AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES (AFAAS) FINANCIAL STATEMENTS 30 JUNE 2018 AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES REPORT AND FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 GLOSSARY OF TERMS AFAAS African Forum for Agricultural Advisory Services AGRA Alliance for a Green Revolution in Africa BuFAAS Burkina Faso Forum for Agricultural Advisory Services CF Country Forum CIKM Communication Information and Knowledge Management CTA Technical Centre for Agricultural and Rural Cooperation FARA Forum for Agricultural Research in Africa IFAD International Fund for Agricultural Development MaFAAS Malawi Forum for Agricultural Advisory Services MDTF Multi-donor Trust Fund NSSF National Social Security Fund PHM Postharvest Management SleFAAS Sierra Leone Forum for Agricultural Advisory Services UFAAS Uganda Forum for Agricultural Advisory Services GFRAS Global Forum for Rural Advisory Services GHFAAS Ghana Forum for Agricultural Advisory Services KeFAAS Kenya Forum for Agricultural Advisory Services KAFACI Korean-Africa Food and Agricultural Cooperation Initiative ZAABTA Zirobwe Agaliawamu Agro Business Training Association TODIFA Tororo District Farmers Association TEFCU Teso Fruit Farmers Cooperative Union VEDCO Volunteer Efforts for Development Concerns AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES REPORT AND FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 CONTENTS PAGES Corporate information 2 Report of Directors 3 Statement of Directors' responsibilities 4 Independent Auditors' report 5- 7 Financial statements: Income and expenditure statement 8 Statement of financial position 9 Statement of changes in accumulated fund 10 Statement of cash flows 11 Notes to the financial statements 12 - 20 AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES REPORT AND FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 CORPORATE INFORMATION DIRECTORS Mrs. Mary Kamau Board Chairperson Kenyan Dr. Kristin Davis Vice Chairman American Dr. Mercy Akeredolu Member Nigerian Dr. Hala Yousry Member Egyptian Dr. Dagnachew Beyene Member Ethiopian Mr. Jeffreyson Mutimba Member Zimbabweian Mrs. Valerie Mbombe Member Cameroonian Dr. Charles Masangano Member Malawian Mr. Johnson Adolphus Member Sierra Leone Mr. Martin Egweg Member South African Dr. Margaret Mangheni Member Ugandan Dr. Modibo G.Coulibaly Member Malian Mr. Tozamilel Lukhalo Member South African Dr. Patrice Djamen Member Cameroon Prof. Tunji Arokoyo Member Nigerian Dr. Silim Nahdy Executive Director Ugandan MANAGEMENT Dr. Silim Nahdy Executive Director Mr. Oupot Max Partnerships, Planning and Learning Officer Ms. Cate Mubiru Finance and Admin Officer Mr. Wanzala Paddy Procurement Officer REGISTERED OFFICE Plot 22A, Nakasero Road P.0 Box 34624 Kampala AUDITORS Deloitte & Touche Certified Public Accountant of Uganda 3rd Floor Rwenzori House 1 Lumumba Avenue P. 0. Box 10314 Kampala BANKERS Standard Chartered Bank Housing Finance Bank Ltd Speke Road Nakasero Branch P.0 Box 7111 P.0 Box 1539 Kampala Kampala LAWYERS Kalenge, Bwanika, Ssawa & Company Advocates KBS Chambers Plot 15A Clement Hill Road 1st Floor Ruth Towers P.0 Box 8352 Kampala, Uganda COMPANY SECRETARY Dr. Silim Nahdy Plot 22A, Nakasero Road P.0 Box 34624 Kampala 2 AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES REPORT AND FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 REPORT OF DIRECTORS The directors present their report together with the audited financial statements of the organisation for the 18 months period ended 30 June 2018. PRINCIPAL ACTIVITIES AFAAS has the mandate to implement the Agricultural Advisory Services aspects of the Comprehensive Africa Agriculture Development Programme (CAADP) - an African-owned and Africa-led initiative through which interventions to transform agriculture are coordinated. FINANCIAL RESULTS 18 months 12 Months 2018 2016 USD USD Income 2,372,256 1,113,534 Expenditure (2,442,903) (1,277,700) Deficit for the period (70,647) (164,166) DIRECTORS The current membership of the board of directors is shown on page 2. MANAGEMENT The current membership of the management team at the secretariat is shown on page 2. AUDITORS The auditors, Deloitte & Touche, Certified Public Accountant of Uganda have expressed their willingness to continue in office in accordance with Section 167(2) of the Uganda Companies Act, 2012 BY ORDER OF THE BOARD SECRETARY Kampala AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES REPORT AND FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 STATEMENT OF THE DIRECTORS' RESPONSIBILITIES The Uganda Companies Act 2012 requires the Directors to prepare financial statements for each financial period, which give a true and fair view of the state of affairs of the company as at the end of the financial period and of the operating results of the company for that period in accordance with AFAAS' financial accounting policies and guidelines. The Directors' responsibility also includes ensuring that the organization keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of the organization. They are also responsible for safeguarding the assets of the organization. The Directors are responsible for the preparation of financial statements that give a true and fair view in accordance with AFAAS' financial accounting guidelines and the requirements of the Ugandan Companies Act 2012, and for such internal control as Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Directors accepts responsibility for the financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgements and estimates, in conformity with AFAAS' financial guidelines and procedures and in the manner required by the Ugandan Companies Act 2012. The Directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the company and of its operating results. The Directors further accept responsibility for the maintenance of accounting records which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control. As disclosed in note 19 of the financial statements, the Directors acknowledge that the existence of the organization as a going concern depends on the continued financial support from donors. The Directors have put in place measures to ensure that they secure more long term funding from donors, in order for the organization to attain financial stability and continues to operate. Signed on behalf of the board of Directors by; Board Chairperson AFAAS Executive Director 2c 0ec18 2018 y 2018 4 Delotte& TouChe Certified Public Accounlant of Uganrda itt CPAU Regstration No AFD001 3rd '-loor, Rwcnzuri Hoise I1-Limumba Avenue P.O. Box 103 14 Kampaia Ugarca Tel +,26 ( 7) 701 000 +256 '414) 343850 -25 7 (2) 230 300 Fx: +256 (4 14) 343 887 256 (414) 259 355 -reIaal adrin@eloitte.co ug vwvw.delotecorn INDEPENDENT AUDITORS' REPORT TO THE BOARD OF DIRECTORS OF THE AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES Audit Opinion We have audited the accompanying financial statements of the African Forum for Agricultural Advisory Services (AFAAS), set out on pages 8 to 20 which comprise the balance sheet as at 30 June 2018, and the income statement, statement of changes in accumulated fund, statement of cash flow, and notes to the financial including a summary of significant accounting. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the organization as at 30 June 2018 and of its financial performance and cash flows fur the period then ended in accordance with the AFAAS Accounting policies. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the financial statements section of our report. We are independent of the organization in accordance with the Institute of Certified Public Accountants of Uganda Code of ethics (ICPAU Code of Ethics), which is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants, together with other ethical requirements that are relevant to our audit of the financial statements in Uganda, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Emphasis of Matter Without qualifying our opinion, we draw your attention to note 13 of the financial statements which indicate that; the organization does not have a tax exemption certificate as required by section 2 of the Income Tax Act Cap340. As a result of which, the organization may potentially be exposed to tax charges, fines and penalties from Uganda Revenue Authority; We also draw your attention to note 19 of the financial statements which indicates that the Organization's most significant project MDTF which contributed 73.9% of the total donor funding in the current period came to an end in June 2018 and the organisation has not been able to subsequently bring in sufficient funding to repiace the lost funding. This situation indicates the existence of material uncertainty, which may cast significant doubt about the organizations ability it continue as a going concern. Basis of accounting and restriction on distribution and use Without modifying our opinion, we draw attention to note 2 to the financial statements, which describes the basis of accounting, The financial statements are prepared on a modified cash basis to comply with the Financial Reporting Guidelines of AFAAS. Our report is intended solely for AFAAS and its donors. However, upon release by AFAAS, its distribution is unlimited. 5 INDEPENDENT AUDITORS' REPORT TO THE BOARD OF DIRECTORS OF THE AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES (CONTINUED) Other information The Directors are responsible for the other information, which comprises the Report of Directors. The other information does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Statements The Directors are responsible for the preparation of the financial statements that give a true and fair view in accordance with the AFAAS accounting policies, and for such internal controls as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, Directors are responsible for assessing the organization'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 Directors intend to cease operations, or have no realistic alternative but to do so. The Directors are responsible for overseeing the organization's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: * Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our 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 of the organization's internal control. 6 INDEPENDENT AUDITORS' REPORT TO THE BOARD OF DIRECTORS OF THE AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES (CONTINUED) Auditor's Responsibilities for the Audit of the Financial Statements (Continued) * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors. * Conclude on the appropriateness of the Directors' 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 organization'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 financial statements 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 organization to cease to continue as a going concern. SEvaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on Other Legal and Regulatory Requirements The Ugandan Companies Act, 2012 requires that in carrying out our audit we consider and report to you on the following matters. We confirm that: We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for- the purposes of our audit; * In our opinion proper books of account have been kept by the Company, so far as appears from our examination of those books; and * The Company's statement of financial position and statement of comprehensive income are in agreement with the books of account. The engagement partner responsible for the audit resulting in this independent auditor's report is Norbert Kagoro Practicing Number P0053. Certified Public Accountant of Uganda Norbert Kagoro O018 Partner 2018 Kampala AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES INCOME AND EXPENDITURE STATEMENT FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 18 months 12 months 2018 2016 Note USD USD INCOME Donor funds received 3 2,347,863 1,092,783 Other income 4 24,393 20,751 TOTAL INCOME 2,372,256 1,113,534 EXPENDITURE Staff costs 5 693,199 640,382 Office costs 6 467,946 303,602 Travel 7 255,490 125,942 Country Fora establishments 556,730 136,840 Meetings and workshops 208,300 53,753 Advertisements 1,161 2,181 Audit Costs 35,701 15,000 Exhibitions/Sensitization 152 - Country Fora Innovations 221,338 - Capital Expenses 2,886 Recruitment costs - 2,442,903 1,277,700 DEFICIT FOR THE PERIOD (70,647) (164,166) 8 AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES STATEMENT OF FINANCIAL POSITION AS AT 30 June 2018 18 months 12 months 2018 2016 Non-current assets Note USD USD Computers and equipment 8 4,198 2,028 Current assets Receivables 9 31,508 167,364 Cash and bank balances 10 124,398 70,903 155,906 238,267 Current liabilities Payables 11 43,723 53,267 Net current assets 112,183 185,000 Net Total Assets 116,381 187,028 Represented by: Accumulated fund General fund 116,381 187,028 TOTAL FUNDS 116,381 187,028 The financial statements on pages 8 to 20 were approved by the Board on k o cc-2018 and signed on its behalf by: Board Chairperson AFAAS Executive Director AFAAS AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES STATEMENT OF CHANGES IN ACCUMULATED FUND FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 General fund Total USD USD Opening fund balance- 1 January 2016 351,194 351,194 Deficit for the year 2016 (164,166) (164,166) Fund balance as at 31 December 2016 187,028 187,028 Opening fund balance- 1 January 2017 187,028 187,028 Deficit for the year 2018 (70,647) (70,647) Fund balance as at 30 June 2018 116,381 116,381 10 AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES STATEMENT OF CASH FLOWS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 18 months 12 months 2018 2016 Cash flows from operating activities USD USD Operating deficit for the period (70,647) (164,166) Adjustments for: Depreciation 2,447 7,350 Assets written off Deficit before working capital changes (68,200) (156,816) Decrease (Increase)/ in receivables 135,856 (12,916) Decrease in payables (9,544) (17,841) Net cash generated from/ (used in) operating activities 58,112 (187,573) Cash flows from investing activities Purchase of computers and equipment (4,617) (813) Net cash used in investing activities (4,617) (813) Increase/ (decrease) in cash and cash equivalents 53,495 (188,386) Cash and cash equivalents at 1 January 70,903 259,289 Cash and cash equivalents at 31 December 124,398 70,903 Represented by: Cash at bank 124,398 70,895 Cash at hand 1 124,398 70,903 AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES NOTES TO THE FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 1 GENERAL AFAAS has the mandate to implement the Agricultural Advisory Services aspects of the Comprehensive Africa Agriculture Development Programme (CAADP) - an African-owned and Africa-led initiative through which interventions to transform agriculture are coordinated. AFAAS is registered as a non-governmental organisation and as a company limited by guarantee. 2 SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements have been prepared on a modified accruals basis to comply with the guidelines of AFAAS. Under this method Grants and revenues are recognized in the period they become available and measurable and expenditures are recognized in the period the associated liability is incurred. INCOME Income represents transfers made by funding partners as reflected on the monthly bank statements. Cash transfers are recognized in the financial statements when received in the component bank account. EXPENDITURE Expenditure comprises costs incurred directly for the activities of AFAAS. Under accruals basis expenditure is recognized as incurred and not when actual payments are made. COMPUTERS AND EQUIPMENT It is the policy of AFAAS to present and disclose all equipment, including vehicles as non-current assets in the statement of financial position. Property and equipment are carried at cost, less accumulated depreciation. Any movement in the period will be disclosed in detail in the notes, including the relevant depreciation. Property, plant and equipment acquired through the use of restricted grants for certain projects should be recorded as an asset but such assets are to be depreciated at 100%/ and the depreciation expense charged directly to the appropriate restricted project. Depreciation on fixed assets shall be calculated on a straight line basis at annual rates estimated to write-off each asset over the term of its expected useful life as indicated below. A full period's depreciation is charged on all additions made during the period and none in the period of disposal. Computers & photocopiers 33.33% Office equipment 20% Office furniture 20% RECEIVABLES Receivables are carried at original historical cost less an estimate made for doubtful receivables based on a review of all outstanding amounts at the year-end. 12 AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES NOTES TO THE FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 (CONTINUED) 2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) COMPONENTS OF CASH AND CASH EQUIVALENTS Cash is considered to be cash on hand and in operating bank accounts. PAYABLES Accounts payahles are defined as funds! services and/or materials received from third parties who are entitled to repayment of equivalent amounts to what they have provided to AFAAS. CURRENCY TRANSLATIONS AFAAS' financial statements are presented in US Dollars. Assets and liabilities denominated in other currencies other than the US Dollar are translated to US Dollars using the bank exchange rate ruling at the time of the transaction. Grants received in currencies other than US Dollars are recorded at the prevailing exchange rates at the time the grant is received. Period-end balances are translated at the closing rate. GENERAL RESERVES The general reserves represents the cumulative unexpended grants. COMPARATIVES Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year. 18 months 12 months 2018 2016 USD USD 3 DONOR FUNDS RECEIVED MDTF 1,735,807 1,015,480 PFRAS 10,832 26,850 PRO INTENSE AFRICA 7,050 10,483 AGRA 8,000 - PHM 67,062 39,970 FAD 79,870 - IFAD 350,000 KAFACI 89,242 2,347,863 1,092,783 4 OTHER INCOME CTA Hosting fees 21,393 8,086 Convention fees - 11,175 PHM professional fees - 1000 Recoveries from staff* -1490 Hosting fees from UFAAS 3,000 24,393 20,751 *Recoveries from staff relate to advances made to staff for organization es that have not yet been accounted for by staff members. AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES NOTES TO THE FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 (CONTINUED) 18 months 12 months 2018 2016 USD USD 5 STAFF COSTS Staff salaries 435,840 427,680 Fringe benefits 53,591 51,097 100 AFAAS NSSF contribution 53,768 47,605 543,199 526,382 Executive director's expenses 150,000 114,000 Total personnel costs 693,199 640,382 6 OFFICE COSTS Professional fees 273,272 198,357 Printing Binding and Reproduction 22,189 (17,282) Office rent 75,488 46,728 Miscellaneous expense 14,976 10,804 Office expense 17,753 14,867 Depreciation expense 2,447 7,350 Telephone 3,862 4,507 Internet and Web Hosting 16,476 10,027 Bank Charges 4,859 3,408 Repairs and maintenance - Equipment 4,982 232 Vehicle expense 3,892 2,372 Security services 4,292 2,911 Electricity 3,303 2,391 Stationery 7,807 1,121 Water 857 469 Postage and delivery 529 122 Exchange gain or loss - 3,184 Insurance expense 10,962 12,034 467,946 303,602 *The prior year expenditure on printing, binding & reproduction is USD 1,202. However, an adjustment of USD 18,484 was passed to write off an accrual wrongly booked in 2015 for an expense that had already been settled in the same year. This reduced the balance to USD (17,282). 18 months 12 months 2018 2016 USD USD 7 TRAVEL International travel 143,602 47,602 Daily safari allowance 95,146 67,382 Internal travel 16,742 10,958 255,490 125,942 14 AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES NOTES TO THE FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 (CONTINUED) 18 months 12 months 2018 2016 5 STAFF COSTS USD USD Staff salaries 369,281 427,680 Fringe benefits 82,130 51,097 10% AFAAS NSSF contribution 91,788 47,605 543,199 526,382 Executive director's expenses 150,000 114,000 Total personnel costs 693,199 640,382 6 OFFICE COSTS Professional fees 273,272 198,357 Printing Binding and Reproduction 22,189 (17,282) Office rent 75,488 46,728 Miscellaneous expense 14,976 10,804 Office expense 17,753 14,867 Depreciation expense 2,447 7,350 Telephone 3,862 4,507 Internet and Web Hosting 16,476 10,027 Bank Charges 1,476 1,02 Repairs and maintenance - Equipment 4,859 3,408 Vehicle expense 3,892 2,372 Security services 4,292 2,911 Electricity 3,303 2,391 Stationery 7,807 1,121 Water 857 469 Postage and delivery 529 122 Exchange gain or loss 5 122 Insurance expense 10,962 12,034 467,946 303,602 *The prior year expenditure on printing, binding & reproduction is USD 1,202. However, an adjustment of yUS 18,484 was passed to write off an accrual wrongly booked in 2015 for an expense -~ that had already been settled in the same year. This reduced the balance to USD (17,282). 18 months 12 months 2018 2016 USD USD 7 TRAVEL International travel 143,602 47,602 Daily safari allowance 95,146 67,382 Internal travel 16,742 10,958 255,490 125,942 14 .. xx assis u!!ie!!M imai mass esims âildie amm AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES NOTES TO THE FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 (CONTINUED) 8 COMPUTERS AND EQUIPMENT Computers Equipment Total COST OR VALUATION USD USD USD At 1 January 2016 29,607 2,573 32,180 Additions 615 198 813 At 31 December 2016 30,222 2,771 32,993 At 1 January 2017 30,222 2,771 32,993 Additions - 2,686 2,686 At 31 December 2017 30,222 5,457 35,679 At 1 January 2018 30,222 5,457 35,679 Additions 1,931 1,931 At 30 June 2018 30,222 7,388 37,610 DEPRECIATION At 1 January 2016 22,585 1,030 23,615 Charge for the year 6,796 554 7,350 At 31 December 2016 29,381 1,584 30,965 At 1 January 2017 29,381 1,584 30,965 Charge for the period 424 2,023 2,447 At 30 June 2018 29,805 3,607 33,412 NET BOOK VALUE At 30 June 2018 417 3,781 4,198 At 31 December 2016 841 1,187 2,028 AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES NOTES TO THE FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 (CONTINUED) 18 months 12 months 9 RECEIVABLES 2018 2016 USD USD Advance to CF MaFAAS 410 1,620 Rwanda CF - 26,173 Ethiopia CF - 15,744 Nigeria CF - 22,573 Madagscar CF 30 14,087 GHAFAAS 318 10,167 KeFAAS CF 174 31,315 UFAAS - 5,250 CAMFAAS 580 18,650 MOZCF - 6,360 Liberia CF - 10,175 MAAFAAS 156 5,250 1,668 167,364 Other Receivables ZAABTA 3 ANADER RESCAR AOC 432 - TEFCU 24 VEDCO 28 - TODIFA 2 Pre-paid expenses 25,162 Staff advances 4,189 29,840 - TOTAL RECEIVABLES 31,508 167,364 10 CASH AND BANK BALANCES This represents balances on the various bank accounts operated by AFAAS as follows: 18 months 12 months 2018 2016 USD USD Stanchart (USD MDTF) 25,141 15,940 Stanchart (USD-IFAD) 42,834 17,365 Stanchart (P-IFM) 45,995 27,113 Stanchart (UG shillings operations) 8,151 2,255 AFAAS reserve Account 2,160 8,089 AFAAS Gratuity Account 117 133 Petty Cash - 8 TOTAL CASH AND BANK BALANCES 124,398 70,903 16 AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES NOTES TO THE FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 (CONTINUED) 11 PAYABLES This represents amounts owed by AFAAS to third parties as follows: 18 months 12 months 2018 2016 USD USD Accrued invoices 32,450 372 PAYE liability - 24,802 NSSF liability 22,350 Withholding Tax 10,873 5,241 Staff refunds** 400 502 43,723 53,267 Staff refunds relate to money used by the employees for AFAAS activities and has not yet been refunded to them. 12 RELATED PARTY TRANSACTIONS AND BALANCES a) Key management compensation The remuneration of the executive director during the period under review were as follows: 18 months 12 months 2018 2016 USD USD Salaries and other benefits 150,000 114,000 13 TAX STATUS As at 30 June 2018, the organization did not have a tax exemption certificate as required by section 2 of the Income Tax Act Cap 340. 14 USE OF ESTIMATES AND JUDGMENT The preparation of financial statements in conformity with the AFAAS accounting principles requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of financial statements and reported amounts of revenues and expenses during the reported period. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. The estimates and associated assumptions are based on historical experiences, the results of which form the basis of making the judgments about the carrying values and liabilities that are not readily apparent from other sources. Actual results ultimately may differ from these estimates. The organization makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Management identifies all significant accounting policies and those that involve high judgment and in particular the significant areas of estimation and uncertainty in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are: AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES NOTES TO THE FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 (CONTINUED) 14 USE OF ESTIMATES AND JUDGMENT (CONTINUED) i impairment The organization makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The organization regularly reviews its assets and makes judgments in determining whether an impairment loss should be recognized in respect of observable data that may impact on future estimated cash flows. The methodology and assumptions used for estimating both the amount and timing of future cash flows are reviewed regularly to reduce any differences between loss estimates and actual loss experience. Amount and timing of future cash flows are reviewed regularly to reduce any differences between loss estimates and actual loss experience. ii Provisions and contingencies A provision is recognized if as a result of past events, the organization has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. For provisions included in the financial statements see note 11. 14 FINANCIAL RISK MANAGEMENT The organization has exposure to the following risks; * Credit risk * Liquidity risk, and . Foreign Exchange risk (a) Credit risk Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the organization. Due to the nature of its grants to member universities, there is minimal exposure to credit risk as the organization does not expect to recover the funds from the grantees but only accountabilities and reports on the research carried out. The credit risk on liquid funds with financial institutions is also low, because the institutions are banks with high credit-ratings. 18 AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES NOTES TO THE FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 (CONTINUED) 14 FINANCIAL RISK MANAGEMENT (CONTINUED) (a) Credit risk (Continued) The amount that best represents the Organization's maximum exposure to credit as at 30 June 2018 is made up as follows: As at 30 June 2018 Fully Total performing Past due Impaired USD USD USD USD Cash & bank balances 124,398 124,398 Advances to Country Forums 1,668 1,668 Other receivables 29,840 29,840 Total 155 906 155,906 ____ As at 31 December 2016 Fully Total performing Past due Impaired US$ US$ US$ US$ Advances to Country Forums 70,903 70,903 Cash & bank balances 167,364 167,364 Total 238,267 238,267 (b) Liquidity risk management Liquidity risk is the risk that the organization is able to meet its financial obligations as they fall due. The organization's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Organization's reputation. The Organization's funds are mainly received from donors. The Organization continuously assesses liquidity risk by identifying and monitoring changes in operational requirements, goals and targets as set in the strategy plan. (c) Foreign Exchange Risk Foreign exchange risk is the risk that exists when a financial transaction is denominated in a currency other than that of the base currency of the organization. The risk is that there may be an adverse movement in the exchange rate of the denomination currency in relation to the base currency before the date when the transaction is completed. The Organization's funds are mainly received in USDs, which is the reporting currency of the organization. A few donors send amounts in other currencies. AFRICAN FORUM FOR AGRICULTURAL ADVISORY SERVICES NOTES TO THE FINANCIAL STATEMENTS FOR THE 18 MONTHS PERIOD ENDED 30 JUNE 2018 (CONTINUED) 15 NON FINANCIAL RISK MANAGEMENT i. Compliance risk Compliance risk is the risk of non-compliance with the contractual obligations and other statutory requirements of the government of Uganda. The contractual obligations are contained in the investment and stakeholder agreement with the stakeholders. Approach to managing compliance risk The approach adopted to manage these risks includes a combination of adequate procedures to assist management in achieving adherence to the legislative requirements and effective monitoring and reporting mechanism to ensure compliance. The entity's top level management is charged with the responsibility of monitoring and ensuring adherence to the concession agreement. 15 NON FINANCIAL RISK MANAGEMENT (CONTINUED) ii. Operational risk Operational risk is the risk of the organization not being able to operate if those uncertainties occurred. These are caused by environmental factors, political, social factors and machine breakdown such as floods, wars, strikes and fire. Approach to managing operational risk The organization recognizes operational risk, inclusive of information risk and business continuity, as a significant risk category and manages it within acceptable levels. The organization's management continues to develop and expand its guidelines, standards, methodologies and systems in order to enhance the management of operational risk. Actual and potential risks are reviewed regularly and proper systems are put in place to avoid and reduce such uncertainties. 16 CONTINGENT LIABILITIES There are no significant contingent liabilities as at 30 June 2018 (2017: Nil) 17 FUNCTIONAL CURRENCY The financial statements are expressed in US dollars which is the entity's functional currency. At 30 June 2018 the exchange rate of the Ushs to the US$ was Ushs 3,585: US$1 (2017: Ushs 3,373: US$1). 18 SUBSEQUENT EVENTS The organization has evaluated the subsequent events through the date of signing these financial statements and there were no significant events to be reported during the year. 19 GOING CONCERN The Organization's most significant project MDTF which contributed 73,9/o of the total Donor funding in the current period came to an end in June 2018 and the Organisation has not been able to subsequently bring in sufficient funding to replace the lost funding. This situation indicates the existence of material uncertainty, which may cast doubt about the organizations ability it continue as a going concern. Management have put in place measures to allow them to continue operating albeit under a leaner structure. Cost cutting measures have already been instituted and management are writing more project proposals to different donors to attract additional funding. Management c also trying to secure long term agreements with donors to ensure that they obtain financial stability and continue operating. Currently there are ongoing negations at an advanced stage with donors like the EU. 20