Strømme Foundation annual report 2016 by Strømmestiftelsen

STR Ã&#x2DC;MME FOUNDATION ANNUAL REPOR T 2016

Contents

From the Secretary General 3 International department 4-5 Support to projects 2015 by country and thematic goal 6-7 Communication and Fundraising 8-9 A World Free From Poverty 10-11 2016 Programme Information 12-13 Education 14-15 Stories from the projects 16-17 Anti-corruption Report 2016 18-19 Report from The Strømme Foundation Board of Directors for 2015 20-22 Activity account and Balance sheet 23 Strømme Foundation 31.12.2016 24 Strømme Foundation Cashflow 25 Accounting principles 25-26 Notes 26-32 Auditor´s report 34 Board and council members 35 Facts behind the figures 35

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From the Secretary General

There is much more to education than providing access to jobs

Education is the key to human development, and 2016 was a year in which the need for securing quality education for all became very clear. In a year where religious extremism led to horrific acts of terror whilst populism seems to be on the rise in rich as well as poor countries, we saw the importance of a proper education system as part of a democracy. With a growing young population in Africa and in other areas with high poverty levels, there is dire need to provide the young generation with relevant education and vocational skills. 2016 has been a year of new challenges and expansion for Strømme Foundation. Never before have we fundraised so much from our private and corporate donors. This year we reached 87.5 million NOK. Furthermore, in West-Africa our Speed School concept has attracted international donors. This year, we also started two new programmes with the support of the EU and Educate a Child. This has a total economic frame of more than 10 million USD over a four-year project period. These additional programmes will give 52 000 children in three of the world’s poorest countries access to education. There is much more to education than providing access to jobs. Adolescents and young girls in many of our intervention countries often see others make the most important decisions for them, and have no influence in the choices that mark out the paths they will take in their future lives. Strømme Foundation’s life skills and empowerment education were started in Bangladesh more than ten years ago under the name Shonglap (Dialogue). Since then, more than 100 000 girls have had a new start in life in Bangladesh. An impact evaluation of the Opera-

tion Day’s Work Project in Bangladesh documented impressive results, and among the achievements is the fact that 40 000 child marriages were avoided as a result of this education. Another important result for Shonglap is the transfer of the model to other countries. We have variations of the programme in Nepal, Uganda, South Sudan and Kenya. This shows the value of working together in different countries and regions. Speed Schools and Shonglap are interventions carried out by Strømme Foundation and our partners. We are proud of them. In our fight against poverty we focus on job creation through savings groups, microfinance, and entrepreneurship. However, when summing up 2016, we need to keep in mind that while getting inspiration and learning from the past is important, it is even more crucial to use all our experience and wisdom to prepare for the future. Yesterday’s solutions are not necessarily sufficient tomorrow, and with our vision to eradicate poverty, only the best is good enough. A lot has been achieved, but there is still work to do. We are up for the challenge.

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Kristine S. Sødal Secretary General

International Department: A year of consolidation and expansion

40 years into Strømme Foundation’s (SF) existence as a professional development organisation, it has seen an encouraging, unprecedented upscaling of programs in a context marked by increasing global insecurity. Through our international deparment, regional, and country offices, SF has continued to work closely with partners in four regions to move people out of poverty. We have worked with a focus on securing access to basic rights, such as education and income, while ensuring that our cross-cutting issues; gender equality, environmental sustainability, and inclusion are systematically integrated into our programmes in all regions. 2016 was a year in which SF’s education components of the fight against poverty were significantly strengthened through new partnerships in West Africa. This is the region in the world with the highest number of children out of school. The Speed School programmes in Mali, Burkina Faso and Niger saw the operationalisation of the partnership between Strømme Foundation (SF) and Plan International, through funding from Qatari-based Education Above All Foundation. The overall target is set at enrolling 181,074 out-of-school children in Speed Schools as well as direct enrolment in primary schools over a three-year period (2016-19). In addition, a significant grant from the European Union for Speed Schools in Mali, as well as extra NORAD-funding for education in Mali, saw a massive scale-up of the education programme in Mali. 2016 has also been a year of looking forward, taking stock and consolidating, particularly since the current Strategic Plan is coming to an end in 2018. Extensive mid-term evaluations have been undertaken in all four regions of intervention, and the recommendations will form the basis of improvements and consolidation within the preparations for the next Strategic Plan. 2016 saw a deterioration of the security situation in some of SF’s countries of implementation, particularly in West Africa, as well as South Sudan and Bangladesh. Mali and Niger saw a continuation of attacks by terror groups, whilst Burkina Faso experienced a significant increase in attacks after having been relatively peaceful until 2015. In South Sudan, Western aid workers were the direct target of abuse in the capital Juba during the summer of 2016, and Bangladesh saw a direct attack against a restaurant frequented by expatriates. It is important to note than no SF staff or projects were directly affected by attacks during 2016. SF is closely monitoring the security situation in all its countries of implementation in order to stay abreast of developments, and is strengthening office security measures and staff capacity.

In 2016, SF worked through four pillars in our 13 countries of intervention: Education, Microfinance, Strengthening Civil Society, and Social Protection. SF works with partners in East Africa to ensure the right to quality education and access to relevant financial services. The educational interventions focus on three key areas: 1) increasing access to and quality of pre-primary and primary schools; 2) providing vocational, life skills, and literacy training to adolescents and youth; 3) providing alternative and accelerated learning opportunities in South Sudan; and 4) operating three teacher-training institutes in South Sudan to secure the recruitment of skilled teachers into the ordinary education system. The microfinance interventions consist of both institutional microfinance and Community-Managed Microfinance (CMMF). All programmes are increasingly implemented through a rights-based approach. In addition, where possible, the synergy between the various programmes is ensured. In South America, SF implements three interventions primarily targeting vulnerable and indigenous women, teenagers, and children: i) Ensuring quality education for children and teenagers, ii) Empowering and enhancing the literacy skills and livelihoods of women; and iii) Strengthening social protection for children and adolescents living in violent environments. A key goal is to transfer the concepts, methodologies, and materials from these interventions to local and decentralised state institutions for scale-up and support. In West Africa, SF concentrates on two thematic goals: 1) Ensuring quality education for disadvantaged groups and 2) Enhancing access to sustainable income sources. These goals are operationalised through five programmes: Speed Schools, Speed School II, Vocational Training (S3A), Active Literacy, and CMMF. The Speed School programme has been ongoing since 2004, and until 2016, more than 171 000 children between the ages of 8 and 12 have been enrolled in 6444 Speed Schools, among whom 137 000 children (more than 80%) have been transferred to primary school. More recently, between 2013 and 2016, 18 323 children have enrolled in 710 Speed Schools, of which 9207 children enrolled in the school year 2015/2016 and 7412 (81%) successfully transferred to primary school afterwards. Work is being undertaken in Mali, Burkina Faso and Niger through 31 partners, made possible through various institutional donors, including NORAD, the EU, the Eriks Foundation, and the AKO and Kavli Foundations, among others. In Asia, SF implements four interventions: i) Strengthening pub-

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2016 was a year in which SF’s education components of the fight against poverty were significantly strengthened through new partnerships in West Africa.

lic sector and civil society, ii) Enhancing access to sustainable income sources, iii) Ensuring quality education for disadvantaged groups, and iv) Strengthening social protection for children and adolescents living in violent environments. The programme is designed in a holistic manner where vulnerable families often benefit from multiple interventions. The overarching strategy is to build up community structures and change the mindset of community members to ensure ownership, empowerment and sustainable results. An impact evaluation of the education programme Shonglap, which focuses on teenage girls in Bangladesh, has shown remarkable results. Results show that Shonglap has stopped 40 000 child-marriages. 76 percent of all girls asked say they can decide themselves how to dress when going out. Among those who have not attended Shonglap, the percentage of is 35 percent. Shonglap continues in Bangladesh and has also been exported to Nepal and a few countries in East Africa. As governments are the primary duty bearers, SF works closely with relevant government agencies at national and district/municipal levels. SF complements and supports government plans, jointly monitors programmes together with relevant government agencies, builds the capacity of governments to effectively deliver services, and aims to transfer successful models to the government, such as the Intercultural Bilingual Education model in South America, and Speed Schools in West Africa. SF also works to educate our target groups about their rights and help them to keep duty bearers accountable through advocacy in Community Based Organisations, participatory budgeting etc.

The Strømme Foundation works with three cross-cutting issues: Gender Equality is pivotal across all projects, and women – who are usually more marginalised than men - are given preference to participate in projects. Environmental sustainability is a focus through components such as aiming at environmentally sound and sustainable income-generating activities, and increased awareness about waste management and hygiene. In terms of Inclusion, measures are taken to provide concrete facilitation for participants with disabilities in projects, as well as to target socially marginalised groups, such as populations marginalised due to their caste or minority status. The Strømme Foundation works diligently to avoid and detect corruption and malpractices within all our departments and partner organisations. In addition to awareness, skills and commitments among our own and partner staff to combat corruption and ensure good governance, we try to strengthen community mechanisms to fight against corruption by promoting ‘watchdog’ mechanisms among our target groups, so that they themselves can fight corruption. A good example of this can be found in Bangladesh, where girls, youth, and People’s Organisation leaders are recruited to the “watchdog-groups”. Looking ahead towards a new Strategic Planning Period which will define our work, we must constantly try to stay up to date with developments, both technically as well as within our thematic areas. We are striving to include innovation in our programmes; one example is to utilise mobile networks to facilitate the monitoring and evaluation of projects; another is to integrate new components into our programmes, to broaden outreach and to strengthen sustainability for our target group.

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Support to projects 2016 by country and thematic goal including distributed regional office capacity building Figures in NOK*

GLOBAL Education Act Now FK - Myrada/FVTR Anti-Corruption Global programmes

Social Capacity Building protection Advocacy

Microfinance

0 0 0 0

Natural Disasters Response

0 2 337 222 0 0 528 030 0 0 276 727 0 0 3 141 979 0

Total

No. of Partners

0 2 337 222 1 0 528 030 2 0 276 727 0 0 3 141 979 3 Figures in NOK*

WEST AFRICA Education Mali Burkina Faso Niger West Africa

Microfinance

Capacity Social Natural Building protection Disasters Advocacy Response

21 867 777 1 717 058 2 489 128 6 964 293 1 804 392 1 339 906 7 477 198 1 385 616 2 212 373 36 309 268 4 907 066 6 041 407

0 0 0 0

Total

No. of Partners

26 073 962 12 10 108 591 5 11 075 187 4 47 257 741 21

Figures in NOK*

NIGER

MALI

BURKINA FASO

PERU BOLIVIA

SOUTH AMERICA Education

Microfinance

Capacity Building Advocacy

Social protection

Natural Disasters Response

Peru 3 553 845 1 765 151 597 553 1 132 264 Bolivia 1 197 796 1 135 532 1 621 077 2 510 016 South America 4 751 642 2 900 683 2 218 630 3 642 279

Total

No. of Partners

0 7 048 813 6 0 6 464 421 5 0 13 513 233 11 Figures in NOK*

*) ex. numbers of partners

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Education

Microfinance

Capacity Natural Social Building Protection Disasters Advocacy Response

No.of partners

Total

Total 88 888 227 22 752 362 26 327 966 6 340 737 2 886 379 147 195 671

1 38 424 501

Grand total - support to projects in 2016 NOK Total number of right-holders under 18 years: 320 069

Total number of right-holders: 975 207

Female 192 835 Male 127 234

Female 680 823 Male 294 384

ASIA Education

Microfinance

Social Natural Capacity Total No. of protection Disasters Building Partners Response Advocacy Sri Lanka 1 935 572 1 663 853 2 379 359 391 579 31 433 6 401 794 6 Nepal 9 049 850 1 750 198 2 137 160 530 829 1 650 007 15 118 044 9 Bangladesh 7 679 776 4 817 425 3 691 673 481 937 56 898 16 727 708 6 Myanmar 0 245 119 1 862 157 0 1 038 333 3 145 609 2 Asia 18 665 198 8 476 595 10 070 349 1 404 344 2 776 671 41 393 156 23 Figures in NOK*

NEPAL

MYANMAR

BANGLADESH

SOUTH SUDAN UGANDA

SRI LANKA

KENYA

TANZANIA

EAST AFRICA Education

Microfinance/ CMMF**

Capacity Building Advocacy

Social protection

Natural Disasters Response

Total

No. of Partners

Uganda 5 635 223 2 715 258 2 122 255 924 289 109 708 11 506 734 11 Tanzania 2 577 988 1 190 925 888 724 195 126 0 4 852 763 5 Kenya 2 578 182 657 237 824 739 174 698 0 4 234 857 4 Sør Sudan 18 370 726 1 904 598 1 019 883 0 0 21 295 207 12 East Africa 29 162 120 6 468 019 4 855 602 1 294 113 109 708 41 889 561 32 Figures in NOK* *) ex. numbers of partners **) Microfinance - technical skills training/Community managed microfinance w w w . s t r o m m e . o r g \ S T R Ø M M E F O U N D AT I O N A N N UA L R E P O R T 2 0 1 6

Communication and Fundraising

2016 ended with a record-breaking NOK 87.5 million raised. We are thankful for all the support, and would like to thank all our donors, partners and staff for making this possible. Strømme Foundation is honoured by the extraordinary generosity of our donors and partners who provide financial resources for our programmes around the world. 2016 turned out to be the best fundraising year for Strømme Foundation ever. Major donors and wills were the main reason for the increase. Strømme Foundation is still experiencing a positive trend of increase in fixed term donors. This remains the focus and main goal for us as well as focusing our work towards the domestic and international philanthropic network. Looking back at 2016, we have a reason to be grateful for our loyal donors, and for our skilled and dedicated employees who are driven by the will and desire to help people in need to get out of poverty. Looking forward, Strømme Foundation will continue to move to seek new ways to raise funds and to engage and inspire existing and new donors to join hands in fighting poverty. Our focus will be to further maintain good stewardship towards our donors and supporters, develop and increase fixed donor recruitment, follow trends using new technology to raise funds, as well as continue to develop our work towards schools, business and the philanthropic sector. Recruitment of Private Donors A major event for Strømme Foundation was the “Jobbskaper” (Job Creator) campaign in September. This year we took the campaign back to the hometown of Strømme Foundation,

Number of yearly fixed-term donors 2012

14306

2013

14394

2014

14530

2015

14680

2016

14921

Kristiansand. The campaign was a success thanks largely to an engaged and highly dedicated ambassador group of 32 profiled, and many dedicated individuals in Kristiansand. The campaign aims to secure fixed-term donors, as well as promoting our work in the local community. The market for the recruitment of fixed-term donors continues to harden. The campaign result for 2016 ended with 721 new “Jobbskaper” fixed-term donors, which is a substantial increase from the 2015 result of 339 new fixed-term donors. We are also very pleased with the positive publicity and enthusiasm for our work that we received during and after the campaign. Having established a good system for recruiting new donors on the street, SF continued this method of recruitment also post Jobbskaper. In collaboration with Switch Communication, a professional company specialising in face-to-face recruitment, this secured a continued increase in new donors, and we will continue to build on these results in 2017. Major Donor Our work towards the corporate sector and trusts continues with vigour. The loyalty and enthusiasm we experience from our partners is encouraging and provides a new future for thousands of poor people in our projects. In 2016 we arranged the CSR Conference in Kristiansand for the first time. The conference became a success and inspired companies, owners, and investors to engage in social responsibility activities. The conference also resulted in a Match Funding event and a record-breaking

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Looking forward, Strømme Foundation will continue to move to seek new ways to raise funds and to engage and inspire existing and new donors to join hands in fighting poverty.

result of NOK 13,6 million. We also celebrated Strømme Foundations 40-year anniversary with an extended event and concert in the concert hall Kilden, where the artist Bjørn Eidsvåg was the headline act. The revenue from this event - NOK 365 000 went to SF’s “Jobbskaper” campaign. Edwin Gutierrez, a former street child from Bolivia and now a cook at five star hotels in London, was one of the head guests and took part in the 40-year celebration, attending several events in the city, among them taking the head chef role in a cooking class competition at Tangen College. Another important part of our work is aimed at adolescents and involves close collaboration with schools and Folk High Schools. We have worked closely with many of these schools for years, and we see a high level of commitment among pupils, students and teachers. Media & Public Relations The Job Creation Campaign in September was also the most important period for Strømme Foundation in our efforts to

Financial Income 1 457 980 Other Income Legacies 1 172 697 11 518 298 Events, schools and artists 3 873 522

increase awareness of development issues among people in Norway. Our main message was that lack of decent work and income is the most important reason behind child labour, and this message clearly attracted interest. During the campaign period, there were 31 media stories on Strømme Foundation and the campaign, both in local and national media. During the campaign, we also held a prize ceremony for the Help to Self Help prize, which was awarded to Proximity Designs in Myanmar, a social entrepreneur that produces innovative tools for small-scale farmers. Strømme Foundation hosted a joint seminar with the University of Agder – “Hungry for Innovations – Innovations against Hunger”, with speeches from representatives of IFAD, Norad, the University of Agder, as well as the prize winner. This seminar attracted positive media attention as well as a large audience. Strømme Foundation also hosted a seminar during Arendalsuka in August in which we focused on sustainable development and the fine balance that exists between the interests of local communities, wildlife and nature.

SF Income 2016 Disaster & rehabilitation 3 650

Corporate Sector 16 622 300

Public Sector Grants 82 834 592

Fixed Term Donations 40 741 333

Individual Donors 8 102 262

Grants from other Organisations 21 934 008

Category 2016 2015 Public Sector Grants 82 834 592 80 132 000 Grants from other Organisations 21 934 008 21 450 000 Individual Donations 8 102 002 8 171 000 Fixed Term Donations 40 741 333 39 485 000 Corporate Sector 16 622 300 18 279 000 Events, schools and artists 3 873 522 4 091 000 Legacies 11 518 298 1 938 000 Financial Income 1 457 980 12 851 000 Other Income 1 172 697 1 329 000 Disaster and rehabilitation 3 650 TOTAL 188 260 640 190 177 000 NOK 1000

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Great things can happen when many share one common vision! In Strømme Foundation our Vision is:

A World Free From Strømme Foundation is inspired by the Christian view of God´s creation and the absolute dignity of man. We strive to approach people with openness and respect, regardless of religion, ethnicity, caste, gender, disability or other minority status. Strømme Foundation is committed to empowering people so that they overcome the root causes of poverty.

In Strømme Foundation our Mission is:

To Eradicate Poverty With a deep respect for human dignity and conviction about the value of equitable partnership, Strømme Foundation works to empower the poor so that they take charge of their own lives and communities. We strive to facilitate change, not only by providing material needs, but also by creating opportunities for people to utilise their talents in a value-based development process. Strømme Foundation works through local partners and through two intervention approaches – microfinance and education. A major focus for our work is to facilitate for people so they can create their own jobs.

Our Values Human Dignity We believe in the inherent, inalienable rights of every individual. At Strømme Foundation, this is considered to be the most important human right from which all other fundamental human rights are derived.

Justice We have a drive to fulfil not only legal, but also social rights of communities and individuals in creating a more just distribution of society’s resources and power.

Solidarity We identify empathically with the plight of marginalised and discriminated groups.

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Poverty

Microfinance and Community Managed Microfinance (CMMF) Microfinance creates access to sustainable income sources and provides a means by which the poor can act upon their decisions. The focus here is to provide access to financial services such as loans, places to save, insurance etc. Capacity building of the participants and clients is also an important component of the programmes in question. The microfinance intervention will use the methods of both institutional MF as well as CommunityManaged Microfinance.

Education

Education helps people develop the attitudes, skills and knowledge needed to make informed decisions concerning the development of themselves and their communities. Our main focus is on facilitating poor children at risk by strengthening the fostering environment within the local community. Interventions are carried out within primary education, adult literacy, vocational skills/life skills and awareness building, and with a special and paramount focus on education for girls.

Cross Cutting Issues Gender Equality SF strives to promote equal rights and opportunities both for women and men to share in the socio-political and economic order.

Environmental Sustainability SF seeks to mainstream environmental awareness, climate change mitigation and adaptation into existing programmes.

Inclusion SF promotes the inclusion, non-discrimination and empowerment of marginalised groups, including people marginalised by disability, ethnicity, caste and other minority statuses.

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2016 Programme Information

What is our focus?

How do we work?

Achievements and Challenges

East Africa

West Africa

• Education. • Community Managed Microfinance (CMMF). • Capacity-Building and Advocacy.

• Accelerated learning programmes for children who have never been to school, or left during the course of their education. The purpose is to ensure their re-entrance into the formal school system in Grade 3 or 4 through a 9- month intensive programme. • Vocational training • Active literacy • Community saving Groups

• Between 2005 and 2016, more than 171 000 children between the ages of 8 and 12 have been enrolled in 6444 Speed Schools, among whom 137 000 children (more than 80%) have been transferred to primary school. • 4176 savings groups were created against a target of 3982, with 103330 women, compared to 99332 planned. • Funds mobilised in one cycle between mid-2014 and the end of 2016 were higher than expected, at 1.8 billion CFA (26.1 million NOK), compared to the forecasted 1.2 billion CFA (17.3 million NOK).

• Strengthen the quality of primary schools. • Enhance access to pre-primary schools. • Enhance access to sustainable income sources and social protection.

• Strengthen infrastructure and results of teaching in primary and pre-primary schools, as well as ensuring the enrolment of children. • Teacher-training. • Vocational-training and skills training for adolescents and youth.

• 4276 pre-primary pupils enrolled - the target was 3550. • A total of 35 744 primary school pupils enrolled compared to the target of 30250. • 4170 adolescent girls were enrolled in the Bonga-programme, compared to the number of 3350 planned - an achievement of about 125%. • Activities in South Sudan were delayed and severely affected by the prolonged insecurity in the country. In 2016, the extra education centres that SF was planning to start were placed on hold because of the increase of armed con- flict in the target areas of intervention.

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Asia

Norway

South America

• • • •

Strengthen public sector and civil society Enhanced access to sustainable income sources Ensure quality education for disadvantaged groups Strengthen social protection for children and adolescents living in violent environments

• • •

•

Using a holistic approach, SF Asia strengthens community structures and promotes collective efforts to empower marginalised communities to lead their own development in a sustainable way.

• By the end of 2016, 148 011 direct and 102 043 indirect beneficiaries were reached. • 39% of the beneficiary families in Bangladesh, 50% of the beneficiary families in Nepal, and 25% of the beneficiary families in Sri Lanka had crossed the poverty line. • More than 116,000 adolescents (98% girls) have taken the one-year Shonglap course between 2006 and 2016. • An impact evaluation of the education programme Shonglap, shows that the programme has stopped 40 000 child-marriages.

Primary and pre-primary education Literacy and livelihood support for indigenous women. Social protection for at-risk children and adolescents

• • •

Increase children’s learning-capabilities and improve the learning environment in schools through providing education in their native tongue (Intercultural Bilingual Education, IBE). Protecting children against violence through child surveillance committees intervening in families where violence occurs. Teaching women how to read and write, and giving them training about income generating activities, such as guinea pig breeding and the production of traditional handicrafts.

• • •

Intercultural Bilingual Education (IBE) was implemented in 159 schools in Peru, benefitting 5,802 students at initial, primary and secondary levels.1 513 teachers were trained in IBE pedagogical methodology. In 2013, only 3.1% of students in the second grade of primary school achieved satisfactory results in Communication in 2013. In IBE implementing schools, this figure increased to 12.6% in 2016.

Strømme Foundation’s main objectives in Norway are to raise money, to do development education and increase people’s knowledge about poverty and poverty eradication. We work to advocate for the poor among politicians and decision makers, and contribute to the national debate about issues related to development aid.

We raise funds through working with schools, organisations, groups, institutions and individual donors. Work with corporate and institutional donors, and through different campaigns and fundraising events. We work with media through editorials and opinion articles to create awareness, knowledge and interest for development work.

• • • • •

Successful “Job Creator” campaign recruiting new donors and attracting media attention. Cooperation with 46 companies and corporates. Several opinion articles published Cooperation with several primary and secondary schools and folk high schools. Fundraising concert and Strømme Foundation 40th anniversary in Kilden - concert hall.

1) While

the methodological approach places an emphasis on the primary level, the mechanism of educational networks has allowed schools with the three levels (initial, primary and secondary) to benefit from it, and apply the components that are most appropriate to wach one. w w w . s t r o m m e . o r g \ S T R Ø M M E F O U N D AT I O N A N N UA L R E P O R T 2 0 1 6

All children have a right to education, and primary education should be made compulsory and free. Bases on United Nations - Convention on the Rights of the Child â&#x20AC;&#x201C; article 28

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Knowledge is power. Information is liberating. Education is the premise of progress, in every society, in every family. Kofi Annan

My dream is to become a doctor Samuel Baker Apuke is a 13-year-old orphan living with his grandmother in Gulu, Northern Uganda. â&#x20AC;&#x201C; Education is so important. That is why I like to go to school. My favorite subject is science and English. I want to continue studying. My dream is to become a doctor so I can help people. But my grandmother cannot afford to send me to higher education. I hope to get a scholarship or a sponsor to help me.

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Stories from the projects

The Changemaker from Rupendehi not able to talk whilst making eye contact with strangers, today provides training for girls on tailoring. Over the last few months, she has been giving training to two girls for two hours a day, charging NPR 500 per person per month. Now, Sushila is known to her community for her positive changes. She shares her learning on clean drinking water, health, sanitation, and prevention from diseases with her family and neighbours. “It feels good to learn new and important things from my daughter. She has been teaching us health and hygiene. We are also able to learn about rights, social behaviours, saving, cutting out unnecessary expenses, and equality between boys and girls from her,” says Sushilas mother, Chandradevi Dhawal, who is happy to see her daughter do something of her own. Even though she had the skills to do wonders with her needle and thread, Sushila Dhawal (picture), from Rupendehi in Nepal, had never had the courage to make use of them. Coming from a background where boys are given more importance than girls, Sushila always suppressed her feelings and involved herself in household chores. After eighth grade, Sushila wanted to keep on studying, but the long distance between her home and the school and the lack of a bicycle to get there on became hindrances. Sushila used to spend her days staying at home and doing a bit of tailoring she had learnt to a basic level. However, things changed when she joined AmaJagriti Kishori SAMVAD Centre eight months ago. The shy and humble Sushila is today an earner in her family. Her SAMVAD Centre has taught her to fight her fears and follow her dreams. Her knowledge of social issues and awareness of equality has made her family members also change their beliefs about gender differences. Sushila, who was

Sushila still dreams about going back to school and plans to reenrol for the coming session. She is intending to continue her involvement at SAMVAD for the next four months, during which time they plan to learn life skills, savings and expenditure. They will also conduct rallies and campaigns against social evils like child marriage, multiple marriage, dowries and untouchability. Sushila also has plans to take an advanced, professional tailor training, and dreams about opening a tailoring shop in her village and using her skills for her livelihood, as well as offering training to other young girls. Sushila with friends.

Reversing Destinies 14-year-old Shajoni Hembrome lost her right leg in a road accident in 2013. She was compelled to drop out of school due to her disability, and spent her time at home, thinking about her days at school. Being day labourers, her father Debhembrome and mother Sonomony Todu could not do anything more for her. Things changed when

Shajoni ‘s disability is not a limitation to continuing her studies.

a Bridge School was opened in her village, Joypur in Bangladesh, in 2016. She wanted so much to join the school and her parents admitted her to Class IV. Shajoni at Bridge School with her classmates. “Disability will not stop me from moving ahead and I will continue my studies like others”, says Shajoni. Shajoni’s father is happy that his daughter is back in school. “We never thought that our daughter would be able to go school again. We are very happy to see that it happened. This became possible thanks to the Bridge School. We will do everything we can to support her studies.”

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The Speed School Miracle

Despite being close to a provincial centre in the central part of Burkina Faso, the village of Kiinga has no school, no health centre and little access to clean water.

her to school. With the opening of the Speed School Centre, she finally had a chance to learn.

During the rainy season, the village is cut off because of poor infrastructure and bad roads. When Strømme Foundation and its local partner approached the community about opening a Speed School Centre in the village, they received an enthusiastic response.

After studying hard for nine months, Mariam graduated, and in October 2015 she transferred to the local primary school in the neighbouring village, together with 21 of her Speed School graduates. Their teacher was so impressed with his new students that he labelled them «the Speed School miracle ».

One of the children eager to enrol was Mariam Nare (picture). Mariam was 13 years old and could not read and write. Instead of attending school, she looked after the family’s herd of sheep. Being one of 12 siblings, her parents could not afford to send

She continues to work hard and was ranked fourth in her class at the end of the school year in June 2016. Her dream is to become a science teacher, if only her father is able to afford for her to stay in school.

Happy to Learn! Siata Traoré (picture) is a 29-year-old school dropout. She lives in Diossogo, a village located on the outskirts of Orodara in Burkina Faso. She is very happy to have the chance to learn how to read and write. “I had lost all hope to go back to school. But then I was informed about the Active Literacy initiative. I did not hesitate to join the centre,” she says. Siata has the support of her husband who is encouraging her to continue learning because it is vital for her to read and calculate. Siata is always on time to the centre and participates in discussions both in the local language, as well as in basic French. These discussions help her to acquire new knowledge about how she can improve her small trading business, as well as introducing health and hygiene measures at home to better protect her family.

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Anti-corruption report 2016

Corruption is complex. It is cultural and systemic. Strømme Foundation (SF) understands corruption as both “the abuse of entrusted power for private gain” but also as a systemic phenomenon: a culture of corruption that is normalised through processes of rationalisation, institutionalisation and socialisation. SF believes that the culture of corruption is a global problem that hinders inclusive economic growth and harms the poorest in society. Corruption is widespread in every country where SF operates, and is a major hindrance to SF’s goal of eradicating poverty. This is evidenced through Transparency International’s annual “Corruption Perception Index”, where countries are scored between 0 and 100 based on the likelihood for corruption to take place in that country. The lower the score, the more corrupt the country is perceived to be. Out of the 13 countries which Strømme Foundation operated in 2016, all 13 countries were assigned a ranking of 42 or below, with Burkina Faso being

perceived as the least corrupt and South Sudan as the most corrupt country. In line with our zero tolerance for corruption and our financial principles, Strømme Foundation has made it compulsory to have anti-corruption measures as an integrated part of regular project and partner management. SF’s strategic aim is to eradicate corruption – both internally and in the communities where it works – by preventing, detecting and handling cases in a way that brings about justice. SF will fight corruption by challenging systemic corruption in society and by enforcing its zero tolerance for corruption policy both within SF and amongst our partners. This approach is operationalised through the following two objectives: • Objective 1: Communities where SF is operating are aware of, preventing and acting against corruption

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Strømme Foundation has experienced that effective whistle-blower channels, as well as regular and robust monitoring and follow-up, are tools that give results.

• Objective 2: SF and its partners have functional financial control systems and are actively working to mitigate risks Strømme Foundation has experienced that effective whistleblower channels, as well as regular and robust monitoring and follow-up, are tools that give results. We have learnt that proper protection of whistle-blowers’ identities is crucial in ensuring that the whistle-blower mechanism works efficiently. Investigations are usually carried out by external resources, depending on the suspicion. For financial misappropriation and embezzlement, external auditors may be involved. Similarly, suspicion of criminal offences may be handed over to the police for further investigation and action. Depending on the nature of the case, the required steps to be taken are discussed and agreed in cooperation between Strømme wFoundation and the partner organisation. Operating in countries where corruption is widespread will naturally lead to the detection of one or more cases of suspected corruption over the course of a year. 2016 was no different, with a total of five cases of possible corruption reported, both internal and external. The detected cases from 2016 were still under investigation at the end of the year. Overall, the processes and methods employed in the detected cases indicate that SF has internal and external controls that are effective and work. However, training, routines, and controls can always be improved, and SF places a significant emphasis on learning from each case. In certain cases, legal proceedings follow investigations. Strømme Foundation’s approach is to make all relevant material available, in collaboration with the relevant parties, before handing the case over to the prosecution authorities in the relevant country for further legal proceedings. The experience we have had in this phase has demonstrated several challenges: • Slow legal processes, and the fact that associated costs are not usually anticipated, have made the expeditious disposal of cases difficult. • Corruption within the legal system itself makes the follow-up of cases challenging as files get lost, charge sheets are debated endlessly, and there is often a lacking drive to finalise cases.

• Protection of whistle blowers and witnesses from harassment has proved problematic with negative effects on concluding cases expeditiously. • High staff turnover of our partners has resulted in the need for constant refresher training to keep partners current with SF’s anti-corruption rules and the wider anti-corruption agenda. • The involvement of the board in the management of organisation compromises the board’s effectiveness in combating corruption. Strømme Foundation continuously focuses on mitigating these challenges through active follow-up during the various steps of the investigation process, as well as through the proactive training of partners on financial controls, and continuous awareness-raising of zero-tolerance for corruption. In addition to working to prevent corruption within its partners and programmes, SF works increasingly to ensure that the communities where SF operates are aware of, prevent, and act against corruption in society. Specifically, elements of anticorruption are integrated into several SF’s programmes. Thus, a range of corruption cases have been identified and resolved. In Bangladesh, for example, a local government official demanded undue payment from poor villagers to issue certificates that entitled them to certain social services. The Self-Reliant Groups in the area organised a demonstration against this practice. After raising the issue through the demonstration, the certificates were issued and the government official in question was suspended on charges of corruption.

Operating in countries where corruption is widespread will naturally lead to the detection of one or more cases of suspected corruption over the course of a year.

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Report from the Strømme Foundation Board of Directors for 2016

Strømme Foundation (SF) works to enable people to overcome the root causes of poverty. SF’s identity is based on Christian values as they are expressed in the life and teachings of Jesus Christ. SF wants to play a catalytic role in enabling marginalised groups to meet their basic needs themselves and gain access to resources and decision-making levels. Thus, SF works to promote a more just society.

One of the major focus areas for SF in 2016 was the Speed School programme in West Africa. This programme aims to prepare and transition out-of-school children into formal schools. During the year, SF successfully worked to both streamline and scale up the programme. Thus, new funding contracts have been signed with national and international organisations.

SF has its coordination/facilitation office in Norway (Kristiansand) and four regional offices in West Africa (Mali); East Africa (Uganda); South America (Peru) and Asia (Sri Lanka), plus six country offices in South Sudan, Bangladesh, Nepal, Myanmar, Burkina Faso and Niger.

“Shonglap,” which means “Dialogue”, is a programme originally developed in Bangladesh. This programme has been further developed and replicated in other countries and regions where SF operates, and is well suited for further upscaling. The goal is to empower adolescent girls to both have more control of their own lives and become active members of their communities.

The Board The Board has had four ordinary and four extraordinary board meetings in 2016 and dealt with 40 issues. The Board members who served during 2016 were; Svein Ove Faksvåg (chairperson), Hans-Christian Vadseth (deputy chairperson), Knut Vollebæk, Lars Saaghus, Anna Minj, Hege Wallevik and Ansgar Gabrielsen. Substitute members were; Jostein Senumstad and Cecilie Wathne. Strategic Planning SF’s mode of operation is unique in our combination of a decentralized structure and our partnership model, which ensures that the solutions to poverty are locally defined and always tailored to the local context. SF also seeks to strengthen civil society by facilitating our partner networks to influence government policies through conducting more direct advocacy work towards the Government(s), and building the capacity of partner organisations to undertake such advocacy in our intervention countries. SF also wants to carry out political lobbying, both internationally and in Norway, in order to fight poverty. To the greatest possible extent, SF seeks to raise funds that will increasingly facilitate a move from implementing single projects to a more integrated and long-term programme approach. This necessarily demands a thorough integration of funding in the programming work, and vice versa.

Fundraising activity was in 2016 at an “all time high” and collected funds are significantly higher than those shown in the accounts for public sector grants, corporate sector and grants from other organisations. Due to current accounting principles, these grants will first be recognised as income when consumed. With regards to fundraising, SF has continued to promote the “Job Creator” concept – a concept that has proved to be popular and well-received. In addition to regular activities, SF also carried out a major campaign in the Kristiansand region in 2016.

Financial Headlines Strømme Foundation The total income in 2016 was 188.3 m NOK compared to 190.2 m NOK in 2015. Public sector income increased from 80.1 m NOK in 2015 to 82.8 m NOK in 2016, mainly due to increased support from EU and Norad. Private donations have increased from 56.1 m NOK in 2015 to 64.2 m NOK in 2016. Income from business partnerships shows a decrease from 18.2 m NOK in 2015 to 16.6 m NOK in 2015. Contributions from other organizations increased from 21.5 m NOK in 2015 to 21.9 m NOK in 2016. If looking at funds received from public sector, business

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partners and other organizations, actual collected amounts increased in 2016. As grants that are not spent by the end of the year are recorded as short term debt these will not be recorded as income before they are utilized in projects. Gifts without conditions of repayment are recorded as income at the time they are received. Financial support to purpose activity increased from 154.7 m NOK in 2015 to 164.7 m NOK in 2016. The result for the year after change in earmarked capital was a surplus of 10.6 m NOK, compared to a surplus of 12.4 m NOK in 2015. Other purpose capital in SF is now 75.5 m NOK compared to 64.9 in 2015. Consolidated Accounts There was a consolidated deficit of 0.9 m NOK compared to 30.2 m NOK in 2015. Total equity decreased from 257.4 m NOK in 2015 to 252.7 m NOK in 2016. The cash flow from operational activities is satisfactory. Total liquid funds at the year-end was 112.2 m NOK compared to 75.9 in 2015. This excludes Strømme Micro Finance AS (SMF AS) that has been consolidated using the equity method. Liquid funds in SMF AS group totals 28 m NOK. The key figures for SF as a percentage of total costs in 2016 were: Administration 3.9 % (4.5 % in 2015); Fundraising 10 % (10.1 % in 2015); and Purpose 86.1 % (85.4 % in 2015). In addition, the Norwegian Fundraising Control Board has introduced a measure of the amount of private funding that goes to purpose costs which is 78.2 % (75.4 % in 2015). SF is following the guidelines given from the Norwegian Control Committee for Fundraising regarding definitions of administration, fundraising and purpose. Working environment and staff The working environment in the SF is considered good. The cooperation with the employees’ unions has been constructive and has contributed positively to the development work. In 2016 there were 5 men and 2 women on the Board com-

pared to respectively 4 and 3 in 2015. Among the employees in the Kristiansand office at the end of the year, there were 16 women and 18 men compared to 13 and 17 in 2015. In the regional offices, there were 35 women and 89 men, compared to 32 and 66 in 2015. On the leadership team, comprising the senior managers in the Kristiansand office plus the regional directors, there were 3 women and 5 men. SF strives for a balance of gender at all levels and is conscious about this when employing new staff. Absence due to illness in the Kristiansand office was approximately 2.1 % (1.6 % in 2015) of the total working time. The organization has a company health service agreement. There were no serious accidents at work resulting in material damages or personal injuries during the year. Every second year, a work environment survey is carried out in SF, which includes the Kristiansand office and the regions. In 2016 SF was included in the pilot project “Likestilt Arbeidsliv” in Agder. This is a project that aims at certifying participants as a diverse and equal workplace during the spring of 2018. Strømme Foundation has an international HR Policy that intend to ensure that there is no discrimination on the grounds of ethnicity, nationality, sexual orientation, political affiliation, age and/or religion. The organization’s pollution of the external environment will mostly be of an indirect nature. The Board considers SF to have a minimal pollution effect on the external environment. The organization has no orders from the public authorities that has not been complied with. Risk Perspective The Board continues to monitor SF’s risk through quarterly reporting. Focus on this has continued during 2016 on deviation reporting to the Board and on preventing corruption in SF and its partners. The organization has established good systems and had good dialogue with donors when suspected corruption cases are uncovered. The security situation has been challenging in Mali, Niger, Bangladesh and South Sudan in 2016. In the northern part of Mali,

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it has not been possible for staff to travel due to the security situation. Still it has been possible to work with partners in the different areas as planned. The regional office in West Africa is well updated on the security situation in all three countries and makes good and safe plans for both local and Kristiansand staff traveling in the region. For South Sudan, the political situation is still challenging and has worsened in 2016. This has affected the planned activities and we are running late on some projects. The Juba office is well updated and has close contact with local partners, the Norwegian Embassy and UN organizations on security matters. It has been challenging for Kristiansand staff to travel to the region in 2016.

Strømme Foundation has no external borrowing. Thus, there will be no serious consequences for the organization if the interest rates should increase considerably. The credit risk is restricted to the microfinance operations of SMF AS. Microfinance operations are exposed to credit risk and country risk. Due to the monitoring system and diversification of the portfolio, the Board believes that the credit risk is reduced to an acceptable and manageable level. The specific country risk cannot be influenced directly by the company, but the sum of country risks has been reduced through the company’s strategic decision to spread its activities over several countries.

The political situation in Bangladesh was tense in parts of 2016. This has affected the activity to some extent, but the country office still managed to carry out most of the planned activity.

Future Perspective SF has clear plans to continue its work of empowering poor communities to climb the ladder out of poverty. The need is clear and urgent, and the organization is in a good position to make a substantial impact.

SF operates in countries, which are occasionally affected by natural disasters. In 2016 we experienced floods and landslides in Asia and South America. It was not initiated fundraising campaigns for these incidents, but some free funds were spent to help some of our partners in the affected areas. We experienced no casualties or injuries related to staff or their families during these incidents.

The Board has good reason to believe that Strømme Foundation is a sound and well-working NGO with a long potential life-span. The results from 2016 show steady growth in regular income. SF is in a good position to respond to changes in the market for funds, whether they come from competitors or from general economic circumstances.

SF’s expenditure is largely in currencies linked to the US dollar or the Euro, and with most income in Norwegian kroner, exchange rates play a large part in what SF can deliver to partners in the South. However, given the nature of SF’s agreements with these partners, our exposure is limited to the Norwegian kroner budget. In 2016 SF has entered into fixed exchange rate contracts in order to try to secure the budgets at a favourable exchange rate between the Norwegian kroner and the US dollar and Euro.

Allocation of the result Out of SF’s overall deficit of 0.6 m NOK, 11.3 m NOK is transferred from the restricted purpose capital, and 10.6 m NOK is transferred to other purpose capital. The consolidated accounts show a net deficit of 0.9 m NOK, of which 11.6 m NOK is transferred from restricted purpose capital and 10.6 m NOK is added to other purpose capital.

Kristiansand, June 22nd 2017

Ansgar Gabrielsen Board Member

Anna Minj Board Member

Hans Christian Vadseth Chairperson of the Board Ingunn Folkestad Breistein Board Member

Lars Saaghus Board Member

Kristine S. Sødal Secretary General

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Strømme Foundation Activity Account Note

Strømme Foundation 2016

Strømme Foundation 2015

Consolidated 2016

Consolidated 2015

Note

Funds acquired Public sector grants 3 82 834 592 80 131 531 82 887 092 83 554 479 Grants from other organisations 4 21 934 008 21 450 000 21 934 008 21 450 000 Private donations 5 64 239 065 56 136 426 64 239 065 56 136 426 Corporate sector 6 16 622 300 18 279 210 16 622 300 18 279 210 Financial income 7 1 457 980 12 850 807 1 448 992 12 878 906 Other income 1 172 697 1 329 386 1 172 697 1 329 386 Total funds acquired 188 260 640 190 177 360 188 304 152 193 628 407 Funds spent Cost of fund acquisition Direct fundraising cost 8 -15 568 205 -13 988 528 -15 568 205 -13 988 528 Other fundraising cost 8 -3 485 005 -4 411 731 -3 602 404 -4 772 400 Total cost of fund acquisition 1 -19 053 210 -18 400 259 -19 170 609 -18 760 928 Purpose cost Support to development partners 9 -115 106 659 -109 422 987 -113 987 066 -106 726 670 Natural disaster response 10 -2 528 356 -1 303 887 -2 528 356 -1 303 887 Programme follow-up at regional offices 11 -29 560 655 -27 515 626 -29 560 655 -27 515 626 Programmme follow-up from Kristiansand 12 -10 678 564 -10 887 368 -10 913 362 -10 858 706 Information and public education 13 -6 850 195 -5 575 630 -6 850 195 -5 575 630 Project support - Mimeta - -2 618 782 Total purpose cost 1 -164 724 430 -154 705 497 -163 839 635 -154 599 300 30 Administration cost 1 -7 449 088 -8 089 722 -7 566 487 -8 450 391 Total funds spent 1, 25 -191 226 728 -181 195 478 -190 576 731 -181 810 619 VAT compensation 14 2 335 097 2 450 300 2 335 097 2 450 300 Result Microfinance (MF) -470 214 16 268 439 Result from investments in other companies -503 936 -369 542 The year’s activity result -630 991 11 432 183 -911 632 30 166 986 32 Hereof minorities’ share (Mimeta) -145 984 -38 644 Additions/reductions in purpose capital Change in purpose capital with restrictions (SF, Mimeta, Other Companies) 15 B -11 271 281 -930 137 -12 201 301 -1 410 090 Change in purpose capital with restrictions (Microfinance) - - 649 379 19 214 756 Transferred to / (from) other purpose capital 10 640 290 12 362 320 10 640 290 12 362 320 Total additions/reductions in purpose capital 15 -630 991 11 432 183 -911 632 30 166 986

Strømme Foundation Balance Sheet 31.12.2016 Note ASSETS

Strømme Foundation 2015

Strømme Foundation 2014

Consolidated 2015

Consolidated 2014

Long-term assets Fixed assets Property 16 7 139 221 7 443 854 7 139 221 7 443 854 Office furniture and equipment 16 216 201 317 224 216 201 321 044 Total fixed assets 7 355 422 7 761 079 7 355 422 7 764 899 Financial assets Investments in subsidiaries 17 37 329 847 37 459 847 - Investments in other companies 18 705 000 705 000 1 125 155 1 303 274 Investments in microfinance - - 177 019 315 182 328 736 Loan to subsidiaries 19 75 316 208 76 816 208 - Overfinanced pension schemes 22 490 861 - Long-term receivables 19 5 414 935 - Total financial assets 119 256 851 114 981 055 184 050 265 183 632 010 Total long-term assets 126 612 272 122 742 134 191 405 687 191 396 908 Receivables Trade Debtors 19 995 260 1 239 023 995 260 1 239 023 Inter-company receivables 19 713 428 1 355 738 - Other short-term receivables 23 3 766 371 7 481 757 3 766 371 7 521 982 Total receivables 5 475 059 10 076 518 4 761 631 8 761 005 Investments in current financial assets 20 26 389 422 26 190 037 26 389 422 26 190 037 Bank and cash 21 85 850 337 48 735 318 85 850 337 49 751 932 Total current assets 117 714 818 85 001 873 117 001 390 84 702 974 TOTAL ASSETS 244 327 090 207 744 007 308 407 077 276 099 882

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Note

Strømme Foundation 31.12.2016 PURPOSE CAPITAL AND LIABILITY

Note

Strømme Foundation 2016

Strømme Foundation 2015

Consolidated 2016

Consolidated 2015

Note

Purpose capital (PC) Founding capital 3 326 092 3 326 092 3 326 092 3 326 092 - - Acquired purpose capital PC with restrictions (SF projects) 15 B 5 779 143 17 050 424 5 779 143 17 050 424 PC with restrictions (Microfinance) 15 106 882 512 106 882 512 136 765 442 140 903 705 Restricted equity (Mimeta) - - - 410 101 Minority interests - - - 220 823 Other purpose capital 15 75 552 738 64 912 448 106 863 160 95 477 213 Total acquired purpose capital 188 214 393 188 845 384 249 407 745 254 062 266 Total purpose capital 15 191 540 485 192 171 476 252 733 837 257 388 358 32 Liability Long-term debt Pension obligations 22 - 840 - 840 Staff gratuities in regional offices 24 6 338 715 5 506 991 6 338 715 5 506 991 Legacy obligations 150 000 150 000 150 000 150 000 Other long-term debt - - 4 125 060 3 799 243 Total long-term debt 6 488 715 5 657 831 10 613 775 9 457 074 Short-term debt Creditors 4 320 354 2 965 129 4 320 354 2 974 243 Public duties and taxes 2 320 532 1 876 840 2 320 532 1 927 367 Owed to employees 2 040 067 1 989 813 2 040 067 2 070 564 Inter-company debt 19 1 238 425 1 038 437 - - Deferred project income 3, 4, 6 34 503 264 1 812 140 34 503 264 2 042 844 Other account payable 1 875 248 232 340 1 875 248 239 433 Total current liability 46 297 890 9 914 699 45 059 464 9 254 450 Total liability 52 786 605 15 572 530 55 673 239 18 711 524 - - TOTAL PURPOSE CAPITAL AND LIABILITY 244 327 090 207 744 007 308 407 076 276 099 882

Kristiansand, June 22nd 2017

Ansgar Gabrielsen Board Member

Hans Christian Vadseth Chairperson of the Board

Ingunn Folkestad Breistein Board Member

Lars Saaghus Board Member Kristine S. Sødal Secretary General

Anna Minj Board Member

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Strømme Foundation Cashflow 201 (The indirect method) Note

Strømme Foundation 2016

Strømme Foundation 2015

Consolidated 2016

Consolidated 2015

The year’s activity result -630 991 11 432 183 -911 632 30 166 986 Adjustment of microfinance group - - 1 641 372 -19 315 114 Share of result from other companies 503 936 369 542 Unrealised loss on investments, i.e. current financial assets - - - Ordinary depreciation and write offs 16 403 057 408 402 403 057 412 222 Loss/Gain from disposal of fixed assets - - - Loss/Gain from disposal of investments 17 -8 988 - - Difference between pension cost and payments 22 -491 701 -590 240 -491 701 -590 240

Posts in the activity account without liquidity effect -97 632 -181 838 415 292 191 524 Proceeds from sale of fixed assets 16 2 600 3 700 2 600 3 700 Acquisition of fixed assets 16 - - - Proceeds from sale of subsidiaries 17 138 988 - -71 022 Change in loan to subsidiary 19 1 500 000 - - Change in long-term receivables 19 -5 414 935 - -5 414 935 Change in long-term debt 831 724 2 138 557 831 724 2 138 557 Investments, disposals and financing -2 941 623 2 142 257 -4 654 233 2 138 557 Change in receivables/other current assets 4 601 459 -899 626 3 999 374 -982 903 Change in creditors/other short-term debt 3 692 067 -514 417 3 344 595 -387 035 Change in deferred project income 3, 4, 6, 23 32 691 124 -2 994 560 32 460 420 -3 268 047 Other changes 40 984 650 -4 408 603 39 804 388 -4 637 985 Total changes in liquidity during the year 37 314 404 8 984 002 36 297 791 8 547 671 Opening balance of cash and current financial assets 1.1. 74 925 355 65 941 353 75 941 969 67 394 298

Closing balance of cash and current financial assets 31.12 112 239 759 74 925 355 112 239 760 75 941 969 Specification: Investment in current financial assets 20 26 389 422 26 190 037 26 389 422 26 190 037 Bank and cash 21 85 850 337 48 735 318 85 850 337 49 751 932 Closing balance of cash and current financial assets 31.12 112 239 759 74 925 355 112 239 759 75 941 969

Accounting Principles applied The financial statements of the Strømme Foundation (SF) are prepared in accordance with the Norwegian Accounting Act and the “Accounting Standard for Not-for-Profit organisations”, produced by The Norwegian Accounting Standards Board. This means that, in place of a traditional profit and loss account, there is an activity account which is meant to give the reader a better understanding of how Strømme Foundation has used the resources at its disposal. SF is not liable for direct taxation.

Allocation of costs

THE PURPOSE OF STRØMME FOUNDATION IS TO LIFT PEOPLE OUT OF POVERTY BY: Managing raised funds and public grants in a way that ensures that recipients gain real influence over their own situations through participation in the developmental process, to strengthen human dignity, and to stimulate the ability of recipients to help themselves. Engaging in dissemination and awareness activities from a North-South perspective, with the aim to create increased interest in development through co-operation; and Providing aid and assistance through local partner organisations, and other regional organisations in co-operation with local authorities. THE REGIONAL OFFICES Strømme Foundation has four regional offices; in West Africa (Mali); East Africa (Uganda); South America (Peru) and Asia (Sri Lanka), plus six country offices in Burkina Faso, Niger, South Sudan, Bangladesh, Nepal and Myanmar. The full cost of these offices is allocated as purpose cost.

UPPORT FOR DEVELOPMENT PROGRAMMES FROM S KRISTIANSAND Costs of the “International Department” are allocated to activity and thereby purpose costs. The department’s function is to co-ordinate, support, evaluate and monitor all programme work, as well as liasing with public and institutional funding bodies such as NORAD, The Norwegian Peace Corps, Operation Dayswork, Läkarmissionen and Eriks Foundation. OTHER SUPPORT FUNCTIONS IN KRISTIANSAND These consist of ‘Secretariat of the Secretary General’, the Administration, Finance and ICT departments. The basis of allocation starts with salaries, which are allocated according to an estimate of the amount of time spent on different activities. Costs that cannot be reasonably and consistently allocated to activity, are classified as administration costs. Thus, support costs relating to the Board of SF, audit costs, general memberships, consultancy, finance costs and about 70% of staff costs in the secretariat, administration, and finance departments are classified as administration costs. Note 1 below shows in summary how the allocation has been made. FUNDRAISING AND INFORMATION ACTIVITIES All expenditure directly connected to personnel employed as fundraisers, and to solely fundraising activity, is classified 100 % as fundraising cost. This includes all direct marketing costs and other costs associated with our main fundraising products “Friend at Heart”, “Bridge-builder”, “Poverty-fighter” and “Job Creator”. All expenditure on personnel and activity whose prime purpose is connected to information and public education is allocated to purpose activity. TRANSACTIONS IN FOREIGN CURRENCY Costs outside Norway are recorded at the exchange rates relating to the corresponding transfers from Kristiansand. The conversion of the regional accounts from local currency to Norwegian kroner follows the prevailing exchange rates that are monthly updated in the system. Accounting summaries from the offices still on separate financial system is recorded monthly at rates corresponding to the fund transfer rates.

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S F enters into forward exchange contracts in foreign currency to reduce the currency exposure connected to money transfers abroad. The currency hedging is classified as securing of cash flow according to the NRS 18 “Financial assets and obligations”. Gain and loss related to forward exchange contracts are recorded directly under financial posts relative to the market rate at the settlement date. These exchange rates serve as basis for the transfers to the regions and therefore affect programme costs in the activity accounts. Foreign currency income is in general recorded at the spot rate on the day of receipt. INCOME Income is entered in the accounts according to the gross method. Costs are entered as they accrue, and income when it is realised. Bequests or donations are recorded as income when there is indisputable confirmation of receipt. SF follows special guidelines concerning earmarked funds, which ensures that these funds cannot be used for activities other than those for which they were donated without specific approval. The Board has set regulations for the handling of earmarked funds when a project is closed. Unused earmarked funds are shown as purpose capital with restrictions on the balance sheet. Grants that are not spent by the end of the year are not shown as income, but as short-term debt in the accounts. CLASSIFICATION AND VALUATION OF BALANCE SHEET ITEMS Current assets and short-term liabilities contain items due for payment within one year after acquisition. Other items are classified as fixed / financial assets or long-term liabilities. Current assets are valued at the lowest of procurement cost and actual value. Other accounts receivable are included on the balance sheet at face value. Items in foreign currency are valued at year-end exchange rates. Short-term liabilities are recorded at the nominal amount at the time of accrual. Fixed / financial assets are valued at procurement cost, but are depreciated to actual value if the fall in value is not expected to be temporary. Long-term debt is entered at the nominal amount at the time of establishment. FIXED ASSETS The fixed assets are entered in the balance sheet and depreciated over their life span if the life span is more than 3 years and the cost is higher than NOK 50 000. Maintenance of fixed assets is charged to operating costs, while renovation or upgrading is added to the cost value and is depreciated along with the asset. At the regional offices all fixed assets are charged to result at the time of procurement. All leasing contracts are classified as operational and accounted for as costs. SHARES IN SUBSIDIARIES AND OTHER COMPANIES Shares in subsidiaries and other companies are recorded at historic cost. SHORT-TERM INVESTMENTS Short-term investments (shares- and bonds units considered to be current

assets) are valued at the lowest of average procurement cost and actual value in the balance sheet. Received interest and dividend from the companies are entered as other financial income. PENSIONS For the time being, the Foundation has both a defined benefit and a defined deposit pension scheme. Defined benefit pension Pension costs and the pension obligations are calculated according to the principle of linear earning, based on estimated factors for the discount rate; future regulation of salary, pensions and contributions from social security, future earnings on the pension fund as well as the actuarial conditions concerning death rate, voluntary resignations, etc. The pension fund is valued according to actual value and is deducted from the net pension obligations on the Balance Sheet. Changes in the obligation due to changes in the pension plans are allocated over the expected remaining contribution period. The same applies to estimate deviations to the extent they exceed 10% of the greater of the gross pension obligations and the pension funds. Arrangements with net obligation are shown as liability and arrangement with net over-financing shown as financial asset. Defined deposit pension The payments to the insurance company are calculated as a fixed percentage of the members’ salaries. The deposits are accounted for as personnel cost. The Foundation has no obligations beyond the annual payments. CASH FLOW The cash flow is calculated using the indirect method. Cash and cash equivalents consist of cash, bank deposits and other short term liquid investments which can immediately be converted to cash without material exchange risk. CONSOLIDATION PRINCIPLES The consolidated accounts includes those companies where Strømme Foundation directly or indirectly has deciding influence. The consolidated accounts are prepared as if the group were one economic unit. Transactions and outstanding balances between the companies in the group are eliminated. The consolidated accounts are prepared according to uniform principles. Purchased subsidiaries are accounted for in the consolidated accounts based on SF’s procurement costs. The costs of acquisition are linked to identifiable assets and debt in the subsidiary, which is stated at actual value in the consolidated accounts at the time of purchase. Investments in microfinance are valued according to the equity method in the consolidated accounts. The equity method requires that a proportion of the relevant companies’ result, reduced by depreciation on possible excess values, is charged to the activity account in the consolidated accounts. Both the purpose capital and the mother company’s lending to the microfinance activity are incorporated in the account line ‘Investments in microfinance’. Minority interests are shown as a separate post under the purpose capital. This means that assets and debt are stated inclusive of the minorities’ share. In the activity account, the minorities’ share of the result is calculated.

Notes for 2016

Note 1 – PRINCIPLES FOR ALLOCATING COSTS Department Total Administration Fundraising Purpose General Secreteriat, Administration, Finance & ICT 13 596 296 5 653 094 2 759 291 5 183 912 Communication/Marketing 23 177 612 1 795 994 15 568 205 5 813 413 International Department 7 257 149 - 725 715 6 531 434 Transfers to development projects, regional offices and partners 147 195 671 - - 147 195 671 Total 191 226 728 7 449 088 19 053 210 164 724 430 NOTE 2 – KEY INDICATORS Percentage spent on purpose Percentage spent on administration Fundraising percentage

2016 2015 2014 86,1 % 85,4 % 83,4 % 3,9 % 4,5 % 4,6 % 78,2 % 75,4 % 73,6 %

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Comments/Allocations basis Some direct allocation to admin, rest allocated on KRS office salary basis Allocation on the basis of activity Generally all purpose activities, apart from some major donors fundraising cost All activity outside Norway and with external partners is defined as purpose.

2013 2012 82,6 % 84,6 % 5,3 % 4,5 % 76,7 % 79,2 %

The percentage spent on purpose shows how much of the total expenditure has gone to fulfilling Strømme Foundation’s various purposes. The percentage spent on administration shows the share of the total expenditure that was covering unallocated administrative costs (general admin, accounts, ICT, audit, Board/Council expenses). The fundraising percentage shows how much of the money SF raises from private donors goes to purpose costs, after the cost of raising the funds is deducted. Public sector grants, grants from foreign organisations, financial income and other income are excluded from the calculation. The criteria for continued membership in the Norwegian fundraisers’ register is that a minimum of 65 % of the funds raised is used on the organisation’s purpose over time. NOTE 3 – PUBLIC SECTOR GRANTS Strømme Foundation has a five year co-operation agreement with the Norwegian Agency for Development Co-operation (NORAD) for expected annual support of NOK 57 mill. In excess of this, we received grants for education in vulnerable states and for the Speed School Secretariat in West Africa. The contribution from UK Aid on the five year agreement from 2013 to provide education for girls in South Sudan and a similar agreement that covers both Uganda and South Sudan was extensive also in 2016. Another large, three-year agreement was signed with The European Union in Mali on funding for Speed Schools. Donor Purpose Norwegian Agency for Dvlpm. Coop. (NORAD) Development Programmes Norwegian Agency for Dvlpm. Coop. (NORAD) Teacher Education, South Sudan Norwegian Agency for Dvlpm. Coop. (NORAD) Inclusive Education for children, South Sudan Norwegian Agency for Dvlpm. Coop. (NORAD) Secretariat for Speed Schools, West Africa Norwegian Agency for Dvlpm. Coop. (NORAD) Education in vulnerable states, Mali Norwegian Agency for Dvlpm. Coop. (NORAD) Framework agreement - Information work Norwegian Agency for Dvlpm. Coop. (NORAD) Education in vulnerable states, South Sudan Swiss Agency for Development & Coop. (SDC) Speed School Programme – Mali The European Union, EU Speed School Programme – Mali The Norwegian Peace Corps – Young Act Now Programme - Hald International Centre The Norwegian Peace Corps (FK) South/South Exchange Programme - East Africa The Norwegian Peace Corps (FK) Exchange programme, HTPV – South Sudan UK Aid Education for girls, South Sudan UK Aid Education for girls, Uganda/South Sudan US Aid Hydroponic Green Forage, Peru Total

2016 2015 55 932 292 56 923 112 -486 337 2 703 800 - 3 600 000 2 321 927 2 260 000 1 572 751 - 900 000 21 818 128 794 56 535 9 871 990 2 371 560 2 547 529 1 236 556 1 539 451 -46 981 593 117 7 979 435 6 460 107 1 849 317 2 215 510 81 470 332 370 82 834 592 80 131 531

These grants are earmarked to specific projects and are shown gross including the administrative support element. Settlement with the donor is made in arrears once a year. The co-operation agreement with NORAD (2014/2018) requires a minimum contribution of 10 % from Strømme Foundation, and allows up to 7 % administration support. For programmes financed by public sector donors like FK, EU and UK Aid, there are certain funds for programme follow-up included in the budget. Grants that were unspent by the end of the year have been periodised, which means that these are not included as income. A total of NOK 17.7 mill have been shown as ‘Deferred project income’ on the balance sheet. NOTE 4 – CONTRIBUTIONS FROM OTHER ORGANISATIONS Donor Purpose Operation Day’s Work, Norway Empower girls to become masters of their own life, Bangladesh Operation Day’s Work, Norway Empower girls to become masters of their own life, Nepal Läkarmissionen, Sweden Saving-/credit groups and youth empowerment, Uganda Läkarmissionen, Sweden Saving-/credit groups and literacy programme, South Sudan Läkarmissionen, Sweden Literacy programme for women, Niger Eriks Foundation, Sweden Speed Schools, Mali Eriks Foundation, Sweden DREAM program, Myanmar Eriks Foundation, Sweden Education and community development, Bangladesh Eriks Foundation, Sweden Local community Development, South Sudan Education for All Foundation, Qatar Speed Schools, Mali, Burkina Faso, Niger Turing Foundation, The Netherlands Speed Schools, Niger Hei Verden, Norway Inclusive Education, Bangladesh Waterloo Foundation, England Literacy programme for women, Burkina Faso Futuro Bolivia, Norway Occupational training for women, Bolivia TearFund, Switzerland Programme follow-up of Peruvian partners Bernhard van Leer Foundation, The Netherlands Safe families and protected childhood, Peru Rishi Sethia, India Earthquake rehabilitation, Nepal Eriks Foundation, Sweden Flood rehabilitation, Myanmar Eriks Foundation, Sweden Food security in drought areas, Uganda Läkarmissionen, Sweden Inter-faith dialogue forum, Niger L’Albero della Vita Onlus Foundation, Peru Programme follow-up of Peruvian partners Total

2016 2015 - 369 287 6 601 821 7 550 178 1 234 280 2 536 639 493 957 1 087 131 -170 534 1 140 856 1 507 440 -143 502 684 880 215 430 1 966 162 2 759 356 3 079 791 3 747 293 4 647 312 - -136 000 525 949 433 682 491 536 591 272 - 115 200 114 691 209 388 227 103 69 796 752 502 - 75 550 354 104 - 48 168 - 137 898 - 65 392 - 21 934 008 21 450 000

The Samvad programme in Nepal, financed by Operation Day’s Work, continued full-scale in 2016. The Eriks Foundation’s support for Speed Schools in Mali was resumed as co-funding towards a new large, five-year agreement with the Education for All Foundation in co-operation with PLAN in Mali, Burkina Faso and Niger for Speed Schools. The programmes in Bangladesh and South Sudan with Eriks Foundation continued as per contract. Full adherence to the applicable accounting standard regarding periodising of non-utilised grants has resulted in some programmes having incoming balances from 2015 now appearing with negative income, even though there has been activity during 2016. Total grants periodised are NOK 7.2 mill. NOTE 5 - PRIVATE DONATIONS Donor Category 2016 2015 Individual donations 8 102 262 8 171 344 Fixed-term donations (Friend at Heart, Bridge Builder, Job Creator etc.) 40 741 333 39 485 280 Events, schools and artists 3 873 522 4 090 784 Testamentary donations 11 518 298 1 938 199 Disasters and aid 3 650 2 450 820 Total 64 239 065 56 136 426 2016 gave new record in testamentary donations, deriving from a few exceptionally valuable properties. NOTE 6 - CORPORATE SECTOR This income comes from our co-operation with the corporate sector and sports clubs. We define the co-operation in three categories. A ”Main partner” contributes NOK 500 000 or more, a ”Plus partner” between 100 000 and 499 000 and a ”Partner” from 15 000 to 99 000. In 2016 we had five main partners: Agder Energi, Skagerak Energi, Kristiansand Dyrepark, The Kavli Trust and AKO Foundation. Their accumulated donations comprise NOK 8.4 mill.

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Our largest sports co-operation partner is IK Start through their organisation Start Life Support. A total of NOK 9.6 mill in contributions were periodised and are included under ‘Deferred project income’ on the balance sheet. NOTE 7 – FINANCIAL INCOME/COST 2016 2015 572 656 750 282 2 378 189 12 299 083 -954 0 -1 491 910 -198 559 1 457 980 12 850 807

Other interest income Other financial income Other interest cost Other financial income Total

On foreign current accounts on the balance sheet, the following exchange rates are applied: USD/NOK 8.62 and EUR/NOK 9.07. As opposed to earlier years, exchange differences occur continously during the year after the resumption of the common financial system together with Kristiansand office at the East Africa and Asia offices. Custodies in foreign currency at balance sheet date are converted at the average bid rate stated by the currency exchange provider Oanda. Net exchange gain/(loss) in the regions is included under ‘Other financial income/(loss)’. Net gain on forward exchange contracts is included under ‘Other financial income’ - see Note 27. The same is pertaining to gain from the sale of shares in Mimeta AS - see Note 17. NOTE 8 – FUNDRAISING COSTS The costs of fundraising in the Norwegian private market are shown here, both the direct costs and the indirect support costs allocated to fundraising. Indirect costs are shown under ‘Other fundraising costs’ in the accounts, and this also includes costs in Norway of securing funds from other organisations. In 2016 a large “Job Creator” recruiting campaign was held in Kristiansand. NOTE 9 - SUPPORT TO DEVELOPMENT PARTNERS/PROJECTS irect costs on behalf of the partners/projects are included here, in addition to transfers to the partners/projects. D Country/Region 2016 2015 Bangladesh 13 616 425 13 714 815 Sri Lanka 4 222 337 6 062 056 Nepal 11 071 289 12 256 619 Myanmar 1 289 610 1 835 790 Asia 30 199 661 33 869 280 Uganda 8 899 538 10 086 060 Tanzania 3 374 551 3 062 586 South Sudan 17 840 305 20 021 054 Kenya 3 710 075 4 950 390 East Africa 33 824 468 38 120 089 Mali 22 777 056 9 481 558 Burkina Faso 7 440 595 6 416 801 Niger 8 596 064 7 250 619 West Africa 38 813 715 23 148 979 Peru Bolivia South America

4 580 994 4 822 569 9 403 563

5 730 101 4 624 061 10 354 162

Act Now 2 337 222 2 581 867 Culture - MIMETA - 500 000 Peace Corps - Myrada/FVTR 528 030 848 611 Global 2 865 252 3 930 477 Total 115 106 659 109 422 987 In 2016, the Speed Schools concept in West Africa was scaled up as a result of new grant agreements with The European Union in Mali and The Education for All Foundation (Mali, Burkina Faso, and Niger). Political unstability in South Sudan influenced, to a large extent, the implementation of the programmes in the country. 10 – NATURAL DISASTERS AID Country (cause) 2016 2015 Nepal (Earthquake) 1 506 014 1 004 224 Myanmar (Flood) 884 296 299 662 Bangladesh (Flood) 56 898 Sri Lanka (Flood) 31 433 Uganda (Food security) 49 715 Totalt 2 528 356 1 303 887 The earthquake disaster in Nepal triggered the willingness of many donors to contribute, and long-term measures were launched in selected areas in order to improve the livelihoods of the inhabitants of the villages. In 2016 severe floods struck several countries were SF is active. NOTE 11 - PROGRAMME FOLLOW-UP AT REGIONAL OFFICES Region Asia (Bangladesh, Sri Lanka, Nepal, Myanmar) East Africa (Uganda, Tanzania, Sør-Sudan, Kenya) West Africa (Mali, Burkina Faso, Niger) South America (Peru, Bolivia) Total

2016 2015 8 966 588,87 7 745 437,52 7 980 780,82 7 672 100,62 8 504 185,72 8 022 867,88 4 109 100,01 4 075 219,48 29 560 655 27 515 626

NOTE 12 - PROGRAMME FOLLOW-UP FROM KRISTIANSAND

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Department International Department The Microfinance Company (SMF AS) Shared support services Totalt

2016 2015 6 531 434,17 6 085 312,78 - 750 000,00 4 147 129,69 4 052 054,81 10 678 564 10 887 368

The microfinance company in Kristiansand is now self-sustainable, and SF’s support of their operative follow-up of the microfinance activities in the regions has been phased out. NOTE 13 – INFORMATION AND PUBLIC EDUCATION WORK The communication department has two purposes: fundraising, and information and public education work. In addition to reports from the projects in the South to donors through our magazine Help for Selfhelp, this part of our work includes activities particularly targeted towards schools, the corporate sector, the press, and social media. The primary focus is on development issues rather than fundraising. Previous years’ agreements with Norad for support for information work, were not granted for 2016. NOTE 14 – VAT COMPENSATION The current legislation relating to VAT provides a facility for voluntary organisations to apply in arrears for compensation of VAT paid. Received VAT compensation in 2016 is based on the total funds spent in 2015, and is recorded as income in the accounts, but stated on a separate line as extraordinary supply of funds in the activity account. No claim of outstanding VAT is recorded in the balance sheet for 2016. The accounts are charged inclusive of VAT, and compensation for VAT will be recorded as income in 2017. NOTE 15 - CHANGES IN PURPOSE CAPITAL (PC) Strømme Foundation Founding Capital PC with restrictions (SF projects) PC with restrictions (Microfinance) Other purpose capital Total Purpose Capital

31.12.2015 3 326 092 17 050 424 106 882 512 64 912 448 192 171 476

Change during 2016 - -11 271 281 See specification in Note 15B - 10 640 290 Result for SF 2016 -630 991

31.12.2016 3 326 092 5 779 143 106 882 512 75 552 738 191 540 485

NOTE 15 B - CHANGE IN PURPOSE CAPITAL WITH RESTRICTIONS Region Asia East Africa West Africa South America Global Natural disasters Totalt

2016 663 367 4 392 030 - - 354 164 369 582 5 779 143

2015 2 417 374 9 235 154 2 307 289 558 266 597 341 1 935 000 17 050 424

Endring 2016/2015 -1 754 006 -4 843 124 -2 307 289 -558 266 -243 177 -1 565 418 -11 271 281

Endring 2015/2014 -485 802 891 250 907 833 558 266 -4 736 684 1 935 000 -930 137

Grants from the public sector and other organisations that were not utilised by the end of the year, are taken out of PC with restrictions and shown as debt in the accounts. This is also the case for opening balances that were still not spent. Therefore, remaining PC with restrictions now only contains private donations that do not have any agreement or expectation of repayment connected to them. NOTE 16 – FIXED ASSETS Property Business Premises Furniture and equipment Total Cost price 01/01/15 290 000 14 776 793 2 157 775 17 224 568 Acquisitions 2016 - - Disposals 2016 - 716 118 716 118 Cost price 31/12/16 290 000 14 776 793 1 441 657 16 508 450 Accumulated depreciation 31/12/16 - 7 927 572 1 225 456 9 153 028 Book value 31/12/16 290 000 6 849 221 216 201 7 355 422 The year’s ordinary depreciation - 304 633 83 734 388 367 Depreciation rates - 2-10 % 20-30% In addition, some paintings are written off by altogether NOK 14 690, which is included under disposal of furniture and equipment. Strømme Micro Finance AS (SMF AS) is titleholder for the building site and business premises, with exception of one unit for which SF is the titleholder. S F has a credit line of NOK 24 mill for foreign exchange hedging. This is secured on the total property value NOK 7.2 mill. Since SF operates with an accounting principle to expense all equipment under NOK 50 000, the majority of the inventory is not included under fixed assets on the balance sheet. For the same reason, most fully depreciated assets do not appear here. All equipment in the Regional Offices is recorded as programme follow-up cost. NOTE 17 - INVESTMENTS IN SUBSIDIARIES Name Number Owner share Strømme Micro-finance AS 10 500 100 Total investments in subsidiaries

Book value in SF 37 329 847 37 329 847

Result 2016 -2 147 460 -2 147 460

Equity 31/12/16 86 867 787 86 867 787

Strømme Micro Finance AS (SMF AS), with its main office in Kristiansand, is a wholly-owned subsidiary of SF. The company conducts the microfinance activities on behalf of SF and submits its own annual report. In 2016, the SMF AS group has received a total of NOK 1.1 mill from SF for capacity building in microfinance. The ownership in Centre for international culture co-operation, Mimeta AS, was sold 31. March 2016. The first quarter is incorporated in the consolidated accounts.

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NOTE 18 - INVESTMENTS IN OTHER COMPANIES Navn Antall Owner share Hald Internasjonale Senter SA 200 33 Luntevika Eiendom AS 500 50 Total investments in other companies

Book value 200 000 505 000 705 000

Result 2016 -539 754 -651 635 -1 191 389

Equity 31/12/16 3 949 313 -793 48 3 155 832

The joint venture Hald International Centre (Hald) has its office in Mandal, and is owned with equal shares by The Norwegian Mission Society, The Norwegion Christian Student and Schools Movement, and Strømme Foundation. The objective of Hald is to provide courses and training for work within mission organisations, evangelisation and development work, as well as for exchange programmes in different parts of the world. Hald is a Not-for-Profit organisation and cannot give dividends to the owners. Hald is responsible for the Peace Corps 2016 grant of NOK 2.4 mill for SF’s exchange programme, Act Now. Luntevika Eiendom AS, with its office in Kristiansand, is owned in fellowship with Kaspar Strømme Eiendom AS. The company is established for facilitating the commercial sale of the residential housing property in Luntevika, Lillesand. The SF Board has, as of 2017, decided to sell out the ownership in the company. NOTE 19 – OUTSTANDING WITH SUBSIDIARIES AND OTHER COMPANIES The ‘Loans to subsidiaries’ of NOK 75.3 mill consists of interest-free subordinated loans of NOK 72.2 mill with no repayment schedule and an interest-bearing loan of NOK 3.1 mill without agreed repayment schedule. The last one is given in connection with the buyout of loans to clients in the Kaputiei project in Nairobi. All the loans are provided to Strømme Micro Finance AS. Long-term receivables consists of a seller’s credit to Luntevika Eiendom AS of NOK 5.4 mill, inclusive of incurred interest, which matures as per specific agreement. This is secured by a guarantee of NOK 5.1 mill. from the co-owner. Remaining inter-company receivables and debt pr. 31/12/16 is mainly related to the microfinance operation. NOTE 20 - INVESTMENTS IN CURRENT FINANCIAL ASSETS Category Cost Price 01/01/16 Book value 01/01/16 Additions 2016 Change in earlier write off Book value 31/12/16 Market value 31/12/16 Market-based shares 15 348 484 15 345 011 62 180 3 473 15 410 664 16 569 748 Primary Capital certificates 953 436 953 436 0 0 953 436 1 368 642 Market-based bonds 10 011 405 9 891 590 15 036 118 696 10 025 322 10 285 614 Total 26 313 325 26 190 037 77 216 122 169 26 389 422 28 224 004 NOTE 21 - LIQUIDITY AND RESTRICTED FUNDS Free funds at Kristiansand office Free funds at the regional offices Sum free funds Employees’ tax deducted account Project/Grant accounts with restrictions Memorial Fund Restricted funds at the regional offices Sum restricted funds Total

2016 2015 45 385 037 26 989 562 14 160 381 8 667 928 59 545 418 35 657 490 797 637 672 199 14 210 153 6 916 984 152 889 151 375 11 144 241 5 337 270 26 304 920 13 077 828 85 850 337 48 735 318

NOTE 22 – PENSION OBLIGATIONS Employees who were 57 years and younger were from March 2015 moved from the defined benefit pension scheme (‘Ytelsespensjon’) to a defined deposit-based solution (‘Innskuddspensjon’). The old pension scheme is comparable to the State Pension Fund. At the start of 2016 there were 7 (33 in 2015) employees in the old pension scheme, while at the end of the year there were 7. For the 27 employees currently on the defined deposit pension scheme, there are no obligations beyond those paid during the year. Total cost related to the defined deposit-based pension scheme was NOK 938.727 in 2016. SF has signed an agreement for a new AFP-plan through the Common National scheme of AFP’s. This agreement applies for 27 (27 in 2015) people, and in 2016 the transition period payments to the old AFP scheme was over. Actuarial calculations have been applied for calculating the obligations and costs in connection with the defined benefit pension plans. The following assumptions have been used for the calculations: 2016 2015 Discounting rate 2.6% 2.7% Expected dividend 3.6% 3.3% Salary adjustments / year 2.5% 2.75% Yearly G-regulation / inflation 2.25% 2.5% Expected pension escalation 1.2% 1.2% Secured system 2016 Secured system 2015 Gross pension obligations at 31/12 calculated at 15 277 347 13 883 862 - Value of pension funds at 31/12 calculated at -14 006 844 -11 875 296 + Deferred obligation in case of (loss) / profit -1 700 705 -2 007 830 = Calculated net pension obligations as of 31/12 -430 202 736 + Social Insurance contributions -60 658 104 = Net pension obligation as of 31/12 -490 860 840 The year’s pension accrual 273 111 840 + interest cost 366 354 301 739 + administration cost 179 661 245 508 - Return on capital -395 179 -364 444 = Net pension cost 423 947 530 692 + Social Insurance contributions 59 776 74 827 + Actuarial loss (gain) 176 683 223 423 Recognised net liability at transition to new scheme - -1 670 794 Recognised share actuarial loss/(gain) by change of scheme - 2 208 739 = Total pension cost 660 406 1 366 887 The amount is included in “Salaries and personnel expenses” in the accounts. (Note 26). Actual yield on the pension funds was 4.36 % in 2016 (4.88 % in 2015).

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NOTE 23 – OTHER SHORT-TERM RECEIVABLES The balance sheet post ‘Other short-term receivables’ contains periodised project income of NOK 1.8 mill. NOTE 24 – GRATUITY PAYMENTS AND OBLIGATIONS AT THE REGIONAL OFFICES t all the regional offices SF as well as the employees make regular deposits into public gratuity funds. These funds are not on the SF balance sheet. In addition to A that, in Asia and East Africa contributions are set aside for a final payment to employees when they leave, but employees are entitled to draw on it before leaving. The sum on the balance sheet refers to these two regions. In most cases both SF and the individual employee make contributions according to the local legislation. In West Africa there is a legal obligation to make a payment on termination, depending on the years of service, that is not included as a liability in the accounts. In South America there are no liabilities above the social security costs already accounted for. NOTE 25 - OPERATIONAL COSTS Even though SF does not present a traditional profit and loss account, the guidelines for charitable organisations require the disclosure of additional information that would be shown if the expenditure were categories by type and not activity. Notes 25, 26 and 27 contain such a breakdown. Note 2016 2015 Project transfers to local partners 94 279 734 94 820 683 Project costs on behalf of local partners 9 319 567 7 674 186 Salary and personnel costs Kristiansand 26 21 939 677 21 720 492 Salary and personnel costs in regions/external programmes 26 23 596 777 20 159 074 Travel costs Kristiansand 3 332 837 2 861 253 Travel costs inclusive vehicle in regions/external programmes 5 172 935 6 381 586 Office, ICT, consultant and other operating costs in Kristiansand 27 10 317 371 10 909 600 Office, ICT, consultant and other operating costs in regions/external programmes 27 14 835 324 9 954 615 Fundraising campaigns Kristiansand 8 029 448 6 305 586 Depreciation and write offs in Kristiansand 16 403 057 408 403 Total operational cost 191 226 728 181 195 478 Several programmes with dedicated project teams have started up in the regions, and this together with the establishment of new offices explains the increase in ‘Salaries and personnel costs in regions/external programmes’ as well as other office costs in the regions/external programmes. NOTE 26 – SALARIES AND PERSONNEL EXPENSES / OTHER ALLOWANCES 2016 2015 Salaries in Kristiansand 17 105 943 16 143 565 Social Security Payments 2 657 919 2 725 523 Pension Costs 1 464 989 2 140 817 Other Personnel Costs in Kristiansand 710 826 710 587 Sum salaries and personnel expenses in Kristiansand 21 939 677 21 720 492 Salaries and allowances at Regional Offices/external programmes Total

23 596 777 20 159 074 45 536 454 41 879 566

The average number of employees in Kristiansand was 32.3 (30.5). This amounts to 30.5 man-labour years in 2016, compared to 28.7 in 2015. In the regional offices the average number was 102.6 (92), equivalent to 101.7 man-labour years, compared to 91.2 in 2015. The total salary cost in 2016 for the Secretary General (SG) was NOK 822 417, other allowances NOK 34 915 and pension contributions NOK 137 379. The SG has no bonus scheme. The SG has waived his general term of termination, but is entitled to compensation upon termination by one of the parties. In Norway, SF is obliged to have a pension scheme according to the Compulsory service pension Law. Employees who were 57 years and younger were in March 2015 moved to a defined deposit pension scheme. Those who were moved, have received an earned pension entitlement from the old scheme. The existing pension schemes fulfils the Law requirement. For the defined benefit pension scheme - see Note 22. The Executive Board and Advisory Board members have received no remuneration other than actual travelling costs. With the exception of salaries and travel claims, there are no financial transactions with employees or connected persons in Strømme Foundation in Norway. Outstanding loans to employees in the Regional Offices totalled NOK 117 084 at the year end compared to NOK 142 183 at the end of 2015. These are included in ‘Other short-term receivables’ on the balance sheet. NOTE 27 – AUDIT FEES Statutory Audit Fees Other certification Other advising and assistance Totalt

2016 2015 805 661

487 369

176 500

181 641

60 000

8 750

1 042 161 677 760

The fees are stated exclusive of VAT. Total fees in 2016 to the group auditor in Kristiansand were NOK 616 500, while total fees to auditors of regional offices were NOK 425 661 for 2016. NOTE 28 – CURRENCY HEDGING The net gain on currency contracts materialised in 2016 was NOK 1.6 mill. This is recognised under financial items as opposed to previous years where financial gain subsidised programme cost. Total unrecognised gains in the period 2008 to 2014 was NOK 14.1 mill. At the end of the financial year, SF had forward currency contracts with a face value of USD 0.2 mill and EUR 2.5 mill which all terminate in 2017. The handling of these contracts is shown in the accounting principles note. The real value of the contracts was NOK -0.4 mill at the end of year. In accordance with the chosen accounting principles, the change in value of the contracts is not shown in the accounts.

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CONSOLIDATED ACCOUNTS (STRØMME FOUNDATION, SMF AS GROUP, MIMETA) NOTE 29 – CONSOLIDATED SALARIES AND PERSONNEL EXPENSES / OTHER ALLOWANCES 2016 2015 18 470 569 18 042 494 2 852 898 3 020 637 1 559 977 2 294 255 731 756 798 627 23 615 201 24 156 013 23 596 777 23 442 563 47 211 978 47 596 566

Salaries in Kristiansand Social security payments Pension costs Other personnel costs Sum salaries and personnel costs in Kristiansand Salaries and allowances in Regions / outside Norway Total Audit Fees (exclusive of VAT): Statutory Audit Fees Other certification Fees Other advising and assistance Total

1 168 180 272 700 364 050 1 804 930

874 281 184 062 16 750 1 075 093

Beyond Strømme Foundation, the table above includes figures for the Microfinance Group and Mimeta. In addition to the employees stated in Note 26, there are an additional 17 employees in the group, 2 of which are in Norway. The salary of the Secretary General is disclosed in Note 26. Audit fees paid to the group auditors in Norway in 2016 is NOK 1 181 750 exclusive of VAT. The audit fees in the regions totalled NOK 623 180. NOTE 30 – CONSOLIDATED PURPOSE ACTIVITIES The total purpose cost in the consolidated accounts are reduced by the total grants of NOK 1.1 mill that was provided by SF to the microfinance activity. These costs are in the consolidated accounts presented as part of “Result Microfinance”. NOTE 31 – INVESTMENTS IN MICROFINANCE S F has organized the microfinance activities through the subsidiary group SMF AS. In the consolidated accounts SMF AS is included according to the equity method. The year’s changes in the Microfinance investments: Book value 01/01 Share of result Currency exchange differences Change in loan Book value 31/12

2016 2015 182 328 736 163 342 552 649 379 19 214 756 -3 668 049 -328 930 -2 290 751 100 358 177 019 315 182 328 736

NOTE 32 - PURPOSE CAPITAL (PC) - GROUP

Purpose Capital 31/12/2015

The years result

Sale of Mimeta Currency exchange differences

Purpose Capital 31/12/2016

Founding capital 3 326 092 3 326 092 PC with restrictions (SF projects) 17 050 424 -11 271 281 5 779 143 PC with restrictions (Microfinance) 140 903 705 -470214 -3 668 049 136 765 442 PC with restrictions (Mimeta) 410 100 -280 101 -129 999 0 Minority interest with restrictions (Mimeta) 220 823 -145 983 -74 840 0 Other purpose capital 95 477 213 11 255 947 130 000 106 863 160 Total purpose capital 257 388 357 -911 632 -74 839 -3 668 049 252 733 837

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To the B oard of St

Indepen Report o n Opinion

romme

Founda tion

dent Au dit the Aud

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it of the

Financia l Statem

ents

We have the finan audited the fin an of the gr cial statements cial statements oup. Th of the pa of Strom e income statemen financial statemrent foundation me Foundatio n sh statemen an t en ts, includ and cash flow st ts comprise th d loss of NOK owing a loss of 911 632 e balanc atemen ing a su t in the fin NOK 630 991 in e mmary In our op of signifi for the year then sheet as at 31 Decembe ancial statemen ca in en io nt ded, an n the fin accountin give a tr ts r d an no g policie ci ue tes to th 2016, and the s. Decembe and fair view al statements ar e financi of the fin al e with the r 2016, and its ancial po prepared in ac fin cordance N sition of ancial Norway orwegian Acc with the ounting performance an the parent fo . law an un Act and d accountin its cash flows dation and the d regulations, and fo group as g r the ye st an Basis for dards an Opinion d practi ar then ended at 31 in ces gene rally acce accordance We cond pted in uc generally ted our audit in responsi accepted in Nor accordance w it bilities w h ay la , w includin s, regula under th Audit of g In tions, an th os d auditi Group as e Financial Stat e standards ar ternational St ng an em e accordan required by law ents sectio further descri dards on Audit standards and be n practice in s ce of d in the an our repo d regula and appr with these re s Auditor’s g (ISAs). Our rt tio . We ns qu opriate to provid irements. We , and we have fu are independ Responsibilitie en s believe lfi e a basi t lle of d our ot the Foun for the that the s for ou he Other in da r audit ev r opinio formatio n. idence w ethical respon tion and the sibi n e have ob tained is lities in Managem sufficient en t is re Directo rs’ repo sponsible for rt, but do th es not in e other inform at clude th Our opin io e financi n. The other io info al statem any form n on the finan cial ents and rmation compr of assura is our audi nce conc statements do tor's repo es the Board of es lu not cove sion ther In conn rt thereo r eo th n. ec e other n. informat informat tion with our au io ion and, di n t an of the fin d we do the finan in doing an not expr cial stat cial stat so, cons ess em misstat em id en ents or er whe ts, ou ed of this ot . If, based on th our knowledg ther the other r responsibilit y e in her info e rmation, work we have obtained in th formation is m is to read the ot e au perf ater he we are re quired to ormed, we conc dit or otherwis ially inconsiste r e ap nt lu report th at fact. de that there is pears to be mat with We have a mater erially ia nothing to report l misstatement in this re Pricewat erhouseC gard. oope T: 02

316, org. rs AS, Gr avane 26 no.: 987 State au 009 713 , Postbo thor ks 447, NO accountin ised public acco VAT, -4664 Kr untants, www.pwc.no g firm istiansan membe d rs of The Norweg ian Institu te of Pu blic Acco untant

s, and au

thorised rt - Stromme Foundation Independent Auditor's Repo

Independent Auditor's Repo rt - Stromme Foundatio n

audit evidence obtained up to the date of our audit or’s report. However, futur conditions may cause the e events or Foundation to cease to conti nue as a going concern. • evaluate the overall presentation, structure and content of the financial state the disclosures, and whet ments, including her the financial statement s represent the underlyin and events in a manner g transactions that achieves fair presentati on. • obtain sufficient appropriat e audit evidence regarding or business activities withi the financial information of the entities n the Group to express an opinion on the consolidate statements. We are respo nsible for the direction, supervision and performan d financial audit. We remain solely ce of the group responsible for our audit opinion. We communicate with the Boar timing of the audit and signi d of Directors regarding, among other matters, the planned scope and ficant audit findings, inclu control that we identify ding any significant defic during our audit iencies in internal

Report on Other Legal and Opinion on the Board of Dire

Regulatory Requiremen ts

ctors’ report

Based on our audit of the financial statements as descr information presented in ibed above, it is our opini the Board of Directors’ repor on that the concern assumption, and t concerning the financial the proposal for the cover statements, the going age of the loss is consistent statements and complies with the financial with the law and regulation s.

Opinion on Registration and

Documentation

Based on our audit of the financial statements as descr considered necessary in ibed above, and control accordance with the Inter procedures we have national Standard on Assu (ISAE) 3000, Assurance rance Engagements Engagements Other than Audits or Reviews of Histo Information, it is our opini rical Financial on that management has fulfilled its duty to produce set out registration and documentation of the found a proper and clearly ation’s accounting informatio the law and bookkeeping standards and practices n in accordance with generally accepted in Norw ay.

Opinion on administratio n and

distributions

Based on our audit of the financial statements as descr considered necessary in ibed above, and control accor proce 3000 “Assurance Engageme dance with the International Standard on Assurance dures we have nts Other than Audits or Engagements ISAE Reviews of Historical Finan our opinion that the found ation is managed and distri cial Information”, it is foundations objectives and butions is made in accor dance with law, the its constitution as a whol e. Kristiansand, 22 June 2017 PricewaterhouseCoope rs AS

Responsibilities of the Boar Financial Statements

d of Directors and the Man

aging Director for the

the preparation agement) are responsible for in the Managing Director (man n of the financial statements The Board of Directors and tions, including fair presentatio generally regula ices and law pract and with ards dance in accor and accounting stand Act e nting enabl Accou to sary egian accordance with the Norw gement determines is neces such internal control as mana nt, whether due to fraud accepted in Norway, and for free from material misstateme are that ents statem cial the preparation of finan or error. Foundation’s and responsible for assessing the statements, management is able, matters related to going In preparing the financial concern, disclosing, as applic going a as ue as it is not likely r contin to insofa y abilit the Group’s basis of accounting ents use the going concern concern. The financial statem tions. opera cease will prise enter that the

Auditor’s Responsibilities

Reidar Henriksen State Authorised Public Accountan Note: This translation from Norw

egian has been prepared

l Statements for the Audit of the Financia

ents as a whole whether the financial statem or’s report reasonable assurance about or error, and to issue an audit Our objectives are to obtain atement, whether due to fraud is not a guarantee but ance, assur of are free from material misst level ance is a high assur nable practices Reaso and on. ards opini that includes our ations, and auditing stand it accordance with laws, regul a material misstatement when that an audit conducted in ing ISAs will always detect or in includ dually ay, indivi Norw if, in ial ted generally accep are considered mater and error or on the fraud from taken arise economic decisions of users exists. Misstatements can be expected to influence the nably reaso could they aggregate, ents. basis of these financial statem practices , and auditing standards and dance with laws, regulations ), we exercise As part of an audit in accor Standards on Auditing (ISAs ay, including International . We also: audit the ghout throu generally accepted in Norw icism maintain professional scept professional judgment and cial statements, whether due ial misstatement of the finan mater of and risks the s asses and • identify dures responsive to those risks, n and perform audit proce a basis for our opinion. The de to fraud or error. We desig provi to priate is sufficient and appro one that for nce than r evide highe is audit obtain from fraud ial misstatement resulting risk of not detecting a mater ry, intentional omissions, may involve collusion, forge resulting from error, as fraud internal control. of ide overr the or ns, misrepresentatio n audit to the audit in order to desig an of internal control relevant for the purpose of expressing • obtain an understanding in the circumstances, but not procedures that are appropriate Foundation's or the Group's internal control. of the ss ivene effect the on on opini of accounting used and the reasonableness ness of accounting policies • evaluate the appropriate made by management. sures disclo d relate and estimates of accounting use of the going concern basis priateness of management’s exists related to • conclude on the appro whether a material uncertainty ed, obtain nce evide continue as to y audit Foundation’s abilit and, based on the cast significant doubt on the , we are required to draw events or conditions that may a material uncertainty exists that ude or, if concl ents we If statem rn. cial a going conce in the finan t to the related disclosures the attention in our auditor’s repor to modify our opinion. Our conclusions are based on quate, inade are sures disclo such (2)

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for information purposes

only. (3)

Strømme Foundation Executive Board, and Advisory Board members 2016 The board; 31 December 2016 Svein Ove Faksvåg (chairperson) Knut Vollebæk Ansgar Gabrielsen Hege Wallevik Lars Saaghus Anna Minj Hans Christian Vadseth

Council members; 31 December 2016 Stein Hannevik (chairperson) Hilde Midthjell Kristin Andresen Katrine Nødtvedt Ingunn Folkestad Breistein Dag Nordbø Loveleen Brenna Henrik Syse Elbjørg Dahl Jan Oddvar Skisland Erik Solheim Torger Reve Endre Glastad Hilde Strømme Svein Gunnar Gundersen Ole Martin Årst Eli Beate Winsnes Hillesund Sigbjørn Sødal Snorre Kjesbu Melissa Lesamana Tor Knutsen Line Alice Ytrehus

Deputy Representatives Cecilie Watne Jostein Senumstad

Election committee; 1 January 2016 Gunnleik Seierstad Hilde M. Sæbø Fjeldstad Stein Hannevik

The facts behind the figures Administration, Fundraising and Purpose cost HOW WE USE THE MONEY/ 2016 Purpose (86,1%) Administration (3,9%) Fundraising (10%)

THE FACTS BEHIND THE PURPOSE COST 2016 International project work (89,4%) Project support/follow-up in Norway (6,5%) Information, development work/education - public (4,1%)

The Strømme Foundation is a member of the Norwegian Control Committee for Fundraising. Strømme Foundation is also a signatory to the Code of Conduct for the International Red Cross and Red Crescent movement and NGO’s in Disaster Relief. Editor: Egil Mongstad Contributors: Tørres Gilje, Tormod Nuland, Rune Mørland, Vidar Moseidjord, Bjørn Stian Hellgren Lay-out and graphic design: Oddvar Paulsen Photos: © Strømme Foundation, cover photos: Hans-Jörgen Ramstedt, page 33: Torleif Svensson.

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Skippergaten 5 • Box 414 • N-4664 Kristiansand Norway Tel +47 38 12 75 00 • Fax +47 38 02 57 10 • Org. no 952 002 139 E-mail: postkrs@stromme.org • www.stromme.org www.strommestiftelsen.no