ISBN 92-9146-813-4 The International Livestock Research Institute (ILRI) works to improve peoples’ lives in the low- and middle-income countries through livestock science that contributes to equitable and resilient livestock systems in order to deliver food systems transformation with climate and environmental benefits. Co-hosted by Kenya and Ethiopia, it has regional or country offices throughout Africa and Asia. CGIAR is a global agricultural research partnership for a food-secure future. Its science is carried out by 15 research centres in close collaboration with hundreds of partner organizations. cgiar.org 2023 FINANCIAL STATEMENTS Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Zimbabwe Mashona cow (photo credit: ILRI/Eric Ouma). ILRI financial statements For the year ended 31 December 2023 1 ILRI financial statements For the year ended 31 December 20232 © 2024 International Livestock Research Institute (ILRI) This publication is copyrighted by the International Livestock Research Institute (ILRI). It is licensed for use under the Creative Commons Attribution 4.0 International Licence. To view this licence, visit https://creativecommons.org/ licenses/by/4.0. Unless otherwise noted, you are free to share (copy and redistribute the material in any medium or format), adapt (remix, transform, and build upon the material) for any purpose, even commercially, under the following condition: ATTRIBUTION. The work must be attributed, but not in any way that suggests endorsement by ILRI or the author(s). NOTICE: For any reuse or distribution, the license terms of this work must be made clear to others. Any of the above conditions can be waived if permission is obtained from the copyright holder. Nothing in this license impairs or restricts the author’s moral rights. Fair dealing and other rights are in no way affected by the above. The parts used must not misrepresent the meaning of the publication. ILRI would appreciate being sent a copy of any materials in which text, photos etc. have been used. Citation: International Livestock Research Institute. 2024. ILRI 2023 financial statements. Nairobi, Kenya: ILRI. ISBN: 92-9146-813-4 Text by Elsa Murano, Appolinaire Djikeng and Robert Nzioka. Statements prepared by Robert Nzioka. Edited by Anne Kibe, Peter Mativo and Paul Karaimu. Cover photo: Portraits of Red Fulani cattle in Bamenda, Cameroon (photo credit: ILRI/StevieMann). ILRI thanks all donors that globally support its work through their contributions to the CGIAR Trust Fund. Patron: Professor Peter C Doherty, AC, FAA, FRS Animal scientist, Nobel Prize Laureate for Physiology or Medicine–1996 Box 30709–00100, Nairobi, Kenya ilri.org Box 5689, Addis Ababa, Ethiopia Phone: + 254 20 422 3000 better lives, better planet through livestock Phone: + 251 11 617 2000 Fax: + 254 20 422 3001 Fax: + 251 11 667 6923 Email: ILRI-Kenya@cgiar.org ILRI is a CGIAR research centre Email: ILRI-Ethiopia@cgiar.org ILRI has offices in East Africa • South Asia • Southeast and East Asia • Southern Africa • West Africa Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes 3ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Contents Page Organization information ................................................................................. 6 Board of Trustees .........................................................................................................6 Senior leadership team.................................................................................................6 Statement of purpose ....................................................................................... 7 Corporate governance...................................................................................... 9 Statement by the chair of the Board of Trustees ........................................... 10 Statement of management responsibilities ....................................................13 ILRI Board statement on risk management .................................................... 14 Financial statements .......................................................................................15 Consolidated statement of financial position ......................................................... 22 Consolidated statement of activities and other comprehensive income ........... 23 Consolidated statement of changes in net assets ................................................ 24 Consolidated statement of cash flows .....................................................................25 Notes to the consolidated financial statements ............................................ 28 Detailed Note 32 (a): Grant revenues and accounts receivable/payable ........... 61 Detailed Note 32 (b): Grant pledges and expenses ..............................................73 Note 33: Detailed statement of activities .......................................................................... 88 Note 34: Detailed statement of financial position ................................................. 89 ILRI financial statements For the year ended 31 December 20234 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes ILRI financial statements For the year ended 31 December 20234 5ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Goat in Finkola Village, near Sikasso, Mali (photo credit: ILRI/Stevie Mann). ILRI financial statements For the year ended 31 December 2023 5 ILRI financial statements For the year ended 31 December 20236 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Organization information Board of Trustees Name Country Period Elsa Murano (voting) USA Chair (as of April 2021, appointed September 2016) Martyn Jeggo (voting) UK/Australia Vice chair (appointed in May 2017) Jonathan Mueke (voting) Kenya Host country member (joined August 2023) Harry Kimtai (voting) Kenya Host country member (left July 2023) Regassa Fikru (voting) Ethiopia Host country member (joined September 2020) Lindiwe Majele Sibanda (voting) Zimbabwe Appointed April 2021 Alyssa Jade McDonald-Baertl (voting) Australia Appointed October 2020 Hilary Wild (voting) UK Appointed October 2020 Neal Gutterson (voting) United States Appointed October 2020 Patrick Caron (voting) France Appointed October 2020 Shenggen Fan (voting) China Appointed October 2020 Alice Ruhweza (voting) Uganda Appointed October 2020 Li Lin Foo (non-voting) Malaysia Appointed December 2022 Jing Zhu (non-voting) China Appointed May 2021 Appolinaire Djikeng (non-voting) USA Director general (appointed April 2023) Senior leadership team Name Country Position Appolinaire Djikeng USA Director general (appointed April 2023) Shirley Tarawali UK Director general a.i (January to March 2023) Shirley Tarawali UK Assistant director general - Board Secretary Iain Wright UK Deputy director general (DDG) Research and Development – Integrated Sciences Siboniso Moyo Zimbabwe DDG Research and Development – Biosciences, Genetics and Feeds Michael Gerba USA Chief operating officer Stella Kiwango Tanzania Director – People and Organizational Development Namukolo Covic Zambia Director general’s representative to Ethiopia, CGIAR regional director for east and southern Africa and Ethiopia country coordinator Robert Nzioka Kenya Chief financial officer Advocates Auditors Oraro & Co Advocates PricewaterhouseCoopers LLP ACK Garden Annex, 6th Floor Certified Public Accountants 1st Ngong Avenue PwC Towers, Waiyaki Way, Westlands P. O Box 51236–00200 P. O Box 43963–00100 Nairobi, Kenya Nairobi, Kenya Address International Livestock Research Institute International Livestock Research Institute Box 30709, Nairobi 00100 Kenya Box 5689, Addis Ababa, Ethiopia Phone +254 20 422 3000 Phone +251 11 617 2000 Fax +254 20 422 3001 Fax +251 11 667 6923 Email ilri-kenya@cgiar.org Email ilri-ethiopia@cgiar.org ilri.org 7ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Statement of purpose The International Livestock Research Institute (ILRI) envisions a world where all people have access to enough food and livelihood options to fulfil their potential. ILRI’s mission is to improve food and nutritional security and to reduce poverty in developing countries through research for efficient, safe, and sustainable use of livestock—ensuring better lives through livestock. ILRI’s three strategic objectives are: With partners, to develop, test, adapt and promote science-based practices that—being sustainable and scalable— achieve better lives through livestock. With partners, to provide compelling scientific evidence in ways that persuade decision makers—from farms to boardrooms and parliaments—that smarter policies and bigger livestock investments can deliver significant socio- economic, health and environmental dividends to both poor nations and households. With partners, to increase capacity among ILRI’s key stakeholders to make better use of livestock science and investments for better lives through livestock. CGIAR ILRI is a One CGIAR research centre, a global research partnership that unites organizations engaged in research for a food-secure future. CGIAR research is dedicated to delivering science and innovation that advance the transformation of food, land, and water systems in a climate crisis. Built on a strong partnership between CGIAR’s funders and One CGIAR research centres, the governance model focuses on enabling the CGIAR’s centres and partners to conduct high-quality research for development based on a solid foundation of clearly defined roles, responsibilities, and accountabilities. Research is carried out in close collaboration with hundreds of partner organizations, including national and regional research institutes, civil society organizations, academia, and the private sector. The CGIAR Research and Innovation Strategy to 2030 provides an overview of how CGIAR will develop and deploy its capacities, assets, and skills to address priority global and regional challenges with partners. The strategy is undertaken through a series of Initiatives that integrate CGIAR research centre capacities to address crucial development challenges. ILRI scientists lead three such Initiatives (Livestock, Climate and Systems Resilience (LCSR); Sustainable Animal Productivity for Livelihoods, Nutrition and Gender inclusion (SAPLING) and Protecting Human Health through a One Health approach. ILRI participates and contributes livestock science to 11 other Initiatives and hosts the CGIAR GENDER Impact Platform – the impact platform on Gender Equality, Youth and Social Inclusion and CGIAR impact platforms for climate adaptation and mitigation, and environmental health and biodiversity. The institute also hosts and manages the CGIAR Antimicrobial Resistance (AMR) Hub. Within ILRI, research staff work in one of ILRI’s six research programs covering integrated sciences and biosciences that develop and deliver science-based practices, provide scientific evidence for decision-making, and develop capacities of livestock-sector stakeholders. Partnership research ILRI works with partners worldwide to achieve its mission. As a relatively small institute with a large global mandate, partnership remains the institute’s fundamental modus operandi. The institute’s current strategy requires that ILRI increases the range as well as the number of its partners to ensure that research results are packaged and scaled for impact. Locations and staff ILRI is co-hosted by the governments of Kenya and Ethiopia and has offices in nine other countries in Africa (Burkina Faso, Burundi, Ghana, Mali, Nigeria, Senegal, Tanzania, Uganda, and Zimbabwe) and four offices in Asia (China, India, Nepal and Vietnam). In 2023, ILRI had 671 - permanent staff. Out of the total number of permanent staff, 141 were internationally recruited staff comprising 40% female. Several scientists at ILRI hold joint appointments with other partner institutions. ILRI also engaged 259 consultants and 99 contractors in 2023. ILRI financial statements For the year ended 31 December 20238 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Governance The Board of Trustees (the Board) is comprised of outstanding professionals with expertise in the fields of livestock science, agricultural research, development, and corporate management. The Board serves as the governing body of the institute primarily through its governance and oversight roles to ensure that ILRI functions to the highest standard to execute its mission and deliver on its strategy. The Board ensures that plans and programs are appropriate for carrying out ILRI’s mandate, that they are in line with CGIAR priorities and that they are aligned with the institute’s mission. The Board has fiduciary responsibility for ILRI’s financial resources. Funding ILRI is financed by and through the CGIAR by a trust fund from multiple donors, major multilateral and bilateral donors, foundations, and governments. Funding for the CGIAR Initiatives is disbursed using a three-window modality. For Window 1, funds are allocated to Initiatives, payment of system costs and any other use required to achieve CGIAR’s mission. Window 3 funds are contributions designated by the fund donors to individual CGIAR centres for specific pieces of work. Bilateral funds are from a diverse number of public, governmental, foundations and private organizations from the North and South. In-kind support from national partners, particularly Kenya and Ethiopia, as well as from other countries and international collaborators, is substantial and vital. This mix of generic, specific, and in-kind resources is essential for the diverse research ILRI conducts. ILRI acknowledges the countries and organizations that supported its research in 2023, which are listed in note 32 (a) and 32 (b). The institute could not have advanced its mission without their intellectual and financial support. Signed on behalf of the Board of Trustees by: ______________________________ Appolinaire Djikeng Director general 14 May 2024 Menz sheep grazing on communal grazing area (photo credit: Bioversity/ Frederik Winfried Oberthür). 9ILRI financial statements For the year ended 31 December 2023 Organization information Corporate governance Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Corporate governance The basic principles and rules concerning the organization and operation of the Board of Trustees of the International Livestock Research Institute (ILRI) are laid down in the institute’s constitution and in the Board’s rules of procedure. During 2020, congruent with the transition to One CGIAR, ILRI’s constitution, the Board rules of procedure and its Board composition were amended. The transition to One CGIAR has progressed through to 2023, when the One CGIAR Audit, Finance and Risk Committee (AFRC) reviewed finance, audit and risk matters and provided its recommendation to the ILRI Board which retains its overall responsibilities for the institutes’ governance, oversight and fiduciary matters as stipulated in its constitution. The ILRI Board has also retained its program committee which provides further recommendations for Board consideration, including reviewing the relationship between programmatic and fiduciary matters. Purpose of the committees All Board members are invited to be members of the Program Committee which addresses all matters regarding the conception, elaboration, implementation, and evaluation of the institute’s programs of research, training, and information. The committee provides recommendations for Board consideration concerning program implementation and resourcing. The One CGIAR Audit, Finance and Risk Committee (AFRC) is responsible for advising ILRI’s Board on all matters relating to ILRI’s accounting and financial management practices, internal controls, and audit results, both external and internal, and institutional risk assessment and management. The committee recommends to the Board whether it should accept the external audit reports and suggests courses of remedial action if any, which should be implemented to follow up on audit findings. This committee also determines whether the internal control and audit systems established are adequate and whether the internal audit function is efficient and effective. A member of the One CGIAR AFRC (Richard Golding for the Q2 meeting and Anne Eriksson for the Q4 meeting) joins, ILRI Board meetings as a focal point. Frequency of Board meetings The Board of Trustees met twice during the year in May (Q2, in Addis Ababa) and in November (Q4 in Nairobi). All meetings were conducted in a hybrid format. The Board committee meetings took place 10–14 days prior to the Board meeting to enable the committee reports and recommendations to be provided to the Board for review and decision- making. External audit ILRI’s auditors are appointed by the Board for a period of six years. The current auditors, PricewaterhouseCoopers LLP (PwC), were appointed in September 2020 for the first six-year term beginning January 2021 and renewable subject to performance. The external auditors present and discuss the annual audited financial statements, their final audit opinion, and their associated management reports on internal controls with the CGIAR Audit, Finance and Risk Committee prior to the Q2 Board meeting. _________________________ Elsa Murano Chair, Board of Trustees 14 May 2024 ILRI financial statements For the year ended 31 December 202310 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Statement by the chair of the Board of Trustees Livestock research conducted by ILRI addresses the sustainable, resilient, and inclusive transformation of livestock food systems in low- and middle-income countries (LMICs). The research contributes to CGIAR’s five impact areas 1) Nutrition, Health, and Food Security; 2) Poverty Reduction, Livelihoods, and Jobs; 3) Gender Equality, Youth, and Social Inclusion; 4) Climate Adaptation and Mitigation; and 5) Environmental Health and Biodiversity and to the Sustainable Development Goals, particularly the eight where livestock make direct contributions. ILRI research contributes to the CGIAR Research and Innovation Strategy to 2030 through CGIAR Initiatives (which integrate CGIAR research centre capacities to deliver development outcomes and impacts) as well as through its bilateral research projects. ILRI scientists have continued to lead three Livestock-focused Initiatives the Livestock, Climate and Systems Resilience (LCSR); Sustainable Animal Productivity (SAPLING) and Protecting Human Health through a One Health approach, and ILRI participates and contributes livestock science to 11 other Initiatives. ILRI hosts three of the five CGIAR impact area platform directors: Gender Equality, Youth and Social Inclusion, Climate Change Adaptation and Mitigation and Environmental Health and Biodiversity. The ILRI Board program committee reviewed reports from programs and Initiatives led by ILRI. It considered ILRI research in the context of food system transformation and climate change, particularly (at its Q4 meeting) and considered the process proposed to develop ILRI’s Research and Innovation Strategy in relation to these global challenges. ILRI’s leadership in livestock research for LMICs has delivered important results during 2023, among which: • A new inventory of adaptation planning tools, frameworks, and methodologies for use by national stakeholders in African countries has been developed to support the efforts to enhance the resilience of farming systems and livelihoods to climate change in Kenya and Senegal and is poised for extension to other countries. • The Capacitating One Health in Eastern and Southern Africa (COHESA) project launched a One Health observatory, an international initiative under the project’s umbrella that serves as an online, centralized hub for sharing and documenting the status of One Health activities across 12 countries in eastern and southern Africa, with ambitions to extend its scope to more countries in north, central and west Africa. • Working with the Hanoi University of Public Health, the Vietnam National University of Agriculture, the Vietnam National Institute of Animal Sciences and the University of Sydney, ILRI researchers in Vietnam have proven the potential of low-cost interventions in reducing microbial contamination in small-scale pig slaughterhouses and traditional pork shops. Contamination reductions as high as 93% were reported in the former, and at pork shops, Salmonella prevalence in retailed pork decreased from 12% to 6% after three weeks and further to 3% after six weeks. Hygiene and safety practices also significantly improved, with compliance rates reaching 80% to 92% in slaughterhouses and 75% to 87% in pork shops. • A roadmap to unlock the potential of India’s livestock sector through digital and financial services was launched in collaboration India’s Ministry of Fisheries, Animal Husbandry and Dairying with the ambition to support policy decisions for resilient livestock systems in South Asia. • The SAPLING Initiative work in Nepal aims to improving livestock productivity, encouraging public and private sector investments, and fostering climate and inclusive policies for the buffalo dairy value chain. In just the first- year stakeholders have noted a positive increase in knowledge among farmers, Village Livestock Promoters and national institutions, subsequently enhancing buffalo productivity and investment. For example, the Saikrishi Cooperative in Rupani Municipality of Saptari District has reported a 60% productivity increase in production. Similarly, the Milk Producers Cooperative in Itahari Municipality of Sunsari District shared that 80% of buffaloes treated in fertility camps came to heat after treatment. Thirty (30) rural municipalities have included resources in their 2023-24 budgets to complement and support SAPLING activities. • Pearl millet (Cenchrus americanus) is a staple crop that provides food for roughly 90 million people across sub- Saharan Africa’s arid and semi-arid regions. In addition to its grain, the leaves of the pearl millet plant are high in energy, calcium, iron and high-quality protein, making them an ideal feed option for livestock. ILRI researchers collaborated with the Sichuan Agricultural University, China, to undertake pangenome assessment which unveiled new opportunities for developing improved varieties of pearl millet. • ILRI is partnered with Kenya Meteorological Department (KMD) to enhance the uptake of decision-making tools that support the development of context-specific weather and agro-advisory services. ILRI’s work in the context of the innovative Jameel Observatory also provides novel opportunities to strengthen the resilience of pastoral communities often hardest hit by climate variability. Strategic partnerships formed or strengthened during 2023 include with the World Organization for Animal Health (WOAH), the University of Edinburgh, Thermo-Fischer, and the Government of Somalia’s Ministry of Livestock, Forestry and Range among others. 11ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes ILRI has continued to engage and raise the profile of sustainable livestock solutions in multiple global events, including a significant presence at COP28, Africa’s Food Systems Forum, the Africa Climate Week, the Food and Agriculture Organization of the United Nations (FAO) Global Conference on Sustainable Livestock Transformation, the Global Forum for Food and Agriculture (GFFA) in Berlin, Germany, and the Conference on Sustainable Animal Agriculture for Developing Countries (SAADC2023) held in Lao PDR. Melkamu Bezabih Derseh, animal nutrition scientist at ILRI, received the Texas A&M AgriLife Research inaugural Neville Clarke Award for International Agriculture. ILRI’s strategic alliance with the Roslin Institute and Royal (Dick) School of Veterinary Studies at the University of Edinburgh, Scotland’s Rural College, forming the Centre for Tropical Livestock Genetics and Health (CTLGH) was recognized by the United Nations Environmental Programmes (UNEP) for fostering sustainable livestock and climate smart research. ILRI director general, Appolinaire Djikeng, was appointed chair of the Board of Trustees of the Sainsbury Laboratory, UK, and Iain Wright, deputy director of general research and development – integrated sciences at ILRI, was reappointed and elected as vice-chair of the Steering Committee of the High-Level Panel of Experts on Food Security and Nutrition (HLPE-FSN) of the United Nations Committee on World Food Security (CFS). 2023 has also been a year when ILRI has been looking to the future, with considerable work and engagement across a wide range of stakeholders to develop a new corporate strategy for the period 2024-2030 ‘Unlocking sustainable livestock’s potential through research for better lives and a better planet’. The Board gave provisional approval for the strategy, requesting a final version early in 2024 for intersessional approval. The Board also approved the process for development of ILRI’s Research and Innovation Strategy alongside leading the development of the wider CGIAR livestock strategy. In 2023, the Board held two regular meetings in May (Q2) in Addis Ababa, Ethiopia, and in November (Q4) in Nairobi, Kenya. Both meetings were in hybrid format. Many ILRI Board members, including myself as ILRI Board Chair, and co-chair of the CGIAR Board Chairs’ Network, engaged through 2023 in the CGIAR Unified Governance Review. I am pleased to report that the ILRI Board: • Endorsed the ‘CGIAR memorandum on the implementation of governance recommendations’ and • Approved the package of proposals set out therein. • Committed to working in good faith to implement these proposals to achieve the Integrated Partnership by the dates set out in the memorandum. In addition to its usual business of review and approval of financial, audit and risk matters, including approval of the internal audit plan, in 2023 the ILRI Board: • Approved a revised ILRI Investment Policy • Approved several amendments to ILRI’s Personnel Policy Manuals, including: Ø Retirement: - The official retirement age at ILRI is 65 years. - Engagement or continued employment beyond the age of 65 may be approved by the DG based on institutional need. - A retirement plan has been established for the purpose of providing a pension or provident fund. The ILRI contribution towards the retirement scheme for its staff will be 15% of the base salary. Ø Severance (noting this provision supersedes any reference to severance pay in any other policy.) - Effective 1 September 2023, severance pay is a lump-sum, non-pensionable compensatory payment only on termination of service due to redundancy/cancellation of posts, and health reasons. - Severance will not be paid in instances where an employee’s contract is terminated for disciplinary reasons, non-renewal of a fixed term contract, retirement, or in cases of employee resignation unless otherwise stipulated in the local legislation. • There were several changes and updates to Board membership during 2023: Ø Approved an extension of the term term of ILRI’s Board Vice Chair, Martyn Jeggo, for an additional 18 months through to the end of the Q4 2024 Board meeting. The Board also approved the appointment of Martyn Jeggo as Chair from Q2 of 2024 to Q4 of 2024. Ø The Board approved extension of the terms of AFRC members Hilary Wild, Esteban Chong and Nancy Andrews until (i) the appointment of a successor following implementation of the Unified Governance Review recommendations, or (ii) 30 June 2024. ILRI financial statements For the year ended 31 December 202312 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Ø The terms of ILRI Board members Alice Ruhweza; Alyssa Jade McDonald-Baertl; Hilary Wild; Neal Gutterson; Shenggen Fan; Patrick Caron were also extended until the earlier of (i) the appointment of a successor following implementation of the UGR recommendations, or (ii) 30 June 2024. Ø The term of Lindiwe Majele Sibanda was extended through to 31 December 2024. The Board was pleased to welcome Jonathan Mueke, Principal Secretary in Kenya’s Ministry of Agriculture and Livestock Development, as host country member for Kenya. The Board extended its gratitude to outgoing Kenya host country Board member, Harry Kimtai. Anne Ericksson began as One CGIAR AFRC, ILRI focal point from July 2023. The Board welcomed Professor Appolinaire Djikeng as ILRI’s director general from 1 April 2023, and thanked ILRI assistant director general, Shirley Tarawali, for serving as director general a.i during the first three months of the year. Appolinaire took on the roles of CGIAR senior director of livestock-based systems and managing director a.i of CGIAR’s resilient agri-food systems. ILRI management continues to ensure that Window 3 and bilateral resources, which constitute most of the funding, are aligned and contributing to the CGIAR Research and Innovation Strategy. ILRI has a broad resource mobilization strategy that aligns resources with CGIAR objectives. I certify that, to the best of my knowledge and belief, that, i. all members of the Board of Trustees, and any centre staff as may be required under the centre’s policies, have made a signed declaration of conflicts of interests, whether perceived or actual, and appropriate action has been taken to manage any such conflicts. ii. the Board of Trustees has carried out an annual evaluation of the director general’s performance in accordance with the centre’s human resource policies. iii. the Board of Trustees has carried out an annual evaluation of the performance of the Board chair, the Board secretary and the overall functioning of the Board and its committees; and iv. the Board and all committees have complied with their respective mandates and terms of reference. The Board is pleased to note the continued financial health and stability and the sound and prudent management of the institute’s financial resources. In 2023, ILRI had an operating budget of USD 100.5 million. Revenue in 2023 amounted to USD 82.9 million against expenditure of USD 80.2 million resulting in a surplus of USD 2.6 million. The Board remains confident that based on sound financial and programmatic planning, management and implementation, the institute remains well positioned to deliver on its mission. The Board would like to thank all ILRI staff for their continued commitment and hard work. On behalf of the members of the Board, I thank our investors and partners for their confidence and continued support that is allowing the institute to fulfil its mission. ____________________ Elsa Murano Chair, Board of Trustees 14 May 2024 13ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Statement of management responsibilities Management is required to prepare consolidated financial statements for each financial year, which give a true and fair view of the state of affairs of the institute and its subsidiary as at the end of the financial year and of the consolidated results of activities and cash flows of the institute and its subsidiary for that year. Management is also required to ensure that the institute keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of the institute and its subsidiary. They are also responsible for safeguarding the assets of the institute and its subsidiary. Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards (IFRS) and for such internal controls as trustees determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Management accepts responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgements and estimates, in conformity with IFRS. Management is of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the institute and its subsidiary and of its consolidated results of activities and cash flows. Management further accepts responsibility for the maintenance of accounting records, which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control, selecting and applying appropriate accounting policies and making accounting estimates and judgments that are reasonable in the circumstances. The Board of Trustees exercised its responsibility for these financial statements through the Finance and CGIAR Audit, Finance and Risk committees. The committees interact regularly with management, internal auditors, and external auditors to review matters relating to financial planning, financial reporting, risk management, internal control, and auditing. Nothing has come to the attention of management to indicate that the institute and its subsidiary will not remain a going concern for at least the next 12 months from the date of this statement. Signed on behalf of management by: _______________________ ________________________ Appolinaire Djikeng Robert Nzioka Director general Chief financial officer 14 May 2024 14 May 2024 ILRI financial statements For the year ended 31 December 202314 Organization information Statement of purpose ILRI Board statement on risk management Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes ILRI Board statement on risk management The ILRI Board has overall responsibility for overseeing the institute’s internal control and risk management systems and for reviewing their adequacy and effectiveness in alignment with CGIAR principles and guidelines adopted by all CGIAR centres. This process lends support to the role of management in implementing the various policies on risk and control, which have been approved by the Board. Under an Enterprise Risk Management (ERM) approach, the goal is not to control or avoid all risk, but rather to take advantage of opportunities, while reducing or mitigating threats within the institute’s risk’s appetite. The institute’s risk appetite approach is to minimize its exposure to reputational, operational, and financial risk, whilst recognizing, accepting, and encouraging an appropriate degree of risk in pursuit of its mission and objectives. It recognizes that its appetite for risk varies according to the activity undertaken, and that its acceptance of risk is subject always to ensuring that potential benefits and risks are fully understood before developments are authorized, and that sensible measures to mitigate risk are established. The Board receives recommendations from the CGIAR Audit, Finance and Risk Committee (AFRC) based on its review and determination of the levels of different categories of risk, whilst management and unit/program heads are delegated the responsibility to manage risks related to their respective units/programs. The process requires the unit/program heads to identify and assess the relevant risks in terms of likelihood and magnitude of impact (each on a four-point scale), as well as to identify and evaluate the adequacy and effectiveness of applying the mechanisms in place to manage and mitigate these risks and how these change over time. Key risks, which include strategic, programmatic, operational, financial, reputational, and staff and stakeholder risks that are inherent in the nature of the institute’s activities are identified and assessed at unit and program level, then deliberated at the Institute Management Committee and significant risks are communicated to the Board at their scheduled meetings. The institute endeavors to manage risk by ensuring that mitigation actions are undertaken, which include making sure appropriate infrastructure, controls, systems, and people are in place throughout the institute. Key practices employed in managing risks and opportunities include business environmental scans, clear policies and accountabilities, transaction approval frameworks, financial and management reporting, and the monitoring of metrics designed to highlight positive or negative performance of individuals and business processes across a broad range of key performance areas. While ILRI has recovered from the effects of the COVID-19 pandemic, ILRI’s Emergency Preparedness Plan remained in place, including (i) a Crisis Management Team, (ii) Crisis Response Teams on its Kenya and Ethiopia campuses and iii) Task force(s) that are constituted as needs arise. These interlocking committees worked seamlessly to develop and communicate guidelines to ILRI staff around the world and those of the centres ILRI hosts in Kenya and Ethiopia. ILRI regularly updates its supporting crisis management and risk management plans to guide the multiple mitigation and business continuity processes. The design and effectiveness of the risk management system and internal controls is subject to ongoing review by the institute’s Internal Audit Unit, which is independent of the business and research units, and which reports on the results of its audits directly to the director general and to the Board. Taken together, the Board is satisfied with the attention paid by management to risk. Regarding ILRI’s 2023 Financial Statements and the effectiveness of internal controls over financial reporting, the CGIAR Audit, Finance and Risk Committee reviewed management’s assertions in its 2023 Management Letter (provided to the external auditors) and Management’s Statement of Responsibility for Financial Reporting included as part of the annual financial statement and its assertions that internal controls are adequate. ____________________ Elsa Murano Chair, Board of Trustees 14 May 2024 15ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Goat in Masaka district Uganda, April 2017 (photo credit: ILRI/Apollo Habtamu). ILRI financial statements For the year ended 31 December 202316 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Five-year financial review December 2023 Management Accounts   2019 USD ‘000’ 2020 USD ‘000’ 2021 USD ‘000’ 2022 USD ‘000’ 2023 USD ‘000’ CGIAR Benchmarks Income 74,498 76,257 97,042 84,084 82,809   Expenses 74,397 75,483 94,574 83,259 80,194   Overhead recovery             Surplus/ (loss) 102 774 2,467 825 2,615                 Assets             Non-current 17,593 21,807 23,917 23,517 21,985   Current 77,831 84,500 79,919 70,086 62,293   Total assets 95,424 106,308 103,836 93,603 84,278               Net Assets & Liabilities             Net Assets 34,852 35,627 38,094 38,919 42,152   Non-current Liabilities 6,713 6,172 6,295 6,642 3,034   Current liabilities 53,858 64,509 59,447 48,042 39,092   Total net assets & liabilities 95,424 106,308 103,836 93,603 84,278                 Short term stability Indicator liquidity (days) 145 125 104 111 123 CGIAR Min 90- 120 days Long term stability Indicator (days) 121 99 67 71 91 CGIAR Min 75- 90 days Expenses per day 165 160 196 198 188   Working capital 23,973 19,992 20,472 22,044 23,201 - Gross operating expenditure 74,395 75,483 94,574 83,259 81,020   _less depreciation (including project assets) (2,161) (2,297) (2,300) (1,975) (2,002)   _less collaboration (11,923) (14,660) (20,602) (8,965) (10,256)   Net operating expenditure 60,312 58,526 71,672 72,319 68,762 -               Undesignated net assets 19,965 15,859 13,157 14,090 17,160   Cash management of restricted operations 0.219 0.178 0.542 0.362 0.357   Current ratio 1.4 1.3 1.3 1.5 1.6   Indirect cost % 17% 17% 17% 17% 17%   17ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes ILRI financial statements For the year ended 31 December 202318 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes CAPEX VS depreciation 19ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes CAPEX VS depreciation ILRI financial statements For the year ended 31 December 202320 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Independent auditor’s report to the trustees of International Livestock Research Institute (ILRI) Report on the audit of the Group financial statements Our opinion We have audited the accompanying financial statements of International Livestock Research Institute (ILRI) (the ‘institute’) and its subsidiary (together, ‘the Group’) set out on pages 18 to 89 which comprise the consolidated statement of financial position at 31 December 2023 and the consolidated statement of comprehensive income, consolidated statement of changes in net assets and consolidated statement of cash flows for the year then ended and the notes to the financial statements, comprising material accounting policies and other explanatory information. In our opinion, the accompanying financial statements of ILRI give a true and fair view of the financial position of the Group at 31 December 2023, and of the Group’s financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial statements’ section of our report. We are independent of ILRI in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Kenya. We have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other information The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of trustees for the financial statements The trustees are responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. PricewaterhouseCoopers LLP. PwC Tower, Waiyaki Way/ Chiromo Road, Westlands P O Box 43963 – 00100 Nairobi, Kenya Partners: E Kerich, B Kimacia M Mugasa, A Murage F Muriu, P Ngahu B Ngunjiri, R Njoroge S O Norbert’s, B Okundi, K Saiti T: +254 (20)285 5000 F: +254 (20)285 5001 www.pwc.com/ke 21ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Independent auditor’s report to the trustees of International Livestock Research Institute (ILRI) Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the trustees. • Conclude on the appropriateness of the trustee’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. • We communicate with the trustees regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. CPA Stephen Ochieng’ Norbert’s, Practising Number P/1819 Engagement partner responsible for the audit  For and on behalf of PricewaterhouseCoopers LLP Certified Public Accountants  Nairobi 23 May 2024 PricewaterhouseCoopers LLP. PwC Tower, Waiyaki Way/ Chiromo Road, Westlands P O Box 43963 – 00100 Nairobi, Kenya Partners: E Kerich, B Kimacia M Mugasa, A Murage F Muriu, P Ngahu B Ngunjiri, R Njoroge S O Norbert’s, B Okundi, K Saiti T: +254 (20)285 5000 F: +254 (20)285 5001 www.pwc.com/ke Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement Financial statements International Livestock Research Institute (ILRI) Notes ILRI financial statements For the year ended 31 December 202322 Consolidated statement of financial position     As at December     2023 2022   Notes USD ‘000 USD ‘000 Current assets   Cash and cash equivalents 5 41,295 42,760 Listed corporate bonds 6 5,654 5,872 Account receivables 7 14,199 20,386 Prepaid expenses 8 663 710 Inventories 9 482 358 Total current assets   62,293 70,086 Non-current assets   Property, plant, and equipment 10 21,126 21,581 Biological assets 11 859 1,936 Total non-current assets   21,985 23,517 TOTAL ASSETS   84,278 93,603 Current liabilities   Accounts payable 12 37,776 46,739 Provisions 13 325 444 Accruals 14 992 859 Total current liabilities   39,093 48,042 Non-current liabilities   Long-term employee benefits 15 3,034 6,642 Total non-current liabilities   3,034 6,642 Net assets   Undesignated 17,160 14,090 Designated 24,991 24,829 Total net assets   42,151 38,919 TOTAL NET ASSETS AND LIABILITIES   84,278 93,603 The notes set out on pages 28 to 89 form an integral part of these consolidated financial statements. The consolidated financial statements were approved by the Board of Trustees on 14 May 2024 and were signed on its behalf by: __________________________ __________________________ Appolinaire Djikeng Robert Nzioka Director general Chief financial officer 14 May 2024 14 May 2024 23ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement Financial statements International Livestock Research Institute (ILRI) Notes Consolidated statement of activities and other comprehensive income     For the year ended 31 December     2023 2022   Notes USD ‘000 USD ‘000 REVENUE   Window 1 & Window 2 17 30,413 23,764 Window 3 17 8,654 17,123 Bilateral 17 31,315 32,154 Other revenues and gains 18 9,722 8,096 Sale of livestock 19 302 345 Fair value (loss) gain on livestock 21 (779) (19) TOTAL REVENUE AND GAINS   79,627 81,463   COST OF SALES   Cost of sale of livestock 20 (234) (274) TOTAL COST OF SALES   (234) (274)   EXPENSES   Research expenses 23 54,429 55,280 Collaborator expenses 24 10,256 8,965 General and administration expenses 25 10,908 10,427 Other expenses and losses 26 686 4,879 Expected credit loss 3 1,486 1,565 TOTAL OPERATING EXPENSES   77,765 81,116   Financial income 27 3,182 2,545 Financial expenses 27 (2,195) (1,869) SURPLUS/(DEFICIT) FROM OPERATING ACTIVITIES 2,615 749   OTHER COMPREHENSIVE INCOME   Exchange differences on translation of subsidiary 28 617 76 TOTAL OTHER COMPREHENSIVE INCOME   617 76   TOTAL SURPLUS/(DEFICIT) FOR THE YEAR   3,232 825 The notes set out on pages 28 to 89 form an integral part of these consolidated financial statements. Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement Financial statements International Livestock Research Institute (ILRI) Notes ILRI financial statements For the year ended 31 December 202324 C o n so lid at ed s ta te m en t o f c h an g es in n et a ss et s D es cr ip ti o n U n d es ig n at ed * * re se rv e U SD ‘0 0 0 D es ig n at ed in ve st m en t i n fi xe d a ss et s U SD ‘0 0 0 K ap it i r es er ve U SD ‘0 0 0 K ap it i e xc h an g e tr an sl at io n re se rv e* U SD ‘0 0 0 IL R I d es ig n at ed re se rv es * ** U SD ‘0 0 0 To ta l U SD ‘0 0 0 A t J an ua ry 2 0 2 2 1 3 ,1 57 2 1, 76 6 3 ,0 0 0 1 7 1 2 4 ,9 37 3 8 ,0 9 4 Su rp lu s/ (d efi ci t) fo r t he y ea r 7 4 9 - - - - 7 4 9 Ex ch an g e tr an sl at io n - - - 7 6 7 6 7 6 To ta l c om p re he ns iv e in co m e fo r t he y ea r 7 4 9 - - 7 6 7 6 8 2 5 A d d iti on al c ap ita l t o su b si d ia ry - - - - ne t c ha ng e in in ve st m en t i n fix ed a ss et s 1 8 4 (1 8 4 ) - - (1 8 4 ) - B al an ce a s at D ec em b er 2 0 2 2 1 4 ,0 9 0 2 1, 5 8 2 3 ,0 0 0 2 4 7 2 4 ,8 2 9 3 8 ,9 19 A t J an ua ry 2 0 2 3 1 4 ,0 9 0 2 1, 5 8 2 3 ,0 0 0 2 4 7 2 4 ,8 2 9 3 8 ,9 19 Su rp lu s/ (d efi ci t) fo r t he y ea r 2 ,6 15 - - - - 2 ,6 15 O th er c om p re he ns iv e in co m e - - - 6 17 6 17 6 17 To ta l c om p re he ns iv e in co m e fo r t he y ea r 2 ,6 15 - - 6 17 6 17 3 ,2 3 2 C en tr e fix ed a ss et s re p la ce m en t - - - - - - A d d iti on al c ap ita l t o su b si d ia ry - - - -  - - N et c ha ng e in in ve st m en t i n fix ed a ss et s 4 5 5 (4 5 5 ) - - (4 5 5 ) - B al an ce a s at D ec em b er 2 0 2 3 1 7, 16 0 2 1, 12 7 3 ,0 0 0 8 6 4 2 4 ,9 9 1 4 2 ,1 5 1 *E xc ha ng e tr an sla tio n on o pe ni ng re se rv es in su bs id ia ry a nd o pe ni ng b al an ce o f a ss et s. ** U nd es ig na te d re se rv es re fe r t o th at p ar t o f n et a ss et s th at is n ot a llo ca te d b y m an ag em en t f or s p ec ifi c p ur p os es . ** *D es ig na te d re se rv es re fe r t o th at p ar t o f n et a ss et s th at h as b ee n al lo ca te d b y m an ag em en t f or s p ec ifi c p ur p os es s uc h as fu tu re a cq ui si tio n of p ro p er ty a nd e q ui p m en t a nd re p la ce m en t o f th e in st itu te ’s a ss et s. Th e no te s se t o ut o n p ag es 2 8 to 8 9 fo rm a n in te g ra l p ar t o f t he se c on so lid at ed fi na nc ia l s ta te m en ts 25ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement Financial statements International Livestock Research Institute (ILRI) Notes Consolidated statement of cash flows     For the year ended 31 December     2023 2022   Notes USD ‘000 USD ‘000 CASH FLOWS FROM OPERATING ACTIVITIES: -   Surplus/(deficit) for the year 2,615 749 Adjustments to reconcile surplus or deficit to net cash flows Depreciation on property and equipment and amortization of intangible assets 10 2,002 1,975 Fair value adjustments on biological assets 11 1,079 216 Exchange differences on subsidiary 617 76 Gain on disposal of fixed assets (278) - Loss on valuation of investments 90 - Amortization of corporate bonds (117) - Decrease (increase) in assets;   Account receivables 7 6,187 8,931 Prepayments 8 47 650 Inventories 9 (124) 55 Increase (decrease) in liabilities; Account payables 12 (8,963) (11,021) Provisions 13 (119) (121) Accruals 14 133 (263) Long-term employee benefits 15 (3,608) 347 Subtotal   (439) 1,594 Net cash inflow (outflow) from operating activities   (439) 1,594 CASH FLOWS FROM INVESTING ACTIVITIES   Purchase of bonds 6 (229) (5,872) Acquisition of property and equipment 10 (1,547) (1,791) Purchase of biological assets 11 (2) - Proceeds from sale of assets 281 - Proceeds from sale of bonds 471 - Net cash inflow (outflow) from investing activities   (1,026) (7,663) Net (decrease)/increase in cash and cash equivalents (1,465) (6,069) Cash and cash equivalents at the beginning of the year 42,760 48,829 Cash and cash equivalents at the end of the year 41,295 42,760 The notes set out on pages 28 to 89 form an integral part of these consolidated financial statements. ILRI financial statements For the year ended 31 December 202326 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes ILRI financial statements For the year ended 31 December 202326 27ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Cows (Ankole breed) being subdued in a crush to be medicated for worms in Akageti, nr Mbarara, Uganda. (photo credit: ILRI/Stevie Mann). 27ILRI financial statements For the year ended 31 December 2023 ILRI financial statements For the year ended 31 December 202328 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Notes to the consolidated financial statements 1. REPORTING ENTITY Creation and status of ILRI The International Livestock Research Institute (ILRI) was created as an international organization by an agreement dated 21 September 1994 signed in Berne, Switzerland, by the governments of Switzerland, Denmark, Sweden, Kenya and Ethiopia and the United Nations Environment Programme. On 1 January 1995, all the activities, assets, liabilities and fund balances of the International Laboratory for Research on Animal Diseases (ILRAD) based in Nairobi, Kenya, and the International Livestock Centre for Africa (ILCA) based in Addis Ababa, Ethiopia, were transferred to ILRI. ILRI operates under agreements entered into with the governments of the respective host countries (Kenya and Ethiopia). The Government of Kenya (1974) and the Government of Ethiopia (1976) made available to ILRI leasehold land of approximately 70 hectares and 32 hectares, respectively. ILRI is a CGIAR research centre, operating under the name CGIAR System Organization since 1 July 2016. The CGIAR System Organization is a global research partnership for a food-secure future. The System Organization advances international agricultural research for a food-secure future by integrating and coordinating the efforts of those who fund research and those who do the research. The CGIAR System Organization is comprised of the System Management Board, the System Management Office and 15 research centres. ILRI’s livestock research agenda continues to address many of the world’s most pressing sustainable development challenges and to raise the profile of livestock globally. Our research contributes to both the CGIAR System Level Outcomes and to the Sustainable Development Goals. CGIAR Research Initiatives The CGIAR Research Initiatives started in 2022 after the CGIAR Research Programs (CRPs) came to an end at the end of 2021. ILRI research contributes to the CGIAR Research and Innovation Strategy to 2030 through CGIAR Research Initiatives which integrate CGIAR research centre capacities to deliver development outcomes and impacts and through its bilateral research projects. ILRI scientists lead three such Initiatives (Livestock, climate, and systems resilience (LCSR); Sustainable Animal Productivity for Livelihoods, Nutrition and Gender inclusion (SAPLING) and Protecting Human Health through a One Health Approach) and ILRI participates and contributes livestock science to 14 others. ILRI hosts the CGIAR platform on Gender Equality, Youth & Social Inclusion, and the CGIAR Antimicrobial Resistance (AMR) Hub. With a better alignment between ILRI’s internal programs, the CGIAR GENDER Impact platform and the AMR Hub, the institute’s livestock research is well positioned to contribute to the CGIAR System Level Outcomes and the Sustainable Development Goals. In 2023, funding through Window 1 and Window 2 constituted about 36% (2022: 28%) of the institute’s total income of USD84million. The financial statements of ILRI have been consolidated with the financial statements of its subsidiary–Kapiti Plains Estate Limited. Subsidiary—Kapiti Plains Estate Limited Kapiti Plains Estate Limited is a wholly owned subsidiary of ILRI purchased in 1981 and registered under the Companies Act of Kenya. The company operates a ranch that was acquired primarily to support the research needs of ILRI. The subsidiary sells surplus livestock to third parties. The loss for the year ended 31 December 2023 amounted to USD3.15million (2022: USD1.82 million). In 2023, Kapiti had a higher loss due to the high value of the loss of the Kenya Shilling currency translations amount due to its loss against the United States dollars. At the end of 31 December 2023, the subsidiary had a debt balance of USD6.04million (2022: USD4.9 million) in ILRI’s books. Management is working on income diversification as well as cost reduction strategies to help in reducing the loss and creating a financially sustainable Kapiti. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of preparation The financial statements of ‘the Group’ (which comprises ILRI and its wholly owned subsidiary, Kapiti Plains Estate Limited) have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The consolidated financial statements have been prepared on a historical cost basis, except where otherwise stated in the accounting policies below. 29ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes The consolidated statement of activities and other comprehensive income refers to the consolidated statement of profit and loss and other comprehensive income in the context of IAS 1. (b) Basis of consolidation The consolidated financial statements comprise the financial statements of the institute and its subsidiary, Kapiti Plains Estate Limited, in which the institute holds 100% of the voting rights as at 31 December 2023. Control is achieved when the institute is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the institute controls an investee if, and only if, the institute has: Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee). Exposure, or rights, to variable returns from its involvement with the investee. The ability to use its power over the investee to affect its returns. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date the control ceases. All inter-company balances, transactions, income and expenses and profits and losses resulting from inter-company transactions are eliminated in full. Where necessary, adjustments are made to the financial statements of the subsidiary to bring their accounting policies into line with those used by other members of the Group. (c) Functional and presentation currency The consolidated financial statements are presented in United States dollars (USD) and all values are rounded to the nearest thousand (USD ’000), which is the Group’s functional currency. (d) Use of estimates and judgments The preparation of financial statements involves the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Although these estimates are based on the management’s best knowledge of current events and actions, actual results ultimately may differ from the estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Information about significant areas of estimation and critical judgement in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are described in Note 4. Revenue recognition Grant revenue The Group recognizes revenue when performance obligations have been settled, the amount of revenue can be reliably measured, when it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the Group’s activities as described below. The Group bases its estimates on historical results, taking into consideration the type of donor, the type of transaction, and the specifics of each arrangement. Unrestricted grant revenue arises from the unconditional transfer of cash or other assets to ILRI. Restricted grant revenue arises from a transfer of resources to ILRI in return for past or future compliance related to the operating activities of the institute. Unrestricted grants are recognized upon receipt of confirmed commitment. Restricted grants are recognized as revenue upon the fulfilment of donor-imposed conditions. Revenue associated with the transaction is recognized by referring to the stage of completion of the transaction at the reporting date. When the outcome of the transaction cannot be estimated reliably, revenue is recognized only to the extent of the expenses that are recoverable. When the Group receives non-monetary grants, the asset and the grant are recorded gross at nominal amounts and released to profit or loss over the expected useful life of the asset, based on the pattern of consumption of the benefits of the underlying asset by equal annual installments. When loans or similar assistance are provided by governments or related institutions with an interest rate below the current applicable market rate, the effect of this favorable interest is regarded as a government grant. ILRI financial statements For the year ended 31 December 202330 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Other revenue and gains Revenue from contracts with customers Other revenue and gains are recognized at an amount that reflects the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. Revenue from service charges, which is the only revenue from contracts with customers, is recognized at the point in time when the services are provided to the customer (fulfills the performance obligations) at the contractual rates. For the year ended 31 December 2023, the Group did not have any contracts with customers exceeding one calendar year or any unfulfilled performance obligations under the contracts as at the year end. Interest income Interest income is recognized on a time proportion basis using the effective interest method. Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit impaired. For credit-impaired financial assets the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance). Interest income is presented as finance income where it is earned from financial assets that are held for cash management purposes. Any other interest income is included in the other income. (e) Currency translation The Group’s financial statements are presented in USD. Transactions and balances expressed in currencies other than the USD are treated as follows: i) Non-USD grants and donations received in the year are converted to USD at the exchange rates prevailing on the dates of receipt. Non-USD grants and donations pledged for the year but not received by the year end are recognized in the financial statements at the exchange rates prevailing at the year end. ii) Non-USD denominated expenditures are recorded at the exchange rates prevailing for the month in which they are incurred and are accumulated in USD. iii) Assets and liabilities denominated in currencies other than the USD are translated into USD at the exchange rates prevailing at the year end. iv) Gains and losses arising from changes in exchange rates are charged to the statement of activities in the year in which they arise. v) On consolidation, exchange translation on opening reserves in the subsidiary is recognized in other comprehensive income and in the translation reserve in net assets. (f) Cash and cash equivalents. Cash equivalents are short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near maturity date that they present insignificant risk of changes in value. For the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group’s cash management. (g) Financial instruments Initial recognition and measurement Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit or loss (FVTPL). The Group has no financial instruments measured at fair value through OCI or FVTPL. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. Apart from trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value, through profit or loss transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15. For a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Group’s business model for managing financial assets refers to how it manages its financial assets to generate cash flow. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. 31ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date (i.e., the date that the Group commits to purchase or sell the asset). Subsequent measurement of financial assets For the purposes of subsequent measurement, all the Group’s financial assets are classified as financial assets at amortized cost (debt instruments). Financial assets at amortized cost (debt instruments) The Group measures financial assets at amortized cost if both of the following conditions are met: i) the financial asset is held within a business model with the objective to hold financial assets to collect contractual cash flows, and ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortized cost are subsequently measured using the effective interest rate (EIR) method and are subject to impairment. Gains and losses are recognized in the statement of activities and other comprehensive income when the asset is derecognized, modified or impaired. The Group’s financial assets at amortized cost includes trade and other receivables, cash and bank balances, corporate bonds and amounts due from related parties. Subsequent measurement of financial liabilities After initial measurement, financial liabilities are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or account payables. The Group’s financial liabilities include trade and other payables, and balances due to related parties. The Group has not designated any financial liabilities as ‘at fair value through profit or loss’ and does not have any loan or borrowing or hold derivatives. Trade and other payables This is the category most relevant to the Group. After initial recognition, these financial liabilities are subsequently measured at amortized cost using the effective interest rate (EIR) method. Gains and losses are recognized in the statement of activities and other comprehensive income when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of activities and other comprehensive income. Accounts payable represent amounts due to donors, employees, and others for support services and/or materials received prior to year-end but not paid for at the reporting date. i) Accounts payable donors These include amounts payable to donors in respect of any unexpended funds received in advance for restricted grants. ii) Accounts payable partners These include amounts partners have accounted for but whose payments or reimbursements have not been made by the reporting date. iii) Accounts payable others These include all other liabilities ILRI has incurred and has been billed for, which remain unpaid as at the reporting date. Derecognition of financial instruments Financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when: • rights to receive cash flows from the asset have expired; or • the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the assets but has transferred control of the asset. ILRI financial statements For the year ended 31 December 202332 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes Financial liabilities A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in profit or loss. Offsetting Financial assets and financial liabilities are offset, and the net amount reported in the statement of financial position only when there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liability simultaneously. Fair values The fair value of the financial assets and liabilities approximate the carrying amounts shown in the statement of financial position due to their short-term nature. Impairment of financial assets The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The Group considers a financial asset in default when contractual payments are 90 days past the due date. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before considering any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. Classification of financial instruments The table below sets out the Group’s classification of each class of financial assets and liabilities. The amounts in the table are the carrying amounts of the financial instruments at the reporting date   Amortized cost Mandatorily measured at FVTPL Carrying amount At 31 December 2023 USD ‘000 USD ‘000 USD ‘000 Financial assets       Cash and bank balances 41,295 - 41,295 Listed corporate bonds 5,654 - 5,654 Accounts receivable 14,199 - 14,199 Total assets 61,148 - 61,148 Financial liabilities   Accounts payable 37,776 - 37,776 Accruals 992 - 992 Total liabilities 38,768 - 38,768 33ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes   Amortized cost Mandatorily measured at FVTPL Carrying amount At 31 December 2022 USD ‘000 USD ‘000 USD ‘000 Financial assets       Cash and bank balances 42,760 - 42,760 Listed corporate bonds 5,872 - 5,872 Accounts receivable 20,386 - 20,386 Total assets 69,018 - 69,018 Financial liabilities Accounts payable 46,739 - 46,739 Accruals 859 - 859 Total liabilities 47,598 - 47,598 (h) Property and equipment Property and equipment whose full cost exceeds USD3,000 and which ILRI has purchased using unrestricted funds and can be used in the production or supply of goods or services or for administrative services for more than one year are capitalized and stated at acquisition cost less accumulated depreciation and accumulated impairment losses. Acquisition cost includes the direct purchase price and incidental costs such as freight, insurance, installation, and handling charges. Subsequent material expenditure that extends the useful life or enhances the operating efficiency of an item of property and equipment is capitalized. The cost of normal repairs and maintenance of existing property and equipment is recognized as an operating expense in the statement of activities and other comprehensive income. Construction work in progress is capitalized as work in progress but depreciation starts only when the work is complete, and the facility is put into use. All immovable assets constructed or carried on leasehold land donated by host countries have been capitalized as assets of the institute. ILRI has the right to negotiate for extension of leases under the host country agreements upon expiry of the current leases. In accordance with the host country agreements, if the host country agreement is terminated, or the host country does not renew a lease upon expiry, all immovable assets will be disposed of by CGIAR (in consultation with the governments of Ethiopia and Kenya). Gains and losses on disposal of property and equipment are determined by reference to their carrying amount and are accounted for in the Statement of Activities. Farm works 5% Buildings and land improvements 3% (33 years) Laboratory and scientific equipment 10–15% (7–10 years) on an item-by-item basis ICT equipment 33.33% (3 years) Office and household furniture and equipment 20% (5 years) Farm equipment 10% (10 years) Motor vehicles 20% (5 years) Depreciation is calculated on a straight-line basis at annual rates estimated to write off the cost of each item of property and equipment over the estimated term of its useful life. The annual rates used are as follows: Depreciation of acquired assets starts in the month that the assets are placed in operation and continues until the assets are fully depreciated or their use discontinued. Depreciation charge is time-apportioned in the year of disposal of items of property and equipment. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gains and losses on disposal of property and equipment are determined by reference to their carrying amount and are accounted for in the Statement of Activities. Operating lease rentals relating to lease land are amortized over the term of lease. The residual values, useful lives, and methods of depreciation of property, plant, and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate. ILRI financial statements For the year ended 31 December 202334 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes (i) Intangible assets The intangible assets of the institute comprise acquired computer software. The cost of acquisition and installation of computer software is capitalized and amortized over the estimated useful life of the software, usually three years. The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortized over their useful economic lives, usually three years, and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of activities in the expense category consistent with the function of the intangible assets. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of activities when the asset is derecognized. (j) Impairment of non-financial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash generating units (CGU’s) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognized in the statement of activities and other comprehensive income in those expense categories consistent with the function of the impaired asset. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognized. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Such reversal is recognized in the statement of activities and other comprehensive income. (k) Inventories Inventory is carried at the lower of cost and net realizable value. Cost is calculated on a weighted average basis and includes purchase price, freight and other incidental costs. Net realizable value is the price at which the inventory can be realized in the normal course of business after allowing for the costs of the realization The determination of obsolescence or expiration is based on the lower of the manufacturer’s recommendations and documented experience and knowledge of the management. The amount of write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period the write-down or loss occurs. (l) Biological assets Biological assets comprise livestock. Livestock is stated at fair value less point of sale costs. The fair value of livestock is determined based on market prices of livestock of similar age, breed and genetic merit. Also, a minimum selling price is set for young stock to minimize depletion of future stock. Changes in fair value are recognized in the statement of activities and other comprehensive income. (m) Employee benefits i) Defined contribution plan The institute’s contributions are maintained as a defined contribution plan for all categories of staff. Contributions to the defined contribution plan are charged to the statement of activities as incurred. ii) Short-term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognized for amounts expected to be paid if the Group has present legal or constructive obligation to pay this amount as a result of past service provided by employees and obligation can be estimated reliably. 35ILRI financial statements For the year ended 31 December 2023 Organization information Statement of purpose Statement of management responsibilities Statement by the chair of the Board of Trustees Independent auditor’s report Consolidated statement of financial position Financial statements International Livestock Research Institute (ILRI) Notes iii) Termination benefits Termination benefits are expensed at the end of the employee contracts when the Group can no longer withdraw the offer of those benefits. iv) Long-term benefits Full provision is made for benefits payable to employees at the end of their contracts. Provisions are also made in respect of repatriation costs and outstanding leave days accruing to all staff. (n) Net assets Net assets represent the residual interest in the institute’s assets remaining after liabilities have been deducted. (o) Accruals Accruals represent liabilities to pay for goods or services that have been received or supplied but not yet invoiced or formally agreed with suppliers. (p) Provisions Provisions are recognized when the institute has (a) a present legal or constructive obligation because of past events, (b) it is more likely than not that an outflow of resources will be required to settle the obligation and (c) a reliable estimate of the amount can be made. Provisions are measured at the present value of the management’s best estimate of the expenditure required to settle the present obligation at the reporting date. (q) Tax ILRI: The governments of Kenya and Ethiopia have undertaken to exempt ILRI from all local taxes including customs duty on goods and services received by the institute. Consequently, the institute does not account for tax in its financial statements. Kapiti Plains Estate Limited Current income tax Income tax expense is recognized in the statement of activities and other comprehensive income except to the extent that it relates to items recognized directly in equity or other comprehensive income, in which case it is recognized in equity or other comprehensive income. Income tax assets and liabilities for the current period are measured at the amount expected to be recovered from, or paid to, the taxation authorities. Current tax is the amount of income tax payable on the taxable profit for the year determined in accordance with the relevant tax legislation. The current income tax charge is calculated on the basis of the tax rates and tax laws that are enacted or substantively enacted at the reporting date. Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences, except when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a