Bal Raksha Bharat

(Registered under the Societies Registration Act, 1860)

Schedules forming part of the accounts

Schedule 9- Notes to accounts

1. Background

Bal Raksha Bharat (“the Society”) was registered under the Societies Registration Act, 1860
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vide registration certificate no. S/ 51101/ 2004 dated 27 December 2004.

The Society has been granted an exemption under Section 12A of the Income Tax Act, 1961,
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vide letter no. DIT (E)/12A/2005-06/B-1120/05/1230 dated 21 December 2005. The
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exemption has been granted with effect from 27 December 2004.

The Society has received prior permission from the Ministry of Home Affairs under the
Foreign Contribution (Regulation) Act, 1976 to accept specified foreign contribution vide letter
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no. II/21022/94(0378-01)/2005- FCRA-IV dated 15 February 2006 and II/21022/94(0378-
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01)/2006- FCRA-III dated 27 December 2007.

Further, the Society has been registered under the Foreign Contribution (Regulation) Act,
1976 for carrying out activities of social nature with registration no. 231660869, vide letter no.
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II/21022/83(0028)/ 2008- FCRA-II dated 23 April 2008.

The main object of the Society is to work towards the promotion and enhancement of the
quality of children’s life.

2. Significant accounting policies

a. Basis of preparation of financial statements

The financial statements of the Society have been prepared under the historical cost
convention on the accrual basis of accounting in accordance with the applicable
accounting standards and Technical Guide on Accounting for Not-for-Profit
Organisations issued by the Institute of Chartered Accountants of India and the
Generally Accepted Accounting Principles (“GAAP”) in India.

b. Use of estimates
 The preparation of financial statements in conformity with Indian GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements. Actual results could differ from those estimates. Any revision to
accounting estimates is recognized prospectively in current and future periods.
Contingencies are recorded when it is probable that a liability will be incurred, and the
amount can be reasonably estimated.

c. Fixed Assets

Fixed assets are stated at historical cost less accumulated depreciation. The cost of
fixed assets includes taxes, duties, freight, and other incidental expenditure related to
acquisition and installation.

d. Depreciation

Depreciation is charged on pro-rata basis to the period of use on the written down
value method using the following rates:
Fixed Assets Rates of depreciation used
Furniture and Fixtures 18.10%
Computer 40.00%
Software 40.00%
Equipment 13.91%
Vehicles 25.89%

Assets costing upto Rs. 5000/- each are fully depreciated in the year of purchase.

Leasehold improvements are being amortized over the remaining term of the lease
agreement or the useful life of the assets, whichever is less.

Licensed software are being amortized as per period for which license is valid.

The rates reflect the economic useful life of the assets as estimated by the
management.

e. Employee Benefits

The Society’s obligations towards various employee benefits have been recognized
as follows:
 Short term employee benefits:

All employee benefits payable wholly within twelve months of rendering service are
classified as short term employee benefits. Benefits such as salaries, allowances, are
recognised in the Income and Expenditure Account in the period in which the
employee renders the related services.

Post- employment benefits:

Defined contribution plans: The Society’s provident fund is a defined contribution plan
where the contribution paid/ payable under the scheme is recognised as an expense
in the period in which employee renders the related services. The Society’s
contributions are deposited with the Regional Provident Fund Commissioner and are
charged to the Income and Expenditure Account.

Defined benefit plans: In respect of gratuity, the liability is determined based on

actuarial valuation using the Projected Unit Credit Method as at the balance sheet
date, which recognises each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build up the final
obligation.

The obligation is measured at the present value of the estimated future cash flows.
The discount rates used for determining the present value of the obligation under
defined benefit plan is based on market yields on Government securities as at the
balance sheet date.

Actuarial gains and losses are recognised immediately in the Income and
Expenditure Account. Gains or losses on the curtailment or settlement of any defined
benefit plan are recognised when the curtailment or settlement occurs.

f. Leases

The Society has taken various premises on operating lease. Lease payments under
operating lease are recognised as an expense in the Income and Expenditure
Account on a straight line basis over the lease term.

g. Distributable Material
 Distributable material is valued at lower of cost or replacement cost as per Technical
Guide on Accounting for Not-For-Profit Organisations issued by the Institute of
Chartered Accountants of India.

3. Corpus Fund

Corpus Fund relates to funds contributed by the founder members at incorporation and
fees received on admission of an Institutional Member in the Society.
Presently, the Society’s Institutional Member is as follows:
 Save the Children, International

4. Restricted Funds

The Society receives funds which are restricted in nature from foreign and Indian
sources. Revenue from the restricted fund is recognized during the year in the Income
and Expenditure Account to match the related expenditure. The balance amount is
carried forward in the restricted fund for use in future periods.

5. Endowment Funds

The Endowment fund comprises of a grant of GBP 2,750,000 (Rs. 216,975,000) received
from Save the Children, United Kingdom to facilitate the establishment of a Centre for
Early Childhood Development (ECD) within Jamia Millia Islamia University. As per the
grant agreement the income arising out of the fund balance would be used to administer
or support the operations of the ECD Centre. The income from the endowment fund is
treated as restricted in nature.

6. General Funds

The Society also receives general funds which are unrestricted in nature from foreign and
domestic sources. The excess of income over expenditure during the year, being general
purpose in nature is carried forward for use in future periods.

7. Expenditure

The Society implements its programmes for children’s rights through projects conducted
by itself or by other local non- governmental organizations to which it disburses grants.
The other organisations are also registered under the Foreign Contribution (Regulation)
Act, 1976 in compliance with the said Act. Accordingly, expenditure incurred by the
Society during the year includes grants disbursed to other local agencies in accordance
with the agreements with them.

a) Programme Expenses
These programme expenses mainly include relief programmes in flood affected
areas, i.e. Uttarakhand and Odisha other than routine programme expenses for child
education, survival, protection, health, nutrition, etc.
The Society’s programme team prepares concept note on the basis of which detailed
proposal of planned activity and expenditure is prepared. The same is submitted to
Resource Mobilization team which agrees with the donors for the amount of donation
to be disbursed and activities to be carried out. After finalization of the agreement
between the Society and the donor, the Society appoints / identifies staff members to
run these programmes as per the approved Scheme of delegation followed by the
Society. A disbursement schedule is prepared according to which the grants are
disbursed for the purpose for which these grants were received.
During the year, in relation to the disaster relief programmes, the Society has mainly
incurred expenditure on distribution of hygiene kits, shelter material, household
material, grains, etc. to the beneficiaries as per approved distribution list. The veracity
of the distribution list approved as per the process followed by the Society has been
relied upon by the auditors for booking of expenses.
Further the Society has hired external consultants for carrying out its programmes.
Expenses in relation to these have also been included under programme expenses.

b) Grants disbursed to others

During the year, the grants have been disbursed towards various programmes on
Child Education, Child Survival and protection, health, nutrition, disaster relief, etc.
These grants are disbursed to the non- governmental organizations after carrying out
diligence procedures as per the Society’s policies and norms. The expenditure is
incurred by respective non-governmental organisations for various activities as per
agreement of the Society with the grantor and the approved budget.
For grants completed, independent audit of each grant by external firms of Chartered
Accountants appointed by the Society is conducted based on which final settlement/
accounting is done. Based on these audits conducted, no significant discrepancies
have been noticed between the information submitted by the non-governmental
organisations earlier and validation of such information post audit, the same has been
relied upon by the statutory auditors.
Further, for projects whose audits are in progress, accounting is being done based on
expenditure reports submitted by respective non- governmental organisations.
8. Legal and Professional charges include Auditors’ Remuneration

(Rupees) (Rupees)
Year Ended Year Ended
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31 March 2014 31 March 2013
Audit Fees 1,450,000 1,400,000
Other Services 200,000 130,000
Service Tax 203,940 189,108
Total 1,853,940 1,719,108

9. Employee Benefits

Defined Contribution Plans

The employee provident fund scheme is a defined contribution plan. A sum of
Rs.25,408,179 (previous year Rs. 21,948,413) has been recognized as an expense in
relation to this scheme and shown under “Salaries and allowances” in the Income and
Expenditure Account.

Defined Benefit Plans

Gratuity is payable to all eligible employees of the Society on resignation, retirement,
death or permanent disablement, in terms of the provisions of the Payment of Gratuity
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Act. The liability for gratuity as at 31 March 2014 is Rs. 6,795,859 (previous year
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Rs.5,038,463) and the charge for the year ended 31 March 2014 is Rs. 1,757,396
(previous year Rs. 2,172,754) shown under “Salaries and Allowances” in the Income and
Expenditure Account.
The principal assumptions used in determining the gratuity obligation are as below:

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31 March 2014 31 March 2013
Discount rate 9.00% 8.25%
Annual salary escalation rate 5.00% 5.00%

Estimates of future salary increase take account of inflation, seniority, promotion, and
other relevant factors such as supply and demand in the employment market.

10. Save the Children Fund UK (‘SC UK’) transferred its operations in India to Bal Raksha
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Bharat with effect from 1 April 2008 as an initiative of the International Save the Children
Alliance, of which both SC UK (with historical cost of Rs. 39,917,422) were transferred
free of cost to Bal Raksha Bharat. In accordance with the generally accepted accounting
 principles in this regard, Bal Raksha Bharat has recognized these assets in its books of
account at nominal value.

11. During the year, the Society received gifts in kind for an emergency project from certain
donors. The value of the gifts in kind, aggregating to Rs.27,719,762 (Previous year
Rs.2,784,580) during the year has been disclosed under Grants received in kind and a
corresponding amount has been included under Other Programme expenses in the
Income and Expenditure Account. Also, the society received free advertisement,
aggregating to Rs.27,580,100 (Previous Year Rs.24,570,056) during the year, has been
disclosed as Grants received in kind and a corresponding amount has been included
under fund raising expenses in the Income and Expenditure Account.

12. The figures for the previous year have been regrouped/ rearranged wherever considered
necessary to conform to the current year’s classification.