2012 Content of This Publication Cannot Be Reproduced Without Due Acknowledgement to PPAF

Poverty reduction and social development Environment- friendly development Equity and social inclusion Transparency Accountability Team work Creativity and responsiveness Honesty and integrity Vision

Restoring hope, Securing the future, Ending poverty Acronyms and Abbreviations

ADB Asian Development Bank AJK Azad Jammu and Kashmir AKRSP Agha Khan Rural Support Programme BISP Benazir Income Support Programme BoD Board of Directors BOP Build, Operate, Participate BRDS Badin Rural Development Society C&M Communication and Media CCBC College for Community-Based Change Makers CECP Committee Encouraging Corporate Philanthropy CED Credit and Enterprise Development CEO Chief Executive Officer CGAP Consultative Group to Assist the Poor CIB Credit Information Bureau CIG Common Interest Group CLF Community Livelihood Fund CLTS Community-Led Total Sanitation CNIC Computerised National Identity Card CO Community Organization CPI Community Physical Infrastructure CRM Corporate Relations Management CSR Corporate Social Responsibility CWD Children with Disabilities DAC Development Assistance Committee DECRG Development Economics Research Group DFID Department for International Development DMPP Drought Mitigation and Preparedness Programme DWSS Drinking Water Supply Scheme ECI Empowerment through Creative Integration EIDM Energy, Infrastructure and Disaster Management EIU Economist Intelligence Unit EPS Environmental Protection Society ERRA Earthquake Reconstruction and Rehabilitation Authority ESA Environmental and Social Audit ESM Environment and Social Management ESMG Environmental and Social Management Group ESMU Environment and Social Management Unit F&A Finance and Accounts FANA Federally Administered Northern Areas FATA Federally Administered Tribal Area FBR Federal Board of Revenue FDO Farmers' Development Organisation FFCL Fauji Fertiliser Company Ltd. FMR Financial Monitoring Report FR Frontier Region Acronyms and Abbreviations

FSG Financial Services Group GB Gilgit-Baltistan GH Group Head GIK Ghulam Ishaq Khan Institute of Technology GoP Government of Pakistan HBL Habib Bank Limited H&E Health and Education HEC Higher Education Commission HMC Health Management Committee HR Human Resource IA Internal Audit ICT Information Communication Technology ID Institutional Development IFAD International Fund for Agricultural Development IIUP Integrated Infrastructure Upgrading Project ILO International Labour Organisation IRDP Integrated Rural Development Programme IWEI Integrated Water-Efficient Irrigation IWMI International Water Management Institute KP Khyber Pakhtunkhwa LACIP Livelihood Support and Promotion of Small Community Infrastructure Project LBOD Left Bank Outfall Drainage LBR LBOD backwash region LEP Livelihood Enhancement and Protection (programme) MER Monitoring, Evaluation and Research MFB Microfinance Bank MFI Microfinance Institution MIED Mountain Institute of Educational Development MIOP Microfinance Innovation and Outreach Programme MIS Management Information Systems MoU Memorandum of Understanding MPMU Microfinance Portfolio Management Unit NBP National Bank of Pakistan NDMA National Disaster Management Authority NDP National Drainage Programme NGO Non-Government Organization NRSP National Rural Support Programme ODF Open Defecation Free OECD Organisation for Economic Cooperation and Development PIM Pakistan Institute of Management PKR Pakistan Rupee PMN Pakistan Microfinance Network PO Partner Organization PPAF Pakistan Poverty Alleviation Fund PRISM Programme for Increasing Sustainable Microfinance Acronyms and Abbreviations

PSC Poverty Scorecard PTA Parent Teacher Association PTV Pakistan Television PWD Persons with Disabilities PWR Poverty Wealth Ranking QPR Quarterly Progress Report R&R Rehabilitation and Reconstruction RCDS Rural Community Development Society RIMS Results and Impact Monitoring System SBP State Bank of Pakistan SCAD Sindh Coastal Areas Development SDPI Sustainable Development Policy Institute SDU Sector Development Unit SEC Socio Engineering Consultants SECP Securities and Exchange Commission of Pakistan SGH Senior Group Head SI Special Initiatives SIP Summer Internship Programme SMC School Management Committee SO Social Organiser SOP Standard Operating Procedures SOPM Standard Operating Procedures Manual SPDC Social Policy and Development Centre SRD Sustainable Rural Development SWWS Support with Working Solutions TIP Technological Innovations Project TUP Targeting Ultra Poor TUSDEC Technology Upgradation and Skill Development Company UBL United Bank Ltd. UC Union Council UNDP United Nations Development Programme UNICEF United Nations Children's Fund USD United States Dollar VIP Visually Impaired Person VMA Voucher Management Agency VO Village Organisation WAPDA Water and Power Development Authority WECC Water, Energy and Climate Change WH Waseela-e-Haq WHO World Health Organisation WMC Water Management Centre WSP Water and Sanitation Programme WWF World Wide Fund for Nature Ahead

Year in Review 08-09

Financial Services 11-18 Lending and Sector Development

Non Financial Services 19-56 Water & Energy Community Physical Infrastructure Health, Education and Disability Institutional Development Responding to Emergencies Livelihood Enhancement and Protection Special Initiatives

Quality Assurance 57-68 Monitoring, Evaluation and Research Environment and Social Management Internal Audit

Core Support Services 69-89 Finance and Accounts Communications and Media Corporate Relations Management Administration, Procurement and Human Resources

Facts and Figures 91-155 Company Information Financial Highlights Directors’Report Financial Statements (for the year ended June 30, 2012) Year in Review

The year 2012 witnessed a to catalyze institutionsof the poor framework of the Government of fundamental paradigm shift at (our communities). We are Pakistan, and at the lowest level PPAF, making a graduated already seeing initial evidence address development needs of the transition from a focus on scale to where the poor, through Union Council – the lowest tier of a focus on depth and intensity of meaningful inclusion and administration in the country - presence. Implementation of the empowerment, are more which is also PPAF's basic level of Comprehensive Results intrinsically engaged in setting intervention. Framework, delineated in the year their own development agenda. 2011, commenced during the In terms of addressing PPAF's year. This framework adopts a In line with our emphasis on poverty reduction mandate, model neutral, non-prescriptive depth of outreach, there is explicit inclusion also means convening but value led approach, recognition of the spatial relationships, which cut across optimizing allocation of resources, dimension of poverty and in year traditional sectorial boundaries. maximizing outcomes at the 2012, PPAF shifted gear to focus It means proactive facilitation and grassroots through increased on the least developed areas and joint venturing of partnerships focus on quality and inclusion, regions of the country so that they with the private sector, academic through progressive integration of have the first claim on our and research institutions and core lines of business. resources. Prioritization of these availing of state of the art areas was determined by using technology and communication International experience objectively determined platforms. In doing so, the demonstrates that development is parameters, which take into objective is to capitalize on not merely about brick and mortar account human development, comparative advantage and or service delivery, nor even food security and national specialized expertise. Our about funding and resources, priorities. systemic approach to outcomes important as they are at one level. and impact focuses on entering Development at a more Innovation and localization of into relationships between fundamental level is about choice measurement are critical to organizations that reinforce and and change. finding new and effective ways to add value to shared objectives. deliver goods and services to the If such a transformation is to be local health facility, the girl's In terms of programming, the catalyzed by PPAF, it must be classroom or the marginal farmer momentum of operations was grounded in identity and self- that needs them. We are sustained in a challenging worth of the end users – the measuring our outcomes through environment. Total disbursement disadvantaged and marginalized – local tracking of the Millennium grew from just under Rs. 16,000 who are the ultimate client of Development Goals. The idea, million in 2011 to almost Rs. PPAF. It is therefore critical that over the long term, is to hold our 20,000 million in 2012 (YoY: 26% our strategy and operations are partners and ourselves growth). Lending for microcredit compatible with this imperative. accountable to results and impact. increased from Rs. 11,000 million In year 2012, a conscious effort to over Rs. 13,000 million (YoY: was made to put the poor in the At the highest level, PPAF has 20% growth), with 100% recovery driving seat through realigning endeavored to remain fully rate and 62% women borrowers. the work of institutionsfor the aligned with the broader national Grant operations posted a year on poor (our partner organizations) macro-economic and development year increase of 39% to stand at

08 ANNUAL REPORT - 2012 Year in Review

Rs. 6,600 million. More Most importantly, it is the significantly, funding for relief, ordinary people and communities rehabilitation, and reconstruction leaving in the face of hardship in disaster affected areas, and adversity, that PPAF is doubled over the preceding year particularly privileged to serve. and crossed the Rs. 1,000 million Their courage and spirit inspires mark. us and reinforces our belief in the future of Pakistan. PPAF has been particularly fortunate to benefit from the extraordinary facilitation, support and autonomy extended Hussain Dawood Qazi Azmat Isa to it by the Government of Chairman Chief Executive Officer Pakistan.

In the same vein we have enjoyed the trust and confidence of our financing partners – the World Bank (IDA), International Fund for Agricultural Development (IFAD), and Government of the Federal Republic of Germany (through KfW). We are grateful for their constructive engagement and proactive support.

The management team and staff of PPAF has been a major strength of the institution. Their sense of ownership and dedication to work has contributed, in no small measure, to performance achieved during the year.

ANNUAL REPORT - 2012 09

Financial Services Lending and Sector Development Financial Services Group

The challenge facing the Pakistan clients, 3.9 million savers, and 2.6 evidenced by the growth in Poverty Alleviation Fund (PPAF) at million insurance policyholders individual active borrowers its genesis in 2000 was developing with a dynamic institutional during 2006–2011. Pakistan's microfinance sector - to structure set for high growth. The introduce this facility to tens of PPAF's position, which is subject In harmony with the market-wide hundreds rural households where to multi-faceted growth in the transition from group-based to people struggle to find a market, has also seen a gradual individual lending, PPAF's Partner reasonable living. A handful of shift. It has been successful in Organisations (POs) are also microfinance practitioners (MFPs) crowding-in financing for the gradually increasing average loan catering to only 60,000 clients sector through its credit sizes, although inflation and posed a formidable challenge for enhancement facility under the clients' higher capital PPAF right from the outset. Programme for Increasing requirements are major Relentless capacity building, Sustainable Microfinance (PRISM) contributors as well. ample funding for on-lending, which has opened new avenues of Consequently, POs' average loan support for new products and a on-lending funds for the sizes rose from PKR 13,627 in FY robust monitoring system put in microfinance sector through 2007 to PKR 20,342 in FY 2012. by stakeholders saw the sector structured transactions from the transform into an innovative and capital market and commercial 1. Annual Review fast-growing industry in less than banks. The PPAF has 1.1 Disbursements a decade. The Economist simultaneously diversified its risk Intelligence Unit's (EIU) “Global by reducing portfolio The PPAF accounted for 45% of the Microscope on the Microfinance concentration with 15 institutions total microcredit gross loan Business Environment 2011” accounting for 90% of the total portfolio in Pakistan as of 30 June, report ranks Pakistan at number portfolio, down from three a 2012. Since its inception, it has one in the world for regulatory decade ago. made cumulative disbursements frameworks and practices, and to the tune of PKR 66.9 billion. A number three globally for overall In keeping with the dynamism of total of PKR 15.3 billion was microfinance business the sector, microfinance disbursed for on-lending to 48 POs environment. In fact, Pakistan is institutions (MFIs) have in the current fiscal year alone. one of the few countries in the successfully remodelled their world that has a separate legal and approach to microfinance. The PPAF started funding MFBs in regulatory framework for Numerous MFIs have transitioned FY 2010 through collaboration microfinance banks (MFBs) and from microcredit to microfinance with Khushhali Bank Ltd. in order key stakeholders have been with value addition to services, to make its services available to successful in ensuring a modified business models, more people in terms of progressive environment for the heightened customer awareness, geographic spread and number. It sector. The PPAF created a market individual assessments and the forged similar partnerships with for microfinance and played the use of the microfinance-exclusive Tameer Microfinance Bank and role of last resort-lender, standing Credit Information Bureau (CIB) to the National Rural Support by its partners, be it during the assess borrower creditworthiness. Programme (NRSP) Microfinance floods in 2010–11 or the Similarly, organisations are Bank in FY 2012. earthquake in 2005. developing customised financial products that will allow their Women empowerment lies at the The potential market for borrowers to deal effectively with heart of all PPAF's efforts. In order microfinance is estimated at economic, political, and external to ensure that its efforts are 20–30 million clients. The critical vulnerabilities and natural relevant and inclusive, PPAF puts investments made by PPAF and calamities. As a result, MFPs have special emphasis on providing other stakeholders have led to a started moving from group-based consistent support to women market today of 2.2 million loan lending to individual lending as borrowers and encourages its POs

ANNUAL REPORT - 2012 13 Financial Services Group

to introduce specialised assistance extended to rural clients, its urban facilities in order to customise programmes and services. Today, portfolio has witnessed a steady credit lines for MFBs. loans to women stand at 54% of increase and stood at 27% of total PPAF's cumulative disbursements loans in FY 2012 (up from 21% The ever-growing demand for on- compared with 36% in FY 2005. during FY 2011). Growth in PPAF's lending funds has made PPAF This emphasis on providing urban portfolio has realise that its credit pool needs income generating opportunities simultaneously increased the enhancement in order to cater to to women is apparent from the share of its loans in small the needs of its current and fact that 73% of all loans during enterprises and commerce, intended beneficiaries. The PPAF the reporting year were extended accounting for 37% of cumulative has had a successful experience to women clients. loan disbursements. Agriculture with the credit enhancement accounts for 35%, livestock for facility under PRISM, which was The PPAF has made efforts to 16% handicraft, light seen as a viable means of make its approach more inclusive manufacturing and services for leveraging on-lending funds. in terms of gender, region and 11%. Cognizant of this, the Board of sector. This includes designing Directors (BoD) has authorised the specialised products and services, 1.2 Products placement of guarantees to secure expanding outreach and coverage lines of credit for POs from while maintaining and improving The PPAF introduced special commercial banks. The PPAF has the quality of assistance provided incentives during the reporting also introduced a grace period of to beneficiaries in earning their year to improve its outreach and up to one year for its mature livelihoods and improving the coverage in the least developed partners in order to provide quality of their lives. It is segments of society and districts. liquidity to POs and improve noteworthy that while 73% of At the same time, it introduced outreach. PPAF microfinance loans are collateral-free clean lending

14 ANNUAL REPORT - 2012 Financial Services Group

Loan products to finance clean sustainable MFPs continued institutions during FY 2012. The alternative energy during the year. Funds were made provision of equity allowed POs to technologies—biogas, solar available for developing business increase the borrower base and energy—were made available to plans, standard operating ensure that equitable products are clients for the first time in procedures (SOPs), manuals, provided to poorer segments. An Pakistan; pilot projects have been institutional assessment, risk additional PKR 530 million has initiated in Chakwal and Soon management procedures, been earmarked for small and Valley. Support under the management information systems medium POs for FY 2013. Microfinance Innovation and (MIS) and arranging international Outreach Programme (MIOP) was exposure visits for POs. The PPAF 1.4 Strategic Partnerships provided to five POs in order to further strengthened the leverage advancements in the microfinance infrastructure by The PPAF strengthened its telecommunication sector and the providing support for 55 new partnerships with the State Bank regulatory framework for branches during the reporting of Pakistan (SBP), the Securities branchless banking. These POs year. These investments in and Exchange Commission of initiated pilot projects in institutional building and Pakistan (SECP) and the Pakistan collaboration with United Bank strengthening have ensured that Microfinance Network (PMN) in FY Ltd.'s “Omni' and Tameer- partnerships with PPAF symbolise 2012. The PPAF has been Telenor's “Easy Paisa” initiatives. quality. The PPAF's support has instrumental in providing The ventures proved successful resulted in improved financial platforms through its POs to carry and POs scaled them up; more stability enabling POs to draw out prototypes in five districts as than 100,000 clients make commercial financing from part of the steering committee for transactions and monthly sources other than PPAF as well. the National Financial Literacy transfers now exceed PKR 200 POs have raised PKR 3.8 billion Programme. These prototypes will million. from commercial banks. promote financial literacy amongst low-income segments of The PPAF believes good 1.3 Equity Funding society thereby building a cadre of governance is imperative for informed clientele for the building credible and effective The PPAF has been providing financial sector. These institutions. In this regard, a support to institutions that interventions are designed to series of trainings on codes of showed potential for growth and, build up MFP staff capacity and corporate governance consequently, these institutions finalise materials on budgeting, emphasizing MFPs were arranged are now experiencing steady business planning, savings, for PO board members. They growth and are ready to achieve branchless banking and loan focused on strengthening scale. The PPAF achieved this management. The programme will governance structures, enhancing target by increasing funds for on- be carried out on a national scale knowledge of roles and lending, grants for deployment of during FY 2013. Collaboration responsibilities and improving infrastructure and equity with the SBP continued transparency at all levels. injections to strengthen capital throughout the year to build a Investments to build strong, structures. A total of PKR 305 policy and regulatory transparent, efficient and million was provided to 16 environment that promotes

PPAF supported institutions that showed potential for growth and they are now ready to achieve scale.

ANNUAL REPORT - 2012 15 Financial Services Group

Cumulative disbursements of PKR 3.8 billion have been made under the credit enhancement facility through 17 transactions.

16 ANNUAL REPORT - 2012 Financial Services Group

growth, stability and transparency new clients in deprived districts. products. The Programme among practitioners. At the same introduced 25 innovative time it adds value to the lives of The PPAF and IFAD launched products and delivery the target communities through PRISM in June 2008. It was mechanisms including value inclusive and holistic financial designed to expand the role of chains, village banking, services. microfinance in Pakistan, bridge branchless banking and business the gap between MFPs and capital revival loans in flood-affected Client protection, knowledge markets, build strong institutions areas. Sixteen products have been management and the launch of the through equity injections and scaled-up and one introduced MF-CIB, inter alia, have been the provide technical support to POs. under the Programme, “Women's focus of collaboration between The PPAF has been successful in Cooperative Livestock Farming”, PPAF and PMN during the last engaging six commercial banks received international acclaim by twelve months. Both since the beginning of the winning IFAD's 2010 Innovation institutions—and other programme. Cumulative Marketplace award. stakeholders—have represented disbursements of PKR 3.8 billion Pakistan at various seminars, have been made under the credit Twenty-one young POs and two published reports and enhancement facility through 17 linkage POs were supported under successfully built an transactions. Equity amounting to the Young Partner Programme. internationally recognised PKR 265 million has been injected Twelve of these graduated to business environment. into five institutions with another PPAF's regular programmes. PKR 530 million earmarked for the Likewise, PPAF continued to 1.5 Programmes next financial year. Adequate provide support for its POs' funds were made available for the institutional development through The PPAF's services and efforts capacity building of individuals improved strategic planning, were channelled through four and institutions alike, in terms of surveys and research for product financing windows, PPAF-III institutional assessments, creation development, partnerships with (World Bank [WB]), PPAF-Reflows, of stronger legal and corporate key stakeholders, and equity the International Fund for structures, knowledge injections of PKR 40 million to 11 Agricultural Development (IFAD)- management, product institutions. supported PRISM and the MIOP. development and other activities. 1.6 Organisational Restructuring The objective of funding under The MIOP comprised three the third phase of the PPAF-WB investment components which Being ever vigilant and responsive partnership was to improve access proved helpful in developing new to the evolving needs of of the poor to microfinance financial products and delivery microfinance practitioners and opportunities in 37 districts to mechanisms in POs. The clients, PPAF acted proactively enhance their capacities, programme was completed and restructured the former productivity and returns from successfully in September 2011. In Credit and Enterprise livelihood initiatives. The funds the final analysis, IFAD found the Development (CED) Unit available for on-lending have been achievements of the programme responsible for microfinance successfully utilised. As of 30 satisfactory and the programme operations into the Financial June, 2012, the entire allocated completion review team also Services Group (FSG) during the amount for on-lending has been commended its successful year. Two units have been set up committed for subsequent implementation. The MIOP under FSG: the Microfinance disbursement to POs. Grants pioneered a structural change in Portfolio Management Unit under this component have been the microfinance sector and (MPMU) and the Sector used to establish and support 139 provided MFPs an opportunity to Development Unit (SDU). The branches thereby creating move from traditional to more MPMU was established to infrastructure to cater to 200,000 inclusive, customised need-based supervise microfinance portfolios

ANNUAL REPORT - 2012 17 Financial Services Group

and build institutional capacity 1.7 New Initiatives The PPAF has always been mindful while the SDU's purpose was to of the needs of a diverse client foster holistic microfinance and As a leader and innovator in the base and their individual develop value-added services. sector, PPAF intends to continue requirements in designing its Tailor-made layered products for pioneering new products and products. Keeping in mind the credit, savings and insurance are services. The FSG has started national power shortage, PPAF is also being launched. The focus, working on key initiatives to piloting solar and biogas energy invariably, remains on improving improve the quality, outreach and products financed through productivity and income at the outcomes of microfinance in microfinance in order to gauge client level. Pakistan. opportunities, barriers, costs and impacts associated with MFP The PPAF has always been In a strategic collaboration with lending portfolios. These pilot sensitive to ever-changing trends the SECP, PPAF and IFAD have projects will be scaled-up in the market and the pressing designed index-based crop and nationally in collaboration with needs and interests of the people, livestock insurance products the livelihood and enterprise and has successfully defined the under PRISM to help marginalised protection unit, the water and role of a microfinance apex and small-income farmers meet energy unit and other PPAF units. institution. their needs. Steps are being taken to introduce weather-indexed crop Almost 12 years of service and (wheat and groundnut) insurance 2. The Way Forward vigorous interaction with people and live-weight livestock and communities has helped gain insurance in Soon Valley and The microfinance sector in an understanding that a Talagang. These products will be Pakistan has changed drastically microfinance apex should launched as commercially viable in the last few years and is ready contribute to wholesale financial and sustainable business models. for a take-off. Possibilities of intermediation, institutional Sustainable commercial insurance collaboration with key sectors of building of service providers, will provide farmers with an the economy are worth exploring. product innovation, and ensuring effective risk mitigation tool and Political instability, inflation and that the core business is protection against weather and macroeconomic instability are a adequately managed and climate shocks. few of the challenges faced by protected while keeping the best financial services providers. interests of its intended After the successful piloting in FY However, these problems may also beneficiaries at heart to prevent 2012, PPAF is now working on be taken as challenges and ways sector crises. Accordingly, PPAF numerous applications of found to reduce risks. The FSG has decided to turn the FSG into a branchless banking to improve intends to focus on structured and new independent specialised transparency, returns, access and bundled products, attract new vehicle. This decision has been sustainability for practitioners sources of funding and develop backed by major stakeholders and clients. The PPAF intends to new services for the sector by including the World Bank and the leverage branchless banking to developing and strengthening State Bank of Pakistan. The provide full banking solutions to strategic partnerships with the decision has been welcomes by the rural poor across the country SBP, PMN, SECP and commercial POs as well, who see it as a through non-banking partners. A banks. These partnerships speak necessary effort in removing national seminar on branchless volumes of PPAF's resolve to bottlenecks from the service banking was organised by PPAF in reducing poverty, restoring hope mechanism. The process to Karachi in 2012 to explore and endeavouring to build a establish the new entity has been possible opportunities and robust microfinance sector and its initiated; work on designing challenges in using technology commitment to catalyze corporate, financial and legal platforms to accelerate growth sustainable growth and move the structures is scheduled to start and outreach in far-flung areas. market to the next milestone. next year.

18 ANNUAL REPORT - 2012 Non Financial Services

ANNUAL REPORT - 2012 01 Water & Energy Water, Energy and Climate Change

The Water, Energy and Climate (DMPP), the Renewable Energy Pakistan. The drought adversely Change (WECC) Unit was set up in Programme (hydropower, solar affected people living in dry- the backdrop of a dismal water power and wind power projects), lands, especially in Baluchistan, management situation and severe Second Generation Sustainable Tharparkar (Sindh), Cholistan power crisis, particularly in rural Rural Development in DMPP areas (southern Punjab) and the arid and marginalised off-grid and the Sindh Coastal Areas areas of northern Punjab and communities - a situation which Development (SCAD) programme. southern Khyber Pakhtunkhwa seriously undermines PPAF's (KPK). The drought damaged the efforts in achieving its core 1. Programme ecosystem in these areas by agenda, poverty alleviation. Components destroying forests, rangelands and resultantly, valuable livestock. It The objective of WECC is to 1.1 The Integrated Water-Efficient also adversely affected the alleviate poverty, reduce Irrigation (IWEI) programme agriculture of these areas forcing vulnerability and improve food people to migrate, damaging both security in target communities the social and natural Integrated Water-Efficient with a focus on sustainable environment. Irrigation projects are designed agricultural development and for the efficient and optimal use of efficient water management using A DMPP typically consists of a water and its associated resources effective alternative energy range of sub-projects, for example through the construction of sources. The unit works to achieve delay action/check dam, karez irrigation-related infrastructure this objective through integrated rehabilitation, water-efficient and sound, integrative water-efficient irrigation systems irrigation, flood protection and management. These projects are and agricultural enhancement land reclamation, rangeland undertaken targeting poor mechanisms, integrated water management, technological communities with their active resource management—effective innovative projects and cropping involvement. This programme management of successive pattern optimisation. The DMPP includes the development of water drought cycles and water-related has increased groundwater sources, the conveyance of water disasters—natural resource recharge for sustained agriculture from water sources to fields conservation, efficient food and livestock development through PVC pipes or lined water processing and the effective and through the construction of delay courses, and efficient water efficient use of alternative action/check dams and increases application in fields, e.g. drip, energy—hydropower, solar power in the culturable command area of bubbler and sprinkler irrigation and wind power. off-season crops and orchards. systems. During the reporting period, 349 The WECC unit has a policy to such sub-projects were During the reporting year, 121 support low-income communities implemented including delay IWEI projects have been on a participatory basis. It action dams, drinking water implemented. These include drip provides grants on a cost-sharing supply schemes, flood protection irrigation, sprinkler irrigation basis for the construction or works, irrigation and land systems, lift irrigation, solar improvement of physical reclamation projects. pumps and biogas projects in an infrastructure assets and for equal number of villages. carrying out allied interventions. 1.3 The Micro hydropower This unit has successfully worked 1.2 The Drought Mitigation and development programme out a number of programmes to Preparedness Programme support low-income communities. (DMPP) Rural communities mostly depend These include the Integrated upon fuel wood, crop residues and Water-Efficient Irrigation (IWEI) cattle dung to meet their basic Pakistan has experienced severe project, the Drought Mitigation energy needs. The significance of droughts between 1997 and 2002, and Preparedness Programme small hydropower projects has which swept 58 districts of

ANNUAL REPORT - 2012 21 Water, Energy and Climate Change

increased in Gilgit-Baltistan (GB) implemented parallel to DMPP management vis-a-vis and Chitral, KPK in the wake of infrastructure projects entail construction of check dams, serious food and energy crises and intensive interventions and are reforestation and other increasing deforestation caused envisioned to substantially protective works by communities' reliance on improve livelihoods in the wake of ? Capacity development of POs nearby forests for fuel wood. This droughts, causing significant and the dissemination and is an on-going programme open to reduction in poverty and implementation of water innovations and improvements. vulnerability in target balance monitoring and early Initially conceived only to help communities. warning systems developed by households meet their lighting, A typical second generation the WECC team heating and cooking needs, the intervention project constitutes ? Motivating POs and the Programme is now believed to be the following activities and respective task forces to ready to include initiatives in sequentially follows the first develop model farms with a water-efficient irrigation and food generation interventions; view to transferring water- processing. One such project was efficient technologies to ? Interaction with selected implemented during the reporting communities DMPP-POs, their task forces period. ? The development of and the development of PO- guidelines and arranging specific implementation plans exchange visits between POs 1.4 Sustainable Rural detailing all proposed and task forces in developing Development (SRD) in activities, timeframes and market linkages for the DMPP areas budget gainful marketing of products ? The assessment of need and prepared/manufactured by The activities under second level of interventions for communities generation interventions watershed and rangeland

22 ANNUAL REPORT - 2012 Water, Energy and Climate Change

? Developing DMPP quantitative PPAF has initiated a two-year multi-sector programme in the and qualitative accounts of targeted achievements conflict-ridden area of South Waziristan Agency.

The first generation interventions under various DMPPs were ongoing during the reporting year. Therefore, the implementation of second generation interventions could not be started.

targeting the ultra-poor projects. As many as 23 such 1.5 Sindh Coastal Areas (TUP) integrated infrastructure projects Development (SCAD) were implemented during the programme An unprecedented heavy rainfall reporting period. caused floods in the area, The SCAD programme was thwarting the overall progress of 1.7 Committee Encouraging initiated in 2006 under the the programme during the Corporate Philanthropy Second Poverty Alleviation Fund reporting period. However, the (CECP)-funded health and (PPAF-II) project of the WB as a communities involved managed to education (H&E) build, vehicle to improve the livelihoods implement 18 sub-projects during operate, and participate of coastal communities affected by FY 2012, while PPAF's Disaster (BOP) project seawater intrusion and the left Preparedness and Management bank outfall drainage (LBOD) unit carried out intense and Administered by the Committee under the National Drainage impressive relief operations that Encouraging Corporate Programme (NDP). The benefited over 61,000 families. Programme was designed to Philanthropy (CECP), on behalf of address various environment and 1.6 The Integrated Rural a group of several American water management problems in Development Programme corporate giants, this project the Sindh coastal areas, in (IRDP) involved the reconstruction, particular, the LBOD Backwash operation for one year and Region (LBR) in the districts of This programme component handing over to a permanent Badin and Thatta. The Programme involves integrated infrastructure operator of over 16 H&E facilities is an attempt to address and development for area upgrading. in the earthquake-struck areas. rehabilitate the livelihoods of It comprises various functionally With a view to ensuring the coastal communities and develop integrated sub-projects including sustainability of the range and their capacity and resilience. water supply, sewerage collection quality of services provided, the and disposal systems, solid waste WECC—then the water management centre The SCAD strategic framework management and street surfacing. [WMC]—developed an innovative comprises the following activities: In addition, PPAF has initiated a ? Social mobilisation and two-year multi-sector programme BOP concept to rationalise the formation of multi-tier in the conflict-ridden area of continued role of PPAF and its POs community institutions South Waziristan Agency for in the operation of the facilities ? Physical infrastructure institutional development, built, beyond the first year. The upgrading/development livelihoods, infrastructure, health, project was successfully ? Improvement in health and education and disability completed in 2010. However, education services interventions. The infrastructure some remaining amount (as final ? Livelihood rehabilitation component involves rehabilitation settlement) was disbursed to some ? Workfare or construction of water supplies, CECP participating POs during the ? Social safety nets and flood protection and irrigation reporting period.

ANNUAL REPORT - 2012 23 Water, Energy and Climate Change

Table 1: Current and cumulative physical progress

Current (FY 2012) Cumulative (2000–2012) Programme No. of No. of Village No. of No. of Village category projects sub-projects coverage projects sub-projects coverage DMPP 8 388 388 41 2,739 2,504 IWEIP 121 325 121 273 783 273 MHDP 1 1 3 55 55 165 SCAD 18 18 18 2,832 2,832 2,746 SGI - - - 73 73 195 IRDP 23 41 33 23 41 33 CECP - - - 16 16 60 Total 171 773 563 3,313 6,539 5,976

DMPP = Drought Mitigation and Preparedness Programme; IWEI = Integrated Water-Efficient Irrigation; SCAD = Sindh Coastal Areas Development; IRDP = Integrated Rural Development Programme; CECP = Committee Encouraging Corporate Philanthropy.

Table 2: Current and cumulative financial progress (million PKR)

Current (FY 2012) Cumulative (2000–2012) Program Funds allocated Funds disbursed Funds allocated Funds disbursed Category DMPP 172 172 1,225 1,225 IWEIP 111 111 405 405 MHDP 74 66 402 394 SCAD 472 36 1,889 1,442 SGI - - 52 52 IRDP 41 11 41 11 CECP 9 9 636 636 Total 879 405 4,650 4,165

2. Progress Update as of 3. Other Activities Water Day, 22 March, 2012. The objectives of the colloquium were June 2012 to: 3.1 World Water Day,

During the reporting year, 773 22 March, 2012 1. Disseminate information on sub-projects were implemented in water-related disasters; 563 new villages and PKR 405 Concerned about rapidly 2. Share PPAF's achievements in million was disbursed to various depleting natural resources and addressing these issues; POs under different programme consequent disasters, PPAF held a 3. Evolve a mechanism to tackle components. Table 1 shows panel colloquium coordinated by water-related challenges. programme-wise physical progress the Disaster Preparedness & and Table 2 shows financial Management Unit and the WECC The colloquium provided an progress for the reporting year titled “Management of Water and opportunity to explore divergent and the cumulative progress of Water-Related Disasters: The role and competing points of view on the WECC. of PPAF”. It was held on World water resource management. It

24 ANNUAL REPORT - 2012 Water, Energy and Climate Change

included panel discussions and Specialist, The WB, Islamabad vibrant and liveable FATA, the presentations by a group of (presenter/discussant) strategy puts institutional experts who shared informed ? Mr. Farhan Sami, Team Leader development and linkages, opinions about the sustainable - Water and Sanitation inclusion, integration, innovation, management of Pakistan's water Programme (WSP), The WB, investment and intactness of the resources. The following speakers Islamabad environment and society at the participated; (presenter/discussant) centre to guide all of PPAF's ? Ms. Simi Kamal, Water Sector interventions. ? Mr. Shams-ul- Mulk, and Gender Specialist President, Ghulam Ishaq Khan (discussant) The PPAF's strategy for FATA Institute (GIKI) of Engineering ? Mr. Zaffar Pervez Sabri, Group considers the breakdown of Science and Technology Head, Energy, Infrastructure political and administrative (chairman) and Disaster Management systems in FATA, recognises the ? Lt. General (R) Nadeem (EIDM), PPAF importance of civic engagement Ahmed, ex-Chairman National (presenter/moderator) and community camaraderie, Disaster Management values local assets for building the Authority (NDMA) and ex- 3.2 Strategy FATA Vision 2020 local economy, identifies Deputy Chairman, Earthquake difficulties in accessing physical Reconstruction and infrastructure services and is The strategy FATA: Vision 2020 is Rehabilitation Authority sensitive to the global concern for a direct response to the instability (ERRA) (co-chair) peace in the area. ? Mr. Ali Hassan Habib, Director and poverty of the Federally Administered Tribal Area (FATA). General, World Wide Fund for PPAF began its interventions in It proposes to build FATA by Nature (WWF)–Pakistan FATA in July 2011 in South drawing on the power of local (discussant) Waziristan. The investment ? associations, i.e., the jirgas, local Mr. Izhar Hunzai, ex-Chief programme covers activities in assets and endowments, local legal Executive, Agha Khan Rural seven agencies and six frontier livelihood opportunities and a Support Programme (AKRSP) regions (FRs) over a period of nine wide range of actors, by forging (presenter/discussant) years (including July 2011) from ? Mr. Amer Zafar Durrani, effective partnerships. Behind this July 2011 to June 2020 - three Senior Infrastructure vision of peaceful, economically phases of three years each.

ANNUAL REPORT - 2012 25 Water, Energy and Climate Change

4. Case Studies

4.1 Voices of People in Lawa

Mehr Khan, President, Community Organisation,“Dhoke Ezta Khel-Changa”

A Community Organisation (CO) was formed by National Rural Support Programme (NRSP) in Dhoke Ezta Khel village Changa, Chakwal, Punjab province. The objective of CO formation was to resolve local problems at the community level and help develop the habit of saving. The CO meets on a monthly basis before and after the DMPP project. We have now developed linkages with the line departments to resolve individual and community-level problems. In the same way, we installed a turbine pump to irrigate our fields using katcha water courses. But there was a lot of wastage of water. We irrigated less area at high (diesel) costs which resulted in low crop production. When we consulted with NRSP field staff, we were informed that the DMPP project allowed for pipe irrigation schemes for communities. Our community happily agreed to contribute a 20% share in the total cost of the project. The proposed project was surveyed by a field engineer. The project was approved and a TOP was conducted with the CO and the NRSP. Our community openly declared that the CO would be responsible for the operation and maintenance costs of the project. The project commenced in January 2011 and was completed in May the same year, as per design specifications, benefiting 17 households. We are now irrigating 25 acres of land whereas previously, we could barely irrigate ten acres at the same cost. We contributed about PKR 80,000 to the project. We are very thankful to NRSP and PPAF for their support. We hardly grew wheat prior to this scheme because its per acre yield was not cost effective. With this system, we are able to harvest much more. We are also growing vegetables. The production of vegetables is very good And we are able to produce enough for ourselves and the market. Our children are going to better schools and we have been renovating our houses.

26 ANNUAL REPORT - 2012 Water, Energy and Climate Change

Master M. Khalid, President, Village Organisation (VO), Goohal

Village Goohal in Chakwal in province of Punjab, is situated at the border of district Khushab. Groundwater water is unavailable even at depths of 400 ft; rainwater is the only source of water and it often goes to waste during heavy rains due to the unavailability of mini dams, ponds and land reclamation works.

The PPAF DMPP project was launched here as the Goohal site was considered ideal for the collection of rainwater flowing from nallahs. Rainwater harvesting ponds, mini dams and land reclamation works were constructed under the project to store rainwater. A single crop harvest was possible before the project was implemented. Three crops a year are now possible. Vegetables are also being grown, now—potatoes, tomatoes and onion. Livestock numbers have also increased after the project as animal feed is now available in the months of April, May and June as well.

The impact of DMPP-completed sub-projects on crop production is summarised in Table 3.

Table 3: Project impact

Before the project After the project (additional crops)

Tera Mera 20 kg Onion 1,000 kg Wheat 40 kg Garlic 120 kg Peanut 45 kg Green Chili 1200 kg Annual income PKR 15,000/- Annual Income PKR 15,000/-

This remarkable increase in annual income is due to the DMPP project.

A major recommendation emerging from this project is that such interventions should not be limited to Union Council Lawa, but should be extended to the adjoining UCs like Thoa Mehram Khan and Bhilomar.

ANNUAL REPORT - 2012 27 Community Physical Infrastructure Community Physical Infrastructure

The Community Physical preceded by months of intensive operations, the CPI unit has Infrastructure Unit is the pivot in social mobilisation and the supported community demands PPAF's multi-sectoral approach to subsequent organisation of target for over 20,599 infrastructure defeating poverty. While making groups into COs that have the projects through 54 POs in 121 development grants for small- capacity to work as vibrant districts, including Azad Jammu scale community infrastructure development institutions at the and Kashmir (AJK), four agencies assets, the unit focuses on grassroots level. Partner in FATA, parts of the Federally schemes that can have an impact organisations facilitate each stage Administered Northern Areas on community welfare, of the development process from (FANA) and Islamabad. Of these, productivity and sustainability. project identification to 6,854 infrastructure Simultaneously, all of the unit's implementation to maintenance. interventions, including interventions are participatory in standalone conventional schemes design and nature and target In addition to the transfer of skills and composite Integrated grassroots-level problems on and resources for better Infrastructure Upgrading Projects merit. implementation and management (IIUP), were operationalised under of infrastructure schemes, the unit the CPI component of the first WB- A key factor that makes places a high premium on project financed project (PPAF-I, infrastructure-related schemes sustainability. This is ensured by 2000–04), while another 9,097 more challenging to develop and building community ownership schemes have been completed implement compared to income through a cost-sharing mechanism under the WB's PPAF-II project transfer programmes is their non- that includes compulsory (2004–10). Similarly, 652 and excludable nature. However, community contributions in the 2,507 infrastructure schemes were PPAF's participatory development shape of finances and/or labour completed under the framework helps overcome this and material inputs towards Rehabilitation and Reconstruction hurdle by mobilizing the poor at construction. Project (R&R) project (2006–09), and the the grassroots level and sustainability is further ensured Social Mobilisation Project motivating them to own the whole through the compulsory collection (2007–11), respectively. process. Such CPI schemes of maintenance resources promote inclusive community sufficient for bearing one year of Another 1,572 schemes have been development. Community Physical such costs, by a project completed under the WB's PPAF-III Infrastructure-supported maintenance committee. project (2009–14). Details are infrastructure interventions are In 12 years of efficacious shown in Table 4. The

Table 4: Distribution of infrastructure projects by category

PPAF-I PPAF-II R&R SM PPAF-III Total

Conventional Drainage and sanitation 993 2,128 43 539 460 4,163 DWSS 2,831 2,519 502 836 687 7,375 Flood protection works 97 140 0 72 123 432 Irrigation 2,099 2,814 3 634 620 6,170 Roads and bridges 805 1,171 104 353 447 2,880 IIUP 1 142 0 7 150 TIP 28 183 0 74 39 324 Total 21,494

DWSS = drinking water supply schemes; IIUP = Integrated Infrastructure Upgrading Project; TIP = technological innovations project

ANNUAL REPORT - 2012 29 Community Physical Infrastructure

aforementioned schemes have The unit mainly approves from the above range of options in cumulatively benefitted a resources for infrastructure accordance with their specific population of over 10.36 million interventions in the irrigation, needs. poor people in over 24,532 COs sanitation, drinking water supply throughout the country (Table 5). and communications sectors The unit has ensured that an The average number of (Figure 1). Each sector further equitable distribution of beneficiaries per project is higher constitutes a number of sub- resources, particularly focused on in Punjab where the population is categories. For instance, irrigation the most deprived regions, is comparatively more concentrated. sector interventions include a made while approving funds for At the same time, PPAF target variety of schemes focused on the demand-driven community communities on the whole efficient management of water infrastructure assets. The represent larger household sizes resources ranging from geographic distribution of CPI in comparison with national watercourse lining and pipe interventions based on priority averages. This indicates an irrigation projects to irrigation areas is consistent with the efficient targeting approach as channels and karez rehabilitation. magnitude of regional needs in household size has been shown to All participating communities are specific sectors. be positively correlated with the empowered to select the These well-targeted resource level of deprivation. appropriate set of interventions allocations have proven to bring

Table 5: Geographic distribution of schemes in provinces, 2000–12

Province Projects Beneficiary households Beneficiary population AJK 909 44,437 353,202 Balochistan 3,570 149,495 1,141,062 FATA 90 9,468 99,764 GB 601 55,427 433,281 ICT 159 13,392 81,048 KPK 4,374 364,464 2,742,456 Punjab 7,525 586,389 3,962,024 Sindh 4,266 224,557 1,550,389

Total 21,494 1,447,629 10,363,227

AJK = Azad Jammu and Kashmir; FATA Federally Administered Tribal Area; GB = Gilgit-Baltistan. positive change in the living decreased the incidence of innovations projects (TIP) were standards of marginalised mortality and morbidity, thus also implemented. communities. About 6,171 enabling backward rural While interventions in the irrigation schemes completed to communities in far-flung areas to sanitation and irrigation sectors date have helped increase enjoy a much healthier and constituted the two largest agricultural growth through the productive lifestyle. priority areas during the efficient management of water The unit completed 1,572 new reporting period, the provision of resources while diversifying infrastructure schemes in FY safe drinking water to poor income and employment 2012, which included DWSS, communities still represents the opportunities for the poor. drainage and sanitation, largest concentration of Similarly, CPI-led interventions in irrigation, link roads and flood infrastructure interventions in drinking water supply and protection works. Similarly, four cumulative terms: DWSS sanitation have significantly IIUP projects and 38 technological constitute 35% of all CPI

30 ANNUAL REPORT - 2012 Community Physical Infrastructure

conventional schemes completed supported infrastructure schemes The CPI Unit launched the ODF to date, followed by interventions have increased over time, campaign as a pilot project in in the irrigation (29%), sanitation prompting the unit to search for collaboration with WSP-WB in six (19%) and communications (13%) additional financing partners. The union councils from all of the (Figure 2). unit successfully established provinces. The unit also organised linkages with the corporate sector a workshop on ODF facilitated by The CPI Unit's interventions are during the reporting year to WSP-WB, in which representatives constantly increasing in volume leverage the maximum possible from different POs participated. and size, but its primary focus resources for the benefit of under- remains on finding cost-efficient resourced communities. The CPI Unit's core objective is to and sustainable strategies to meet provide quality infrastructure community needs. A Memorandum of Understanding assets in marginalised (MoU) was signed with ENGRO communities. It continues to assist Technological innovation projects Pakistan for the provision of social POs and participating have successfully been introduced sector services, including communities in regular in 437 communities at a cost of sanitation facilities on a cost- supervision of these assets. PKR 249.50 million. On average, sharing basis at mutually agreed the communities have borne 18% locations. Subsequently, an The required capacities of POs of total costs. agreement was signed to initiate were duly built up in order to schemes for providing better ensure and maintain the quality of In addition to standalone sanitation in two villages of Sindh. infrastructure projects. Wherever conventional schemes, the unit Similarly, MoUs were signed with field observations indicated the has also introduced the IIUP to Shell Pakistan and Unilever Foods need to further strengthen CPI implement a larger number of for the provision of sanitation, implementation processes and infrastructure schemes at the street pavements, housing units record keeping practices, the unit village level for dealing with and safe drinking water to poor has responded promptly and multiple deprivations, more communities at mutually agreed developed the required formats effectively. A typical IIUP includes locations. and record keeping guidelines for three to six schemes including the POs and Cos. The unit has also An MoU was signed with Plan interventions in drinking water conducted a series of workshops Pakistan in the components of supply and the sanitation, to train the POs in the proper community-led total sanitation communications and irrigation implementation of these (CLTS) and open defecation free sectors. guidelines. Community demands for PPAF- (ODF) in common interventions areas.

ANNUAL REPORT - 2012 31 Health, Education and Disability Health, Education and Disability

1. Education ? One teacher per grade; ? Abandoned government ? Realistic salary packages for schools that have become teachers The education component of the non-functional, can be ? School management H&E programme is designed to adopted. Partner committees (SMCs), parent “provide access to quality formal organisations identify such teacher associations (PTAs) education (up to grade ten) to the facilities in consultation ? Government-approved children of poor and marginalised with their communities. syllabi rural communities” with added These facilities may be ? Regular teacher training emphasis on female education. refurbished in terms of ? Scholarships/partial fee PPAF has created benchmarks over absent facilities and waivers and/or in-kind time in terms of providing quality teaching staff recruitment support for the children of education to enable itself to the poor c) Achievements of the unit review and further improve ? School fees based on service and processes. These community's ability to pay ? Of 865 schools that were include (but are not limited to) ? Maintenance of furniture, supported, 254 were hiring qualified and trained uniforms and adopted in the reporting teachers/staff, the availability of teaching/learning materials year and the remaining 611 proper buildings, standardised were from previous years equipment, furniture and b) Supporting/strengthening ? Some 118,598 students have medicines, approved teacher- government schools directly benefitted from student ratios, conducive learning these schools, including environments and bringing good Under this arrangement, 52,386 girls. Of these, practices from private sector PPAF's support may take two 28,677 students were from schools of repute. forms for an existing the reporting year and the government facility; remaining 89,921 were from 1.1 The models that PPAF previous years supports ? Providing missing facilities ? A total of 3,281 teachers in existing public sector were trained in advanced PPAF has chiefly been supporting institutions in terms of teaching methodologies, two models: the establishment of physical infrastructure and subject teaching, community schools and human resources, wherever curriculum enrichments, strengthening government required. Teachers on material development, and schools. However, a few other government payrolls are not early childhood education models have recently been eligible to receive PPAF ? Of 865 SMCs, 256 were initiated as prototypes. funding as salary or revived during the remuneration. These reporting year. Overall a) Community schools teachers are supplemented membership of these SMCs by PPAF-funded recruitment stands at 6,542, including ? School buildings (with of additional staff from the 2,105 female members enough rooms to support private, non-government involved in school grades one through ten) sector management

PPAF has chiefly been supporting two models; establishment of community schools and strengthening government schools.

ANNUAL REPORT - 2012 33 Health, Education and Disability

PPAF has supported establishment and/or strengthening of 399 health centres under this programme.

34 ANNUAL REPORT - 2012 Health, Education and Disability

2. Health 3.1 Healthcare financing identified underserved, poor and marginalised pregnant women in their second and third trimesters. The health component of the H&E The PPAF joined hands during the The goal is to improve access to, programme aims to “provide reporting period with a non- and utilisation of these services. access to quality basic health government think tank, Heartfile. Consumers receive nine vouchers services with a special focus on The project's intention is to that cover the cost of a full maternal and child health, to poor provide health financing to people package of services including and marginalised rural who cannot afford medical antenatal care, postnatal care, lab communities”. treatment and are in danger of investigations, ultrasounds, incurring massive debt or delivery by skilled birth 2.1 Achievements of the unit foregoing it, altogether. attendants and family planning Patients—with a poverty scorecard services. Consumers have the ? PPAF has supported the of less than 23—who run the risk choice of deciding where to establishment and/or of massive spending on medical purchase the services, usually in strengthening of 399 health treatment or who cannot afford to the public or private sector from centres under this pay at all, are provided with programme-approved suppliers. programme. Of these, 162 financial help, thereby protecting To date, 1,454 health vouchers were strengthened in the them from the risk of medical have been distributed after reporting year and the impoverishment. This careful identification of target remaining 237 from previous collaboration has benefitted 513 groups through poverty score years are being supported patients to date in the priority card ratings and a voucher continuously. These health areas of KPK, FATA and GB. These management agency (VMA). A centres are aimed primarily at patients received medical and total of 967 pregnant women providing basic health surgical treatment in tertiary care received delivery services from services with a special focus hospitals in Islamabad. on mother and child health skilled birth attendants. ? Some 2.4 million patients were 3.2 Education for visually treated at these health centres impaired persons (VIPs) 3.4 Business-oriented solutions in the reporting year alone, for education and health including 1.4 million female The PPAF began supporting projects patients activities aimed at mainstreaming In December 2011, PPAF initiated ? Some 1,150 health staff VIPs into society in July 2011. The an innovative capacity building personnel were trained in Audio World programme project in partnership with management and health (initiated by one of its partners) is Empowerment through Creative issues a doorstep facility providing Integration (ECI), to create ? Of 399 health management recorded textbooks and pleasure “change makers” who can drive committees (HMCs), 162 were listening books on audio cassettes socio-economic change agendas revived during the reporting and CDs free-of-cost to VIPs across from within the community and year. Overall membership of Pakistan through free registered contribute to achieving H&E HMCs stands at 2,419, mail. A total of 124 students (21 outcome indicators. Some 30 including 826 female boys and 103 girls) are benefitting participants from Ziarat, including members directly involved in from this project. health centre management three women, have received 3.3 Maternity care vouchers structured capacity building at 3. Other Initiatives the Islamabad-based College for Community-Based Change makers This project started in November (CCBC) where they learnt to “see” A few other models have also been 2011 and is a financing their own problems and create initiated as prototypes by the H&E mechanism meant to subsidise the their own solutions. This is a unit during the reporting period. cost of health services to

ANNUAL REPORT - 2012 35 Health, Education and Disability

formal four-semester course secretaries, officials from which supports the local clinical spread over a year. The associated government staff with IP-based videophone participants have gone through departments, the PPAF and its POs consultations with a medical three semesters i.e., bol tujhay kia and international organisations specialist. The telemedicine chahiay, Uth baandh qamar and including the World Health project has increased the scope of Kuch karkey dikha. The change Organisation (WHO), Save the health services to the community makers developed 20 business Children, Mercy Corps, the in collaboration with the Karachi plans for H&E, had 20 girls commissioner for Afghan refugees Dow University of Health Sciences. admitted at the Allama Iqbal Open and representatives of the print To date, 4,872 beneficiaries—of University, and developed and electronic media. which 2,421 are females—have linkages with the government. been provided health services by Representative of different highly qualified consultants 3.5 Baluchistan H&E organisations share their work through active community development forum progress and future plans to avoid involvement. duplication and explore new During the reporting period, PPAF avenues for collaborative efforts. 3.7 Chamalang education established an H&E development programme forum to leverage strengths of 3.6 Telemedicine various stakeholders working for The PPAF has provided the provision of healthcare PPAF started an innovative project scholarships to over 3,000 services and education in called telemedicine in December children from district Kohlu Baluchistan. The forum is a 2011. The project model consists through this on-going programme. platform for sharing and of a health clinic that is manned Children from various districts developing strategies to ensure by trained paramedics and were enrolled for scholarships that communities in Baluchistan equipped with state-of-the-art under the programme. Financial have access to sustainable and telemedicine tools and equipment. support in terms of fee, books, improved healthcare and It is staffed by doctors and health uniforms and stationery was education services. The forum specialists on the hub side. A provided to children for the meets quarterly and is attended unique component in this model is continuation of their education in by health and education the tele-health consulting service Kohlu's schools.

36 ANNUAL REPORT - 2012 Health, Education and Disability

4. Disability (PWDs). A carpet survey to mandatory for itself and its identify such persons and the POs—as per legal nature of their disabilities, is in requirements—to ensure at least PPAF initiated its disability project progress in all of the districts. The two percent of hired staff are with financial assistance from the Disability unit intends to PWDs. This unit intends to lobby WB in light of the disastrous incorporate some new initiatives for the widespread earthquake in 2005 and other in this programme such as implementation of this law natural calamities. enterprise development trainings nationwide in collaboration with Encouraged by its success, PPAF and business incubation. DSPs. made the project a component of These initiatives are designed to PPAF-III and launched it 4.1 Project Execution help enable target persons to nationwide in January 2010. establish and run/manage their 4.1.1Survey It began in the districts of Multan, own businesses successfully, thus A carpet survey was carried out in Khairpur, Swabi, Swat, Rawalakot, giving them opportunities to 24 union councils across the Mansehra and Karachi. The PPAF become active and contributing country to identify PWDs through a designed this programme for the members of the community. specially designed tool (Table 6): benefit of persons with disabilities The PPAF has also made it

Table. 6: Programme survey details - gender segregated

Sr. No PO District Covered Covered # Persons Male Female Children % of Households Population With Disabilities Persons With Identified Disabilities

1 NRSP Rawalakot 5,69129,500 2,618 947 1,215456 9% 2 FDO Multan 29,166154,812 11,209 3,642 5,6401,927 7% 3 SRSP Mansehra 12,01263,012 3,955 1,745 1,256954 6% 4 EPS Swat 8,31565,246 6,339 2,451 2,4471,441 10% 5 SWWS Swabi 9,01656,443 5,379 1,922 2,2761,181 9% 6 MRDO Khairpur 74,5747,419 4,387 2,049 1,628710 9%

7 HANDS Karachi 12,28167,828 6,039 2,026 2,2681,745 9%

Grand Total 83,938 484,260 39,926 14,728 16,730 8,414 8%

NRSP = National Rural Support Programme; FDO = Farmers' Development Organisation; SRSP = Sarhad Rural Support Programme; EPS = Environmental Protection Society; SWWS = Support with Working Solutions; MRDO = Marvi Rural Development Organisation.

PPAF has made the disability project a component of PPAF-III and launched it nationwide in January 2010.

ANNUAL REPORT - 2012 37 Health, Education and Disability

Business incubation aims at encouraging entrepreneurial initiatives under taken by persons with disabilities.

38 ANNUAL REPORT - 2012 Health, Education and Disability

4.2 Assessment Camps 4.4.3 Teachers training organizing themselves, identifying and prioritizing their needs Twenty-four assessment camps In keeping with the importance of (income generation, developmental had been held in 24 union the role of primary school activities), and addressing those councils in Multan, Rawalakot, teachers in child development, needs on self-help basis. Khairpur, Karachi, Swat, Swabi customised trainings were and Mansehra as of April 2012. arranged for primary school The CO can also serve to empower Technical experts assessed PWDs teachers to train them in special PWDs by making them aware of and designed customised needs and inclusive education. A their rights. Inclusion of PWDs in individual rehabilitation plans total of 501 teachers were trained these COs is another important that included prescriptions for in six districts across Pakistan. The component of the programme. devices and specific trainings. objective was to sensitise teachers Details are shown in Table 7. and develop their capacities on Children with disabilities (CWDs) two counts; were also enrolled in mainstream 4.3 Distribution of Assistive ? Identifing and detecting forms schools (Table 13). of limitations at early stages Devices ? Develop capacity on how to help 4.6 Sports Day for Children and nurture children with mild Discouraged by their limitations, Persons with disabilities identified or moderate disabilities to CWDs rarely find opportunities to in the assessment camps were develop and become productive discover their talents. Regional- given the following assistive members of society (Table 11) devices as per their prescriptions level sports days were organised (Table 8). 4.4.4 Attendantship trainings in order to encourage them and help bring out their potential. Five The family members of PWDs were such events were organised in 4.4 Training trained in attendantship. Swat, Rawalakot, Swabi, Khairpur Attendants (family members) were and Karachi in which 350 CWDs 4.4.1Enterprise development selected for the concerned training participated. attendantship training. According to the nature of the person's Enterprise development trainings disabilities, training modules were given to PWDs who were allowed participants to learn either recommended for these different aspects and skills of trainings by technical experts in attendantship using different assessment camps, or were within methodologies. the age limit of 18–40 years. They were selected following a strict set The use of visuals proved useful in of criteria followed by enterprise involving illiterate or semi-literate experts (Table 9). participants. Lectures, plenary discussions, group discussions, 4.4.2 Business incubation case studies, practical Business incubation aims at demonstrations, and exercises were encouraging and supporting the key methodologies adopted in the training (Table 12). business initiatives taken by PWDs. This training is planned to provide assistance to small 4.5 Social Inclusion businesses according to the needs A CO is a group of people resident of the market (Table 10). of an area with common interests and needs and are capable of

ANNUAL REPORT - 2012 39 Health, Education and Disability

Table. 7: Details of assessment camps

Sr.No PO Distric t Number of UCs Number of identified PWDs % of Number of days covered that attended the camps attendance of the camps

1 NRSP Rawalakot 2/2 1,64566% 15 2 FDO Multan 6/6 6,71190% 57 3 SRSP Mansehra 4/4 3,12879% 12 4 EPS Swat 3/3 4,66973% 28 5 SWWS Swabi 3/3 3,64469% 24 6 MRDO Khairpur 3/3 2,41854% 20 7 HANDS Karachi 3/3 3,02850% 26

Grand Total 24/24 25,010 64% 181

Table. 8: Distribution of assistive devices

S. No Types of Assistive Devices Number of Devices Delivered

1 Wheelchairs, CP chairs, and tricycles 1,075 2 Elbow and auxiliary crutches 294 3 Walking sticks, tripods, and frames 506 4 Toilet seats 1,146 5 White canes 121 6 Orthotics and prosthesis 1,267 7 Glasses 7,636 8 Hearing aids 5,737 Grand Total 17,782

Table. 9: District-wise details of enterprise development trainings

Sr.No PO District Number of enterprise Number of Male Female development participants

1 NRSP Rawalakot 5 143 90 53

2 FDO Multan 14 187 123 64 3 SRSP Mansehra 3 180 90 90 4 EPS Swat 6 174 132 42 5 SWWS Swabi 3 72 46 26 6 MRDO Khairpur 3 57 30 27 7 HANDS Karachi 124 124 54 70 Grand Total 158 937 569 368

Table. 10: Business incubation details

S.No PO District Business incubation Male Female 1 NRSP Rawalakot 135 80 55 2 FDO Multan 158 103 55 3 SRSP Mansehra 180 90 90 4 EPS Swat 99 69 30 5 SWWS Swabi 52 27 25 6 MRDO Khairpur 46 22 24 7 HANDS Karachi 85 46 39 Grand Total 755 437 318

40 ANNUAL REPORT - 2012 Health, Education and Disability

Table. 11: Details of trainings

S. No PO District Number of teachers Participants Male Female trainings

1 NRSP Rawalakot 2 70 39 31 2 FDO Multan Nil - - - 3 SRSP Mansehra 2 60 30 30 4 EPS Swat 3 112 56 56 5 SWWS Swabi 2 67 35 32 6 MRDO Khairpur 1 36 32 4 7 HANDS Karachi 3 156 70 86 Grand Total 13 501 262 239

Table. 12: District-wise details of attendantship trainings

S.No PO District Number of attendantship Trainings Participants Male Female

1 NRSP Rawalakot 3 117 82 35 2 FDO Multan 8 248 105 143 3 SRSP Mansehra 2 90 0 90 4 EPS Swat 3 145 85 60 5 SWWS Swabi 3 184 125 59 6 MRDO Khairpur 3 110 64 46 7 HANDS Karachi 3 117 37 80 Grand Total 25 1,011 498 513

Table. 13: District-wise details of individuals included in COs and schools

S.No PO District CO membership of Male Female Enrolment of CWDs in PWDs school

1 NRSP Rawalakot 521 235 286 355 2 FDO Multan 149 74 75 118 3 SRSP Mansehra 2441 1404 1037 327 4 EPS Swat 123 78 45 287 5 SWWS Swabi 252 139 113 533 6 MRDO Khairpur 598 318 280 294 7 HANDS Karachi 87 38 49 100 Grand Total 4171 2,286 1,885 2,014

ANNUAL REPORT - 2012 41 Institutional Development Institutional Development

The PPAF's experience in social promotes self-reliance according PPAF's core values i.e., mobilisation and capacity to situational variables. The Unit governance, transparency, building spans over a decade of acts as a bridge between PPAF and inclusion, and accountability reaching out to marginalised and its partners—including civil while taking into account the under-resourced communities in society—in the process towards a current status of these the country. This experience finds more equitable society. Its institutions. The following factors an expression in PPAF's programmes include partner are given respective weightage; Institutional Development (ID) capacity building with a focus on unit. This Unit lies at the heart of rural youth. ? Household organised all operational activities and ? Bank accounts ? provides the basis for quality- 1. Achievements and Women inclusion ? Poverty scorecard based, closely monitored, and major activities concerted development efforts. baseline/assessment ? Village development The role of this Unit does not stop 1.1 Checklist formation for plan/member development at helping people taking the plan crucial first step towards self- community institutions empowerment through self-help; The detailed checklist is shown in it also supplements this initial Social mobilisation and Annexure I. effort with capacity building of institutional development are the institutions for, and of the poor. bedrock of all PPAF interventions. 1.2 Analysis of districts The unit's work relies on learning Under PPAF-III, this unit has and linkages development, and formed 24,190 additional COs These checklists were used during promoting sectoral synergies with their subsequent FY 2012 for all monitoring visits through documented patterns of organisation into 1,423 higher- conducted in order to draw the knowledge. order institutions at the village level, and 38 at the UC level. These assessment of the POs. The same Recent studies and reports on COs are adequately facilitated and were used in the subsequent Pakistan's development process capacitated to manage need-based quarterly analysis as well. identify lags and gaps attributed development initiatives through a to political and social elements transparent, equitable, inclusive, 1.3 FATA internship programme and severe economic instability. and accountable process of Poverty has increased and human community development. The ID The third PPAF-ID's FATA development indicators have unit has coverage in 51 priority internship programme was held fallen. Not surprisingly, the districts and 1,020 UCs. from 20 March, 2012 to 30 progress in welfare indicators is September, 2012. The Pakistan both insufficient and asymmetric The unit designed a Army's help was sought in the across different regions of the comprehensive checklist to gauge identification process, and it country. The unit's mandate is the quality of community helped complete the programme community empowerment institutions during the reporting in a timely manner. The six through a flexible approach which year. This checklist covers all of month-long programme offered

The role of Institutional Development Unit is to help build capacity of institutions.

ANNUAL REPORT - 2012 43 Institutional Development

detailed insights into the sector. It 1.4 Balochistan internship After successfully completing focused on developing field-based programme their one-month classroom knowledge and experience for training in July 2012, all the Master's level students who had The Balochistan Internship interns were attached with completed their matriculation Programme (Batch I) began on 25 different PPAF POs all over the from FATA and had a local June, 2012. Eighteen interns from country, for a further five months. domicile (Table 14). different districts of Balochistan The next batch was scheduled to participated in the programme. begin in September 2012.

1.5 Summer internship Table 14: Internship programme details programme

S. No Batch Total interns The PPAF summer internship 1I 15 programme (SIP) is a four-week learning-based programme. The 2II 18 basic objective is to identify and 3 III 18 assist undergraduate students Total 51 who exhibit potential and help

44 ANNUAL REPORT - 2012 Institutional Development

them become true development possibilities of working for poor meetings with PO staff and professionals, over time. A batch communities in Pakistan. The core management, a review of relevant of 24 interns (eight boys and 16 focus in the field was on credit documents, strengths, weaknesses, girls) from various prestigious and enterprise development, opportunities, threats (SWOT) Pakistani and foreign universities institutional development, analysis, meetings with successfully completed their four education, post-earthquake community members, a review of weeks between July and August reconstruction and rehabilitation, community institution records, an 2011. livelihood enhancement and orientation on training guidelines PPAF's protection interventions. and checklists pertaining to staff This learning-based internship and community trainings, and a programme was focused on 1.6 Handholding trainings training needs assessment of the community exposure with relation with POs Baanhn Beli team. to PPAF's interventions. The first week included an orientation This unit has initiated a 1.7 Priority UCs coverage data session in Islamabad. It also handholding practice to address included a number of other the capacity issues of small and The ID unit also collected and interesting events such as a new partners through orientation formulated data on UC- and photography field visit to Saidpur trainings. The first handholding district-wise coverage under PPAF- village and an exposure visit to training of the series was III and shared it with other PPAF Pakistan Television (PTV) centre, conducted at Baanhn Beli, units. This data includes the Islamabad. The second and third Nagarparkar. The primary focus of number of districts, UCs, percentage weeks included visits to diverse the event was to facilitate partners of existing coverage and field locations in Punjab, Sindh, towards comprehensive districts/UCs not covered under and Kashmir in order to observe institutional building. The PPAF-III until now (Table 15). the opportunities, challenges, and foremost activities included

ANNUAL REPORT - 2012 45 Institutional Development

Table 15: Summary sheet - PPAF presence in priority districts of Pakistan

No. of Existing % Not ID presence ID not present Province Units priority coverage coverage covered (priority districts) (priority districts)

Balochistan Districts 29 17 59% 12 Awaran, Gwadar, Harnai, Barkhan, Bolan, Jhal Magsi, Kharan, Kech, Chagai, Dera Bugti, Khuzdar Jaffarabad, Kalat, Killa Abdullah, Killa Mastung, Saifullah, Kohlu, Lasbela, Nasirabad, Loralai, Musakhel, Naushki, Sherani, Panjgur, Pishin, Sibi, Washuk UCs 513 163 32% 350 Zhob, Ziarat

Batagram, Bannu, Buner, Districts 16 12 75% 4 Chitral, Dera Ismail Khan, Hangu, Lower Dir, *KPK Kohistan, Lakki Marwat, Tank, Tor Ghar Mansehra, Shangla, UCs 534 175 33% 359 Swabi, Swat, Upper Dir

Bahawal Nagar, Bahawal Pur, Bhakkar, Dera Ghazi Districts 12 10 83% 2 Rahim Yar Khan, Punjab Khan, Khushab, Layyah, Lodhran Multan, Muzaffargarh, UCs 978 455 47% 523 Rajanpur

Districts 10 6 60% 4 Dadu, Jacobabad, Tharparkar, Badin, Ghotki, Sindh Kashmore, Sanghar, Thatta UCs 407 154 38% 253 Umerkot

Districts 5 0 0% 5 Hattian, Haveli, Kotli, AJK Muzaffarabad, UCs 91 0 0% 91 Neelum

Districts 5 4 80% 1 Astore, Ghizer, Ghanche, *GB Diamir Sakardu UCs 69 41 59% 28

Bajaur Agency, Mohamand Districts 13 2 15% 11 Agency, North Waziristan Agency, Kurram Agency, *FATA Khyber Agency, S. Orakzai Agency, Waziristan Agency T.A Kohat, T.A Peshawar, T.A Bannu, T.A Dera Ismail Khan, T.A Lakki Marwat, T.A Ucs/Villages 32 Tank

Districts 77 51 66% 28 Grand Total UCs 2,592 1,020 39% 1,604

* Number/names of total UCs are not found in District Torghar (KPK), Diamir (GB). The administration unit for FATA is“village”.

46 ANNUAL REPORT - 2012 Institutional Development

1.8 Collaboration for knowledge academia e.g., the Higher studies, journals and audio-video sharing Education Commission (HEC), the material for development Asian Development Bank (ADB), specialists and practitioners. The Over the years, this unit has the United Nations Children's majority of the material is on the developed meaningful Fund (UNICEF), the United Nations development sector covering collaborations with a number of Development Programme (UNDP), poverty alleviation, rural prestigious institutions in the area the International Labour development, participatory of knowledge sharing. Having Organisation (ILO), the development, economics, established PPAF's Knowledge International Water Management microfinance, livelihoods and Centre, the unit is working to Institute (IWMI), the Social Policy employment, education, human make it a centre for both paper and Development Centre (SPDC), resource development and and electronic-based knowledge the Sustainable Development management, infrastructure dissemination. Policy Institute (SDPI), the Urban development, law and legislation, PPAF's Knowledge Centre is in Resource Centre, the Pakistan natural resource management and constant contact with various Institute of Management (PIM), environment, water and regional, national and and WWF. Knowledge resource sanitation and gender and international institutions. These sharing is focused mainly on development. In addition, PPAF's include institutions from the bibliographic material including employees' physical and online public sector, the private sector, books, publications, research access to the HEC's library is also civil society organisations and studies, content reports, case ensured.

ANNUAL REPORT - 2012 47 Responding to Emergencies PPAF's Response to the 2011 Rain Emergency

The PPAF has invariably been altitude belt and was declared as Immediate dry food provision engaged in various segments of the worst-hit district of the prevented affected families from the disaster management cycle province. The flood also caused a starvation. Some 61,000 families since its inception. A Disaster number of canals and surface were provided with basic food Preparedness and Management drains to overflow. Various items i.e., flour, rice, pulses, ghee, unit was established in July 2011 breaches in canals and drains sugar, tea and chillies. The ration in order to put PPAF in a position along with the LBOD left hundreds supply was adequate in terms of from where it could respond to of villages inundated. A large daily caloric requirements. multiple types of disasters in a number of people—old people, smooth, effective and coherent disabled people, women and The PPAF ensured the provision of manner. children—were displaced and hygiene kits which included jerry forced to take shelter on cans, buckets, water mugs, and The unit's objective is to put roadsides, canal embankments, soaps. About one million litres of necessary community-managed and nearby government buildings. fresh drinking water was supplied infrastructure, equipment and to 24,000 families to help prevent institutional mechanisms in place PPAF's response to this waterborne diseases. In addition, so as to: a) mitigate/minimise the catastrophe was both PPAF dispensed 625 shelters. impact of a disaster, b) help instantaneous and adequate people better prepared to cope through its POs—HANDS, Badin The PPAF ensured the adequate with various disasters in a pre- Rural Development Society (BRDS) provision of basic health facilities planned manner and c) in case a and NRSP). Sufficient relief through mobile medical camp disaster occurs, become actively activities were supported for services at the doorsteps of people involved in relief, reconstruction, flood-affected communities in 14 facing cholera, diarrhoea, and rehabilitation efforts, in of the worst-hit UCs of Badin gastroenteritis, scabies, skin and coordination with the government district. eye infections, snake bites and and other stakeholders. gastric ulcers. PPAF carried out these relief It successfully helped people in 1. The PPAF's Response operations in close coordination with its POs, the speaker of the fighting communicable diseases to 2011 Floods National Assembly and local and reduced their incidence. district administration. Relief Special care was taken of pregnant The floods of 2011 were a activities commenced in the women who were forced to find testament to the fury of the second half of August 2011 with shelter in camps or open areas, monsoon rains that lashed much an overall internal financing of and ensured a constant supply of of southern Sindh from August to PKR 257.8 million (USD three balanced-diet foods to them. September. They left 300 people million), which continued until dead, affected six million people, the end of October 2011. damaging 0.6 million houses and eight million acres of standing crops and left 200,000 people homeless. Sufficient relief activities were supported for flood-affected communities in 14 of the worst-hit UCs of Badin district. The torrential monsoon rainfall which started on 10 August and continued intermittently until the middle of September 2011 in Sindh—particularly Badin district—created havoc. Badin is among the four coastal districts of Sindh which lies in the lowest

ANNUAL REPORT - 2012 49 Livelihood Enhancement and Protection Livelihood Enhancement and Protection Unit

The PPAF started the Livelihood Major interventions under the livelihood project include Enhancement and Protection (LEP) programme in 2010. It was graduation of TUP by establishing micro-enterprises, designed to help develop improving bargaining power and strengthening value capacities, opportunities, assets, and individual and community chains. productivity. It was also designed to reduce vulnerability to shocks, improve livelihood initiatives and strengthen people's business operations. This objective is achieved through a community- The programme is being thus empowering them. Women and market-driven approach implemented in 39 POs in 243 UCs are also encouraged to become where community institutions in 44 districts across Pakistan. An owners of enterprises. Resultantly, provide basic infrastructure for amount of PKR 5.10 billion has almost 52% of the asset recipients the programme. been earmarked for POs of which are women. Major interventions under the PKR 1.2 billion was disbursed in The PPAF ensures provision of livelihood project include FY 2012 alone. continuous implementation graduation of TUP by establishing support and livelihood micro-enterprises, improving 1. Progress during counselling to beneficiary bargaining power, and FY 2012 households for at least a year after strengthening value chains the transfer of productive assets through the formation of common 1.1 Graduation of TUP for the establishment of interest groups (CIGs), enhancing households through enterprises. It conducts employability through skill establishment of micro graduation surveys at the development and better linkages, enterprises completion of the programme to and providing communities with realise the impact of the the Community Livelihood Fund A total of 20,687 micro- programme on beneficiary (CLF). enterprises were established households. Success, however, is during the reporting year. They manifest in the struggle of the were aimed at graduating TUP to beneficiaries to take these above the poverty line. These Figure 3: Province-wise initiatives to a higher level. allocation of the amount enterprises are established on the committed to POs for the basis of an extensive needs 1.2 Enhancing employability analysis of target communities through skill development implementation of and a rapid assessment of livelihood projects livelihood issues and The PPAF trained 47,000 persons opportunities in relevant Ucs. during the reporting period under LEP. Sindh 27% Balochistan Intended beneficiaries are 9% identified using the poverty Livelihood trainings include (but scorecard survey (PSC) and FATA 1% are not limited to) skill and GB 3% poverty wealth ranking (PWR). enterprise development training Active community participation in provided to communities in order the establishment of these micro- to enhance their employability. enterprises is ensured by making Technical and vocational skill KPK 19% beneficiaries, particularly women, trainings in particular focus on part of the procurement process, youths from remote areas—both Punjab 31%

ANNUAL REPORT - 2012 51 Livelihood Enhancement and Protection Unit

The LEP works in tandem with its POs and is instrumental in developing PO staff capacities, thus enabling them to ensure the effective implementation of livelihood projects.

illiterate and school dropouts—by coordinated marketing, develop 2. Enhancing the equipping them with skills linkages with markets and public required in the local, national sector service providers, and Capacity of POs and international market. People reduce vulnerability of the poor Involved in the are trained in various trades that through livelihoods Implementation of are carefully chosen after a diversification. These groups thorough analysis of market consist of members participating Livelihood Projects demand, subject to the availability in similar activities from different of required training facilities in segments of society. The UC level 2.1 Orientation workshops for the vicinity. Participants for such livelihood plans initiated by LEP partners trainings are identified through provide a basis for decisions about The LEP works in tandem with its community institutions. The the type of CIGs to be formed POs and is instrumental in partners also liaise with the around certain economic developing PO staff capacities, corporate sector to identify skill activities. Specific training thus enabling them to ensure the requirements in the market. manuals are being prepared to effective implementation of build the capacity of CIG livelihood projects in their 1.3 Enhancing bargaining power members. They include basic CIG respective areas. These of the poor through CIGs concepts—including savings and orientation workshops include recordkeeping—marketing, sessions on concepts of The PPAF has also undertaken an saving, financial management sustainable livelihood. Various initiative to encourage people to basics and sector-specific techniques, methods, and formats form CIGs around common trainings like enterprise for data collection and reporting economic activities. It oversaw the development, poultry, agriculture are explained and discussed. The formation of about 1,100 CIGs and livestock. during the reporting year. These workshops provide partners with a are designed to help increase the Other activities under the CIGs platform where staff can share bargaining power of the poor, include trainings and savings and their field-related concerns and create economies of scale through productive linkages with markets experiences. collective purchases and and institutions. 2.2 Harnessing a community of practice

The unit organised a three-day Basic CIG concepts include savings & recordkeeping, experience sharing and marketing, financial management basics and enterprise networking workshop with the objective of bringing all POs to a development trainings. single platform where they could share their experiences and learn from one another. The knowledge accumulated and shared provides new implementers with relevant information enabling them to

52 ANNUAL REPORT - 2012 Livelihood Enhancement and Protection Unit

prepare a clear roadmap for an active and participatory tool Documenting and consolidating themselves. after the workshop and currently learning from the field will be has 67 members and more than another area of focus. This The workshop was envisaged to 200 posts related to ongoing includes developing case studies help develop linkages between activities. This initiative proved and stories from the field. partners and other service helpful in developing interaction Guidelines will be developed for providers and derive strategy to between partners. strengthening and enabling CIGs work for the mutual cause of to play their role in enhancing the poverty alleviation. Another 3. The Way Forward bargaining power and objective was to develop online productivity of all segments of experience-sharing and a In harmony with PPAF's regional communities along with TUP. networking platform to enhance strategies, the LEP unit intends to project productivity. focus chiefly on the effective Grants from the CLF will be implementation of projects signed provided to cluster groups in Benefitting from technology, the with POs, deepening support in communities according to the LEP unit also created a Facebook® areas where support has already eligibility criteria for financial page for sharing information and been provided and increasing support provision to strengthen activities in the field, especially in outreach in the least developed micro-enterprises and linkages difficult areas. The page became regions of the country. with the market.

The LEP Unit intends to focus chiefly on effective implementation of projects and increasing outreach in the least developed regions of the country.

ANNUAL REPORT - 2012 53 Special Initiatives Special Initiatives

The PPAF's Special Initiatives (SI) the same household to establish 2. Youth Development Unit is responsible for two main their own enterprises, thus interventions, income support and helping in sustainable poverty Young women and men are youth development. reduction and women Pakistan's greatest assets. They empowerment. bring energy, talent, and 1. Income support PPAF partnered with BISP in creativity, and constitute the September 2010 to impart foundations for future This unit has been involved in enterprise and skill development development. Youth in Pakistan, implementing the Waseela-e-Haq trainings to beneficiaries to however, also faces severe (WH) component of the Benazir facilitate and guide them in challenges and disadvantages in Income Support Programme (BISP) establishing their businesses. All national and international labour targeted at 18,000 ultra-poor of these trainings are residential markets. Pakistan has become a women/households across and PPAF is responsible for disaster-prone country in the last Pakistan. The BISP is a social planning and executing trainings, decade; natural disasters have safety net mechanism established and training logistics. This been adversely impacting both the by the government of Pakistan partnership was further economy and public morale. (GoP) and is aimed at poverty strengthened with the additional alleviation. It was initiated to Approximately 63% of the responsibilities of monitoring and hand out cash benefits of PKR population (180 million) is below facilitation in disbursement 1,000 to underprivileged families the age of 25 compared to the assigned to PPAF. worst hit by high inflation international average of 48%. This (especially of food items) makes the Pakistani population So far, PPAF has successfully resulting in a reduction of their one of the youngest potential trained almost 11,000 WH purchasing power. However, it was workforces in the world. The beneficiaries in seven phases and observed later that doling out population's youthfulness monitored around 2,000 cash benefits can potentially presents a significant challenge in beneficiaries who started their create a dependency syndrome. It creating jobs for approximately businesses with the first loan was also noted that the system two million people entering the instalment. These trainings have should be such that it helps and workforce each year. This been held all over Pakistan encourages women to join situation presents both targeting micro-enterprises in mainstream economic activities. opportunities and threats; a demand in each district. Consequently, the WH programme young and enthusiastic workforce Enterprises preferred by was launched in order to provide is a definite edge for any country, beneficiaries include general women with opportunities to earn but to adjust to create two million stores, dairy farming, livestock, on their own and escape the jobs is an enormous task. cloth shops, tailoring, welding, poverty cycle. flour mills and rickshaws. The Young people in much of the The WH programme offers a soft PPAF has facilitated developing world are growing up loan of PKR 300,000 to female disbursements of more than without the opportunities, beneficiaries or a nominee from 10,000 WH beneficiaries. information and services they

PPAF partnered with BISP in September 2010 to impart enterprise and skill development trainings to beneficiaries to facilitate and guide them in establishing their businesses.

ANNUAL REPORT - 2012 55 Special Initiatives

need to reach their full potential. targeted at 30,000 literate youth ? Restoring hope and making There is mounting evidence to in Sindh. This programme has the youth proud of Pakistan prove that a lack of investment same pattern as the regular WH ? Behavioural change and an indifference to the needs programme, except that the ¢ to ensure a tolerant society of youth incur a high cost in terms audience is aged 18–30 and at ¢ interprovincial/cultural of lost development opportunities, least matric qualified. PPAF has so harmony ill health, social, physical and far managed to provide trainings ? Income support mental disruption, and unrest in to over 6,700 youth across Sindh. ¢ life/employability and the country. Pakistan's rapidly Major enterprises established enterprise development skills increasing working-age include groceries stores, dairy ¢ technical trainings and population is largely unskilled farming, livestock, rickshaws, developing forward and and incapable of catering to the general stores, tailoring shops, backward linkages, career needs of national and mobile phone shops, electric counselling, brother-sister international markets. This is spares, beauty parlours and auto mentoring, scholarships compounding the decelerating spares. ? Raising awareness of health, economic growth rate and hygiene, social accountability, creating frustration among youth. Based on the importance of and environment engaging youth in a meaningful ? Liaising with provincial Based on the progress and manner and developing their governments in the design and response of the WH/BISP capacities in an effective way, effective implementation of programme, PPAF was assigned PPAF has shortlisted the following youth policies another project in March 2012, areas for immediate attention;

56 ANNUAL REPORT - 2012 Quality Assurance Monitoring, Evaluation and Research Monitoring, Evaluation and Research

PPAF is now focused on assessing and identifying its progress at outcome and impact through grant‐ based and credit interventions.

The Monitoring, Evaluation, and also responsible for regular is in complete harmony with Research (MER) Unit at PPAF is dissemination of information PPAF's core values - social mandated with critically through a series of ongoing and inclusion, democratic evaluating the impact and periodic reporting formats participation, accountability and progress of PPAF interventions in including; transparency. addition to a regular collection and dissemination of information ? Quarterly progress reports The unit prepared four QPRs and to all stakeholders. The (QPRs) facilitated the preparation of the responsibilities this Unit ? Annual report annual report during the ? shoulders include several Case studies reporting period. It also ? interactive and mutually Guidance notes customised periodic progress ? Knowledge management portal supportive management reports prepared for specific PPAF ? Thematic reports functions. programmes, including the third ? Baseline reports Pakistan Poverty Alleviation Fund ? Impact assessment studies These functions help PPAF ensure (PPAF-III), the MIOP, PRISM and accountability in the use of the Livelihood Support and PPAF's approach over the years resources, provide a clear basis for Promotion of Small Community has seen a steady evolution and is decision-making, and offer Infrastructure Project (LACI-P). now more focused upon assessing practical lessons learnt from and identifying its progress at the experiences in the development of Smooth functioning and ready outcome and impact level, further interventions. availability of an integrated MIS through grant‐ based and credit along-with multilayered This unit also supports PPAF in interventions. The MER Unit has customised functions to PPAF's formulating focused regional been closely involved in requirements, has remained the strategies and other useful conceptualizing the new Results MER's foremost priority during policies through collating and Framework which allows improved the reporting year. To achieve this disseminating results from various monitoring and evaluation for target, the unit developed its researches, assessments, learning purposes within PPAF scope of work and terms of evaluations and reports. In and at the PO level. reference, and engaged a leading addition, the efforts of MER are consulting firm for the focused on improving the relevant 1. Activities development of an integrated MIS. capacities of POs in continuous MER programme outputs and The MIS will be a web-based The Unit conducted a series of outcomes. solution that will automate three regional workshops during business processes for PPAF's the reporting period for all active The MER Unit collects, grants and credit components. It POs; one each in Islamabad, consolidates and analyses a contains built-in components for Lahore and Karachi. Participating reserve of technical, financial and proposal management and project POs were oriented with socio-economic data received progress reporting, and outcome‐ based monitoring and from POs, third-party evaluators administers and monitors and in-house assessment data collection as envisaged in the payments, deliverables, and goal exercises, regularly and serves as PPAF Results Framework. This unit management. It also includes a PPAF's main databank. The Unit is sees to it that the work it produces web portal, a built-in component

ANNUAL REPORT - 2012 59 Monitoring, Evaluation and Research

The methodology is aligned with criteria for evaluating development assistance that focuses on outcomes instead of impact.

for GIS mapping, workflow marriage in PPAF-supported management, security and communities. The Unit also reporting. engaged and supervised various teams of consultants for The MER Unit has adopted a two- conducting results and impact pronged approach in pursuance of monitoring system (RIMS) impact internationally accepted assessment surveys, evaluation studies aimed at user/beneficiary assessment evaluating its partnerships and surveys, an evaluation of an SRSP performance. Its impact partnership and a baseline for evaluation surveys ensure the social mobilisation impact (A WB availability of core baseline research study). The unit also quantitative data on important facilitated a research study socio-economic indicators, and undertaken in collaboration with helps gauge the impact of the Development Economics programme interventions against Research Group (DECRG), WB. The these indicators. On the other MER Unit has also provided a hand, qualitative evaluations use follow-up and post-survey support a methodology developed by the to the BISP by redressing Organisation for Economic complaints from local and Cooperation and Development's provincial BISP offices. (OCED) development assistance committee (DAC). The The MER Unit works to ensure methodology is aligned with quality control in all of PPAF's criteria for evaluating designed, envisaged, or assisted development assistance that interventions. The Unit remains focuses on outcomes instead of proactively engaged in guiding impact, particularly when project PPAF towards finding the correct duration is short and impacts are solutions through relevant and not expected to emerge during verifiable research while project implementation as is the providing management with a case in many PPAF programmes. continuous feed-back loop for informed decision making. Corresponding with its mandate, the MER unit prepared four guidance notes for PPAF during the reporting period. These guidance notes covered themes such as participatory monitoring, inclusion of women in disaster planning, management tools for writing quality case studies and responses to issues of child

60 ANNUAL REPORT - 2012 Monitoring, Evaluation and Research

The MER Unit remains proactively engaged in guiding PPAF towards finding the correct solutions through relevant and verifiable research.

ANNUAL REPORT - 2012 61 Environment and Social Management Environment and Social Management Unit

Established in July 2011, the management, research and go beyond ESM compliance and Environment and Social assessment. address issues of environmental Management Unit (ESMU), has a significance. mandate to provide oversight in 1. Capacity Building the implementation of PPAF's To ensure the efficacy of ESMF environmental and social compliance, the Unit has set up a This unit has designed a management framework at all network of ESM focal persons to comprehensive three-tiered levels including PPAF, its partners, represent all trained POs. These capacity building programme to and community institutions. The focal persons are responsible for institutionalise environmental ESMU is central to the design and the mainstreaming of and social management within implementation of all PPAF environment and social PPAF, its POs and communities. In interventions and draws upon a safeguards within their this respect, ESMU has conducted coherent policy framework organisations and at the three workshops with PPAF staff constituting the Environmental community level through on the use of the Environment and Protection Act 1997, WB monitoring and regular trainings. Social Management Framework operational policies on (ESMF). Similarly, quarterly environmental and social Based on this initiative, over 30 planning sessions with PPAF's safeguards and PPAF's Strategic POs have already conducted panel on environmental and social Focus 2011–2015. sessions on environmental and management—constituting social safeguards with community representation from all PPAF Amongst various other institutions. In addition, the unit units—are held to address any responsibilities, ESMU functions to is incorporating ESM capacity issues with the adequacy of the assess the environmental and building programmes into the ESMF against PPAF's programme social consequences of PPAF's regular training schedules of coverage, as well as to explore interventions. These operations institutional development, and ways to improve further had previously been taken care of has formulated a comprehensive compliance. by the Environmental and Social strategy to develop linkages with Management Group (ESMG) renowned regional, national and The ESMU has also conducted 14 housed in what used to be PPAF's international institutions as well training and orientation sessions Water Management Centre. as indigenous people's for its POs across Pakistan which organisations for technical and Now, ESMU is an independent unit are designed to build their policy support. offering its best to oversee and capacity to manage their impact ensure compliance with on social and natural 2. Mainstreaming and infrastructure. These workshops environmental and social Compliance management within PPAF and at successfully trained over 350 the PO level, with additional focus participants from 67 POs in the Management on compliance with PPAF's core use of the ESMF and reporting values of social transformation. requirements. The ESMU has developed a standard ESM QPR in which The creation of ESMU as an In addition, the environment and sections showing ESM compliance independent unit speaks volumes social management (ESM) module have been proposed to be of the importance PPAF attaches to has been incorporated by all units incorporated into the standard environmental and social in their capacity building back-to-office-report format. responsibility as a cross-cutting workshops and 12 such events Similarly, specific clauses have theme in all interventions it arranged by various units have been added to PPAF's consolidated provides support for. The unit has already been conducted over the financing agreement to ensure three major functions, namely reporting period. The Unit plans ESM compliance and an efficient capacity building of PPAF staff, to conduct more detailed thematic reporting regime. The Unit has POs and communities, compliance workshops in the coming year to further established an ESM

ANNUAL REPORT - 2012 63 Environment and Social Management Unit

This unit's internal monitoring strategy includes regular environmental and social audits of its interventions in order to carry out regular compliance probes of POs.

64 ANNUAL REPORT - 2012 Environment and Social Management Unit

helpdesk to facilitate operational initiated a multi-stakeholder incorporating environment as an units in environmental and social policy dialogue at the macro level, integral component of their work. safeguard reviews of project headed by a former chairman of Two such knowledge products proposals. the Water and Power Development titled “people, environment and Authority (WAPDA). This initiative development – a vision for district This unit's internal monitoring has facilitated a national-level D. G. Khan, Punjab” and strategy includes regular qualitative engagement with “Muzaffarabad – factors of environmental and social audits leading experts from the WB, sustainability: lessons from (ESA) of its interventions in order NDMA, specialised environment mountain areas” have been to carry out regular compliance agencies, and civil society at large. published. probes of POs who are made to Under this initiative, a colloquium guarantee sound environmental named “Water and Water-Related The Unit has also developed an and social safeguards through Disasters” was held at PPAF in environment module in Urdu with legally binding commitments. March 2012. Another workshop, pictorials for communities, aimed Environmental and social audit “Disaster Preparedness and at inclusion in the training exercises of 11 POs in six ESM Management” was conducted at programmes designed for priority districts have been PPAF in May 2012. recipients of the WH grants given conducted so far by the team. by the GoP. The ESMU is working Reporting on the new safeguards 3. Research and towards developing further such QPR format started in January materials for wide dissemination 2012. Assessment to communities across the country. The number of POs reporting on In order to enhance this format has increased from ten environmental awareness amongst The Unit also arranges exposure in the quarter January–March PPAF staff, POs and communities visits for PPAF staff to introduce 2012 to 63 in the quarter at large, the ESMU has undertaken them to environmental April–June 2012. Sixty-three POs a number of steps towards the management initiatives so as to reporting on the last quarter compliance 'plus' approach. This sensitise them towards comprise 87% of the PPAF-III includes constituency building for environmental responsibility and portfolio. environmental and social sustainability. The first such visit management that move from the planned was to Nathiagali, district In order to ensure the objectivity 'do no harm' principle to the 'do Abottabad, for a cohort of of its compliance role, the ESMU good' principle. environment champions in PPAF has recently commissioned an in June 2012. assessment study “Environmental The unit has been involved in the and Social Monitoring and preparation of knowledge In addition to compliance and Evaluation of PPAF Interventions” products for environmentally and mainstreaming, PPAF has to be carried out by a third party. socially significant districts to successfully engaged specialised The Unit has incrementally assess interlinked environment agencies like WWF-Pakistan to mainstreamed ESM as one of and development issues as well as undertake joint venture to combat PPAF's core values by putting in to identify environmental and environmental degradation as a place a strong legal and social challenges faced by these whole, and generate livelihoods procedural framework to protect districts. from improved environmental the implementation of a coherent management. set of environmental and social These knowledge products principles. provide ESMU with opportunities These initiatives are currently to collaborate with POs and other underway in district Ziarat, Soon As a result of ESM mainstreaming operational units within PPAF, and Valley and Swat. A number of efforts and to create an enabling assist in developing holistic similar initiatives are being policy environment, PPAF has development models planned for other areas as well.

ANNUAL REPORT - 2012 65 Internal Audit Internal Audit

The significance of effective ? Recommendations for more quarterly reviews to ensure their corporate governance, risk effective and efficient compliance with management management and internal control operations directives and the elimination of systems in the life and non-compliances on a proactive development of institutions can The IA Unit regularly reports to basis. Comprehensive procedures never be overstated. Similarly, the the audit committee of the BoD. were performed to obtain value of assurance regarding The audit committee held three assurance regarding compliance integrity, accountability, meetings during the reporting with guidelines for procurement transparency and reliability of year in which it reviewed the and exercise of control over fixed organisational systems cannot be performance of the IA Unit, the assets. Investment portfolios and understated either, particularly in scope and extent of IA and the financial management systems building and strengthening annual audit plan. were reviewed to ensure confidence between stakeholders. transparency and seamless The creation of a credible This unit reviews the performance application of internal controls at institution which enjoys the of all operational units against various stages. The MER Unit, support of all stakeholders and PPAF's SOPs as well as the Human Resource Unit and acts as a role model for effective guidelines and directions Administration and Procurement delivery mechanisms at the provided by international donors unit were reviewed in terms of grassroots level was the PPAF's (as required). Recognizing that their effectiveness to provide raison d'être. The PPAF's BoD, in excellence is a process rather than critical and timely support to its proactive approach to taking a state, the IA unit continuously operational units in project care of its responsibility towards reviews the adequacy and delivery. all stakeholders, has entrusted the efficiency of the mechanisms audit committee of the board with developed by the units in Since the success of the PPAF the oversight of mechanisms in achieving their goals and model depends upon the place to ensure transparency and adherence to PPAF core values. performance of its POs and the accountability at all levels. Any areas for improvement in the effectiveness of the PPAF-PO systems are immediately relationship, the IA Unit also 1. Responsibilities discussed with concerned units carries out audits of POs on a and the best possible yearly basis. During the year, the options/alternatives are reached IA Unit carried out review of POs Internal audit (IA) at PPAF fulfils through rigorous consultation and which encompasses more than its responsibilities to the Board consensus. 90% of the total PPAF portfolio. and audit committee by delivering The focus of PO audits in each case the following at PPAF and the PO was reviewing the adequacy of level; 2. Activities organisational governance, financial management, and risk ? An objective evaluation of The IA unit successfully carried management systems which are in existing risk and internal out annual reviews of all place to ensure the efficiency and control systems operational and support units of effectiveness of development ? A systematic analysis of PPAF during the reporting year. operations, compliance with business processes and This included a review of financing agreements with PPAF associated controls performance against agreed ? A review of indicators of fraud objectives, and particularly the and other regulations, and the and irregularities effectiveness of the appraisal and reliability of financial reporting. ? Reviews of the compliance monitoring activities of all framework and specific operational units, including the Since most of PPAF's partners compliance issues FSG, the Public Good and Services come from the grassroots level ? A review of operational, project, Group and the ID Unit. Similarly, and require support for their and financial performance support units were also subject to growth and development, the IA

ANNUAL REPORT - 2012 67 Internal Audit

The IA Unit has developed an effective mechanism to ensure implementation of all agreed upon procedures with all PPAF units and POs.

Unit gradually introduces the In addition, this Unit has purpose of the exercise. The IA requirements of internationally developed an effective and timely Unit thus constitutes a critical recognised risk management follow-up mechanism to ensure component of PPAF's governance systems and provides them with the implementation of all agreed mechanisms and is one of the key the support they require in upon procedures with all PPAF players in the achievement of building proficiencies and units and POs, realizing the fact PPAF's shared objectives and its developing their systems. that the slightest procrastination partners, both local and may seriously jeopardise the very international.

68 ANNUAL REPORT - 2012 Internal Audit

Core Support Services

ANNUAL REPORT - 2012 01 Finance and Accounts Finance and Accounts

As a custodian of public funds, fashion. In addition, two The F&A Unit's standard operating PPAF is conscious of the need for standalone modules are in use to procedures manual (SoPM) prudent and appropriate financial monitor loan- and grant-based documents the internal control controls and management. This operations. These modules framework and accounting mandated a Finance and Accounts produce a number of reports policies and procedures, in detail. (F&A) Unit to execute, record, allowing analysis and monitoring The financial management system classify, and present all financial of the microcredit portfolio and has been set-up to handle transactions in a systematic and grant interventions. Mark-up extensive reporting requirements transparent manner. The F&A unit schedules of POs are system in a flexible manner. Since PPAF's ensures compliance with statutory generated, ensuring accuracy and existing portfolio consists of laws and regulations with respect completeness. The unit has multi-donor-funded projects, its to agreements signed with the GoP introduced a web-based tracking MIS is equipped to handle a and multilateral and bilateral system in order to facilitate its POs multitude of donor-specific agencies. in tracking the status of reporting requirements. statements of expenses. This Transparency of financial In the conduct of its business, the online facility provides prompt information for different F&A unit maintains the highest feedback to POs on the status of stakeholders is a prime standards of financial their expenses and disbursements. consideration of the Unit. In order management while strictly to ensure this, the Unit has put in following SOPs laid out in PPAF's The unit has implemented an place an accurate and reliable operational manual. The work accounting and internal control reporting framework. Mechanisms processes and procedures related system which is sound in design are in place to ensure that the to F&A are attuned to an SOP and and has effectively been reporting requirements related to procedures manual dedicated to implemented and monitored, with all donors' funded projects and the unit's requirements. The unit's an ongoing effort for further regulatory agencies are met, and activities are carried out in an improvement. Accounting checklists are used to monitor automated computerised controls consist of plans, compliance. environment through customised procedures and records software. Similarly, books of safeguarding assets and checking The unit constantly strives to accounts are kept in accordance the accuracy and reliability of encourage and facilitate all with statutory requirements and financial data, promoting processes and procedures aimed agreements with the GoP and operational efficiency and at strengthening the highest level donors. encouraging adherence to of accountability within the prescribed managerial policies. organisation. All documentary 1. Practices The system provides assurance records and transactions are that transactions are executed in subject to strict scrutiny by accordance with management independent internal and external The F&A unit uses an SQL-based authorisation and recordkeeping auditors, as well as by supervision financial MIS. It comprises is done in a manner that permits missions from different donors. In integrated modules for general the preparation of financial the conduct of its routine ledgers, fixed assets, and payrolls. statements in conformity with obligations, the unit has The system is regularly updated generally accepted accounting prioritised true presentation of and has been functioning principles. facts and the timely issuing of all effectively for the maintenance of periodic financial statements for comprehensive books of account; the PPAF is using a detailed chart of accounts. Sufficient data is The F&A Unit strives to facilitate all processes and captured to enable all external and internal reporting procedures for the highest level of accountability. requirements to be met in a timely

ANNUAL REPORT - 2012 71 Finance and Accounts

management, donors and ? Financial statements of the IFAD strong financial management stakeholders. Simultaneously, the PRISM project for the year systems and procedures. In case of unit is particularly conscious of ended 30 June 2012 IFAD and KfW projects, the maintaining transparency and ? Financial statements of the KfW disbursement was based on prompt handling of reporting Livelihood and Infrastructure statements of expenses. All FMRs requirements at all times and at project for the half year ended and withdrawal applications all levels. These principles are 30 June 2012 related to WB and IFAD projects applied to both internal reporting were submitted within the period in the form of monthly financial In conformity with best practices, allowed by donors. All updates, and external reports quarterly, half-yearly and nine- information and data submitted important to stakeholders in the monthly condensed interim un- were in compliance with form of quarterly, half-yearly, and audited financial statements and disclosure requirements and nine-monthly un-audited financial management reviews are also formats. These were reviewed by statements, management reviews, prepared. The annual audited donors and found to be eligible annual audited financial financial statements along with for reimbursement or statements, and the director's the director's report, donor- replenishment. report. To improve the usefulness specific audited financial of internal financial reporting, the statements and interim un- As a result of the combined efforts F&A unit developed a dashboard audited financial statements, were of PPAF tax advisors and the F&A and made it available on the submitted to the audit committee unit, the Federal Board of Revenue computers of senior management of the Board for review. On the (FBR) renewed PPAF's status as a with effect from 1 January, 2012. recommendations of the welfare institution. Consequently, It readily makes available key committee, the BoD and general there was no tax liability for the financial information in graphical body approved these financial year under review. form and allows users to display statements along with the the level of detail desired. director's report and management The F&A unit participated in the reviews. The general body appraisals and monitoring of POs 2. Activities approved the audited financial and reviewed their financial statements of the company for the management systems to ascertain financial year ended 30 June, their effectiveness in carrying out The PPAF's operations for the 2012 together with the auditors' PPAF programmes. This Unit reporting year ended 30 June, and director's reports within four ensured swift receipt of audited 2012 were audited by its external months of the financial year. financial statements from all POs auditors M/s A. F. Ferguson and Annual audited financial within six months of the close of Company, chartered accountants statements along with the the financial year in addition to (a member firm of director's report, quarterly and the submission of management PricewaterhouseCoopers) who half-yearly un-audited financial letters issued by their respective gave a clean/unqualified opinion. statements, and management external auditors. These were In addition to preparing financial reviews are published and subsequently reviewed and statements as per statutory circulated to stakeholders. These necessary actions were taken requirements, the unit also statements are also made available accordingly. Not only have the prepared separate financial on PPAF's website. above steps infused financial statements for the following discipline within POs, the Unit's donors' projects as per the Disbursements to PPAF under the consistent emphasis on the requirements stipulated in their WB project were on the basis of submission of periodic statements respective financing agreements; financial monitoring reports of expenditures and all necessary (FMRs). This report-based documents in support of grant- ? Financial statements of the IFAD disbursement is allowed only to related expenditure, has further MIOP for the period 1 July institutions with effective and prompted POs to maintain proper 2011–31 March 2012

72 ANNUAL REPORT - 2012 Finance and Accounts

financial and operational records. focus on small and medium size ? Liquidity and reserves Simultaneously, it continued to organisations. maintained by PPAF as per conduct regular field visits to Board policy review the financial management On the guidelines of risk oversight ? Reflows generated from systems of POs and suggest committee of the Board, the F&A repayments of the microcredit improvements wherever needed. unit developed a treasury portfolio which are not required The unit, in realisation of its role management strategy which was for immediate on-lending in the development of POs, plans approved by the Board in October to continue efforts in 2011. The said strategy provides a In accordance with this policy, the strengthening the latter's systems detailed framework for the (dis)investment of funds was and procedures with a particular investment of; approved by the treasury

ANNUAL REPORT - 2012 73 Finance and Accounts

Khubaib, a former masonry helper from a remote village of Kot Addu, would never earn what could be called sufficient, no matter how hard he labored.

management committee 2.1 Workshops on financial were trained during the first comprising the chief executive management procedures phase of this specialised training officer (CEO), group head (GH), and internal control systems workshop. financial services and GH, 2.3 Community trainings financial management and The workshop's target audience corporate affairs. The treasury was all of PPAF's POs. The content The F&A Unit has started focusing manager acts as secretary of the of the trainings focused on on the effectiveness of sound committee. The treasury reports financial management and financial management and were prepared on a quarterly internal control systems at both internal control systems at CO basis and shared with the risk the PO and CO level. oversight committee of the Board. level record. The Unit organised a workshop, “good governance and Furthermore, an MS Access® Three executives representing the best practices at the CO level” for database was created to ensure finance, social mobilisation, and UC-level development that the guidelines and eligibility infrastructure units were invited organisations formed by the Sindh criteria defined in the strategy to attend the workshop. Being Agriculture and Forestry Workers were adhered to. This included directly involved with COs, Coordinating Organisation in interest calculations, credit engineers and SOs were specially Hyderabad. ratings, and all other information oriented with best practices for required for reporting, planning, financial management at the CO Thirty-three participants and monitoring. level. A total of 189 participants representing 11 tier III-level from 67 POs were trained during organisations, 60 VOs, and 470 In order to inculcate values of the first phase of the workshop. transparency, accountability, and COs participated in the workshop. Women's participation was 50% good governance in PPAF partners Basic financial manuals were also and also includes minority and COs, the F&A Unit was actively provided to facilitate smaller Pos. involved in the provision of participation. trainings to its POs and COs. These 2.2 Workshops on the 2.4 Recordkeeping at the focused primarily on financial preparation of financial CO level management and governance. In statements and SOEs this regard, the unit has started a This workshop was designed for series of workshops and To help grow a sense of ownership PPAF's small- and medium-sized developed a two-pronged strategy; and social responsibility, it was Pos. As a first step, the POs were felt that COs should do their own ? Training of POs staff, i.e. SOs requested to provide details of recordkeeping and funds and engineers in financial their finance and accounts unit management. management staff, i.e. qualifications, ? Training of UC-level experience, and job descriptions. This task was nearly impossible development organisations (Tier Moreover, the selection of POs was for most COs due to widespread III)/COs made on the basis of a review of illiteracy and a lack of proper SOEs and a review of audited recordkeeping. In order to address A brief description of these financial statements. Thirty-three these issues, COs were divided workshops is given below. participants from 17 partners into three categories (i) literate;

74 ANNUAL REPORT - 2012 Finance and Accounts

(ii) mixed/semi-literate, and (iii) One hurdle faced while developing 2.5 Corporate governance illiterate. this system was the pictorial responsibilities representation of numerical To encourage self-reliance within figures. After much thought, the Following best practices, PPAF has the COs, two new methods of system of tally lines was included adopted a code of corporate recordkeeping were developed in the system. governance and became fully over a period of time. For literate compliant with it. COs, a comprehensive register for Based on the assumption that each documentation of records was individual, no matter how The GH, financial management developed. isolated, has at some point carried and corporate affairs, who also out a financial transaction and acts as the company secretary, was The register contained detailed was able to recognise the currency responsible for ensuring requirements for the recording of used and its monetary value, all compliance with the requirements transactions, materials movement, notes and coins currently in of the code. In addition, all labour records, community circulation were printed on the statutory reporting to the SECP resolutions, and community charts, and tally lines was done well in time. proceedings records. Secondly, for corresponding to each expected COs where the majority of expense in the project were The F&A Unit remains fully members are illiterate, pictorial included. committed to international best recordkeeping formats were practices in the management of its developed. The idea was simply that records affairs and responsibilities as is of expenditures can be kept by reflected in all of its activities, A brainchild of PPAF, this modus marking off the number of each systems, and procedures, while operandi was based on the adage kind of note/coin used against the being committed to continually 'a picture paints a thousand resource purchased. Workshops building on its strengths. words' - the notion that a complex were held in various cities of the idea can be effectively conveyed country in order to introduce and The unit strives for further with a single image. propagate these project registers innovations to strengthen its to the POs. One hundred and sixty financial management and Charts for each individual project participants from 52 POs and COs procedural efficiency in the next were specially designed which attended these workshops. financial year. showed the aim of the project using a picture. For example, a The pictorial form of Thus far, it has achieved its results chart for a water-pump recordkeeping for illiterate COs owing to a well-coordinated installation project would show a was shared in two workshops held operational structure and clearly- pump. The raw materials and in Islamabad and Karachi. Twenty defined spheres of responsibility equipment needed for the project PO and 53 CO representatives equitably distributed amongst a were also visually represented. attended the workshop. qualified and dedicated staff.

The F&A Unit remains fully committed to international best practices in the management of its affairs and responsibilities.

ANNUAL REPORT - 2012 75 Communications and Media Communication and Media Unit

The information technology process signifying the shift in of PPAF by sharing the revolution has assigned priorities. Resultantly, the unit organisation's successes in unparalleled importance to now has the grassroots transforming the lives of millions communication and media in communities in the spotlight and of people in Pakistan. The C&M today's world. Never before has is producing more material in Unit has provided journalists communication and media had local languages, thus empowering direct access to PPAF such a significant impact on the them through information communities. This has proved lives and behaviours of people. dissemination. extremely helpful in shaping views through subsequent appearances 1. Responsibilities The C&M Unit has also produced a of comprehensive feature articles media manual to build the and news packages in the print capacity of POs to harness media and electronic media, The Communication and Media power for wider dissemination respectively. (C&M) Unit at PPAF strives to and acceptance of their work. In bring change in the mindsets of all collaboration with the ID unit, the During the reporting period, four stakeholders, particularly C&M Unit is sharing its exposure visits for journalists grassroots communities through communications strategy and were arranged and these media people-centred approaches in media manual with POs through teams produced 12 development. Likewise, it builds workshops so that they can align comprehensive feature articles in PPAF's corporate image by their work and strategies, leading newspapers and six news developing linkages with the accordingly. So far, two workshops packages on television channels. mainstream national and have been held in this regard Immersion visits have thus played international media, besides which also provided a platform to a key role in generating support capacity building of POs to share their best practices for viable public-private communications and media units and lessons learnt while working partnerships as a prerequisite for of PPAF partners for effectively with communities. comprehensive change at the engaging local communities in the grassroots level. These measures development process. It has an This Unit, in order to educate and and their achievements need to be imbedded responsibility of using inform people of the vast potential viewed in the context of a highly transmission channels and tools to of PPAF's poverty alleviation politicised public arena where store and deliver interventions, is working hard to political and security issues information/data about PPAF's build critical linkages across the continue to dominate the debate activities and interventions aimed print and electronic media. The in mainstream media. Exposure at helping marginalised and poor unit's emphasis on using mass visits also serve as an opportunity communities across the country media for leveraging continued to test PPAF's performance by and transforming their lives. The support is complementary to its allowing journalists open access to C&M Unit has made a key transformative role in eliminating report from the field. Their paradigm shift by focusing on conventional barriers and reflection in their respective communication with communities, introducing fresher perspectives media also serves as a third-party helping POs improve their for meaningful change. This role is evaluation. communications operations, and particularly relevant to PPAF's influencing/promoting pro-poor efforts towards influencing In pursuit of its objectives, the policies and legislation. decision making for pragmatic, Unit's wide-ranging use of media need-based, and affirmative access also includes radio 2. Activities policy formulation. The Unit is programmes on PPAF-supported committed to engaging the community interventions. The During 2012, the C&M unit mainstream electronic national C&M unit has produced two series developed a communications and international media for the of the popular radio programme strategy through a consultative effective branding and positioning Roshan Raahein, which were

ANNUAL REPORT - 2012 77 Communication and Media Unit

broadcast through a national The C&M Unit has been quite successful in mainstreaming hook-up of Radio Pakistan. The show is a dramatised version of poor communities by spreading PPAF experience to a large PPAF's success stories and flood audience. preparedness. These radio programmes generated a lot of revamped and renamed Restoring (Inspiration), and PPAF's efforts interest and awareness among Hope. It keeps stakeholders for the rehabilitation of flood- target communities and informed of PPAF's growth, affected people (Restoring Hope). stakeholders – a fact substantiated programmes, and future direction. Besides this, the Unit routinely by the receipt of a large number of Besides production and conducts case studies and letters from across the country. dissemination of other important produces video documentaries in This programme regularly informative material, the unit close collaboration with all PPAF broadcasts PPAF's experiences in launched e-sharing during the units to document and critically participatory development by reporting period—an internal analyse the impact of PPAF transmitting stories on the electronic newsletter—on a interventions on participating organisation's multi-sectoral fortnightly basis. This has helped communities. interventions from across in keeping Team PPAF well aware The Unit further facilitates PPAF's Pakistan. Additionally, this of important happenings taking agenda for prescriptive research programme has routinely relayed place within the organisation. useful information on ways in through the regular publication which the general public and In addition, the C&M Unit and dissemination of reports, aspiring organisations can access launched the Amtul Raqeeb Award brochures, manuals, flyers, and PPAF and its network of POs. It has on the occasion of International factsheets. The Unit also plays its also played an important role in Women's Day during the same part in providing technical educating people on how best to period, to pay tribute to support and expertise to both POs organise themselves for the extraordinary women proving and participating communities in common good of their themselves as role models in their relevant fields, particularly communities and begin to respective communities. The Unit providing assistance in building participate in the process of also produced photo stories effective communication channels development. featuring PPAF's initiatives aimed for raising awareness and at building institutions of the poor behavioural change, rather than As a tool of information and an animated video, Badalni solely focusing on public relations dissemination, this unit arranged Hai Duniya on the process of CO exercises. Simultaneously, the interactive theatre performances formation. The Unit also produced Unit seeks to effectively on issues such as environment, a booklet, “Women of Substance” compliment the work of other health, education, the importance depicting stories of resilience, units within PPAF by providing of computerised national identity adversity, unwavering self-belief, media coverage and preparing cards (CNICs) and flood and faith in destiny of seven support materials for all preparedness in Ghotki and Badin exceptional women entrepreneurs workshops, seminars, and districts in Sindh. Besides belonging to PPAF-supported ceremonies. providing entertainment, these communities from seven different Through its varied set of activities, theatrical performances created regions representing the cultural the unit has been quite successful awareness amongst more than and geographic diversity of the in mainstreaming poor 10,000 community members on country. communities by spreading the civil rights and disaster PPAF experience to a large management in the The C&M Unit produced three audience. At the same time, it has aforementioned districts. A video documentaries on flood established itself as a critical quarterly newsletter previously relief and recovery (Turning the support component crucial to the titled Povertyline has been Tide), PPAF's work philosophy growth of the organisation.

78 ANNUAL REPORT - 2012 Communication and Media Unit

3. Liaison with international media

With a view to expanding outreach to the mainstream international media, the C&M Unit successfully engaged leading international print and electronic media houses to cover PPAF's efforts aimed at transforming lives. It engaged US-headquartered CNN International, which provides 24-hour coverage to its viewers in over 212 countries and territories. The CNN International team was taken to Ehsanpur where PPAF and Engro joined hands as a model public-private partnership to provide housing and livelihood facilities to the flood-affected people of tehsil Kot Addu in district Muzaffargarh. CNN International produced and aired a comprehensive documentary on PPAF endeavours for the rehabilitation of flood-affected people, free of cost on its international hook-up with a repeat telecast.

Likewise, the C&M Unit developed synergies with Khaleej Times International who conducted an exclusive interview of the chief executive. Published from Dubai, Khaleej Times International is one of the most popular English language newspapers in the UAE with a worldwide circulation of over 500,000.

The C&M Unit's efforts to attract and engage the mainstream international print and electronic media to showcase PPAF's efforts for the marginalised segments of society has begun to bear fruit and is bound to make PPAF a household name, internationally.

ANNUAL REPORT - 2012 79 Corporate Relations Management Corporate Relations Management

The Corporate Relations local and multinational in achieving PPAF's strategic Management (CRM) Unit functions corporate sector of Pakistan objectives by engaging local, to mobilise the national and by attracting financial multinational, and international international corporate sector in participation from corporate organisations and the implementing Corporate Social corporations to jointly media, academia, non-profit Responsibility (CSR) and support PPAF programmes in organisations, and institutions of corporate philanthropy priority areas the poor. The unit also played a initiatives. The vision of this unit ? Fundraising and resource role in rationalizing CSR is “to comprehensively co-opt the mobilisation from initiatives as per requirements at private and corporate sector (local international trusts and the grassroots level; the unit and international) in the process foundations to help diversify provided support to the SECP in of poverty reduction and PPAF funding resources formulating CSR guidelines for the grassroots development”. In this ? Linking PPAF communities corporate sector. respect, the CRM Unit has with livelihood opportunities partnered with several corporate through inclusion in the value During the reporting year, this sector organisations in Pakistan chains of the corporate sector unit undertook various projects and built contacts with for trainings, enterprise designed to benefit the poor in international corporations, as development, and job different areas. The unit is also well. Unit objective include; placement exploring new partners for scaling-up and replicating ? Building linkages with the The CRM Unit plays a pivotal role successes all over the country (Table 16).

Table 16: PPAF interventions with the corporate sector

Corporate partner Intervention type Areas of interventions Value (million PKR)

Engro SM, CPI, H&E Ghotki, Sukkur, Tharparkar, Sahiwal and 350.00 Sheikhupura

Flood relief and rehabilitation Ghotki, Sukkur, Rajanpur, Thatta, 200.00 Muzaffargarh

Disaster preparedness (R&R) Pakistan 500.00

Shell-Pakistan CPI, H&E, LEP Goth Noor Mohammad (SCAD) 50.40

Tetra Pak Dairy hub, school milk programme Muzaffargarh, Rahim Yar Khan 34 mil

Pakistan Petroleum CPI Kashmore 71.43

CitiBank CMA Pakistan 11.70

Fauji Fertiliser Education Ghotki 60.00

Socio Engineering Interactive boards Mianwali 3.27

Agritech Industries Education Mianwali 100.00

Unilever CPI Qasur 4.89

Tetra Pak School Milk Programme Rahim Yar Khan 22.00

Total 1,385.70

ANNUAL REPORT - 2012 81 Corporate Relations Management

PPAF and Pakistan Petroleum Ltd. signed an MoU worth PKR 71.43 million for the provision of basic physical infrastructure in districts Kashmore and Kandhkot.

1. Projects Completion ensured project component laboratories and procurement sustainability with computer of books and equipment. 9. The development of digital The fiscal year 2012 saw the laboratories and e-libraries. library software for successful completion of PPAF- Another organisation, Socio schoolchildren and teachers. corporate joint initiatives. The Engineering Group, has taken up 10. The provision of furniture to details are as follows; these schools to further strengthen ICT in classroom schools and school 1.1 Safe drinking water supply education; PPAF is responsible for renovations. with Unilever Pakistan providing coordination and support. A proper sustainability plan was The PPAF and Unilever signed an developed by all of the partners MoU of PKR 4.89 million on 12 The objectives of this project were for this project and is now in October 2010, for a small CPI to enhance teachers' knowledge place. The PPAF supported staff in project aimed at providing a safe and skills in pedagogy, develop selected schools including 16 drinking water supply to under- principals' and middle managers' MIED-support teachers, two resourced communities in district skills and knowledge of effective gardeners, and two part-time Qasur. The project was conducted school leadership and attendants now employed by through the Rural Community management, and enrich Agritech Industries. This step has Development Society (RCDS), a curriculums to promote holistic further built up the morale of the PPAF implementing PO. primary-school student teachers. development. More specific 1.2 School improvement objectives include; 1.3 Ittehad model village with programme with Agritech Engro Foundation Industries 1. The completion of a baseline study. In response to the floods of 2010, The PPAF and the Nightingale 2. Capacity building of PPAF and Engro Foundation signed Foundation (Agritech Industries principals and vice principals; an MoU worth PKR 200 million for part of the AZGARD-9 Group) 3. Capacity building of teachers relief and rehabilitation on 14 signed an MoU of PKR 100 million through trainings. August 2010. The target area on 29 January 2010, for a school 4. The formation of parent included the districts of Ghotki, improvement Programme at support groups. Sukkur, Rajanpur, Thatta and Iskandarabad, district Mianwali. 5. The formation of student Muzaffargarh. Ehsanpur in district This project aimed to strengthen representative councils; Muzaffargarh was adopted as a education services in order to 6. The appointment of 12 model village under rehabilitation improve the quality of education teachers and eight support initiatives. in schools. The Mountain Institute staff. 7. A new type of school culture Others that joined the project of Educational Development where parents are involved included Tetra Pak Pakistan, the (MIED) was taken as implementing and students and teachers, government of Punjab, PO. The project was highly alike have renewed Technology Upgradation and Skill appreciated by PPAF's corporate confidence. Development Company partners and Agritech Industries 8. The establishment of (TUSDEC)—a local technology

82 ANNUAL REPORT - 2012 Corporate Relations Management

company—Ansar Management TUP. This programme is the best Consultants (SEC)—part of Socio Company (a local low-cost housing example of public-private Engineering Group—signed an company), and Roshni, a local partnerships. Houses are owned MoU worth PKR 3.27 million on 19 non-government organization by women and the whole project is July 2012. The SEC is providing (NGO) for an integrated project being looked after by the local capital and technical support to implementation through the community very well through identified schools under the Ilm Farmers' Development their representation in COs. This Ideas project funded by the Organisation (FDO), a PPAF PO. An project was highly appreciated in Department for International innovative approach was adopted the local and international media, Development (DFID). The scope of for rehabilitation and including CNN. the programme includes the reconstruction with a focus on installation of ICT-related housing, alternative energy, girls' 2. Projects Inception education equipment (active education, women empowerment, classroom technology) in three livelihoods, sanitation, and local PPAF-adopted government area development. The following 2.1 CPI with Pakistan Petroleum schools, teachers' trainings, targets were achieved at the end Ltd. baselines and impact assessments of the project; over a one-year period. Under the flood relief and ? One hundred and sixty-six rehabilitation initiatives, PPAF 2.3 School improvement houses constructed with two also partnered with Pakistan programme with Fauji rooms, a veranda, a washroom, Petroleum Ltd. and signed an MoU Fertiliser Company Ltd. and a hand-pump worth PKR 71.43 million on 22 (FFCL) ? Solar electrification of March 2012, for the provision of residential (three solar panels, basic physical infrastructure in The PPAF and FFCL partnered and 100 watts, each) and common districts Kashmore and Kandhkot. signed an MoU worth PKR 60 facilities, i.e. six parks and million on 19 June 2012, for the Currently, the project scope is livestock sheds along with play- School Improvement Programme limited to providing and pumps that help provide easy in district Ghotki. The PPAF and improving basic infrastructure for access to water FFCL shall work together in 11 the communities of 41 villages ? Underground sewerage government schools at district badly hit by the floods of 2010 connected to a grey-water Ghotki for the next three years. and 2011 in various UCs including harvesting unit for purification The current scope of the Malir, Habit, and Gubloo of and reuse of water; a mosque, a programme is limited to providing district Kashmore. However, the community centre and dairy and improving education in scope of the partnership may be hub financed by Tetra Pak communities through hard and extended to health, education, Pakistan for milk collection soft components. However, the livestock, agriculture and credit purposes scope may be expanded to include and livelihood interventions in ? Two skills training programmes health, physical infrastructure, other areas of the country subject in construction and welding, as livestock, agriculture, and credit to mutual agreement. well as three women-focused and livelihood interventions, livelihood trainings in mat- subject to mutual agreement. making, beekeeping, and 2.2 Provision of ICT in schools kitchen gardening with Socio Engineering 2.4 Disaster preparedness (relief Group and rehabilitation) with The PPAF has also launched a Engro Foundation separate programme for To further strengthen the PPAF livelihood enhancement and School Improvement Programme The PPAF and Engro Foundation, protection which included skills in collaboration with Agritech after the successful completion of development training Industries in district Mianwali, PPAF-EngroFlood Relief and programmes and asset transfers to PPAF and Socio Engineering

ANNUAL REPORT - 2012 83 Corporate Relations Management

Rehabilitation signed another and livelihood components. The other agreed areas. A MoU worth PKR 500 million on 24 project is being implemented comprehensive school July 2012, to work together in through a PO called HANDS. improvement programme is also selected areas of Pakistan for next in the planning phase for district three years. The scope of the A comprehensive programme for Ghotki. partnership has been expanded to livelihood improvement has also the whole country with an been launched in which PPAF emphasis on disaster would be providing skill preparedness. The funds would be development trainings, divided as per requirement for transferring assets to TUP and preparedness (20%), relief and creating linkages with potential recovery, (40%) and rehabilitation markets. More and more partners and reconstruction activities are being engaged to address the (40%). needs of target communities for uninterrupted safe drinking water 3. Projects in Progress supplies and electricity for security and household usage. In this respect, the options of solar 3.1 Goth Noor Mohammad energy and reverse osmosis water adopt a village with Shell- treatment are under Pakistan consideration.

The PPAF and Shell-Pakistan 3.2 Village development signed an MoU on 21 April 2010, programme with Engro aiming at transforming a Foundation scavenger's town (Goth Noor Muhammad – suburbs of Karachi, The Engro Foundation and PPAF near Hub) into a model village. signed an MoU worth PKR 205 The project kicked-off with need- million on 11 December 2009 for based interventions ranging from a village development programme. housing, streets, and sanitation to The programme was aimed at the health and education. So far, provision of basic infrastructure, almost 40 of 133 housing units education, health, and social have been constructed and sector services in districts Ghotki handed over to the community and Sukkur. However, upon along with the completion of successful completion of this joint whole physical infrastructure venture, PPAF and Engro signed an work including street pavements addendum to the MoU worth PKR and sanitation. A basic health unit 350 million. Resultantly, the scope and a school have been of the programme expanded to operational since inception. livelihood, environment and However, separate buildings for a research and feasibility studies school, a health facility, and a while adding Sahiwal, community centre are under Sheikhupura, Tharparkar and construction and will be other areas of mutual interest to operational by early 2013. In this the project. respect, Shell will bear the cost of housing only while PPAF is The project is progressing in providing support for the physical district Ghotki as per plan while in infrastructure, health, education the process of expanding to the

84 ANNUAL REPORT - 2012 Corporate Relations Management

A programme for livelihood improvement has also been launched in which PPAF would be imparting skill development trainings, transferring assets and creating linkages.

ANNUAL REPORT - 2012 85 Administration, Procurement and Human Resources Administration, Procurement and Human Resources

1. Administration business at PPAF the local microfinance market. ? Commencement of its first The annual post review audit of ever mega annual family gala PO procurements was key to both Support departments are vital to for PPAF staff and their validating PPAF's implementing all organisations. Their cost- families modality through POs, and in effective and time-sensitive ? Started cafeteria operations identifying capacity building actions ensure smooth and hassle- for PPAF staff on self-reliant areas. In order to ensure free conduct of business. All other basis (the cost of food is borne transparency and draw on a departments are considered by the staff) rechargeable multi-disciplinary internal clients and this is exactly ? Special initiatives for security human resource database for how Administration Unit takes clearance were initiated for individual consultancies, the unit care of its responsibilities. sensitive areas of Pakistan, has introduced the services of a making it mandatory for the The Administration Unit job portal resulting in enhanced staff to obtain security contributes in furthering the efficiency and reduced clearances from the cause PPAF has committed itself paperwork, hence going green. Administration unit prior to to. It takes care of staff and client any field visit This unit has also introduced a logistical needs in a timely fashion ? A day care centre was started schedule of timelines for various by attending to a multitude of for staff members' children procurement methods to assist services which include operational units in planning maintaining PPAF office and project activities. For its external physical resources, ensuring a 2. Procurement Unit clients, principally 114 POs, this smooth workflow through well- unit's assistance takes the form of coordinated secretarial services, The Procurement Unit is PPAF's dedicated trainings in arranging and coordinating operative delivery arm for the procurement policies and meetings and other events both acquisition of services and goods procedures and documentation, inside and outside PPAF premises, in timely, efficacious, and cost- and approves actions to and regular maintenance of office effective fulfilment of project implement their respective cars and their logbooks to ensure objectives vis-à-vis WB guidelines. procurement plans. In addition, transparency. As a service centre for its internal the Procurement unit actively and external clients, it engages in undertakes POs visits to monitor This Unit operates to bring ease securing individuals and compliance with prescribed rules and comfort to Team PPAF during consultant firms to help deliver and processes. The unit also their stay and work at PPAF. outputs contributing to the assists the organisations and During the reporting year, the project's five components i.e., donor agencies partnering with Administration Unit arranged 892 livelihood enhancement and PPAF in procuring a range of items countrywide air travels, 806 protection, social mobilisation including vehicles, information countrywide road travels, 51 and institutional building, technology, office equipment, and international travels and 70 microcredit access, basic services furniture. The unit has meetings/lunches/trainings/work and infrastructure, and project successfully established a large shops. implementation and support. database of vendors in multiple During the reporting year, this categories to leverage competition 1.1 Major Achievements unit secured the consultancy among vendors, resulting in during FY 2012 services of 61 individuals and substantial savings. Periodic nine firms for baseline and impact status updates of the entire gamut ? Smooth shifting of seven assessment surveys to post review of the procurement portfolio office premises to a newly audits of POs' procurements to ensure that the unit remains acquired office building in environment and social accountable to its clients and Bani Gala, Islamabad, without monitoring studies to an takes pride in its consistent any interruptions to daily internationally tendered study of satisfactory audit rating.

ANNUAL REPORT - 2012 87 Administration, Procurement and Human Resources

The staff are encouraged to come up with ideas and suggestions for improvement with proper follow-up actions, where required.

3. Human Resource with bonuses based on actual headhunting services to find performance. The performance of talent for critical positions in the an individual is measured on two organisation. Besides this, there The fiscal year 2012 witnessed a key factors - key performance were a few vertical movements of steady progress towards robust indicators and key competency employees based on internal organisational systems and indicators. Key performance vacancy notifications and open processes focused upon promoting indicators are derived from set positions. That women constitute and strengthening a culture of objectives during the year 30% of the workforce is a clear teamwork and mutual assistance between the individual and the manifestation of diversity and amongst various units of PPAF in supervisor, while key competency equal opportunity. Management order to achieve the indicators are derived from the keeps striving to receive effective organisation's strategic objectives. role of the employee and covers feedback from all staff, especially Likewise, the HR Unit has designed soft skills. The purpose of linking women in order to improve the a number of interventions and bonuses with performance was to system, processes, and taken various steps to help PPAF recognise and reward employees procedures. There have been a staff internalise the organisation's at all levels for good performance. series of meetings during the core values, i.e inclusion and The training and development reporting year with women staff outcome and impact. Some of the process was also one of the members to take their ideas and initiatives undertaken are given strategic areas where employees develop an understanding of the below. from all levels were given the challenges they face. Women are This Unit organised special opportunity to attend national encouraged to apply and the interactive sessions for staff at all and international trainings based overall staff composition presents levels to take their feedback on on present and future business a beautiful mix of regional policies, organisational culture, and individual needs. The aim of representation. and work environment. The staff such trainings was to enhance In harmony with its strategy, the are encouraged to come up with work-related performance and PPAF's organisational structure ideas and suggestions for employees attitudes and measure has undergone some improvement with proper follow- the impact in due time. The HR developments. Two new groups up actions, where required. The unit strongly believes in staff were introduced - the compliance efforts of HR have always been development through both formal and quality assurance group and focused on creating a conducive and informal methods. the strategy and external work environment for the staff in relationship group. The former the best possible manner. The Talent acquisition has always been comprises the MER, MIS and ESM introduction of flexi-hours is a a challenge for PPAF. Being the units, while the latter comprises clear manifestation of this; women apex organisation, the aim of the strategy and external relations are the chief beneficiaries. recruitment policy is to attract the most qualified and competent group, the C&M Unit, the CRM Performance management and professionals. To achieve this aim, Unit and new products and evaluation systems were linked sourcing strategy also included partnerships.

88 ANNUAL REPORT - 2012 Administration, Procurement and Human Resources

3.1 Key Interventions and the annual performance taken on board as regular Achievements in review activity of employees employees = 12 FY 2012 ? A comprehensive training ? The number of promoted policy for PPAF staff members employees = 57 (17 women, 3.2 Training and development of was introduced 40 men) PPAF staff members ? An employee handbook for ? The HR unit started using was introduced online job portals such as In FY 2012, the statistics related to ? An employee code of conduct Brightspyre, along with staff members who had undergone was introduced national newspapers national and international ? The practice of employees' trainings and exposure orientation on the day of 3.4 Compensation and benefits visits/seminars were; joining was revived. This for PPAF staff members entails providing new staff ? National trainings = 70 members a comprehensive ? A contributory provident fund ? International trainings = 15 welcome packet, physical was added to the ? International exposure orientation of office premises, compensation and benefits visits = 13 and presentations from all package of employees ? International/national units and meeting with the ? Employees were given conferences and CEO transportation allowances on seminars = 15 account of PPAF's office 3.3 Recruitment and selection of shifting to Bani Gala. Other measures include; PPAF staff members Management executives ? The mandatory practice of receive PKR 4,000, senior undergoing one immersion ? The number of employees management executives visit in each calendar year for taken on board during FY receive PKR 2,000, and every staff member, was 2012 = 47 (22 women, 25 support staff receive PKR initiated. This has also been men) 3,000 made a compulsory portion of ? The number of consultants

ANNUAL REPORT - 2012 89

Facts and Figures Company Information

Board of Directors BOD Committees

Mr. Hussain Dawood Board Compensation Committee Chairman Mr. Hussain Dawood Dr. Nuzhat Ahmad Chairman Mr. Rafiud Deen Ahmad Dr. Rajab Ali Memon Dr. Naved Hamid Dr. Aisha Ghaus Pasha Mr. Abdul Khaliq Mr. Zubyr Soomro

Mr. Himayatallah Khan Audit Committee Dr. Rajab Ali Memon Mr. Rafiud Deen Ahmad Dr. Aisha Ghaus Pasha Chairman Mr. Asif Qadir Dr. Nuzhat Ahmad Mr. Zubyr Soomro Dr. Naved Hamid Mr. Qazi Azmat Isa Mr. Abdul Khaliq Chief Executive Officer Mr. Asif Qadir Risk Oversight Committee Mr. Zubyr Soomro Chairman Dr. Aisha Ghaus Pasha Mr. Asif Qadir

Company Secretary Mr. Amir Naeem

Auditors A. F. Ferguson & Company, Chartered Accountants

Legal Advisors Azam Chaudhry Law Associates

Tax Advisors A. F. Ferguson & Company, Chartered Accountants

Bankers Allied Bank of Pakistan, Askari Commercial Bank Limited, Citibank, Faysal Bank Limited, First Women Bank Limited, Habib Bank Limited, Hong Kong and Shanghai Banking Corporation Limited, National Bank of Pakistan, Silk Bank Limited, Standard Chartered Bank Limited

Registered Office 1, Hill View Road, Bani Gala, Islamabad, Pakistan. UAN: (+92-51) 111-000-102, Ph: 2613935-50 Fax: (+92-51) 2613931, Email: [email protected] Website: www.ppaf.org.pk

92 ANNUAL REPORT - 2012 Facts and Figures

General Body Chairman Hussain Dawood Chairman, The Dawood Group.

Members Mueen Afzal Former Secretary General, Ministry of Finance, Government of Pakistan Nuzhat Ahmad Director, Applied Economic Research Center, University of Karachi Rafiud Deen Ahmad Former Senior Partner, Orr, Dignam & Co. Rashid Bajwa Chief Executive Officer, National Rural Support Programme. Nazrat Bashir Additional Secretary, Ministry of Finance, Government of Pakistan. Javed Burki Former Civil Servant. Naved Hamid Director, Centre for Research in Economics & Business, Lahore School of Economics. Ashraf Muhammad Hayat Former Civil Servant. Akmal Hussain Managing Director, Sayyed Engineers Ltd. Ahlullah Khan Kakarr Former Civil Servant. Abdul Khaliq Additional Secretary, Ministry of Finance, Government of Pakistan. Himayatallah Khan Joint Secretary, Economic Affairs Division, Government of Pakistan Shoaib Sultan Khan Chairman, National Rural Support Programme. Rajab Ali Memon Educationist. Nazar Memon Director, National Rural Support Programme. Hamayun Murad Managing Director, Orix Leasing Pakistan Ltd. Kaiser H Naseem Manager, Pakistan Corporate Governance Project, International Finance Corporation. Aisha Ghaus Pasha Director Institute of Public Policy, Beachonhouse National University. Asif Qadir Ex President Engro Polymer and Chemicals. Aijaz Ahmed Qureshi Former General Manager, Sindh Irrigation & Drainage Authority. Fazlullah Qureshi Former Member, National Electric Power Regulatory Authority. Muhammad Ismail Qureshi Former Federal Secretary, Government of Pakistan. Syed Ayub Qutub Executive Director, Pakistan Institute of Environment Development & Research. Sadiqa Salahuddin Executive Director, Indus Resource Center. M. Suleman Shaikh Chairperson Sindh Graduates Association. Zubyr Soomro Director Sanjan Nagar Public Education Trust. Jahangir Tareen Former Federal Minister, Government of Pakistan. Fareeha Zafar Director, Society for the Advancement of Education.

ANNUAL REPORT - 2012 93 Financial Highlights

2012 2011 2010 2009 2008 2007

Outreach - Numbers (Cumulative) Partner Organizations 116 100 87 77 74 70 Districts 129 128 127 124 117 111 Loans ('000) 5,167 5,000 3,600 3,000 2,300 1,513 Water & Infrastructure Projects 26,933 25,500 21,000 18,500 17,000 14,900

Disbursements - Rs. in million

Total disbursements 19,792 15,733 13,846 13,066 16,697 15,806 Microcredit/enterprise development loans 13,149 10,952 9,048 6,949 9,075 6,228 Grants - Core Operations 5,162 4,215 4,350 2,134 1,951 1,654 Grants - Project, Relief & Reconstruction Operations 1,481 566 448 3,983 5,671 7,924

Balance Sheet - Rs. in million

Total assets 27,091 24,565 23,629 18,509 18,923 18,702 Micro credit/enterprise development loans receivable 12,552 11,098 10,572 9,141 7,982 5,642 Long term investments 994 1,151 1,000 1,000 1,000 1,000 Investments -specific to projects 1,845 1,445 600 530 1,050 1,050 Investments - specific to grant fund 3,804 2,572 1,763 - - - Investments - others 4,565 4,868 4,058 5,225 5,442 6,712 Equity and reserves 8,905 7,530 6,114 4,785 3,755 2,817 Long term loans 13,575 13,761 12,246 11,031 10,770 10,777 Deffered benefit of below market rate of interest on loans 1,780 - - - - -

Operational Results - Rs. in million

Total income 2,794 2,485 2,070 1,669 1,314 1,255 General and admin expenses 435 349 358 274 218 161 Surplus before provisions for loan loss 1,598 1,444 1,404 1,266 947 965 Surplus after provisions for loan loss 1,375 1,416 1,329 1,030 802 914

Financial Ratios - Percentage

Surplus after provision for loan loss / total income 49% 57% 64% 62% 61% 73% Return on equity 15% 19% 22% 22% 21% 32% Return on assets 5% 6% 6% 6% 4% 5% Repayment rate (microcredit & enterprise development loans) 100% 100% 100% 100% 100% 100% General and admin expenses / total disbursements 2.20% 2.22% 2.59% 2.10% 1.31% 1.02% General and admin expenses / total income 16% 14% 17% 16% 17% 13%

Debt/equity 67 : 33 65 : 35 67 : 33 70 : 30 74 : 26 78 : 22

Current ratio 8 : 1 7 : 1 4 : 1 6 : 1 4 : 1 3 : 1

94 ANNUAL REPORT - 2012 Directors’ Report

ANNUAL REPORT - 2012 95 PAKISTAN POVERTY ALLEVIATION FUND DIRECTORS’ REPORT

It gives me great pleasure to present on behalf of the Board of Directors the twelfth Annual Report along with audited financial statements of the Company for the year ended June 30, 2012.

Poverty reduction remained the greatest challenge for the country. Although substantial progress has been made in reducing poverty, a significant number of people still live under the povertyline struggling to sustain their livelihood. Despite the incessant rise in poverty due to various socio-economic factors, the poor benefited in the form of self-sufficiency and community driven development in the sectors of PPAF sponsored interventions. PPAF through its integrated approach is striving to achieve lasting improvement in the lives of the deprived people.

The year in review marked as a significant year in underlying results for the Company. PPAF continued to uphold its image as the apex institution in the development sector and successfully achieved its operational and financial targets, addressing the needs of the poo of the por through multi-dimensional programmes. To make the process of economic impact more conducive in reducing poverty, PPAF focused on three prime strategies: inclusion, sustainable growth and regional integration. Special emphasis was given on achieving the Millennium Development Goals for all segments of the society, with a particular focus on marginalized communities, especially women.

PPAF has remained committed to its overarching objective of alleviating poverty through concerted and sustainable efforts at the grassroots. PPAF has expanded its outreach to almost every district of the country. This outreach is exemplified by a diverse range of products and services anchored in social mobilization, institutional development and individual empowerment. The emphasis remained on delivering customized solutions tailored to address specific constraints of house holds and communities and at the same time, be culturally sensitive and contextually relevant. PPAF’s track record as a robust institution for transferring development resources to the poor through cost effective and efficient delivery mechanisms has secured trust and confidence of all stakeholders, including the Government of Pakistan, international bilateral and multilateral donor agencies, private and corporate sector institutions, grass root partner organizations and above all the men, women and children in participating communities.

Capitalizing on PPAF’s credible track record of managing disasters and emergency situations on a large scale, PPAF proactively responded to widespread destruction caused by August 2011 floods affecting more than 8 million people in the province of Sindh. The Company adopted a comprehensive strategy focused on immediate relief through provision of food, milk, water, medicines, shelter and related items for the affectees. PPAF disbursed Rs 206 million from its own reserves for early recovery programme to help overcome plight of affected communities. The relief operations were carried out in 14 union councils of district Badin of Sindh. PPAF successfully completed the relief activities to allow people in affected areas to rebuild their lives and livelihoods.

96 ANNUAL REPORT - 2012 Facts and Figures

Disbursements and Outputs PPAF continued to maintan a resilient financial position over the past year. PPAF’s operations demonstrated impressive performance which was manifest from the strong asset base, improved equity and sustained returns.

The overall disbursements during the year enhanced to Rs 19,792 million as compared to Rs.15,738 million during FY 2011, an upsurge of 26% over the last year. Loan disbursements (microcredit and enterprise development facilities) climbed to Rs 13,149 million as compared to Rs 10,952 million in 2011 indicating a rise of 20% and disbursements for grants based interventions (water and infrastructure; health and education; capacity building/social mobilization; livelihood enhancement and protection) sprung up to Rs. 6,437 million from Rs.4,574 million in the last year. In addition, Rs 1,481 million was disbursed for project and relief activities as against Rs 566 million in the preceding year [fig. 2].

Fig 2: Disbursements

Rs. Million Description Jul-Jun 2012 Jul-Jun 2011 Variance (%)

Credit & enterprise development 13,149 10,952 +20 Water & infrastructure 1,271 1,449 -12 Health & education 830 866 -4 Capacity building/social mobilization 1,576 1,491 +6 Livelihood enhancement 1,485 414 +259 Project & relief activities 1,481 566 +162 Total 19,792 15,738 +26

During the period under review, PPAF financed over 880,000 microcredit loans; 1,975 water and infrastructure projects were completed; 1,178 health and education projects were supported; 25,150 community organizations were formed/revitalized, 57,000 staff and community members were trained; 20,000 assets were transferred to poor households and 2,050 persons with disabilities rehabilitated.

Cumulative disbursements by the end of June 2012, stood at Rs. 110,423 million out of which credit and enterprise development was 60% followed by relief, rehabilitation and reconstruction activities (19%); community physical infrastructure (10%); human and institutional development (including social mobilization)/livelihood enhancement and protection (8%); and health & education (3%) [fig. 3].

ANNUAL REPORT - 2012 97 Fig 3: Share of funds disbursed

CPI (10%)

HID/LEP (8%) MC (60%)

H&E (3%)

RNR (19%)

PPAF played a significant role with respect to providing provincial coverage to combat poverty. Among provinces interventions were carried out with the percentage of 51% in Punjab, 18% in Sindh, 16% in Khyber Pakhtunkhwa, 4% in Balochistan; 10% in Azad Jammu and Kashmir; 1% each in Gilgit Baltistan and Islamabad Capital Territory. To improve the availability of resources in most deprived provinces reforms will rely on the implementation of district prioritization strategy that focuses on regions that have historically lagged behind in socio-economic development and are particularly underserved.

Fig 4: Provincial distribution of funds

GB (1%) AJK (9%)

KPK (16%)

P (52%) B (4%)

S (18%)

98 ANNUAL REPORT - 2012 Facts and Figures

By the end of June 2012, PPAF had expanded its partnership with 116 partner organizations which deployed resources in both urban and rural areas of 129 districts of the country. Aggregately, PPAF enumerated a record spread of 5,167,152 microcredit loans, of which 2,728,000 were to women, completed 26,933 water and infrastructure projects, supported and financed 2,015 health and education facilities, transferred 20,073 assets to poor and trained 563,691 staff and community members nationwide. In provision of addressing the natural crisis within the country, PPAF provided record financing to 122,000 households during the previous years for construction of earthquake resistant homes and to build capacities of over 100,000 individuals in seismic construction and related skills.

Operational and Financial Overview As a non-profit institution, PPAF seeks to maximize profits and earn enough income to ensure its financial strength and sustain its development activities. PPAF’s income rose from Rs. 2,485 million in the fiscal year 2011 up to Rs. 2,794 million in 2012, increase of 12%. The service charges (profit) on loan to partner organizations increased by 15% due to high volume of amount of credit outstanding and introduction of market based rates for large partner organizations. Income on investments and saving accounts increased by 24% due to increase in level of investments and reserve. This includes income of Rs. 380 million that was generated on investments specific to grant based activities. During the year, grant of Rs. 278 million was made available by Government of Pakistan and donor agencies for PPAF operational support [fig. 5].

Fig 5:Total income [Rs. in million]

1400 1213 1200 1055 FY 2012 1000 889 FY 2011

800 755

600

400 388 380 278 267 200 34 18 0 SC on loans Profit on Amortization of Income on Others invest/bank Grants Reserve

ANNUAL REPORT - 2012 99 The general and administrative expenses relate to the operations of PPAF. During the year Rs 435 million were consumed on carrying out the general operations of the Company as against Rs 349 million during the preceding year, an increase of 25%. The main increases were in salaries/benefits, travel and vehicle running/maintenance expanses. The salaries, wages and other benefits increased due to annual increments to existing employees to provide relief against higher cost of living and recognition of their work performance; as well as hiring of additional staff for managing expansion in core operations and new activities under different projects. Travel expense increased due to extensive appraisal and monitoring visits in view of high cumulative disbursements and enhanced activities. The increase in running/maintenance expenses were on account of high POL charges. Seminar, workshops and training expenses of Rs 40.92 million included Rs 15.04 million spent on trainings and Rs 25.88 million incurred on seminar and workshops. Total expense of Rs 98.83 on technical and other studies included Rs 41.62 million in respect of poverty scorecard survey. Project and relief activities, financed from PPAF own resources, included Rs 202.83 million on relief activities in flood affected areas and Rs 269.28 million for PPAF II project.

Rs. Million Description 2012 2011

Service charges (profit) on loans 1,213 1,055 Income on investments/saving accounts 1,268 1,022 Amortization of deferred income - grant fund 278 390 Benefit of below market rate of interest on loans 3 3 - Other income 1 18 Total income 2 ,793 2 ,485 General and administrative expenses 435 349 Seminar, workshops and trainings 41 25 Technical and other studies 99 350 Project and relief activities 472 208 Loan loss provision 223 28 Financial charges 148 109 Total expenditure 1 ,418 1,069 Surplus for the year 1,375 1,416

The general loan loss provided at 5% of the gross outstanding balances of loans to partner organizations. In addition, specific provision for loan losses was also made against loans which were considered doubtful. The financial charges include commitment and service charges on long term loan and bank charges.

Financing Agreements signed with the Government of Pakistan (GoP) required repayment of loan amounts alongwith service and commitments charges from PPAF on the stipulated rates each year. PPAF profoundly repaid its obligations to GoP. During the year, 288.613 million (FY 2011 : 109.62 million) was repaid on account of principal amount of loan and Rs 149.428 million (FY 2011 : Rs 111.050 million) as service/commitment charges to the GoP.

100 ANNUAL REPORT - 2012 Facts and Figures

Over the years PPAF strived to attain operational and financial sustainability to provide support to activities vital in alleviating poverty. In this direction, PPAF strengthened its microcredit function through further engagement of its reflows coming in the form of repayments from its 8 partner organizations. During the year, out of total credit disbursements of Rs 13,149 million, an amount of Rs 11,919 million (91%) was disbursed from PPAF reflows/own resources. Considering the increasing need for sustainable grant based operations in the absence of external financing, the Board of Directors has approved the creation of a reserve for grant operations. The principal amount of the reserve is held in investments and interest earned thereon is used for grant based health, education, infrastructure, emergency and any other activity that falls within the overall strategic purview of PPAF objectives. As at June 30, 2012 the reserve stood at Rs 3,804 million as against Rs 2,572 million as at June 30, 2011.

Total equity and reserves significantly increased to Rs 8,905 million as at June 30, 2012 as against Rs 7,530 million as at June 30, 2011. Total assets of the Company reached Rs. 27,091 million on June 30, 2012 against Rs 24,565 million as at June 30, 2011. Total receivables (loan/service charges) from partner organizations rose to Rs 13,434 million on June 30, 2012 as against Rs 11,755 million as at June 30, 2011. PPAF continued to maintain almost 100% recovery rate in respect of its lending operations. The debt equity ratio during the current financial year stood at 63:37 as against 65:35 (year 2011).

Sectoral and Programme Overview PPAF has been driven by inspiration and dedication to improving people’s lives in the country. It personifies the spirit of being capable of addressing the multi-dimensional issues of poverty with a view to achieving social and economic change. PPAF serves its target community by following an integrated approach through various interventions focused on strengthening social mobilization, micro-credit, infrastructure, health, education, livelihood enhancement and skills development.

The social mobilization framework of PPAF is based on the strong belief that poor communities possess a profound latent capacity to lead the process of development at the grassroots as agents of change. As a necessary precondition for transferring financial and non- financial assistance to communities, social mobilization fundamentally focuses on transforming attitudes and ensuring effective collective action for the common good of the poor. Community mobilization lies at the heart of all PPAF development initiatives. The community organization provides the poor with an effective platform to voice demands, pool savings, plan investments and manage development projects, while enabling them to take those crucial first steps on the long road to empowerment. On the wider economic landscape, the increasing number of organized communities contributes to making growth at the same time less sporadic and more broad-based with poor communities effectively lobbying to extract maximum benefits from donor agencies, political representatives and government functionaries.

ANNUAL REPORT - 2012 101 PPAF remains steadfast in promoting microcredit sector growth through facilitating capital access within a carefully strategized institutional framework at the grassroots. As the microfinance sector has evolved in Pakistan, and is facing a new array of opportunities and challenges, the vision of PPAF is commensurately evolving. It sees the opportunity to spur a revitalization of the microfinance sector where the technological innovation, the progressive operating environment, and the range of institutions operating in Pakistan is now matched with a resurgence in financial penetration and responsible growth of outreach, particularly in untapped markets. In order to achieve this vision, PPAF plans to create a transformative, modern, specialized, and innovative microfinance apex that would spur a resurgence of high quality growth of the microfinance sector and substantially increase financial sector penetration for poor households and microenterprises, particularly in underserved areas of Pakistan. PPAF has engaged experts to conduct extensive study and recommend options for new institutional design. PPAF recently institutionalized a new pricing and grant policy to incentivize the microfinance institutions and banks to extend their lending operations to deprived and remote areas.

The water and infrastructure interventions have proven to be one of the most productive investments providing high economic returns. These interventions are a central resource facility aimed at reducing poverty and safeguarding against vulnerability related to water scarcity and disasters, following a community led demand driven approach. The availability of basic infrastructure in critical sectors like drinking water, sanitation, irrigation and communications is central to a community’s long term prospects of defeating poverty. All PPAF infrastructure projects are designed to reach the poorest through an intensive process of community mobilization ensuring project sustainability, while simultaneously seeking to reduce the possibility of elite capture. PPAF’s interventions in infrastructure development have gradually evolved in consonance with its experience as the largest operating fund for investing targeted infrastructure grants in the private sector. While continuing to provision standalone small scale infrastructure projects to meet specific community demands, such interventions have increasingly been supplanted by a variety of integrated projects that have since gone through several stages of refinement and innovation.

One of the critical roles of PPAF is the development and consolidation of human and institutional capacities for effective policy interventions at the grassroots. PPAF follows a three tier approach focusing respectively on a triple set of stakeholders: participating communities, grassroots partner organizations and service providers provisioning professional capacity building support at the regional and national level. PPAF has critically enhanced human and institutional productivity to optimize resource utilization and economic gains on the national stage, while simultaneously facilitating development of a demand responsive institutional framework catering to the long term needs of marginalized communities. PPAF’s success in fostering skill sets for effective community management and entrepreneurship has been equally matched by its contributions in enhancing institutional capacity of partner organizations to further consolidate accrued gains at the community level.

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The poor and marginalized communities are provided access to quality education and health services within the overarching goal of poverty alleviation. In addition to establishing new schools and Community Health Centers in areas lacking such services, PPAF also invests substantial technical and financial resources in underperforming health and education facilities in the public sector. In keeping with PPAF’s overall approach, effective quality control and community mobilization are prioritized as necessary components for sustainable interventions in the social sector. All PPAF financed schools and health centers are encouraged to adopt a stringent monitoring framework ensuring an ongoing system of feedback and reform. While PPAF partner organizations lead the monitoring effort, community-based education and health committees are empowered to play an oversight role in the management of all schools and health centers by identifying bottlenecks and proposing corrective measures.

Through its livelihood enhancement and protection programme PPAF seeks to enhance productivity of poor individuals and communities through focused interventions aimed at developing skill sets and assets for greater income generating opportunities and better livelihoods. It encourages saving and internal lending within organized communities, while striving to introduce efficient mechanisms for identifying and supporting innovative microenterprises.

The objective of this component is to develop the capacity, opportunities, assets and productivity of community members to reduce their vulnerability to shocks, improve their livelihoods initiatives and strengthen their business operations. Community members are supported to build up their savings capacity and proficiency in funds management through internal lending while complementing these efforts with grants and technical support to increase assets, productivity and incomes. Mechanisms are also developed and implemented to identify and support innovative micro-enterprises and value chain development which results in improved livelihoods and facilitates and promotes linkages with private, public sector and civil society service providers.

PPAF’s disability program subsumes several focused interventions in support of persons with disabilities including awareness raising campaigns, assessment camps, devices distribution camps, attendant ship training, enterprise development training, and business incubation. PPAF also works with communities suffering from natural calamities and disasters such as earthquakes, droughts, cyclones and floods and also responds to special needs of various groups of poor.

PPAF has in place an environmental and social management framework to ensure that all PPAF supported interventions take place in a socially inclusive and environmental friendly manner. A fully dedicated group of professionals is responsible for regular dissemination of the framework among all its partner organizations. The group is also responsible for ensuring compliance with stringent social and environmental safeguards by all partner organizations through regular monitoring and periodic environmental and social audits. Task of the group is facilitated by a specifically constituted PPAF Panel on Social and Environmental Management.

ANNUAL REPORT - 2012 103 PPAF is developing linkages with private and corporate sector with the aim to work jointly for establishing social sector partnerships to fighting poverty in the country. By involving business and corporate sectors, PPAF plans to further increase its country wide activities through bilateral relationships. This would enable the poor to access, and benefit from wider private sector markets and opportunities for value addition.

Key Events/ Initiatives Arranged under the aegis of PPAF, representatives of the National Disaster Management Authority, State Bank of Pakistan, Security and Exchange Commission of Pakistan, Pakistan Microfinance Network, leading insurance companies and partners organizations at “Strategizing for Resilience Against Disasters - A Microfinance Dialogue” evaluated the utility of microfinance as a coping mechanism with catastrophes and an instrument for the rehabilitation of the affectees in flood-hit areas. This included the use of microcredit, micro-insurance, savings and micro-assets for reducing/mitigating negative impacts on livelihoods.

An interactive session on “Branchless Banking and Savings” was organized in which 45 partner organizations and representatives of major stakeholders including State Bank of Pakistan, Pakistan Microfinance Network, Shore Bank International, a number of Insurance Companies, KfW (Development Bank of Germany) participated. The objectives of the workshop were to explore opportunities for scaling up Branchless Banking models as they holds tremendous promise for reducing microfinance transactions costs, thereby assisting with increasing outreach to far-fetched areas.

PPAF has introduced a new product for the microfinance sector, which permits grant of “Equity Fund” to the most dynamic partners and microfinance institutions enabling them to access commercial financing to realize their growth potential and expansion into rural areas. This initiative would provide a much needed boost to expand the outreach of microfinance sector in Pakistan.

The graduation ceremony of the third batch interns of the Federally Administered Tribal Areas (FATA) internship programme was organized. Sixteen interns enrolled from South Waziristan successfully completed an in-house course at PPAF head office. These graduates have now been attached with the selected PPAF POs to gain field experience.

On the occasion of International Women’s Day (March 8, 2012) PPAF launched Amtul Raqeeb Award which pays tribute to the services of courageous women who braved adversity and chalked out their own and their communities' destiny. On this occasion women belonging to PPAF's communities from various geographical locations of the country were given awards. A simple ceremony was organized to launch this chronicle of success captioned 'Women of Substance.

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On the occasion of World Water Day 2012, PPAF organized a half day Panel Colloquium on March 22, 2012. Leading water sector and disaster management practitioners/specialists were invited as panelists/discussants. PPAF offered its services as a secretariat for a potential Water Forum initiative.

A ceremony was arranged to mark the 40th World Environment Day on June 5, 2012 on the premises of Pakistan Poverty Alleviation Fund (PPAF), with the purpose of inculcating among the Team PPAF a true spirit needed not only to protect our environment but also to save and improve the same for our next generations.

Treasury Management PPAF invest its resources which are not required immediately for financing its operations. The liquid assets are invested based on the guidelines stipulated in the investment policy devised and issued through Board approved treasury management strategy. The Company has a separate treasury management function with a mandate to maintain and monitor the liquidity and to minimize the cash flow risk whereby keeping an eye on cash inflows and outflows on a regular basis. The Company manages a portfolio of long term and short term investments, made after thorough financial evaluation. The credit risk in short term investments is minimized through diversification in investments among top ranking financial institutions.

Business Risks and Challenges In carrying out its development mandate, PPAF seeks to maximize its capacity to assume core business risks resulting from its lending and investing operations while at the same time minimizing its non-core business risks that are incidental but nevertheless critical to the execution of its mandate. The policies, processes and procedures by which PPAF manages its risk profile continually evolve in response to market, credit products and other developments. Broadly, we classify risks as follows:

Strategic Risks Strategic risks are those risks associated with operating in a particular industry and are not in the company’s control.

Operational Risks These are risks associated with operational and administrative procedures. These include the risks relating to workforce turnover, supply chain disruption, IT system shutdowns, or control failures.

Financial Risks Financial Risks are divided in the following categories:

ANNUAL REPORT - 2012 105 Credit risk Credit risk is the potential financial loss due to default of one or more debtors. Credit risk is the largest source of risk for the Company arising from lending to partner organizations and treasury operations. PPAF manages the credit risk on loans by defining exposure limits to financing so as to maintain an adequately diversified portfolio with partner organizations. In this percept a performance based criteria has been adopted for selection of partner organizations. The risk is further controlled and managed by regularly monitoring the exposure limits of the partner organizations. The credit risk on investments and bank balances is managed through a framework of exposure limits based on the counterparty credit rating and size defined in the standards set by the Board of Directors.

Currency risk Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. It arises mainly where receivables and payables exist due to transactions with foreign buyers and suppliers. The Company is not exposed to currency risk as there are no foreign currency assets and liabilities.

Interest / mark-up rate risk The interest/mark-up rate risk describes as the risk borne by the financial instrument due to changes in the market interest/mark-up rates. The Company is not exposed to this risk as all its interest bearing financial assets and liabilities are at fixed interest/mark-up rates.

Liquidity risk Liquidity risk emerges resulting from insufficient funds to meet cash flow in a timely manner. PPAF’s principal liquidity risk management objective is to hold sufficient liquid resources to enable it to meet all probable cash flow needs for semiannual horizon without additional financing from the reserves. PPAF maintains a prudential minimum level of liquidity based on the projected net cash requirements. The Company strikes a balance between generating adequate investment returns and holding securities that can be easily liquidated for cash if required. Moreover, the Company’s financial position strongly supports its balanced approach.

Risk Governance The roles and responsibilities of the various participants in our risk management program are outlined in our risk governance structure.

Board of Directors Oversees the risk management process primarily through its committees: ? The Risk Oversight Committee reviews the effectiveness of overall risk management framework including risk policies, strategies, risk tolerance and risk appetite limits. ? The Audit Committee monitors the Company’s risk management process quarterly, or more

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frequently if required, focusing primarily on financial and regulatory compliance risks. ? The Compensation Committee focuses on risks in its area of oversight, including assessmentof compensation programs to ensure they do not escalate corporate risk.

Internal Audit Provides independent and objective evaluations and reports to Management and the Audit Committee on the effectiveness of governance, risk management and control processes.

Internal Control Compliance Each department identifies and manages risks pertaining to their respective areas of responsibility in addition to ensuring compliance with established internal controls.

Best Corporate Practices PPAF enforced a well-defined corporate governance structure that works for the benefit for all the stakeholders by ensuring that the Company adheres to accepted ethical standards and best practices as well as to formal law.

PPAF ensures best practices of corporate governance by adopting a set of processes, custom and policies, to direct and control management activities with good business sense, objectivity, accountability and integrity. PPAF believe in openness and transparent reporting to the stakeholders to empower them in exercising their lawful rights.

The Management believes in true and fair presentations and circulation of periodic financial and non-financial information to governing bodies, donors and other stakeholders of the Company. The Company produces separate financial statements for different donors’ projects, duly audited by its external auditors in addition to preparing financial statements abreast with statutory requirements.

During the year all periodic financial statements, the annual audited financial statements alongwith Directors’ Report as well as quarterly and half yearly and nine monthly un-audited financial statements alongwith Management Reviews, were endorsed and circulated to stakeholders. These statements were also made available on the Company website. Other nonfinancial information to be circulated to governing bodies and other stakeholders were also delivered in an accurate and timely manner.

Corporate Governance Smearing the maximum legal requirements for good corporate governance obligatory by applicable law and regulations, PPAF pursues perfection by encouraging adherence to international and local principles of best corporate practices.The Company seeks to protect the interest of the stakeholders by adopting sound corporate governance practice to help to improve

ANNUAL REPORT - 2012 107 its performance and attract investments while enabling to realize its corporate objectives, protect stakeholders’ right and meet legal requirements. The Company is committed to ensure business integrity and upholding the confidence of all its stakeholders by observing high standards of corporate governance. PPAF has endorsed the code of corporate governance of listing regulations to comply with best practices. The Management is continuing to comply with the provisions of best practices set out in the Code of Corporate Governance, which is reflected in the following specific statements:

? The financial statements prepared by the Management, present fairly its state of affairs, the result of its operations, cash flows and changes in equity. ? Proper books of accounts of the Company have been maintained. ? Appropriate accounting policies have been consistently applied in preparation of the financial statements. Accounting estimates are based on reasonable and prudent judgment. ? International Accounting Standards, as applicable in Pakistan, have been followed in the preparation of financial statements and any departure therefrom has been adequately disclosed. ? The system of internal control is sound in design and has been effectively implemented and monitored with ongoing efforts to improve it further. ? The Company’s ability to continue as a going concern is well established. ? There has been no material departure from the best practices of corporate governance. ? Key operating and financial data of the last six (6) years in summarized form is annexed.

Board of Directors

Composition of the Board The prerequisites and configuration of the Board of Directors are defined by the legal and regulatory framework parameters for smooth running of operations and promotion of corporate culture. The Company has on its Board highly experienced competent and committed personnel with vast expertise, integrity and strong sense of responsibility necessary for shielding the interest of all stakeholders. The Board comprises of eleven Members including the Chairman and the Chief Executive Officer. Of these, three were nominated by the Government; seven elected by the General Body; and the Chief Executive Officer appointed by the Board. The Chairman of the Board is an independent non-executive director. Except for the CEO, all members of the Board are non-executive Directors and serve in an honorary capacity, without compensation.

Role and Responsibilities of the Board Corporate Governance is a system of structures and processes for the direction and control of the Company. Through this process a balance of duties and responsibilities for the Board are defined and segregated, enabling the Company to maintain the right balance of power and accountability while striving to achieve its objective of enhancing stakeholder value. The Board is copiously aware of the colossal errands conferred on them for increasing efficiency of the Company and

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safeguarding its assets. A formal schedule of responsibilities has been specifically ordained for the Board by virtue of provisions of the Articles of Association of the Company, the Companies Ordinance 1984 and other applicable regulations.

The Board participates actively in major decisions of the Company including appointment of the Chief Executive Officer; review and approval of operational policies and procedures; projects of different donors and sponsors; minutes of Board Committee meetings, financial assistance for partner organizations; quarterly progress; annual work plans, targets and budgets; un-audited financial statements alongwith Management Reviews; audited financial statements alongwith Directors’ and Auditors’ Reports.

Meetings of the Board The Board is required to meet at least every quarter to monitor the Company’s performance aimed at effective and timely accountability of its management.

During the year the Board held six meetings, agendas of which were circulated in a timely manner beforehand. Decisions made by the Board during the meetings were clearly stated in the minutes of the meetings maintained by the Company Secretary, which were duly circulated to all the Directors for endorsement and were approved in the following Board meetings. All meetings of the Board had the minimum quorum attendance as stipulated in the Articles of Association. The Chief Financial Officer/Company Secretary attended the meetings of the Board in the capacity of non-director without voting entitlements as required by the Code of Corporate Governance.

Appointment of Directors As per the Articles of Association of the Company, all Members of the Board, except Government nominees, are appointed for a term of three years, on completion of which they are eligible for re- election through a formal election process. However, no such Member of the Board of Directors shall serve for more than two consecutive terms of three years each except for Government nominees.

Change of Directors The Board placed on record its appreciation for the valuable contributions made by the outgoing Government nominated Directors, Mr. Rana Assad Amin, representative of Ministry of Finance, Mr. Ahmad Farooq and Mr. Zaffar Hasan, representatives of Economic Affairs Division.

Board Committees Board Audit Committee The Audit Committee comprises of five non-executive members of the Board. The Chairman is an independent non-executive Director. The head of Internal Audit Unit acts as Secretary of the Committee.

ANNUAL REPORT - 2012 109 The Committee assists the Board in over sighting integrity of the Company’s financial control, with particular emphasis on reliability of internal controls and financial reporting; qualification and independence of Company’s external auditors; and performance of the Company’s internal and external auditors.

During the year, the Audit Committee met three times. As part of its core activities, Committee discussed assertions on system of internal controls, internal audit reports, risk management and audit process besides recommending for Board’s approval, annual work plan of internal audit; appointment of external auditors; un-audited condensed interim financial statements alongwith Management Review; audited financial statements alongwith Auditors’ and Directors’ Reports of the company; and project specific audited financial statements as per donors requirements. The Committee held separate meetings with the Chief Financial Officer and the External Auditors to discuss issues of concern.

Board Compensation Committee The Compensation Committee comprises of four members of the Board including the Chairman who is appointed by the Board from the non-executive Directors. The Head of Human Resource Unit acts as Secretary of the Committee.

The Committee assists the Board in overseeing the Company’s human resource policies and framework, with particular emphasis on ensuring fair and transparent compensation policy; and continuous development and skill enhancement of employees.

During the year under review, the Committee held four meetings. The Committee reviewed and recommended for Board’s approval, annual increment for the employees; appointment of group heads; travel allowance for employees, establishment of PPAF contributory provident fund, and revised training and development policy.

The Chief Executive Officer and other management employees were invited to attend meetings for discussion and suggestions

Risk Oversight Committee The Risk Oversight Committee comprises of three members including its Chairman who is appointed by the Board from the non-executive Directors. The head of Financial Services Group acts as Secretary of the Committee.

The Committee assists the Board to review the effectiveness of overall risk management framework including risk policies, strategies, risk tolerance and risk appetite limits. During the year under review, the Committee held three meetings. The Committee reviewed and recommended for Board’s approval, eligibility criterion for lending to for-profit organizations, terms of reference for microcredit spin-off study, unsecured lending particularly to microfinance banks, treasury management strategy, and new strategy and products for microfinance sector.

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Role and Responsibilities of the Chairman and the CEO The Chairman and the Chief Executive Officer are assigned segregated and distinct responsibilities by the Board of Directors vested under law and the Articles of Association of the Company, as well as duties assigned by the Board. In particular, the Chairman coordinates the activities of the Directors and various committees of the Board, and presides over the meetings of the Board and General Body. The Chief Executive Officer is responsible for the operations of the Company and conduct of its business. The Chief Executive Officer recommends policy and strategic business plans for Board approval and is responsible for exercising the overall control, discretion, administration and supervision for sound and efficient management and conduct of the business of the Company.

Management The Company Management is supervised by the Chief Executive Officer who is responsible for the operations of the Company and conduct of its business, in accordance with the powers vested in him by law, the Articles of Association of the Company and authorities delegated to him through a General Power of Attorney and Board resolutions from time to time.

The Chief Executive Officer recommends policy and strategic direction and annual business plans for Board approval and is responsible for exercising the overall control, discretion, administration and supervision for sound and efficient management and conduct of the business of the Company. The Board sets financial, non-financial goals and objectives for the Company in line with the short, medium and long term plans of PPAF and has delegated appropriate authority to the Management to implement strategic objectives of the Company.

Human Resource PPAF’s human resource strategy focuses on investing continuously in its Human Capital. We strongly believe in bringing on board the most talented and imaginative people through a highly transparent and competitive recruitment process and then encouraging them to attain new levels of excellence through job enrichment and focused trainings.

Future Outlook PPAF is leveraging its unique experience by gearing up to play a proactive role as a responsive and versatile national institution; an institution that is creating synergies, forming partnerships and forging alliances with diverse stakeholders – government, public-sector agencies, corporate and private entities and academia. This paradigm shift has required a fundamental recalibration of operations to explicitly address the spatial dimensions of poverty. The new strategy calls for a deliberate shift of priorities towards those regions of Pakistan that have historically lagged behind in socio-economic development and are particularly underserved. This reorientation now ensures that all PPAF initiatives are rolled out under an overarching strategy, which is

ANNUAL REPORT - 2012 111 community-led and demand driven. Institutional strengthening and development is therefore the central pillar of all interventions. PPAF seeks to significantly improve the quality of community organizations in terms of inclusion, sustainability, effectiveness, and depth of coverage. This is manifested in the move away from project-based criteria to an integrated, appropriately sequenced, multi-sector approach.

The Company executed Financing Agreements for EUR 31.50 million KfW (Development Bank of Germany) “Livelihood Support and Promotion of Small Community Infrastructure” Project. The project will be implemented in five districts of Khyber-Pakhtunkhwa Province and its objectives are; (a) increased access and sustainable utilization of social and economic infrastructure; (b) increased employment and income opportunities, especially for the poor; and (c) strengthening local civil society and enhanced participation of the population in the decision making at local level.

The Company finalized modalities for effectiveness of Italian Government’s Programme for “Poverty Reduction through Rural Development”. The project size is EUR 40 million with an overall objective of establishing a social and productive infrastructure system and an effective/sustainable social safety net. The project will be implemented in Balochistan, Khyber- Pakhtunkhwa and Federally Administered Tribal Areas.

During the period under review, PPAF negotiated with KfW “Renewable Project” for EUR 22.5 million. The overall objective of the project is to contribute to the improvement of the general living conditions and quality of life of the poor population living in the selected districts by increased access to energy for communities; reduction in the use of fuel wood; increased employment and income opportunities, especially for the poor through promotion of productive usage of the energy; and strengthening of the local civil society and enhanced participation of the population in the decision making at the local level. The project will be implemented in Khyber Pakhtunkhwa.

Auditors The present auditors of the Company, Messer’s A. F. Ferguson and Company, Chartered Accountants, have completed their five year term on conclusion of their assignment for the financial year ended June 30, 2012 and shall retire at the conclusion of 16th Annual General Meeting. The code of corporate governance requires the companies to change their external auditors or rotate the engagement partner after every five years.

In accordance with the provisions of code of corporate governance, the Audit Committee considered and recommended their re-appointment for the financial year ending June 30, 2013 with change of partner. The Board also endorsed the recommendations of the Audit Committee.

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Conclusion The comparative advantage of PPAF lies in the strength of its track record, which enables it to convene and co-opt public, private and civil society sectors to the broader objective of grassroot empowerment. These partnerships and relationships aim to put marginalized and excluded households in the driving seat in making resource allocation choices among competing alternatives. PPAF demonstrated solid competences and continued to post good results and has shown strong capacities in helping the poor. PPAF expanded its outreach to all the district of the country to support to the emerging needs of the deprived segment. Multi-sector operations of PPAF foster improvements in lives of the poor thereby enhancing their social status. While the interventions continued to target the core strategic priorities the emphasis remained on delivering customized solutions tailored to address specific constraints of households and communities and at the same time, be culturally sensitive and contextually relevant. PPAF’s performance in terms of its institutional development remained impressive. The previous track record showed PPAF as an institution striving to facilitate poor through cost effective and efficient delivery and secured trust and confidence of all stakeholders, including the Government of Pakistan, international bilateral and multilateral donor agencies, private and corporate sector institutions, grass root partner organizations and communities.

Acknowledgement I would like to thank the Board members for their continued effort to improve the policies and governance framework by providing their valuable guidance. The insightfulness fortitude, intensive participation and enduring commitment helped PPAF in reaching heights. I always appreciate their corporation, wisdom, support, able guidance and as well as the assistance and co-operation in benefit of the Company at all levels. I am confident that this relationship will go a long way to reap fruitful prosperity of the Company.

In addition, the Board also likes to appreciate incompatible guidance of the Members of the General Body for the betterment of the Company and also look forward to their continuous support. The Board would also like to praise the partner organizations and their communities for their commitment towards the success of the programme.

The success and the glory achieved by the Company is attributable to the resolute support of the company’s stakeholders - Government of Pakistan, World Bank, International Fund for Agricultural Development; KfW Development Bank (Germany); and U.S. Agency for International Development. We thank them for their support, understanding and co-operation. The Board looks forward to the persistent support of all the stakeholders in order to align the Company activities with its strategic vision. The Company continues to add to the stakeholders’ value while being a socially responsible entity, dispensing its corporate roles and responsibilities. We are proud of all the employees of the Company for their dedication and determination. With unmatched performance, devotion and participative leadership style, they made significant contribution towards the result achieved by the Company during the year.

ANNUAL REPORT - 2012 113 We realize that the scale we have reached make us a significant factor not only on the development sector of Pakistan, but in the country’s economy as well. The broad range of our impact brings a big responsibility as well. Accomplishment is not an end-result for us; it is an everlasting quest, one that will continue to have us reach for new horizons and surpass new milestones.

Karachi Hussain Dawood September 19, 2012 Chairman

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PAKISTAN POVERTY ALLEVIATION FUND Financial Statements

FOR THE YEAR ENDED JUNE 30, 2012

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PAKISTAN POVERTY ALLEVIATION FUND 1 - Hill View Road, Banigala, Islamabad. UAN: +92-51-111-000-102, Fax: +92-51-261-3931-33 Website: www.ppaf.org.pk