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ANNUAL REPORT PAKISTAN Annual Report 2015 1
BRAC is a development organisation dedicated to alleviating poverty by empowering the poor. Our journey began in 1972 in the newly sovereign Bangladesh, and over the course of our evolution, we have been playing a role of recognising and tackling the many different realities of poverty. BRAC believes that poverty is a system and its underlying causes are manifold and interlinked. Some of these linkages are obvious, for example, a day’s wage forgone because of illness or resources lost to a natural disaster. Others play a more indirect role in perpetuating poverty, such as lack of awareness about laws and rights can lead not only to outright exploitation, but also encourage a lack of accountability on the part of the state to cater to its most vulnerable citizens. In order for the poor to come out of poverty, they must have the tools to fight it across all fronts. We have, therefore, developed support services in the areas of human rights and social empowerment, education and health, economic empowerment and enterprise development, livelihood training, environmental sustainability and disaster preparedness. Gender equality, respect for the environment and inclusivity are themes crosscutting all of our activities. To ensure that we are always learning and that our work is always relevant, we have put in place training, research and monitoring systems across all our activities and financial checks and balances in the form of audits. But what we really do is best portrayed in the true life stories of those who make the real changes.
A world free from all forms of exploitation and discrimination where everyone has the opportunity to realise their potential.
To empower people and communities in situation of poverty, illiteracy, disease and social injustice. Our interventions aim to achieve large-scale, positive changes through economic and social programmes that enable women and men to realise their potential.
Integrity Innovation Inclusiveness Effectiveness
Annual Report 2015 1
CONTENTS
01
Our Vision, Mission and Values
03
Chairperson’s Statement
04
BRAC International Governance and Management
06 EDUCATION 08
HEALTH
10
MICROFINANCE
12
POVERTY REDUCTION
14
Support Programmes
16 Governance 16 Management 16
Development Partners
17
Country Map
18
BRAC Across the World
20 Financials
CHAIRPERSON’S STATEMENT It gives me great pleasure to present the annual report and the audited financial statements for the year ending 31 December 2015. Although Pakistan has made considerable progress in achieving the Millennium Development Goals, a significant number of Pakistanis still live below the poverty line. BRAC began its microfinance programme in Pakistan in 2007 with the aim of aiding the government to reduce poverty and enhance the incomes of people living in poverty by providing easy access to institutional lending. This year, USD 21.2 million has been disbursed among 54,021 borrowers, which has led to income generation and improved livelihoods for the clients. Although Pakistan’s literacy rate has remained steady over the last two years, it failed to meet the MDG target of 88 per cent. Inequalities in the provincial literacy rate and gender disparity are also prevalent. To help the government in these areas, BRAC has set up community schools which provide quality and cost-effective education in a girl-friendly environment. In 2015, 350 new schools were opened in Rahim Yar Khan of the Punjab province, ensuring the enrolment of 10,500 out-of -school children. Even though maternal and under-five mortality rates have steadily declined in recent years, they still remain high, reflecting a poor child survival rate in the early years and poor antenatal and post-natal health coverage. Pakistan also has an acute shortage of trained health workers. BRAC utilises its cadre of trained community health volunteers to address this problem. 1,343 community health promoters and 120 community health workers
received training in 2015. As part of capacity-building efforts, our community health promoters in Sahiwal monitored Oral Polio Vaccinations for 45,000 children during a mass polio vaccination campaign. To combat Vitamin A deficiency, which is a leading cause of blindness, severe infections in children and can be life threatening, we ensured 21,720 children received vitamin A drops during mother-and-child week. We are implementing a programme of livelihood employment, enterprise development and institutional development in the Lasbela district with financial support from the Pakistan Poverty Alleviation Fund to address extreme poverty. 200 assets were transferred and skills training was provided to 600 community members this year. 73 per cent of whom were female. I would like to take this opportunity to express my sincere thanks to the Pakistan government and our development partners for their continued support as we strive to create greater value in our services to contribute to the progress and prosperity of Pakistan. I also thank the members of the governing board and advisory committee, whose leadership and foresight assist in strengthening our engagement in Pakistan. I am grateful too, for the dedication of our staff in Pakistan who ensure that BRAC’s programmes continue to flourish.
Sir Fazle Hasan Abed, KCMG Founder and Chairperson
Annual Report 2015 3
GOVERNANCE AND MANAGEMENT GOVERNANCE THE LEGAL STATUS OF BRAC INTERNATIONAL BRAC International is registered
as Stichting BRAC International
under the laws of the Netherlands, with its seat in The Hague. All of
BRAC International’s development entities operate under this umbrella. The programmes include health, education, agriculture, livelihoods, targeting the ultra poor, human rights and legal services. BRAC International Holdings BV is a wholly owned subsidiary of Stichting BRAC International and was incorporated in 2010. BRAC International’s microfinance programmes, social enterprises and investment companies are consolidated under this wing. The social programmes currently supporting
the enterprises include
seed production, feed mills, training centres and tissue culture labs. BRAC International has introduced programmes in Afghanistan, Haiti, Pakistan, Uganda, Tanzania, South Sudan, Sierra Leone, Liberia, the Philippines, Myanmar and Nepal. It is legally registered with the relevant authorities in
each of these countries.
GOVERNING BODY BRAC International is governed by a governing body. The governing body is elected from amongst distinguished individuals with a sound reputation in the sector of social development, businesses or professions who have demonstrated their personal commitment to pro-poor causes. These individuals are elected in the governing body to bring their diverse skills, knowledge and experience to the governance of BRAC International. At present, there are 10 members in the governing body. The governing body usually meets four times a year, in accordance with the rules
of Stichting BRAC International. The composition of the present governing body of Stichting BRAC International is as follows:
Ms Shabana Azmi
Mr Shafiqul Hassan (Quais) Ms Parveen Mahmud
Ms Irene Zubaida Khan Dr Fawzia Rasheed The composition of the present governing body of BRAC International Holdings BV is as follows: Chairperson: Sir Fazle Hasan Abed, KCMG Members: Ms Sylvia Borren
Dr Muhammad Musa Ms Parveen Mahmud Mr Hans Eskes Details about the roles of the governing body are available in the Deed of Incorporation of Stichting BRAC International and BRAC International Holdings BV.
FINANCE AND AUDIT COMMITTEE Composition of the present finance and audit committee is as follows: 1. Ms Parveen Mahmud, Chair 2. Dr Muhammad Musa, Member
3. Ms Sylvia Borren, Member
4. Mr Faruque Ahmed, Member 5. Mr SN Kairy, Secretary of the Committee 6. Mr Hans Eskes The primary function of the finance and audit committee is to assist the governing board in fulfilling its responsibilities on: • The financial reporting and budgeting processes • The system of internal controls and risk assessment • The compliance with legal and regulatory requirements • The qualifications, independence, and performance of the external auditors
• The qualifications, independence, and performance of the internal audit function
Members of the governing body
LOCAL BOARDS
Chairperson: Sir Fazle Hasan Abed, KCMG Members: Ahmed Mushtaque Raza Chowdhury Dr Muhammad Musa Ms Sylvia Borren
Dr Debapriyo Bhattacharya
Each country’s entities have a local board. We have aimed to pursue microfinance and development activities through separate entities in most of our countries. The local board members are appointed by Stichting BRAC International’s board. The business of the local entities is managed by these local boards. Further details of the roles of the
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local boards are available in the respective incorporation documents of these entities.
ADVISORY COMMITTEE In 2015, BRAC International decided to source suitable candidates in its countries of operation to form an advisory committee. This was in part driven by the need to strengthen governance, support advocacy at the national level and enhance credibility with donors whose expectations around governance included setting up boards at the country level which comprise largely of members who are preferably nationals. The committee members provide the country leadership with advice and support on standards and policies, overseeing the development and implementation of programmes. They are expected to advise on key external developments and trends nationally, and promote BRAC’s mission. That means developing and maintaining effective and strategic working relationships with key stakeholders and civil society partners in the countries through information sharing and relevant advocacy on behalf of BRAC.
ACCOUNTABILITY AND TRANSPARENCY The internal audit department normally conducts audits at all our cost centres on a sample basis. All departments or units in which irregularities are detected through the course of regular internal audit are then audited. Audits take place at least once a year and twice or more in locations and on programmes where a closer watch is warranted. External audit of Stichting BRAC International, BRAC International Holdings BV and all of our legal entities are undertaken annually. Financial transparency is ensured by BRAC International’s finance and accounts division, which prepares financial statements following the International Financial Reporting Standards and the laws of relevant countries.
MANAGEMENT There is a clear-cut policy regarding the authority of each level of staff at all levels of BRAC International’s management. Staff members are equipped and empowered to act as effective managers. This is clearly set out in BRAC international’s human resources policies and procedures and the Table of Authority. Staff are empowered to take decisions at relevant levels and areas of management, including recruitment, deployment, capacity building, transfer, leave, financial transactions, purchase and procurement. These are described in detail to staff at the area, regional and country office levels.
The Human rights policies and procedures also contain all policies relating to staff salary, benefits, recruitment and promotion procedures, and payments. Every staff member receives orientation on the Human rights policy procedures. The Stichting board appoints officers, namely the executive director, directors, group chief financial officer, chief people officer and finance director to manage affairs from the secretariat in Dhaka. BRAC International’s management policies clearly define the authority of each level of staff. Appropriate staff are empowered to take decisions at the area, regional, country levels and the head office. Procedural manuals and policy documents are available to staff. Day-today decisions are taken by area managers, regional coordinators and programme heads as appropriate. Larger policy decisions involve country representatives, executive director, senior directors, group chief financial officer, finance director and chief people officer, and in particular cases, the executive director, the chairperson and the governing body.
FINANCIAL MANAGEMENT Matters relating to finance and accounts from branch offices to the country head offices are supervised and controlled by the country finance and accounts department. The branch offices prepare project-wise monthly cash requisitions, which are sent to the area/regional offices. The area/ regional offices check and monitor the accuracy of the requisition and transmit them to the country office. The country office disburses funds as per the requisitions after checking. The area and branch offices send monthly expenditure statements along with bank statements to the country office’s finance and accounts department. The country office then consolidates all the expenditure statements, prepares monthly financial statements and reports to BRAC International’s head office (herein after secretariat) and donors, as required. A comprehensive accounting manual and statement of standard operating procedures guides the finance and accounts personnel to prepare the financial statements and reports in accordance with the accounting standards. It also guides in running the financial activities in a systematic and efficient way. In consultation with different levels of stakeholders, the country office prepares project-wise budgets, which are then sent to the secretariat. The secretariat reviews and performs analytical procedures on the project budgets of its country offices, which are recommended by the finance director and finally approved by the group chief financial officer. The secretariat consolidates all BRAC International country financials and produces the BRAC International budget and consolidated audited financials. The budget and the consolidations are submitted to the BRAC International governing body for approval.
INFORMATION TECHNOLOGY The country IT department provides data
to the country management information system and finance teams by managing financial and programme-related information. This data is used by country and head office personnel to prepare various financial and managerial reports
and to monitor project progress. The IT team based in the secretariat also provides support relating to software update, troubleshooting and Enterprise Resource Planning development. The country IT team is reportable to the respective country management and the worldwide operations are centrally administered by the secretariat.
HUMAN RESOURCE MANAGEMENT BRAC International’s human resources and training department caters to about 7,110 employees across 10 operating countries. The team strengthens BRAC International’s human resources capacity, visibility, and practices through strategic interventions and new initiatives. Following are some of the year’s highlights: Key recruitment: Significant changes to
the upper management at BRAC International occurred in 2015 with the joining of new regional directors for the Africa and Asia regions, new chief people officer and research director, three new country representatives of Afghanistan, Liberia and Sierra Leone, and for the first time, a resident representative fundraiser in the Netherlands office. BRAC International established an emergency response coordination team with new emergency response coordinators joining in Uganda, Tanzania, Pakistan and South Sudan. More countries will recruit emergency response coordinators in 2016. In keeping with BRAC’s vision towards localisation of operations, local heads of department have joined in multiple countries. Some of these include local heads of finance, audit, monitoring, human resource development, research, agriculture and fundraising. The first chief executive officer of BRAC Uganda’s microfinance is planning its transformation to a microfinance deposittaking institution in 2016.
Performance management system:
To promote a high-performance culture, the performance management system has cascaded down to all employees, from country management to field staff. This has clear guidelines provided for more focused performance management, discussing performance-related rewards and developing low performers through a performance improvement process. Employees have become more attuned to key performance indicator-based achievements and rewards are linked to both performance and demonstration of BRAC values in the workplace.
Human resources management capacity: In 2015, country-level HR
departments were strengthened with improved automation of HR processes for better service delivery. The department aims to maximise
job satisfaction, enhance transparency and ensure procedural justice for all employees in accordance with the human resources policies and procedures manual. The manual provides all employees with an understanding of new policies, due benefits and the processes required to fulfil them. The human resources development further ensures employees’ commitment to BRAC International’s 15 policies under the code of conduct, particularly in regards to child protection and gender equality.
Staff motivation schemes: Full scholarships for higher studies are provided annually to high potential and committed staff to boost local capacity development. In 2015, four female employees were given full scholarships from BRAC to pursue postgraduate studies locally and overseas. In addition, seven female staff received the prestigious BRAC Values Award for their outstanding display of ethics and professionalism, after a rigorous screening of nominations from the entire BRAC workforce. Organisational development: All representative job roles have been determined and placed within the organisational hierarchy. Roles have been evaluated using the Hay Method and accordingly, employees are being placed on a new salary structure. This year, all Bangladeshi staff on secondment underwent the re-grading process which took place at BRAC’s headquarters. In the next phase, new country-specific salary structures, organograms and role-wise grading will come into practice for local employees next year. Enterprise resource planning: A HR
module in the new system has been designed and piloted in-house to streamline HR processes, enhance staff data management and analytic capacity. It will be implemented in phases across BRAC International, starting with BRAC South Sudan in the first quarter of 2016.
Training and development: With the vision of streamlining staff development activities, BRAC International HRD organised BRAC’s first ever inclusion and diversity campaign to promote a culture of diversity, inclusion, gender sensitivity and BRAC values among its workforce. In October 2015, 16 employees from 10 operating countries participated in a 20-day training of trainers workshop at BRAC headquarters in Dhaka.
Training received on four modules:
A group of 16 trainers received training on BRAC values, inclusion and diversity, gender awareness and people leadership programme. They will develop a further pool of trainers who will execute this training programme throughout the country in 2016 to promote the ‘one BRAC’ culture. In addition to classroombased training, the trainers also visited BRAC’s field operations in Bangladesh and met the chairperson and BRAC International’s senior management. World Diversity Day was celebrated for the first time in May 2015, where employees took part together in cultural programmes, sports tournaments, and cooking events. This will continue to be an annual event to promote harmony and inclusiveness within the
workplace.
Annual Report 2015 5
EDUCATION
BRAC’s education programme is the largest secular private education system in the world, reaching seven countries in total. At the pre-primary level, we target underprivileged children to prepare them for mainstream primary school entry. BRAC schools are designed to give a second chance at learning to children who have been left out of the formal education system due to extreme poverty, violence, displacement or discrimination. Our non-formal approach complements the mainstream school system with innovative teaching methods and materials. At the secondary level, we provide scholarships, need-based training and student mentoring to improve mainstream education.
P rov i d i ng qualit y OPPORTUNITIES BRAC Pakistan’s education programme supports the government to increase enrolment and minimise gender disparity in schools. It aims to improve the quality of education by setting up primary schools within communities, ensuring girl-friendly environments and rigorous teacher training.
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BRAC schools are facilitating a high-quality and cost-effective education model among out-of-school children from poor and hardto-reach communities. The model provides training to female teachers at education centres and government schools, preparing them as para-professional teachers to deliver quality education. The programme includes co-curricular activities for students free of cost. Parents and communities are encouraged to be closely involved in the schools’ management committees. The integrated approach in BRAC’s education programme involves a wide
range of key stakeholders, including community members, local, provincial or central government education officials, local NGOs, research and funding organisations. This ensures community participation and accountability.
programme H i gh l i ghts 350 new schools opened in Rahim Yar
Khan in Punjab province this year, ensuring the enrolment of 10,500 out-of-school children. 500 new schools began operating in the Sindh province. 1,552 teachers were trained on delivering quality education.
A total of 1,250 BRAC primary schools are operational in Sindh and Punjab. Out of these, 900 BRAC primary schools are set across Karachi, Khairpur and Qamber Shahdadkot in Sindh. These schools cater to the educational needs of 37,491 children in their localities.
A contract has been signed with the Sindh Education Foundation to open 500 new schools and enrol 16,666 students in 3 districts starting next year.
special needs. She helped me with the registration process and I was overjoyed to be able to join school.
am a source of inspiration for them. They make me want to work harder and do better in school. I am working towards my dream of becoming a teacher.
CASE STORY Brac schools care
I am Suleiman Azad, a ten-year-old student of BRAC primary school in the Afridi colony in Karachi. I was born with syndactyly, a medical condition where my fingers and toes are joined together. My father is a fruit seller and my mother is a housewife. I come from a humble background, but it is my parents’ greatest wish that my siblings and I complete our education. The community I live in is very conservative and they do not see education as a priority. Girls’ education is seen as taboo. Most parents want their children to work and bring in money so that they can contribute as early as possible to the family’s finances. My parents are different. When BRAC started community-based schools in my area, we all knew about it, because the programme organiser conducted a door-to-door survey. When the schools opened, my parents visited one of the BRAC offices and spoke to a programme organiser about my admission. They informed BRAC about my medical condition and the programme organiser assured them that BRAC schools give great emphasis on caring for children with
I am now in class 3 and one of the best students at my school. My teacher is very encouraging and proud of my progress. I have many friends at school who tell me I
Annual Report 2015 7
HEALTH
BRAC’s health programme combines preventive, promotive, curative and rehabilitative services. We aim to improve reproductive, maternal, adolescent, neonatal, and child healthcare. We work to raise the nutritional status of children and mothers, reduce vulnerability to communicable diseases, and combat non communicable diseases. Through our low-cost essential healthcare services, we serve the disadvantaged, socially-excluded and hard-to-reach populations. BRAC’s approach utilises trained frontline community health promoters, creating an effective bridge between underserved communities and formal healthcare systems. We ensure community empowerment and mobilisation to bring cost-effective basic healthcare services to the doorsteps of clients. We work in collaboration with the government, NGOs, donors, private sectors, academic institutions and local governance to bring the most needed healthcare services to communities.
Door - to - d oor hea lthcare serv i ce BRAC’s health programme in Pakistan aims to increase the usage of preventive and curative services at the community level. The programme is targeted particularly to help women and children living in poverty through community education and mobilisation. A unique feature of BRAC’s health programme is its cadre of female health volunteers, known as community health promoters (CHPs). BRAC recognises the importance of health volunteers
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to overcome critical human resource limitations in the health sector, particular in rural areas. CHPs are given basic training to enable them to provide door-to-door health education, treatment of basic health problems, collection of health information, sales of medicine and health commodities, and to make referrals to nearby government health centres and facilities. CHPs also provide information on family planning and nutrition, methods of birth control and contraception. They keep track of the immunisation status of children, their vitamin A intake and they treat common diseases. They help to raise awareness about safe water and sanitation practices. They provide free counselling on the importance of antenatal and postnatal
care, identification of danger signs during pregnancy and the next recommended steps. CHPs also provide counselling on the benefits of birth preparedness and how to manage complications that may arise during pregnancy. BRAC is currently operating its health programme in Pakpattan, Sahiwal and Sukkur districts through 14 branch offices. Currently, 1,343 CHPs provide basic health counselling to a population of over 1 million.
programme H i gh l i ghts 130,050 families were provided with essential healthcare (EHC) services in the Sahiwal and Pakpattan districts of Punjab and 79,950 families in the Sukkur district of Sindh. 216,057 people participated in 20,611 health meetings.
and child health with 350,000 women of child-bearing age. ChildLife Foundation provided USD 147,447 to deliver essential healthcare services to 6,000 families in the urban slum of Shireen Jinnah Colony in Karachi.
The EHC programme received USD 200,000 from Johnson and Johnson to expand the programme’s coverage and to raise awareness on maternal, neonatal
The CHPs of Sahiwal provided 45,000 children with oral polio vaccines during a mass polio vaccination campaign. A total of 21,720 children received vitamin A drops
community health promoters trained
Referrals by community health promoters
during mother and child week. 1,343 CHPs and 120 community health workers received basic training on health and nutrition, safe water and sanitary latrines, family planning, immunisation, treatment for common diseases, maternal and child healthcare.
community health promoters trained
Referrals by community health promoters
community health promoters trained
Referrals by community health promoters
CASE STORY reaching out to more lives every day I am Rubina Javeed. I live with my husband and three children in a village in Sahiwal in Punjab. My husband works as a day labourer and earns USD 2-3 (PKR 210315) per day. Our community has never had proper sanitary conditions or safe drinking water, so we regularly suffered from diarrhoea, cholera and other waterborne diseases. I wanted to help my community but, as I was only educated up to secondary level, I did not have the skills to make any real contribution. This changed however, when a community health worker from BRAC visited my home and spoke about BRAC’s health projects in my area. I wanted to be part of the project, so I spoke to the programme organiser of the nearest BRAC office. I was selected as a health volunteer, and received 12 days of basic training on maternal and child health, nutrition, immunisation, family planning, safe water and sanitation practices, communicable disease control and basic
curative care for common illnesses. As a volunteer, I was able to earn a living to support my family, and raise awareness about common health practices. I gained the trust and respect of my community members and built a good team of volunteers to support my work. I was soon promoted to a health worker, to supervise the activities of nine community health promoters. So far, I have served 150 households as a volunteer and 1,500 as a community health worker. I have conducted
more than 140 community health forums. I convinced conservative families to send women in their families to hospitals for childbirth. So far, I have referred 21 institutionalised deliveries to safe hospitals. I have also referred 12 tuberculosis patients for care and 121 pregnant women to receive antenatal care. Two more villages were recently allocated to me, to supervise their immunisation processes. The trust that I have earned through my work continually inspires me to reach out to more lives around me.
Annual Report 2015 9
MICROFINANCE
Over the last four decades, BRAC microfinance has grown to become one of the world’s largest providers of financial services to the marginalised, who have limited access to formal financial institutions. It provides the necessary tools to enable the financial inclusion of millions of people across seven countries. Through its innovative, client-focused and sustainable approach, BRAC continues to show that microfinance can have a powerful impact on the lives of the marginalised. Our small enterprise loans are offered to entrepreneurs who seek to enlarge their businesses. The BRAC microfinance programme is a critical component of our holistic approach to supporting livelihoods.
Inst i t u t i ona l l en d i ng at y o u r d oorstep BRAC’s microfinance programme in Pakistan aims to increase the income of people living in poverty by providing access to credit to invest in micro and small enterprises. Through 4,706 communitybased village organisations in the country, the programme serves poor households with three main products: microloans, small enterprise loans and agriculture loans. The programme imparts financial awareness to women living in poverty to promote gender equity by enabling women to earn an income alongside their male counterparts.
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Microloans BRAC’s microfinance programme is operating in 68 branch offices, of which 47 are located in urban and 21 in rural areas of the country. Microloans are provided to women living in poverty, to enable them to invest in income-generating assets. BRAC Pakistan has moved from a weekly collection system to a monthy system, based on borrowers’ feedback.
Small enterprise loanS BRAC is successfully providing small enterprise loans through 46 branch offices and 14 area offices in Pakistan. These loans enable business owners to expand their enterprises and create new employment opportunities. They are available to both women and men, with a monthly repayment
scheme. Some members of BRAC’s microloan products become eligible for small enterprise loans as their business expands and their investments change. BRAC Pakistan is piloting collection through mobile money in the country, which will be scaled up in all branches after evaluating the pilot.
Agriculture loanS BRAC has developed customised microfinance services to meet the needs of small and marginal farmers by providing access to credit. These services are a part of BRAC’s efforts to support the Pakistan government in stabilising and improving the agricultural economy to achieve food security and increase rural employment.
programme H i gh l i ghts MicroloanS
Small enterprise loanS
Agriculture loanS
USD 18.15 million was disbursed in micro loans. At the end of 2015, 50,107
USD 2.08 million was disbursed in small enterprise loans. At the end of 2015, 1,156 clients were availing small enterprise programme facilities. The portfolio outstanding has increased by 17 per cent, with an average loan size of USD 1,888.
Approximately USD 1 million was disbursed through 16 branch offices to 2,758 borrowers. The portfolio increased by 47 per cent.
clients were availing microloan facilities. The principal outstanding portfolio has increased by 2.5 per cent over the previous year.
Microloans
Small enterprise loans
Agriculture loans
50,107 clients
1,156 clients
2,758 clients
USD 18.15 million disbursed
USD 2.08 million disbursed
USD 1 million disbursed
CASE STORY A HAPPY GROCER I am Asia Kanwal, from Wahidabad, a rural locality in Multan, in the Punjab province. My husband used to be a driver in the Pakistan railway. After his retirement, he received USD 4,533 (PRK 4,76,000), and we used this provident fund money to purchase a small house. Once we bought it we did not have enough money left. One of my sons dropped out of school, while the other moved out with his wife to support his own family. My daughter suffers from a mental illness and is unable to manage on her own. During this time, an officer of BRAC Pakistan’s microfinance programme approached me. The officer motivated me to acquire a loan to start a business. I started attending meetings regularly and learned how to invest and maintain finances. After several meetings, I took my first loan of USD 114 (PKR 12,000). With this amount, I set up a small grocery shop in my house.
I regularly attend the village organisation meetings hosted by BRAC. The meetings provide borrowers with the knowledge to properly utilise and manage loans. My business has grown, and now I earn USD 285 (PRK 30,000) monthly. When I have enough in savings, I plan to open a cosmetics shop, where I can provide employment to young girls from my community to help them make a living for themselves. It has not been an easy journey, but I was recently able to take a
second loan of USD 286 (PKR 30,000) to expand my grocery shop. BRAC has given me the strength to take risks for my business and contribute to my community.
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PROGRAMME FOR POVERTY REDUCTION
BRAC’s ultra poor programme focuses on improving the socio-economic situation of those at the base of the economic pyramid. Living in extreme poverty, this group struggles to meet the minimal dietary requirements and faces difficulty to reach mainstream antipoverty programmes like microfinance. To help this population at least get on the bottom rung of the economic ladder, our process includes a deliberate sequencing of interventions including asset grants, skill development and personalised healthcare support.
T arget i ng e x treme povert y i n B a l u ch i stan
The programme addresses the pressing needs of the extreme poor population of Baluchistan to develop an enabling socioeconomic environment for those who are severely affected by seasonal income crises, acute food insecurity, malnutrition and scarcity of water and sanitation.
BRAC Pakistan is implementing the programme for poverty reduction (PPR) and the livelihood employment and enterprise development-institutional development (LEED-ID) programme in Lasbela district of Balochistan, with financial support from Pakistan Poverty Alleviation Fund (PPAF).
The programme support package includes asset transfers, enterprise development training, technical and vocational training and strengthening community institutions to enhance their productivity and reduce their vulnerability to seasonal changes. Economic, social and technical support is
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provided to the members. An integrated approach has been taken by PPR to enable a supporting environment for socioeconomic development, through physical infrastructure, including water supply schemes, solar energy schemes and roads, education and health support alongside livelihood generation support.
programme H i gh l i ghts 735 households were surveyed for the programme. 200 members were given assets and 600 members were given enterprise skills training. 33 village
organisations and 90 community resource persons were trained on diverse social issues.
600
735
200
household surveyed
members given assets
33
90
village organisations
members given assets
members given enterprise skills training
CASE STORY setting up his own milk enterprise I am Muhammad Shafi from Daryani Goth, a small village in Tehsil Bela. I am 36 years old. I have three daughters and two sons, and I am the sole earner in my family. I used to work as a day labourer, but the lack of work limited my chances of a decent income. I never had the opportunity to go to school or learn the basic skills needed to start a business. My wife is a skilled artisan, but she cannot contribute financially to the family as most of her time is spent looking after the children. There is also a lack of a suitable market in our community to sell her products. I was not able to send our children to school and both my wife and I feared, that like me, they too would be deprived of a formal education. BRAC surveyed my locality and I was identified under the livelihood enhancement programme as an ultra poor member. They enlisted my name in their livelihood programme and I received livelihood assistance and enterprise development training, which helped me choose an enterprise that could work for me.
I established a milk supply enterprise. I was given a motorbike and a grant of USD 477 (50,000 PRK) and linked with a common interest group of milk producers near my village. Every day, I collect milk from them and sell it in the city.
By charging a profit margin, I earn a steady income. Having a motorbike has also made it easier for me to take my children to school, as the school is located quite far from my village.
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SUPPORT PROGRAMMES FINANCE AND ACCOUNTS UNIT The finance and accounts unit of BRAC Pakistan plays a crucial role in improving programme efficiency. The unit enhances the decision-making capability of management and promotes transparency and accountability. The unit produces periodic progress reports for donors and coordinates with statutory auditors for the annual audit under local and international regulations. The unit successfully migrated to the new enterprise resource planning software in 2015, and successfully completed its statutory audit for 2014. The unit also improved relationship with donors and financial institutions.
INTERNAL AUDIT DEPARTMENT The internal audit department (IAD) is an independent support programme providing objective assurance and consulting services to add value and improve BRAC International’s operations. It helps the organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluating and improving the effectiveness of control and governance. Internal audit is a catalyst for improving the effectiveness and efficiency of programmes by providing insights and recommendations based on data analysis. With a commitment to integrity and accountability, the department provides value to governing bodies and executive management as an objective source of independent opinion. The department also assists management by providing risk-based audit reports for accelerating efficiency and effectiveness. These reports are based on the internal audit charter, the terms of reference for the audit review committee, and the internal audit manual approved by the finance and audit committee. In 2015, an external quality assurance review was conducted as per requirement of the institute of internal auditors standards. A major achievement of the department was the implementation of BRAC internal audit management system software, for audit management, report writing and archiving. The department implemented 89 percent of their year plans
14 Annual Report 2015
and reviewed 203 cost centres across all programmes in the same year. In 2016, the programme will implement a full-fledged risk-based audit and system audit. An information systems audit will also be initiated, incorporating information systems audit and control association guidelines and best practices.
exposures as well as in aggregate across all programmes and risk types. On a country level, the bi-annual assessment of overall risk management was done and the summary was discussed in the executive risk management committee meetings on 22 April and 4 November 2015, chaired by the executive director, BRAC International.
COMPLIANCE SERVICES Compliance services are committed to achieving specific compliance goals by ensuring individual job responsibilities and assessing all programmes’ standing with organisational goals. In 2015, the coverage of the internal compliance questionnaire (ICQ) was expanded to all areas and regional levels of country programme management. This was only for branch-level of management and was reported quarterly in the previous year. The ICQ ‘quick review’ mechanism was initiated in this period, with a view to strengthening the compliance culture by ensuring accountability and transparency. Compliance related to regulatory and donor affairs was reviewed and reported biannually for each of the BI countries. To further strengthen the established compliance environment, plans have been made for more review of the self compliance activities (e.g. ICQ audit) in the coming year.
RISK MANAGEMENT SERVICES For BRAC International and its country operations, risk management is at the core of the operating structure. Risk management services seek to limit adverse variations in programme activities and outcome by managing risk exposures within agreed levels of risk appetite. Risk management processes in BI have continued to prove their effectiveness throughout 2015 with developing a group risk register. Executive management remained closely involved in important risk management initiatives, which have focused on ensuring appropriate levels of funds, and effectively managing risk portfolios. Responsibility and accountability for risk management is implemented at all levels of operations within the country. Risks are controlled at the level of individual
HUMAN RESOURCES AND TRAINING DEPARTMENT The human resources and training department (HRD) of BRAC Pakistan oversees 844 local and expatriate employees dispersed across the country. Among them, 55 per cent are female staff and 98 per cent of the total workforce is comprised of local employees. The department aims to maximise job satisfaction, enhance transparency and ensure procedural justice for all employees in accordance with the human resources policies and procedures (HRPP) manual. The HRPP provides all employees with an understanding of new policies, due benefits and the processes required to fulfil them. HRD further ensures employees’ commitment to BRAC International’s 15 policies under the code of conduct, particularly in regards to child protection and gender equality. With the recruitment of new heads of finance, audit, and monitoring, there has been a significant increase of local representation in key senior management positions, in keeping with BRAC’s vision towards localisation of operations. This year, a new emergency response coordination department was established, with a local emergency response coordinator being part of the wider network of BRAC International’s emergency response team. To promote a high-performance culture, the performance management system has cascaded down to all employees, from country management to field staff. The system has clear guidelines provided for a more focused performance management, discussing performance-related rewards and improving low performers through a new performance improvement process. Employees have become more attuned
to KPI-based achievements and rewards are linked to both performance and demonstration of BRAC values in the workplace. With the vision of streamlining staff development activities, BRAC International HRD organised BRAC’s first ever inclusion and diversity campaign. This campaign was introduced to promote a culture of diversity, inclusion, gender sensitivity and BRAC values among its workforce. In October 2015, 16 employees from 10 operating countries participated in a 20-day training of trainers workshop at BRAC headquarters in Dhaka. Among the participants, the HR manager of BRAC Pakistan HRD received training on four modules: BRAC values, inclusion and diversity, gender awareness and people leadership programme. They will develop a further pool of trainers who will execute this mandatory training throughout the country in 2016 to promote the ‘One BRAC’ culture. In addition to classroom-based training, the trainers also visited BRAC’s field operations in Bangladesh and met with BRAC’s chairperson and BRAC International’s senior management. In 2015, one female employee received the prestigious BRAC values award for her outstanding display of ethics and professionalism. The selection came after a rigorous screening of nominations from the entire BRAC Pakistan workforce.
MONITORING DEPARTMENT BRAC’s monitoring department in Pakistan is an internal mechanism to ensure quality, accountability, and transparency of programmes. It ensures regular collection and analysis of information to assist timely decision-making, and provides the basis for evaluation and learning. The monitoring department is mandated to critically evaluate the process and progress of BRAC’s interventions in addition to regularly collecting and disseminating information to country management and the head office.
out internal assessments, evaluations and research support. The team investigates administrative issues, abuse of discretion, corruption, financial misappropriation and discrimination as per the requirement of the programme and management. It also prepares quarterly progress reports, the monthly MIS report and facilitates the preparation of the annual report. These functions help BRAC Pakistan ensure accountability in the use of resources, provide a clear basis for decision-making, and offer practical lessons from experiences in the development of further interventions. There are seven staff members currently working in the monitoring department.
INFORMATION TECHNOLOGY UNIT The information technology (IT) unit provides an effective and efficient IT infrastructure and level of automation within BRAC Pakistan. The IT unit meets the needs for both internal and external purposes by implementing management information system (MIS) and financial information system (FIS) reporting. The unit maintains and updates the software of credit and savings management systems for microfinance and accounting of all programmes. The credit and savings management system identifies future business trends and liaises with all programmes in gathering and compiling business-related information. In 2015, the IT unit implemented the new enterprise resource planning software in BRAC Pakistan. The unit supported all activities, from training sessions, to month closing and report submission complications. The unit worked to initiate branchless banking for collecting installments. The unit is also working to establish credit information bureau’s reporting requirements on loan disbursement to borrowers, and their repayment behaviour.
COMMUNICATIONS DEPARTMENT The communications department is focused on raising the office’s profile through effective positioning, by using diverse mediums, channels and platforms. A comprehensive and integrated communications process is being established with all of BRAC Pakistan’s donors, stakeholders and BRAC’s counterparts in line with BRAC’s vision. Throughout the year, BRAC Pakistan communications effectively showcased BRAC’s achievements in various forums, conferences and exhibitions at the national level. With technical support from BRAC International, the department acted as a bridge in carrying out a coordinated communications effort within the country. The department also successfully coordinated and documented special meetings and important visits. As part of capacity building, communication training was held in Dhaka, Bangladesh on exposure and insights into modern communication techniques and approaches. The BRAC Pakistan communication focal participated in the training during May.
PROCUREMENT UNIT The procurement unit manages the acquisition of goods and services needed by other programmes, and works to deliver them within the expected time. The unit is managed by the procurement committee, and has successfully implemented its procurement guideline and procedures effectively in the education, microfinance, and health programmes. The procurement unit strives to get the best value for money through timely planning and the provision of requisite goods and services for successful programme operations in field offices.
The monitoring department performs several essential management functions, which include monitoring and reporting on inputs and outputs achieved, carrying
Annual Report 2015 15
GOVERNANCE B R A C PA K I S TA N BRAC PAKISTAN COMPANY LIMITED BY GUARANTEE Local Board Members
Country Advisory Committee Members Shoaib Sultan Khan Dr Fareeha Zafar Dr Dure Samin Akram
Dr A M R Chowdhury (Chair) Mr Faruque Ahmed Mr S N Kairy
MANAGEMENT Muzaffar Uddin Served as Country Representative & CEO BRAC Pakistan from 2013-2016 Sher Zaman Present Country Representative & CEO BRAC Pakistan Md Shehan Kabir Acting Programme Manager Microfinance Shahzad Nisar County Head of Accounts Md Jaidul Hoque Manager Field Operations, Education Saifullah Mengal Project Manager, Programme for Poverty Reduction
Dr Huma Haider Programme Coordinator Health Athmar Arbab Country Head of Monitoring Muhammad Arslan, ACA Country Head of Internal Audit Aisha Faheem Manager Human Resource Zilay Huma Country Communication Coordinator
DEVELOPMENT PARTNERS We are grateful to our development partners for their continued support for our work:
16 Annual Report 2015
BRAC IN PAKISTAN
Annual Report 2015 17
BRAC ACROSS THE WORLD
18 Annual Report 2015
Annual Report 2015 19
FINANCIALS 1 Net Income BRAC Pakistan registered net profit of USD 263,219 against profit of USD 376,986 in 2014. Service charge income increased by 5% in 2015. 2 Operating expenses Total operating expense for the year was USD 8,036,119 as against USD 7,656,423 in 2014 showing an increase of 5 %. The Increase is due to incremental salary and program expenses. 3 Provisions for Impairment losses This year amount charged for impairment on loans was USD 314,013 as against USD 254,481 in 2014, showing increase of 23% which is consistent with the PAR30.Total reserve as against impairment in 2015 was USD 538,330 as against USD 432,536 in 2014, representing 4.3% of Gross portfolio. Portfolio At Risk (PAR>30) is 2.79% as against 2.19% in 2014. 4 Financial Position In 2015, BRAC Pakistan’s total assets increased by 8.3 % to USD 13,342,599. 5 Grants and Utilization Grants received amounting to USD 3,448,914 as against USD 2,292,487 in 2014. Grant utilized in projects for the year were USD 3,758,399 (USD 3,545,409 in 2014). Out of the total expenses majority is expensed in Education sector with support from DFID.
Programme Cost by Nature of Program 2015
Expenses
USD
2014 %
USD
%
Microfinance
4,349,334
54%
4,314,875
56%
Education
3,072,438
38%
2,663,272
35%
TUP
441,987
6%
589,559
8%
Health & others
172,360
2%
88,717
1%
8,036,119
100%
7,656,423
100%
Total
20 Annual Report 2015
2015 2%
6%
38 % 54 %
Microfinance Education
54%
38%
TUP
6%
Health & others
2%
Value Added Statements A value added statement provides a detail account of total value addition and the distribution of value created by the organization. BRAC Pakistan contributes positively to overall economic development by empowering the poor people (specially female) through micro-credit, employees through the payment of salaries and allowances and by assisting the local regulatory authorities through paying taxes and of course keeping in mind of organization’s growth.
2015
Figures in USD
Amount
2014 %
Amount
%
Value added: Services charges on loans
4,645,646
108%
4,426,955
114%
Grant income
3,785,229
88%
3,515,476
90%
Interest on bank deposits
13,729
0%
338
0%
Other income
65,766
2%
70,507
2%
(3,891,522)
-90%
(3,862,689)
-99%
(314,013)
-7%
(254,481)
-7%
4,304,835
100%
3,896,106
100%
Operating exp. Loan prov. (doubtful losses) Total value added
Annual Report 2015 21
2015
Figures in USD
2014
Amount
%
Amount
%
Value Distributed: Employees Salary and allowances
2,978,765
69%
2,766,904
71%
60,280
1%
46,495
1%
734,785
17%
663,608
17%
Retained income
413,971
10%
310,358
8%
Depreciation
117,034
3%
108,741
3%
4,304,835
100%
3,896,106
100%
Local Authorities Taxes Creditors Interest Growth
Total value distributed
Value Added
Value Distributed -2 %
3% 10 %
-31 %
37 %
17 % 69 % 1%
0% 0% 30 % Services charges on loans
Other Income
Salary and allowances
Retained income
Grant income
Operating exp.
Taxes
Depreciation
Interest on bank deposits
Loan prov. (doubtful losses)
Interest
22 Annual Report 2015
Five Year Performance Review Figures in USD
2015
2014
2013
2012
2011
8,510,370
8,013,276
6,175,932
4,829,563
4,947,182
474,251
356,853
49,845
(854,336)
(909,042)
Total Asset
13,342,599
12,322,682
11,430,107
10,698,883
10,746,864
Loans to Customers (net)
10,209,920
9,941,283
6,546,049
6,322,014
8,357,434
1,660,429
1,528,918
3,852,342
3,817,206
1,748,786
3.55%
2.90%
0.44%
-7.80%
-8.50%
94%
95%
99%
117%
118%
Total borrowers
54,021
58,389
56,359
68,192
97,547
PAR>30
2.79%
2.19%
5.52%
8.31%
5.33%
Income Statement Operating Income Net Profit/(Loss) before tax Financial Position
Cash at Bank Returns and ratio Return on Asset Cost to Income Operational Statistics
Last Five Years Income Vs Expenses (In ‘000 USD) 9000
Income
8000
Expenses
7000 6000 5000 4000 3000 2000 1000 0 2015
2014
2013
2012
2011
Annual Report 2015 23
BRAC Pakistan financial statements For the year ended 31 December 2015
24 Annual Report 2015
Telephone : Fax: Website:
KPMG Taseer Hadi & Co. Chartered Acountants Sixth Floor, State Life Building No. 5 Jinnah avenue, Blue Area Islamabad, Pakistan
+92 (51) 282 3558 +92 (51) 282 5956 +92 (51) 282 2671 www.kpmg.com.pk
Auditors’ Report to the Members of BRAC Pakistan We have audited the annexed balance sheet of BRAC Pakistan (“the Company”) as at 31 December 2014 and the related income and expenditure statement, statement of comprehensive income, statement of changes in reserves and funds and cash flow statement together with the notes forming part thereof, for the year then ended and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit. It is the responsibility of the Company’s management to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordicance, 1984. Our responsibility is to express an opinion on these statements based on our audit. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the above said statements. An audit also includes assessing the accounting policies and significant estimates made by management, as well as, evaluating the overall presentation of the financial statements. We believe that out audit provides a reasonable basis for our opinion and, after due verification, we reprot that: a)
in our opinion, proper books of account have been kept by the Company as required by the Companies Ordinance, 1984;
b)
in our opinion:
i) the balance sheet and income and expenditure statement together with the notes thereon have been drawn up in conformity with the Comapines Ordinance, 1984, and are in agreement with the books of account and are further in accordance with accounting policies consistently applied except for the changes as stated in note 3.1 with which we concur;
ii) the expenditure incurred during the year was for the purpose of the Company’s business; and
iii) the business conducted, investments made and the expenditure incurred during the year were in accordance with the objects of the Company;
c)
in our opinion and to the best of our information and according to the explanations given to us, the balance sheet, income and expenditure statement, statement of comprehensive income, cash flow statement and statement of changes in reserves and funds together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan, and, give the information required by the Companies Ordinance, 1984, in the manner so required and respectively give a true and fair view of the state of the Company’s affairs as at 31 December 2014 and of the surplus, its cash flows and changes in reserves and funds for the year then ended; and
d)
in out opinion no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980).
We draw attention to: -
Note 1.2 to the financial statements, which indicate that the Company has applied to the Securities and Exchange Commission of Pakistan (SECP) for renewal of license under section 42(4) of the Companies Ordinance, 1984.
-
Note 1.3 to the financial statements which indicates that pursuant to ammendments in Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 and Non-Banking Finance Companies and Notified Entities regulations, 2008, the Company is required to obtain license for micro finance operations. The Company is in the process of filling applications for obtaining license under the said rules and regulations.
-
Note 7.1 to the financial statements, which explains that based on negotiations with the original donor, the management is confident of recoverability of receivable of Rs. 45.27 million from Education Fund for Sindh (“EFS”).
Our opinion is not qualified in respect of above matters.
Islamabad 31 March 2016
KPMG Taseer Hadi & Co. Chartered Accoutants Engagement Partner: Riaz Pesnani KPMG Taseer Hadi & Co., a Partnership firm registered in Pakistan and a member firm of the KPMG network of independent member firms affiliated with KPMG Internantional Cooperative ("KPMG International"), a Swiss entry.
Annual Report 2015 25
BRAC Pakistan Balance Sheet As at 31 December 2015 2015 2014 Note PKR USD PKR USD (Note 2.5) (Note 2.5) NON-CURRENT ASSETS Property and equipment 4 32,465,509 309,963 36,380,784 362,070 Intangible Assets 5 14,293,195 136,464 - Logn term deposit 750,000 7,161 -
47,508,704 453,588
36,380,784 362,070
CURRENT ASSETS Stock of pass book 499,711 4,771 279,431 2,781 Microcredit receivables, secured - net 6 1,069,386,956 10,209,920 998,900,176 9,941,283 Advances - - 229,874 2,288 Deposits, short term prepayments and other receivables 7 80,161,234 765,334 37,888,297 377,073 Accrued interest and service charges 8 25,070,995 239,364 10,878,884 108,269 Advance tax - net 9 962,833 9,193 - Cash and bank balances 10 173,913,297 1,660,429 153,625,649 1,528,918 1,349,995,031 12,889,011 1,201,802,311 11,960,612 TOTAL ASSETS
1,397,503,735
13,342,599
1,238,183,095
12,322,682
RESERVES AND LIABILITIES FUNDS AND RESERVES Accumulated deficit (235,579,264) (2,848,934) (267,952,768) (3,236,569) General fund balances 11 381,263,000 4,089,251 381,263,000 4,089,251 Convenience translation reserve 2.5 - 150,591 - 275,007 145,683,736 1,390,908 113,310,232 1,127,689 NON-CURRENT LIABILITIES Long term loans 12 421,195,600 4,021,344 144,300,000 1,436,107 Deferred grant 13 23,199,578 221,497 24,356,901 242,405 Deferred liabilities 14 55,477,324 529,667 38,656,880 384,722 499,872,502 4,772,508 207,313,781 2,063,234 CURRENT LIABILITIES Payable to related parties 15 181,449,883 1,732,384 110,863,304 1,103,337 Accrued and other liabilities 16 8,422,666 80,416 10,607,411 105,567 Short term loans 17 130,229,443 1,243,359 313,574,755 3,120,769 Restricted grant 18 41,541,497 396,616 21,372,408 212,703 Current portion of long term loans 12 381,896,400 3,646,137 440,600,000 4,384,952 Interest accrued on loans 8,407,608 80,271 20,392,940 202,955 Taxation - net 9 - - 148,264 1,476 751,947,497 7,179,183 917,559,082 9,131,759 TOTAL FUNDS AND RESERVES AND LIABILITIES 1,397,503,735 13,342,599 1,238,183,095 12,322,682 CONTENGENCIES AND COMMITMENTS 19 The annexed notes an integral part of these financial statements.
Director Finance Director
Chief Executive Officer
26 Annual Report 2015
BRAC Pakistan Income and Expenditure Statement For the year ended 31 December 2015
2015 2014 Note PKR USD PKR USD (Note 2.5) (Note 2.5) INCOME Service charges on microcredit receivables 476,875,609 4,645,646 447,653,661 4,426,955 Grant income 18 379,704,300 3,699,019 350,161,054 3,462,827 Deferred grant recognized as income 13 8,849,461 86,210 5,323,864 52,649 Admission fee from group members 3,615,970 35,226 4,427,340 43,783 Interest on bank deposits 1,410,320 13,729 34,192 338 Other income 20 3,134,891 30,540 2,702,313 26,724 873,589,551 8,510,370 810,302,424 8,013,276 EXPENDITURE Administrative and program expenses 21 (718,397,569) (6,998,514) (673,505,991) (6,660,461) Provision against microcredit receivables 6.2 (32,233,480) (314,013) (25,733,098) (254,481) Service charges - written off (3,708,556) (36,128) (3,205,425) (31,699) Exchange (loss) (1,772,045) (17,263) (4,222,014) (41,753) Financial charges 22 (76,213,214) (742,457) (67,551,051) (668,029) (832,324,864) (8,036,119) (774,217,579) (7,656,423) Surplus / (deficit) of income over expenditure for the year before taxation 41,264,687 474,251 36,084,845 356,853 Provision for taxation - current - prior
9 9
Surplus/ (deficit) of income over expenditure for the year after taxation
(5,138,252) (50,056) (1,049,537) (10,224)
(4,520,810) (180,784)
(44,707) (1,788)
(6,187,789)
(60,280)
(4,701,594)
(46,495)
35,076,898
413,971
31,383,251
310,358
The annexed notes an integral part of these financial statements.
Director Finance Director
Chief Executive Officer
Annual Report 2015 27
BRAC Pakistan Statement of Comprehensive Income For the year ended 31 December 2015 2015 2014 Note PKR USD PKR USD (Note 2.5) (Note 2.5) Surplus of income over expenditure for the year 35,076,898 413,971 31,383,251 310,358 Items that will not be reclassified to income and expenditure statement Experience adjustments on staff retirement benefits (2,703,394) (26,336) 5,802,911 57,386 Effect of convenience translation 2.5 - (124,416) - 9,242 Other Comprehensive income for the year (2,703,394) (150,752) 5,802,911 66,628 Total comprehensive income for the year The annexed notes an integral part of these financial statements.
32,373,504
37,186,162
263,219
Director Finance Director
Chief Executive Officer
28 Annual Report 2015
376,986
BRAC Pakistan Statement of Changes in Reserves and Funds For the year ended 31 December 2015 Note Accumulated deficit Fund balance PKR USD PKR USD (Note 2.5) (Note 2.5)
Convenience translation reserve USD PKR (Note 2.5)
Total USD (Note 2.5)
Opening balance (305,138,930) (3,604,313) 278,883,000 3,089,251 265,765 (26,255,930) (249,297) Surplus of income over expenditure for the year 31,383,251 310,358 - - - 31,383,251 310,358 Experience adjustments on staff retirement benefits 5,802,911 57,386 - - - 5,802,911 57,386 Effect of convenience translation
2.5
-
-
-
-
9,242
-
9,242
Total comprehensive income for the year 37,186,162 367,744 - - 9,242 37,186,162 376,986 Other changes in fund Capital receipts from BRAC Bangladesh
1,000,000
-
102,380,000
1,000,000
As at 31 December 2014 (267,952,768) (3,236,569)
381,263,000 4,089,251
275,007
113,310,232
1,127,689
As at 1 January 2015 Surplus of income over expenditure for the year
381,263,000 4,089,251
275,007
113,310,232
1,127,689
35,076,898
413,971
11
-
-
(267,952,768) (3,236,569) 35,076,898
413,971
102,380,000
-
-
-
Experience adjustments on staff retirement benefits (2,703,394) (26,336) - - - (2,703,394) (26,336) Effect of convenience translation Total comprehensive income for the year As at 31 December 2015
-
-
32,373,504
387,635
(235,579,264) (2,848,934)
-
-
(124,416)
-
-
381,263,000 4,089,251
-
(124,416)
(124,416)
32,373,504
263,219
150,591
145,683,736
1,390,908
The annexed notes an integral part of these financial statements.
Director Finance Director
Chief Executive Officer
Annual Report 2015 29
BRAC Pakistan Cash Flow Statement For the year ended 31 December 2015 2015 2014 Note PKR USD PKR USD (Note 2.5) (Note 2.5) CASH FLOWS FROM OPERATING ACTIVITIES 25 (312,647,377) (2,973,503) (325,608,682) (3,226,678) BEFORE WORKING CAPITAL CHANGES Working capital changes: (increase) / Decrease in current assets Stock of pass book (220,280) (1,990) (46,255) (568) Microcredit receivables - net (83,410,240) (374,431) (298,557,975) (3,311,500) Advances 219,874 2,195 4,525,842 42,867 Increase long term deposit 750,000 (7,306) - Deposits and prepayments (42,272,942) (388,261) 16,817,498 142,352 (126,423,588) (769,793) (277,260,890) (3,126,849) Decrease / (increase) in current liabilities Accrued and other liabilities (2,184,745) (25,151) (3,517,671) (28,549) Payable to related parties 70,586,579 629,047 21,696,170 256,706 68,401,834 603,896 18,178,499 228,157 (370,669,131) (3,139,400) (584,691,073) (6,125,370) Interest paid (87,411,057) (734,785) (63,088,771) (616,157) Payment in respect of staff gratuity scheme (6,722,674) (65,491) (7,501,074) (74,180) Interest and service charges received 464,092,818 4,528,280 446,846,309 4,414,327 Taxes paid (7,298,880) (71,105) (8,699,620) (86,033) Net cash used in operating activities (8,008,930) 517,499 (217,134,229) (2,487,412) CASH FLOWS FROM INVESTING ACTIVITIES Net cash used in investing activities: Purchase of property and equipment - net of deferred grant (9,768,519) (92,487) (7,620,566) (145,174) Purchase of intangible assets (17,117,599) (162,068) - - (26,886,118) (254,555) (7,620,566) (145,174) CASH FLOWS FROM FINANCING ACTIVITIES (Decrease)/Increase in restricted grant 20,169,089 (183,913) (95,756,166) 324,184 Equity funds received during the year - - 102,380,000 1,000,000 Long term loans received during the year 602,652,000 5,870,940 250,000,000 3,997,595 Long term loan repaid during the year (384,460,000) (3,745,348) (339,350,000) (2,201,115) Short term loans received during the year 17 618,211,748 6,022,521 860,298,555 8,507,699 Short term loans repaid during the year 17 (803,910,995) (7,831,573) (803,862,688) (7,949,591) Net cash generated from financing activities 52,661,842 132,627 (26,290,299) 3,678,772 (Decrease)/increase in cash and cash equivalents 17,766,794 395,571 (251,045,094) 1,046,186 Cash and cash equivalent at beginning of the year 153,625,649 1,528,918 405,728,635 3,852,342 Exchange (gain)/loss on foreign currency bank accounts 2,520,854 24,558 (1,057,892) (10,462) Effect of convenience translation - (288,618) - (3,359,148) Cash and cash equivalent at end of the year
10 173,913,297
1,660,429
153,625,649
the annexed notes an integral part of these financial statements.
Director Finance
30 Annual Report 2015
Chief Executive Officer
Director
1,528,918
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 1
STATUS AND OPERATIONS
BRAC Pakistan (“the Company”) was registered in Pakistan on 4 February 2008 as a public company with liability limited by guarantee, under section 42 of the Companies Ordinance, 1984. The registered office of the Company is located at plot No. 5, street 9, G-8/2, Islamabad, Pakistan. Prior to its registration, the Company was operating as a branch of BRAC Bangladesh in Pakistan. Upon conversion, the net liabilities of the Pakistan Branch of BRAC International (Bangladesh) were transferred to the Company on 04 February 2008.The principal activity of the Company is to undertake programs associated with socio-economic development in Pakistan, particularly in the field of micro-financing, health, education and poverty alleviation. 1.2
The Company has applied to the Securities and Exchange Commission of Pakistan (SECP) for renewal of license under section 42(4) of the Companies Ordinance, 1984 and renewal is under process by the SECP on account of clearance from Ministry of Interior.
1.3
Persuant to ammendmants in Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 and Non-Banking Finance Companies and Notified Entities Regulations, 2008, the Company is required to apply to obtain license for micro finance operations. The company is in process of filing applications for obtaining license under the said rules and regulations.
2.
BASIS OF PREPARATION
2.1
Statement of compliance
2.2
These financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standard Board (IASB) as are notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail. Basis of measurement
2.3
These financial statements have been prepared under the historical cost convention except for staff retirement gratuity and staff self insurance which are carried at present value of defined benefit obligations. Functional and presentation currency
2.4
Items included in these financial statements are measured using the currency of the primary economic environment in which the Company operates. The financial statements of the Company are presented in Pak Rupees, which is the Company’s functional and presentation currency. Amounts presented have been rounded off to the nearest Rupees. The figures in USD are presented for information purpose only (refer note 2.5) Significant estimates
The preparation of financial statements in conformity with the approved accounting standards requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which estimates are 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’s about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is discussed in the ensuing paragraphs :
2.4.1 Property and equipment
The Company reviews the useful lives and residual value of property and equipment on a regular basis. Any change in estimates in future years might affect the carrying amounts of the respective items of property, and equipment with a corresponding effect on the depreciation charge and impairment. 2.4.2 Provisions
The Company reviews the contingencies and other potential liabilities on a regular basis and appropriate amount of provision is made as and when necessary.
Annual Report 2015 31
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 2.4.3 Impairment The carrying amounts of the Company’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment loss. If any such indication exists, recoverable amount is estimated in order to determine the extent of the impairment loss, if any. Impairment loss is recorded on judgmental basis, for which provision may differ in the future years based on the actual experience. 2.4.4 Staff gratuity scheme Staff gratuity is provided for all eligible employees of the Company. Calculations in this respect require assumptions to be made of future outcomes, the principal ones being in respect of increase in remuneration and the discount rate used to convert future cash flows to current values. Calculations are sensitive to changes in the underlying assumptions. 2.4.5 Staff insurance scheme Staff self insurance scheme is provided for all eligible local employees of the Company. Calculations in this respect require assumptions to be made of future outcomes, the principal ones being in respect of increase in remuneration and the discount rate used to convert future cash flows to current values. Calculations are sensitive to changes in the underlying assumptions. 2.5
Convenience translation reserve For the purpose of convenience translation: The exchange rate of US$ 1 = PKR 104.74 (2014: PKR 100.48) is used for balance sheet items. This represents the selling rate of US Dollar at the end of the year as quoted by the State Bank of Pakistan. The average conversion rate is used for the items of income and expenditure statement, cash flow statement and statement of comprehensive income. The average conversion rate is the monthly average of the selling rate as quoted by the State Bank of Pakistan. The difference between average and year end exchange rates is recognized in reserves as convenience translation foreign currency reserve. Amounts presented in foreign currencies are for the purpose of convenience only and do not necessarily represent amounts at which assets and liabilities could be realised.
3.
SIGNIFICANT ACCOUNTING POLICIES Except for the change below, the accounting policies set out below have been applied consistently to all periods presented in these financial statements, except for the change as updated below; IFRS 13 “Fair Value Measurement” became effective from financial periods beginning on or after 01 January 2015. IFRS 13 establishes a single framework for measuring fair value and making disclosures about fair value measurements when such measurements are required or permitted by other IFRSs. It unifies the definitition of fair value as a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It replaces and expands the disclosure requirements about fair value measurements in other IFRSs, including IFRS 7. The application of IFRS 13 does not have any impact on the financial statements of the Comapny except for certain additional disclosures.
3.1
Deferred grant Grant received and utilized for capital expenditure is accounted for as deferred grant in the balance sheet. An amount equal to the annual charge for depreciation on assets so acquired is recognized as income in the income and expenditure statement.
3.2 Property and equipment These are stated at cost less accumulated depreciation and impairment loss, if any. Initial cost of property and equipment comprises its purchase price, including import duties and non-refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Depreciation is charged to income applying the straight line method. Full month’s depreciation is charged in the month of acquisition and no depreciation is charged for the month in which asset is disposed of, using the rates as mentioned in note 4. Normal repairs and maintenance are charged to the income and expenditure account as and when incurred whereas major improvements and modifications are capitalized. Gains and losses on disposals of property, plant and equipment are taken to the income and expenditure account.
32 Annual Report 2015
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 3.3 Microcredit receivables
Loans and advances are initially measured and recognized at fair value plus incremental direct transaction costs, on the date that they are originated and subsequently measured at their amortised cost using the effective interest method at repayment date. All microcredit receivables are recognized when cash is advanced to borrowers. Management regularly assess the adequacy of allowance for impairment. The Company calculates the required provision for doubtful microcredit receivables based on classification and provisioning methodology. 3.4 Cash and cash equivalents
Cash and cash equivalents include cash in hand and cash at banks. 3.5 Revenue recognition
Revenue is recognized on accruals basis.
Service charges on microcredit receivables Service charges on microcredit receivables are recognised on accrual basis. The recognition ceases when a loan is transferred to Non Interest Bearing Loan (NIBL) upon default. Service charge is recognised thereafter only when it is received.
Membership fees and other charges Membership fees and other charges are recognized as and when received.
Other income Other income comprises interest from short term deposits and includes gains from disposal of assets and foreign exchange differences. Interest income on bank deposit is earned on accruals basis at the agreed interest rate with the respective financial institution.
Grants Grants related to income are included in income when the related conditions are satisfied. Utilized portion of grant related to a specific purpose is transferred from restricted funds at the year end to match with the extent of expenditure incurred during a particular accounting year. Grants in kind are recognized on the basis of non-commercial invoices submitted by the donors. Grants for capital assets are taken to deferred grant account. (Refer note 3.2 for details). 3.6
Foreign currency transactions
These financial statements are presented in Pak Rupees (Rupees) and US Dollars (US$). The functional currency of the Company is Pak Rupees. The figures in US$ are reported for information purposes only (refer note 2.5).
Foreign currency transactions are recorded in functional currency at the exchange rates approximating those ruling on the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange which approximate those prevailing on the balance sheet date. Gains and losses on translation are taken to income currently. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using exchange rates at the date of the initial transaction. 3.7 Taxation
Income tax expense is recognised in income and expenditure account except to the extent that it relates to items recognised directly in equity or in other comprehensive income. Provision for current taxation is based on taxable income at the applicable rates of taxation after taking into account tax credits and tax rebates, if any. 3.8
Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to contractual provisions of the instrument. These are initially measured at cost, which is the fair value of the consideration given and received respectively. These financial assets and liabilities are subsequently measured at fair value and amortised cost respectively, whichever is applicable. The Company derecognizes financial assets and liabilities when it ceases to be a party to such contractual provisions of the instruments.
Financial assets mainly comprise of microcredit receivables, accrued interest and service charges, deposits, other receivables and bank balances. Significant financial liabilities are long term loans, short term loans, markup on loan, payable to related parties and accrued and other liabilities.
Annual Report 2015 33
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015
3.9 Impairment
Non-financial assets The carrying amounts of non-financial assets other than inventories and deferred tax asset, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 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 assessment of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit, or CGU”).
The Company’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs. An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in income and expenditure account.
Impairment loss recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. 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 recognised. Financial assets
Financial assets are assessed at each reporting date to determine whether there is objective evidence that they are impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. Objective evidence that financial assets are impaired may include default or delinquency by a debtor, indications that a debtor or issuer will enter bankruptcy.
All individually significant assets are assessed for specific impairment. All individually significant assets found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in statement of comprehensive income and reflected in an allowance account. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through statement of comprehensive income. 3.10 Stock of pass book
These are valued at the lower of cost and net realisable value. Cost represents weighted average purchase cost. Net realisable value signifies the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The Company reviews the carrying amount of stock of pass books on a regular basis and provision is made for obsolescence if there is any change in usage pattern and physical form. 3.11 Provisions
A provision is recognized in the balance sheet when the Company has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. Provisions are determined by discounting the expected future cash flows at a pre tax discount rate that reflects current market assessment of time value of money and risk specific to the liability. The unwinding of discount is recognized as finance cost. 3.12 Off setting of financial instruments
Financial assets and liabilities are set off in the balance sheet, only when the Company has a legally enforceable right to set off the recognized amounts and intends either to settle them on a net basis or to realize the assets and settle the liabilities simultaneously.
34 Annual Report 2015
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015
3.13 Restricted grant
Funds received as grants for specific purposes are classified as restricted grant. Restricted grant is transferred to income to the extent of expenditures incurred out of these funds in a particular accounting year. 3.14 Mark-up bearing borrowings
Mark-up bearing borrowings are recognised initially at cost being the fair value of consideration received, less attributable transaction costs. Subsequent to initial recognition, mark-up bearing borrowings are stated at their amortised cost less subsequent repayments. 3.15 Staff gratuity scheme
The Company operates an unfunded gratuity scheme covering all eligible employees completing the minimum qualifying period of service at the rate of one last drawn gross salary of the employee. The Company’s obligation under gratuity scheme is recognized on the basis of actuarial valuation by using the Projected Unit Credit Method . Latest valuation was conducted as at 31 December 2015.
Actuarial gains / losses are recognised directly to equity through statement of Other Comprehensive Income (OCI) and are not reclassified to income and expenditure account in subsequent period. The amount recognised in the balance sheet represents the present value of defined benefit obligations adjusted for actuarial gains and losses, past service cost and interest cost. 3.16 Staff self insurance scheme The Company operates a staff self insurance scheme for all its local employees. The scheme requires the Company to make payment to employees / dependents in case of permanent disability / death of an employee during the course of service with the Company. The Company’s obligation under self insurance scheme is recognized on the basis of actuarial recommendations. Charge determined by actuary for relevant year is included in respective year’s income and expenditure account. Latest valuation was conducted as at 31 December 2015. 3.17 Provision for leave encashment The company allows encashment of unavailed leaves balances at the time of retirement / resignationProvision for leave encashment is recognized on the basis of last drawn salary and number of leaves outstanding as at 31 December 2015. 3.18 Standards, interpretations and amendments to published approved accounting standards that are not yet effective The following standards, amendments and interpretations of approved accounting standards will be effective for accounting periods beginning on or after 01 January 2016:
‘- Amendments to IAS 38 Intangible Assets and IAS 16 Property, Plant and Equipment (effective for annual periods beginning on or after 1 January 2016) introduce severe restrictions on the use of revenue-based amortization for intangible assets and explicitly state that revenuebased methods of depreciation cannot be used for property, plant and equipment. The rebuttable presumption that the use of revenue-based amortization methods for intangible assets is inappropriate can be overcome only when revenue and the consumption of the economic benefits of the intangible asset are ‘highly correlated’, or when the intangible asset is expressed as a measure of revenue. The amendments are not likely to have an impact on the Company’s financial statements.
‘- Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10 – Consolidated Financial Statements and IAS 28 – Investments in Associates and Joint Ventures) [effective for annual periods beginning on or after 1 January 2016) clarifies (a) which subsidiaries of an investment entity are consolidated; (b) exemption to present consolidated financial statements is available to a parent entity that is a subsidiary of an investment entity; and (c) how an entity that is not an investment entity should apply the equity method of accounting for its investment in an associate or joint venture that is an investment entity. The amendments are not likely to have an impact on the Company’s financial statements. - Amendment to IAS 27 ‘Separate Financial Statement’ (effective for annual periods beginning on or after 1 January 2016) allows entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements. The amendment is not likely to have an impact on Company’s financial statements.
Annual Report 2015 35
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 3.18 Standards, interpretations and amendments to published approved accounting standards that are not yet effective (contd.) ‘- Agriculture: Bearer Plants [Amendment to IAS 16 and IAS 41] (effective for annual periods beginning on or after 1 January 2016). Bearer plants are now in the scope of IAS 16 Property, Plant and Equipment for measurement and disclosure purposes. Therefore, a company can elect to measure bearer plants at cost. However, the produce growing on bearer plants will continue to be measured at fair value less costs to sell under IAS 41 Agriculture. A bearer plant is a plant that: is used in the supply of agricultural produce; is expected to bear produce for more than one period; and has a remote likelihood of being sold as agricultural produce. Before maturity, bearer plants are accounted for in the same way as self-constructed items of property, plant and equipment during construction. The amendments are not likely to have an impact on the Company’s financial statements.
‘- Annual Improvements 2012-2014 cycles (amendments are effective for annual periods beginning on or after 1 January 2016). The new cycle of improvements contain amendments to the following standards:
‘- IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. IFRS 5 is amended to clarify that if an entity changes the method of disposal of an asset (or disposal group) i.e. reclassifies an asset from held for distribution to owners to held for sale or vice versa without any time lag, then such change in classification is considered as continuation of the original plan of disposal and if an entity determines that an asset (or disposal group) no longer meets the criteria to be classified as held for distribution, then it ceases held for distribution accounting in the same way as it would cease held for sale accounting. ‘- IFRS 7 ‘Financial Instruments- Disclosures’. IFRS 7 is amended to clarify when servicing arrangements on continuing involvement in transferred financial assets in cases when they are derecognized in their entirety are in the scope of its disclosure requirements. IFRS 7 is also amended to clarify that additional disclosures required by ‘Disclosures: Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS7)’ are not specifically required for inclusion in condensed interim financial statements for all interim periods.
‘- IAS 19 ‘Employee Benefits’. IAS 19 is amended to clarify that high quality corporate bonds or government bonds used in determining the discount rate should be issued in the same currency in which the benefits are to be paid. ‘- IAS 34 ‘Interim Financial Reporting’. IAS 34 is amended to clarify that certain disclosures, if they are not included in the notes to interim financial statements and disclosed elsewhere should be cross referred.
The above amendments are not likely to have an impact on the Company’s financial statements.
36 Annual Report 2015
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 4 PROPERTY AND EQUIPMENT
Motor vehicles Furniture Note and fixtures
Office equipment
Computer equipment
Total
PKR
PKR
Cost As at 1 January 2014 33,858,737 11,568,237 6,045,115 15,362,025 66,834,114 Additions during the year 4,091,956 2,818,676 1,102,979 2,633,779 10,647,390 Written off during the year (156,689) (1,358,665) (1,143,518) (1,830,831) (4,489,703) As at 31 December 2014 37,794,004 13,028,248 6,004,576 16,164,973 72,991,801 As at 1 January 2015 37,794,004 13,028,248 6,004,576 16,164,973 72,991,801 Additions during the year 2,108,340 1,808,118 870,346 3,824,392 8,611,196 Written off during the year (95,499) (289,558) (174,790) (1,138,949) (1,698,796) As at 31 December 2015 39,806,845 14,546,808 6,700,132 18,850,416 79,904,201 Depreciation As at 1 January 2014 15,490,835 3,627,084 2,956,486 5,831,459 27,905,864 Charge for the year 6,420,870 1,230,840 1,048,301 2,295,890 10,995,901 Written off during the year (80,855) (550,073) (606,175) (1,053,645) (2,290,748) As at 31 December 2014 21,830,850 4,307,851 3,398,612 7,073,704 36,611,017 As at 1 January 2015 21,830,850 4,307,851 3,398,612 7,073,704 36,611,017 Charge for the year 21 6,848,860 1,375,633 995,020 2,794,003 12,013,516 Written off during the year (81,028) (159,905) (151,370) (793,538) (1,185,841) As at 31 December 2015 28,598,682 5,523,579 4,242,262 9,074,169 47,438,692 Written down value 31 December 2015 - PKR 11,208,163 9,023,229 2,457,870 9,776,247 32,465,509 31 December 2015 - USD 107,009 86,149 23,466 93,338 309,963 31 December 2014 - PKR 15,963,154 8,720,397 2,605,964 9,091,269 36,380,784
5
31 December 2014 - USD
158,869
86,787
25,935
90,478
Rates of depreciation per annum
20%
10%
15%
15%
INTANGIBLE ASSET Note
362,070
Amount
PKR USD As at 01 January 2015 - Additions during the year 5.1 17,117,599 163,429 Less: amortisation charge for the year (2,824,404) (27,515) Effect of convenience translation - 549 Net book value as at 31 December 2015 14,293,195 136,464 Amortisation rate per annum 33% 33% 5.1
This represents cost of Enterprise Resource Planning Software acquired by the Company during the year from Brac IT services, through BRAC Bangladesh, related parties.
Annual Report 2015 37
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 6 MICROCREDIT RECEIVABLES, secured - net 2015 2014 Note PKR USD PKR USD Microcredit receivables: - considered good 1,255,835,694 11,990,030 1,181,322,924 11,756,796 - considered doubtful 56,384,664 538,330 43,461,204 432,536 6.1 1,312,220,358 12,528,360 1,224,784,128 12,189,332 Provision against doubtful receivables 6.2 (56,384,664) (538,330) (43,461,204) (432,536) Loan security fund / amounts withheld for settlement against installment 6.5 (186,448,738) (1,780,110) (182,422,748) (1,815,513) 1,069,386,956 10,209,920 998,900,176 9,941,283 6.1 Movement in microcredit receivables is as follows : Opening balance 1,224,784,128 12,189,332 884,295,153 8,396,270 Disbursements during the year 6.3 2,175,656,000 21,194,895 2,365,275,000 23,390,773 Recoveries made during the year (2,068,909,750) (20,154,990) (1,988,140,542) (19,661,200) Principal written off during the year (19,310,020) (188,115) (36,645,483) (362,396) Effect of convenience translation - (512,763) - 425,885 1,312,220,358 12,528,359 1,224,784,128 12,189,332 6.2 Particulars of provision are as follows: Opening balance 43,461,204 432,536 54,373,589 516,270 Provision made during the year 32,233,480 314,013 25,733,098 254,481 Provision adjusted against principal written off (19,310,020) (188,115) (36,645,483) (362,396) Effect of convenience translation - (20,104) - 24,181 56,384,664 538,330 43,461,204 432,536 6.3 Microcredit receivables were disbursed by the Company to individuals in Punjab, Sindh, Khyber Pakhtun Khwa and Balochistan pursuant to different financing agreements with Pakistan Poverty Alleviation Fund (PPAF). These carried service charges at effective interest rate ranging from 38% to 48% per annum (2014: 38% to 48% per annum ). The Company does not hold any collateral against the loans, however, the Company has personal guarantees of local community members of the borrowers. Till 2014 Company withheld 10% of microcredit loans disbursed to the borrowers which was settled against last installments due as disclosed in note 6.5. However with effect from March 2015, the Company takes cash security at 10% of micro credit loan disbursed which is adjusted against last installment. All microcredit receivables are repayable in 12 equal installments.
38 Annual Report 2015
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015
2015 2014 6.4
PKR USD
PKR USD
Age analysis of microcredit receivables-Gross No past due
1,270,967,188
12,134,497
1,192,030,328
11,863,359
Over due by : 30 days
4,606,853
43,984
5,894,755
58,666
Over due by : 31-180 days
6,959,744
66,448
9,116,367
90,728
Over due by : 181-350 days
1,444,160
13,788
960,367
9,558
351 days and above past due
28,242,413
269,643
16,782,311
167,021
1,312,220,358 12,528,360 1,224,784,128
12,189,332
At the balance sheet date, management has recorded a provision of PKR 25.41 million (USD 0.242 million) on good receivables (2014: PKR 23.84 million, USD 0.432 million) and PKR 30.96 million (USD 0.295 million) on doubtful receivables (2014 : 19.61 million, USD 0.195 million) in respect of microcredits. 6.5
This represents amounts withheld from microcredit loans disbursed by the Company and securities deposited by the borrowers, as described in note 6.3 These will be settled against last installment of microcredit due from the borrower.
7 DEPOSITS, SHORT TERM PREPAYMENTS AND OTHER RECEIVABLES 2015 2014 Note PKR USD PKR USD Security deposits 9,211,331 87,944 8,269,200 82,297 Prepaid rent 707,795 6,758 805,834 8,020 Account receivables 229,874 2,195 619,452 6,165 Receivable from donor 18 & 7.1 55,609,136 530,925 28,193,811 280,591 Prepaid interest 14,403,103 137,513 - 80,161,239 765,334 7.1
37,888,297
377,073
This includes Rs. 45.27 million originally receivables from Education Fund for Sindh (‘‘EFS’’) represention the excess of expenditure over grants received during this year. EFS was implementing the project through the grant originally funded by department for International Development (DFID). Subsequent to the year end, DFID has decided to discontinue the funding through EFS and accordingly the company’s agreement with EFS has been terminated. Management of the company has approached DFID and on its advice has re-submitted its claim with EFS. The management believes that the company has valid claim and based on negotiation with DFID, believes that the amount will be recovered shortly and hence no provision is required to be recognized against this amount.
8 ACCRUED INTEREST AND SERVICE CHARGES On microcredit receivables 28,779,551 280,366 14,084,309 139,283 Service charges written off (3,708,556) 36,128 (3,205,425) (31,699) Convenience translation - (77,130) - 685 25,070,995 239,364 10,878,884 108,269
Annual Report 2015 39
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 2015 2014 PKR USD PKR USD 9 Advance Tax-net Opening balance 148,264 1,476 4,146,290 39,368 Charge for the year 6,187,789 60,280 4,701,594 46,495 Advance tax paid during the year (7,298,886) (71,105) (8,699,620) (86,033) Advance tax written off - - - Effect of translation - 18,542 - (1,307) Closing balance (receivable) / payable (962,833) (9,193) 148,264 1,476 9.1
The Company is entitled to 100% tax credit against its tax liability as provided in section 100C out Tk. Income Tax Ordinance 2001. Provision for taxation has been recorded on income from mircrocredit operation in which so far tax credit is not admissible.
9.2
Relationship between tax expense and accounting profit
Surplus before taxation
41,264,687
Tax charge @ 32% (2014: 33%) Tax effect of exempt income u/s 100C Effect of prior year tax expense Other permanent differences
13,204,700 150,596 11,907,999 117,762 (8,384,030) (81,676) (10,258,643) (101,450) 1,049,537 10,224 180,784 1,788 317,582 (20,023) 2,871,454 28,396
Tax charge for the year
10 CASH AND BANK BALANCES Cash in hand - Local currency
470,613
36,084,845
6,187,789 60,280 4,701,594
356,853
46,495
Note 2015 2014 PKR USD PKR USD
10.1
625,853
6,229
Cash at banks - Local currency - current accounts 25,695,617 245,328 31,740,332 - Local currency - saving accounts 10.2 13,577 130 13,005 - Foreign currency - current accounts 10.3 14,312,079 136,644 69,885,605 - Foreign currency - saving accounts 10.3 132,819,657 1,268,089 51,360,854 172,840,930 1,650,191 152,999,796 173,913,297 1,660,429 153,625,649
315,887 129 695,518 511,155 1,522,689 1,528,918
1,072,367
10,238
10.1 This is net of Rs. 1,007,087 (2014: 2,642,243) written off consequent to theft. 10.2 This carry interest rate from 5% to 7% (2014 : 5% to 7%) per annum. 10.3 This includes Rs. 104,740,000 (USD 1,000,000) (2014 : Rs. 50,240,000 & USD 500,000) placed with Habib Bank Limited as lien against running finance facility (note 17.2) other foreign currency saving accounting carry interest rate ranging from 0.51% to 1% (2014 : 0.5% to 1%) per annum.
40 Annual Report 2015
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015
Note 2015 2014 PKR USD PKR USD
11
11.1 125,850,000 11.1 255,413,000
1,500,000 2,589,251
125,850,000 255,413,000
1,500,000 2,589,251
381,263,000
4,089,251
381,263,000
4,089,251
GENERAL FUND BALANCES BRAC USA BRAC Bangladesh
11.1 These represent contributions for the purpose of microfinance activity and self sustainability of the Company. During the previous year BRAC Bangladesh contributed Rs. 102.38 million (USD 1,000,000) as equity after approval vide grant agreement referenced 2014-001 dated 11 November 2014 and 2014002 dated 21 December 2014.
2015 2014 Note PKR USD PKR USD 12 LONG TERM LOANS, secured From Pakistan Poverty Alleviation Fund (PPAF) PPAF III Phase V 17.1 - - 72,500,000 721,537 PPAF Phase V 17.1 - - 42,400,000 421,975 PPAF Phase V reflows 17.1 - - 220,000,000 2,189,490 PPAF 17.1 102,652,000 980,065 - PPAF III Phase VI 17.1 200,440,000 1,913,691 250,000,000 2,488,057 From banking companies Habib Bank Limited - Demand Finance
500,000,000
803,092,000 7,667,481 584,900,000 5,821,059
Less: Transferred to current portion
13
4,773,725
-
-
(440,600,000)
(4,384,952)
421,195,600 4,021,344 144,300,000
1,436,107
(381,896,400)
(3,646,137)
DEFERRED GRANT Opening balance 24,356,901 242,405 21,330,077 202,526 Property and equipment purchased during the year 18 6,095,479 59,381 8,350,688 82,582 Recognition of deferred grant as income (8,777,470) (85,509) (5,323,864) (52,649) Adjustment for assets written off (71,991) (701) - Transferred from restricted grant 1,596,659 15,554 - Effect of translation - (9,633) - 9,946 23,199,578 221,497 24,356,901 242,405
Annual Report 2015 41
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 Note 14 DEFERRED LIABILITIES
2015 PKR USD
2014 PKR USD
Staff gratuity scheme 14.1 48,339,161 Staff self insurance scheme 14.2 7,138,163 55,477,324 14.1 Staff gratituity scheme
461,516 68,151 529,667
35,652,711 3,004,169 38,656,880
354,824 29,898 384,722
a) Movement in present value of defined benefit obligation recognized in balance sheet Opening balance 35,652,711 354,824 32,853,817 320,332 Expense recognized for the year 21 16,705,730 162,745 16,102,879 159,245 Actuarial loss / (gain) recognized during the year 2,703,394 26,336 (5,802,911) (57,386) Benefits paid during the year (6,722,674) (65,491) (7,501,074) (74,180) Effect of translation - (16,898) - (50,573) Present value of defined benefit obligation at end o f the year 48,339,161 461,516 35,652,711 354,824 b) Movement of actuarial gains Actuarial gain on obligations during the year 2,703,394 26,336 (5,802,911) (57,386) Actuarial (gain) / loss recognised during the year to other comprehensive income (2,703,394) (26,336) 5,802,911 57,386 Unrecognized actuarial gain at end of the year - - - c) Particulars of expense for the year Current service cost 13,315,136 129,714 12,464,969 123,269 Interest cost 3,390,594 33,031 3,637,910 35,976 Total charge for the year 21 16,705,730 162,745 16,102,879 159,245 d) Principal actuarial assumptions used in the actuarial valuations are as follows: Discount rate 9.00% N/A 10.50% N/A Expected rate of salary growth 9.00% N/A 9.50% N/A Mortality rate Adjusted SLIC N/A Adjusted EFU N/A 2001-2005 N/A 61-66 N/A e) Expected annual charge for the next year 23,150,830 225,532 16,680,429 164,957
42 Annual Report 2015
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015
f) Sensitivity Analysis
The calculation of the defined benefit obligation is sensitive to the assumption set out above. For a change of 100 basis points in these assumptions, present value of defined benefit obligation as at 31 December 2015 would have been as follows;
Defined Benefit Obligation In case of 1% In case of 1% incerase decrease PKR Financials assumptions Discount rate 44,116,606 53,480,176 Future salary growth 53,673,108 43,878,468
Demographic assumption Future withdrawal 48,339,162 48,339,162
Defined Benefit Obligation In case of 01 year In case of 01 year mortality age set mortality age set back forward PKR Mortality rate 48,339,162 48,339,162 The above sensitivities are based on the average duration of the benefit obligation determined at the date of the last actuarial valuation at 31 December 2015 and are applied to adjust the defined benefit obligation at the end of the reporting period for the assumptions concerned.
Maturity Profile
Year 06 to Year 11 and Year 01 Year 02 Year 03 Year 04 Year 05 year 10 above Rupees 6,907,362 5,948,441 5,150,079 4,505,698 3,927,277 14,161,439 146,123,682 Risks Associated with Defined Benefit Plans i) Investment Risks: The risk arises when the actual performance of the investments is lower than expectation and thus creating a shortfall in the funding objectives. ii) Longevity Risks: The risk arises when the actual lifetime of retirees is longer than expectation. This risk is measured at the plan level over the entire retiree population. iii) Salary Increase Risk: The most common type of retirement benefit is one where the benefit is linked with final salary. The risk arises when the actual increases are higher than expectation and impacts the liability accordingly. iv) Withdrawal Risk: The risk of actual withdrawals varying with the actuarial assumptions can impose a risk to the benefit obligation. The movement of the liability can go either way.
Annual Report 2015 43
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 14.2 Staff self insurance scheme a) The Company has unfunded staff insurance scheme for its employees. Under this scheme, employees will be paid compensation in accordance with predetermined criteria in case of injuries and death. Charge and liability is determined on the basis of actuarial valuations using Projected Unit Credit Method (PUC). Latest actuarial valuation was carried out as at 31 December 2015. Charge in respect of staff self insurance scheme for the year amounts to PKR 4.133 million (USD: 40,273). b)
Principal actuarial assumptions used in the actuarial valuations are as follows: 2015 2014 Discount rate Expected rate of salary growth Mortality rate and disability rate
c)
9.00% 10.50% 9.00% 9.50% 11% of SLIC EFU 61-66 2001-2015 mortality table Note 2015 2014 PKR USD PKR USD
Expected annual charge for the next year
15 PAYABLE TO RELATED PARTIES
2,887,665
28,131
1,020,483
Note 2015 PKR USD PKR
BRAC Bangladesh - Head office 15.1 117,992,534 1,126,528 Stichting BRAC International 15.2 63,457,349 605,856 181,449,883 1,732,384
10,092
2014 USD
78,100,489 32,762,815 110,863,304
777,274 326,063 1,103,337
15.1 This represents amount payable to BRAC Bangladesh on account of expenditure incurred on behalf of the Company. 15.2 This represents amount payable to Stichting BRAC International on account of head office logistic expense / management fee. This amount is unsecured, interest free and payable on demand (Note 22.1). 2015 2014 Note PKR USD PKR USD 16 ACCRUED AND OTHER LIABILITIES
Salaries payable 626,730 Withholding tax deducted at source 366,427 Transferred from restricted grant 16.1 1,184,748 Accrued expenses 1,507,664 Provision for leave encashment 4,677,633 Others 59,464
5,984 1,337,791 13,314 3,498 364,564 3,628 11,311 1,184,728 11,791 14,394 2,637,112 26,245 44,659 - 568 5,083,216 50,589
8,422,666 80,414
10,607,411
16.1 This represents unspent funds transferred from restricted grant to other payables on completion of the projects. (Refer Note 18).
44 Annual Report 2015
105,567
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 17
SHORT TERM LOANS
These represent following loans obtained by the Company: 2015 2014 Note PKR USD PKR USD
From banking companies Habib Bank Limited (HBL) 17.1 58,503,883 558,563 241,370,019 2,402,170 Standard Chartered Bank (Pakistan) Limited (SCB) 17.1 - - 21,823,307 217,191
From others, unsecured
KIVA Microfinancing 17.1 71,725,560 684,796 50,381,429 501,408 130,229,443 1,243,359 313,574,755 3,120,769 Movement during the year is as follows: Opening balance 313,574,755 3,120,769 259,168,059 2,460,769 Received during the year KIVA Microfinancing 17.1 25,686,079 250,230 24,899,820 246,240 Standard Chartered Bank (Pakistan) Limited (SCB) 17.1 79,082,139 770,406 80,923,307 800,270 Habib Bank Limited 17.1 513,443,530 5,001,885 754,475,428 7,461,189 618,211,748 6,022,521 860,298,555 8,507,699 Repayments during the year (803,910,995) (7,831,573) (803,862,688) (7,949,591) Foreign exchange loss/(gain) 2,353,935 22,932 (2,029,171) (20,067) Effect of translation - (91,290) - 101,892
130,229,443
1,243,359
313,574,755
3,120,769
Annual Report 2015 45
46 Annual Report 2015
Long term loans
PKR
PKR
Amount received to date under the agreement (%)
Mark-up rate per annum as per agreement
Number of installments outstanding
Availability period*/ Date of final repayment
Pakistan Poverty Alleviation Fund (PPAF) and others
December 2014 95,000,000 - to March 2016
3 Months KIBOR Bullet payment 31 March 2016 + 0.75%
Lien on Company’s foreign currency deposit of US $ 1.0 million.
Lien on PPAF’s deposit of PKR 200 million.
i) SBP’s partial guarantee under MCGF* for 60% of the o/s principal amount ii) SBLC** of US $ 2.1 million from HBL Netherlands. iii) 1st Hypothecation charge over all present and future current assets including micro credit receivables for PKR 667 million.
Security against loans
17.1.1 Loan from PPAF on at slightly lower rate than other borrowngs availed by the company.
v) PPAF III Phase VI April 2014 to 232,200,000 232,200,000 Six months KIBOR 6 quarterly 15 September This loan is secured against assignment (250 M) - Category A September 2014 with a floor of 8% installemetns 2016 of rights over a portfolio of the Company’s PPAF III Phase VI April 2014 to 17,800,000 17,800,000 Six months KIBOR loan upto an amount received by the (250 M) - Category B September 2014 less 500 bps with Company under the agreement, a demand a floor of 4% promissory note and a first charge on all assets / capital items created out of the agreement. Short term loans vi) KIVA Microfinancing August 2015 to 641,008,800 71,725,560 0% Monthly 12 months from Unsecured July 2017 installments the date of disburement. *Micro Credit Guarantee Facility. **Standby Letter of Credit
Long term loans from PPAF iv) PPAF III (410 M) - April 2015 to 374,000,000 93,500,000 Six months KIBOR 5 quarterly 31 March 2018 This loan is secured against assignment of Category A March 2016 with a floor of 8% installements after rights over a portfolio of the Company’s loan PPAF III (410 M) - April 2015 to 36,000,000 9,152,000 Six months KIBOR a grace period upto an amount received by the Company Category B March 2016 less 500 bps with of one year under the agreement, a demand promissory a floor of 4% note and a first charge on all assets / capital items created out of the agreement.
iii) Habib Bank Limited
i) Habib Bank Limited March 2015 to 500,000,000 500,000,000 6 Months 8 Quarterly 01 April 2018 April 2018 KIBOR + 1.5% installements Short term loans (Running facilities) ii) Habib Bank Limited March 2014 to 200,000,000 58,503,883 Deposit rate Bullet payment 31 March 2016 March 201 + 1.50%
Banking companies
17.1 Terms and conditions of these borrowings are given below: Availability Total facility period amount Loan
For the year ended 31 December 2015
Notes to the Financial Statements
BRAC Pakistan
Annual Report 2015 47
RESTRICTED GRANT
PPAF-III
Note
-
28,386 - - -
Opening balance
Received during the year
Company’s contribution
Interest earned on saving bank accounts 12
(1,206) (138,197)
(7,386)
(1,166)
4,762,381
(710,232)
-
-
34,900,364
-
-
(25,563)
-
-
-
-
36,114
1,004,670
-
-
-
-
-
(15,556) (600) -
Effect of convenience translation
97,875
(1,993)
- 39,241
(2,533)
- 9,633
(197)
-
9,592
(959)
-
-
-
(362,414)
(23,027)
-
-
387,320
-
192,821
-
-
-
-
(37,201,789)
(2,363,750)
-
-
39,758,360
-
(1,002)
-
1,841
(38)
-
-
210,772 -
-
(590,241)
(6,919)
-
-
339,994
47,396
-
-
-
21,635,776
Rupees
Schools
-
-
-
(1)
-
-
(160,700)
-
1,109,683
100,749
-
(217,848)
(11,103)
-
-
128,203
-
(327,540)
(878,035)
800
-
-
-
(1,861,460)
(8,554)
8
-
1,642,983
(3,260)
-
-
-
(599,495)
635
-
71,862,871
-
(1,217)
-
-
-
-
32,947
-
-
(3,185,595)
-
124,887
2,731
(76)
-
-
-
69
-
-
(6,095,479)
1,435
1,109,683
354,030,869
-
(696)
-
(31,034)
-
(8,350,688)
97,703
2,875,311
231,816,279
117,128,574
2014
Total
(3,185,595)
(12,009)
-
(441,985)
(5,840)
6
-
700,077
235,703
(4,546)
-
-
(227,528) -
28,193,811
212,702
396,616
(12,572)
(15,554)
(31,034)
541,735
-
(3,699,018)
(59,381)
14
10,810
3,448,914
212,703
(417)
-
-
280,591
(2,264)
(3,462,827)
(82,582)
967
28,435
2,292,487
1,158,313
21,372,408
(1,596,659) 24,687,551 41,541,497
-
-
- 55,609,136
-
- 230,214 - -
-
(40,475)
(1,566)
-
10,810
33,003
1,035
286,000
-
-
- 23,631,484
-
Total 2015
(1,206,649) 21,372,409
PPAF
PPR
- (45,369,811) (379,704,300) (350,161,054)
-
-
-
-
3,310,482
DFATD
LEP
Research for
3,387,771 168,652,201
103,987
Schoois
EFS 500
(4,440,741) (191,078,910)
USD
-
-
BRAC
Stiching
(Note 18.2)
10,341,876
-
(22,362,102)
(1,139,774)
-
-
13,160,000
Smith
EFS-200(C) PEPS/Adam
Education
Non- Micro Finance
EPS 200
(2,624,088) (60,588,289)
-
-
-
-
3,628,758
USA
BRAC
- - - - - -
Transferred to other income
Repaid to donor
-
-
-
-
-
18,382
-
1,008,973
-
-
-
-
-
-
(12,232)
-
-
99,084
82,093
4,110,074
-
-
-
-
(758,211)
(119,708)
-
-
-
15
16.1
-
-
99,868
-
10,251,410
-
-
-
-
- 1,886,892
CLF
Transferred to other receivables 7 - - -
Transferred to other payables
- Operating expenditure
- Capital expenditure
(123,785)
-
-
10,171,000
8,248,730
USA
BRAC
- (14,185,871)
-
-
-
-
Utilised during the year against:
(1,596,659)
Transferred to deferred grant
Repaid to donor
-
-
Transferred to other payables
(1,255,601)
Transferred to other receivables
- Operating expenditure
- Capital expenditure
Utilised during the year against: -
-
Interest on savings accounts
-
- 10,251,410
2,852,260 -
Company’s Contribution
Received during the year
Opening balance
Movement in restricted grant during the year is as follows:
-
USA
Health
Micro Finance Capacity Building BRAC
18
For the year ended 31 December 2015
Notes to the Financial Statements
BRAC Pakistan
48 Annual Report 2015 PPAF-III
USA
- -
Rent -
- - 1,255,601
Self Insurance
Audit fee
596,101
179,657
298,864
-
9,684
259,105
593,461
301,100
1,240,470
-
2,933
12,084
5,807
- 5,781
-
-
-
1,750
- 12,232
Audit fee
-
-
- 138,194
-
94 7,386
-
8
- -
-
-
-
98,296
161,320 -
178,188
2,183,370
10,857,620
BRAC
2,826
3,187
103,134
125,630
60,588,289
-
31,916
293,424
253,193
13,044,030
18,994,738
958
1,572
51,746
70,640
37,201,789
-
28,347
799,669
333,873
11,931,300
9,384,760
-
1,736
21,270
105,773
USD
22,362,102
-
30,259
1,990,020
380,914
2,575,708
346,547
18.3 Grants received till 31 December 2015 under the grant agreements, is expected to be utilized in the next year.
811,488
1,139,531
30,390,567
38,088,829
320,000
95,607
780,749
1,723,812
62,270,898
49,672,848
43
494
3,378
20,114
7,905
11,101
296,060
371,055
4,154,741 191,078,910
-
4,733
138,685
-
1,013,302
19,199
-
25,563
-
-
91,425 116,233
590,242
-
311
362,415
-
276
7,790
2,467 3,253
- 2,858
-
185,044 127,073
3,376
187 9,872
483,905 606,633
524,811
179,206
429,806
-
217,848
-
295
19,386
40,475
-
46
1,351
1,861,458
3,117
931
7,606
2,333,494
2,248,213
49,617,494
2,528,734
1,745,763
18,249,164
68,185,811
2014
Total
73,487
3,394,249
320,000
220,008
8,028,852
5,113
1,746
4,187
68,415
22,733
21,902
483,366
864,619
45,304,472 379,704,300
-
18,660
3,767,200
75,572,017
25,007
17,264
180,470
674,306
350,161,054
315,000
253,470
5,059,748
7,763,425
160,591,910
1,217
-
232,074
82,104
1,217
-
-
-
441,987
-
182
37,361
747,350 1,588,132
3,699,017
3,117
2,143
78,851
3,462,826
3,115
2,507
50,037
33,067 76,774
1,146,690
871,540
- 10,114 170,989 97,864
-
-
-
-
124,887
-
-
-
-
117,707,768
8,428,023 89,463,660 23,822,365
3,711 - 16,793 - 716
25,092
Total 2015
7,022,749 88,753,201
PPAF
PPR
- 1,038,165 17,552,022 9,896,012
-
-
-
-
124,887
DFATD
LEP
Research for
512,219 5,784,581
4,423
50,689
346,708
2,064,693
(Note 16.2)
Schoois
EFS 500
- 37,712 18,522 37,209 4,990 56,352
-
-
-
-
25,563
-
346
-
1,183
81
316
7,251,236 5,311,720
Smith
Stiching
18.2 This represents amount received from Stichting BRAC International under grant agreement between Stichting BRAC International and Department for International Development (DFID) UK.
-
- - 2,524
Self Insurance
Maintenance and general expenses
Head office logistics and management fees -
Program supplies and related expenses
12,232
- 4,943 1,147
Travelling and transportation
Training and development
-
Printing and stationeries
-
680
-
2,911
Utilities
-
290,050
327,149
10,586,659
12,895,965
Rupees
EFS-200(C) PEPS/Adam
Schools
EPS 200
Education
Non- Micro Finance
- 3,871,165 1,901,268 3,819,476
-
-
-
-
2,624,088
-
3,625
USA
2,624,088
Rent
99,367
758,211
-
802
-
35,509
-
121,474
117,718
8,325
32,473
69,800
372,110
-
-
- 14,185,871
-
-
-
-
-
-
- 507,430
-
-
-
- 10,199,999
CLF
BRAC
Salaries and benefits
- -
Head office logistics and management fees
Maintenance and general expenses
-
1,255,601
Program supplies and related expenses
Training and development
Travelling and transportation
-
-
Printing and stationeries
Utilities
Salaries and benefits
18.1 Expenditure charged during the year is as follows:
USA
BRAC
Health
Micro Finance Capacity Building BRAC
For the year ended 31 December 2015
Notes to the Financial Statements
BRAC Pakistan
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 19
CONTINGENCIES AND COMMITMENTS There are certain cases outstanding as on 31 December 2015. The management assess and claim favorable outcome in these cases and the lawyers have also asserted management claims in respect of favorable outcome. The Company has capital commitments up to the amount of restricted grant.
20
OTHER INCOME
Loan application fee Others
2,245,500 889,391
21,875 8,664
1,933,560 768,753
19,121 7,603
3,134,891 30,539 2,702,313 26,724 21 ADMINISTRATIVE AND PROGRAM EXPENSES Salaries and benefits 21.1 305,770,278 Rent 67,187,712 Utilities 9,188,309 Printing and stationeries 6,672,505 Travelling and transportation 36,284,840 Depreciation 4 12,013,516 Amortisation 5 2,824,404 Training and development 92,176,641 Group member death benefits 2,300,000 Maintenance and general expenses 24,101,379 Head office logistics and management fees 22.2 30,675,184 Program supplies and related expenses 117,707,768 Professional charges 2,776,487 Staff self insurance scheme 14.2 4,133,994 Items of property and equipment written off 512,955 Cash written off due to theft 1,007,087 Security deposit written off 103,000 Payment against tax demands 21.3 - Auditors’ remuneration 1,210,000 Other expenses 1,751,510
2,978,765 279,789,301 2,766,904 654,532 34,730,773 343,461 89,511 7,657,350 75,725 65,002 6,378,438 63,078 353,481 32,425,670 320,665 117,034 10,995,901 108,741 27,515 - 897,970 75,785,307 749,459 22,406 1,720,000 17,009 234,792 16,557,931 163,745 298,833 29,207,842 288,843 1,146,690 160,591,910 1,588,132 27,048 1,430,150 14,143 40,273 1,583,149 15,656 4,997 2,198,955 21,746 9,811 2,642,243 26,130 1,003 228,000 2,255 - 8,428,071 83,347 11,788 1,155,000 11,422 17,063 - -
6,998,514
718,397,569
673,505,991
6,660,461
21.1 This includes Rs. 16,705,730 (2014 : 16,102,879) inrespect of staff gratuity scheme and Rs. 33, 253,397 (2014 : 33,692,909) inrespect of salaries paid to enpatriate staff.
Annual Report 2015 49
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 21.2 Head office logistics and management fee is based on operating cost (excluding depreciation and write off) incurred at areas offices, regions and branches. 21.3 This included Rs. 6,696,624 paid in year 2014 on account of tax demands raised by the taxation authorities for shortfall in tax withheld on payments made during periods relevant to Tax Years 2010 and 2011 and Rs. 1,731,447 paid on account of additional tax for delayed payment of minimum tax liability for the Tax Years 2010 to 2012.
FINANCIAL CHARGES 2015 2014 PKR USD PKR USD Interest on loans 75,425,725 734,785 67,104,044 663,608 Bank charges 787,489 7,672 447,007 4,421 76,213,214 742,457 67,551,051 668,029 23 TRANSACTIONS WITH RELATED PARTIES The related parties comprise of directors, key management personnel and entities over which the directors are able to exercise influence. Balances with related parties including balance relating to restricted funds are disclosed in notes 7, 10, 14, and 16 to the financial statements. The remuneration to Chief Executive and Directors is disclosed in note 24 to the financial statements. Transactions with related parties are as follows: 2015 2014 PKR USD PKR USD Associated company by virtue of common directorship BRAC USA - Donations received 10,251,410 99,868 16,717,226 165,321 BRAC Bangladesh - Expense incurred on behalf of the Company - net 18,706,519 182,236 19,515,069 217,691 - Expense incurred by company on behalf of the - - 610,179 6,034 BRAC Bangladesh - net - Purchase of intangible by the Company from 17,117,599 163,429 - ‘BITS through BRAC Bangladesh 22
Stichting BRAC International - Donations received 3,387,771 33,003 13,669,369 135,180
- Payments made
-
-
20,936,184
202,870
- Expense incurred by company on behalf of the Stichting BRAC International
-
-
365,309
3,613
- Head office logistic / management fees for the year
30,675,184
298,833
29,207,842
288,843
23.1 2.1 Milllion USD Guarantee by Stitchting BRAC International to HBL HBL Rotterdam, The Netherlands as security against loan of Rs. 500 million obtained by the Company from HBL Pakistan. 23.2 Others Remuneration to key management personnel (Note 24)
50 Annual Report 2015
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 24
REMUNERATION TO CHIEF EXECUTIVE AND DIRECTORS The aggregate amounts charged in these financial statements for the year in respect of remuneration including benefits applicable to the Chief Executive and the Directors of the Company are given below: Cheif Executive 2015 - PKR
Directors
Cheif Executive 2014 - PKR
Directors
Managerial remuneration 7,741,440 - 7,380,000 Bonus 645,120 - 551,250 2014 - USD 2015 - USD Managerial remuneration 75,416 - 72,983 Bonus 6,285 - 5,451 No. of persons 1 - 1 Gratuity is payable to the Chief Executive Officer in accordance with the terms of employment while charge for the year in respect of grutuity is recognised in the financial statements based on actuarial valuation.
25
CASH FLOWS FROM OPERATING ACTIVITIES BEFORE WORKING CAPITAL CHANGES
2015 Note PKR USD (Note 2.5) Surplus / (Deficit) of income over expenditure for the year before taxation
2014 PKR USD (Note 2.5)
41,264,687
474,251
36,084,845
356,853
4 12,013,516
117,034
10,995,901
108,741
Adjustments for: Depreciation charge for the year Amortization charge for the year
5
2,824,404 27,515
- -
Provision against microcredit receivables
6.2 32,233,480
314,013
25,733,098
254,481
Provision adjusted against principal charges written off
6.1
(19,310,020)
(188,115)
(36,645,483)
(362,396)
Provision for Staff retirement gratuity scheme
16,705,730
162,745
16,102,879
159,245
Provision for Staff self insurance scheme
4,133,994
40,273
1,476,211
14,599
Service charges from microcredit receivables
(476,875,609)
(4,645,646)
(447,653,661)
(4,426,955)
Interest on bank deposits
(1,410,755)
(13,743)
(34,192)
(338)
Exchange loss / (gain) on long term loans
2,353,937
22,932
(2,029,171)
(26,724)
Exchange loss/(gain) on foreign currency bank accounts
(2,520,854)
(24,558)
1,057,892
10,462
Items of property and equipment written off
512,955
4,997
2,198,955
21,746
22
75,425,725
734,785
67,104,044
663,608
Cash flows before working capital changes
(312,647,377)
(2,973,503)
(325,608,682)
(3,226,678)
Interest expense on loans
Annual Report 2015 51
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2014 26
FINANCIAL INSTRUMENTS The Company has exposures to the following risks from its use of financial instruments: - Credit risk; - Liquidity risk; and - Market risk. The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Board is also responsible for developing and monitoring the Company’s risk management policies. The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Board of Directors oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.
26.1
Credit risk Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to microcredit receivables, security deposits, interest and service charges accrued, other receivables and balances at banks. The Company is exposed to credit risk from its operating and certain investing activities and the Company’s credit risk exposures are categorized under the following headings.
26.1.1 Counterparties In relation to the Company’s exposure to credit risk, microcredit borrowers and financial institutions are major counter parties and the Company’s policies to manage risk in relation to these counter parties are as follows: Microcredit receivables including service charges Receivable from borrowers with respect to microcredit receivables is diversified due to number of clients comprising the Company’s customer base. The Company has credit policy that governs the management of credit risk, including the specific transaction approvals and establishment of counter party credit repayment timeline. The Company limits credit risk by limiting the loan up to a maximum amount and continuing to evaluate creditworthiness of borrowers after transactions have been initiated. The Company controls its credit risk of micro credit advance by the following methods: (i) Ascertainment of credit worthiness of borrowers; (ii) Monitoring of advance on a continuing basis; (iii) Social and moral pressure of community and personal guarantors; and (iv) Active follow up. Banks The Company maintains its bank balances and makes investment in fixed deposits with banks having high credit rating and marketable securities in reputable companies. These balances are exposed to minimal credit risk as these are with reputable financial institutions and can be redeemed upon demand.
52 Annual Report 2015
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 26.1.2 Exposure to credit risk The carrying amount of financial assets represents the maximum credit exposure at the reporting date as follows:
2015 PKR
USD
2014 PKR
USD
Microcredit receivables 1,069,386,956 10,209,920 998,900,176 9,941,283 Long term deposit 750,000 7,161 - Security deposits (short term) 9,211,331 87,944 8,269,200 82,297 Accrued interest and service charges 25,070,995 239,364 10,878,884 108,269 Bank balances 172,840,930 1,650,191 152,999,796 1,522,689 Receivable from donor 55,609,136 530,925 28,193,811 280,591 Account receivable 229,874 2,195 619,452 6,165 1,333,099,222 12,727,700 1,199,861,319 11,941,294 The maximum exposure to credit risk by geographic region is limited to Pakistan. As at the year end the Company’s most significant receivable was from a bank from whom PKR 151,618,490 (USD: 1,447,570) (2014: 126,925,103) (USD: 1,263,188) was receivable. Based on past experience, the management believes that no further impairment allowance is necessary in respect of Company’s financial assets. The age analysis of Microcredit receivables and provision there against has been disclosed in notes 6.4 and 6.2 to these financial statements. 26.2 Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company uses different methods which assists it in monitoring cash flow requirements. Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a reasonable period, including the servicing of financial obligation; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
Annual Report 2015 53
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 The following are the contractual maturities of financial liabilities: Carrying amount
Contractual cash outflows
Within one year
Over one year
2015 - PKR Long term loans including markup 809,868,651 866,986,854 Short term loans including markup 131,860,400 131,860,400 Payable to related parties 181,449,883 181,449,883 Accrued and other liabilities 8,056,239 8,056,239 1,131,235,173 1,188,353,376
424,500,597 131,860,400 181,449,883 8,056,239 745,867,119
442,486,257 442,486,257
2015 - USD
Long term loans including markup 7,732,181 8,277,514 Short term loans including markup 1,258,931 1,258,931 Payable to related parties 1,732,384 1,732,384 Accrued and other liabilities 76,916 76,917 10,800,412 11,345,746
4,052,899 1,258,931 1,732,384 76,917 7,121,131
4,224,615 4,224,615
475,129,542 313,574,755 110,863,304 10,607,411 910,175,012
150,701,693 150,701,693
2014 - PKR Long term loans Short term loans Payable to related parties Accrued and other liabilities
605,292,940 313,574,755 110,863,304 10,607,411 1,040,338,410
625,831,235 313,574,755 110,863,304 10,607,411 1,060,876,705
2014 - USD Long term loans Short term loans Payable to related parties Accrued and other liabilities
6,024,014 3,120,769 1,103,337 105,567 10,353,687
6,228,416 3,120,768 1,103,337 105,567 10,558,088
4,728,598 3,120,768 1,103,337 105,567 9,058,270
1,499,818 1,499,818
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts. 26.3 Market risk Market risk is the risk that the value of the financial instrument may fluctuate as a result of changes in market interest rates or the market price due to change in credit rating of the issuer or the instrument, change in market sentiments, speculative activities, supply and demand of securities and liquidity in the market. The Company incurs financial liabilities to manage its market risk. All such activities are carried out with the approval of the Board. The Company is not significantly exposed to market risk.
54 Annual Report 2015
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 26.3.1 Currency risk Foreign currency risk is the risk that the value of financial asset or a liability will fluctuate due to a change in foreign exchange rates. It arises mainly where receivables and payables exist due to transactions entered into foreign currencies. The Company is exposed to currency risk on its bank balances denominated in foreign currencies, primarily US Dollars.
2015 PKR
USD
2014 PKR
USD
Bank balances 147,131,736 1,404,733 121,246,459 1,206,673 Payable to related parties (117,992,534) (1,126,528) (78,100,489) (777,274) KIVA Microfinancing 71,725,560 684,796 50,381,429 501,408 Net exposure (42,586,358) 406,491 (7,235,459) (72,009)
Following are the significant exchange rates applied during the year: US Dollars
Average rates Balance sheet date rate 2015 2014 2015 2014 PKR PKR PKR PKR 102.65
101.12
104.74
100.48
Sensitivity analysis A ten percent strengthening / (weakening) of the Pakistani Rupees against US Dollars at 31 December would have (decreased) / increased net surplus for the year by PKR 4.26 million (USD: 40659), (2014: PKR 0.72 million (USD : 7201) 26.3.2 Interest rate risk Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of the changes in the market interest rates. Majority of the interest rate exposure arises from microcredit receivables, loans and bank balances. 2015 2014 Rupees USD Rupees USD
Fixed rate instruments Financial assets Bank balances 104,753,577 1,000,130 51,373,859 511,284 Microcredit receivables - net 1,069,386,956 10,209,920 998,900,176 9,941,283 1,174,140,533 11,210,050 1,050,274,035 10,452,567 Financial liabilities Loan from KIVA micro financing (130,229,443) (1,243,359) (291,751,448) (3,120,769) Net exposure 1,043,911,090 9,966,691 758,522,587 7,331,798
Variable rate instruments Loan term loans 803,092,000 7,667,481 584,900,000 5,821,059 Fair value sensitivity analysis for fixed rate instruments The Company does not hold any financial asset at fair value through profit and loss. Therefore a change in interest rate at reporting date would not affect income and expenditure account of the Company.
Annual Report 2015 55
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015 Cash flow sensitivity analysis for variable rate instruments A change of 100 basis points in interest rates at the reporting date would have increased or decreased surplus by amount shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for 2014. Cash flow sensitivity (net) Variable rate instruments
Income and expenditure account 100 basis points 100 basis points 100 basis points 100 basis points increase increase decrease decrease Rupees USD Rupees USD (8,030,920) (76,675) 8,030,000 76,675
31 December 2015
(8,030,920)
(76,675)
8,030,000
76,675
Variable rate instruments
(5,849,000)
(58,211)
5,849,000
58,211
31 December 2014
(5,849,000) (58,211) 5,849,000 58,211
27 DETERMINATION OF FAIR VALUES The carrying value of all the financial assets and liabilities reflected in financial statements approximate their fair values. 27.1 Fund management The Board of Directors of the Company monitors the performance along with the fund required for the sustainable operations of the Company. There were no changes to the Company’s approach to the fund management during the year. The Company is not subject to externally imposed fund requirements. 27.2 Fair value hierarchy The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). Transfers between levels of the fair value hierarchy are recognised at the end of the reporting period during which the change has occurred. 27.3
Determination of fair values A number of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the following methods. Non - derivative financial assets The fair value of non-derivative financial assets is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes. Non-derivative financial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.
56 Annual Report 2015
Annual Report 2015 57
- - - -
Financial liabilities not measured at fair value Long term borrowings including markup Accrued and other liabilities* Payable to related parties* Short term borrowing including mark-up
- - - -
Other financial liabilities
- - - -
998,900,176 28,813,263 153,625,649 10,878,884
605,292,940 10,242,847 110,863,304 313,574,755
- - - -
- 809,868,651 - 8,056,239 - 181,449,883 - 131,860,400
1,069,386,956 55,609,136 173,913,297 25,070,995
Loans and receivables
605,292,940 10,242,847 110,863,304 313,574,755
998,900,176 28,813,263 153,625,649 10,878,884
809,868,651 8,056,239 181,449,883 131,860,400
1,069,386,956 55,609,136 173,913,297 25,070,995
Total
605,292,940 - - 313,574,755
998,900,176 - - -
809,868,651 - - 131,860,400
1,069,386,956 - - -
Level 2
605,292,940 313,574,755
-
809,868,651 131,860,400
1,069,386,956 -
Total
* The Company has not disclosed the fair values for these financial assets and financial liabilities, as these are either short term in nature or reprice periodically. Therefore, their carrying amounts are reasonable approximation of fair value.
- - - -
Financial assets not measured at fair value Micro credit receivables Other receivables* Cash and cash equivalents* Accrued interest*
31 December 2014
Held to 31 December 2015 maturity Financial assets not measured at fair value Micro credit receivables - Other receivables* - Cash and cash equivalents* - Accrued interest* - Financial liabilities not measured at fair value Long term borrowings including markup - Accrued and other liabilities* - Payable to related parties* - Short term borrowing including mark-up -
27.4 The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. Carrying amount Fair valu
For the year ended 31 December 2015
Notes to the Financial Statements
BRAC Pakistan
BRAC Pakistan Notes to the Financial Statements For the year ended 31 December 2015
28
29
OTHER INFORMATION Number of employees
2015
2014
Number of employees as at 31 December (Number) Average employees during the year (Number)
854 754 804 713
DATE OF APPROVAL These financial statements were approved by the Board of Directors of BRAC Pakistan in their meeting held on 31 March 2016.
Director Finance
Chief Executive Officer
58 Annual Report 2015
Director
BRAC Communications/AR15/June 16
BRAC BRAC Centre 75 Mohakhali Dhaka 1212 Bangladesh
T : +88 02 9881265 F : +88 02 8823542 E :
[email protected] W : www.brac.net
BRAC International Bezuidenhoutseweg 2, 2594 AV The Hague The Netherlands
BRAC Pakistan Plot No. 05, Street No. 09, Fayyaz Market, Sector G-8/2 Islamabad, Pakistan
T : +92-51-2263376-80 E :
[email protected]
Photo credit: BRAC/Nasir Ali Mamun/ Shehzar Noorani/Asad Zaidi Design: Consilium
