LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT ( ACE-AF II-AQUAFISH ) STATEMENT OF INCOME AND EXPENDITURE 31 MARCH 2024 LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT (ACE- AF II -AQUAFISH) STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 CONTENTS Page Statement of management responsibilities 1 Executive summary 2-3 4-6 Statement of income and expenditure 7 Note to the statement of income and expenditure 8-9 Budget and expenditure statement 10 - 13 LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT( ACE-AF II -AQUAFISH} STATEMENT OF MANAGEMENT RESPONSIBILITIES FORTHE PERIOD FROM l APRIL 2023 TO 31 MARCH 2024 Management is responsible for the preparation of the statement of income and expenditure of the ACE II-AF-AQUAFISH project implemented by Lilongwe University of Agriculture and Natural Resources. This report captures the statement of income and expenditure for the period from 1 April 2023 to 3t March 2024, and the notes to the statement of income and expenditure, which includes a summary of significant accounting policies and other explanatory Management is also required to ensure that the project keeps accounting records which disclose with reasonable accuracy at any time the financial position ofthe project are kept and to ensure that the statement of income and expenditure complies with set accounting policies. ln preparing the statement of income and expenditure, the management accepts responsibility for the following: r maintenance ofproper accounting records; o selection of suitable accounting policies and applying them consistently; o making judgement and estimates that are reasonable and prudent; r compliance with applicable accounting standards when preparing statement of income and expenditure, subject to any material departures being disclosed and explained in the statement of income and expenditure. Management also accepts responsibility for taking such steps as are reasonably open to them to safeguard the assets ofthe project and to maintain adequate systems of internal controls to prevent and detect fraud and other irregularities. Management is of the opinion that the statement of income and expenditure was prepared in accordance with World Bank financing agreement. The statement of income and expenditure was approved by management and is signed on its behalf by:- VICE CHANCELLOR /B'uw DIRECTOR OF FINANCE 1l ill rc r+ tDATE--T- Ct lttllu-r+ I DATEI - 1,- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT( ACE-AF II -AQUAFISH) EXECUTIVE SUMMARY FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 Background African Centre of Excellence in Aquaculture and fisheries (ACE II-AF-AQUAFISH) project is a five (5) year project (July 2016 -June 2021, now extended to December 2025) that aims to widen access to higher education so as to foster innovation and entrepreneurship in the production of high skilled fit for purpose critical mass of agriculture scientists for improved aquaculture and fisheries management in order to enhance food, nutrition and economic security in Eastern and Southern Africa. ACE II-AF- AQUAFISH project which is funded through a loan from World Bank to Malawi Government is coordinated by the inter -University Council for East Africa and implemented by Lilongwe University of Agriculture and Natural Resources (LUANAR). The world Bank will make available to Malawi a financial loan not exceeding USD$5.9million to be used exclusively to finance the project in the planned period from July 2016 to June 2021, now extended to December 2025. The overall goal of the ACE II-AF AQUAFISH project is to train a pool of skilled and innovative graduate students to contribute towards improved fish -based food and income from aquaculture and fisheries in Africa. Objective /Purposes • The purpose of ACE II-AF-AQUAFISH project is to train a pool of skilled and innovative graduate students, to contribute onwards improved fish based food and income from aquaculture and fisheries in Africa. Specific programme objective • Enhance capacity to produce graduates that are relevant to industrial needs in aquaculture and fisheries sector in the region. • Strengthen proactive graduates to support aquaculture, natural resources management and nutrition. • Strengthen the fisheries value chain, relevant for economic development. ACE II-AF AQUAFISH project will achieve its goal through nine (9) key Performance Based Conditions (PBCs) detailed below: PBC Description PBC1.1 Institutional readiness PBC1.2 Bi-annual National Steering Committee meeting held PBC2.1 New students enrolled in the Agriculture ACEs in PhD, Masters programs and short PBC3.1 courses. Quality accreditation for agriculture education programs PBC4.1 MOUs on partnerships for collaboration in applied research and training entered into by Agriculture ACEs PBC5.1 Peer-reviewed journal papers or peer-reviewed conference papers prepared for the agriculture sector collaboratively with national, regional, or international co-authors PBC6.1 Faculty and PhD student exchanges to promote research and teaching in Agriculture PBC7.1 Amount of externally generated revenue by the Agriculture ACEs PBC9 Number of enterprises incubated, and spin-offs realized - 2- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT( ACE-AF II EXECUTIVE SUMMARY (CONTINUED) FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 Objectives of the audit ▪ To enable the auditor to express a professional opinion(s) on the financial position of the project at the end of each fiscal year and on funds received and expenditures incurred for the relevant accounting period. The project books of accounts provide the basis for preparation of the Project Financial Statements by LUANAR and are established to reflect the financial transactions in respect of the project. LUANAR maintains adequate internal controls and supporting documentation of transactions. - 3- S Graham Carr ADL House, 3rd Floor, City Centre P.O. Box 898, Lilongwe, Malawi Tel: +265 (0) 992 873 845 +265 (0) 992 873 846 E-mail : lilongwe@grahamcarrmw.com INDEPENDENTAUDITOR'S REPORTTO THE MEMBERS OF LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR} AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT( ACE- AF II -AQUAFISH) ON THE STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD ENDED 31 MARCH 2024 Opinion We have audited the statement of income and expenditure of the African Center of Excellence in Aquaculture and Fisheries project (ACE ll -AF- AQUAFISH) implemented by the Lilongwe University of Agriculture and Natural Resources funded bythe World Bank as set out on page 7, which comprise the statement of income and expenditure for the period ended 31 March 2024, and notes to the statement of income and expenditure, including a summary of significant accounting policies and other explanatory information. ln our opinion: o The statement of income and expenditure the period ended 31 March 2o24,was prepared in accordance with the World Bank financing agreements. Basis for opinion We conducted our audit in accordance with lnternational Standards on Auditing (lSAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the income and expenditure statement section of our report. We are independent of the Project in accordance with the lnternational Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) and we have fulfilled our ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other matters - limitation of distribution and use The Project's statement of income and expenditure have been prepared in order for the responsible party to meet the user's requirements. As a result, the Project's statement of income and expediture may not be suitable for other purposes. Our report has been prepared solely for the use of the responsible party and the user and should not be distributed to or used by any other parties. We have not modified our opinion in respect of this matter. Audit Tax- 1-Advisory Partners: Cornwell Banda, lvlartha Nyirongo Mrs, lulius Gondwe Graham Carr is a member firm of ihe'Nexia Intemational" network, Nexia International Limited does not deliver s€rvices in its own name or Nexia otherwise. Nexia International Umited and tfie memter fims of the Nexia International netwo* (including those members which bade under a namewhich includes the word NDOA) are not part of a woddwide partnership. Nexia International Umited does not accept any responsibillty for the commission of any act or omission to act by, or the liabilities of, any of its members. Each member firm within the Nexia International network is a separate legal en$ty. ADL House, 3rd Floor, City Centre S Graham Carr P.O. Box 898, Lilongwe, Malawi Tel: +265 (0) 992 873 845 +265 (0) 992 873 A46 E-mail : lilongwe@grahamcarrmw.com INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT( ACE- AF II -AQUAFISH) ON THE STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD ENDED 31 MARCH 2024 Responsibilities of the Management and those charged with governance for the statement of income and expenditure he management is responsible for the preparation of the statement of income and expenditure that are fairly in all material respects in accordance with financing reporting provisions of the relevant donor financing agreements for such internal control as management determines is necessary to enable the preparation of statement of income and expenditure that are free from material misstatement, whether due to fraud or error, ln preparing the statement of income and expenditure, the management is responsible for assessing the Program's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to cease the program, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Project's financial reporting process. Auditor's responsibilities for the audit of the income and expenditure statement Our objectives are to obtain reasonable assurance about whether the income and expenditure statement 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 conducted in accordance with lSAs 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 could reasonably be expected to influence the economic decisions of users taken on the basis ofthese income and expenditure statement. As part of an audit in accordance with lSAs, we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also: . ldentify and assess the risks of material misstatement of the income and expenditure statement, 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 opinion. The risk of not detecting a material misstatement resulting 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 ofthe Project's internal control. -5- INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT( ACE- ON THE STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD ENDED 31 MARCH 2024 Auditor's responsibilities for the audit of the income and expenditure statement - continued ' Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Project. . Conclude on the appropriateness of the Project's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's ability to continue as a going concern. lf we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the income and expenditure statement or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained 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 ofthe income and expenditure statement, including the disclosures, and whether the income and expenditure statement is prepared, in all material respects in accordance with financial reporting provisions of the financing agreement. . Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Project to express an opinion on the income and expenditure statement. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion. We communicate with the Project 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 identifl/ during our audit. We also provide the Project with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. Graham Carr Chartered Accountants (Malawi) Cornwell Banda Date : 1sl.No.v-ember 20 2 4 -6- Tax Advisory Partners: Cornwell Banda, Martha Nyirongo Mrs, Julius Gondwe Graham Carr is a member firm of the "Nexia Internatonal" network. Nexia lntemational Limited cloes not dellver services ln iLt own name or otherwise. Nexia lnternationd Limited and the member firms of the Nexia Intemational network (including those members which fade under a Nexia nanEwhich imludes the word NEXLA) are not part of a worldvJide partnership. Nexia Intemational Limited does not a€cept any responsibiliiy for dle commission of any act, or omission to trt by. or the liabllities of, any of its members. Each member firm within the Nexia lntemational network is a separate leqal entty. LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT( ACE-AF II - AQUAFISHI STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD FROM l APRIL 2023 TO 31 MARCH 2024 2024 2024 Notes MK u5$ INCOHE World Bank Funding 1,449,985,972 1,046,058 Total Income L,449,9A5,972 1,046,O68 EXPENDITURE Management& Governance 223,459,275 168,052 Outreach & Linkages 185,984,996 L18,424 Facilities & Equipment 37,504,424 28,199 Education 747 ,757 ,497 110,645 Training 48,804,544 35,695 Applied research 20,970,728 75,7 67 Total Expenditure (663,880,9971 147 8,193) Excess of receipts 7 86,LO4,97 5 567 ,87 6 payments Represented by: Cash and cash equivalents 7 86,104,97 5 567 ,87 6 7 86,tO4,97 5 567,476 The statement of income and expenditure was approved by management and is signed on its behalf by: VICE CHANCELLOR DIRECTOR OF FINANCE ot[ r l:o:+ DATE DATE -7- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT ( ACE ) NOTES TO THE STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 1 PROGRAMME BACKGROUND Africa Centre of Excellence in Aquaculture and fisheries (ACE II AF-AQUAFISH) Project is a three and half (3.5) years project (July 2022 - December 2025) that aims to widen access to higher education. ACE -II AF - AQUAFISH project which is funded through a loan from World Bank to Malawi Government is coordinated by the Inter- University Council for East Africa and implemented by Lilongwe University of Agriculture and Natural Resources (LUANAR). The World Bank will make available to Malawi a financial loan not exceeding US$5.9 million to be used exclusively to finance the project in the planned period July 2022 to December 2025. 2 BASIS OF PREPARATION The statement of income and expenditure of Lilongwe University of Agriculture and Natural Resources- ACE AQUAFISH Project has been prepared for the purpose of reporting to donors as required under the terms of the funding agreement . The reporting currency is the Malawian Kwacha (MK) and United states Dollar (US$. The statement of income and expenditure has been prepared on a modified cash receipts and disbursements basis of accounting where funding is recognized when received and expenses are recognized when paid. The is deemed to be an appropriate accounting treatment. In addition, unliquidated funds as at period end are represented as cash balance in the statement of income and expenditure. 3 SIGNIFICANT ACCOUNTING POLICIES The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the statement of income and expenditure of Lilongwe University of Agriculture and Natural Resources - ACE AQUAFISH project. 3.1 Receipts Receipts related to funds received from World Bank, other project receipts interest received, exchange gains and other income . Receipts are recognized when the are received and measured at the actual amount received. 3.2 Payment These represent all payments made from bank accounts of the LUANAR ACE-AQUAFISH project .Payments are recognized when paid and are measured at the amount paid. 3.3 Exchange rates Transaction in foreign currencies are translated into Malawi Kwacha using the rate ruling at the date of the transaction ,transactions in Malawi Kwacha are translated into United States Dollars at annual weighted average rates balances of period end are translated at exchange rates prevailing at the reporting date. - 8- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT( ACE-AF II - AQUAFISH) NOTES TO THE STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 3.4 Bank and Unliquidated funds These are bank balances and all expenses incurred by the implementing partners but not yet liquidated by Lilongwe University of Agriculture and Natural Resources- ACE AQUAFISH Project as at the end of the year. 4 GRANT INCOME This represents the direct transfer from the World Bank into Lilongwe of Agriculture and Natural Resources - Bunda ACE-AQUAFISH Project bank account held with FDH Bank as follows: Date Details 2024 2024 MK USD 29.05.23 World Bank funding 1,210,159,888 905,051 14.03.24 World Bank funding 239,826,084 141,018 1,449,985,972 1,046,068 5 CASH AND CASH EQUIVALENTS 2024 2024 MK USD Forex bank accounts-FDH Forex & Local 786,104,975 567,876 These are bank balances held with banks as at the end of the period. These funds are held in parent project's accounts i.e. Aquaculture Centre of Excellence 6 EXCHANGE RATES AND INFLATION The foreign currencies affecting most of the operation of the Programme are United states Dollar. The average of selling and buying exchange rate of the currency and the country's national price index which represets inflation rate are as follows: 2024 Malawi Kwacha to 1 United Stated Dollars (USD) 1683.33 Inflation rate 31.8% At the time of signing the statement of income and expenditure, the average exchange rate were as follows: United states Dollar (USD) 1733.83 Inflation rate 33.9% 7 CAPITAL COMMITMENTS There were no capital commitments as at year end requiring disclosure in the statement of income and expenditure. 8 CONTINGENT LIABILITIES /PROVISIONS There were contingent liabilities existing as at year end requiring disclosure in the statement of income and expenditure. 9 SUBSEQUENT EVENTS Subsequent to the reporting date there were no significant events necessitating adjustments to /or disclosure in the statement of income and expenditure. - 9- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT ( ACE ) BUDGET AND EXPENDITURE STATEMENT FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 PROGRAMME ACTIVITIES Additional Expenditure Expenditure Balance US$ Financing MK US$ Budget US$ Management & Governance 1.1.8 Two (2) Research Fellows 38,790 - 38,790 /Post docs 1.2.1 Hold Project Inception - - - Workshop 1.2.2 Support Communication 13,900 4,733,074 3,559 10,341 Costs 1.2.3 Support Stationery & 8,600 6,762,378 5,084 3,516 Consumables 1.2.4 Contribute to University 4,800 6,060,000 4,556 244 Utility bills 1.2.5 Support office supplies and 3,600 692,798 521 3,079 refreshments 1.2.6 Support Coordination, 55,500 45,658,985 34,330 21,170 Networking and synergies 1.2.7 Attend conferences and 10,000 7,000,802 5,264 4,736 meetings 1.2.8 Hold annual Project - - - Steering Committee 1.2.9 Conduct National Steering 23,000 2,720,000 2,045 20,955 Committee and its annual meetings 1.2.10 Support Project 50,000 63,622,485 47,836 2,164 Technical committee Meetings 1.2.11 Contribute towards 5,000 1,977,206 1,487 3,513 Maintenance of Project Vehicles & Insurance 1.2.12 Train LUANAR and 10,000 - 10,000 Colleges management team on management, leadership, communication skills and work ethics 1.2.13 Support Financial 17,500 21,308,833 16,022 1,478 management system 1.2.14 Support Audit fee 8,000 - 8,000 1.2.15 Bank Charges & Sundries 5,000 - 5,000 1.3.1 Support local travels 10,380 11,708,000 8,851 1,529 1.3.2 Support local travels 12,000 9,907,120 7,449 4,551 perdiems - 10 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT ( ACE ) BUDGET AND EXPENDITURE STATEMENT FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 PROGRAMME ACTIVITIES Additional Expenditure Expenditure Balance US$ Financing MK US$ Budget US$ 1.4.1 Support International 6,040 - 6,040 Travels 1.4.2 Support Regional Travels 10,200 - 10,200 1.4.3 Support perdiems for 6,720 - 6,720 International travels 1.4.4 Support perdiems for 30,600 36,155,339 27,184 3,416 Regional travels 1.5.1 Engage academic 10,500 3,450,000 2,594 7,906 institutions in research activities 1.5.2 Engage private sector 7,000 1,702,195 1,280 5,720 captains for seminars on emerging issues Sub Total 347,130 223,459,215 168,062 179,068 OutReach & Linkages Establish Community Farmer 25,000 29,106,250 21,884 3,116 Field Schools & Incubation hubs within the community Organize Community product 22,000 28,466,900 21,404 596 fairs or dissemination workshop Procure Project Vehicle 95,000 128,411,846 75,536 19,464 Support ESMP in 20,000 - 20,000 Implementation sites Sub Total 162,000 185,984,996 118,824 43,176 Facilities & Equipment 3.1 Commerical Aquaponics 30,000 - 30,000 Facilities (school of Aquaponics) 3.4 Office furniture & Equipment 70,000 37,504,024 28,199 41,801 (ICT, computers, phones, accessories) 3.5 Contribution towards 177,000 - 177,000 completion of ACE II Center 3.6 Cannabis Irrigation System 50,000 - 50,000 and greenhouse (Fish-hemp- livestock IAA) Sub Total 327,000 37,504,024 28,199 298,801 - 11 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT ( ACE ) BUDGET AND EXPENDITURE STATEMENT FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 PROGRAMME ACTIVITIES Additional Expenditure Expenditure Balance US$ Financing MK US$ Budget US$ Education 4.1 Advertise for training in- 4,350 - 4,350 country and regional Masters and PhD scholars/researchers 4.2 MSc Full Scholarship 105,405 136,777,281 102,840 2,564 4.3 MSc Partial Scholarship 73,176 - 73,176 4.4 PhD Full Scholarship 148,082 10,380,211 7,805 140,277 4.5 PhD Partial Scholarship 69,270 - 69,270 4.6 Special stipend for post 28,800 - 28,800 graduates 4.7 Support Special needs 8,000 - 8,000 students Sub Total 437,083 147,157,491 110,645 326,438 TRAINING 5.3 Enhance capacity for 10,000 7,996,775 6,013 3,987 product development, safety and marketing 5.5 Train existing student SMEs 25,000 - 25,000 to bridge the gap between graduation and SME development (Student SME incubation) 5.6 Conduct staff and students 45,000 40,807,769 30,683 14,317 exchange programs 5.8 Support training of Finance, 12,000 - 12,000 Procurement and project team members in financial and procurement management system Sub Total 92,000 48,804,544 36,695 55,305 - 12 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AQUACULTURE AND FISHERIES PROJECT ( ACE ) BUDGET AND EXPENDITURE STATEMENT FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 PROGRAMME ACTIVITIES Additional Expenditure Expenditure Balance US$ Financing MK US$ Budget US$ APPLIED RESEARCH 6.1 Develop research agenda for 12,000 - 12,000 IAA systems 6.3 Hold workshops to review 15,000 17,349,680 13,045 1,955 innovation ready for upscale through technologies 6.4 Conduct research with 20,000 - 20,000 Cannabis i.e. fish feed, fish- health related innovation 6.6 Support publications 13,650 - 13,650 6.7 Strengthen existing regional 20,000 - 20,000 research capacities in the IAA value chain focusing on the Aquaculture and Cannabis values chains interlink 6.9 Cannabis Annual Research 15,000 3,621,048 2,723 12,277 Licence Sub Total 95,650 20,970,728 15,767 79,883 Grand Total 1,460,863 663,880,997 478,193 982,670 Other Projects BIOFISA 3,420 2,081,016 1,565 1,855 Ich - Liebe 1,885 - 1,885 DAAD 216,607 239,051,934 179,738 36,869 RFU STUDENTS 19,586 6,803,077 5,115 14,471 SUPPORT/IUCEA PFAP II 2,040 - 2,040 SPAITS PROJECT - - - SFAD - MW Project 712 - 712 World Fish Gender Project 22,943 6,317,041 4,750 18,194 ECARESA Project 228,973 144,137,673 108,374 120,599 Greenwich Project 10,745 - 10,745 OTHER PROJECTS GRAND 506,912 398,390,741 299,542 207,370 OVERALL GRAND TOTAL 1,967,775 1,062,271,738 777,735 1,190,040 The Average Convertion Rate of MK1306 has ben used to convert Malawi Kwacha expenditures to 1US$ Expenditures for April 2023 to March 2024 - 13 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYIS IN AQUACULTURE AND FISHERIES PROJECT ( ACE II AF-APA) STATEMENT OF INCOME AND EXPENDITURE 31 MARCH 2024 LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 CONTENTS Page Statement of management responsibilities 1 Executive summary 2-3 4-6 Statement of income and expenditure 7 Note to the statement of income and expenditure 8 - 10 Budget and expenditure statement 11 - 16 LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA} STATEMENT OF MANAGEMENT RESPONSIBILITIES FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 Management is responsible for the preparation of the statement of income and expenditure of the ACE-ll AF-APA project implemented by Lilongwe University of Agriculture and Natural Resources. This reort captures the statement of income and expenditure for the period from 1 April2023 to 31 March 2024, and the notes to the statement of income and expenditure, which includes a summary of significant accounting policies and other explanatory information. Management is also required to ensure that the project keeps accounting records which disclose with reasonable accuracy at any time the financial position ofthe project are kept and to ensure that the statement of income and expenditure complies with set accounting policies. ln preparing the statement of income and expenditure, the management accepts responsibility for the following: . maintenance ofproper accounting records; . selection of suitable accounting policies and applying them consistently; '. making judgement and estimates that are reasonable and prudent; . compliance with applicable accounting standards when preparing statement of income and expenditure, subject to any material departures being disclosed and explained in the statement of income and expenditure. Management also accepts responsibility for taking such steps as are reasonably open to them to safeguard the assets of the project and to maintain adequate systems of internal controls to prevent and detectfraud and other irregularities. Management is of the opinion that the statement of income and expenditure was prepared in accordance with World Bank financing agreement, The statement of income and expenditure was approved by management and is signed on its behalf by:- *. ,,:$,x6 1s oel l02t f.olroltfL? DATE - 1- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) EXECUTIVE SUMMARY FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 Background The African Centre of Excellence in Agricultural Policy Analysis (ACE II-AF APA) is aligned to Overall Strategic Plan 2019-2023. The broad aim of the plan, among others, is inject a strategic impact in the transformation of agriculture in Malawi and beyond by endeavouring to produce relevant graduates with multi-disciplinary skills to transform agri-food The Agricultural Policy Analysis (ACE II-AF APA) is highly aligned to all the pillars of Strategic Plan which are Teaching and Learning; Research Consultancy and Outreach; Infrastructure Development; Resource Mobilization, Utilization and Financial Management; Human Capacity Building; and Governance and Management. The World Bank will make available to Malawi a financial loan not exceeding USD$6million to be used exclusively to finance the project in the planned period from July 2016 to June 2021, now extended to December 2023. The interventions under ACE II-AF APA are also in line with the Ministry of Strategic Plan. The Malawi National Agriculture Investment Plan (NAIP) (2017-2023) is the Strategic Framework that operationalizes the National Agriculture Policy of 2016 by guiding investment focus in the sector to accelerate agriculture transformation, economic growth and poverty reduction. The NAIP focuses on public investments, while recognizing that agricultural growth must be driven by investments of private actors. It, therefore, supports critical policy, legal and regulatory reforms, as well as, strengthens public institutions to fulfil their mandates. It further provides a framework for effective coordination within the public sector and between the public and private sectors. One of the four programmes under the NAIP is Institutions and The objective of this Program is to improve policy and regulatory environment, stakeholder coordination and accountability. The ACE II-AF APA project, which aims at addressing the key development challenge of weak institutions and poor linkages between university and actors in agri- food system policy analysis, therefore fits perfectly within the NAIP. Project goal The main objective of the ACE II-AF APA is to strengthen linkages between universities in participating countries and regional agricultural sector needs. The specific objectives are as follows: - 2- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) EXECUTIVE SUMMARY (CONTINUED) FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 Objectives • To enhance agri-food systems related education and training using trans-disciplinary approaches and applied research. This objective aims at (a) Improving the usage and mining of big data to inform evidence-based agri-food system policy formulation and practice; (b) Promoting mind-set change in the utilization of food; and (c) Creating a gender responsive community of practice to support development, testing and validation of market-oriented extension approaches for rural innovations and reduction of climate change induced food loss and food waste; • To create or strengthen university and linkages to the regional agricultural sector. This objective focuses, among others, on (a) Strengthening university linkages to the regional agricultural sector to develop adaptive agri-food systems management; (b) Assessing the transdisciplinary linkages related to sustainable pathways and dialogue to mitigate incoherencies in agri-food systems policies; and (c) Strengthening capacity in policy processes for agri-food systems transformation; • To establish or strengthen university partnership with private and public entities related to agri-food systems both within and outside the region. This objective addresses issues intended to: (a) Enhance the capacity of multisector stakeholders to address agri-food systems transformation bottlenecks, and (b) Develop mechanism of transitioning from subsistence labour productivity to medium scale labour productivity regimes in the agri- food systems. Objectives of the audit ▪ To enable the auditor to express a professional opinion(s) on the financial position of the project at the end of each fiscal year and on funds received and expenditures incurred for the relevant accounting period. The project books of accounts provide the basis for preparation of the Project Financial Statements by LUANAR and are established to reflect the financial transactions in respect of the project. LUANAR maintains adequate internal controls and supporting documentation of transactions. - 3- S Graham Carr ADL House, 3rd Floor, City Centre P.O. Box 898, Lilongwe, Malawi Tel: +265 (0) 992 873 845 +26s (0) 992 873 846 E-mail : lilongwe@grahamcarrmw,com INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) ON THE STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD ENDED 31 MARCH 2024 Opinion We have audited the statement of income and expenditure of the African Center of Excellence in Aquaculture and Fisheries project (ACE ll AF-APA) implemented by the Lilongwe University of Agriculture and Natural Resources funded by the World Bank as set out on page 7, which comprise the statement of income and expenditure for the period ended 31 March 2024, and notes to the statement of income and expenditure, including a summary of significant accounting policies and other explanatory information. ln our opinion: o The statement of income and expenditure the period ended 31 March 2o24,was prepared in accordance with the World Bank financing agreements. Basis for opinion We conducted our audit in accordance with lnternational Standards on Auditing (lSAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the income and expenditure statement section of our report. We are independent of the Project 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 the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other matters - limitation of distribution and use The Project's statement of income and expenditure have been prepared in order for the responsible party to meet the user's requirements. As a result, the Project's statement of income and expediture may not be suitable for other purposes. Our report has been prepared solely for the use ofthe responsible party and the user and should not be distributed to or used by any other parties. We have not modified our opinion in respect of this matter. -4- Audit Tax Advisory Partners: Cornwell Banda, Martha Nyirongo Mrs, Julius Gondwe Grdham Gn is a member fifin of the "No(ia Intemational" netwo*. Nexia Ioteroational Llmited does not deliver services in iE own name or Nexia otherwise. Nexia Intemational Limited and the member flrms of h€ Nexia Internatbnal network (induding those members which trade under d namewhlch includes the word NDCLA) are not part of a worldwide partneEhip. Ncxia Intemational Limlted does not accept any responstbilit, for the commission of any act, or omission to act by, or the liabilitjes of, any of its membe6. Each member firm wjthin the Nexia Intemational network is a sepa.ate legal en5ty. ADL House, 3rd Floor, City Centre S Craham Carr P.O. Box 898, Lilongwe, Malawi Tel : +265 (0) 992 873 845 +265 (0) 992 873 846 E-mail : lilongwe@grahamcarrmw.com INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LILONGWE LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) ON THE STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD ENDED 31 MARCH 2024 Responsibilities ofthe Management and those charged with governance for the statement of income and expenditure he management is responsible for the preparation of the statement of income and expenditure that are fairly in all material respects in accordance with financing reporting provisions of the relevant donor financing agreements for such internal control as management determines is necessary to enable the preparation ofstatement of income and expenditure that are free from material misstatement, whether due to fraud or error. ln preparing the statement of income and expenditure, the management is responsible for assessing the Program's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to cease the program, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the,Project's financial reporting process. Auditor's responsibilities for the audit of the income and expenditure statement Our objectives are to obtaln reasonable assurance about whether the income and expenditure statement 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 conducted In accordance with lSAs 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 could reasonably be expected to influence the economic decisions of users taken on the basis of these income and expenditure statement. As part of an audit in accordance with lSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: . ldentify and assess the risks of material misstatement of the income and expenditure statement, 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 opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, orthe 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 ofthe Project's internal control. -5- INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LILONGWE LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) ON THE STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD ENDED 31 MARCH 2024 Auditor's responsibilities for the audit of the income and expenditure statement - continued . Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Project. . Conclude on the appropriateness of the Project's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the income and expenditure statement or, if such disclosures are inadequate, to modifl/ our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Projectto cease to continue as a going concern. . Evaluate the overall presentation, structure and content of the income and expenditure statement, including the disclosures, and whether the income and expenditure statement is prepared, in all material respects in accordance with financial reporting provisions of the financing agreement. . Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Project to express an opinion on the income and expenditure statement. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion. We communicate with the Project 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. We also provide the Project with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. G-fu" 6- Graham Carr Chartered Accountants (Malawi) Cornwell Banda Date: 16th October 2024 -6- Audit Tax Advisory Partners: Cornwell Banda, Martha Nyirongo Mrs, lulius Gondwe Graham Can is a member firm of the "No{a Intemational" netwo*. Nexia Intematonal Limiied does not ddiver seMces in its own name or otherwis€. Nexia International Limited and the member firms of the Nexia Intemational network (in.ludinq those members which trade under a Nexia namewhich includes the word NEXIA) are not part of a woddwlde partnership. Nexia international Limited does not accept any responsibility for the @mmission of any act, or omission ts] act by, or the liabilities of, any of its members. Each member firm within the Nexia lnternational network is a separate legal entity. LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD FROM l APRIL 2023 TO 3T MARCH 2024 2024 2o24 Note MK us$ INCOME World Bank Funding 933,325,582 7 48,079 lnterest receivable 467,829 355 Exchange Gain 167,515,888 Total lncome 1,101,310,300 7 48,435 EXPENDITURE Research Dissemination & outreach/linkages 67,804,O10 51,601 Education L46,7 52,423 111,584 Training and facilitation 15,185,000 11,556 Project Management & Governance 491,955,188 325,239 Monitoring & Evaluation 99,397 ,LO3 75,583 Total Expenditure lazl,O7 4,7241 (s7s,663) Excess of receipts over payments 280,235,57 6 L72,772 Represented by: FDH Local account 5 46,337 ,430 35,264 FDH Forex account 5 335,898,146 197,508 APA Centre- Creditors 6 (102,000,000) (60.000) 24O,235,576 L72,772 The statement of income and expenditure was approved by management and is signed on its behalf by:..' t.tnwersltyo-fR!ffi ,,0 r.iiihj ll#!,#$-::9lid;1"i Je DIRECTOR OF FINANCE t 0 ocr 2021 ttlnl:yntt DATE 7- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) NOTES TO THE STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 1 PROGRAMME BACKGROUND The African Centre of Excellence in Agricultural Policy Analysis (ACE II-AF APA) is aligned to Overall Strategic Plan 2019-2023. The broad aim of the plan, among others, is inject a strategic impact in the transformation of agriculture in Malawi and beyond by endeavouring to produce relevant graduates with multi-disciplinary skills to transform agri-food The Agricultural Policy Analysis (ACE II-AF APA) is highly aligned to all the pillars of Strategic Plan which are Teaching and Learning; Research Consultancy and Outreach; Infrastructure Development; Resource Mobilization, Utilization and Financial Management; Human Capacity Building; and Governance and Management. 2 BASIS OF PREPARATION The statement of income and expenditure of Lilongwe University of Agriculture and Natural Resources-Africa Centre of Excellence in Agricultural Policy Analysis Project (ACE II AF- APA) Project has been prepared for the purpose of reporting to donors as required under the terms of the funding agreement . The reporting currency is the Malawian Kwacha (MK) and United states Dollar (US$. The statement of income and expenditure has been prepared on a modified cash receipts and disbursements basis of accounting where funding is recognized when received and expenses are recognized when paid. The is deemed to be an appropriate accounting treatment. In addition, unliquidated funds as at period end are represented as cash balance in the statement of income and expenditure. 3 SIGNIFICANT ACCOUNTING POLICIES The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the statement of income and expenditure of Lilongwe University of Agriculture and Natural Resources - Africa Centre of Excellence in Agricultural Policy Analysis Project (ACE II AF- APA) project. 3.1 Receipts Receipts related to funds received from World Bank, other project receipts interest received, exchange gains and other income . Receipts are recognized when the are received and measured at the actual amount received. 3.2 Payment These represent all payments made from the bank accounts of the LUANAR-Africa Centre of Excellence in Agricultural Policy Analysis Project (ACE II AF- APA)'s Local and Forex Accounts .Payments are recognized when paid and are measured at the amount paid. 3.3 Exchange rates Transaction in foreign currencies are translated into Malawi Kwacha using the rate ruling at the date of the transaction ,transactions in Malawi Kwacha are translated into United States Dollars at annual weighted average rates balances of period end are translated at exchange rates prevailing at the reporting date. - 8- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) NOTES TO THE STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 3.4 Bank and Unliquidated funds These are bank balances and all expenses incurred by the implementing partners but not yet liquidated by Lilongwe University of Agriculture and Natural Resources-Africa Centre of Excellence in Agricultural Policy Analysis Project (ACE II AF- APA) Project as at the end of the year. 4 GRANT INCOME This represents the direct transfer from the World Bank into Lilongwe of Agriculture and Natural Resources - Centre of Excellence in Transformative Agriculture Commercialisation and Entrepreneurship (TACE) Project bank account held with FDH Bank as follows: Date Details 2024 2024 MK USD 29.05.23 World Bank funding 511,423,606 493,572 20.03.24 World Bank funding 165,888,078 97,542 20.03.24 World Bank funding 256,014,898 150,537 933,326,582 741,651 5 CASH AND CASH EQUIVALENTS 2024 2024 MK USD Local bank account-FDH 46,337,430 35,264 Forex bank account-FDH 335,898,146 197,508 382,235,576 232,772 6 APA Centre-Payables Aquafish project 8,500,000 50,000 Bunda Collge Department of Economics 1,700,000 10,000 102,000,000 60,000 The payable balances represent the advances lendered from Aquafish project and Bunda college Department of Economics but they were not yet settled as at 31st March 2024. - 9- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) NOTES TO THE STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 7 EXCHANGE RATES AND INFLATION The foreign currencies affecting most of the operation of the Project are United states Dollar. The average of selling and buying exchange rate of these currencies and the country's national price index which represents inflation rate are as follows: 2024 Malawi Kwacha to 1 United Stated Dollars (USD) 1683.33 Inflation rate 31.8% At the time of signing the statement of income and expenditure, the average exchange rate were as follows: United states Dollar (USD) 1733.83 Inflation rate 33.9% 8 CAPITAL COMMITMENTS There were no capital commitments as at year end requiring disclosure in the statement of income and expenditure. 9 CONTINGENT LIABILITIES /PROVISIONS There were contingent liabilities existing as at year end requiring disclosure in the statement of income and expenditure. 10 SUBSEQUENT EVENT Subsequent to the reporting date there were no significant events necessitating adjustments to /or disclosure in the statement of income and expenditure. - 10 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) BUDGET AND EXPENDITURE STATEMENT FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 PROGRAMME ACTIVITIES PLANNED / ACTUAL ACTUAL VARIANCE BUDGET EXPENDITURE EXPENDITURE US$ US$ MK US$ 1 Project Management & Governance 4.1.1 Project Inception workshop - - 4.1.2.1 Adminstrative assistant - - 4.1.2.2 Project officer - - 4.1.2.3 Staff-time compensation (Accounts, audit, - - - procurement, ict, library) 4.1.3 Gratuity and Benefits for Project unit 1,000 - 1,000 4.1.4 Office running costs - - - 4.1.4.1 Office Maintenance Costs 300 - 300 4.1.4.2 Communication Costs 4,400 4,666,550 3,551 849 4.1.4.3 Stationery & Consumables - - 4.1.4.4 Contribute towards University Utility bills 1,800 - 1,800 4.1.4.5 Office supplies and refreshments 3,500 4,032,419 3,069 431 4.1.4.6 Office Furniture & Equipment (1 Water Dispensor @ 20,000 - 20,000 $300, 6 Air Conditioners @ $600 each, 1 Fridge @ $500, 2 Kettle @ $50 each, 4 Flasks @ $50 each, 5 Cellphones @ $1000 each, Office Utensils lumpsum @ $1500 all, 6 Office Chairs @ $ 350 each and Tables @ $800 each, 8 Visitos chairs @ $200 each and 1 microwave @ $300) Bank Charges 5,000 4,841,675 3,685 1,315 4.1.5.1 Conduct Quarterly Project Technical meetings 25,000 31,340,525 23,851 1,149 4.1.5.2 Hold annual Project Steering Committee meetings 6,000 7,574,600 5,765 235 4.1.6.1 Procurement of Vehicles 155,000 258,794,981 147,810 7,190 4.1.6.2 Maintenance of Project Vehicle - - 4.1.6.3 Vehicle Insurance & COF 1,500 - 1,500 4.1.7 Financial management systems 15,400 20,515,836 15,613 (213) - 11 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) BUDGET AND EXPENDITURE STATEMENT FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 PROGRAMME ACTIVITIES PLANNED / ACTUAL ACTUAL VARIANCE BUDGET EXPENDITURE EXPENDITURE US$ US$ MK US$ 4.1.8 ACE 11 AF APA Meetings for peer learning 8,000 11,642,301 8,860 (860) Support local travels perdiems 16,000 21,255,800 16,176 (176) International Travels (airticket, travel insurance, - - - accomodation, DSA) Conduct Networking & Synergies 20,500 26,975,824 20,530 (30) Within Africa Travels (airticket, travel insurance, 22,500 29,291,394 22,292 208 accomodation, DSA) Local collaboration - - - Regional collaboration 55,000 71,004,283 54,037 963 Sub-total 360,900 491,936,188 325,239 35,661 2. Research Dissemination & Outreach/linkages 1.1.9.1 Journal publication with national authors 3,500 - 3,500 1.1.9.2 Journal publication with regional authors 10,500 - 10,500 1.1.9.3 Journal publication with international authors 3,500 - 3,500 1.1.9.4 Conference publication with national authors 3,500 - 3,500 1.1.9.5 Conference publication with regional authors 3,500 - 3,500 2.3.4.1 National Exchange 10,000 - 10,000 2.3.4.2 Regional exchange 75,000 67,804,010 51,601 23,399 2.3.4.3 Online exchange 7,000 - 7,000 Sub Total 116,500 67,804,010 51,601 64,899 - 12 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) BUDGET AND EXPENDITURE STATEMENT FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 PROGRAMME ACTIVITIES PLANNED / ACTUAL ACTUAL VARIANCE BUDGET EXPENDITURE EXPENDITURE US$ US$ MK US$ 3. Facilities and equipment Big data ICT infrastructure 1.1.5.9 Support towards generation of real time data 20,000 - 20,000 Laptop (core team, engeneer) - - - Potable power banks - - - Desktop computers (Office personnel) - - - 1.1.1.1 Desktop computers (students) 45,000 - 45,000 1.1.1.2 Documents binder - - 1.1.1.3 Heavy duty printer 12,000 - 12,000 1.1.1.6 3D Printer medium 20,000 - 20,000 1.1.1.7 Laptops &Accessories 33,000 - 33,000 1.2.1.1 Still cameras 3,500 - 3,500 1.2.1.2 Video Cameras 4,500 - 4,500 1.2.1.3 5K TV screens 1,500 - 1,500 1.2.1.4 Voice recorder 300 - 300 1.2.1.5 Editing software 2,500 - 2,500 1.2.1.6 Video-conference equipment (furniture, computers, 20,000 - 20,000 PA system, Carpet & sound proofing) Sub Total 162,300 - - 162,300 - 13 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) BUDGET AND EXPENDITURE STATEMENT FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 PROGRAMME ACTIVITIES PLANNED / ACTUAL ACTUAL VARIANCE BUDGET EXPENDITURE EXPENDITURE US$ US$ MK US$ 4. Education 1.1.6.1 Curriculum development for MSc & PhD in Data 24,000 24,857,895 18,918 5,082 Science 1.1.6.2 Curriculum development for PhD in Data Science - - 1.1.6.3 Curriculum development for PhD & MSc in Rural 24,000 14,282,500 10,869 13,131 Innovations and Extensions 1.1.6.4 Curriculum development for PhD in Rural Innovations 12,000 - 12,000 and Extensions 1.1.7.1 MSc, Data Science - National (Female) 92,280 - 92,280 1.1.7.3 MSc, Data Science -Regional (Female) 105,168 - 105,168 1.1.7.5 MSc, Agricultural & Applied Economics -National 138,420 83,654,128 63,664 74,756 (Female) 1.1.7.7 MSc, Agricultural & Applied Economics -Regional 105,168 - 105,168 (Female) 1.1.7.9 MSc, Extension & RD - National (Female) 92,280 - 92,280 1.1.7.11 MSc, Extension & RD - Regional (Female) 70,112 - 70,112 1.1.8.1 PhD in Data Science - National (Female &Male) 35,694 - 35,694 1.1.8.3 PhD in Data Science - Regional (Female) 22,046 - 22,046 1.1.8.5 PhD, Agric. & Resource Economics - National (Female) 53,540 14,653,747 11,152 42,388 1.1.8.7 PhD, Agric. & Resource Economics - Regional (Female) 44,094 - 44,094 1.1.8.9 PhD, Extension & RD - National (Female) 30,000 - 30,000 1.1.8.11 PhD, Extension & RD - Regional (Female) 22,046 - 22,046 - 14 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) BUDGET AND EXPENDITURE STATEMENT FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 PROGRAMME ACTIVITIES PLANNED / ACTUAL ACTUAL VARIANCE BUDGET EXPENDITURE EXPENDITURE US$ US$ MK US$ Module development short courses in Development 2,694 2,720,000 2,070 624 and Agricultural Policy Module development short courses in Data Science - - - Module development short courses in Rural Innovation 2,500 2,840,000 2,161 339 Module development short courses in Participatory - - - Action Research Module development short courses in Social Learning - - - and Mindset Change 1.1.10.1 Accreditation of MSc in Applied Data Science (Self- 15,000 3,744,154 2,849 12,151 evaluation) Accreditation of MSc in Applied Data Science - - (National) 1.1.10.2 Accreditation of PhD in Applied Data Science (Self- 15,000 - 15,000 evaluation) 1.1.10.3 Accreditation of PhD in Applied Data Science (National) - - - 1.1.10.5 Accreditation of MSc in Rural Innovations and 15,000 - 15,000 Extension (Self-evaluation) 1.1.10.6 Accreditation of MSc in Rural Innovations and 15,000 - 15,000 Extension (Self-acreditation) 1.1.10.7 Accreditation of MSc in Rural Innovations and - - - Extension (National) 1.1.10.8 Accreditation of PhD in Rural Innovations and 15,000 - 15,000 Extension (Self-evaluation) 1.1.10.9 Accreditation of PhD in Rural Innovations and - - - Extension (National) - 15 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) BUDGET AND EXPENDITURE STATEMENT FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 PROGRAMME ACTIVITIES PLANNED / ACTUAL ACTUAL VARIANCE BUDGET EXPENDITURE EXPENDITURE US$ US$ MK US$ 1.1.10.10 Accredation of PhD in Agricultural and Resource - - - Economics (Internaional level) 1.1.11.1 Signed MOU with Public Universities 20,000 - 20,000 1.1.11.2 Signed MOU with Private Institutions 15,000 - 15,000 Sub-total 959,542 146,752,423 111,684 874,358 5. Training and facilitation 1.1.5.9 Support towards generation of real time data - - Conduct short courses in Economics 10,000 6,830,000 5,198 4,802 Conduct short courses in RD 10,000 8,355,000 6,358 3,642 Sub Total 20,000 15,185,000 11,556 8,444 Applied research Sustanable Financing & Resource Mobilization 5.1.1. Proposal writing workshops for strengthening and 8,000 - 8,000 sustainability of the APA 5.1.2.1 Support National Consultacies by faculty members 6,000 - 6,000 5.1.2.2 Support International Consultancies by faculty 2,000 - 2,000 members Sub-total 14,000 - - 16,000 - 16 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) AFRICA CENTRE OF EXCELLENCE IN AGRICULTURAL POLICY ANALYSIS PROJECT (ACE II AF-APA) BUDGET AND EXPENDITURE STATEMENT FOR THE PERIOD FROM 1 APRIL 2023 TO 31 MARCH 2024 PROGRAMME ACTIVITIES PLANNED / ACTUAL ACTUAL VARIANCE BUDGET EXPENDITURE EXPENDITURE US$ US$ MK US$ 6.Monitoring & Evalution 6.1.1 Conduct bi-nnual monitoring and evaluation 10,000 - 10,000 6.1.2 Tracer study - - 6.1.3 Support towards Environmental and Social 4,000 505,250 385 3,615 Safeguards, and grievance redress mechanism 6.1.4 Research Coordination and networking 80,000 98,891,853 75,198 4,802 6.1.5 Project Closure Workshop - - Sub-total 94,000 99,397,103 75,583 18,417 - Grand Total 1,681,882 821,074,724 575,663 1,176,438 - 17 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION (TACE) STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 MARCH 2024 LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE A COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) N D STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 MARCH 2024 CONTENTS Page Statement of management responsibilities 1 Executive summary 2 Independent Auditor's report 3-5 Statement of receipts and payments 6 Notes to the statement of receipts and payments 7-9 Additional information that do not form part of the statement of receipts and payments Expenditure against budget 10-18 Fixed assets register 19 LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) STATEMENT OF MANAGEMENT RESPONSIBILITIES FOR THE YEAR ENDED 31 MARCH 2024 Management is responsible for the preparation ofthe statement ofreceipts and payments of the Centre of Excellence in Transformative Agriculture (TACE) Programme implemented by Lilongwe University of Agriculture and Natural Resources. This report captures the statement of receipts and payments for the year ended 31 March 2024, and the notes to the statement of receipts and payments, which includes a summary of significant accounting policies and other explanatory information. Management is also required to ensure that the Project keeps accounting records which disclose with reasonable accuracy at any time the financial position of the Project and to ensure that the statement of receipts and payments complies with the World Bank financing agreements. ln preparing the statement of receipts and payments, the management accepts responsibility for the following: . maintenance ofproper accounting records; o selection of suitable accounting policies and applying them consistently; r makingjudgement and estimates that are reasonable and prudent; o compliance with applicable accounting standards when preparing statement of receipts and payment, subject to any material departures being disclosed and explained in the statement of receipts and payments. Management also accepts responsibility for taking such steps as are reasonably open to them to safeguard the assets ofthe project and to maintain adequate systems of internal controls to prevent and detect fraud and other irregularities. Management is of the opinion that the statement of receipts and payment was prepared in accordance with the World Bank financing agreements. The statement of receipts and payments was approved by management and is signed on its behalf by:- ",,r".-7ffi;ffi Vit,e Ch '-"u'cesjl l,AryAh; - DIRECTOR OF FINANCE taori. iiht lo fri1t6 k - 1- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) EXECUTIVE SUMMARY FOR THE YEAR ENDED 31 MARCH 2024 Background The Lilongwe University of Agriculture and Natural Resources (LUANAR) is establishing a Centre of Excellence in Transformative Agriculture Commercialization and Entrepreneurship (TACE) to address(i) agribusiness and entrepreneurship; (ii) rural innovations and agricultural extension, which are among the priority areas under ACE ll AF. The conceptualization of the envisaged approach to be taken was conceived after critical examination of the problems and challenges that are preventing the agriculture sector in Malawi from transforming and graduating from a predominantly subsistence sector into a vibrant industrialized commercial sector. Programme goal The main goal of TACE is to catalyse transformation of the agriculture sector i.e the agriculture sector in Malawi from transforming and graduating from a predominantly subsistence sector into a vibrant industrialized commercial sector.To deliver on these outcomes', activities proposed are centred on strengthening linkages; provision of infrastructure and equipment; evidence driven; use of innovative approaches and having transformative leadership at all levels. The primary value chains of focus for TACE include legumes, dairy and horticulture. Fish will be among the secondary value chains depending on technology and innovations identified that need commercialisation. Specific objectives of the programme and methodology TACE will catalyse transformation of the agriculture sector by addressing four specific objectives, using specific innovative methodologies to deliver on anticipated results; o To develop experts at postgraduate level in engineering for food processing, agribusiness management and entrepreneurship leading to a transformed agriculture industry. To enhance creative, integrative, and critical thinking skills in entrepreneurship and commercialization among students and academic staff. To build and strengthen partnership and linkages among higher education institutions and with private sector at national, regional, and international levels To improve productivity and quality of agricultural produce and value- added products that meet domestic and export market standards -2- S Graham Carr ADL House, 3rd Floor, City Centre P.O. Box 898, Lilongwe, Malawi Tel: +265 (0) 992 573 84s +265 (0) 992 873 846 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LILONGWE E-mail: lilongwe@grahamcanmw.com UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR} CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEU RSHIP(TACE) ON THE STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 MARCH 2024 Opinion We have audited the statement of receipts and payments of the Centre of Excellence in Transformative Agriculture Commercialisation and Entrepreneurship (TACE) coordinated by the Lilongwe University of Agriculture and Natural Resources, funded by the World Bank set out on pages 6 to 9, which comprises the statement of receipts and payments for the year ended 31 March 2024, and notes to the statement of receipts and payments, including significant accounting policies and other explanatory information. ln our opinion, the statement of receipts and payments of the TACE for the year ended 31 March 2024, was prepared in accordance with the World Bank financing agreements. Basis for opinion We conducted our audit in accordance with lnternational Standards on Auditing (lSAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the statement of receipts and payments section of our report. We are independent of the project in accordance with the lnternational Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) and we have fulfilled our ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for a unqualified opinion as above. Responsibilities of the Management and those charged with governance for the statement of receipts and payments Management is responsible for the preparation of the statement of receipts and payments in accordance with financing reporting provisions of the Norwegian lnstitute of Bioeconomy Research(NlBlO) and internal controls as management determines necessary to enable the preparation of the statement of receipts and payments that is free from material misstatement, whether due to fraud or error. ln preparing the statement of receipts and payments, management is responsible for assessing the programme's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management either intends to cease the programme, or has no realistic alternative butto do so. Those charged with governance are responsible for overseeing the Project's financial reporting process. -3- Tax Mvisory Partners: Cornwell Banda, lvlartha Nyirongo Mrs, Julius Gondwe Graham Carr is a member firm ol the'Nexia htemationd" net\4orlc Nexia Intemational Limited does not deliver seMces in ib own narne or Nexia othe.wise. Nexh Intemational Limited and tfi€ member firms of the Nexia Intemational netwo* (includlng those rnembers wfiidt tiade under a namewhich indudes the t6rd ND(A) are not part of a $,oddi ,ide partneEhip. Nexia Intemational Limited does not accept any responsibility for the commisslon of any acl or omission tg act by, or the liabilities of, any of its membe6. Each member firm within the Nexia Intemational network is a separate legal entity, ADL House, 3rd Floor, City Centre S Granam Carr P.O. Box 898, Lilongwe, Malawi Tel: +265 (O) 992 873 845 +265 (O) 992 873 846 E-mail: lilongwe@grahamcarrmw.com INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION ON THE STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 MARCH 2024 Auditor's responsibilities for the audit of the statement of receipts and payments Our objectives are to obtain reasonable assurance about whether the statement of receipts and payments as a whole is 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 conducted in accordance with lSAs 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 could reasonably be expected to influence the economic decisions of users taken on the basis of this statement of receipts and payments. As part of an audit in accordance with lSAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: o ldentify and assess the risks of material misstatement of the statement of receipts and payments, 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 opinion. The risk of not detecting a material misstatement resulting 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. o 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 ofexpressing an opinion. o Evaluate the appropriateness ofaccounting policies used. o Conclude on the appropriateness of the programme's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the programme's ability to continue as a going concern. lf we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the statement of receipts and payments or, if such disclosures are inadequate, to modifj/ our opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit report. However, future events or conditions may cause the programme to cease to continue as a going concern. o Evaluate the overall presentation, structure and content of the statement of receipts and payments, and whether the statement of receipts and payments represents the underlying transactions and events in a manner that achieves a fair presentation. -4- INDEPENDENTAUDITOR'S REPORTTOTHE MEMBERS OF LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION ON THE STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 MARCH 2024 Auditor's responsibilities for the audit of the statement of receipts and payments (Continued) o Obtain sufficient appropriate audit evidence regarding the financial information of the programme activities to express an opinion on the statement of receipts and payments. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion. 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 identifo during our audit. We also provide management with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with management, we determine those matters that were of most significance in the audit of the statement of receipts and payments for the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. C"/* Graham Carr A* Cornwell Banda Chartered Accountants (Malawi) -5- Audit Tax Advisory Padners: Cornwell Banda, Martha Nyirongo Mrs, Juljus Gondwe G.aham Car Is 6 member firm of the'Ne*a I0teroational' network. Nexia International Limited does not ddiver services io ib ovvn name or otlEMise, Nexia lntemational Limited and the member firms of the Nexia lnternational netwod< (including those members which trade under a Nexia namewhich includes the word NEXTA) are not part of a worldwide partnership. Nexia Intematlonal Limited does not accept any responsibility for the @mmission of any acl or omission to act by, or the liabilities of, ary of its members, Each member finn within the Nexia International network is a separate legal entity. LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 MARCH 2OZ4 2023 2023 Note MK us$ RECEIPTS Funding from World Bank 1,185,653,679 889,99s Tuition fees 11,406,559 7,500 tnterest received 666,232 508 Other income 73,762,937 56,728 Total lncome L,270,899,4A7 951,731 PAYMENTS Develop experts at postgraduate level (MSc/PhD) in food 723,577,784 92,7 75 processing, agribusiness management and entrepreneurship for a transformed agricultural industry Enhance creative, integrative and critical thinking skills in 29,31X,500 22,OO2 entrepreneurship and commercialization among students and academic staff by offering transformative programmes Partnership and linkages among higher education institutions at 14,7 47,865 r.1,066 national, regional and international level build and strengthen Capacitate HEI for improved production of agricultural produce 13,219,000 9,9?2 and value-added products that meet national and international quality standards Administrative : Facilities and Equipment 17 6,O32,O35 732,733 Administrative; Project Management, Monitoring and Learning 343,377 ,711 258,468 Total Expenditure (700,139,896) (s25.307) Unspent funds for the period 570,759,511 428,424 Represented By: CDH lnvestment Forex Account 3.3 332,337,3L5 249,455 CDH lnvestment Local Account 3.3 288,4?8,196 216,500 Payable (ACE- Aquafish) 5 (50,o00,oo0) (s7 ,s37t. 570,759,511 428,4?4 The statement ofreceipts and payments was approved by management and is signed on its behalf by: t,,i,n5\ '-i D1,,r ,,,,,, i r4r\,;isriV .-1i rr. .tr , -.,U,., @1,bw6L €{"^r-4, dlid ,, Flesca.,-.r,-, Vtcr 0fi6nooiirx s Lrllqe DIRECTOR OF FINANCE VICE CHANCELLOR r 0 ocT m2{ DATE DATE -6- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) NOTES TO THE STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 MARCH 2024 1 PROGRAMME BACKGROUND The Lilongwe University of Agriculture and Natural Resources (LUANAR) is establishing a Centre of Excellence in Transformative Agriculture Commercialization and Entrepreneurship (TACE) to address(i) agribusiness and entrepreneurship; (ii) rural innovations and agricultural extension, which are among the priority areas under ACE II AF. The conceptualization of the envisaged approach to be taken was conceived after critical examination of the problems and challenges that are preventing the agriculture sector in Malawi from transforming and graduating from a predominantly subsistence sector into a vibrant industrialized commercial sector. Implementation approach is therefore guided by a drive to solve a developmental challenge of “Low commercialization and lack of agri-entrepreneurship capacity to transform and industrialize the agriculture sector in Malawi”. The gap area challenges will be addressed by leveraging on expertise and experience of key partners locally, regionally and internationally through establishment and strengthening of networks and linkages with all actors in the entrepreneurial ecosystem, and the hence the food system; and by enhanced engineering and entrepreneurial human capital skills, agricultural productivity and commercialization of innovations services. For TACE to meet its goal of strengthened partnerships, several stakeholders in the entrepreneurial ecosystem have been identified to collaborate with. The stakeholders include Higher Education Institutions (HEI) both locally and internationally, private sector players focused on food product engineering and agro-processing, commercialisation of innovations, investment readiness services, TEVET institutions, farmers, researchers, and regulators among others. Each of these actors plays a unique role to deliver a demand driven service in a manner that will enhance quality goods and services for a functional and transformed agriculture industry. Evidence based decision making for the sector will be enhanced through Community Action Research, Outreach and Collaboration as an enabler for research at HEI’s. Such an approach will provide a way of training highly skilled human resource, who will not only pursue cutting edge research, but will also be innovative to develop technologies and business models that are relevant and responsive to the market needs and demand for the industry. To deliver on these outcomes’, activities proposed are centred on strengthening linkages; provision of infrastructure and equipment; evidence driven; use of innovative approaches and having transformative leadership at all levels. The primary value chains of focus for TACE include legumes, dairy and horticulture. Fish will be among the secondary value chains depending on technology and innovations identified that need commercialisation. 2 Basis of preparation The statement of receipts and payments of Lilongwe University of Agriculture and Natural Resources-TACE was prepared for the purpose of reporting to donors as required under the terms of the funding agreement. The reporting currencies are the Malawian Kwacha (MK) and The statement of receipts and payments has been prepared on a modified cash receipts and disbursements basis of accounting where funding is recognized when received and expenses are recognized when paid. This is deemed to be an appropriate accounting treatment. In addition, unliquidated funds as at period end are represented as cash balance in the statement of receipts and payments. - 7- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) NOTES TO THE STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 MARCH 2024 3 Significant accounting policies The following accounting policies were applied consistently in dealing with items which are considered material in relation to the statement of receipts and payments of Lilongwe University of Agriculture and Natural Resources -TACE Programme. 3.1 Payments These represent all payments made from CDH Investment Account and CDH Investment Local Account. 3.2 Exchange rates Transaction in foreign currencies are translated into Malawi Kwacha using the rate ruling at the date of the transaction. Transactions in Malawi Kwacha are translated into United States Dollars at annual weighted average rates, balances of period end are translated at exchange rates prevailing at the reporting date. 3.3 Cash and cash equivalents These are bank balances held with banks as at the end of the period. 4 Income Receipts related to funds received from World Bank, Interest received, Tuition fees from IUCEA and other income from various one-off donors. Receipts received during the period are as follows; Date Details MK USD WORLD BANK 29.05.23 Funding 1st Tranche 511,419,461 493,540 14.03.24 Funding 2nd Tranche 503,549,473 296,087 14.03.24 Funding 3rdTranche 170,694,745 100,369 1,185,663,679 889,995 TUITION FEES ( IUCEA) 28.11.23 Tution fees from Inter-University Council for 8,856,559 6,000 23.02.24 Tution fees from Inter-University Council for 2,550,000 1,500 11,406,559 7,500 OTHER INCOME 07.02.24 Royal Academy of Science 9,337,894 6,305 03.07.23 Vice chancellor innovation( CDH Bank) 9,999,996 9,650 14.12.23 Vice chancellor innovation( CDH Bank) 10,559,047 6,273 21.06.23 Fees for Training SMEs 496,000 479 1,984,000 1,915 16.07.23 Fees for Training SMEs 04.10.23 Funding from GIZ 30,286,000 25,930 22.12.23 Proceeds of Crops from GALA Farms 10,500,000 6,176 73,162,937 56,728 - 8- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) NOTES TO THE STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 MARCH 2024 5 Payables ACE-Aquafish project 50,000,000 37,531 The payable balance represents the advance lendered from Aquafish project but was not yet settled as at the date of audit 31st March 2024. 6 Exchange rates and inflation The foreign currencies affecting most of the operation of the Programme are United states Dollar. The average of selling and buying exchange rate of these currencies and the country's national price index which represents inflation rate are as follows: 2024 Malawi Kwacha to 1 United Stated Dollars (USD) Inflation rate At the time of signing the statement of receipts and payments, the average exchange rates were as follows: United states Dollar (USD) Inflation rate 7 Capital commitments There were no capital commitments as at year end requiring disclosure in the statement of receipts and payments. 8 Contingent liabilities /provisions There were no contingent liabilities existing as at year end requiring disclosure in the statement of receipts and payments. 9 Subsequent event Subsequent to the reporting date there were no significant events necessitating adjustments to /or disclosure in the statement of receipts and payments. - 9- LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) NOTES TO THE STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 MARCH 2024 The following pages do not form part of the statement of receipts and payments LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) EXPENDITURE AGAINST BUDGET FOR THE YEAR ENDED 31 MAY 2024 No. Key Deliverables Activity Planned Activity or Process Year 1 (US$) Actual Actual (MWK) Variance Variance Code (US$) (US$) % 1 To develop experts at postgraduate level (MSc/PhD) in food processing, agribusiness management and entrepreneurship for a transformed agricultural industry Experts at MSc and PhD 1.1.1 Sponsor and train MSc level in food processing students in food processing, (capable of designing and agribusiness management building the food processing and entrepreneurship, and plants, and food packaging), other sector specific 285,000 45,308 60,360,643 239,692 84 agribusiness management programmes and entrepreneurship trained 1.1.2 Sponsor and train PhD students in agribusiness management Engineering; 150,000 - - 150,000 100 and other sector specific programmes 1.1.3 Organise and Conduct trainings for postgraduate students , staff and 37,000 591 787,834 36,409 98 stakeholders 1.1.4 Provide travel and upkeep grants to staff, PhD and MSc students for academic 76,500 42,725 56,919,269 33,775 44 exchange programme and short course 1.1.5 Accreditation of programmes 15,000 4,091 5,450,038 10,909 73 1.1.6 Development of new PhD and 60,000 - - 60,000 100 MSc programmes Subtotal 623,500 92,715 123,517,784 530,785 85 - 10 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) EXPENDITURE AGAINST BUDGET FOR THE YEAR ENDED 31 MAY 2024 No. Key Deliverables Activity Planned Activity or Process Year 1 (US$) Actual Actual (MWK) Variance Variance Code (US$) (US$) % 2 To enhance creative, integrative and critical thinking skills in entrepreneurship and commercialization among students and academic staff by offering transformative programmes Agricultural start-ups and 2.1.1 Design and test a holistic spin-offs with creative, university spin-off creation integrative, and critical business model thinking skills enhanced for 20,000 - - 20,000 100 commercialization of agricultural technologies and innovations 2..1.2 Identify and pre incubate potential technologies and innovations addressing 8,000 - - 8,000 100 agricultural challenges 2.1.3 Sponsor identified technologies/innovations with refining, testing, and 13,333 3,866 5,150,000 9,468 71 commercialisation services to be spin-offs/ start ups 2.1.4 Review, redesign, test and upscale the experiential agribusiness incubation process to creating start ups 30,000 13,898 18,515,800 16,102 -100 (including Training farms establishment) - 11 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) EXPENDITURE AGAINST BUDGET FOR THE YEAR ENDED 31 MAY 2024 No. Key Deliverables Activity Planned Activity or Process Year 1 (US$) Actual Actual (MWK) Variance Variance Code (US$) (US$) % 2.1.5 Support creation of start-ups and spin-offs ( through incubation based on their 15,000 4,238 5,645,700 10,762 72 needs to make them investment ready) 2.1.6 Facilitate start-ups and spin- offs networking with external financing (investors) through hackathons, attending 15,000 - - 15,000 100 showcase and start-up speed dating events Subtotal 101,333 22,002 29,311,500 79,332 78 3 Partnership and linkages among higher education institutions at national, regional and international level build and strengthen Ag- 3.1.1 Identify institutional partners TEVET programmes and ap and collaborate to design and proaches offered deliver experiential approach collaboratively with trainings i.e dual education 1,000 4,549 6,060,814 (3,549) -355 entrepreneurial training, and Business ecosystems players/actors simulation games trainings. 3..1.2 Sign MoUs with stakeholders to collaborate in using facilities and equipment for 3,200 210 280,000 2,990 93 demonstrations and production cycles - 12 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) EXPENDITURE AGAINST BUDGET FOR THE YEAR ENDED 31 MAY 2024 No. Key Deliverables Activity Planned Activity or Process Year 1 (US$) Actual Actual (MWK) Variance Variance Code (US$) (US$) % 3.1.3 Conduct joint monitoring and learning assessments of programme delivery with 5,000 2,434 3,243,052 2,566 51 selected partners 3.1.4 Conduct/ support short term trainings in food processing and engineering, agribusiness, 15,000 - - 15,000 financial lieterancy and entrepreneurial initiatives Private and public sectors 3.2.1 Sponsor postgraduate engaged via multiple students, staff, partners to channels to bring awareness attend writeshops for of the existing innovations, publications development, 5,000 893 1,190,000 4,107 82 technologies and services at present at a conference or to university develop peer reviewed papers 3.2.2 Design and maintain active social media presence and other visibility activities to 2,800 1,817 2,420,000 984 35 supports linkage with the industry Agritech and science park 3.3.1 Conduct learning visits on established in collaboration establishment of an with private sector agricultural science and 73,500 1,162 1,548,000 72,338 98 technology park 3.3.2 Prepare establishment of an agricultural science and technology park including 30,000 - - 30,000 100 signing MoUs Subtotal 135,500 11,066 14,741,866 124,434 92 - 13 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) EXPENDITURE AGAINST BUDGET FOR THE YEAR ENDED 31 MAY 2024 No. Key Deliverables Activity Planned Activity or Process Year 1 (US$) Actual Actual (MWK) Variance Variance Code (US$) (US$) % 4 To capacitate HEI for improved production of agricultural produce and value-added products that meet national and international quality standards Model crop, livestock, and 4.1.1 Establish model commercial related processing entities for teaching , learning enterprises within and business incubation - 9,802 13,059,000 (9,802) (100) LUANAR created services 4.1.2 Conduct innovation mentorship trainings to produce coaches and mentors 7,000 - - 7,000 100 to support SMEs in the agricultural sector 4.1.3 Support establishment of a Technology Transfer office to - - - - have coaches and mentors Facilities accessible to SMEs 4.2.1 Operationalise a food or innovators to facilitate processing plant product development focusi ng on food processing, - - - - testing, and packaging established 4.2.2 Develop guidelines (SOPs) for accessing processing, testing and packaging facilities for - - - - supported SMEs - 14 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) EXPENDITURE AGAINST BUDGET FOR THE YEAR ENDED 31 MAY 2024 No. Key Deliverables Activity Planned Activity or Process Year 1 (US$) Actual Actual (MWK) Variance Variance Code (US$) (US$) % Production of agricultural 4.3.1 Scouting for innovations and produce in both quality and technologies as potential spin- quantity for consistent offs/start-ups i.e innovation availability of raw materials r showcasing 20,000 120 160,000 19,880 99 equired by various agribusinesses enhanced 4.3.2 Launch a call and support implementation of action research to test innovative business models for potential spin offs or start ups; and - - - - cooperative models to improve agricultural productivity 4.3.3 Build institutional capacity to respond to emerging issues - - - - affecting farmers and students 4.3.4 Support fabrication or development of farm machinery with potential to enhance production or - - - - processing of agricultural products at commercial level Subtotal 27,000 9,922 13,219,000 17,078 63 - 15 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) EXPENDITURE AGAINST BUDGET FOR THE YEAR ENDED 31 MAY 2024 No. Key Deliverables Activity Planned Activity or Process Year 1 (US$) Actual Actual (MWK) Variance Variance Code (US$) (US$) % 5 Administrative : Facilities and Equipment Procurement and refurbish 5.1.1 Procure project Furniture 20,000 - - 20,000 100 facilities 5.1.2 Procure Project Equipment 198,250 - - 198,250 100 and machines 5.1.3 Procure project vehicle 200,000 132,133 176,032,035 67,867 34 5.1.4 Procure equipment and raw material to capacitate labs to handle emerging issues and - - - - - conduct quality tests 5.1.5 Establish and operationalise a design studio for food process - - - - - engineering 5.1.6 Equip and operationalise a - - - - - food processing plant 5.1.7 Refurbishing a nursery as part of mainstreaming gender in 20,000 20,000 100 training Subtotal 438,250 132,133 176,032,035 306,117 70 6 Administrative; Project Management, Monitoring and Learning Salaries (gross salaries 6.1.1 Support Salaries and staff including social security time for Coordination Unit charges and other related Staff 67,200 14,290 19,038,120 52,910 79 costs, local staff) 6.1.2 Gratuity & Benefits for Project 10,656 - - 10,656 100 coordination unit Office Supplies and 6.2.1 Communication Costs 7,200 3,168 4,220,000 4,032 56 Communication 6.2.2 Stationery & Consumables 4,800 1,575 2,098,915 3,225 67 - 16 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) EXPENDITURE AGAINST BUDGET FOR THE YEAR ENDED 31 MAY 2024 No. Key Deliverables Activity Planned Activity or Process Year 1 (US$) Actual Actual (MWK) Variance Variance Code (US$) (US$) % 6.2.3 University Utility bills 20,400 3,425 4,562,321 16,975 83 6.2.4 Financial management system - 6,495 8,653,400 (6,495) -100 (Sage Package) 6.2.5 Audit fees (External Audit) 9,000 984 1,311,300 8,016 89 6.2.6 Documents verification ( Internal Audit) 16,500 11,822 15,749,634 4,678 28 6.2.7 Maintenance & Vehicle Insurance 16,500 3,817 5,085,540 12,683 77 6.2.8 Administrative Travel Costs 12,000 16,616 22,136,600 (4,616) -38 Project Management and 6.3.1 Attend Project Steering networking Committee meetings 36,833 48,025 63,979,689 (11,191) -30 6.3.2 Conduct Quarterly Project Partners Advisory committee 20,000 4,413 5,878,600 15,587 78 meetings (MEL) 6.3.3 ACE II AF Techincal Review meetings 15,000 - - 15,000 100 6.3.4 Project core team (theme coordinators) collaboration and networking meetings and 104,400 98,425 131,124,319 5,975 6 monthly progress reporting and planning meetings 6.3.5 ICT, marketing and procurement activities 16,000 7,247 9,655,139 8,753 55 support 6.3.6 Project Inception Workshop 15,000 - - 15,000 100 - 17 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) EXPENDITURE AGAINST BUDGET FOR THE YEAR ENDED 31 MAY 2024 No. Key Deliverables Activity Planned Activity or Process Year 1 (US$) Actual Actual (MWK) Variance Variance Code (US$) (US$) % 6.3.7 Support resource mobilisation proposal writing workshops/ 7,000 2,629 3,502,281 4,371 62 trainings 6.3.8 Conduct team building activities with LUANAR management team to 8,000 - - 8,000 100 transform leadership 6.3.9 Institutionalisation of the TACE into LUANAR - - - - operational structure 6.3.10 Monitoring and learning on social and environmental 6,000 9,344 12,447,722 (3,344) -56 safeguards Local transportation All 6.4.1 Project Inception Workshop flights: transfer to/from 1,519 - - 1,519 100 airports 6.4.2 Conduct Quarterly Project Partners Technical Advisory 4,568 - - 4,568 100 committee meetings (MEL) International 6.5.1 Project Inception Workshop 21,000 - - 21,000 100 Transportation Other project expenditures - 22,218 29,600,377 (22,218) -100 6.5.2 Bank charges - 3,975 4,273,753 (3,975) 100 Subtotal 419,577 258,468 343,317,711 161,108 38 Grand Total 1,745,160 526,307 700,139,896 1,218,853 70 - 18 - LILONGWE UNIVERSITY OF AGRICULTURE AND NATURAL RESOURCES (LUANAR) CENTRE OF EXCELLENCE IN TRANSFORMATIVE AGRICULTURE COMMERCIALISATION AND ENTREPRENEURSHIP(TACE) FIXED ASSETS REGISTER FOR THE YEAR ENDED 31 MARCH 2024 FIXED ASSET REGISTER DATE OF DESCRIPTION MODEL REGISTRATION VALUE HOLDER PURCHASE NUMBER (MK) 16.01.24 Toyota Hilux D. Cabin 2.8L GUN126R-DNFSXN 11 82SC211 73,905 Dr Garvin Chipula 4x4 Manual 16.01.24 Toyota Hilux D. Cabin 2.8L GUN126R-DNFSXN 11 82SC210 73,905 Dr Serah Gondwe 4x4 Manual TOTAL 147,810 - 19 -