The Bombay Parsi Punchayet (BPP) accounts for the financial year April 1, 2021 to March 31, 2022 are finally available for viewing on their website bombayparsipunchayet.org. Click directly on the Audit tab on top or on the three, short horizontal lines in the top right-hand corner and then click on the word "Audit.” Exactly when the balance sheet and the income and expenditure statements were put up is not known. The BPP doesn’t believe in communicating with the community. The last entry on their website under the heading "News and Notices” is dated June 30, 2022! The items all pertain to the May 29, 2022 trusteeship election for seven seats.
When Parsiana had earlier inquired as to when the accounts would be posted on their website, the replies were either misleading or evasive. But now since the 2021-2022 balance sheet is finally available to the public, all seven trustees are to be congratulated for fulfilling their electoral promise. In the old days when one wished to examine the balance sheets one was told to write to the trust and then fix an appointment to visit.
As a rule people are reluctant to disclose their finances. Institutions, individuals and families opt to keep their income and expenditure figures to themselves. Only when required by law do governments, listed companies and registered societies make their accounts public. By sharing their accounts, the BPP is removing one of the many barriers between the trust and the community. If the trustees want public support for their endeavors, they have to take the community into confidence.
Perhaps now that the accounts are public, trustees may be more open to accepting advice and counsel from consultants, economists and those who specialize in turning around loss-making concerns. Whether the trustees then take appropriate steps or continue to adopt populist policies is to be determined. Either way, the day of reckoning is not far off.
Living with the realization that you may be unable to meet salary expenses, pay vendors, reimburse service providers and worst of all, default on statutory payments, can be nerve wracking. As it is, the auditors, Kalyaniwalla & Mistry, in their "Independent Auditor’s Report” have stated, "The trust has not invested the amounts allocated to Sinking Fund and Depreciation Fund in earmarked deposits. The shortfall… is Rs 22,33,29, 694 (USD 2,730,426).” A similar observation made for the year earlier puts the figure at Rs 21.59 crores (USD 2,639,590). The amount has been mounting over the years.
Donations to the trust are almost non-existent and BPP’s main source of income, auctioning charitable flats to the highest bidder, is showing diminishing returns. The sales receipts are euphemistically labeled "donations,” but are "donated” for a quid pro quo: possession of a flat. The auction falls in the definition of running a business. Under the new tax amendments and court judgments, the monies realized from such auctions would be taxed. This will result in a further loss of revenue to the trust.
A few months prior to the May elections, the majority three trustees on the then five-member board repealed the Rs 750 service charge on flats in the colonies managed by them. The five Wadia Baugs retained the levy. But unless the BPP raises such levies, the trust will have no alternate avenue to augment its income. The trustees may venture to sell some assets, but aside from earning public animus, the proposal will take years to fructify, assuming the proposal complies with all the formalities, and the trust wins all the court cases opposing the sale.
The main source of income for a trust should be from donations. But with a 30+ year history of public squabbling — magnified by the social and print media — the public’s perception of the BPP is blighted. Even if the image were burnished, where would one find donors today? In an aging, dying community with few earning members and an increasing number of dependents, money will be hard to come by. The BPP will also have to compete for donations with other reputed charities.
While a thorough analysis of the balance sheets would require one to sit with the auditors and the accounting staff of the BPP, a cursory study shows that aside from supporting several community institutions, the trust does little in terms of welfare. The amount spent to assist individuals for medical expenses, third child subsidy, supplementary income to mobeds, poverty assistance and so on constitute a negligible amount for a charitable institution of this size.
Expenses in 2022 versus 2021 increased by Rs 5.42 crores (USD 663,276). Of this, the major increases were due to higher expenditure for water charges, ground rent, professional charges, repairs and maintenance, and internal audits. The expenditure for the years 2019-2020 was Rs 43.91 crores (USD 5,372,859), for 2020-2021 the figure was Rs 39.18 crores (USD 4,797,746) and for 2021-2022, Rs 44.75 crores (USD 5,479,814). The total income of the trust in 2021-2022 was shown as Rs 37.92 crores (USD 464,049) as versus Rs 39.18 crores (USD 479,468) in the previous year and Rs 42.72 crores (USD 5,227,250) in the year before.
In the 2020-2021 balance sheet the loss was Rs 26 lakhs (USD 31,817) while in 2019-2020 the figure was Rs 1.18 crores (USD 144,266). In 2021-2022 the loss jumped to Rs 6.8 crores (USD 832,052). One reason for the variations is differing amounts paid for repairs and maintenance in that particular year and for the compensation given to tenants/licensees who give up their flats for auction. In 2021-2022, under the heading "Other charitable objects,” the trust spent Rs 3.59 crores (USD 439,329) of which Rs 3.33 crores (USD 407,511) was given to individuals as "compensation paid towards alternate accommodation.” This is the outgoing tenants’ share from the auction proceeds. The other major amount paid is Rs 14 lakhs (USD 17,132) to the A. H. Wadia Baug as their share of the sale proceeds of the ownership flats.
Under "Religious objects,” the BPP spent Rs 3.2 crores (USD 391,231) in 2021-2022 on maintaining Doongerwadi.
If the losses continue into 2022-2023, the trust may be unable to make ends meet. The only option then would be to liquidate fixed deposits, a remedy worse than the ailment.
The BPP is too big to fail. Other smaller anjumans with fewer assets have managed their finances well, turned loss making assets into profitable ones. Maybe the BPP can draw lessons from them on how to adapt to changing times.