contactus

RBS Foundation India The Royal Bank of Scotland N.V. 7th floor, Sakhar Bhavan, Nariman Point, Mumbai, Maharashtra, India. Postal Code 400021. Tel.: +91 (22) 6656 3786 Fax: +91 (22) 6637 2568 Email: foundation@rbs.com

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RBS Foundation India

RBS Foundation India | The Royal Bank of Scotland N.V. For private circulation only.

Supporting Enterprise

Annual Report 2010 - 11

ourmission
We believe in delivering real and sustainable benefits to our communities.
Our mission is to support the most vulnerable and poor in our communities by developing innovative models in Microfinance, Livelihoods and Financial Literacy, thereby promoting financial inclusion and micro-enterprises.

contents
messages
p4-11

anoverviewp12, 13 theneedp14 milestonesp15 projectcoveragep16, 17 focusareasp18-43 structure&managementp44 risk&controlp45 auditorsreportp46-54 projectpartnersp55 acknowledgements
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Chairperson
Board of Directors RBS Foundation India

We must strive continuously to understand the role of business in tackling the critical issues of human development and environmental sustainability in developing countries.

It is my privilege to present to you the annual report of the RBS Foundation India (RBS-FI). Our mission is to attempt to address the core issues of poverty and environmental degradation in India through the tools of Financial Inclusion and Financial Literacy. In this we are guided by the vision stated in the Millennium Development Goals: A world with less poverty, hunger and disease, greater survival prospects for mothers and their infants, better educated children, equal opportunities for women, and a healthier environment. Sadly, we are still a long way from realising these shared goals in India. The role that the Corporate Community voluntarily adopts in addressing these issues will determine our own sustainability. Key stakeholders whose views shape our on-going success, namely Clients, Employees & Regulators are increasingly demanding that Banks & Financial Institutions invest meaningfully in the communities on which they rely for their profits. The objective of this report is to share with you the outcomes of work of the RBS Foundation India in Community Investment during

2010-11. In India, the areas of poverty, equity and environment are key socio-economic indicators and as a result, these areas have been the focus of our efforts. The empowerment of women is widely recognised as a key determinant in improving the social and economic conditions of a community. Empowerment in turn is determined by economic opportunity, social equality, and personal rights. In many parts of rural India, women are denied these opportunities. They are perceived as not having the ability to generate an income, and hence, relegated to household duties and/or cheap labour. Without the power to work and earn deserving incomes, their voices are silenced and traditional perceptions remain unchallenged. The RBS Foundation thus focuses on women as the primary beneficiaries of our Livelihood assistance projects. As education is critical in helping to empower women, the RBS-FI focuses on entrepreneurial training for women, with the objective of creating economic opportunities, improving financial literacy and connecting these women to relevant financial services.

As important as What we do is How we do it. We strongly believe that by harnessing the collective talent pool of our employees we can bring both knowledge as well as passion to solving the challenges of community work. To encourage employee volunteering involvement in community work, RBS Business Leaders in India encourage their staff to participate in MAGIC HANDS at WORK our Employee volunteering programme. The Foundation offers a range of hands on opportunities at our projects and equips our staff with training and tools to conduct impact assessments on Poverty & Biodiversity. I take this opportunity to thank you for your continued support. I hope that the insights outlined in this report strongly evoke our passion for proactive social change and our commitment to making it happen. Meera H. Sanyal

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Head, Global Banking & Markets, South-East Asia and India

and CEO, Singapore

Financial Institutions and corporations have a major impact on social issues. Including responsibility for these issues in a business model provides the means for a positive social influence.

Is it prudent for a corporation to be involved with philanthropy and social initiatives? We think so. By aligning our business goals with social initiatives we believe RBS can foster community sustainability with corporate growth. We strengthen our communities by providing good jobs, donating our time and talents, supporting under served populations and promoting education programs that create economic opportunity. We also focus on environmental sustainability through partnering with other agencies to unlock the full potential of positive change at the community level.

Organising the infrastructure of a company to include these principles, there does not need to be a separation between business and social participation. The motivation for companies to be socially responsible revolves around sustainability which is at the heart of RBS Foundation India. Madan Menon

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Senior Independent Director, RBS

and Chairman, Group Sustainability Committee

At RBS, we focus our external support on areas where we have greatest expertise and so can make a real difference. In India, our focus has been on encouraging enterprise as a route to financial inclusion for individuals, families and communities.

The Royal Bank of Scotland Group (RBS) is an international business that is committed to supporting the local communities in which it operates, wherever they may be. The Group's commitment to Sustainability is reflected in the excellent work done by the RBS Foundation India. Throughout this report, you can read testimony from people whose lives have been improved through the Foundation's work, and specifically its focus on the power of enterprise to change lives. At RBS, we focus our external support on areas where we have greatest expertise and so can make a real difference. For example, in the UK, our MoneySense financial education programme has been running in schools for 17 years to help young people learn about money. In India, our focus has been on encouraging enterprise as a route to financial inclusion for individuals, families and communities. Previously, that included technical assistance for microfinance institutions in areas that lacked this kind of support. Our current programmes are designed specifically to empower women - building on their special role and responsibility in the family - by helping them develop their financial awareness and

entrepreneurial skills. And the power of enterprise is also put to good use through the Livelihoods Assistance Programme - which helps fragile communities find prosperity whilst becoming environmentally sustainable. Combined, we believe our efforts play a small, but important, part in building communities that can participate in India's growing prosperity. Sir Sandy Crombie

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Director & Head

RBS Foundation India

Since 2006, RBS Foundation India has been engaged actively in and around the forest fringe areas, empowering communities dependent on critical ecosystem resources in the tiger landscapes by providing them with alternative livelihood opportunities.

We began this journey in 2003, with the launch of our microfinance business where we learnt that the poorest regions were often deprived of financial inclusion. To address this we:
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Developed a specialised Technical Assistance Programme that has built capacities of more than 37 robust micro-finance service providers in the underserved parts of the country. Strengthened our commitment to local communities with a second level of engagement - our Supporting Enterprises Programme - targeting vulnerable communities located in or around ecosystems at risk, with the objective of alleviating poverty through the conservation of natural resources. A glance at our countrys map will reveal that regions of extreme poverty and areas of continued loss of bio-diversity overlap. Where livelihoods depend disproportionately on natural resources, poverty persists.

We work in geographic regions in the country at the intersection of poverty and critical ecosystems. Our Supporting Enterprises Programme exists to support projects that create and enhance sustainable livelihoods for poor communities that are dependent on natural resources. Increasing incomes from sources other than forest resources assists efforts to reduce/eliminate the unsustainable dependence on ecosystem resources. Thus, many of our Supporting Enterprises projects are located in tiger landscapes and other such ecologically important areas. Our programmes are implemented through Non Government Organisations (NGOs) and Microfinance Institutions (MFIs) with a strong community presence. In an effort to increase the value we add to local communities, we also work with local government agencies.

Realising our commitment to Financial Inclusion for all communities, the Foundation is set to roll out financial literacy programmes to 1 million women by March 2012 using a combination of various ICT tools. We invite you to be a part of this journey and to read more about our work that is captured in this report. We will be calling upon you for input, advice, suggestions and support. Working together, we can strive to realise sustainable social change in India- a change that we all believe is both possible and essential. N. Sunil Kumar

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anoverview
RBS Foundation India works with Indias most vulnerable - those living in both, the buffer regions of protected areas (National Parks, Sanctuaries, and Reserves) and corridors between protected areas.
In 2007, we strengthened our commitment to local communities through promotion of micro-enterprises. Our partnerships with NGOs allowed us to reduce anthropogenic pressures on critical ecosystem resources by developing alternative livelihood opportunities and accessing health and education services, thereby fostering conservation.

The poor face two major disadvantages in the market economy - poor quality and lack of scale.
To help achieve critical mass, our micro-enterprise initiatives have been focused on skill development.

Economic growth can be attained if the Governments efforts are supported by business and civil society.

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theneed
1210 million more than 17% of the global population and 25% of the global livestock population is spread over 2.4% of the global land mass. Land, people and forests are inextricably linked. Half of Indias 90 million tribal people - the most disadvantaged in society, live in forest fringe areas and have close cultural and economic links with the forest. Yet forests are rapidly deteriorating due to encroachment of agricultural production, mining, construction of dams, industrial and railway demand. The country has been losing 1.5 million hectares of forest cover annually (GOI, 1988). Its estimated that 41% of Indias forest cover has been degraded to some degree over the last few decades.

milestones
Half of Indias 90 million tribal people, the most disadvantaged in society, live in forest fringe areas and have close cultural and economic links with the forest.

technicalassistance
37 projects 13 States Beneficiaries: 2,04,589 households
Assam, Bihar, Delhi, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Orissa, Rajasthan, Uttar Pradesh, Uttarakhand and West Bengal

programme

Agriculture accounts for the largest land use, followed by forestry which covers 69 million ha or 21% of the total land base.

275 million or 27% of the population - mostly rural poor depend on forests for at least part of their subsistence and cash livelihoods, which they earn from fuel wood, fodder, poles and a range of non-timber forest produce (NTFP) such as fruit, flowers, lac, medicinal plants, honey and wax.

livelihoodssupport
19 Projects 13 States Beneficiaries: 64,127 households
Andhra Pradesh, Gujarat, Jharkhand, Kerala, Madhya Pradesh, Maharashtra, NCR, Orissa, Rajasthan, Tamil Nadu, Uttar Pradesh, Uttarakhand and West Bengal

Indias population has grown, from 390 million in 1950 to 1210 million in 2011

70% of Indias rural population depend on fuel wood to meet domestic energy needs.

4.5 million ha of forest has been lost since 1950 through agricultural conversion and other uses

employeeengagement
287 Employee Volunteers 15,599 working hours

Approximately 78% of forest is subject to heavy grazing

50% of forests are exposed to fires

By 2002, 1.36 million ha of forest had been encroached , with evictions covering only 10% of affected land by 2004.

Shifting cultivation affects almost 10 million ha of forest 14

Source: WB Report on Unlocking opportunities for forest dependent people in India, February 2006)

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l Technical Assistance n Livelihoods Support

projectcoverage
Technical Assistance
46 Assam 1 Ajagar Social Circle, Goalpara 2 Grameen Sahara, Kamrup, 3 Nightingale Charitable Society, Guwahati 4 Panchratna, Nalbari 5 SDCCC, Darrang 43 36 33 26 29 62 17 32, 34 & 35 9 7 8 41 6 10 12 47 42 18 20 28 56 57 37 64 38 4 1 2&3 24 & 25 5 63 31 Bihar 6 CDOT, Nalanda 7 Trust Microfin Services, Muzaffarpur 8 Gramyasheel, Supaul 9 Nidan, Patna Jharkhand 10 Ajiwika, Deogarh, 11 SUPPORT, Hazaribagh 12 Samarthan, Jamtara Karnataka 13 Nirantara Community Services, Bidar Madhya Pradesh 14 Lok Biradari Trust, Indore, 15 MCM, Bhopal 16 AES, Satna 17 VAMA, Gwalior Maharashtra 18 Dmatrix (GSST), Wardha, 19 Hindusthan, Mumbai, 20 Sampada Trust, Ahmednagar, 21 Svasti Foundation, Mumbai, 22 DST, Pune 23 KVGPS (Krushi), Buldana, Manipur 24 Chanura, Imphal 25 WSDS, Imphal New Delhi 26 SDF, Delhi Orissa 28 Sanginee, Kalahandi Rajasthan 29 MITR, Alwar 30 BGFL, Jodhpur Uttarakhand 31 PAHAL, Kathgodam, Uttar Pradesh 32 Jaago, Lucknow 33 RISE, Ghaziabad 34 Samridhi, Lucknow 35 BMC, Lucknow 36 Disha, Saharanpur West Bengal 37 SSVWS, Kolkata 38 KRS, Coochbehar Kerala 48 Evangelical Social Action Forum Madhya Pradesh 49 Foundation For Ecological Security 50 Indian Grameen Services 51 Watershed Organisation Trust Maharashtra 52 Population First 53 Indian Grameen Services 54 Asha Handicrafts Association 55 Satpuda Foundation Orissa 56 Council of Professional Social Workers 57 Indian Grameen Services Rajasthan 58 Access Development Services 59 Asha Handicrafts Association Tamil Nadu 60 Srinivasan Services Trust 61 Asha Handicrafts Association Uttar Pradesh 62 Asha Handicrafts Association Uttarakhand 63 Appropriate Technology India West Bengal 64 Nature Environment & Wildlife Society

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58 59

44 45

16 14 23 19 & 21 22 52 53 54 15 49 50 51 11

Livelihoods Support
Andhra Pradesh 39 Conservation of Nature through Rural Awakening 40 Asha Handicrafts Association Bihar 41 PRADAN Chhattisgarh 42 PRADAN Delhi 43 Asha Handicrafts Association Gujarat 44 Asha Handicrafts Association 45 Development Support Centre Jammu and Kashmir 46 Ladakh Rural Women Enterprising Society Jharkhand 47 PRADAN

13 39 40

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60 61

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focusareas
technicalassistance livelihoodssupport employeeengagement

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technicalassistance
Project Partner: Microsave Technical Assistance for Micro Finance Institutes (MFIs) enabled 37 small MFIs located in the under-banked regions of the country to improve their Business Management systems and Governance.
The 18 month structured programme made it possible for MFI's to scale up their operations, access bank funds and increase their outreach i.e. provide small value loans to the unbanked communities. The programme came to a closure in 2011. Funded jointly by the Foundation and Stitching CORDAID (a Dutch development organisation) it consisted of three components:
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Capacity building Setting up robust systems and processes via onsite support and training, thereby enabling the MFI to scale up its operations Consultant development Nurturing local consultants to ensure partners have access to quality technical expertise and mentoring support in a sustainable manner Toolkit development Developing structured ready to use training material in key areas such as Governance, internal controls, financial management and accounting systems, available to the larger microfinance sector, as well as a comprehensive Do It Yourself toolkit, (MFI Out Of A Box).

The RBS-FI programme is a large scale, long term intervention in institutional development. It has succeeded in engaging with and improving the performance of small and fledgling MFIs operating in difficult geographies. The improvements have not been limited to operational systems, processes and staff skill sets financial and business performance has also significantly improved, exceeding that of comparable MFIs in the sector. The MFIs experienced learning even as they were developing with visible progress and improvement. Given the large foot print of the programme, it would have been a challenge to ensure quality across institutions and regions. With the majority of institutions expressing their satisfaction, the programme was considered to be effective in both design, and implementation and highly impactful. The willingness of partner MFIs to pay for such services is a reflection of the utility and relevance of the programme. While ongoing improvements must be made to ensure its ongoing effectiveness in the context of developments in the sector, the implementers and funders must be acknowledged for bringing to fruition a sound idea. - End of program review by N. Srinivasan

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livelihoodssupport
The Supporting Enterprises Programme of the Foundation supports projects that create and enhance sustainable livelihoods for poor communities dependent on the countrys critical natural resources.
Community Governance
Livelihood enhancement Livelihood interventions are provided according to local need analysis and market studies. These interventions are aimed at improving and developing sustainable sources of incomes. Each of the Foundations projects includes one or more of the following activities:
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insemination, fodder management, dairy management and integration with milk routes. Adoption of stall-fed practices is sought for better incomes and for removal of grazing pressure on forest ecosystems.
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established with Micro Finance Institutes and Banks to enable the enterprise members to access loans for business needs. Impact Assessments Employees play an important role in collecting crucial data for impact assessments. Third party impact assessments are conducted on projects to measure the progress against the plan.

Apiculture - guidance and advice is provided on alternative techniques, semi processing of produce and marketing. Non Timber Forest Produce - an important source of cash income, the community is equipped to form collectives and add value to the produce by cleaning, grading and extraction and seek newer markets.

Agriculture - technical support is provided to improve the productivity of the land, availability of water, scientific agriculture practices, higher quality seeds, organic manure etc. The aim is to improve productivity, crop diversification and risk mitigation and production. Eco Tourism - the community is trained in various aspects of hospitality, communications, book-keeping, marketing, ecofriendly tourism and assistance with infrastructure in ecologically sensitive locations. Handicrafts - the focus is on improving the skills, new product development, exposure and linkages to markets as well as improving capabilities to manage small businesses Dairy - expertise is provided for breed improvements, artificial

Market linkages Efforts are made to create and establish market linkages through the aggregation of produce, with the objective of removing and/or reducing the middle men from the value chain. This enables the community to realise better prices. Financial Linkages Scaling up of the livelihood initiatives is dependent on the availability of finances. Over time, community owned and managed revolving funds are developed to provide small value loans to the community and build credit histories to allow access to institutional finance. Linkages are 23

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mangalojodichilka
Beneficiaries: 500 households Project Partner: Indian Grameen Services (IGS)
Chilka, the largest coastal lagoon in India is recognised globally for its rich biodiversity and as home to an abundance of migratory bird species. Mangalajodi is one of the largest of the 132 villages located on the banks of Chilka. A decade long community conservation effort initiated by Wild Orissa has resulted in the creation of a Bird Protection committee that patrols the waters during the winter migrant season and throughout the native species breeding season. As a result of this protection, Bombay Natural History Society and others have reported an increase in migrant arrivals and breeding success among local species. The increased interest in bird life from researchers, bird watchers and day visitors led to a community based eco tourism project being initiated by the Foundation in the villages of Dhani and Mangalajodi. The purpose of this project is to proactively protect the forests of local community members and in turn, sustain their livelihoods. This eco-resort is a unique convergence of efforts by:
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lake

simlipaltiger

reserve, orissa

Eco Tourism as a sustainable livelihood

Sustainable livelihoods for tribal communities

Beneficiaries: 1000 households Project Partner: Indian Grameen Services (IGS)
The Simlipal Biosphere Reserve (SBR) is spread across more than 5,000 sq.km. and encompasses 2,750 sq.km. of Simlipal tiger reserve. The region is home to eight rivers, 1,076 plant species, 42 mammal species, 242 bird species, 30 reptile species and wide variety of micro flora and fauna. The region is also one of the major tiger reserves and connected to the Saranda forests in Jharkhand and the Satkosia Reserve forest in Orissa. The core region is made up of four villages while the buffer region is made up of 60 villages. The relationship between communities and the ecosystem has been fractious and hostile and as a result, is not sustainable. The Governments of India and Orissa have been working to enhance livelihoods and steer communities away from the critical ecosystem resources. The four core villages have agreed to relocate with the enhanced government package. The 60 buffer villages comprised of the Mankadia and Khadia tribes and non-tribal settlers continue to exert pressure on the ecosystem. As such, the Foundation through IGS provides an integrated livelihood promotion service to tribal and non-tribal households in 21 of these villages, with the objective of enhancing their incomes whilst reducing biotic pressure on the Simlipal biosphere reserve. In another village, the project is also providing vocational training to youths and working age groups on trades such as plumbing, driving, carpentry, and electronics which demand skilled hands in the neighbouring industrial districts.

The Foundation and IGS maintaining community relations; Wild Orissa - providing expertise in conservation and wildlife protection; Four RBS employee volunteers, who developed the marketing and business plans for the resort were among the first guests.

The local community has been trained to manage the Eco Tourism Trust that has been formed within the project as overseen by Gram Sabha. Local youth are trained in aspects of hospitality, including catering, guiding tourists, book keeping and marketing to ensure a steady flow of tourists. This model demonstrates that conservation efforts have assisted in building and strengthening livelihood options. Potential for revenue generation is a positive motivator for conservation, giving value to and supporting the model of community based eco-tourism replicated in eco-sensitive zones.

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kanhanational

park, madhya pradesh

bandhavgarhnational
Beneficiaries: 417 households Project Partner: Indian Grameen Services (IGS)

park

Sustainable livelihoods for tribal communities

Beneficiaries: 1500 households Project Partner: Foundation for Ecological Security (FES)
The Bichhia Tehsil of Mandla District falls under the rich biodiversity zone of Kanha National Park. The park is located in the vast and extensive forest belt of the Satpuras and the Vindhyas which stretch almost 500km east to west. This part of Madhya Pradesh and Chhattisgarh is home to crucial forest and grassland ecosystems along with dense tribal populations. The Foundations project is a part of the Mahakaushal region which is predominantly inhabited by the Gond and Baiga communities, the latter being a primitive tribe dependent on hunting and gathering food. The livelihood portfolio of the population comprises three basic components: - agriculture, forest produce and wage labour. Agriculture is still in the primitive stage, with 91% being rain-fed. The average land holding is as low as one hectare, with varying compositions of uplands where minor millets such as kodo and kutki, and oil seeds such as niger and maize are grown and mid and low lands suitable for paddy. This subsistence agriculture supports food requirements for about 6 - 7 months of the year and therefore there is great dependence on wage labour and the sale of forest produce. As such, a large proportion of the population is prone to seasonal migration in search of livelihoods. This project in partnership with FES has:
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Sustainable livelihoods for tribal communities

interaction in the eco-sensitive zones in the park and its adjoining areas.

Strengthened institutional processes for pro-poor and gender sensitive arrangements of natural resource governance at both habitation & regional level; Improved farm and non-farm livelihood options of the poor, reducing vulnerability of local communities and biotic pressure from bio-diversity rich areas; Promoted enhanced interface between scientific knowledge and traditional wisdom to achieve development and conservation goals; Reduced biotic pressure and optimised anthropological

The Bandhavgarh National Park (BNP) is located in central India between the Vindhyan hill range and the eastern flank of the Satpura hill range. It is among the most viable ecosystems in the region with a total area of 1165 sq.km. Fourteen villages located in the core are eligible for relocation with an attractive package of Rs 1 million per adult. In the delineated buffer zone (yet to be notified) there are 61 villages with a population of 28,519 and more than 50,000 cattle. These villages host largely tribal communities comprising Gonds, Baigas, Ahirs and Kachhis, most of who live below the poverty line (less than $1USD per day / marginal landholdings). The cattle are unproductive and the livelihoods are dependent upon illegal and unsustainable harvest of forest resources. Present livelihoods do not support either their communities or the ecosystem. RBS-FI in partnership with IGS has established community governance through the creation

of multi-tier structures, linkages for finance and markets leading to sustainable livelihoods:
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Introduction of 'Wadi'(small orchard) program

Self Help Groups based micro enterprises and technical interventions in multiple livelihood activities; Improved crop production and protection, surface and ground water management and irrigation practices; Holistic approach to livestock development, by reducing and / or replacing unproductive cattle herds with improved local variety and adopting stall feeding; Mass vegetable cultivation for aggregation of produce for access markets; Backyard poultry; Apiculture to improve agriculture productivity and as an alternative livelihood option; Medicinal herb plantation at high lands; Artisan clusters such as; pottery and basket making, and

These efforts have increased the incomes of the project villagers whilst reducing their dependence on forest resources.

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deogharjharkhand
Support to women producers of MASUTA
Beneficiaries: 2600 women Project Partner: PRADAN
MASUTA is a one-of-its-kind tussar silk producers collective in India. Stemming from the development of PRADAN, the company has 2,600 women producer members spread over Jharkhand, Bihar and Chhattisgarh but mostly around Deoghar. The working capital requirement of Tussar is unique as the commercial cocoon is available only once a year between October and December. There is no formal marketing channel for its procurement and it is purchased from the individual. State Governments have tried to organise rearers around cooperatives but this has not been successful. MASUTA therefore needs to procure the entire years cocoon supply and store it in a warehouse. This requires funds, of which the producers need to bear the stock holding cost. Since its formation, the producer company is financially sustainable but the income of its member producers is low comparative to effort. As a result, an alternate quasi-equity structure, was thought to help the company grow with reduced dependence on expensive debts, and therefore better incomes for the producers. The Foundation is providing working capital support to the female yarn producers of MASUTA via a revolving equity fund.

akolamaharashtra
Carbon Markets for the poor
Beneficiaries: 1200 households Project Partner: Satpuda Foundation
Satpuda landscape in central India is important in its rich bio-diversity. The landscape is spread over 20,000 sq.km comprising five important tiger reserves with a network of protected areas . Melghat Tiger Reserve (MTR) is just one of them, with 58 tigers across an area of 1600 sq.km. Years of unsustainable land use has resulted in significant land degradation. Together with a rapidly growing population, this in turn has resulted in added pressure on Melghats resources. RBS-FI together with the Satpuda Foundation created a project to:
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Eco-restoration entails treatment of soil, watershed and plantation of plant and tree species in the same mix and densities as per those already existing in the good habitats of the adjoining Melghat Tiger Reserve. Each of the households has been provided entitlement letters with responsibilities for watch and care over their allocated parcels of land. Communities have undertaken watershed development, fodder development and plantation cultivation on 2,500 hectares of land with usufruct rights over plant produce and carbon credits. The cash flow has increased two and a half times over a period of three years. The community is looking forward to the additional benefits from carbon credits which will flow once the CERs / VERs are sold.

Restore and conserve the environmental resources (ecorestoration) in a participatory manner; Improve the socio-economic conditions of the community by sharing benefits of conservation and enhancing livelihood support; Facilitate and enable the community to obtain benefits from carbon credits.

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melghattiger

project, maharashtra

gujarat
Livelihood Enhancement through participatory natural resource management
Beneficiaries: 45,000 households Project Partner: Development Support Centre (DSC)
Conscious of the harmful effects of excessive and indiscriminate use of chemicals on the environment and agro-ecology, as well as the longer term sustainability of agriculture. RBS-FI is directing agricultural livelihoods towards sustainability in the four districts of Mehsana, Sabarkantha, Ahmedabad and Amreli of Gujarat. These districts cover an area of approximately 45,000 ha and account for 45,000 households. This activity aims to improve rural economy through participatory natural resource management in selected drought-prone areas. The success of this activity has resulted in the dissemination of effective productivity enhancement practices and techniques in Gujarat to the rest of India. It relies on the existing technical and social infrastructure at a grassroots level and multiplies the benefits to this region. It leverages the collective strength of a community to improve land productivity, yields and realisation. The 2004 Gujarat Human Development Report together with our own experiences working in rain fed and irrigated areas guided us in adopting a multi-pronged approach to increase agriculture productivity, reducing input costs and reducing the risks faced by the rural communities. The need for this project was identified during pre-project PRAs conducted with farmers to understand factors affecting agriculture as a viable livelihood. The main issues related to information gaps, lack of a reliable extension system, high cost of inputs, risks related to farming and marketing of produce and poor price realization. These were validated through a professional study conducted in 2008. The results of the study indicated significant yield gaps in almost all crops cultivated by the farmers in all project areas. The study also identified causes and suggested remedial measures, which formed the basis of the interventions. Over a three year period, 11,000 farmers adopted the new practises that were demonstrated, resulting into several gains and learnings. 31 Crop productivity increased from 23% to 167%, Input cost reduced by 25% to 50%. Farmers who adopted the PoPs experienced a net increase in incomes from INR 10,000 - 20,000 per ha. Interventions on vermin compost, mulching and Micro Irrigation Systems have indicated that sustained use can have positive impact on the environment.

Enhancing livelihoods of resettled tribal population

Beneficiaries: 338 households Project Partner: Indian Grameen Services (IGS)
Three villages from the core of Melghat Tiger Reserve were voluntarily resettled to the adjoining non-forest block of Akola-Bori, Koha and Kund. The success of this initiative saw an additional three villages resettled. Our involvement ensured a smooth transition and rehabilitation of these villages, improving the livelihoods of households economically and socially through strong community-based institutions, thereby reducing biotic pressures on the nearby tiger reserve. We have successfully established community based in dairying, irrigation, agricultural produce and marketing. Conflict resolution is conducted at community level. The project and its objectives were communicated to the local community. Activities are planned with the Gram Sabha and its implementation monitored by them. Local youth have also been trained to provide continued support following completion of the project.

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sunderbanswest

bengal

uttarakhand
Integrated livelihood skills in hills of Uttarakhand
Beneficiaries: 1000 households Project Partner: Appropriate Technology India (ATI)
States that have the highest level of poverty often have the highest reserves of natural resources. The acute poverty can be attributed to the populations dependence on the natural resource base for their livelihoods, often unsustainably. Uttarakhand is one such state. 93% of the area is hilly with 63% of the area under forest cover. 37% of the population lives below the poverty line and 28% of the population migrate to other states in search of employment. With its beautiful mountains and forests, Uttarakhand is a tourist hub; however these revenues fail to benefit the locals who largely depend on the forest-based produce, dairy and agriculture.
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A lifeline for the Sunderban Biosphere Reserve

Beneficiaries: 450 households Project Partner: Nature Environment and Wildlife Society (NEWS)
Sunderbans is among the largest mangrove habitat in the world, spanning 26,000 sq.km. across India and Bangladesh - ecologically very sensitive, productive and economically critical to the region. The mangrove ecosystem plays a vital role in protecting the coast against cyclonic activity, which is common to the Bay of Bengal. Fifty two of the 104 Sunderban villages inhabit this hostile environment. Life is a constant battle against the elements, with the ongoing erosion of embankments that protect the villages from tidal inundation. Livelihoods are unsustainable, consisting of subsistence agriculture and the harvest of fish, honey and wax from prohibited waters and forests. The collection of Tiger Prawn, P monotone seed for example, entails netting this larva along with hundreds of other micro flora and fauna species, whilst standing in estuarine waters, and risking attack from saltwater crocodiles, sharks and tigers. The prawn seed is retained and the rest discarded. IUCN reports that this activity alone accounts for 25% of the mangrove destruction. The region is home to a diverse array of flora and fauna including 34 unique mangrove species of plants and trees. The Indian tiger, P tigris is an iconic species in the region along with the saltwater crocodile, C porosus and the Gangetic and Irrawady dolphins, P gangetica and O brevirostris. Community invasion of forests and estuarine waters for livelihood means that mortalities from tiger, shark and crocodile attacks are a common occurrence. The Foundation and NEWS collaborated to extend livelihood support to 450 households in four critical villages - Tridebnagar, Sonagaon, Mathurakhand and Dulki. Livestock raising is one of the few options available to the locals given the geographic and supply chain limitations. Cyclone Aila in 2009 resulted in catastrophic losses. Insurance services are not available in the region Thrift funds based on livestock incomes were set up in each village, enabling the households to replenish stocks soon after the cyclone. The project undertook plantation of mangrove tree species on the village embankments in an effort to protect against tidal scouring. Two-thirds of the plantation survived and are standing forests on the village embankments today. Corporates seeking to create carbon sinks for obtaining carbon offsets have shown great interest in the RBS-FI-NEWS project region. NEWS has reported plantations on 6000 ha.

The projects involvement has seen:

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Improved methods of managing dairy, better agricultural practices and bee keeping; Group-based livelihood enterprises promoted; Linkages to finance and markets established, sustaining the activities following the project period. Parallel activity of financial linkages has also resulted in financial inclusion of the beneficiaries through microfinance and bank linkages.

Alternate income sources have been generated through intervention in dairy, agriculture and honey. Though these are traditional activities, they are at subsistence level due to low production levels and dependency on local markets.

The community is at the centre of the project, with people from the target villages proactively involved. They decide which livelihood activities to take on at a commercial level. At the apex level (producers, shareholders, members of the producer company and the MFI), the community governs the management of the project and thus ensures operations in a manner best suited for the community.

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ranthambhorenational
Beneficiaries: 200 women, 500 farmers Project Partner: ACCESS Development Services (ADS)
The population around the Ranthambhore National Park are mainly agriculturists, pastoralists and wage labourers largely dependent on natural resources. The transition of the surrounding forests from a princely estate to a designated National Park has alienated this population from the mainstream society with curtailed access to forest resources. This has pushed them further into poverty. With limited opportunities, this population is trapped in poverty and caught in man-animal conflicts. The National Park, a major tourist destination on account of its famed tiger population has spawned a township of resorts and tourist activities. The community, denied access into the park for resource extraction, suffers an exaggerated sense of alienation coupled with hostility towards the ecosystem. RBS-FI and ACCESS have worked together to create alternative livelihood opportunities for this local population through handicraft manufacturing and strengthened the existing mainstay for livelihoods (agriculture). These income avenues have reduced the local pressures on the fragile ecosystem of the national park especially for those communities that have been traditionally dependent on forests for their livelihoods. The women have been provided with skills on handicrafts - design, production and packaging - and the farmers provided with techniques to enhance and improve agriculture productivity and market linkages, thereby, increasing the average household income.

park

kanha&penchtiger
Natural Resource Management
Beneficiaries: 300 households Project Partner: Watershed Organisation Trust (WOTR)
This project operates in Kalpi cluster of Bijadandi block in Mandala district where the average annual rainfall is about 1,250 mm. The entire catchment area feeds water to Narmada River through two main drainage systems. This cluster is mostly laid out over hilltops covered with deciduous teak forests where the slope is gentle with verdant vegetation and good tree cover. Communities in these village clusters live mostly below the poverty line. Agricultural activities depend on the monsoon and are already degraded to a large extent. The Foundation with WOTRs expertise, has invested in watershed development which regenerates the local environment thus enhancing the productive basis of the local economy; the impacts have been dramatic enough to attract reverse and inmigration from nearby areas. With three years of intervention, the community is now able to take two crops in a year, have access to drinking water and develop micro plans for village development. The increase in income enables them to explore alternative livelihood through both individual and group enterprises like nursery, poultry, piggery, petty shops etc. Moreover, the additional income has enabled purchase of pressure cookers and solar units thereby reducing the consumption of firewood by ~40%.

reserves, madhya pradesh

Promotion of Eco-tourism & local handicraft to protect tigers

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employeeengagement
In the last year, significant changes were brought in. The group came up with a uniform volunteering policy, which encouraged a larger number of employees to volunteer. The number of volunteering opportunities too went up.

Employee Director
RBS Foundation India
Employee volunteering has played an important role in the various projects of the foundation, with employees actively participating in the baseline or impact assessment surveys. This has helped both the foundation and the employees in understanding and appreciating the issues around sustainability. The Foundation actively works towards creating volunteering opportunities across the projects so that employees from various geographies and business units of the group are able to come forward and be a part of the projects. Many of the volunteers subsequently continue active work in their sphere of influence. In the last year, significant changes also were brought in. The group came up with a uniform volunteering policy, which encouraged a larger number of employees to volunteer. The number of volunteering opportunities too went up. "Magic Hands", the training programme on sustainability became an essential component of this programme. "Magic Hands" opportunities augments the community work that many of our enthusiastic employees were already undertaking. Employee volunteering has become a very important aspect of the foundation's projects. Tushar Lowalekar

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employeespeak
The Group employee volunteering policy allows employees to take up to three days a year to undertake community work. Recognising the remoteness of locations and the need for continuity of work in India, the policy allows employees to take up to four days for volunteering through the Foundations projects. This policy enables a supply of resources to the Foundations projects. It enables transfer of employee knowledge, engenders compassion around our community work and helps build and support teams. In 2010, 196 employees volunteered at nine locations. In 2010 - 11, 88 employees have volunteered at six locations and several volunteering events are in the pipeline. Employees have shown a keen interest in volunteering for projects that are located at the intersection of community and biodiversity. Magic Hands at Work was a very comprehensive program. It gave me the rare opportunity of experiencing rural life, which was in itself an extremely humbling experience. I realized the importance of things we take for granted such as water, electricity etc. The afternoon session by the Foundation was well conducted and gave me insights into the watershed program implemented in the village. I am also glad to be working for a company that believes in and supports sustainability through its various community programs. This trip has motivated me to get involved in community work and be more responsible towards my environment by conserving electricity and recycling. Rupa Basu Human Resources, Mumbai

keyinitiatives
RBS organises the tenth Annual RBS Sanctuary Asia Wildlife Awards On 4 December 2010, RBS organised the tenth Annual RBS Sanctuary Asia Wildlife Awards to honour Earth Heroes - people who have done remarkable work to help conserve wildlife in their respective geographical and occupational areas. The Wildlife Award ceremony was organised in partnership with wildlife publication Sanctuary Asia. The 2008 Lifetime Service Award was bestowed upon Fateh Singh Rathore for his remarkable work in the Ranthambore Tiger Reserve. Awards were also given to five individuals - inspired wildlifers, forest employees, researchers and villagers involved in nature conservation. They all help protect the natural resources of India for generations to come. in this campaign on 25th September, 2010 where they were given gloves, masks and garbage bags to carry out clean up on the beach. Team leaders were assigned the responsibility to ensure that each item of waste material found on the beach was recorded and recovered correctly.

It was a great opportunity to be a part of such a wonderful trip to Kanha, which provided a variety of experiences on animal conservation, tribes and jungle life. This short trip helped me to understand the real challenges of tribes situated in close proximity of KNP and the issues they face for survival, especially the Baiga & Gonda communities. Ravinder Ray Property services, Gurgaon

come out of their homes in time; bridges were torn away from their embankments; and some villages were entirely wiped out. RBS Foundation India with an NGO, 'Goonj', initiated a campaign to collect funds for the affected families of Leh, Ladakh. Eighty employees of RBS India contributed INR 400,500 towards the rehabilitation efforts in Leh. Others donated warm clothes, blankets and utensils. The cash donation was given to provide skills training to the refugee women of Choglamsar and collected items were given to 'Goonj' which in turn gave them to those living in the camps and in the affected areas of around Leh.

The RBS Foundation India is providing sustainable income generating activities and techniques for productivity enhancement. As the popular adage goes teach a man to fish and you feed him (and his family) for a lifetime... To know that my organisation commits significant resources to this honourable programme is extremely gratifying Raghu Bhat Retail Banking, Mumbai

Contribution by RBS employees for Leh-Ladakh Flash floods On the 5th of August, 2010 Leh was hit by flash floods. The houses at Choglamsar, one of the most affected villages, sank 20 feet in slick mud; the colourful gates and prayer wheels of Leh city were smashed by cars and boulders; several families could not even

These RBS India volunteers filled garbage bags with plastic packets, tobacco packages, drinking straws, spoons and glasses, pieces of glass, beverage bottles, cigarette stubs, building material, food wrappers, tiles, clay items like Ganesha idol pieces, shoes and items of clothing, all of which were found in plenty. This initiative made our employees more conscious of their environment as they did their bit to ease the tremendous pressure put on it. As the saying goes each drop makes an ocean, an ocean with clean beaches to visit with 39

Ocean clean up Mumbai Juhu Beach is part of the global Ocean Cleanup campaign that takes place every year. Twenty six RBS India employees participated

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employeeengagement
family and friends. Employees of RBS India are doing their bit for this good cause. Brief details about volunteering activities held in 2009-10 and 2010-11 Magic Hands training in Ranthmabore A three day training programme was scheduled in Ranthambore to sensitize employees with issues of biodiversity, climate change and poverty alleviation. 45 employees from Gurgaon and Mumbai attended this training. Newspapers for Leprosy Bandhavgarh Twelve employees of RBS volunteered with local NGOs to conduct a baseline survey. The objective was to study, analyze livelihood context of households of the fringe villages to develop project intervention framework. The survey covered 8 villages of Bandhavgarh Tiger reserve covering 417 households. Ranthambore Impact assessment

Kanha Magic Hands training, Chennai RBS Foundation with HR Learning and Development team scheduled a Magic Hands training programme in Chennai. 75 participants from RBS Business Services - Chennai nominated themselves for Magic Hands and were taken through the challenges of Supporting Enterprises, the complexities of Biodiversity Conservation, the threats of Climate Change and the opportunities offered by RBS Community Investment schemes. Meera H Sanyal, Country Head India, an active member of the training, launched the event Ron Teerlink, Chief Administrative Officer - RBS Group with his MANCO and William Higgins, Director - Group Operations.

Globally , India tops the list for the highest number of Leprosy patients. There are close to 1.5 million leprosy patients in India, who are still regarded as social outcasts and face numerous hardships for survival and cure. Bombay Leprosy Project (BLP), a not for profit organization was established in 1976 to cure and rehabilitate leprosy patients. In support of their mission, RBS donates news papers and magazines collected from its various offices in Mumbai. Up until Sep 2011, approximately 7,814 kg of news papers amounting to INR 67,000 have been donated. These funds were utilized to provide ulcer care kits , medicines and special footwear for the patients. 40

Fifteen employees volunteered to conduct a socio-economic survey of villages in and around Kanha National park. This baseline survey was carried out to understand the economic and social condition of the households and design an implementation plan accordingly.

STRIPES, a project of the RBS Foundation in Ranthambore looks at livelihood intervention. At the onset of the project a baseline survey was conducted and a year later an impact assessment was done to understand the changes post intervention. 21 employees from Mumbai and Gurgaon participated in this impact assessment. This three day volunteering activity provided an opportunity to the employees to meet villagers in their homes, farms and to understand their problems first hand.

Ranthambore (RTR) In 2010 Foundation initiated a Teach conservation program among the schools in the fringes of Ranthambore Tiger Reserve (RTR) in response to a need expressed at the park for a better 41

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structure&management
Board of Directors RBS Foundation India
Meera H Sanyal Chairperson

risk&control
As a natural association with the Bank, the culture of strong risk management is inculcated within the Foundation as well. We use structured and tested tools for objective project appraisal, gated funding for control and the active involvement of senior management. The table below details the risk management process of the Foundation.

PROCESS
Origination and pre-appraisal

GRANT PROCESS / MECHANISM

Proposals for the livelihood programmes are typically sent in by NGOs. For the TA programme third party recommendations originate the partner. The responsible Project Manager prepares a pre-appraisal based on secondary documentation and submits to the Foundation Board for sign off. The Project Manager visits the NGO to understand the project and employs a Microenterprise Evaluation tool or a Rapid Institutional Assessment tool to determine if the NGO and / or the project is sustainable, benefiting the poor and committed. The Project Manager prepares a final evaluation report with risk, challenges and impact. This is first discussed internally within the team, subsequent to which it is presented to the Foundation Board for final sign off. An agreement is signed between the Foundation and the NGO. The agreement clearly lays out the scope of work, milestones, the fund tranches as well as reporting requirements.

Tushar Lowalekar Employee Director

N Sunil Kumar Chief Executive

Due diligence

The Executive Body: Management Team of RBS Foundation India

N Sunil Kumar Chief Executive

Proposal approval

Documentation and regulatory clearances (if applicable) Disbursal

Funds are typically released in quarterly tranches and amount for each tranche is determined in agreement with the NGO so that it is synchronised with project activities. Prior to release of each tranche, the NGO is required to submit a utilisation certificate. If required the Project Manager or a volunteer from the Bank may visit to verify the report. This is an ongoing activity and multiple means are adopted to maintain control of the project. This includes: - Quarterly / monthly project progress reports - CA certified fund utilisation reports prior to disbursement of each new tranche. - Random employee volunteering visits to verify progress - Regular Project Manager visits - Setting up Project Implementation & Management Committees as a grassroots monitor. In cases where there is a deviation or delay in performance and / or use of funds, the Project Manager prepares a variance report and the proposed action plan. In such circumstances it is at the discretion of the Foundation to terminate the project if there has been a misuse of funds. The team has both monthly and quarterly reviews of the overall grant portfolio. - Internally, a monthly MIS and financial statement allows the team to review project progress. - Quarterly, the RBS Foundation India management team is required to present financial and narrative updates on all projects to the Board 45

Neeraj Sharma Program Director

Monitoring

Dhruvi Shah Senior Project Manager, Livelihoods

Karishma Kalro Project Assistant

Yashu Chaudhury Project Manager, Financial Literacy & Financial Inclusion

Sweta Asawa Project Manager, Employee Programs & Compliance

Reviews of individual cases

Periodic Review of portfolio

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auditorsreport
1 We have audited the attached Balance Sheet of RBS Foundation India ("the Company") as at 31st March, 2011 and the Income and Expenditure Account of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit. 2 We conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on test basis, evidences supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management as well as evaluating the overall financial statement presentation. We believe our audit provides a reasonable basis for our opinion. 3 The companies (Auditors Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956 is not applicable to the company in terms of clause 1 (2) (iii) of the order. 4 We report as follows: (a) we have obtained all 46 information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; (b) in our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books; (c) the Balance Sheet, the Income & Expenditure Account dealt with by this report are in agreement with the books of account; (d) in our opinion, the Balance Sheet, the Income and Expenditure Account dealt with by this report are in compliance with Accounting Standards referred to in Section 211 (3c) of the Companies Act, 1956; (e) in our opinion and to the best of our information and according to explanations given to us, said accounts give information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; (i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011; (ii) in the case of the Income and Expenditure Account, of the excess of the income over expenditure of the Company for the year ended on that date. 5 On the basis of written representations received from the Directors, as on 31st March, 2011 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956. For Deloitte Haskins & Sells Chartered Accountants (Registration No. 117365W)

auditedfinancial
Balance sheet as at 31 March 2011 Schedule number Sources of funds
Shareholders' Funds Share capital Reserves and surplus Total 1 2

statements
01 April 2010 to 31 March 2011

` As at 31 March 2011

` As at 31 March 2010

45,000 30,794,747 30,839,747

45,000 19,207,852 19,252,852

Application of funds
Current Assets, Loans & Advances (A) Cash and Bank Balances Interest accrued on Bank Fixed Deposits Loans & Advances 4 3 205,608,858 2,004,993 20,927,309 228,541,160 178,460,694 919,624 5,069,424 184,449,742

Sd/Z. F. Billimoria Partner (Membership No. 42791) Mumbai, 10th August, 2011

Current Liabilities (B) Net Current Assets (A-B) Total Notes to and forming part of the Accounts In terms of our report attached For Deloitte Haskins & Sells Chartered Accountants Sd/Z. F. Billimoria Partner Place: Mumbai Date: 10th August 2011

197,701,413 30,839,747 30,839,747

165,196,890 19,252,852 19,252,852

For and on behalf of the Board of Directors of RBS Foundation India Sd/N. Sunil Kumar Director Sd/Tushar Lowalekar Director Sd/Meera H. Sanyal Director

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Income & Expenditure account for the year ended 31 March 2011 Schedule number Income
Interest on Fixed Deposit [Tax Deducted at Source ` 10,67,016/(Previous year ` 11,75,692/- )] Admininstrative Expenses written back Total 2,693,841 12,284,360 8,350,074

Schedules forming part of the Balance Sheet as at 31 March 2011 Year ended 31 Mar 2010 (`)
8,350,074 Schedule 1: Share Capital Authorised 10,000 Equity shares of Rs.10 each 100,000 100,000 Issued, Subscribed and Paid Up 4,500 Equity shares of Rs.10 each fully paid up 100,000 100,000

Year ended 31 March 2011 (`)

9,590,519

` As at 31 March 2011

` As at 31 March 2010

45,000 45,000

45,000 45,000

Expenditure
Administrative Expenses Professional Fees Bank Charges Auditors' Remuneration Sub total Less: Grants Received Total Excess of income over expenditure Basic/diluted earnings per share [Nominal Value / share ` 10/- (Previous Year ` 10/-)] Notes to and forming part of the Accounts Refer note 3 Refer note 6 Refer note 7 Refer note 5 7,099,776 613,432 756 83,277 7,797,241 7,099,776 697,465 11,586,895 2,575 9,733,841 32,394 50,000 9,816,235 7,040,000 2,776,235 5,573,839 2,572 Schedule 3: Cash & Bank Balances Balances with a Scheduled Bank - In Deposit Account - In Current Account 6 Schedule 2: Reserves and Surplus Income & Expenditure Account Opening Balance Excess of Income over Expenditure during the year

19,207,852 11,586,895 30,794,747

13,634,013 5,573,839 19,207,852

204,852,000 756,858 205,608,858

170,859,879 7,600,815 178,460,694

Schedule 4: Loans & Advances (Unsecured, Considered good) Advance Recoverable in Cash or in kind or value to be received In terms of our report attached For Deloitte Haskins & Sells Chartered Accountants Sd/Z. F. Billimoria Partner Place: Mumbai Date: 10th August 2011 48 Tax Deducted at Source For and on behalf of the Board of Directors of RBS Foundation India Sd/N. Sunil Kumar Director Sd/Tushar Lowalekar Director Sd/Meera H. Sanyal Director Income Tax (AY 2008 - 09) (Refer Note 8) 5,320,409 15,606,900 20,927,309 816,031 4,253,393 5,069,424

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Schedules forming part of the Balance Sheet as at 31 March 2011 ` As at 31 March 2011
Schedule 5: Current Liabilities Grants AAF Grant 2006 - 08 Less: Utilised RBS Fund 2009 Less: Utilised Less: Utilised for Administrative Expense RBS Fund 2010 Add: Receipt Less: Utilised Less: Utilised for Administrative Expense GAYE Fund Add: Receipt Less: Utilised Support Gurukul Add: Receipt Less: Utilised Supergrounds Less: Utilised Employee Volunteering Less: Utilised Employee Donation Less: Utilised 6,900 6,900 146,233 657,121 657,121 400,523 400,523 146,233 196,045,432 50 1,059,640 913,407 146,233 155,405,115 82,132,050 21,682,152 72,774,008 31,983,828 106,183,350 4,424,453 7,099,776 352,824 1,433,031 1,785,855 94,659,121 40,790,180 60,449,898 112,018,463 29,886,413 88,000,000 8,185,992 7,040,000 2,930,352 2,577,528 352,824 72,774,008 82,132,050

continued from previous page -

` As at 31 March 2010
Sundry Creditors Payable to RBS N.V. Deloitte Haskins & Sells RBS Business Service Pvt. Ltd. EV Bandhavgarh Pramod S Shah & Associates KPMG
[(Other than Micro Small & Medium Entreprises) (Refer Note 5 & 10)]

` As at 31 March 2011

` As at 31 March 2010

1,099,776 75,577 7,135 139,500 279,000 1,600,988

9,733,841 45,000 7,135 6 9,785,982

Other Liabilities TDS payable 54,993 197,701,413 5,793 165,196,890

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Schedule 6: Notes to and forming part of the Accounts

1 Background Information RBS Foundation India (Formerly ABN AMRO Foundation India) ("the Company") was incorporated on 17th February 2007.The Company has been registered under section 25 of the Companies Act, 1956 with effect from 19 January, 2007. The Company has also procured the approval of the Ministry of Home Affairs, required under the Foreign Currency Regulation Act, 1976 for receiving foreign grants from RBS Group Communication, UK of GBP 2.7 million. The Company has received 2.68 million GBP till date out of GBP 2.7 million granted. The Company provides grants for development of infrastructure, promoting sustainable livelihood activities, vocational, entrepreneurial and skill enhancement training, social intermediation, providing health care, functional literacy and technical assistance and any other activity that contributes to the poverty alleviation of poor living in undeserved / backward areas and not for profit. been prepared to comply in all material respects in accordance with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company. b. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the Management to make estimates and assumptions that effect the reported amounts of asset and liabilities and disclosure of contingent liabilities at the date of financial statement and the result of the operations during the reporting period end. Although the estimates are based upon the Management's best knowledge of current events and actions, actual results could differ from these estimates. c. Revenue recognition Interest Interest income is recognized on a time proportion basis taking into account amount outstanding and rate applicable. d. Foreign currency transaction (i) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. (ii) Conversion Foreign currency monetary items are reported using the closing rate. (iii) Exchange differences Exchange differences arising on the settlement of monetary items or on reporting Companys monetary items at rates different from those at which they were initially recorded during the year, are recognized as income or as expense in the year in which they arise. e. Income taxes The Company has been granted exemption from Income tax under Section 12AA(1)(b)(i) of the Income Tax Act, 1961. 3 Earnings per Share In accordance with the Accounting Standard on "Earnings Per Share" (AS-20) notified under the Companies (Accounting Standards) Rules, 2006.

Particulars
Excess of Income over Expenditure during the Year Weighted average number of Equity shares outstanding Earnings per Share (Basic and Diluted) [A/B]

Current year `
11,586,895 4,500 2,575

Previous year `
5,573,839 2,167 2,572

4 Related Party Disclosure Name of Related Party: RBS PLC Nature of transactions: Grant recieved Relation: 2010 - 11: 2009 - 10: Parent 107,615,556 91,989,992

amounted to Rs.8,494,668 can be utilised for overhead costs. Accordingly during the Current Year the Company has utilised 7,099,776 for its Administrative and Other Expenses.

5 Administrative Expenses The Company has accrued Rs.7,099,776 during the current year to RBS N.V., India ("The bank") for services rendered by the bank in nature of infrastructure support services, including cost of premises, cost of human resources and other transaction processing related costs incurred on managing the dealings of the Company.

7 Auditor's Remuneration Particulars 2010 - 11 2009 - 10

Statutory audit fees Out of pocket expenses Service tax Total

75,000 500 7,777 83,277

50,000 500 5,201 55,701

2 Statement of Significant Accounting Policies a. Basis of preparation The financial statements have

6 As per the AAF 2007-11 Agreement, dated 1st November, 2007, 8% of the grants received under this agreement, which

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Schedule 6: Notes to and forming part of the Accounts

8 The Company has received during the year an order from the Income Tax Department contending that it has spent the money received as grants in the name of alleviation of poverty, etc. for building a market share for RBS N.V. - Indian Branches Micro Finance Business and accordingly denied it the exemption claimed under section 11 of the Income Tax Act, 1961 and raised a demand of `78,030,489. Consequently, the company has filed an appeal with the Commissioner of Income Tax and paid an amount of `15,606,900 under protest, pending resolution of appeal. Subsequently to the year end, the Commissioner of Income Tax has ruled appeal in favour of the Company and hence the company currently doesnt have any liability. 9 The Company has no employees and thus no disclosure is required under the Accounting Standard on "Employee Benefits" (AS-15) notified under the Companies (Accounting Standards) Rules, 2006. 10 The Company has initiated the process of identification of 'suppliers' registered under " The Micro, Small and Medium Enterprises Development Act, 2006" (MSMED Act) by obtaining confirmation from suppliers. Based on the intimation received by the Company, none of the suppliers have confirmed to be registered under the MSMED Act, 2006. Accordingly, no disclosures relating to amounts unpaid as at end year together with the interest paid / payable are required to furnished. 11 The Company is Small and Medium sized company (SMC) as defined in the General Instructions in respect of Accounting Standards notified under the Companies Act, 1956. Accordingly the Company has compiled with the Accounting Standards as applicable to SMCs. 12 Previous Year Comparatives Previous year's figures have been regrouped & rearranged , wherever necessary.

projectpartners

CPSW

For and on behalf of the Board of Directors of RBS Foundation India Sd/N. Sunil Kumar Director 54 Sd/Tushar Lowalekar Director Sd/Meera H. Sanyal Director 55

acknowledgements
A special thanks to all our project partners and employees of the RBS Group, for their inputs, inspiration and co-operation.

concept&design
Ahead Communications RBS Foundation India

editing
RBS Foundation India Fiona Gibson Head, Marketing and Communications, SE Asia, RBS

printing
Tag: Worldwide India

photographs
Project Partners RBS Foundation India

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