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Financial report

In 2004 the International Potato Center achieved a net surplus of US$1.1 million. The result exceeded the budget by US$0.7 million, or 163%, increasing the Center’s financial reserves from US$4.5 million to US$5.6 million by the end of 2004.

CIP’s total revenues in 2004 were US$22.7 million, 24 percent greater than 2003 revenues. Total revenues included US$9 million of unrestricted donations and US$13.4 million of restricted donations. At the end of 2004, US$3.6 million of grants approved (15 percent of total revenues) had not been released.

The increase in donations from Canada and United Kingdom and the new contribution from New Zealand helped to expand unrestricted revenues in 2004. In addition, the continued weakening of the US Dollar in 2004 increased CIP’s unrestricted and earmarked revenues by US$0.76 million. CIP’s revenues are received in US Dollars, Euros and in several other currencies, but they are booked in US Dollars.

Accumulated expenditures reached US$21.6 million in 2004, representing a 24% growth with respect to 2003.

Expenditures grew in all categories. Specifically restricted expenditures grew by 36%, due to the success in fund raising during the previous years, thereby expanding project-based contributions. In addition, during the year, steps were taken to improve cost recovery from ongoing and new restricted projects, which resulted in additional resources that contributed to project development and implementation.

CIP’s financial health continued to strengthen during the year. The current ratio grew from 1.4 in 2003 to 1.6 and net working capital measured as the number of days of expenditures excluding depreciation grew from 97 days in 2003 to 99 days in 2004. However, the financial stability index, which measures the number of days of unrestricted net assets, fell from 97 days to 95 days. Financial indicators are within the acceptable range established by the CGIAR providing flexibility to deal with short-term negative effects from unanticipated events.

During the year, 90 new project proposals for US$53.0 million were submitted to donor agencies and 51 were approved for total commitment of US$12.5 million. The average donation approved per project declined from US$0.29 million in 2003 to US$0.25 million in 2004. By the end of the year, the backlog of projects pending approval increased by US$18.6 million to US$51.7 million.

Austere and prudent policies and programmatic growth reduced the share of CIP’s indirect expenses. Following the CGIAR indirect cost ratio guidelines, the indirect cost ratio declined from 13% in 2003 to 12% in 2004. The Center plans to continue exercising prudent policies to strengthen even further CIP’s financial health.

The statement here summarizes CIP’s financial position as of December 2004. A copy of the complete audited financial statements may be requested from the office of the Director General, at CIP headquarters in Lima, Peru.