Sri Lanka Wonder of Asia An Indian Ocean island republic famous for its tea, coffee and cinnamon, Sri Lanka bore the brunt of the 2004 Asian tsunami. BRAC quickly responded to the disaster by setting up relief and emergency operations in 2005. Since then, BRAC has expanded its outreach, touching the lives of an estimated 527,000 Sri Lankans, helping to improve livelihoods through rigorous capacity development training and providing over USD 74.2 million in microloans, with 74,000 active borrowers across the country’s 15 most vulnerable districts. What started out in 1972 in a remote village of Bangladesh as a limited relief operation BRAC - has turned into the largest development organisation in the world. Of major nongovernmental organisation, it 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 – a global leader in creating opportunity for the world’s poor. Organising the poor using communities’ 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 TOOLSÖLIKEÖMICROÙNANCE ÖEDUCATION ÖHEALTHCARE ÖLEGALÖ 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 – 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.
BRAC LANKA (GUARANTEE LIMITED)
40th Year Special Edition
Harnessing the past Enriching the future
Contents Our Mission, Vision and Values Chairperson’s Statement 0LFURÛQDQFH Governance Management Development partners BRAC across the world Harnessing the past Financials
01 02 08 09 09 10 12 15
1 BRAC 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, socioeconomic 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 BRAC Annual Report 2011
Chairperson’s Statement
It gives me great pleasure to present the ANNUALÖREPORTÖANDÖTHEÖAUDITEDÖÙNANCIALÖ statements for the year ended 31 December 2011. The year concluded saw Sri Lanka engaging in large-scale reconstruction and development projects following the end OFÖTHEÖ YEARÖCONÚICTÖWITHÖTHEÖ,IBERATIONÖ Tigers of Tamil Eela, including increasing electricity access and rebuilding its road and rail network. Sri Lanka now seeks to reduce poverty by using a combination of state directed policies and private investment promotion to spur growth in disadvantaged areas, develop small and medium enterprises, and promote increased agriculture. In a country with a population of over 21 million, the unemployment rate is relatively low, standing at 4.3 per cent as of 2011, the lowest yet for the country. Continued employment generation was due to reconstruction, infrastructure development and expansion of economic activities. In 2011, BRAC Sri Lanka began its agricultural development programme to provide farmers living below the poverty LINEÖWITHÖAGRICULTURE SPECIÙCÖCREDITÖSUPPORT Ö With the support of our development partner Etimos, 471 farmers in this programme have received orientation and input support for the cultivation of cocoa plants which they can sell to Etimos’ cocoa factory, based in Sri Lanka, at a fair wage.
BRAC Annual Report 2011 3
BRAC continues to provide relief in areas suffering from environmental disasters. With the support from Stromme Foundation and food donations from its BENEÙCIARYÖFARMERS Ö"2!#ÖHASÖPROVIDEDÖ ÖPEOPLEÖAFFECTEDÖBYÖTHEÖÚOODSÖINÖ eastern Sri Lanka in February 2011 with dried and cooked foods while they focused on rebuilding their livelihoods. At the request of the government of Sri Lanka, BRAC has also provided public LATRINESÖFORÖÙSHERMENÖINÖTHEÖPORTÖOFÖ4RICNO Ö ÚOORÖMATSÖFORÖÚOODÖVICTIMSÖINÖ"ATTICOLA Ö and sports and wet weather materials for school children in southern Sri Lanka. In 2011, BRAC directed its efforts to scaling up its services, opening ÖNEWÖBRANCHESÖINÖÙVEÖDISTRICTSÖINÖ western, central, north central and eastern provinces of Sri Lanka. We have organised 112,329 members, all women, into 6,131 village organisations. Over 74,000 members (including 36,022 new members) are actively borrowing and more than USD 74.2 million has been disbursed to date. We provided holistic capacity development training to 177 members of staff. While our work in Sri Lanka started with disaster relief and rehabilitation following the Indian Ocean tsunami of 2004, by 2007 our focus had turned to longer term efforts in revitalising affected enterprises ANDÖECONOMIESÖTHROUGHÖMICROÙNANCE Ö With the end to three decades of armed CONÚICTÖINÖ Ö"2!#lSÖWORKÖINÖ3RIÖ,ANKAÖ aims to build livelihoods to help turn the peace dividends into a practical reality.
Through our extensive global experience INÖMICROÙNANCE ÖWEÖKNOWÖTHATÖLIVELIHOODÖ development works best when it goes beyond providing loans. In Sri Lanka, "2!#lSÖHOLISTICÖMICROÙNANCEÖPROGRAMMEÖ acts as a capacity-building platform. A combination of local knowledge and rigorous training means that our staff are best placed to support the poorest, MOSTÖMARGINALISEDÖBENEÙCIARIESÖINÖTHEIRÖ entrepreneurial endeavours. BRAC’s local staff are women, employed from within the branch areas in which they work, ensuring a truly contextual understanding of the challenges faced locally. The combination of all our efforts results in enhanced livelihoods of women across the country, in turn ensuring PROGRESSÖTOWARDSÖACHIEVINGÖTHEÖÙRSTÖANDÖ third Millennium Development Goals, eradicating extreme poverty and hunger and the empowerment of women. In the coming year, BRAC hopes to continue its expansion to reach more of the most vulnerable women in rural Sri Lanka.
I take this opportunity to commend our team in Sri Lanka who have worked with enduring commitment and loyalty to engage 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 company to success. I thank the government and our development partners in Sri Lanka for their continued support as we strive to create greater value in our services to contribute towards the progress and prosperity of Sri Lanka.
BRAC Programmes
4 BRAC Annual Report 2011
Microfinance )NNOVATIVE ÖCLIENT FOCUSEDÖANDÖSUSTAINABLE ÖTHEÖ"2!#ÖMICROÙNANCEÖPROGRAMMEÖISÖAÖCRITICALÖCOMPONENTÖOFÖOURÖHOLISTICÖ approach to support livelihoods. Over the course of the last four decades, we have grown to become one of the WORLDlSÖLARGESTÖPROVIDERSÖOFÖÙNANCIALÖSERVICESÖTOÖTHEÖPOOR ÖPROVIDINGÖTOOLSÖWHICHÖMILLIONSÖCANÖUSEÖFORÖTHEÖBETTERMENTÖOFÖ their lives.
Filling service gaps for the poor $ESPITEÖTHEÖSIGNIÙCANTÖSTEPSÖFORWARDÖSINCEÖTHEÖCIVILÖWARÖOFÙCIALLYÖENDEDÖINÖ ÖANDÖTHEÖ devastating impact of the 2004 Tsunami eased, it is estimated that 1.8 million people in Sri Lanka remain below the poverty line . Economic activity is concentrated in the prosperous western provinces, with huge income differentials in the eastern and inland RURALÖDISTRICTS Ö"2!#ÖAIMSÖTOÖÙLLÖTHEÖGAPSÖINÖÙNANCIALÖSERVICESÖACROSSÖTHEÖCOUNTRYÖANDÖTOÖ support its clients as they grow.
Women attend a BRAC Village Organizations weekly collection meeting in Madapathana neighbourhood of Galle district. Sri Lanka.
BRAC Annual Report 2011 5
Microfinance
Our approach: 4UFQT UPXBSE ÙOBODJBM JODMVTJPO
:4, SVHUZ MYVT THPUZ[YLHT IHURZ
4PJYV LU[LYWYPZL SVHUZ
4PJYVSVHUZ
#3"$mT NJDSPÙOBODF programme reliably serves millions each year - a rarity anywhere. Recent improvements in products and delivery mechanisms further allow BRAC to EFMJWFS CFUUFS ÙOBODJBM services to the poor in the years to come. Gregory C. Chen
;HYNL[LK HZZL[ NYHU[Z HUK ZVM[ SVHUZ
As depicted in the diagram, we address THEÖSCARCITYÖOFÖÙNANCIALÖACCESSÖTOÖPOORÖ women by providing them with targeted ÙNANCIALÖSERVICES Ö"2!#ÖSTRONGLYÖBELIEVESÖ that the poor are able to help themselves when organised effectively. With this in mind, BRAC conducts comprehensive door-to-door surveys, consulting traditional and government leaders to select poor, uneducated but economically active women. To date, BRAC has mobilised over 112,000 such women into village organisations (VOs), each consisting of 20 to 40 members, across 15 districts out of 25 of Sri Lanka. These groups, led by AÖRIGOROUSLYÖTRAINEDÖ"2!#ÖCREDITÖOFÙCER Ö network and support the women to be effective conduits for their own social change.
Regional Representative for South Asia Consultative Group to Assist the Poor (CGAP)
Serving women borrowers At the core of our intervention is the collateral-free micro-loan, exclusively provided to women participating in the VOs. Understanding the limits OFÖMICROÙNANCE ÖWEÖTARGETÖPOORÖBUTÖ economically active women, typically INVOLVEDÖINÖTAILORING ÖÙSHING ÖFOODÖ processing, agriculture and small BUSINESSES Ö/URÖCREDITÖOFÙCERSÖAREÖ responsible for identifying clients and forming VOs from among the women in their target areas.
/URÖWOMENÖBORROWERSÖMUSTÖÙRSTÖORGANISEÖ THEMSELVESÖINTOÖGROUPSÖOFÖÙVE ÖEACHÖWITHÖ their own elected leader. These groups meet weekly in their VOs to receive support and discuss their business challenges and successes. In these meetings, women make loan repayments and receive further disbursements under THEÖGUIDANCEÖOFÖTHEIRÖTRAINEDÖCREDITÖOFÙCER Ö
$ISBURSEMENTÂ&#x;CRITERIA pÂ&#x;Â&#x;
Household monthly income less then or up to LKR 15000.
4ARGETÂ&#x;BENEĂšCIARIES p Poor, economically active women
p
Participation in six weekly group meetings prior to start of disbursements
p
Loan range of LKR10,000-100,000 LKR (USD 80-800)
p
Repayment in equal weekly instalments
aged 18 to 60
pĂ– Ă– Ă–
,IVINGÖWITHINÖÙVEÖKILOMETRESÖOFÖONEÖÖ OFÖOURÖ ÖBRANCHÖOFÙCESÖFORÖAÖPERIODÖÖ OFÖATÖLEASTÖÙVEÖYEARS
pĂ–
.OTÖSERVEDÖBYÖOTHERÖMICROÙNANCEÖÖ organisations
p
Priority to female-headed households and widows with children
pĂ– pĂ–
ÖÚATÖRATEÖOFÖINTEREST ,+2Ö Ö 53$Ö ÖBENEÙTÖÖ Ö provided to family on borrower’s death
6 BRAC Annual Report 2011
Microfinance
Achievements of 2011
Capacity development programme for BRAC staff:
!GRICULTURALÂ&#x;DEVELOPMENTÂ&#x; PROGRAMME Â&#x;In 2011, BRAC Sri
BRAC’s local staff are women, employed from within the branch areas in which they work, ensuring a truly contextual understanding of the challenges faced locally. Staff across all 15 districts participate in an intensive capacity development programme, comprising ÙNANCIALÖANDÖOPERATIONSÖMANAGEMENTÖANDÖ enterprise development, followed up with periodic refresher sessions.
Lanka began its agricultural development programme. Partnering with Etimos Lanka, BRAC provides farmers living below the POVERTYÖLINEÖWITHÖAGRICULTURE SPECIÙCÖCREDITÖ support. The programme has disbursed LKR 55 million to 2643 farmers in selected rural areas of Trincomalee and Kurunagala districts. The farmers continue to be supported through VOs and monthly farmers meetings with an emphasis on improving the production of the agricultural sector. With Etimos’ support, we gave orientation on cocoa cultivation to 471 farmers and distributed cocoa plants to 311 farmers. Farmers will have the opportunity to sell the cocoa they produce to Etimos’ cocoa factory, based in Sri Lanka, at a fair wage.
Relief: BRAC continues to provide relief in areas suffering from environmental disasters. Supported by Stromme Foundation and food donations from its BENEÙCIARYÖFARMERS Ö"2!#ÖPROVIDEDÖ Ö PEOPLEÖAFFECTEDÖBYÖTHEÖÚOODSÖINÖEASTERNÖ3RIÖ Lanka (Batticaloa, Trincomalee, Ampara, Anuradapura) in February 2011 with dried and cooked foods to support them while they focused on rebuilding their livelihoods. At the request of the government of Sri Lanka, BRAC has also provided public LATRINESÖFORÖÙSHERMENÖINÖTHEÖPORTÖOFÖ4RICNO Ö ÚOORÖMATSÖFORÖÚOODÖVICTIMSÖINÖ"ATTICOLA ÖANDÖ sports and wet weather materials for 550 school children in southern Sri Lanka. The combination of all our efforts results in enhanced livelihoods of women across the country, in turn ensuring progress towards ACHIEVINGÖTHEÖÙRSTÖANDÖTHIRDÖ-ILLENNIUMÖ Development Goals, eradicating extreme poverty and hunger and the empowerment of women.
The year in numbers A combination of local knowledge and rigorous training means that our staff are best placed to support the poorest, MOSTÖMARGINALISEDÖBENEÙCIARIESÖINÖTHEIRÖ entrepreneurial endeavours. In 2011, BRAC directed its efforts to scaling up its SERVICES ÖOPENINGÖ ÖNEWÖBRANCHESÖINÖÙVEÖ districts in western, central, north central and eastern provinces of Sri Lanka. We have organised 112,329 members (100% women) into 6,131 village organisations. Over 74,000 members (including 36,022 new members) are actively borrowing and more than USD 74.6 million (USD 23.2 million in 2011) has been disbursed to date. We provided with holistic capacity development training to 177 members of staff.
3CALINGÂ&#x;UPÂ&#x;ANDÂ&#x;ADAPTATION Initiated in Bangladesh, BRAC is CURRENTLYĂ–IMPLEMENTINGĂ–CONTEXTĂ–SPECIĂ™CĂ– MICROĂ™NANCEĂ–PROGRAMMESĂ–INĂ–NINEĂ–OTHERĂ– countries including Afghanistan, Liberia, Pakistan, Sierra Leone, South Sudan, Sri Lanka, Tanzania, Uganda and Haiti. While our work in Sri Lanka started with disaster relief and rehabilitation following the Indian Ocean tsunami of 2004, by 2007 our focus had turned to longer term efforts in revitalising affected enterprises and ECONOMIESĂ–THROUGHĂ–MICROĂ™NANCE Ă–7ITHĂ–THEĂ– ENDĂ–TOĂ–THREEĂ–DECADESĂ–OFĂ–ARMEDĂ–CONĂšICTĂ– in 2009, BRAC’s work in Sri Lanka aims to build livelihoods to help turn the peace dividends into a practical reality.
Through our extensive global experience INÖMICROÙNANCE ÖWEÖKNOWÖTHATÖLIVELIHOODÖ development works best when it goes beyond providing loans. In Sri Lanka, "2!#lSÖHOLISTICÖMICROÙNANCEÖPROGRAMMEÖ acts as a capacity-building platform. Clients are encouraged to save and learn from each other, before being given careful support to select, develop and manage their own small businesses effectively. "2!#lSÖBENEÙCIARIESÖANDÖSTAFFÖGOÖONÖ to act as highly effective vehicles for development within their communities.
Future plans 4OÖCONTINUEÖSUPPORTINGÖOURÖBENEÙCIARIESlÖ growth, our team is currently developing a micro-leasing service to begin in 2012. In partnership with leasing specialists, BRAC hopes to provide its borrowers with the opportunity to lease otherwise prohibitively expensive agricultural machinery and vehicles, increasing the pace and scale of production and allowing them to truly alter their future. In the coming year, BRAC hopes to continue its expansion to reach more of the most vulnerable women in rural Sri Lanka.
BRAC Annual Report 2011 7
Microfinance
CA S E
S T U DY
Pathmawathi in her restaurant, which she opened with loans from BRAC. Today, her business is booming as she makes plans for expansion.
4ESTIMONIAL Pathmawathi is a borrower from BRAC’s Sooriyawewa branch. She was deserted by her husband within weeks of her daughter being born. To make ends meet, she used to walk with her baby from door to door through her local streets, persuading people to buy her home-made string hopper noodles. Knowing of Pathmawathi’s predicament and of her dream and potential to become a restaurateur, a friend encouraged her to talk to BRAC. In July 2011, Pathmawathi TOOKÖOUTÖHERÖÙRSTÖLOANÖFORÖ,+2Ö Ö rupees. Within six months of receiving the loan and participating in her village organisation, Pathmawathi has made a complete life turnaround. She has been able to save enough to set up her own one-room restaurant, in which she now operates a buffet style restaurant serving breakfast, lunch and dinner as well as snacks on the side. Today, her small restaurant business is expanding to meet increasing demand.
Pathmawathi’s income has skyrocketed from LKR 250 rupees to 3,000 per day. Pathmawathi re-invests all the excess after living costs back into her business, and is determined to add a bakery in 2012 and start a small hotel in 2013.
“BRAC gave me an opportunity to invest in my business and my family. Now I am independent and happy and I have faith that I can go ONĂ–TOĂ–FULĂ™LĂ–ALLĂ–OFĂ–MYĂ–DREAMS n
8 BRAC Annual Report 2011
Governance
Sir Fazle Hasan Abed Founder and Chairperson, BRAC
Sir Fazle is recognised by Ashoka as one of the mGLOBALÖGREATSnÖANDÖISÖAÖ 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.
Faruque Ahmed Senior Director BRAC International
Prior to joining BRAC, Mr. Ahmed worked for the World Bank. He is a member of the working group of Bangladesh Health Watch, a civil society initiative, vice chair of Bangladesh Country Coordination Mechanism for Global Funds for AID Tuberculosis and Malaria (GFATM) and a member of World Bank Civil Society Consultative Group on Health, Nutrition and Population. He also represented civil society on the GAVI Alliance Board.
S.N. Kairy CFO, BRAC Group
Tanwir Rahman Director, Finance, BRAC and BRAC International
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.
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.
BRAC Annual Report 2011 9
Management
Sagarika Indu Country Representative, BRAC Sri Lanka
Ms. Indu has been working with BRAC since December 1996. In her 15 years of working with BRAC, she has worked as a programme organiser before being appointed the country representative for Sri Lanka. Aside from her work in the microfinance and ultra-poor programmes, she also has experience as a management consultant of sustainable livelihood programme for the extreme poor in India and Yemen. She was born in Chittagong, Bangladesh in 1963 and holds a BA (Hons) and Master degrees in Bangla Literature from Chittagong University, Bangladesh, and a Bachelor degree in Education from Open University, Bangladesh. She also has a post graduate diploma on International Rural Planning and Development (Major in Microfinance and Women Empowerment) from University of Guelph, Canada.
Lalitha Senarathne
Gretion E Perera
Honorary director of BRAC Lanka (Guarantee) Ltd
Director, BRAC Lanka (Guarantee) Limited
Ms. Senarathne is a lawyer, who actively practiced law in Sri Lanka . from 1986 to 2000as a junior to Mr. Nimal Senanayake, PC, then president of the Bar Association of Sri Lanka, and to the late Honourable Lakshman Kadirgamar, PC, minister of Foreign Affairs. From 2000 onwards, she has been practicing as a specialist in Conflict of the Laws and International Trade. She is also working as a consultant to the Sri Lanka Medical Council, and legal consultant (through the WHO) to the government of East Timor in the matter of draft legislation for the establishment of a Medical Council. She is the member of the Bar Association of Sri Lanka, and SAARC Law. She is the former vice president of the Sri Lanka Federation of University Women and the former chairperson of the National YWCA Constitution Committee. She was the Hon. Executive Director of m&OCUS n ÖASÖWELLÖASÖTHEÖ Hon. Executive Director of the Coastal Fisheries & Industries Trust.
Mr. Perera is an attorney-at-law, and notary public, with a career spanning 26 years, primarily in civil law practice, civil courts, notarial work and corporate work. In 1981, he obtained his (LL.B) from University of Colombo, Sri Lanka, and three years later, he passed the attorneys-atlaw final examination from Sri Lanka Law College with first class honours. From the beginning, he has worked in the unofficial bar as a practicing lawyer and gained wide experience in the field of law. As of 26July 2011, he has been serving as the Sri Lankan director of BRAC Lanka (Guarantee) Limited, the company which controls micro finance activities of BRAC in Sri Lanka.
Development Partners
Sadara Wedage Padma Subashini Regional Manager Southern, Microfinance
Abeysingha Gunawardana Nadeeka Regional Manager - Central & North Central Region, Microfinance
Juli Diana Ragel Regional Manager Eastern Region, Microfinance
Chief Accountant - Microfinance
10 BRAC Annual Report 2011
BRAC across the world
BRAC Annual Report 2011 11
12 BRAC 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
BRAC Annual Report 2011 13
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
$UWLĂ›FLDO LQVHPLQDWRUV We transformed over 2,000 rural poor into entrepreneurs with an innovative livelihood opportunity: providing fee based ‘door to door’ artificial insemination and education services for livestock farmers
Birthing huts Safe and culturally accepted childbirth places with appropriate services for mothers in urban slums
47 BRAC Annual Report 2011
Notes
BRAC Annual Report 2011 48
Notes
BRAC SRI LANKA Statement Of Comprehensive Income %NQĂ˜3GDĂ˜/DQHNCĂ˜$MCDCĂ˜ Ă˜#DBDLADQĂ˜
2011
2010
2011
2010
LKR
LKR
USD
USD
4 5
3,618,790 (132,939) 3,485,851
4,024,328 (113,329) 3,910,999
32,022 (1,176) 30,846
36,542 (1,029) 35,513
6 15.1
54,100 13,262 67,362 3,553,213
3,910,999
479 117 596 31,442
35,513
Impairment losses on loans and advances to customers Operating income after impairment charges
7
56,582 3,496,631
42,426 3,868,573
501 30,941
385 35,127
Other operating expenses
8
418,532 418,532 Ă˜ Ă˜Ă˜ 369,372 Ă˜ Ă˜Ă˜
28,500 28,500 Ă˜ Ă˜Ă˜ 768,015 Ă˜ Ă˜Ă˜
3,703 3,703 Ă˜ Ă˜Ă˜ 3,268 Ă˜ Ă˜Ă˜
259 259 Ă˜ 6,974 Ă˜
Notes
Service charge on loans Interest expenses Net income from service charge
Membership fees and other charges Grant income Total operating income
/QNĂšSĂ˜ADENQDĂ˜S@WĂ˜ Income tax expense -DSĂ˜OQNĂšSĂ˜ENQĂ˜SGDĂ˜XD@QĂ˜
Ă˜ 9(a) Ă˜
BRAC SRI LANKA 2S@SDLDMSØ.EØ%HM@MBH@KØ/NRHSHNMØ SØ Ø#DBDLADQØ
2011
2010
2011
2010
LKR
LKR
USD
USD
Notes
ASSETS Cash in hand and at Bank Loans and advances to customers Other assets Total assets
10 11 13
11,972,809 11,972,809
494,703 12,179,772 16,992,680 29,667,155
105,945 105,945
4,492 110,594 154,296 269,382
12 14 A
2,318,020 1,739,453 369,372 4,426,845
2,217,247 5,393,006 768,015 8,378,268
20,512 15,392 3,268 39,172
20,133 48,969 6,974 76,076
15 16
1,765,179 5,780,785 7,545,964
16,451,650 1,765,179 3,072,058 21,288,887
15,620 51,153 66,773
149,383 16,028 27,895 193,306
Ø ØØ
Ø ØØ
Ø ØØ
Ø Ø
Ö
Ö
LIABILITIES AND CAPITAL FUND +H@AHKHSHDR Loan security fund Other liabilities Tax payable
Capital fund Donor funds BRAC contribution Retained earnings Total capital fund
3NS@KØKH@AHKHSHDRØ@MCØB@OHS@KØETMCØ
Ø
Country Head of Accountant BRAC Sri Lanka 4HEÖÙNANCIALÖSTATEMENTSÖWEREÖAPPROVEDÖBYÖTHEÖGOVERNINGÖBODYÖONÖ THÖ!PRILÖ ÖANDÖWEREÖSIGNEDÖONÖITSÖBEHALFÖBY Ö
Director
4HEÖACCOMPANYINGÖNOTESÖAREÖANÖINTEGRALÖPARTÖOFÖTHESEÖÙNANCIALÖSTATEMENTS
Director
BRAC SRI LANKA 2S@SDLDMSØ.EØ"G@MFDRØ(MØ$PTHSXØ %NQØ3GDØ8D@QØ$MCDCØ Ø#DBDLADQØ
Retained Earnings
BRAC "NMSQHATSHNM
LKR
At 1 January 2010
0ROÙTÖFORÖTHEÖYEARÖ
SØ Ø#DBDLADQØ Ø
LKR
-
Ö ÖÖ
Total Capital Fund LKR
1,765,179
Ö ÖÖÖÖ
Total Capital Fund USD
1,765,179
16,028
Ö Ö
Ö Ö
Ø ØØ
Ø ØØ
Ø ØØ
Ø Ø
At 1 January 2011
3,072,058
1,765,179
4,837,237
42,804
0ROÙTÖFORÖTHEÖYEARÖ
Ö ÖÖ
Ö Ö
ÖÖ
Ö
Ø ØØ
Ø ØØ
Ø ØØ
Ø Ø
SØ Ø#DBDLADQØ Ø
BRAC SRI LANKA "@RGÛNVØ2S@SDLDMSØ %NQØ3GDØ8D@QØ$MCDCØ Ø#DBDLADQØ
2011
2010
2011
2010
LKR
LKR
USD
USD
10,846 (20,100,000) 20,261,693
4,002,061 (18,545,000) 16,423,433
96 (177,860) 179,177
36,339 (168,392) 149,128
161,693
(2,121,567)
1,317
(19,264)
-
-
-
-
100,773 (768,015) (667,242)
706,073 (4,714,846) (4,008,773)
892 (6,796) (5,904)
6,411 (42,812) (36,400)
(494,703) 494,703 Ø ØØØØ
(2,128,279) 2,622,982 ØØ ØØ
(4,492) 4,492
ØØ
(19,325) 23,817 Ø Ø
Notes
"@RGØÛNVØEQNLØ.ODQ@SHMFØ BSHUHSHDRØ Loan disbursements Loan collection
-DSØB@RGØÛNVØEQNLØ.ODQ@SHMFØ BSHUHSHDR "@RGØÛNVØEQNLØ(MUDRSHMFØ BSHUHSHDR "@RGØÛNVØEQNLØ%HM@MBHMFØØ BSHU@SDR Loan security fund Tax paid -DSØB@RGØÛNVØEQNLØØÚM@MBHMFØ@BSHUHSHDR Net (decrease)/increase in cash in hand and at Bank "@RGØHMØG@MCØ@MCØ@SØ!@MJØ@SØØADFHMMHMFØNEØSGDØXD@Q "@RGØHMØG@MCØ@MCØ@SØ!@MJØ@SØØDMCØNEØSGDØXD@QØ
Ø
BRAC SRI LANKA NOTES TO THE FINANCIAL STATEMENTS
1.00 Ö
THE REPORTING ENTITY "2!#Ö3RIÖ,ANKAÖSTARTEDÖITSÖOPERATIONSÖFROMÖ!PRILÖ ÖASÖANÖ).'/ÖREGISTEREDÖWITHÖTHEÖ.ATIONALÖ3ECRETARIATÖFORÖ.'/SÖUNDERÖTHEÖ-INISTRYÖOFÖ3OCIALÖ Services and Welfare (Reg. No. 94806).BRAC Sri Lanka is engaged in implementing and operating rehabilitation and livelihood development activities.
2.00 2.01 Ö
BASIS OF PREPARATION Statement of Compliance 4HEÖÙNANCIALÖSTATEMENTSÖHAVEÖBEENÖPREPAREDÖINÖACCORDANCEÖWITHÖANDÖCOMPLYÖWITHÖ)NTERNATIONALÖ&INANCIALÖ2EPORTINGÖ3TANDARDSÖ )&23 ÖANDÖTHEÖ requirements of the Sri Lankan’s Voluntary Service Act No 1980.
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Basis of Measurement 4HEÖÙNANCIALÖSTATEMENTSÖAREÖPREPAREDÖUNDERÖTHEÖHISTORICALÖCOSTÖCONVENTION Ö
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ØØ Ö
%TMBSHNM@KØ@MCØ/QDRDMS@SHNMØ"TQQDMBX 4HESEÖÙNANCIALÖSTATEMENTSÖAREÖPRESENTEDÖINÖ3RIÖ,ANKANÖ2UPEEÖ ,+2 ÖWHICHÖISÖTHEÖENTITYlSÖFUNCTIONALÖCURRENCY Ö
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4HEÖÙNANCIALÖSTATEMENTSÖINCLUDEÖÙGURES ÖWHICHÖHAVEÖBEENÖTRANSLATEDÖFROMÖ3RIÖ,ANKANÖ2UPEEÖ ,+2 ÖTOÖ5NITEDÖ3TATESÖ$OLLARSÖ 53Ö ÖATÖTHEÖYEARÖ ENDÖRATEÖOFÖ53 Ö Ö Ö,OCALÖCURRENCY Ö4HESEÖÙGURESÖAREÖFORÖMEMORANDUMÖPURPOSESÖONLYÖANDÖDOÖNOTÖFORMÖPARTÖOFÖTHEÖAUDITEDÖÙNANCIALÖ statements.
2.04 Ö
Use of Estimation and Judgments 4HEÖPREPARATIONÖOFÖÙNANCIALÖSTATEMENTSÖINÖCONFORMITYÖWITHÖ)NTERNATIONALÖ&INANCIALÖ2EPORTINGÖ3TANDARDSÖREQUIRESÖMANAGEMENTÖTOÖMAKEÖJUDGMENTS Ö estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and disclosure of contingent ASSETSÖ ANDÖ LIABILITIESÖ ATÖ THEÖ DATEÖ OFÖ ÙNANCIALÖ STATEMENTSÖ ANDÖ REPORTEDÖ AMOUNTSÖ OFÖ REVENUESÖ ANDÖ EXPENSESÖ DURINGÖ THEÖ REPORTEDÖ PERIOD Ö 4HEÖ ESTIMATESÖ ANDÖ ASSOCIATEDÖ ASSUMPTIONSÖ AREÖ BASEDÖ ONÖ HISTORICALÖ EXPERIENCES Ö THEÖ RESULTSÖ OFÖ WHICHÖ FORMÖ THEÖ BASISÖ OFÖ MAKINGÖ THEÖ JUDGMENTSÖ about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results ultimately may differ from these estimates.
3.00 Ö
SIGNIFICANT ACCOUNTING POLICIES 4HEÖACCOUNTINGÖPOLICIESÖSETÖOUTÖBELOWÖHAVEÖBEENÖAPPLIEDÖCONSISTENTLYÖTOÖALLÖPERIODÖPRESENTEDÖINÖTHISÖÙNANCIALÖSTATEMENTS Ö
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/QNODQSXØ@MCØ$PTHOLDMS Property and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset.
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The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to AÖWORKINGÖCONDITIONÖFORÖITSÖINTENDEDÖUSE ÖANDÖTHEÖCOSTSÖOFÖDISMANTLINGÖANDÖREMOVINGÖTHEÖITEMSÖANDÖRESTORINGÖTHEÖSITEÖONÖWHICHÖTHEYÖAREÖLOCATED Ö 0URCHASEDÖSOFTWAREÖTHATÖISÖINTEGRALÖTOÖTHEÖFUNCTIONALITYÖOFÖTHEÖRELATEDÖEQUIPMENTÖISÖCAPITALIZEDÖASÖPARTÖOFÖTHATÖEQUIPMENT Ö Ö Ö
Ö
'AINSÖANDÖLOSSESÖONÖDISPOSALÖOFÖANÖITEMÖOFÖPROPERTYÖANDÖEQUIPMENTÖAREÖDETERMINEDÖBYÖCOMPARINGÖTHEÖPROCEEDSÖFROMÖDISPOSALÖWITHÖTHEÖCARRYINGÖ VALUEÖOFÖPROPERTYÖANDÖEQUIPMENTÖANDÖRECOGNIZEDÖNETÖWITHÖOTHERÖINCOMEÖINÖPROÙTÖORÖLOSS
3.02 Ö
Depreciation $EPRECIATIONÖISÖRECOGNIZEDÖINÖPROÙTÖORÖLOSSÖANDÖCALCULATEDÖTOÖWRITEÖOFFÖTHEÖCOSTÖOFÖTHEÖPROPERTYÖANDÖEQUIPMENTÖONÖAÖREDUCINGÖBALANCEÖBASISÖOVERÖ the expected useful lives of the assets concerned, and intangible assets on a straight line basis. Land is not depreciated.
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4HEÖESTIMATEDÖUSEFULÖLIVESÖFORÖTHEÖCURRENTÖANDÖCOMPARATIVEÖPERIODSÖAREÖASÖFOLLOWS Ö Ö
Ö Ö Ö Ö Ö
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-ANAGEMENTÖ ANDÖ DIRECTORSÖ REVIEWÖ THEÖ DEPRECIATIONÖ METHODS Ö RESIDUALÖ VALUEÖ ANDÖ USEFULÖ LIFEÖ OFÖ ANÖ ASSETÖ ATÖ THEÖ YEARÖ ENDÖ ANDÖ ANYÖ CHANGEÖ considered to be appropriate in accounting estimate is recorded through the statement of comprehensive income.
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'AINSÖANDÖLOSSESÖONÖDISPOSALSÖAREÖDETERMINEDÖBYÖCOMPARINGÖPROCEEDSÖWITHÖCARRYINGÖAMOUNTSÖANDÖAREÖINCLUDEDÖINÖTHEÖOPERATINGÖRESULTÖFORÖTHEÖ reporting period.
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%NQDHFMØ"TQQDMBXØ3Q@MR@BSHNMRØ Ø Ø Ø Ø Ø Ø Ø Transactions in foreign currencies are translated to Sri Lankan Rupee at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Sri Lankan Rupee at the foreign exchange RATEÖAPPLICABLEÖFORÖSETTLEMENT Ö4HEÖFOREIGNÖCURRENCYÖGAINÖORÖLOSSÖONÖTHEÖMONETARYÖITEMSÖISÖTHEÖDIFFERENCEÖBETWEENÖAMORTIZEDÖCOSTÖINÖTHEÖFUNCTIONALÖ CURRENCYÖ ATÖ THEÖ BEGINNINGÖ OFÖ THEÖ PERIOD Ö ADJUSTEDÖ FORÖ THEÖ EFFECTIVEÖ INTERESTÖ ANDÖ PAYMENTSÖ DURINGÖ THEÖ PERIOD Ö ANDÖ THEÖ AMORTIZEDÖ COSTÖ INÖ THEÖ foreign currency translated at the exchange rate at the end of the period.
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.ON MONETARYÖASSETSÖANDÖLIABILITIESÖDENOMINATEDÖINÖFOREIGNÖCURRENCIES ÖWHICHÖAREÖSTATEDÖATÖHISTORICALÖCOST ÖAREÖTRANSLATEDÖTOÖ,+2ÖATÖTHEÖFOREIGNÖ exchange rate ruling at the date of transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair VALUEÖAREÖTRANSLATEDÖTOÖ,+2ÖATÖFOREIGNÖEXCHANGEÖRATESÖRULINGÖATÖTHEÖDATESÖTHEÖFAIRÖVALUESÖWEREÖDETERMINED Ö&OREIGNÖEXCHANGEÖDIFFERENCESÖARISINGÖ ONÖTRANSLATIONÖAREÖRECOGNIZEDÖINÖTHEÖSTATEMENTÖOFÖCOMPREHENSIVEÖINCOME ÖÖ Ö Ö Ö Ö Ö Ö
3.04 Ö
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&URNITUREÖ Ö&IXTURESÖ Ö -OTORÖ6EHICLESÖ Ö "ICYCLESÖ Ö Ö -OTORÖ#YCLESÖ Ö %QUIPMENTSÖ Ö
Ö Ö Ö Ö Ö
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Loans and Advances to the Customers A Ö,OANSÖORIGINATEDÖBYÖTHEÖCOMPANYÖBYÖPROVIDINGÖÙNANCEÖDIRECTLYÖTOÖBORROWERSÖISÖCATEGORIZEDÖASÖLOANSÖTOÖGROUPÖMEMBERSÖANDÖISÖCARRIEDÖATÖ AMORTIZEDÖ COST Ö WHICHÖ ISÖ DEÙNEDÖ ASÖ FAIRÖ VALUEÖ OFÖ THEÖ CASHÖ CONSIDERATIONÖ GIVENÖ TOÖ ORIGINATEÖ THOSEÖ LOANSÖ ASÖ ISÖ DETERMINABLEÖ BYÖ REFERENCEÖ TOÖ market prices at origination date and subsequently measured at the original effective interest rate at reporting date. All loans and advances are RECOGNIZEDÖWHENÖCASHÖISÖADVANCEDÖTOÖBORROWERS Ö Ö Ö Ö Ö Ö Ö Ö B Ö "2!#Ö 3RIÖ ,ANKAÖ GENERALLYÖ PROVIDESÖ FORÖ ANÖ ALLOWANCEÖ FORÖ LOANÖ IMPAIRMENTÖ ATÖ Ö Ö OFÖ LOANÖ DISBURSEMENTSÖ MADE Ö -ANAGEMENTÖ REGULARLYÖ ASSESSÖTHEÖADEQUACYÖOFÖALLOWANCEÖFORÖIMPAIRMENTÖBASEDÖONÖTHEÖAGEÖOFÖTHEÖLOANÖPORTFOLIO Ö!TÖTHEÖYEARÖENDÖ"2!#Ö3RIÖ,ANKAÖÖCALCULATESÖTHEÖ REQUIREDÖPROVISIONÖFORÖLOANÖLOSSESÖBASEDÖONÖLOANÖCLASSIÙCATIONÖANDÖPROVISIONINGÖMETHODOLOGYÖWHICHÖISÖSHOWNÖBELOWÖANDÖANYÖADJUSTMENTSÖ IFÖ REQUIREDÖAREÖMADEÖANDÖACCOUNTEDÖFORÖINÖTHEÖÙNANCIALÖSTATEMENTSÖFORÖTHEÖYEAR Ö Ö Ö Ö Ö Ö Ö
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3.05 Ö
Impairment i) Financial Assets !TÖEACHÖBALANCEÖSHEETÖDATEÖ"2!#Ö3RIÖ,ANKAÖASSESSESÖWHETHERÖTHEREÖISÖOBJECTIVEÖEVIDENCEÖTHATÖÙNANCIALÖASSETSÖNOTÖCARRIEDÖATÖFAIRÖVALUEÖTHROUGHÖ PROÙTÖORÖLOSSÖAREÖIMPAIRED Ö&INANCIALÖASSETSÖAREÖCONSIDEREDÖTOÖBEÖIMPAIREDÖWHENÖOBJECTIVEÖEVIDENCEÖINDICATESÖTHATÖONEÖORÖMOREÖEVENTSÖTHATÖHAVEÖAÖ NEGATIVEÖEFFECTÖONÖTHEÖESTIMATEDÖFUTUREÖCASHÖÚOWÖOFÖANÖASSET Ö Ö Ö Ö Ö Ö Ö Ö
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)NDIVIDUALLYÖSIGNIÙCANTÖÙNANCIALÖASSETSÖAREÖTESTEDÖFORÖIMPAIRMENTÖONÖANÖINDIVIDUALÖBASIS Ö4HEÖREMAININGÖÙNANCIALÖASSETSÖAREÖASSESSEDÖCOLLECTIVELYÖ in groups that share similar credit characteristics.
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!LLÖ IMPAIRMENTÖ LOSSESÖ AREÖ RECOGNIZEDÖ INÖ PROÙTÖ ORÖ LOSSÖ ANDÖ IMPAIRMENTÖ LOSSESÖ ONÖ AVAILABLE FOR SALEÖ INVESTMENTÖ SECURITIESÖ AREÖ RECOGNIZEDÖ BYÖ TRANSFERRINGÖTHEÖDIFFERENCEÖBETWEENÖTHEÖAMORTIZEDÖACQUISITIONÖCOSTÖANDÖCURRENTÖFAIRÖVALUEÖOUTÖOFÖEQUITYÖTOÖPROÙTÖORÖLOSS Ö Ö Ö
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ii) Non Financial Assets 4HEÖCARRYINGÖAMOUNTSÖOFÖ"2!#Ö3RIÖ,ANKAlSÖNONÖÙNANCIALÖASSETSÖOTHERÖTHANÖINVENTORIESÖAREÖREVIEWEDÖATÖEACHÖBALANCEÖSHEETÖDATEÖTOÖDETERMINEÖ WHETHERÖTHEREÖISÖANYÖINDICATIONÖOFÖIMPAIRMENT Ö)FÖSUCHÖCONDITIONÖEXISTS ÖTHEÖASSETSÖRECOVERABLEÖAMOUNTÖISÖESTIMATEDÖANDÖANÖIMPAIRMENTÖLOSSÖ RECOGNIZEDÖINÖTHEÖSTATEMENTÖOFÖCOMPREHENSIVEÖINCOMEÖWHENEVERÖTHEÖCARRYINGÖAMOUNTÖOFÖANÖASSETÖEXCEEDSÖITSÖRECOVERABLEÖAMOUNT Ö Ö
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3.06 Ö
3.07 Ö
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Other Assets /THERÖASSETSÖCOMPRISEÖPREPAYMENTS ÖDEPOSITSÖANDÖOTHERÖRECOVERABLEÖWHICHÖARISEÖDURINGÖTHEÖNORMALÖCOURSEÖOFÖBUSINESS ÖTHEYÖAREÖCARRIEDÖATÖ ORIGINALÖINVOICEÖAMOUNTÖLESSÖPROVISIONÖMADEÖFORÖIMPAIRMENTÖLOSSES Ö!ÖPROVISIONÖFORÖIMPAIRMENTÖOFÖTRADEÖRECEIVABLEÖISÖESTABLISHEDÖWHENÖTHEREÖISÖ OBJECTIVEÖEVIDENCEÖTHATÖTHEÖFUNDÖWILLÖNOTÖBEÖABLEÖTOÖCOLLECTÖALLÖAMOUNTSÖDUEÖACCORDINGÖTOÖTHEÖORIGINALÖTERMSÖOFÖRECEIVABLES Ö4HEÖAMOUNTÖOFÖTHEÖ PROVISIONSÖISÖTHEÖDIFFERENCEÖBETWEENÖTHEÖCARRYINGÖAMOUNTÖANDÖTHEÖRECOVERABLEÖAMOUNT Ö Ö Ö Ö Ö Ö
Cash and Cash Equivalents &ORÖTHEÖPURPOSESÖOFÖTHEÖCASHÖÚOWÖSTATEMENT ÖCASHÖANDÖCASHÖEQUIVALENTSÖCOMPRISEÖBALANCESÖWITHÖLESSÖTHANÖ ÖDAYSÖMATURITYÖFROMÖTHEÖBALANCEÖ SHEETÖDATEÖANDÖINCLUDE ÖCASHÖINÖHAND ÖDEPOSITSÖHELDÖATÖCALLÖWITHÖBANKS ÖNETÖOFÖBANKÖOVERDRAFTÖFACILITIESÖSUBJECTÖTOÖSWEEPINGÖARRANGEMENTS Ö
/QNUHRHNMRØ@MCØ.SGDQØ+H@AHKHSHDRØ !ÖPROVISIONÖISÖRECOGNIZEDÖIF ÖASÖAÖRESULTÖOFÖAÖPASTÖEVENT Ö"2!#Ö3RIÖ,ANKAÖHASÖAÖPRESENTÖLEGALÖORÖCONSTRUCTIVEÖOBLIGATIONÖTHATÖCANÖBEÖESTIMATEDÖ RELIABLY ÖANDÖITÖISÖPROBABLEÖTHATÖANÖOUTÚOWÖOFÖECONOMICÖBENEÙTSÖWILLÖBEÖREQUIREDÖTOÖSETTLEÖTHEÖOBLIGATION Ö Ö Ö Ö Ö
/THERÖ ACCOUNTSÖ PAYABLEÖ AREÖ CARRIEDÖ ATÖ COST Ö WHICHÖ ISÖ THEÖ FAIRÖ VALUEÖ OFÖ THEÖ CONSIDERATIONÖ TOÖ BEÖ PAIDÖ INÖ THEÖ FUTUREÖ FORÖ GOODSÖ ANDÖ SERVICESÖ received.
Ø ØØ
(MBNLDØ3@W Current income tax is the expected tax payable on taxable income for the year, using tax rates enacted at the balance sheet date. Management PERIODICALLYÖEVALUATESÖPOSITIONSÖTAKENÖINÖTAXÖRETURNSÖWITHÖRESPECTÖTOÖSITUATIONSÖINÖWHICHÖAPPLICABLEÖTAXÖREGULATIONSÖAREÖSUBJECTÖTOÖINTERPRETATIONÖANDÖ ESTABLISHESÖPROVISIONSÖWHEREÖAPPROPRIATEÖONÖTHEÖBASISÖOFÖAMOUNTSÖEXPECTEDÖTOÖBEÖPAIDÖTOÖTHEÖTAXÖAUTHORITIES Ö Ö Ö Ö
3.10
Revenue Recognition 2EVENUEÖISÖRECOGNIZEDÖONÖANÖACCRUALSÖBASIS Ö
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i) Service Charge on Loans 3ERVICEÖCHARGEÖONÖLOANÖISÖRECOGNIZEDÖONÖANÖACCRUALÖBASIS Ö4HEÖRECOGNITIONÖCEASESÖWHENÖAÖLOANÖISÖTRANSFERREDÖTOÖ.ONÖ)NTERESTÖ"EARINGÖ,OANÖ .)", Ö ASÖDESCRIBEDÖINÖNOTEÖ Ö3ERVICEÖCHARGEÖISÖRECOGNIZEDÖTHEREAFTERÖONLYÖWHENÖITÖISÖRECEIVED Ö Ö Ö Ö Ö Ö
HH Ø,DLADQRGHOØ%DDRØ@MCØ.SGDQØ"G@QFDRØ -EMBERSHIPÖFEESÖANDÖOTHERÖCHARGESÖAREÖRECOGNIZEDÖONÖANÖACCRUALÖBASISÖWHENÖTHEÖSERVICEÖHASÖBEENÖPROVIDED ÖÖ Ö
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iv) Other Income Other income comprises interest from short term deposits, gains less losses related to trading assets and liabilities, and includes gains from DISPOSALÖOFÖ"2!#Ö3RIÖ,ANKAÖASSETSÖANDÖALLÖREALIZEDÖANDÖUNREALIZEDÖFOREIGNÖEXCHANGEÖDIFFERENCES Ö Ö Ö Ö Ö Ö
)NTERESTÖ INCOMEÖ ONÖ "2!#Ö 3RIÖ ,ANKAÖ BANKÖ DEPOSITÖ ISÖ EARNEDÖ ONÖ ANÖ ACCRUALSÖ BASISÖ ATÖ THEÖ AGREEDÖ INTERESTÖ RATEÖ WITHÖ THEÖ RESPECTIVEÖ ÙNANCIALÖ institution.
3.11
Donor Grants !LLÖDONORÖGRANTSÖRECEIVEDÖAREÖINITIALLYÖRECOGNIZEDÖASÖDEFERREDÖINCOMEÖATÖFAIRÖVALUEÖANDÖRECORDEDÖASÖLIABILITIESÖINÖTHEÖ'RANTSÖ2ECEIVEDÖINÖ!DVANCEÖ Account for the period.
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4HEÖPORTIONÖOFÖTHEÖGRANTSÖUTILIZEDÖTOÖPURCHASEÖPROPERTYÖANDÖÙXEDÖASSETSÖAREÖTRANSFERREDÖASÖDEFERREDÖINCOMEÖINÖLIABILITIESÖANDÖSUBSEQUENTLYÖTHEÖ PORTIONÖ OFÖ THEÖ DEPRECIATIONÖ EXPENSEÖ OFÖ THEÖ SAMEÖ ASSETSÖ FORÖ THEÖ PERIODÖ ISÖ RECOGNIZEDÖ INÖ THEÖ STATEMENTÖ OFÖ COMPREHENSIVEÖ INCOMEÖ ASÖ GRANTÖ income.
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'RANTSÖUTILIZEDÖTOÖREIMBURSEÖPROGRAMÖRELATEDÖEXPENDITURE ÖTHEÖAMOUNTSÖAREÖRECOGNIZEDÖASÖ'RANTÖ)NCOMEÖFORÖTHEÖPERIOD ÖÖ
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'RANTÖINCOMEÖISÖCLASSIÙEDÖASÖTEMPORARILYÖRESTRICTEDÖORÖUNRESTRICTEDÖDEPENDINGÖUPONÖTHEÖEXISTENCEÖOFÖDONOR IMPOSEDÖRESTRICTIONS Ö&ORÖCOMPLETEDÖ ORÖ PHASEDÖ OUTÖ PROJECTSÖ ANDÖ PROGRAMS Ö ANYÖ UNUTILIZEDÖ AMOUNTSÖ AREÖ DEALTÖ WITHÖ INÖ ACCORDANCEÖ WITHÖ CONSEQUENTÖ DONORÖ ANDÖ MANAGEMENTÖ agreements.
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&ORÖONGOINGÖPROJECTSÖANDÖPROGRAMS ÖANYÖEXPENDITURESÖYETÖTOÖBEÖFUNDEDÖBUTÖFORÖWHICHÖFUNDINGÖHASÖBEENÖAGREEDÖATÖTHEÖENDÖOFÖTHEÖREPORTINGÖPERIODÖ ISÖRECOGNIZEDÖASÖ'RANTSÖRECEIVABLE Ö Ö Ö Ö Ö Ö Ö Ö
3.12 Ö
Grant Income 'RANTÖINCOMEÖISÖRECOGNIZEDÖONÖAÖCASHÖBASISÖTOÖTHEÖEXTENTÖTHATÖ"2!#Ö3RIÖ,ANKAÖFULÙLLSÖTHEÖCONDITIONSÖOFÖTHEÖGRANT Ö4HISÖINCOMEÖISÖTRANSFERREDÖFROMÖ THEÖDEFERREDÖGRANTÖRECEIVEDÖFROMÖ$ONORSÖANDÖRECOGNIZEDÖASÖINCOMEÖINÖTHEÖSTATEMENTÖOFÖCOMPREHENSIVEÖINCOME Ö Ö Ö Ö
Ö
!ÖSUBSTANTIALLYÖPORTIONÖOFÖ"2!#Ö3RIÖ,ANKAlSÖDONORÖGRANTSÖAREÖFORÖTHEÖFUNDINGÖOFÖ.OT FOR PROÙTÖPROJECTSÖANDÖPROGRAMS ÖANDÖFORÖTHESEÖGRANTS ÖINCOMEÖ RECOGNIZEDÖISÖMATCHEDÖTOÖTHEÖEXTENTÖOFÖACTUALÖEXPENDITURESÖINCURREDÖONÖPROJECTSÖANDÖPROGRAMSÖFORÖTHEÖPERIOD Ö
Ö
&ORÖDONORÖGRANTSÖRESTRICTEDÖTOÖFUNDINGÖPROCUREMENTÖÙXEDÖASSETS ÖGRANTÖINCOMEÖISÖRECOGNIZEDÖASÖTHEÖAMOUNTÖEQUIVALENTÖTOÖDEPRECIATIONÖEXPENSESÖ CHARGEDÖONÖTHEÖÙXEDÖASSET Ö
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Ø ØØ Ö
+N@MRØ@MCØ!NQQNVHMFRØ Ø Ø Ø Ø Ø Ø Ø ,OANSÖANDÖ"ORROWINGSÖAREÖRECOGNIZEDÖASÖTHEÖPROCEEDSÖAREÖRECEIVED ÖNETÖOFÖTRANSACTIONÖCOSTSÖINCURRED Ö4HEÖCARRYINGÖVALUESÖOFÖÖTHESEÖINSTRUMENTSÖ approximate their fair values due to their short term maturity.
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!LLÖBORROWINGÖCOSTSÖAREÖRECOGNIZEDÖASÖANÖEXPENSEÖINÖTHEÖSTATEMENTÖOFÖINCOMEÖANDÖEXPENDITUREÖINÖTHEÖPERIODÖINÖWHICHÖTHEYÖAREÖINCURRED Ö
Ø ØØ Ö
$LOKNXDDØ!DMDÚSRØØ Ø Ø Ø Ø Ø Ø %MPLOYEEÖENTITLEMENTSÖTOÖANNUALÖLEAVEÖAREÖRECOGNIZEDÖWHENÖTHEYÖACCRUEÖTOÖEMPLOYEES Ö!ÖPROVISIONÖISÖMADEÖFORÖTHEÖESTIMATEDÖLIABILITYÖFORÖANNUALÖ LEAVEÖASÖAÖRESULTÖOFÖSERVICESÖRENDEREDÖBYÖEMPLOYEESÖUPÖTOÖTHEÖBALANCEÖSHEETÖDATE Ö4HEÖCOMPANYÖDOESÖNOTÖOPERATEÖANYÖRETIREMENTÖBENEÙTÖFUND Ö (OWEVERÖSEVERANCEÖPAYÖISÖPROVIDEDÖFORÖINÖACCORDANCEÖWITHÖTHEÖ3RIÖ,ANKANÖSTATUTE Ö4HEÖCOMPANYÖALSOÖOPERATESÖANÖEMPLOYEEÖBONUSÖINCENTIVEÖ SCHEME Ö4HEÖPROVISIONÖFORÖEMPLOYEEÖBONUSÖINCENTIVEÖISÖBASEDÖONÖAÖPREDETERMINEDÖCOMPANYÖPOLICYÖANDÖISÖRECOGNIZEDÖINÖOTHERÖACCRUALS Ö4HEÖ ACCRUALÖFORÖEMPLOYEEÖBONUSÖINCENTIVEÖISÖEXPECTEDÖTOÖBEÖSETTLEDÖWITHINÖ ÖMONTHS Ö Ö Ö Ö Ö Ö Ö
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1DK@SDCØ/@QSXØ3Q@MR@BSHNMRØ Ø Ø Ø Ø Ø Ø Ø 2ELATEDÖPARTIESÖCOMPRISEÖDIRECTORS ÖSUBSIDIARIESÖOFÖ"2!#Ö)NTERNATIONALÖANDÖKEYÖMANAGEMENTÖPERSONNELÖOFÖTHEÖCOMPANYÖANDÖCOMPANIESÖWITHÖ COMMONÖOWNERSHIPÖAND ORÖDIRECTORS ÖÖÖ Ö Ö Ö Ö Ö Ö Ö
3.16
Comparatives 7HEREÖNECESSARYÖCOMPARATIVEÖÙGURESÖHAVEÖBEENÖADJUSTEDÖTOÖCONFORMÖTOÖCHANGESÖINÖPRESENTATIONÖINÖTHEÖCURRENTÖYEAR Ö
Ö
Ö
Ö
2011 LKR
2010 LKR
Ö ÖÖ 3,618,790
Ö ÖÖ 4,024,328
Ö ÖÖ 32,022
132,939 132,939
113,329 113,329
1,176 1,176
1,029 1,029
6.00 MEMBERSHIP FEES AND OTHER CHARGES Membership fee Total
54,100 54,100
-
479 479
-
7.00 IMPAIRMENT LOSSES ON LOANS AND ADVANCES Provision on Impairment losses Total
56,582 56,582
42,426 42,426
501 501
385 385
388,292 30,240 418,532
28,500 28,500
3,436 268 3,703
259 259
Corporation tax –charge for the year 3@WØ "QDCHS ØDWODMRDØ
369,372 Ø ØØ
768,015 Ø ØØ
3,268 Ø ØØ
A Ø3@WØO@X@AKDØ Balance b/f Charge for the period Paid during the year Tax payable
768,015 369,372 (768,015) 369,372
4.00 SERVICE CHARGE ON LOANS 'ROUPÖ,OANSÖ Ö-ICROÙNANCE Ö
5.00 INTEREST EXPENSES Interest on VO Members Savings Total
8.00 OTHER OPERATING EXPENSES Maintenance and general expenses Audit fee Total
2011 USD
2010 USD
Ö 36,542
9.00 TAXATION @ ØØ(MBNLDØS@WØDWODMRD
Ø
Ø 4,714,846 768,015 (4,714,846) 768,015
Ø 6,796 3,268 (6,796) 3,268
9.01ÖÖ4HEÖTAXÖCHARGEÖONÖTHEÖCOMPANYlSÖPROÙTÖBEFOREÖTAXÖDIFFERSÖFROMÖTHEÖTHEORETICALÖAMOUNTÖUSINGÖTHEÖBASICÖTAXÖRATEÖASÖFOLLOWS Ö
Ö Ö
/PERATINGÖPROÙT SURPLUSÖBEFOREÖTAXATIONÖ 4AXÖCALCULATEDÖATÖ Ö Tax charge for the year
ÖÖ Ö ÖÖ 369,372
Ö ÖÖ Ö ÖÖ 768,015
6,974 Ø Ø
42,812 6,974 (42,812) 6,974
Ö
Ö
Ö ÖÖ Ö ÖÖ 3,268
Ö Ö Ö Ö 6,974
2011 LKR
2010 LKR
2011 USD
2010 USD
-
494,703 494,703
-
4,492 4,492
12,266,343 11,609 (305,143) 11,972,809
12,428,036 297 (248,561) 12,179,772
108,542 103 (2,700) 105,945
112,849 3 (2,257) 110,594
10.00 CASH AND BANK Cash in hand Cash at bank
11.00
LOANS AND ADVANCES TO CUSTOMERS Group loans Interest receivable Impairment loss on loan advance
Ă–!DVANCESĂ–TOĂ–CUSTOMERSĂ–AREĂ–CARRIEDĂ–ATĂ–AMORTIZEDĂ–COST Ă–Ă–)TĂ–ISĂ–ESTIMATEDĂ–THATĂ–THEĂ–FAIRĂ–VALUESĂ–OFĂ–ADVANCESĂ–TOĂ–CUSTOMERSĂ–AREĂ–APPROXIMATELYĂ–THEĂ–SAMEĂ– as the carrying values. All advances to customers are unsecured.
11.01Ă–Ă– 4HEĂ–MOVEMENTĂ–ONĂ–THEĂ–LOANĂ–ACCOUNTSĂ–ISĂ–ANALYZEDĂ–ASĂ–SHOWNĂ–BELOW Ă–
At 1 January Loans disbursed ,ESS Ă–,OANSĂ–REPAYMENTSĂ– Gross advances to customers Interest receivable Impairment loss on loans advance (Note -11.02) Net advances to customers
Ă–
Ă–
Ă–
Ă–
Ă–
12,428,036 20,100,000 Ă– Ă– 12,266,343 11,609 (305,143) 11,972,809
10,269,861 18,545,000 Ă– Ă– 12,428,036 297 (248,561) 12,179,772
109,973 177,860 Ă– Ă– 108,542 103 (2,700) 105,945
93,252 168,392 Ă– 112,849 3 (2,257) 110,594
11.02 Ă– 4HEĂ–MOVEMENTĂ–ONĂ–THEĂ–IMPAIRMENTĂ–ONĂ–LOANSĂ–ACCOUNTĂ–ISĂ–Ă–SHOWNĂ–BELOW Ă– At 1 January Charge for the year
Ă–
Ă–
Ă–
Ă–
248,561 56,582 305,143
206,135 42,426 248,561
2,199 501 2,700
1,851 406 2,257
Principal Outstanding Local
Provision rate
Provision required Local
Ă–
Ă–
11.03 Annalysis of impairment of loans
Ă– Ă– Ă–
For general Provision .OĂ–PASTĂ–DUEĂ–
Ă–
%NQĂ˜RODBHĂšBĂ˜OQNUHRHNMĂ˜ Ă–DAYSĂ– Ă–DAYSĂ– Ă–DAYSĂ– Ă–DAYSĂ–ANDĂ–ABOVEĂ–PASTĂ–DUEĂ–
Ă– Ă– Ă– Ă–
Ă–Ă–
Ă– Ă–Ă–Ă–Ă– Ă– Ă–Ă– Ă– Ă–Ă–Ă–Ă– Ă– Ă–Ă–
143,465 12,266,343
Ă– Ă– Ă– Ă–
Ă– Ă–Ă– Ă– Ă– Ă– Ă–Ă– Ă– Ă–
62,685 305,143
2011 LKR 12.00
Ă–
LOAN SECURITY FUND Opening balance Received during the year 0AIDĂ–OFFĂ– !DJUSTEDĂ–DURINGĂ–THEĂ–YEARĂ– Closing balance
2010 LKR
2,217,247 2,010,000 Ă– Ă– 2,318,020
1,511,174 927,250 Ă– Ă– 2,217,247
2011 USD
2010 USD
19,620 17,786 Ă– Ă– 20,512
13,722 8,420 Ă– 20,133
Ă–
4HEĂ–,OANĂ–3ECURITYĂ–&UNDĂ–ACTSĂ–ASĂ–COLLATERALĂ–FORĂ–THEĂ–CUSTOMERSlĂ–LOANĂ–OBLIGATIONSĂ–TOĂ–"2!#Ă–3RIĂ–,ANKA Ă–4HISĂ–ISĂ–COMPUTEDĂ–ASĂ– Ă–OFĂ–THEĂ–CUSTOMERSlĂ– APPROVEDĂ–LOAN Ă–)NĂ–THEĂ–EVENTĂ–OFĂ–ANYĂ–DEFAULT Ă–THEĂ–CLIENTSĂ–FORFEITĂ–ALLĂ–ORĂ–PARTĂ–OFĂ–THEĂ–,OANĂ–3ECURITYĂ–&UNDĂ–TOĂ–THEĂ–EXTENTĂ–OFĂ–THEĂ–AMOUNTĂ–ATĂ–RISK Ă–Ă– Ă–Ă–
13.00
Other Assets Related party receivables
14.00
15.00
15.10
OTHER LIABILITIES Accrual for expenses VO members saving deposits Total
DONOR FUNDS Donor funds investment in loans to group members Donor funds received in advance (15.10) Total
Donor funds received in advance Opening balance Transferred to statement of income and expenses "KNRHMFĂ˜A@K@MBDĂ˜
-
16,992,680 16,992,680
-
154,296 154,296
1,738,563 890 1,739,453
4,822,171 570,835 5,393,006
15,384 8 15,392
43,786 5,183 48,969
-
16,438,388 13,262 16,451,650
-
149263 119 149,383
13,262 (13,262) Ă˜ Ă˜Ă˜Ă˜Ă˜
13,262 Ă˜ Ă˜Ă˜
117 (117) Ă˜ Ă˜Ă˜Ă˜Ă˜
119 Ă˜ Ă˜
16.00
BRAC CONTRIBUTION 4HEĂ–FUNDĂ–AMOUNTINGĂ–TOĂ–,+2Ă– Ă–RELATESĂ–TOĂ–VARIOUSĂ–CONTRIBUTIONSĂ–MADEĂ–TOWARDSĂ–THEĂ–ESTABLISHMENTĂ–OFĂ–"2!#Ă–3RIĂ–,ANKAĂ–Ă–
17.00
SUBSEQUENT EVENTS !LLÖMATERIALÖEVENTSÖOCCURRINGÖAFTERÖTHEÖBALANCEÖSHEETÖDATEÖAREÖCONSIDEREDÖANDÖAPPROPRIATEÖADJUSTMENTSÖORÖDISCLOSURESÖHAVEÖBEENÖMADEÖINÖTHEÖ ÙNANCIALÖSTATEMENTS
Ă–Ă–
18.00
CASHFLOW FROM OPERATING ACTIVITIES 2011 LKR
Ø
"@RGØÛNVØEQNLØNODQ@SHMFØ@BSHUHSHDR
Ø
$WBDRRØNEØHMBNLDØNUDQØDWODMCHSTQD Loan loss provision "@RGØÛNVØADENQDØBG@MFDRØHMØVNQJHMFØB@OHS@KØ
Ø
"G@MFDRØHMØVNQJHMFØB@OHS@K Decrease/(increase) of Other Assets Decrease/(increase) of Interest Receivable Increase/(decrease) of Current Liabilities )NCREASE DECREASE ÖOFÖ$ONORÖ&UNDSÖ Net cash from operations
Ö
3,078,099 56,582 Ø ØØ
16,992,680 (11,312) (3,653,553) Ö Ö 10,846
2010 LKR
3,840,073 42,426 Ø ØØ
119,562 Ö ÖÖÖÖ 4,002,061
2011 USD
2010 USD
27,237 501 Ø ØØ
34,869 385 Ø Ø
150,364 (100) (32,329) Ö 96
(3,798) Ö 36,339
19.00
CONTINGENT LIABILITIES #ONTINGENTÖLIABILITIESÖAREÖNOTÖRECOGNIZEDÖBUTÖDISCLOSEDÖINÖTHEÖÙNANCIALÖSTATEMENTSÖUNLESSÖTHEÖPOSSIBILITYÖOFÖANÖOUTÚOWÖOFÖRESOURCESÖEMBODYINGÖ ECONOMICÖBENEÙTSÖISÖRELIABLYÖESTIMATED Ö Ö Ö Ö Ö
Ö
#ONTINGENTÖASSETSÖAREÖNOTÖRECOGNIZEDÖINÖTHEÖÙNANCIALÖSTATEMENTSÖASÖTHISÖMAYÖRESULTSÖINÖTHEÖRECOGNITIONÖOFÖINCOMEÖWHICHÖMAYÖNEVERÖBEÖ REALIZED Ö Ö Ö Ö
Ö
BRAC LANKA (GUARANTEE) LIMITED Statement Of Comprehensive Income %NQĂ˜3GDĂ˜/DQHNCĂ˜$MCDCĂ˜ Ă˜#DBDLADQĂ˜
2011
2010
2011
LKR
LKR
USD
2010
Notes
Service charge on loans Interest expense Net income from service charge
Membership fees and other charges Other income Grant income
Total operating income Impairment losses on loans and advances to customers Operating income after impairment charges
Staff costs Other operating expenses Depreciation /QNĂšSĂ˜ADENQDĂ˜%HM@MBH@KĂ˜5 3Ă˜ &INANCIALĂ–6!4Ă– /QNĂšSĂ˜ADENQDĂ˜S@WĂ˜ Income tax expense -DSĂ˜OQNĂšSĂ˜ENQĂ˜SGDĂ˜XD@QĂ˜ Other comprehensive income Total comprehensive income
USD
4 5
373,121,918 (45,988,258) 327,133,660
377,367,954 (36,890,570) 340,477,384
3,301,672 (406,940) 2,894,732
3,388,334 (329,733) 3,058,601
6 7 21.1
8,415,743 9,733,518 131,028 18,280,289
8,815,985 28,275,964 131,028 37,222,977
74,469 86,130 1,159 161,758
78,798 252,734 1,190 332,722
345,413,949 10,881,417 334,532,532
377,700,361 10,669,012 367,031,349
3,056,490 96,287 2,960,203
3,391,322 95,361 3,295,961
154,028,904 100,754,040 8,674,888 263,457,832 Ă˜ Ă˜Ă˜ Ă– Ă– Ă˜ Ă˜Ă˜Ă˜ (22,921,633) Ă˜ Ă˜Ă˜Ă˜ 44,283,522
133,370,680 125,592,339 5,954,701 264,917,720 Ă˜ Ă˜Ă˜ Ă– Ă–Ă–Ă–Ă–Ă–Ă– Ă˜ Ă˜Ă˜ (21,501,399) Ă˜ Ă˜Ă˜ 80,612,230
1,362,967 1,192,119 891,550 1,122,563 76,762 54,070 2,331,279 2,368,752 Ă˜ Ă˜Ă˜ Ă˜ Ă˜ Ă– Ă– Ă˜ Ă˜Ă˜Ă˜Ă˜ Ă˜ Ă˜ (202,828) (195,237) Ă˜ Ă˜Ă˜Ă˜Ă˜ Ă˜ Ă˜ 391,855 731,973
8
9 10 16 Ă˜ Ă– Ă˜ 11(a) Ă˜
BRAC LANKA (GUARANTEE) LIMITED 2S@SDLDMSØ.EØ%HM@MBH@KØ/NRHSHNMØ SØ Ø#DBDLADQØ
2011
2010
2011
2010
LKR
LKR
USD
USD
Notes
ASSETS Cash in hand and at Bank Short term deposits Loans and advances to customers Other assets Property, plant and equipment Total assets
LIABILITIES AND CAPITAL FUND +H@AHKHSHDR Loan security fund Related party payables "ORROWINGSÖ Other liabilities Tax payable 3NS@KØKH@AHKHSHDRØ
Capital fund Donor funds BRAC contribution Retained earnings Total capital fund
3NS@KØKH@AHKHSHDRØ@MCØB@OHS@KØETMCØ
25,579,312 1,261,358,262 3,964,069 47,130,532 1,338,032,175
12 13 14 15 16
17 18 19 20 A Ø
21 22
Ø
175,942,975 50,000,000 986,872,622 10,543,667 46,657,379 1,270,016,643
226,346 11,161,475 35,077 417,048 11,839,946
1,597,594 454,009 8,960,979 95,738 423,657 11,531,977
254,085,289 198,907,388 294,448,787 24,741,626 22,795,207 Ø ØØ
68,328,588 167,478,290 292,248,213 221,558,768 21,501,399 Ø ØØ
2,248,343 1,760,087 2,605,511 218,933 201,710 Ø ØØ
620,436 1,520,733 2,653,666 2,011,793 195,237 Ø Ø
4,864,349 460,599,963 77,589,566 543,053,878
4,995,377 460,599,963 33,306,045 498,901,385
43,044 4,075,745 686,574 4,805,362
45,359 4,182,330 302,425 4,530,113
Ø ØØ Ø ØØ
4HEÖ&INANCIALÖ3TATEMENTSÖAREÖINÖ#OMPLIANCEÖ7ITHÖTHEÖ2EQUIREMENTÖOFÖTHEÖ#OMPANIESÖ!CTÖ.OÖ ÖOFÖ Ö
Ö
Ø ØØ Ø Ø
Ö
Ö
Ö
Ö
Country Head of Accounts BRAC Lanka (Guarantee) Limited
4HEÖÙNANCIALÖSTATEMENTSÖWEREÖAPPROVEDÖBYÖTHEÖBOARDÖOFÖDIRECTORSÖONÖ THÖ!PRILÖ ÖANDÖWEREÖSIGNEDÖONÖITSÖBEHALFÖBY Ö
Director
4HEÖACCOMPANYINGÖNOTESÖAREÖANÖINTEGRALÖPARTÖOFÖTHESEÖÙNANCIALÖSTATEMENTSÖ
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BRAC LANKA (GUARANTEE) LIMITED 2S@SDLDMSØ.EØ"G@MFDRØ(MØ$PTHSXØ %NQØ3GDØ8D@QØ$MCDCØ Ø#DBDLADQØ
Retained $@QMHMFRØ
BRAC "NMSQHATSHNMØ
Total "@OHS@KØ%TMCØ
Total "@OHS@KØ%TMCØ
LKR
LKR
LKR
USD
At 1 January 2010
(47,306,187)
460,599,963
413,293,776
3,752,781
0ROÙTÖFORÖTHEÖYEARÖ
ÖÖ ÖÖ
Ö ÖÖÖÖ
Ö ÖÖ
Ö Ö
Ø
Ø
SØ Ø#DBDLADQØ Ø
Ø
ØØ ØØ
Ø ØØØ
Ø ØØ
Ø Ø
At 1 January 2011
33,306,045
460,599,963
493,906,008
4,370,463
0ROÙTÖFORÖTHEÖYEARÖ
ÖÖ ÖÖ
Ö ÖÖÖÖ
Ö ÖÖ
Ö Ö
ØØ ØØØ
Ø ØØØØ
Ø ØØ
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BRAC LANKA (GUARANTEE) LIMITED "@RGÛNVØ2S@SDLDMSØ%NQØ3GDØ8D@QØ$MCDCØ Ø#DBDLADQØ
2011
2010
2011
2010
LKR
LKR
USD
USD
Notes
"@RGØÛNVØEQNLØ.ODQ@SHMFØ BSHUHSHDRØ Loan disbursements Loan collection
(74,309,919) (2,537,819,000) 2,254,714,876
78,718,534 (1,855,782,000) 1,638,551,521
(698,266) (22,456,588) 19,951,463
706,947 (16,666,206) 14,715,326
-DSØB@RGØÛNVØEQNLØ.ODQ@SHMFØ BSHUHSHDRØ
Ø
Ø Ø
Ø ØØ
Ø Ø
Ø
"@RGØÛNVØEQNLØ(MUDRSHMFØ BSHUHSHDR !CQUISITIONÖOFÖÙXEDÖASSETSÖ )NVESTMENTÖINÖÙXEDÖDEPOSITSÖ
Ö Ö
Ö Ö Ö ÖÖ
Ö Ö Ö Ö
Ö Ö Ö ÖÖ
Ö Ö
-DSØB@RGØÛNVØEQNLØ(MUDRSHMFØ BSHUHSHDRØ
Ø
Ø ØØ
Ø Ø
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Ø
"@RGØÛNVØEQNLØ%HM@MBHMFØØ BSHU@SDR Term loans Loan security fund Deferred income Tax paid
2,200,574 185,756,701 (131,028) (21,627,825)
34,390,018 68,328,589 (131,028) (7,103,122)
19,472 1,643,719 (1,159) (191,380)
308,846 613,638 (1,177) (63,791)
-DSØB@RGØÛNVØEQNLØØÚM@MBHMFØ@BSHUHSHDRØ
Ø
Ø ØØ
Ø ØØ
Ø ØØ
Ø Ø
-DSØ CDBQD@RD HMBQD@RDØHMØB@RGØHMØG@MCØ@MCØ@SØA@MJØ Cash in hand and at bank at beginning of the year
Ø
Ø Ø 175,942,975
Ø Ø 280,417,569
Ø Ø 1,597,594
Ø 2,535,848
Ø
Ø ØØ
Ø ØØ
Ø ØØ
Ø Ø
"@RGØHMØG@MCØ@MCØ@SØA@MJØ@SØØDMCØNEØSGDØXD@QØ
BRAC LANKA (GUARANTEE) LIMITED Notes To The Financial Statements
1.00 Ö
THE REPORTING ENTITY "2!#Ö,ANKAÖ 'UARANTEE Ö,IMITEDÖISÖAÖLIMITEDÖLIABILITYÖBYÖGUARANTEEÖCOMPANYÖINCORPORATEDÖANDÖDOMICILEDÖINÖ3RIÖ,ANKA Ö4HEÖREGISTEREDÖOFÙCEÖISÖLOCATEDÖINÖ THEÖDISTRICTÖOFÖ#OLOMBO Ö4HEÖ#OMPANYÖHASÖRE REGISTEREDÖUNDERÖTHEÖNEWÖ#OMPANIESÖ!CTÖ.O Ö ÖOFÖ Ö4HEÖ#OMPANYÖISÖENGAGEDÖINÖ-ICROÖ&INANCEÖ Activities to assist in poverty alleviation.
2.00 2.01 Ö
BASIS OF PREPARATION Statement of Compliance 4HEÖ ÙNANCIALÖ STATEMENTSÖ HAVEÖ BEENÖ PREPAREDÖ INÖ ACCORDANCEÖ WITHÖ ANDÖ COMPLYÖ WITHÖ )NTERNATIONALÖ &INANCIALÖ 2EPORTINGÖ 3TANDARDSÖ )&23 Ö ANDÖ THEÖ requirements of the Sri Lankan’s Companies Act No. 07 of 2007.
Ö
4HESEÖÙNANCIALÖSTATEMENTSÖWEREÖISSUEDÖBYÖTHEÖ"OARDÖOFÖ$IRECTORSÖONÖ Ö!PRILÖ Ö
Ö
Ö
Ö
Ö
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2.02 Ö
Basis of Measurement 4HEÖÙNANCIALÖSTATEMENTSÖAREÖPREPAREDÖUNDERÖTHEÖHISTORICALÖCOSTÖCONVENTION Ö
Ö
Ö
Ö
Ö
Ö
Ø Ö
Ö
Ö
Ö
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%TMBSHNM@KØ@MCØ/QDRDMS@SHNMØ"TQQDMBXØ Ø Ø Ø Ø Ø Ø 4HESEÖÙNANCIALÖSTATEMENTSÖAREÖPRESENTEDÖINÖ3RIÖ,ANKANÖ2UPEEÖ ,+2 ÖWHICHÖISÖTHEÖENTITYlSÖFUNCTIONALÖCURRENCY Ö
Ö
4HEÖÙNANCIALÖSTATEMENTSÖINCLUDEÖÙGURES ÖWHICHÖHAVEÖBEENÖTRANSLATEDÖFROMÖ3RIÖ,ANKANÖ2UPEEÖ ,+2 ÖTOÖ5NITEDÖ3TATESÖ$OLLARSÖ 53Ö ÖATÖTHEÖYEARÖENDÖRATEÖ OFÖ53 Ö Ö Ö,OCALÖCURRENCY Ö4HESEÖÙGURESÖAREÖFORÖMEMORANDUMÖPURPOSESÖONLYÖANDÖDOÖNOTÖFORMÖPARTÖOFÖTHEÖAUDITEDÖÙNANCIALÖSTATEMENTS Ö Ö
2.04 Ö
Use of Estimation and Judgments 4HEÖ PREPARATIONÖ OFÖ ÙNANCIALÖ STATEMENTSÖ INÖ CONFORMITYÖ WITHÖ )NTERNATIONALÖ &INANCIALÖ 2EPORTINGÖ 3TANDARDSÖ REQUIRESÖ MANAGEMENTÖ TOÖ MAKEÖ JUDGMENTS Ö estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and disclosure of contingent assets ANDÖLIABILITIESÖATÖTHEÖDATEÖOFÖÙNANCIALÖSTATEMENTSÖANDÖREPORTEDÖAMOUNTSÖOFÖREVENUESÖANDÖEXPENSESÖDURINGÖTHEÖREPORTEDÖPERIOD Ö4HEÖESTIMATESÖANDÖ ASSOCIATEDÖASSUMPTIONSÖAREÖBASEDÖONÖHISTORICALÖEXPERIENCES ÖTHEÖRESULTSÖOFÖWHICHÖFORMÖTHEÖBASISÖOFÖMAKINGÖTHEÖJUDGMENTSÖABOUTÖTHEÖCARRYINGÖVALUESÖ of assets and liabilities that are not readily apparent from other sources. Actual results ultimately may differ from these estimates.
3.00
SIGNIFICANT ACCOUNTING POLICIES 4HEÖACCOUNTINGÖPOLICIESÖSETÖOUTÖBELOWÖHAVEÖBEENÖAPPLIEDÖCONSISTENTLYÖTOÖALLÖPERIODÖPRESENTEDÖINÖTHISÖÙNANCIALÖSTATEMENTS Ö
Ö
Ø ØØ
Ö
Ö
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Ö
/QNODQSX Ø/K@MSØ@MCØ$PTHOLDMSØ Ø Ø Ø Ø Ø Ø Ø Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to AÖ WORKINGÖ CONDITIONÖ FORÖ ITSÖ INTENDEDÖ USE Ö ANDÖ THEÖ COSTSÖ OFÖ DISMANTLINGÖ ANDÖ REMOVINGÖ THEÖ ITEMSÖ ANDÖ RESTORINGÖ THEÖ SITEÖ ONÖ WHICHÖ THEYÖ AREÖ LOCATED Ö 0URCHASEDÖSOFTWAREÖTHATÖISÖINTEGRALÖTOÖTHEÖFUNCTIONALITYÖOFÖTHEÖRELATEDÖEQUIPMENTÖISÖCAPITALIZEDÖASÖPARTÖOFÖTHATÖEQUIPMENT Ö Ö Ö Ö
Ö
'AINSÖANDÖLOSSESÖONÖDISPOSALÖOFÖANÖITEMÖOFÖPROPERTY ÖPLANTÖANDÖEQUIPMENTÖAREÖDETERMINEDÖBYÖCOMPARINGÖTHEÖPROCEEDSÖFROMÖDISPOSALÖWITHÖTHEÖCARRYINGÖ VALUEÖOFÖPROPERTY ÖPLANTÖANDÖEQUIPMENTÖANDÖRECOGNIZEDÖNETÖWITHÖOTHERÖINCOMEÖINÖPROÙTÖORÖLOSS Ö Ö Ö Ö Ö Ö
Ö
3.02
Depreciation $EPRECIATIONÖISÖRECOGNIZEDÖINÖPROÙTÖORÖLOSSÖANDÖCALCULATEDÖTOÖWRITEÖOFFÖTHEÖCOSTÖOFÖTHEÖPROPERTY ÖPLANTÖANDÖEQUIPMENTÖONÖTHEÖSTRAIGHTÖLINEÖBASISÖONÖTHEÖ cost over the expected useful lives of the assets concerned, and intangible assets on a straight line basis. Depreciation is not provided for Land.
Ö
4HEÖESTIMATEDÖUSEFULÖLIVESÖFORÖTHEÖCURRENTÖANDÖCOMPARATIVEÖPERIODSÖAREÖASÖFOLLOWS Ö Ö
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$EPRECIATIONÖOFÖASSETSÖBEGINÖWHENÖITÖISÖAVAILABLEÖFORÖUSE Ö
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Ö
'AINSÖANDÖLOSSESÖONÖDISPOSALSÖAREÖDETERMINEDÖBYÖCOMPARINGÖPROCEEDSÖWITHÖCARRYINGÖAMOUNTSÖANDÖAREÖINCLUDEDÖINÖTHEÖOPERATINGÖRESULTÖFORÖTHEÖREPORTINGÖ period.
ØØ
%NQDHFMØ"TQQDMBXØ3Q@MR@BSHNMRØ Ø Ø Ø Ø Ø Ø Ø Transactions in foreign currencies are translated to Sri Lankan Rupee at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Sri Lankan Rupee at the foreign exchange rate applicable FORÖSETTLEMENT Ö4HEÖFOREIGNÖCURRENCYÖGAINÖORÖLOSSÖONÖTHEÖMONETARYÖITEMSÖISÖTHEÖDIFFERENCEÖBETWEENÖAMORTIZEDÖCOSTÖINÖTHEÖFUNCTIONALÖCURRENCYÖATÖTHEÖ BEGINNINGÖOFÖTHEÖPERIOD ÖADJUSTEDÖFORÖTHEÖEFFECTIVEÖINTERESTÖANDÖPAYMENTSÖDURINGÖTHEÖPERIOD ÖANDÖTHEÖAMORTIZEDÖCOSTÖINÖTHEÖFOREIGNÖCURRENCYÖTRANSLATEDÖ at the exchange rate at the end of the period.
Ö
.ON MONETARYÖASSETSÖANDÖLIABILITIESÖDENOMINATEDÖINÖFOREIGNÖCURRENCIES ÖWHICHÖAREÖSTATEDÖATÖHISTORICALÖCOST ÖAREÖTRANSLATEDÖTOÖÖÖ3RIÖ,ANKANÖ2UPEEÖ ,+2 Ö at the foreign exchange rate ruling at the date of transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at FAIRÖVALUEÖAREÖTRANSLATEDÖTOÖÖ3RIÖ,ANKANÖ2UPEEÖ ,+2 ÖATÖFOREIGNÖEXCHANGEÖRATESÖRULINGÖATÖTHEÖDATESÖTHEÖFAIRÖVALUESÖWEREÖDETERMINED Ö&OREIGNÖEXCHANGEÖ DIFFERENCESÖARISINGÖONÖTRANSLATIONÖAREÖRECOGNIZEDÖINÖTHEÖSTATEMENTÖOFÖCOMPREHENSIVEÖINCOME ÖÖÖ Ö Ö Ö Ö Ö
3.04
Loans and Advances to the Customers a)Ö,OANSÖORIGINATEDÖBYÖTHEÖCOMPANYÖBYÖPROVIDINGÖÙNANCEÖDIRECTLYÖTOÖBORROWERSÖISÖCATEGORIZEDÖASÖLOANSÖTOÖGROUPÖMEMBERSÖANDÖISÖCARRIEDÖATÖAMORTIZEDÖ COST Ö WHICHÖ ISÖ DEÙNEDÖ ASÖ FAIRÖ VALUEÖ OFÖ THEÖ CASHÖ CONSIDERATIONÖ GIVENÖ TOÖ ORIGINATEÖ THOSEÖ LOANSÖ ASÖ ISÖ DETERMINABLEÖ BYÖ REFERENCEÖ TOÖ MARKETÖ PRICESÖ ATÖ ORIGINATIONÖDATEÖANDÖSUBSEQUENTLYÖMEASUREDÖATÖTHEÖORIGINALÖEFFECTIVEÖINTERESTÖRATEÖATÖREPORTINGÖDATE Ö!LLÖLOANSÖANDÖADVANCESÖAREÖRECOGNIZEDÖWHENÖCASHÖ ISÖADVANCEDÖTOÖBORROWERS Ö Ö Ö Ö Ö Ö Ö Ö
&URNITUREÖ Ö&IXTURESÖ Ö -OTORÖ6EHICLESÖ Ö "ICYCLESÖ Ö Ö -OTORÖ#YCLESÖ Ö %QUIPMENTSÖ Ö
Ö Ö Ö Ö Ö
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3.05
Impairment i) Financial Assets !TÖEACHÖBALANCEÖSHEETÖDATEÖ"2!#Ö,ANKAÖ 'UARANTEE Ö,IMITEDÖASSESSESÖWHETHERÖTHEREÖISÖOBJECTIVEÖEVIDENCEÖTHATÖÙNANCIALÖASSETSÖNOTÖCARRIEDÖATÖ FAIRÖVALUEÖTHROUGHÖPROÙTÖORÖLOSSÖAREÖIMPAIRED Ö&INANCIALÖASSETSÖAREÖCONSIDEREDÖTOÖBEÖIMPAIREDÖWHENÖOBJECTIVEÖEVIDENCEÖINDICATESÖTHATÖONEÖORÖMOREÖ EVENTSÖTHATÖHAVEÖAÖNEGATIVEÖEFFECTÖONÖTHEÖESTIMATEDÖFUTUREÖCASHÖÚOWÖOFÖANÖASSET Ö Ö Ö Ö Ö Ö Ö
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)NDIVIDUALLYÖSIGNIÙCANTÖÙNANCIALÖASSETSÖAREÖTESTEDÖFORÖIMPAIRMENTÖONÖANÖINDIVIDUALÖBASIS Ö4HEÖREMAININGÖÙNANCIALÖASSETSÖAREÖASSESSEDÖCOLLECTIVELYÖ in groups that share similar credit characteristics.
Ö
!LLÖ IMPAIRMENTÖ LOSSESÖ AREÖ RECOGNIZEDÖ INÖ PROÙTÖ ORÖ LOSSÖ ANDÖ IMPAIRMENTÖ LOSSESÖ ONÖ AVAILABLE FOR SALEÖ INVESTMENTÖ SECURITIESÖ AREÖ RECOGNIZEDÖ BYÖ TRANSFERRINGÖTHEÖDIFFERENCEÖBETWEENÖTHEÖAMORTIZEDÖACQUISITIONÖCOSTÖANDÖCURRENTÖFAIRÖVALUEÖOUTÖOFÖEQUITYÖTOÖPROÙTÖORÖLOSS Ö Ö Ö
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!NÖIMPAIRMENTÖLOSSÖISÖREVERSEDÖIFÖTHEÖREVERSALÖCANÖBEÖRELATEDÖOBJECTIVELYÖTOÖANÖEVENTÖOCCURRINGÖAFTERÖTHEÖIMPAIRMENTÖLOSSÖWASÖRECOGNIZED Ö&ORÖ ÙNANCIALÖASSETSÖMEASUREDÖATÖAMORTIZEDÖCOSTÖANDÖAVAILABLEÖFORÖSALEÖSECURITIESÖISÖRECOGNIZEDÖINÖPROÙTÖORÖLOSS Ö&ORÖAVAILABLEÖFORÖSALEÖSECURITIESÖTHATÖAREÖ EQUITYÖSECURITIESÖTHEÖREVERSALÖISÖRECOGNIZEDÖDIRECTLYÖINÖEQUITY Ö Ö Ö Ö Ö Ö Ö Ö
Ö
3.06 Ö
3.07 Ö
ii) Non Financial Assets 4HEÖCARRYINGÖAMOUNTSÖOFÖ"2!#Ö,ANKAÖ 'UARANTEE Ö,IMITEDlSÖNONÖÙNANCIALÖASSETSÖOTHERÖTHANÖINVENTORIESÖAREÖREVIEWEDÖATÖEACHÖBALANCEÖSHEETÖ DATEÖTOÖDETERMINEÖWHETHERÖTHEREÖISÖANYÖINDICATIONÖOFÖIMPAIRMENT Ö)FÖSUCHÖCONDITIONÖEXISTS ÖTHEÖASSETSÖRECOVERABLEÖAMOUNTÖISÖESTIMATEDÖANDÖANÖ IMPAIRMENTÖLOSSÖRECOGNIZEDÖINÖTHEÖSTATEMENTÖOFÖCOMPREHENSIVEÖINCOMEÖWHENEVERÖTHEÖCARRYINGÖAMOUNTÖOFÖANÖASSETÖEXCEEDSÖITSÖRECOVERABLEÖ amount.
Other Assets /THERÖASSETSÖCOMPRISEÖPREPAYMENTS ÖDEPOSITSÖANDÖOTHERÖRECOVERABLEÖWHICHÖARISEÖDURINGÖTHEÖNORMALÖCOURSEÖOFÖBUSINESS ÖTHEYÖAREÖCARRIEDÖATÖ ORIGINALÖINVOICEÖAMOUNTÖLESSÖPROVISIONÖMADEÖFORÖIMPAIRMENTÖLOSSES Ö!ÖPROVISIONÖFORÖIMPAIRMENTÖOFÖTRADEÖRECEIVABLEÖISÖESTABLISHEDÖWHENÖTHEREÖISÖ OBJECTIVEÖEVIDENCEÖTHATÖTHEÖFUNDÖWILLÖNOTÖBEÖABLEÖTOÖCOLLECTÖALLÖAMOUNTSÖDUEÖACCORDINGÖTOÖTHEÖORIGINALÖTERMSÖOFÖRECEIVABLES Ö4HEÖAMOUNTÖOFÖTHEÖ PROVISIONSÖISÖTHEÖDIFFERENCEÖBETWEENÖTHEÖCARRYINGÖAMOUNTÖANDÖTHEÖRECOVERABLEÖAMOUNT Ö Ö Ö Ö Ö Ö
Cash in Hand and at Bank &ORÖTHEÖPURPOSESÖOFÖTHEÖCASHÖÚOWÖSTATEMENT ÖCASHÖANDÖCASHÖEQUIVALENTSÖCOMPRISEÖBALANCESÖWITHÖLESSÖTHANÖ ÖDAYSÖMATURITYÖFROMÖTHEÖBALANCEÖ SHEETÖDATEÖANDÖINCLUDE ÖCASHÖINÖHAND ÖDEPOSITSÖHELDÖATÖCALLÖWITHÖBANKS ÖNETÖOFÖBANKÖOVERDRAFTÖFACILITIESÖSUBJECTÖTOÖSWEEPINGÖARRANGEMENTS Ö
Ø ØØ Ö
/QNUHRHNMRØ@MCØ.SGDQØ+H@AHKHSHDRØ !ÖPROVISIONÖISÖRECOGNIZEDÖIF ÖASÖAÖRESULTÖOFÖAÖPASTÖEVENT ÖÖ"2!#Ö,ANKAÖ 'UARANTEE Ö,IMITEDÖHASÖAÖPRESENTÖLEGALÖORÖCONSTRUCTIVEÖOBLIGATIONÖTHATÖCANÖ BEÖESTIMATEDÖRELIABLY ÖANDÖITÖISÖPROBABLEÖTHATÖANÖOUTÚOWÖOFÖECONOMICÖBENEÙTSÖWILLÖBEÖREQUIREDÖTOÖSETTLEÖTHEÖOBLIGATION Ö Ö Ö
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/THERÖ ACCOUNTSÖ PAYABLEÖ AREÖ CARRIEDÖ ATÖ COST Ö WHICHÖ ISÖ THEÖ FAIRÖ VALUEÖ OFÖ THEÖ CONSIDERATIONÖ TOÖ BEÖ PAIDÖ INÖ THEÖ FUTUREÖ FORÖ GOODSÖ ANDÖ SERVICESÖ received.
Ø ØØ
(MBNLDØ3@W Current income tax is the expected tax payable on taxable income for the year, using tax rates enacted at the balance sheet date. Management PERIODICALLYÖEVALUATESÖPOSITIONSÖTAKENÖINÖTAXÖRETURNSÖWITHÖRESPECTÖTOÖSITUATIONSÖINÖWHICHÖAPPLICABLEÖTAXÖREGULATIONSÖAREÖSUBJECTÖTOÖINTERPRETATIONÖANDÖ ESTABLISHESÖPROVISIONSÖWHEREÖAPPROPRIATEÖONÖTHEÖBASISÖOFÖAMOUNTSÖEXPECTEDÖTOÖBEÖPAIDÖTOÖTHEÖTAXÖAUTHORITIES Ö Ö Ö Ö
3.10
Revenue Recognition 2EVENUEÖISÖRECOGNIZEDÖONÖANÖACCRUALSÖBASIS Ö
Ö
Ö
Ö
Ö
Ö
Ö
Ö
Ö
Ö
i) Service Charge on Loans 3ERVICEÖCHARGEÖONÖLOANÖISÖRECOGNIZEDÖONÖANÖACCRUALÖBASIS Ö4HEÖRECOGNITIONÖCEASESÖWHENÖAÖLOANÖISÖTRANSFERREDÖTOÖ.ONÖ)NTERESTÖ"EARINGÖ,OANÖ .)", Ö ASÖDESCRIBEDÖINÖNOTE Ö Ö3ERVICEÖCHARGEÖISÖRECOGNIZEDÖTHEREAFTERÖONLYÖWHENÖITÖISÖRECEIVED Ö Ö Ö Ö Ö Ö
Ø Ö
HH Ø,DLADQRGHOØ%DDRØ@MCØ.SGDQØ"G@QFDRØ -EMBERSHIPÖFEESÖANDÖOTHERÖCHARGESÖAREÖRECOGNIZEDÖONÖANÖACCRUALÖBASISÖWHENÖTHEÖSERVICEÖHASÖBEENÖPROVIDED ÖÖ Ö
Ö
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iv) Other Income Other income comprises interest from short term deposits, gains less losses related to trading assets and liabilities, and includes gains from DISPOSALÖOFÖÖ"2!#Ö,ANKAÖ 'UARANTEE Ö,IMITEDÖASSETSÖANDÖALLÖREALIZEDÖANDÖUNREALIZEDÖFOREIGNÖEXCHANGEÖDIFFERENCES Ö Ö Ö Ö
)NTERESTÖINCOMEÖONÖÖ"2!#Ö,ANKAÖ 'UARANTEE Ö,IMITEDÖBANKÖDEPOSITÖISÖEARNEDÖONÖANÖACCRUALSÖBASISÖATÖTHEÖAGREEDÖINTERESTÖRATEÖWITHÖTHEÖRESPECTIVEÖ ÙNANCIALÖINSTITUTION Ö Ö Ö Ö Ö Ö Ö Ö
3.11
Donor Grants !LLÖDONORÖGRANTSÖRECEIVEDÖAREÖINITIALLYÖRECOGNIZEDÖASÖDEFERREDÖINCOMEÖATÖFAIRÖVALUEÖANDÖRECORDEDÖASÖLIABILITIESÖINÖTHEÖ'RANTSÖ2ECEIVEDÖINÖ!DVANCEÖ Account for the period.
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4HEÖPORTIONÖOFÖTHEÖGRANTSÖUTILIZEDÖTOÖPURCHASEÖPROPERTYÖANDÖÙXEDÖASSETSÖAREÖTRANSFERREDÖASÖDEFERREDÖINCOMEÖINÖLIABILITIESÖANDÖSUBSEQUENTLYÖTHEÖ PORTIONÖ OFÖ THEÖ DEPRECIATIONÖ EXPENSEÖ OFÖ THEÖ SAMEÖ ASSETSÖ FORÖ THEÖ PERIODÖ ISÖ RECOGNIZEDÖ INÖ THEÖ STATEMENTÖ OFÖ COMPREHENSIVEÖ INCOMEÖ ASÖ GRANTÖ income.
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'RANTSÖUTILIZEDÖTOÖREIMBURSEÖPROGRAMÖRELATEDÖEXPENDITURE ÖTHEÖAMOUNTSÖAREÖRECOGNIZEDÖASÖ'RANTÖ)NCOMEÖFORÖTHEÖPERIOD ÖÖ
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$ONORÖGRANTSÖRECEIVEDÖINÖKIND ÖTHROUGHÖTHEÖPROVISIONÖOFÖGIFTSÖAND ORÖSERVICES ÖAREÖRECORDEDÖATÖFAIRÖVALUEÖ EXCLUDINGÖSITUATIONSÖWHENÖ"2!#Ö,ANKAÖ 'UARANTEE Ö,IMITEDÖMAYÖRECEIVEÖEMERGENCYÖSUPPLIESÖFORÖONWARDÖDISTRIBUTIONÖINÖTHEÖEVENTÖOFÖAÖDISASTERÖWHICHÖAREÖNOTÖRECORDEDÖASÖGRANTS Ö
Ö
'RANTÖINCOMEÖISÖCLASSIÙEDÖASÖTEMPORARILYÖRESTRICTEDÖORÖUNRESTRICTEDÖDEPENDINGÖUPONÖTHEÖEXISTENCEÖOFÖDONOR IMPOSEDÖRESTRICTIONS Ö&ORÖCOMPLETEDÖ ORÖ PHASEDÖ OUTÖ PROJECTSÖ ANDÖ PROGRAMS Ö ANYÖ UNUTILIZEDÖ AMOUNTSÖ AREÖ DEALTÖ WITHÖ INÖ ACCORDANCEÖ WITHÖ CONSEQUENTÖ DONORÖ ANDÖ MANAGEMENTÖ agreements.
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&ORÖONGOINGÖPROJECTSÖANDÖPROGRAMS ÖANYÖEXPENDITURESÖYETÖTOÖBEÖFUNDEDÖBUTÖFORÖWHICHÖFUNDINGÖHASÖBEENÖAGREEDÖATÖTHEÖENDÖOFÖTHEÖREPORTINGÖPERIODÖ ISÖRECOGNIZEDÖASÖ'RANTSÖRECEIVABLE Ö Ö Ö Ö Ö Ö Ö Ö
3.12 Ö
Grant Income 'RANTÖINCOMEÖISÖRECOGNIZEDÖONÖAÖCASHÖBASISÖTOÖTHEÖEXTENTÖTHATÖÖ"2!#Ö,ANKAÖ 'UARANTEE Ö,IMITEDÖFULÙLLSÖTHEÖCONDITIONSÖOFÖTHEÖGRANT Ö4HISÖINCOMEÖ ISÖTRANSFERREDÖFROMÖTHEÖDEFERREDÖGRANTÖRECEIVEDÖFROMÖ$ONORSÖANDÖRECOGNIZEDÖASÖINCOMEÖINÖTHEÖSTATEMENTÖOFÖCOMPREHENSIVEÖINCOME Ö Ö
Ö
!ÖSUBSTANTIALLYÖPORTIONÖOFÖÖ"2!#Ö,ANKAÖ 'UARANTEE Ö,IMITEDlSÖDONORÖGRANTSÖAREÖFORÖTHEÖFUNDINGÖOFÖ.OT FOR PROÙTÖPROJECTSÖANDÖPROGRAMS ÖANDÖFORÖ THESEÖGRANTS ÖINCOMEÖRECOGNIZEDÖISÖMATCHEDÖTOÖTHEÖEXTENTÖOFÖACTUALÖEXPENDITURESÖINCURREDÖONÖPROJECTSÖANDÖPROGRAMSÖFORÖTHEÖPERIOD Ö
Ö
&ORÖDONORÖGRANTSÖRESTRICTEDÖTOÖFUNDINGÖPROCUREMENTÖÙXEDÖASSETS ÖGRANTÖINCOMEÖISÖRECOGNIZEDÖASÖTHEÖAMOUNTÖEQUIVALENTÖTOÖDEPRECIATIONÖEXPENSESÖ CHARGEDÖONÖTHEÖÙXEDÖASSET Ö Ö Ö Ö Ö Ö Ö Ö
Ö
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+N@MRØ@MCØ!NQQNVHMFRØ Ø Ø Ø Ø Ø Ø Ø ,OANSÖANDÖ"ORROWINGSÖAREÖRECOGNIZEDÖASÖTHEÖPROCEEDSÖAREÖRECEIVED ÖNETÖOFÖTRANSACTIONÖCOSTSÖINCURRED Ö4HEÖCARRYINGÖVALUESÖOFÖÖTHESEÖINSTRUMENTSÖ approximate their fair values due to their short term maturity.
Ö
!LLÖBORROWINGÖCOSTSÖAREÖRECOGNIZEDÖASÖANÖEXPENSEÖINÖTHEÖSTATEMENTÖOFÖINCOMEÖANDÖEXPENDITUREÖINÖTHEÖPERIODÖINÖWHICHÖTHEYÖAREÖINCURRED Ö
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$LOKNXDDØ!DMDÚSRØØ Ø Ø Ø Ø Ø Ø %MPLOYEEÖENTITLEMENTSÖTOÖANNUALÖLEAVEÖAREÖRECOGNIZEDÖWHENÖTHEYÖACCRUEÖTOÖEMPLOYEES Ö!ÖPROVISIONÖISÖMADEÖFORÖTHEÖESTIMATEDÖLIABILITYÖFORÖANNUALÖLEAVEÖ ASÖAÖRESULTÖOFÖSERVICESÖRENDEREDÖBYÖEMPLOYEESÖUPÖTOÖTHEÖBALANCEÖSHEETÖDATE Ö4HEÖCOMPANYÖDOESÖNOTÖOPERATEÖANYÖRETIREMENTÖBENEÙTÖFUND Ö(OWEVERÖ SEVERANCEÖPAYÖISÖPROVIDEDÖFORÖINÖACCORDANCEÖWITHÖTHEÖ3RIÖ,ANKANÖSTATUTE Ö4HEÖCOMPANYÖALSOÖOPERATESÖANÖEMPLOYEEÖBONUSÖINCENTIVEÖSCHEME Ö4HEÖ PROVISIONÖFORÖEMPLOYEEÖBONUSÖINCENTIVEÖISÖBASEDÖONÖAÖPREDETERMINEDÖCOMPANYÖPOLICYÖANDÖISÖRECOGNIZEDÖINÖOTHERÖACCRUALS Ö4HEÖACCRUALÖFORÖEMPLOYEEÖ BONUSÖINCENTIVEÖISÖEXPECTEDÖTOÖBEÖSETTLEDÖWITHINÖ ÖMONTHS Ö Ö Ö Ö Ö Ö Ö Ö
ØØ Ö
1DK@SDCØ/@QSXØ3Q@MR@BSHNMRØ Ø Ø Ø Ø Ø Ø Ø 2ELATEDÖPARTIESÖCOMPRISEÖDIRECTORS ÖSUBSIDIARIESÖOFÖ"2!#Ö)NTERNATIONALÖANDÖKEYÖMANAGEMENTÖPERSONNELÖOFÖTHEÖCOMPANYÖANDÖCOMPANIESÖWITHÖCOMMONÖ OWNERSHIPÖAND ORÖDIRECTORS ÖÖÖ Ö Ö Ö Ö Ö Ö Ö
3.16
Comparatives 7HEREÖNECESSARYÖCOMPARATIVEÖÙGURESÖHAVEÖBEENÖADJUSTEDÖTOÖCONFORMÖTOÖCHANGESÖINÖPRESENTATIONÖINÖTHEÖCURRENTÖYEAR Ö
Ö
Ö
Ö
Ö
Ö
4.00 SERVICE CHARGE ON LOANS 'ROUPÖ,OANSÖ Ö-ICROÙNANCE Ö
5.00 INTEREST EXPENSE Lender 1. SMAGL 2. People’s Bank 3. Etimos 4. Deutsche Bank 5. Interest on VO Members Savings Total
6.00 MEMBERSHIP FEES AND OTHER CHARGES Membership fee Total
7.00 Other Income )NTERESTÖONÖÙXEDÖDEPOSITSÖ Other income Total
2011
2010
2011
2010
LKR
LKR
USD
USD
ÖÖ ÖÖ 373,121,918
Ö ÖÖ 377,367,954
Ö ÖÖ 3,301,672
13,993,916 126,717 19,269,806 12,597,819 45,988,258
10,719,660 704,359 13,174,604 164,397 12,127,550 36,890,570
123,829 1,121 170,514 111,475 406,940
95,814 6,296 117,757 1,469 108,398 329,733
8,415,743 8,415,743
8,815,985 8,815,985
74,469 74,469
78,798 78,798
Ö ÖÖ 22,835,425 28,275,964
Ö ÖÖ 62,098 86,130
Ö Ö 204,106 252,734
Ö Ö ÖÖ 7,017,706 9,733,518
Ö Ö 3,388,334
The exchange gains arise from translation of foreign currency transactions and revaluations of foreign currency denominated assets and liabilities TOÖ,+2 Ö&INANCIALÖASSETSÖANDÖLIABILITIESÖDENOMINATEDÖINÖFOREIGNÖCURRENCIESÖAREÖTRANSLATEDÖTOÖ,+2ÖATÖRATEÖRULINGÖATÖBALANCEÖSHEETÖDATE Ö Ö
8.00 IMPAIRMENT LOSSES ON LOANS AND ADVANCES Provision on Impairment losses Total
9.00 STAFF COSTS 3ALARIESÖ Ö"ONUSÖ Total
10,881,417 10,881,417
10,669,012 10,669,012
ÖÖ ÖÖ 154,028,904
ÖÖ 133,370,680
96,287 96,287
Ö ÖÖ 1,362,967
95,361 95,361
Ö Ö 1,192,119
2011
2010
2011
2010
LKR
LKR
USD
USD
10.00 OTHER OPERATING EXPENSES Staff training and development Travel and transportation Maintenance and general expenses Ö 0RINTINGÖANDÖOFÙCEÖSTATIONERYÖ Occupancy expenses (10.10) Ö 'ROUPÖMEMBERÖDEATHÖBENEÙTSÖ Audit fees Program supplies Ö "ADÖDEBTÖWRITTENÖOFFÖ HO logistics and management expenses Total
1,931,676 14,592,791 29,722,209 Ö Ö ÖÖ 20,086,968 Ö Ö ÖÖ 403,200 184,160 Ö Ö ÖÖÖÖ 23,162,086 100,754,040
3,064,981 20,137,962 16,725,128 Ö ÖÖ 15,592,783 Ö ÖÖ 369,600 425,050 Ö ÖÖ 49,605,026 125,592,339
17,093 129,128 263,005 Ö ÖÖ 177,745 Ö ÖÖ 3,568 1,630 Ö ÖÖÖÖ 204,956 891,550
Ø Ø.BBTO@MBXØDWODMRDR Rent 5TILITIESÖ Total
14,663,560 Ö Ö ÖÖ 20,086,968
10,997,198 Ö ÖÖ 15,592,783
129,755 Ö ÖÖ 177,745
98,295 Ö Ö 139,371
11.00 TAXATION @ ØØ(MBNLDØS@WØDWODMRD Corporation tax –charge for the year 3@WØ "QDCHS ØDWODMRDØ
22,921,633 Ø Ø ØØ
21,501,399 Ø ØØ
202,828 Ø ØØ
195,237 Ø Ø
21,501,399 22,921,633 (21,627,825) Ø Ø ØØ
7,103,122 21,501,399 (7,103,122) Ø ØØ
190,261 202,828 (191,380) Ø ØØ
64,498 195,237 (64,498) Ø Ø
Ö
Ø
A Ø3@WØO@X@AKD Balance b/f Charge for the period Paid during the year 3@WØO@X@AKDØ
27,395 179,996 149,492 Ö Ö 139,371 Ö Ö 3,304 3,799 Ö 443,377 1,122,563
11.01ÖÖ4HEÖTAXÖCHARGEÖONÖTHEÖCOMPANYlSÖPROÙTÖBEFOREÖTAXÖDIFFERSÖFROMÖTHEÖTHEORETICALÖAMOUNTÖUSINGÖTHEÖBASICÖTAXÖRATEÖASÖFOLLOWS ÖÖ Ö Ö
/PERATINGÖPROÙT SURPLUSÖANDÖOTHERÖINCOMEÖBEFOREÖTAXATIONÖ 4AXÖCALCULATEDÖATÖ Ö Tax effect of non deductible expense and non taxable income 3@WØBG@QFDØENQØSGDØXD@QØ
Ö Ö ÖÖ Ö Ö ÖÖ 3,020,717 Ø Ø ØØ
Ö ÖÖ Ö ÖÖ 772,332 Ø ØØ
Ö ÖÖ Ö ÖÖ 26,730 Ø ØØ
Ö Ö Ö Ö 7,013 Ø Ø
12.00 CASH IN HAND AND AT BANK Cash in hand Cash at Bank Standard Chartered Bank Hatton National Bank PLC Commercial Bank of Ceylon PLC Peoples Bank Bank of Ceylon Seylan Bank PLC Sampath Bank PLC "@RGĂ˜HMĂ˜G@MCĂ˜@MCĂ˜@SĂ˜A@MJĂ˜
13.00 FIXED DEPOSITS AT AMORTISED COST 0EOPLESĂ–"ANKĂ– Total
Ă˜
14.00 LOANS AND ADVANCES TO CUSTOMERS Group loans ,OANĂ–WRITEĂ–OFFĂ– Interest receivable Impairment loss on loan advance
Ă–
2010
2011
2010
LKR
LKR
USD
USD
205,996
Ă˜
Ă–
3GDĂ˜L@STQHSXĂ˜NEĂ˜SGDĂ˜ĂšWDCĂ˜CDONRHSRĂ˜HRĂ˜@M@KXYDCĂ˜@RĂ˜ENKKNVR Ă˜ Within 3 months Total
Ă–
2011
Ă–
15,644,728 886,058 276,955 7,971,287 505,631 55,888 32,769 25,373,316 Ă˜ Ă˜Ă˜
2,221,782 133,774,655 6,995,737 6,219,451 18,389,325 3,612,027 3,837,541 892,457 173,721,193 Ă˜ Ă˜Ă˜
1,823 138,437 7,841 2,451 70,536 4,474 495 290 224,523 Ă˜ Ă˜Ă˜
20,174 1,214,698 63,523 56,474 166,978 32,798 34,846 8,104 1,577,419 Ă˜ Ă˜
Ă– Ă–Ă–Ă–Ă– -
Ă– Ă–Ă– 50,000,000
Ă– Ă–Ă–Ă–Ă– -
Ă– Ă– 454,009
-
50,000,000 50,000,000
-
454,009 454,009
1,296,508,615 Ă– Ă–Ă–Ă–Ă– 2,705,131 (37,855,484) 1,261,358,262
1,024,317,480 Ă– Ă– 442,198 (26,974,067) 986,872,622
11,472,512 Ă– Ă–Ă–Ă–Ă– 23,937 (334,975) 11,161,475
9,300,985 Ă– 4,015 (244,929) 8,960,979
!DVANCESĂ–TOĂ–CUSTOMERSĂ–AREĂ–CARRIEDĂ–ATĂ–AMORTIZEDĂ–COST Ă–Ă–)TĂ–ISĂ–ESTIMATEDĂ–THATĂ–THEĂ–FAIRĂ–VALUESĂ–OFĂ–ADVANCESĂ–TOĂ–CUSTOMERSĂ–AREĂ–APPROXIMATELYĂ–THEĂ–SAMEĂ– as the carrying values. All advances to customers are unsecured.
14.01Ă–Ă–4HEĂ–MOVEMENTĂ–ONĂ–THEĂ–LOANĂ–ACCOUNTSĂ–ISĂ–ANALYZEDĂ–ASĂ–SHOWNĂ–BELOW Ă– Ă– At 1 January 1,013,404,491 Loans disbursed 2,537,819,000 Ă– ,ESS Ă–,OANSĂ–REPAYMENTSĂ– Ă– Ă– Ă– Gross advances to customers 1,296,508,615 Ă– ,ESS Ă–7RITEĂ–OFFĂ– Ă– Ă– Ă–Ă–Ă–Ă– Interest receivable 2,705,131 Impairment loss on loans advance (Note -14.02) (37,855,484) Net advances to customers 1,261,358,262
Ă– 807,087,001 1,855,782,000 Ă– Ă– 1,024,317,480 Ă– Ă– 442,198 (26,974,067) 986,872,622
Ă– Ă– 8,967,388 7,328,494 22,456,588 16,850,831 Ă– Ă– Ă– 11,472,512 9,300,985 Ă– Ă–Ă–Ă–Ă– Ă– 23,937 4,015 (334,975) (244,929) 11,161,475 8,960,979
2011
2010
2011
2010
LKR
LKR
USD
USD
14.02Ă–Ă–4HEĂ–MOVEMENTĂ–ONĂ–THEĂ–IMPAIRMENTĂ–ONĂ–LOANSĂ–ACCOUNTĂ–ISĂ–Ă–SHOWNĂ–BELOW Ă–
Ă– Ă–
At 1 January Charge for the year ,OANĂ–WRITE OFFĂ– )NTERESTĂ–RECEIVABLEĂ–WRITEĂ–OFFĂ– At 31 December
Ă–
26,974,067 10,881,417 Ă– Ă– Ă–Ă–Ă–Ă– Ă– Ă– Ă–Ă–Ă–Ă– 37,855,484
Ă– 16,647,303 21,582,001 Ă– Ă– Ă– Ă– 26,974,067
Ă–
Ă–
238,687 96,287 Ă– Ă–Ă–Ă–Ă– Ă– Ă–Ă–Ă–Ă– 334,975
151,160 195,968 Ă– Ă– 244,929
Provision rate
Provision required Local
14.03 Analysis of Impairment of loans Principal Outstanding Local
Ă– Ă– Ă–
For general provision (4.40) .OĂ–PASTĂ–DUEĂ–
Ă–
Ă–
Ă– Ă–Ă–
Ă–
Ă– Ă–
%NQĂ˜RODBHĂšBĂ˜OQNUHRHNMĂ˜ Ă–DAYSĂ– Ă–DAYSĂ– Ă–DAYSĂ– Ă–DAYSĂ–ANDĂ–ABOVEĂ–PASTĂ–DUEĂ–
Ă– Ă– Ă– Ă–
Ă– Ă– Ă– Ă–
Ă– Ă–Ă– Ă– Ă–Ă– Ă– Ă–Ă– Ă– Ă–Ă– 20,202,708 1,296,508,615
Ă– Ă– Ă– Ă–
Ă– Ă– Ă– Ă– Ă– Ă– Ă– Ă– 12,329,366 37,855,484
15.00 OTHER ASSETS Advance to third party Related party receivables Advances to staff Ă– &IELDĂ–RECEIVABLEĂ– Total
Ă–
3,941,619 22,450 Ă– Ă–Ă–Ă–Ă– 3,964,069
3,144,718 5,946,455 Ă– Ă–Ă– 10,543,667
34,878 199 Ă– Ă–Ă–Ă–Ă– 35,077
28,555 53,995 Ă– Ă– 95,738
At 1 January 2010 Charge for the year SØ Ø#DBDLADQØ Ø Charge for the year SØ Ø#DBDLADQØ Ø
SØ Ø#DBDLADQØ Ø
SØ Ø#DBDLADQØ Ø
Ø
Ø
Depreciation
At 1 January 2010 Additions SØ Ø#DBDLADQØ Ø Additions !DJUSTÖ Ö$ISPOSALÖ Ö4RANSFERREDÖ SØ Ø#DBDLADQØ Ø
Cost
Ö Ö
PROPERTY AND EQUIPMENT
Ø
Ö Ø
Ø
Ö Ö
16.00
LKR
LKR
Ø ØØ
Ø ØØ
Ø ØØØØ Ø ØØØØ
Ø ØØ
Ø ØØ
2,163,654 1,035,110 Ø ØØ 1,324,704 Ø ØØ
15,000,000 9,437,263 1,827,639 Ø ØØ ØØ ØØ 2,536,437 Ö ÖÖÖÖ Ö ÖÖ Ø ØØ Ø ØØ
&URNITUREÖÖ Ö&IXTURESÖ
,ANDÖ Ö
Ø ØØ
Ø ØØ
2,392,779 1,399,682 Ø ØØ 1,913,825 Ø ØØ
8,297,437 2,067,558 Ø ØØ 3,559,092 Ö Ö Ø ØØ
LKR
%QUIPMENTSÖ Ö
Ø ØØ
Ø ØØ
3,437,699 943,217 Ø ØØ 2,272,600 Ø ØØ
3,437,700 11,363,000 Ø ØØØØ Ö ÖÖÖÖ Ø ØØ
LKR
6EHICLEÖ Ö
Ø ØØ
Ø ØØ
1,137,054 400,800 Ø ØØ 447,021 Ø ØØ
2,237,003 48,790 Ø ØØØ 315,603 Ö ÖÖ Ø ØØØ
LKR
"ICYCLEÖ Ö
Ø ØØ
Ø ØØ
3,888,457 2,175,892 Ø ØØ 2,716,738 Ø ØØ
10,775,215 1,140,118 Ø ØØ 3,815,350 Ö ÖÖ Ø ØØØØØ
LKR
-OTORÖ#YCLESÖ Ö
Ø ØØ
Ø ØØ
13,019,643 5,954,701 Ø ØØ 8,674,888 Ø ØØ
49,184,618 16,447,105 Ø ØØ 10,226,482 Ö ÖÖ Ø ØØ
LKR
4OTALÖ Ö
Ø
Ø Ø
118,221 54,070 Ø Ø 76,762 Ø Ø
446,605 149,343 Ø Ø 79,894 Ö Ö Ø Ø
USD
4OTAL Ö Ö
17.00
Ö
LOAN SECURITY FUND Opening balance Received during the year 0AIDÖOFFÖ !DJUSTEDÖDURINGÖTHEÖYEARÖ Closing balance
Ö
2011
2010
2011
2010
LKR
LKR
USD
USD
68,328,588 253,781,900 Ö Ö 254,085,289
92,789,100 Ö Ö 68,328,588
604,624 2,245,659 Ö Ö 2,248,343
842,542 Ö 620,436
4HEÖ,OANÖ3ECURITYÖ&UNDÖACTSÖASÖCOLLATERALÖFORÖTHEÖCUSTOMERSlÖLOANÖOBLIGATIONSÖTOÖ"2!#Ö,ANKAÖ 'UARANTEE Ö,IMITED Ö4HISÖISÖCOMPUTEDÖASÖ ÖOFÖ THEÖCUSTOMERSlÖAPPROVEDÖLOAN Ö)NÖTHEÖEVENTÖOFÖANYÖDEFAULT ÖTHEÖCLIENTSÖFORFEITÖALLÖORÖPARTÖOFÖTHEÖ,OANÖ3ECURITYÖ&UNDÖTOÖTHEÖEXTENTÖOFÖTHEÖAMOUNTÖATÖ risk. 18.00
RELATED PARTY PAYABLE Payable to Stitching BRAC International Payable to BRAC Bangladesh
23,162,086 175,745,302 198,907,388
167,478,290 167,478,290
204,956 1,555,131 1,760,087
1,520,733 1,520,733
2ELATEDÖPARTYÖPAYABLESÖRELATEÖTOÖAMOUNTSÖOWINGÖTOÖ"2!#Ö!SSOCIATESÖFORÖTHEÖSETTLEMENTÖOFÖSTAFFÖCOSTSÖANDÖOPERATINGÖEXPENDITURESÖONÖBEHALFÖOFÖ BRAC Lanka (Guarantee) Limited, HO logistics and other fees payable.
19.00 Ö
Ø
!Ø Ö Ö Ö Ö Ö Ö Ö Ö Ö Ö Ö
"Ø Ö Ö Ö
BORROWINGS SMAGL +)6!Ö Etimos Peoples Bank Total
Ö
!NQQNVHMFR Opening balance Obtained during the year Less - Loan Repayment during the year
19 . B 19 . C
!NQQNVHMFRØ .AS@HMDCØCTQHMFØSGDØXD@Q #ONSORZIOÖ%TIMOSÖS C Ö 3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖ 3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖ 3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖ 3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖ +)6!Ö,TDÖ 3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖ 3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖ 3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖ 3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖ 3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖ 3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖ
19.1 19.2 19.3 19.4 19.5 19.6 19.7 19.8 19.9 19.10 19.11 19.12
+N@MØ1DO@XLDMSØCTQHMFØØSGDØXD@QØ $EUTSCHEÖ"ANKÖ!MERICASÖ&OUNDATIONÖ 3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖ People’s Bank Sri Lanka #ONSORZIOÖ%TIMOSÖS C Ö +)6!Ö,TDÖ
Ö Ö Ö Ö
185,312,483 Ö ÖÖÖÖ 108,865,143 271,161 294,448,787
105,029,168 Ö Ö 182,554,292 4,039,905 292,248,213
1,639,788 Ö ÖÖÖÖ 963,323 2,399 2,605,511
953,684 Ö Ö 1,657,625 36,683 2,653,666
292,248,213 150,000,000 (147,799,426) 294,448,787
257,858,196 171,837,539 (137,447,522) 292,248,213
2,653,666 1,327,316 (1,375,471) 2,605,511
2,341,398 1,560,315 (1,248,048) 2,653,666
20,000,000 20,000,000 30,000,000 30,000,000 20,000,000 30,000,000 150,000,000
99,712,691 8,000,000 8,500,000 25,000,000 30,000,000 624,848 171,837,539
176,975 176,975 265,463 265,463 176,975 265,463 1,327,316
905,409 72,641 77,182 227,004 272,405 5,674 1,560,315
Ö ÖÖÖÖ Ö ÖÖ 73,689,149 Ö ÖÖ Ö ÖÖ 147,799,426
Ö ÖÖ Ö ÖÖ 8,333,316 Ö ÖÖ Ö ÖÖÖÖ 137,447,522
Ö ÖÖÖÖ Ö ÖÖ 684,111 Ö ÖÖ Ö ÖÖ 1,375,471
Ö Ö Ö Ö 75,668 Ö Ö ÖÖÖ 1,248,048
Ø ØØ
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Ø ØØ
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Ø ØØ
2SQNLLDØ,HBQNØ%HM@MBDØ RH@Ø &T@Q@MSDD Ø+SC Ø Ø Ø Ø Ø Ø ,OANSÖFROMÖ3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖOFÖ,+2Ö ÖWASÖOBTAINEDÖTOÖDISBURSEÖAMONGÖ6/ÖMEMBERSÖASÖLOANS ÖANDÖ BEARSÖINTERESTÖATÖ Ö ÖPERÖANNUMÖONÖREDUCINGÖBALANCE Ö4HEÖLOANÖISÖTOÖBEÖPAIDÖASÖMONTHLYÖINSTALLMENTS Ö Ö Ö Ö Ö
Ø ØØ
2SQNLLDØ,HBQNØ%HM@MBDØ RH@Ø &T@Q@MSDD Ø+SC Ø Ø Ø Ø Ø Ø ,OANSÖFROMÖ3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖOFÖÖ,+2Ö ÖWASÖOBTAINEDÖTOÖDISBURSEÖAMONGÖ6/ÖMEMBERSÖASÖLOANS ÖANDÖ BEARSÖINTERESTÖATÖ Ö ÖPERÖANNUMÖONÖREDUCINGÖBALANCE Ö4HEÖLOANÖISÖTOÖBEÖPAIDÖASÖMONTHLYÖINSTALLMENTS Ö Ö Ö Ö Ö
Ø ØØ
2SQNLLDØ,HBQNØ%HM@MBDØ RH@Ø &T@Q@MSDD Ø+SC Ø Ø Ø Ø Ø Ø ,OANSÖFROMÖ3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖOFÖÖ,+2Ö ÖWASÖOBTAINEDÖTOÖDISBURSEÖAMONGÖ6/ÖMEMBERSÖASÖLOANS ÖANDÖ BEARSÖINTERESTÖATÖ Ö ÖPERÖANNUMÖONÖREDUCINGÖBALANCE Ö4HEÖLOANÖISÖTOÖBEÖPAIDÖASÖMONTHLYÖINSTALLMENTS Ö Ö Ö Ö Ö
Ø ØØ
*(5 Ø+SC Ø Ø Ø Ø Ø ,OANSÖFROMÖ+)6!Ö,TDÖOFÖ,+2Ö ÖWASÖOBTAINEDÖTOÖDISBURSEÖAMONGÖ6/ÖMEMBERSÖASÖLOANS ÖREPAYMENTÖWILLÖMADEÖENDÖOFÖTHEÖPROJECT Ö
Ø ØØ
2SQNLLDØ,HBQNØ%HM@MBDØ RH@Ø &T@Q@MSDD Ø+SC Ø Ø Ø Ø Ø Ø ,OANSÖFROMÖ3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖOFÖÖ,+2Ö ÖWASÖOBTAINEDÖTOÖDISBURSEÖAMONGÖ6/ÖMEMBERSÖASÖLOANS ÖANDÖ BEARSÖINTERESTÖATÖ Ö ÖPERÖANNUMÖONÖREDUCINGÖBALANCE Ö4HEÖLOANÖISÖTOÖBEÖPAIDÖASÖMONTHLYÖINSTALLMENTS Ö Ö Ö Ö Ö
Ø ØØ
2SQNLLDØ,HBQNØ%HM@MBDØ RH@Ø &T@Q@MSDD Ø+SC Ø Ø Ø Ø Ø Ø ,OANSÖFROMÖ3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖOFÖÖ,+2Ö ÖWASÖOBTAINEDÖTOÖDISBURSEÖAMONGÖ6/ÖMEMBERSÖASÖLOANS ÖANDÖ BEARSÖINTERESTÖATÖ Ö ÖPERÖANNUMÖONÖREDUCINGÖBALANCE Ö4HEÖLOANÖISÖTOÖBEÖPAIDÖASÖMONTHLYÖINSTALLMENTS Ö Ö Ö Ö Ö
Ø ØØ
2SQNLLDØ,HBQNØ%HM@MBDØ RH@Ø &T@Q@MSDD Ø+SC Ø Ø Ø Ø Ø Ø ,OANSÖFROMÖ3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖOFÖÖ,+2Ö ÖWASÖOBTAINEDÖTOÖDISBURSEÖAMONGÖ6/ÖMEMBERSÖASÖLOANS ÖANDÖ BEARSÖINTERESTÖATÖ Ö ÖPERÖANNUMÖONÖREDUCINGÖBALANCE Ö4HEÖLOANÖISÖTOÖBEÖPAIDÖASÖMONTHLYÖINSTALLMENTS Ö Ö Ö Ö Ö
Ø ØØ
2SQNLLDØ,HBQNØ%HM@MBDØ RH@Ø &T@Q@MSDD Ø+SC Ø Ø Ø Ø Ø Ø ,OANSÖFROMÖ3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖOFÖ,+2Ö ÖWASÖOBTAINEDÖTOÖDISBURSEÖAMONGÖ6/ÖMEMBERSÖASÖLOANS ÖANDÖ BEARSÖINTERESTÖATÖ ÖPERÖANNUMÖONÖREDUCINGÖBALANCE Ö4HEÖLOANÖISÖTOÖBEÖPAIDÖASÖMONTHLYÖINSTALLMENTS Ö Ö Ö Ö Ö
Ø ØØ
2SQNLLDØ,HBQNØ%HM@MBDØ RH@Ø &T@Q@MSDD Ø+SC Ø Ø Ø Ø Ø Ø ,OANSÖFROMÖ3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖOFÖÖ,+2Ö ÖWASÖOBTAINEDÖTOÖDISBURSEÖAMONGÖ6/ÖMEMBERSÖASÖLOANS ÖANDÖ BEARSÖINTERESTÖATÖ ÖPERÖANNUMÖONÖREDUCINGÖBALANCE Ö4HEÖLOANÖISÖTOÖBEÖPAIDÖASÖMONTHLYÖINSTALLMENTS Ö Ö Ö Ö Ö
Ø ØØ
2SQNLLDØ,HBQNØ%HM@MBDØ RH@Ø &T@Q@MSDD Ø+SC Ø Ø Ø Ø Ø Ø ,OANSÖFROMÖ3TROMMEÖ-ICROÖ&INANCEÖ!SIAÖ 'UARANTEE Ö,TDÖOFÖÖ,+2Ö ÖWASÖOBTAINEDÖTOÖDISBURSEÖAMONGÖ6/ÖMEMBERSÖASÖLOANS ÖANDÖ BEARSÖINTERESTÖATÖ ÖPERÖANNUMÖONÖREDUCINGÖBALANCE Ö4HEÖLOANÖISÖTOÖBEÖPAIDÖASÖMONTHLYÖINSTALLMENTS Ö Ö Ö Ö Ö
Ø Ö Ö
20.00
Ö
5.Ø,DLADQRØ2@UHMFØ#DONRHSRØØ Opening balance !DD Ö$EPOSITSÖDURINGÖTHEÖYEARÖ
Ö
Ö
,ESS Ö2EPAYMENTÖDURINGÖTHEÖYEARÖ
Ö
21.00
DONOR FUNDS $ONORÖFUNDSÖINVESTMENTÖINÖÙXEDÖASSETSÖ .OTE Ö Total
Ö
Ø ØØ
Ø
22.00 Ö
23.00 Ö
2010
2011
2010
LKR
LKR
USD
USD
OTHER LIABILITIES Accrual for expenses VO Members Saving Deposits (20.10) Interest Payable Total
Ø ØØ
2011
Ø
#NMNQØETMCRØHMUDRSLDMSØHMØÚWDCØ@RRDSR Ø#DEDQQDCØHMBNLDØØ Opening balance Transferred from donor funds received in advance Depreciation charged during the year "KNRHMFØA@K@MBDØ Ø
13,376,410 10,992,443 372,773 24,741,626
13,494,182 208,064,586 221,558,768
118,365 97,270 3,299 218,933
122,530 1,889,263 2,011,793
Ø 208,064,586 Ö ÖÖÖÖ 208,064,586 Ö Ö 10,992,443
Ø 179,591,326 Ö ÖÖ 242,664,832 Ö Ö 208,064,586
Ø 1,889,263 Ö ÖÖÖÖ 1,889,263 Ö Ö 97,270
Ø 1,630,721 Ö Ö 2,203,440 Ö 1,889,263
Ö ÖÖ 4,864,349
Ö ÖÖ 4,995,377
Ö ÖÖ 43,044
Ö Ö 45,359
Ø 4,995,377 (131,028) Ø ØØ
Ø 5,126,405 (131,028) Ø ØØ
Ø 44,203 (1,159) Ø ØØ
Ø Ø 46,549 (1,190) Ø Ø
BRAC CONTRIBUTION 4HEÖFUNDÖAMOUNTINGÖTOÖ,+2Ö ÖRELATESÖTOÖVARIOUSÖCONTRIBUTIONSÖMADEÖTOWARDSÖTHEÖESTABLISHMENTÖOFÖ"2!#Ö,ANKAÖ 'UARANTEE Ö,IMITEDÖ
EVENTS AFTER THE BALANCE SHEET DATE !LLÖMATERIALÖEVENTSÖOCCURRINGÖAFTERÖTHEÖBALANCEÖSHEETÖDATEÖAREÖCONSIDEREDÖANDÖAPPROPRIATEÖADJUSTMENTSÖORÖÖDISCLOSURESÖHAVEÖBEENÖMADEÖINÖTHEÖ ÙNANCIALÖSTATEMENTS Ö Ö Ö Ö Ö Ö Ö
24.00
Ö
Ö
CASHFLOW FROM OPERATING ACTIVITIES
#ASHÖÚOWÖFROMÖOPERATINGÖACTIVITIESÖ $WBDRRØNEØHMBNLDØNUDQØDWODMCHSTQD Depreciation &INANCIALÖ6!4Ö Loan loss provision "@RGØÛNVØADENQDØBG@MFDRØHMØVNQJHMFØ capital
"G@MFDRØHMØVNQJHMFØB@OHS@K Decrease/(increase) of other assets Increase/(decrease) of related parties payable Increase/(decrease) of other liabilities (Increase)/decrease interest receivable Net cash from operations
25.00
2011
2010
2011
LKR
LKR
USD
Ö
Ö
Ö
71,074,700 8,674,888 Ö Ö 10,881,417 Ø ØØ
Ø
6,579,598 31,429,098 (196,817,142) (2,262,933) (161,071,379) (74,309,919)
Ö 102,113,629 5,954,701 Ö ÖÖÖÖ 21,582,001 Ø ØØ
(105,317) 68,793,759 (144,456,213) 24,835,974 (50,931,797) 78,718,534
2010 USD Ö
628,924 76,762 Ö Ö 96,287 Ø ØØ
58,221 278,109 (1,782,304) (20,024) (1,465,998) (698,266)
Ö
Ö
917,051 53,477 Ö ÖÖÖ 193,821 Ø Ø
(946) 617,816 (1,297,317) 223,044 (457,403) 706,947
CONTINGENT LIABILITIES #ONTINGENTÖ,IABILITIESÖAREÖNOTÖRECOGNIZEDÖBUTÖDISCLOSEDÖINÖTHEÖÙNANCIALÖSTATEMENTSÖUNLESSÖTHEÖPOSSIBILITYÖOFÖANÖOUTÚOWÖOFÖRESOURCESÖEMBODYINGÖ ECONOMICÖBENEÙTSÖISÖRELIABLYÖESTIMATED Ö Ö Ö Ö Ö Ö Ö
#ONTINGENTÖASSETSÖAREÖNOTÖRECOGNIZEDÖINÖTHEÖÙNANCIALÖSTATEMENTSÖASÖTHISÖMAYÖRESULTSÖINÖTHEÖRECOGNITIONÖOFÖINCOMEÖWHICHÖMAYÖNEVERÖBEÖREALIZED ÖÖ
Photo Credit: Rest of the Photos : BRAC/Shehzad Noorani
BRAC BRAC Centre 75 Mohakhali Dhaka 1212 Bangladesh
T : +88 02 9881265 F : +88 02 8823542 E : info@brac.net W : www.brac.net
BRAC International
BRAC in Sri Lanka
Teleportboulevard 140 1043 EJ Amsterdam Netherlands
197/1, Templers Road, Mount Lavinia, Sri Lanka. Tel: +94-11-4853063 Fax: +94-11-2727503
www.brac.net