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ANNUAL REPORT
2 Annual Report 2015
CONTENTS
CHAIRPERSON’S FOREWORD
01 03 04 06 08 10 16 18 22 24 28 30 32 34 36 38 44 48 50 52 54
Our Vision, Mission and Values Chairperson’s Foreword Executive Director’s Statement
56 Investments 58 Social Enterprises 62 Social Innovation Lab
BRAC five-year strategic plan Headlines from the Year Research from 2015
Targeting the Ultra Poor Microfinance Skills Development Disaster, Environment and Climate Change Gender Justice and Diversity Community Empowerment Advocacy for Social Change Urban Development Human Rights and Legal Aid Services
64 Governance, Management and Capacity-building
68 71 72 74
BRAC Management BRAC Organogram BRAC Governing Body Stichting BRAC International Governing Body
78 Development Partners 80 Financials 84 BRAC Across the World
The year 2015 has seen the culmination of the millennium development goals set by the United Nations in 2000. Bangladesh has notched up significant achievements against the eight goals, especially in the areas of health and poverty reduction. There has been a substantial drop in both child and maternal mortality, and poverty has been halved. Also noteworthy is the rise in life expectancy; Bangladeshis can now expect to live to the age of 70. Progress in education has been mixed. Getting 97 per cent of children into school is a commendable achievement, but this means 3 per cent of primary-school-aged children are still not receiving an elementary education. In addition, around 20 per cent of those who enroll drop out before completing class 5. Equally worrisome is the lack of improvement in the quality of education. A skilled workforce is critically important for Bangladesh’s future development; without it, the country will not be able to compete in the globalised economy. Providing young people with a quality education and, where needed, vocational training, is a top priority. World leaders made an unwavering commitment in September to achieve 17 transformative sustainable development goals (SDGs) by 2030. The first of these goals is to ‘end poverty in all its forms everywhere’. This is the first time in human history that the global community has made an unequivocal pledge to eliminate this scourge. I am pleased to report that BRAC’s work is already well-aligned with the SDGs. The 2030 Agenda for Sustainable Development provided the framework for the drafting of our new 20162020 strategy and will continue to shape our programmatic priorities over the next 15 years.
Health, Nutrition and Population Education Integrated Development Agriculture and Food Security Water, Sanitation and Hygiene Migration
Sir Fazle Hasan Abed, KCMG Founder and Chairperson
Annual Report 2015 3
EXECUTIVE DIRECTOR’S STATEMENT
I see Bangladesh at a crossroads, in a rapid transition that is gaining pace every day - from one economy to another, one society to another, one culture to another and one generation to another. We are on an exciting journey. Bangladesh was classified as a lower middle-income country in 2015 and we are on track to become a middle-income country. There is a definite dynamism in the air. Economic activity is happening at every level, and opportunities are relatively well distributed because of the collective efforts of the government and development partners at the grassroots level. Rural villages feel like economic fairs; farmers are harvesting crops, sowing new seeds, markets are expanding, people’s choices are changing and, except for those living in ultra poverty, general incomes are rising. Everybody wants to educate their children, drink safe water and live in better quality houses, and people are increasingly engaging directly with providers to access better quality basic services.
1.3 million people were lifted out of extreme poverty. 25,000 neonatal deaths were averted, 35,000 child deaths were averted and 6.8M newborns were breastfed within one hour of birth. 16.7M eligible couples used modern contraceptive methods. 16.4M people gained access to hygienic toilets and 600,000 people gained access to safe drinking water. 2M students finished pre-primary courses and 860,000 graduated from primary school. 9000 adolescent clubs were set up and welcomed 225,000 new members. USD8.4 billion in loans was disbursed. 27,000 court cases were filed and 22,000 cases were resolved. Grassroots community action groups initiated 498,000 new development projects and took collective action against 12,000 incidents of violence and social injustice. 89,000 group members secured leadership positions in local power structures.
Access to technology is catalysing massive changes. Initiatives such as bKash are bringing a variety of services to the doorsteps of millions of people. The country is experiencing a demographic dividend, leading to an increase in the potential workforce. We are seeing a steep upward trend in urban migration, challenging us to increase our attention on urban poverty. In parallel, global foreign aid architecture is changing, resulting in a significant reduction of aid flowing into countries such as Bangladesh. Bi-lateral donorcountries are increasingly focusing on conflict-affected areas and many are moving towards trade as opposed to aid. This is a positive development for our country, on our journey towards self-reliance. 2015 was a transformative year for BRAC, with three critical drivers of change. The global sustainable development goals (SDGs) were introduced, which expanded on the millennium development goals (MDGs). We finished the first phase and planned the second phase of our Strategic Partnership Agreement with the UK’s Department for International Development and the Australian Department of Foreign Affairs and Trade. In parallel with these two developments, our last five-year strategy ended and we developed our strategy for the next five years. We expanded our reach to cover twelve countries, starting operations in Nepal after the earthquake. We now touch the lives of one in every 50 people across the world. Here is a small glimpse of what we, along with government and development partners, have achieved in just one country – Bangladesh – over the last five years:
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We will aim even higher over the next five years. We will continue to maximise opportunities and expand services for the unserved needs of the 120 million people we already reach, while empowering 20 million of the most underserved and disenfranchised women and men to gain greater access to and control over resources, decisions and actions for social transformation. In addition, we will continue to work on the underlying structural causes of poverty and social inequality.
We will focus on improving knowledge management within our workforce, to improve our own programme quality and to become a knowledge partner of choice. We will strengthen our policy advocacy work by using our learning from the field as empirical evidence to influence governments and development partners to better serve people living in poverty and socially marginalized populations. This will allow us to scale our impact faster and wider than ever before.
In parallel, we will continue to work on strengthening our organizational sustainability, including our financial viability, and reducing donor dependence. We will do this by adopting social enterprise models across almost all of our programmes, except for those specifically targeting people living in hard-to-reach areas and in ultra poverty. This will require us to upgrade the services that we offer and the ways in which we offer them. BRAC-supported front-line service providers will bring an even wider range of services to doorsteps, through higher-skilled staff equipped with cutting-edge digital tools and supported by higher-level service centres. We will work differently, to make sure that we continue to create opportunities for the people for whom we exist.
These changes will require a significant transformation. We have a responsibility to the country, to continue to find solutions to the social problems of a rapidly changing Bangladesh. BRAC has always been there for the people of Bangladesh, working with government and other development partners, to reach every last mile. Our new five-year strategy will ensure that we stay at the forefront of the country’s development journey. We look forward to embarking on this exciting new path with you.
Dr Muhammad Musa
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BRAC
FIVE-YEAR STRATEGIC PLAN (2016-2020)
Bangladesh stands at interesting crossroads. In the 45 years since it gained independence, the country has not only emerged from war, but has made significant strides in both social and economic fields - poverty reduction, per capita income and gender parity in education and health. Bangladesh’s development trajectory is considered as a unique success story globally. Rising inequality is the most pressing social challenge for the country now, and it is an obstacle that could halt, if not derail, any ambitions of an inclusive society. Against this backdrop, we have set the following overarching goal: In the next five years, we will empower 20 million of the most underserved and disenfranchised women and men to gain greater access to and have more control over resources, decisions and actions, while continuing to maximise opportunities and expand services for the unmet needs of the 120 million people we already reach.
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To achieve this goal, we will make the following changes:
PROGRAMMING 1
Eliminate extreme poverty in Bangladesh by 2020: Reduce the cost of our targeting ultra poor programme and scale it up to graduate half a million households out of extreme poverty.
2
Financially empower people living in poverty: Strengthen client protection mechanisms, expand financial education services to all clients and introduce customised financial products for a wider range of groups. Continue to look for market gaps and set up new social enterprises to provide livelihood opportunities for people living in poverty.
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4
Skills and decent work for underprivileged women and men: Equip 500,000 young people (50 per cent women, 10 per cent persons with disabilities and minority groups) with skills training and link them to decent jobs or entrepreneurship. Resilience to climate change and emergency response capacity: Establish BRAC as a leading humanitarian response entity, helping people adapt to (and mitigate, when applicable) climate change. Integrate climate change adaptability in all programmes.
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Gender equality: Reduce violence, increase men’s engagement and increase gender parity within BRAC through integrated actions for women’s empowerment across programmes. Create a gender resource centre to provide technical support to programmes. Pro-poor urban development: Deliver customised, affordable and quality basic services for people living in urban poverty. Mobilise communities to be more aware of their rights. Advocate for safe, affordable and quality transportation and propoor urban governance. Universal healthcare access and improved nutrition: Address emerging health problems (such as noncommunicable diseases), increase the professionalism of frontline services and introduce a wide range of feebased products and services.
ORGANISATIONAL FOCUS 1
2 Increase efficiency of structures and processes and leverage greater use of data for decision making: Incorporate more technology, particularly around data collection and management. Use more evidence in management decision making to run a leaner and more effective organisation. 3
Increase influence through knowledge and evidence-driven advocacy and strategic partnership: Increase our value as a knowledge partner of choice of other humanitarian and development stakeholders. Attract innovation, implementation and knowledge dissemination partners.
4
Strengthen and align support programmes: Increase accountability within support units through streamlining processes and introducing feedback loops.
5
Develop mechanisms to strategically support and leverage BRAC International and other BRAC institutions more systematically: Bring the entire BRAC family together through one global strategy.
Invest in the next generation through early childhood and improved education quality: Enhance quality of and access to education at all levels, with an added focus on early childhood development, and advocate for quality education nationally.
FINANCING Amid shifting global development aid priorities, we will continue to diversify our funding sources. 1
Our social development programmes will increasingly adopt social enterprise models. Five programmes will be the initial focus; health, education, skills and employment, migration and human rights and legal services. More sophisticated targeting mechanisms will be introduced, with diversified financing options (free, subsidised, fee based, etc) available for different economic groups.
2
A proactive fundraising strategy will be devised, with a focus on new, diversified channels such as philanthropy and corporate social responsibility.
3
Our microfinance programme will contribute a portion of their surplus to support our other social development programmes.
Develop management and business thinking capacity: Change leadership style to encourage risk taking, promote innovation and ensure a continuous succession of leaders. Attract staff with business skills who can implement social enterprise models. Introduce e-learning and strengthen staff capacity on technology and communication.
BRAC has always been an evolving organisation, and the strategic plan 2016-2020 is a continuation of this trend. Bangladesh graduated from low income country status to lower middle income country status in 2015 and the country’s economic progression shows no signs of slowing. It is essential that we take early steps to ensure that we will be able to respond to changes in funding patterns and development needs. As a leading organisation in the field of social development, we will become even more relevant, efficient and effective, continuing to ensure that Bangladesh is a country where everyone has the opportunity to realise their potential.
Annual Report 2015 7
HEADLINES FROM THE YEAR JANUARY 2015
Young Ebola survivors become entrepreneurs Survivors received cash grants from BRAC and the Ministry of Social Welfare Gender and Children Affairs of Sierra Leone to start their own small businesses. Learning continued when schools were closed, through radio sets, textbooks, exercise books, and stationery, provided by our empowerment and livelihood of adolescents project. Survivors started to reintegrate into their communities with psychosocial and psychological counselling support provided by trained staff and mentors.
1.2 million people call for children’s rights to education
support meritorious students from financially-disadvantaged families to pursue post-secondary level studies.
Over 1.2 million people called on world leaders to keep their promises to secure every child’s right to education by the end of 2015. The Up For School petition is an initiative by the global campaign ‘A World at School’, to bring attention to the more than 58 million children around the world who remain out of school. The campaign looks at the reasons why children are not in school, such as discrimination against girls and child marriage.
MAY 2015
USD 15m for Nepal’s earthquake survivors
BRAC in the 14th World Toilet Organization Hall of Fame The World Toilet Organisation gave us a place in their Hall of Fame for improving sanitation in the lives of over 66 million people in Bangladesh. 97 per cent of the population has access to a toilet, with an estimated 57 per cent of people now using sanitary latrines.
FEBRUARY 2015
Bangladesh’s first app for women maya.com.bd, in partnership with BRAC, launched the first ever one-touch help service mobile phone app for women. The service allows women and girls in both urban and rural areas to post anonymous questions on health, legal and psychosocial issues. Teams of doctors, lawyers and psychosocial counsellors respond in either English or Bangla, depending on the user’s preference.
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MARCH 2015
BRAC awarded most femalefriendly organisation in Bangladesh Bangladesh Brand Forum awarded us the ‘RFL Inspiring Women Award’ for being the most female-friendly organisation in Bangladesh. The award was given for female-friendly policies, supporting female employees in their careers and ensuring female staff a congenial workplace for pursuing their aspirations.
APRIL 2015
Bangladesh’s best talent awarded The Medhabikash (promoting talent) Education Summit brought together 300 scholarship awardees, corporate leaders, media personalities, academics and journalists. Our Medhabikash scholarships
We pledged to spend USD 15 million in the next two years to help earthquake survivors in Nepal. The two-year-long support programme in Nuwakot village includes support for 2,000 households, short-term and long-term rehabilitation of 200 maimed earthquake victims, psychosocial rehabilitation of 30,000 earthquake victims, and livelihood support for 5,000 households.
Development. The seminar presented a new study that revealed a direct relationship between a child’s learning skills in Bangla, English and math, to factors like parents’ income, availability of electricity and child labour. A number of possible solutions for ensuring quality education were identified, through research, consultation with experts, and discussions with students, parents and teachers. Education activists raised concerns for political parties to commit to isolating the education sector from political and non-political violence.
The ‘Quality education for the next generation’ seminar was held, an initiative of our ongoing education campaign and the Institute of Informatics and
We reached out to 1,200 families with 1.4 tonnes of food supplies and cash support worth USD 9,758 (BDT 764,000) during the severe floods in Gaibandha, Lalmonirhat, Kurigram and Sirajganj. We also arranged makeshift sheds on hospital premises, supplied intravenous fluid and created childfriendly spaces in Gaibandha.
DECEMBER 2015
Wall Street Journal praises BRAC
120 innovators, 36 hours, 7 winning solutions
We were selected as a finalist in the Wall Street Journal’s Financial Inclusion Challenge, in the category of operational effectiveness. The Financial Inclusion Challenge looks for innovative and impactful models that address barriers to financial inclusion. Our health loans have been issued to nearly 3,000 households as of April 2015. Financial Inclusion Challenge judge Chetna Sinha praised our unique model for working in the most remote areas of Bangladesh.
‘BRACathon’, our first ever in-house hackathon, attracted more than 120 budding app developers and students to develop mobile applications for social challenges. The 36-hour-long development marathon took place in BRAC University. Participants tackled a wide range of issues, such as tuberculosis prevention, micro learning, microfinance data access, crowdsourcing information for city road improvement and new user interfaces for mobile money. We will pilot and potentially scale up the apps developed by the seven winning teams.
Gates Foundation goals met and exceeded
The next generation of education in Bangladesh
Relief for flood victims
launched a nationwide dialogue with local government leaders on how microfinance is contributing to alleviating poverty in the country.
JULY 2015
JUNE 2015
The water, sanitation and hygiene programme achieved and surpassed the targets set by the Bill and Melinda Gates Foundation and was awarded a performance incentive. USD 4.9 million was received to support safe water, sanitation and hygiene from 20152020 in selected urban areas.
SEPTEMBER 2015
AUGUST 2015
Fight against anaemia and stunting continues The Alive & Thrive programme was implemented in 50 sub-districts to reduce anaemia and stunting in young children. Health workers worked with young mothers to improve infant feeding practices and hand washing habits. Exclusive breastfeeding rose from 48 per cent to 88 per cent and hand washing among mothers rose from 23 per cent to 31 per cent.
OCTOBER 2015
World Food Prize Our founder and chairperson, Sir Fazle Hasan Abed received the 41st annual World Food Prize at an international symposium in the United States. He was recognised for his outstanding contribution to enhancing the world’s production and distribution of food to those most in need. In the words of Sir Fazle, “The real heroes in our story are the poor themselves and, in particular, women struggling with poverty. In situations of extreme poverty, it is usually the women in the family who have to make do with scarce resources. When we saw this at BRAC, we realised that women needed to be the agents of change in our development effort.”
NOVEMBER 2015
Nationwide dialogue on microfinance for FI2020 The Financial Inclusion 2020 campaign built global momentum around how to address the remaining gaps in financial inclusion through FI2020 week. The international event included banks, policy makers, non-government organisations, microfinance institutions, investors, and financial capability experts. We
London School of Economics publishes research on BRAC Researchers at the London School of Economics published a study on our targeting the ultra poor programme. The programme lifts households out of extreme poverty by developing women’s entrepreneurial capacities, and has long-term benefits, according to the evaluation. The programme has supported women in 1.6 million households to shift from low-paid insecure jobs to small business ownership. Aspects of the programme have been replicated across Africa, Asia and Latin America by other organisations.
Annual Report 2015 9
RESEARCH FROM 2015
International labour migration selection: Findings from the baseline survey of BRAC’s safe migration project Assessing the knowledge and awareness of aspiring migrants on the process of migration
Exploration of multiple micronutrient powder usage among children of 6-59 months in Maternal Infant and Young Child Nutrition (MIYCN, Phase II) project areas of Bangladesh Fighting anaemia through home-based food fortification
Less educated and skilled workers are more likely to migrate through middlemen. Potential migrants with relatives who have migrated are more likely to arrange migration through personal connections. Study districts with high levels of migration show less migration attempts through middlemen and more through personal networks. Study districts with low levels of migration have low levels of awareness about migration processes. Aspiring migrants who are more educated and skilled, and have higher earnings in Bangladesh, are more likely to stop trying to migrate after some time. Substantial financial losses are associated with failed attempts, with higher losses among those who failed in attempting to migrate through middlemen. Wage rates in destination countries are lower for those who migrate through middlemen. Most migrants do not get formal job contract documents.
One in every three children under five in Bangladesh is anaemic. We started promoting multiple micronutrient powder in 2009 to address this. Research mapped usage of the powder among children 6-59 months old in the project areas. 4,616 children were selected from 10 MIYCN districts and two urban slums. 57 per cent of mothers had heard of MNP, but only 26.2 per cent fed it to their children. Percentages were notably higher among children 6-24 months old in rural areas. Most mothers believed the powder fulfilled nutritional requirements, fostered intellectual development, and promoted child growth. A small number avoided the powder, believing that regular family food was enough for children.
Moving from extreme poverty towards sustainable livelihoods: Evidence from the Challenging the Frontier of Poverty Reduction- Targeting Ultra Poor (CFPR-TUP) programme
Investigating low consumption of iodized salt
Does the transfer of capital and skills to the ultra poor sustainably improve their livelihoods? Long-term impacts of the CFPR-TUP programme were estimated using randomised control trials. Three rounds of panel data from the years 2007, 2011 and 2014 were analysed. The programme had a significant positive impact on occupational choices, per capita income and assets. There is no statistically significant impact on education after 2-4 years of programme support, but the effect on education is positive and statistically significant after seven years of programme support.
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Building awareness on consumption of iodized salt and compliance management of Rapid Test Kits
Much of the salt available in Bangladesh is ‘open’/noniodized salt, or is falsely labelled as iodized, despite the presence of a government law that prohibits the sale of non-iodized salt. Our health, nutrition and population programme, in partnership with other organisations, provides Rapid Test Kits to check iodine levels. We complement this with promotional activities aimed at boosting consumption of iodized salt. The study investigated the compliance of retailers in using the kits, whether promotional activities improved the availability of iodized salt in local shops and the acceptability of iodized salt by consumers. Retailers were willing to utilise the kits while buying salt from wholesalers; however, in most cases, dealers did not co-operate to check the salt. There is public demand for cheaper, non-iodized salt, however salt with false labels is gradually fading from local markets due to counselling and implementation of the Rapid Test Kit strategy.
Incidence and risk factors of recurrent pulmonary tuberculosis within a successfully treated cohort: Preliminary findings How significant is the threat of recurrent tuberculosis in Bangladesh? Tuberculosis remains a challenging communicable disease. Recurrent tuberculosis poses a significant threat to the tuberculosis control programme, as it is associated with lower cure rates compared to new tuberculosis cases. A cohort of smear positive pulmonary tuberculosis patients declared as cured or having completed treatment were selected to measure the incidence and predictors of recurrent tuberculosis, and its variation in rural and urban settings. 44 patients were diagnosed as having recurrent tuberculosis, showing a recurrence rate of 4.5 per cent. Higher incidence was noted in rural areas compared to urban areas. Although the recurrent tuberculosis rate was low in Bangladesh, adequately treated patients are still at risk of recurrence if they come into contact with a tuberculosis patient.
Social Identity: Community skilled birth attendants Evaluating the social acceptance of community skilled birth attendants Our health, nutrition, and population programme seeks to increase the number of community skilled birth attendants across Bangladesh. The study explored the process of social identification of the birth attendants. Birth attendants are known as BRAC health cadres in communities. They are respected, and referred to as ‘daktar’ or ‘nurse apa’. Professional training on birthing methods enables them to generate income and social prestige. However, village doctors and traditional birth attendants interrupt their work in home birthing. Most people in villages perceive that assisting home birthing is a social norm rather than a professional duty. BRAC Neuro Developmental Disability Centres Neuro developmental disability centres were initiated in 2014 to explore ways to improve the lives of children with special needs. Annual Report 2015 11
The centres are an initiative of our education programme, in cooperation with our health programme. This research study documented and analysed their operations, processes, outcomes, challenges and solutions. A qualitative approach was employed, documenting the development of the centres from the perspectives of policy and personnel, children, their families and communities. Learning outcomes of children with disabilities, and changes in the attitudes of families and communities regarding disability were observed. Outcomes could improve if teachers, even in situations where resources were constrained, consistently implemented certain activities. Concerns were expressed over limited resources in centres, problems with transportation of children, inadequate medical support including therapy and a lack of intrinsic motivation of teachers and caregivers because of poor honorarium. Challenges in providing education services in marginalised areas: BRAC’s experiences in Sylhet division Assessing quality of education The study was initiated to scientifically document the operational challenges, coping strategies and barriers to implementing successful school operations. A purely qualitative approach was employed in five sub-districts to capture variations across regions such as plain lands, wetlands (haor) and tea estates. Major challenges in the tea-estates and haor areas related to availability of space for schools, maintenance, teacher recruitment, training and retention. Geographical exclusion and financing gaps were also seen to have a significantly negative impact on the quality of education. Ensuring access to safe drinking water in coastal areas of Bangladesh: A pilot study in Tala union Finding suitable drinking water options Household census data revealed that shallow tubewells were the main source of drinking water in Tala union. Rahimabad was identified as the most vulnerable mouza in terms of access; approximately 28 per cent of households need to travel over 500 metres to collect water. Danganalta
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was identified as the most arsenic-contaminated mouza. 84 per cent of households were willing to pay BDT 20 per week to have access to safe drinking water. Piped water supply was the most preferred option for buying drinking water. Serious concerns remain about using groundwater. Approximately 89 per cent of households prefer deep tubewells as a drinking water source, however the underground layers of soil in some villages are too deep and salinity intrusion is found in some of the layers. How students are experiencing and combating sexual harassment against girl students in public places
Livelihoods in depressed basins of Bangladesh What are the factors that influence the socioeconomic conditions and livelihoods of people living in the wetlands? In 60 out of 500 sub-districts identified, people lag far behind in health, education and livelihood opportunities.
Investigating sexual harassment of adolescent girls
Poverty, protection and exclusion in rural Bangladesh
A baseline survey of ‘meyeder jonnyo nirapod nagorikotto’ (MEJNIN) Phase I, a project of the gender justice and diversity programme to combat sexual harassment against girl students in public places, found that 36 per cent of girls experienced sexual harassment when going to school. A qualitative study on the impact of MEJNIN Phase II was initiated to understand existing knowledge of sexual harassment, investigate attitudes and explore the occurrence of sexual harassment within a defined period of time. Relevant actions taken by adolescent boys and girls, teachers, and other members in the community were also investigated.
The processes through which marginalised families are included are often determined by local elites. The study seeks to understand how and why the poorest face constraints in gaining access to public services and entitlements, and why children from ultra poor families stop going to school.
A lack of understanding about sexual harassment was found among most students, who wrongly referred to harassment as eve teasing. Parents and community leaders expressed concerns that harassment mostly occurred when girls go or return from school. Perpetrators were mainly close relatives, or people known to the girls.
Lives of streetconnected children in Bangladesh
Publications from 2015 The status of water, sanitation and hygiene in rural Bangladesh
What are the reasons behind street migration and what daily struggles do street children face? The study presents a range of push and pull factors that lead to and keep children on the streets.
Engaging men and boys in the journey towards gender equality and female empowerment: Gender quality action learning An investigation about men’s engagement in reproductive issues, and an examination into their role in ensuring the participation of female family members in decision-making. Environmental and economic sustainability of groundwater for irrigation: Implications for ensuring food security in the northwest region of Bangladesh Increased demand for food, poor water management and declining rainfall is creating unprecedented pressure on groundwater, the main source of irrigation for increasing crop production in the region. What are the key factors that constrain the use of groundwater and the policy suggestions for its sustainable use?
The study explores the status and quality of practice of key hygiene behaviours and the quality of drinking water based on chemical and microbiological water parameters. The study also explores perceptions of drinking water interventions in a coastal district where unsafe water is a growing crisis. Annual Report 2015 13
HUMAN DEVELOPMENT, AS AN APPROACH, IS CONCERNED WITH WHAT I TAKE TO BE THE BASIC DEVELOPMENT IDEA: NAMELY, ADVANCING THE RICHNESS OF HUMAN LIFE, RATHER THAN THE RICHNESS OF THE ECONOMY IN WHICH HUMAN BEINGS LIVE, WHICH IS ONLY A PART OF IT. - Amartya Sen
TARGETING THE ULTRA POOR
Graduation, measured through a set of criteria, occurs when households achieve economic and social advancement over a period of 24 months. At least three sources of income in the household within two years Nutritious meals twice a day for every member of the household
Lifting MILLIONS OF LIVES out of ultra poverty
Use of a sanitary latrine and safe drinking water At least 10 ducks/chickens/pigeons owned by the household Kitchen garden present in the household Sustainable homes considering the geographical context Children attend school Four fruit-bearing or woody trees owned by the household, if space is available Eligible couples adopt family planning Zero child marriage in the household
Our programme is specifically designed to meet the needs of households that are too poor to access traditional development interventions. We create and improve livelihoods for those at the base of the economic pyramid through our ‘graduation’ model, eradicating poverty in all its forms (SDG 1). Over 25 countries have adapted and replicated our groundbreaking model to date. 95 per cent of our participants graduate from ultra poverty. Globally, 75-98 per cent of the participants meet the country-specific graduation criteria in 18-36 months, according to reports from CGAP and Ford Foundation-funded pilots.
HIGHLIGHTS 2 015 We reached 90,000 ultra poor households in rural, urban and coastal areas with our targeted ultra poor strategy. 80,000 participants (97 per cent) from the 2014 group graduated out of ultra poverty.
We installed 19,000 latrines and 450 tubewells in collaboration with village poverty reduction committees. The committees enrolled 2,000 children into government schools. We planted 546,986 saplings to reduce climate change-induced vulnerabilities.
We introduced a new pilot, called the TUP-nutrition project, to prevent under-nutrition (measured through stunting) in the first 1,000 days of a child’s life. The baseline survey was conducted and we look forward to investigating its impact through the endline survey.
WE WILL BUILD A COMMON CONSENSUS WITH DEVELOPMENT ACTORS FROM ALL OVER THE WORLD TO BREAK THE POVERTY CYCLE
A spirit unbroken It is a weekday afternoon in Moulvibazar, Rangpur, and the melody of children chanting times tables is wafting through the trees. School is over, but students are gathered under shady trees in the village courtyards for free coaching. Not just in this village, but in many others nearby as well. It is not the work of any organisation- this network of open-air classrooms is all due to the initiative of one barely literate woman. Shamsunnahar has lived through enough adversity to know the value of education. She is the proud owner of two houses and 36 decimals of land today, but was working long, hard hours as a domestic helper just a few years ago. Growing up in an ultra poor family and married at 13, she was never given the opportunity to study. She was left with next to nothing when her husband passed away from cancer a few years into their marriage. Sending her two sons to school was a distant dream. Things started to change for the better when she was selected for our ultra poor programme. Shamsunnahar attended training on running a poultry and livestock enterprise. She received an asset transfer and weekly stipends, and graduated from the programme after two years. She took out three microfinance loans to set up her own poultry business, and used the profit from her first investment to send her children to school. Shamsunnahar often visited the local government school to check on her children’s progress and was appointed as a member of the village poverty reduction committee, an independent voluntary body. She quickly discovered that students would benefit from after-school coaching classes. She rallied village authorities and organised free additional classes for all children. She personally made sure that children from ultra poor families attended these classes. Her innovative thinking landed her a position as a member of the village school management committee. Shamsunnahar then focused on the nutrition of her children, taking training on vegetable cultivation and guiding others to do the same. This brought her further recognition, and she was made the president of the village agriculture development committee. Refusing to bow down to adversities, Shamsunnahar continues to promote better practices in education and agriculture, while encouraging women and the larger community to make better lives for themselves. Annual Report 2015 17
MICROFINANCE
Helping 5 MILLION FAMILIES move toward economic freedom
Smart spending, better savings In September 2014 we launched a financial diaries research project that looks at how low-income households in Bangladesh access finance and manage their money. The project included tracking financial transactions of over 300 respondents for one year, and is helping BRAC to modify and develop our services based on a better understanding of clients’ financial lives. Mafidul Islam manages a shop that services computer hardware in Dhaka. He enrolled as a respondent and was given a financial diary in which he recorded all of his earnings and spending each day. A field officer collected the data once a week. He was earning USD 166 per month at the time. “After two or three weeks of maintaining the diary I noticed a pattern in my spending. I realised that I didn’t need to spend in those ways; that I could save.” He continues, “I used to smoke a lot but when I saw that I was spending over USD 50 on cigarettes, I cut down”. Two months into the project, Mafidul opened a deposit premium scheme (DPS) – a special savings plan where you save monthly, and receive a handsome return upon maturity. He then opened two more with other institutions in the following months, and now saves USD 65 a month. “I have worked in Dhaka for a long time but I’ve never been able to think about saving. Now I save what I can because I am earning and in the future I may not be able to. This money will give me security if that happens.” Today he retains over half of his earnings, which he either saves, or sends to his family outside of Dhaka, via bKash. Financial management hasn’t improved his life in every way, however: “Before I used to take air-conditioned bus services to go home, but now I go without it.”
Mafidul’s experience highlights how access to better financial tools and management can transform one’s ability to build on one’s assets and plan for the future. This project has reinforced our belief that there is a huge need for improved money management skills and more targeted products for low-income people. In 2015, we thus significantly scaled up our financial literacy trainings and developed and piloted several new products, including a consumer loan, emergency loan and a credit-shield life insurance.
Mafidul’s monthly transactions (USD)
Before enrolment
After enrolment
Monthly income
166
204
Living costs
64
64
Cigarettes and miscellaneous
51
19
Remittances to family
51
51
Savings
0
64
Surplus cash-in-hand
0
6
-
-
HIGHLIGHTS 2 015 As one of the largest providers of financial services to the poor in the world, we offer a diverse range of products and services to families across Bangladesh. Microfinance supports people living in poverty in myriad ways by facilitating easy access to credit and savings, from enabling investment in small enterprises, to helping families maintain spending on food, to accessing foreign employment opportunities, and offering coping mechanisms for emergencies. We directly contribute to achieving eight of the sustainable development goals – relating to extreme poverty, food security, health, education, gender equality, sanitation, inclusive economic growth and climate change resilience.
We continued our drive to promote full financial inclusion, by increasing the number of households provided with financial services, and building the suite of products available to them. Furthering our reach We continued to expand our reach among poor women, farmers, salaried workers, migrant workers, and small entrepreneurs. We also disbursed more loans to households affected by disability, through specific targeting, recognising that households with disabled income-earners face additional barriers to accessing financial services. In 2015 our total
number of borrowers grew 8 per cent from 4.5 million borrowers to 4.9 million; and our portfolio grew 24 per cent from USD 1.16 billion to USD 1.44 billion, the largest so far.
Putting clients front and centre Promoting financial inclusion means more than increasing our numbers reached, but how effectively we are reaching them. This means ensuring
that clients can access a range of financial services tailored to specific needs, that they clearly understand and can use easily. We continued to strengthen measures for client protection, by diagnosing over-indebtedness, promoting transparency, making products as fair and useful as possible and ensuring clients are consistently well treated. Annual Report 2015 19
More clients now have access to a set of complementary services that secure families against financial shocks. 4,700 clients borrowed health loans to help them manage large medical expenditures in the family, while 20,000 clients opted for our credit shield life insurance, giving the household financial security in the event that a client or their spouse passes away. Almost 300 households affected by flooding took up pre-approved emergency loans that were being piloted in flood-prone areas. Many clients have changed the way they pay for their savings. In 2015, 12,000 clients, primarily women, chose to make savings deposits via mobile money using bKash - a BRAC Bank subsidiary. The support they receive from us to bring them on to the service is also helping to promote numerical and digital literacy, enabling more people to use the platform in ways that best suit their needs. 20 Annual Report 2015
BRAC: Delivering financial services to the underserved
BRAC HOPES TO ATTAIN SMART CERTIFICATION, THE GLOBAL GOLD STANDARD FOR CLIENT PROTECTION FOR FINANCIAL INSTITUTIONS, AND CATALYSE GREATER ATTENTION TO CLIENT PROTECTION ACROSS THE SECTOR
Total disbursed: In 2015, we disbursed
USD 2.5 billion
Total clients:
5.4 million
*
Total borrowers:
4.9 million
of BRAC microfinance clients are women
246,000 clients received small enterprise loans BRAC microfinance clients
We kicked off the year by reducing our interest rates by one percentage point. We also expanded our customer service assistants to 1,300 branches; this all-woman cadre conducts financial awareness trainings and offers advice to clients that have questions and concerns.
94,000 clients received migration loans
614,000 clients received agriculture finance 20,000 households with disability in the family received access to credit and savings * Not all of our clients are borrowers;
T
U
P
some choose to just save.
Annual Report 2015 21
SKILLS DEVELOPMENT Unlocking the potential of future generations
Hotel Amari’s newest employee Similar to the young women who challenged social norms to make Bangladesh’s ready-made garment industry what it is today, it is likely that Jhuma will be remembered one day in Bangladesh’s hospitality industry. As is the case with most pioneers though, her personal stakes are very high. Rehana Akhter Jhuma has to lie every single day. She leaves home early so that she has time to change her clothes before she gets to work, and she leaves late so that she can change and hide her uniform. Her job brings in enough money to support everyone in her family, but she cannot tell the truth about what she does to people who matter the most to her.
A third of Bangladesh’s population is 10-24 years old and two million young people enter the labour market every year. Half of the population are illiterate or semi-literate however, and most young people end up with irregular, informal jobs.
Jhuma is a housekeeper. At work, she wears a crisp, ironed uniform at Amari, a five-star international hotel chain in the capital. At home, her community thinks that she works for a nongovernmental organisation.
Bangladesh’s workforce is expected to reach 76 million people in 2025. We aim to use skills to ensure inclusive and sustainable economic growth and create decent employment opportunities for 500,000 young people within the next five years. We provide competency-based training, in line with the National Skills Development Policy, with a focus on women and marginalised groups. We strive to enhance employment opportunities through apprenticeships, institution-based training and enterprise development, focusing particularly on decent jobs in growth sectors.
HIGHLIGHTS 2 015 Building on the success of our skills training for advancing resources (STAR) project, we launched a new programme which provides competency-based training following the Skills Development Policy 2011. We provided apprenticeship training to 5,400 marginalised young people through STAR. 57 per cent were female and 10 per cent had disabilities. Strengthening social inclusion, we included hijras*, orphans, children of sex workers and ethnic minorities. 99 per cent of the
graduates were employed within one month of training and 15 per cent of the female graduates were employed in non-traditional jobs. We piloted two new cost sharing dual system models with support of the International Labour Organization. Our housekeeping project equipped 15
female high school graduates from disadvantaged families with hospitality skills. Graduates were employed by internationally recognised
* refers to trans-women (male-to-female transsexuals or transgender individuals)
hotels and BRAC Centres for Development and Management. Our pharmacy project trained 38 disadvantaged young people to work as C-grade pharmacists.
50 per cent were female and 5 per cent had disabilities. All graduates are employed in pharmacies while they wait for their certification. We became active members of the National Skills Development Council’s National Committees on Gender and Disability, the Informal Sector Industry Skills Council and other policy-level forums.
In many of the other countries where Amari operates, housekeeping is a respectable job for women, and the first step to a career in the hospitality industry.
WE WILL EQUIP AT LEAST 14,000 UNEMPLOYED YOUNG PEOPLE FROM DIVERSE BACKGROUNDS WITH HIGH QUALITY SKILLS AND LINK AT LEAST 80 PER CENT OF THE GRADUATES WITH JOBS.
Housekeeping is still not considered a decent job for girls in Bangladesh though. It is likely that Jhuma’s community would stigmatise her and not allow her to work further if they learnt that she was a housekeeper. Ironically, girls like Jhuma, who her manager Sadekur Rahman describes as “a quick learner and definitely as good as any male colleague” are exactly what the industry needs. A recent BRAC survey found that only 17 per cent of hotels in three major cities employ women. It is assumed that this is primarily because of the social perception associated with the occupation. Jhuma is a graduate of the BRAC hospitality programme, and her family had always lived in poverty before her training. Through a mix of practical and theoretical lessons, she now brings home USD 150 (BDT 12,000) every month in her first year of employment. Jhuma was made permanent before she had even finished probation. Changing social norms is a complex process, but Jhuma’s broad smile, professional conduct and her proud manager standing behind her will hopefully mean an easier journey for Jhuma’s 17-month-old daughter, when she one day enters the workforce. Annual Report 2015 23
DISASTER MANAGEMENT AND CLIMATE CHANGE
REDUCING VULNERABILITY OF WOMEN AFFECTED BY CLIMATE CHANGE
STRENGTHENING RESILIENCE to combat climate change
Holding on to childhood through child-friendly spaces Disaster responses traditionally focus on the immediate, tangible needs of survivors - food, medical aid and shelter. Children often either get in the way or are forgotten during the chaos, meaning that they can end up being the most vulnerable group, both emotionally and physically, during and in the aftermath of disasters. How can children return to life as usual and how can a sense of hope be maintained during these periods? In 2015, we initiated safe spaces for children. Schools had to close down temporarily during the severe floods in Gaibandha, a district in northern Bangladesh. We set up three child-friendly spaces to look after children in the affected communities.
Climate change is a rising global concern. Bangladesh, a low-lying river delta region, is particularly at risk. Our aim is to enhance our institutional capacity to respond to natural and human-made hazards through humanitarian response, and support communities in rebuilding their lives as quickly as possible. We also focus on empowering communities to sustainably reduce vulnerability of their populations. In alignment with the sustainable development goals, we strengthen resilience through community-based disaster risk reduction and adaptive strategies against climate change (SDG 13).
HIGHLIGHTS 2 015 We reached out to affected families during the floods, creating childfriendly spaces, monitoring the situation, managing diarrhoea and providing food, medicine and cash support. During the floods, we also distributed vegetable seeds to 20,000 households to restore their nutritional needs. 3,000 marginal farmers received support through mobile money to restart cultivation. Farmers pooled together a percentage of the support
they received after the harvest to create their own community level disaster-resilient funds for future emergencies. Polli shomaj, our women-led, community-based organisations, coordinated the initiative in the affected districts of Sirajganj, Kurigram, Gaibandha and Lalmonirhat. We expanded support to 450 survivors of the Savar (Rana Plaza) tragedy with medical support, skills development and psychosocial counselling through a new initiative.
Another 330 survivors are receiving monthly subsistence against fiveyear-long fixed deposits through mobile money. More than 19,000 women living in vulnerable districts formed a network of 764 groups across Bangladesh. They acquired leadership, mental stress management and skills training to help build resilience in their communities. Approximately 3,820 of them started new livelihoods with seed capital and have now planted 38,200 tree saplings to protect their homesteads.
Children engaged themselves in various activities such as painting, story telling, playing games and sports, with the support of kits received from UNICEF. These activities kept them busy throughout the daytime, which, under normal circumstances, would have been their school hours. Trained volunteers monitored the children, keeping the rights of the children in mind.
WE WILL PROMOTE AND COMBINE INDIGENOUS KNOWLEDGE WITH COMMUNITYBASED ADAPTATION STRATEGIES AGAINST CLIMATE CHANGE, NATURAL AND HUMAN-MADE HAZARDS
The initiative not only provided an enabling environment for children to continue their activities, but it also had some far-reaching impacts. Children were kept safe from physical and psychological harm. The shocks that families in poverty face during disasters typically lead to a spike in school dropouts and child labour. In the desperation for survival, families often marry their daughters offcontributing to rise in child marriage. These safe spaces have the potential to deter further damage in the lives of children. Parents reported that child-friendly spaces allowed them to fully engage themselves in post-flood rehabilitative activities, knowing that their children were in safe hands. Mental distress caused by loss and other unpleasant changes in the damaged homes was minimised. The cost of accommodating a child per day in a childfriendly space is less than two cents. From what we learned in Gaibandha, the positive impacts they could have on children are priceless.
Annual Report 2015 25
INJUSTICE ANYWHERE IS A THREAT TO JUSTICE EVERYWHERE. - Martin Luther King, Jr.
GENDER JUSTICE AND DIVERSITY
Safe spaces to prevent violence and sexual harassment against girls Adolescents reached
Spreading GENDER TRANSFORMATIVE CHANGE from institutions to communities
2015
95,000
155,500
250,500
Psychosocial counselling
Nearly two out of three women in Bangladesh experience gender-based violence during their lifetime. Violence ranges from sexual harassment and emotional abuse, to child marriage, stalking, sex trafficking, acid attacks, rape and dowry killings. We work to combat violence against women and girls and to eliminate all forms of gender discrimination. Our aims are consistent with the national Seventh Five Year Plan and the sustainable development goal of achieving gender equality and empowering all women and girls (SDG 5).
HIGHLIGHTS 2 015 We developed the capacity of 13,000 members of our staff on gender issues. The ‘mon khule kotha bola’ forum provided a platform for staff, especially women, to share their feelings and experiences. We reached 250,000 young people through awareness campaigns on violence against women and sexual harassment. We stopped 130 child marriages. The ‘economic empowerment of poor and vulnerable women in Bangladesh’ project built the
entrepreneurship skills and
rights knowledge of over 1,300 women. The Snehaloy (safe space) project supported the cognitive, social
and physical development of 1000 children, while their mothers
gained access to better income opportunities. The project’s internal monitoring data revealed that the mean income among parents increased from BDT 1,617 to BDT 4,143 (USD 20 to USD 53). We raised awareness on violence against women and children at the household level. We effectively influenced the national policy structure and service provisions. We led Girls Not Brides networks
Sheela Rani’s quiet revolution
Our services
and mobilised actors to end child marriage. We followed it up by engaging young people and civil society to advocate for safe spaces for girls and reducing violence against women. We launched the website www.maya. com.bd as part of our partnership with Mayalogy. The website provides information on health, social, legal and psychosocial issues to 8.5 million users. We ran a national campaign in 55 districts and initiated a special radio season titled Maya Apa Ki Bole to promote the initiative.
sexual harassment redressal mechanism
Sensitising and involving community actors
Leadership development training
Engaging with peer groups
Mobilising local administrations
WE WILL CREATE EQUAL OPPORTUNITIES FOR WOMEN AND MEN, AND CONTINUE TO REDUCE VIOLENCE AGAINST WOMEN AND GIRLS
She runs her own business making bags in the small village of Rupganj. She wakes up early in the morning to sort her orders, distributes them to her subcontractors, takes new orders and delivers products to her customers. Sheela Rani, an entrepreneur who enjoys her work more than anything, produces 2,000 bags every day. She employs three women in her business, and four more women as sub-contract partners. Sheela, along with her employees, was trained on making jute, net and non-woven bags through our ‘economic empowerment of poor and vulnerable women in Bangladesh’ project. She went further and applied for training on business management and entrepreneurship development, part of a government-funded project. She developed her own technique of net cutting that increases the number of bags produced from one sheet of net without affecting the quality of the product. Sheela, now 33, led a very different life before she started her business. Married at 14 years old, she faced years of abuse from her husband and in-laws for her inability to bear children. She adopted her younger sister’s child, even though her family did not approve of it. When her husband suffered a paralytic stroke, she sold her cows and goats to pay for his treatment. “My life took a turn for the worse. We didn’t have food to eat. It was a matter of survival - I had to work for income.” Sheela is just one of the 3,600 women who participated in the project. Her story, and the stories of the seven women she employs, prove that when one woman is empowered, the effect ripples through her community.
Annual Report 2015 29
COMMUNITY EMPOWERMENT
Tackling an incident of violence
Giving a voice to 1 MILLION WOMEN living in poverty
Minara - the fighter on a bicycle Bangladesh has one of the highest rates of child marriage in the world, with 65 per cent of girls being married off before their 18th birthday. Despite having strict laws against the practice, child marriage continues unabated using forged documents that raise the ages of the child brides. Meet Minara, a woman who fights child marriage every day. It is a common sight to see her making her way on a cycle along the dusty roads of rural Gaibandha where she lives. She spends her day visiting families and counselling them on the harms of child marriage. She then follows it up with public announcements on the harms of child marriage, with the help of the village authorities who hold her in great esteem.
Community development is not possible unless women living in poverty are given a voice. We provide women the tools to claim their entitlements, develop leadership, prevent exploitation, and play active roles in their communities. We strengthen rural communities by building institutions to close gaps between communities and local government. We increase access to information with a specific focus on reducing violence against women and children. We address the sustainable development goals of achieving gender equality and empowerment for all women and girls, and building effective and accountable institutions at all levels. (SDGs 5 and 16).
Minara speaks on what is at stake when girls are married young and not given the chance to pursue a proper education. She believes that more parents will change their stance on child marriage once they are aware of the emotional and physical trauma that young girls experience when they are married too young. She has never considered a different path of life for herself, despite the verbal abuse she sometimes faces from parents.
HIGHLIGHTS 2 015 Over 12,000 community-based organisations (polli shomaj) participated in a range of activities, from building access to local government services to preventing violence against women and securing positions for women in local power structures. The Government of Bangladesh honoured 1,068 women from our community-based organisations. with Joyeeta Nari Awards in recognition of their extraordinary accomplishments. Our ‘strengthening local governance initiative’ aims to develop the capacity of local government to
engage in pro-poor governance, enhance transparency and accountability and promote participatory democracy. This year, 420 union council (union parishad) members were trained on improving efficiency and sensitised on being pro-poor. Our popular theatre groups performed 13,378 drama shows to disseminate information among communities. Polli kontho, our community radio, received the international ABU Prize 2015 and the Meena Media Award in four categories from UNICEF for its
contributions in improving access to information. We addressed a total of 22,216 cases of human rights violations, such as child marriage,
dowry, unlawful divorce, polygamy, domestic violence, and fatwa. We provided 9,277 survivors of violence with need-based support. Interactive communications materials were designed for our programme participants, including a book featuring stories of our successful female leaders, popular theatre and a polli shomaj implementation guidebook.
WE WILL CONTINUE TO ENABLE WOMEN TO CLAIM THEIR RIGHTS, AND PROMOTE PRO-POOR LOCAL GOVERNANCE
Minara has directly stopped 20 cases of child marriage and indirectly prevented many more. Her pride lies in the fact that the girls managed to continue their studies; some of the girls did get married but not before they turned 18. She hosts weekly meetings with young girls and women where they are regularly counselled on the dangers of early marriage and the legal support that girls can seek if they are forced into one. Minara is determined to safeguard the futures of young girls in Bangladesh. Riding her cycle in her traditional dress, she is a beacon of hope for the hundreds of field officers striving to break complex social norms.
Annual Report 2015 31
ADVOCACY FOR SOCIAL CHANGE Create SUSTAINABLE IMPACT through knowledge sharing and partnerships
For safer roads “Travelling would particularly become intolerable for passengers during the summer time,” says Mahmudul Hasan, a resident of the Madhabpur sub-district. He is a volunteer working to promote the safe road code project. “Scorching heat and hours of confinement in the buses stuck in unending gridlocks made any trip a nightmare.” Madhabpur, in Habiganj district, is the gateway to the northeastern district of Sylhet. It was always known for its infamous highway junction where thousands of commuters were stranded every day. Illegal roadside establishments, three wheelers and buses stopping randomly for passengers and to load goods were the primary reasons behind the congestion.
We scale BRAC’s impact through influence and partnerships. We ensure sustainability through advocating for changes to be incorporated into national laws and policies. We mobilise government, communities, and non-government actors, and facilitate social dialogue to promote people-centric policies and programmes. Additionally, we work with both internal and external stakeholders to translate development experiences into knowledge resources for future interventions.
HIGHLIGHTS 2 015 We continued strong advocacy efforts in the areas of health, education, ultra poverty, road safety and climate-resilient technologies. We organised two mayoral debates in Dhaka in collaboration with multilevel stakeholders in an effort to enforce good governance. Voters were able to watch debates live on television and directly share their problems with the candidates.
We developed a database with information on existing development interventions in the wetland regions, which will be shared online for easy public access. This will help us to identify potential service needs and identify the communities that are deprived of coverage. We influenced the highest legislative authority to rethink the reform of the Road Transport Act.We developed
a national database to address the absence of a comprehensive information repository on road accidents. We strengthened knowledge sharing and collaboration with BRAC’s sister concerns, introducing the Advocacy Forum to synchronise research and advocacy initiatives between BRAC and BRAC University and its institutes.
A community-wide campaign was launched in collaboration with local associations, administration, transport owners and businesses to take collective action in solving the problem. Enthusiastic locals were trained as volunteers to mobilise the public. Hundreds of meetings, street theatres, and quiz competitions at schools were conducted, paving the way for a communityled movement.
WE WILL INITIATE BEHAVIOURAL INSIGHT DEVELOPMENT AND KNOWLEDGE PORTALS TO ESTABLISH BRAC AS A KNOWLEDGE-BASED ORGANISATION
In September 2015, with the help of local administration and residents, illegal establishments around bus stands and roadsides were evicted. Unruly three wheelers were brought under control. For the first time in years, the area was made congestion free. A similar campaign was initiated in November 2015 in Mohammadpur, Dhaka. The same community participation model was used and similar success was observed. In both cases, the people who were stuck in the traffic jam every day had the answers. We just created an opportunity for collective local action to solve local problems.
Annual Report 2015 33
URBAN DEVELOPMENT
Our three-pronged approach to tackle urban poverty: 1. Promote pro-poor governance
2. Ensure access to quality, affordable basic services
Making cities INCLUSIVE, RESILIENT and SUSTAINABLE
We aim to make Bangladesh’s urban spaces more liveable for all residents. Our interventions are pillared on the sustainable development goal of making cities and human settlements inclusive, safe, resilient and sustainable (SDG 11). Urbanisation is intensifying across the country, and by 2050, an estimated 50 per cent of the country’s population will live in urban areas. We aim to ensure access to affordable, quality basic services for marginalised communities in urban areas. We will address systemic inequalities and empower people to demand their rights to lead better lives. Simultaneously, we will strengthen urban local governance institutions to develop, adopt and effectively implement pro-poor policies and services in urban spaces.
HIGHLIGHTS 2 015 Launched in April 2015, we are the latest addition to the BRAC family. An emerging priority
Our achievements in 2015
With increasing economic development, Bangladesh’s cities have become magnets for internal migration. Urban areas are rapidly expanding, with minimal planning, presenting challenges such as rising urban poverty and inequality. Our urban development programme offers a coordinated intervention through which to tackle poverty.
As of December 2015, we have created socio-economic profiles of 50 target settlements. We implementing the project with in-depth have also mapped existing service providers working within the slums to research on 150 target slums collect data, which helped us identify and low-income settlements, gaps in services and opportunities to because of a lack of reliable data on collaborate with service providers. urban poverty. Our research covers seven city corporations and 10 municipalities in Bangladesh. Our core project, EMPOWER, targets
500,000 people living in urban poverty in Bangladesh. We started
3. Foster innovation
Rethinking service delivery in low-income, urban settlements
WE WILL ENSURE ACCESS TO BASIC SERVICES, PROMOTE PRO-POOR GOVERNANCE AND FOSTER INNOVATION TO TACKLE URBAN POVERTY
Mobile-based solutions to improve maternal health. Mini piped water supply systems to tackle water crises. Drop-in centres for children living on the streets. These are just some of the innovative solutions that service providers across Bangladesh have implemented to help urban communities living in poverty. With urban areas facing unprecedented growth however, challenges continue to rise, especially in low-income areas. This calls for urgent and collective action on the ground. We are creating a network of government, non-government and private sector urban service providers who will provide access to quality, affordable basic services to clients living in poverty. Using this network, we will develop a referral system where clients can learn about, demand and use the best available services within their reach.
Annual Report 2015 35
HUMAN RIGHTS AND LEGAL AID SERVICES
Ensuring access to justice
Raising awareness on human rights, land rights and the criminal justice system
Engaging stakeholders to promote and protect the rights of people within their communities
Ensuring equal access to JUSTICE FOR ALL
Providing legal aid and legal assistance to the poor and marginalised
• Our legal aid clinics received a total of 23,913 complaints, of which 13,338 were resolved through alternative dispute resolutions. 5,763 complaints were sent to court through our external panel of lawyers. • We recovered a total of BDT 266,390,712 on behalf of our
clients through alternative dispute resolutions and court cases. • Our land entrepreneurs provided 24,664 clients with paid land measurement services and 1,054 clients with free land measurement services through the property rights initiative.
• Land entrepreneurs earned BDT 9,953,080 through measuring a total of 1,046,228 decimals of land. • 228 new land entrepreneurs, including 45 women, were equipped with the skills to measure land.
Sufia Begum was recognised as one of five Human Rights and Legal Services Heroes of 2015. She has provided legal aid and essential support to clients seeking legal redressal for abuse and discrimination for the past eight years. Two of the practices that Sufia fights to prevent are child marriage and hilla (interim) marriage in Kurigram’s char (riverine islands) areas in northern Bangladesh. Locals in these regions now say no to child marriages, and continue to refute the conditions of the traditional hilla marriages commonly enforced by local community leaders as a form of traditional dispute resolution. In 2014, Sufia stood up for a client named Lina (pseudonym) and her family in Taragonj, Rangpur district after Lina was raped and her family was forcefully confined in their home.
Access to justice is defined as the ability of people to seek and obtain a remedy through formal or informal institutions of justice, in compliance with universal human rights standards. We believe that in order to facilitate a smooth access to justice pathway, it is necessary to uphold the quality of justice services particularly through legal aid and legal awareness, strengthen the capacity of civil society, exercising equal and fair application of the law, promote transparency in the judicial system, and uphold professionalism in service delivery. Our efforts address the goal of promoting the rule of law at the national level and ensure equal access to justice for all (SDG 16).
HIGHLIGHTS 2 015
A champion for equal rights
Sufia, then a field organiser in rural Bangladesh, went on investigating the matter and found out about the forceful confinement, a norm still practiced in some rural villages when rape occurs. She resolved to safeguard Lina’s rights even though she knew her life would be threatened.
TO NO ONE WILL WE SELL, TO NO ONE WILL WE REFUSE OR DELAY THE RIGHT TO JUSTICE
Sufia sensitised the local community on the culturally-tabooed topic of rape as a criminal offense and built resilience among local union council members and other influential community members against illegal confinement. People started sympathising with Lina’s suffering, and eventually community support led to Lina and her family being freed.
- Magna Carta
Sufia is a compassionate rights advocate, accepted by the communities she works within, which continues to mean that she can bring change in a male-dominated society. She was recognised for her indomitable courage in protecting Lina and her family’s rights.
Sufia helped Lina and her family resettle into their community. She sought medical assistance for Lina through one of our health workers. She helped the family to file a complaint at the local police station against Momdedul, the perpetrator, and also filed a complaint on Lina’s behalf at one of our legal aid clinics. Lina was provided with counselling services and presented with her legal options.
Annual Report 2015 37
HEALTH, NUTRITION AND POPULATION Bringing INTEGRATED HEALTHCARE solutions to every doorstep
HIGHLIGHTS 2 015 We began testing early childhood development interventions in a number of sub-districts, in partnership with our education programme. We reached 8,245 pregnant women, 1,742
postpartum mothers, 27,034 parents/ caregivers and ensured the physical, cognitive and psychosocial development of 26,901 children under three.
We improved the frequency of skilled birth deliveries through our comprehensive maternal, neonatal and child health programme in urban slums and rural areas. We continued to promote correct infant and young child-feeding practices. We introduced a comprehensive maternal nutrition package in several rural sub-districts. We reached 79,459 pregnant women and 11,858 lactating mothers with counselling,
coaching and demonstration sessions on dietary diversity and micronutrient supplementations. We also mobilised men to support their wives in maintaining their diets.
We expanded our services to meet the changing needs of adult and ageing populations, and cater for common non-communicable diseases, disabilities and injuries. We developed multiple partnerships with specialised organisations to ensure effective referrals. We focused on prevention of disease through lifestyle modification and education, combined with periodic screening and referrals. Our trained staff identified and arranged the appropriate correction for 59,859 cataract and 164,077 presbyopia patients.
Mothers and children die every day from preventable causes and diseases. We aim to change that, by ensuring that underserved populations in rural and urban Bangladesh have access to health, nutrition and reproductive services. Our focus is on scale and impact, but without compromising quality, equity and sustainability. Over 100,000 of our frontline community health workers offer healthcare and nutrition services and connect communities with healthcare facilities, keeping communicable and non-communicable diseases a priority. Our interventions ensure healthy lives and promote wellbeing for all at all ages (SDG 3).
Over 1.2 million people were screened for tuberculosis symptoms through the expansion of new tuberculosis diagnostic tools like Gene Xpert and digital x-ray machines, and through specific interventions in hard to reach areas. New interventions resulted in an additional 11,146 tuberculosis cases being identified and treated. Enhanced malaria prevention, early diagnosis and prompt treatment in hot-spot areas reduced overall malaria incidence from over 57,000 in 2014 to less than 40,000 cases.
How do you build a smart nation? Studies show that 80 per cent of a child’s brain is developed by the age of three. Their brains will not make the cognitive connections that enable learning in later years if a child is not supported and stimulated during those initial years of life. We started piloting an early childhood development model in several districts of Bangladesh keeping this in mind. The playbased curriculum, which combines elements from BRAC’s education and health programmes, is gaining popularity among rural mothers. The model trains and enlists young women, usually students aged 16-24, to conduct courtyard sessions with young mothers and babies. Mothers and children respond positively to the educated women, called early childhood development promoters. The sessions are also a source of education not provided by conventional schooling for promoters who aspire to pursue early childhood development as a career. Shahina is a 17-year-old early childhood development promoter juggling college and courtyard sessions with mothers and babies in the small village of Sreepur, Mymensingh. She makes sure that children receive sufficient time to play and, using age-appropriate toys, she shows mothers how to engage with their children. She informs mothers on a wide range of child development issues, such as how to tell when they are in discomfort, appropriate responses, how to look after their health and their specific dietary needs. Shahina attends college in the mornings and conducts the courtyard sessions in the afternoons. The stipend she receives per session helps her continue her education. Watching mothers learn to read their babies’ responses continually inspires her. She regularly reminds them to report any sign of illness to the nearest health worker. Shahina’s role as an early childhood development promoter is fuelling a movement towards a smart generation in Bangladesh, and fuelling her own future at the same time. She now aspires to attend university, to take her skills further and inform more women and children about the importance of the first years of life. Annual Report 2015 39
KE Y ACHIE VEMENTS OF 2 015
Over 11 million couples in project-supported areas used modern contraceptive methods.
We initiated breastfeeding within the first hour of birth for over 1.6 million newborns and over 3.4 million children were exclusively breastfed up to six months of age.
Our community health volunteers treated 892,000 children suffering from pneumonia using oral antibiotics.
Over 1,350,000 registered pregnant women received four or more antenatal care visits.
We ensured 935,000 deliveries, and skilled attendants conducted over half of them.
40 Annual Report 2015
Our community health workers diagnosed over 1.1 million under-five children with diarrhoea. They were managed at the community level using oral rehydration solution.
135,000 tuberculosis cases were identified and treated in BRAC areas, making up 65 per cent contribution to the national case notification. The case notification rate for all forms of tuberculosis was 146 per 100,000 people.
95 per cent of tuberculosis cases identified in 2014 were successfully treated, using the directly observed treatment method, against the national target of 85 per cent.
60,000 cataract surgeries were performed.
23,000 malaria patients were diagnosed and treated through the early diagnosis and prompt treatment strategy, making up 59 per cent of cases treated nationally.
More than 200,000 long-lasting insecticide-treated bed nets were distributed, and total distribution in collaboration with our partners amounted to over 2.4 million.
WE WILL TEST OUT INNOVATIVE MODELS TO CONTINUALLY IMPROVE ACCESS TO AND SUSTAIN QUALITY HEALTHCARE SERVICES, PARTICULARLY FOR WOMEN AND CHILDREN Annual Report 2015 41
WHEN YOU EDUCATE A GIRL, YOU KICK-START A CYCLE OF SUCCESS. IT MAKES ECONOMIC SENSE. IT MAKES SOCIAL SENSE. IT MAKES MORAL SENSE. - Queen Rania al Abdullah
EDUCATION
HIGHLIGHTS 2 015 We increasingly focused on implementing costsharing models through our pilot ‘shishuniketon’ that was scaled up to 4,832 centres. This is a fee-based model that caters to children from lowerincome families but who can afford to pay for quality education.
Investing in the NEXT GENERATION of learners
80 per cent of the 120,018 BRAC school children taking the class 5 completion exam achieved the highest grade results (A+, A and A-). The pass rate stood at 99.95 per cent, slightly
higher than the national average. Students from seven BRAC-run secondary schools took the junior secondary school certificate exam and 82 per cent of the students received the highest grades. The pass rate was 99.43 per cent. We piloted transforming traditional textbook content into multi-device enabled interactive multimedia content with support from the Ministry of ICT, Government of Bangladesh and technical support from Save the Children. We introduced 125 tablets into five BRAC primary schools in Manikgonj and Mymensingh districts of Dhaka. We began work in 20 Dakhil madrasas1, where training for English language teachers is being offered. We developed region-specific supplementary materials for our primary schools on environment and climate change. We also developed supplementary materials on values education for primary and pre-primary students to enhance good morals. Materials include six story books and six activity-based guides for teachers.
In line with the National Education Policy 2010, our strategic vision for the next five years ensures inclusion, equitable quality education and promotes lifelong opportunities for all (SDG 4). A core challenge for Bangladesh, as a country with an emerging economy, is to ensure that its growth strategy addresses equity. Education for all children, which ensures economic and social inclusion, is a key element of that strategy. We aim to provide a full range of education opportunities from early childhood to adolescence, focusing particularly on girls from disadvantaged areas.
Changing social norms and supporting adolescent empowerment, a joint pilot project with UNICEF Bangladesh, was initiated in Mirpur and Karail slums of Dhaka. The project targets adolescent girls. A total of 3,000 girls between 10 to 19 years of age, including girls with disabilities, received education and counselling on basic nutrition, dietary consumption to prevent iron deficiency anaemia and iodine deficiency disorder, and demonstration on healthy cooking and eating habits. Additionally, adolescent girls received iron folic acid capsules and deworming tablets.
1
Madrasah students in the secondary level take junior Dakhil certificate and Dakhil certificate exams- equivalent to junior certificate and secondary school certificate exams by the national board.
From mentoring to lifelong learning “I believe success is not confined to academic achievements. To me, it is also about developing leadership skills and helping my peers achieve their goals,” says Imamul Islam, a 20-year-old student. Imamul recalls himself as a shy student. He was selected as a mentor in class 6. It was an experience that changed his life. He remembers, “I changed as a person and my role as mentor was a big reason”. Peer mentoring is an initiative that trains proactive and academically-advanced students as mentors. In the BRACsupported rural secondary schools, where the initiative runs, mentors take up various responsibilities, including encouraging attendance, preventing dropouts, increasing participation in exams and extra-curricular activities, all the while ensuring better academic performance among their peers. Peer mentoring can be helpful especially for younger people who may need a little extra attention, or those who do not have a strong support system available to them. Mentors serve as a resource for students who need guidance and encouragement. Each mentor works with a group of 7-10 peers. Peer mentoring stresses the importance of collaboration and team work. Studying in a school in a remote village that frequently faced a shortage of teachers, Imamul helped his peers in subjects like math, science and English. The result could be seen in his peers’ success in their national board exams. Imamul thinks the beauty of peer mentoring is its ‘peer approach method’, lessons from which are helping him to this day. Now in college, Imamul still maintains the habit of helping out his peers. He organises debates and poetry recitals, extra-curricular that he loved participating in during his days of peer mentoring. He hopes that the peer mentoring initiative will expand into the remotest corners of Bangladesh and continue helping students find and nurture their potential. Annual Report 2015 45
Early childhood development (ECD), a cross-programme pilot initiative, is one of our emerging priorities that provide children of 3-5 years with quality early childhood development services. We work alongside health, nutrition and population programme (HNPP) and Institute of Educational Development (IED) under BRAC University.
BEP
• Support cognitive, linguistic and socioemotional development through stimulation and joyful learning • Prepare children for primary schooling
46 Annual Report 2015
IED
• Develop curriculum focusing on children’s cognitive, social, emotional and physical development • Develop parenting guideline • Research on the effectiveness of the centres
HNPP
• Conduct sessions with parents • Provide guidance on health and hygiene ie, ensure nutritious diet for children, demonstrate preparation of oral saline • Introduce age-appropriate toys
Objectives of ECD centres • Stimulate children’s learning capabilities • Improve children’s health and nutrition • Support parents, caregivers and people in the community with appropriate parenting skills and knowledge on raising children to develop to their full potential • Ease their transition into formal schooling
WE WILL STRENGTHEN OUR EFFORTS IN THE REMOTE CHAR (RIVERINE ISLANDS) AND HAOR (WETLANDS) AREAS AS WELL AS IN URBAN SLUMS Annual Report 2015 47
INTEGRATED DEVELOPMENT
Financial inclusion and enterprise development: We formed 1,993 village organisations to operate microfinance. We provided grant and asset support to 9,650 ultra poor participants.
ELIMINATING POVERTY in HARD-TO-REACH AREAS through holistic interventions
We trained 9,342 people in char areas on income-generating activities. We also trained 600 clients in our cashless branches on the use of mobile money to carry out microfinance transactions. We trained 791 ultra poor, indigenous participants on livestock rearing, homestead gardening and skill building.
Integrated Development Programme In spite of the overall development and economic growth of the country, poverty is still very prevalent in the hard-to-reach areas of Bangladesh. We work for underserved communities that are socially and geographically detached from mainstream development interventions. We realise that poverty is multifaceted, especially in the hard-to-reach wetlands (haor), riverine islands (char) and among indigenous populations in north-western Bangladesh. We offer multi-faceted support, covering a range of sustainable development goals such as ending poverty and hunger, ensuring education and wellbeing for all and promoting sustainable economic growth.
We formed and trained 3,292 village development organisations to empower women. 27,091 students living in the haor (wetland) areas were provided access to BRAC pre-primary and primary schools. Over 1,414 popular theatre shows were staged.
Health and sanitation: 50 per cent of 556 legal complaints received were resolved through alternative dispute resolution. Four media advocacy meetings were held to create awareness for indigenous rights at the sub-district level. We organised 17 solidarity meetings with union councils, and 1,333 courtyard meetings involving 9,405 participants.
We provided over three postnatal care visits to 11,602 mothers and over four antenatal care visits to 15,880 pregnant women. We established 26,183 sanitary latrines, 110 deep tube wells and 24 community latrines. 105,463 households involved in homestead gardening were able to meet their nutrition demands. We distributed micronutrients among 2,16,035 members.
Alpina Begum lives in Nurpur, a village in the north-eastern district of Netrokona. By day, she tends to the vegetables and fruits in her garden and looks after the bull, ducks and hens. As soon as night falls, she takes out a special bag, replaces her plain coloured sari with a colourful salwarkameez and swaps the bucket on her arm for a row of shiny bangles. Alpina acts in a local theatre group that regularly travels across the northern villages of Bangladesh. On stage, her voice resounds with hope and passion, about gender equality and social justice. Her performances speak out against violence against women, child marriage and the need for all women and men to come together to build a better society. Alpina’s colourful stories are rooted humbly to her own experiences, for she was once on the receiving end of the sort of violence she emulates on stage. Her husband deserted her and their three daughters after ten years of marriage, forcing them to share a single room in her brother’s house. It was only much later that she realised that the physical abuse she had endured for so long at the hands of her husband was a punishable act. There are two reasons why Alpina says she did not speak out earlier; she was missing the right information and, more importantly, she was missing a sense of entitlement to her own rights.
HIGHLIGHTS 2 015 Education and empowerment:
Her own hero
We will combine all of BRAC’s services into a single, HOLISTIC APPROACH to FIGHTING POVERTY
After her husband left, Alpina armed herself with legal information through one of our village development organisations and filed a complaint against her husband. She nurtured her resources and grew her income steadily as an active participant of the ultra poor programme. Alpina wanted to give her daughters the gift that she had always wanted - education. As her small farm and her theatre career flourished, the first investment she made was to admit her three daughters in school. Alpina’s story is one that she crafted entirely on her own. She continues to touch lives, almost every evening, as she rallies other women on gender equality and taking charge of their own lives. On stage, the audience’s eyes shine with excitement and laughter as she tells her story. At home, her daughters’ eyes shine with the pride of all those eyes looking up to their mother.
Annual Report 2015 49
AGRICULTURE AND FOOD SECURITY
Participant coverage in agricultural and food security activities in 2015
Increasing agricultural productivity with SUSTAINABLE, CLIMATE-RESILIENT TECHNOLOGY
Participant coverage
Hybrid and HYV rice cultivation
Aquaculture in gher (pond-like structure) areas and seasonal floodplains
Sunflower cultivation
Bangladesh is highly vulnerable to the impacts of climate change, facing extreme events that continually affect crop production. We are committed to developing and disseminating a diverse range of climate-smart agricultural technologies to ensure food security. We design our interventions to meet the sustainable development goals of achieving food security and improved nutrition and promote sustainable agriculture (SDG 2).
HIGHLIGHTS 2 015 We developed three hybrid rice, three hybrid maize, three inbred rice, four vegetables, one pulse and one oilseed variety for commercial cultivation. We developed aromatic rice Kalijira PL9 through pure line breeding. This variety has a much higher yield potential and shorter maturity period than usual Kalijira rice. Approximately 117 aromatic and 77 non-aromatic traditional rice varieties were maintained for on-farm rice biodiversity conservation.
Research on four crops in a yearround cropping pattern was successfully completed. We demonstrated new agriculture and aquaculture technologies to 88,821 farmers. A total of 156,352 farmers in 51 sub-districts across Bangladesh were trained on improved technologies. 6,693 farmers were introduced to an environment-friendly system of rice intensification. The initiative covered over 1,332 hectares of land across 73 sub-districts, mostly in the
137,400
2,300
Flooding and water logging are common occurrences in Gopalganj district in central Bangladesh. Parts of the region stay submerged for months on end during the monsoon season, resulting in reduced crop production. People have adopted a new method of cultivation called floating agriculture. Plants are grown in the water and derive nutrients from the water instead of the soil.
25,600
Floating agriculture is not only climate-adaptive, but can also lead to sustainable, large-scale crops. Monika Kirtoniya is one of many who started a floating farm upon receiving training on floating vegetable cultivation.
Maize cultivation
22,400
Vegetable cultivation
19,300
Mustard cultivation
6,600
drought-prone northern regions of Bangladesh. Sunflowers were cultivated on 6,565 hectares of land. Homestead vegetable cultivation and dyke farming were introduced to 19,344 farmers to meet nutritional demands and ensure year-round availability of vegetables. Aquaculture was introduced into 30 seasonal floodplains in 16 sub-districts, helping to conserve indigenous fish species.
Floating farms that fight climate change
WE WILL IMPROVE NUTRITION BY ENGAGING RURAL WOMEN IN THE PRACTICE OF NUTRIGARDENING
Aquatic plants like water hyacinth are grown on soil-less rafts on water, providing a platform to sow seedlings in. Plants get nutrition from either composted organics or from the water. Field crops often perish during water logging, but floating farms survive. Monika used to follow traditional rice cultivation methods on her 33 decimals of land. The land she cultivated on would stay waterlogged for up to six months every year, leading to an unstable income. Managing three meals a day for her family was often impossible during those months. When waters around her home began to rise again last year, she turned to floating farms. Both Monika and her husband now work in her floating farm. She cultivates red amaranth, water spinach, indian spinach and okra, producing 3,900 kg of crop per acre. She makes a net profit of USD 865 (BDT 67,500) per acre. Floating farms have meant not only securing three meals a day, but the freedom of having vegetables all year round.
Annual Report 2015 51
WATER, SANITATION AND HYGIENE
BUILDING BLOCKS OF THE BRAC WASH SERVICE DELIVERY APPROACH
Promoting SOCIAL TRANSFORMATION AND WELL BEING through communitydriven interventions
Creating demand
Ensuring supply
WASH
Strengthening the enabling environment
Appropriate financial arrangements
The case of the three-headed tube well Chitalmari, a village in the southern district of Bagerhat, is known for being a difficult area to drill deep tube wells. Since 1971, the government has drilled only 13 tube wells in the entire area. The underground layers of soil are exceptionally hard, so it takes over a month to drill what normally would take only two weeks. The rates charged by drill workers are determined according to the conditions of the area. As a result, the process was deemed too difficult and expensive almost every time it was attempted. Our intervention opened up the rates for drilling, allowing the workers to charge higher than normal. Contracts were signed and the workers wasted no time to start work. A bore hole left empty for too long means a higher chance of the hole collapsing, which means starting again from scratch - this resulted in fast completion of the bore holes.
Access to safe water and sanitation are basic human rights. Inability to access them can lead to a wide variety of social impacts, from water-related diseases and malnutrition, to low school attendance rates and loss of productivity. We have been working to improve services relating to water, sanitation and hygiene in Bangladesh since 2006. So far, we have provided these services across half the country, ensuring sustainability through community ownership, developing linkages with local governments, and supporting local entrepreneurs. From 2016, we will expand our reach into urban and hard-to-reach areas, contributing to the sustainable development goal of ensuring access to water and sanitation for all (SDG 6).
HIGHLIGHTS 2 015 significant progress has been made since the inception of the programme in 2006. As of December 2015, we have helped 2.3 million people gain access to safe drinking water. This includes arsenic and saline-prone areas, which benefitted from the installation of deep tubewells, piped water supply systems, pond sand filters and water treatment plants. We helped 41.6 million people gain access to hygienic latrines. We provided loan support to poor
households and grant support to ultra poor households to encourage them to build latrines. Outcome monitoring shows that 78 per cent of the households in areas where the programme has worked for more than eight years now have access to hygienic latrines. All adult members and children (above 6 years) in 97 per cent of these households use the latrines regularly.
latrines for girls, which included facilities for menstrual hygiene management. We have recently started providing separate latrines for boys along with piped water systems in schools in both rural and urban areas. Every year we provide hygiene education to an average of 13.9 million people in communities, and 2.9 million students in schools.
WE WILL COMMENCE OPERATIONS IN 400 HARD-TO-REACH UNIONS AND 35 POURASHAVAS (SMALL TOWNS), PRIMARILY ALONG THE CLIMATE-AFFECTED COASTAL BELT AND WETLANDS OF BANGLADESH
One day, a drill worker approached a water, sanitation and hygiene engineer, Narayan Chandra Somoddar, and suggested adding extra heads (hand pumps) to an existing tube well. Somoddar knew that this had never been attempted before. Choosing a spot where safe water was available, he carried out an experiment, adding three heads to a tube well. Three water pipes were laid out, reaching three different communities, each almost a thousand feet away. Results showed that the water flow from three heads was good, but was even better in a tube well with two heads. The breakthrough idea was immensely successful, and soon seven more two-headed deep tube wells were installed in the region – drastically reducing the costs of boring and maximising access to safe water. “Previously, the people of Chitalmari used to drink pond water, and had to travel far to collect safe water. Now nearly 100 households receive access to safe water nearby, saving time”, says Somoddar.
Over 5,600 schools in rural areas have been provided with separate Annual Report 2015 53
MIGRATION Making labour migration SAFE FOR ALL
Safe migration for economic development
Leaving home
Potential and departing migrants pursue safe migration routes
The ultimate weapon for migrant workers All mothers want the best for their children. In times of uncertainty, when the very act of survival becomes a challenge, a mother will go to any extent to protect and provide for her family - even if it means travelling to a foreign land with no prior knowledge of its language or culture.
Working abroad
Migrants are ensured decent working conditions in their host countries
A combination of factors - lack of proper information, inadequate services from government and nongovernment agencies, absence of proactive migration policies and a lack of policy implementation mean that migrants face challenges when leaving home, when working abroad and when returning. We provide support at every step of the journey to try and change that, to ensure that migrant workers know their rights and can exercise them. Our goals are to create an environment for orderly, safe, regular and responsible migration (SDG 10) and promote safe and secure working environments for migrant workers (SDG 8).
HIGHLIGHTS 2 015 We were awarded for outstanding contribution in the area of migration by the Government of Bangladesh. We oriented 250,000 potential migrants on safe migration, and built the capacity of 700 migrant workers through pre-departure and life skills training. 1,770 women received training on safe migration and antitrafficking. Seven government-run counter-trafficking committees were restructured to more effectively prevent trafficking of women.
BDT 3,781,000 was recovered through We signed a memorandum of social arbitrations and BDT 7,535,066 understanding with the Centre for was received in death benefits from Asia-Pacific Initiatives of the University the Bureau of Manpower, Employment of Victoria, Canada, to exchange and Training. interns to foster collaboration and knowledge sharing on migration. 220 returnee migrants were trained for economic reintegration. We introduced the first media award Of them, 48 were provided with for local and national level journalists economic grants for entrepreneurship for their contribution to raising mass development. 10 received financial awareness on migration, migrant assistance for medical treatment. rights and welfare. 87 partnerships were established with community-based and nongovernment organisations to bring our services to the doorsteps of migrants.
Returning home
Returnee migrants find jobs or start businesses
We will introduce a sustainable model of migration service centres and language training centres to ensure QUALITY AND SAFE MIGRATION FOR ALL
Meet Arzina, a 25-year-old mother from rural Narshingdi in central Bangladesh, who was recently offered a job in the Maldives. Each year, more than 400,000 workers like Arzina leave home in search of better lives, for themselves and for their families. At home, 87 per cent of the labour force is employed in the informal economy. It is not uncommon that women like Arzina cannot access the opportunities that would allow them to provide the life they want for their children. Many Bangladeshi migrants encounter unimaginable difficulties from the moment they leave their doorsteps; high fees and complex visa processes, exploitation, and social stigmatisation when returning home. When Arzina’s neighbour, a middleman, offered her the job as a caregiver, she accepted it in a heartbeat. She, like so many others, did not have a lot to lose. The risk of going to a distant tropical island with minimal education was a small challenge if it meant a better future for her son. The middleman demanded that USD 510 (BDT 40,000) was to be paid in advance. Arzina was about to comply when she attended a courtyard meeting that made her reconsider. BRAC’s courtyard meetings verify the documents of potential migrant workers. Arzina grew suspicious while listening to the risks and actual costs involved. She showed a photocopy of her visa. It turned out to be fake, an issue rampant in Bangladesh. In 2009, over 60 per cent of 50,000 visas of migrant workers travelling to Malaysia were found to be unauthorised. Arzina has not retrieved her passport. The middleman denied everything when she charged him. Working in a Dhaka garment factory now, she says, “I plan to work abroad someday - but not before knowing all of the terms and conditions.”
Annual Report 2015 55
BRAC Global Report 2013
INVESTMENTS
56
6 investments:
Investing to SOLVE SOCIAL PROBLEMS
The teacher with her own motto Hosne Ara Farid married as a teenager, just after she passed her matriculation examination. She accepted her father’s decision to arrange her marriage because she had 14 younger siblings that her parents needed to care for. She was determined to pursue her education, and her husband encouraged that decision. Hosne Ara graduated with a Bachelor of Arts from Comilla Women’s College, a Bachelor of Education from Mymensingh College and began teaching at Siddeswari Girls’ School. She continued to work in several schools over the years, gaining a wealth of experience. She observed that young children needed freedom in creativity to facilitate their intellectual growth, and dreamt of starting her own school. She tried multiple times, but family responsibilities and financial constraints got in the way. When her own children graduated from college, Hosne Ara rented an apartment for USD 76 (BDT 6,000) and invested a seed fund of USD 455 (BDT 36,000). Her school, Parijat Shikkhangon, was born. The single room school started with 23 children. In total, 250 students now attend Parijat Shikkhangon schools. Hosne Ara runs two schools across Dhaka and oversees three others. “Every child is special. Education should be an enjoyable experience to engage young minds, not bore them. This is the motto at my school.”
We are a social organisation constantly evolving to the changing needs of society. Whether in education, health or community mobilisation, our unique models bring services to the doorsteps of those living in poverty. We aim to achieve self-sustainability in everything we do. As part of the financial strategy, we invest in socially-responsible companies that assist us in our mission to empower people and communities in situations of poverty, illiteracy, disease and social injustice. Our six investments help us reach the goal of sustainable social development.
BRAC Bank supported Hosne Ara with a small and medium enterprise loan of USD 6,382 (BDT 500,000) in 2009, USD 12,765 (BDT 1,000,000) in 2011 and USD 19,150 (BDT 1,500,000) in 2014. BRAC Bank often supports non-traditional initiatives under its small and medium enterprise loan scheme. The loans are aimed at ventures that have the potential to create ripples of change in a community, and are often smaller than what most corporations allow.
Annual Report 2015 57
We wanted to support dairy farmers
SOCIAL ENTERPRISES
to become financially secure
We funded new farmers to buy cows and land We funded existing farmers to expand their operations
Creating ECONOMIC and SOCIAL IMPACT through enterprise solutions
Soon, there was TOO MUCH MILK
We developed services like artificial insemination, superior grass seeds and veterinary services to improve their chances of success
Farmers could not sell the milk fast enough, and they had no way to preserve it Aarong Dairy was born, to connect farmers to markets. 101 chilling stations keep the milk fresh and we use strict methods to maintain quality. We process the milk to produce a wide range of dairy products which we sell through our retail and modern trade channels. Thanks to the efforts of our 50,000 dairy farmers, our products reach urban consumers fresh, fair priced and of the highest quality. Operating since 1998, Aarong Dairy has become one of our largest social enterprises. We employ over 1,500 people and our farmers produce over 250,000 litres of milk per day. Any surplus we make goes into the sustainability of our projects and the creation of new opportunities.
There is an increasing urgency among developing economies to promote market-based initiatives that offer sustainable business and consumer solutions to disadvantaged populations. This is exemplified by the social enterprise model for business, which promotes inclusive and sustainable economic growth, full and productive employment and decent work for all (SDG 8). Our continuous presence in the rural economy has helped us understand the challenges that rural and disadvantaged communities face. These challenges hinder economic growth and social empowerment. We invest in business solutions that engage rural and urban small/micro enterprises as suppliers, producers and consumers, ensuring affordable products and services that give families across Bangladesh the opportunity to lead better lives.
3 big facts about Aarong Dairy
Aarong Dairy accounts for 22 per cent of Bangladesh’s total dairy market share.
The cattle development fund provided subsidised artificial insemination services to 6,500 farmers, vaccinated 25,600 heads of cattle, delivered 8,000 kg of free fodder seed and trained 2,000 farmers on animal husbandry methods.
In 2015, we collected over 16 Olympic-sized swiming pools, or 42 million litres of milk through our extensive network of rural dairy farmers.
The effect of a single yogurt As Bangladesh’s cities rapidly expand to accommodate growing populations, urbanites continue to rely almost solely on produce from rural areas. What urban consumers are not always aware of is the role that these purchases continue to have in transforming the lives of people in those areas. A single yoghurt that a mother in an urban area buys each day for her child is the reason that a mother like Afroza in rural Pabna is able to send her children to school.
farm. Initially she relied on local milk buyers, but could not earn enough to make a profit regularly. After a few months, she partnered with Aarong Dairy.
Afroza’s life was predictably unpredictable for many years in a sleepy village of Pabna in northern Bangladesh. Her husband worked as a mason and work was often irregular. There was never certainty about when they would have their next meal or when her children could go to school.
A team of veterinarians guided her through the initial stages, providing her with animal husbandry training, basic animal healthcare and vaccination, hygienic milking and artificial insemination services. Afroza’s small dairy farm quickly became a business. She supplied milk directly to her local dairy chilling centre. It was turned into dairy products in urban areas and then sold through Aarong Dairy’s extensive network of retailers. As the farm grew, she continued to get cattle rearing and management support.
One of those days when they did not know, Afroza decided to do something about it. She borrowed money, chose to invest in a calf and start a dairy
Soon, 15 other households in her village were following her lead. Women wanting to start their own farms in other areas close by came to her for
advice. Together, the families now run some of the most productive homestead dairy farms in Pabna. Afroza’s small farm now boasts of five cows and 11 cattle. She saves every month and purchases one cow each year with her savings. She also owns the land which she runs the farm on, and has started a biogas plant. Her younger son is now in class four. He has big dreams, and with the foundation his mother has built for him through her farm, those dreams no longer seem out of reach. Annual Report 2015 59
KE Y ACHIE VEMENTS OF 2 015
Aarong We started in 1978, to create opportunities for women in rural areas and to preserve traditional handicraft methods. We now have a network of over 65,000 artisans. Our products are crafted in dedicated rural production centres and through partnering with independent producers. We sell them through a chain of commercial retail outlets and through e-commerce. In 2015 i. 194 individual producers and artisans were trained to improve their production skills. ii. Two new retail outlets opened in Dhaka. iii. New healthcare and social protection initiatives were integrated for artisans and producers at three of the twelve Ayesha Abed Foundation centres. iv. Awarded the best brand in the Fashion Boutique Category by Bangladesh Brand Forum.
Aarong Dairy We collect milk from over 50,000 farmers, process it into a wide range of different products, and market it through a variety of retail channels. We focus on producing premium quality products and promoting dairy nutrition knowledge. We are the second largest local milk processor in the country. In 2015 i. 110 automated milk collection units were introduced, to improve the quality and efficiency of milk collection. ii. Introduced Laban, a new dairy drink. 60 Annual Report 2015
Seed We are the largest private seed producer in Bangladesh. We supply quality seeds while complementing government initiatives in agricultural research, production and distribution. We work to address food security challenges and promote good agricultural practices among farmers, with a strong focus on research and development, extensive infrastructure and specialised staff. In 2015 i. Awarded the Standard Chartered Bank Best Agricultural Award (Support and Execution). ii. Added wheat and lentil seed to the current product line. iii. Introduced 84 community nutrition scholars to promote nutrition in rural households.
Chicken We offer healthy, convenient food choices to consumers, by preparing and supplying dressed chicken and value-added frozen chicken products to a range of institutional clients and retailers. In 2015 i. Launched the National Hygiene Drive with Bangladesh Parjatan Corporation to raise awareness about hygienic practices within the food services industry. ii. Organised the first National Surfing Tournament in Cox’s Bazar to empower disadvantaged young people, especially girls, through sports.
Fisheries We create income-generating opportunities for rural communities by using ponds and other water bodies for commercial fish farming. We have acted as a catalyst for attracting private investment in the pond-fish sector since the 1990s. We produce and sell varieties of fish seeds to farmers through our many hatcheries and are the market leader for all of the products we sell. In 2015 i. New technology was introduced at the hatchery level, resulting in the production of tilapia rising to approximately 100 million (33 per cent growth compared to 2014). ii. We released 8 million fish fingerling in haor areas (wetland ecosystems) to aid the livelihoods of local fishermen in collaboration with our integrated development programme.
Sericulture We started in 1978 to engage poor rural women in silk production. Our work spans the entire silk-making process, from mulberry cultivation and silkworm rearing to producing fabric and silk products, which are sold through Aarong retail outlets and trade fairs. In 2015 i. Adopted a new rearing technique, the ‘shoot rearing system’, for higher cocoon yield. ii. Started high-quality bivoltine silkworm rearing at Sherpur, Bogra.
Artificial Insemination We began in 1985 as a partnering initiative with the government of Bangladesh to provide people living in poverty in rural areas with access to better quality cow breeds. We distribute semen from our bull station in Mymensingh to depots around the country, where our network of 2,500 trained entrepreneurs provide insemination services to cattle farmers. In 2015 i. 1,640,102 cows were inseminated, with a success rate of 70 per cent. ii. 55 health camps were organised, where over 100,000 heads of cattle were vaccinated. iii. The mastitis control programme was launched and over 0.9 million tests were administered. iv. 153 new workers were trained, bringing the total up to 2,200.
Poultry Breeding We ensure higher earnings for rural women by supplying them with high quality chicken breeders. In addition, we provide farming knowledge and extension services through training of vaccinators and other support services.
Nursery We provide high quality seedlings across the country and give technical assistance and income support to small households.
Feed We provide high quality poultry, cattle and fish feed at affordable prices for rural farmers. We also offer knowledgebased extension services at the farmer level to ensure the efficient and appropriate use of feed for production.
Poultry Rearing We pioneered organised poultryrearing in Bangladesh through producing broiler chickens and layered eggs for urban consumer markets. We focus on retail sales and are a key supplier for the poultry-based processing industry.
Sanitary Napkin and Delivery Kits We employ over 230 women in producing hand-made sanitary napkins and delivery kits, which are sold to rural households through our network of over 95,000 shasthya shebikas (community health workers).
Cold Storage We operate as a micro-enterprise venture, supporting local potato farmers to store their harvested yields and integrating them with the potato processing industry.
Recycled Handmade Papers We employ women to recycle 60 metric tons of waste paper per year. We produce handmade paper and a wide range of other products, such as envelopes, photo frames, greeting cards and gift boxes. Our products are sold to institutional clients and at Aarong retail outlets.
Printing Pack We produce flexible, high quality packaging material for food items, fortified healthy ingredients, processed edibles and agricultural inputs such as seed and bio-chemicals for animal husbandry.
Salt We were established in response to a public health need – the lack of iodised salt in the national diet. We produce and distribute iodised salt through our network of distributors and community health workers, with a particular focus on low-income households. Annual Report 2015 61
SOCIAL INNOVATION LAB
Celebrating innovators inspires the wider BRAC community to engage in idea sharing and problem solving. We focused on motivating staff to contribute ideas through videos and folk songs. (Right) The chairperson and executive director presided over the award ceremony and thanked the winners for their contributions.
WHAT WE LEARNED:
We explore tomorrow’s challenges and build solutions to empower people living in poverty. Bangladesh’s position in the global economy is rapidly changing, and development needs are becoming more complex and diverse.
HIGHLIGHTS 2 015 We held our third Frugal Innovation Forum, themed Pushing the boundaries of development, bringing together 150 leading development practitioners, impact investing experts and social entrepreneurs to explore financially-sustainable innovations to meet these emerging needs.
Digital solutions are increasingly in focus. BRAC Bank’s subsidiary bKash is quickly becoming one of the world’s largest mobile money companies. Our Innovation Fund for Mobile Money seeded a portfolio of diverse pilots for financial inclusion across BRAC, which we are now focusing on scaling up.
The best solutions continued to come from our staff in the field; the grassroots experiences and creativity of our 120,000 staff around the world. The topics we trained staff on this year included building innovative teams, incorporating methods for humancentered design, brainstorming, and talking about failure.
Adopting mobile money poses some technical challenges, but these are relatively easy to overcome if clients and staff see the benefits of going digital. The innovation fund created a low-risk space to experiment and gain deeper insights into how to smoothen the transition to mobile money.
Understanding how to take innovations to scale is increasingly a global priority. We ran events in Dhaka, London and New York, and saw that there were clear opportunities and enthusiasm for collaboration between the private sector and civil society, particularly for hybrid organisations like BRAC that work in both spheres.
The best innovations take into account the realities of client’s lives. Solutions are designed around available resources, and then change ecosystems are created to take the solutions to scale. This ensures continuous improvement and full adoption of the new initiatives.
Managers at all levels can be innovation architects if the organisation encourages an innovation mindset, through initiatives such as our recently-launched short course on innovation for field managers. A key part of this attitude is promoting small behavioural changes and celebrating problemsolving attempts among team members.
Annual Report 2015 63
GOVERNANCE, MANAGEMENT AND CAPACITY-BUILDING ADMINISTRATION
COMMUNICATIONS
We ensure smooth governance and successful implementation of BRAC’s programmes and enterprises. Our department comprises procurement, estate, security risk management, transport, road safety programme, logistics, central store, telecommunication, visa and protocol units.
We enhance, promote and protect BRAC’s image through strategic communication. We foster innovation and synergy across and outside BRAC by facilitating the exchange of ideas and information. We maintain the consistency of all external communications, and employ a wide range of modes of communication to promote a better understanding of what we all do.
We developed procurement guidelines and implementation procedures for BRAC South Sudan and signed a memorandum of understanding with Grameenphone for knowledge sharing on procurement practices in the corporate sector. The security incident recording system was digitised at the security control centre. It operates 24 hours a day now, supporting field staff to manage incidents of crime and facilitate police investigations. A security alert system through mobile text messaging was extended to the district BRAC representatives. We provided support to BRAC International in developing country security contingency plans and conducting security risk assessments. We efficiently managed our fleet of 173 vehicles by integrating the software of the transport department with the software of our workshop wing. A vehicle tracking system was installed in vehicles engaged in field operations to improve safety. A mobile text alert service was introduced for vehicle users. We continued purchasing land and ensuring protection of unused, and sometimes vulnerable areas across Bangladesh. We provided logistic support in distributing warm clothes and relief materials in crisis periods and regularly organised blood donation drives at the BRAC Centre for Bangladesh Thalassaemia Hospital. We also continued managing BRAC’s telecommunication network and arranged visas for BRAC staff travelling overseas.
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In 2015, we coordinated the celebration of BRAC’s 43rd birthday. We held a monthlong campaign called #PowerWomen to celebrate the cause of women empowerment during International Women’s Day. We reached out to young people in urban areas through a cricket match comprising teams of girls from BRAC’s adolescent development programme. We partnered with Grameenphone, the biggest telecom service provider in the country, to run a campaign called #deyarKhushi (joy in giving) where we delivered more than 900 smartphones to budding entrepreneurs and young community leaders from disadvantaged socioeconomic backgrounds. We ran a number of training sessions and workshops to build the capacity of our staff, both nationally and internationally, to deliver effective communications. Our social media following reached 200,000 fans on Facebook, making us the leading non-government organisation in Bangladesh in terms of followers.
CONSTRUCTION AND MAINTENANCE Our team comprises of two units; an infrastructure development department, with 53 engineers, architects and support staff; and a maintenance department, with 108 engineers, technicians and support staff. We advise on and undertake repair, renovation and construction projects to meet the evolving infrastructural needs of the organisation.
FINANCE AND ACCOUNTS We work both nationally and internationally, ensuring aesthetically pleasing, eco-friendly and disability-friendly designs.
We ensure that stakeholders get accurate performance and financial information when they need it.
In 2015, our major projects included the new construction at BRAC’s centre for development management in Rajendrapur and the development of BRAC University’s new campus.
We are responsible for financial planning, record keeping, and managing costs, assets and liabilities. We finance investments, analyse cash flow, profitability, and prepare budgets and financial frameworks for all programmes, divisions and departments. We are accountable for property, provident funds, employee gratuity, salary, tax and loans. We ensure effective financial control and transparency of the financial data of our projects and enterprises, including timely reports for our donors, regulatory authorities and other relevant stakeholders.
DONOR LIAISON OFFICE We ensure mutual understanding and effective communication between donor agencies and other partner organisations. Since 2011, one of our key roles has been managing the strategic partnership arrangement, a unique partnership between BRAC, DFID and DFAT, based on shared goals, clear results and mutual accountability. We manage relationships with partners, and coordinate all technical assistance, evaluations and review missions.
In 2015, we continued to work towards internalising BRAC’s values, in addition to our core workload. We prioritised employing female cashiers at branch offices, as a contribution towards ensuring a positive and harassment-free working environment for all our staff.
We introduced an automated and integrated management information system for HR field offices and Aarong. A standard operating procedure for fraud management was published. This mandated that the head of the investigation and grievance management unit will be notified of all fraud-related issues. Our learning unit was awarded a certificate of merit in ‘improving quality of working life’ category at the 44th International Federation of Training and Development Organisations (IFTDO) world conference. In Bangladesh, BRAC has a staff body of 42,625 members. In 2015, 3,737 new members joined our organisation.
INTERNAL AUDIT
In 2015, we strengthened our auxiliary role of standardising BRAC’s fundraising and proposal development efforts through the relationship management forum. Resources, knowledge and expertise are shared through the forum to harness synergy and realise strategic goals together.
HUMAN RESOURCE AND
We delivered workshops on partnership management, theory of change, monitoring and evaluation.
In 2015, we implemented a new grade and market competitive salary structure to attract and retain high performers, and encourage a performance-driven culture.
We organised the annual partners’ meeting, which saw record participation from over 17 development organisations, donor agencies and partners. The meeting was testament to our continuous pursuit of new and more effective forms of development cooperation and knowledge sharing.
We arranged career-grooming sessions and partnered with career clubs of various universities. We introduced a CV bank and CV drop box to improve our recruitment process.
Our long-term goal is to leverage our experience of partnership and relationship management to support the organisation becoming self-sustainable.
The monitoring unit for the first time, conducted a third-level evaluation to measure behavioural changes resulting from all the different training received.
LEARNING DIVISION We attract, recruit, develop and retain the right talent to continually grow the BRAC family.
We have formed a talent management team, with a vision to ensure high performance and sustainability within the organisation. The objectives of the team are to identify critical roles and talents within the organisation and cultivate their development plans.
We work independently within BRAC’s governance framework, undertaking risk-based internal audit and compliance services in accordance with the Institute of Internal Auditors. We evaluate and report on the adequacy and effectiveness of internal control and risk management within the organisation’s governance, operations, and information systems. We maintain integrity, deliver reliable financial and operational information, safeguard assets, and ensure compliance with laws, regulations, policies, procedures and contracts. In 2015, we initiated an internal control questionnaire for area managers to cover their operational activities. A quality performance review (peer review) of divisionbased audit managers was started. We also implemented the data management software, BRAC internal audit management system, in divisional offices successfully. There is a provision to conduct external assessments at least once every five
years by a qualified independent assessor, in accordance with the Institute of Internal Auditors’s International Professional Practice Framework. A quality assurance review of the internal audit department was also executed.
INFORMATION AND COMMUNICATIONS TECHNOLOGY We are a technology-based solution hub, ensuring quality technological interventions for BRAC. We are continuously improving BRAC’s service model, focusing onrealtime data collection to monitor programme operations and make strategic decisions. In 2015, we worked with the health, nutrition and population programme to run an e-health pilot that covered almost 200,000 clients in urban areas through 210 extension workers. The pilot will scale up to cover one million clients by 2016. We began piloting a technology platform designed to graduate people from poverty through the targeting the ultra poor programme. The platform allowed trend analysis and forecasting, and improved decision-making. Field operations were coordinated more effectively and data was interpreted using modern visualisation tools. We enabled business process automation, such as fixed asset trackers and an inventory control system, in all our learning centres, as part of the paperless initiative. Tools developed for internal audit helped BRAC International’s internal audit process in Uganda, Tanzania and Pakistan. We implemented virtualisation platforms to improve our data centre infrastructure. 80 per cent of our existing servers’ computing load was transferred to virtual machines. This reduced the number of physical servers, and promoted green computing. We organised BRACathon, the biggest coding marathon for app developers of the country. The event aimed at developing useful mobile applications for social innovation, with the motto ‘technology for Annual Report 2015 65
social good’. Over 120 contestants from universities and tech start-ups participated in the competition,taking up challenges from preventing tuberculosis to improving city roads.
LEGAL AND COMPLIANCE We protect legal interests, promote good governance in all of BRAC’s endeavours, and create legal awareness within the organisation. We are a team of 44 legal and compliance lawyers at the district level and 12 lawyers in the head office, and our key objective is to provide BRAC’s staff, programmes, property and reputation with legal protection. 2015 was about strengthening ties with our partners. Our legal team worked towards stronger working relationships with the regulatory authorities of the government, the judiciary and anticorruption commissions. A total of 81 compliance review visits of BRAC Enterprise establishments were conducted throughout the country. The implementation of a district case management committee meetings improved the knowledge and efficiency of the field offices while boosting BRAC’s programme coordination in the field. A total of 555 of these meetings were conducted, across all 64 districts. The percentage of pending or ongoing cases being disposed increased by 17 per cent, compared to 2014, in the continuing process of rationalising the existing number of cases. Our documentation wing successfully fulfilled all 211 requests for review, vetting and legal opinions for BRAC and BRAC International.
MONITORING We support decision-making at policy and operational levels. We conduct periodic analysis based on set standards, to ensure transparency. We assist management to determine whether key activities are being carried out as planned, and whether they are achieving expected outcomes.
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We align our monitoring objectives and indicators with BRAC’s transformation to a social enterprise model. We provide continuous feedback on programme performance to ensure smooth progress towards achieving the global sustainable development goals. In 2015, we monitored 174 issues, covering all programmes and enterprises, and generated reports based on the findings. We organised six bi-monthly meetings to share the findings with senior and mid-level management of different programmes. Significant findings were shared with the programmes, facilitating quick measures for improvement. We also successfully implemented an e-monitoring and data collection system through open data kit software.
PARTNERSHIP STRENGTHENING UNIT We develop and strengthen partnerships with NGOs, private and government agencies. Within BRAC, we facilitate field-level coordination and collaboration among BRAC programmes through the support of district BRAC representatives. These representatives facilitate in obtaining yearly project completion certificates from government counterparts. They ensure smooth implementation of the programmes in the field in collaboration with local government administration. They also act as designated officials under the Right to Information Act 2009 in national and district levels. On the national level, the NGO Affairs Bureau (NGOAB)— the government counterpart agency for BRAC, is our principle partner. We ensure timely approval of internationally-aided projects from the NGOAB. In addition, we work with a wide array of government agencies to create synergy between BRAC’s work and the work of those agencies. We also arrange registration, permits, etc needed for BRAC’s social enterprises and investments. We administer work permits and visas for expatriate employees.
RESEARCH AND EVALUATION
RISK MANAGEMENT SERVICES
We have played an integral role in designing BRAC’s development interventions since 1975. We carry out multidisciplinary studies on issues of national and global importance, such as agriculture, nutrition, health, education, and gender. We maintain strong linkages with government organisations, UN bodies and academic and research institutions nationally and internationally. Our research helps to achieve programme objectives through modifying and improving strategies, and identifying new issues.
We ensure that the organisation identifies, understands and effectively manages risks to safeguard its staff and meet its obligations. We provide support in implementing effective plans to prevent losses, and reducing impact in the case of losses. We also provide consultation and capacity development training to all beneficiaries, and quarterly and annual risk management reports.
In 2015, we conducted more than 23 studies. Our impact assessment study on BRAC’s safe migration programme revealed that potential migrants are the most dominant group among the five categories of migrants. There is, however, a general lack of knowledge on key factors like registration, visa verification and the kinds of support systems available for migrants aboard. Our ethnographic study on women garment workers resulted in several major interventions, recommendations and guidelines to formulate strategies for their wellbeing. Findings on BRAC’s neuro-development disability centres indicated positive learning outcomes for children with disabilities. The centres serve the purpose of a joyful learning environment, and it was found that there is progressive change in attitudes towards disabilities in the community. We produced four research reports, ten articles in peer-reviewed journals, eight working papers, a book, four quarterly newsletters and a Bangla compendium, Nirjash. We organised three research dissemination seminars, a book launching ceremony and 38 research seminars.
We support BRAC’s governing body and senior executives in making strategic decisions, by reporting jointly to the risk management committee and the governing body. We are currently in the process of introducing an e-risk management system to ensure timely identification, assessment, mitigation and monitoring of all risks that BRAC may face.
ROAD SAFETY
visibility at night. 402 bus and truck drivers received three days of training on residential road safety and a defensive driving course called Shurakkha. Members of six community road safety groups met once a month to review the progress of the road safety action plans. A seminar on Shurakkha was held in Sylhet, and attended by BRTA officials, police, district administration, BRAC, transport owners and workers associations. 845 candidates were given basic driving training in 2015 from our driving school. BRAC Driving School is the only school in Bangladesh that provides road safety, defensive and advanced driving training, classifying competencies of in-service drivers through the ‘P’ drive system. 290 professional drivers from organisations such as the US Embassy, British High Commission, Red Crescent, Save the Children, Unilever Bangladesh, Halliburton have received training from our driving school in 2015.
We signed a memorandum of understanding with the Local Government Engineering Department to implement a ‘community road safety programme’ in four sub-districts in Cox’s Bazar and Gazipur. 15 leaders from non-government orgainisations and community-based organisations, and 360 community leaders, were trained and organised into 30 community road safety groups. These groups identified their local road safety problems and solutions through action plans. 360 teachers were trained to instruct 51,000 students on how to use roads safely. Educational materials, including flipcharts, booklets, and training videos for students and drivers, were developed. Two sub-district road safety committees were reactivated. 38 teachers from 25 schools participated in refresher training on road safety, with support from a project with Chevron Bangladesh Limited. The project brought lessons on road safety to 4,500 students. Students participated in quizzes and were awarded with token prizes. 265 rickshaw pullers were trained on road safety. Reflective stickers were put up on the back of rickshaws for better
Annual Report 2015 67
BRAC MANAGEMENT
DIRECTORS
EXECUTIVES
Dr Muhammad Musa
Faruque Ahmed
Shib Narayan Kairy
Executive Director BRAC
Executive Director BRAC International
Chief Financial Officer BRAC and BRAC International
Shameran Abed
Dr Kaosar Afsana
Jalaluddin Ahmed
Director Microfinance BRAC and BRAC International
Director Health, Nutrition and Population Programme
Director Asia Region BRAC International
Abdul Bayes
Senior Director Enterprises, BRAC
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Director Skills Development
Sayeda Tahya Hossain
Ahmed Najmul Hussain
Chief People Officer BRAC International
Chief People Officer Human Resources Division Learning Division
Director Administration Road Safety
Md Akramul Islam
Safiqul Islam
Rachel Kabir
Anna Minj
Director Tuberculosis and Malaria Control Water, Sanitation and Hygiene
Director Education
Director Chairperson’s Office
Director Community Empowerment Integrated Development Gender Justice & Diversity
KAM Morshed
Saieed Bakth Mozumder
Faustina Pereira
Taufiqur Rahman
Director Human Rights and Legal Aid Services
Director BRAC Dairy and Food Enterprises
Director Research and Evaluation Division
Tamara Hasan Abed
Tahsinah Ahmed
Munmun Chowdhury
Asif Saleh Senior Director Strategy, Communication and Empowerment BRAC and BRAC International
Director Advocacy for Social Change Information and Communication Technology Partnership Strengthening Unit
Director Tea Estates
Annual Report 2015 69
Lamia Rashid
Nanda Dulal Saha
Munshi Sulaiman
Saif Md Imran Siddique
Director Africa Region BRAC International
Director Internal Audit BRAC and BRAC International
Director Research Director BRAC International
Director Finance BRAC International
Gawher Nayeem Wahra Director Disaster Management and Climate Change
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BRAC ORGANOGRAM
As of June 2016
DIRECTORS
Annual Report 2015 71
BRAC GOVERNING BODY GENERAL BODY The general body of BRAC consists of 33 members. As per the Memorandum of Association and Rules and Regulations of BRAC, the general body elects the governing body. The Annual General Meeting of BRAC was held in June 2015, in which the general body approved the audited financial statements for the year ended December 31, 2014, approved the annual budget for 2016, and approved the appointment of external auditors for the year ended December 31, 2015.
GOVERNING BODY The governing body of BRAC consists of 10 members. Distinguished professionals, activists and entrepreneurs of excellent repute have been elected to the governing body, bringing their diverse skills and experience to the governance of BRAC.
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 2009, in recognition of his services to reducing poverty in Bangladesh and internationally. Sir Fazle has received numerous national and international awards for his achievements in leading BRAC, including the World Food Prize (2015), the Spanish Order of Civil Merit (2014) and the inaugural WISE Prize for Education (2011), the David Rockefeller Bridging Leadership Award (2008), the Conrad N Hilton Humanitarian Prize (2008), the inaugural Clinton Global Citizen Award (2007) and the Henry R Kravis Prize in Leadership (2007).
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Ahmed Mushtaque Raza Chowdhury Vice Chairperson, BRAC
Tahrunnesa Abdullah Social Scientist and Gender Specialist
Latifur Rahman Chairman and CEO Transcom Group
Dr Chowdhury is also a professor of population and family health at Columbia University in New York. He previously served as senior adviser at the Rockefeller Foundation, based in Bangkok, Thailand. He was also the founding dean of the James P Grant School of Public Health in Dhaka and served as a research associate at Harvard University’s Center for Population and Development Studies. He is the co-recipient of the Innovator of the Year 2006 award from the Marriott School of Management, Brigham Young University in the USA.
Ms Abdullah is an advisor to Democracywatch and also serves as the chairperson of Gono Bishwabidyalay, ASA, Ain o Salish Kendra and South Asia Partnership-Bangladesh. She started her career at the Comilla Academy for Rural Development and headed the women’s education and home development programme. She oversaw the development of the National Plan of Action for Children 1997-2002, and has served as chair of Bangladesh Shishu Academy and Bangladesh Jatiya Mohila Sangstha.
Mr Latifur Rahman is also the chairman of Nestlé Bangladesh, Holcim Cement (Bangladesh), and National Housing Finance and Investments. Mr Rahman holds the position of vice president of International Chamber of Commerce in Bangladesh. He has also been elected as a member of the executive board of International Chamber of Commerce in Paris. Formerly the president of the Metropolitan Chamber of Commerce, he is an erstwhile president of Bangladesh Employers’ Federation. Mr Rahman was chairman of the Trade Body Reforms Committee and member of Bangladesh Better Business Forum. He was member of the executive board of Bangladesh Bank (Central Bank). Mr Rahman is an Honouree of the Oslo Business for Peace Award in 2012, and was named Business Executive of the Year in 2001 by the American Chamber in Bangladesh.
Rokia Afzal Rahman Vice President, International Chamber of Commerce Bangladesh
Luva Nahid Choudhury Director General Bengal Foundation
Ms Rahman currently chairs Airlinks Group of Companies and RR Group of Companies. She is the chair of Mediaworld Ltd, and a director of Mediastar and ABC Radio. As chair of MIDAS Financing Ltd, Ms Rahman has initiated loan facilities to several thousand women. She was a director of Reliance Insurance and is the former president of the Metropolitan Chamber of Commerce and Industries. Ms Rahman is a board member of Asian University for Women.
Ms Choudhury is an architect who was a part of the Bangladesh Government service for 10 years and currently heads an architectural practice in Dhaka. She is the director general of Bengal Foundation, a trust that supports and promotes the arts in Bangladesh. She also heads ICE Media and Bengal Publications, both leading publishing houses.
Mr Adeeb H Khan Chartered Accountant Vice President Institute of Chartered Accountants of Bangladesh
Adv Syeda Rizwana Hasan Lawyer Supreme Court of Bangladesh Chief Executive Bangladesh Environmental Lawyers’ Association
Mr Khan is a chartered accountant and the senior partner of Rahman Rahman Huq (Member Firm of KPMG International). He is a council member (elected position) of the Institute of Chartered Accountants of Bangladesh and currently its vice president. He is also a committee member (elected position) of the Metropolitan Chamber of Commerce and Industry (MCCI), the oldest and one of the most prestigious trade chambers of Bangladesh. Mr Khan’s past directorships include Biman Bangladesh Airlines, the national Flag carrier of Bangladesh.
Ms Hasan is a lawyer with the Supreme Court of Bangladesh. She is working for the cause of environment as the chief executive of the Bangladesh Environmental Lawyers’ Association (BELA). Ms Hasan did her masters and graduation in law from the University of Dhaka. She is a recipient of the Goldman Environmental Prize and was recognised by TIME magazine as one of the 40 Environmental Heroes of the World. Ms Hasan was awarded the Ramon Magsaysay Award in 2012.
Martha Alter Chen Lecturer in Public Policy Harvard Kennedy School and International Coordinator, WIEGO Dr Chen is a lecturer in public policy at the Harvard Kennedy School, an affiliated professor at the Harvard Graduate School of Design, and international coordinator of Women in Informal Employment: Globalising and Organising (WIEGO), a global researchpolicy-action network that seeks to improve the status of the working poor, especially women, in the informal economy. An experienced development practitioner and scholar, her areas of specialisation are employment, poverty and gender. Dr Chen has spent two decades in Bangladesh and India working for BRAC and Oxfam America.
Syed S Kaiser Kabir CEO and Managing Director Renata Limited Mr Kabir is CEO and managing director of Renata Limited. He is also the chairman of Renata Agro Industries Limited, Purnava Limited and Renata Oncology Limited. Mr Kabir is vice chairperson of the Sajida Foundation and is also on the Board of Directors of the Global Alliance for Improved Nutrition. Mr Kabir started his career as a research officer at the Institute of Economics and Statistics, University of Oxford. He moved on to serve as a consultant at the World Bank from 1991-1993. He was appointed executive director of the Sajida Foundation in 1996, and later joined Renata Agro Industries Limited as managing director from 1997 to 2004.
Annual Report 2015 73
STICHTING BRAC INTERNATIONAL GOVERNING BOARD Sir Fazle Hasan Abed Founder and Chairperson, BRAC Ahmed Mushtaque Raza Chowdhury Vice Chairperson, BRAC
Parveen Mahmud Managing Director Grameen Telecom Trust
Dr Muhammad Musa Executive Director, BRAC
Dr Musa has an extensive background in leading humanitarian, social development, and public health organisations in international, cross-cultural settings. A medical doctor and a public health specialist, he has a specialised training in maternal and child nutrition, and disaster management. Before joining BRAC, he worked for 32 years with CARE International as one of its senior international management professionals. Twenty of those years were spent working in Ethiopia, Uganda, Sudan, Tanzania, Thailand, India, Bangladesh and the Asia region. He has long experience in strategic leadership, governing board management, executivelevel management of large-scale operations, humanitarian and social development programme management, and organisational change management.
Debapriya Bhattacharya Macro Economist and Public Policy Analyst
Dr Bhattacharya, a macro-economist and public policy analyst, is currently a distinguished fellow at the Centre for Policy Dialogue in Dhaka. He is a former ambassador and permanent representative of Bangladesh to the World Trade Organization offices in Geneva and Vienna, and the special advisor on least-developed countries (LDCs) to the secretary general of the UN Conference on Trade and Development (UNCTAD). He is associated with a number of leading institutions, networks and editorial boards of reputed journals. Dr Bhattacharya studied in Dhaka, Moscow and Oxford and has held a number of visiting positions, including at the Centre for Global Development, Washington DC. He is the chair of two global initiatives, LDC IV Monitor and Southern Voices on Post-MDGs.
Shabana Azmi Actor and Social Activist
Ms Azmi is an internationally-acclaimed actress who was a member of the Indian Parliament and a UN Goodwill Ambassador. She is also a vocal and committed social activist, undertaking campaigns and making public statements on various issues, particularly social justice and the rights of women. She is a leading advocate of AIDS awareness in India. Ms Azmi is a visiting professor at Ann Arbor, Michigan and has addressed several universities including Harvard, Columbia, Berkeley, MIT, University of Chicago, and University of London.
Over the course of her professional career, Ms Mahmud has invested substantial time in working with national and international development agencies. She is a chartered accountant and was the first woman to be a council member (2007) and president (2011) of the Institute of Chartered Accountants of Bangladesh. She was also the first female board member of the South Asian Federation of Accountants. She was the deputy managing director of Palli Karma Sahayak Foundation. She also served as the chairperson of the Acid Survivors’ Foundation.
FINANCE AND AUDIT COMMITTEE The governing body of BRAC constitutes the BRAC Finance and Audit Committee with the following members:
Quais Shafiq ul Hassan
Irene Z Khan
Sylvia Borren
Managing Director Echo Sourcing Ltd UK and Echotex Ltd Bangladesh
Director General, International Development Law Organisation
Executive Director, Greenpeace Netherlands
Mr Hassan is the managing director of Echo Sourcing Ltd UK and Echotex Ltd Bangladesh. Echotex has received Bangladesh’s National Environmental Award, Metropolitan Chamber of Commerce and Industry, Dhaka’s Environmental Award and J Sainsbury plc’s Corporate Social Responsibility Award in 2010. Echotex was also awarded Best Clothing Supplier in 2011 as well as Best Clothing Supplier and Supplier of the Year in 2012 by J Sainsbury plc. He is the co-founder of Children’s Hope, an NGO that works to educate slum children in Dhaka.
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Ms Khan is Director-General of the International Development Law Organization. She was Secretary General of Amnesty International and worked for the UN High Commissioner for Refugees for 21 years. Ms Khan is a member of the World Bank Advisory Council on Gender and Development. She sits on the boards of several international human rights and development organisations. She received the Sydney Peace Prize in 2006 for her work to end violence against women and girls. Her book, The Unheard Truth: Poverty and Human Rights, has been translated into seven languages.
Ms Borren was a director of Oxfam Novib from 1994 to 2008. She is a former co-chair of the Global Call to Action against Poverty and chair of its Dutch chapter, EEN. She is a member and former co-chair of the Worldconnectors, a Dutch transformative multi-stakeholder think tank, and is on the Board of the Forest Stewardship Council Netherlands. She was previously a member of the Dutch Government’s Advisory Council on International Affairs and also chaired Quality Educators for All. She was a part of the International Women’s Commission for a Just and Sustainable Palestinian-Israeli Peace. She was also on the board of governors of the Altrecht Mental Health Institute.
1. 2. 3. 4. 5.
Ahmed Mushtaque Raza Chowdhury, Vice Chairperson, BRAC Governing Body Tahrunnesa Abdullah, Member, BRAC Governing Body Adeeb H Khan, Member, BRAC Governing Body Parveen Mahmud, FCA (Independent) Muhammad Musa, Executive Director, BRAC
Chair Member Member Member Member (ex-officio)
SN Kairy, Chief Financial Officer acts as secretary of the committee. Each member is free of any relationship that would interfere with the exercise of his or her independent judgment as a member of the committee. Members of the committee have professional experience and expertise in different sectors. Role and purpose The primary function of the finance and audit committee (the committee) is to assist the governing body (the board) in fulfilling its responsibilities for: • • • •
Financial reporting and budgeting processes System of internal controls and risk assessment Compliance with legal and regulatory requirements Qualifications, independence, and performance of the external and internal auditors
Meetings during 2015 A total of two meetings were held during the year 2015. Annual Report 2015 75
Meeting date: 9 June 2015
•
Highlights: •
•
•
•
•
•
•
•
The Committee suggested to develop the SOP of Enterprises by hiring Consultant The Committee suggested that ‘frauds’ and ‘irregularities’ should be segregated at least for internal use The Committee suggested that the “Risk Management Policies and Framework” of BRAC should be compared with other international organizations and the Risk Management Department should also look into the organizational risk, reputation risk and asset management risk The Committee recommended the Audited Annual Accounts of BRAC for the year 2014 for approval of BRAC Governing Body The Committee recommended to BRAC Governing Body for approval of the proposed Annual Budget for the period from January 2016 to December 2016 and Financial Year budget for the period from July 2015 to June 2016 The Committee recommended for approval of BRAC General Body that A. Qasem & Co., Chartered Accountants, Bangladesh be appointed as the auditor of BRAC for the year January 2015 to December 2015 and for the Financial Year July 2015 to June 2016 The Committee suggested that the time series of findings in relation to ‘financial irregularities’ should be prepared The Committee suggested to explore if the Business related “internal control and weaknesses” could be reported separately
Meeting date: 30 November 2015 Highlights: •
•
•
The Committee further suggested that the “Summary Report on Internal Audit” to the Finance & Audit Committee should include graphical presentation for the time series of findings The Committee recommended to BRAC Governing Body for approval of the proposed revised budget for BRAC for the period from January 2016 to December 2016 The Committee approved the Internal Audit Plan for the year 2016
76 Annual Report 2015
•
•
The Committee endorsed the recommendations of Ernst and Young on “External Quality Assurance Review of Internal Audit Department” and suggested the Director, Internal Audit to implement the recommendations The Committee approved the Revised Terms of Reference (TOR) of Audit Review Committee To increase the effectiveness of the Audit Review Committee, the Committee has been reconstituted with the following members: 1. Executive Director BRAC Chair
2. Treasurer BRAC University Member (Independent)
3. Director Administration, BRAC Member
4. CPO
SN Kairy, Chief Financial Officer, acts as secretary of the committee. The Committee approved the sale of BRAC Banskhali Tea Co. Limited located in Banskhali, Chittagong.
Ombudsperson BRAC has established an Office of the Ombudsperson with a comprehensive mandate to investigate any grievance or complaint made to him by any individual concerning any decision taken by BRAC. The Ombudsperson always maintains the highest level of confidentiality regarding complainants and complaints. The office prepares an annual report concerning the discharge of its functions and submits it to the Chairperson who then put the report before the BRAC Governing Body for their consideration. The roles of the ombudsperson are: •
Human Resources, BRAC Member
5. Director Internal Audit, BRAC Member
•
•
The Committee suggested to engage Ernst & Young for vetting the Revised Internal Audit Manual and place to the next meeting of the Committee for approval
The Ombudsperson can also investigate any grievance/complaint made to him by any individual/third party concerning any decision taken by BRAC Ombudsperson can also investigate by his own regarding any issue of BRAC such as corruption, abuse of power or discretion, negligence, oppression, nepotism, rudeness, arbitrariness, unfairness and discrimination or may give appropriate recommendations to improve BRAC’s performance Anyone (Management or an Employee) can complain/ask to Ombudsperson to investigate any incident of misadministration and misuse of power within the organisation
Investment committee
•
The Investment committee oversees the BRAC investments, and consists of five members. The Governing Body constituted the Investment Committee of BRAC with the following members:
Award and recognition
1. Sir Fazle Hasan Abed KCMG Chairperson, BRAC Governing Body Chairperson
2. Dr Ahmed Mushtaque Raza Chowdhury Vice Chairperson, BRAC Governing Body Member
3. Latifur Rahman Member, BRAC Governing Body Member
4. Rokia A Rahman Member, BRAC Governing Body Member
5. Luva Nahid Choudhury Member, BRAC Governing Body Member
•
2nd position in the Institute of Chartered Accountants of Bangladesh (ICAB) National Award under the category of NGOs for the year 2014.
Membership of INGO Accountability Charter BRAC became a full charter member of the INGO Accountability Charter in December 2013. The INGO Accountability Charter was incorporated in 2008. It is registered as a company in the UK and having its secretariat in Berlin, Germany. The objective is to create and develop a charter relating to the accountability of non-governmental organisations. At present there are 24 charter members. The Accountability Reports submitted by BRAC are available in the websites of BRAC and INGO Accountability Charter at this link: http://www.ingoaccountabilitycharter.org/ home/charter-members/brac
External Auditor The Annual General Meeting of BRAC held on June 11, 2015 have approved the appointment of A. Qasem & Co., Chartered Accountants, Bangladesh (member firm of Ernst & Young Global LLP) as the auditor of BRAC for the year ended on December 31, 2015.
BRAC was awarded the ‘AAA’ by Credit Rating Agency of Bangladesh Ltd. (CRAB). (The ‘AAA’ means Extremely Strong Capacity and Highest Quality) BRAC has been receiving ‘AAA’ rating consecutively for the last six years. BRAC received many awards in the field of financial transparency in different times. In 2015, BRAC received the following awards: •
1st position in the Institute of Cost and Management Accountants of Bangladesh (ICMAB) Best Corporate Award in the NGO Sector for the year 2014.
Annual Report 2015 77
DEVELOPMENT PARTNERS
MAJOR INSTITUTIONAL DONORS
GOVERNMENT ALLIANCES BRAC has a long history of working in collaboration with the Government of Bangladesh. Our joint effort has significantly contributed to attaining many of the millennium development goals. Below are the names of some of the ministries and Government units that we have been closely working with. Ministry of Cultural Affairs Ministry of Education Ministry of Fisheries & Livestock Ministry of Food and Agriculture Ministry of Health and Family Welfare Ministry of Primary and Mass Education Ministry of Social Welfare Ministry of Foreign Affairs Directors General of Health Services
Ministry of Women and Children Affairs Ministry of Young people and Sports National Institute for Local Government Tongi Paurashava All-Party Parliamentary Group Bureau of Manpower Employment and Training Ministry of Expatriate Welfare and Overseas Employement Bangladesh Overseas Employment and Services Limited Bureau of Manpower, Employment and Training
STRATEGIC PARTNERS
KNOWLEDGE PARTNERS
R
The strategic partnership arrangement (SPA) is a partnership between BRAC, the UK Government and the Australian Government, based on shared goals, clear results and mutual accountability. Core funding provided through the SPA helps BRAC deliver tangible results for the people living in poverty in Bangladesh, while developing plans to reduce its reliance on external donor funds, the SPA strengthens its internal systems, and seeks ways to work more closely with the Government of Bangladesh. In the last forty-three years, BRAC has consistently ensured that programmes funded by development partners are efficient, effective, and achieving results at scale. For these reasons, in 2012, two of BRAC's major donors – Department for International Development (DFID) and Department of Foreign Affairs and Trade (DFAT), Australia (formerly known as AusAid) entered into a strategic partnership arrangement with BRAC to support the effectiveness of its work in reducing poverty. Through engaging in a partnership, DFID and DFAT hope to reduce the transaction costs of aid and facilitate greater focus on high-level outcomes rather than inputs. Through the provision of core funding, it enables BRAC to develop a flexible response to learning and a more holistic response to poverty reduction. 2015 marked the successful completion of the first phase of this partnership. We will look forward to engage with our strategic partners in a knowledge-based partnership in future while they continue supporting our work in the next five years.
78 Annual Report 2015
Annual Report 2015 79
Year 2015 USD million
Year 2014 %
USD million
Year 2015
Name of Donor
%
USD million
Year 2014 %
USD million
%
195.44
34.94%
171.35
31.89%
DFID
38.57
38.56%
89.05
46.52%
Health
58.70
10.49%
61.82
11.50%
DFAT
22.51
22.51%
46.46
24.27%
Education
71.40
12.76%
64.99
12.09%
The Global Fund
16.49
16.49%
21.13
11.04%
Water, Sanitation and Hygiene
15.62
2.79%
31.02
5.77%
EKN/NOVIB
1.90
1.90%
9.45
4.94%
Agriculture and Food Security
4.28
0.77%
6.68
1.24%
BRAC USA
1.79
1.79%
5.89
3.08%
35.64
6.37%
30.84
5.74%
EACI, QATAR
1.12
1.12%
2.97
1.55%
150.61
26.92%
150.41
27.99%
UNICEF
2.08
2.08%
2.91
1.52%
27.70
4.95%
20.27
3.77%
Family Health International 360
1.48
1.48%
2.40
1.25%
559.39
100.0%
537.38
100.0%
14.08
14.08%
11.18
5.84%
100.02
100.00%
191.44
100.00%
Microfinance
Ultra Poor Social Enterprises Others *
Total
Others
Total NOTES * Others include the following: Gender Justice and Diversity, Community Enpowerment Programme, Human rights and Legal Aids Services, Policy Advocacy and others.
Annual Expenditure (including capital expenditure) in Million USD 904
Contribution of BRAC to Government Exchequer 2015 Income Year
BDT
845 728
2014 USD
BDT
USD
Income Tax deduction at source by third parties Tax deduction at source from third parties Income Tax deduction at source from Staff salary VAT collection from customers Import Duty paid
221,757,839 144,303,824 30,134,778 513,740,098 1,374,310
2,843,049 1,850,049 386,343 6,586,412 17,619
86,528,390 140,829,291 28,262,260 446,012,259 909,137
1,109,338 1,805,504 362,337 5,718,106 11,656
Total
911,310,849
11,683,472
702,541,337
9,006,940
2015
80 Annual Report 2015
2014
2013
583
572
2012
2011
Annual Report 2015 81
BALANCE SHEET CONVERTED TO USD
Statement of Income and Expenditure Converted to USD
as at December 31, 2015 (NOT PART OF AUDITED FINANCIAL STATEMENTS)
for the year ended December 31, 2015 (NOT PART OF AUDITED FINANCIAL STATEMENTS)
2015 US $
ASSETS Cash in hand and at banks Advance, deposits and prepayments Inventories Grants and accounts receivable Microfinance loans Motorcycle loans Investments in securities and others Investments in related undertakings Property, plant and equipment
16,916,766,552 216,881,622 4,076,719,030 52,265,629 3,518,982,401 45,115,159 1,795,343,586 23,017,225 108,342,249,742 1,389,003,202 807,014,427 10,346,339 1,617,150,000 20,732,692 13,400,660,055 171,803,334 14,089,310,523 180,632,186
TOTAL ASSETS
164,564,196,316
LIABILITIES AND NET ASSETS Liabilities: Liabilities for expenses and materials Bank overdrafts Term loans Members’ savings deposits Grants received in advance account Deferred income Other long term liabilities Provision for taxation Total Liabilities
6,359,703,947 81,534,666 14,303,182,466 183,374,134 26,516,487,055 339,954,962 40,228,457,331 515,749,453 971,166,244 12,450,849 200,469,723 2,570,125 11,251,247,075 144,246,757 1,551,941,030 19,896,680 101,382,654,871 1,299,777,626
Net Assets: Capital fund Unrestricted Temporarily restricted TOTAL LIABILITIES AND NET ASSETS Exchange rate: 1 US $ = Tk.78
82 Annual Report 2015
2015
2014
Taka
2,109,797,388
62,043,960,522 795,435,391 1,137,580,923 14,584,371 63,181,541,445 810,019,762 164,564,196,316 2,109,797,388
Taka
18,663,715,348 239,278,402 3,297,318,487 42,273,314 3,477,460,108 44,582,822 1,806,548,216 23,160,875 85,680,765,603 1,098,471,354 796,996,894 10,217,909 1,291,350,000 16,555,769 12,543,181,846 160,810,024 11,504,955,982 147,499,436 139,062,292,484 1,782,849,904
5,599,599,179 71,789,733 10,992,516,759 140,929,702 19,075,261,360 244,554,633 34,180,809,446 438,215,506 6,740,890,268 86,421,670 235,500,016 3,019,231 10,619,583,309 136,148,504 1,386,941,030 17,781,295 88,831,101,367 1,138,860,273
49,131,940,934 629,896,679 1,099,250,183 14,092,951 50,231,191,117 643,989,630 139,062,292,484 1,782,849,904
2014
Taka
US $
US $
Taka
US $
Income Donor grants Social Enterprises Microfinance Programme Self-financing Social Development Programmes Investment Income House Property
13,785,992,217 13,345,427,760 26,682,363,975 1,055,881,151 1,739,681,517 92,370,223
176,743,490 171,095,228 342,081,589 13,536,938 22,303,609 1,184,234
16,395,561,736 13,199,374,550 21,359,616,040 1,649,918,857 662,691,206 91,365,205
210,199,509 169,222,751 273,841,231 21,152,806 8,496,041 1,171,349
Total income
56,701,716,843
726,945,088
53,358,527,594
684,083,687
Expenditure Social Enterprises Micro Finance Programme House Property Agriculture and Food Security Community Empowerment Programme Education Programme Gender, Justice and Diversity Health Programme Human Rights and Legal Aids Services Policy Advocacy Water, Sanitation and Hygiene Programme Ultra Poor Programme Other Development Projects
11,747,263,079 15,244,367,848 99,443,136 334,185,896 364,919,588 5,569,214,047 402,633,544 4,578,956,175 271,203,344 170,883,319 1,218,247,312 2,779,602,037 851,311,420
150,605,937 195,440,613 1,274,912 4,284,435 4,678,456 71,400,180 5,161,969 58,704,566 3,476,966 2,190,812 15,618,555 35,635,924 10,914,249
11,732,422,213 13,365,418,399 100,942,249 520,785,414 317,494,987 5,069,581,690 298,568,038 4,821,668,757 240,445,413 156,788,921 2,419,632,575 2,406,137,155 465,759,212
150,415,669 171,351,518 1,294,131 6,676,736 4,070,449 64,994,637 3,827,795 61,816,266 3,082,634 2,010,114 31,020,930 30,847,912 5,971,272
Total expenditure
43,632,230,745
559,387,574
41,915,645,023
537,380,064
Surplus of income over expenditure before taxation Taxation
13,069,486,098 (165,000,000)
167,557,514 (2,115,385)
11,442,882,571 (340,000,000)
146,703,623 (4,358,974)
Net surplus for the year
12,904,486,098
165,442,129
11,102,882,571
142,344,648
Exchange rate: 1 US $ = Tk.78
Annual Report 2015 83
BRAC ACROSS THE WORLD
NEPAL Initiated : 2015 Programme Focus: MF, EHC, Ag, P&L, HRLE, ELA and FSN
Programme Focus: Ag, BEP, ELA, EHC, NP, PB, TB and TUP
Programme Focus: MF, SEP, BEP, ARCs, EHC, CDP, NSP and TUP
Programme Focus: MF, SEP, BEP, TUP, EHC, and Ag
Population reached:
Population reached:
1.5 million
1.5 million
Population reached:
Population reached:
4.65 million
0.7 million
Programme Focus: MF, SEP, BEP, SP, EHC, Ag, P&L, ELA, PB and KI
Programme Focus: MF
Programme Focus: BEP
Population reached:
Population reached:
Population reached:
0.0326 million
0.06 million
Programme Focus: MF, SEP, Ag, P&L, EHC and ELA
Population reached: 0.7 million
Programme Focus: Rehabilitation Programme Population reached 32, 630 persons
4.4 million
Programme Focus: MF, SEP, Ag, P&L, BEP, LEAD and ELA
Population reached: 3.38 million
AFSP - Agriculture and Food Security Programme Ag - Agriculture Programme ARCs - Adolescent Reading Centres DECC - Disaster, Environment and Climate Change EHC - Essential Health Care ELA - Empowerment and Livelihood for Adolescents FSN - Food Security and Nutrition HRLS - Human Rights and Legal Aid Services IDP - Integrated Development Programme KI - Karamoja Initiative LEAD - Livelihood Enhancement through Agriculture Development PB - Peace Building P&L - Poultry and Livestock RS - Road Safety SEP - Small Enterprise Programme SP - Scholarship Programme
BEP - BRAC Education Programme BLBC - BRAC Limb and Brace Centre CDP - Capacity Development Programme CEP - Community Empowerment Programme GJD - Gender Justice and Diversity HNPP - Health, Nutrition and Population Programme HRLE - Human Rights and Legal Empowerment MF - Microfinance MGP - Migration Programme MLP - Malaria Programme NP - Nutrition Programme NSP - National Solidarity Programme TB- Tuberculosis Control TUP - Targeting the Ultra Poor WASH - Water, Sanitation and Hygiene
86 Annual Report 2015
Annual Report 2015 87
BRAC (Registered in Bangladesh under the Societies Registration Act, 1860) Balance Sheet as at 31 December 2015
Notes
ASSETS Cash and bank balances Advances, deposits and prepayments Inventories Grants and accounts receivable Microfinance loans Motorcycle loans Investments in securities and others Investments in related undertakings Property, plant and equipment
3 4 5 6 7 8 9 10 11
TOTAL ASSETS
2015 Taka
2014 Taka
16,916,766,552 4,076,719,030 3,518,982,401 1,795,343,586 108,342,249,742 807,014,427 1,617,150,000 13,400,660,055 14,089,310,523 164,564,196,316
LIABILITIES AND NET ASSETS LIABILITIES Liabilities for expenses and materials Bank overdrafts Term loans Members’ savings deposits Grants received in advance Deferred income Other long term liabilities Provision for taxation
12 13 14 15 16 17 18
TOTAL LIABILITIES
6,359,703,947 14,303,182,466 26,516,487,055 40,228,457,331 971,166,244 200,469,723 11,251,247,075 1,551,941,030 101,382,654,871
18,663,715,348 3,297,318,487 3,477,460,108 1,806,548,216 85,680,765,603 796,996,894 1,291,350,000 12,543,181,846 11,504,955,982 139,062,292,484
5,599,599,179 10,992,516,759 19,075,261,360 34,180,809,446 6,740,890,268 235,500,016 10,619,583,309 1,386,941,030 88,831,101,367
NET ASSETS: Unrestricted Temporarily restricted TOTAL LIABILITIES AND NET ASSETS
62,043,960,522 1,137,580,923 63,181,541,445 164,564,196,316
49,131,940,934 1,099,250,183 50,231,191,117 139,062,292,484
The annexed notes form an integral part of these statements.
Chairperson, Governing Body BRAC
Cheif Financial Officer BRAC
Executive Director BRAC
Dhaka, March 15, 2016
88 Annual Report 2015
Annual Report 2015 89
BRAC
BRAC
(Registered in Bangladesh under the Societies Registration Act, 1860) Statement of Income and Expenditure for the year ended 31 December 2015
(Registered in Bangladesh under the Societies Registration Act, 1860) Statement of Income and Expenditure for the year ended 31 December 2014
Income Donor grants Social Enterprises Microfinance Programme Self-financing Social Development Programmes Investment Income House Property Total income
Notes
Unrestricted Taka
Temporarily Restricted Taka
Total 2015 Taka
19 20 21 22 23
991,300 13,345,427,760 26,682,363,975 1,055,881,151 1,739,681,517 92,370,223 42,916,715,926
13,785,000,917 - - - - - 13,785,000,917
13,785,992,217 13,345,427,760 26,682,363,975 1,055,881,151 1,739,681,517 92,370,223 56,701,716,843
Expenditure Social Enterprises Micro Finance Programme House Property Agriculture and Food Security Community Empowerment Programme Education Programme Gender, Justice and Diversity Health Programme Human Rights and Legal Aids Services Policy Advocacy Water, Sanitation and Hygiene Programme Ultra Poor Programme Other Development Projects Total expenditure Surplus/(deficit) of income over expenditure BRAC Contribution to support Donor Funded Programmes Surplus of income over expenditure before taxation Taxation Net surplus for the year The annexed notes form an integral part of these statements.
Chairperson, Governing Body BRAC
11,747,263,079 15,244,367,848 99,443,136 - 12,604,271 483,819,965 14,269,674 46,625,417 - - - - 133,756,644 27,782,150,034
- - - 334,185,896 352,315,317 5,085,394,082 388,363,870 4,532,330,758 271,203,344 170,883,319 1,218,247,312 2,779,602,037 717,554,776 15,850,080,711
11,747,263,079 15,244,367,848 99,443,136 334,185,896 364,919,588 5,569,214,047 402,633,544 4,578,956,175 271,203,344 170,883,319 1,218,247,312 2,779,602,037 851,311,420 43,632,230,745
25 26
15,134,565,892 (2,103,410,534) 13,031,155,358 (165,000,000) 12,866,155,358
(2,065,079,794) 2,103,410,534 38,330,740 - 38,330,740
13,069,486,098 - 13,069,486,098 (165,000,000) 12,904,486,098
Cheif Financial Officer BRAC
Income Donor grants Social Enterprises Microfinance Programme Self-financing Social Development Programmes Investment Income House Property Total income Expenditure Social Enterprises Micro Finance Programme House Property Agriculture and Food Security Community Empowerment Programme Education Programme Gender, Justice and Diversity Health Programme Human Rights and Legal Aids Services Policy Advocacy Water, Sanitation and Hygiene Programme Ultra Poor Programme Other Development Projects Total expenditure Surplus of income over expenditure before taxation Taxation
Notes
Unrestricted Taka
Temporarily Restricted Taka
19 20 21 22 23
48,961,804 13,199,374,550 21,359,616,040 1,649,918,857 662,691,206 91,365,205 37,011,927,662
16,346,599,932 - - - - - 16,346,599,932
16,395,561,736 13,199,374,550 21,359,616,040 1,649,918,857 662,691,206 91,365,205 53,358,527,594
11,732,422,213 13,365,418,399 100,942,249 - 4,797,944 170,001,239 11,937,491 136,474,074 1,791,087 3,967,554 - - 108,990,141 25,636,742,391
- - - 520,785,414 312,697,043 4,899,580,451 286,630,547 4,685,194,683 238,654,326 152,821,367 2,419,632,575 2,406,137,155 356,769,071 16,278,902,632
11,732,422,213 13,365,418,399 100,942,249 520,785,414 317,494,987 5,069,581,690 298,568,038 4,821,668,757 240,445,413 156,788,921 2,419,632,575 2,406,137,155 465,759,212 41,915,645,023
26
11,375,185,271 (340,000,000)
67,697,300 -
11,442,882,571 (340,000,000)
11,035,185,271
67,697,300
11,102,882,571
Net surplus for the year The annexed notes form an integral part of these statements.
Total 2014 Taka
Executive Director BRAC
Dhaka, March 15, 2016
90 Annual Report 2015
Annual Report 2015 91
BRAC
BRAC
(Registered in Bangladesh under the Societies Registration Act, 1860) Statement of Cash Flows for the year ended 31 December 2015
(Registered in Bangladesh under the Societies Registration Act, 1860) Statement of Changes in Net Assets for the year ended 31 December 2015
Net Assets
Note
Unrestricted Taka
Temporarily Restricted Taka
At 1 January 2014
37,976,777,730
1,031,552,883
39,008,330,613
Net surplus for the year
11,035,185,271
67,697,300
11,102,882,571
Share of non operating changes in net assets in related undertakings
Taka
119,977,933
-
119,977,933
At 31 December 2014
49,131,940,934
1,099,250,183
50,231,191,117
At 1 January 2015
49,131,940,934
1,099,250,183
50,231,191,117
Net surplus for the year
12,866,155,358
38,330,740
12,904,486,098
Share of non operating changes in net assets in related undertakings At 31 December 2015 The annexed notes form an integral part of these statements.
45,864,230
-
45,864,230
62,043,960,522
1,137,580,923
63,181,541,445
2015 Taka
Total Net Assets Cash flows from operating activities: Surplus of income over expenditure before taxation Adjustments to reconcile changes in net assets to net cash provided by operating activities: Loan loss provision Depreciation Gain on disposal of BRAC Banshkhali Tea Company Ltd Gain on disposal of property, plant and equipment Share of results in related undertakings Donor grants - amortisation of investment in property, plant and equipment and motorcycle replacement fund Interest on fixed deposits and bank accounts Adjustments for other accounts: Increase in service charge outstanding on microfinance loans (Increase)/decrease in inventories Increase in advances, deposits and prepayments Decrease/(increase) in accounts receivable Increase in motorcycle loans Decrease/(increase) in liabilities for expenses and materials Increase in deferred income Net cash provided by operating activities
2014 Taka
13,069,486,098
11,442,882,571
7 11 10 23 19 24
1,055,886,221 704,408,539 (787,320,202) (3,026,358) (793,099,927) (63,516,033) (1,298,951,999)
(101,432,843) (1,292,065,957)
(484,755,823) (41,522,293) (779,400,543) 134,876,747 (10,017,533) 760,104,768 28,485,740 11,491,637,402
(494,451,805) 155,938,576 (537,576,352) (222,016,153) (57,431,175) (283,239,171) 64,501,701 10,772,978,740
2,103,377,241 665,339,261 - (47,113,756) (623,733,398)
Cash flows from investing activities: Increase in microfinance loans Decrease/(increase) in fixed deposits pledged with financial institutions Increase in investments in related undertakings Interest received on fixed deposits and bank accounts Purchase of property, plant and equipment Proceeds from Banshkhali Tea Company Ltd Proceeds from disposal of property, plant and equipment Dividends received from related undertakings Realisation of investment in securities and others Net cash used in investing activities
92 Annual Report 2015
10
(23,232,614,537) (20,276,485,750) 601,984,893 (52,021,245) (535,909,621) (2,427,386,200) 1,298,951,999 1,292,065,957 (3,306,546,008) (1,611,641,415) 602,500,000 - 20,809,285 113,945,390 702,215,772 254,223,094 (325,800,000) (1,054,000,000) (24,174,408,217) (23,761,300,169)
Annual Report 2015 93
BRAC
BRAC (Registered in Bangladesh under the Societies Registration Act, 1860) Notes to Financial Statements for the year ended 31 December 2015
(Registered in Bangladesh under the Societies Registration Act, 1860) Statement of Cash Flows for the year ended 31 December 2015
Note
2015 Taka
2014 Taka
Cash flows from financing activities:
Grants received during the year Grants utilised during the year for: - operational expenditure & micro-finance - investment in property, plant and equipment - motorcycle replacement funds Increase in term loans Increase in members savings deposits Increase in other long term liabilities Net cash provided by financing activities
7,801,946,598 (13,666,856,999) (23,785,870) (4,699,870) 7,441,225,695 6,047,647,885 631,663,766 8,227,141,205
(16,124,768,023) (57,380,571) (7,121,130) 3,673,261,051 5,145,957,757 739,806,830 8,302,272,731
Net decrease in cash and cash equivalents
(4,455,629,610)
(4,686,048,698)
6,654,320,026 2,198,690,416
11,340,368,724 6,654,320,026
Cash and cash equivalents, beginning of the year Cash and cash equivalents, end of the year The annexed notes form an integral part of these statements.
94 Annual Report 2015
3.4
1
Introduction
BRAC, a development organisation, was formed in 1972 under the Societies Registration Act 1860. Although it was first set up to resettle refugees in post-war Bangladesh, BRAC later redesigned its strategies in accordance with its philosophy of poverty alleviation and empowerment of the poor. At present, BRAC has a large number of development programs that cover the areas of health, education, credit, employment and training for the poor people of Bangladesh. BRAC carries out licensed banking activities through the BRAC Bank Ltd. and also earns from various income generating projects such as Aarong Rural Craft Centre, BRAC Printers and Printing Pack, BRAC Dairy and Food project, BRAC Tea Estates, and various programme support enterprises such as poultry farms, feedmills, seedmills and prawn hatcheries.
2
Summary of Significant Accounting Policies
BRAC prepares its financial statements on a going concern basis, under the historical cost convention, except for investments in shares in listed companies classified within investment in securities and others, which are stated at fair value. BRAC generally follows the accrual basis of accounting or a modified form thereof for key income and expenditure items.
The significant accounting policies, which have been materially consistent over the years, as applied and followed in the preparation and presentation of these financial statements are summarized below:
2.1
Basis of preparation of financial statements
BRAC maintains its books of account and records on a programme or project-wise basis. The Head Office maintains records of all treasury, investment and management functions. All cash balances, including those held for programmes, are held by the Head Office and transferred to programmes as required. Balances between projects are eliminated upon combination for the purposes of presentation of the financial statements.
These financial statements include the financial statements of BRAC and, on an equity accounted basis, those of the related undertakings set out in Note 10 in which BRAC has equity interests through which it exercises control or significant influence. As stated in Note 2.5, BRAC, being a society under the Societies Registration Act, 1860, is not subject to any requirement to prepare consolidated financial statements.
In contrast to the ownership of equity interest in related undertakings, BRAC also extends gratuitous grants or provides donor liaison assistance to certain organisations that, in some instances, may bear names with resemblance to BRAC, viz BRAC University, BRAC International Holding B.V, Stichting BRAC International, BRAC Afghanistan, BRAC Sri Lanka, BRAC Tanzania, BRAC Uganda, BRAC Southern Sudan, BRAC Pakistan, BRAC Liberia, BRAC Sierra Leone, BRAC Philippines and BRAC Nepal. However, no equity is held in these entities, and BRAC’s financial statements therefore do not include the financial information of these entities.
BRAC’s accounting records and financial statements are maintained and presented in accordance with the principles of fund accounting. This is the procedure by which resources are classified for accounting and internal reporting into funds established according to their nature and purposes based on the existence or absence of donor-imposed restrictions.
14,932,516,817
Annual Report 2015 95
2
Summary of Significant Accounting Policies (contd.) :
2.1
2
Summary of Significant Accounting Policies (contd.) :
Basis of preparation of financial statements (contd.)
2.6
Donor grants (contd.)
In the combined financial statements, funds have been classified within either of two net asset categories - temporarily restricted and unrestricted. Accordingly, the net assets of BRAC and changes therein are classified and reported as follows:
All donor grants received are initially recorded as liabilities in Grants Received in Advance Account. For grants utilized to purchase fixed assets and motorcycles, the donor grants are transferred to deferred income accounts whilst for grants utilized to reimburse programme-related expenditure, the amounts are recognized as income. Donor grants received in-kind, through the provision of gifts and/or services, are recorded at fair value (excluding situations when BRAC may receive emergency supplies for onward distribution in the event of a disaster which are not recorded as grants). Income recognition of such grants follows that of cash-based donor grants and would thus depend on whether the grants are to be utilized for the purchase of fixed assets or expended as programme-related expenditure.
Grant income is classified as temporarily restricted or unrestricted depending upon the existence of donor-imposed restrictions. For completed or phased out projects and programmes, any unutilized amounts are dealt with in accordance with subsequent donor and management agreements.
For ongoing projects and programmes, any expenditure yet to be funded but for which funding has been agreed at the end of the reporting period is recognized as grant receivable.
2.7
Revenue recognition
•
Temporarily restricted net assets - Net assets subject to donor-imposed restrictions that permit BRAC to use or expend the assets as specified. The restrictions are satisfied either by the passage of time and/or by actions of BRAC. When donor restrictions expire, that is, when a time restriction ends or a purpose restriction is fulfilled, any balances of temporarily restricted net assets are either returned to donors in accordance with donor agreements or utilized consequent to donor and management agreements on a temporarily restricted or unrestricted basis.
In case where restrictions expire, it is BRAC’s policy to effect the reclassification of assets from temporarily restricted net assets to unrestricted net assets via transfers within the balance sheet.
•
Unrestricted net assets - Net assets that are not subject to any donor-imposed restrictions or which arise from internally funded activities. This category of net assets include amongst others, amounts designated by BRAC for income generating activities, programme support enterprises, micro-financing activities and self-financing social development activities.
2.2
Reporting period
These financial statements has been prepared for the period from 1 January to 31 December 2015.
2.3
Functional and presentation currency
These financial statement are presented in Bangladesh Taka, which is BRAC’s functional currency. Except as indicated, the figures have been rounded off to the nearest Taka.
2.4
Use of estimates and judgments
The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
2.5
Non-consolidation
BRAC, being a society registered under the Societies Registration Act, 1860 is not subject to any requirement on the preparation of consolidated financial statements. Accordingly, BRAC’s investments in related undertakings wherein the effective equity interests are more than 50% are accounted for by the equity method as explained in Note 2.14, together with related undertakings in which BRAC has significant influence and/or where effective equity interests are between 20% and 50%.
2.6
Donor grants
Income from donor grants is recognized when conditions on which they depend have been met. Substantially, BRAC’s donor grants are for the funding of projects and programmes, and for these grants, income is recocnized to equate to expenditure incurred on projects and programmes. For donor grants which involve funding for property, plant and equipment, grant income is recognized as the amount equivalent to depreciation expenses charged on the fixed assets concerned. For donor grants provided to purchase motocycles for specific projects, income is recognized over the extimated useful life of the motorcycles.
96 Annual Report 2015
Social Enterprise projects Social enterprise projects comprise Aarong Rural Craft Centre, BRAC Printers and Printing Pack and BRAC Dairy and Food Project, poultry farms, feedmills, seedmills, fish and prawn hatcheries, horticulture nurseries, chilling centres, broiler rearing and meat marketing, salt production and marketing, recycle paper production and health product related activities. Revenue from sale of goods Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, discount and VAT. Revenue is recognized at the time , when significant risks and rewards of ownership have been transferred to the buyer and recovery of consideration is probable. Transfer of risks and rewards occur, when the goods are delivered to the distributor/ customers along with dispatch documents and invoices. Service charge on microfinance loans Service charges on microfinance loans are recognized on an accrual basis as income. The recognition of service charge ceases when a loan is transferred to non-interest bearing loan as described in Note 2.12. Service charge is included in income thereafter only when it is realized. Loans are returned to the accrual basis only when the full amount of the outstanding arrears of loans received and future collectability is reasonably assured.
Interest on bank accounts, fixed deposits, bonds Interest income is recognised on an accrual basis.
House property income House property income is recognised on an accrual basis whether cash is received or not.
Other income Other income is recognized when BRAC’s right to receive such income has been reasonably determined.
2.8
Expenses
Programme related expenses arise from goods and services being distributed to beneficiaries in accordance with the programme objectives and activities. BRAC’s Head Office overhead expenses are allocated to various projects and programmes at a range of 7% to 10% of their costs, based on agreement with donors or management’s judgement.
Annual Report 2015 97
2
Summary of Significant Accounting Policies (contd.) :
2.9
2
Summary of Significant Accounting Policies (contd.) :
Property, plant and equipment
2.11
Provision for loan losses
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if all the following conditions are met:
Management regularly assesses the adequacy of the loan loss provision based on the age of the loan portfolio and calculates the required provision for loan losses based on the loan classification and following the provisioning methodology which is shown below.
a) it is probable that future economic benefits will flow to BRAC b) the cost of the item can be measured reliably and exceeds Taka. 2,000 c) it is expected to be used for more than 3 years
Subsequent to recognition, plant and equipment and furniture and fixtures are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation respectively.
Loan Classification
Days in Arrears
Provision Required
Current (no arrears) 1 - 30 31 - 180 181 - 350 Over 350
Standard Watch list Substandard Doubtful Loss
Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is provided for on a straight-line basis over the estimated useful lives of the assets at the following annual rates which are consistent with the prior year:
2.12
Loans written off
Item
Loans within their maturity period are classified as “ Current loans”. Loans which remain outstanding after one month of their maturity period are considered as “Late loans”. Late loans which remain unpaid after one year are classified as “Non-Interest Bearing Loans” (NIBL). The total amount of NIBL, which are considered bad and have no possibility of recovery, is referred to the Governing Body of BRAC for approval of write off, generally within one year from the date when a loan is transferred to NIBL. Generally loans are written off twice a year i.e. July and December. Any collections realised from loans previously written off are credited to the statement of income and expenditure.
2.13
Provision for liabilities
Provisions for liabilities are recognised when BRAC has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
2.14
Investment in related undertakings
Buildings Furniture & Fixtures Equipment Computer Vehicles Bicycles Machinery Deep tube wells and tanks Hatcheries Motorcycles Camp/ Poultry/ Livestock sheds Crates/ Mannequins/ Samples
Annual Depreciation Rate (%) 4 - 10 10 - 20 15 - 33.3 20 - 33.3 20 20 20 20 20 20 20 33.3
1% 5% 25% 75% 100%
Assets under construction included in plant and equipment are not depreciated as these assets are not yet available for use.
Related undertakings refer to separately-established undertakings in which BRAC has significant influence and/or effective equity interests. Details of these undertakings are disclosed in Note 10.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.
BRAC’s investments in these undertakings are accounted for by the equity method whereby the investments are initially recorded at cost and subsequently adjusted to reflect BRAC’s share of results for each period added to or deducted from the respective investment costs, from the dates of their acquisition and to the dates of their disposal. On disposal, gains or losses representing the difference between the proceeds on disposal and the carrying value of the undertakings at the date of disposal are recognised in the statement of income and expenditure. Gains or losses on dilution of interest in related undertakings, representing the difference in BRAC’s share of net assets before and after the dilution concerned is also recognised in the statement of income and expenditure. Any changes in the net assets in the related undertakings other then by the effect of operating results are directly accounted for as a separate item in the statement of net assets with corresponding increase/decrease in the investment. Provision is also made for any impairment if the carrying amount of an investment exceeds its recoverable amount.
2.15
Investment in securities and others
All investments other than investment in associated understakings are initially recognized at cost, being the fair value of the consideration given and including acquisition charges associated with the investment.
After initial recognition, investments in shares of listed companies are subsequently measured at fair value, with unrealized gains or losses recognized in the statement of income and expenditure. Fair value is generally determined by reference to stock exchange quoted market bid prices at the close of business on the balance sheet date, adjusted for transaction costs necessary to realize the asset.
The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the statement of income and expenditure in the year the asset is derecognized.
2.10
Microfinance loans
BRAC’s activities include providing micro-finance loans to members without collateral, on a service charge basis under various programmes. Loans inclusive of service charge and are stated net of provision for loan losses.
98 Annual Report 2015
Annual Report 2015 99
2
Summary of Significant Accounting Policies (contd.) :
2.15
2
Summary of Significant Accounting Policies (contd.) :
Investment in securities and others (contd.)
2.20
Employee gratuity and redundancy fund
Other long-term investments which are intended to be held to maturity, such as debentures and private debt securities, are subsequently measured at amortized cost. Amortized cost is calculated by taking into account any discount or premium on acquisition, over the period to maturity. For investments carried at amortized cost, apart from the amortization process which is dealt with through the statement of income and expenditure, any gain or loss is recognized in the statement of income and expenditure when the investment is disposed of or suffers a permanent diminution in value.
BRAC makes provisions for an Employee Gratuity and Redundancy fund, on the basis of two months’ basic salary for each completed year’s service for each permanent employee (based on basic salary of the last month). The fund is held as a provision within ‘Other long term liabilities’, as depicted in Note 18, and is not externally funded. Gratuity is to be disbursed upon retirement of employees whilst redundancy disbursements are to be made as a one-time termination benefit in the event of cessation of service from BRAC on grounds of redundancy.
2.16
Accounts receivable
Accounts receivable arise principally from BRAC’s income generating activities and programme support enterprises, and are stated net of provision for doubtful debts. An estimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheet date. Bad debts are written off when identified.
The extent of future liabilities requiring current provisions, and the rate of provisions required in the immediate following financial periods have been determined based on actuarial valuation carried out in 2014, and are disclosed in Note 18 to the financial statements. It is BRAC’s policy to carry out actuarial reviews at least every three years to assess the adequacy of the provision in respect of the fund.
2.21
Employee provident fund
2.17
Inventories
Retail inventories are stated at cost based on selling price less average mark-up, and other inventories are stated at cost. Cost is determined using the weighted average basis. The cost of inventories includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. Provision is made for obsolete or slow moving items, to reduce their carrying amounts to net realizable value.
BRAC makes contributions to a recognised contributory provident fund for its eligible employees which is operated by a Board of Trustees. The contribution by BRAC is 10% of the basic salary of each confirmed employee and this is equivalent to the contribution by each eligible employee. Contributions to this fund are recognised as an expense in the period in which the employee services are performed.
2.22
Foreign currencies
2.18
Motorcycle replacement fund
Applicable donor funds are utilized for providing motorcycles to project or programme staff and these funds are held in a replacement fund. The cost of providing motorcycles to staff is recovered through monthly salary deductions. Donor funds received and utilized for the purchase of motorcycles are amortized to the statement of income and expenditure over a period of five years, being the average estimated useful life of the motorcycles.
Foreign currency transactions are converted into equivalent Taka at the ruling exchange rates on the respective dates of such transactions.
Monetary assets and liabilities denominated in foreign currencies as at 31 December 2015 have been converted into Taka at the exchange rates prevailing at that date.
The resulting exchange translation gains and/ or losses are recognised in the statement of income and expenditure.
The principal exchange rates used for each respective unit of foreign currency ruling at the balance sheet date are as follows
2.19
Self-insurance fund
BRAC has created a self-insurance fund to cover the risks of cyclone and fire on its properties and motorcycles. This self-insurance fund is based on estimates by the Governing Body, and as from 2001, by reference to external actuarial valuations. It is held as a provision within ‘Other long term liabilities’, as depicted in Note 18, and is not externally funded.
BRAC also sets aside monthly amounts equivalent to 1% of the basic salary of employees, to constitute the group self-insurance fund. This fund is to cover liabilities arising out of death and other permanent injuries suffered by the employees. The terms of employment provide for payment in the event of death or permanent injury, of amounts ranging from 12 months’ equivalent of basic salary in the first year of employment, to 50 months’ equivalent of basic salary in the 10th year of employment onwards. The selfinsurance fund for employees is held as a provision, also within ‘Other long term liabilities’ and is not externally funded. It is based on estimates by the Governing Body, and as from 2001, by reference to external actuarial valuations. The extent of future liabilities requiring current provisions, and the rate of provisions required in the immediate following financial periods have been determined based on actuarial valuations carried out in 2014 in respect of the funds, and are disclosed in Note 18 to the financial statements. It is BRAC’s policy to carry out actuarial reviews at least every three years to assess the adequacy of the provisions in respect of the fund.
100 Annual Report 2015
2015 Taka 77.90 84.38 113.45 55.14
2014 Taka
United States Dollars Euro Great Britain Pound Australian Dollars
77.85 93.71 118.78 62.46
BRAC’s foreign currency denominated assets and liabilities are disclosed in Note 27.
2.23
Taxation
Income tax liabilities for the current period are measured at the amount expected to be paid to the taxation authorities in accordance with the Income Tax Ordinance, 1984 (Amended) for activities by which BRAC generates taxable income.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Annual Report 2015 101
2
Summary of Significant Accounting Policies (contd.) :
2.24
Borrowing costs
Borrowing costs are interest and other costs that BRAC incurs in connection with the borrowing of funds.
2
Summary of Significant Accounting Policies (contd.) :
2.27
Financial instruments (contd.)
e)
Interest-bearing borrowings
Borrowing costs are recognised as an expense in the period in which they are incurred except where such costs are directly attributable to the acquisition, construction or production of a qualifying asset, in which case these costs are capitalised as part of the cost of that asset. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Interest-bearing bank loans, overdrafts and securitised financing are recorded at the amount of proceeds received, net of transactions costs. For borrowings made specifically for the purpose of acquiring a qualifying asset, the amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investments of funds drawn down from that borrowing facility.
2.25
Impairment of assets
All borrowing costs are recognized as an expense in the statement of income and expenditure in the period in which they are incurred. The carrying values of these financial instruments approximate their fair values due to their short term maturities
At each balance sheet date, BRAC reviews the carrying amounts of its assets to determine whether there is any indication of impairment. If any such indication exists, impairment is measured by comparing the carrying values of the assets with their recoverable amounts. Recoverable amount is the higher of net selling price and value in use.
2.28
Cash and cash equivalents
Cash and cash equivalents for the purposes of the statement of cash flows comprises cash and bank balances and unpledged fixed deposits, against bank overdrafts, if any, are deducted. Included in cash and bank balances are donations which are received through donor grants. By virtue of donor agreements, the manner in which such donations are to be applied may be restricted to specific projects and/or assets.
An impairment loss is recognised as an expense in the statement of income and expenditure immediately. Reversal of impairment losses recognised in prior years is recorded in the statement of income and expenditure when the impairment losses recognised for the asset no longer exists or have decreased.
2.26
Goodwill
2.29
Contingent liabilities
Goodwill represents the excess of the cost of acquisition over BRAC’s interest in the fair value of the identifiable assets and liabilities of investments in related undertakings at the date of acquisition.
Any possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of BRAC; or any present obligation that arises from past events but is not recognized because:
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently, if events or changes in circumstances indicate that the carrying value may be impaired.
The policy for the recognition and measurement of impairment losses is in accordance with Note 2.25 above except that an impairment loss for goodwill is not reversed unless the specific external events that caused the impairment loss is reversed by a subsequent external event. Goodwill arising on the acquisition of related undertakings is included within the respective carrying amounts of the related undertakings concerned.
•
it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
•
the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not recognised but disclosed in the financial statements unless the possibility of an outflow of resources embodying economic benefits is reliably estimated.
2.27
Financial instruments
Contingent assets are not recognized in the financial statements as this may results in the recognition of income which may never be realized.
Financial instruments are recognised in the balance sheet when BRAC has become a party to the contractual provisions of the instrument.
2.30
Events after the balance sheet date
a)
Investments in related undertakings Investments in related undertakings are stated at cost less impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.25.
Events after the balance sheet date that provide additional information about the organization’s position at the balance sheet date are reflected in the financial statements. Events after the balance sheet date that are not adjusting events are disclosed.
2.31
Segmental Reporting
b)
Investments in securities and others Investments in securities and others are stated at cost, subsequently adjusted for fair value or at amortised cost. The policy for recognition and measurement of impairment losses is in accordance with Note 2.25.
BRAC is organised into operating segments based on projects and programmes which are independently managed by the respective program managers responsible for the performance within the operating segments.
c)
Receivables Receivables are carried at anticipated realisable values. Bad debts are written off when identified and an estimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheet date.
The programme managers report directly to the management of BRAC who regularly review the segment results in order to assess segment performance. Additional disclosures on each of these segments are shown in notes 28 and 29 respectively. BRAC provides segment information voluntarily.
d)
Payables Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received.
102 Annual Report 2015
Annual Report 2015 103
3.
Cash and bank balances
4. 2015 Taka
Cash in hand and at banks (Note 3.1) Deposits (Note 3.2)
2,530,935,525 14,385,831,027 16,916,766,552
2015 Taka
4,317,479,423 14,346,235,925 18,663,715,348
3.1 Cash in hand and at banks 2015 Taka
Cash in hand Cash at banks
2014 Taka
390,562,703 2,140,372,822 2,530,935,525
444,055,344 3,873,424,079 4,317,479,423
2015 Taka
Fixed deposits pledged with financial institutions (Notes 13 and 14) Fixed deposits unpledged Short term deposits unpledged
No.
Name of Related Party
1.
BRAC Bank Ltd.
Fixed deposits pledged Fixed deposits unpledged Short term deposits unpledged 67 Bank Accounts (2014: 55)
2.
Delta BRAC Housing Finance Corp.Ltd.
Fixed deposits pledged Fixed deposits unpledged
2014 Taka
414,893,670 9,091,258,086 4,879,679,271 14,385,831,027
Included in the above balances are amounts placed with related undertakings as follows: Nature of balances
1,016,878,563 9,995,494,725 3,333,862,637 14,346,235,925
2015 Taka
2014 Taka
414,893,670 157,856,330 4,775,489,492 2,755,932,845 - -
Advances: Employees Suppliers Advance for tax Deposits: Deposits for facilities and utilities Prepayments
5.
Inventories
Seeds and feed Medical supplies and consumables Printing and stationery Handicraft goods Dairy products Programme materials
6.
Grants and accounts receivable
250,000,000 138,063,292
Microfinance Programme Grant based project Other Programmes
104 Annual Report 2015
655,188,678 405,632,676 1,488,974,736 2,549,796,090
11,862,430 889,952,123 4,076,719,030
9,232,340 738,290,057 3,297,318,487
842,297,023 100,020,012 89,857,978 2,140,424,077 140,321,050 206,062,261 3,518,982,401
2014 Taka 630,733,349 144,364,631 61,642,571 2,211,265,082 230,024,601 199,429,874 3,477,460,108
2015 Taka 175,920,953 519,404,544 1,156,112,905 1,851,438,402 (56,094,816) 1,795,343,586
2014 Taka 52,248,836 765,263,686 1,070,067,531 1,887,580,053 (81,031,837) 1,806,548,216
Included in interest receivable on fixed deposits is Tk. 83,927,133 (2014: Tk. 103,932,998) receivable after 12 months. Microfinance loans
12,310,857,416 104,189,779 1,970,783,832 14,385,831,027
2014 Taka
Principal outstanding Taka
6,686,052,979 6,643,334,770 1,016,848,176 14,346,235,925
3.4 Cash and cash equivalents For the purpose of the statement of cash flows, cash and cash equivalents comprise the following as at December 31:
Cash in hand and at banks Fixed deposits unpledged Short term deposits unpledged Bank overdrafts (Note 13)
437,230,657 404,502,296 2,333,171,524 3,174,904,477
2015 Taka
2014 Taka
2015 Taka
Grants receivable (Note 16) Interest receivable on fixed deposits and bank accounts Other accounts receivable Provision for doubtful debts
416,695,416 1,364,861,030 3,333,862,637 1,036,887,589
7. 3.3 Deposits analysed by programme:
Advance, deposits and prepayments
2014 Taka
At 1 January 2015 Additions Realisation Write-off At 31 December 2015
90,535,525,108 192,982,791,000 (169,750,176,463) (1,597,958,454) 112,170,181,191
Service charge receivable Taka 709,142,160 25,878,910,925 (25,394,155,102) (257,638,531) 936,259,452
Loan loss provision Taka
Total Taka
(5,563,901,665) 85,680,765,603 (1,055,886,221) 217,805,815,704 - (195,144,331,565) 1,855,596,985 - (4,764,190,901) 108,342,249,742
2015 Taka
2014 Taka
2,530,935,525 9,091,258,086 4,879,679,271 (14,303,182,466) 2,198,690,416
4,317,479,423 9,995,494,725 3,333,862,637 (10,992,516,759) 6,654,320,026
Annual Report 2015 105
7.
Microfinance loans (contd.)
10.
Investments in related undertakings
Loans to members bear annual service charges 18% to 26% (2014: 18% to 27%) on a declining balance method. Repayments are made in weekly/monthly instalments. The loan loss provision rate during the year was revised to 1% (2014: 2%).
The loan principal outstanding and loan loss provision are analysed as follows: Loan Classification
Standard Watchlist Substandard Doubtful Loss
8.
Days in Arrears
Current (no arrears) 1 - 30 31 - 180 181 - 350 Over 350
Loan Outstanding 2015 Taka 106,953,997,598 967,900,310 717,650,763 255,157,204 3,275,475,316 112,170,181,191
Loan loss Provision 2015 Taka 1,069,539,976 48,395,015 179,412,691 191,367,903 3,275,475,316 4,764,190,901
Loan Principal 2014 Taka
Loan loss Provision 2014 Taka
Motorcycle loans
At 1 January 2015 Additions during the year Loan realisation during the year At 31 December 2015
796,996,894 45,070,000 (35,052,467) 807,014,427
Related undertakings
Cost of Investment Taka
BRAC Bank Ltd. 4,760,329,616 BRAC Industries Ltd. 24,999,900 BRAC BD Mail Network Ltd. 186,161,000 BRAC IT Services Ltd. 34,300,000 BRAC Services Ltd. 10,000,000 Delta BRAC Housing Finance Corp. Ltd. 40,000,000 BRAC Karnafuli Tea Company Ltd. 243,908,025 BRAC Kaiyachara Tea Company Ltd. 63,300,695 BRAC Kodala Tea Company Ltd. 81,680,954 Bangladesh Netting Factory Ltd. 17,071,429 BRAC Assets Management Company Ltd. 13,000,000 BRAC Impact Ventures Ltd. 10,200,000 BRAC Environmental Enterprises Ltd. 90,000,000 Industrial Promotion and Development Company of Bangladesh Ltd. 759,023,000 6,333,974,619
85,242,874,796 1,704,857,496 721,663,654 36,083,183 936,139,421 234,034,855 183,684,423 137,763,317 3,451,162,814 3,451,162,814 90,535,525,108 5,563,901,665
2015 Taka
2015
2014 Taka 739,565,719 116,658,900 (59,227,725) 796,996,894
Provision for impairment in value Taka
Share of Reserves Taka
Loans Taka
5,070,759,128 5,116,961 (84,301,811) (57,716,253) (118,944,075) 468,678,277 (203,079,016) 47,581,843 (22,447,706) 33,813,846 2,909,688 (9,112,585) (70,787,715)
- - - 88,757,762 161,920,937 - 1,036,934,458 227,656,313 331,425,381 33,064,297 - - 124,570,412
- 9,831,088,744 - 30,116,861 - 101,859,189 - 65,341,509 (18,211,239) 34,765,623 - 508,678,277 - 1,077,763,467 - 338,538,851 - 390,658,629 - 83,949,572 - 15,909,688 - 1,087,415 - 143,782,697
18,096,533 5,080,567,115
- 2,004,329,560
- 777,119,533 (18,211,239) 13,400,660,055
Total Taka
2014
9.
Investments in securities and others 2015 Taka
DBH 1st Mutual Fund AB Bank Ltd. Subordinated Bond MTB Subordinated Bond Bangladesh Sanchay Patra (BSP)
29,400,000 1,000,000,000 250,000,000 337,750,000 1,617,150,000
2014 Taka
27,600,000 1,000,000,000 - 263,750,000 1,291,350,000
Market value of DBH 1st Mutual Fund at 31 December 2015 was Taka. 4.90 per unit (2014: Taka. 4.60) and Taka. 4.90 per unit (2014: Taka. 4.50) on the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) respectively.
The AB Bank Ltd. Subordinated Bond maturity date will be on 25 August 2021 with effective interest rate ranging from 11% to 13% (2014: 11% to 13%) per annum.
Mutual Trust Bank Ltd. Subordinated Bond was purchased on 20 October 2015, the maturity date of the bond will be on 19 October 2022 with effective interest rate ranging from 10.5% to 13.5% per annum.
The Bangladesh Sanchay Patra (BSP) earned interest at 10.5% to 13.45% (2014: 10.5% to 13.45%) per annum respectively during the year.
Related undertakings
Cost of Investment Taka
BRAC Bank Ltd. 4,760,329,616 BRAC Industries Ltd. 24,999,900 BRAC BD Mail Network Ltd. 186,161,000 BRAC IT Services Ltd. 34,300,000 BRAC Services Ltd. 10,000,000 Delta BRAC Housing Finance Corp. Ltd. 40,000,000 BRAC Karnafuli Tea Company Ltd. 243,908,025 BRAC Kaiyachara Tea Company Ltd. 63,300,695 BRAC Banshkhali Tea Company Ltd. 27,719,870 BRAC Kodala Tea Company Ltd. 81,680,954 Bangladesh Netting Factory Ltd. 17,071,429 BRAC Assets Management Company Ltd. 13,000,000 BRAC Impact Ventures Ltd. 10,200,000 BRAC Environmental Enterprises Ltd. 90,000,000 5,602,671,489
Share of Reserves Taka
Loans Taka
4,786,312,504 6,655,317 (90,609,255) (23,277,996) (111,030,260) 399,138,670 (137,091,913) 42,297,271 (127,721,957) 3,144,642 34,109,593 2,400,624 (4,048,491) (49,000,092) 4,731,278,657
- - - 36,249,000 168,584,133 - 911,000,948 213,727,366 471,759,830 287,814,152 26,216,073 - - 112,091,437 2,227,442,939
2015 Taka
106 Annual Report 2015
Represented by: Share of net tangible assets Goodwill on acquisition Loans
11,186,724,541 209,605,954 2,004,329,560 13,400,660,055
Provision for impairment in value Taka
Total Taka
- 9,546,642,120 - 31,655,217 - 95,551,745 - 47,271,004 (18,211,239) 49,342,634 - 439,138,670 - 1,017,817,060 - 319,325,332 - 371,757,743 - 372,639,748 - 77,397,095 - 15,400,624 - 6,151,509 - 153,091,345 (18,211,239) 12,543,181,846
2014 Taka 10,134,250,460 181,488,447 2,227,442,939 12,543,181,846
Annual Report 2015 107
Related undertakings
108 Annual Report 2015
Significant transactions with related undertakings are as follows:
Nature of transaction
BRAC Bank Ltd. Interest on fixed deposits and bank balance Delta BRAC Housing Finance Corp. Ltd. Interest on fixed deposits BRAC Services Ltd. Service facilities
2015 Taka
26,202,844 37,373 33,290,623
BRAC’s investments in the related undertakings are represented by its share in the respective net tangible assets, goodwill and loans extended. Loans represent finance provided for working capital and earn 12% (2014: 12%) interest per annum. These loans are unsecured and have no fixed repayment terms. On 10 September 2015, BRAC acquired 31,562,618 ordinary shares of face value Taka. 10, representing 25% of total shares in Industrial Promotion and Development Company (“”IPDC””) of Bangladesh Ltd with a cash consideration of Taka. 759,023,000. The principal activities of IPDC is providing financial services. On 3 November 2015, BRAC disposed BRAC Banshkhali Tea Company Ltd. for cash consideration of Taka. 602,500,000. This resulted in a gain on disposal of Taka. 787,320,202.
The market value of BRAC Bank Ltd. shares at 31 December 2015 was Taka. 48.40 per share (2014: Taka. 37.20) and Taka. 47.70 per share (2014: Taka. 37.30) on the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) respectively. The market value of Delta BRAC Housing Finance Corporation Ltd. shares at 31 December 2015 was Taka.114.00 per share (2014: Taka. 71.60) and Taka.110.10 per share (2014: Taka. 71.00) on the DSE and CSE respectively.
2014 Taka
i) included in cost of sales of commercial projects ii) included in programme related expenses
Note 31 Note 31
80,930,188 623,478,351 704,408,539
Dec. 2015
- (277,128,281) 17,424,363,015
78,812,474 586,526,787 665,339,261
Dec. 2014
5,464,364,419 665,339,261
- - 1,737,298,596 195,531,444 721,773,175 114,777,078 1,171,452,497 123,977,104 435,349,691 61,716,729 575,077,256 96,363,780 11,459,311 1,943,906 783,563,293 63,947,603 20,103,724 1,674,511 13,891,366 1,162,838 179,067,932 19,864,495 2,036,351 406,685 - - 268,333,841 23,042,366 5,919,407,033 704,408,539
Charged during the year
(210,296,647)
- - (44,627,837) (94,479,300) (48,777,463) (46,212,441) (1,447,306) (7,072,844) - - - - - - (242,617,191)
5,919,407,033 11,504,955,982
- 7,890,865,292 6,228,649,677 1,932,830,040 2,959,081,182 2,709,941,069 791,922,416 589,526,913 556,456,148 1,200,950,301 490,576,197 384,593,338 448,288,957 193,185,190 147,546,331 625,228,595 295,229,902 263,301,791 11,955,911 3,847,448 3,861,615 840,438,052 229,070,672 230,669,670 21,778,235 8,422,785 9,030,997 15,054,204 799,855 907,908 198,932,427 89,140,919 107,593,806 2,443,036 - 406,685 - 1,257,192,814 826,053,097 291,376,207 82,371,354 35,943,850 6,381,198,381 14,089,310,523 11,504,955,982
Closing Balance 31-12-2015
Amount in Taka Written Written down down value value 31-12-2015 31-12-2014
An amount of Taka. 53,946,525 (2014: Taka. 90,166,624) has been transferred to the statement of income and expenditure from deferred income - investment in fixed assets to cover the depreciation charge for donor funded fixed assets as disclosed in Notes 17 & 19.
Allocation of depreciation:
1,611,641,415
16,089,849,881
211,965,922 84,967,650 25,795,308
Total 2014
6,228,649,677 1,662,215,615 - - 7,890,865,292 4,447,239,665 - 444,671,557 - 4,891,911,222 1,278,229,323 151,360,805 - (48,140,799) 1,381,449,329 1,556,045,835 237,496,721 - (102,016,058) 1,691,526,498 582,896,022 111,747,087 - (53,168,962) 641,474,147 838,379,047 128,291,891 - (46,212,441) 920,458,497 15,320,926 1,946,150 - (1,463,717) 15,803,359 1,014,232,963 64,673,903 - (9,398,142) 1,069,508,724 29,134,721 1,066,299 - - 30,201,020 14,799,274 1,054,785 - - 15,854,059 286,661,738 1,411,608 - - 288,073,346 2,443,036 - - - 2,443,036 826,053,097 875,811,274 (444,671,557) - 1,257,192,814 304,277,691 69,469,870 - - 373,747,561 17,424,363,015 3,306,546,008 - (260,400,119) 20,470,508,904
Opening balance 01-01-2015
Banking business, listed on the Dhaka and Chittagong Stock Exchanges Cold storage Internet service provider Software development Hospitality Housing finance, listed on the Dhaka and Chittagong Stock Exchanges Tea plantation Tea plantation Tea plantation Poultry processing Management of assets and portfolio investment “Sustainable, conscious, green and ethical investment” Waste management services Financial services Tea plantation Depreciation Adjustment/ disposals and during the year
Principal activities
Freehold land Buildings Furniture & fixtures Equipment Computer Vehicles Bicycles Machineries Deep tube wells and tanks Hatcheries Camp/Poultry/Livestock sheds Motorcycles Construction work-in-progress Crates/Mannequins/Samples/Antiques Total 2015
44.64 99.99 19.99 48.67 100.00 18.39 99.94 99.85 99.12 93.94 26.00 51.00 90.00 - 99.92
Closing balance 31-12-2015
44.64 99.99 19.99 48.67 100.00 18.39 99.94 99.85 99.12 93.94 26.00 51.00 90.00 25.00 -
Disposals during the year
2014
Additions during the year
BRAC Bank Ltd. BRAC Industries Ltd. BRAC BD Mail Network Ltd. BRAC IT Services Ltd. BRAC Services Ltd. Delta BRAC Housing Finance Corp. Ltd. BRAC Karnafuli Tea Company Ltd. BRAC Kaiyachara Tea Company Ltd. BRAC Kodala Tea Company Ltd. Bangladesh Netting Factory Ltd. BRAC Assets Management Company Ltd. BRAC Impact Ventures Ltd. BRAC Environmental Enterprises Ltd. Industrial Promotion and Development Company of Bangladesh Ltd. BRAC Banshkhali Tea Company Ltd. 2015
Opening balance 01-01-2015
Related undertakings (All Incorporated in Bangladesh)
Cost Transferred during the year
Investments in related undertakings (contd)
Group of fixed assets
11. Property, plant and equipment
10.
Annual Report 2015 109
12. Liabilities for expenses and materials
14. Term loans 2015 Taka
Liabilities for expenses Liabilities for goods Advances received for training, publications, supplies etc. Provision for stock loss
3,796,975,972 606,770,565 2,048,071,341 6,451,817,878 (92,113,931) 6,359,703,947
2015 Taka
2014 Taka 3,256,790,497 630,938,469 1,797,457,125 5,685,186,091 (85,586,912) 5,599,599,179
13. Bank overdrafts 2015 Taka AB Bank Ltd Agrani Bank Ltd. Bank Alfalah Bank Asia Ltd. Dhaka Bank Ltd. Dutch Bangla Bank Ltd. Eastern Bank Ltd. Habib Bank Ltd HSBC IFIC Bank Ltd. Jamuna Bank Ltd. Janata Bank Ltd. Mutual trust Bank Ltd. Prime Bank Ltd. *Pubali Bank Ltd. Rupali Bank Ltd. Sonali Bank Ltd. Southeast Bank Ltd. Standard Bank Ltd. The Trust Bank Ltd. United Commercial Bank Ltd. Uttara Bank Ltd.
2014 Taka
- 674,622 89,456,983 49,362,218 188,801,780 165,511,027 26,930,418 587,765,672 1,645,002,580 573,015,995 13,537,798 - 5,070,474 1,112,222 389,220,376 - 469,883 456,130 8,136,356 1,609,092 38,413,625 941,753,627 32,783,210 15,268,942 3,800,862 926,051,556 1,909,025,395 1,291,196,814 5,700,915,019 3,945,132,979 44,992,182 10,026,345 1,815,183,170 39,559,087 1,371,456 286,275 3,309,789 7,569,058 48,280,117 993,656,336 1,343,306 365,665 2,337,137,687 1,442,143,097 14,303,182,466 10,992,516,759
2014 Taka
Bangladesh Bank Bank Alfalah BASIC Bank Ltd. BRAC Bank Ltd. Citibank, N.A. Commercial Bank of Ceylon PLC Dhaka Bank Ltd. Eastern Bank Ltd. HSBC IFIC Bank Ltd Jamuna Bank Ltd. Prime Bank Ltd. Pubali Bank Ltd *Rajshahi Krishi Unnayan Bank (RAKUB) SABINCO Shahjalal Islami Bank Ltd. Standard Chartered Bank (SCB) The Premier Bank Ltd
5,566,390,000 200,000,000 1,160,705,020 2,896,786,692 500,000,000 1,000,000,000 - 2,106,316,967 - 1,599,822,222 1,000,000,000 1,999,532,109 85,061,980 365,000,000 462,965,620 1,533,916,647 4,340,000,000 1,699,989,798 26,516,487,055
4,066,390,000 - 898,595,401 2,594,829,057 - 900,000,000 419,431,780 2,177,574,277 1,229,750,000 1,178,609,337 - - - 495,000,000 - 1,101,081,508 4,014,000,000 - 19,075,261,360
Term Loans are analysed as follows: Amount repayable within 12 months Amount repayable after 12 months: - Repayable after 12 months and within 24 months - Repayable after 24 months and within 36 months
24,109,055,273
15,778,874,461
1,959,893,143 447,538,639 2,407,431,782 26,516,487,055
2,358,924,871 937,462,028 3,296,386,899 19,075,261,360
*
Secured by fixed deposits amounting to Taka. 183,147 (2014: Taka. 100,183,147).
All repayment obligations in respect of the term loans were met and no amounts were in arrears as at 31 December 2015.
he term loan were obtained to support various micro finance and development projects undertaken by BRAC and for working capital purposes. T The loans are repayable at various intervals, i.e. monthly, quarterly, half-yearly, bi-annually and annually and bear 5% to 11.5% (2014: 5% to 13%) interest rates.
15. Members’ savings deposits *The bank overdraft is secured by fixed deposits amounting to Taka. 414,710,523 (2014: Taka. 916,695,416). The bank overdrafts were obtained for BRAC’s micro-finance programme and to finance working capital requirements. The bank overdrafts bear interest at 5.50% to 12.5% (2014: 8.5% to 16%) per annum, and are repayable within 12 months.
110 Annual Report 2015
2015 Taka
2014 Taka
At 1 January 2015 Deposits during the year Withdrawals during the year At 31 December 2015
34,180,809,446 30,521,109,555 (24,473,461,670) 40,228,457,331
29,034,851,689 34,859,947,590 (29,713,989,833) 34,180,809,446
Compulsory savings Voluntary savings Term deposits At 31 December 2015
32,170,932,001 25,730,530,696 4,863,588,623 4,095,609,911 3,193,936,707 4,354,668,839 40,228,457,331 34,180,809,446
Annual Report 2015 111
15. Members’ savings deposits (contd.)
17.
The rate of interest paid in respect of savings deposits by members was 6% - 10% (2014: 6% - 10%) per annum.
BRAC has three types of savings initiatives, namely (a) Compulsory savings (b) Voluntary savings and (c) Term deposits, with a view to facilitating and encouraging savings by members in rural areas. (a)
Compulsory saving (i)
Each member deposits a minimum amount of Taka. 10 in a weekly meeting. The amount to be deposited weekly is fixed by the member at the inaugural meeting of the year. The interest rate is 6% per annum.
(ii)
A member can withdraw the entire amount of savings after the loan outstanding balance including service charges thereon has been fully repaid.
(iii) BRAC is allowed to offset the amount of loan balance with the equivalent savings balance of the loanee in the event of default. (b)
Voluntary savings (i)
Each member can save for periods ranging from 3 years to 10 years on a monthly basis. The voluntary savings range from Taka. 100 to Taka. 1,000. The interest rate ranges from 7% for a 3 years period to 10% for a 10 year period.
(ii) Any member can withdraw his/her savings by giving a seven (7) days written notice. c)
Each member can save for a period 1 to 10 years for a fixed time period. The amount of deposit can range from Taka. 10,000 to 100,000. Interest rate for the maturity period range from 7% in the first year to 10% for 10 years.
16. Grants received in advance account
At 1 January 2015 Receivables as at 1 January 2015 Donations received during the year Transferred to deferred income: - Investment in property, plant and equipment - Motorcycle replacement fund Transfer to Statement of Income and Expenditure for expenditure during the year Grants receivable At 31 December 2015
112 Annual Report 2015
29 17 17
19 6
2015 Taka 6,740,890,268 (52,248,836) 6,688,641,432
2014 Taka 8,061,468,930 (116,074,591) 7,945,394,339
7,801,946,598 14,932,516,817 (23,785,870) (4,699,870)
(57,380,571) (7,121,130)
At 1 January 2015 Transferred from Grants received in advance Amortization to Statement of Income and Expenditure At 31 December 2015
18. Other long term liabilities
Term deposits
Note
Notes
Investment in Fixed Assets Taka
16
204,236,746 23,785,870
31,263,270 4,699,870
235,500,016 28,485,740
(53,946,526) 174,076,090
(9,569,507) 26,393,633
(63,516,033) 200,469,723
Deferred income
Employee gratuity and redundancy fund Self-insurance fund - Employees - BRAC properties and motorcycles Other funds - Special fund for scholarship - Relief and rehabilitation fund - Staff welfare fund
Motorcycle Replacement Fund Taka
2015 Taka 9,456,164,710
Total Taka
2014 Taka 8,680,440,167
422,641,872 733,694,168 1,156,336,040
395,519,327 678,082,772 1,073,602,099
5,765,565 583,877,320 49,103,440 638,746,325 11,251,247,075
5,543,031 762,958,604 97,039,408 865,541,043 10,619,583,309
An actuarial valuation of the employee gratuity and redundancy fund as at 31 December 2014 was performed by an independent professional actuary. Based on the valuation, there was an excess provision of Taka. 423,900,000. The principal assumptions applied in the actuarial valuation, were similar to those applied in the previous years. An actuarial valuation of the self-insurance fund for employees as at 31 December 2014 was performed by an independent professional actuary. Based on the valuation, there was an excess provision of Taka. 216,000,000. The principal assumptions applied in the actuarial valuation, were consistent with those applied in previous years. The indicative excess provisions in respect of the above funds, have not been written back, but will be considered in determining future provisions for the respective funds. Such determination would include further consideration given to the probability of unforeseen adverse events which may cause strain on the funds concerned. BRAC also commissioned an investigation report by an independent professional actuary on the properties and motorcycles selfinsurance fund as at 31 December 2014. The investigation report addressed BRAC’s properties and motor cycles within and outside the Dhaka City Corporation areas. The investigation report set out a recommendation that to attain a satisfactory financial position required for the self-insurance fund, an additional provision of Taka. 10,000,000 would be required, which was made by BRAC in 2014. The Special fund for scholarship represents the Catherine H. Lovel memorial fund which will subsequently be utilized for a scholarship programme for poor girls. It is represented by specific fixed deposits, from which interest is added to the fund.
(13,666,856,999) (16,124,768,023) 795,245,291 6,688,641,432 175,920,953 52,248,836 971,166,244 6,740,890,268
Annual Report 2015 113
18. Other long term liabilities (contd.)
21. Microfinance Programme
The Relief and Rehabilitation fund for disaster and climate change represents recoveries from prior disbursements of grants for rehabilitation, as well as additional amounts accreted by BRAC as deemed appropriate and is held as a liability. This fund is utilized to meet outgoing during natural disasters and climate change and is substantially represented by separate bank balances from which interest is added to the fund. The staff welfare fund represents deductions from the staff salary which are utilised to defray medical expenses incurred by staff and, under certain instances, their families. The fund is managed by a staff committee who decide upon the quantum to be disbursed as well as the eligibility of staff family members for benefits.
Service charge on microfinance loans Bank interest against member saving deposits (Note 24) Less: Inter-programme interest charged during the year
Donor grants recognised in the Statement of Income and Expenditure:
20.
2015 Taka
2014 Taka
Transferred from grants received in advance
16
13,666,856,999
16,124,768,023
Transferred from deferred income: Amortisation of investment in property, plant and equipment - unrestricted - temporarily restricted
17
683,274 53,263,252 53,946,526
48,609,068 41,557,556 90,166,624
Amortisation of motorcycle replacement fund - unrestricted - temporarily restricted
17
308,026 9,261,481 9,569,507
352,736 10,913,483 11,266,219
Total donor grants Interest on bank accounts and fixed deposits in respect of donor funds Other income - Partial reimbursements on cost of donor funded programme supplies
24
13,730,373,032 27,057,988 28,561,197 13,785,992,217
16,226,200,866 125,409,190 43,951,680 16,395,561,736
Aarong Rural Craft Centre BRAC Printers BRAC Printing Pack BRAC Dairy and Food Project Agro-based Programme Support Enterprises Non-agrobased Programme Support Enterprises 20.2 Other Income Gain/(loss) on disposal of property, plant and equipment Partial reimbursements on cost of donor funded programme supplies Sale of waste materials Foreign exchange gain Less: Inter-programme interest charged during the year
114 Annual Report 2015
25,983,492,605 780,582,091 (81,710,721) 26,682,363,975
21,106,797,751 581,148,480 (328,330,191) 21,359,616,040
2015 Taka
2014 Taka
Interest on bank accounts and fixed deposits (Note 24) Other income (22.1) 22.1 Other Income (Loss)/gain on disposal of property, plant and equipment Partial reimbursements on cost of donor funded programme supplies Training income Sale of waste materials Interest received on other loans and advances Foreign exchange (loss)/gain Inter-programme interest received during the year
491,311,920 564,569,231 1,055,881,151
585,508,287 1,064,410,570 1,649,918,857
(7,555,687) 60,252,181 320,105,691 53,513,856 52,045,467 (682,406) 86,890,129 564,569,231
50,424,765 107,307,160 391,976,931 40,166,761 126,406,360 4,006,137 344,122,456 1,064,410,570
23. Investment income 2015 Taka Share of profits less losses from investments in related undertakings Gain on disposal of BRAC Banshkhali Tea Company Ltd Interest on Subordinated Bond and BSP Gain/(loss) on investment in quoted securities
793,099,927 787,320,202 157,461,388 1,800,000 1,739,681,517
2014 Taka 623,733,398 - 44,957,808 (6,000,000) 662,691,206
24. Interest on fixed deposits and bank accounts
Social enterprises Revenue from sales (Note 20.1) Other income (Note 20.2) 20.1 Revenue from Sales
2014 Taka
22. Self-financing Social Development Projects
19. Donor grants Note
2015 Taka
13,288,877,264 56,550,496 13,345,427,760
13,147,337,426 52,037,124 13,199,374,550
5,631,368,906 - 295,158,054 2,976,347,522 4,115,676,523 270,326,259 13,288,877,264
5,344,243,106 77,484,834 291,877,416 2,940,755,762 4,266,912,804 226,063,504 13,147,337,426
10,174,037 9,036,589 42,503,569 15,709 (5,179,408) 56,550,496
2015 Taka Microfinance programme against member saving deposits Donor based development projects Self-financing social development programmes
780,582,091 27,057,988 491,311,920 1,298,951,999
2014 Taka 581,148,480 125,409,190 585,508,287 1,292,065,957
25. BRAC Contribution to support Donor Funded Programmes RAC contributed funds to meet the funding shortfall in donor funded programmes expenditure during the year in order to ensure B the continued implementation and execution of such programmes.
(3,311,009) 17,963,670 47,370,973 5,805,755 (15,792,265) 52,037,124
Annual Report 2015 115
28. Financial Instruments
26. Taxation 2015 Taka Income tax provision for the year
165,000,000
2014 Taka 340,000,000
Under the Income Tax Ordinance, 1984 (Amended), in addition to its commercial activities, BRAC is also subject to taxation on income derived from other non-commercial activities unless they are tax exempt. Income from microfinance and social development activities are tax-exempt. The tax charge is in respect of taxable income arising from BRAC’s taxable activities in 2015, and is subject to agreement with the tax authorities. For years of assessment 1991-92 to 2011-12, BRAC has been issued directives requesting payment of taxes cumulatively amounting to approximately Taka. 5.5 billion. BRAC has disagreed with the basis of taxation, successfully obtaining stays of execution on the said directives, and has referred the matter to the High Court Division of the Supreme Court of Bangladesh. Similar directives for year of assessment 2012-13 amounting to Taka. 0.51 billion has been issued by the Deputy Commissioner of Taxation (DCT) for which appeal is in progress as at the date of the financial statements. BRAC continues to be of the view that the basis of taxation contained in the abovementioned directives are inappropriate, and therefore BRAC would not be liable to taxation. Accordingly, the amounts referred to above have not been provided for in the financial statements as at 31 December 2015.
(a) Financial Risk Management Objectives and Policies BRAC’s financial risk management policy seeks to identify, appraise and monitor the risks facing BRAC whilst taking specific measures to manage its interest rate, foreign exchange, liquidity and credit risks. BRAC does not, however, engage in speculative transactions or take speculative positions, and where affected by adverse movements, BRAC has sought the assistance of donors. (b) Interest Rate Risk RAC’s financial risk management policy seeks to identify, appraise and monitor the risks facing BRAC whilst taking specific measures B to manage its interest rate, foreign exchange, liquidity and credit risks. BRAC does not, however, engage in speculative transactions or take speculative positions, and where affected by adverse movements, BRAC has sought the assistance of donors. (c) Foreign Exchange Risk BRAC’s foreign exchange risks comprise transaction risk which arise from donor grants received in currencies other than the local currency and minimal foreign currency deposits and cash at bank placed with licensed financial institutions. BRAC is exposed to foreign currency fluctuations, mainly in respect of donor grants denominated in United States Dollars, Great Britain Pound and the Euro. oreign exchange exposures in transactional currencies other than the local currency are monitored via periodic project cash flow F and budget forecasts and are kept to an acceptable level. (d) Liquidity Risk
27. Foreign currency denominated monetary assets and liabilities 2015 Taka Resident Foreign Currency Deposits (in US$) Resident Foreign Currency Deposits (Euro) Resident Foreign Currency Deposits (in GBP) Cash at bank and in hand (in US$) Cash at bank and in hand (in Euro) Cash at bank and in hand (in GBP) Cash at bank and in hand (in AUD)
116 Annual Report 2015
621,859,214 16,024,908 18,054,422 14,303,106 2,312,465 1,245,538 14,061
2014 Taka 659,905,760 17,791,444 18,859,242 27,288,847 2,423,220 1,029,079 -
BRAC manages its debt maturity profile, operating cash flows and the availability of funding so as to meet all refinancing, repayment and funding needs. As part of its overall liquidity management, BRAC maintains sufficient levels of cash or fixed deposits to meet its working capital requirements. In addition, BRAC maintains banking facilities of a reasonable level. (e) Credit Risk The credit policy of BRAC requires all credit exposures to be measured, monitored and managed proactively. Exposure to credit risk is monitored on an ongoing basis by the commercial ventures’ respective management teams. BRAC does not have any significant exposure to any individual customer or counterparty.
Annual Report 2015 117
29. Schedule of donation received Name of the projects
Donor
2015 Taka
BRAC Education Program (BEP-II)
CIDA/DFATD BRAC-USA Sub total
59,789,781 - 59,789,781
Vision Bangladesh Project
Orbis International BRAC-UK Sub Total
Strategic Partnership Arrangement (SPA)
DFID DFAT Sub Total
Assistant and Support to the Victims of Rana Plaza
BRAC-USA Bencom S.r.l. Sub Total
IED BRACU Skill Training for Rana Plaza Victims BRAC University Institute of Education Development BRAC New Initiative of HRLS Char Development and Settlement Program Improving Incomes, Nutrition and Health in Bangladesh through Potato, - Sweet potato and Vegetables BRAC Water, Sanitation and Hygiene Program (WASH-II) TB Control Program TB Care-II TB CARE II Wave 3 Early Childhood Development Support Program Malaria Control Program Early Learning for Child Development Project (ELCDP) BRAC Boat School BRAC Urban Slum School Community Safety Initiatives Coordination and Change Enabling Project VCT Services BRAC TB Centre Innovation in Sustainable Sanitation in Bangladesh Alive and Thrive Project Bangladesh MYCN-Home Fortification Program BRAC Emergency Preparedness Project BRAC HRLS Property Rights Program National Food Security Nutritional Surveillance Project BRAC Project Laser Beam (PLB) Changing Social Norms and Supporting Adolescent Empowerment Vocational Skill Training for Urban Working Children Productive, profitable and resilient agriculture and aquaculture systems Monitoring and Evaluation of the School Nutrition Sexual and Reproductive Health Rights Education Program in Bangladesh Sustainable Human Development and Empowerment of Vulnerable Women affected Climate Change Urban School Nutrition Programme Engaging Communities for Behaviour Social Change in Cox’s Bazar District COMDIS-HSD Marketing Innovation for Health (MIH) Program Technology (ex-ante) assessment and farm House hold Segmentation for Inclusive Poverty Reduction and Sustainable Growth Building Young Women’s Leadership through Sports Economic Empowerment for Poor and Vulnerable Women in Bangladesh Guiding Pro-Poor Investments in the Nexus among Domestic Water Quality and Quantity Iron/Folic Acid Root and Tuber Crops Research and Dev. Prog. For Food Security Asia and Pacific Region
118 Annual Report 2015
482,669 70,665 553,334 3,008,070,416 1,756,125,832 4,764,196,248
2014 Taka - 233,998,596 233,998,596 - 694,487 694,487 6,946,250,000 3,623,697,700 10,569,947,700
- 7,935,053 7,935,053
1,021,798 23,502,566 24,524,364
International Inst. Of Social Studies ODI PORTICUS EKN Adam Smith International Royal Tropical Institute UNESCO The What to Expect Foundation Sub Total
- 817,406 - 21,074,222 5,862,276 1,066,448 190,741 - 29,011,093
3,687,825 - 900,370 28,000,000 - - - 384,112 32,972,307
ILO EKN GIZ Euroconsult Mott Mac Donald AVRDC (The World Vegetable Centre) EKN The Global Fund University Research Company LLC. University Research Company LLC. AKF The Global Fund UNICEF EACI-QATAR EACI-QATAR Safer World World Fish Family Health International BRAC-USA FHI Solutions The Global Alliance for Improved Nutrition BRAC-USA BRAC-USA EC Unilever-UK UNICEF UNICEF IRRI The Global Alliance for Improved Nutrition Novib
- - 24,324,233 20,504,303
1,528,287 22,922,747 (351,428) 21,537,191
33,518,658 123,712,564 1,022,178,767 - 25,386,236 - 263,878,601 - 25,418,728 61,249,544 4,794,935 3,362,727 - - 19,523,213
55,682,762 686,460,168 1,324,900,970 38,774,716 45,041,637 181,429 323,366,404 152,784,080 112,915,025 118,856,298 6,484,085 15,564,210 2,045,765 206,737,204 39,175,726
147,543,869 7,537,360 80,568,087 24,809,403 - 22,584,299 - - 489,680 -
45,012,744 11,874,507 - 88,449,525 21,655,757 6,370,955 3,980,995 1,048,778 6,462,105 8,935,723
UN Women The Global Alliance for Improved Nutrition UNICEF University of Leeds Social Marketing Company (SMC)
29,509,400 7,117,244 6,136,686 772,576 56,822,675
53,826,784 - - 1,964,725 45,648,374
Center for Development Research Women Win EC
751,928 10,548,496 17,115,834
1,116,480 8,185,159 -
University of Bonn ICDDRB AVRDC (The World Vegetable Centre)
1,396,027 -
- 12,487,420
386,781
2,086,415
Name of the projects Reaching out of School Children Project-II (ROSC) Improving Maternal & Child Nutrition (MCN) Aquatic Agricultural System (AAS) Measuring Health System Costs of TB Treatment in Bangladesh Pilot project of distributing reading glasses Shikha Project Wash and Clean in the Labour Ward-A Situation Analysis Study BRAC School Meal Piloting Safe Migration for Bangladesh Workers Impact Assessment of Credit Program for the Tenant Farmers Early Recovery Facility of UNDP Bangladesh Bangladesh:2013 Global Disaster Pre-Positioning Initiative BRAC Innovation fund for Digital Financial Services Developing Interactive Multimedia Digital Version of Primary Education Contents English & ICT for Adolescent Phase-2 Ensure Sufficient Food & Nutrition Through Maize Cultivation for marginalise group of people in Bangladesh Holistic Support package for Rana Plaza Survivors Livelihood Skills Training for Out of School Working Children Pop culture within a purpose Edu’s_VAW Pro-Poor Slum Integration Project(PPSIP) Road Safety Awareness campaign Project Sustainable Clubfoot Care Bangladesh Targeting The Ultra poor Nutrition Teaching & Learning Materials Research of Refinement Program BRAC Health Security Program BRAC USI RTK Project English through Mobile for Adolescent girl Graduation as Resilience National Database on Violence Against Women Safe Migration Program Study TB REACH WAVE 3 Increase Access to Improved Water Sanitation and Hygiene Service Improving Educational Outcome of Female Disadvantaged School Student Agri-Business for Trade Competitiveness Project Improving Demand and Referral Linkage for Injectable Long acting and permanent methods of contraceptives Technology Adoption and Food Security in Rural Bangladesh Neuro Developmental Disability (NDD) Project Establish Reintegration & Referral Service for Returnee migrant Workers Prevent and Respond to Sexual and Gender Based Violence BRAC Splash Wash in School Building Blocks of Early Years Learning in Bangladesh Community Based Digital Fat Testing Project Community Based Intervention for the Empowerment of Women Community Water Management for Improved food Security nutrition and livelihoods in the polders of Holistic Enhancement of Early Childhood Development in Rural Bangladesh National Early Childhood Development Support Program Promoting Maize Cultivation in Southern part of Bangladesh School Feeding Program at Gaibandha Training Program on Non Communicable Disease Control Working with Children at Risk in the Slums of Dhaka Fistula Care Plus Project Strengthening Strategic Communication for Development Support to Education Priorities Health Protection through Alternative Financing(HPAF) Community Road Safety Programme Skills Development and Self-Employment Program Ensuring Long Term Medical Services & Post Award Livelihood Support for the Victims of Rana Plaza Building capacity to address issues of SRHR, Gender and Emotional wellbeing in technical, vocational, higher and general education SUSTAIN Delivering maternal health care through mobile biometrics in Dhaka Urban Slums Technology Adoption and diffusion the system of Rice Intensification and Food Security in Rural Bangladesh Improving mother and child nutrition in Bangladesh (SHIMA) TOTAL
Donor World Bank WFP World Fish London School of Hygiene & Tropical Medicine Vision Spring Family Health International The Burnland Trust WFP World Bank Global Development Network Inc. UNDP Americares Foundation Bill and Melinda Gates Foundation Government of Bangladesh British Council CIMMYT-India BRAC-UK UNICEF Novib BRAC University Chevron Bangladesh The University of British Columbia(“UBC”) WFP CfBT Education Trust Rockefeller Foundation The Global Alliance for Improved Nutrition GSMA Mobile for Dev. Foundation BRAC-UK UNDP BRAC-USA ICDDRB Charity Water MONASH University KATAYLYST
2015
2014
- 5,264,137 534,182
5,947,520 4,095,908 1,029,334
- 14,952,968 115,638,624 - 18,574,802 65,951,114 11,771,538 475,505 - 117,628,856
579,000 18,806,116 145,794,000 3,352,464 11,442,298 12,369,057 5,779,433 3,328,529 1,038,726 85,652,707
26,497,370 3,341,663
6,643,069 1,462,082
936,992 - 4,013,878 3,211,476 600,000 2,632,000
1,938,454 14,218,421 63,952,434 8,479,633 1,717,870 2,518,808
- 13,628,850 4,991,355 7,763,602
55,005,469 12,893,355 11,175,179 7,728,609
4,174,834 6,561,564 - - - 835,188 48,167,433 2,205,421 1,000,000
3,867,214 3,495,970 5,609,219 3,113,175 6,050,489 1,670,376 45,216,605 2,670,330 500,000
Engender Health Monash University Apasen International UN Women UNDP Splash International PORTICUS Care-Bangladesh ILO
19,133,935 3,916,978 594,105 3,389,148 10,530,724 14,565,307 46,974,750 23,155,634 5,368,194
4,920,696 2,157,413 598,749 3,422,096 6,424,834 - - - -
IRRI BRAC-USA UNICEF EDGE Consulting Ltd. WFP GOB BRAC-UK Engender Health
3,088,000 4,258,533 123,039,350 2,352,522 3,047,624 16,042,151 11,673,015 2,695,028
- - - - - - - -
UNICEF BRAC-UK GOB ILO BRAC USA
6,813,946 - 1,697,257 1,700,000 46,997,513
- - - - -
MDF Training & Consultancy The International Potato Center (CIP)
7,772,697 -
- -
SimPrints
1,279,259
-
2,200,624 54,878,589 7,801,946,598
- - 14,932,516,817
Monash University CIFF
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BRAC BRAC Centre 75 Mohakhali Dhaka 1212 Bangladesh
T : +88 02 9881265 F : +88 02 8823542 E : info@brac.net W : www.brac.net
Photo credit: BRAC BRAC/Nasir Ali Mamun BRAC/Shehzad Noorani
Hasan Chandan/MAP for BRAC Shafiqul Alam Kiron/MAP for BRAC SujaN/MAP for BRAC Hassan Bipul for BRAC
Cover photo: SujaN/MAP for BRAC 128 Annual Report 2015
Annual Report 2015 129
BRAC Communications/AR15/June 16
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