Pakistan Annual Report 2011 by BRAC

Pakistan 5,000 years of heritage From the delta of the Indus to the mountains of the Karakoram, Pakistan is a land of ancient civilizations â&#x20AC;&#x201C; yet still plagued by challenges similar to those of "ANGLADESH Ă&#x2013;,AUNCHINGĂ&#x2013;AĂ&#x2013;MICROĂ&#x2122;NANCEĂ&#x2013;PROGRAMMEĂ&#x2013; here in 2007, BRAC Pakistan has since added pilots to include vital services in health, education and integrated assistance for the ultra poor. In addition to having over 90,000 micro-borrowers, BRACâ&#x20AC;&#x2122;s 138 Pakistani health volunteers have referred thousands of patients and its 40 schools have given hundreds of disadvantaged students a head start in pre-primary education. What started out in 1972 in a remote village of Bangladesh as a limited relief operation, turned into the largest development organisation in the world. Of major non-governmental organisations, BRAC is one of the few based in the global south. Today, BRAC is a development success story, spreading solutions born in Bangladesh to 10 other countries around the world â&#x20AC;&#x201C; a global leader in creating opportunity for the worldâ&#x20AC;&#x2122;s poor. Organising the poor using communitiesâ&#x20AC;&#x2122; own human and material resources, it catalyses lasting change, creating an ecosystem in which the poor have the chance to seize control of their own lives. We do this with a holistic development approach geared toward inclusion, using TOOLSĂ&#x2013;LIKEĂ&#x2013;MICROĂ&#x2122;NANCE Ă&#x2013;EDUCATION Ă&#x2013;HEALTHCARE Ă&#x2013;LEGALĂ&#x2013; services, community empowerment and more. Our work now touches the lives of an estimated 126 million people, with staff and BRAC-trained entrepreneurs numbering in the hundreds of thousands â&#x20AC;&#x201C; a global movement bringing change to 10 countries in Asia, Africa and the Caribbean, with operations in our 11th country, Philippines, being launched in 2012.

Pakistan

Harnessing the past Enriching the future

Contents Mission, Vision and Values Chairpersonâ&#x20AC;&#x2122;s Statement Education Health 0LFURĂ&#x203A;QDQFH TUP BRAC across the world Harnessing the past Governance Management Development partners Financials

01 02 04 07 13 16 18 20 21 21 22

1 Annual Report 2011

Vision, Mission and Values

Vision

Mission

Values

A world free from all forms of exploitation and discrimination where everyone has the opportunity to realise their potential.

Our mission is to empower people and communities in situations of poverty, illiteracy, disease and social injustice. Our interventions aim to achieve large scale, positive changes through economic and social programmes that enable men and women to realise their potential.

Innovation For forty years, BRAC has been an innovator in the creation of opportunities for the poor to lift themselves out of poverty. We value creativity in programme design and strive to display global leadership in groundbreaking development initiatives.

Integrity We value transparency and accountability in all our professional work, with clear policies and procedures, while displaying the utmost level of honesty in our financial dealings. We hold these to be the most essential elements of our work ethic.

Inclusiveness We are committed to engaging, supporting and recognising the value of all members of society, regardless of race, religion, gender, nationality, ethnicity, age, physical or mental ability, socio economic status and geography.

Effectiveness We value efficiency and excellence in all our work, constantly challenging ourselves to perform better, to meet and exceed programme targets, and to improve and deepen the impact of our interventions.

2 Annual Report 2011

Chairperson’s Statement

It gives me great pleasure to present the ANNUALÖREPORTÖANDÖTHEÖAUDITEDÖÙNANCIALÖ statements for the year ended 31 December 2011. Pakistan has suffered from internal political disputes and low levels of foreign investments for decades. Some of their long term challenges include expanding investments in education, healthcare, electricity production, and reducing dependence on foreign donors. As of 2011, 60.98 per cent of the population is living on below USD 2 a day, with an unemployment rate of 5.6 per cent. On the Human Development Index, Pakistan stands at 145 out of 187 countries. Amongst the highlights of 2011, BRAC has EXPANDEDÖITSÖMICROÙNANCEÖPROGRAMMEÖTOÖAÖ total of 100 branches across the country, adding six more branches since 2010. Our total disbursement of micro, small enterprise and agriculture loans for the year 2011 is PKR 1,656,204,000 (USD 19,162,374) among 97,547 borrowers. Small enterprise loans have been initiated in twenty branches across the country, and agriculture loans are provided to male farmers in three districts of Punjab.

Annual Report 2011 3

During this year, we distributed assets as a means of income for 1,500 women in Lasbela through our ultra-poor programme, which serves those living in extreme poverty. These women also received health cards from us so that they can acquire free-of-cost medicine at three of our health clinics in Lasbela. So far, 1,416 of these women have received health subsidies. Looking ahead, we will be continuing our plan of expanding the health coverage to REACHÖATÖLEASTÖÙVEÖDISTRICTSÖANDÖESTABLISHINGÖ seven health clinics by end of 2012. I take this opportunity to commend our team in Pakistan who have worked with enduring commitment and loyalty to make use of every opportunity that has come our way. The quality of our performance is attributed to this remarkably competent team, their knowledge, skills and professionalism. I extend my sincere thanks to the members of the governing body, whose leadership and foresight has steered the organisation to success.

I thank the government and our development partners in Pakistan for their continued support as we strive to create greater values in our services to contribute towards the progress and prosperity of Pakistan.

BRAC Programmes

4 Annual Report 2011

Education With education programmes in six countries, BRAC has built the largest secular, private education system in the world, including 36,000 schools giving disadvantaged youth a second chance at learning. Complementing mainstream school systems with innovative teaching methods and materials, BRAC opens primary schools in communities unreached by formal education systems, bringing joyful learning to millions of children, particularly those affected by extreme poverty, violence, displacement or discrimination. At the pre-primary level, we target underprivileged children to prepare them for mainstream primary school entry. At the secondary level, we provide need-based trainings, student mentoring initiatives, and e-learning materials to improve the mainstream secondary education system.

Eradicating educational inequality BRAC is implementing its educational programme in Pakistan to supplement the governmentâ&#x20AC;&#x2122;s drive to establish early childhood education centres in various PARTSĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;COUNTRY Ă&#x2013;4HEYĂ&#x2013;AREĂ&#x2013;SPECIĂ&#x2122;CALLYĂ&#x2013; targeting those who are underprivileged, deprived, neglected, and are suffering from multiple discrimination, which impacts their ability to access and retain further schooling. Similarly, the education programme is designed to supplement

the government of Pakistan (GoPâ&#x20AC;&#x2122;s) efforts in achieving the Millennium Development Goals of ensuring gender equality in education as well as access to, and completion of, quality primary education for all children by 2015. Global experiences clearly demonstrate that early childhood interventions HAVEĂ&#x2013;MANYĂ&#x2013;BENEĂ&#x2122;TSĂ&#x2013;FORĂ&#x2013;COGNITIVEĂ&#x2013;ANDĂ&#x2013; psycho-social development of children.

Pre-primary education is, therefore, an important strategic intervention for promoting quality primary education. It serves as a â&#x20AC;&#x2DC;school readiness programmeâ&#x20AC;&#x2122; for young children, easing their transition from home into a formal classroom setting and familiarising them with the alphabet and numbers. Creating provisions for pre-primary schooling, especially for girls, can ensure their continued participation in primary schooling, which contributes

A BRAC primary school in Khyber-Pakhtunkhwa.

Annual Report 2011 5

Education

to gender equality in education. Early education is therefore a valuable intervention for success in achieving universal primary education. In March 2009, we piloted an early childhood education project in Haripur, Khyber-Pakhtunkhwa with a grant from BRAC USA. Based on our initial assessment and consultation with community members, we found that education, particularly for girls, has been one of the most pressing needs for the country. Additionally, children from poor families require access to pre-primary and primary school.

The objective of the education programme is to develop an institutional structure with skilled key personnel and trained teachers to deliver a cost-effective and replicable pre-school intervention to strengthen the GoP’s efforts to implement early childhood education. They are aiming to create child-centred learning environments, which are favourable for personal, social and emotional development, language development and communication, knowledge and understanding of the world, creative and aesthetic development, physical development, and mathematical development, as well as building a positive attitude towards further learning.

Sir Fazle Hasan Abed’s life and career embody the values of WISE. He recognised that education is a passport to social inclusion and opportunity. He discovered a successful formula, and he adapted and expanded it – first in Bangladesh and then in other countries. As a Growth in 2011 direct consequence, millions BRAC Pakistan established pre-primary of people around the world and primary schools to promote education and reduce the drop-out rate from lead healthier, happier and government schools. Currently, there are more productive lives. His ÖPRE PRIMARYÖANDÖÙVEÖPRIMARYÖSCHOOLSÖ vision, resourcefulness and in Haripur and Lasbela respectively, with 465 current students and 1,187 graduates determination are vital who have completed pre-primary ingredients of the innovation schooling and moved on to government process and he stands as an schools. example to all of us who BRAC’s education programme in Pakistan is not the replication of the BRAC model, believe that education, more a synthesis of its experience combined than anything else, determines but with local practices and needs. One of the destiny of individuals and the major distinctive features of BRAC’s approach is the involvement of the societies.

H.E. Dr. Abdulla bin Ali Al-Thani

WISE (World Innovation Summit for Education) Chairman

community, local government, provincial/ CENTRALÖEDUCATIONÖOFÙCIALS ÖANDÖOTHERÖ stakeholders of primary education in the design and implementation process.

In March 2009, BRAC USA made a grant amounting to USD 47,143 to support 75 percentof the funding for BRAC Pakistan

Part of their strategy includes transitioning pre-primary graduates into Grade I in formal primary schools, so that there is a lower drop-out rate and a greater retention OFÖÙRSTÖGENERATIONÖSTUDENTSÖATTENDINGÖ government primary schools. The effective participation of parents and communities in the educational process is crucial for the development of any child, with a surrounding environment rich in culture and experience.

to open 20 pre-primary schools, with 620 students (386 girls and 234 boys) in Haripur District of KPK Province. As of $ECEMBERÖ Ö ÖPRE PRIMERYÖANDÖÙVEÖ primary schools have been completed. So far, 40 schools have been completed and 1,187 students have graduated. In 2012, BRAC will open 200 pre-primary schools in Khyber-Pakhtunkhwa province with support from DFID, providing early education to 6,600 children.

6 Annual Report 2011

CA S E

Education

S T U DY

Saiqa now loves attending school, learning new things and making new friends.

SAIQA BIBI: A truly special student

â&#x20AC;&#x153;Before, I didnâ&#x20AC;&#x2122;t think someone with my condition could ever go to school, but thanks to BRAC, and the support I received from my teachers, I love going to school now.â&#x20AC;&#x153; Saiqa Bibi is eight years old and lives with her parents and three siblings in the Old Bakka village of the Haripur district, Khyber Pakhtunkhwa province. Her father earns his livelihood working in a shop, whilst her mother works in the homes of other people. Saiqaâ&#x20AC;&#x2122;s physical disability has prevented her from receiving any formal education. Even her parents were not hopeful of providing the adequate schooling for their daughter, due to the lack of schools which cater to children with special needs. Saiqa spent the majority of her time at home, refusing to engage in any recreational activities due to her physicall differences. While opening a pre-primary school in Old Bakka, a surveyor included her

name in the list as a probable student, because they were instructed that the children with special needs and the poorest children will be admitted on a priority basis. Her parents initially asked the surveyor to remove Saiqaâ&#x20AC;&#x2122;s name from the list of the selected students since they felt she would be unable to attend. However, her name was kept on the list and Saiqa was admitted to the school. Saiqaâ&#x20AC;&#x2122;s teacher was instructed to pay special attention to her, and during the monthly Motherâ&#x20AC;&#x2122;s Forum, the BRAC education programme organiser advised her parents to encourage and support her in her daily life, such as helping her with her homework. They wanted Saiqa to feel connected to the school so they motivated her to attend every day. Gradually, through the encouragement from her parents and teachers, Saiqa became more punctual and was participating in all school activities. She was even elected as a group leader. After the completion of her course from BRACâ&#x20AC;&#x2122;s pre-primary school, she was enrolled at the nearby government primary school with the help of BRACâ&#x20AC;&#x2122;s staff. Her parents are now very hopeful that Saiqa

will be able to continue her education and achieve great success in her life. The BRAC education programme Ă&#x2122;RSTĂ&#x2013;OPENEDĂ&#x2013;THEĂ&#x2013;DOORSĂ&#x2013;OFĂ&#x2013;ITSĂ&#x2013;SCHOOLSĂ&#x2013; in Pakistan in the spring of 2009. Before establishing the schools, BRAC ENGAGEDĂ&#x2013;INĂ&#x2013;EXTENSIVEĂ&#x2013;Ă&#x2122;ELDĂ&#x2013;WORKĂ&#x2013;WITHĂ&#x2013;LOCALĂ&#x2013; communities to get their approval for "2!#lSĂ&#x2013;EDUCATIONĂ&#x2013;PROGRAMME Ă&#x2013;4HEĂ&#x2013;Ă&#x2122;RSTĂ&#x2013; task was to establish a partnership with the government of Khyber-Pakhtunkhwa. This enabled BRAC to survey areas in the province to establish the schools where they were needed. With the support of the local government, "2!#Ă&#x2013;CONDUCTEDĂ&#x2013;DOOR TO DOORĂ&#x2013;Ă&#x2122;ELDĂ&#x2013; surveys and held a number of town hall meetings with communities to understand their needs.

BRAC Programmes

Annual Report 2011 7

Health Working in eight countries, BRACâ&#x20AC;&#x2122;s health programmes promote sustainable and accessible healthcare for the poor in collaboration with both the state and private healthcare sector. Working in their own slums and villages, BRACâ&#x20AC;&#x2122;s army of self-employed community health volunteer helps the entire community in staying healthy, with a groundbreaking door-to-door approach. These workers create a cost-effective bridge between the under-served poor communities and formal healthcare systems. BRAC also organises health meetings to encourage an exchange of knowledge, thus empowering people to take care of themselves, their families and neighbours.

Growth in 2011 BRACâ&#x20AC;&#x2122;s health programme in Pakistan can now boast 16 lady health workers, and 158 health volunteers in helping to provide primary healthcare services in Nowshera, Sahiwal and Lasbela. With a focus on knowledge retention, BRAC organised monthly refreshers for 34 programme assistants and 138 health volunteers in 2011. During 2011, 200 traditional birth attendants received training on safe delivery, while antenatal care was provided to 3,821 pregnant women, while 3,526 mothers received postdelivery care. Around 8,526 patients who had contracted malaria were treated through the malaria programme, and 180

TUBERCULOSISĂ&#x2013;PATIENTSĂ&#x2013;BENEĂ&#x2122;TTEDĂ&#x2013;FROMĂ&#x2013;THEĂ&#x2013; TB control programme. Pneumonia is another deadly disease that kills a large number of children and vulnerable adults and BRAC was able to offer treatment to 6,549 patients. As of December 2011, 7,856 children and women were immunised. Amongst the highlights of 2011, BRAC in Pakistan began issuing health cards to its ULTRA POORĂ&#x2013;BENEĂ&#x2122;CIARIES Ă&#x2013;"YĂ&#x2013;USINGĂ&#x2013;THESEĂ&#x2013; cards, the ultra poor can receive medicine free of cost from any of the three health clinics established by BRAC in the Lasbela DISTRICT Ă&#x2013;3OĂ&#x2013;FAR Ă&#x2013; Ă&#x2013;BENEĂ&#x2122;CIARIESĂ&#x2013;HAVEĂ&#x2013; received health subsidies.

Within our generation we have seen a worldwide sharp reduction of deaths related to treatable diseases. We owe a lot of this to BRAC. Jeffrey Sachs

Director, Earth Institute, Columbia University

A BRAC community health worker checks the blood pressure of a woman during her daily door-to-door visits to households in her community.

8 Annual Report 2011

Health

Improving health in Pakistan Pakistan has made reasonable progress in improving the health status of its population over the last decade, as REÚECTEDÖBYÖANÖINCREASEÖINÖIMMUNISATIONÖ coverage, and reduced infant mortality. However, the situation still remains dire in most parts of the country as the health status is well below the average amongst all low income countries. Unsanitary conditions, polluted water, illiteracy amongst rural mothers, urban slums, high fertility, small budget allocation, and inadequate administrative structure have BEENÖIDENTIÙEDÖASÖTHEÖMAINÖHURDLESÖINÖ the progress of health conditions. The government’s effort to reach out to the poor through lady health workers (LHWs) have been a success in many aspects, although in certain areas this initiative has failed to provide full coverage.

Health and nutrition education is provided through separate health forums for men and women at the community level as in some regions of Pakistan, gender segregation is strictly maintained. BRAC also has alternative methods to deliver health messages through the imams during prayers in the mosques. A greater NEEDÖHASÖBEENÖIDENTIÙEDÖREGARDINGÖFAMILYÖ planning as the population of Pakistan is increasing at an accelerated rate. BRAC’s community health volunteers (CHVs) provide door to door family planning service, including supplying temporary birth control methods. The CHVs also provide follow-up services on UNDER ÙVEÖCHILDRENÖDURINGÖTHEIRÖREGULARÖ household visits, keeping a record of their immunisation and Vitamin A intake status in a family card. They also provide health and nutrition education to all the families.

BRAC initiated their health programme in Pakistan with the aim to improve the access to health care, and consequently improving the health status of the poor, particular the women and children. The programme provides basic primary health care services and maternal, neonatal, and child health (MNCH) services to the local community.

The health programme targets the immunisation of infants less than one year, and also women of childbearing age, especially pregnant women. They also provide antenatal and postnatal care, promote breast feeding, encourage family planning, advise to use a trained birth attendant in the case of normal

delivery, and refer mothers to hospital if complication arises. The CHVs are trained to provide basic curative services by diagnosing and treating 10 common diseases and referring patients with serious complications to the nearest government facility. Activities under the water and sanitation intervention are regularly conducted by raising awareness among community people about the importance of using safe water and sanitary latrines through household visits and group health education.

Farhanda Naveed (from left), forty-two years old. She is a health worker of BRAC Pakistan health program. Farhanda has been taking weight of a pregnant woman at weekly BRAC health forum meeting in Midhali village of Sahiwal district of Punjab province of Pakistan.

Annual Report 2011 9

Health

Azra is proud to serve her community as a health volunteer.

AZRA BIBI: Learning to save her husbandâ&#x20AC;&#x2122;s life

â&#x20AC;&#x153;I can help my people as BRAC helped my husband. The BRAC health forum left a remarkable impact on my life because through this forum I was able to recognise early symptoms of tuberculosis and I was able to help my husband. Thank you very much BRAC.â&#x20AC;?

Azra Bibi, a 42-year old woman, who lives in Mohalla Rajpura, Pakistan, is among the many women who have been empowered by BRACâ&#x20AC;&#x2122;s health programme. She was informed about a BRAC health forum held in her neighbourhood by Rashida, a BRAC community health worker. Community health workers (CHWâ&#x20AC;&#x2122;s) and community health volunteers (CHVâ&#x20AC;&#x2122;s) are GIVENĂ&#x2013;EXTENSIVEĂ&#x2013;TECHNICALĂ&#x2013;ANDĂ&#x2013;Ă&#x2122;ELDĂ&#x2013;WORKĂ&#x2013; training that enables them to deliver quality services to the community members, such as Azra. They are knowledgeable

and equipped to treat many common illnesses that can be treated effectively with common medicines. They are also educated on many basic health matters, such as sanitation, family planning, ante/post-natal care, vaccinations, and respiratory and stomach illnesses. Rashida is provided with extensive training from BRAC that gives her the essential information to brief community members on health topics such as the symptoms, prevention and initial treatment of pneumonia, which is one of the topics of the health forum. Azra was intrigued by this forum which led her to become eager to participate in future forums. During the forum, Azra listened attentively while the topic of tuberculosis was discussed and found the session to be very informative and educational. At the end of the health forum, she met Nasreen, who was a health worker and speaker of the forum, to share some of her concerns. Azra mentioned to Nasreen that some of the symptoms explained during the session were common symptoms her husband was experiencing during that time. Although he has been taking

medicine for the last two months, there have been no visible improvements. Nasreen visited her home afterwards and advised Azraâ&#x20AC;&#x2122;s husband, Aslam Ali, to take a sputum test called Directly Observed Therapy (DOT) for the treatment of tuberculosis performed by community health workers themselves. Nasreen performed the DOT on Ali, and the results of the examination CONĂ&#x2122;RMEDĂ&#x2013;THATĂ&#x2013;HEĂ&#x2013;WASĂ&#x2013;INĂ&#x2013;FACTĂ&#x2013;SUFFERINGĂ&#x2013; from tuberculosis. Although both the husband and wife were distraught by the results, Nasreen explained to them that tuberculosis is a curable disease and she can help assist Ali in getting free medicine from a local hospital. As part of her responsibility, Nasreen consistently followed up with Ali, and after nine months of medication and treatment, he was FEELINGĂ&#x2013;SIGNIĂ&#x2122;CANTLYĂ&#x2013;BETTER Ali and Azra were thankful to BRAC because Nasreen was able to help identify Aliâ&#x20AC;&#x2122;s disease at the initial stage and, as a result, he was able to seek treatment. This educational forum and follow up treatment left a positive impact on Azra, which inspired her to work with BRAC as a health

BRAC Programmes

10 Annual Report 2011

Microfinance )NNOVATIVE Ă&#x2013; CLIENT FOCUSEDĂ&#x2013; ANDĂ&#x2013; SELF SUSTAINABLE Ă&#x2013; THEĂ&#x2013; "2!#Ă&#x2013; MICROĂ&#x2122;NANCEĂ&#x2013; PROGRAMMEĂ&#x2013; ISĂ&#x2013; AĂ&#x2013; CRITICALĂ&#x2013; COMPONENTĂ&#x2013; OFĂ&#x2013; OURĂ&#x2013; holistic approach to support livelihoods. Over the course of the last four decades, we have grown to become one OFĂ&#x2013;THEĂ&#x2013;WORLDlSĂ&#x2013;LARGESTĂ&#x2013;PROVIDERSĂ&#x2013;OFĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;SERVICESĂ&#x2013;TOĂ&#x2013;THEĂ&#x2013;POOR Ă&#x2013;PROVIDINGĂ&#x2013;TOOLSĂ&#x2013;THATĂ&#x2013;MILLIONSĂ&#x2013;OFĂ&#x2013;PEOPLEĂ&#x2013;USEĂ&#x2013;TOĂ&#x2013;BETTERĂ&#x2013; manage their lives.

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BRAC shows how microcredit schemes are a very important means of delivering self-sustainability in the poorest communities and how women are proving to be the most responsible and successful beneficiaries.

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Cherie Blair

Human Rights Activist Cherie Blair Foundation for Women

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Serving the poor in Pakistan Pakistan is a developing country with unevenly distributed access to economic opportunities or basic services. The MICROĂ&#x2122;NANCEĂ&#x2013;SECTORĂ&#x2013;INĂ&#x2013;0AKISTANĂ&#x2013;OFFERSĂ&#x2013; AĂ&#x2013;SMALLĂ&#x2013;PROPORTIONĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013; services to the poor. The countryâ&#x20AC;&#x2122;s present infrastructure is able to meet the demands of only 10 per cent of the potential market estimated at 10 million HOUSEHOLDS Ă&#x2013;4HISĂ&#x2013;IMPLIESĂ&#x2013;AĂ&#x2013;SIGNIĂ&#x2122;CANTĂ&#x2013;GAP Ă&#x2013; and an opportunity for growth, product DIVERSIĂ&#x2122;CATION Ă&#x2013;ANDĂ&#x2013;MARKETĂ&#x2013;SEGMENTATION Ă&#x2013;Ă&#x2013; Foreseeing the opportunity to serve the poor, BRAC started operations with the objective of poverty alleviation and human DEVELOPMENTĂ&#x2013;THROUGHĂ&#x2013;MICROĂ&#x2122;NANCE

Working mostly with women, this programme aims to strengthen the income base of the poor by providing easy access to institutional lending to start small and medium income generating activities, as well as mobilise women to contribute to household income. -ICROĂ&#x2122;NANCEĂ&#x2013;ISĂ&#x2013;AĂ&#x2013;POWERFULĂ&#x2013;TOOLĂ&#x2013;WHICHĂ&#x2013;CANĂ&#x2013; be wielded by the poor to pave their way out of poverty by taking advantage of new opportunities and better managing the sufferings they face. The social INTERMEDIATIONĂ&#x2013;EMBEDDEDĂ&#x2013;INĂ&#x2013;MICROĂ&#x2122;NANCEĂ&#x2013; in the form of group functions can build social capital among the poor which, COMBINEDĂ&#x2013;WITHĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;CAPITAL Ă&#x2013;HASĂ&#x2013;THEĂ&#x2013; potential to be a powerful mix in the Ă&#x2122;GHTĂ&#x2013;AGAINSTĂ&#x2013;POVERTY Ă&#x2013;4HEĂ&#x2013;FORMATIONĂ&#x2013;OFĂ&#x2013;

such social capital through the process OFĂ&#x2013;MICROĂ&#x2122;NANCEĂ&#x2013;PROVISIONĂ&#x2013;CANĂ&#x2013;ALSOĂ&#x2013;BEĂ&#x2013; used as an entry point to challenge other structures that reproduce poverty. It is such a holistic vision of possibilities that DEĂ&#x2122;NESĂ&#x2013;"2!#lSĂ&#x2013;VISIONĂ&#x2013;OFĂ&#x2013;MICROĂ&#x2122;NANCE The overall objectives of BRACâ&#x20AC;&#x2122;s MICROĂ&#x2122;NANCEĂ&#x2013;PROGRAMMEĂ&#x2013;INĂ&#x2013;0AKISTANĂ&#x2013;AREĂ&#x2013; TOĂ&#x2013;SIGNIĂ&#x2122;CANTLYĂ&#x2013;CONTRIBUTEĂ&#x2013;TOĂ&#x2013;THEĂ&#x2013;REDUCTIONĂ&#x2013; of poverty, create self-employment opportunities, enhance household income level and reduce the vulnerabilities of the rural poor of Pakistan, especially the women. In order to accomplish these goals, BRAC will emphasise on the following immediate objectives:

Increase permanent access to credit to poor households, and subsequently offer

Annual Report 2011 11

Microfinance

Boshra sits with her husband Saeed and a group leader who will sign as guarantor to receive a loan from BRAC in Quanchi Amer Sadhu branch in the city of Lahore, the capital of Punjab Province in Pakistan.

Ă&#x2013;

savings services through a regulated MICROĂ&#x2122;NANCEĂ&#x2013;BANK Ă&#x2013;

Give opportunities to the disadvantage, especially women, for income generating activities, so they could be empowered and have greater decision making power both within her household and beyond, and

Alleviate poverty in rural Pakistan and contribute to attaining the Millennium Development Goals (MDGs).

Growth in 2011 As of December 2011, we have 97,547micro, small enterprise and agriculture loan borrowers from our 100 branches. A total amount of PKR 1,656,204,000 (USD 19,162,374) has been disbursed in loans as of December 2011. BRAC has also initiated its small enterprises programme (SEP) in 20 branches in the Nowshera, Peshawar, Rawalpindi, Gujrat, Lahore, Sahiwal and Multan Districts in Pakistan. All

arrangements, including the recruitment of relevant staff and their proper training have already been conducted. In addition, we initiated the agriculture loan through eight branches in the Sahiwal, Multan, Muzaffargarh and Multan districts of Punjab Province. BRAC is successfully replicating its STANDARDĂ&#x2013;MICROĂ&#x2122;NANCEĂ&#x2013;MODELĂ&#x2013;INĂ&#x2013;0AKISTAN Ă&#x2013; "2!#Ă&#x2013;USESĂ&#x2013;ITSĂ&#x2013;FARĂ&#x2013;REACHINGĂ&#x2013;MICROĂ&#x2122;NANCEĂ&#x2013; platform to spearhead its health and education programmes, and improve market access of the poor by developing extension services and sub sectors such as poultry and livestock. It combines with a grant-based assistance to craft a graduation scheme for the ultra-poor. The basic business model is one that focuses on building the structure for sustainable MICROĂ&#x2122;NANCEĂ&#x2013;INĂ&#x2013;HAVINGĂ&#x2013;THEĂ&#x2013;ABILITYĂ&#x2013;TOĂ&#x2013;REACHĂ&#x2013; the appropriate scale. To do more, our programme builds on that structure of INSTITUTIONALĂ&#x2013;CAPITALĂ&#x2013;TOĂ&#x2013;Ă&#x2122;GHTĂ&#x2013;POVERTY Ă&#x2013;7EĂ&#x2013; UNDERSTANDĂ&#x2013;THATĂ&#x2013;MICROĂ&#x2122;NANCEĂ&#x2013;MUSTĂ&#x2013;BEĂ&#x2013; managed separately and sustainably, BUTĂ&#x2013;ALSOĂ&#x2013;SEEKĂ&#x2013;TOĂ&#x2013;Ă&#x2122;NDĂ&#x2013;SYNERGIESĂ&#x2013;WITHĂ&#x2013;OTHERĂ&#x2013;

development interventions. "2!#Ă&#x2013;STARTEDĂ&#x2013;ITSĂ&#x2013;MICROĂ&#x2122;NANCEĂ&#x2013;PROGRAMMEĂ&#x2013; in the Khyber Pakhtunkhwa (KPK) of Pakistan in August 2007 at a small scale. By December 2008, BRAC was OPERATINGĂ&#x2013;WITHĂ&#x2013; Ă&#x2013;BRANCHĂ&#x2013;OFĂ&#x2122;CESĂ&#x2013;INĂ&#x2013;SEVENĂ&#x2013; districts in KPK, Sindh and Punjab. During 2007 to 2008, the organisation gained knowledge and experience assessing potential demand and socio-cultural dynamics in the local market. Through this learning process, BRAC has made NECESSARYĂ&#x2013;ADJUSTMENTSĂ&#x2013;TOĂ&#x2013;Ă&#x2122;TĂ&#x2013;THEĂ&#x2013;0AKISTANĂ&#x2013; environment. Looking ahead to the future, BRAC ISĂ&#x2013;AIMINGĂ&#x2013;TOĂ&#x2013;EXPANDĂ&#x2013;ITSĂ&#x2013;MICROĂ&#x2122;NANCEĂ&#x2013; programme, increasing their number of members to 142,081 and their number of borrowers to roughly 117,724 in Pakistan. For our agriculture programme, we are planning to steadily increase the number of districts we cover by end of 2012, targeting to reach 2,836 borrowers.

12 Annual Report 2011

CA S E

Microfinance

S T U DY

Naziran and her husband are now financially secure, and can send their children to school.

NAZIRAN: Finding hope through BRAC

â&#x20AC;&#x153;I am very appreciative of the steps undertaken by BRAC in Pakistan to alleviate poverty, and to lend us a hand and COMEĂ&#x2013;TOĂ&#x2013;OURĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;RESCUEĂ&#x2013; when we were desperately in need of assistance.â&#x20AC;? Naziran came from a poor family, living in Sukkur in the Sindh province of northern Pakistan. As a day labourer, her husbandâ&#x20AC;&#x2122;s INCOMEĂ&#x2013;WASĂ&#x2013;NOTĂ&#x2013;SUFĂ&#x2122;CIENTĂ&#x2013;TOĂ&#x2013;SUPPORTĂ&#x2013; HERĂ&#x2013;ANDĂ&#x2013;THEIRĂ&#x2013;Ă&#x2122;VEĂ&#x2013;CHILDREN Ă&#x2013;3ENDINGĂ&#x2013;THEIRĂ&#x2013; children to school was not an option BECAUSEĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;FAMILYlSĂ&#x2013;GRIMĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013; situation. Naziran desperately wanted to do something to help her family overcome their present situation. One day, a female staff working for BRAC in Pakistan visited her home and informed HERĂ&#x2013;ABOUTĂ&#x2013;THEIRĂ&#x2013;MICROĂ&#x2122;NANCEĂ&#x2013;PROGRAMMEĂ&#x2013; ANDĂ&#x2013;ITSĂ&#x2013;BENEĂ&#x2122;TS Ă&#x2013;3HEĂ&#x2013;ASSISTEDĂ&#x2013;HERĂ&#x2013;EVENĂ&#x2013; FURTHERĂ&#x2013;BYĂ&#x2013;FACILITATINGĂ&#x2013;HERĂ&#x2013;Ă&#x2122;RSTĂ&#x2013;LOANĂ&#x2013;FROMĂ&#x2013; BRAC, which she utilised by initiating her own small business. In March 2010, she took out a loan amounting to PKR 10,000

(USD 110) from BRAC and invested on a bangles shop, since there were no other shop of such kind in the surrounding areas. Soon after entering the business, SHEĂ&#x2013;BEGANĂ&#x2013;TOĂ&#x2013;TURNĂ&#x2013;AĂ&#x2013;PROĂ&#x2122;TĂ&#x2013;FROMĂ&#x2013;HERĂ&#x2013;NEWĂ&#x2013; profession. She was earning a good income from her business, but soon the region was affected by a natural disaster. 4HEĂ&#x2013;DEVASTATINGĂ&#x2013;Ă&#x161;OODĂ&#x2013;INĂ&#x2013; Ă&#x2013;LEFTĂ&#x2013;HOUSESĂ&#x2013; and shops destroyed, affecting the lives of 14 million residents. During this time, BRAC played a vital role in aiding those affected by the Ă&#x161;OOD Ă&#x2013;4HEYĂ&#x2013;WEREĂ&#x2013;ABLEĂ&#x2013;TOĂ&#x2013;ASSISTĂ&#x2013;WITHĂ&#x2013;THEĂ&#x2013; re-establishment of the businesses by providing those affected by the disaster WITHĂ&#x2013;REĂ&#x2122;NANCINGĂ&#x2013;LOANS Ă&#x2013;WHICHĂ&#x2013;WOULDĂ&#x2013;COVERĂ&#x2013; ALLĂ&#x2013;THEĂ&#x2013;DAMAGESĂ&#x2013;CAUSEDĂ&#x2013;BYĂ&#x2013;THEĂ&#x2013;Ă&#x161;OOD Ă&#x2013; Naziran reshaped her business and STARTEDĂ&#x2013;GAININGĂ&#x2013;PROĂ&#x2122;TSĂ&#x2013;AGAIN Ă&#x2013;WHICHĂ&#x2013;GAVEĂ&#x2013; her the ability to pay back both her loans in time. Recently, she took out a third loan from BRAC to expand her business. She is hopeful that she will be able to earn a SUFĂ&#x2122;CIENTĂ&#x2013;INCOMEĂ&#x2013;THROUGHĂ&#x2013;THISĂ&#x2013;VENTUREĂ&#x2013;TOĂ&#x2013; lead a comfortable life. Eventually, she will be able to send her children to school as well.

BRAC focuses on both the economic and social needs of their target borrowers in Pakistan, recognising and understanding that communities of borrowers require multiple interventions to move out of poverty. BRACâ&#x20AC;&#x2122;s aim is to strengthen the income base of underprivileged women by providing easy access to institutional lending, which in turn will enable them to begin their own income-generating activities. BRACâ&#x20AC;&#x2122;s policy in Pakistan is to encourage investments for women in productive activities. They place primary focus on women borrowers because they play a pivotal role within the local and FAMILYĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;NETWORKS Ă&#x2013;ASĂ&#x2013;THEYĂ&#x2013;TYPICALLYĂ&#x2013; operate businesses that provide products or services to their local communities.

BRAC Programmes

Annual Report 2011 13

Targeting the Ultra-Poor BRACâ&#x20AC;&#x2122;s ground-breaking ultra-poor programme focuses on improving the economic and social situation of extremely deprived women and their households. Upholding BRACâ&#x20AC;&#x2122;s holistic approach to development, we carry out a sustainable model by creating prospects for the most disadvantaged people within communities to overcome extreme poverty through careful selection, intensive integrated support including asset grants, skill development, personalised healthcare support, and ensuring social security through community mobilisation.

INTERVENING

Reducing extreme poverty

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Zareen Khan tends to the goat that her mother received as an asset from BRAC.

In the Balochistan province of Pakistan, the poorest people suffer the most due to the seasonal income crisis, acute food insecurity, severe malnutrition, and scarcity of water and sanitation. Due to unfavourable weather, and subsequently the underutilisation of resources, most of the poor only manage to survive with low purchasing power. In order to address the particular need of the extremely poor population in Balochistan, BRAC implemented a full grant based programme called challenging the frontiers of poverty reduction, targeting the ultrapoor (CFPR-TUP) in the Lasbela district in Pakistan. The programme operates using innovative approaches with a mission to identifying and addressing the heterogenic factors which are prevalent in the poverty situation in the region, and thus offering tailor made services to the target group.

14 Annual Report 2011

Targeting the Ultra-Poor

CFPR-TUP programme is specially designed to meet the needs of extremely vulnerable, and who are unable to access ANDĂ&#x2013;BENEĂ&#x2122;TĂ&#x2013;FROMĂ&#x2013;THEĂ&#x2013;MAINSTREAMĂ&#x2013;POVERTYĂ&#x2013; reduction programmes. The CFPRTUPâ&#x20AC;&#x2122;s advocacy component functions as an agent of change to bring about SIGNIĂ&#x2122;CANTĂ&#x2013;CHANGESĂ&#x2013;INĂ&#x2013;EXISTINGĂ&#x2013;ATTITUDESĂ&#x2013; in the larger society. The main objective of the CFPR-TUP programme is to help the ultra-poor graduate from extreme POVERTYĂ&#x2013;TOĂ&#x2013;AĂ&#x2013;BETTERĂ&#x2013;POSITION Ă&#x2013;4OĂ&#x2013;FULĂ&#x2122;LĂ&#x2013;THIS Ă&#x2013; the programme works to ensure regular and sustainable participation of clients in income-generating activities, removing socio-economic constraints against human development and assisting the ultra-poor households to have access to the mainstream development services.

a TUP member suffers from any loss of property or livestock. They also play an important role in raising awareness through DISCUSSIONSĂ&#x2013;TOĂ&#x2013;INCREASEĂ&#x2013;THEĂ&#x2013;CONĂ&#x2122;DENCEĂ&#x2013; level of the TUP members to participate in the mainstream development. In light of the recommendations from the GGMC committee, 263 houses, 476 latrines and, 53 sinking hand pumps were constructed, and 6,000 trees were planted.

Growth in 2011

Data collection has been completed and data entry and compilation is currently INĂ&#x2013;PROGRESS Ă&#x2013;/NĂ&#x2013;THEĂ&#x2013;BASISĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;Ă&#x2122;NDINGSĂ&#x2013; from the data, as well as by following the selection criteria, the selection of TUP BENEĂ&#x2122;CIARIESĂ&#x2013;WILLĂ&#x2013;BEĂ&#x2013;COMPLETEDĂ&#x2013;INĂ&#x2013; Ă&#x2013;Ă&#x2013;

BRAC Pakistan started its CFPR-TUP programme in 2010, with funds from the Pakistan Poverty Alleviation Fund (PPAF) in Uthal, Bela and Hub Tehsils of Lasbela district of Balochistan. The two-year programme reached out to Ă&#x2013;BENEĂ&#x2122;CIARIESĂ&#x2013;WITHĂ&#x2013;INTERVENTIONSĂ&#x2013;OFĂ&#x2013; cash stipend, asset transfer, enterprise development training, social development ANDĂ&#x2013;ESSENTIALĂ&#x2013;HEALTHĂ&#x2013;CARE Ă&#x2013;4HEĂ&#x2013;BENEĂ&#x2122;CIARIESĂ&#x2013; received economic, social, and health support for a full 24-month cycle. All 1,500 BENEĂ&#x2122;CIARIESĂ&#x2013;WEREĂ&#x2013;PROVIDEDĂ&#x2013;TRAININGĂ&#x2013;ONĂ&#x2013; the basis of their interest, awareness and involvement, so that they can take the proper steps to use their assets more effectively. After receiving appropriate TRAINING Ă&#x2013;THEĂ&#x2013;BENEĂ&#x2122;CIARIESĂ&#x2013;WEREĂ&#x2013;ENTITLEDĂ&#x2013;TOĂ&#x2013; receive the assets. In 2011, the assets were distributed as such: 295 people received livestock, 512 received goats for rearing, 248 received sheep and poultry for rearing, 377 received one cow and 10 birds, 60 for non-farming activities, and eight for vegetable cultivation. So far, 75 per cent of their assets have commenced production. To strengthen their social security, social acceptance, a sense of volunteerism and sympathy, BRAC has formed a poverty reduction committee called Gaonki Goribaonki Madad Korneki (GGMC) in every village under Uthal, Bela and Hub branches. These committees are responsible for recommendations and serve as a communication channel when

BRAC has implemented its TUP programme effectively in Pakistan, and thus the PPAF has approved further funds for expansion of the programme to the remaining areas of Lasbela and Khuzdar. A survey is being conducted for the SELECTIONĂ&#x2013;OFĂ&#x2013; Ă&#x2013;BENEĂ&#x2122;CIARIES Ă&#x2013;!Ă&#x2013;TOTALĂ&#x2013;OFĂ&#x2013; 9,846 households, 6,595 from Lasbela and 3,251 from Khuzdar, have been interviewed by using a poverty score card.

BRAC has served as an important model for microfinance institutions in other countries hoping to reach the bottom of the pyramid. Programmes including SKS and Bandhan in India and Fonkoze in Haiti have launched replications of TUP (Targeting the Ultra-Poor)... [that] share the fundamental approach of targeting and subsidising the poorest of the poor.... For USD 135 per participant, BRAC aimed to forever remove the need for participants to require future handouts. The evolution of the Targeting the Ultra-Poor programmes signals the challenge of reaching that goal, but the overall vision behind the programme remains compelling. From the book The Economics of -ICROĂ&#x2122;NANCE

Beatriz ArmendĂĄriz,

Lecturer in Economics, Department of Economics, Harvard University

Jonathan Morduch,

Professor in Public Policy and Economics, Wagner Graduate School of Public Service, New York University

Annual Report 2011 15

Targeting the Ultra-Poor

CA S E

S T U DY

A financially independent Noor, with the assets she received from BRAC.

NOOR BANO: From ultra-poor to entrepreneur

â&#x20AC;&#x153;I was very much dependent on my husband to provide for me and our family. I never thought I could make an EARNINGĂ&#x2013;ANDĂ&#x2013;BEĂ&#x2013;Ă&#x2122;NANCIALLYĂ&#x2013; independent, but the TUP programme has given me a lifeline and hope when I had none.â&#x20AC;? Noor Bano, like many young women in Pakistan, was married at a very young age. She was married, at 17, to a man twice her age. Noor had to take on many responsibilities, both great and small. At THEĂ&#x2013;AGEĂ&#x2013;OFĂ&#x2013; Ă&#x2013;SHEĂ&#x2013;GAVEĂ&#x2013;BIRTHĂ&#x2013;TOĂ&#x2013;HERĂ&#x2013;Ă&#x2122;RSTĂ&#x2013; child. Within a few years, she had a total of seven children. Her husband was a wage earner and with such a large family, HISĂ&#x2013;INCOMEĂ&#x2013;WASĂ&#x2013;NOTĂ&#x2013;SUFĂ&#x2122;CIENTĂ&#x2013;TOĂ&#x2013;PROVIDEĂ&#x2013; FORĂ&#x2013;THEĂ&#x2013;WHOLEĂ&#x2013;FAMILY Ă&#x2013;$UEĂ&#x2013;TOĂ&#x2013;THEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013; instability within their family, Noor moved out of the house with her seven children to raise them on her own. She was not INĂ&#x2013;THEĂ&#x2013;POSITIONĂ&#x2013;TOĂ&#x2013;Ă&#x2122;NANCIALLYĂ&#x2013;PROVIDEĂ&#x2013;FORĂ&#x2013; her children, especially in regards to their education.

In the midst of all the challenges, Noor was fortunate to qualify for BRACâ&#x20AC;&#x2122;s targeting the ultra-poor (TUP) programme. The programme provides intensive support to extremely poor families, especially those headed by women. Eligibility is assessed based on several different indicators such as income level. Women selected for the programme had the option of choosing from multiple asset packages and related enterprise development trainings. Noor received professional training in poultry and goat rearing. After completing her training, BRAC gave her four goats and 10 hens. Noor is currently earning PKR 60-80 a day, and has accumulated 11 goats. The BRAC programme organisers (POs) are very involved from the beginning to the end, selecting TUP clients and continuing to follow up on them after the asset transfer, in which the types of assistance delivered by the POs differ from client to client.

After getting to know Noor and observing her interest in handicraft, BRAC advised her to save PKR 20 daily from her income to invest in supplies for her hobby. With the savings she acquired, she was able to purchase materials such as needles and other handicraft tools. Now she has been ABLEĂ&#x2013;TOĂ&#x2013;TURNĂ&#x2013;HERĂ&#x2013;HOBBYĂ&#x2013;INTOĂ&#x2013;AĂ&#x2013;PROĂ&#x2122;TĂ&#x2013;ANDĂ&#x2013; earn a good income. Noor has been given the opportunity to provide a better life for herself and, most importantly, for her family. BRACâ&#x20AC;&#x2122;s TUP programme has opened the door for her to establish herself as an entrepreneur and invest in the future of her children as well. She has gained respect from the community and her husband whom she was able to reconcile with after their separation. Her family has been reunited and the children have enrolled in school.

16 Annual Report 2011

BRAC across the world

Annual Report 2011 17

18 Annual Report 2011

Harnessing the Past: Our innovations in the last four decades

Functional education

Village organisations (VOs)

Life skills development education for adults that helps to build solidarity, create a savings mentality and prepare people for new income generation

The most effective medium for catalysing change in disadvantaged communities

Homemade oral rehydration solution campaign

Incentive salary system

A groundbreaking campaign in which 13 million households in Bangladesh learned how to make oral saline at home – a lesson that continues to save millions of lives from diarrhoea

A result oriented incentive package that measures effectiveness of and compensates our community workers and volunteers accordingly

Enterprises for value chain support

Directly observed treatment (DOT) for TB control

An integrated network of our development programmes, enterprises and investments that result in a unique synergy that supports our holistic approach for alleviating poverty

An effective treatment method for tuberculosis, a result of our incentive based salary system for community health workers, ensuring patients’ daily intake of medicine for six months or more

Para-professionals Pioneering models for vaccinators, community health workers and ‘barefoot lawyers’ that provide incentive based jobs for those ready to serve their own communities

Education for dropouts and non entrants Our own primary schools that help disadvantaged children make successful transitions to formal schools

Credit ++ approach An integrated set of services for the landless poor, marginal farmers and small entrepreneurs working together to strengthen the supply chain of the enterprises in which our microfinance borrowers invest

Annual Report 2011 19

Empowerment and livelihood for adolescents A range of initiatives to empower adolescents including skills training, social development and micro-loans for their future businesses.

Hybrid maize A pioneer venture to commercialise corn harvesting, which plays a key role in making farmers shift from traditional single cropping to multiple cropping to maximise land usage during idle seasons

Sharecroppers scheme A phenomenal initiative to offer soft loans for tenant farmers (sharecroppers) with a specially tailored recovery plan

Adolescent clubs

Pre primary schools

Safe spaces where peer driven intervention for adolescents enhance their personal growth and social skills

Our own pre primary schools where we prepare underprivileged children to enter mainstream primary schools

Popular theatre A traditional platform became an effective communication medium to advocate for social changes in rural communities, particularly to the illiterate

Challenging the frontiers of poverty reduction A unique model focusing on extremely deprived women to improve their economic and social situations, allowing ultra poor households to graduate from extreme poverty and enter mainstream development programmes

M-health services

Unique management model

A mobile based platform that community health workers use to collect data and provide a range of real time automated services such as storing patient records, categorising and assessing medical risks, prioritising medical responses and monitoring referrals

A unique management model that focuses on internal control without suffocating creativity, runs our large scale interventions cost effectively, and enables us to constantly learn from the communities we serve across the world

$UWLĂ&#x203A;FLDO LQVHPLQDWRUV We transformed over 2,000 rural poor into entrepreneurs with an innovative livelihood opportunity: providing fee based â&#x20AC;&#x2DC;door to doorâ&#x20AC;&#x2122; artificial insemination and education services for livestock farmers

Birthing huts Safe and culturally accepted childbirth places with appropriate services for mothers in urban slums

20 Annual Report 2011

Governance

Sir Fazle Hasan Abed Founder and Chairperson, BRAC

Sir Fazle is recognised by Ashoka as one of the “global greats” and is a founding member of its prestigious Global Academy for Social Entrepreneurship. He was also appointed Knight Commander of the Most Distinguished Order of St. Michael and St. George (KCMG) by the British crown in 2010 in recognition of his services to reducing poverty in Bangladesh and internationally. He has received numerous national and international awards for his achievements in leading BRAC, including WISE Prize – the world’s first major international prize for education by Qatar Foundation (2011), the David Rockefeller Bridging Leadership Award (2008), the Conrad N. Hilton Humanitarian Prize (2008) – the world’s largest humanitarian prize, the Inaugural Clinton Global Citizen Award (2007), the Henry R. Kravis Prize in Leadership (2007)

Dr. Mahabub Hossain

Muhammad A. (Rumee) Ali

Executive Director, BRAC and BRAC International (Ex-officio)

Managing Director, BRAC (Ex-officio)

A renowned agricultural economist, Dr. Hossain is former head of Social Sciences Division of the International Rice Research Institute (IRRI), Philippines and former director General of the Bangladesh Institute of Development Studies (BIDS). He was awarded the first Gold Medal from the Bangladesh Agricultural Economist Association in 1985, in recognition of outstanding contribution to understanding the operation of rural economy in Bangladesh.

Mr. Rumee is the vice chairman of Bangladesh Association of Banks and a member of the Global Steering Committee of the ‘Performance Based Grants Initiative’ of the International Finance Corporation and the Technical Advisory Committee of Bangladesh Investment Climate Fund. He served as the deputy governor of Bangladesh Bank, and country head and general manager of Grindlays Bangladesh. He was appointed the CEO of the Standard Chartered Group in Bangladesh, heading both Standard Chartered Bank and Standard Chartered Grindlays Bank. He also served as a member of the Governing Body of PKSF.

S.N. Kairy

Tanwir Rahman

CFO, BRAC Group

Director, Finance, BRAC and BRAC International

Mr. Kairy joined the Accounts Section of BRAC in April 1982. He is responsible for ensuring the effective Procurement and Asset Management of BRAC Group. Currently, Mr. Kairy is serving on the board of BRAC Bank Limited as a Director nominated by BRAC. He is also the Chair of the Board Audit Committee of BRAC Bank Limited.

Previously, Mr. Rahman was the Divisional Controller for HBG (Hollandsche Beton Groep) Royal BAM, Assistant Controller for Mitchell engineering, Senior Project Accounting Manager for Bovis Lend Lease. Before joining BRAC he worked as Controller for Allied Container System.

Annual Report 2011 21

Management Muhammed Faridur Rahman

Chief Executive Officer and Country Representative

Md.Zinnur Rahman

Programme Manager, Microfinance

Dr. Muhammad Umar Farooqui

Project Manager, Health

Ulfat Mehmood Khan

Project Manager, Education

Md. Wazedul Islam Pahlowan

Project Manager, CFPR-TUP

Ghulam Ahmed

Country Head, Accounts

Md. Nazrul Islam Talukdar

Country Head, Monitoring & Investigation

Md. Golam Sorwaor

Country Head, Internal Audit

Major (Retd) Syed Muhammad Feroz Shah TI(M)

Manager, Communication & Security

Side-Al-Fahad

Programmer, IT

Mohamamd Emdad Hossain

Financial Analyst

Md. Maruf Hassan Khan

Financial Management Trainer

Muhammad Imran

Project Proposal Writer and Liaison Officer

Aisha Faheem

Officer, HR

Adnan Arshad

Officer, Procurement

Development Partners

BRAC USA

PIERRE AND PAMELA OMIDYAR FUND (SILICON VALLEY)

22 Annual Report 2011

Notes

Annual Report 2011 23

Notes

BRAC PAKISTAN Balance Sheet As at 31 December 2011 2011

NON-CURRENT ASSETS Property and equipment CURRENT ASSETS Stock in trade Microcredit receivables, secured - net Advances Deposits and prepayments Accrued interest and service charges Other receivables Tax deducted at source Cash and bank balances Total current assets

NON-CURRENT LIABILITIES Long term loan Deferred grant Total non-current liabilities

CURRENT LIABILITIES Payable to related parties Accrued and other liabilities Restricted grant Shot term loans, secured Interest accrued on loans Total current liabilities

US$ (Note 2.5)

Rupees

US$ (Note 2.5)

Rupees

42,867,547

476,571

29,074,408

346,537

14,673,043

880,497

9,789

671,314

8,001

5 6 7 8

751,751,032 877,729 4,812,545 5,730,481 2,457,260 157,303,360 923,812,904

8,357,434 9,758 53,502 63,707 27,317 1,748,786 10,270,293

549,841,959 585,988 5,423,910 2,820,665 1,745,231 421,357,799 982,446,866

6,553,540 6,985 64,647 33,620 20,801 5,022,144 11,709,738

287,102,234 759,249 4,727,839 2,286,120 15,924,827 1,007,917 470,914,470 782,722,656

3,415,573 9,028 56,217 27,183 189,356 11,985 5,599,459 9,308,801

966,680,451

10,746,864

1,011,521,274

12,056,275

797,395,699

9,483,271

Ã&#x2013; Ã&#x2013; Ã&#x2013; 170,643,000 Ã&#x2013; Ã&#x2013; Ã&#x2013;

Ã&#x2013; Ã&#x2013; 2,033,886 112,039 Ã&#x2013; Ã&#x2013;

Ã&#x2013; Ã&#x2013; 170,643,000 Ã&#x2013; Ã&#x2013;Ã&#x2013;

Ã&#x2013; Ã&#x2013; 2,033,886 93,333 Ã&#x2013; Ã&#x2013;Ã&#x2013;

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;

Ã&#x2013; 119,428 Ã&#x2013;

13,101,749 13,101,749

145,656 145,656

6,543,578 6,543,578

80,780 80,780

6,930,000 2,562,637 9,492,637

82,208 33,459 115,667

159,136,002 51,309,181 10,321,439 744,557,000 36,634,951 1,001,958,573

1,769,161 570,419 114,745 8,277,455 407,281 11,139,061

97,497,122 7,836,273 65,488,774 782,084,800 21,882,052 974,789,021

1,162,063 93,403 785,104 9,321,631 260,811 11,623,012

114,591,974 8,329,226 87,345,624 617,932,950 13,923,829 842,123,603

1,359,335 98,860 1,045,229 7,330,165 165,170 9,998,759

966,680,451

10,746,864

1,011,521,274

12,056,275

797,395,699

9,483,271

Ã&#x2013;

____________ Ã&#x2013;$IRECTORÃ&#x2013;Ã&#x2013;

10 2.5

12 13 14 15

TOTAL EQUITY AND LIABILITIES

COMMITMENTS

___________________ #HIEFÃ&#x2013;%XECUTIVEÃ&#x2013;/FÃ&#x2122;CERÃ&#x2013;

US$ (Note 2.5)

174,470

4HEÃ&#x2013;ANNEXEDÃ&#x2013;NOTESÃ&#x2013;AREÃ&#x2013;ANÃ&#x2013;INTEGRALÃ&#x2013;PARTÃ&#x2013;OFÃ&#x2013;THESEÃ&#x2013;Ã&#x2122;NANCIALÃ&#x2013;STATEMENTS Ã&#x2013;

Ã&#x2013;

2009

Rupees

TOTAL ASSETS

RESERVES AND LIABILITIES FUNDS AND RESERVES !CCUMULATEDÃ&#x2013;DEÃ&#x2122;CITÃ&#x2013; Fund balance Convenience translation reserve 4OTALÃ&#x2013;FUNDSÃ&#x2013;ANDÃ&#x2013;RESERVESÃ&#x2013;

2010

Note

Ã&#x2013;

__________________ Ã&#x2013; Ã&#x2013;$IRECTORÃ&#x2013;&INANCEÃ&#x2013;Ã&#x2013;

BRAC PAKISTAN Income and Expenditure Statement For the year ended 31 December 2011

Note

2011 US$ (Note 2.5)

Rupees

2010 US$ (Note 2.5)

Rupees

INCOME Service charges on microcredit receivables Transfer from restricted grant Deferred grant recognised as income Admission fee from group members Sale of passbooks Interest on bank deposits Other income

EXPENDITURE Administrative and PROGRAMĂ&#x2013;EXPENSESĂ&#x2013; Provision against MICROCREDITĂ&#x2013;RECEIVABLESĂ&#x2013; %XCHANGEĂ&#x2013; LOSS Ă&#x2013; Ă&#x2013;GAINĂ&#x2013; &INANCIALĂ&#x2013;CHARGESĂ&#x2013; Ă&#x2013; Ă&#x2013; #DĂ&#x161;BHSĂ&#x2DC;NEĂ&#x2DC;HMBNLDĂ&#x2DC;NUDQĂ&#x2DC;Ă&#x2DC; Ă&#x2DC;DWODMCHSTQDĂ&#x2DC;ENQĂ&#x2DC;SGDĂ&#x2DC;XD@QĂ&#x2DC;

314,052,242 97,443,800 3,454,243 3,441,201 567,723 8,060,545 564,957 427,584,711

3,633,602 1,127,432 39,966 39,815 6,569 93,261 6,537 4,947,182

208,208,346 115,372,550 1,972,634 2,860,792 960,306 9,692,845 1,203,455 340,270,928

2,472,783 1,370,223 23,428 33,976 11,405 115,117 14,293 4,041,225

Ă&#x2013;

Ă&#x2013; Ă&#x2013;

Ă&#x2013;

Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2DC; Ă&#x2DC;

Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2DC; Ă&#x2DC; Ă&#x2DC;

Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2DC; Ă&#x2DC; Ă&#x2DC;

Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2DC; Ă&#x2DC;

Ă&#x2013;

_____________ Ă&#x2013;$IRECTORĂ&#x2013;&INANCEĂ&#x2013;Ă&#x2013;

Ă&#x2013;

____________ Ă&#x2013;$IRECTORĂ&#x2013;Ă&#x2013;

14 11

4HEĂ&#x2013;ANNEXEDĂ&#x2013;NOTESĂ&#x2013;AREĂ&#x2013;ANĂ&#x2013;INTEGRALĂ&#x2013;PARTĂ&#x2013;OFĂ&#x2013;THESEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATEMENTS Ă&#x2013;

Ă&#x2013;

__________________ #HIEFĂ&#x2013;%XECUTIVEĂ&#x2013;/FĂ&#x2122;CERĂ&#x2013;

Ă&#x2013;

BRAC PAKISTAN Cash Flow Statement For the year ended 31 December 2011

Note CASH FLOWS FROM OPERATING ACTIVITIES $EÙCITÖOFÖINCOMEÖOVERÖEXPENDITUREÖFORÖTHEÖYEARÖ Adjustments for: Depreciation charge for the year Provision against microcredit receivables 0ROVISIONÖADJUSTEDÖINTERESTÖRECEIVABLEÖWRITTENÖOFFÖ 3ERVICEÖCHARGESÖWRITTENÖOFFÖÖ 3ERVICEÖCHARGESÖFROMÖMICROCREDITÖRECEIVABLESÖ )NTERESTÖINCOMEÖONÖBANKÖDEPOSITSÖ 'AINÖONÖDISPOSALÖOFÖASSETSÖ Interest on short term loans $EÙCITÖBEFOREÖWORKINGÖCAPITALÖCHANGESÖ Working capital changes: (Increase) / decrease in current assets 3TOCKÖINÖTRADEÖ -ICROCREDITÖRECEIVABLESÖ ÖNETÖ !DVANCESÖ $EPOSITSÖANDÖPREPAYMENTSÖ Other receivables Ö Ö Increase / (decrease) in current liabilities !CCRUEDÖANDÖOTHERÖLIABILITIESÖ 0AYABLEÖTOÖRELATEDÖPARTIESÖ Ö Ö Ö )NTERESTÖPAIDÖ Interest and service charges received 4AXESÖPAIDÖ -DSØB@RGØTRDCØHMØNODQ@SHMFØ@BSHUHSHDRØ CASH FLOWS FROM INVESTING ACTIVITIES 0URCHASEÖOFÖPROPERTYÖANDÖEQUIPMENTÖ ÖNETÖOFÖDEFERREDÖGRANTÖ Proceeds from disposal of property and equipment -DSØB@RGØTRDCØHMØHMUDRSHMFØ@BSHUHSHDRÖ CASH FLOWS FROM FINANCING ACTIVITIES $ECREASEÖINÖRESTRICTEDÖGRANTÖ Contribution received from BRAC group companies Short term loans received during the year 3HORTÖTERMÖLOANSÖREPAIDÖDURINGÖTHEÖYEARÖ -DSØB@RGØ TRDCØHM Ø ØFDMDQ@SDCØEQNLØÚM@MBHMFØ@BSHUHSHDRÖ .ETÖDECREASEÖINÖCASHÖANDÖCASHÖEQUIVALENTSÖ Cash and cash equivalent at beginning of the year %FFECTÖOFÖCONVENIENCEÖTRANSLATIONÖ "@RGØ@MCØB@RGØDPTHU@KDMSØ@SØDMCØNEØSGDØXD@Q

2011 US$ (Note 2.5)

Rupees

2010 US$ (Note 2.5)

Ö Ö

5,965,360 35,187,767 Ö Ö Ö Ö Ö Ö Ö Ö Ö ÖÖÖÖ 95,556,240 Ö Ö

69,020 407,124 Ö Ö Ö Ö Ö Ö Ö Ö Ö ÖÖÖÖ 1,105,591 Ö Ö

4,056,415 26,289,028 Ö Ö Ö Ö Ö Ö Ö Ö Ö Ö 79,858,880 Ö Ö

48,176 312,221 Ö Ö Ö Ö Ö 948,443 Ö

Ö Ö Ö Ö Ö Ö Ö ÖÖ Ö Ö

Ö Ö Ö Ö Ö ÖÖ Ö Ö 15,924,827 Ö Ö

Ö Ö Ö Ö Ö 189,356 Ö

Ö Ö Ö

Ö ÖÖ Ö ÖÖ Ö ÖÖ

Ö Ö Ö Ö Ö Ö

Ö Ö Ö

Ö Ö

Ö Ö Ö Ö 319,202,971 Ö Ö Ö Ö

Ö Ö Ö Ö 3,696,776 Ö Ö Ö Ö

Ö Ö Ö Ö 217,366,648 Ö Ö Ö Ö

Ö Ö 2,530,808 Ö Ö

Ö Ö Ö Ö

Ö Ö 1,976,805 Ö Ö

Ö 23,477 Ö

Ö 10 15 Ö Ö

Ö Ö 916,800,000 Ö Ö Ö Ö

Ö Ö 10,607,429 Ö Ö Ö Ö

Ö Ö 170,643,000 949,000,000 Ö Ö Ö ÖÖ

Ö 2,033,886 11,311,085 Ö Ö

4 5.2 Ö Ö Ö Ö Ö 18 Ö

Ö Ö Ö Ö

Ö Ø

Ö Ö 9

Ö Ö 421,357,799 Ö ÖÖÖÖ 157,303,360

Ö Ö 5,022,144 Ö Ö 1,748,786

Ö Ö 470,914,470 Ö ÖÖÖÖ 421,357,799

Ö 5,599,459 Ö Ö 5,022,144

4HEÖANNEXEDÖAREÖANÖINTEGRALÖPARTÖOFÖTHESEÖÙNANCIALÖSTATEMENTS Ö

__________________ #HIEFÖ%XECUTIVEÖ/FÙCERÖ

_____________ $IRECTORÖ&INANCEÖ

____________ Ö$IRECTORÖÖ

BRAC PAKISTAN 2S@SDLDMSÃ&#x2DC;NEÃ&#x2DC;"NLOQDGDMRHUDÃ&#x2DC;(MBNLD For the year ended 31 December 2011

Note

,OSSÃ&#x2013;FORÃ&#x2013;THEÃ&#x2013;YEARÃ&#x2013;

Effect of Ã&#x2013;CONVENIENCEÃ&#x2013;TRANSLATIONÃ&#x2013;

2011

Ã&#x2013;

2010

Rupees

US$ (Note 2.5)

Rupees

US$ (Note 2.5)

Ã&#x2013; Ã&#x2013;

Ã&#x2013;

Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;

Ã&#x2013; Ã&#x2013;Ã&#x2013;

Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;

Ã&#x2013;

Total comprehensive income Ã&#x2013;FORÃ&#x2013;THEÃ&#x2013;YEARÃ&#x2013; Ã&#x2013; LOSS Ã&#x2013;

Ã&#x2013;

(78,568,546)

(890,336)

(86,233,783)

(1,050,247)

4HEÃ&#x2013;ANNEXEDÃ&#x2013;NOTESÃ&#x2013;AREÃ&#x2013;ANÃ&#x2013;INTEGRALÃ&#x2013;PARTÃ&#x2013;OFÃ&#x2013;THESEÃ&#x2013;Ã&#x2122;NANCIALÃ&#x2013;STATEMENTS Ã&#x2013;

Ã&#x2013;

_____________ $IRECTORÃ&#x2013;&INANCEÃ&#x2013;

Ã&#x2013;

____________ Ã&#x2013;$IRECTOR

Ã&#x2013;

__________________ #HIEFÃ&#x2013;%XECUTIVEÃ&#x2013;/FÃ&#x2122;CERÃ&#x2013;

Ã&#x2013;

BRAC PAKISTAN 2S@SDLDMSĂ&#x2DC;NEĂ&#x2DC;"G@MFDRĂ&#x2DC;HMĂ&#x2DC;1DRDQUDRĂ&#x2DC;@MCĂ&#x2DC;%TMCR For the year ended 31 December 2011

-NSDĂ&#x2DC; Ă&#x2DC;

Ă&#x2DC;

/PENINGĂ&#x2013;BALANCEĂ&#x2013;

Ă&#x2DC; Rupees

Ă&#x2013;

Loss for the year

Effect of convenience translation

Contribution from BRAC group companies As at 31 December 2010

Loss for the year Effect of convenience translation Total comprehensive income FORĂ&#x2013;THEĂ&#x2013;YEARĂ&#x2013; Ă&#x2013; LOSS Ă&#x2013; As at 31 December 2011

__________________ #HIEFĂ&#x2013;%XECUTIVEĂ&#x2013;/FĂ&#x2122;CERĂ&#x2013;

%TMCĂ&#x2DC;A@K@MBDĂ&#x2DC; Ă&#x2DC; US$ (Note 2.5)

Ă&#x2DC;

Rupees

Ă&#x2013; Ă&#x2013;

(86,233,783)

" Ă&#x2DC; NMUDMHDMBDĂ&#x2DC; SQ@MRK@SHNMĂ&#x2DC;QDRDQUD US$ (Note 2.5)

Ă&#x2013; Ă&#x2013;Ă&#x2013;

3NS@K Rupees

US$ (Note 2.5)

Ă&#x2013; Ă&#x2013;Ă&#x2013;Ă&#x2013;Ă&#x2013;

(1,024,152)

(26,095)

(86,233,783)

(1,024,152)

(26,095)

(140,454,325)

(1,774,736)

170,643,000 170,643,000

2,033,886 2,033,886

93,333

170,643,000 30,188,675

2,033,886 352,483

(78,568,546)

(909,042)

(78,568,546)

(909,042)

Ă&#x2013; Ă&#x2013;

Ă&#x2013;

(86,233,783) (1,024,152)

(26,095)

(86,233,783) (1,050,247)

2.5

18,706

Ă&#x2013;

(78,568,546) (219,022,871)

(909,042) (2,683,778)

170,643,000

2,033,886

18,706 112,039

(78,568,546) (48,379,871)

(890,336) (537,853)

4HEĂ&#x2013;ANNEXEDĂ&#x2013;NOTESĂ&#x2013;AREĂ&#x2013;ANĂ&#x2013;INTEGRALĂ&#x2013;PARTĂ&#x2013;OFĂ&#x2013;THESEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATEMENTS Ă&#x2013;

Ă&#x2013;

Ă&#x2DC; Ă&#x2DC;

Ă&#x2013; Ă&#x2013;

2.5

Total comprehensive income for the year - (loss)

BBTLTK@SDCĂ&#x2DC; CDĂ&#x161;BHSĂ&#x2DC; US$ (Note 2.5)

Ă&#x2013;

_____________ Ă&#x2013;$IRECTORĂ&#x2013;&INANCEĂ&#x2013;

Ă&#x2013;

____________ Ă&#x2013;$IRECTORĂ&#x2013;

Ă&#x2013;

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011

STATUS AND OPERATIONS

Ă&#x2013;

"2!#Ă&#x2013;0AKISTANĂ&#x2013; mTHEĂ&#x2013;#OMPANYn Ă&#x2013;WASĂ&#x2013;REGISTEREDĂ&#x2013;INĂ&#x2013;0AKISTANĂ&#x2013;ONĂ&#x2013; Ă&#x2013;&EBRUARYĂ&#x2013; Ă&#x2013;ASĂ&#x2013;AĂ&#x2013;PUBLICĂ&#x2013;COMPANYĂ&#x2013;WITHĂ&#x2013;LIABILITYĂ&#x2013;LIMITEDĂ&#x2013;BYĂ&#x2013;GUARANTEE Ă&#x2013;UNDERĂ&#x2013;SECTIONĂ&#x2013; Ă&#x2013;OFĂ&#x2013; THEĂ&#x2013;#OMPANIESĂ&#x2013;/RDINANCE Ă&#x2013; Ă&#x2013;4HEĂ&#x2013;REGISTEREDĂ&#x2013;OFĂ&#x2122;CEĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;ISĂ&#x2013;SITUATEDĂ&#x2013;INĂ&#x2013;)SLAMABAD Ă&#x2013;0AKISTAN Ă&#x2013;0RIORĂ&#x2013;TOĂ&#x2013;ITSĂ&#x2013;REGISTRATION Ă&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;WASĂ&#x2013;OPERATINGĂ&#x2013; ASĂ&#x2013;AĂ&#x2013;BRANCHĂ&#x2013;OFĂ&#x2013;Ă&#x2013;"2!#Ă&#x2013;"ANGLADESHĂ&#x2013;INĂ&#x2013;0AKISTAN Ă&#x2013;5PONĂ&#x2013;CONVERSION Ă&#x2013;THEĂ&#x2013;NETĂ&#x2013;LIABILITIESĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;0AKISTANĂ&#x2013;"RANCHĂ&#x2013;OFĂ&#x2013;"2!#Ă&#x2013;)NTERNATIONALĂ&#x2013; "ANGLADESH Ă&#x2013;WEREĂ&#x2013;TRANSFERREDĂ&#x2013; to the Company on 04 February 2008.

Ă&#x2013;

4HEĂ&#x2013;PRINCIPALĂ&#x2013;ACTIVITYĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;ISĂ&#x2013;TOĂ&#x2013;UNDERTAKEĂ&#x2013;PROGRAMMESĂ&#x2013;ASSOCIATEDĂ&#x2013;WITHĂ&#x2013;SOCIO ECONOMICĂ&#x2013;DEVELOPMENTĂ&#x2013;INĂ&#x2013;0AKISTAN Ă&#x2013;PARTICULARLYĂ&#x2013;INĂ&#x2013;THEĂ&#x2013;Ă&#x2122;ELDĂ&#x2013;OFĂ&#x2013;MICRO Ă&#x2122;NANCING Ă&#x2013;HEALTH Ă&#x2013;EDUCATIONĂ&#x2013;ANDĂ&#x2013;POVERTYĂ&#x2013;ALLEVIATION Ă&#x2013;Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;

BASIS OF PREPARATION

Ă&#x2DC;

2S@SDLDMSĂ&#x2DC;NEĂ&#x2DC;BNLOKH@MBD

Ă&#x2013;

4HESEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATEMENTSĂ&#x2013;HAVEĂ&#x2013;BEENĂ&#x2013;PREPAREDĂ&#x2013;INĂ&#x2013;ACCORDANCEĂ&#x2013;WITHĂ&#x2013;THEĂ&#x2013;APPROVEDĂ&#x2013;ACCOUNTINGĂ&#x2013;STANDARDSĂ&#x2013;ASĂ&#x2013;APPLICABLEĂ&#x2013;INĂ&#x2013;0AKISTAN Ă&#x2013;!PPROVEDĂ&#x2013;ACCOUNTINGĂ&#x2013; STANDARDSĂ&#x2013;COMPRISEĂ&#x2013;OFĂ&#x2013;SUCHĂ&#x2013;)NTERNATIONALĂ&#x2013;&INANCIALĂ&#x2013;2EPORTINGĂ&#x2013;3TANDARDSĂ&#x2013; )&23 Ă&#x2013;ISSUEDĂ&#x2013;BYĂ&#x2013;THEĂ&#x2013;)NTERNATIONALĂ&#x2013;!CCOUNTINGĂ&#x2013;3TANDARDĂ&#x2013;"OARDĂ&#x2013; )!3" Ă&#x2013;ASĂ&#x2013;AREĂ&#x2013;NOTIĂ&#x2122;EDĂ&#x2013; 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.

Ă&#x2DC;

!@RHRĂ&#x2DC;NEĂ&#x2DC;LD@RTQDLDMS

Ă&#x2013;

4HESEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATEMENTSĂ&#x2013;HAVEĂ&#x2013;BEENĂ&#x2013;PREPAREDĂ&#x2013;UNDERĂ&#x2013;THEĂ&#x2013;HISTORICALĂ&#x2013;COSTĂ&#x2013;BASIS Ă&#x2013;Ă&#x2013; Ă&#x2013;

2.3

Functional and presentation currency

Ă&#x2013;

)TEMSĂ&#x2013;INCLUDEDĂ&#x2013;INĂ&#x2013;THESEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATEMENTSĂ&#x2013;AREĂ&#x2013;MEASUREDĂ&#x2013;USINGĂ&#x2013;THEĂ&#x2013;CURRENCYĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;PRIMARYĂ&#x2013;ECONOMICĂ&#x2013;ENVIRONMENTĂ&#x2013;INĂ&#x2013;WHICHĂ&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;OPERATES Ă&#x2013;4HEĂ&#x2013; Ă&#x2122;NANCIALĂ&#x2013;STATEMENTSĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;AREĂ&#x2013;PRESENTEDĂ&#x2013;INĂ&#x2013;0AKĂ&#x2013;2UPEES Ă&#x2013;WHICHĂ&#x2013;ISĂ&#x2013;THEĂ&#x2013;#OMPANYlSĂ&#x2013;FUNCTIONALĂ&#x2013;ANDĂ&#x2013;PRESENTATIONĂ&#x2013;CURRENCY Ă&#x2013;!MOUNTSĂ&#x2013;PRESENTEDĂ&#x2013;HAVEĂ&#x2013; been rounded off to the nearest Rupees.

Ă&#x2DC;

2HFMHĂ&#x161;B@MSĂ&#x2DC;DRSHL@SDRĂ&#x2DC;

Ă&#x2013;

4HEĂ&#x2013; PREPARATIONĂ&#x2013; OFĂ&#x2013; Ă&#x2122;NANCIALĂ&#x2013; STATEMENTSĂ&#x2013; INĂ&#x2013; CONFORMITYĂ&#x2013; WITHĂ&#x2013; THEĂ&#x2013; APPROVEDĂ&#x2013; ACCOUNTINGĂ&#x2013; STANDARDSĂ&#x2013; REQUIRESĂ&#x2013; MANAGEMENTĂ&#x2013; TOĂ&#x2013; MAKEĂ&#x2013; JUDGMENTS Ă&#x2013; ESTIMATESĂ&#x2013; ANDĂ&#x2013; 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.

Ă&#x2013;

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011

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. Ă&#x2013;

3IGNIĂ&#x2122;CANTĂ&#x2013; AREAĂ&#x2013; REQUIRINGĂ&#x2013; THEĂ&#x2013; USEĂ&#x2013; OFĂ&#x2013; MANAGEMENTĂ&#x2013; ESTIMATESĂ&#x2013; INĂ&#x2013; THESEĂ&#x2013; Ă&#x2122;NANCIALĂ&#x2013; STATEMENTSĂ&#x2013; ANDĂ&#x2013; THATĂ&#x2013; MAYĂ&#x2013; HAVEĂ&#x2013; SIGNIĂ&#x2122;CANTĂ&#x2013; AFFECTĂ&#x2013; INĂ&#x2013; THEĂ&#x2013; FUTUREĂ&#x2013; YEARSĂ&#x2013; AREĂ&#x2013; ASĂ&#x2013; follows:

2.4.1

Property and equipment The Company reviews the useful lives and residual value of property, plant and equipment on a regular basis. Any change in estimates in future years might affect the carrying amounts of the respective items of property, plant and equipment with a corresponding effect on the depreciation charge and the impairment.

Ă&#x2DC;

/QNUHRHNMRĂ&#x2DC;

Ă&#x2DC;

The Company reviews the carrying amount of liabilities on a regular basis and appropriate amount of provision is made as and when necessary.

2.4.3

Impairment

Ă&#x2013;

4HEĂ&#x2013;CARRYINGĂ&#x2013;AMOUNTSĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;#OMPANYlSĂ&#x2013;ASSETSĂ&#x2013;AREĂ&#x2013;REVIEWEDĂ&#x2013;ATĂ&#x2013;EACHĂ&#x2013;BALANCEĂ&#x2013;SHEETĂ&#x2013;DATEĂ&#x2013;TOĂ&#x2013;DETERMINEĂ&#x2013;WHETHERĂ&#x2013;THEREĂ&#x2013;ISĂ&#x2013;ANYĂ&#x2013;INDICATIONĂ&#x2013;OFĂ&#x2013;IMPAIRMENTĂ&#x2013;LOSS Ă&#x2013;)FĂ&#x2013; 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.

Ă&#x2DC;

"NMUDMHDMBDĂ&#x2DC;SQ@MRK@SHNMĂ&#x2DC;QDRDQUDĂ&#x2DC;

Ă&#x2DC;

For the purpose of convenience translation: Ă&#x2013;

4HEĂ&#x2013;EXCHANGEĂ&#x2013;RATEĂ&#x2013;OFĂ&#x2013;53 Ă&#x2013; Ă&#x2013; Ă&#x2013;0+2Ă&#x2013; Ă&#x2013; Ă&#x2013;0+2Ă&#x2013; Ă&#x2013;ISĂ&#x2013;USEDĂ&#x2013;FORĂ&#x2013;BALANCEĂ&#x2013;SHEETĂ&#x2013;ITEMS Ă&#x2013;4HISĂ&#x2013;REPRESENTSĂ&#x2013;THEĂ&#x2013;SELLINGĂ&#x2013;RATEĂ&#x2013;OFĂ&#x2013;53Ă&#x2013;$OLLARĂ&#x2013;ATĂ&#x2013;THEĂ&#x2013;ENDĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013; year as quoted by the State Bank of Pakistan.

Ă&#x2013;

4HEĂ&#x2013;AVERAGEĂ&#x2013;CONVERSIONĂ&#x2013;RATEĂ&#x2013;ISĂ&#x2013;USEDĂ&#x2013;FORĂ&#x2013;THEĂ&#x2013;ITEMSĂ&#x2013;OFĂ&#x2013;INCOMEĂ&#x2013;ANDĂ&#x2013;EXPENDITUREĂ&#x2013;STATEMENT Ă&#x2013;CASHĂ&#x2013;Ă&#x161;OWĂ&#x2013;STATEMENTĂ&#x2013;ANDĂ&#x2013;STATEMENTĂ&#x2013;OFĂ&#x2013;COMPREHENSIVEĂ&#x2013;INCOME Ă&#x2013;4HEĂ&#x2013; 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.

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011 3. Ă&#x2DC;

SIGNIFICANT ACCOUNTING POLICIES #DEDQQDCĂ&#x2DC;FQ@MS Grant received and utilized for capital expenditure is accounted for as deferred grant in 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. The 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 basis using the rates as mentioned in note 4. Maintenance and normal repairs are charged off as these are incurred. Major repairs are capitalised. Gains and losses on disposal of assets are recognized in the year in which the asset is disposed off.

Ă&#x2DC;

,HBQNBQDCHSĂ&#x2DC;QDBDHU@AKDR

Ă&#x2013;

,OANSĂ&#x2013;ORIGINATEDĂ&#x2013;BYĂ&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;BYĂ&#x2013;PROVIDINGĂ&#x2013;Ă&#x2122;NANCEĂ&#x2013;DIRECTLYĂ&#x2013;TOĂ&#x2013;BORROWERSĂ&#x2013;AREĂ&#x2013;CATEGORIZEDĂ&#x2013;ASĂ&#x2013;MICROCREDITĂ&#x2013;RECEIVABLESĂ&#x2013;ANDĂ&#x2013;AREĂ&#x2013;CARRIEDĂ&#x2013;ATĂ&#x2013;AMORTISEDĂ&#x2013;COST Ă&#x2013; WHICHĂ&#x2013;ISĂ&#x2013;DEĂ&#x2122;NEDĂ&#x2013;ASĂ&#x2013;FAIRĂ&#x2013;VALUEĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;CASHĂ&#x2013;CONSIDERATIONĂ&#x2013;GIVENĂ&#x2013;TOĂ&#x2013;ORIGINATEĂ&#x2013;THOSEĂ&#x2013;LOANSĂ&#x2013;ASĂ&#x2013;ISĂ&#x2013;DETERMINABLEĂ&#x2013;BYĂ&#x2013;REFERENCEĂ&#x2013;TOĂ&#x2013;MARKETĂ&#x2013;PRICESĂ&#x2013;ATĂ&#x2013;ORIGINATIONĂ&#x2013;DATEĂ&#x2013; and subsequently measured at the original effective interest rate at reporting date. All microcredit receivables are recognized when cash is advanced to borrowers. Management regularly assess the adequacy of allowance for impairment based on the age of the loan portfolio. At the year end, the Company calculates THEĂ&#x2013;REQUIREDĂ&#x2013;PROVISIONĂ&#x2013;FORĂ&#x2013;DOUBTFULĂ&#x2013;MICROCREDITĂ&#x2013;RECEIVABLESĂ&#x2013;BASEDĂ&#x2013;ONĂ&#x2013;CLASSIĂ&#x2122;CATIONĂ&#x2013;ANDĂ&#x2013;PROVISIONINGĂ&#x2013;METHODOLOGYĂ&#x2013;WHICHĂ&#x2013;ISĂ&#x2013;SHOWNĂ&#x2013;BELOWĂ&#x2013;ANDĂ&#x2013;ADJUSTMENTS Ă&#x2013;IFĂ&#x2013; REQUIRED Ă&#x2013;AREĂ&#x2013;ACCOUNTEDĂ&#x2013;FORĂ&#x2013;INĂ&#x2013;THEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATMENTSĂ&#x2013;FORĂ&#x2013;THEĂ&#x2013;YEAR Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;

Ă&#x2DC;

Ă&#x2DC;,HBQNBQDCHSĂ&#x2DC;QDBDHU@AKDRĂ&#x2DC;BK@RRHĂ&#x161;B@SHNMĂ&#x2DC; Standard Watch list Substandard Doubtful Loss

Ă&#x2013;

FDHMF No arrear 1-30 31-180 181-350 350+

-ICROCREDITĂ&#x2013;RECEIVABLESĂ&#x2013;WITHINĂ&#x2013;THEĂ&#x2013;MATURITYĂ&#x2013;PERIODĂ&#x2013;AREĂ&#x2013;CONSIDEREDĂ&#x2013;m#URRENTĂ&#x2013;,OANSn Ă&#x2013;2ECEIVABLEĂ&#x2013;WHICHĂ&#x2013;REMAINSĂ&#x2013;OUTSTANDINGĂ&#x2013;AFTERĂ&#x2013;THEĂ&#x2013;EXPIRYĂ&#x2013;OFĂ&#x2013;THEIRĂ&#x2013;MATURITYĂ&#x2013; PERIODĂ&#x2013;AREĂ&#x2013;CONSIDEREDĂ&#x2013;ASĂ&#x2013;k,ATEĂ&#x2013;LOANSn Ă&#x2013;,ATEĂ&#x2013;LOANSĂ&#x2013;WHICHĂ&#x2013;REMAINĂ&#x2013;UNPAIDĂ&#x2013;AFTERĂ&#x2013;ONEĂ&#x2013;YEARĂ&#x2013;OFĂ&#x2013;BEINGĂ&#x2013;CLASSIĂ&#x2122;EDĂ&#x2013;ASĂ&#x2013;m,ATEnĂ&#x2013;AREĂ&#x2013;CONSIDERDĂ&#x2013;ASĂ&#x2013;m.ON )NTERESTĂ&#x2013;BEARINGĂ&#x2013;LOANSlĂ&#x2013; .)", Ă&#x2013;ANDĂ&#x2013;ISĂ&#x2013;REFERREDĂ&#x2013;TOĂ&#x2013;THEĂ&#x2013;"OARDĂ&#x2013;FORĂ&#x2013;WRITEĂ&#x2013;OFF Ă&#x2013;!PARTĂ&#x2013;FROMĂ&#x2013;THAT Ă&#x2013;ANYĂ&#x2013;LOANSĂ&#x2013;CANĂ&#x2013;BEĂ&#x2013;WRITTENĂ&#x2013;OFFĂ&#x2013;SUBJECTĂ&#x2013;TOĂ&#x2013;THEĂ&#x2013;APPROVALĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;BOARDĂ&#x2013;WHEREĂ&#x2013;THEĂ&#x2013;BOARDĂ&#x2013;THINKSĂ&#x2013;THATĂ&#x2013;ITĂ&#x2013; is not realizable due to death, dislocation of the borrower or any other natural or humanitarian disaster that affects the livelihood of the borrowers. Subsequent recoveries are credited as income in the income and expenditure statement.

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011 Ã&#x2DC;

"@RGÃ&#x2DC;@MCÃ&#x2DC;B@RGÃ&#x2DC;DPTHU@KDMSRÃ&#x2DC; Ã&#x2DC;

Ã&#x2DC;

Cash and cash equivalents include cash in hand, cash at banks and short-term highly liquid investments that are readily convertible to known amounts of cash WITHÃ&#x2013;ORIGINALÃ&#x2013;MATURITIESÃ&#x2013;OFÃ&#x2013;THREEÃ&#x2013;MONTHSÃ&#x2013;ORÃ&#x2013;LESSÃ&#x2013;ANDÃ&#x2013;THATÃ&#x2013;AREÃ&#x2013;SUBJECTÃ&#x2013;TOÃ&#x2013;ANÃ&#x2013;INSIGNIÃ&#x2122;CANTÃ&#x2013;RISKÃ&#x2013;OFÃ&#x2013;CHANGEÃ&#x2013;INÃ&#x2013;VALUE Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;

Ã&#x2DC;

1DUDMTDÃ&#x2DC;QDBNFMHSHNMÃ&#x2DC;

Ã&#x2DC;

Revenue is recognized on accruals basis. Ã&#x2DC; Ã&#x2013;

2DQUHBDÃ&#x2DC;"G@QFDÃ&#x2DC;NMÃ&#x2DC;LHBQNBQDCHSÃ&#x2DC;QDBDHU@AKDÃ&#x2DC; Ã&#x2DC; Ã&#x2DC; Ã&#x2DC; Ã&#x2DC; 3ERVICEÃ&#x2013;CHARGEÃ&#x2013;ONÃ&#x2013;LOANÃ&#x2013;ISÃ&#x2013;RECOGNISEDÃ&#x2013;ONÃ&#x2013;ACCRUALÃ&#x2013;BASIS 4HEÃ&#x2013;RECOGNITIONÃ&#x2013;CEASESÃ&#x2013;WHENÃ&#x2013;AÃ&#x2013;LOANÃ&#x2013;ISÃ&#x2013;TRANSFERREDÃ&#x2013;TOÃ&#x2013;.ONÃ&#x2013;)NTERESTÃ&#x2013;"EARINGÃ&#x2013;,OANÃ&#x2013; .)", Ã&#x2013;3ERVICEÃ&#x2013;CHARGEÃ&#x2013; is recognised thereafter only when it is received.

Ã&#x2DC;

,DLADQRGHOÃ&#x2DC;EDDRÃ&#x2DC;@MCÃ&#x2DC;.SGDQÃ&#x2DC;BG@QFDRÃ&#x2DC;Ã&#x2DC; Ã&#x2DC; Ã&#x2DC; Ã&#x2DC; Membership fees and other charges are recognized as and when the money is received. Other Income Other income comprises interest from short term deposits, gains less losses related to trading assets and liabilities, and includes gains from disposal of assets and all realized foreign exchange differences. Interest income on bank deposit is earned on accruals basis at the agreed interest rate with the RESPECTIVEÃ&#x2013;Ã&#x2122;NANCIALÃ&#x2013;INSTITUTIONÃ&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;

Ã&#x2013;

Grants 'RANTSÃ&#x2013;RELATEDÃ&#x2013;TOÃ&#x2013;INCOMEÃ&#x2013;AREÃ&#x2013;INCLUDEDÃ&#x2013;INÃ&#x2013;INCOMEÃ&#x2013;WHENÃ&#x2013;THEÃ&#x2013;RELATEDÃ&#x2013;CONDITIONSÃ&#x2013;AREÃ&#x2013;SATISÃ&#x2122;ED Ã&#x2013;5TILIZEDÃ&#x2013;PORTIONÃ&#x2013;OFÃ&#x2013;GRANTÃ&#x2013;RELATEDÃ&#x2013;TOÃ&#x2013;AÃ&#x2013;SPECIÃ&#x2122;CÃ&#x2013;PURPOSEÃ&#x2013;ISÃ&#x2013;TRANSFERREDÃ&#x2013; 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 BASISÃ&#x2013;OFÃ&#x2013;NON COMMERCIALÃ&#x2013;INVOICESÃ&#x2013;SUBMITTEDÃ&#x2013;BYÃ&#x2013;THEÃ&#x2013;DONORS Ã&#x2013;'RANTSÃ&#x2013;FORÃ&#x2013;CAPITALÃ&#x2013;ASSETSÃ&#x2013;AREÃ&#x2013;TAKENÃ&#x2013;TOÃ&#x2013;THEÃ&#x2013;DEFERREDÃ&#x2013;GRANTÃ&#x2013;ACCOUNT Ã&#x2013; 2EFERÃ&#x2013;NOTEÃ&#x2013; Ã&#x2013;FORÃ&#x2013;DETAILS Ã&#x2013; Ã&#x2013;

3.6

Foreign currency transactions

Ã&#x2013;

4HESEÃ&#x2013;Ã&#x2122;NANCIALÃ&#x2013;STATEMENTSÃ&#x2013;AREÃ&#x2013;PRESENTEDÃ&#x2013;INÃ&#x2013;0AKÃ&#x2013;2UPEESÃ&#x2013; 2UPEES Ã&#x2013;ANDÃ&#x2013;53Ã&#x2013;$OLLARSÃ&#x2013; 53 Ã&#x2013;4HEÃ&#x2013;FUNCTIONALÃ&#x2013;CURRENCYÃ&#x2013;OFÃ&#x2013;THEÃ&#x2013;#OMPANYÃ&#x2013;ISÃ&#x2013;0AKÃ&#x2013;2UPEES Ã&#x2013;4HEÃ&#x2013;Ã&#x2122;GURESÃ&#x2013; INÃ&#x2013;53 Ã&#x2013;AREÃ&#x2013;REPORTEDÃ&#x2013;FORÃ&#x2013;INFORMATIONÃ&#x2013;PURPOSESÃ&#x2013;ONLYÃ&#x2013; REFERÃ&#x2013;NOTEÃ&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Foreign currency transactions during the year 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.

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011

3.7

Taxation

Ă&#x2013;

!Ă&#x2013; PROVISIONĂ&#x2013; FORĂ&#x2013; CURRENTĂ&#x2013; TAXATIONĂ&#x2013; HASĂ&#x2013; NOTĂ&#x2013; BEENĂ&#x2013; MADEĂ&#x2013; INĂ&#x2013; THESEĂ&#x2013; Ă&#x2122;NANCIALĂ&#x2013; STATEMENTSĂ&#x2013; ASĂ&#x2013; THEĂ&#x2013; #OMPANYĂ&#x2013; HASĂ&#x2013; APPLIEDĂ&#x2013; TOĂ&#x2013; THEĂ&#x2013; TAXATIONĂ&#x2013; AUTHORITIESĂ&#x2013; FORĂ&#x2013; GRANTĂ&#x2013; OFĂ&#x2013; AĂ&#x2013; RETROSPECTIVEĂ&#x2013;EXEMPTIONĂ&#x2013;FROMĂ&#x2013;THEĂ&#x2013;DATEĂ&#x2013;OFĂ&#x2013;ITSĂ&#x2013;INCORPORATION Ă&#x2013;ANDĂ&#x2013;MANAGEMENTĂ&#x2013;ISĂ&#x2013;CONĂ&#x2122;DENTĂ&#x2013;OFĂ&#x2013;SECURINGĂ&#x2013;THISĂ&#x2013;EXEMPTION Ă&#x2013;4HEĂ&#x2013;LEGALĂ&#x2013;ADVISORĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;ISĂ&#x2013;ALSOĂ&#x2013; OFĂ&#x2013;THEĂ&#x2013;VIEWĂ&#x2013;THATĂ&#x2013;THEĂ&#x2013;EXEMPTIONĂ&#x2013;WILLĂ&#x2013;BEĂ&#x2013;GRANTEDĂ&#x2013;TOĂ&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;INĂ&#x2013;VIEWĂ&#x2013;OFĂ&#x2013;ITSĂ&#x2013;STATUSĂ&#x2013;ASĂ&#x2013;ANĂ&#x2013;k!SSOCIATIONĂ&#x2013;.OTĂ&#x2013;FORĂ&#x2013;0ROĂ&#x2122;TlĂ&#x2013;UNDERĂ&#x2013;THEĂ&#x2013;#OMPANIESĂ&#x2013;/RDINANCE Ă&#x2013; Ă&#x2013;

3.8

Financial instruments

Ă&#x2013;

&INANCIALĂ&#x2013;ASSETSĂ&#x2013;ANDĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;LIABILITIESĂ&#x2013;AREĂ&#x2013;RECOGNISEDĂ&#x2013;WHENĂ&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;BECOMESĂ&#x2013;AĂ&#x2013;PARTYĂ&#x2013;TOĂ&#x2013;CONTRACTUALĂ&#x2013;PROVISIONSĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;INSTRUMENT Ă&#x2013;4HESEĂ&#x2013;AREĂ&#x2013;INITIALLYĂ&#x2013; MEASUREDĂ&#x2013;ATĂ&#x2013;COST Ă&#x2013;WHICHĂ&#x2013;ISĂ&#x2013;THEĂ&#x2013;FAIRĂ&#x2013;VALUEĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;CONSIDERATIONĂ&#x2013;GIVENĂ&#x2013;ANDĂ&#x2013;RECEIVEDĂ&#x2013;RESPECTIVELY Ă&#x2013;4HESEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;ASSETSĂ&#x2013;ANDĂ&#x2013;LIABILITIESĂ&#x2013;AREĂ&#x2013;SUBSEQUENTLYĂ&#x2013;MEASUREDĂ&#x2013; ATĂ&#x2013;FAIRĂ&#x2013;VALUEĂ&#x2013;ANDĂ&#x2013;AMORTISEDĂ&#x2013;COSTĂ&#x2013;RESPECTIVELY Ă&#x2013;WHICHEVERĂ&#x2013;ISĂ&#x2013;APPLICABLE Ă&#x2013;4HEĂ&#x2013;#OMPANYĂ&#x2013;DERECOGNIZESĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;ASSETSĂ&#x2013;ANDĂ&#x2013;LIABILITIESĂ&#x2013;WHENĂ&#x2013;ITĂ&#x2013;CEASESĂ&#x2013;TOĂ&#x2013;BEĂ&#x2013;AĂ&#x2013;PARTYĂ&#x2013; to such contractual provisions of the instruments.

Ă&#x2013;

&INANCIALĂ&#x2013;ASSETSĂ&#x2013;MAINLYĂ&#x2013;COMPRISEĂ&#x2013;OFĂ&#x2013;MICROCREDITĂ&#x2013;RECEIVABLES Ă&#x2013;ACCRUEDĂ&#x2013;INTEREST Ă&#x2013;ADVANCES Ă&#x2013;OTHERĂ&#x2013;RECEIVABLESĂ&#x2013;ANDĂ&#x2013;BANKĂ&#x2013;BALANCES Ă&#x2013;3IGNIĂ&#x2122;CANTĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;LIABILITIESĂ&#x2013; are short term loans, markup on loan, payable to related parties, security against microcredit receivables and accrued and other liabilities.

3.9

Impairment

Ă&#x2013;

4HEĂ&#x2013;CARRYINGĂ&#x2013;AMOUNTĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;#OMPANYlSĂ&#x2013;ASSETSĂ&#x2013;AREĂ&#x2013;REVIEWEDĂ&#x2013;ATĂ&#x2013;EACHĂ&#x2013;BALANCEĂ&#x2013;SHEETĂ&#x2013;DATEĂ&#x2013;TOĂ&#x2013;DETERMINEĂ&#x2013;WHETHERĂ&#x2013;THEREĂ&#x2013;ISĂ&#x2013;ANYĂ&#x2013;INDICATIONĂ&#x2013;OFĂ&#x2013;IMPAIRMENTĂ&#x2013;LOSS Ă&#x2013;)FĂ&#x2013; 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.

3.10

Stock in trade

Ă&#x2013;

4HESEĂ&#x2013;AREĂ&#x2013;VALUEDĂ&#x2013;ATĂ&#x2013;THEĂ&#x2013;LOWERĂ&#x2013;OFĂ&#x2013;COSTĂ&#x2013;ANDĂ&#x2013;NETĂ&#x2013;REALISABLEĂ&#x2013;VALUE Ă&#x2013;#OSTĂ&#x2013;REPRESENTSĂ&#x2013;WEIGHTEDĂ&#x2013;AVERAGEĂ&#x2013;PURCHASEĂ&#x2013;COST Ă&#x2013;.ETĂ&#x2013;REALISABLEĂ&#x2013;VALUEĂ&#x2013;SIGNIĂ&#x2122;ESĂ&#x2013;THEĂ&#x2013;ESTIMATEDĂ&#x2013; 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 in trade on a regular basis and provision is made for obsolescence if there is any change in usage pattern and physical form.

Ă&#x2DC;

/QNUHRHNMRĂ&#x2DC;

Ă&#x2013;

0ROVISIONSĂ&#x2013;AREĂ&#x2013;RECORDEDĂ&#x2013;WHENĂ&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;HASĂ&#x2013;AĂ&#x2013;PRESENTĂ&#x2013;OBLIGATIONĂ&#x2013;ASĂ&#x2013;AĂ&#x2013;RESULTĂ&#x2013;OFĂ&#x2013;PASTĂ&#x2013;EVENT Ă&#x2013;ANDĂ&#x2013;ITĂ&#x2013;ISĂ&#x2013;PROBABLEĂ&#x2013;THATĂ&#x2013;ANĂ&#x2013;OUTĂ&#x161;OWĂ&#x2013;OFĂ&#x2013;ECONOMICĂ&#x2013;BENEĂ&#x2122;TSĂ&#x2013;WILLĂ&#x2013;BEĂ&#x2013; required to settle the obligation and a reliable estimate can be made of the amount of provision.

Ă&#x2DC;

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011 Ă&#x2DC;

.EEĂ&#x2DC;RDSSHMFĂ&#x2DC;NEĂ&#x2DC;Ă&#x161;M@MBH@KĂ&#x2DC;HMRSQTLDMSRĂ&#x2DC;

Ă&#x2DC;

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.

3.13

Restricted grant

Ă&#x2013;

&UNDSĂ&#x2013;RECEIVEDĂ&#x2013;ASĂ&#x2013;GRANTSĂ&#x2013;FORĂ&#x2013;SPECIĂ&#x2122;CĂ&#x2013;PURPOSESĂ&#x2013;AREĂ&#x2013;CLASSIĂ&#x2122;EDĂ&#x2013;ASĂ&#x2013;RESTRICTEDĂ&#x2013;GRANTĂ&#x2013;WITHĂ&#x2013;SEPARATEĂ&#x2013;ACCOUNTINGĂ&#x2013;RECORDSĂ&#x2013;BEINGĂ&#x2013;MAINTAINEDĂ&#x2013;FORĂ&#x2013;EACHĂ&#x2013;ANDĂ&#x2013; every account. Restricted grant is transferred to income to the extent of expenditures incurred out of these funds in a particular accounting year.

3.14

Borrowing costs Markup, interest and other direct charges on borrowings are capitalized to the related qualifying asset till substantially all the activities necessary to prepare the qualifying asset for its intended use are complete. All other markup, interest and related charges are charged to the income and expenditure statement.

3.15

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.

Ă&#x2DC;

-DVĂ&#x2DC;@BBNTMSHMFĂ&#x2DC;RS@MC@QCRĂ&#x2DC;@MCĂ&#x2DC;(%1("Ă&#x2DC;HMSDQOQDS@SHNMRĂ&#x2DC;SG@SĂ&#x2DC;@QDĂ&#x2DC;MNSĂ&#x2DC;XDSĂ&#x2DC;DEEDBSHUDĂ&#x2DC;

Ă&#x2DC;

The following standards, amendments and interpretations of approved accounting standards will be effective for accounting periods beginning on or after 01 January 2012: Ă&#x2013;

Ă&#x2013; Ă&#x2013;!MENDMENTSĂ&#x2013;TOĂ&#x2013;)!3Ă&#x2013; Ă&#x2013;pĂ&#x2013;DEFERREDĂ&#x2013;TAXĂ&#x2013;ONĂ&#x2013;INVESTMENTĂ&#x2013;PROPERTYĂ&#x2013; EFFECTIVEĂ&#x2013;FORĂ&#x2013;ANNUALĂ&#x2013;PERIODSĂ&#x2013;BEGINNINGĂ&#x2013;ONĂ&#x2013;ORĂ&#x2013;AFTERĂ&#x2013; Ă&#x2013;*ANUARYĂ&#x2013; Ă&#x2013;4HEĂ&#x2013; Ă&#x2013; amendment provides an exception to the measurement principle in respect of investment property measured using the fair value model in accordance with IAS 40 Investment Property. The measurement of deferred tax assets and liabilities, in this limited circumstance, is based on a rebuttable presumption that the carrying amount of the investment property will be recovered entirely through sale. The presumption can be rebutted only if the investment property is depreciable and held within a business model whose objective is to consume substantially all of the ASSETlSĂ&#x2013;ECONOMICĂ&#x2013;BENEĂ&#x2122;TSĂ&#x2013;OVERĂ&#x2013;THEĂ&#x2013;LIFEĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;ASSET Ă&#x2013;4HEĂ&#x2013;AMENDMENTĂ&#x2013;HASĂ&#x2013;NOĂ&#x2013;IMPACTĂ&#x2013;ONĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATEMENTSĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;#OMPANY Ă&#x2013; Ă&#x2013; Ă&#x2013;

Ă&#x2013;

Ă&#x2013; Ă&#x2013;)!3Ă&#x2013; Ă&#x2013;3EPARATEĂ&#x2013;&INANCIALĂ&#x2013;3TATEMENTSĂ&#x2013; Ă&#x2013; Ă&#x2013; EFFECTIVEĂ&#x2013;FORĂ&#x2013;ANNUALĂ&#x2013;PERIODSĂ&#x2013;BEGINNINGĂ&#x2013;ONĂ&#x2013;ORĂ&#x2013;AFTERĂ&#x2013; Ă&#x2013;*ANUARYĂ&#x2013; Ă&#x2013;Ă&#x2013;)!3Ă&#x2013; Ă&#x2013; Ă&#x2013;SUPERSEDESĂ&#x2013;)!3Ă&#x2013; Ă&#x2013; Ă&#x2013;4HREEĂ&#x2013;NEWĂ&#x2013;STANDARDSĂ&#x2013;)&23Ă&#x2013; Ă&#x2013; Ă&#x2013;#ONSOLIDATEDĂ&#x2013;&INANCIALĂ&#x2013;3TATEMENTS Ă&#x2013;)&23Ă&#x2013; Ă&#x2013;*OINTĂ&#x2013;!RRANGEMENTSĂ&#x2013;ANDĂ&#x2013;)&23Ă&#x2013; Ă&#x2013;$ISCLOSUREĂ&#x2013;OFĂ&#x2013;)NTERESTĂ&#x2013;Ă&#x2013; INĂ&#x2013;/THERĂ&#x2013;%NTITIESĂ&#x2013;DEALINGĂ&#x2013;WITHĂ&#x2013;)!3Ă&#x2013; Ă&#x2013;WOULDĂ&#x2013;BEĂ&#x2013;APPLICABLEĂ&#x2013;EFFECTIVEĂ&#x2013; Ă&#x2013;*ANUARYĂ&#x2013; Ă&#x2013;)!3Ă&#x2013; Ă&#x2013; Ă&#x2013;CARRIESĂ&#x2013;FORWARDĂ&#x2013;THEĂ&#x2013;EXISTINGĂ&#x2013;ACCOUNTINGĂ&#x2013;ANDĂ&#x2013; DISCLOSUREĂ&#x2013;REQUIREMENTSĂ&#x2013;FORĂ&#x2013;SEPARATEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATEMENTS Ă&#x2013;WITHĂ&#x2013;SOMEĂ&#x2013;MINORĂ&#x2013;CLARIĂ&#x2122;CATIONS Ă&#x2013;4HEĂ&#x2013;AMENDMENTSĂ&#x2013;HAVEĂ&#x2013;NOĂ&#x2013;IMPACTĂ&#x2013;ONĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATEMENTSĂ&#x2013; of the Company.

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011

Ö Ö)!3Ö Ö)NVESTMENTSÖINÖ!SSOCIATESÖANDÖ*OINTÖ6ENTURESÖ Ö Ö EFFECTIVEÖFORÖANNUALÖPERIODSÖBEGINNINGÖONÖORÖAFTERÖ Ö*ANUARYÖ Ö)!3Ö Ö Ö SUPERSEDESÖ)!3Ö Ö Ö)!3Ö Ö ÖMAKESÖTHEÖAMENDMENTSÖTOÖAPPLYÖ)&23Ö ÖTOÖANÖINVESTMENT ÖORÖAÖPORTIONÖOFÖANÖINVESTMENT ÖINÖANÖASSOCIATEÖ ORÖ AÖ JOINTÖ VENTUREÖ THATÖ MEETSÖ THEÖ CRITERIAÖ TOÖ BEÖ CLASSIÙEDÖ ASÖ HELDÖ FORÖ SALE Ö ANDÖ Ö ONÖ CESSATIONÖ OFÖ SIGNIÙCANTÖ INÚUENCEÖ ORÖ JOINTÖ CONTROL Ö EVENÖ IFÖ ANÖ INVESTMENTÖINÖANÖASSOCIATEÖBECOMESÖANÖINVESTMENTÖINÖAÖJOINTÖVENTURE Ö4HEÖAMENDMENTSÖHAVEÖNOÖIMPACTÖONÖÙNANCIALÖSTATEMENTSÖOFÖTHEÖ#OMPANY Ö

Ö Ö)!3Ö Ö%MPLOYEEÖ"ENEÙTSÖ AMENDEDÖ Ö Ö EFFECTIVEÖFORÖANNUALÖPERIODSÖBEGINNINGÖONÖORÖAFTERÖ Ö*ANUARYÖ Ö4HEÖAMENDEDÖ)!3Ö ÖINCLUDESÖ THEÖAMENDMENTSÖTHATÖREQUIREÖACTUARIALÖGAINSÖANDÖLOSSESÖTOÖBEÖRECOGNISEDÖIMMEDIATELYÖINÖOTHERÖCOMPREHENSIVEÖINCOME ÖTHISÖCHANGEÖWILLÖREMOVEÖ THEÖCORRIDORÖMETHODÖANDÖELIMINATEÖTHEÖABILITYÖFORÖENTITIESÖTOÖRECOGNISEÖALLÖCHANGESÖINÖTHEÖDEÙNEDÖBENEÙTÖOBLIGATIONÖANDÖINÖPLANÖASSETSÖINÖPROÙTÖORÖLOSS Ö WHICHÖCURRENTLYÖISÖALLOWEDÖUNDERÖ)!3Ö ÖANDÖTHATÖTHEÖEXPECTEDÖRETURNÖONÖPLANÖASSETSÖRECOGNISEDÖINÖPROÙTÖORÖLOSSÖISÖCALCULATEDÖBASEDÖONÖTHEÖRATEÖ USEDÖTOÖDISCOUNTÖTHEÖDEÙNEDÖBENEÙTÖOBLIGATION Ö4HEÖAMENDMENTSÖHAVEÖNOÖIMPACTÖONÖÙNANCIALÖSTATEMENTSÖOFÖTHEÖ#OMPANY Ö Ö Ö Ö

Ö Ö0RESENTATIONÖOFÖ)TEMSÖOFÖ/THERÖ#OMPREHENSIVEÖ)NCOMEÖ !MENDMENTSÖTOÖ)!3Ö Ö Ö EFFECTIVEÖFORÖANNUALÖPERIODSÖBEGINNINGÖONÖORÖAFTERÖ Ö*ULYÖ Ö 4HEÖAMENDMENTSÖREQUIREÖTHATÖANÖENTITYÖPRESENTÖSEPARATELYÖTHEÖITEMSÖOFÖOTHERÖCOMPREHENSIVEÖINCOMEÖTHATÖWOULDÖBEÖRECLASSIÙEDÖTOÖPROÙTÖORÖLOSSÖINÖ THEÖFUTUREÖIFÖCERTAINÖCONDITIONSÖAREÖMETÖFROMÖTHOSEÖTHATÖWOULDÖNEVERÖBEÖRECLASSIÙEDÖTOÖPROÙTÖORÖLOSS Ö4HEÖAMENDMENTSÖDOÖNOTÖADDRESSÖWHICHÖITEMSÖ AREÖPRESENTEDÖINÖOTHERÖCOMPREHENSIVEÖINCOMEÖORÖWHICHÖITEMSÖNEEDÖTOÖBEÖRECLASSIÙED Ö4HEÖREQUIREMENTSÖOFÖOTHERÖ)&23SÖCONTINUEÖTOÖAPPLYÖINÖTHISÖ REGARD Ö4HEÖAMENDMENTSÖHAVEÖNOÖIMPACTÖONÖÙNANCIALÖSTATEMENTSÖOFÖTHEÖ#OMPANY Ö Ö Ö Ö Ö

Ö Ö $ISCLOSURESÖ pÖ 4RANSFERSÖ OFÖ &INANCIALÖ !SSETSÖ !MENDMENTSÖ TOÖ )&23Ö Ö Ö EFFECTIVEÖ FORÖ ANNUALÖ PERIODSÖ BEGINNINGÖ ONÖ ORÖ AFTERÖ Ö *ULYÖ Ö 4HEÖ AMENDMENTSÖ INTRODUCEÖ NEWÖ DISCLOSUREÖ REQUIREMENTSÖ ABOUTÖ TRANSFERSÖ OFÖ ÙNANCIALÖ ASSETS Ö INCLUDINGÖ DISCLOSURESÖ FORÖ ÙNANCIALÖ ASSETSÖ THATÖ AREÖ NOTÖ DERECOGNISEDÖINÖTHEIRÖENTIRETY ÖANDÖÙNANCIALÖASSETSÖTHATÖAREÖDERECOGNISEDÖINÖTHEIRÖENTIRETYÖBUTÖFORÖWHICHÖTHEÖENTITYÖRETAINSÖCONTINUINGÖINVOLVEMENT Ö4HEÖ AMENDMENTSÖHAVEÖNOÖIMPACTÖONÖÙNANCIALÖSTATEMENTSÖOFÖTHEÖ#OMPANY ÖÖ Ö Ö Ö Ö

Ö Ö/FFSETTINGÖ&INANCIALÖ!SSETSÖANDÖ&INANCIALÖ,IABILITIESÖ !MENDMENTSÖTOÖ)!3Ö ÖpÖ EFFECTIVEÖFORÖANNUALÖPERIODSÖBEGINNINGÖONÖORÖAFTERÖ Ö*ANUARYÖ Ö The amendments address inconsistencies in current practice when applying the offsetting criteria in IAS 32 Financial Instruments: Presentation. 4HEÖ AMENDMENTSÖ CLARIFYÖ THEÖ MEANINGÖ OFÖ kCURRENTLYÖ HASÖ AÖ LEGALLYÖ ENFORCEABLEÖ RIGHTÖ OFÖ SET OFFl Ö ANDÖ THATÖ SOMEÖ GROSSÖ SETTLEMENTÖ SYSTEMSÖ MAYÖ BEÖ considered equivalent to net settlement. This amendment may result in certain additional disclosures and presentational changes without any impact on the results of operations.

Ö Ö/FFSETTINGÖ&INANCIALÖ!SSETSÖANDÖ&INANCIALÖ,IABILITIESÖ !MENDMENTSÖTOÖ)&23Ö ÖpÖ EFFECTIVEÖFORÖANNUALÖPERIODSÖBEGINNINGÖONÖORÖAFTERÖ Ö*ANUARYÖ Ö 4HEÖAMENDMENTSÖTOÖ)&23Ö ÖCONTAINÖNEWÖDISCLOSUREÖREQUIREMENTSÖFORÖÙNANCIALÖASSETSÖANDÖLIABILITIESÖTHATÖAREÖOFFSETÖINÖTHEÖSTATEMENTÖOFÖÙNANCIALÖPOSITIONÖ or subject to master netting agreement or similar arrangement. This amendment may result in certain additional disclosures and presentational changes without any impact on the results of operations.

Ö Ö)&2)#Ö Ö Ö3TRIPPINGÖCOSTÖINÖTHEÖPRODUCTIONÖPHASEÖOFÖAÖSURFACEÖMININGÖ EFFECTIVEÖFORÖANNUALÖPERIODSÖBEGINNINGÖONÖORÖAFTERÖ Ö*ANUARYÖ Ö4HEÖ interpretation requires production stripping cost in a surface mine to be capitalized if certain criteria are met. The amendments have no impact on ÙNANCIALÖSTATEMENTSÖOFÖTHEÖ#OMPANY Ö Ö Ö Ö Ö

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011

PROPERTY AND EQUIPMENT

Ø Ø

Cost As at 1 January 2010 Additions during the year $ISPOSALÖDURINGÖTHEÖYEARÖ As at 31 December 2010

-NSDØ Ø

5,925,468 1,829,335 Ö Ö 7,752,153

2,878,088 1,761,063 Ö Ö 4,595,851

15,718,235 9,165,146 24,883,381

7,752,153 1,217,396 8,969,549

4,595,851 1,847,837 6,443,688

737,109 1,815,117 Ö Ö 1,922,620

579,362 773,964 Ö Ö 1,351,551

272,681 714,933 Ö Ö 949,244

1,922,620 Ø 3,365,639 5,288,259

1,351,551 Ø 894,153 2,245,704

Ø 19,595,122

Depreciation As at 1 January 2010 Charge for the year $ISPOSALÖDURINGÖTHEÖYEARÖ As at 31 December 2010

As at 1 January 2011 "G@QFDØENQØSGDØØ year / adustment As at 31 December 2011

Ø 17

6QHSSDMØCNVMØU@KTDØ 31 December 2011 - Rupees 31 December 2011 - US$ 31 December 2010 - Rupees 31 December 2010 - US$

Rates of depreciation %

.EÚBDØ "NLOTSDQØ DPTHOLDMSØØ DPTHOLDMSØØ Rupees

5,664,423 12,419,762 Ö Ö Ö 15,718,235

As at 1 January 2011 Additions during the year As at 31 December 2011

,NSNQØ %TQMHSTQDØ UDGHBKDRØØ @MCØÚWSTQDRØØ

2,161,932 4,189,769 Ö ÖÖÖÖ 6,351,701

6,351,701 6,910,120 13,261,821

"@OHS@KØ @CU@MBDR

Ö ÖÖÖÖ -

618,000 618,000

3NS@K

16,629,911 20,199,929 Ö 34,417,940

34,417,940 19,758,499 54,176,439

367,716 752,401 Ö ÖÖÖÖ 1,120,117

Ö ÖÖÖÖ -

1,956,868 4,056,415 Ö 5,343,532

949,244 Ø 657,937 1,607,181

1,120,117 Ø 1,047,631 2,167,748

5,343,532

Ø -

5,965,360 11,308,892

Ø 6,723,845

Ø 4,836,507

Ø 11,094,073

Ø 618,000

42,867,547

217,845

74,751

53,769

123,336

6,870

476,571

13,795,615

6,400,602

3,646,607

5,231,584

29,074,408

164,429

76,289

43,464

62,355

346,537

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011 5.

MICROCREDIT RECEIVABLES, secured - net 2011 Note

Rupees

5.1 Ã&#x2013;

915,894,186 63,966,706 979,860,892 Ã&#x2013; Ã&#x2013;

Microcredit receivables: - considered good - considered doubtful Ã&#x2013;

0ROVISIONÃ&#x2013; Amounts withheld for settelement against LASTÃ&#x2013;INSTALLMENTSÃ&#x2013;

Ã&#x2013;

Ã&#x2DC; ,NUDLDMSÃ&#x2DC;HMÃ&#x2DC;LHBQNBQDCHSÃ&#x2DC;Ã&#x2DC; Ã&#x2DC;QDBDHU@AKDRÃ&#x2DC;HRÃ&#x2DC;@RÃ&#x2DC;ENKKNVRÃ&#x2DC; Ã&#x2DC;Ã&#x2DC;

Ã&#x2013; Ã&#x2013; Ã&#x2013;

Opening balance Disbursements during the year 2ECOVERIESÃ&#x2013;MADEÃ&#x2013;DURINGÃ&#x2013;THEÃ&#x2013;YEARÃ&#x2013; 0RINCIPALÃ&#x2013;WRITTENÃ&#x2013;OFFÃ&#x2013;DURINGÃ&#x2013;THEÃ&#x2013;YEARÃ&#x2013; %FFECTÃ&#x2013;OFÃ&#x2013;TRANSLATIONÃ&#x2013;DIFFERENCEÃ&#x2013;

Ã&#x2DC; /@QSHBTK@QRÃ&#x2DC;NEÃ&#x2DC;Ã&#x2DC;OQNUHRHNMÃ&#x2DC;@QDÃ&#x2DC;@RÃ&#x2DC;ENKKNVR Opening balance Provisions made during the year Provision adjusted against SERVICEÃ&#x2013;CHARGEÃ&#x2013;WRITTENÃ&#x2013;OFFÃ&#x2013; Ã&#x2013; 3ERVICEÃ&#x2013;CHARGESÃ&#x2013;ONÃ&#x2013;LOANÃ&#x2013;WRITTENÃ&#x2013;OFFÃ&#x2013; Ã&#x2013; %FFECTÃ&#x2013;OFÃ&#x2013;TRANSLATIONÃ&#x2013;DIFFERENCEÃ&#x2013;

Ã&#x2DC; Ã&#x2DC;

2010 US$

Rupees

US$

10,182,261 670,137,916 711,136 32,383,097 10,893,397 702,521,013 Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;

7,987,342 349,330,488 385,973 13,852,715 8,373,315 363,183,203 Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;

4,153,751 164,717 4,318,467 Ã&#x2013;

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; 751,751,032 8,357,434 549,841,959

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; 6,553,540 287,102,234

Ã&#x2013; 3,415,573

Ã&#x2DC; Ã&#x2DC;

Ã&#x2DC; -NSDÃ&#x2DC;

5.3 Ã&#x2013; Ã&#x2013; Ã&#x2013;

Ã&#x2013; Ã&#x2013; Ã&#x2013;

2009

Ã&#x2013; Ã&#x2013; Ã&#x2013;

Rupees

US$

Ã&#x2DC; Ã&#x2DC; Ã&#x2DC;1TODDRÃ&#x2DC;Ã&#x2DC;

Ã&#x2DC;42 Ã&#x2DC;Ã&#x2DC;

Ã&#x2DC; Ã&#x2DC;1TODDRÃ&#x2DC;Ã&#x2DC;

702,521,013 8,373,315 363,183,203 1,656,204,000 19,162,374 1,248,655,000 Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 979,860,892 10,893,397 702,521,013

Ã&#x2DC;42 Ã&#x2DC; 4,318,468 14,882,658 Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; 8,373,315

32,383,097 35,187,767

385,973 407,124

13,852,715 26,289,028

164,717 312,221

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 63,966,706

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; 711,136

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 32,383,097

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; 385,973

5.3Ã&#x2013; -ICROCREDITÃ&#x2013;RECEIVABLESÃ&#x2013;WEREÃ&#x2013;DISBURSEDÃ&#x2013;BYÃ&#x2013;THEÃ&#x2013;#OMPANYÃ&#x2013;TOÃ&#x2013;INDIVIDUALSÃ&#x2013;INÃ&#x2013;0UNJAB Ã&#x2013;3INDH Ã&#x2013;+HYBERÃ&#x2013;0AKHTUNÃ&#x2013;+HWAÃ&#x2013;Ã&#x2013;ANDÃ&#x2013;"ALUCHISTANÃ&#x2013;PURSUANTÃ&#x2013;TOÃ&#x2013;DIFFERENTÃ&#x2013;Ã&#x2122;NANCINGÃ&#x2013; AGREEMENTSÃ&#x2013;WITHÃ&#x2013;0AKISTANÃ&#x2013;0OVERTYÃ&#x2013;!LLEVIATIONÃ&#x2013;&UNDÃ&#x2013; 00!& Ã&#x2013;4HESEÃ&#x2013;CARRYÃ&#x2013;3ERVICEÃ&#x2013;CHARGESÃ&#x2013;ATÃ&#x2013;THEÃ&#x2013;RATEÃ&#x2013;OFÃ&#x2013; Ã&#x2013;PERÃ&#x2013;ANNUMÃ&#x2013; Ã&#x2013; Ã&#x2013;PERÃ&#x2013;ANNUM Ã&#x2013;ANDÃ&#x2013;AREÃ&#x2013;SECUREDÃ&#x2013; against personal guarantees of local community members of the borrowers. Further, the Company withholds 10% of microcredit loans disbursed to the borrowers which is settled against last installments due as disclosed in note 5.5. These receivables are repayable in 48 equal weekly installments.

Ã&#x2DC;

FDÃ&#x2DC;@M@KXRHRÃ&#x2DC;NEÃ&#x2DC;LHBQNBQDCHSÃ&#x2DC;QDBDHU@AKDRÃ&#x2DC;

Not yet due Over due by: - 30 days - 31 to 180 days - 181 to 365 days - above 365 days

Ã&#x2013;

Ã&#x2DC;

Ã&#x2DC;Ã&#x2DC;

2011- Gross Ã&#x2DC;(LO@HQLDMSÃ&#x2DC;Ã&#x2DC; Ã&#x2DC; Rupees US$ 920,800,528 6,788,566 8,405,536 1,344,409 42,521,853 979,860,892

10,236,804 75,470 93,447 14,946 472,728 10,893,395

2010- Gross Ã&#x2DC;Ã&#x2DC;Ã&#x2DC; Ã&#x2DC;(LO@HQLDMSÃ&#x2DC; Rupees US$ 663,172,759 9,910,228 13,246,404 867,089 15,324,533 702,521,013

7,904,324 118,120 157,883 10,335 182,652 8,373,313

!TÃ&#x2013;THEÃ&#x2013;BALANCEÃ&#x2013;SHEETÃ&#x2013;DATE Ã&#x2013;MANAGEMENTÃ&#x2013;HASÃ&#x2013;RECORDEDÃ&#x2013;AÃ&#x2013;PROVISIONÃ&#x2013;OFÃ&#x2013;2S Ã&#x2013; Ã&#x2013;MILLIONÃ&#x2013; 53 Ã&#x2013; Ã&#x2013;MILLION Ã&#x2013; Ã&#x2013;2S Ã&#x2013; Ã&#x2013;MILLION Ã&#x2013;53 Ã&#x2013; Ã&#x2013;MILLION Ã&#x2013;INÃ&#x2013;RESPECTÃ&#x2013;OFÃ&#x2013; microcredit receivables considered doubtful.

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011 5.5

This represents amounts withheld from microcredit loans disbursed by the Company. These will be settled against last installment microcredit installments due from the borrower.

5.6Ã&#x2013; #OMPARATIVEÃ&#x2013;Ã&#x2122;GUREÃ&#x2013;OFÃ&#x2013;SECURITYÃ&#x2013;DEPOSITSÃ&#x2013;ASÃ&#x2013;ATÃ&#x2013; Ã&#x2013;*UNEÃ&#x2013; Ã&#x2013;HASÃ&#x2013;BEENÃ&#x2013;RECLASSIÃ&#x2122;EDÃ&#x2013;BYÃ&#x2013;2S Ã&#x2013; Ã&#x2013;MILLIONÃ&#x2013;FORÃ&#x2013;APPROPRIATEÃ&#x2013;CLASSIÃ&#x2122;CATIONÃ&#x2013;WITHÃ&#x2013;CORRESPONDINGÃ&#x2013;EFFECTÃ&#x2013; on microcredit receivables. Accordingly third balance sheet has been presented in accordance with the requirements of IAS 1.

ADVANCES - unsecured, considered good 2011 Note Employees Others

US$

Rupees

US$

514,103 363,626 877,729

5,715 4,043 9,758

555,059 30,929 585,988

6,616 369 6,985

3,908,087 904,458 4,812,545

43,447 10,055 53,502

156,595 5,267,315 5,423,910

1,866 62,781 64,647

6,009,215 Ã&#x2013; Ã&#x2013; 5,730,481 5,730,481

66,806 Ã&#x2013; Ã&#x2013; 63,707 63,707

2,489,012 Ã&#x2013; Ã&#x2013; 2,236,247 584,418 2,820,665

29,666 Ã&#x2013; 26,654 6,966 33,620

4,246,648 31,213 4,277,861

47,211 347 47,558

4,414,703 82,138 4,496,841

52,619 979 53,598

152,974,497 Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 51,002 153,025,499 157,303,360

1,700,661 Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 567 1,701,228 1,748,786

DEPOSITS AND PREPAYMENTS Security deposits Prepaid rent

ACCRUED INTEREST AND SERVICE CHARGES

Ã&#x2013;

On microcredit receivables Ã&#x2013; Ã&#x2013;3ERVICEÃ&#x2013;CHARGESÃ&#x2013;ONÃ&#x2013;LOANÃ&#x2013;WRITTENÃ&#x2013;OFFÃ&#x2013;

Ã&#x2013;

On bank deposits

2010

Rupees

CASH AND BANK BALANCES Cash in hand - Local currency - Foreign currency Cash at banks

Ã&#x2013;

- Local currency - current accounts Ã&#x2013; Ã&#x2013;)NVESTMENTÃ&#x2013;INÃ&#x2013;Ã&#x2122;XEDÃ&#x2013;DEPOSITSÃ&#x2013; - Foreign currency - current accounts

Ã&#x2013;

226,146,061 Ã&#x2013; Ã&#x2013;Ã&#x2013; 4,549,897 416,860,958 421,357,799

2,695,424 Ã&#x2013; 54,230 4,968,546 5,022,144

9.1Ã&#x2013; 4HESEÃ&#x2013;REPRESENTEDÃ&#x2013;Ã&#x2122;XEDÃ&#x2013;DEPOSITSÃ&#x2013;PLACEDÃ&#x2013;WITHÃ&#x2013;AÃ&#x2013;COMMERCIALÃ&#x2013;BANK Ã&#x2013;4HISÃ&#x2013;CARRIEDÃ&#x2013;RETURNÃ&#x2013;RANGINGÃ&#x2013;FROMÃ&#x2013; Ã&#x2013;TOÃ&#x2013; Ã&#x2013;PERÃ&#x2013;ANNUMÃ&#x2013;CALCULATEDÃ&#x2013;ONÃ&#x2013;AÃ&#x2013;DAILYÃ&#x2013;BASISÃ&#x2013;ANDÃ&#x2013; matured on 31 January 2011. 2011 10.

2010

Note

Rupees

US$

Rupees

US$

10.1

125,850,000 44,793,000 170,643,000

1,500,000 533,886 2,033,886

125,850,000 44,793,000 170,643,000

1,500,000 533,886 2,033,886

FUND BALANCE BRAC USA BRAC Bangladesh

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011 10.1Ã&#x2013; 4HESEÃ&#x2013;REPRESENTÃ&#x2013;CONTRIBUTIONÃ&#x2013;RECEIVEDÃ&#x2013;FROMÃ&#x2013;"2!#Ã&#x2013;53!Ã&#x2013;FORÃ&#x2013;MICROÃ&#x2122;NANCEÃ&#x2013;PURPOSEÃ&#x2013;ANDÃ&#x2013;CONVERSIONÃ&#x2013;OFÃ&#x2013;LOANÃ&#x2013;PAYABLEÃ&#x2013;TOÃ&#x2013;"2!#Ã&#x2013;"ANGLADESHÃ&#x2013;PURSUANTÃ&#x2013;TOÃ&#x2013;"OARDÃ&#x2013;OFÃ&#x2013; $IRECTORSÃ&#x2013;DECISIONÃ&#x2013;DATEDÃ&#x2013; Ã&#x2013;$ECEMBERÃ&#x2013; Ã&#x2013;4HEÃ&#x2013;FUNDÃ&#x2013;BALANCEÃ&#x2013;WILLÃ&#x2013;BEÃ&#x2013;UTILISEDÃ&#x2013;FORÃ&#x2013;MICROÃ&#x2122;NANCEÃ&#x2013;ACTIVITYÃ&#x2013;ANDÃ&#x2013;SELFÃ&#x2013;SUSTAINABILITYÃ&#x2013;OFÃ&#x2013;THEÃ&#x2013;#OMPANY Ã&#x2013; Ã&#x2013; Ã&#x2013;

2011 11.

Ã&#x2013;

Opening balance 6ALUEÃ&#x2013;OFÃ&#x2013;Ã&#x2122;XEDÃ&#x2013;ASSETSÃ&#x2013;Ã&#x2013; transferred from restricted grant Depreciation charge Ã&#x2013;Ã&#x2013;Ã&#x2013;RECOGNISEDÃ&#x2013;ASÃ&#x2013;INCOMEÃ&#x2013; %FFECTÃ&#x2013;OFÃ&#x2013;CONVENIENCEÃ&#x2013;TRANSLATIONÃ&#x2013;

12.

PAYABLE TO RELATED PARTIES

Ã&#x2013;

"2!#Ã&#x2013;"ANGLADESHÃ&#x2013; Ã&#x2013;(EADÃ&#x2013;OFÃ&#x2122;CEÃ&#x2013; BRAC Stichting International

Ã&#x2013;

2010

Rupees

US$

Rupees

US$

6,543,578

80,780

2,562,636

33,459

DEFERRED GRANT

Ã&#x2013; 14 Ã&#x2013; Ã&#x2013;

Ã&#x2013; Ã&#x2013;Ã&#x2013; 12.2

Ã&#x2013; 10,012,414

Ã&#x2013; 115,844

Ã&#x2013; 5,953,576

Ã&#x2013; 70,749

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 13,101,749

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; 145,656

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 6,543,578

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013; 80,780

Ã&#x2013; Ã&#x2013;Ã&#x2013; 29,646,332 159,136,002

Ã&#x2013; Ã&#x2013;Ã&#x2013; 329,587 1,769,161

Ã&#x2013; Ã&#x2013;Ã&#x2013; 97,497,122

Ã&#x2013;

Ã&#x2013; Ã&#x2013; 1,162,063

12.1Ã&#x2013; 4HISÃ&#x2013;REPRESENTSÃ&#x2013;AMOUNTÃ&#x2013;PAYABLEÃ&#x2013;TOÃ&#x2013;"2!#Ã&#x2013;"ANGLADESHÃ&#x2013;ONÃ&#x2013;ACCOUNTÃ&#x2013;OFÃ&#x2013;EXPENDITUREÃ&#x2013;INCURREDÃ&#x2013;ONÃ&#x2013;BEHALFÃ&#x2013;OFÃ&#x2013;THEÃ&#x2013;#OMPANY Ã&#x2013;LOANÃ&#x2013;OBTAINEDÃ&#x2013;ANDÃ&#x2013;HEADÃ&#x2013;OFÃ&#x2122;CEÃ&#x2013;LOGISTICÃ&#x2013; EXPENSEÃ&#x2013; Ã&#x2013;MANAGEMENTÃ&#x2013;FEE Ã&#x2013;4HISÃ&#x2013;AMOUNTÃ&#x2013;ISÃ&#x2013;UNSECURED Ã&#x2013;INTERESTÃ&#x2013;FREEÃ&#x2013;ANDÃ&#x2013;PAYABLEÃ&#x2013;ONÃ&#x2013;DEMAND Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;

12.2Ã&#x2013; 4HISÃ&#x2013;REPRESENTSÃ&#x2013;AMOUNTÃ&#x2013;PAYABLEÃ&#x2013;TOÃ&#x2013;3TICHTINGÃ&#x2013;)NTERNATIONALÃ&#x2013;ONÃ&#x2013;ACCOUNTÃ&#x2013;OFÃ&#x2013;HEADÃ&#x2013;OFÃ&#x2122;CEÃ&#x2013;LOGISTICÃ&#x2013;EXPENSEÃ&#x2013; Ã&#x2013;MANAGEMENTÃ&#x2013;FEE Ã&#x2013;4HISÃ&#x2013;AMOUNTÃ&#x2013;ISÃ&#x2013;UNSECURED Ã&#x2013;INTERESTÃ&#x2013;FREEÃ&#x2013; and payable on demand.

2011

13.

2010

Note

Rupees

US$

Rupees

US$

13.1 & 14

5,851,003 730,657 40,933,180 3,794,341 51,309,181

65,047 8,123 455,067 42,182 570,419

5,629,529 2,206,744 7,836,273

67,098 26,305 93,403

ACCRUED AND OTHER LIABILITIES Salaries payable Withholding tax deducted at source Transferred from restricted grant Others

13.1 This represents surplus funds transferred from restricted grant to other payables on completion of the projects.

/PENINGÃ&#x2013;BALANCEÃ&#x2013; Received during the year Utilised during the year against:

Ã&#x2013; Ã&#x2013;#APITALÃ&#x2013;EXPENDITUREÃ&#x2013; Ã&#x2013; Ã&#x2013;/PERATINGÃ&#x2013;EXPENDITUREÃ&#x2013; 2EFUNDEDÃ&#x2013; Ã&#x2013;ADJUSTEDÃ&#x2013; 4RANSFERREDÃ&#x2013;TOÃ&#x2013;OTHERÃ&#x2013;PAYABLESÃ&#x2013; Ã&#x2013;

/PENINGÃ&#x2013;BALANCEÃ&#x2013; Received during the year Utilised during the year against: Ã&#x2013; Ã&#x2013;#APITALÃ&#x2013;EXPENDITUREÃ&#x2013; Ã&#x2013; Ã&#x2013;/PERATINGÃ&#x2013;EXPENDITUREÃ&#x2013; 2EFUNDEDÃ&#x2013; Ã&#x2013;ADJUSTEDÃ&#x2013; 4RANSFERREDÃ&#x2013;TOÃ&#x2013;OTHERÃ&#x2013;PAYABLESÃ&#x2013; %FFECTÃ&#x2013;OFÃ&#x2013;CURRENCYÃ&#x2013;TRANSLATIONÃ&#x2013;Ã&#x2013; Ã&#x2013;

Ã&#x2013;

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;

Ã&#x2013;

3ALARIESÃ&#x2013;ANDÃ&#x2013;BENEÃ&#x2122;TSÃ&#x2013; Rent expense Utilities Printing and stationery Travelling and transportation Training and development Program supplies and related expenses (EADÃ&#x2013;OFÃ&#x2122;CEÃ&#x2013;LOGISTICSÃ&#x2013;ANDÃ&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;MANAGEMENTÃ&#x2013;FEEÃ&#x2013; Institutional and market survey Miscellaneous expenses

Ã&#x2013;

Ã&#x2013; Ã&#x2013;

Ã&#x2013;

14.1 Expenditure charged during the year is as follows:

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;

-OVEMENTÃ&#x2013;INÃ&#x2013;RESTRICTEDÃ&#x2013;GRANTÃ&#x2013;DURINGÃ&#x2013;THEÃ&#x2013;YEARÃ&#x2013;ISÃ&#x2013;ASÃ&#x2013;FOLLOWS Ã&#x2013; Ã&#x2013;

Ã&#x2013;

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 6,835,323

14.2

Ã&#x2013; Ã&#x2013;Ã&#x2013; 5,401 2,081 3,019 5,360 -

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 79,086

Ã&#x2013;

14.2

Ã&#x2013; Ã&#x2013;

Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013; 75,969

Ã&#x2013;

Ã&#x2013; Ã&#x2013;Ã&#x2013; 80,982

Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 55,536 Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;

Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 87,796

US$ Ã&#x2013; Ã&#x2013;Ã&#x2013; 75,064

Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 57,499 22,200

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; -

Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 46,281 65,404

Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 11,674 152,969

Ã&#x2013; Ã&#x2013;Ã&#x2013; 13,801 2,279 5,325 5,785 13,338

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 58,155

Ã&#x2013; Ã&#x2013;Ã&#x2013; 482 2,147 484 44,200

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 556 16,446

Ã&#x2013; Ã&#x2013;Ã&#x2013; 1,116 1,445 1,010 605 -

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 277 41,072

10,529

Ã&#x2013; Ã&#x2013;Ã&#x2013; 2,000 5,438 1,369 126

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 144 38,440

Ã&#x2013; Ã&#x2013;Ã&#x2013; 3,185 2,525 297 2,077

909,990 1,210,109 Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 4,000,000 1,008,994 48,044 23,926 12,448 5,652,837 13,221,147 5,026,383 1,421,472 3,549,777 3,322,383

Rupees Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 1,192,810 96,480 172,850 275,305 196,949 41,697 124,917 470,032 218,212 460,263 185,588 87,280 118,332 25,639 500,000 41,838 52,326 1,152,837 3,820,193 10,848 179,542

Ã&#x2013; Ã&#x2013;Ã&#x2013; 113,330

Ã&#x2013; Ã&#x2013;Ã&#x2013; 466,800 179,836 260,902 463,291 -

Ã&#x2013; Ã&#x2013;

Kiosks

Ã&#x2013;.ON -ICROÃ&#x2013;&INANCEÃ&#x2013;

Ã&#x2013;

Ã&#x2013; 2011

Ã&#x2013;4OTALÃ&#x2013;Ã&#x2013;

Ã&#x2013;

2010

Ã&#x2013;4OTALÃ&#x2013;

-------- Education -------TUP ------------ Flood -----------PPAF BRAC USA PPAF PPAF & others BRAC USA Ã&#x2013; Ã&#x2013; Ã&#x2013; .OTEÃ&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;

Ã&#x2013; Ã&#x2013;Ã&#x2013; 389,378

Ã&#x2013; Ã&#x2013;Ã&#x2013; -

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 925 18,670

14,001

US$ Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; 355 311 53 3,025

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 1,584 50,213

33,818

Ã&#x2013; Ã&#x2013;Ã&#x2013; 3,855 1,490 325 315 3,633

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 15,096 590,932

440,987

Ã&#x2013; Ã&#x2013;Ã&#x2013; 2,408 1,086 2,591 13,875 11,873

2,922,924 38,114,521 Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 79,956 136,904 1,304,718 1,613,615 4,339,882 51,074,278

Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 30,650 333,164 208,150 26,883 128,738 93,879 4,569 28,090 223,927 27,183 1,199,251 261,448 314,042 1,026,206

Ã&#x2013; Ã&#x2013; 11,140

Ã&#x2013; Ã&#x2013;Ã&#x2013; 1,072,375 Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;

Ã&#x2013; Ã&#x2013;Ã&#x2013; 41,723

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; -

Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; -

5,652 Ã&#x2013; Ã&#x2013; Ã&#x2013; 4,508 16,045

Ã&#x2013; Ã&#x2013;Ã&#x2013; 23 5,688 -

488,498 43,646,042 Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; 389,599 1,386,703

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 46,281 34,764 1,127,432

504,987

Ã&#x2013; Ã&#x2013;Ã&#x2013; 32,121 17,160 16,136 32,112 78,272

Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 4,000,000 3,004,589 97,443,800

65,884,951

Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 2,776,209 1,965 1,483,108 1,394,590 491,632 2,775,521 6,765,116

Ã&#x2013; Ã&#x2013; 61,758

Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; 59,459 1,370,223

782,980

Ã&#x2013; Ã&#x2013; 41,040 15,323 13,040 90,616 28,816

Ã&#x2013; Ã&#x2013; Ã&#x2013; 5,014,115 115,372,550

Ã&#x2013; Ã&#x2013; 3,460,040 1,289,409 1,096,499 7,636,422 2,429,412

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;

Ã&#x2013; Ã&#x2013; 1,511,862

Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;

Agriculture

--------- Health -------PPAF BRAC USA Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Rupees Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013;Ã&#x2013; Ã&#x2013;Ã&#x2013; Ã&#x2013; Ã&#x2013;Ã&#x2013; 9,795,081 6,566,000 4,800,000 6,999,299 7,588,175 4,969,650 1,918,732 6,487,769

MIOP

Ã&#x2013; ICROÃ&#x2013;&INANCEÃ&#x2013; Ã&#x2013;0AKISTANÃ&#x2013;0OVERTYÃ&#x2013;!LLEVIATIONÃ&#x2013;&UNDÃ&#x2013; 00!& Ã&#x2013; Ã&#x2013;

For the year ended 31 December 2011

Capacity Capacity Support to partner building enhancement organizations Ã&#x2013; Ã&#x2013; Ã&#x2013;

Ã&#x2013;

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;

Ã&#x2013;

Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013; Ã&#x2013;

Ã&#x2013;

Note

RESTRICTED GRANT Ã&#x2013;

14.

BRAC PAKISTAN Notes to the Financial Statements

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011

14.2Ă&#x2013; $URINGĂ&#x2013;THEĂ&#x2013;YEAR Ă&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;ALLOCATEDĂ&#x2013;ANĂ&#x2013;EXPENSEĂ&#x2013;OFĂ&#x2013;2S Ă&#x2013; Ă&#x2013;MILLIONĂ&#x2013; Ă&#x2013;2S Ă&#x2013;.IL Ă&#x2013;TOĂ&#x2013;450Ă&#x2013;PROJECTĂ&#x2013;ASĂ&#x2013;THEĂ&#x2013;#OMPANYlSĂ&#x2013;CONTRIBUTIONĂ&#x2013;TOĂ&#x2013;THEĂ&#x2013;PROJECT Ă&#x2013;

Ă&#x2013;

14.3 As per terms of the grants agreements, maximum period for utilisation of grants is 30 June 2012.

15.

SHORT TERM LOANS, secured These represent following loans obtained by the Company:

Note

2011

2010

Rupees

US$

Rupees

US$

150,000,000

1,667,593

Ă&#x2013; Ă&#x2013;Ă&#x2013; Ă&#x2013; Ă&#x2013;Ă&#x2013; 2,997,000 Ă&#x2013; Ă&#x2013;Ă&#x2013; 82,500,000 25,000,000 5,760,000 594,557,000 744,557,000

Ă&#x2013; Ă&#x2013;Ă&#x2013; Ă&#x2013; Ă&#x2013;Ă&#x2013; 33,319 Ă&#x2013; Ă&#x2013;Ă&#x2013; 917,176 277,932 64,036 6,609,862 8,277,455

38,296,800 Ă&#x2013; Ă&#x2013;Ă&#x2013; Ă&#x2013; Ă&#x2013;Ă&#x2013; 42,488,000 Ă&#x2013; Ă&#x2013;Ă&#x2013; 21,300,000 10,000,000 782,084,800 782,084,800

456,458 Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; 506,412 Ă&#x2013; Ă&#x2013; 253,874 119,190 9,321,631 9,321,631

782,084,800

9,321,631

624,862,950

7,412,373

Ă&#x2013; Ă&#x2013;Ă&#x2013;Ă&#x2013;Ă&#x2013; Ă&#x2013; Ă&#x2013;Ă&#x2013; Ă&#x2013; Ă&#x2013;Ă&#x2013; 90,000,000 25,000,000 10,800,000 150,000,000 916,800,000 Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;Ă&#x2013;Ă&#x2013;Ă&#x2013; 744,557,000

Ă&#x2013; Ă&#x2013;Ă&#x2013;Ă&#x2013;Ă&#x2013; Ă&#x2013; Ă&#x2013;Ă&#x2013; Ă&#x2013; Ă&#x2013;Ă&#x2013; 1,041,305 289,251 124,957 1,735,509 10,607,429 Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; 8,277,455

Ă&#x2013; Ă&#x2013;Ă&#x2013; Ă&#x2013; Ă&#x2013;Ă&#x2013; 50,000,000 Ă&#x2013; Ă&#x2013;Ă&#x2013; 30,000,000 10,000,000 949,000,000 Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;Ă&#x2013;Ă&#x2013;Ă&#x2013; 782,084,800

Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; 595,948 Ă&#x2013; Ă&#x2013; 357,569 119,190 11,311,085 Ă&#x2013; Ă&#x2013; Ă&#x2013; 9,321,631

From banking companies Habib Bank Limited

15.1 & 15.3

From PPAF

Ă&#x2013; Ă&#x2013; Ă&#x2013;

Phase II 0HASEĂ&#x2013;))Ă&#x2013;REĂ&#x161;OWSĂ&#x2013; 0HASEĂ&#x2013;))Ă&#x2013;REĂ&#x161;OWSĂ&#x2013;))Ă&#x2013; Phase III 0HASEĂ&#x2013;)))Ă&#x2013;REĂ&#x161;OWSĂ&#x2013; MIOP I MIOP II Agriculture Kiosks

Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; 15.1 & 15.2 Ă&#x2013; Ă&#x2013; Ă&#x2013; 15.1 & 15.2 15.1 & 15.2 15.1 & 15.2

Movement during the year is as follows: Opening balance

Ă&#x2DC; Ă&#x2013; Ă&#x2013; Ă&#x2013;

Ă&#x2013; Ă&#x2013;

1DBDHUDCĂ&#x2DC;CTQHMFĂ&#x2DC;SGDĂ&#x2DC;XD@Q 00!&Ă&#x2013;0HASEĂ&#x2013;))Ă&#x2013;REĂ&#x161;OWSĂ&#x2013; 00!&Ă&#x2013;0HASEĂ&#x2013;))Ă&#x2013;REĂ&#x161;OWSĂ&#x2013;))Ă&#x2013; PPAF Phase IIII 00!&Ă&#x2013;0HASEĂ&#x2013;)))Ă&#x2013;REĂ&#x161;OWSĂ&#x2013; PPAF MIOP I PPAF MIOP II PPAF Agriculture PPAF Kiosks Habib Bank Limited 2EPAYMENTSĂ&#x2013;MADEĂ&#x2013;DURINGĂ&#x2013;THEĂ&#x2013;YEARĂ&#x2013; %FFECTĂ&#x2013;OFĂ&#x2013;TRANSLATIONĂ&#x2013;DIFFERENCEĂ&#x2013;

Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; 15.1 & 15.2 Ă&#x2013; Ă&#x2013; Ă&#x2013; 15.1 & 15.2 15.1 & 15.2 15.1 & 15.2 15.1 & 15.3 Ă&#x2013; Ă&#x2013;

*ANUARYÖ ÖTOÖ$ECEMBERÖ Ö Ö/CTOBERÖ ÖTOÖ3EPTEMBERÖ ÖÖ *ANUARYÖ ÖTOÖ$ECEMBERÖ Ö Ö/CTOBERÖ ÖTOÖ3EPTEMBERÖ ÖÖ Ö/CTOBERÖ ÖTOÖ3EPTEMBERÖ ÖÖ *ULYÖ ÖTOÖ*UNEÖ Ö *ANUARYÖ ÖTOÖ*UNEÖ Ö

-ARCHÖ ÖTOÖ-ARCHÖ Ö

Ö ÖÖ Ö ÖÖ Ö ÖÖ Ö ÖÖ Ö ÖÖ Ö ÖÖ Ö ÖÖ

Ö ÖÖ

Rupees

3NS@KØE@BHKHSXØ@LNTMSØ

Ö ÖÖ Ö ÖÖ Ö ÖÖ Ö ÖÖ Ö ÖÖ Ö ÖÖ Ö ÖÖ

Ö ÖÖ

LNTMSØQDBDHUDCØ to date under the Agreement Rupees

*Agreement period excludes the period for repayment of loan to PPAF by the Company.

II Ö0HASEÖ))ÖREÚOWSÖ III Ö0HASEÖ))ÖREÚOWSÖ))Ö IV Ö0HASEÖ)))Ö V Ö0HASEÖ)))ÖREÚOWSÖ VI Ö-)/0Ö))Ö VII Ö!GRICULTUREÖ VIII Ö+IOSKSÖ

From PPAF

I Ö(ABIBÖ"ANKÖ,IMITEDÖ

Banking companies

/DQHNCØNEØ FQDDLDMSØ Ø

Ö Ö Ö Ö Ö Ö Ö

ÖQUARTERLYÖ ÖQUARTERLYÖ ÖQUARTERLYÖ ÖQUARTERLYÖ ÖQUARTERLYÖ ÖQUARTERLYÖ ÖQUARTERLYÖ

"ULLETÖPAYMENTÖ

,@QJ TOØ -N ØNEØHMRS@KKLDMSRØ rate per annum outstanding (%)

*ANUARYÖ Ö /CTOBERÖ Ö *ANUARYÖ Ö *ANUARYÖ Ö *ANUARYÖ Ö /CTOBERÖ Ö *ULYÖ Ö

-ARCHÖ Ö ÖÖ

15.4Ö 4HEÖAMOUNTSÖDRAWNÖUNDERÖTHESEÖLOANÖAGREEMENTSÖATÖTHEÖBALANCEÖSHEETÖDATE ÖAREÖREPAYABLEÖINÖNEXTÖTWELVEÖMONTHSÖANDÖACCORDINGLYÖHAVEÖBEENÖCLASSIÙEDÖASÖSHORTÖTERMÖLOANS Ö

15.3Ö )NÖADDITIONÖTOÖTHEÖABOVE ÖTHEÖ#OMPANYÖHASÖUNUTILISEDÖDEMANDÖÙNANCEÖFACILTYÖOFÖ2S Ö ÖMILLIONÖFROMÖ(ABIBÖ"ANKÖ,IMITED Ö4HEÖFACILITYÖCARRIESÖINTERESTÖATÖSIXÖMONTHÖAVERAGEÖ+)"/2ÖPLUSÖ ÖPERÖANNUM Ö 4HISÖFACILITYÖISÖSECUREDÖAGAINTÖ3TATEÖ"ANKÖOFÖ0AKISTANlSÖREPAYMENTÖGUARANTEEÖFORÖ ÖOFÖPRINCIPALÖTOÖBEÖDISBURSEDÖUNDERÖTHISÖFACIILITY ÖCORPORATEÖGUARANTEEÖBYÖ"2!#Ö"ANGLADESHÖANDÖAÖÙRSTÖÚOATINGÖCHARGEÖ ONÖALLÖPRESENTÖANDÖFUTUREÖCURRENTÖANDÖÙXEDÖASSETSÖOFÖTHEÖ#OMPANYÖFORÖ2S Ö ÖMILLION Ö Ö Ö Ö Ö Ö Ö

#@SDØNEØÚM@KØQDO@XLDMSØØ Ø

15.2Ö &INANCEÖ I ÖISÖOBTAINEDÖFORÖOPERATIONALÖWORKINGÖCAPITALÖNEEDSÖOFÖTHEÖ#OMPANYÖANDÖISÖSECUREDÖAGAINSTÖASSIGNMENTÖOFÖLIENÖONÖ00!&lSÖTERMÖDEPOSITSÖWITHÖ(", Ö&INANCESÖ II ÖTHROUGHÖ VIII ÖAREÖAIMEDÖATÖ THEÖALLEVIATIONÖOFÖPOVERTYÖTHROUGHÖCREDITÖANDÖENTERPRISEÖDEVELOPMENT Ö4HESEÖÙNANCESÖAREÖSECUREDÖAGINSTÖASSIGNMENTÖOFÖRIGHTSÖOVERÖAÖPORTFOLIOÖOFÖTHEÖ#OMPANYlSÖLOANÖUPTOÖANÖAMOUNTÖRECEIVEDÖBYÖTHEÖ #OMPANYÖUNDERÖTHEÖAGREEMENTS ÖAÖDEMANDÖPROMISSORYÖNOTEÖANDÖAÖÙRSTÖCHARGEÖONÖALLÖASSETSÖ ÖCAPITALÖITEMSÖCREATEDÖOUTÖOFÖTHEÖAGREEMENTS Ö Ö Ö Ö

Ö Ö Ö Ö Ö Ö

+N@MØ

15.1 Terms and conditions of these borrowings are given below:

For the year ended 31 December 2011

BRAC PAKISTAN Notes to the Financial Statements

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011

16.

COMMITEMENTS As at 31 December 2011, there were no capital commitments of the Company.

17.

ADMINISTRATIVE AND PROGRAM EXPENSES 2011 Note

Ă&#x2013;

18.

3ALARIESĂ&#x2013;ANDĂ&#x2013;BENEĂ&#x2122;TSĂ&#x2013; Rent expense Utilities Printing and stationery Travelling and transportation Depreciation Training and development 'ROUPĂ&#x2013;MEMBERĂ&#x2013;DEATHĂ&#x2013;BENEĂ&#x2122;TSĂ&#x2013; Maintenance and general expenses (EADĂ&#x2013;OFĂ&#x2122;CEĂ&#x2013;LOGISTICSĂ&#x2013;Ă&#x2013; and management fee Program supplies and related expenses Professional charges Audit fee

Ă&#x2013;

4 Ă&#x2013;

Ă&#x2013; Ă&#x2013;Ă&#x2013; 18,948,469 8,078,755 5,534,228 22,200,994 5,965,360 8,464,922 Ă&#x2013; Ă&#x2013;Ă&#x2013; 16,829,393

Ă&#x2013;

2010 US$

Rupees

Ă&#x2013; Ă&#x2013;Ă&#x2013; 219,235 93,472 64,031 256,867 69,020 97,940 Ă&#x2013; Ă&#x2013;Ă&#x2013; 194,717

Ă&#x2013;

US$

Ă&#x2013; Ă&#x2013;Ă&#x2013; 17,512,502 5,613,873 3,773,073 17,251,823 4,056,415 2,271,907 Ă&#x2013; Ă&#x2013;Ă&#x2013; 15,416,120

Ă&#x2013;

Ă&#x2013; Ă&#x2013; 207,987 66,673 44,81 204,891 48,176 26,982 Ă&#x2013; Ă&#x2013; 183,089

Ă&#x2013;

14.2

32,434,121

375,265

21,547,472

255,908

14.2

44,938,583 1,171,366 870,716 364,288,596

519,942 13,553 10,074 4,214,842

65,987,849 1,169,136 738,320 321,319,100

783,704 13,885 8,769 3,816,142

95,556,240 1,509,415 97,065,655

1,105,591 17,464 1,123,055

79,858,880 775,687 80,634,567

948,443 9,212 957,655

FINANCIAL CHARGES Interest on short term loans Bank charges

19.

Rupees

TAXATION !Ă&#x2013;PROVISIONĂ&#x2013;FORĂ&#x2013;CURRENTĂ&#x2013;TAXATIONĂ&#x2013;HASĂ&#x2013;NOTĂ&#x2013;BEENĂ&#x2013;MADEĂ&#x2013;INĂ&#x2013;THESEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATEMENTSĂ&#x2013;ASĂ&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;HASĂ&#x2013;APPLIEDĂ&#x2013;TOĂ&#x2013;THEĂ&#x2013;TAXATIONĂ&#x2013;AUTHORITIESĂ&#x2013;FORĂ&#x2013;GRANTĂ&#x2013;OFĂ&#x2013;AĂ&#x2013; RETROSPECTIVEĂ&#x2013;EXEMPTIONĂ&#x2013;FROMĂ&#x2013;THEĂ&#x2013;DATEĂ&#x2013;OFĂ&#x2013;ITSĂ&#x2013;INCORPORATIONĂ&#x2013;ANDĂ&#x2013;MANAGEMENTĂ&#x2013;ISĂ&#x2013;CONĂ&#x2122;DENTĂ&#x2013;OFĂ&#x2013;SECURINGĂ&#x2013;THISĂ&#x2013;EXEMPTION Ă&#x2013;4HEĂ&#x2013;LEGALĂ&#x2013;ADVISORĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;ISĂ&#x2013; ALSOĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;VIEWĂ&#x2013;THATĂ&#x2013;THEĂ&#x2013;EXEMPTIONĂ&#x2013;WILLĂ&#x2013;BEĂ&#x2013;GRANTEDĂ&#x2013;TOĂ&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;INĂ&#x2013;VIEWĂ&#x2013;OFĂ&#x2013;ITSĂ&#x2013;STATUSĂ&#x2013;ASĂ&#x2013;ANĂ&#x2013;k!SSOCIATIONĂ&#x2013;.OTĂ&#x2013;FORĂ&#x2013;0ROĂ&#x2122;TlĂ&#x2013;UNDERĂ&#x2013;THEĂ&#x2013;#OMPANIESĂ&#x2013;/RDINANCE Ă&#x2013; 1984.

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011

20.

TRANSACTIONS WITH RELATED PARTIES 4HEĂ&#x2013;RELATEDĂ&#x2013;PARTIESĂ&#x2013;COMPRISEĂ&#x2013;OFĂ&#x2013;DIRECTORS Ă&#x2013;KEYĂ&#x2013;MANAGEMENTĂ&#x2013;PERSONNELĂ&#x2013;ANDĂ&#x2013;ENTITIESĂ&#x2013;OVERĂ&#x2013;WHICHĂ&#x2013;THEĂ&#x2013;DIRECTORSĂ&#x2013;AREĂ&#x2013;ABLEĂ&#x2013;TOĂ&#x2013;EXERCISEĂ&#x2013;INĂ&#x161;UENCE Ă&#x2013;"ALANCESĂ&#x2013;WITHĂ&#x2013; RELATEDĂ&#x2013;PARTIESĂ&#x2013;AREĂ&#x2013;SHOWNĂ&#x2013;INĂ&#x2013;NOTEĂ&#x2013; Ă&#x2013;OFĂ&#x2013;THEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATEMENTS Ă&#x2013;4HEĂ&#x2013;REMUNERATIONĂ&#x2013;TOĂ&#x2013;#HIEFĂ&#x2013;%XECUTIVEĂ&#x2013;ANDĂ&#x2013;$IRECTORSĂ&#x2013;ISĂ&#x2013;DISCLOSEDĂ&#x2013;INĂ&#x2013;NOTEĂ&#x2013; Ă&#x2013;TOĂ&#x2013;THEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013; statements. Transactions with related parties are as follows: 2011

Ă&#x2DC;

2010

Rupees

US$

Rupees

US$

44,691,451

529,506

RRNBH@SDCĂ&#x2DC;BNLO@MXĂ&#x2DC;AXĂ&#x2DC;UHQSTDĂ&#x2DC;NEĂ&#x2DC;BNLLNMĂ&#x2DC;CHQDBSNQRGHO BRAC Bangladesh - Capital contribution - Liabilities undertaken by BRAC Bangladesh from BRAC Afghanistan - Expense incurred on behalf of the Company

BRAC Stichting International Ă&#x2013; Ă&#x2013;(EADĂ&#x2013;OFĂ&#x2122;CEĂ&#x2013;LOGISCTICĂ&#x2013; Ă&#x2013;MANAGEMENTĂ&#x2013; fee for the year

Ă&#x2013;

44,793,000

533,250

23,671,016

273,875

20,753,821

232,902

Ă&#x2013; 32,434,121

Ă&#x2013; 375,265

Ă&#x2013; 21,547,472

Ă&#x2013; 145,735

2,396,521

27,728

1,716,343

20,547

Others Remuneration to key management personnel

21.

REMUNERATION TO CHIEF EXECUTIVE AND DIRECTORS 4HEĂ&#x2013;AGGREGATEĂ&#x2013;AMOUNTSĂ&#x2013;CHARGEDĂ&#x2013;INĂ&#x2013;THESEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATEMENTSĂ&#x2013;FORĂ&#x2013;THEĂ&#x2013;YEARĂ&#x2013;INĂ&#x2013;RESPECTĂ&#x2013;OFĂ&#x2013;REMUNERATIONĂ&#x2013;INCLUDINGĂ&#x2013;BENEĂ&#x2122;TSĂ&#x2013;APPLICABLEĂ&#x2013;TOĂ&#x2013;THEĂ&#x2013;#HIEFĂ&#x2013;%XECUTIVEĂ&#x2013; and the Directors of the Company are given below: 2011 - Rupees

Managerial remuneration

2010 - Rupees

Chief executive

Directors

Chief executive

Directors

2,396,521 2,396,521

1,716,343 1,716,343

Chief executive

Directors

Chief executive

Directors

27,728 27,728

20,547 20,547

2011 - US$

Managerial remuneration

No. of persons

2010 - US$

Chief Executive is also provided with the Company maintained car and Company maintained residence.

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011

22.

FINANCIAL INSTRUMENTS

Ă&#x2013;

4HEĂ&#x2013;#OMPANYĂ&#x2013;HASĂ&#x2013;EXPOSURESĂ&#x2013;TOĂ&#x2013;THEĂ&#x2013;FOLLOWINGĂ&#x2013;RISKSĂ&#x2013;FROMĂ&#x2013;ITSĂ&#x2013;USEĂ&#x2013;OFĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;INSTRUMENTS Ă&#x2013;

Ă&#x2013;

- Credit risk - Liquidity risk - Market risk Ă&#x2013;

4HEĂ&#x2013;"OARDĂ&#x2013;OFĂ&#x2013;$IRECTORSĂ&#x2013;HASĂ&#x2013;OVERALLĂ&#x2013;RESPONSIBILITYĂ&#x2013;FORĂ&#x2013;THEĂ&#x2013;ESTABLISHMENTĂ&#x2013;ANDĂ&#x2013;OVERSIGHTĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;#OMPANYlSĂ&#x2013;RISKĂ&#x2013;MANAGEMENTĂ&#x2013;FRAMEWORK Ă&#x2013;4HEĂ&#x2013;"OARDĂ&#x2013;ISĂ&#x2013;ALSOĂ&#x2013; RESPONSIBLEĂ&#x2013;FORĂ&#x2013;DEVELOPINGĂ&#x2013;ANDĂ&#x2013;MONITORINGĂ&#x2013;THEĂ&#x2013;#OMPANYlSĂ&#x2013;RISKĂ&#x2013;MANAGEMENTĂ&#x2013;POLICIES Ă&#x2013;Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;

Ă&#x2013;

4HEĂ&#x2013;#OMPANYlSĂ&#x2013;RISKĂ&#x2013;MANAGEMENTĂ&#x2013;POLICIESĂ&#x2013;AREĂ&#x2013;ESTABLISHEDĂ&#x2013;TOĂ&#x2013;IDENTIFYĂ&#x2013;ANDĂ&#x2013;ANALYSEĂ&#x2013;THEĂ&#x2013;RISKSĂ&#x2013;FACEDĂ&#x2013;BYĂ&#x2013;THEĂ&#x2013;#OMPANY Ă&#x2013;TOĂ&#x2013;SETĂ&#x2013;APPROPRIATEĂ&#x2013;RISKĂ&#x2013;LIMITSĂ&#x2013;ANDĂ&#x2013; CONTROLS Ă&#x2013;ANDĂ&#x2013;TOĂ&#x2013;MONITORĂ&#x2013;RISKSĂ&#x2013;ANDĂ&#x2013;ADHERENCEĂ&#x2013;TOĂ&#x2013;LIMITS Ă&#x2013;2ISKĂ&#x2013;MANAGEMENTĂ&#x2013;POLICIESĂ&#x2013;ANDĂ&#x2013;SYSTEMSĂ&#x2013;AREĂ&#x2013;REVIEWEDĂ&#x2013;REGULARLYĂ&#x2013;TOĂ&#x2013;REĂ&#x161;ECTĂ&#x2013;CHANGESĂ&#x2013;INĂ&#x2013;MARKETĂ&#x2013; CONDITIONSĂ&#x2013;ANDĂ&#x2013;THEĂ&#x2013;#OMPANYlSĂ&#x2013;ACTIVITIES Ă&#x2013;4HEĂ&#x2013;#OMPANY Ă&#x2013;THROUGHĂ&#x2013;ITSĂ&#x2013;TRAININGĂ&#x2013;ANDĂ&#x2013;MANAGEMENTĂ&#x2013;STANDARDSĂ&#x2013;ANDĂ&#x2013;PROCEDURES Ă&#x2013;AIMSĂ&#x2013;TOĂ&#x2013;DEVELOPĂ&#x2013;AĂ&#x2013;DISCIPLINEDĂ&#x2013; and constructive control environment in which all employees understand their roles and obligations.

Ă&#x2013;

4HEĂ&#x2013;"OARDĂ&#x2013;OFĂ&#x2013;$IRECTORSĂ&#x2013;OVERSEESĂ&#x2013;HOWĂ&#x2013;MANAGEMENTĂ&#x2013;MONITORSĂ&#x2013;COMPLIANCEĂ&#x2013;WITHĂ&#x2013;THEĂ&#x2013;#OMPANYlSĂ&#x2013;RISKĂ&#x2013;MANAGEMENTĂ&#x2013;POLICIESĂ&#x2013;ANDĂ&#x2013;PROCEDURESĂ&#x2013;ANDĂ&#x2013;REVIEWSĂ&#x2013; the adequacy of the risk management framework in relation to the risks faced by the Company.

22.1

Credit risk

Ă&#x2013;

#REDITĂ&#x2013;RISKĂ&#x2013;ISĂ&#x2013;THEĂ&#x2013;RISKĂ&#x2013;OFĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;LOSSĂ&#x2013;TOĂ&#x2013;THEĂ&#x2013;#OMPANYĂ&#x2013;IFĂ&#x2013;AĂ&#x2013;COUNTERPARTYĂ&#x2013;TOĂ&#x2013;AĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;INSTRUMENTĂ&#x2013;FAILSĂ&#x2013;TOĂ&#x2013;MEETĂ&#x2013;ITSĂ&#x2013;CONTRACTUALĂ&#x2013;OBLIGATIONS Ă&#x2013;4HEĂ&#x2013;#OMPANYlSĂ&#x2013; credit risk is primarily attributable to microcredit receivables, security deposits, interest accrued, other receivables and balances at banks.

Ă&#x2013;

4HEĂ&#x2013;#OMPANYĂ&#x2013;ISĂ&#x2013;EXPOSEDĂ&#x2013;TOĂ&#x2013;CREDITĂ&#x2013;RISKĂ&#x2013;FROMĂ&#x2013;ITSĂ&#x2013;OPERATINGĂ&#x2013;ANDĂ&#x2013;CERTAINĂ&#x2013;INVESTINGĂ&#x2013;ACTIVITIESĂ&#x2013;ANDĂ&#x2013;THEĂ&#x2013;#OMPANYlSĂ&#x2013;CREDITĂ&#x2013;RISKĂ&#x2013;EXPOSURESĂ&#x2013;AREĂ&#x2013;CATEGORISEDĂ&#x2013;UNDERĂ&#x2013; the following headings.

22.1.1

Counterparties

Ă&#x2013;

)NĂ&#x2013;RELATIONĂ&#x2013;TOĂ&#x2013;THEĂ&#x2013;#OMPANYlSĂ&#x2013;EXPOSUREĂ&#x2013;TOĂ&#x2013;CREDITĂ&#x2013;RISK Ă&#x2013;MICROCREDITĂ&#x2013;LOANEESĂ&#x2013;ANDĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;INSITITUTIONSĂ&#x2013;AREĂ&#x2013;MAJORĂ&#x2013;COUNTERĂ&#x2013;PARTIESĂ&#x2013;ANDĂ&#x2013;THEĂ&#x2013;#OMPANYlSĂ&#x2013;POLICIESĂ&#x2013; to manage risk in relation to these couter parties are as follows:

Ă&#x2013;

2ECEIVABLEĂ&#x2013;FROMĂ&#x2013;LOANEESĂ&#x2013;WITHĂ&#x2013;RESPECTĂ&#x2013;TOĂ&#x2013;MICROCREDITĂ&#x2013;RECEIVABESĂ&#x2013;ISĂ&#x2013;DIVERSIĂ&#x2122;EDĂ&#x2013;DUEĂ&#x2013;TOĂ&#x2013;NUMBERĂ&#x2013;OFĂ&#x2013;CLIENTSĂ&#x2013;COMPRISINGĂ&#x2013;THEĂ&#x2013;#OMPANYlSĂ&#x2013;CUSTOMERĂ&#x2013;BASE Ă&#x2013;4HEĂ&#x2013; #OMPANYĂ&#x2013;HASĂ&#x2013;CREDITĂ&#x2013;POLICYĂ&#x2013;THATĂ&#x2013;GOVERNSĂ&#x2013;THEĂ&#x2013;MANAGEMENTĂ&#x2013;OFĂ&#x2013;CREDITĂ&#x2013;RISK Ă&#x2013;INCLUDINGĂ&#x2013;THEĂ&#x2013;SPECIĂ&#x2122;CĂ&#x2013;TRANSACTIONĂ&#x2013;APPROVALSĂ&#x2013;ANDĂ&#x2013;ESTABLISHMENTĂ&#x2013;OFĂ&#x2013;COUNTERĂ&#x2013;PARTYĂ&#x2013; credit repayment timeline. The Company limits credit risk by limiting the loan up to a maximum amount and continuing to evaluate creditworthiness of loanees after transactions have been initiated. The Company controls its credit risk of micro credit advance by the following methods:

Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;

I Ă&#x2013; II Ă&#x2013; III Ă&#x2013; IV Ă&#x2013;

Microcredit receivables including interest

!SCERTAINMENTĂ&#x2013;OFĂ&#x2013;CREDITĂ&#x2013;WORTHINESSĂ&#x2013;OFĂ&#x2013;LOANEES Ă&#x2013; -ONITORINGĂ&#x2013;OFĂ&#x2013;ADVANCEĂ&#x2013;ONĂ&#x2013;AĂ&#x2013;CONTINUINGĂ&#x2013;BASIS Ă&#x2013; 3OCIALĂ&#x2013;ANDĂ&#x2013;MORALĂ&#x2013;PRESSUREĂ&#x2013;OFĂ&#x2013;COMMUNITY Ă&#x2013;ANDĂ&#x2013; !CTIVEĂ&#x2013;FOLLOWĂ&#x2013;UP Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;

Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;

Ă&#x2013; Ă&#x2013; Ă&#x2013;

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011

Banks Ö

4HEÖ#OMPANYÖMAINTAINSÖITSÖBANKÖBALANCESÖANDÖMAKESÖINVESTMENTÖINÖÙXEDÖDEPOSITSÖWITHÖBANKSÖHAVINGÖHIGHÖCREDITÖRATINGÖANDÖMARKETABLEÖSECURITIESÖINÖ REPUTABLEÖCOMPANIES Ö4HESEÖBALANCESÖAREÖEXPOSEDÖTOÖMINIMALÖCREDITÖRISKÖASÖTHESEÖAREÖWITHÖREPUTABLEÖÙNANCIALÖINSTITUTIONSÖANDÖCANÖBEÖREDEEMEDÖUPONÖ demand.

22.1.2

Exposure to credit risk

4HEÖCARRYINGÖAMOUNTÖOFÖÙNANCIALÖASSETSÖREPRESENTSÖTHEÖMAXIMUMÖCREDITÖEXPOSUREÖATÖTHEÖREPORTINGÖDATEÖASÖFOLLOWS ÖÖ

2011

Microcredit receivables Advances Deposits Interest accrued Bank balances

2010

PKR

US$

PKR

US$

751,751,032 514,103 3,908,087 5,730,481 153,025,499 914,929,202

8,357,433 5,715 43,447 63,707 1,701,228 10,171,530

549,841,959 555,059 156,595 2,820,665 416,860,958 970,235,236

6,553,540 6,616 1,866 33,620 4,968,546 11,564,188

The maximum exposure to credit risk by geographic region is limited to Pakistan. Ö

!SÖATÖTHEÖYEARÖENDÖTHEÖ#OMPANYlSÖMOSTÖSIGNIÙCANTÖRECEIVABLEÖWASÖWITHÖAÖÖ"ANKÖFROMÖWHOMÖ2S Ö Ö 53 Ö Ö Ö2S Ö Ö 53 Ö ÖWASÖRECEIVABLE Ö Ö Ö Ö Ö Ö Ö Ö Ö

"ASEDÖONÖPASTÖEXPERIENCE ÖTHEÖMANAGEMENTÖBELIEVESÖTHATÖNOÖFURTHERÖIMPAIRMENTÖALLOWANCEÖISÖNECESSARYÖINÖRESPECTÖOFÖ#OMPANYlSÖÙNANCIALÖASSETS Ö4HEÖ AGEÖANALYSISÖOFÖ-ICROCREDITÖRECEIVABLESÖANDÖPROVISIONÖTHEREÖAGAINSTÖHASÖBEENÖDISCLOSEDÖINÖNOTEÖ ÖTOÖTHESEÖÙNANCIALÖSTATEMENTS Ö Ö Ö

22.2

Liquidity risk

,IQUIDITYÖRISKÖISÖTHEÖRISKÖTHATÖTHEÖ#OMPANYÖWILLÖNOTÖBEÖABLEÖTOÖMEETÖITSÖÙNANCIALÖOBLIGATIONSÖASÖTHEYÖFALLÖDUE Ö4HEÖ#OMPANYlSÖAPPROACHÖTOÖMANAGINGÖLIQUIDITYÖ ISÖTOÖENSURE ÖASÖFARÖASÖPOSSIBLE ÖTHATÖITÖWILLÖALWAYSÖHAVEÖSUFÙCIENTÖLIQUIDITYÖTOÖMEETÖITSÖLIABILITIESÖWHENÖDUE ÖUNDERÖBOTHÖNORMALÖANDÖSTRESSEDÖCONDITIONS Ö WITHOUTÖ INCURRINGÖ UNACCEPTABLEÖ LOSSESÖ ORÖ RISKINGÖ DAMAGEÖ TOÖ THEÖ #OMPANYlSÖ REPUTATION Ö 4HEÖ #OMPANYÖ USESÖ DIFFERENTÖ METHODSÖ WHICHÖ ASSISTSÖ ITÖ INÖ MONITORINGÖCASHÖÚOWÖREQUIREMENTS Ö4YPICALLYÖTHEÖ#OMPANYÖENSURESÖTHATÖITÖHASÖSUFÙCIENTÖCASHÖONÖDEMANDÖTOÖMEETÖEXPECTEDÖOPERATIONALÖEXPENSESÖFORÖ AÖREASONABLEÖPERIOD ÖINCLUDINGÖTHEÖSERVICINGÖOFÖÙNANCIALÖOBLIGATION ÖTHISÖEXCLUDESÖTHEÖPOTENTIALÖIMPACTÖOFÖEXTREMEÖCIRCUMSTANCESÖTHATÖCANNOTÖREASONABLYÖ be predicted, such as natural disasters.

4HEÖFOLLOWINGÖAREÖTHEÖCONTRACTUALÖMATURITIESÖOFÖÙNANCIALÖLIABILITIES ÖÖ

"@QQXHMFØ@LNTMSØØ Ø

Ø"NMSQ@BST@KØØ

Ø6HSGHMØNMDØXD@QØØ Ø.UDQØNMDØXD@QØ

B@RGØNTSÛNVRØ 2011 - Rupees

Short term loans Payable to related parties Accrued and other liabilities

781,191,951 159,136,002 51,309,181 991,637,134

819,222,461 159,136,002 51,309,181 1,029,667,644

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011

2011 - US$ Short term loans Payable to related parties Accrued and other liabilities

8,684,735 1,769,161 570,419 11,024,315

Short term loans Payable to related parties Accrued and other liabilities

803,966,852 97,497,122 7,836,273 909,300,247

Short term loans Payable to related parties Accrued and other liabilities

9,582,442 1,162,063 93,403 10,837,908

9,107,532 1,769,161 570,419 11,447,112

856,751,765 97,497,122 7,836,273 962,085,160

10,211,582 1,162,063 93,403 11,467,048

2010 - Rupees 856,751,765 97,497,122 7,836,273 962,085,160

2010 - US$ 10,211,582 1,162,063 93,403 11,467,048

Ă&#x2013;

)TĂ&#x2013;ISĂ&#x2013;NOTĂ&#x2013;EXPECTEDĂ&#x2013;THATĂ&#x2013;THEĂ&#x2013;CASHĂ&#x2013;Ă&#x161;OWSĂ&#x2013;INCLUDEDĂ&#x2013;INĂ&#x2013;THEĂ&#x2013;MATURITYĂ&#x2013;ANALYSISĂ&#x2013;COULDĂ&#x2013;OCCURĂ&#x2013;SIGNIĂ&#x2122;CANTLYĂ&#x2013;EARLIERĂ&#x2013;ORĂ&#x2013;ATĂ&#x2013;SIGNIĂ&#x2122;CANTLYĂ&#x2013;DIFFERENTĂ&#x2013;AMOUNTS Ă&#x2013;

Ă&#x2013;

22.3

Market risk

Ă&#x2013;

-ARKETĂ&#x2013;RISKĂ&#x2013;ISĂ&#x2013;THEĂ&#x2013;RISKĂ&#x2013;THATĂ&#x2013;THEĂ&#x2013;VALUEĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;INSTRUMENTĂ&#x2013;MAYĂ&#x2013;Ă&#x161;UCTUATEĂ&#x2013;ASĂ&#x2013;AĂ&#x2013;RESULTĂ&#x2013;OFĂ&#x2013;CHANGESĂ&#x2013;INĂ&#x2013;MARKETĂ&#x2013;INTERESTĂ&#x2013;RATESĂ&#x2013;ORĂ&#x2013;THEĂ&#x2013;MARKETĂ&#x2013;PRICEĂ&#x2013;DUEĂ&#x2013;TOĂ&#x2013; change in credit rating of the issuer or the instrument, change in market sentiments, speculative activities, supply and demand of securities and liquidity INĂ&#x2013;THEĂ&#x2013;MARKET Ă&#x2013;4HEĂ&#x2013;#OMPANYĂ&#x2013;INCURSĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;LIABILITIESĂ&#x2013;TOĂ&#x2013;MANAGEĂ&#x2013;ITSĂ&#x2013;MARKETĂ&#x2013;RISK Ă&#x2013;!LLĂ&#x2013;SUCHĂ&#x2013;ACTIVITIESĂ&#x2013;AREĂ&#x2013;CARRIEDĂ&#x2013;OUTĂ&#x2013;WITHĂ&#x2013;THEĂ&#x2013;APPROVALĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;"OARD Ă&#x2013;4HEĂ&#x2013; #OMPANYĂ&#x2013;ISĂ&#x2013;NOTĂ&#x2013;SIGNIĂ&#x2122;CANTLYĂ&#x2013;EXPOSEDĂ&#x2013;TOĂ&#x2013;MARKETĂ&#x2013;RISK Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;

22.3.1

Currency risk

Ă&#x2013;

&OREIGNĂ&#x2013;CURRENCYĂ&#x2013;RISKĂ&#x2013;ISĂ&#x2013;THEĂ&#x2013;RISKĂ&#x2013;THATĂ&#x2013;THEĂ&#x2013;VALUEĂ&#x2013;OFĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;ASSETĂ&#x2013;ORĂ&#x2013;AĂ&#x2013;LIABILITYĂ&#x2013;WILLĂ&#x2013;Ă&#x161;UCTUATEĂ&#x2013;DUEĂ&#x2013;TOĂ&#x2013;AĂ&#x2013;CHANGEĂ&#x2013;INĂ&#x2013;FOREIGNĂ&#x2013;EXCHANGEĂ&#x2013;RATES Ă&#x2013;)TĂ&#x2013;ARISESĂ&#x2013;MAINLYĂ&#x2013;WHEREĂ&#x2013; 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. 2011

Ă&#x2013; Ă&#x2013;

Bank balance 0AYABLEĂ&#x2013;TOĂ&#x2013;RELATEDĂ&#x2013;PARTIESĂ&#x2013; .ETĂ&#x2013;EXPOSUREĂ&#x2013;

Ă&#x2013; Ă&#x2013;

2010

Rupees

US$

Rupees

US$

51,002 Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;

567 Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;

4,549,897 Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;

54,230 Ă&#x2013; Ă&#x2013;

BRAC PAKISTAN Notes to the Financial Statements For the year ended 31 December 2011 Ă&#x2013;

&OLLOWINGĂ&#x2013;AREĂ&#x2013;THEĂ&#x2013;SIGNIĂ&#x2122;CANTĂ&#x2013;EXCHANGEĂ&#x2013;RATESĂ&#x2013;APPLIEDĂ&#x2013;DURINGĂ&#x2013;THEĂ&#x2013;YEAR Ă&#x2013;

Ă&#x2DC;

Ă&#x2013;

Ă&#x2DC;

Ă&#x2013;

Ă&#x2DC;!@K@MBDĂ&#x2DC;RGDDSĂ&#x2DC;C@SDĂ&#x2DC;Q@SDĂ&#x2DC;Ă&#x2DC;

2011 Rupees

2010 Rupees

2011 Rupees

2010 Rupees

86.43

84.20

89.95

83.90

US Dollars 2DMRHSHUHSXĂ&#x2DC;@M@KXRHRĂ&#x2DC;

Ă&#x2013;

Ă&#x2DC; Ă&#x2DC; UDQ@FDĂ&#x2DC;Q@SDRĂ&#x2DC;Ă&#x2DC;

Ă&#x2DC;

Ă&#x2013;

!Ă&#x2013;TENĂ&#x2013;PERCENTĂ&#x2013;STRENGTHENINGĂ&#x2013; Ă&#x2013; WEAKENING Ă&#x2013;OFĂ&#x2013;THEĂ&#x2013;2UPEEĂ&#x2013;AGAINSTĂ&#x2013;53Ă&#x2013;$OLLARĂ&#x2013;ATĂ&#x2013; Ă&#x2013;$ECEMBERĂ&#x2013;WOULDĂ&#x2013;HAVEĂ&#x2013;DECREASEDĂ&#x2013; Ă&#x2013; INCREASE Ă&#x2013;NETĂ&#x2013;DEĂ&#x2122;CITĂ&#x2013;FORĂ&#x2013;THEĂ&#x2013;YEARĂ&#x2013;BYĂ&#x2013; 2S Ă&#x2013; Ă&#x2013;MILLIONĂ&#x2013; 53 Ă&#x2013; Ă&#x2013; Ă&#x2013;2S Ă&#x2013; Ă&#x2013;MILLIONĂ&#x2013; 53 Ă&#x2013; Ă&#x2013;Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013; Ă&#x2013;

22.3.2

Interest rate risk

Ă&#x2013;

)NTERESTĂ&#x2013;RATEĂ&#x2013;RISKĂ&#x2013;ISĂ&#x2013;THEĂ&#x2013;RISKĂ&#x2013;THATĂ&#x2013;THEĂ&#x2013;FAIRĂ&#x2013;VALUEĂ&#x2013;ORĂ&#x2013;THEĂ&#x2013;FUTUREĂ&#x2013;CASHĂ&#x2013;Ă&#x161;OWSĂ&#x2013;OFĂ&#x2013;AĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;INSTRUMENTĂ&#x2013;WILLĂ&#x2013;Ă&#x161;UCTUATEĂ&#x2013;BECAUSEĂ&#x2013;OFĂ&#x2013;THEĂ&#x2013;CHANGESĂ&#x2013;INĂ&#x2013;THEĂ&#x2013;MARKETĂ&#x2013;INTERESTĂ&#x2013; rates. Majority of the interest rate exposure arises from microcredit receivables and loans from PPAF. 2011

2010

Rupees

US$

Rupees

US$

Fixed rate instruments Financial assets )NVESTMENTSĂ&#x2013;INĂ&#x2013;Ă&#x2122;XEDĂ&#x2013;DEPOSITSĂ&#x2013; Microcredit receivables - net

Ă&#x2013;

Ă&#x2DC;

Ă&#x2013;

Financial liabilities Loan from PPAF .ETĂ&#x2013;EXPOSUREĂ&#x2013;

Ă&#x2013;

Ă&#x2013; Ă&#x2013;Ă&#x2013;Ă&#x2013;Ă&#x2013; 751,751,032 751,751,032

Ă&#x2013; Ă&#x2013;Ă&#x2013;Ă&#x2013;Ă&#x2013; 8,357,433 8,357,433

Ă&#x2013; Ă&#x2013;Ă&#x2013; 549,841,959 736,006,959

Ă&#x2013; Ă&#x2013; 6,553,540 8,772,432

744,557,000 Ă&#x2013; Ă&#x2013;Ă&#x2013;

8,277,455 Ă&#x2013; Ă&#x2013;Ă&#x2013;

782,084,800 Ă&#x2013; Ă&#x2013;

9,321,631 Ă&#x2013;

Ă&#x2DC;

%@HQĂ&#x2DC;U@KTDĂ&#x2DC;RDMRHSHUHSXĂ&#x2DC;@M@KXRHRĂ&#x2DC;ENQĂ&#x2DC;Ă&#x161;WDCĂ&#x2DC;Q@SDĂ&#x2DC;HMRSQTLDMSRĂ&#x2DC;

Ă&#x2DC;

Ă&#x2013;

4HEĂ&#x2013;#OMPANYĂ&#x2013;DOESĂ&#x2013;NOTĂ&#x2013;HOLDĂ&#x2013;ANYĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;ASSETĂ&#x2013;ATĂ&#x2013;FAIRĂ&#x2013;VALUEĂ&#x2013;THROUGHĂ&#x2013;PROĂ&#x2122;TĂ&#x2013;ANDĂ&#x2013;LOSS Ă&#x2013;4HEREFOREĂ&#x2013;AĂ&#x2013;CHANGEĂ&#x2013;INĂ&#x2013;INTERESTĂ&#x2013;RATEĂ&#x2013;ATĂ&#x2013;REPORTINGĂ&#x2013;DATEĂ&#x2013;WOULDĂ&#x2013;NOTĂ&#x2013;AFFECTĂ&#x2013; income and expenditure account of the Company.

Ă&#x2DC;

%@HQĂ&#x2DC;U@KTDĂ&#x2DC;

Ă&#x2013;

4HEĂ&#x2013;CARRYINGĂ&#x2013;VALUEĂ&#x2013;OFĂ&#x2013;ALLĂ&#x2013;THEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;ASSETSĂ&#x2013;ANDĂ&#x2013;LIABILITIESĂ&#x2013;REĂ&#x161;ECTEDĂ&#x2013;INĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATEMENTSĂ&#x2013;APPROXIMATEĂ&#x2013;THEIRĂ&#x2013;FAIRĂ&#x2013;VALUES Ă&#x2013;Ă&#x2013;

22.5

Fund management

Ă&#x2DC;

Ă&#x2DC; Ă&#x2013;

Ă&#x2013;

The Board of Directors of the Company monitors the performance along with the fund required for the sustainable operations of the Company. There WEREĂ&#x2013; NOĂ&#x2013; CHANGESĂ&#x2013; TOĂ&#x2013; THEĂ&#x2013; #OMPANYlSĂ&#x2013; APPROACHĂ&#x2013; TOĂ&#x2013; THEĂ&#x2013; FUNDĂ&#x2013; MANAGEMENTĂ&#x2013; DURINGĂ&#x2013; THEĂ&#x2013; YEAR Ă&#x2013; 4HEĂ&#x2013; #OMPANYĂ&#x2013; ISĂ&#x2013; NOTĂ&#x2013; SUBJECTĂ&#x2013; TOĂ&#x2013; EXTERNALLYĂ&#x2013; IMPOSEDĂ&#x2013; FUNDĂ&#x2013; requirements.

23.

DATE OF APPROVAL

Ă&#x2013;

4HESEĂ&#x2013;Ă&#x2122;NANCIALĂ&#x2013;STATEMENTSĂ&#x2013;WEREĂ&#x2013;APPROVEDĂ&#x2013;BYĂ&#x2013;THEĂ&#x2013;"OARDĂ&#x2013;OFĂ&#x2013;$IRECTORSĂ&#x2013;OFĂ&#x2013;"2!#Ă&#x2013;0AKISTANĂ&#x2013;INĂ&#x2013;THEIRĂ&#x2013;MEETINGĂ&#x2013;HELDĂ&#x2013;ONĂ&#x2013; Ă&#x2013; Ă&#x2013;

Ă&#x2013;

_______________ #HIEFĂ&#x2013;%XECUTIVEĂ&#x2013;/FĂ&#x2122;CERĂ&#x2013;

Ă&#x2013;

_____________ Ă&#x2013;$IRECTORĂ&#x2013;&INANCEĂ&#x2013;Ă&#x2013; Ă&#x2013;

Ă&#x2013;

____________ Ă&#x2013;$IRECTORĂ&#x2013;Ă&#x2013;

Ă&#x2013;

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