THEATRE FOR A CHANGE - MALAWI

INDEPENDENT AUDITOR'S REPORT

31 MARCH 2012

INDEPENDENT AUDITOR'S REPORTFOR THE YEAR ENDED 31 MARCH 2012

ON THE INCOME AND EXPENDITURE STATEMENTFOR THE YEAR ENDED 31 MARCH 2012

Management of the Theatre for a Change - Malawi is required to prepare income andexpenditure statement which gives a true and fair view of the state of affairs of the project as atthe end ofa specific period and of the operating results for that period.

Management is also required to ensure that proper accounting records which disclose withreasonable accuracy at any time the financial position of the project are kept and to ensure thatthe income and expenditure statement comply with the financial agreements and statutes.

In preparing the income and expenditure statement, management accepts responsibility for thefollowing:

• maintenance of proper accounting records;• selection of suitable accounting policies and applying them consistently;• making judgment 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 income andexpenditure statement.

Management also accepts responsibility for taking such steps as are reasonably open to them tosafeguard the assets of the project and to maintain adequate systems of internal controls toprevent and detect fraud and other irregularities.

Management is of the opinion that the income and expenditure statement give a true and fairview of the state of the financial affairs of the project and of its operating results.

The income and expenditure statement has been approved by the Board and is signed on theirbehalf by:

••GRAHAM CARR IICertified Public Accountants

leim~INTERNATIONAL

AUDITOR'S REPORTTO THE MEMBERS OF

THEATRE FOR A CHANGE - MALA WI

ON THE INCOME AND EXPENDITURE STATEMENTFOR THE YEAR ENDED 31 MARCH 2012

We have audited the income and expenditure statement of Theatre for a Change - Malawi for theyear ended 31 March 2012 as set out on pages 4 - 6.

Management is responsible for the preparation and fair presentation of the income andexpenditure statement in accordance with applied accounting principles and for such internalcontrols as management determines is necessary to enable the preparation and fair presentationof the income and expenditure statement that is free from material misstatement, whether due tofraud or error.

Our responsibility is to express an opinion on the income and expenditure statement based on ouraudit. We conducted our audit in accordance with International Standards on Auditing. Thosestandards require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance whether the income and expenditure statement is free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the income and expenditure, statement. The procedures selected depend on theauditor's judgment, including the assessment of the risks of material misstatement of the incomeand expenditure statement, whether due to fraud or error. In making those risk assessments, theauditor considers internal control relevant to the entity's preparation and fair presentation of theincome and expenditure statement in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of theentity's internal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates made by management, as well asevaluating the overall presentation of the income and expenditure statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

ITaurus House - Off-Convention Drive - City Centre - P.O. Box 898 - Lilongwe - Malawi

Tel.: (265) 01 775763/01 775764/01 775836 - Fax.: (265) 01 775762 - E-mail: lilongwe@grahamcarrmw.com

Graham Carr is a member of Nexia International, a worldwide network of independent accounting firms.Partners: C.M.C. Banda, D.E.Z. Mhango - Lilongwe, D. Ngwira (Mrs), J.K. Ndovi, - Blantyre.

Offices in Lilongwe and B1antyre.

GRAHAM CARR

I

• All necessary supporting documents, records and accounts have been kept in respect to alltransactions.

• The income and expenditure statement has been prepared in accordance with consistentlyapplied Accounting Principles and give a true and fair view of the financial transactions andposition of Theatre for a Change in Malawi as at 31st March 2012.

Cq~~~Graham Carr17th July 2012

THEATRE FOR A CHANGE

INDEPENDENT AUDITORS' REPORTFOR THE PERIOD FROM 1 APRIL 2011 TO 31 MARCH 2012

INCOME AND EXPENDITURE STATEMENT

MK lKNote 2012 2011

IncomeOpening balance 16,315,956 18,722,984Funding received 3 194,352,094 129,830,189Other income 4 2,950,938

Available income 213,618,988 148,553,173

Expenditure

Administration and support costsStaff Costs 13,442,314 5,304,502Bank charges 429,309 155,744Office stationery 1,784,029 1,295,816Insurance 1,406,141 1,046,484Audit and legal 463,896 261,148Advertisements 360,307 345,519Transport 1,895,419 2,838,363Publicity and marketing 2,750,000 267,529Telephone/Internet 3,062,066 924,300Office & Accommodation Costs 4,587,902Other Support Costs 778,218Currency revaluation 328,712

Sub-Total 30,959,60 I 12,768,117Programme activitiesWorkshop materials 12,590,025 18,587,380Programme staff costs 69,353,441 35,498,685Training costs 841,400 7,572,593Transport costs 21,028,473 11,441,606Programme staff accommodation 7,203,260 4,883,356Monitoring and evaluation 7,835,612 8,950,652Monitoring and evaluation staff costs 3,754,905 5,581,957Medical insurance 3,259,841 3,009,705Other programmes 19,444,941 16,801,882Vehicle Costs inc. Fuel 2,614,496Programme stationery 9,555,380 2,0 I0,251

Sub-Total 157,481,774 I 14,338,067Capital expenditureMotor vehicles 1,783,135Other equipment 1,858,415 3,347,898

1,858,415 5,131,033

Total expenditure ( 190,299,790) (132,237,217)

Unspent funds 23,319,198 16,315,956

INDEPENDENT AUDITORS' REPORTFOR THE PERIOD FROM I APRIL 2011 TO 31 MARCH 2012

MK MKNote 2012 2011

Represented by:

Bank balances 5 4,344,128.00 17, J ~5,428.00Receivables 6 20,0 I 0,489.00 49,600.00Payables 7 (1,035,419.00) (859,072.00)

23,319,198.00 16,315,956.00

The income and expenditure statement has been approved by the Board on .!:1..j tJ. .c../Q/~ ..and is signed on itsbehalfby:

A~--~'BOARD CHAIRMAN

NOTES TO THE INCOME AND EXPENDITURE STATEME TFOR THE YEAR ENDED 31 MARCH 2012

1 ORGANISATION INFORMATION

VISION

Theatre for a Change wants to see marginalised and vulnerable groups empowered with knowledge,awareness, and skills to positively transform their lives and the lives of others at local, national, andinternational levels.

Theatre for a Change seeks to improve the qual ity of life of marginalised and vulnerable groups throughactive, participatory tools that promote positive behaviour change and advocacy of fundamental humanrights.

Behaviour Change

To equip marginalised and vulnerable groups with the knowledge and skills to positively change ourbehaviours an.d those of others.

Advocacy

To promote gender and sexual rights of marginal ised and vulnerable groups among policy and decisionmakers at local, national, and international levels.

GOAL IN MALA WITo reduce the risk of HIV infection among marginali.sed and vulnerable groups.

Legal Status

Theatre for a Change Malawi is a registered NGO in Malawi (Reg. No. 8557), and forms part of theinternational Federation Agreement with other Theatre for a Change branches in Ghana and the UK.Theatre for a Change Malawi is registered with CONGOMA, the Council for Non-GovernmentalOrganisations in Malawi (Reg. No. C429/2009) .

Programme Activity and Impact

Theatre for a Change Malawi uses innovative, ambitious and impactfu I approaches to HIV preventionamong at risk groups in Malawi, teachers, young people in school, sex workers, the police and the

INDEPENDENT AUDITORS' REPORTFOR THE YEAR ENDED 31 MARCH 2012

Programme Activity and Impact (continued)

By training teachers in teacher training colleges In Malawi, they seek to promote health seekingbehaviours among the student teachers, and equip them with the skills to be able to hand these on to thechildren they go on to teach. Theatre for a Change's education strategy is to place young Malawiangraduates who they have trained and accredited into Teacher Training Colleges where they canpositively impact on their peers both during Lifc Skills on the curriculum and after school. These youngteachers are then posted to Primary Schools where Theatre for a Change helps them to implementinnovative approaches to {-UV prevention among the children they teach. Theatre for a Change is alsorunning an Interactive Radio Programme to enable primary school teachers, parents and children tocommunicate more effectively about HIV.

By training a core group of sex workers to become peer facilitators with young people involved in sexwork, Theatre for a Change reduces the risk of HIV transmission between sex workers and their clients.They are FUnning a behaviour change programme where these peer facilitators work with younger sexworkers and enable them to make sex work safer and to find alternative means of income generation.Theatre for a Change are also running an advocacy programme, where sex workers perform their storiesto policy makers with a view to promoting their rights and catalysing institutional and policy reform.

Theatre for a Change has this year launched a Child Protection Project for children who are beingsexually exploited, and a project with the Police and the Army, to help reduce their risk of mvinfection.

Theatre for a Change achieves their success through an innovative, participatory, physical methodologywhere the leamer's physical, personal and social experience is the starting point for the educationalprocess.

Theatre for a Change is an accredited centre through The Open College Network for deliveringeducational training.

The impact of their programmes is measured and publ ished every year - for more information on theirimpact please see http://www.tfacafrica.com/What-we-do/Monitoring-Evaluation-Learning

THEATRE FOR A CHANGE

INDEPENDENT AUDITORS' REPORTFOR THE YEAR ENDED 31 MARCH 2012

2 Accounting policies

The principal accounting policies, which are set out below have been consistently followed In allmaterial respects.

2.1 Basis of preparation

The report has been prepared on the basis of cash accounting which IS a comprehensive basis ofaccounting as modified by the inclusion of payables and receivables.

The main income represents donations - further details can be found in Note 3. All income received inthe period has been shown in the accounts.

2.3 Expenditure

These represent all expenditure incurred during the period.

2.4 Property, plant and equipment

Capital expenditure is expensed in the project books in the period in which the payment for such itemsis made. There is no provision for depreciation.

3 Donations2012 2012 2011

MK MK

Christian Aid GBP 200,000 50,234,680 25,743,800Medicor GBP 136,666 34,725,260 21,335,900Comic Relief GBP 94,354 24,817,933 10,320,700Ferguson Trust GBP 100,100 24,674,650GiZ 19.3 12,227 8.829.400Annie Lennox Foundation GBP 45,083 12,269,583DFID GBP 22,289 5,416,227 27,319,900UNICEF GBP 12,000 5,065,608 3,244,400PACT USD 30.317 5.026.563National Aids Commission 3,721,176 11,905,304OSISA USD 24,954 4,106,460Saving Grace GBP 12,000 3,067,220 3,781,350AIDS Fonds Euro 7,254 1,615,970 3,728,405British Council 298,537 4,726,680CIDA 2.986.000Stavros Niarchos 5,908,350

194,352,094 129,830,189

INDEPENDENT AUDITORS' REPORTFOR THE YEAR E DED 31 MARCH 2012

4 Other income 2012MK

Exchange gain 2,652,995Bank Interest 248,943Equipment hire 49,000

2,950,938

5 Cash and bank

Main Kwacha Account 3,283,566PACT-Kwacha Account 41,676GBP Account 1,018,886

4,344,128

6 Receivables

Staff Operational Advances 5,987,665Theatre for a Change - UK(£56,091)** 14,022,824

20,010,489

2011MK

6,032,9796,137,6574,954,792

** Relate to balance offunds received through Theatre ofa Change UK but not remitted to Malawi asat year end

7 Payables

Pay As You Earn TaxFunds for British Council

APPENDIX TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2012

SUMMARISED BUDGET, INCOME AND EXPENDITURE REPORT

Budget Actual VarianceMK MK MK

IncomeOpening balance 16,315,956 16,315,956Funding received 195,000,000 194,352,094 647,906Other income 2,950,938 (2,950,938)

Available income 211,315,956 213,618,988 (2,303,032)

ExpenditureLocal travel and transportation 21,000,000 21,028,473 (28,473)Meeting and training cost 13,000,000 12,590,025 409,975Communication 3,000,000 3,062,066 (62,066)Project monitori~g cost 11,500,000 11,590,517 (90,517)Other Programme Costs 111,750,000 111,069,108 680,892Indirect costs 27,200,000 30,959,601 (3,759,601)

187,450,000 (190,299,790) (2,849,790)