PASTORALISTS RIGHTS & ADVOCACY NETWORK

AUDITED FINANCIAL STATEMENTS

31ST DECEMBER 2022

General Information 1

Report of the Board of Directors 2-5

Statement of Directors' Responsibilities 6

Report of the Independent Auditors 7-9

Statement of Comprehensive Income 10

Statement of Financial Position 11

Statement of Changes in Equity 12

Cash Flow Statement 13

Notes to the Financial Statements 14 - 19

Wamutu & Associates

Certified Public Accountants
P. O. Box 46335-00100
NAIROBI
Email: audit@[email protected]
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PASTORALISTS RIGHTS & ADVOCACY NETWORK

EXECUTIVE BOARD MEMBERS : Abdikadir Ibrahim Diriye - Chairperson

: Abdullahi Muhumed Yussuf - Secretary
: Abdirahman Maalim - Treasurer
Abdullahi

BOARD MEMBERS : Roble Abdullahi Sheikh - Member

: Mariam Abdinoor Sheikh - Member
: Abdi Gedi Mohamed - Member
:
Abdikadir Ibrahim Diriye - Chairperson
: Abdullahi Muhumed Yussuf - Secretary

REGISTERED OFFICE : 2nd Floor, Orahey Building

Along Wajir-Mandera Road
WAJIR.
P. O. BOX 485-70200
WAJIR
KENYA

PRINCIPAL BANKERS : ABSA Bank Limited

Market Branch

: First Community Bank Limited

Kimathi St. Branch

: Ecobank Kenya Limited

Ecobank Towers Branch

INDEPENDENT AUDITORS : Wamutu & Associates

Certified Public Accountants of Kenya
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PASTORALISTS RIGHTS & ADVOCACY NETWORK

Annual Report of the Board of Directors

The Directors have pleasure in presenting their report together with the audited financial
statements for the year ended 31st December 2022.

INTRODUCTION
ParaNET is a registered civil society organization NGO (OP.218/051/2007/0395/4932) that is
engaged in active advocacy around the attainment and enjoyment of basic human rights among
pastoral communities in Kenya. The organization aims to work with partners including donors,
relevant state agencies, and communities in ensuring that impoverished and traditionally
marginalized pastoralists’ communities do not only access their basic human rights as enshrined in
the relevant laws, but are also fully informed of their rights and responsibilities as citizens.

At the national level, PARANET aims to actively advocate for the integration of pastoralists’ agenda
in the mainstream development process and contribute to efforts geared towards tackling the systemic
marginalization and exclusion of pastoralists’ communities. At the regional/county levels, we ensure
that policies and programs are informed by actual needs of rural communities, and at the grass root
levels, engaged in effectively tackling the rights’ deprivation and social exclusion that pastoralists’
communities have long suffered through dissemination of information, development of advocacy
skills, and active community participation.

Apart from advocacy, we partner with rural communities in positively addressing negative social
cultural norms in support of long-term, sustainable behavior change at the population level and
strengthen community responses to issues through the application of Communication for
Development (C4D) Processes. Such interventions include Social and Behavior Change Processes in
the areas of: Health Interventions, Environmental Awareness, Peace & Conflict Resolution, Girls-
Child Education, Early Marriage and FGM

MISSION

Contributing to the full realization of, and enjoyment of economic, social, cultural and political
rights, by pastoralists’ communities through effective community- based civic education and national
advocacy.

VISION

A progressive pastoralists’ communities that are fully informed about their rights and responsibilities,
and are actively contributing towards the attainment of a modern and prosperous Country.

CORE VALUESUES

- Respect for basic human rights

- Good Governance
- Equality and Equity
- Gender Mainstreaming
- Respect for Diversity
- Enhance the principle of responsible Stewardship, Transparency and Accountability
AREA OF COVERAGE
The Organization currently operates in 6 C o n s t i t u e n c i e s o f W a j i r C o u n t y ( Wajir East,
Wajir West, Wajir North, Wajir South, Eldas and Tarbaj).
 PASTORALISTS RIGHTS & ADVOCACY NETWORK
Annual Report of the Board of Directors
(Continuation)

PLANNED ACTIVITIES FOR NEXT YEAR

ParaNET with financial and technical support from NAMATI, is currently implementing 'Access to
Citizenship Documents project" in Wajir. The project aims to help vulnerable communities in Wajir
get identification and citizenship documents including national ID cards and birth certificates for
children. The Project is geared towards preventing statelessness, upholding human rights, and
ensuring that all eligible individuals have access to citizenship documents and the legal identity they
deserve. The project whose theme is 'know and use the law' utilizes paralegals to empower
communities and facilitate access to citizenship documents thus playing a critical role of addressing
issues related to statelessness and ensuring that individuals can assert their legal rights.
By providing documentation and legal support, it aims to empower those at risk of statelessness to
participate fully in society and enjoy their fundamental rights. The paralegals contribute to this
important process by imparting Legal Knowledge and Guidance. They educate communities on the
law and about their rights and provide guidance on how to navigate bureaucratic procedures
effectively. They also assist individuals in collecting and preparing the necessary documentation for
citizenship applications including birth certificates and national ID cards.
The Paralegals also do Advocacy and Mediation, Community Mobilization and Monitoring and
Reporting on cases of arbitrary denial of citizenship and document such cases, which can be used for
advocacy and policy. They also do capacity Building of local community members, enabling them to
become advocates for their own rights and for the rights of others facing citizenship challenges. The
Paralegals also collect data on statelessness cases, analyze trends, and use this information for
advocacy.
ParaNET other key strategic activities for 2022, categorized in the main thematic areas include;
1. Paralegal Program
2. Awareness and Education,
3. Legal Aid and Advocacy,
4. Equality & Inclusion,
5. Monitoring and Reporting,
6. Capacity Building and Training

INDEPENDENT AUDITORS

The auditors, Wamutu & Associates, Certified Public Accountants, were appointed as the
organisation auditors on 28th February 2021 and have expressed their willingness to
continue in office.

Nairobi By Order of the Board

Country Director
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PASTORALISTS RIGHTS & ADVOCACY NETWORK

Statement of Directors' Responsibilities

The directors are required to prepare financial statements for each financial year, which give a true
and fair view of the financial position of the organization as at the end of the financial year and of
its surplus and deficit for that year. The directors are also required to ensure that the organization
keeps proper accounting records that: (a) show and explain the transactions of the organization (b)
disclose, with reasonable accuracy, the financial position of the organization; and (c) enable the
organization to ensure that every financial statement required to be prepared complies with the
requirements of the NGO Act.

The directors accept responsibility for the preparation and presentation of these financial
statements in accordance with the International Financial Reporting Standard for Small and
Medium-sized Entities and in the manner required by the NGO Act. They also accept
responsibility for:

i) Designing, implementing and maintaining such internal control as they determine necessary to
enable the presentation of financial statements that are free from material misstatements,
whether due to fraud or error:

ii) Selecting suitable accounting policies and applying them consistently; and
iii) Making accounting estimates and judgements that are reasonable in the circumstances.
Having made an assessment of the organization's liability to continue as a going concern, the
directors are not aware of any material uncertainties related to events or conditions that may cast
doubt upon the organization's ability to continue as a going concern.

The directors acknowledge that the independent audit of the financial statements does not relieve
them of their responsibilities.

Approved by the board of directors on 31st December, 2022and signed on its behalf by:-

Chairperson Director
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Report of the Independent Auditors

To the Members of PASTORALISTS RIGHTS & ADVOCACY NETWORK

Report of the audit of the financial statements

Opinion
We have audited the financial statements of PASTORALISTS RIGHTS & ADVOCACY
NETWORK, which comprise the statement of financial position as at 31 December 2022, and the
statement of comprehensive income, statement of changes in equity and statement of cash flows for the
year then ended, and notes to the financial statements, including a summary of significant accounting
policies and other explanatory notes.

In our opinion, the financial statements present fairly, in all material respects, the financial position of
PASTORALISTS RIGHTS & ADVOCACY NETWORK as at December 31, 2022 and its financial
performance and cash flows for the year then ended in accordance with International Financial
Reporting Standard for Small and Medium-sized Entities and the requirements of the Non-
Governmental Organisations Co-ordination Act.

Basis of opinion
We conducted our audit in accordance with International Standards on Auditing. Our responsibilities
under those standards are further described in the Auditors’ Responsibilities for the Audit of the
financial statements section of our report. We are independent of the organization in accordance with
the International Ethics Standards Board for Accountants Code of Ethics for Professional
Accountants (Parts A and B) (IESBA Code) and other independence requirements applicable to
performing audits of financial statements in Kenya. We have fulfilled our other ethical
responsibilities in accordance with the IESBA Code and in accordance with other ethical
requirements applicable to performing audits in Kenya. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion

Other Information
The directors are responsible for the other information. The other information comprises the
corporate information, report of the board of directors and statistical information and other
disclosures, but does not include the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, 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.

Independent Member Firm of

A worldwide association of independent accounting firms

and business advisers (www.dfk.com).
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PASTORALISTS RIGHTS & ADVOCACY NETWORK
PASTORALISTS RIGHTS & ADVOCACY NETWORK
Report of the
Report of Independent Auditors
the Independent Auditors
To the Members of PASTORALISTS RIGHTS & ADVOCACY NETWORK
To the Members of PASTORALISTS RIGHTS & ADVOCACY NETWORK
Responsibilities of the Directors
The directors are responsible for the preparation and fair presentation of the financial statements in
accordance with International Financial Reporting Standards and the requirements of the Kenyan
Non-Governmental Co-ordination Act and for such internal control as the directors 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 organization’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the
organization or to cease operations, or have no realistic alternative but to do so.

Auditors’ 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 auditors’ 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 International Standards on Auditing will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:-
● Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.

● Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the organization’s internal control.
● Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
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PASTORALISTS
PASTORALISTS RIGHTS &RIGHTS & ADVOCACY
ADVOCACY NETWORKNETWORK
Report of the Independent Auditors
Report of the Independent Auditors
To the Members of PASTORALISTS
To the Members ofRIGHTS & ADVOCACY NETWORK
PASTORALISTS
RIGHTS & ADVOCACY NETWORK
● Conclude on the appropriateness of management’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 organization’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the financial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the organization to cease to continue as a going concern.

● 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.

The engagement partner responsible for the audit resulting in this independent auditors'
report is CPA John Wamutu Wachira (P. 3937).

Nairobi, Kenya

Wamutu & Associates

Certified Public Accountants of Kenya
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PASTORALISTS RIGHTS & ADVOCACY NETWORK

Statement of Comprehensive Income

for the year ended 31st December 2022

2021 2022
INCOME Note Kshs Kshs

Grant income 2 12,800,391 24, 460,500

Other income 3 1,080,000 1,000,000
13,880,000 25,460,500
EXPENDITURE
Staff costs 4 6,240,000 12,480,000
Administrative expenses 5 1,926,000 3,852,000
Establishment expenses 6 488,000 976,900
Program expenses 7 4,346,391 8,083,493
Total expenditure 13,000,391 25,392,393
SURPLUS FOR THE YEAR Kshs 879,609 68,107
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PASTORALISTS RIGHTS & ADVOCACY NETWORK

Statement of Financial Position

as at 31st December 2022

2021 2022
ASSETS Note Kshs Kshs

Non-current assets
Property and equipment 9 12,733,006 15,249,380

Current assets
Inventories 10 900 900
Accounts receivable 11 37,948,073 36,487,909
Cash and bank balances 12 7,622,802 19,288,256
45,571,775 55,777,065
Current liabilities
Payables and accruals 13 4,000,402 14,593,818
Net current assets 41,571,373 41,183,247

TOTAL ASSETS Kshs 54,304,379 56,432,625

FUNDS
Capital fund 49,146,811 51,663,185
Unrestricted net assets 5,157,568 4,769,442

TOTAL FUNDS Kshs 54,304,379 56,432,625

The financial statements on pages 10 to 19 were approved by the board of directors on

31st December, 2022 and signed on their behalf by:

Chairperson Director
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PASTORALISTS RIGHTS & ADVOCACY NETWORK

Statement of Changes in Equity

as at 31st December 2022

Unrestricted Capital PARANET

net assets fund funds Total
Kshs Kshs Kshs Kshs

At 1 January 2021 30,368,612 51,156,211.47 36,413,805 117,938,628

Fixed assets additions (3,667,970) 3,667,970 - -

Depreciation - (3,160,996) - (3,160,996.3)

Deficit for the year (21,931,200) - - (21,931,200)

AT 31 DECEMBER 2021 Kshs 4,769,441 51,663,185 36,413,805 92,846,432

At 1 January 2022 4,769,441 51,663,185 36,413,805 92,846,432

Fixed assets additions (120,500) 120,500 - -

Depreciation - (2,636,874) - (2,636,874)

Deficit for the year 508,627 - - 508,627

AT 31 DECEMBER 2022 Kshs 5,157,568 49,146,811 36,413,805 90,718,185

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PASTORALISTS RIGHTS & ADVOCACY NETWORK

Cash Flow Statement

for the year ended 31st December 2022

CASH FLOWS (USED IN)/GENERATED FROM 2021 2022

OPERATING ACTIVITIES Kshs Kshs

Surplus/(Deficit) for the year 508,627 (21,931,200)

Changes in operating assets and liabilities

Decrease in inventories - 127
(Increase)/decrease in receivables and prepayments (1,460,164) 2,696,428
(Decrease)/ increase in payables (1,593,416) 3,085,096
Cash flows (used)/ generated from operations (1,544,954) 5,087,451
CASH FLOWS USED IN INVESTING
ACTIVITIES
Purchase of property, plant and equipment (120,500) (1,667,970)
Net cash used in investing activities (120,500) (4,667,970)
NET (DECREASE)/INCREASE IN CASH AND
CASH EQUIVALENTS (1,665,454) 4,419,481
Balance at beginning of the year(fixed assets) 9,288,256 4,868,775

CASH AND CASH EQUIVALENTS AT

END OF THE YEAR (Note 12) Kshs 7,622,802 9,288,256
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PASTORALISTS RIGHTS & ADVOCACY NETWORK
Notes to the Financial Statements
for the year ended 31st December 2022
1.0 ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are
set out below. These policies have been consistently applied to all years presented, unless
otherwise stated.

1.1 Basis of preparation

These financial statements have been prepared in compliance with the International Financial
Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) issued by the
International Accounting Standards Board. The measurement basis used is the historical cost
basis except where otherwise stated in the accounting policies below.

1.2 Revenue recognition

Grants, remittances, interest on loans and other income are credited into the respective
accounts upon receipt.

1.3 Property and equipment

Items of property and equipment, are measured at cost less accumulated depreciation and any
accumulated impairment losses.

Depreciation is charged so as to allocate the cost of assets less their residual value over their
estimated useful lives, using the reducing balance method. The following annual rates are used
for the depreciation of property and equipment:

Land Nil
Buildings 2.5%
Motor cycles 25%
Computers 30%
Furniture and fittings 12.5%
If there is an indication that there has been a significant change in depreciation rate, useful life
or residual value of an asset, the depreciation of that asset is revised prospectively to reflect the
new expectations.

On disposal, the difference between the net disposal proceeds and the carrying amount of the
item is recognised in the statement of comprehensive income.

1.4 Capital expenditure

The cost of additional fixed assets is expensed in the year of purchase. A capital fund is created
to represent the organization's equity held in fixed assets.
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PASTORALISTS RIGHTS & ADVOCACY NETWORK
Notes to the Financial Statements
for the year ended 31st December 2022.../(Contd)
1.5 Receivables
Receivables are stated at their nominal value as reduced by appropriate allowance for estimated
irrecoverable amount. An estimate is made for doubtful receivables based on a review of all
outstanding amounts at the year end. Bad debts are written off after all efforts of recovery have
been exhausted.

1.6 Payables
Payables are recognized at fair values.

1.7 Cash and cash equivalents

For the purpose of the cash flow statement, cash and cash equivalents comprise cash in hand and
deposits held at call with bank.

1.8 Translation of foreign currencies

All transactions in foreign currencies are initially recorded in Kenya Shillings using the spot rate at
the date of the transaction. Foreign currency monetary items at the balance sheet date are translated
using the closing rate. All exchange differences arising on settlement or translation are recognized
in statement of comprehensive income.

1.9 Comparatives
Where necessary, comparative figures have been adjusted to conform with changes in
presentation in the current year.
2021 2022
2.0 PROGRAM FUNDING Kshs Kshs
ParaNET (NAMATI) Kshs 12,880,39 24,460,500
1

3.0 OTHER INCOME Kshs Kshs

Programme income
Other income 1,080,000 1,000,000

Kshs 1,080,000 1,000,000

4.0 STAFF COSTS Kshs Kshs

Salaries and wages 5,593,641 11,187,282
Staff welfare, training and development 646,359 1,292,718

Kshs 6,240,000 12,480,000

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PASTORALISTS RIGHTS & ADVOCACY NETWORK
Notes to the Financial Statements
for the year ended 31st December
2022…/(Contd)
2021 2022
5.0 ADMINSTRATION EXPENSES Kshs Kshs
Bank commissions and fees 459,068 259,925
Board of Directors expenses 80,754 517,840
Insurance 2,381,070 638,322
Provision for bad debts write off - 7,798,134
Contract services: audit fees 727,320 727,320
Contract services: IT services 19,000 257,500
Contract services: security 143,813 327,169
Contract services: regions audit 417,890 330,467
Other contractual services 902,003 226,204
Contract services: legal fees 66,314 18,000
Books, subscriptions and reference 16,846 77,120
Community welfare - 86,900
Postage and mailing services 522,213 387,440
Printing and stationery 503,709 681,592
Miscellaneous expenses - 131,067
Travelling: other permits - 15,000
Kshs 6,240,000 12,480,000

6.0 ESTABLISHMENT EXPENSES Kshs Kshs

Rental 514,933 1,819,873
Furniture and equipment repairs 405,026 1,523,880
Building repairs 422,300 12,069
Building utilities 583,741 496,178
Kshs 1,926,000 3,852,000

7.0 PROGRAMME EXPENSES Kshs Kshs

Research 166,650 2,054,107
Community development and training 398,622 740,115
Office supplies 285,734 1,620,508
Telephone, postage and internet 432,694 1,127,179
Travel: conference, conventions and meetings 609,785 652,275
Travel: lodging 730,840 201,230
Travel: meals 1,019,771 414,243
Travelling and permits 702,295 1,273,922
Kshs 4,346,391 8,083,493
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PASTORALISTS RIGHTS & ADVOCACY NETWORK

Notes to the financial Statements

for the year ended 31st December 2022

9.0 PROPERTY AND EQUIPMENT Furniture &

Land Buildings Motorcycles equipment Computers Total
COST OR VALUATION Kshs Kshs Kshs Kshs Kshs Kshs
At 1 January 2021 7,174,020 42,079,731 3,669,000 8,023,879 6,402,820 63,681,480
Additions - - - 21,500 99,000 120,500
7,174,02 42,079,73 3,669,000 8,045,379 6,501,820 63,801,98
0 1 0
DEPRECIATION
At 1 January 2021 - 5,981,723 1,487,156 3,988,346 4,229,039 12,525,268
Charge for the year - 902,450 545,461 507,129 681,834 2,636,875
- 6,884,173 2,032,617 4,495,475 4,910,874 15,162,14
3
NET BOOK VALUE
AT 31 DECEMBER 2022 Kshs 7,174,02 35,195,55 1,636,383 3,549,904 1,590,947 49,146,81
0 7 1
NET BOOK VALUE
AT 31 DECEMBER 2021 Kshs 7,174,02 36,098,00 2,181,844 4,035,533 2,173,781 51,663,18
0 7 5
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PASTORALISTS RIGHTS & ADVOCACY NETWORK

Notes to the financial Statements

for the year ended 31st December 2022

2021 2022
10.0 INVENTORIES Kshs Kshs

Stationaries Kshs 900 900

11.0 ACCOUNTS RECEIVABLE Kshs Kshs

Due 36,413,805 36,413,805
Loans due from pastoralists 31,902 47,310
Amount due from pastoralists - 7,798,134
Provision for bad debts - (7,798,134)
Prepaid Insurance 1,502,366 26,794

Kshs 37,948,073 36,487,909

(i) This relates to monies advanced to PARANET a related party entity and is refundable to
PASTORALISTS RIGHTS & ADVOCACY NETWORK.
2021 2022
12.0 CASH AND BANK BALANCES Kshs Kshs

Cash at bank Kshs 7,622,802 19,288,256

13.0 PAYABLES AND ACCRUALS Kshs Kshs

Capitalists 2,262,768 12,902,910
Payroll liabilities 1,055,077 1,120,916
Consultants 727,320 727,320
Support cost (57,398) (716,667)
Networking 12,635 -
Accounts payable - 559,339
Kshs 4,000,402 14,593,818

14.0 REGISTRATION
PASTORALISTS RIGHTS & ADVOCACY NETWORK was registered on 06th December
2007, under The Non-Governmental Organizations Co-ordinations (NGO) Act.
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PASTORALISTS RIGHTS & ADVOCACY NETWORK

Notes to the financial Statements

for the year ended 31st December 2022

15.0 TAXATION
No provision for corporate taxation has been made in these financial statements. The
organisation qualifies for exemption from Kenyan corporate tax under the provisions of
Paragraph 10 of the First Schedule of Income Tax Act, Cap 470 (Laws of Kenya). Further,
grants and donations are not subject to taxation in Kenya.

16.0 EVENTS AFTER REPORTING PERIOD

The directors are not aware of any matters arising since the end of the year that significantly
affect the operations of the organization.

16.0 CURRENCY
These financial statements are presented in Kenya Shillings (Kshs).