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STRØMME FOUNDATION ANNUAL REPORT 2007

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Contents

Introduction 2007 Programme Highlights Asia and East Africa Reports South America and West Africa Reports 2007 Outreach Figures Quality Assurance Communication and fundraising The year 2007 – January to December Young journalists with a big task / South America The microfinance salon / East Africa Finally able to go to school / West Africa Created his own business / Asia Report from the Strømme Foundation Board for 2007 Strømme Foundation activity account Strømme Foundation balance sheet 31.12 Strømme Foundation cashflow (The indirect method) Accounting principles Notes Auditor´s Report for 2007

A year of reflection heading for the future!

3 4 5 6 7 8 10 12 14 15 16 17 18 21 22 24 25 26-34 35

A child of 12 is still a child. But life realities in many of the poorest countries of the world put a dramatic stop to being a child. On a visit with the Board of Stromme Foundation (SF) to Bangladesh in 2007 we met many of these children who are being at risk to be married as too young girls. Many girls drop out from school, and are then regarded as a burden to their families. Through our program “Shonglap” (dialogue in Bangla) we have been able to redirect many of these children from a forced entrance to adult life and the suffering that follows. Through a Pablo Freire inspired pedagogical program animated by local women, a number of SF partner organizations have been able to make these girls “in charge of their own lives”. Empowerment through education, microfinance and advocacy in the local community, help them get started, and give them future and hope. Through our interventions in Education and Microfinance we managed to help poor people get started on a journey that will take them out of poverty. That is what Stromme Foundation is all about. We want to have a catalytic function, to provide that small initial resource to make them help themselves. And many succeeded in 2007. Our direct outreach in all our development interventions in 2007 was 650,000 as against 559,000 people in 2006 (an increase of 16 percent). More than 77 percent of those we reached out to with microfinance and education interventions were women. Income was raised a little bit, and the balance between public and private donations were respectively 29 percent to 71 percent. In microfinance alone nearly 395,000 people had access to gainful occupation and as a result at five members per family, nearly two million people were benefited indirectly. 2007 has also been a year of transition. Øyvind Aadland took office as the new Secretary General in June. This appointment co-incided with the presentation of SF’s new Development Policy Paper and the Board’s approval of new Ethical Guidelines. Preparations of the Norad organizational review, and the upcoming of the five year Strategic Masterplan for SF have influenced the activities. Some re-shuffeling of personell in the Leadership has made 2007 a year of preparation for major changes within the organization.

How to base the “branding of SF interventions” on our core competencies to make sure that our activities are created in an interplay with civil society on the community level. How to make our microfinance activities be sustainable and financially sound, still serving the poorest segment? We are closing 2007 with humble inspiration from a chain of small success stories, entering 2008 with a strong challenge to focus, to consolidate and to put emphasis on result measurements. On the micro level Ms. Akter from the Asia Region gives as one of these mentioned stories of real people behind the figures: Ms Kohinoor Akter, a mother of two, was struggling to pass by the hurdles of life with her husband’s meager income earned as a part-time boatman. She was wondering to improve the family income. She took a loan of 5,000 taka (approx. NOK 382) from SF partner BARNALY. Kohinoor invested this amount and bought a cow and earned a living by selling milk. With this initiative, the Akter family was able to improve their life slightly. After repaying the loan, Kohinoor took another loan (NOK 690) and the husband and wife jointly started a grocery shop. This resulted in earning significant profit within a short period of time. Consequently, they were able to send their two children to school, besides being able to meet their daily needs. By the end of the year 2007, they had established themselves as leading grocers in the neighborhood besides setting an example to other families in their village that with one’s own initiative, it is possible to improve the standard of life. Geir Magnus Nyborg Chairman of the Board Øyvind Aadland Secretary General

Fundraising strategies have been addressed and preparations for new concept launching have been analyzed. At the end of the year we have a strong sense of looking into the future. How to strengthen the inclusion of the Global South in the decision making processes of SF ? How to focus and be able to monitor results?

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2007 Programme Highlights

The overall development policy and principles of Strømme Foundation (SF) was approved by the Board. Gender equality, environmental sustainability and cultural freedom together with any other important issues that are considered crucial in a given region will henceforth form the cross-cutting issues (e.g. HIV/ AIDS). The policy also outlines criteria for choice of partner organizations, countries and focus areas for quality management. The next five-year SF plan will be anchored on the development policy and principles as well as on agreed thematic goals and interventions. The Framework Agreement with NORAD was to have come to an end by the end of 2007, and the Regional Offices and the Programme Department therefore began preparation for an organisational review as well as the next five-year plan for the Framework Agreement. However, with the postponement of the review to early 2008, the existing agreement was extended by another year, i.e. 2008. During the year much emphasis was given to cross-fertilization within and between regions as well as to building up capacity. Accordingly, an education annual meeting was arranged in Bangladesh and a microfinance annual meeting was arranged in Norway. In Bangladesh, the Regional Directors, Education Coordinators, staff from the Programme Department as well as the Communication Director participated in the meeting, besides undertaking field visits. This was followed by training in MYRADA in India to strengthen our competence in formation of self-help groups’ methodology and documentation of results even at the endusers level. Similarly MYRADA trainers visited East Africa to train partners’ representatives. Exposure visits were also arranged for the staff and partners from East Africa to West Africa to study the accelerated learning programme and Self-Help Women’s Savings Groups programme. The Microfinance annual meeting was a two-day conference, which was organised in cooperation with the University of Agder. Microfinance staff members of SF present at the conference, were able to use their expertise while at the same time avail of such expertise from elsewhere. The conference aimed at learning from each other both from within and outside SF. The partnership with Geneva Global, an institutional donor, resulted in scaling up projects focusing on adolescent girls/mothers, out of school boys and girls, and women centred self-help savings groups. In the education sector focus was on ensuring quality education for vulnerable children with access, retention and completion

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Asia

of primary education as the desired results. Additionally, the focus was on enabling out of school boys and girls with accelerated learning programme, so that they could become eligible to pursue primary education. In adult education, various forms of interventions promoted awareness, life skills, and community empowerment with a view to strengthening civil society. SF’s interventions in Sri Lanka, in particular, aimed at promoting peace and harmony among various faith-based communities. In the Microfinance sector, this has been a year with increased focus on forward looking strategies with the Nobel Peace Prize being awarded to Dr. Muhammad Yunus in December 2006. Interest in MF was augmented with media, back donors as well as private sectors have become increasingly interested in the activities and results of SF’s involvement. Consequently, this is a real challenge for Strømme Foundation in finding more efficient means of interventions, in addition to continuing to build inclusive financial systems. This provides services to the unbanked, driven by the fact that access to sustainable financial services will help the poor improve their lives. SF is also happy with the private-public initiative: Norwegian Microfinance Initiative, where private investors have joined hands with the government with a view to increasing the investments in Microfinance. SF represents the NGOs in the Steering Committee and is looking forward to the launching of this initiative in 2008. During the year, SF supported 144 partners with 177 projects in 17 countries in the four regions reaching out directly to more than 650,000 people. The focus of our activities was to undertake interventions that would eventually bring durable life changes in the lives of the people.

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East Africa

The year 2007 has been a challenging year for Strømme Foundation (SF) in Asia given the expansion of programmes in Sri Lanka with funds from the Norwegian Embassy and scaling up of operations in Bangladesh with institutional funding from Geneva Global. SF continued to focus on integrating interventions in education and microfinance sectors targeting the same community through the following means: • Improved access to financial and non-financial services through strengthened community institutions • Increased access to basic education and other services as a result of increased awareness of households and communities with regard to children’s rights to education • Improved gender and ethnic relationship as a result of jointly owned collective actions • Strengthening civil society with good governance, gender equality and peace building. A total of 250,000 people were reached with SF’s interventions, of whom 170,000 were assisted in the microfinance sector and another 70,000 in the education sector. Quality education for vulnerable children continues to improve academic performance of the children in addition to reducing dropout rates. For example, in Bangladesh, the dropout rate in 2007 was 8 percent as against the national average of 33 percent with average attendance in schools being 89 percent. A total of 807 children appeared in the national scholarship examination, and 56 students received scholarships. The Shonglap (dialogue) programme in Bangladesh has created a tremendous effect on the lives of adolescent girls, parents, communities and local government authorities. SF has created a special MF entity in Sri Lanka, namely SMAGL, and functions as a MF APEX body focusing its operations in Sri Lanka to promote access to financial services among the poor. In Bangladesh, SF and INFAI have initiated on a trial basis microfinance insurance. SF’s focus is to facilitate the process with the new entity – Microfinance Insurance Mutual Entity. During the year, emphasis was also placed on establishing a quality assurance system in education as well as microfinance sectors. Capacity building had been the main focus in both sectors as a strategy for consolidation and quality assurance.

The year 2007 was another successful year for Strømme Foundation (SF) in East Africa. Strømme Microfinance East Africa Ltd, a wholesale lending and shareholding company to microfinance institutions in the region established in 2004, was able to break even. The company portfolio grew by an appreciable 41 percent, spread out among 37 partner organisations. The number of poor people reached directly through the services of the company was 145,000. Through Focus Group Discussions held throughout the year with the end users of the money, it was observed that the loans are contributing to alleviating the plight of the poor people, 65 percent of whom are women. In a bid to extend financial services to even poorer strata of the people who could not be reached by formal Microfinance Institutions, a Community Managed Microfinance portfolio using the Self Help Group was supported. The approach uses participatory community development where the members of the community are organised to form groups of 15 to 20 people. Groups are facilitated to save together and then lend to each other. Group projects as well as individual income generating projects are undertaken. Training is imparted in various skills. These projects have demonstrated an important role in alleviating poverty among the hard core poor in addition to strengthening civil society institutions. In the second half of 2007, three such projects in very marginal areas of Uganda, Rwanda and South Sudan were started and by the end of the year more than 3,800 people, 90 percent of whom are women, were assisted. In the education sector, SF has continued to focus on strengthening basic education for vulnerable children. Through 23 education partner organisations, there has been an increase in pupils’ enrolment in primary schools and decrease in drop out rates. This has been possible through various interventions geared to address issues that have been causing low enrolment and high school dropout rates. Basic education in the poor and marginalised communities has been strengthened using a community based education approach. Broadly, the concept incorporates community sensitisation, soliciting community participation in planning and monitoring. In effect, the importance of education is viewed through the eyes of the poor by creating community awareness in problem solving. In 2007, the number of children enrolled for primary education had increased from 56,714 in 2006 to 81,769. This is an appreciable increase of 44 percent. Moreover, there had been greater increase in girl enrolment, reduction in school dropouts as well as very good academic performance compared to the previous years. In 2007, SF established a liaison office in Juba, South Sudan, and another one in Renk in Northern Upper Nile.

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West Africa

South America 2007 Outreach Figures (Direct) Sl. No. 1 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

The year 2007 was a year of consolidation and concentration. The focus was on accelerated learning programme (Speed Schools) for out of school boys and girls in the age group of 8-12, and empowerment of women with Self-Help Women’s Savings Groups. In order to ensure synergy, Strømme Foundation (SF) tried to target the same community both with education and microfinance programmes. During the year 250 Speed School centres were in operation in Mali and Burkina Faso with an enrollment of 20,242 boys and girls, of whom 5,982 successfully completed the 8 months course, whereas the remaining boys and girls were in the academic year 2007/2008. The number of students who were transferred to primary school numbered 5,347. In Self-help Women’s Savings Groups, a total of 47,584 women were mobilized during the year as against 29,026 in the previous year. A total of 76,610 women are in 3,360 groups. The group members were able to save and establish a total of USD 917,388 as against USD 295,259 in the previous year. More than 76 percent of the total fund had been given on loan to the members of the groups. Resulting from awareness and knowledge gained from training sessions on malaria prevention and cure, most of the members have bought mosquito nets for their families. About 2,636, mostly women, were benefitted by literacy classes. The literacy programme experimented on among group members in two areas of Mali revealed that women were not regular in attending the classes and many left the classes before completion of the course. Therefore, to remedy this problem, new modules based on thematic issues were developed so that they are useful to participants. In addition to acquiring learning skills in reading, writing and simple arithmetic, the modules covered areas such as decentralization, democracy, and citizenship, human and animal health. It is planned to test these modules further in the year 2008, before launching the programme among all group members.

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Strømme Foundation in South America continues to focus its activities in two countries – Bolivia and Peru. In Bolivia, the partner organisations Alalay and Red Via reach out to street children and adolescents by means of a group therapeutic programme that aims at reintegration of the children and adolescents with their families and/or society. Literacy and vocational training are the main components of the programme. SF is also partnering with another organization, SICOR, focusing on music for development of the individuals and the community. In Peru, SF has supported 14 partner organisations in education and microfinance sectors. Basic education is one of the main areas of support in Peru as well as Bolivia. The target groups include the most excluded people, such as indigenous people, adolescent mothers who are victims of rape, and children at risk. Nearly 40,500 people benefit from the interventions. The Centre for adolescent mothers attends to many cases of pregnant teenage girls, who are victims of family violence or sexual abuse. About 10,000 adolescent mothers have been identified in Villa Maria del Triunfo. Most young mothers are trapped in a vicious circle of poverty. They cannot afford to remain in school and they have few job skills. Most of their children, up to the age of five, do not receive proper care, early stimulation or education due to their mothers’ limitations and lack of family support. Because there are so many adolescent mothers in this area, selection criteria for this project were limited to those girls who were victims of sexual abuse or domestic violence. CEDETEP’s Adolescent Mothers Project works with those girls who left school due to their pregnancies and family situations, but are able to continue their formal education. The centre provides them with work and life skills, teaches good decision-making and helps boost their selfconfidence. It also provides healthcare and education for their children.

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Country Peru Bolivia TOTAL Sri Lanka Bangladesh East Timor Myanmar TOTAL Mali Burkina Faso Niger Mauritania TOTAL Kenya Rwanda Uganda Tanzania Sudan TOTAL GRAND TOTAL

Microfinance 249 249 17,642 120,832

Education 22,503 16,908 39,411 17,501 53,009

Others 914

Total 23,666 16,908 40,574 38,488 173,841 5,423 32,804 250,556 103,075 6,197 1,183 555 111,010 76,956 31,693 91,953 19,527 30,583 250,712 652,852

914 3,345 5,423

32,804 171,278 72,693 3,572

70,510 17,617 2,625 1,183 210 21,635

345 76,610 56,412 3,036 66,031 17,424 3,800 146,703 394,840

8,768 12,765

12,765 20,544

28,657 25,637 1,024 26,451 81,769 213,325

285 1,079 332 22,240 44,687

Microfinance Education Others

300000

225000

150000

75000

South America West Africa 0

East Africa Asia

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Quality Assurance As regards the poor, the picture is a little bit more complex. But we think it is important to keep the valuable values related to the customer orientation: SF is just a channel. It is important to understand our customers. We need to understand that customer loyalty, retention and market share gain is maximised through a clear focus on the needs and expectations of both existing and potential customers. We are responsive to those customers’ present needs and expectations. Where appropriate, we want to segment our customers to improve the effectiveness of their response. We want to monitor competitor activity and understand our competitive advantage. We need to effectively anticipate what customers’ future needs and expectations will be and act now in order to meet, and where possible, exceed them. We want to monitor and review the experiences and perceptions of our customers, and where things go wrong we need to respond quickly and effectively. We want to build and maintain excellent relationships with all our customers: The poor, our microfinance clients, our individual donors, our Business Partners, our government and embassies, our international donors and partners.

Securing resources We invite you to join us on a journey: We want to improve. We want to improve both because we believe it is possible and because we think it is necessary. We are stewarding technical resources, human resources and financial resources on behalf of individual and institutional donors, on behalf of business partners and on behalf of the Norwegian Government, and most of all on behalf of the poor. We base our quality assurance efforts on these foundations: Result Orientation Do our interventions really help the poor to change their lives? We have referred to many stories and testimonies from the poor since our organisation was established in 1976 and some of us have seen the grass root work and spoken to families, children and women that are sure: Yes, my life is changed. But we need a more systematic and professional approach. In 2008 we establish a project where we will follow eight projects – two in each of our four regions – and establish indicators for outcome: Social change at the individual level.

Leadership and Constancy of Purpose We think visionary and inspirational leadership coupled with constancy of purpose is a criterion for success in any organisation. We think Strømme Foundation (SF) has leaders who set and communicate a clear direction for the organisation. In doing so we think SF will unite and motivate other leaders to inspire our people. We want to establish values, ethics, culture and a governance structure for the organisation that provides a unique identity and attractiveness to stakeholders. Leaders at all levels within SF constantly drive and inspire others towards excellence, and in so doing display both role model behavior and performance. They lead by example, recognising their stakeholders and working with them on joint improvement activity. During times of turbulence SF display a constancy of purpose and steadiness that inspires the confidence and commitment of its stakeholders. At the same time we want to demonstrate the capability to adapt and realign the direction of SF in the light of a fast moving and constantly changing external environment, and in so doing carry our people with us. In SF we want our leaders to be present enthusiasm agents.

Professional organisations are agile, flexible and responsive as stakeholders needs and expectations change, often frequently and quickly. Strømme Foundation (SF) wants to measure and anticipate the needs and expectations of our stakeholders, monitor their experiences and perceptions, and monitor and review the performance of other organisations. The benefit of having a focus on results is credibility: By showing results we legitimate all individual and institutional donors’, NORAD’s and SF’s interventions. We also document efficient stewarding of resources. Additionally, we will be in a continuous learning mode: Results give information that works as a valuable basis for new decisions. Customer Focus What is a “customerâ€?? A customer is someone you are dependent on, someone who can choose not to use your services or buy your goods. In the volunteer sector, not-for-profit sector or public sector, the customer term is a little bit more complicated. To be clear: Our individual and institutional donors and supporters are definitely “customersâ€?. The Norwegian Government through NORAD is a customer, and likewise our Business Partners like ABCenter, Dale+Bang, Agder Energi, Expert and the thirty others.

Management by Processes and Facts As a professional development organization, we need to strengthen our focus on management by established processes,



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procedures and facts. The needs and expectations of our stakeholders will be in the forefront. We systematically want to implement policies, strategies, objectives and plans of the organization through a clear and integrated set of processes. These processes are effectively deployed, managed and improved on a day to-day basis. Decisions are based on factually reliable information relating to current and projected performance, process and systems capability, stakeholder needs, expectations and experiences, and the performance of other organizations, including, where appropriate, that of competitors. Risks are identified based on sound performance measures and effectively managed. We want Strømme Foundation to be governed in a highly professional manner, meeting and exceeding all corporate requirements. We need to identify appropriate prevention measures and identify and implement inspiring confidence with stakeholders. People Development and Involvement SF wants to identify and understand the competence needed, both now and in the future, in order to implement the organisation’s policies, strategies, objectives and plans. We want to recruit and develop our staff to match this competence and actively and positively support them throughout. Personal development is promoted and supported allowing people to realize and unlock their full potential. We want to prepare people to meet and adapt to the changes required of them, both in terms of operational changes and personal capabilities. We need to recognize the increasing importance of the intellectual capital of our staff and use their knowledge for the benefit of SF. We seek to care, reward and recognize our staff and volunteers in a way that builds their commitment and encourages their loyalty to the organisation. We want to maximize the potential and the active involvement of our people through shared values and a culture of trust, openness and empowerment. We will utilize that involvement to generate and implement ideas for improvement. Continuous Learning, Innovation and Improvement SF wants to continuously learn, both from our own activities and performance and from that of others. We rigorously need to benchmark, both internally and externally. We need to capture and share the knowledge of our people in order to maximise learning across and within the organisation. There is an openness to accept and use ideas from all stakeholders. People are encouraged to look beyond today and today’s capabilities. SF is careful to guard our intellectual property and to exploit it for commercial gain, where appropriate. Our people constantly challenge the status quo and seek opportunities for continuous innovation

and improvement for added value. In this way, we think we will improve the generation of values, improve effectiveness and efficiency, increase competitiveness, achieve innovation in products and services and capture and share knowledge. Partnership Development Strømme Foundation (SF) is not the implementing part– we are working only together with and through local expertise – local NGOs that we call partners. We are proud of that. In the Global North, we are also working with partners: The Norwegian Government through NORAD, Geneva Global in the US, our 30 Business Partners – we all have a great partnership with one mission: To eradicate poverty. We think binding partnership is a criterion for success. SF seeks out and develops partnerships with other organisations. These partnerships enable us to deliver enhanced value to our stakeholders through optimizing core competencies. These partnerships may be with customers, societies, suppliers or even competitors and are based on clearly identified mutual benefits: We want to serve the poor. Partners work together to achieve shared goals, supporting one another with expertise, resources and knowledge and build a sustainable relationship based on mutual trust, respect and openness. Corporate Social Responsibility We want to adopt a highly ethical approach by being transparent and accountable to our stakeholders for their performance as a responsible organisation. SF wants to give consideration to, and actively promote social responsibility and ecological sustainability, both now and in the future. The organisation’s Corporate Social Responsibility (CSR) is expressed in the values and integrated within the organisation. Through open and inclusive stakeholder engagement, we want to meet and exceed the expectations and regulations of the local and, where appropriate, global community. As well as managing risk, we seek out opportunities to work on mutually beneficial projects with societies, inspiring and maintaining high levels of confidence with stakeholders. We are aware of the organisation’s impact on both the current and future community taking care to minimise any adverse impact. This is our journey and where we are aiming to go. Join us. Lars-Ivar Gjørv Quality Assurance Director

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Public Sector Grants

Communication and fundraising

Individual Donors

Strømme Foundation (SF) aims at raising sufficient funds to support our development projects. In connection with our fundraising activities we wish to actively spread information about our development work around the world, as well as influence attitudes on North-South issues. Total private income has increased from NOK 59.9m in 2006 to 61.0m in 2007. At the same time the fundraising and marketing expenses has decreased from 7.6m to 6.6m. We are very pleased with this and would like to thank all our donors, partners and staff for making this possible. SF is focusing on brand awareness. Although the knowledge of SF is relatively high in the southern and western part of Norway, the overall knowledge in Norway is low. In a brand analysis from December 2007, only 31% answer that they know SF. 40% say they have heard the name, but do not know what we do. 25% of the people in Norway have never heard of SF (a 1% decrease from 2006). Through target marketing, product development and competence building, we aim to raise our brand awareness in 2008 and 2009. In 2007 our Manager of Individual Donors and Manager of Strømme Business Partner (SBP) both joined the Norwegian School of Managements (BI) Branding School in Kristiansand.

Fixed-term donations Events, schools and artists

7% 6% 3%

Corporate Sector Grants Contributions from other organisations

45% 31%

9%

THANK YOU! Communication and Fundraising work in 2007:

Individual Donors

Network Group

Information/media

Most of our income comes from traditional fundraising through direct mail, donation forms in our magazines and regular monthly donations, where Friend at Heart is the dominant one. In 2007 we started a process of redeveloping our Friend at Heart concept – moving from a traditional earmarked child sponsorship program to a non earmarked support directly targeted at Norwegian families. In September we launched our new regular donor program “Fattigdomsbekjemper” (Poverty Buster), focusing on new target groups and using untraditional marketing strategies and modern media (blogging, Facebook, mobile phones etc). Fixed-term donors: 18.706 Friend at Heart: 14.393 Brobygger: 3.888 Fattigdomsbekjemper: 225 Total number of donors: 26.924

SF believes in networking to develop the value chain in resource mobilisation for development issues. Schools, sports clubs, festivals and artists are some examples of networks SF is working with. Our goal is to create compassionate and tolerant attitudes by passing on information about our partners in the South. In 2007 the computer game “President for a day” was played 18 times, this is nearly double of what we planned. Outreach Norwegian children/youth: 15.904

SF is constantly working with the media to get attention and to promote in media development issues. We are also using our own channels, e.g. our website and magazine. In 2007 we started a process of redeveloping our web pages, also including a new structure for our English webpages.

Strømme Business Partner For SF, Corporate Social Responsibility (CSR) is a focus on building sustainable partnerships with professional businesses. Our goal is to get partners to join SF in our fight against poverty, and through partnerships to generate vital and enthusiastic co-workers as well as a strengthened reputation and branding for the partner. In 2007 we developed the “Micro Share” - a product suitable for smaller businesses that wish a smooth start in partnering with SF. Number of business partners: 16 Outreach SBP employees: 10.000 Number of Micro Shares: 27

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Institutional funds Norwegian Ministry of Foreign Affairs (UD) Norwegian Agency for Development Cooperation (NORAD) Geneva Global (US foundation) Fredskorpset Norway (The Norwegian Peace Corps) Vest-Agder Fylkeskommune Aust-Agder Fylkeskommune Cultiva

Private funds 18.706 individuals giving on a fixed-term basis 8.218 individuals giving one or several single donations 14 Major Private Donors with grants larger than NOK 50.000,40 schools contributing with funding campaigns 2500 youth engaged in SKRIK campaigns

Corporate Sector/Strømme Business Partner Main Partners:

Strømme Foundation (SF) makes no money from lotteries, slot machines or telephone sales. We want and believe in supporters with engagement and involvement in the work of eradicating poverty. We thank all donors and contributors for the commitment and support in 2007. With out your help, none of the work SF does would be possible.

Culture The Culture Initiative in SF had its international breakthrough in 2007. We cooperated with several development organisations and culture institutions in order to enhance the African culture sector. For instance we made a substantial contribution to the establishment of ARTerial, a network of 60 African culture organisations. We also promoted arts and culture from the global South. This was done by linking several Norwegian culture organisations and festivals with African performers and organisations. In addition we displayed the Culture Campaign Imagine Africa at various Norwegian music festivals like Hove, Canal Street and String Swing Circus. The web site www.imagineafrica.no was launched to support our effort.

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Partners: Mosvold & Co Kjeldsberg Ventelo Lauvland Øyeoptikk Hotel Norge Scantrade Formuesforvaltning TeamWorks Valero Dale+Bang Baker Hughes Avigo

Additional grants: Taran Management AS Skandinaviska Enskilda Banken AB (SEB) Nordea Finans Norge AS Sparebanken Vest Stål-Consult Color Line Handelsbanken Tor Sandal Revisjonsfirma AS Boomerang Media SAS Royal Hotel AS Radisson SAS Hotel Ålesund Bandak AS Absolutt: KRS Electrolux Home Prod Norw. AS Pioneer Norge AS

Focused This is all about being result-oriented, right on target, professional, effective and demanding. In our opinion this word embraces our “international values” of responsibility, justice, human rights and sustainability in more than just a loose synonymous fashion. Everything we do, we do with a clear view of the goal. We know what we want to achieve.

Fonn Kontorservice AS Kanal 24 Norge Wold Invest AS Lykkebo Hotell Drift AS Axxe Logistics AS Invivo AS Grønn Strek AS Mikroaksjonær (Micro Share): Preventor Troll Aktiv Stormberg Omnes Valero Datakameratene as

Beckmann Andås begravelsesbyrå Kruse Smith Mosvold & Co Profitbase Stepchange Aspelund Eiendom Inventas produktdesign Jens Knutsen Mek. Verksted Øyvind Reinhardsen Arne Sørlie Frank Abrahamsen Vegard Hansson Grete S. Risvold

Motivated Motivated sums up our optimism, aggression and generosity, and focuses us on the fact that we are able to inspire people to make the right choices. Motivated also expresses the positive effects of development work’s possibilities and results, directs value back to our donors and energy to our partners and beneficiaries. This value is connected to openness, participation and gender.

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What happened in

2007

JANUARY

MARCH

After the Nobel Peace prize was awarded to Muhammad Yunus, investor Johan H. Andresen jr. together with DnB Nor and Storebrand, challenged the Norwegian government to establish a fund for investing in Microfinance. The Minister of Development followed up and during 2008 we will see the launching of the Norwegian Microfinance Initiative.

Strømme Business Partner (SBP) becomes an international actor, after head of SBP, Rune Mørland’s successful presentation at the international leadership meeting of Expert ASA. His presentation focused on the cooperation between SF and Expert in Norway and how such a cooperation promotes good values and a healthy work ethic within a company. Expert in Sweden and Denmark was so impressed that they joined in on the Expert Help to Self Help programme in Sri Lanka on short notice.

The process of reorganising our private donor product, Friend at Heart, is started. The Friend at Heart product was focusing on individual children who represented the program within which we were working. Instead of having pictures of more than 15,000 children, we wanted to have only two children – one boy and one girl – who would represent all the children in all the programs in which we were working. This way our Friend at Heart program would be more cost efficient, and as an organisation we would be more flexible regarding where to use the money donated.

JULY

AUGUST

SEPTEMBER

July is summer, holiday and festival time in Norway. Strømme Foundation (SF) is represented with stands on several of the best visited festivals. At Canal Street, Hove Festival and Arendal International Market SF promoted Imagine Africa, an initiative that contributes to communication of African Arts, expressions of reasoning and creative industries. At Skjærgårds Music and Mission Festival and Arena Act Now students presented SF with great enthusiasm.

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FEBRUARY

SF starts the long process of applying for Operation Days Work (OD). OD is the largest solidarity campaign among pupils worldwide. One day every year, pupils at the majority of the Norwegian schools work instead of going to school. Each pupil earns at least NOK 300 which is donated to an education project for adolescents, chosen by the Norwegian pupils themselves. SF decided to apply for OD 2008 for the Shonglap program in Bangladesh.

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SF releases the new fundraising concept Fattigdomsbekjemper (Poverty Buster). Fattigdomsbekjemper is a concept for fundraising from individuals, targeting especially young people. The concept is visualised with an eye catching determined bell sheep, which is the leader of the flock. Fattigdomsbekjemper is marketed through a facebook group, where the members are challenged: “Strømme Foundation and the Poverty Busters help people getting started all around the world – now it’s your turn. Where the Poverty Buster goes, the rest will follow!

APRIL

The Micro Share is launched as a new fundraising product for small companies from SBP. One Micro Share costs NOK 15,000 annually over three years. The idea of calling the product a Micro Share is that through buying this product, the companies have a “share” in the changes that happens to poor people involved in microfinance through SF: The return of the invested capital benefits the poor who are getting micro loans.

OCTOBER

The Kristiansand football club Start, through their programme for social responsibility – Start Life Support – starts cooperating with SF to raise money for Uganda partner Child Restoration Outreach, and their project to build a new football stadium in Mbale, Uganda. Through an interactive Advent Calendar on the web page of regional newspaper Fædrelandsvennen, money is going to be raised for the Street Children project.

MAY

JUNE

SF’s Act Now students return to Norway from their stay in the South, and those from the South return to their own countries. Act Now is SF’s youth exchange program. 20 students from Norway and six students from the South take part in the program. The overall goal is to give young people knowledge about the reason for, and how to combat, poverty, and through field experience learn, work and live with our development partners in the South. At the same time we are inviting adolescents from the South to live, work and experience Norwegian culture.

Øyvind Aadland is appointed Secretary General in SF. Aadland leaves the position as Director and Associate Professor of the Extension Studies and Consultancy Department at the School of Journalism and Communication, in Kristiansand. Aadland is brought up and has worked both in Norway and in Africa and describes himself as bicultural. He has served as a missionary in Ethiopia. During his years in Ethiopia he worked within the Ethiopian Evangelical Church Mekane Yesus, and under Ethiopian leadership. He was appointed to serve in different management positions. Aadland has also worked in the Addis Abeba University.

NOVEMBER

DECEMBER

The Christmas concert “Stille natt, Hellige natt (Silent night, holy night) is celebrating its 20th anniversary. The tour started on November 25th and they performed 51 concerts in different churches from Mandal and Kristiansand in the south to Trondheim in the north. Over the years SF has received a great contribution towards our development work from these concerts. Over the last two years close to NOK one million. The concert is arranged by Taran Management in Oslo together with SF who has been affiliated with the Christmas concert since 1999.

Secretary General Øyvind Aadland visits WestAfrica together with Program Director John Nathan, and Trond Backer, Director of Communication, to promote Speed School. Aadland and his delegation met with the prime minister in Mali and Burkina Faso and with the minister of education in Niger. Speed School, aiming to get dropouts back to school, is well received by the officials and is today helping thousands of children back to school in these three countries. Today SF is working closely with the governments in these three countries, who have all recognized Speed School as an important tool in achieving education for all within year 2015.

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\ \ SO U T H AMERI C A

Young journalists with a big task

\ \ E A ST A F R ICA

The microfinance salon In the Mathare slum four friends are running a hair salon. They started the salon with the help of microfinance. Microfinance has made the four friends entrepreneurs and selfemployed in the Mathare slum of Nairobi. And with the help of microfinance they want to get away from the slum. They want to give their children a different upbringing to what they themselves had. That is why they are willing to work so hard for it. Individually, they became members of the organisation Jamii Bora, one of Strømme Foundation’s partners in Kenya. They started saving, and some years ago they borrowed a couple of thousand shillings and started a hair salon in one of the worst residential areas in Kenya. Today the business is a small success for the women. The four friends, sisters Rose and Caroline and sisters Anfia and Fatia, together formed a loan group in Jamii Bora and started the hair salon «Sweet Strawberry». ”The salon gives us work and an income. In one weekend we may have a net earning of $30,” they say.

“Being part of this project has just been fantastic. I have learnt so much, it is an important job and it has helped me decide my future,” says Keilita Silvano, who wants to study communication.

Equipped with a camcorder, an eager attitude and a big portion of bravery, three teenagers in the jungle town of Iquitos in Peru have worked to document and inform of the lives of high-risk children. The project is organised by the organisation La Restinga in association with Strømme Foundation. The project has made a short film and TV film about the street child John Lenon, a seven-year-old boy who is sent out by his mum every day to beg. The film is the first one made by the young people in La Restinga’s open school group. It will be broadcast on TV and shown in several local schools. The purpose of the film is to give the viewers a real and unbiased meeting with a street child. The idea behind the project is to involve young people and make them take responsibility and motivate them to stay away from the town’s criminal environments. As a part of this effort, La Restinga has applied journalism and communication made by and for young people. One of La Restinga’s goals is to see children and teenagers participate actively in the development of their own local community. Journalism, TV and video are some of the means used to shed light on children’s conditions growing up, rights and environments, and that may give the children a voice. The project is run by a group of young people from the age of 13 to 16. They are accompanied by an adult experienced producer. In the programmes they deal with different issues, all including things that interest children and young people and challenges they face every day, such as discrimination, education, child labour, sexual ethics, pregnancy, drugs, crime, gender equality, violence, abuse and much more.

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16-year-old Keilita Silvano is part of the project which is also done in association with the local TV station. The 20-minute reports are aired once a month. The target groups are children, teenagers, their families and everyone who is involved with children and young people growing up. “The programmes are meant to be about the everyday lives of us who live here,” Keilita explains.

A difficult childhood All four of the ladies grew up down in the valley in the Mathare slum, by the river where criminals ravage and one of the traditions is to brew the local liquor Changa – a beverage which kills in the slum. Alcohol, marihuana, rapes, thefts, violence, diarrhoea, food poisoning, sewage and skin disease made the frame around their childhoods. With a mum working as a maid and an alcoholic carpenter dad, everyday life for Rose and Caroline was

anything but safe. ”Every month when we knew dad would get paid, we prayed to God that he would come straight home. And when we saw that he had made it home without spending the money, we knew that we would have food that month. As dad was drinking, mum also started to drink,” the two sisters tell us. No joy Both the parents are dead now, and the two sisters are left with no good memories from their childhood. ”It was terrible growing up there. There was no joy – we didn’t have anything. The only things I remember with joy are getting new clothes for Christmas, and the day I got to start going to boarding school and was able for the first time in my life, at 14 years of age, to lay down in a clean bed in a room with a ceiling that wasn’t leaking, in a house with a toilet,” Rose tells us. Still living by the river Anfia and Fatia’s mum worked in a restaurant. She would gather whatever was left on the customers’ plates after they had eaten. She was allowed to take this home and give it to her children. ”It was terrible,” the two sisters say. Today they both still live in the area by the river. ”It’s very unsafe to live there, and we don’t want our children to continue growing up there,” says Fatia. The hair dressing salon has changed the four friends’ lives and future prospects. Now they all want to get away – away from Mathare and all the bad memories. ”Our dream is to go to Kaputiei, the town which Jamii Bora is building outside of Nairobi,” they say in unison.

Keilita is hosting the programme this year together with the two 14-year-olds Julio Guerrero and Adolfo Chumbe. Representatives from La Restinga challenged pupils at their school to do a course in TV journalism, and the three pupils took the challenge. They all live in one of the slum areas on the outskirts of Iquitos. It is the poorest part of town, and tops all the negative statistics for crime, poverty, sanitary conditions and so on. ”Getting to be a part of this project has been one long adventure. I have learned so much, and this has been decisive for my choices for the future,” says Keilita, who wants to study communication at university. Keilita’s mum was not pleased when her daughter told her she wanted to join the project. But after having seen her on TV and understood what it is she is a part of, she supports her fully. “Mum is proud of me. She watches all the programmes, and now my sister is allowed to join as well,” Keilita says, smiling. Now she, Julio and Adolfo will train other young people who can continue the important work.

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The hair dressing salon has changed the four friends’ lives and future prospects. Now they all want to get away – away from Mathare and all the bad memories. ”Our dream is to go to Kaputiei, the town which Jamii Bora is building outside of Nairobi,” they say in unison. From the left: Caroline Akumu (37) Fatia Suleiman (32) and her sister Anfia Suleiman (40) and far right, Caroline’s sister Rose Anyango (30) 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 U A L R E P O RT 2 0 0 7

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\ \ WE ST AF RI C A

Finally able to go to school

Created his own business

Jamila (12) has never attended school. Not until Strømme Foundation’s Speed School came to her village almost one year ago.

35- year-old Kandaiyya Padmanadan used to be a poor driver of a borrowed three wheeler taxi. Now he has got his own business, a vehicle and four employees - all thanks to microfinance.

\ \ A S IA

“I never thought I would ever own a three wheeler. For me this is a dream come through,” he says. For many years he worked as a driver of a three wheeler taxi he didn’t own. He earned very little, and the father-of-four struggled to make ends meet. Life was hard.

“I so much wanted to go to school that I signed up without my parents knowing,” Jamila says. She is now one of 25 students at the Speed School in Dantchandou. The village is in the West African country of Niger. She sits by her desk smiling. The class room is full of children. She has been given text books, pencils and exercise books. It has only been a few weeks since the school started. Some of her school mates have attended school a little bit in the past, while others, like Jamila, have never set their foot in a classroom before.

Collected metal and paper In April 2002, advisers from Lakjaya, one of Strømme Foundation’s partner organisations in Sri Lanka, came to the village. They said they could help people who would like to start their own small business.

“My husband is ill and hasn’t been working for years. Somebody had to earn money. Besides, my husband didn’t want Jamila to start school. So she didn’t. Dad makes the decisions here,” says Jamila’s mother, Halimatu Seini. And Jamila still has to get up early and go to the market every morning before she goes to school. Her teacher, Kimba Jibo, thinks her parents must understand that for their daughter to do well in school, she cannot go to the market in the mornings. “I notice that she’s often weary already after the first lessons. So she becomes unconcentrated

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This is very good news for Lakjaya since the organisation especially works to help talented entrepreneurs who in the future will be in a position to employ others. For Kandaiyya, the key issue is that his family no longer has to fight a daily battle to survive. They have got a better and nicer home, and he is hoping to build an extension soon.

Kandaiyya was interested, and so he became one of the first 15 to receive a loan. He borrowed $ 250 and started his own small recycling business. The idea was to collect old newspapers and scrap metal that could be sold on to recycling stations. He used the three-wheeler to deliver the newspapers. He collected metal until he had 3 tons, and then a lorry would come and take it to the recycling station. He got his business going, and after paying off his first loan, he got another one for the same amount. When that was paid, he borrowed $500. This time he also bought a second hand three-wheeler.

Eager to learn “I’m so eager to learn,” Jamila says, her face shining, because now she has been given a second chance. With the help of the Strømme Foundation, and through our local partner, VIE, the Speed School started in Jamila’s village in the autumn of 2007. Here, children from the age of eight to twelve who don’t attend regular school, and who for different reasons have quit school, can come and make up for lost time. The goal is to get them back into ordinary school after one year. Today the Strømme Foundation has got 40 Speed Schools for 1000 children in Niger, a work we run in association with our local partners, VIE and RAEDD. Sent out to make money Jamila is the youngest of nine siblings. Every morning since she was six, she has been sent to the market to sell pancakes. She would not come back home until late in the evening, after dark. At home she had to help her mum do the housework. There was no time for school for the young girl.

Being his own boss The loan advisers at Lakjaya have no reason to regret helping Kandaiyya. Now, three years on, he has paid back everything. He owns the three-wheeler. Business is doing well, and he has got four employees.

Jamila is smiling happily for being abele to attend school.

and it gets difficult to learn. And she’s not the only one experiencing that,” says Jibo. School is important At home Jamila’s parents have realised how much going to school means for their daughter, and they accept her strong wish to do so. “We now realise how important it is for children to get education. And we believe that Jamila can get a much better future if she learns to read and write,” says the mother, who also wants to make it possible for Jamila not to have to go to the market in the morning.

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An easier life The business was thriving, and the family’s life improved. They built a new brick house, and they could also afford to send their children to school. When the third loan was paid off, Kandaiyya realised he could even borrow money to buy three-wheelers for small businesses. He sold his old three-wheeler to get enough equity to buy a brand new one. A dream he had never dared believe in, came true. “I was so proud and very grateful to Lakjaya for showing me such trust.”

”I’m so grateful to have been given this opportunity,” says Kandaiyya.

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Report from the Strømme Foundation Board for 2007

The vision of Strømme Foundation (SF) is inspired by the dream of Martin Luther King, however with a different focus. A world free from poverty ! Strømme Foundation aims at eradicating poverty through a network of partner organizations in East and West Africa, Asia and South America. In all its work SF places strong emphasis on empowering people, promoting the rights of the poor and building civil society institutions that will enable them to work their way out of poverty. SF works with partners that demonstrate a strong commitment to the values of human dignity, justice, participation and transparency. The Boards work The Board has had 6 meetings in 2007 and dealt with 55 issues. The following Board members were re-elected; Gunvor Andresen, Trond Randøy. In addition two new board members were elected; Joanna Ilboudo from Burkina Faso representing the global South, and Egil Gjesteland. The Board’s work has revisited the structure of the organisation and strengthened their financial overview of the SF operations. Appointment of a new Secretary General In January 2007 Øyvind Aadland, formerly the Director of the Extension Studies and Consultancy Department at the School of Journalism and Communication (Mediehøgskolen Gimlekollen), was appointed as the new Secretary General and he started his work June 1st 2007. Leadership Team Strømme Foundation is a complex and multi-national organisation and defining and developing an inclusive leadership team has continued into 2007. The Leadership team have been working together to update the strategy for the organisation. Following the NORAD assessment in 2008, a new Framework agreement will be negotiated with NORAD, and a Master plan for 2009-13 will be presented. Thus the work has started to identify goals, processes and significant indicators at all levels that will bring more focus and improve monitoring of the effectiveness of our interventions. Development work in 2007 The overall development policy and principles of Strømme Foundation was approved by the Board. Gender equality, environmental sustainability and cultural freedom together with any other important issues that are considered crucial in a given region will henceforth form the cross-cutting issues (e.g. HIV/ AIDS). The policy also outlines criteria for choice of partner organizations, countries and focus areas for quality management. The next five-year SF plan will be anchored on the development policy and principles as well as on agreed thematic goals and interventions.

18

The Framework Agreement with NORAD was to have come to an end by the end of 2007, and the Regional Offices and the Programme Department therefore began preparation for an organizational review as well as the next five-year plan for Framework Agreement. However, with the postponement of the review to early 2008, the existing agreement was extended by another year, i.e. 2008. During the year much emphasis was given to cross-fertilization within and between regions as well as to building up capacity. Accordingly, an education annual meeting was arranged in Bangladesh and a Microfinance annual meeting was arranged in Norway. In Bangladesh, the Regional Directors, Education Coordinators, staff from Programme Department as well as Communication Director participated in the meeting, besides undertaking field visits. This was followed by training in MYRADA in India to strengthen our competence in formation of self-help group’s methodology and documentation of results even at the endusers level. Similarly MYRADA trainers visited Eastern Africa to train partners’ representatives. Exposure visits were also arranged for the staff and partners from Eastern Africa to West Africa to study the accelerated learning programme and Self-Help Women’s Savings Groups programme. The Microfinance annual meeting was a two-day conference, which was organised in co-operation with the University of Agder. Microfinance staff members of SF present at the conference, were able to use their expertise while at the same time avail of such expertise from elsewhere. The conference aimed at learning from each other both from within and outside Strømme Foundation. The partnership with Geneva Global, an institutional donor, resulted in scaling up projects focusing on adolescent girls/ mothers, out of school boys and girls, and women centered self-help savings groups. In the education sector focus was on ensuring quality education for vulnerable children with access, retention and completion of primary education as the desired results. In addition, the focus was also on enabling out of school boys and girls with accelerated learning programme, so that they could become eligible to pursue primary education. In adult education, various forms of interventions promoted awareness, life skills, and community empowerment with a view to strengthening civil society. Strømme Foundation’s interventions in Sri Lanka, in particular, aimed at promoting peace and harmony among various faithbased communities. In the Microfinance sector, this has been a year with increased focus on forward looking strategies with the Nobel Peace Prize being awarded to Dr. Muhammad Yunus in December 2006. Interest in MF was augmented with media, back donors as well as pri-

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vate sectors have become increasingly interested in the activities and results of SF’s involvement. Consequently, this is a real challenge for Strømme Foundation in finding more efficient means of interventions, in addition to continuing to build inclusive financial systems. This provides services to the unbanked, driven by the fact that access to sustainable financial services will help the poor improve their lives.

compared to a 0.2 million kroner deficit in 2006.

Strømme Foundation is also happy with the private-public initiative: Norwegian Microfinance Initiative, where private investors have joined hands with the government with a view to increasing the investments in Microfinance. Strømme Foundation represents the NGOs in the Steering Committee and is looking forward to the launching of this initiative in 2008.

Total equity increased by 0.9 million kroner and totals 11 million at the year end. In addition the acquired microfinance funds increased from 97.6 million in 2006 to 103.0 million in 2007 and the total loan portfolio in microfinance increased from 80.6 million kroner in 2006 to 89.8 million kroner in 2007. The cash flow from operational activities is satisfactory; total liquid funds at the yearend were 23.3 million kroner and there is satisfactory liquidity in the new year.

During the year, Strømme Foundation supported 144 partners with 177 projects in 17 countries of the four regions. The focus of our activities was to undertake interventions that would eventually bring durable life changes in the lives of the people. Financial Headlines The total income in 2007 was 137.5 million kroner compared to 127.0 million kroner in 2006. This difference is largely due to an increase in contributions from other organizations, notably Geneva Global, a US foundation with whom we have a three year agreement. Public Sector income increased from 53.3 million kroner in 2006 to 56.3 million kroner in 2007 due to an additional grant from the Norwegian Ministry of Foreign Affairs for flood and cyclone rehabilitation in Bangladesh. Private Donations have decreased from 55.6m in 2006 to 53.5m in 2007 but including the Corporate Sector the overall income from both individuals and companies shows an increase from 59.9m in 2006 to 61.0m in 2007. Some wealthy individuals choose to give through their companies so the apparent decrease in Private Donations is a little misleading and it is truer to say that Private Income overall has increased. The key figures for SF as a percentage of total costs in 2007 are; Administration 7.1% (6.0 in 2006), Fundraising 9.6% (9.9) and Purpose 83.3 % (84.1). There was a slight increase in administration costs in 2007 due to a strategy of investing in Head Office support costs in order to improve the quality of monitoring and co-ordination of our work in the regions. An explanation of how SF has allocated expenditure between administration, fundraising and purpose costs is shown in the Accounting Principles. Financial support to projects in 2007 totaled 106 million compared to 111 million in 2006. The decrease is mostly related to tightening of purpose costs spent in Norway on Information and some centrally co-ordinated projects; there is also a slight decrease in the re-circulated microfinance loans attributable to SF grants from the previous year. The result for the year after change in earmarked capital was a surplus of 0.9 million kroner

The Board and Secretary General feel it is correct to present the annual report under the going concern assumption. The organization is in a good economic and financial position with its footing in the Norwegian fundraising market and its good relations with NORAD and the Ministry of Foreign Affairs.

Working environment and Staff The working environment in the SF is considered to be good. The cooperation with the employee’s unions has been constructive and has contributed positively to the development work. Absence due to illness at the head office was approximately 2.7 % (7.6 % in 2006) of the total working time largely attributable to long term sickness. The organization has a company doctor agreement. There were no serious accidents at work resulting in material damages or personal injuries during the year. In 2007 there were 4 (4) women and 3 (3) men in the Board. Among the employees at the head office at the end of the year there were 14 (12) women and 21 (21) men, and 23 (17) women and 46 (39) men worked in the regions. SF strives for a balance of gender at all levels and is conscious about this when employing new staff. The organizations contamination of the external environment will mostly be of an indirect nature. The Board considers this to have minimal contamination effect on the external environment. The organization has no order from the public authorities that has not been complied with. Risk The Board continue to monitor the SF´s financial risk, which is first and foremost tied up in currency variations. Our currency strategy is normally not to undertake any currency hedging, as we find this to be most profitable in the long run. However, with the exceptional low value of the US dollar SF are now entering into limited forward exchange rate contracts in order to secure beneficial Norwegian kroner : US Dollar rates. The organization has no external borrowing, so there will be no serious consequence for the organization if the interest rates should increase considerably. The credit risk is tied up to the microfinance business.

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Future Perspective The future perspectives are considered to be good both for private and public funding, although SF is constantly looking for new sources of funds. In 2007 we received significant grants from Geneva Global, a US based fund for philanthropists interested in international development work, as this relationship develops it will provide an important and significant new source of funds for SFs work as well as material useful for engaging other institutional and private donors in Norway and internationally.

accounts will not be consolidated with SFs ordinary accounts until this agreement has been finalized.

NORAD has agreed that SF has disposal rights over repaid loan funds from the microfinance programs and the new framework agreement is expected to clarify the position. The microfinance

Allocation of the result • The year`s surplus of NOK 889 323 is allocated to unrestricted retained earnings.

The Board would like to thank the leadership team and all the employees for excellent results in 2007. Collaboration with local partners has been extremely good and through continual competence building at all levels of the organization we have reason to believe that even more people have been given the chance they deserve to come out of poverty.

STRØMME FOUNDATION ACTIVITY ACCOUNT Note

2007

2006

2 1

56 315 374 53 477 990 7 484 389 8 772 326 295 667 10 396 675 798 529 137 540 950

53 268 196 55 643 169 4 222 476 625 548 522 287 12 264 627 405 261 126 951 564

Cost of funds acquisition

-12 212 048

-13 074 145

Gross Available funds

125 328 902

113 877 419

Administration costs

-9 042 335

-7 889 265

116 286 567

105 988 154

-83 823 679 -22 019 380 -105 843 059

-82 913 252 -28 204 201 -111 117 453

10 443 507

-5 129 299

-9 554 184

4 975 060

889 323

-154 239

889 323 889 323

-154 239 -154 239

Acquisition of funds Public Sector grants Private Donations Corporate Sector Contributions from other organisations Other Income Credit Components Financial Income Total Acquisition of funds

17 6

Kristiansand, 15 May 2008

Available for purpose activities Purpose Activities Project Support Credit Components Total purpose activities Geir Magnus Nyborg Chairman of the Board

17 17

Result before change in restricted equity Change in Restricted Equity

14

Result after Change in Restricted Equity Egil Gjesteland

Solfrid Lind

Allocations Transferred to/(from) reserves Total Allocations

8

Gunvor K. Andresen

Joanna Ilbouudo Kabore

Olaf Gundersen

Liv Næss

Øyvind Aadland Secretary General

20

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STRØMME FOUNDATION BALANCE SHEET 31.12

STRØMME FOUNDATION BALANCE SHEET 31.12

ASSETS

Note

Long term assets Fixed Assets Property Office furniture and equipment Total fixed assets Financial assets Investment in subsidiaries Loan to subsidiaries Pension scheme (overfinanced) Total financial assets

2007

2006

EQUITY AND LIABILITY

Note

2007

2006

8

3 326 092 3 326 092

3 326 092 3 326 092

14 8

21 024 744 6 810 401 889 323 28 724 468

11 470 559 6 964 640 -154 239 18 280 960

32 050 560

21 607 052

2 406 080 150 000 762 917 350 000 3 668 997

2 132 563 150 000 483 579

EQUITY 4 4

9 9 10

9 303 018 337 999 9 641 017

9 588 572 471 059 10 059 631

700 000 3 000 000 1 514 751 5 214 751

700 000 3 000 000 1 593 538 5 293 538

14 855 768

15 353 169

2 992 624

2 961 821

Founding Capital

Acquired equity Restricted equity Unrestricted retained earnings Result for the year Total Acquired equity TOTAL EQUITY

Current Assets Property development Receivables Trade debtors Prepaid expenditure Prepaid project transfers Public duties Other receivables Total receivables

11

1 836 164 234 500 12 16

824 861 1 304 277 4 199 802

728 741 234 500 1 033 010 1 086 168 1 329 949 4 412 368

LIABILITY Long Term Debt Pension obligations Legacy obligations Staff Gratuities in Regional Offices Other Long term debt Total long term debt

10

2 766 142

Investments in shares and bonds

7

1 936 400

3 074 000

Bank and cash

13

23 271 471

8 534 330

Total current assets

32 400 297

18 982 519

Short term debt Creditors Unused public grants Unpaid Project transfer Employees tax, social security Intercompany debt Other accounts payable Total current liability

TOTAL ASSETS

47 256 065

34 335 688

TOTAL LIABILITY

15 205 505

12 728 636

TOTAL EQUITY AND LIABILITY

47 256 065

34 335 688

2 877 355 3 419 584 912 550 1 817 838

2 339 036 1 800 000

2 509 181 11 536 508

1 677 801 2 320 510 1 825 147 9 962 494

Kristiansand, 15 May 2008

Geir Magnus Nyborg Chairman of the Board

Joanna Ilbouudo Kabore

Gunvor K. Andresen

Solfrid Lind

Egil Gjesteland

Olaf Gundersen

Liv Næss

Øyvind Aadland Secretary General

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STRØMME FOUNDATION CASHFLOW (The indirect method)

Note Result Profit/Loss from sale of securities Ordinary depreciation Adjustment in the value of securities Changes in accounts payable Difference between pension costs and payments Profit from sale of property Non cash income Changes in restricted equity Changes in other current assets and liabilities Net cashflow from operational activity

Acquisition of fixed assets Disbursement of property investement loan Proceeds from the sale of property Proceeds from the sale of securities Acquisition of securities Net cashflow from investment activities

Accounting Principles

4 7

2007 889 323 -316 103 477 994 -37 600 538 319 352 304 3 095 -99 919 9 554 184 1 877 599 13 239 196

-155 000 -4 975 060 1 407 943 -2 812 840

The financial statements of the Strømme Foundation are prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles. The financial statements have also been prepared in accordance with the “Accounting Standard for Not-for-Profit organisations” for 2006 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 should give the reader a better understanding of how Strømme Foundation has used the resources at its disposal in 2007. As the activity of the subsidiary company; Strømme Micro Finance AS, is small and regarded as immaterial for the accounts, no consolidated accounts have been compiled.

Principles of allocating costs to Purpose Activites Fundraising and Information All expenditure directly connected to personnel employed as fundraisers and to solely fundraising activity is classified 100% as a fundraising cost. This includes all direct marketing costs and all costs associated with our main fundraising products “Friends at Heart” and “Bridge Builders”.

4

-93 278

-164 222

7

1 591 223 1 497 945

1 945 527 -1 025 000 756 305

0

0

8 534 330 14 737 141 23 271 471

10 590 865 -2 056 535 8 534 330

The Regional Offices Strømme Foundation has four regional offices in West Africa (Mali); East Africa (Uganda); South America (Peru) and Asia (Colombo) plus two satellite offices in Sudan and Bangladesh. Strømme Foundation works very closely with partner organisations through these regional offices so that the vast majority of our partner-facing work is conducted by staff in these offices and they are therefore considered primarily purpose costs. This includes the majority of the salary for both the regional directors and the accountants who spend most of their time building the capacity and competence of partner organisations and performing audit work to ensure that the money is properly utilised.

Cashflow from financing activities Opening balance of cash and cash equivalents Net change in cash and cash equivalents Closing balance of cash and cash equivalents

2006 -154 239 -152 153 503 079 4 200 632 144 76 246

13

The balance consists of bank deposits and cash holdings Unused overdraft facility

1 000 000

1 000 000

Cash per balance sheet

23 271 471

8 534 330

Strømme Foundation has information work in Norway as a part of our purpose, specifically to engage the Norwegian public and business community in contributing to development work in the South, whether through financial or other means and through whatever channels are appropriate. All expenditure on personnel and activity whose prime purpose is connected to this information provision is allocated to purpose activity. This includes for example 100% of our schools and youth work and 50% of the work of Strømme Business Partners.

We have allocated 12.5% of the regional office costs to administration to allow for the costs of administration and accounts for the office itself. Support for Program work from Head Office Education and Microfinance specialists are employed to build capacity and competence at the regional office level and ensure quality, they are 100% purpose. Other head office program department activity is related to report writing and applications with a smaller capacity building role, this is 25% purpose, 75% administration. We also allocate a small percentage of admin salaries and activity costs to purpose in proportion to time spent training regional staff in financial and administrative competence so that they can pass this knowledge on to the partners. Recognition of income in the accounts 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. Strømme Foundation follows strict guidelines concerning earmarked funds, which ensures that these funds cannot be used for activities other than those for which they were donated without specific authority. The Board has set regulations for the handling of earmarked funds when a project is closed. Unused earmarked funds are shown as restricted capital in the balance sheet.

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Classification and Valuation of Balance Sheet Items Current assets and short-term liabilities contain items due for payment within one year after purchase. Other items are classified as fixed/financial assets or long-term liabilities.

Note 2 - Public Sector Grants Donor

Purpose

Current assets are valued at the lowest of procurement cost and actual value. Other accounts receivable are included in the balance sheet at face value after deduction of provision for expected loss. 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.

Norwegian Agency for Dvlpm. Coop. (NORAD) Norwegian Agency for Dvlpm. Coop. (NORAD) Norwegian Ministry of Foreign Affairs (MFA) Norwegian Ministry of Foreign Affairs (MFA) Norwegian Ministry of Foreign Affairs (MFA) Norwegian Ministry of Foreign Affairs (MFA) Norwegian Ministry of Foreign Affairs (MFA) Norwegian Ministry of Foreign Affairs (MFA) Fredskorpset - Young Fredskorpset - Norway Fredskorpset – Norway

Framework Agreement - Development Programs Framework Agreement - Information Activities Education Programs - Sudan Improvement of Livelihood - Myanmar Restoration and Recovery - Sri Lanka (tsunami) Flood and cyclone rehabilitation - Bangladesh Flood Rehabilitation - Myanmar Other Programs (2005 - Education Ivory Coast) Act Now Exchange Program - Hald International Centre South/South Exchange Program - East Africa

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. Presentation of Microfinance Activities Grants from NORAD are channelled by Strømme Foundation to partners in the South, partly as grants and partly as loans (credit components). Grants received are shown as Public Sector grants and transfer to partners as specific project-related cost elements in the activity account. In agreement with NORAD, Strømme Foundation has the disposition rights of repaid loan funds from the microfinance programs (credit components). Thus the credit components, being a new source of income for Strømme Foundation, can be revolved for further microfinance purposes in the region. In the financial statements these credit components are shown as income and are also countercharged to “Support to projects”. Strømme Foundation has, over the years, accumulated substantial financial assets from loans to microfinance institutions in the regions. The total financial assets from microfinance are not included in the balance sheet as of 31/12/07; details are found in Note 18. Furniture and Equipment These 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.

2007 ‘000 NOK 35 300 962 4 700 2 000 4 900 3 335 495

South/South Exchange Program - Asia Cultural Centre / Art for the UN-house, Arendal

Regional Governments, Agder Total

2006 ‘000 NOK 36 620 976 5 849 1 500 4 244

946 2 200

23 1 760 1 246

1 377 100 56 315

766 285 53 268

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. Unused capital must be returned. The current framework agreement with NORAD (2003/2008) requires a minimum contribution of 10 % from Strømme Foundation, and allows up to 8% administration support on the project cost. For MFA funded programmes, the self-contribution requirement varies from 0 to 30% and the administration support varies from 0 to 8%.

Note 3 – Salaries and Personnel Expenses /other allowances Note 6 Salaries and Personnel Expenses/other allowances

Shares in Subsidiary Companies and Affiliated Companies Shares in subsidiary companies and affiliated companies are recorded at historic cost.

2007 ‘000 NOK 12 746 1 990 1 498 747 4 934 21 916

2006 ‘000 NOK 11,365 1,805 1,556 877 4,901 20,504

Short-term Investments Short-term investments (shares and share 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.

Salaries Norway Social Insurance Payment Pension Costs Other Costs Norway Salaries and allowances Regional Offices Total

Pensions 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 in 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 is shown as financial asset.

The average number of employees at the head office was 35. This amounts to 30 man-labour years in 2007, compared to 29 in 2006. In the Regional offices the average number was 46, equivalent to 46 man-labour years, compared to 40 in 2006. In addition there were 10 employees in microfinance in the South, their salaries are shown in Note 18, and 8 employees in total in Sudan and Myanmar, the cost of whom is allocated directly to the program.

Note 1 – Private Donations

The Board members have received no remuneration other than travelling costs.

Individual donations Fixed-term donations Events, schools and artists Testamentary donations Disaster Relief & Rehabilitation Total

2007 ’000 NOK 9 434 39 156 3 514 1 272 102 53 478

2006 ’000 NOK 11 696 39 860 3 343 739 5 55 643

The total salary cost for the Secretary General in 2007 was NOK 588 254 plus pension contributions of NOK 85 567.

Audit Fees: The cost of the annual statutory audit was NOK 100 000. Fees for certification services primarily connected to NORAD and MFA financed projects were NOK 182 450. All amounts are excluding VAT.

Friend at Heart-sponsorship, registered under fixed-term donations, represents the largest source of income with MNOK 32.0 in 2007 compared to MNOK 32.6 in 2006.

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Note 4 – Fixed Assets All figures in ‘000 NOK Cost price 01//01/07 Acquisitions/Disposals 2007 Cost price 31/12/07 Accumulated depreciation 31/12/07 Book value 31/12/07 The year’s ordinary depreciation Depreciation rate

Note 7 – Investments in Shares and Bonds Property 414 -3 411 -22 411 22 0%

Business Premises 14 336 0 14 336 -5 276 9 060 291 2 -10%

Furniture and equipment 771 62 834 -641 193 164 20-30 %

Total 15 521 59 15 580 -5 939 9 641 478

Strømme Micro Finance AS is titleholder for the building site and part of the business premises. Since Strømme Foundation operates with an accounting principle to expense all equipment under NOK 50 000, the majority of the inventory is not included under fixed assets in the balance sheet. For the same reason fully depreciated assets do not appear here. All equipment in the Regional Offices is shown as project cost.

Note 5 – Other Running Expenses Running expenses Head Office Running expenses Regional Offices Travel expenses Head Office Travel expenses Regional Offices Fund-raising and marketing expenses Total

2007 ’000 NOK 10 137 4 229 3 912 1 950 6 637 26 865

2006 ’000 NOK 11 060 3 425 4 264 1 899 7 566 28 214

Note 6 – Other Financial income/expenditure Other Interest income

2007 ’000 NOK 138 247 385

2006 ’000 NOK 79 159 238

Other financial income Currency exchange gains Net financial income in Regional Offices Other financial income Total

2007 476 97 316 889

2006 298

Other financial costs Currency exchange losses Net financial costs in Regional Offices Other financial costs Total

2007 -275

2006 -404 -29 -15 -448

Interest from subsidiaries Other interest income Total

-1 -276

167 465

Reported Financial income of MNOK 0.798 in the Activity Account is total other interest income MNOK 0.385 + net financial income in the south + other financial income MNOK 0.316. Net Currency exchange losses/gains are shown as purpose costs.

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All figures in ‘000 NOK Book value 31/12/06 Market based shares Market based bonds Total

0 3 074 3 074

Net changes 2007 0 -1 100 -1 100

Change revaluation 2007 0 -38 -38

Accumulated Write-downs 31/12/07 0 -64 -64

Book value 31/12/07 0 1 936 1 936

Market value 31/12/07 0 1 989 1 989

Investments are only made with a view to getting a better return on unused funds, and are all placed in such a way that they can be easily realised if necessary. The Strømme Foundation takes a very cautious approach with regard to risk in such investments. The bond holdings and the other market based financial instruments are guaranteed minimum repayment of invested amount at the date of expiry.

Note 8 – Changes in Equity All figures in ‘000 NOK Unrestricted Equity as of 31/12/06 Result of the year Unrestricted Equity as of 31/12/07 Restricted Equity Total Equity

Initial Fund 3 326

Retained Earnings 6 810 889 7 700

3 326

Total 10 136 889 11 026 21 025 32 051

In addition total assets from Strømme Foundation’s microfinance activities as of 31/12/07 is MNOK 102.7. For specifications see note 18.

Note 9 a – Investments in Subsidiary Companies All figures in ‘000 NOK Name Strømme Micro Finance AS

Number 500

Nominal value 1

Book value 500

Result 2007 -217

Equity 31/12/07 -69

Strømme Micro Finance AS (SMF) with its main office in Kristiansand is a wholly-owned subsidiary company of Strømme Foundation. A long-term loan without a specific instalment plan of 3.0 MNOK as been given to SMF. This has been utilized for purchase of office premises in Skippergata 3 – 5, Kristiansand, Norway. At the year end there is MNOK 3.0 outstanding.

Note 9 b – Investments in Associated Companies All figures in ‘000 NoK Name Hald International Centre BA

Book value 200

Results 2007 -34

Equity 31/12/07 2 225

Hald International Centre (HIS) was in 2004 officially registered as a company with limited liability with its Head Office in Mandal. Strømme Foundation’s share in ownership and votes is 1/3. The objective of HIS is giving courses and training for work within missionary organisations, for evangelism and development work, as well as for exchange-programs in different parts of the world. HIS is a Not-for-Profit organisation and cannot give dividends to the owners. Strømme Foundation had accounts receivable of NOK 44 447 from HIS as of 31/12/2007.

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Note 10 – Pension Obligations

Note 13 – Liquidity and Restricted Assets

The Strømme Foundation has a pension scheme that is comparable to the State pension fund. For 2007, the scheme covers 35 people. The Foundation has also signed an agreement for an AFP-plan. This agreement applies for 34 people and is included in the list below. Actuarial calculations have been applied for calculating the obligations and costs in connection with the payment plans. The following assumptions have been used for the calculations:

Discount rate Expected dividend Salary adjustments / year Yearly G-regulation / inflation Expected pension escalation Withdrawal probability AFP

2007 4,35% 5,40% 4,50% 4,25% 1,6% 30,0 %

All figures in ‘000 NoK

Gross pension obligations at 31.12 calculated at - Value of pension funds at 31.12 calculated at + Deferred obligation in case of (loss) / profit = Calculated net pension obligations at 31.12 + Social Insurance contributions = Pension obligation as at 31.12

2006 4,35 % 5,40 % 4,50 % 4,25 % 1,6 % 30,0 %

1 515

11 096 -10 681 -2 009 -1 594 297 -1 594

1 515

1 594

Un-secured system 2007

Un-secured system 2006

1 790 0 319 2 109 264 2 406

2 009 0 - 140 1 869

Note 14 – Restricted Equity / Project Commitments A substantial part of fund-raised capital is linked directly to projects. Many of these are also financed through public sector grants. After the allocation of public sector grants according to the terms of the cooperation agreements, the fund-raised capital is used to cover Strømme Foundation’s own share. From year to year the usage of fundraised capital for this purpose will vary. Balance of closed projects will be reallocated to other projects according to agreed guidelines. After covering the project costs for 2007, the capital earmarked for projects increased by MNOK 9.55.

2 133 Region

Net over-financing Net contractual obligation

2006 ’000 NoK 557 1,603 178 452 2,790 3,315 2,429 5,744 8,534

* See also note 7 for specification of investments in shares and bonds.

Secured Secured system 2007 system 2006

11 103 -12 682 65 -1 515

Employees tax deducted account Restricted projects and public grant accounts Memorial Fund Restricted funds at the Regional Offices Total Restricted bank balance Free funds available in Norway Free funds available at Regional Offices Free available funds Total liquidity

2007 ’000 NoK 576 5 291 186 4 474 10 528 5 718 7 026 12 744 23 271

The year’s pension accrual 1 414 1 250 + interest cost 529 417 + amortisation 0 61 + administration cost 39 39 - Return on capital -642 -515 = Net pension cost 1 340 1 252 + Social Insurance 178 225 - Employees pension deductions 0 -202 = Total pension cost 1 517 1 275 The amount is included in Salaries and personnel expenses in the accounts

2 406

2 133

173 81 -14 0 0 240 34 0 274

212 75 80 0 0 366 52 0 418

Asia East Africa West Africa South America Total

2007 ’000 NoK 8 812 6 794 0 5 239 21 025

2006 ’000 NoK 2,349 3,527 0 5,594 11 471

Change 2007/2006 ’000 NoK 6 463 3 447 0 356 9 554

Partner agreements are usually signed in local currency, but contributions are limited to agreed budget in NOK. This is done to minimise exchange rate risk in the development sector.

Note 15 – Collateral Security Part of the business premises and the building site are collateral for the overdraft facilities (limit MNOK 1.0). Book value as of 31/12/07 is MNOK 5.6.

Note 11 – Property under development In 2002 the Strømme Foundation took over a property in Lillesand which had been left to us as a legacy gift. The property was valued and entered into our accounts at MNOK 2.5 in 2004. Strømme Foundation has chosen to retain the property and seek to regulate it for residential use. In 2005 a portion of land was sold, reducing the book value by MNOK 0.2. Up to this point the cost of the planning work has been MNOK 0.69.

Note 12 - Public duties – VAT compensation As a result of the introduction of VAT on public services from July 2001, the Storting (Norwegian Parliament) has approved a VAT-compensation to NGOs. The entry Public expenses includes claims in this regard of MNOK 0.8. The amount is calculated on basis of real additional expense connected to this scheme, as the intention of the Storting was for 100% compensation. It is anticipated that the whole amount will be refunded, but it is not guaranteed.

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Note 16 – Connected Parties Balances with subsidiary and associated companies are disclosed in Note 9. Strømme Foundation’s microfinance activities which are not shown on the face of the accounts are disclosed in Note 18. With the exception of salaries and travel claims, there are no financial transactions with employees or connected persons in Strømme Foundation Norway. Outstanding loans to employees in the Regional Offices totalled NOK 328 663 at the year end compared to NOK 275 811 at the end of 2006. These are included in other assets in the balance sheet under other receivables. NOK 203 865 of the outstanding balance is for loans of more than one years duration.

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Note 17 – Purpose / Project Support costs

Note 18 – Microfinance Activities

Madagascar Uganda Tanzania Sudan Kenya Rwanda East Africa

2007 ’000 NoK 258 5 885 2 839 6 329 7 799 1 994 25 103

2006 ’000 NoK 262 4 528 4 483 7 966 8 091 1 975 27 305

Mauritania Mali Burkina Faso Ivory Coast West Africa

767 15 974 1 733 432 18 907

660 13 101 262 0 14 023

India Bangladesh Sri Lanka Sri Lanka - Tsunami Rehab. East Timor Cambodia Myanmar Asia

194 14 561 3 929 4 453 1 077 0 1 898 26 111

634 12 040 5 930 6 326 2 108 613 2 538 30 190

Peru Bolivia South America

5 810 3 835 9 645

4 961 3 688 8 649

79 667

80 167

Norwegian information and public awareness

9 574

10 947

Global programs

6 307

7 634

-202

105

Credit Components

10 397

12 265

Total Purpose Costs

105 843

111 117

The microfinance activities are organised in a separate microfinance department which provides loans via Strømme Foundations Regional Offices to microfinance partners in Asia, West Africa and South America. In East Africa and Sri Lanka we have established wholesale lending institutions called Strømme Microfinance East Africa Ltd and Strømme Microfinance Asia Guarantee Ltd through which all respetive regional microfinance activities are channelled. The figures below are a consolidated view of all microfinance activities and show good growth in 2007. In addition loans to partners in Sri Lanka working with survivors of the tsunami are included in these figures. BALANCE SHEET: ASSET

Total

Net Currency Gain/loss (on transfers to projects)

WEST AFRICA SOUTH AMERICA ASIA EAST AFRICA

Credit Components under Purpose Activities in the Activity Account Statement MNOK 21.9 includes MNOK 11.7 lending to partners from the current year’s budget (initial credit component), which is distributed onto the respective countries in the above table, and MNOK 10.4 from the current year’s repayment of credit components adjusted by the result in the microfinance activity.

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2007 ‘000 NOK 19 079 89 829 -6 045 1 771 104 634 3 294 107 929

2006 ‘000 NOK 26 238 79 753 -4 789 3 061 104 263 5 355 109 618

1 651 3 209 4 860 103 069 107 929

702 11 237 11 939 97 679 109 618

PROFIT AND LOSS STATEMENT Interest income from external loans Income from investments/deposits Other operating income Total operating income Total financing expenses Gross financial margin Provision for loan losses + Write-offs Recovered write-offs Net financial margin

2007 7 383 831 117 8 332 471 7 861 -3 245

2006 5 811 637 0 6 448 -344 6 104 -5 477

4 616

628

Personnel expenses Travel expenses Total operating expenses Income tax

-2 528 -3 455 -5 983 -31

-2 126 -2 152 -4 278

Net income from operations Net income (deficit) from non financial services Grant income for loan capital Grant income for operations Total grants received Net income after grants for the period

-1 398 -10 113 14 146 1 880 16 026 4 516

-3 651 -5 957 21 907 1 789 23 696 14 088

2007 97 679 4 516 477 1 140 -743 103 069

2006 82 534 14 088

Deposits in financial institutions Gross Loan Portfolio (Loan loss reserve) Other Short term assets Total current assets: Total non-current assets: TOTAL ASSETS LIABILITIES Total current liabilities: Total non-current liabilities: Total liabilities Total equity TOTAL EQUITY AND LIABILITIES

Changes in Total Equity Total Equity as of 01/01 Result of the year Capital from Shareholders Donated Equity Net difference in total assets due to exchange rate conversions Total Equity as of 31/12

291 766 97 679

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Regional distribution of loan portfolio at the end of the year: Outstanding loans 2007 Asia 50 169 East Africa 34 823 West Africa 4 675 South America 162 Total 89 829

2006 41 378 35 165 2 960 250 79 753

The loan terms depend on the legal and economic conditions in each country, corresponding to the conditions of the commercial financing market. Most of the loans to microfinance institutions (MFIs) have two year terms with one year interest only. Interest and instalments are paid quarterly. Rate of interest varies between 8 % and 15 %. All loans are in local currency. This is a development policy. Strømme Foundation takes the exchange rate risk, protecting the borrower. Changes in exchange rates have varied strongly from year to year and from country to country. Normally the microfinance activity counts on approximately an annual 10 % loss due to exchange rates for the loan portfolio and bank deposits. Total equity includes minority interests.

Strømme Foundation Board and Council members Board Members 2007 Geir Magnus Nyborg - Chairman of the Board Gunnleik Seierstad – Vice Chairman Solfrid Lind Liv Næss Olaf Gundersen Gunvor Andresen Dorothy Katantazi Substitue: Trond Randøy Asle Jøssang Jon Østby

Council Members 2007 Torger Reve – Leader of the Council Hanne Grete Brommeland Larsen Hege Wallevik Liv Sandvand Hergum – Ended September 2007 Vidar Blakseth Gunnar Thelin Harald Knutsen Dagrun Pedersen Arne Olav Øyhus Kurt Mosvold Ansgar Gabrielsen Per Sævik (new 2007) Rannveig Rivedal Nilsen (new 2007) Grethe Raddum (new 2007) Finn Arild Stie (new 2007)

rs AS PricewaterhouseCoope Postboks 447 NO-4664 Kristiansand Telephone +47 02316 00 Telefax +47 23 16 10

Foundation) mestiftelsen (Stromme To the Board of Strøm 7, showing a profit 7 as of December 31, 200 Auditor’s report for 200 en tels stif me øm Str of s tements, ual financial statement cerning the financial sta We have audited the ann the directors' report con in n atio rm info the e also audited financial statements of NOK 889 323. We hav of the profit. The annual ion cat allo the for al The umption, and the propos accompanying notes. the going concern ass and cash flows, and the e om inc of s ent tem sheet, the sta practices generally comprise the balance standards, principles and ting oun acc and act ncial statements gian accounting al statements. These fina regulations of the Norwe nci fina the of n atio prepar ress e been applied in the r responsibility is to exp accepted in Norway hav Managing Director. Ou and ors ect Dir of ard Bo the Company’s nts of the Norwegian are the responsibility of ording to the requireme acc n atio rm info er oth ncial statements and on an opinion on these fina ditors. Act on Auditing and Au ctices generally iting standards and pra s, regulations and aud law the h wit nts. e anc ord it in acc titute of Public Accounta We conducted our aud d by The Norwegian Ins pte ado g itin aud on luding standards assurance about accepted in Norway, inc it to obtain reasonable n and perform the aud pla we t tha test basis, e uir req rds ludes examining, on a These auditing standa statement. An audit inc mis ial ter ma of e ing fre tements are it also includes assess whether the financial sta al statements. An aud nci fina the in es sur the overall amounts and disclo ent, as well as evaluating evidence supporting the tes made by managem ima est t can nifi sig prises a and com les used rds an audit also the accounting princip law and auditing standa by d uire req ent ext sentation. To the l control systems. We financial statement pre accounting and interna its and irs affa al nci fina ent of the Company's review of the managem is for our opinion. bas e abl son provides a rea believe that our audit e and ulations and give a tru In our opinion, e with the law and reg anc ord acc in ed par s pre s have been results of its operation the financial statement • ber 31, 2007, and the cem De of as y pan practices al position of the com standards, principles and fair view of the financi ance with accounting ord acc in ed, end n the the year and its cash flows for Norway istration and in generally accepted and clearly set out reg y to produce a proper dut its d ille fulf in has ement bookkeeping practice the company's manag • with the law and good e anc ord acc in n atio ting inform documentation of accoun n ents, the going concer Norway ning the financial statem cer con ort rep rs' cto in the dire financial statements and the information given • are consistent with the fit pro the of ion cat posal for the allo assumption, and the pro regulations. comply with the law and 2008 Kristiansand, May 15 pers AS oo eC Pricewaterhous

Strømme Foundation is member of the Norwegian Control Committee for Fundraising Strømme Foundation is a signatory to the Code of Conduct for the International Red Cross and Red Crescent Movement and NGO’s in Disaster Relief. Editors: Egil Mongstad og Asle Stalleland, Strømme Foundation Proofreader: Kristine Røed Rosseland Lay-out and graphic design: Oddvar Paulsen, Strømme Foundation

Reidar Henriksen Accountant (Norway) State Authorised Public n prepared for from Norwegian has bee Note: This translation

only. information purposes

sber Tromsø Trondheim Tøn Oslo Stav anger Stryn a Molde Måløy Narv ik organisasjonen ar Kris tians and Mo i Ran pers Ham Coo e ouse Førd ad terh rikst ewa mspennende Pric en Drammen Fred tilknyttet den verdenso Kontorer: Arendal Berg iduelle medlemsfirmaer navnet refererer til indiv 713 009 PricewaterhouseCoopers 987 NO t: taksregis tere ke Rev isorforening | Fore Medlemmer av Den nors

g Åles und

www.pwc .no

All photos: Strømme Foundation

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Skippergaten 3 • 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: post@stromme.org • www.stromme.org

Strømme Foundation Annual Report 2007  

Strømme Foundation Annual Report 2007

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