GRAMEEN FOUNDATION USA

Transcription

1 CONSOLIDATED FINANCIAL STATEMENTS GRAMEEN FOUNDATION USA AND AFFILIATE FOR THE YEARS ENDED

2 CONTENTS PAGE NO. INDEPENDENT AUDITOR'S REPORT 2-3 EXHIBIT A - Consolidated Statements of Financial Position, as of March 31, 2015 and EXHIBIT B - Consolidated Statements of Activities and Changes in Net Assets, for the Years Ended March 31, 2015 and EXHIBIT C - Consolidated Statement of Functional Expenses, for the Year Ended March 31, EXHIBIT D - Consolidated Statement of Functional Expenses, for the Year Ended March 31, EXHIBIT E - Consolidated Statements of Cash Flows, for the Years Ended March 31, 2015 and NOTES TO COMBINED FINANCIAL STATEMENTS SUPPLEMENTAL INFORMATION SCHEDULE 1 - Consolidating Schedule of Support and Revenue and Functional Expenses, for the Year Ended March 31,

3 INDEPENDENT AUDITOR'S REPORT To the Board of Directors Grameen Foundation USA and Affiliate Washington, D.C. We have audited the accompanying consolidated financial statements of Grameen Foundation USA and Affiliate (together "the Foundation"), which comprise the consolidated statements of financial position as of March 31, 2015 and 2014, and the related consolidated statements of activities and changes in net assets, functional expenses and cash flows for the years then ended, and the related notes to the consolidated financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We did not audit the financial statements of Grameen Foundation India Private Limited (the Affiliate), which statements reflect total assets of $341,125 and $212,701 as of March 31, 2015 and 2014, respectively, and total support and revenues of $148,199 and $158,984, respectively, for the years then ended. Those statements were audited by other auditors, whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Affiliate is based solely on the report of the other auditors. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion MONTGOMERY AVENUE SUITE 650 NORTH BETHESDA, MARYLAND (301) FAX (301) MEMBER OF CPAMERICA INTERNATIONAL, AN AFFILIATE OF HORWATH INTERNATIONAL MEMBER OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS' PRIVATE COMPANIES PRACTICE SECTION 2

4 Opinion In our opinion, based on our audits and the report of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Foundation as of March 31, 2015 and 2014, and the consolidated changes in its net assets and its consolidated cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter The accompanying consolidated financial statements have been prepared assuming that Grameen Foundation India Private Limited (the Affiliate) will continue as a going concern. As discussed in Note 8 to the consolidated financial statements, the Affiliate has suffered a substantial loss from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter. Other Matter Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole.the Consolidating Schedule of Support and Revenue and Functional Expenses on page 22 is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole. August 17,

5 EXHIBIT A GRAMEEN FOUNDATION USA AND AFFILIATE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF CURRENT ASSETS ASSETS Cash and cash equivalents $ 6,263,195 $ 5,254,610 Investments (Notes 2 and 14) 2,758,254 3,141,116 Loans receivable, net of allowance (Note 3) 857, ,386 Grants and contributions receivable 1,051,069 2,363,136 Other receivables and advances (Note 15) 949, ,068 Prepaid expenses 322, ,165 PROPERTY AND EQUIPMENT Total current assets 12,202,225 12,886,481 Furniture and equipment 606, ,752 Less: Accumulated depreciation and amortization (291,892) (223,821) OTHER ASSETS Net property and equipment 314, ,931 Loans receivable, net of current portion and allowance (Note 3) 43, ,240 Program-related investments (Notes 4 and 14) 3,466,272 3,477,182 Deposits 160, ,948 Total other assets 3,670,715 4,201,370 TOTAL ASSETS $ 16,187,429 $ 17,222,782 CURRENT LIABILITIES LIABILITIES AND NET ASSETS Note payable (Note 5) $ 96,394 $ 50,196 Accounts payable and accrued expenses 1,140,597 1,455,889 Current portion of deferred rent (Note 10) 38,060 - Deferred revenue 391, ,771 NONCURRENT LIABILITIES Total current liabilities 1,666,615 1,752,856 Note payable, net of current portion (Note 5) - 75,659 Deferred rent, long term (Note 10) 697, ,400 NET ASSETS Total noncurrent liabilities 697, ,059 Total liabilities 2,363,618 2,537,915 Unrestricted 7,345,392 9,545,078 Temporarily restricted (Note 6) 6,478,419 5,139,789 Total net assets 13,823,811 14,684,867 TOTAL LIABILITIES AND NET ASSETS $ 16,187,429 $ 17,222,782 See accompanying notes to consolidated financial statements. 4

6 EXHIBIT B GRAMEEN FOUNDATION USA AND AFFILIATE CONSOLIDATED STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEARS ENDED SUPPORT AND REVENUE Unrestricted Temporarily Restricted Total Unrestricted Temporarily Restricted Total Contributions and grants $ 2,177,546 $ 15,144,738 $ 17,322,284 $ 2,026,757 $ 13,235,152 $ 15,261,909 Program revenues 2,694,522-2,694,522 3,381,225-3,381,225 Government grants 944, ,041 1,438,756-1,438,756 Interest and investment income (Note 2) 195, , , ,803 Loan interest 175, , , ,644 In-kind contributions (Note 9) 4,870,819-4,870,819 1,589,504-1,589,504 Net assets released from donor restrictions (Note 7) 13,806,108 (13,806,108) - 14,512,577 (14,512,577) - EXPENSES Total support and revenue 24,864,290 1,338,630 26,202,920 24,321,266 (1,277,425) 23,043,841 Program Services: Regional Services 1,999,040-1,999,040 1,563,397-1,563,397 Financial Services 5,782,775-5,782,775 5,651,425-5,651,425 Information Access 8,936,564-8,936,564 8,894,687-8,894,687 Poverty Tools 3,385,736-3,385,736 3,284,807-3,284,807 Public Education 744, , , ,404 Total program services 20,848,191-20,848,191 20,113,720-20,113,720 Supporting Services: Management and General 4,558,283-4,558,283 4,194,946-4,194,946 Fundraising 263, , , ,549 Total supporting services 4,821,449-4,821,449 4,431,495-4,431,495 Total expenses 25,669,640-25,669,640 24,545,215-24,545,215 Changes in net assets before other items (805,350) 1,338, ,280 (223,949) (1,277,425) (1,501,374) OTHER ITEMS Allowances for uncollectable loans receivable and foreign exchange risk (991,140) - (991,140) (48,533) 57,331 8,798 Foreign exchange rate loss (403,196) - (403,196) (321,846) (50,415) (372,261) Changes in net assets (2,199,686) 1,338,630 (861,056) (594,328) (1,270,509) (1,864,837) Net assets at beginning of year 9,545,078 5,139,789 14,684,867 10,139,406 6,410,298 16,549,704 NET ASSETS AT END OF YEAR $ 7,345,392 $ 6,478,419 $ 13,823,811 $ 9,545,078 $ 5,139,789 $ 14,684,867 See accompanying notes to consolidated financial statements. 5

7 EXHIBIT C GRAMEEN FOUNDATION USA AND AFFILIATE CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED MARCH 31, 2015 Program Services Supporting Services Regional Programs Financial Services Information Access Poverty Tools Public Education Total Program Services Management and General Fundraising Total Supporting Services Total Expenses Salaries $ 601,041 $ 1,847,027 $ 2,837,800 $ 1,519,576 $ 233,267 $ 7,038,711 $ 2,248,189 $ 125,578 $ 2,373,767 $ 9,412,478 Benefits (Note 12) 127, , , ,233 14,399 1,870, ,891 26, ,794 2,383,457 Professional services 140, ,202 2,094, ,113 81,893 3,807, ,982 2, ,810 4,044,779 In-kind contributions (Note 9) 883,775 1,607, , , ,159 4,033, , ,731 4,870,819 Grants 1,851 76, , , ,573 Travel 96, , ,092 85,924 22,064 1,312,014 91,144 17, ,469 1,420,483 Conferences and meetings 12,007 69, ,051 21,668 19, ,472 34,479 2,777 37, ,728 Communications 8,515 35, ,719 20,691 2, ,916 36,346 1,460 37, ,722 Information technology 24,536 34, ,948 45,314 6, ,715 67,706 3,318 71, ,739 Occupancy (Note 10) 35, , , ,732 23, , ,699 16, ,726 1,015,141 Vehicles and equipment 6,455 56, ,131 35,486 1, ,259 21,134 1,051 22, ,444 Depreciation and amortization 5,505 10,512 18,135 9,411 1,213 44,776 16, ,092 61,868 Insurance 2,709 19,724 36,162 14,118 1,820 74,533 31,511 1,208 32, ,252 Office expenses 4,590 25,501 72,085 6,460 4, ,524 79,805 36, , ,286 Advertising 21,595 8,936 26,860 4, ,915 6, ,187 69,102 Bank fees 5,635 40,106 6,262 1, ,011 13,666 14,456 28,122 82,133 Other 20,975 26,319 52,028 4,314 1, ,637 30,093 11,906 41, ,636 TOTAL $ 1,999,040 $ 5,782,775 $ 8,936,564 $ 3,385,736 $ 744,076 $ 20,848,191 $ 4,558,283 $ 263,166 $ 4,821,449 $ 25,669,640 See accompanying notes to consolidated financial statements. 6

8 EXHIBIT D GRAMEEN FOUNDATION USA AND AFFILIATE CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED MARCH 31, 2014 Program Services Supporting Services Regional Programs Financial Services Information Access Poverty Tools Public Education Total Program Services Management and General Fundraising Total Supporting Services Total Expenses Salaries $ 671,713 $ 2,216,775 $ 2,878,461 $ 1,605,170 $ 205,594 $ 7,577,713 $ 2,477,878 $ 111,031 $ 2,588,909 $ 10,166,622 Benefits (Note 12) 221, , , ,117 24,457 2,049, ,056 24, ,099 2,633,631 Professional services 128,604 1,444,240 2,400, ,594 43,003 4,714, ,957 9, ,711 4,944,314 In-kind contributions (Note 9) 213, , , , ,054 1,417, ,027 1, ,561 1,589,504 Grants 1, , , , ,023 Travel 169, , , ,445 14,167 1,396, ,134 11, ,982 1,534,929 Conferences and meetings 21,048 44, ,213 17,987 23, ,117 61,404 9,765 71, ,286 Communications 15,529 47, ,812 22,423 3, ,016 45,138 1,068 46, ,222 Information technology 12,445 76, ,877 31,499 14, ,538 65,440 1,684 67, ,662 Occupancy (Note 10) 58, , , ,526 23, , ,421 10, ,289 1,036,032 Vehicles and equipment 18,131 41, ,000 17,736 1, ,721 17, , ,884 Depreciation and amortization 3,981 9,788 22,906 5, ,829 8, ,930 51,759 Insurance 4,570 26,431 47,308 10,979 1,426 90,714 24, , ,947 Office expenses 11,348 27,164 74,968 18,955 9, ,999 70,718 25,027 95, ,744 Advertising 734 3,173 50,937 2,196 6,098 63,138 17, ,553 80,691 Bank fees 6, ,345 6,369 1, ,426 12,028 16,168 28, ,622 Other 4,361 12,106 86,045 8,429 2, ,718 29,740 11,885 41, ,343 TOTAL $ 1,563,397 $ 5,651,425 $ 8,894,687 $ 3,284,807 $ 719,404 $ 20,113,720 $ 4,194,946 $ 236,549 $ 4,431,495 $ 24,545,215 See accompanying notes to consolidated financial statements. 7

9 EXHIBIT E GRAMEEN FOUNDATION USA AND AFFILIATE CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED CASH FLOWS FROM OPERATING ACTIVITIES Changes in net assets $ (861,056) $ (1,864,837) Adjustments to reconcile in net assets to net cash provided (used) by operating activities: Depreciation and amortization 61,868 51,759 Unrealized loss (gain) on investments 68,773 (741,420) Realized gain on sales of investments (160,718) (82,567) Change in allowances for uncollectable loans receivable and foreign exchange risk 22,513 (830,810) Impairment of program-related investments 748, ,637 (Increase) decrease in: Grants and contributions receivable 1,312,067 (1,410,956) Other receivables and advances 6, ,017 Prepaid expenses (42,502) (19,340) Deposits 27,380 (9,468) Increase (decrease) in: Accounts payable and accrued expenses (315,292) (393,522) Deferred revenue 144, ,521 Refundable advance - (71,296) Deferred rent liability 25,663 33,686 Net cash provided (used) by operating activities 1,039,050 (4,078,596) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of furniture and equipment (241,426) (36,881) Proceeds from sales of investments 1,518, ,441 Reinvestments/purchases of investments (1,088,824) (321,809) Recognition of program-related investments (692,465) (933,478) Net cash used by investing activities (504,513) (522,727) CASH FLOWS FROM FINANCING ACTIVITIES Loans provided to local partners (101,839) (453,919) Loan repayments from local partners 605,348 2,469,597 Repayment on note payable (54,293) (6,047) Proceeds on note payable 24,832 87,844 Net cash provided by financing activities 474,048 2,097,475 Net increase (decrease) in cash and cash equivalents 1,008,585 (2,503,848) Cash and cash equivalents at beginning of year 5,254,610 7,758,458 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 6,263,195 $ 5,254,610 See accompanying notes to consolidated financial statements. 8

10 EXHIBIT E (Continued) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SCHEDULE OF NONCASH INVESTING AND FINANCING TRANSACTIONS Donated Securities $ 149,877 $ 408,158 See accompanying notes to consolidated financial statements. 9

11 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION Organization - Grameen Foundation USA is a non-profit organization that was created to collaborate with public and private institutions to achieve the long-term goal of eliminating poverty throughout the world. Grameen Foundation India Private Limited (the Affiliate), a for-profit corporation registered in India, was established for the purpose of furthering the mission of Grameen Foundation USA. Basis of presentation - The accompanying consolidated financial statements are presented on the accrual basis of accounting, and in accordance with FASB ASC , Not-for-Profit Entities, Consolidation. The consolidated financial statements include the accounts of Grameen Foundation USA and Grameen Foundation India Private Limited, a wholly-owned subsidiary (together the Foundation ). All significant intercompany transactions and balances have been eliminated in consolidation. Cash and cash equivalents - The Foundation considers all cash and certificates of deposit to be cash equivalents. As of March 31, 2015 and 2014, certificates of deposit, including accrued interest, included in cash totaled $3,489,804 and $2,813,427, respectively. Bank deposit accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to a limit of $250,000. At times during the year, the Foundation maintains cash balances in excess of the FDIC insurance limits. Management believes the risk in these situations to be minimal. At March 31, 2015 and 2014, the Foundation had $710,429 and $793,862, respectively, of cash and cash equivalents held at financial institutions in foreign countries to support operations in those countries. The majority of funds held in foreign countries is uninsured. Investments - Investments are recorded at their readily determinable fair value. Realized and unrealized gains and losses are included in interest and investment income in the Consolidated Statements of Activities and Changes in Net Assets. Receivables - All amounts receivable are recorded at their net realizable value, which approximates fair value. Management considers all amounts from grants, contributions and other receivables to be fully collectible within one year. The allowance for doubtful accounts is determined based on the age of the balance. The allowance for doubtful accounts for loans receivable is determined based upon a quarterly review of account balances, including the age of the balance, the historical experience with the customer and the risk of the institution and country. 10

12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION (Continued) Property and equipment - Property and equipment with an acquisition value of $2,500 or more are stated at cost. Property and equipment are depreciated on a straight-line basis over the estimated useful lives of the related assets, generally three to ten years. The cost of maintenance and repairs is recorded as expenses are incurred. Leasehold improvements are recorded at cost and are amortized over the life of the lease. Deferred revenue - Deferred revenue consists of unearned fees. The Foundation recognizes subscription revenue on a monthly basis over the life of the subscription and recognizes volunteer engagement revenue when the engagement actually occurs. Income taxes - Grameen Foundation USA is exempt from Federal income taxes under Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision for income taxes has been made in the accompanying consolidated financial statements. Grameen Foundation USA is not a private foundation. Grameen Foundation India Private Limited (GFI) is a for-profit corporation registered in India and is subject to tax on any net profit recognized during the fiscal year. However, GFI is operated as a social business and is expected to incur losses for the foreseeable future. Accordingly, no provision for income taxes has been made in the accompanying consolidated financial statements. Uncertain tax positions - For the years ended March 31, 2015 and 2014, the Foundation has documented its consideration of FASB ASC , Income Taxes, that provides guidance for reporting uncertainty in income taxes and has determined that no material uncertain tax positions qualify for either recognition or disclosure in the financial statements. The Federal Form 990, Return of Organization Exempt from Income Tax, is subject to examination by the Internal Revenue Service, generally for three years after it is filed. Net asset classification - The net assets are reported in two self-balancing groups as follows: Unrestricted net assets include unrestricted revenue and contributions received without donor-imposed restrictions. These net assets are available for the operation of the Foundation and include both internally designated and undesignated resources. Temporarily restricted net assets include revenue and contributions subject to donorimposed stipulations that will be met by the actions of the Foundation and/or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Consolidated Statements of Activities and Changes in Net Assets as net assets released from restrictions. 11

13 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION (Continued) Contributions and grants - Contributions and grants are recorded as revenue in the year notification is received from the donor. Temporarily restricted contributions and grants are recognized as unrestricted support only to the extent of actual expenses incurred in compliance with the donor-imposed restrictions and satisfaction of time restrictions. Such contributions and grants received in excess of expenses incurred are shown as temporarily restricted net assets in the accompanying consolidated financial statements. The Foundation receives funding under grants from the U.S. Government, for direct and indirect program costs. This funding is subject to contractual restrictions, which must be met through incurring qualifying expenses for particular programs. Accordingly, such grants are considered exchange transactions and are recorded as unrestricted income to the extent that related expenses are incurred in compliance with the criteria stipulated in the grant agreements. Foreign currency translation - The U.S. Dollar ("dollars") is the functional currency for the Foundation's worldwide operations. Transactions in currencies other than U.S. dollars are translated into dollars at the rate of exchange in effect during the month of the transaction. Current assets and liabilities denominated in non-u.s. currency are translated into dollars at the exchange rate in effect at the date of the Consolidated Statements of Financial Position. In-kind contributions - The Foundation receives and recognizes contributed services and gifts in-kind from various sources. In-kind contributions are recorded at their fair market value as of the date of the gift. Use of estimates - The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Functional allocation of expenses - The costs of providing the various programs and other activities have been summarized on a functional basis in the Consolidated Statements of Activities and Changes in Net Assets. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Risks and uncertainties - The Foundation invests in various investment securities. Investment securities are exposed to various risks such as interest rates, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the consolidated financial statements. 12

14 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION (Continued) Credit risk - Credit risk is the risk of financial loss to the Foundation if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Foundation's lending activity. The Foundation takes on exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Allowances for uncollectable loans are accounted for where there is objective evidence that the loans and advances to customers are impaired. Significant changes in the economy, depreciation of local currencies against the currencies of the indexed portfolios, or in the health of a particular industry segment, could result in evidence that the expected future cash flows are different from those provided for at the end of the reporting period. Management, therefore, carefully monitors and manages its exposure to credit risk. Market risk - Market risk is defined as external influences, generally outside of the control of the organization's executive management, but which can be identified, assessed and mitigating actions put in place to reduce any adverse impact. Currency risk - The Foundation is exposed to currency risk through transactions in foreign currencies against the U.S. Dollar ("dollars"). There is also a statement of financial position risk that the net monetary liabilities in foreign currencies will take a higher value when translated into dollars as a result of currency movements. Fair value measurement - The Foundation adopted the provisions of FASB ASC 820, Fair Value Measurement. FASB ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs (assumptions that market participants would use in pricing assets and liabilities, including assumptions about risk) used to measure fair value, and enhances disclosure requirements for fair value measurements. The Foundation accounts for a significant portion of its financial instruments at fair value or considers fair value in their measurement. 2. INVESTMENTS Investments consisted of the following at March 31, 2015 and 2014: Cost Fair Value Cost Fair Value Mutual funds $ 2,129,836 $ 2,429,158 $ 2,250,537 $ 2,609,634 Bonds 323, , , ,482 TOTAL INVESTMENTS $ 2,452,988 $ 2,758,254 $ 2,767,077 $ 3,141,116 13

15 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. INVESTMENTS (Continued) Included in interest and investment income in the Consolidated Statements of Activities and Changes in Net Assets are the following at March 31, 2015 and 2014: Interest and dividends (from cash and investment accounts) $ 103,878 $ 110,816 Unrealized (loss) gain on investments (68,773) 741,420 Realized gain on sales of investments 160,718 82,567 TOTAL INTEREST AND INVESTMENT INCOME $ 195,823 $ 934, LOANS RECEIVABLE Grameen Foundation USA provides loans to microfinance institutions and social enterprises serving the world's poorest in regions of the world that traditionally have been underserved. These loans bear interest between 5% and 27.8%, mature at various times over the next several years, and are disbursed and repaid in either U.S. Dollars or the local currency of the respective country. As of March 31, 2015 and 2014, all loans receivable are stated in U.S. Dollars (or translated into U.S. Dollars from foreign currency where applicable). All loans are reserved based on expected delinquency and exchange rate devaluation. Year Ending March 31, $ - $ 990, ,023, , ,000 69, , ,086 1,068,215 1,571,724 Less: Current maturities, net of current allowance (857,729) (891,386) Less: Allowance for uncollectable loans and foreign exchange risk (current portion) (165,486) (98,985) Less: Allowance for uncollectable loans and foreign exchange risk (noncurrent portion) (1,125) (45,113) TOTAL NONCURRENT LOANS RECEIVABLE $ 43,875 $ 536, PROGRAM-RELATED INVESTMENTS Grameen Foundation USA has made certain program-related investments in an effort to further the impact of its programmatic activities. All investments are stated at cost; however, certain impairments have been recognized to adjust to fair value. Grameen Foundation USA has performed independent valuations and deemed the net values to be a fair representation of lower of cost or market. 14

16 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. PROGRAM-RELATED INVESTMENTS (Continued) Following is a list of all program-related investments at March 31, 2015 and 2014: Equity Grameen-Jameel Pan-Arab Microfinance Limited $ 787,550 $ 787,550 Grameen Capital India Ltd. 658, ,420 Kashf Holdings (Pvt.) Limited 250, ,000 Cashpor Financial and Technical Services 250, ,027 Drishtee Dot Com Ltd. 20,000 20,000 Musoni (DTM & Kenya) 1,026,129 1,026,129 Fairtrade Access Fund 750, ,000 Juhudi Kulimo 741, ,099 PT Ruma 905, ,819 Radaur Holdings 404,239-5,792,939 5,055,044 Less: Allowance for impairment of Grameen-Jameel Pan- Arab Microfinance Limited (787,550) (787,550) Less: Allowance for impairment of Grameen Capital India (321,935) (341,925) Less: Allowance for impairment of Kashf Holdings (Pvt.) (250,000) (250,000) Limited Less: Allowance for impairment of Drishtee Dot Com Ltd. (20,000) (20,000) Less: Allowance for impairment of Musoni (DTM & Kenya) (262,776) (113,587) Less: Allowance for impairment of Fairtrade Access Fund (22,500) (64,800) Less: Allowance for impairment of Juhudi Kulimo (403,525) - Less: Allowance for impairment of Radaur Holdings (258,381) - TOTAL PROGRAM-RELATED INVESTMENTS $ 3,466,272 $ 3,477, NOTE PAYABLE On October 17, 2012, Grameen Foundation USA entered into an agreement to borrow up to $200,000 from Kiva Microfunds, a California non-profit public benefit corporation. The purpose of the loan is to provide loan capital to allow Community Knowledge Workers (CKWs) in Uganda to purchase a "business-in-a-box" mobile phone kit. These kits allow CKWs to provide valuable information to smallholder farmers as well as generate income from data collection services. As Grameen Foundation USA disburses loans to CKWs, Kiva Microfunds then disburses equivalent funds to Grameen Foundation USA. Repayments from CKWs to Grameen Foundation USA happen on a monthly basis over a 41-month term. Repayment from Grameen Foundation USA to Kiva Microfunds on a monthly basis is contingent upon the CKWs repaying the loan to Grameen Foundation USA. During the years ended March 31, 2015 and 2014, $24,832 and $87,844, respectively, was disbursed to Grameen Foundation USA under this facility and the total balance due under this facility as of March 31, 2015 was $96,

17 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5. NOTE PAYABLE (Continued) The following is a schedule of required principal payments due under the aforementioned note: Year Ending March 31, 2016 $ 96, TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consisted of the following at March 31, 2015 and 2014: Regional Services $ 80,153 $ 165,136 Financial Services 1,972,580 1,947,874 Information Access 3,961,932 2,149,020 Poverty Tools 365, ,055 Public Education - 4,384 6,380,432 4,941,469 Restricted micro-credit loans 97, ,320 TOTAL TEMPORARILY RESTRICTED NET ASSETS $ 6,478,419 $ 5,139, NET ASSETS RELEASED FROM DONOR RESTRICTIONS The following temporarily restricted net assets were released from donor restrictions, at March 31, 2015 and 2014, by incurring expenses and through partner financing, thus satisfying the restricted purposes specified by the donors: Regional Services $ 399,267 $ 366,013 Financial Services 3,554,222 4,104,620 Information Access 7,202,098 6,366,550 Poverty Tools 2,495,805 3,061,787 Public Education 54, ,602 13,705,775 14,034,572 Partner financing through issuance of loans, cashbacked SBLCs and equity investments 100, ,005 TOTAL NET ASSETS RELEASED FROM DONOR RESTRICTIONS $ 13,806,108 $ 14,512, FUTURE FUNDING OF THE AFFILIATE During the year ended March 31, 2015 and 2014, Grameen Foundation India Private Limited (the Affiliate) experienced a negative change in unrestricted net assets of $1,719,416 and $316,060, respectively. Failure to obtain additional unrestricted revenue may affect the Affiliate s future activities. 16

18 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8. FUTURE FUNDING OF THE AFFILIATE (Continued) Grameen Foundation USA is committed to continuing to invest resources in the Affiliate because of its social mission to ensure it can meet its obligations. The consolidated financial statements do not include any adjustment that might be necessary if the Affiliate is unable to continue as a going concern. 9. IN-KIND CONTRIBUTIONS During the years ended March 31, 2015 and 2014, Grameen Foundation USA was the beneficiary of donated services, which allowed Grameen Foundation USA to provide greater resources toward various programs. To properly reflect total program expenses, the following donations have been included in revenue and expense for the years ended March 31, 2015 and 2014: Advertising $ 313,362 $ 261,643 Legal services 696, ,275 Professional services 3,860,728 1,054,586 TOTAL IN-KIND CONTRIBUTIONS $ 4,870,819 $ 1,589, LEASE COMMITMENTS Grameen Foundation USA leases office space in Washington, D.C. under a 131-month lease agreement that began on September 1, 2010 and expires on July 31, The annual rental rate is adjusted annually to include a proportionate share of operating expenses and real estate tax reimbursements. Grameen Foundation USA has the right to terminate the lease at any time after the last day of the fifth lease year. Grameen Foundation USA leases office space in Seattle, Washington under an eleven-year lease agreement that began on January 1, 2011 and expires on December 31, The annual rental rate is adjusted annually to include a proportionate share of operating expenses and real estate tax reimbursements. Grameen Foundation USA has the right to terminate the lease at any time between the 60th and 82nd month. Grameen Foundation USA leases office space in Kenya under a five-year sublease agreement that began on April 1, 2014 and expires on March 27, Grameen Foundation USA leases office space in the Philippines under a one-year lease agreement that began on June 1, 2014 and expires on May 31, Grameen Foundation India Private Limited leases office space in India under a three-year lease agreement that began on February 7, 2014 and expires on February 6, Grameen Foundation USA leases office space in Colombia under a one-year lease agreement that began on October 1, 2014 and expires on September 30, Grameen Foundation USA leases office space in Ghana under a two-year lease agreement that began on July 15, 2013 and expires on July 14, All rents were prepaid at the time of the lease execution. 17

19 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 10. LEASE COMMITMENTS (Continued) Grameen Foundation USA leases office space in Uganda under a two-year lease agreement that began on November 1, 2014 and expires on October 31, The first year was prepaid at the time of the lease execution. Accounting principles generally accepted in the United States of America require that the total rent commitment should be recognized on a straight-line basis over the term of the lease. Accordingly, the difference between the actual monthly payments and the rent expense being recognized for consolidated financial statement purposes is recorded as a deferred rent liability on the Consolidated Statements of Financial Position. As of March 31, 2015 and 2014, the deferred rent liability totaled $735,063 and $709,400, respectively. Future minimum lease payments are as follows: Year Ending March 31, 2016 $ 886, , , , ,699 Thereafter 1,296,716 $ 5,764,308 Grameen Foundation USA also entered into sublease agreements with three unrelated organizations in Washington, D.C. The subleases extend between March 31, 2016 and March 31, Sublease income was $121,287 for the year ended March 31, The following is a schedule of the future minimum rental income: Year Ending March 31, 2016 $ 178, , ,390 $ 347,729 Total occupancy expense, including operating and renovation expenses and net of sublease income, totaled $1,015,141 and $1,036,032 for the years ended March 31, 2015 and 2014, respectively. 11. CONTINGENCY Grameen Foundation USA and Affiliate receives grants from various agencies of the United States Government. Such grants are subject to audit under the provisions of OMB Circular A-133. The ultimate determination of amounts received under the United States Government grants is based upon the allowance of costs reported to and accepted by the United States Government as a result of the audits. Audits in accordance with the provisions of OMB Circular A-133 have been completed for all required fiscal years through Until such audits have been accepted by the United States Government, there exists a contingency to refund any amount received in excess of allowable costs. Management is of the opinion that no material liability will result from such audits. 18

20 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 12. PENSION PLAN Grameen Foundation USA maintains a contributory defined contribution plan under Section 401(k) of the Internal Revenue Code for all eligible U.S. employees. The Board of Directors determines the employer contributions. Currently, Grameen Foundation USA contributes 50% of each employee's contribution, up to 3% of each employee's salary. During the years ended March 31, 2015 and 2014, pension expense totaled $160,364 and $144,965, respectively. 13. GROWTH GUARANTEE PROGRAM As of March 31, 2015, Grameen Foundation concluded its Growth Guarantees program, a financing program for microfinance institutions (MFI) whereby guarantees, in the form of a Citibank Standby Letter of Credit (SBLC), are leveraged at the local level through a variety of local financing including, among others, direct loans, securitization, the agency or partnership model, bond issues and private placements. The Growth Guarantees program worked to increase local currency financing options for MFIs to expand outreach to micro-entrepreneurs, particularly women, thereby maximizing impact on poor women and their families. All guarantees under the program expired by March 31, 2015 and there is no residual liability. 14. FAIR VALUE MEASUREMENT In accordance with FASB ASC 820, Fair Value Measurement, Grameen Foundation USA has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Investments recorded in the Consolidated Statements of Financial Position are categorized based on the inputs to valuation techniques as follows: Level 1. These are investments where values are based on unadjusted quoted prices for identical assets in an active market Grameen Foundation USA has the ability to access. Level 2. These are investments where values are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-based valuation techniques that utilize inputs that are observable either directly or indirectly for substantially the full-term of the investments. Level 3. These are investments where inputs to the valuation methodology are unobservable and significant to the fair value measurement. 19

21 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 14. FAIR VALUE MEASUREMENT (Continued) Following is a description of the valuation methodology used for investments measured at fair value. There have been no changes in the methodologies used at March 31, 2015 and Mutual funds - Fair value is equal to the reported net asset value of the fund, which is the price at which additional shares can be obtained. Bonds - Fair value is based upon current yields available on comparable securities of issuers with similar ratings, the security s terms and conditions, and interest rate and credit risk. Program-related investments - These instruments do not have a readily determinable fair value. The fair values used are generally determined by an external valuation expert and are based on appraisals or other estimates that require varying degrees of judgment. Inputs used in determining fair value may include the cost and recent activity concerning the underlying investments in the funds or partnerships. The table below summarizes, by level within the fair value hierarchy, Grameen Foundation USA's investments as of March 31, 2015: 2015 Level 1 Level 2 Level 3 Total Asset Class: Mutual funds $ 2,429,158 $ - $ - $ 2,429,158 Bonds - 329, ,096 Program-related investments - - 3,466,272 3,466,272 TOTAL $ 2,429,158 $ 329,096 $ 3,466,272 $ 6,224,526 The table below summarizes, by level within the fair value hierarchy, Grameen Foundation USA's investments as of March 31, 2014: 2014 Level 1 Level 2 Level 3 Total Asset Class: Mutual funds $ 2,609,634 $ - $ - $ 2,609,634 Bonds - 531, ,482 Program-related investments - - 3,477,182 3,477,182 TOTAL $ 2,609,634 $ 531,482 $ 3,477,182 $ 6,618,298 Level 3 Financial Assets The following table provides a summary of changes in fair value of Grameen Foundation USA's financial assets for the year ended March 31, 2015: Program- Related Investments Beginning balance as of April 1, 2014 $ 3,477,182 Recognition of program-related investments 737,894 Change in allowance for impairment of program-related investments (748,804) BALANCE AS OF MARCH 31, 2015 $ 3,466,272 20

22 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 14. FAIR VALUE MEASUREMENT (Continued) The following table provides a summary of changes in fair value of Grameen Foundation USA's financial assets for the year ended March 31, 2014: Program- Related Investments Beginning balance as of April 1, 2013 $ 2,431,901 Recognition of program-related investments 1,442,918 Change in allowance for impairment of program-related investments (397,637) BALANCE AS OF MARCH 31, 2014 $ 3,477, RELATED PARTY TRANSACTIONS During the years ended March 31, 2015 and 2014, Grameen Foundation USA received several payments from Grameen-Jameel Pan-Arab Microfinance Limited, a joint-venture providing microfinance services in the Middle East, in which Grameen Foundation USA owns 50%. For the years ended March 31, 2015 and 2014, the transactions totaled $200,000 under a Management and Technical Assistance Agreement (M&TA), $38,601 and $60,555, respectively, under other arms-length agreements for technical services. Of these amounts, $128,725 and $66,103 were outstanding as receivables as of March 31, 2015 and 2014, respectively. During the years ended March 31, 2015 and 2014, Grameen Foundation USA paid fees to Grameen Capital India Private Limited, a joint venture providing capital raising advisory services to microfinance institutions and other social businesses. These transactions totaled $0 and $7,512, respectively, and were related to advisory services for Growth Guarantee placements at microfinance institutions in India. During the years ended March 31, 2015 and 2014, Grameen Foundation USA also made a program related equity investment of $0 and $30,000, respectively, into Grameen Capital India Private Limited (see Note 4) and $404,239 and $0, respectively, into Raduar Holdings Private Limited, an investment fund launched by Grameen Capital India Private Limited to provide capital to social enterprises in India. The payments were approved by the Board of Directors. In August 2010, Grameen Foundation USA incorporated a wholly-owned subsidiary in India, with an initial investment of $100,000. Grameen Foundation India Private Limited is a for-profit entity that operates as a social business to improve the lives of the poor and poorest. During the years ended March 31, 2015 and 2014, additional investments of $650,000 and $550,000, respectively, were made by Grameen Foundation USA. During the years end March 31, 2015 and 2014, the investment totaled $2,527,569 and $1,877,569, respectively. During the years ended March 31, 2015 and 2014, Grameen Foundation USA also paid fees to Grameen Foundation India for professional services in India totaling $92,530 and $0, respectively. Interorganization balances and transactions have been eliminated in the accompanying consolidated financial statements. 16. SUBSEQUENT EVENTS In preparing these consolidated financial statements, Grameen Foundation USA and Affiliate have evaluated events and transactions for potential recognition or disclosure through August 17, 2015, the date the consolidated financial statements were issued. 21

23 SUPPLEMENTAL INFORMATION

24 SCHEDULE 1 GRAMEEN FOUNDATION USA AND AFFILIATE CONSOLIDATING SCHEDULE OF SUPPORT AND REVENUE AND FUNCTIONAL EXPENSES FOR THE YEAR ENDED MARCH 31, 2015 SUPPORT AND REVENUE Grameen Grameen Foundation USA Foundation Uganda Ghana Philippines Hong Kong Colombia Kenya Indonesia India Private Headquarters Branch Branch Branch Branch Branch Branch Branch Limited Consolidated Contributions and grants $ 16,846,437 $ - $ 261,890 $ - $ 213,957 $ - $ - $ - $ - $ 17,322,284 Program revenues 1,170,610 1,215,728 2, , , ,390 2,694,522 Government contributions 944, ,041 Interest and investment income 193, , ,823 Loan interest 175, ,431 In-kind contributions 4,870, ,870,819 TOTAL SUPPORT AND REVENUE $ 24,200,352 $ 1,215,728 $ 264,800 $ - $ 213,957 $ 156,928 $ 988 $ 1,968 $ 148,199 $ 26,202,920 FUNCTIONAL EXPENSES Salaries $ 6,826,484 $ 914,384 $ 406,038 $ 195,888 $ 17,874 $ 288,360 $ 343,523 $ 122,879 $ 297,048 $ 9,412,478 Benefits 1,659, , ,581 31, ,993 78,763 (4,223) 27,239 2,383,457 Professional services 3,045, , ,920 26,289 6, ,632 43,083 1, ,357 4,044,779 In-kind contributions 4,870, ,870,819 Grants 226, ,573 Travel 520, , ,337 29,127 3,152 81,956 77, ,741 1,420,483 Conferences and meetings 109,056 49,007 90,808 1,800-1,805 12, , ,728 Communications 109,536 96, , ,836 6,895-2, ,722 Information technology 280,085 7, (1,657) , ,739 Occupancy 736, ,378 43,990 9, ,019 48, ,028 1,015,141 Vehicles and equipment 220, , , ,290 62, ,444 Depreciation and amortization 44,007-9, , ,479 61,868 Insurance 93,751 7,557 5,053 (892) , ,252 Office expenses 123,792 45,336 46, ,191 4, , ,286 Advertising 42,335 2, ,386 9,322-7,615 69,102 Bank fees 64,492 7,315 2, ,753 1, ,133 Other 83,725 8,860 25,716 2,930-17,979 2, , ,636 TOTAL EXPENSES $ 19,057,132 $ 2,575,582 $ 1,494,021 $ 296,985 $ 29,765 $ 731,141 $ 692,701 $ 122,766 $ 669,547 $ 25,669,640 22