to the ‘We Want Peace’ song by our ambassador Emmanuel Jal (a former

child soldier turned rapper). This would not have been possible without the dedication, hard work and support of

everyone, from our board to our founding partners, partners, teams, clubs, supporters and fans.

2013 was a year of many milestones. We challenged ourselves like never before, surpassing all expectations, which

resulted in us being one of the fastest growing movements in the world. Just few months earlier to the UN award,

the prestigious Rockefeller Foundation added both MasterPeace founders, Mohamed Helmy and Ilco Van der Linde

to its list of ‘Top100 of Next Centuries Innovators’. The year 2013 featured our best International Day of Peace to

date, in terms of content and outreach! MasterPeace organized 38 celebrations in 35 countries as MasterPeace Clubs

were able to increase their ‘directly impacted people’ by 215% compared to the year before.

MasterPeace Clubs gained momentum, ending the year of 2013 with 62 functioning clubs in 45 countries. Many of

these MasterPeace Clubs were started in the new focus region of ‘Balkan Areas’, such as Croatia, Macedonia, Kosovo,

Albania, Bosnia and Herzegovina. In Yemen, Tunesia, Sudan and Kosovo young MasterPeacers started to gather

themselves into new MasterPeace Clubs, aiming to improve these conflict-stricken areas.

MasterPeace Club’s team empowered a new track of local “boot camps”, where MasterPeace Clubs organized an

intensive few days of workshops and meetings between these different clubs and nations that boosts the capacity of

the team, and works as a platform to discuss local, national and international expansion strategies. The initiative

echoed very well with the clubs, having 11 clubs (exceeding the initial plan of 8 clubs) conducted their local boot

camps, which were attended by around 600 young social leaders. MasterPeace gatherings took place in Armenia,

India, Nepal, Philippines, Morocco, Guinea, Sierra Leone, Russia, Uganda, Kenya, and Afghanistan.

All efforts were crowned by an unsurpassable 38 International Day of Peace celebrations in 37 countries: Gambia,

Kenya, Ghana, Senegal, Democratic Republic of Congo, Cameroun, Uganda, Sierra Leone, Zimbabwe, Zambia,

Tanzania, Guinea, Nigeria, Bangladesh, Nepal, India, Pakistan, the Philippines, Iraq, Afghanistan, Lebanon, Yemen,

Morocco, Armenia, Russia, Croatia, Macedonia, Kosovo, Albania, Bosnia and Herzegovina, Georgia, Iceland, Egypt, the

Netherlands, United Kingdom and the United States of America.

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Scalability and content of the IDP 2013, was far better than any preceding year. MasterPeace clubs involved

thousands of volunteers (1035 team members and volunteers) in more than 85 initiatives (some clubs organized

multiple events this year), with uppermost media coverage, local and International, and an estimated outreach of

30+ million people globally.

MasterPeace launched a 2013-IDP competition, to recognize the great work and efforts invested by the clubs to

celebrate the IDP with a wide broad of categories to give chance for all celebrations and scales, “The Jury award”

(Russia, and Afghanistan on second place) “The People’s Choice Award” (Nepal) and the” Innovation Award” (India)

as a MasterPeace IDP 2013 Awards Winners!

For the second year in row, MasterPeace Central Office organized the International Boot Camp for MasterPeace

Country Coordinators. The main objective of 2013 boot camp was to evaluate the different challenges our clubs face

and create concrete action plans. Moreover, we wanted to discuss the “Club Manual” and role of the country

coordinator and its function in each country.

With constant improvements and close evaluation, our clubs are getting more and more effective, more clubs are

joining but most importantly: there are lots of well organized activities concerning the subject of peace. Each and

every one of these activities is locally fitted. There is a strong involvement of different layers of leadership per club,

more maturity in term of the focus on initiatives that tackle conflicts, bringing opponents together and getting more

attention from the local media.

Throughout the year, MasterPeace 2014 concert was the main goal and focus, with intensive preparations and major

transformation. The year started with deciding that the ongoing chaos in Cairo forced researching the possibility of

Istanbul as the new location for the seminar and concert, however half a year ago, the situation in Turkey changed

dramatically when millions of people started to demonstrate against their government, which resulted in large scale

violence in Istanbul and other areas in Turkey, causing tremendous negative PR for the country globally, and a society

(people, media and especially companies) in stress, while also putting our plans for organizing global scale concert in

hazard.

The focus remained on the proven strength of the concept: our DNA of being a 2.0 grassroots, bottom-up and

innovative platform for MasterPeacers who are trying to make a difference by raising their voice for peace. This is the

core of MasterPeace and our main focus, working together to create a series of connected events named

“MasterPeace in Concert” turning the world into our stage. We will bring opponents together in via music, art, sports

and dialogue and connect them all with our unifying event in Amsterdam: gathering artists from conflict zones all

over accompanied by the famous Dutch Metropole Orchestra at the world-class Ziggo Dome arena in Amsterdam.

We are working on MasterPeace Concerts on 21st

of September 2014 in around 50 countries, with bigger (flagship)

and smaller events, altogether hopefully involving around 500,000 people. All countries will mobilize as much local

media (Radio, TV, Newspaper and social media) as possible. All concerts aim to programme local ‘opponents’ fuelling

dialogue through music, outstanding concerts, speeches, performances and a special ‘Great Minds Meeting’ will

provide footage for an Internet broadcast.

2013 marked a remarkable year for MasterPeace communication, PR and social media. MasterPeace communication

efforts boomed with unparalleled campaigns, media outreach and buzz. The focus this year in addition to the huge

outreach was also on ensuring the consistency of MasterPeace messaging and branding globally.

One of 2013’s projects was the planning of one of MasterPeace’s major campaigns, My Music MasterPeace, a music

competition that invites all artists and bands to submit their peace songs to win being the opening act of

MasterPeace in Concert. After the three-month submission phase (Dec.-Feb), participants enter a stage of public

voting to select the Top 20 entrants, followed by a jury who will decide the Winner (mid-May).

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My Music MasterPeace received 220 entries of peace songs from 43+ countries around the world, more than 25,000

people voted on the MasterPeace website, increasing dramatically the traffic on our platform and adding more than

10,000 new users.

My Music MasterPeace teamed up with some of the biggest names in the music industry as partners, we have CMJ

(400+ US/Canada College radio stations), Mideast Tunes (largest music network in Middle East), Tribe of Noise (21K

composers, singers, songwriters from 170 countries), International Radio Festival (one of the largest radio festival in

Europe), and Radio and Music India (online music website in India).

With the help of MGC, My Music MasterPeace gathered some big names in music to be our jury and help selecting

the winner, artists and music connoisseurs like Downtown Julie Brown, Sirius Radio Host & iconic MTV VJ, Nusrat

Durrani, General Manager & SVP of MTV World; Robert Kraft, CEO of Kraftbox (fr. President of Fox Music), Anil

Wanvari, (founder of Music & Radio India and the Indian Telly Awards) and Karsu Dutch/Turkish singer and

songwriter are part of the MY Music MasterPeace Jury.

We have had milestones during this year, on social media we exceeded quarter million fans (266K fans on Facebook)

making MasterPeace the largest peace campaign on social media today, jumping from 9000K fans at the start of

2013.

On PR and media, we surpassed media outreach of 30 million during the International Day of Peace. In almost all

countries where MasterPeace celebrated the International Day of Peace in 2013, MasterPeace attracted media

attention; it was featured in more than 300 publications including Huffington Post, Reuters and Yahoo, among many

others.

MasterPeace platform grew exponentially in 2013, with an accessible user journey, the platform focused on building

attractive content and encouraging interactions between users (25,000 users). MasterPeace platform hosted two

major competitions (Clubs’ awards, and My Music MasterPeace) in addition to active peace building initiatives ( 500)

and an extended network of MasterPeace Blog Ambassadors ( 1100 blogger).

In the EU office there have been some organizational developments, which resulted in a more strategic focus on

innovation and business alignments,> Aart Bos, started as the Managing Director of the European Office Jan 2013. ,.

MasterPeace NL achieved a breakthrough in the Dutch brand recognition through “Music above fighting” campaign

that consists of a series of television and radio commercials, ads and billboards and a special television program

'MasterPeace: Music above Fighting', which in partnership with the Dutch company NewBeTV produced a top-quality

documentary featuring the journey of the famous Dutch artist VanVelzen from Holland to DR Congo to perform

together with the Congolese superstar Innocent B.

MasterPeace brought on board strategic forces, teams, and partners to maximize its impact. MasterPeace hired

MGC, a PR agency based in New York; which added tremendous value and presence of MasterPeace in USA, including

securing a strategic partnership with the Sunset Marquis, luxurious hotel in LA home-away from home for key music

industry people, where we launched MasterPeace USA in a special, with attendance of (250 guests) of top names in

the music industry, including Aerosmith’s legend Steven Tyler.

MasterPeace enforced its brand, with strategic presences and events. MasterPeace teamed up with CMJ to organize

this panel on music and social change during it's annual Marathon, the longest-running music industry event of its

kind, in addition to notable interview at MTV World’s ‘Rebel Music’ series with our CEO Mohamed Helmy on music

and social change.

MasterPeace also secured a unique ad spot at the UN directory of journalists and a must have for all UN staff.

MasterPeace will continue to work on a world with less armed conflicts by providing a platform for those who believe

in our core values. Music above Fighting, Dialogue above Judgement, Bread above Bombs and Creation above

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Destruction. Together with our partners, our offices, but most of all, our MasterPeace Clubs, we are Creating peace.

Together.

1.4 Organisation

In 2013 the MasterPeace foundation was led on a daily basis by the new Managing Director Europe Aart Bos,

together with Deputy Director Daniëlle Willemse, whereas the overall MasterPeace project was led by the Managing

Director, Mohamed Helmy (from Egypt) and Creative Director Ilco van der Linde.

MasterPeace was able to grow the team in the Netherlands with focus in the core team on alignments with business,

Education and ICT experts. We are building and expanding “circles of expertise” with freelance experts, social

entrepreneurs and experts in companies who contribute their talents and competences without being paid. .

(http://masterpeace2014.nl/ons-netwerk)

In 2013 the MasterPeace project office in Cairo was financed by the MasterPeace foundation. This office is called

NextPUD and is led on a daily basis by Mohamed Helmy. In this capacity Mohamed Helmy is also the CEO of the total

MasterPeace project – Mohamed reports to the board of the MasterPeace Foundation. The team at the Cairo project

office consisted, at its peak, of nine other paid members of staff and an intern.

In 2013 the board consisted of former Business Woman of the Year Yolanda Eijgenstein (chair), former KPMG CEO

Wessel Ganzevoort, Middle East expert and former diplomat Petra Stienen, Heba Ramzy, Head of Corporate Affairs at

Microsoft, Gema Morena Vega, partner at Deloitte Mexico Consulting Division, Katherine Maher, consultant in

technology for international development and democratization, Craig Zelizer, associate director of the MA Conflict

Resolution within the department of Government at George Town University, Craig Bowman, leading social sector

futurist at Common Ground Consulting LLCTM

and Farid Tabarki, founder and director of Studio Zeitgeist.

In 2013 MasterPeace had 12 paid members of staff (8.5fte) as well as a group of 9 people working on the project

from Egypt.

MasterPeace complies with the Dutch General Accepted Accounting Principles, as well as the special governance

requirements for the ANBI status of foundations. Transparent reporting and governance are our guiding principles.

Until 2013 there were no specific Governance Codes that fit the Situation of MasterPeace, but in 2014 MasterPeace

will study the implications on its governance of the expected net “SBF Gedragscode” for Philanthropy organisations.

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1.5 Operations 2013 and prognosis 2014

Result

The MasterPeace foundation realised a negative result of EUR 6.373 before appropriation.

Difference between budget and realization

In the board meeting of November 2012 the board agreed to an ideal budget and a basic budget. The ideal budget

was set at 1.692.000 revenue and 1.642.000 expenditure whilst the basic budget was set at 1.190.000 revenue and

1.164.000 expenditure. Throughout the year the management of MasterPeace worked with the basic budget.

Revenue

The difference between the planned revenue on the basic budget and the realised revenue is small.

MasterPeace acquired EUR 5.492 more revenue than was budgeted in the basic budget.

Expenditure

MasterPeace spent EUR 39.212 more than was budgeted in the basic budget. Compared to what was

budgeted, MasterPeace spent EUR 70.090 more on personnel costs and EUR 33.542 less on operational

costs. In general the organisation managed the funds well and was able to achieve the goals set with the

allocated budget.

Financial position

The current ratio of the MasterPeace foundation is expressed by dividing the current assets by the current liabilities.

The ratio expresses whether the foundation can meet its payment obligations on short notice without the

continuation of the foundation being in danger.

Current assets December 31, 2013: EUR 145.515

Current liabilities December 31, 2013: EUR 153.999

The current ratio on December 31, 2013 was 0,94

The MasterPeace foundation will and assesses that it can fully meet its payment obligations.

The year 2014 is an important year for MasterPeace.

1. The number of countries with MasterPeace presence will keep growing as well as the quality (measured in

impact and media reach). At this moment, June 2014, MasterPeace has a presence in 47 countries.

2. On The International Day of Peace, 21st

of September, our goal is to mobilise tens of thousands of active

peace builders. As a wave around the world, people will feel the energy of music at MasterPeace events in

more than 40 countries, with local artist, sometimes from conflicting sides, acting and singing together. In

Amsterdam, the “beating heart” of this unifying concept, International artists from conflict areas will

perform together with the Metropole Orchestra.

The financial impact of both ambitions is managed separately.The financial position for MasterPeace organisation will

be covered by structural funding:

Revenue from founding & funding partners is contracted through end 2015 and will be received.

Management has made an analysis of whether these partners will stay committed if the minimal scenario

needs to be realised and the outcome of this analysis is positive.

We very much welcome Cordaid as a new Founding Partner ; who will contribute the first year EUR 75.000.

We foresee more than 100 % coverage in 2015 based on present partner commitments.

Moreover MasterPeace is always flexible in the outflow of project costs and salary expenses.

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We expect additional income streams from social entrepreneurs and Shareholders 4Peace. The latter is a new type of

partnerships with socially engaged brands who pay EUR 25.000,- per year for brand alignment and a tailor-made

package of “peace dividend” which can e.g. exist of Master classes for young talents on leadership and dialogue. With

our founding partners and Shareholders4Peace we believe we can build an “ecosystem“ of value based companies

who can increase their business and meet like-minded people through our innovative network.

On the basis of the current analysis and action plans, board and management believe that the financial report could

be prepared on the basis of the going concern assumption

The events will be covered by sponsoring. Strong risk and cash flow management is in place. The management

decides bi-weekly on commitments towards opportunities. Events organisation requires secure cash flow planning

and priority management of commitments.

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1.6 Budget 2014

As 2014 is a “tipping Point” year in the growth of our movement, our target is to reach out to millions of viewers and

fans with concerts in more than 40 countries. The ambitious event In Ziggo Dome will be organised based on

available cash flow. We do thank the Ziggo Dome management for offering their location rental free.

The gap still to be managed is Euro 285.000,-; according to our governance we will implement various actions;

managing costs like FTE reduction

cancelling web broadcast

cash flow management

It is our intention to use the ticket sales (>100K) for building the movement and not for covering the cost of the

event.

FUNDING- FP-1 donation Triodos Foundation             75.000

- FP-2 donation IKVPC                       65.000

- FP-3 donation Corio 75.000

- FP-6 donation vfonds 75.000

- Private Foundations 75.000

- NPL additional contribution IKV Pax Christi 250.000

Shareholders4Peace 25.000

- vfonds Event donation 300.000

Cordaid 75.000

various donations 240.000

Total secured 1.255.000

Prospects June 2014 285.000

GRAND TOTAL 1.540.000

PLANNED COSTS

A. MasterPeace Cairo Egypt 265.000

a. Salary costs in Egypt 125.000

b. Project costs 80.000c. Other operational costs 60.000

B. MasterPeace EU 1.275.000

a. Salary costs 366.000

b. Other operational costs 74.000

c. MasterPeace in Concert 775.000

d. MasterPeace Turkish Office 60.000

Total 1.540.000

MASTERPEACE BUDGET 2014 actual June

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1.7 Audit of the financial statements

On request of the MasterPeace foundation, KPMG Accountants N.V. has audited the annual accounts for the year

2013. The report is presented on page 31.

Utrecht, 25Th

of June 2014

MasterPeace foundation

Representing the board, Representing the management,

Yolanda Eijgenstein Wessel Ganzevoort Ilco van der Linde Aart Bos

Chairwoman Secretary Founder and Creative Director Managing Director

Petra Stienen Heba Ramzy Gema Morena Vega Katherine Maher Craig Zelizer Craig Bowman Farid Tabarki

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ANNUAL ACCOUNTS

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Balance sheet December 31, 2013 (after proposed appropriation of result)

ref. EUR EUR EUR EUR

Assets

FIXED ASSETS

Tangible fixed assets 4 6.088 10.563

CURRENT ASSETS

Receivables 5

Subsidies and donations to be received 31.250 67.692

Taxes and social securities 2.876 0

Debtors 23.474 2.014

Other receivables, prepayments and accrued income 2.214 2.142

59.814 71.848

Cash at banks and in hand 6 85.701 21.874

151.603 104.285

Equity and liabilities

EQUITY 7

Other reserves -2.396 3.976

-2.396 3.976

LONG TERM LIABILITIES 8

Lease 0 0

0

CURRENT LIABILITIES

Creditors 75.685 15.980

Taxes and social securities 9 12.872 13.453

Other liabilities, accruals and deferred income 9 65.442 70.876

153.999 100.309

151.603 104.285

December 31, 2013 December 31, 2012

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Statement of revenue and expenditure 2013

ref. EUR EUR EUR EUR EUR EUR

Revenue

Revenue from founding partners 11 415.000 465.000 390.000

Revenue from funding partners 12 379.989 475.000 422.786

Revenue from donations 13 150.503 0 21.988

Other funds 14 250.000 250.000 250.000

Total revenue 1.195.492 1.190.000 1.084.774

Expenditure

Wages, salaries and social securities 16 503.752 435.000 480.453

Depreciation tangible fixed assets 4 6.164 3.500 4.546

Operational costs 18 690.220 725.500 585.151

Total expenditure 1.200.136 1.164.000 1.070.150

Financial income and expenses 19 -1.729 0 -2.140

Result -6.373 26.000 12.484

Allocation result

Movemement earmarked funds 0 0 0

Movement earmarked reserves 0 0 0

Other reserves -6.373 26.000 12.484

0 0 0

Budget 2013 2012Realisation 2013

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Notes to the balance sheet and statement of revenue and expenditure

1. General

MasterPeace Foundation has its legal address in Utrecht, the Netherlands.

The financial statements have been prepared in accordance with ‘Richtlijn 640 voor organisaties zonder winststreven’

(guideline for non-profit organisations).

The financial statements are denominated in euros.

1.1 Financial statement

1.1.1. Reporting period

These financial statements have been drawn up for the reporting year 2013. The year under review is calendar year

2013.

1.1.2 Continuity

The year 2014 is an important year for MasterPeace.

1. The number of countries with MasterPeace presence will keep growing as well as the quality (measured

in impact and media reach). At this moment, June 2014, MasterPeace has a presence in 45 countries.

2. On The International Day of Peace, 21st

of September, our goal is to mobilise tens of thousands of active

peace builders. As a wave around the world people will feel the energy of music at MasterPeace events

in more than 40 countries, with local artist, sometimes from conflicting sides, acting and singing

together. In Amsterdam, the “beating heart” of this unifying concept, International artists from conflict

areas will perform together with the Metropole Orchestra.

The financial impact of both ambitions is managed separately.

The first will be covered by structural funding. We expect four new Shareholders 4Peace that will donate EUR 25.000

and one extra founding partner that will donate EUR 75.000.

The events will be covered by sponsoring. Strong risk and cash flow management is in place. The management

decides bi-weekly on commitments towards opportunities.

Revenue from founding & funding partners is contracted through end 2015 and will be received.

Management has made an analysis of whether these partners will stay committed if the minimal scenario

needs to be realised and the outcome of this analysis is positive.

We foresee more than 100 % coverage in 2015 based on present partner commitments.

Moreover MasterPeace is always flexible in the outflow of project costs and salary expenses.

We expect additional income streams from social entrepreneurs and Shareholders 4Peace. The latter is a new type of

partnerships with socially engaged brands who pay EUR 25.000,- per year for brand alignment and a tailor-made

package of “peace dividend” which can e.g. exist of Masterclasses for young talents on leadership and dialogue. With

our founding partners and Shareholders4Peace we believe we can build an “ecosystem“ of value based companies

who can increase their business and meet like-minded people through our innovative network.

On the basis of the current analysis and action plans, board and management believe that the financial report could

be prepared on the basis of the going concern assumption.

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1.1.3. Accounting principles

Unless stated otherwise, assets and liabilities are shown at nominal value.

An asset is disclosed in the balance sheet when it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably. A liability is recognised in the balance sheet when it is expected to result in an outflow from the entity of resources embodying economic benefits and the amount of the obligation can be measured with sufficient reliability.

Income is recognised in the profit and loss account when an increase in future economic potential related to an increase in an asset or a decrease of a liability has arisen, the size of which can be measured reliably. Expenses are recognised when a decrease in the economic potential related to a decrease in an asset or an increase of a liability has arisen, the size of which can be measured with sufficient reliability.

If a transaction results in a transfer of future economic benefits and or when all risks relating to assets or liabilities transfer to a third party, the asset or liability is no longer included in the balance sheet. Assets and liabilities are not included in the balance sheet if economic benefits are not probable and/or cannot be measured with sufficient reliability.

The revenue and expenses are allocated to the period to which they relate.

1.1.4 Use of estimates

The preparation of the financial statements requires the management to form opinions and to make estimates and assumptions that influence the application of principles and the reported values of assets and liabilities and of income and expenditure. Actual results may differ from these estimates.

The estimates and the underlying assumptions are constantly assessed. Revisions of estimates are recognised in the period in which the estimate is revised and in future periods for which the revision has consequences.

1.1.5 Foreign currencies

Transactions denominated in foreign currencies during the reporting period are recognized in the annual accounts at

the exchange rate ruling at the transaction date.

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange prevailing at

the balance sheet date. Exchange differences resulting from settlement and translation are charged or credited to

the statement of revenue and expenditure.

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2. Principles of valuation of assets and liabilities

2.1 Financial instruments

Financial instruments include receivables, cash items, lease, creditors and other liabilities, accruals and deferred

income. Financial instruments are initially recognised at fair value and any directly attributable transactions costs are

included. After initial recognition, financial instruments are valued in the manner described below.

2.2 Tangible fixed assets

Fixed assets are stated at cost of acquisition, less accumulated depreciation.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each item of the tangible fixed assets.

The following rates of depreciation are applied:

Other fixed assets: 25 - 50

2.3 Receivables

Receivables are recognized at nominal value, where necessary less provision for possible uncollectible accounts.

2.4 Cash at banks and in hand

Cash at banks and in hand are freely disposable funds.

2.5 Leasing

Tangible fixed assets, for which the company possess the economic ownership under a financial lease, are capitalized. The obligation arising from the financial lease contract is recognized as a liability. The interest included in the future lease installments is charged to the profit and loss account during the term of the finance lease contract.

2.6 Liabilities

Obligations to beneficiaries are recorded as a liability if and when the donation has effectively been notified to the

beneficiary.

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3. Principles for determination of result

3.1 General

The result represents the difference between the value of the revenue generated and the costs and other charges for

the year.

3.2 Revenue from founding partners

MasterPeace involves founding partners for financial support to guarantee its development and continuation, and for

the purpose of co-creation. Founding partners actively support the development of MasterPeace with their network,

communications, personnel, expertise and other relevant experience. Revenue from founding partners are

recognized in the profit and loss in the same period to which the contract is relating.

3.3. Revenue from funding partners

Revenue from funding partners can relate to large donations and to project subsidies from governments.

Government grants are initially recognised in the balance sheet as deferred income when there is reasonable

assurance that they will be received and MasterPeace will comply with the conditions associated with the grant.

Grants that compensate MasterPeace for expenses incurred are recognized in the profit and loss on a systematic

basis in the same period in which the expenses are recognised.

Project subsidies are recorded as income in the statement of revenue and expenditure in the period in which the

related costs are recorded. Institutional subsidies are recorded in the period mentioned in the award letters of the

subsidizers.

Subsidies are recognised as income when all the conditions can be satisfied and it is probable that the subsidies will

be received.

Revenue from large donations is recorded in the annual accounts of MasterPeace since the foundation is the

beneficial entity regarding the donations.

3.4 Revenue from donations

Revenue from donations relates to one time donations up to an amount of EUR 15.000 and are recorded in the

annual accounts of MasterPeace since the foundation is the beneficial entity regarding the donations.

Donations are accounted for in the year when they are received, with exception of the donations received which can

be ascribed to a period in which a specific action is performed.

3.5 Revenue received in goods and services

Revenue received in goods and services have not been accounted for in the statement of revenue and expenditure.

The true value is difficult to estimate and has a value we could not have bought ourselves. We are very proud on our

business and media partner who contributed their talents and (media) outlets for free.

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3.6 Costs

Costs are recognized on the historical cost and are allocated to the reporting year to which they relate.

3.7 Personnel remuneration

Regular payments

Salaries, wages and social security costs are charged to the statement of revenue and expenditure when due, and in

accordance with employment contracts and obligations.

Pensions

MasterPeace has no pension schemes in operation.

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4. Tangible fixed assets

Movements un tangible fixed assets were as follows:

Other fixed

assets

EUR

Balance as at January 1, 2013

Purchase price 18.116

Accumulated depreciation 7.553

Carrying amount 10.563

Movements 2013

Investments 1.689

Depreciation 6.164

-4.475

Balance as at December 31, 2013

Purchase price 19.805

Accumulated depreciation 13.717

Carrying amount 6.088

Depreciation rates 25% - 50%

Additions to the fixed assets comprise of IT equipment.

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5. Receivables

Subsidies and donations to be received

December 31,

2013

December 31,

2012

EUR EUR

vfonds education subsidy 12.500 33810

vfonds founding partner grant 18.750 18.750

Ministry of Foreign Affairs 0 11.250

Christmas auction Ministry Economic Affairs 0 3.882

31.250 67.692

Taxes and social securities

December 31,

2013

December 31,

2012

EUR EUR

2.876 0

2.876 0

Wage tax and social securities

Debtors

December 31,

2013

December 31,

2012

EUR EUR

Debtors 23.474 2014

23.474 2.014

Other receivables, prepayments and accrued income

December 31,

2013

December 31,

2012

EUR EUR

Prepayments 2.214 2.142

2.214 2.142

All receivables are due within one year.

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6. Cash at banks and in hand

December 31,

2013

December 31,

2012

EUR EUR

Cash 317 0

Banks 85.384 21.874

85.701 21.874

7. Equity

The movements in equity over 2013 are as follows:

Other

reservestotal

EUR EUR

Balance as at January 1, 2013 3.977 3.977

Appropriation of result reporting year -6.373 -6.373

Total movements -2.396 -2.396

Balance as at December 31, 2013 -2.396 -2.396

Appropriation of result 2013

The proposed appropriation of the result, as disclosed in other information, is reflected in these annual accounts.

In 2013 a negative result of EUR 6.373 was realised.

8. Long term liabilities

MasterPeace has a lease contract for a server. The lease plan has a term of 36 months and will expire on 1st

August

2014 after which MasterPeace will be the owner of the server.

The short term part of the lease (EUR 1.272) is recorded under other accruals, deferred income and liabilities.

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9. Current liabilities

Taxes and social securities

December 31,

2013

December 31,

2012

EUR EUR

Wage tax & social securities 12.872 13.453

12.872 13.453

Other liabilities, accruals and deferred income

December 31,

2013

December 31,

2012

EUR EUR

Payments to be made to employees 5.722 2.942

Reservation for holiday pay 11.595 17.022

Unused holiday days 7.077 8.378

Invoices still to be received 17.328 23.481

Other accruals, deferred income and liabilities 23.720 19.053

65.442 70.876

All current liabilities have a remaining term of less than one year.

Invoices still to be received relates, amongst other things, to invoices for accounting costs, and several smaller

invoices related to 2013.

Other accruals, deferred income and liabilities refer mainly to amounts still due to MasterPeace Egypt office for bills

relating to 2013.

10. Commitments not included in the balance sheet

There is one potential commitment not included in the balance sheet. Part of this commitment is included but the

other part is still under dispute at this time. The chance that (part of) the amount under dispute will need to be paid

is deemed small by legal experts. The board is confident that the amount to be settled on will be a symbolic amount.

Page 25

11. Revenue from founding partners

2013 2012

EUR EUR

Triodos Foundation 75.000 75.000

IKV Pax Christi 65.000 65.000

Vrede van Utrecht 25.000 25.000

Corio NV 75.000 75.000

&samhoud 75.000 75.000

vfonds 75.000 75.000

Search for Common Ground 25.000 0

415.000 390.000

Triodos Foundation was the first founding partner who committed to a long term involvement starting in 2010 with a

donation of EUR 50.000. From 2011 onward Triodos Foundation committed to a yearly donation of EUR 75.000 until

2015.

Pax (formally known as IKV Pax Christi) was the second founding partner who committed to long term involvement,

starting with a donation of EUR 50.000 in 2010 and a commitment from 2011 until 2015 of an intended amount of

EUR 75.000 per year, of which EUR 50.000 per year is guaranteed.

The Vrede van Utrecht was the third founding partner to come on board with a donation of EUR 50.000 in 2010 and a

commitment from 2011 until 2014 of EUR 75.000 per year. Due to financial limits it was agreed that the Vrede van

Utrecht would pay EUR 25.000 in 2012 and EUR 25.000 in 2013, after which the founding partnership was ended.

Corio N.V. joined in September 2011 and committed to a yearly donation of EUR 75.000 until and including the

year 2015.

The international consultancy company &samhoud joined in March 2011 and committed to a yearly donation of

EUR 75.000 until and including 2013.

In 2012 vfonds joined MasterPeace as sixth founding partner and agreed to principal donation of EUR 75.000 per

year, whereby the decision will be made yearly whether the founding partnership will be prolonged. For 2014 the

founding partnership has been prolonged. The vfonds is supported by the Dutch Postcode Lottery, BankGiro Lottery

and the Lotto.

Page 26

12. Revenue from funding partners

2013 2012

EUR EUR

Ministry of Foreign Affairs 5.000 151.476

vfonds education grant 100.524 146.310

Private family foundation 100.000 125.000

vfonds grant tv programme 165.000 0

War Child / EU subsidy 9.465 0

379.989 422.786

Regarding all subsidies and other types of revenues from funding partners

The amount received in subsidies can not be considered definitely settled until all subsidizers have approved the

evaluation and financial report of MasterPeace. The Board does not expect to need to pay back any funds since the

foundation has complied with the needs and demands of the subsidizers. The financial report to all five funding

partners have been approved.

13. Revenue from donations

2013 2012

EUR EUR

Donations small business & corporates 126.332 19.125

Donations from schools for PeaceMasters 3.500 2.863

Various donations 20.671 0

150.503 21.988

14. Other funds

2013 2012

EUR EUR

Dutch National Postcode Lottery (via IKV Pax Christi) 250.000 250.000

250.000 250.000

Together with founding partner Pax, MasterPeace was successful in acquiring a multiyear grant (out of the ‘reguliere

bijdrage’) from the Dutch National Postcode Lottery of EUR 250.000 per organization per year, for the years 2012

through 2016.

With the financial cut backs of the Rutte II cabinet the necessity of private fundraisers like the Dutch National

Postcode Lottery increases. The contribution of the lottery and its participants is unique, not only because it is

multiyear, but also because the receiving charities decide themselves what they spend the money on, based on their

own expertise.

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The current cabinet has said that they want to modernize the policies regarding lotteries. We hope that the changes

suggested will leave the National Postcode Lottery enough space to continue its successful fundraising. Because

without the Dutch National Postcode Lottery and its participants we would miss the financial means to be able to

execute a large part of our goals.

15. Revenue received in goods and services

Many organizations and social entrepreneurs kindly offered their services to MasterPeace in kind or at a reduced

cost because they wanted to contribute to building MasterPeace. MasterPeace would like to thank the following for

their in kind contributions.

8Beaufort, Administer, Alef book stores, Aon Direct, Brand Architects, Clear Channel, Cratos Mobility, DA Drogisterij,

de Baak, Dutch Liberation Festivals Wageningen, Zwolle en Assen, EZDG, Helemaalloos, Italiq Automatisering,

Lloyd Hotel Amsterdam, Mise en Place, Schijvens Confectiefabriek Hilvarenbeek BV, Seats2Meet, Soldaat van Oranje,

Stichting Expertisecentrum Organisatie Interventies, Trendbox, Visser Advocatuur, Zwart Hoevenaars Netwerk

Notarissen

We are very proud that media partners like TV stations AVRO and Xite, media purchasing companies Zuiver Media

and PHD, Corio (bill boarding) and Radio stations like 538, Sublime FM donated their talents (ads per channel) which

had a tremendous communication value in building our brand.

16. Wages, salaries and social securities

2013 2012

EUR EUR

Salaries 420.192 389.455

Social securities 64.589 52.860

Freelancers/social enterpreneurs & volunteers 18.971 38.138

503.752 480.453

The creative director Ilco van der Linde is a permanent resident in Spain. Therefore MasterPeace does not pay wage

tax and social securities for this employee. Ilco van der Linde pays all taxes and social securities as needed in Spain.

Remuneration of Management

The managing director Aart Bos receives a salary of EUR 49.362 gross per year (including holiday pay)

The creative director Ilco van der Linde receives a salary of EUR 64.800 gross per year (including holiday pay)

MasterPeace does not have a pension scheme.

17. Remuneration of Board of DirectorsBoard members emoluments

The board received no emoluments in 2012 and 2013.

The emolument of the management director is mentioned under 16.

Formatted: English (U.S.)

Page 28

18. Operational costs

2013 2012

EUR EUR

Project costs 540.044 470.787

Other operational costs 150.176 114.364

690.220 585.151

Specification project costs

2013 2012

EUR EUR

Project costs 5th of May Liberation Day 9.045 32.857

MasterPeace Egypt project Cairo Office 146.141 150.074

MasterPeace.org platform 2.0 52.886 84.303

MasterPeace Clubs abroad 49.002 76.327

International communication and PR 23.365 42.688

Project costs Educational programme NL 11.341 30.416

MasterPeace Worldband/Virals 894 29.674

Project costs 21st of September International Day of Peace 89.323 24.448

TV programme 21st September 158.047 0

540.044 470.787

MasterPeace was able to reduce the costs for the 5th

of May to a minimum without losing impact. In 2013 less drastic

changes were needed on the MasterPeace.org, hence less money was spent on the website than the year before.

Because of the limited budget, new MasterPeace clubs received smaller seed grants than in 2012. In 2013 we were

assisted by a communication expert in the USA which cost less than the PR firms that assisted us in 2012. For the

education project in 2013 less out of pocket costs were made than in 2012. In contrast to 2012, MasterPeace did not

produce a viral film about the World Band in 2013. Project costs 21st

of September consist of preparatory costs for

the big concert in 2014. Evidently these costs were higher in 2013 than 2012.

Thanks to the generous offer of NewBeTV and Tuvalu to make a MasterPeace tv programme for the 21st

of

September at reduced cost, and vfonds for agreeing to fund this programme, MasterPeace was able to air a

documentary about MasterPeace in Congo on the 21st

of September on Veronica.

Page 29

Specification other operational costs

2013 2012

EUR EUR

Travel costs 20.145 19.256

General communication costs 45.246 20.682

Conferences/meetings/presentations 17.637 16.465

Indirect personnel costs 19.940 15.324

Office and general costs 31.065 30.380

Accountants, insurance 16.143 12.257

150.176 114.364

The increase in travel costs can be attributed to a growing international network and therefore more meetings

abroad than in 2012.

In 2013 more was spent on communication mainly due to costs related to a media campaign for the tv programme

on 21st

September and costs related to the nomination of MasterPeace by the UNCA in New York.

19. Financial income and expenses

2013 2012

EUR EUR

Financial income 0 0

Financial expenses -1.729 -2.140

-1.729 -2.140

Financial expenses were made, for the main part, for transfer costs to the MasterPeace Cairo office and to other

recipients outside of the Netherlands, mainly MasterPeace clubs in many countries.

Page 30

20. Other notes to the statement of revenue and expenditure

Employees

At the end of 2013 the foundation was employing a total of 12 people which translated to 8,5 fte at the end of the

year. (2012: 13 members of staff, 8 fte).

Utrecht, 2518th

of June, 2014

Representing the board, Representing the management,

Yolanda Eijgenstein Wessel Ganzevoort Ilco van der Linde Aart Bos

Chairwoman Secretary Founder and Creative Director Managing Director

Petra Stienen Heba Ramzy Gema Morena Vega Katherine Maher Craig Zelizer Craig Bowman Farid Tabarki

MasterPeace Foundation

Radboudkwartier 245B

3511 CK Utrecht

Page 31

OTHER INFORMATION

Appropriation of result

For the proposed appropriation of result we refer to the statement of revenue and expenditure.

Explanation fee founder Masterpeace

According to the statutes of the Foundation board members nor founder are eligible to receive emoluments. The

founder however left the board and became creative director of the foundation in 2011, working full time for the

project. In this capacity he does receive a salary. The statutes will be changed in 2014 so that mentioned article only

relates to board members and not to the founder.

Page 32

Auditor’s report