national council for higher education (nche) public

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NATIONAL COUNCIL FOR HIGHER EDUCATION (NCHE)

ON BEHALF OF MALAWI GOVERNMENT SKILLS DEVELOPMENT

PROJECT IDA PROJECT P131660

FINANCIAL STATEMENTS

FOR THE YEAR ENDED

30 JUNE 2017

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' NATIONAL COUNCIL FOR HIGHER EDUCATION (NCHE)

ON BEHALF OF MALAWI GOVERNMENT SKILLS DEVELOPMENT PROJECT IDA PROJECT P131660

FINANCIAL STATEMENTS For the year ended 30 June 2017

CONTENTS Page

Statement of management responsibilities

. Audit summary 2 - 6 ,.

Financial statements

' Independent auditor's report . 7 . 9 Statement of financial position 10 Statement of income and expenditure 11 Statement of changes in funds 12 Statement of cash flows 13 Statement of activity on the designated account 14 Notes to the financial statements 15 - 27

Internal controls

Independent auditor's report 28

Compliance with agreement terms

Independent auditor's report 29

Appendices

Appendix 1- Detailed income and expenditure statement 31

' Appendix II - Fixed asset register 32-42

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NATIONAL COUNCIL FOR HIGHER EDUCATION (NCHE) ON BEHALF OF MALAWI GOVERNMENT SKILLS DEVELOPMENT PROJECT P131660

STATEMENT OF MANAGEMENT RESPONSIBILITIES For the year ended 30 June 2017

Management is responsible for the preparation and fair presentation of the financial statements of Skills Development Project, comprising the statements of financial position, income and expenditure, changes in funds, cash flow and activity on the designated account as at and for the year ended 30 June 2017, and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes, in accordance with International Financial Reporting Standards, and provisions of the Project Agreement.

Management is also required to ensure that the Council keeps proper accounting records which disclose, with reasonable accuracy, at any time, the financial position of the project and enable them to ensure that the financial statements comply with the Internationa l Financial Reporting Standards and the provisions of the Project Agreement.

In preparing the financial statements, the Management accept responsibility for the following :

• Ma intenance of proper accounting records; • Selectio n of suitable accounting policies and applying them consistently; • Making judgements and estimates that are reasonable and prudent; • Compliance with applicable accounting standards, when preparing financial statements, subject to any material

departures being disclosed and explained in the financial statements; and • Preparation of financial statements on a going concern basis unless it is inappropriate to presume that the

Council will continue in business.

Management is also responsible for maintain ing adequate accounting records and an effective system of risk management.

Management's responsibility includes designing, implementing and maintaining interna l controls relevant to the preparation and fair presentation of these financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the ci rcumstances.

The auditor is responsible for reporting on whether the financial statements are fairly presented in accordance with the International Financial Reporting Standards.

Approval of the financial statements A ~ The financia l statements of th e project, as indicated above, were approved by the Board on-+l-~-d--+-6--'-----1--·2018 and are signed on its behalf by:

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COUNCIL CHAIRPERSON

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NATIONAL COUNCIL FOR HIGHER EDUCATION (NCHE) ON BEHALF OF MALAWI GOVERNMENT SKILLS DEVELOPMENT PROJECT IDA PROJECT P131660


AUDIT SUMMARY

Background and project identification The National Council for Higher Education (NCHE) is implementing the Malawi Government Skills Development Project (SDP), project no. P131660, w ith support from the World Bank. The SDP is implemented in selected public higher education institutions. They are:

• University of Malawi - The Polytechnic (POLY)

• University of Malawi - Chancellor Colleg e (CHANCO)

• Mzuzu University (MZUNI)

• Lilongwe University of Agricu lture and Natural Resources (LUANAR)

• Technical, Entrepreneurial and Vocational Education and Training Authority (TEVETA)

The National Council for Higher Education was estab lished by Act of Parliament No. 15 of 2011, with the primary purpose of providing accreditation and quality assurance services in higher education institutions in Malawi . Its mission is to promote and coordinate relevant, accessible, equitable, sustainable quality higher education in Malawi through accreditation, qua lity assurance policy support and planning and representation of Malawi's higher education interest nationally and internationally.

The project became effective on 11th May 2015, ten months after signing the financing agreement, and is expected

to end on 30th June 2019. The key guiding project documents are: The Project Appraisal Document (PAD), Financing Agreement (FA), Sub-Project Grant Agreement (SPGA) and Project Implementation Manual (PIM), among others.

Project objective

The SDP aims to equip the primary beneficiaries - the students/trainees - with applicable skills in the society. It is hoped that the primary beneficiaries will be able to use the skills they will acquire for their livelihood and improve their general welfare either by getting employed or being self- employed and/or creating jobs for others. The Project Development Objective (PDO) statement of the SDP is: To increase access, market relevance and results orientation of supported skills development institutions in agreed priority areas.

The project aims to equip its primary Direct Beneficiaries, i.e. the students / trainees, with skills needed in the labour market. By scaling up training of semi-skilled persons and expanding skilling opportunities for the currently underserved groups including rural communities and school dropouts from poor families, it is hoped that the project will work towards eradicating extreme poverty and promoting shared prosperity either through selfemployment or salaried jobs which will guarantee regular income for the beneficiaries. It is further hoped that the improved income levels of the primary beneficiaries will contribute to the country's economic growth .

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AUDIT SUMMARY (CONTINUED)

The project consists of two components. Component 1 involves supporting participating institutions (Pis) in implementing Sub-Project Grant Agreements (SPGA). Through this component, the Pis are assisted in their strategic interventions in order to "i ncrease access, market relevance, and results orientation in agreed priority areas" .

In this regard, the Pis are assisted through construction and rehabilitation of infrastructure, supply of equ ipment, development of new programs and strengthening of staff capacity to deliver the programs. In addition to these, MZUNI and LUANAR are both assisted through establishment of open and distance learning (ODL) centres and setti ng up of sate ll ite centres at Karonga and Li longwe TICs and at Mulanje and Balaka secondary schoo ls for MZUNI and in Mzuzu and Blantyre for LUANAR.

For its part, TEVETA is assisted through tra ining of master craftsmen, supplying of equipment, tra ining of staff in selected institutions offering informal sector training in rural areas and in selected institutions offering technician level programs.

In Component 2, the focus is on systems strengthening and policy reforms. It consists of carrying out a program of activities to strengthen the capacity of the National Council for Higher Education (NCHE) in Project planning, implementation, coo rd ination, reporting, monitoring and evaluation and fiduciary management as well as provision of equipment. NCHE is mandated to regulate and coordinate higher education in Malawi .

Audit objective

The objective of the audit of the project financial statements as set out in the Terms of Reference for the Assignment issued by National Counci l for Higher Education is to:

• Enable the auditor to express an independent professional opinion on the financial position of the project

as at the end of the financial year;

• Ensure that the funds granted to the project have been used for the intended purposes;

• Ensu re that the project books of accounts provide the basis for the preparation of the project financia l statements are established to reflect the financial transactions in respect of the project;

• Ensu re that adequate interna l controls and supporting documentation for transactions are maintained.

Audit scope

Our audit was carried out in accordance with the International Standards on Auditing . It included such tests as we considered necessary to enable us to obtain reasonab le assurance on whether:-

a) World Bank funds have been used in accordance with the conditions of the financing agreement with due attention to economy and efficiency and only for the purposes for which they were provided;

b) Counterpart fund (government budget) and external funds (in case of co-financing) have been provided and used in accordance with the conditions of the financing agreement, with due attention to economy and efficiency and only for the pu rposes for which they w ere provided;

c) Goods, works and services financed have been procured in accordance with the financing agreement and in accordance with bank's rules and procedures and have been properly accounted for;

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Audit scope (continued)

d) Appropriate suppo rting documents, records and books of accounts relating to project activities havebeen kept. Clear linkages should exist between the books of account and the fi nancia l statements presented to the bank;

e) Special accounts have been maintained in accordance with the provisions of the financing agreement and in accordance with the bank's disbursement rules and procedures;

f) The financial statements have been prepared by project management in accordance with applicable accounting standards and give a true and fair v iew of the financial position of the project as at the year end and of its incomes and expenditures for the year ended on that date;

g) Comprehensive assessment of the adequacy and effectiveness of the accounting and overall interna l control system to monitor expend itures and other financial transactions and ensure safe cu stody of project-financed assets and that they are being used for the intended purposes;

h) Project's fixed assets are real and properly eva luated and project property rights or related beneficiaries' rights are established in accordance with financing conditions; and

i) Ineligible expenditures identified during the audit be reflected in a separate paragraph of the audit report and if materia l, the point be reflected in the auditor's opinion.

In complying with International Standards on Auditing (ISA), the auditor is expected to pay particular attention to the following matters:

j) Fraud and Corruption: Consider the risks of material misstatements in the financial statements due to fraud as required by ISA 240: The Auditor' s Responsibi lity to Consider Fraud in an Audit of Financial Statements. The auditor is required to identify and assess these risks (of materia l misstatement of the financial statements) due to fraud , obtai n sufficient appropriate audit evidence about the assessed risks; and respond appropria tely to identified or suspected fraud;

k) Laws and Regulations: In designing and performing audit procedures, evaluating and reporting the resu lts, consider that noncompliance by the implementing agency with laws and regulations may materially affect the financial statements as required by ISA 250: Consideration of Laws and Regulations in an Audit of Financial Statements;

I) Governance: Communicate audit matters of governance interest aris ing from the audit of financial statements with those charged with governance of an entity as required by International Standard on Auditing 260: Communication of Aud it Matters with those Charged with Governance.

111) Risks: In order to reduce audit risk to an acceptable low level, determine the overall responses to assessed risks at the financial statement level, and design and perform further audit procedures to respond to assessed risks at the assertion level as required by Internal Standard on Auditing 330: the Auditor's Procedures in Response to Assessed Risks .

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Pre-audit steps

• Familiarization with project's records in respect of the following :

Project financial statements (PFS)

• Examination of the project financial statements including budgeted amounts by category;

• For expenditure, examination of source documents, verification of adequate authorization and verification that expenditure was allowable under the purposes for which the financing w as provided;

• Review of accounting records and ensuring that these have been maintained in accordance with generally accepted accounting principles hereunder, that Skills Development Project has kept adequate records of the cash and bank transactions;

• The conversion of one currency to another has been supported by an official receipt from the bank or an

official exchange institution, stating the exchange rate;

• Review of procurement procedures to ensure that they are in accordance with the financing agreement and the bank's rules and procedures.

Internal control

• Obtaining a sufficient understanding of the internal control structure to plan the audit and determine

the nature, timing and extent of tests to be performed;

• Documentation and evaluation of the control environment, the accounting system and the control procedures;

• Assessment of control risk that is the effectiveness of the internal control structure, pol icies and procedures of the project in preventing or detecting material misstatements in the financial statements.

Compliance with financing agreement terms

• Identification of the agreement terms and determination of those which if not observed could have a material

effect on financial statements.

• Assessment of each material requirements and the risks that non-compliance could occur;

• Design of audit steps and procedures to test for errors, irregularities, and illegal acts that provide reasonable assurance of detecting instances of non-compliance.

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Compliance with financing agreement terms (contin ued)

• For payments, verifying that they have been made in accordance with agreement terms and applicable

regulations;

• Verifying that expenditure by category was within the approved categories and the approved list of goods and

services;

• Determination that counterpart funds have been provided and expended in accordance with the relevant agreement;

• Determination that the financial statements are supported by the books and records from which the financial

statements are prepared;

• Assessment of the physical status of implementation of the project components in relation to the level of

disbursement made so far against the targets as set out in the Appraisal Report.

Special account

There is no special account since all payments are made through direct payments method.

Skills Development Project management did not prevent us from conducting any tests and procedures deemed necessary to form a reasonable basis for our opinion.

Audit results

Financial statements.

In our opinion, the financial statements give a true and fair view of the financial position of the project as of 30 June 2017 and of its income and expenditure for the year then ended in accordance with the International Financial Reporting Standards.

Internal control

In our opinion, internal controls were adequate for the year.

Compliance with agreement terms

In our opinion, the bank's disbursement rules and procedures were complied with during the year under review except for the delays in quarterly reporting .

Special account

There are no special account to be audited since the payment method is direct disbursement by the bank. Please do not hesitate to contact us should you require any further information or clarification.

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KPMG Chartered Accountants and Business Advisors Nurses Council Building New Capital City Centre P.O. Box 30453 Lilongwe 3, Malawi

INDEPENDENT AUDITOR'S REPORT TO NATIONAL COUNCIL FOR HIGHER EDUCATION (NCHE)

Telephone: Fax: E-mail : Website:

ON BEHALF OF MALAWI GOVERNMENT SKILLS DEVELOPMENT PROJECT

IDA PROJECT P131660

Report on the financial statements

Opinion

(265) 01 773 855/01 773 371 (265) 01 771 070 [email protected] www.kpmg.com/mw

We have audited the financial statements of National Council for Hig her Education (NCHE) - Skills Development Project (SDP) set out on pages 10 to 27, which comprise the statement of financial position as at 30 June 2017, and the statements of income and expenditure, changes in funds and cash flows for the year then ended, and the notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion, the financial statements give a true and fair view of the financial position of Nat_ional Council for Higher Education (NCHE) - Skills Development Project (SDP) as at 30 June 2017, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Basis for opinion We conducted ou r audit in accordance with the International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Council in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) and we have fulfilled our ethical responsibilities in accordance with IESBA Code. We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other matter The financial statements of the Project as at and for the year ended 30 June 2016 were audited by another auditor who expressed an unqualified opinion on those statements in their report dated 31 October 2016.

Other information Management of National Council for Higher Education (NCHE) is responsible for the other information. The other information comprises the Statement of Management's Responsibilities and the Audit Summary. The other information does not include the financial statements and our auditor's report thereon .

Our opinion on the financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon .

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard .

Management's responsibility for the financial statements Management is responsible for the preparation of the financial statements that give a true and fai r view in accordance with the International Financial Reporting Standards, and for such internal controls as the management determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the management is responsible for assessing the project's ability to continue as a going concern, disclosing , as applicable, matters related to goi ng concern and using the going concern basis of accounting unless the management either intend to liquidate the Council or to cease operations, or have no realistic alternative but to do so.

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Resident Partners: L.M. Gama, H.B. Nyirenda, B.J. Mwenelupembe, G. Tembo KPMG Malawi, a member firm of the KPMG network of independent member firms affilliated with KPMG internationalCooperative ("KPMG International"), a swiss entity.

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INDEPENDENT AUDITOR'S REPORT (CONTINUED) For the year ended 30 June 2017

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit cond ucted in accordance with ISAs will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they cou ld reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit . We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opin ion . The risk of not detecting a material misstatement result ing from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the project's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of the management's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty ex ists related to events or conditions that may cast significant doubt on the project's ability to continue as a going concern. If we conc lude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the f inancial statements or, if such disclosures are inadequate, to modify our opinion. Our conc lusions are based on the audit evidence obtain ed up to the date of our auditor's report. However, future events or conditions may cause the project to cease to continue as a going concern. ·

• Evaluate the overall presentation, structure and content of the financia l statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report of on other contractual requirements.

As required by the terms of reference for the external audit services for the Skills Development Project, we report to you based on our audit that:

a) World Bank financing has been used in accordance with the conditions of the relevant financing agreement, with due attention to economy and efficiency and only for the purposes for which the financing was provided

b) Goods, works and Servi ces financed have been procured in accordance with the financing agreements including specific provisions of the Wo rld Bank Procurement policies and procedures;

c) Necessary supporting documents, records and accounts have been maintained in respect of project activities, including expenditures reported using Statements of Expenditure {SOE) methods of reporting.

d) Desi gnated Accounts have been maintained in accordance with the provisions of the financing agreements and funds disbursed out of the accounts were used only for the purpose intended in the f inancing agreem ent;

e) National laws and regulations have been compl ied with that the financia l and accounting procedures approved for the project were followed and used for th e yea r ended 30 June 2017;

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INDEPENDENT AUDITOR'S REPORT (CONTINUED) For the year ended 30 June 2017

Report of on other contractual requirements (continued)

f) Financial performance of the project is satisfactory;

g) Assets procured from project funds exist and there is verifiable ownership by NCHE or beneficiaries in line with the financing agreement; and

h) There-were no ineligible expenditures in the year under review.

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KPMG

J el Mwenelupemb hartered Accountant (Malawi)

Lilongwe, Malawi

Date 1- 6 Io -;J 2018 I

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ON BEHALF OF MALAWI GOVERNMENT SKILLS DEVELOPMENT PROJECT IDA PROJECT Pl31660

STATEMENT OF FINANCIAL POSITION As at 30 June 2017

ASSETS

Non-current assets Property, plant and equ ipment

Current assets Other receivables Cash and cash equivalents

Total current assets

Total assets

FUNDS AND LIABILITIES Funds Capital funds

Current liabilities Deferred income Other payables Bank overdraft

Total current liabilities

Total funds and liabilities

Note

5

6 7

8 9 7

2017 MK'OOO

662.407

11,442 245.203

256,645

919.052

662.407

244,395 12,250

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256.645

919.052

2017 US$ '000

934

16 340

356

1,29_0

934

339 17

--

356

L29Q

* Restated 2016

MK'OOO

649,211

4,873 441 ,126

445.999

l Q95,2 1Q

649,211

407,180 38,760

59

445,999

l ,095210

* Restated 2016

US$ '000

910

7 619

626

Ll3fi

571 54

_ 1

626

The restatement has been fully explained under note 18 to the financial statements. \0 O L,, These financial statements were approved for issue by the Board of Directors on '> \ 2018 - ------'------.!:..!!..!.>! and were signed on its beha lf by:

COUNCIL CHAIRPERSON

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STATEMENT OF INCOME AND EXPENDITURE For the year ended 30 June 2017

* Restated * Restated 2017 2017 2016 2016

Note MK'OOO USD'OOO MK'OOO USD'OOO Income Funds received 8 & 10 921,138 1,276 712,517 1,435 Capital grant amortization 5 59,609 82 46,545 71 Interest received 11 482 3 4,737 7 Exchange gains 11 7,630 _j__Q 256.462 ---Total income 988,859 1,371 1,020.261 1.513

Expenditure Operating expenses 13 916,055 1,270 377,086 571 Capital expenses 5 73,557 102 643.175 942

: Total expenses 989.612 1.312 1.020.261 ~

t Deficit for the year 12 ~ ill -- --

The restatement has been fully explained under note 18 to the financial statements.

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NATIONAL COUNCIL FOR HIGHER EDUCATION


STATEMENT OF CHANGES IN FUNDS For the year ended 30 June 2017

Capital fund General fund Total Total

MK '000 MK '000 MK '000 usi ·ooo Balance as at 01 July 2016 649,211 649,211 910

Deficit for the period (753) (753) (1)

Transfer to deferred income (Note 8) 753 753 1

Additions for the period 73,557 73,557 102 Disposal during the year (1,199) (1,199) 2 Amortisation for the period (59,609) (59,609) (83) Utilisations in the period 447 - 447 ~ -Balance as at 30 June 2017 662.407 - 662.407 93.4

Balance as at 01 July 2015 52,581 52,581 119 Additions for the period 643,175 643,175 942 Amortisation for the period (46.545) - (46.545 ) ill..11 -Balance as at 30 June 2016 649.211 - 649,211 __9j__Q -

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NATIONAL COUNCIL FOR HIGHER EDUCATION ON BEHALF OF MALAWI GOVERNMENT SKILLS DEVELOPMENT PROJECT IDA PROJECT P131660

STATEMENT OF CASH FLOWS For the year ended 30 June 2017

Note 2017 2017 2016 201 6

MK'OOO US$ '000 MK'OOO US$ '000

Deficit for the year (753) (1)

Adjustment for:

Int erest incom e 11 (482) (3) (4,737) (7)

Depreciation 59,609 83 46,545 -11 Operating surplus for the year excluding interest and capital expenditure 58,374 79 41,808 64

Loss on disposa l of assets 753 1

Interest rece ived 11 ~ J 4,737 J_

Operating income before working capital changes 59,609 83 46,545 71

Movement in working capital

Ch anges in oth er receivables (6,569) (9) 19,353 27

Changes in deferred income (162,033) (237) 363,752 551

Changes in other payables (26,5101 Jm 32,288 ~ Cash (used in)/generated from operating activities (135.5031 (2001 461.938 678

Cash flows from investing activities

Purchase of property, plant and eq uipment 5 (73,5571 (102) (643.175) (887)

Net cash used in investing activities (73,557) (102) (643,1 75) (887)

Cash flows from financing activities

Movem ent in capit al funds 13,196 24 596.630 791

Net cash from financing activities 13,196 24 596.630 791

Net (decrease)/ increase in cash and cash (195,864) (278) 415,393

equivalents 582

Cash and cash equivalent at 1 July 441,067 618 25.674 36

Cash and cash equivalent at 30 June 7 245.203 3.4.0 44] Q6Z fil8

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STATEMENT OF ACTIVITY ON THE DESIGNATED ACCOUNT For the year ended 30 June 2017

IDA Credit No. Q8920 Deposit Bank: NBS Bank

Account No. 14253181

Part I

2

3

Part II

4

5

6

7

8

9

10

11

12

13

14

Part Ill

15

16

17

18

19

Cumulative advances to end of the current reporting period

Cumulative expenditures to end of last reporting period

Outstanding advance to be accounted for (line 1 minus line 2)

Opening DA balance at the beginning of the reporting period (as of beginning of quarter)

Add/ Subtract: Cumulative adjustment (if any)

Advances from World Bank during the period

Add lines 5 and 6

Outstanding balance to be accounted for (add lines 4 and 7)

Closing DA balance at the end of the current reporting period (as of quarter)

Add/Subtract: Cumulative adjustment

Expenditure for current reporting period

Add line 10 and 11

Add lines 9 and 12

Difference (if any) (line 8 less line 13)

Total forecasted amount to be paid by World Bank

Less: Closing DA balance after adjustment

Direct payments/Special Commitments

Add lines 16 and 17

Cash requirement from World Bank for the next two reporting period (line 15 less line 18)

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Currency USD'OOO

3,002

2,413

589

(6)

433

427

589

339

(6)

256

250

589

969

339

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NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2017

1. Reporting entity The National Council for Higher Education (NCHE) was established by an Act of Parl iament (Act 15 of 201 1 ), to

oversee institutions of higher learning in Malawi, by specifically providing a frame-work for the promotion and

regulation of quality higher education in Malawi .

The National Council for Higher Education (NCHE) is implementing the Malawi Government Skills Development Project (SDP), project no. P131660, with support from the World Bank. The SDP is implemented in selected public

higher education institutions.

The project became effective on 11th May 2015, ten months after signing the financial agreement, and is expected to end on 30th June 2019. The key guiding project documents are: The Project Appraisal Document (PAD). Financial Agreement (FA), Sub-Project Grant Agreement (SPGA) and Project Implementation Manual

(PIM). among others.

In Component 2, the focus is on systems strengthening and policy refo rms. It consists of carrying out a program of activities to strengthen the capacity of the National Council for Higher Education (NCHE) in Project planning, implementation, coordination, reporting, monitoring and evaluation and fiduciary management as well as provision of equipment. NCHE is mandated to regulate and coordinate higher education in Malawi .

The Council is funded by the Malawi Government, international donors and internally generated income.

These financial statements are for the National Council for Higher Education - Skills Development Project for the year ended 30 June 2017 .

2. Basis of preparation

(a) Statement of compliance The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and provisions of the project agreement.

(b) Basis of measurement The financial statements have been prepared under the historical cost convention .

(c) Functional and presentation currency These financial statements are presented in Malawi Kwacha, (converted to US$ at appropriate rate) which is the Council's functional and presentation currency. All amounts have been rounded to the nearest thousand unless otherwise stated .

(d) Use of estimates and judgments In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the following notes:

Note 5: Property, plant and equipment - useful lives and residual value estimates .

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2. Basis of preparation (continued)

(e) New standards and interpretations not yet adopted The Council has adopted those new and revised Standards and Interpretations issued by the International Accounting Standards Board and the International Financial Reporting Interpretations Committee of the International Accounting Standards Board that are relevant to its operations and are effective for reporting periods beginning 1 January 2016.

The adoption of these new and revised Standards and Interpretations did not have a significant impact on the financial statements of the project.

New Standards and Interpretations in issue A number of new standards and amendments to standards are effective for annual periods beginning on 1 July 2017 and earlier application is permitted; however, the Council has not early applied the following new or amended standards in preparing these financial statements:

(i) IFRS 9 Financial Instruments This standa rd will replace the existing standard on the recognition and measurement of financial instruments and requires all financial assets to be classified and measured on the basis of the entity's business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.

The accounting for financial assets differs in various other areas to existing requirements such as embedded derivatives and the recognition of fair value adjustments in other comprehensive income (OCI) .

All changes in the fair value of financial lia bilities that are designate at fair value through profit or loss due to changes in own credit risk will be required to be recognised within OCI.

The standard has introduced a new expected-loss impairment model that will require more timely recognition of expected credit losses. This new model will apply to financial assets measured at either amortised cost or fair value through OCI, as well as loan commitments when there is present commitment to extend credit (unless these are measured at fair value through profit or loss) .

With the exception of purchased or originated credit impaired financial assets, expected credit losses are required to be measured through a loss allowance at an amount equal to either 12-month expected credit losses or full lifetime expected credit losses.

A loss allowance for full lifetime expected credit losses is required for a financial instrument if the credit risk of that financial instrument has increased significant ly since initial recognition as well as for certain contract assets or trade receivables. For all other financial instruments, expected credit losses are measured at an amount eq ual to 12-month expected credit losses.

The revised general hedge accounting requirements are better aligned with an entity's risk management activities; provide addit ional opportunities to apply hedge accounting and various simplifications in achieving hedge accounting.

The standard will be applied retrospectively. The impact on the financial statements has not yet been fully determined.

IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted .

16



2. Basis of preparation (continued)

(e) New standards and interpretations not yet adopted (continued)

(ii) IFRS 15 Revenue from Contracts with Customers This standard will replace the existing revenue sta ndards and their related interpretations. The standard sets out the requirements for recognising revenue that applies to all contracts with customers (except for contracts that are within the scope of the standards on leases, insurance contracts or financial instruments).

The core principle of the standard is that revenue recognised reflects the consideration to which the Project expects to be entitled in exchange for the transfer of promised goods or services to the customer.

The standard incorporates a five-step analysis to determine the amount and timing of revenue recognition.

The standard will be applied retrospectively. The Council is assessing the potential impact on the project's financial statements resulting from the application of IFRS 15.

IFRS 15 is effective for annual reporti ng periods beg inning on or after 1 January 2018 with early adoption permitted.

(iii) IFRS 16 Leases This standard will replace IAS 17 leases and its related interpretations. IFRS 16 eliminates the classification of leases as either operating leases or finance leases for a lessee. Instead, all leases are treated in a similar way to finance leases applying IAS 17.

Leases are 'capitalised' by recognising the present value ofthe lease payments and showing them either as lease assets (right-of-use assets) or together with property, plant and equipment. If lease payments are made over time, an entity also recognises a financial liability representing its obligation to make future lease payments.

The most significant effect of the new requirements in IFRS 16 will be an increase in lease assets and financial liabilities. Accordingly, for entities with material off balance sheet leases, there will be a change to key financial metrics derived from the entity's assets and liabilities (for example, leverage ratios) .

The standard will be applied retrospectively. The Council is assessing the potential impact on the project's financial statements resulting from the application of IFRS 16.

IFRS 16 is effective for annual report ing periods beginning on or after 1 January 2019 w ith early adoption permitted but only if IFRS 15 Revenue from Contracts with Customers is also adopted.

(iv) IAS 7 (amendments) statement of cash flows The amendments as part of the disclosure initiative requiring entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities. The amendment requires that the following changes in liabilities arising from financing activities be disclosed and should be separate from other assets and liabilities:

• Changes from financing cash flows • Changes arising from obtaining or losing cont rol of subsidiaries or other businesses • The effect of changes in foreign exchange rates • Changes in fair values • Other changes.

The standard will be applied prospectively. The impact on the financial statements has not yet been fully determined.

17

.. _

. ·



3 Significant accounting policies

3.1 Property, plant and equipment

(i)

(ii)

(iii)

Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of selfconstructed assets includes the cost of materials and direct labour, any other costs d irectly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased softwa re that is integral to the functionality of the related equipment is capitalized as part of the equipment. Borrowing costs related to the acquisition or construction of qualifying assets are recognized in the statement of income and expenditure as incurred. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment . Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized net within "other income" in the statement of income and expenditure.

SubsequentexpendHure The cost of replacing component of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied w ithin the component will flow to the project and its cost can be measured reliably. The carrying amount of the replaced component is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in the statement of income and expenditure as incurred .

Depreciation Depreciation is recognized in the statem ent of income and expenditure on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the project will obtain ownership by the end of lease term. Land is not depreciated.

Depreciation is not provided on capital works in progress.

The estimated useful lives for the current and comparative periods are as follows: -

Buildings Motor vehicles Furniture and equipment ITC equipment

40 years 5 years

10 years 3 years

Depreciation methods, useful lives, and residual values are reviewed at each reporting date and adjusted if appropriate.

3.2 Other receivables Other receivables are measured at cost less impa irment, if any known bad debts are written off and specific provisions are made for those considered doubtful.

18



NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

For the year ended 30 June 2017

3 Significant accounting policies (Continued)

3.3 Impairment of assets

(i) Financial assets A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired.

Objective evidence that financial assets are impaired includes; default or delinquency by a debtor, restructuring of an amount due to the Project on terms that the Project would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers, the disappearance of an active market for a security, observable data indicating that there is measurable decrease in the expected cash flows from a group of financial assets. In addition , for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

Management considers evidence of impa irment for receivables at both an individual asset and collective level. All individually significant assets are individually assessed for impairment. Those found not to be impaired are then collectively assessed for any impairment that has been incurred but not yet individually identified. Assets that are not individually significant are collectively assessed for impairment. Collective assessment is done by grouping together assets with similar risk characteristics.

In assessing collective impairment the Management uses historical information on the tim ing of recoveries and the amount of loss incurred, and makes an adjustment if current economic and credit conditions are such that the actua l losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognized in the statement of income and expenditure reflected in an allowance account. When the Management considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through the statement of income and expenditure.

(ii) Non-financial assets The carrying amounts of the project's non-financial assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated.

The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the cash generating unit). An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impa irment losses are recognized in the statement of income and expenditure.

In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the est imates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized .

19

·.






3.4 Funds

Capital fund The capital fund was created to account for funds which have been used specifica lly to purchase f ixed assets, the adjustments are made as the asset s are depreciated and/or revalued.

3.5 Other payables Other payables are measured at cost .

3.6 Income SOP's income, contribut ions, interest, and any other fo rm of income is accounted for in the fi nancial period to which the income is earned . When a fixed asset is disposed of, the profit from t he disposal sha ll be recog nized as income during the period in wh ich t he asset was disposed.

(i) Unrestricted income/grants This is income that SOP is free to use for any of the Project purposes. Income generated from assets held in unrestricted funds will be unrestricted income. Unrestricted gra nts are recognized as income in the year in wh ich funds are received or to the extent that related expenses have been incu rred in the corresponding year and a va lid collectible pledge exist s. If the pledge is cancel led in subsequent period, it is writte n off and charged again st revenues in t he yea r it is cancel led.

(ii) Restricted grants/ Deferred income This is income that SOP can only use for a specif ied purpose. Income generated from restri cted funds wi ll not necessa ri ly be restricted income. Restricted grants are recognized when funds are rece ived and the conditions to which the grant is subjected have been satisfied except for grants that are on a reimbursement basis. In this case, revenue is recognized only to the extent that related eligible expenses have been incurred in the correspond ing year and a valid collectible pledge exists. If the pledge is cancel led in subseq uent period, it is written off and charged against revenues in the yea r it is cancelled .

(iii) Other revenues Other revenues: Such as reven ues from sale of intellectual property, sale of tender documents as well as inte rest ea rned on deposits are recogn ized in t he period in w hich t hey are earned .

3.7 Expenses Expenses are recognized when incurred and not when paid.

3.8 Finance income and expenses Finance income compri ses of interest income on funds in bank accounts. Interest income is recognized as it accrues in the statement of income and expend iture using the effective interest method.

Finance expense com prises interest on borrowings, bank cha rges and im pairment losses recognized on fina ncia l assets t hat are recognized in th e statement of income and expendit ure. All bo rrowing costs are recognized in t he statement of income and expenditure using the effective interest method.

3.9 Direct and deferred taxation The Counci l is a public institution and is therefore, treated as exempt from income tax and other related taxes on any surpl us rea lized.

3.10 Foreign currency transaction Transactio ns in foreign currencies are translated into the funct ional currency of the Council at exchange rates at the dates of th e tra nsactions.

Monetary asset s and li abilities denomin ated in fore ign currency are trans lated into the functi onal currency at the excha nge rate at the reporting date.

Non-monetary assets and liabilities t hat are measured at fair va lue in a foreign currency are translated into the functional currency at the exchange rate when the fa ir value was determi ned. Non-m on etary items that are measured based on historical cost in a fore ign currency are trans lated at the exchange rate at the date of the t ransaction . Foreign currency d ifferences are genera lly recognized in the statement of income and expenditure.

20

,.






3.1 1 Provisions A provision is recognized if, as a result of a past event, the project has a present legal or construct ive obligation th at can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obl igation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liabil ity. The unwinding of the discount is recognized as finance costs.

3.12 Cash and cash equivalents Cash and cash equivalents comprise cash balances and short-term investments with maturities of three months or less from the acquisition date. For the purpose of statement of cash flows, these include overdrafts.

3.13 Related party balances There are no related party transactions as the project is run by World Bank funds, except for NCHE owing the Project K10million (refe r to Note 6) .

4. Financial risk management

The Council and the project have exposure to the following risks from its use of financial instruments: i). Market risk ii) . Credit risk iii) . Liquidity risk

This note presents information about the project's exposure to each of the above risks, the project's objectives, policies and processes for measuring and managing risk, and the project' s management of capital. Further quantitative disclosures are included throughout these financial statement s.

Risk management framework The Council has overall responsibility for the establishment and oversight of the proj ect 's risk management framework. The Council is responsible for developing and monitoring project's risk management policies in their specified areas.

The project's risk management policies are established to identify and analyse the risk faced by the project, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and services offered. The project, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment, in which all employees understa nd their ro les and obligations. The Counci l is responsible for monitoring compli ance with the project's management policies and procedures, and for reviewing the adequacy of the ri sk management framework in relat ion to the risks faced by the Project.

The project's overall risk management programs focuses on the unpredictability of financial ma rkets and seeks to minimize potential adverse effects on th e project's fin ancial performance.

Market risk Market risk is the risk that changes in ma rket prices, such as foreign exchange rates, interest rates and equity prices will affect the Project's income or the value of its holdings of financial instruments. The objective of market ri sk management is to manage and control market risk exposures within acceptable parameters, while opt im ising the return.

Foreign currency risk The project is exposed to currency risk on receipts and purchases that are denominated in a currency other than the functional currency of the project. The currency in which these transactions are denominated is United States Dollars. In respect of other monetary assets and liabilities denominated in foreign currencies, the project ensures that its net exposure is kept to an acceptable level by buying or sel ling foreign currencies at spot rates when necessary to address short-term imba lances.

Price risk As the project had no publicly traded equity and commodity securities, the project's income and operating cash flows are substantia lly independent of changes in market security prices.

21

NATIONAL COUNCIL FOR HIGHER EDUCATION (NCH E)




4. Financial risk management (Continued)

Market risk

Interest rate risk The project's interest rate risk arises from its investment in cash deposits.

Credit risk Credit ri sk is the risk of financial loss to the project if any counterparty to a financial instrument fails to meet its

contractual obligations, and it arises principally from the project's cash and cash equiva lents and other

receivables.

Credit risk for the project arises from cash and cash equivalents and deposits with banks and financial institutions

and other receivables. Below are the financial assets that are exposed to credit risk:

Other rece ivables

Cash and cash equivalents

Total exposure

Exposure to credit risk

The carrying amount of financial assets represents the maximum

credit exposure. The maximum exposure to credit risk at the

reporting date was:

Other receivables


The aging of trade and other receivables at the reporting date was:

Note

6

7

6

7

Other receivables 31 -120 days

Total

Liquidity risk Liquidity risk is a risk that the project will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

Management's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabil ities when due, under both normal and stressed conditions, without incu rring unacceptable losses or risking damage to the Counci l's reputation .

Financial assets Other receivables


Total

Financial liabilities

Deferred income Other payables Bank overdraft

Total

22

6

7

8 9 7

2017

MK '000

11,442

245,203

256,645

11,442

245,203

11,442

245,203

256,645

244,395 12,250

----

256.645

2016

MK '000

4,873

441 ,126

445,999

4,873

441,126

4,873

441,126

445.999

407,180 38,760

59

445.999

·.





4. Financial risk management (Continued)

Accounting classifications and fair values The fair values of financia l assets and financial liabilities that are traded in act ive markets are based on quoted market prices or dealer price quotations. For all other financial instruments, the Management determines fair values using other valuation techniques.

For financial instruments that trade infrequently and have little price transpa rency, fair value is less objective, and requires varying degrees of judgment depending on liqu idity, concentration, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.

Valuation models Management measures fair values using the following fair value hierarchy, which reflects the significance of the inputs used in making the measurements. • Level 1: inputs that are quoted market prices (unadjusted) in active markets for identical instruments.

• Level 2: inputs other than quoted prices included within Level 1 that are observable either directly (i .e. as prices) or indirectly (i .e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or sim ilar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirect ly observable from market data

• Level 3: inputs that are unobservable. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments. The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.

Management uses widely recognized valuation models for determining the fair value of common and more simple financial instruments, such as interest rate and currency swaps that use only observable market data and require little management judgment and estimation. Observable prices or model inputs are usual ly available in the market for listed debt and equity securities, exchange-traded derivatives and simple over-the-counter derivatives such as interest rate swaps. Availability of observable market prices and model inputs reduces the need for management judgment and estimation and also reduces the uncertainty associated with determining fair values. Availability of observable market prices and inputs varies depending on the products and markets and is prone to changes based on specific events and general conditions in the financial market.

If Management measures portfolios of financial assets and financial liabilities on the basis of net exposures to market risks, then it applies judgment in determining appropriate portfolio-level adjustments such as bid-ask spreads. Such adjustments are derived from observable bid-ask spreads for similar instruments and adjusted for factors specific to th e portfo lio. Similarly, when Management measures portfolios of financial assets and financial liabilities on the basis of net exposure to the credit risk of a particular counterparty, then it takes into account any existing arrangements that mitigate the credit risk exposure (e.g. master netting agreements with the counterparty).

Th e following table ana lyses financial instruments at the reporting date. The amounts are based on the values recognized in the statement of financial position .

Financial assets Other receivables


Total financial assets

Financial liabilities

Deferred income Other payables Bank overdraft

Total financia l liabilities

23

6

7

8 9 7

2017 2016 MK'OOO MK'OOO

11,442 4,873

245,203 441,126

256.645 445.999

244,395 407,180 12,250 38,760

- 59 - - -

256,645 445 999


NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 30 June 2017 5. Property, plant and equipment

Plant and Motor Furniture ICT Total

2017 Buildings eguigment vehicles and fittings eguigment amount

Cost MK'OOO MK'OOO MK'OOO MK'OOO M K'OOO M K'OOO

As at 01 July 562,875 455 89,720 12,242 49,800 715,092 Additions during the year 8,400 41,830 15,949 7,378 73,557 Disposal/reclassification - (1,199) (1 ,199) - --

As at 30 June 562.875 8,855 131.550 28.191 55.979 787.450

Depreciation As at 01 July (13,368) (43) (23,474) (1 ,1 63) (27,833) (65,881 ) Charge for the year (13,363) (841) (24,993) (2,679) (17,733) (59,609) Disposal/reclassification - - 447 447 -- --

As at 30 June (26,731) (884) (48,467) (3,842) (45.119) (125,043)

Carc)ling amounts .. As at 30 June 2017 536.144 L911 83..0.83. ~ liLlliiO. 662.407

201 6 Cost As at 01 July 33,824 38,093 71,917 Additi ons duri ng t he yea r 562.875 455 55.896 12,242 11 .707 643.175

As at 30 June 562.875 455 89.720 12.242 49.800 715.092

Depreciation As at 01 July (6,765) (12,571) (19,336) Charge for the year (13.368) (43) (1 6.709) i1..1fil.l (15.262) (46.545)

As at 30 June (13.368) (43) (23.474) i1..1fil.l (27.833) (65.881)

Carryi ng amounts As at 30 June 2016 549,507 --412 ...6.6.246 ~ __2.1_,__9_fil 649.211

2017 2017 201 6 2016 Other receivables MK'OOO USD'OOO MK'OOO USD'OOO

6 See accounting policy 3.2

Prepayments 1,419 2 4,873 7

Inter-Project and Inter-Bank receivables - SDP 10,000 13 Ot her receivables - SDP _____n _ 1 - -- - -

11.442 16 4,873 z 7 Cash and cash equivalents

See accounting policy 3.12

NBS Bank FCD accou nt 195,207 27 1 416,030 583 NBS Bank SDP curre nt account 49.996 69 25.096 36

245.203 340 441 .126 619 Bank overdraft

NBM SDP current account -- -- ifilU w Net cash and cash equivalent 245.203 340 441 .067 618

24


NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 30 June 2017

8 Deferred income 2017 2017 2016 2016 See accounting policy 3.6 MK'OOO USD'OOO MK'OOO USO

Opening balance 407,180 571 43,445 61 Open ing balance adjustment 1,440 (2) (19,537) (13) Transfer from general fund (753) 1 Funds received during the year - World Bank 757,666 1,048 1,095,789 1,958 Funds utilized during the period (921,138) (1,279) (712,517) (1,435)

244.395 ----339 407 180 _fill

Other payables 9 See accounting policy 3.5

Accrued Expenses - SOP 3,418 5 11,442 16

Other payables - SOP 4,159 6 13,659 19

Withhold ing Tax Payable - SOP 4,673 ~ 13.659 19

12..250 11 ~ .54 Operating income

10 See accounting policy 3.6

Funds for specific activities 921,138 1,279 712.517 1,435

.92.1 .138 1..21.9 712,517 ~ 11 Finance income

See accounting policy 3.8

Exchange gain 7,630 10 256,462 Interest received 482 ~ 4.737 .2

JU.12 .13. 261.199 :z 12.

Deficit/ Reclassification of Assets See accounting policy 3.6, 3.7 & 5

Asset at cost 1,199 2

Less: Accumulated Depreciation (446) ill - -- -

1.5.3 1 - -The Deficit has come about due to ICT Equipment

= =

reclassified as an expense and not as an asset in the PPE at net of 753. The reclassification was done to recognise as an expense and not as assets which were wrongly captured in previous year accounts.

25

. .

•



2017 2017 2016 2016

Expenditure MK'OOO US$'000 MK'OOO US$'000 13 See accounting policy 3.7

Accommodation and hire charges 39,910 55 27,548 42

Advertising and promotions 41,518 58 8,997 14

Audit fees 1,513 2 4,000 6

Bank service charge 807 1 804 1

Equipment repairs and maintenance 2,667 4 2,242 3

Fixed assets depreciation 59,609 83 46,545 71

Loss on asset disposals 753 1

Internet, email & other communication 20,384 28 2,758 4

Licenses and insurances 9,988 14 1,091 2

Miscellaneous expenses 2,089 3 177

Motor vehicle expenses 2,742 4 6,932 10

Office expenses 8,021 11 3,117 5

Postage and courier charges 191

Printing and stationery 6,163 9 10,516 16

Professional fees and charges 537,558 744 158,894 241

Reimbursements of various expenses 8,223 11

Security expenses 1,934 3

Staff expenses 4,013 6 240

Staff recruitment 176 -00 230

Staff training expenses 135,700 188 26.400 40

Subscription to various bodies 843 1 249

Telephone, faxes and other charges 2,033 3 3,751 6 Travel allowances 9,116 13 46,203 70

Travel and transportation expenses 19,121 27 26,392 40

Utilities 983 __ 1 --Total operational expenses 916,055 .L.210 ...311.086 fill

14. Capital commitments The Council had no capital commitments at 30 June, 2017 requiring disclosures in the fi nancial statements

15. Contingent liabilities The project does not expect any event outcome of which could materialize into a liability not recorded that can have a material effect on the financial statements as at 30 June 2017.

16. Taxation The Project is exempted from taxation on any of its surplus.

17. The project has the following related parties; National Council for Higher Education (NCHE) - The Project is implemented by National Council for Higher Education (NCHE) on behalf of the Malawi Government.

The National Council for Higher Education (NCHE) owes the project as followings:

National Council for Higher Education (NCHE)

26

2017 MK'OOO

2017 US$'000

2016 MK'OOO

2016 US$'000

-,



18. Comparative information/ prior year adjustment

Comparative information

19.

The comparative information and figures in these financial statements represent amounts relating to Skills Development Proj ect (SOP) only as derived from the Skills Development Project (SOP) 2015-2016 aud ited financial statements.

Prior period adjustment

In the prior year, income was recognised in full as received from the donor. During the year the project reclassified the surplus for the year to deferred income to recognise the restricted funds carried forward . In effect the project recognised income only to the extent of the expenditures incurred and funds remaining/surplus carried forward as deferred income; which is in line with !AS 20 Accounting for Government Grants and Disclosure of Government Assistance by analogy. Similarly, the prior year Restricted funds have been reclassified to Deferred income (liability) .

As reported June 2016

Impact of restatement of in 2016 Adjustment Restated

comparatives

K'OOO K'OOO K'OOO Comment

Funds received representing 1,095,789 1 (383,272) I 712,517

expenditure incurred

World Bank receipts 1,095,789 (336,727) 759,062 Transfer/ reclassification of surplus to Deferred income

Capital fund amortisation 0 (46,545) -46,545 Accounting for capital fund amortisation

Surplus for the year 336,727 (336,727) Transfer/reclassification of surplus to Deferred income

Total funds 1,056,391 (407,180) 649,211 Reclassification of restricted funds to Deferred income

Total liabilities/current liabilities 38,819 407,180 445,999 Reclassification of restricted funds to Deferred income

Exchange and inflation rate

The average of the year end buying and selling rates of the major foreign currencies affecting the performance of the organization are stated below, together with the increase in the National Consumer Price Index, wh ich represent an official measure of inflation.

Kwacha/US Dollar Infl ation rate

At the tim e of signing the financial statements the exchange rates were as follows:

Kwacha/US Dollar

Inflation rate

2017 725.65

8.4%

2017

730.13

7.7%

2016 713.16 22.6%

2016

717.36

22.6%

20. Subsequent events

Subsequent to the reporting date there w ere no significant events necessitating adjustments to/or disclosure in the financial statements.

27

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Telephone: Fax: E-mail: Website:



INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL For the year ended 30 June 2017

We have audited the Vi1t~I statements of Skills Development Project as of 30 June 2017, and have issued a

report thereon dated .q.,O ..... February 2018.

We conducted our audit in accordance with International Standards on Auditing . Those stand a rd s require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

In planning and performing our audit of the Skills Development Project, for year ended 30 June 2017, we considered its internal controls as a basis of designing our audit procedures for the purpose of expressing our opinion on the financial statements.

Our consideration of internal controls was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal controls that might be significant deficiencies or material weaknesses and therefore, there can be assurance that all deficiencies, significant deficiencies or material weaknesses have been identified.

A deficiency in internal controls exists when the design or operation of a control does allow management or employees, in the normal course of performing thei r assigned funct ions to prevent or detect and correct misstatement on a timely basis. A material weakness is a deficiency or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented or detected and corrected on a t imely basis.

In our opinion, internal controls were adequate for t he year.

Information contained in this report may be privileged . This report is intended solely for the use of Skills Development Project and the International Development Association but th is is not intended to limit the distribution of the report if it is a matter of public record.

KPMG

Joel Cha

enelupembe red Accountant (Malawi) r

Lilongwe, Malawi

Date _ a~ g -+-/ _1>_~ -+-,1_ .2018

28 Resident Partners: L.M. Gama, H.B. Nyirenda, B.J. Mwenelupembe, G. Tembo

KPMG Malawi, a member firm of the KPMG network of independent member firms affilliated with KPMG intemationalCooperative ('"KPMG International"), a swiss entity.

I



Telephone: Fax: E-mail: Website:


ON BEHALF OF MALAWI GOVERNMENT SKILLS DEVELOPMENT PROJECT IDA PRO'JECT P131660

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH AGREEMENT TERMS For the year ended 30 June 2017

We have audited the financial state l):jlfl~ of Skills Development Project for the year ended 30 June 2017 and have issued a report thereon dated ¢fp.~February 2018.

We conducted our audit in accordance with International Standards on Auditing Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

As part of obtaining reasonable assurance about whether financial statements are free of material misstatements, we performed tests of compliance with certain provisions of the agreement terms. However, our objective was not to provide an opinion on overall compliance w ith such provisions. Accordingly, we do not express such an opinion .

Material instances of non-compliance are failures to follow requirements or violations of agreement te rms that cause us to conclude that the aggregation of misstatements resulting from those failures or v iolations is material to the financial statements.

We considered these material instances of non-compliance in forming our opinion on the financial statements whether they are presented11aj'l'.{t in all material respects and this report does not affect our opinion on the financial statements dated ~,~.'February 2018.

In our opinion, the project has complied with the agreement terms except for the late rem ittance of the quarterly project reports for the year under review.

Financial information contained in this report may be privileged. This report is intended solely for the use of Skills Development Project and IDA but this is not intended to limit the distribution of t he report if it is a matter of record.

KPMG

wenelupembe Jo Ch red Accountant (Malawi)

er Lilongwe, Malawi

Date Q_6 / o~ / 2018

29

Resident Partners: L.M. Gama, H.B. Nyirenda, B.J. Mwenelupembe, G. Tembo KPMG Malawi, a member firm of the KPMG network of independent member firms aflilliated with KPMG intemationalCooperative ("KPMG International"), a swiss entity.

SUPPLEMENT ARY INFORMATION

The following page does not form part of these financial statements:

30

c'· NATIONAL COUNCIL FOR HIGHER EDUCATION (NCHE) ON BEHALF OF MALAWI GOVERNMENT SKILLS DEVELOPMENT PROJECT IDA PROJECT P131660

SUPPLEMENTARY INFORMATION. For the year ended 30 June 2017

DETAILED INCOME AND EXPENDITURE STATEMENT 2017 2017 2016 2016

Income MK US$ MK US$

Support towards specific activities 921,138 1,276 712,517 1,435

Amortisation of capital fund 59,609 82 46,545 71

Exchange gains 7,631 10 256,462

Interest received ~ __ 3 4 737 __ 7

988,859 1.371 1.020.261 1.513

Expenditure

Accommodation and hire charges 39,910 55 27,548 42

Advertising and promotions 41,518 58 8,997 14

Audit fees 1,513 2 4,000 6

Bank service charge 807 1 804 1

Equipment repairs and maintenance 2,667 4 2,242 3

Fixed assets depreciation 59,609 83 46,545 71

Gains and losses on asset disposals 753 1

Internet, email & other communication 20,384 28 2,758 4

Licenses and insurances 9,988 14 1,091 2

Miscellaneous expenses 2,089 3 177

Motor vehicle expenses 2,742 4 6,932 10

Office expenses 8,021 11 3,117 5

Postage and courier charges 191 0

Printing and stationery 6,163 9 10,516 16

Professional fees and charges 537,558 745 158,894 240

Reimbursements of various expenses 8,223 11

Security expenses 1,937 3

Staff expenses 4,013 6 240

Staff recruitment 176 230

Staff training expenses 135,700 188 26,400 40

Subscription to various bodies 843 1 249

Telephone, faxes and other charges 2,033 3 3,751 6

Travel allowances 9,116 13 46,203 70

Travel and transportation expenses 19,121 27 26,392 40

Utilities 983 __ 1 - ---- --

& Total operational expenses 916,055 1,270 377,086 570

Capital expenses 73,557 102 643.175 942

Total expenses 989.612 1.372 1.020.261 1.513

Deficit for the year (7531 (.11 --

,-

31

. . .. "'

•,' ' t

IIATIONAL COUNCIL FOR HIGHER EDUCATION (NCHE)

)N BEHALF OF MALAWI GOVERNMENT SKILLS DEVELOPMENT PROJECT IDA PROJECT P131660

~PPENDIX TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2017

Appendix II

FIXED ASSET REGISTER

Juildings

~o Asset name and description Qty Reference Purchase Unit Cost Additions Total Cost Useful life Disposals Acc·m Depr'n Net book val ue date

Buildings

1 Bui ldings on Plot 47/2/377 1 SDP000683 5/11/1 6 525 000 000.00 525 000 000.00 40.00 24 937 500.00 500 062 500.00

2 Sta mp duty on bu ild ing transfer 1 SDP000753 6/8/16 7 875 000.00 7 875 000.00 40.00 374 062.50 7 500 937 .50

3 Lawyer's transfer charges 1 GNN15/149 6/30/16 30 000 000.00 30 000 000.00 40.00 1 425 000.00 28 575 000.00

562 875 000.00 562 875 000.00 26 736 562.50 536 138 437.50

Plant & Equipment

16 Hisense bar fr idges 1 SDP000286 10/29/15 151 800.00 151 800.00 10.00 - 28 842.00 122 958.00

17 Hisense bar fridges 1 SDP000286 10/29/15 151 800.00 151 800.00 10.00 - 28 842.00 122 958.00

18 Hisense bar fridges 1 SDP000286 10/29/15 151 800.00 151 800.00 10.00 - 28 842.00 122 958.00

21 Caterpillar 50KVA Genera tor 1 SDP001090 11 /21/16 8 400 000.00 8 400 000.00 8 400 000.00 10.00 798 000.00 7 602 000.00

Total for office equipment 8 400 000.00 8 855 400.00 884 526.00 7 970 874.00

Motor vehicles

5 Toyota Hilux Pickup - 80 SC 7 1 000163+000294 1/27/15 33 823 984. 17 33 823 984. 17 5.00 - 19 279 670.98 14544313.19

8 Toyota Coro lla - 80 SC 8 1 SDP000331 /381 /421 12/21 /1 5 16 916 580.00 16 916 580.00 5.00 6 428 300.40 10 488 279.60

9 Toyota Corolla - 80 SC 9 1 SDP000331 /381 /421 12/21 /15 16 916 580.00 16 916 580.00 5.00 6 428 300.40 10 488 279.60

10 Toyota Hiace 15 seater mini bus - 80 SC 1 SDP000681 5/1/16 19 401 504.00 19 401 504.00 5.00 - 7 372 57 1.52 12 028 932.48 10

11 Honda XL 125 LKC motorcycle - 80 SC 1 SDP000803 6/28/16 2 660 500.01 2 660 500.01 5.00 - 1 010 990.00 1 649 510.01 11

12 Ford Ranger XL T - LL 7527 1 SDP001/177 11 /29/17 41 830 647.44 41 830 647.44 41 830 647.44 5.00 7 947 823.01 33 882 824.43

Total for motor vehicl es 41 830 647.44 131 549 795.62 48 467 656.31 83 082 139.31

32

' . . ' ...


.. , ·


APPENDIX TO THE FINANCIAL STATEMENTS


FIXED ASSET REGISTER (Continued)

Office furniture and fittings

No Asset name and descript ion Qty Reference Purchase date

85 1.8m L-shaped executive desk 1 SDP000309 11 /20/15





90 1.8m L-shaped executive desk 1 SD P000309 11 /20/15

91 1.8m L-shaped execut ive desk 1 SDP000309 11 /20/15


93 Executive high-back leather chair 1 SDP000309 11 /20/15


95 Executive hi gh-back leather chair 1 SDP000309 11 /20/15


97 Executive high-back leather chai r 1 SDP000309 11 /20/15




101 Standard visitors ' chair 1 SDP000309 11 /20/15

102 Standard visito rs' chair 1 SDP000309 11 /20/15

103 Stan dard visitors ' chair 1 SDP000309 11 /20/15


105 Stan dard v isitors' chair 1 SDP000309 11 /20/15


107 Standard visito rs' chair 1 SDP000309 11 /20/ 15


Unit Cost Additions

419 500.00 -

419 500.00 -

419 500.00 -

419 500.00

419 500.00

419 500.00

419 500.00

419 500.00

165 000.00

165 000.00

165 000.00

165 000.00

165 000.00

165 000.00

165 000.00 -

165 000.00 -

55 000.00 -

55 000.00 -

55 000.00 -

55 000.00

55 000.00

55 000.00

55 000.00

55 000.00 -

33

Appendix II

Total Cost Useful li fe Disposals Acc'm Depr'n Net book value

419 500.00 10.00 - 79 705.00 339 795.00

419 500.00 10.00 79 705.00 339 795.00

419 500.00 10.00 79 705.00 339 795.00

419 500.00 10.00 - 79 705.00 339 795.00

419 500.00 10.00 79 705.00 339 795.00

419 500.00 10.00 - 79 705.00 339 795.00

419 500.00 10.00 79 705.00 339 795.00

419 500.00 10.00 79 705.00 339 795.00

165 000.00 10.00 31 350.00 133 650.00

165 000.00 10.00 - 31 350.00 133 650.00

165 000.00 10.00 31 350.00 133 650.00

165 000.00 10.00 - 31 350.00 133 650.00

165 000.00 10.00 - 31 350.00 133 650.00

165 000.00 10.00 31 350.00 133 650.00

165 000.00 10.00 31 350.00 133 650.00

165 000.00 10.00 - 31 350.00 133 650.00

55 000.00 10.00 - 10 450.00 44 550.00

55 000.00 10.00 - 10 450.00 44 550.00

55 000.00 10.00 10 450.00 44 550.00

55 000.00 10.00 - 10 450.00 44 550.00

55 000.00 10.00 - 10 450.00 44 550.00

55 000.00 10.00 - 10 450.00 44 550.00

55 000.00 10.00 10 450.00 44 550.00

55 000.00 10.00 - 10 450.00 44 550.00

.... • ' NATIONAL COUNCIL FOR HIGHER EDUCATION (NCHE)




Appendix II

FIXED ASSET REGISTER(Continued)

No Asset name and description Qty Reference Purchase date Unit Cost Additions Total Cost Useful life Disposals Acc'm Depr'n Net book value

109 Standa rd visitors' chai r 1 SDP000309 11 /20/15 55 000.00 55 000.00 10.00 - 10 450.00 44 550.00

110 Standard v isitors ' chair 1 SDP000309 11/20/ 15 55 000.00 55 000.00 10.00 - 10 450.00 44 550.00

111 Standard visitors ' chair 1 SDP000309 11 /20/15 55 000.00 55 000.00 10.00 10 450.00 44 550.00

112 Standard visitors' chai r 1 SDP000309 11 /20/15 55 000.00 55 000.00 10.00 - 10 450.00 44 550.00

11 3 Standard v isi tors' chair 1 SDP000309 11/20/15 55 000.00 - 55 000.00 10.00 - 10 450.00 44 550.00

114 Standard v isitors ' chair 1 SDP000309 11 /20/15 55 000.00 55 000.00 10.00 - 10 450.00 44 550.00

115 Standard visitors' chair 1 SDP000309 11 /20/15 55 000.00 55 000.00 10.00 10 450.00 44 550.00

116 Standard visitors ' cha ir 1 SDP000309 11 /20/15 55 000.00 - 55 000.00 10.00 10 450.00 44 550.00

117 Standard visitors ' chair 1 SDP000309 11 /20/15 55 000.00 - 55 000.00 10.00 - 10 450.00 44 550.00

118 Standard visitors ' chair 1 SDP000309 11 /20/15 55 000.00 55 000.00 10.00 10 450.00 44 550.00

119 Standard v is itors ' chair 1 SDP000309 11 /20/15 55 000.00 55 000.00 10.00 - 10 450.00 44 550.00

120 Standard visi tors ' chair 1 SDP000309 11 /20/15 55 000.00 - 55 000.00 10.00 - 10 450.00 44 550.00

121 Standa rd v isi tors' chair 1 SDP000309 11 /20/ 15 55 000.00 55 000.00 10.00 10 450.00 44 550.00

122 Standard visitors ' chair 1 SDP000309 11/20/15 55 000.00 - 55 000.00 10.00 10 450.00 44 550.00

123 Standard visitors ' chair 1 SDP000309 11 /20/15 55 000.00 55 000.00 10.00 - 10 450.00 44 550.00

124 Standard v isi tors ' chair 1 SDP000309 11/20/15 55 000.00 - 55 000.00 10.00 10 450.00 44 550.00

125 4-drawer filling cabinet 1 SDP000309 11 /20/15 135 000.00 - 135 000.00 10.00 25 650.00 109 350.00

126 4-drawer f i lling cabinet 1 SDP000309 11 /20/15 135 000.00 - 135 000.00 10.00 - 25 650.00 109 350.00

127 4-drawer filling cabinet 1 SDP000309 11 /20/15 135 000.00 - 135 000.00 10.00 - 25 650.00 109 350.00

128 4-drawer filling cabinet 1 SDP000309 11/20/15 135 000.00 - 135 000.00 10.00 25 650.00 109 350.00

129 4-drawer filling cabinet 1 SDP000309 11 /20/ 15 135 000.00 - 135 000.00 10.00 25 650.00 109 350.00

130 4-drawer filling cab inet 1 SDP000309 11 /20/15 135 000.00 135 000.00 10.00 25 650.00 109 350.00

131 4-drawer filling ca binet 1 SDP000309 11 /20/15 135 000.00 135 000.00 10.00 - 25 650.00 109 350.00

132 White washboard 1 SDP000309 11 /20/15 65 000.00 - 65 000.00 10.00 - 12 350.00 52 650.00

133 White washboard 1 SDP000309 11 /20/15 65 000.00 - 65 000.00 10.00 12 350.00 52 650.00

134 MR1200 meeting table 1 SDP000310 11 /20/15 139 800.00 - 139 800.00 10.00 26 562.00 113 238.00

34

. ' .. .. . ,'





Appendix II

FI XED ASSET REGISTER(Continued)

No Asset nam e and description Oty Reference Purchase date Un it Cost Add itions Total Cost Useful life Disposals Acc'm Depr'n Net book value 135 MR1200 meetin~ table 1 SDP000310 11 /20/15 139 800.00 139 800.00 10.00 26 562.00 113 238.00 136 MR1200 meeting table 1 SDP000310 11 /20/15 139 800.00 139 800.00 10.00 26 562.00 113 238.00

137 MR1200 meeting table 1 SDP000310 11 /20/15 139 800.00 139 800.00 10.00 - 26 562.00 113 238.00

138 MR1200 m eeting table 1 SDP000310 11 /20/15 139 800.00 139 800.00 10.00 26 562.00 113 238.00

139 MR1200 meeting table 1 SDP0003 10 11 /20/15 139 800.00 - 139 800.00 10.00 26 562.00 113 238.00

140 MR1200 meeting table 1 SDP00031 0 11 /20/15 139 800.00 - 139 800.00 10.00 26 562.00 113 238.00

141 MR1200 meeting tabl e 1 SDP000310 11/20/15 139 800.00 - 139 800.00 10.00 26 562.00 113 238.00

142 MR1200 meeting table 1 SDP000376 12/18/ 15 139 800.00 139 800.00 10.00 26 562.00 113 238.00

143 MR1200 meeting table 1 SDP000376 12/18/ 15 139 800.00 139 800.00 10.00 - 26 562.00 113 238.00

144 Executive Desk 1 SDP000378 12/ 18/1 5 489 882.50 489 882.50 10.00 93 077.68 396 804.83

145 Executive Desk 1 SDP000378 12/ 18/1 5 489 882.50 489 882.50 10.00 93 077.68 396 804.83

146 Executive leather swivel cha ir 1 SDP000378 12/18/1 5 244 650.00 244 650.00 10.00 - 46 483.50 198 166.50

147 Executive office leather sofa set 1 SDP000378 12/18/15 844 625.00 - 844 625.00 10.00 160 478.75 684 146.25

148 Executive visitors ' chairs 1 SDP000378 12/18/15 75 725.00 - 75 725.00 10.00 - 14 387.75 61 337.25

149 Executive visitors' chairs 1 SDP000378 12/18/15 75 725.00 - 75 725.00 10.00 - 14387.75 61 337 .25

150 Executive visito rs' chairs 1 SDP000378 12/ 18/15 75 725.00 - 75 725.00 10.00 14387.75 61 337.25

151 Standard vis itors ' chairs 1 SDP000378 12/18/15 54 755.00 - 54 755.00 10.00 10 403.45 44 351 .55

152 Standard vis itors' chairs 1 SDP000378 12/18/15 54 755.00 54 755.00 10.00 10 403.45 44351 .55

153 Stan dard v isi tors' chairs 1 SDP000378 12/1 8/15 54 755.00 54 755.00 10.00 - 10 403.45 44 351 .55

154 Standard v isitors' chai rs 1 SDP000378 12/18/15 54 755.00 54 755.00 10.00 10 403.45 44 351.55

35

.... . .





Appendix II



155 Standard visitors ' chairs 1 SDP000378 12/18/15 54 755.00 54 755.00 10.00 - 10 403.45 44 351 .55

156 Standard visitors ' chairs 1 SDP000378 12/18/15 54 755.00 - 54 755.00 10.00 10 403.45 44 351.55

157 Standard visitors ' chairs 1 SDP000378 12/18/15 54 755.00 - 54 755.00 10.00 10 403.45 44 351.55

158 Executive Desk 1 SDP000379 12/18/15 424 900.00 - 424 900.00 10.00 80 731.00 344 169.00

159 Executive coffee table 1 SDP000379 12/18/15 103 900.00 103 900.00 10.00 - 19 741 .00 84 159.00

160 Printer 1 SDP000379 12/18/15 131 800.00 - 131 800.00 10.00 25 042.00 106 758.00

161 Coffee stool 1 SDP000379 12/ 18/15 229 500.00 229 500.00 10.00 - 43 605.00 185 895.00

162 Executive leather swivel chair 1 SDP000419 1/14/16 203 875.00 203 875.00 10.00 - 38 736.25 165 138.75

163 Executive Leather high back swivel 1 SDP001036 9/29/16 227 900.00 227 900.00 227 900.00 10.00 - 21 650.50 206 249.50 chair

164 Executive Leather high back swivel 1 SDP001036 9/29/16 227 900.00 227 900.00 227 900.00 10.00 21 650.50 206 249.50 chair

165 Executive Leather high back swivel 1 SDP001036 9/29/16 227 900.00 227 900.00 227 900.00 10.00 21 650.50 206 249.50 chair



168 Executive L-shaped desk with drawers 1 SDP001036 9/29/16 495 900.00 495 900.00 495 900.00 10.00 - 47110.50 448 789.50

169 Executive L-shaped desk with drawers 1 SDP001036 9/29/16 495 900.00 495 900.00 495 900.00 10.00 - 47 11 0.50 448 789.50

170 Executive L-shaped desk w ith drawers 1 SDP001036 9/29/16 495 900.00 495 900.00 495 900.00 10.00 - 47 110.50 448 789.50

171 Executive L-shaped desk with drawers 1 SDP001036 9/29/16 495 900.00 495 900.00 495 900.00 10.00 47110.50 448 789.50

172 Executive L-shaped desk with drawers 1 SDP001036 9/29/16 495 900.00 495 900.00 495 900.00 10.00 47 11 0.50 448 789.50

36

' . ' l " ' '·.;,





Appendix II


No Asset name and description Qty Reference Purchase dat e Unit Cost Additions Total Cost Useful life Disposals Acc'm Depr'n Net book value

173 4 Draw er steel f iling cabinet 1 SDP001 167 1/10/17 139 900.00 139 900.00 139 900.00 10.00 13 290.50 126 609.50

174 4 Draw er stee l fili ng ca binet 1 SDP0011 67 1/1 0/17 139 900.00 139 900.00 139 900.00 10.00 13 290.50 126 609.50

175 4 Drawer steel fil ing cabinet 1 SDP001167 1/10/17 139 900.00 139 900.00 139 900.00 10.00 - 13 290.50 126 609.50

176 4 Drawer steel fili ng cabi net 1 SDP001 167 1/10/1 7 139 900.00 139 900.00 139 900.00 10.00 - 13 290.50 126 609.50

180 4 Drawer steel f i ling ca binet 1 SDP001167 1/10/17 139 900.00 139 900.00 139 900.00 10.00 13 290.50 126 609.50

181 4 Drawer stee l fil ing cabinet 1 SDP001167 1/10/17 139 900.00 139 900.00 139 900.00 10.00 13 290.50 126 609.50

182 4 Draw er steel filing cabinet 1 SDP001167 1/10/17 139 900.00 139 900.00 139 900.00 10.00 13 290.50 126 609.50

183 4 Draw er steel fili ng ca binet 1 SDP001167 1/10/17 139 900.00 139 900.00 139 900.00 10.00 13 290.50 126 609.50

184 4 Drawer steel fil ing cab inet 1 SDP001167 1/10/17 139 900.00 139 900.00 139 900.00 10.00 - 13 290.50 126 609.50

185 4 Drawer steel fil ing ca binet 1 SDP0011 67 1/10/17 139 900.00 139 900.00 139 900.00 10.00 13 290.50 126 609.50

186 4 Drawer steel filing ca binet 1 SDP001167 1/10/17 139 900.00 139 900.00 139 900.00 10.00 13 290.50 126 609.50

187 4 Drawer steel filin g cabinet 1 SDPOOl 167 1/10/17 139 900.00 139 900.00 139 900.00 10.00 13 290.50 126 609.50

188 Wooden glass door cabinets 1 SDP0011 67 1/10/17 334 900. 00 334 900.00 334 900.00 10.00 - 31 81 5.50 303 084.50

189 Wooden glass door cabinets 1 SDP0011 67 1/10/17 334 900.00 334 900.00 334 900.00 10.00 - 31 815.50 303 084.50

190 Leatherette conference room chair 1 SDP001205 1/11/17 161 935.00 161 935.00 161 935.00 10.00 - 15 383.83 146 55 1.18

191 Leatherette conference room chair 1 SDP001205 1/11/17 161 935.00 161 935.00 161 935.00 10.00 - 15 383.83 146 551.18

192 Leatherette conference room chair 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 15 383.83 146 551 .18

193 Leatherette conference room chair 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 - 15 383.83 146 551.18

194 Lea the rette confe rence room chair 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 - 15 383.83 146 55 1.18

195 Leatherette conference room chair 1 SDP001205 1/11/17 161 935.00 161 935.00 161 935.00 10.00 15 383.83 146 551.18

196 Leatherette conference room chair 1 SDP001205 1/11/17 161 935.00 161 935.00 161 935.00 10.00 15 383.83 146 551.18

197 Leatherette conference room chair 1 SDP001205 1/11 /17 161 935.00 161 935. 00 161 935.00 10.00 - 15 383.83 146 551.18

198 Lea therette conference room chair 1 SDP001205 1/11 /17 161 935.00 161 935. 00 161 935.00 10.00 15 383.83 146 551.18

37

~ . . ' •J •





Appendix II



199 Leatherette conference room chair 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 . 15 383.83 146 551. 18

200 Leatherette conference room cha ir 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 . 15 383.83 146 55 1.18

201 Leatherette conference room cha ir 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 15 383.83 146 551 .1 8

202 Leatherette conference room cha ir 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 15 383.83 146 551 .18

203 Leatherette conference room chair 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 15 383.83 146 551.18

204 Leatherette conference room cha ir 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 . 15 383.83 146 551 .18





209 Lea therette conference room chair 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 . 15 383.83 146 55 1.18

210 Leatherette conference room chair 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 . 15 383.83 146 551 .18

211 Leath erette conference room chair 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 . 15 383.83 146 551 .18

212 Leatherette conference room chair 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 . 15 383.83 146 551 .18

213 Leatherette conference room ch air 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 . 15 383.83 146 551.18

214 Leatherette conference room chair 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 15 383.83 146 551.18

215 Leatherette conference room chair 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 . 15 383.83 146 551.18

216 Lea th erette conference room chair 1 SDP001205 1/1 1/17 161 935.00 161 935.00 161 935.00 10.00 15 383.83 146 551 .18

21 7 Leatherette conference room chai r 1 SDP001205 1/11 /17 161 935.00 161 935.00 161 935.00 10.00 . 15 383.83 146 551.18

21 8 Leath erette conference room chai r 1 SDP001205 1/11/17 161 935.00 161 935.00 161 935.00 10.00 . 15 383.83 146 551. 18

219 Leatherette co nference room cha ir 1 SDP001205 1/11/17 161 935.00 161 935.00 161 935.00 10.00 15 383.83 146 551 .18

230 Visitors ' chair 1 SDP001215 2/2/17 65 000.00 65 000.00 65 000.00 10.00 . 6 175.00 58 825.00

231 Visitors' chai r 1 SDP001215 2/2/17 65 000.00 65 000.00 65 000.00 10.00 . 6 175.00 58 825.00

232 Visitors ' chai r 1 SDP001215 2/2/17 65 000.00 65 000.00 65 000.00 10.00 . 6 175.00 58 825.00

233 Visitors ' chair 1 SDP001215 2/2/17 65 000.00 65 000.00 65 000.00 10.00 . 6 175.00 58 825.00

38

~ . - • ' "'L





Appendix II


No Asset name and description Oty Reference Purchase date Unit Cost Additions Total Cost Useful life Disposals Acc'm Depr'n Net book value

234 Visitors ' chair 1 SDP001215 2/2/17 65 000.00 65 ODO.DO 65 000.00 10.00 6 175.00 58 825.00

235 Visitors' chair 1 SDP001215 2/2/17 65 000.00 65 000.00 65 000.00 10.00 6 175.00 58 825.00

236 Visitors ' chair 1 SDP001215 2/2/17 65 000.00 65 000.00 65 000.00 10.00 - 6 175.00 58 825.00

237 Visitors ' chai r 1 SDP001215 2/2/17 65 000.00 65 000.00 65 000.00 10.00 - 6 175.00 58 825.00

238 Vis itors ' chair 1 SDP001215 2/2/17 65 000.00 65 000.00 65 000.00 10.00 6 175.00 58 825.00

239 Visitors' chair 1 SDP001215 2/2/17 65 000.00 65 000.00 65 000.00 10.00 6 175.00 58 825.00

240 Visitors' chair 1 SDP001215 2/2/17 65 000.00 65 000.00 65 000.00 10.00 - 6 175.00 58 825.00

241 Visitors ' chair 1 SDP001215 2/2/17 65 000.00 65 000.00 65 000.00 10.00 - 6 175.00 58 825.00

242 Vis itors ' chair 1 SDP001215 2/2/17 65 000.00 65 000.00 65 000.00 10.00 - 6 175.00 58 825.00

243 Vis itors' cha ir 1 SDP001215 2/2/1 7 65 000.00 65 000.00 65 000.00 10.00 6 175.00 58 825.00

244 Visitors ' chair 1 SDP001 215 2/2/1 7 65 000.00 65 000.00 65 000.00 10.00 6 175.00 58 825.00

245 Executive 3-door bookshelf 1 SDP001351 5/26/17 334 900.00 334 900.00 334 900.00 10.00 31 81 5.50 303 084.50

246 Executive 3-door bookshelf 1 SDP001351 5/26/17 334 900.00 334 900.00 334 900.00 10.00 - 31 815.50 303 084.50

Total for office furniture 14 699 640.00 26 942 115.00 3 722 536.05 23 219 578.95

Office fittings

4 Signpost 1 SDP001148 12/6/17 1 248 565.45 1 248 565.45 1 248 565.45 10.00 118 613.72 1129 951 .73

Total for office fittings 1 248 565.45 1 248 565.45 118 613.72 1 129 951 .73

39

, . :.




For t he year ended 30 June 2017

Appendix II


Information and Communication Technology (ICT) equipment and accessories

No Asset name and description Oty Reference Purchase date Unit Cost Additions Total Cost Useful life Disposals Acc'm Depr'n Net book value

31 Sage ERP300 Finance mgt package 1 849+SDP24+SDP164+ 11 /1 2/ 14 27 769 314.40 - 27 769 314.40 3.00 26 380 848.68 1 388 465.72 SDP752

36 42 U Server Rack 1 SDP000295 1/23/15 926 524.50 - 926 524.50 3.00 880 198.28 46 326.22

37 Server HP ProLiant DL 380P 2620 1 SDP000295 1/23/1 5 7 515 299.00 7 515 299.00 3.00 - 7 139 534.05 375 764.95

38 APC 3000 VA Rack mounted UPS 1 SDP000297 1/26/15 980 000.00 980 000.00 3.00 931 000.00 49 000.00

55 Laptop Dell lnspiron 15R, 8GB, 1TB 1 SDP000776 3/11 /15 693 175.00 693 175.00 3.00 658 516.25 34 658.75

57 Hard drives 1 SDP000600 5/5/1 5 208 535.00 - 3.00 132 072.17 -

70 HP ProBook 450G2 i7 laptop 1 SDP000311 11 /20/15 733 950.00 733 950.00 3.00 - 464 835.00 269 115.00

71 HP Laser printer 1 SDP000312 11 /20/15 375 414.26 - 375 414.26 3.00 237 762.36 137651 .90

72 HP 225DN LaserJet printer 1 SDP000407 1/4/16 295 000.00 295 000.00 3.00 186 833.33 108 166.66

73 HP 350G1 Ci7 laptop 1 SDP000407 1/4/16 795 000.00 795 000.00 3.00 503 500.00 291 500.00

74 HP 350G1 Ci7 laptop 1 SDP000407 1/4/16 795 000.00 - 795 000.00 3.00 503 500.00 291 500.00

75 HP PR0450 G3 i7 laptop 1 SDP000407 1/4/ 16 795 000.00 - 795 000.00 3.00 503 500.00 291 500.00

76 HP PR0450 G3 i7 laptop 1 SDP000407 1/4/ 16 795 000.00 - 795 000.00 3.00 503 500.00 291 500.00

77 HP PR0450 G3 i7 laptop 1 SDP000407 1/4/16 795 000.00 - 795 000.00 3.00 - 503 500.00 291 500.00

78 HP PR0450 G3 i7 laptop 1 SDP000407 1/4/16 795 000.00 - 795 000.00 3.00 503 500.00 291 500.00

79 Dell OptiPlex 9020 i5 desktop computer 1 SDP000407 1/4/16 685 000.00 - 685 000.00 3.00 - 433 833.33 251 166.67

80 Dell OptiP lex 9020 i5 desktop computer 1 SDP000407 1/4/16 685 000.00 - 685 000.00 3.00 - 433 833.33 251 166.67

81 Dell Opti Plex 9020 i5 desktop computer 1 SDP000407 1/4/1 6 685 000.00 - 685 000.00 3.00 - 433 833.33 251 166.67

82 APC 650VA UPS 1 SDP000407 1/4/ 16 70 000.00 3.00 22 166.67 - -

83 APC 650VA UPS 1 SDP000407 1/4/16 70 000.00 3.00 22 166.67

84 APC 650VA UPS 1 SDP000407 1/4/16 70 000.00 3.00 22 166.67

85 Sony DX147 32001m w ire less projector 1 SDP000407 1/4/16 640 000.00 640 000.00 3.00 - 405 333.33 234 666.67 w ith pointer

40

• I .. NATIONAL COUNCIL FOR HIGHER EDUCATION (NGHE)




Appendix II


No Asset name and description Oty Reference Purchase Unit Cost Additions Total Cost Useful Disposals Acc'm Depr'n Net book value date life

86 Sony DX147 32001m wireless 1 SDP000407 1/4/16 640 000.00 - 640 000.00 3.00 405 333.33 234 666.67 projector with pointer

89 1TB USB external hard drive 1 S0P000407 1/4/16 78 000.00 - - 3.00 24 700.00 -

90 1TB USB external hard drive 1 S0P000407 1/4/16 78 000.00 - 3.00 24 700.00 - -

91 1TB USB external hard drive 1 S0P000407 1/4/16 78 000.00 - 3.00 24 700.00 - -

92 1TB USB external hard drive 1 SDP000407 1/4/1 6 78 000.00 - 3.00 24 700.00 -

93 1TB USB external hard drive 1 S0P000407 1/4/16 78 000.00 - 3.00 24 700.00

94 1TB USB external hard drive 1 SDP000407 1/4/16 78 000.00 - - 3.00 24 700.00

95 1TB USB external hard drive 1 S0P000407 1/4/16 78 000.00 3.00 24 700.00

96 1TB USB external hard drive 1 SDP000407 1/4/16 78 000.00 3.00 24 700.00 -

97 1TB USB external hard drive 1 S0P000407 1/4/ 16 78 000.00 3.00 24 700.00 -

98 1TB USB external hard drive 1 SDP000407 1/4/16 78 000.00 3.00 24 700.00 - -

99 Projector screen tripod 200x200 1 S0P000408 1/5/16 193 256.90 193 256.90 3.00 122 396.04 70 860.86

100 Projector screen tripod 200x200 1 SDP000408 1/5/16 193 256.90 - 193 256.90 3.00 122 396.04 70 860.86

105 Nikon 03300 digital camera 1 S0P000807 2/28/16 410 429.50 410 429.50 3.00 259 938.68 150 490.82

106 Nikon 03300 digital camera 1 SDP000807 2/28/16 410 429.50 - 410 429.50 3.00 259 938.68 150 490.82

108 HP LaserJet 2250N printer 1 S0P001040 8/18/16 295 000.00 295 000.00 295 000.00 3.00 93 416.67 201 583.33

109 HP PRO 450 laptop computer 1 SDP000957 9/1 3/16 835 596.25 835 596.25 835 596.25 3.00 264 605.48 570 990.77

110 HP PRO 450 laptop computer 1 S0P000957 9/13/16 835 596.25 835 596.25 835 596.25 3.00 264 605.48 570 990.77

111 HP PRO 450 laptop computer 1 S0P000957 9/13/16 835 596.25 835 596.25 835 596.25 3.00 264 605.48 570 990.77

112 HP PRO 450 laptop computer 1 SDP000957 9/13/16 835 596.25 835 596.25 835 596.25 3.00 - 264 605.48 570 990.77

113 HP PRO 450 laptop computer 1 S0P000957 9/13/16 835 596.25 835 596.25 835 596.25 3.00 - 264 605.48 570 990.77

114 HP PRO 450 laptop computer 1 SDP000957 9/13/16 835 596.25 835 596.25 835 596.25 3.00 264 605.48 570 990.77

115 HP PRO Desk 280 desktop computer 1 SDP000957 9/13/16 658 807.50 658 807.50 658 807.50 3.00 208 622.38 450 185.13

117 Printer 1 SDPOOl 142 11 /23/ 16 441 012.21 441 012.21 441 012.21 3.00 - 139 653.87 301 358.34

41

.. ... • NATIONAL COUNCIL FOR HIGHER EDUCATION (NCHE)




Appendix II


No Asset name and description Qty Reference Purchase Unit Cost Additions Total Cost Useful life Disposals Acc'm Depr'n Net book value date

122 LG 32" LED TV 1 SDP00121 7 3/22/17 244 950.00 244 950.00 244 950.00 - 77 567.50 167 382.50 3.00

123 LG 49" LED TV 1 SDP001217 3/22/17 724 950.00 724 950.00 724 950.00 - 229 567.50 495 382.50 3.00

Total for ICT equipment & 7 378 297.21 55 979 347.17 445 572.17 45 113 824.84 10 865 522.33 accessories Grand total 73 557 150.10 787 450 223.24 445 572.17 125 043 719.42 662 406 503.82

Removed from fixed assets register (disposals and reclassifications) Electronic equipment

No Asset name and description Qty Reference Purchase Unit Cost Additions Total Useful life Disposals Acc'm Depr'n Net book value date Cost

57 Hard drives 1 SDP000600 5/5/15 208 535.00 - 3.00 132 072.1 7 -

82 APC 650VA UPS 1 SDP000407 1/4/16 70 000.00 3.00 22 166.67 -

83 APC 650VA UPS 1 SDP000407 1/4/1 6 70 000.00 - 3.00 22 166.67 -

84 APC 650VA UPS 1 SDP000407 1/4/1 6 70 000.00 - 3.00 22 166.67 - -


90 1TB USB external ha rd drive 1 SDP000407 1/4/16 78 000.00 - 3.00 24 700.00

91 1TB USB external hard drive 1 SDP000407 1/4/16 78 ODO.OD 3.00 24 700.00 -

92 1TB USB external hard drive 1 SDP000407 1/4/16 78 000.00 - 3.00 24 700.00 -

93 1TB USB external hard drive 1 SDP000407 1/4/16 78 000.00 - - 3.00 24 700.00 -


95 1TB USB external hard drive 1 SDP000407 1/4/16 78 000.00 - - 3.00 24 700.00 - -

96 1TB USB ext ernal hard drive 1 SDP000407 1/4/16 78 ODO.OD 3.00 24 700.00 - -


98 1TB USB ext ernal hard drive 1 SDP000407 1/4/16 78 ODO.OD - - 3.00 24 700.00 - -

Total disposals - 445 572.17 -

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