1.

0 Company Background
IDLC Finance Limited commenced its journey in 1985, as the first ever leasing company of the country. In 1995, IDLC was licensed as a Financial Institution by the countrys central bank, Bangladesh Bank, following the enactment of the Financial Institution Act 1993. Over the last two and a half decades, IDLC has grown in tandem with the countrys transition into a developing country and has emerged as Bangladeshs leading multiproduct financial institution. IDLC has changed its name to IDLC Finance Limited from earlier Industrial Development Leasing Company of Bangladesh Limited in August 2007. Since 1985, when IDLC was formed as the pioneering leasing company in Bangladesh, the company continues to evolve as an innovative financial solutions provider. IDLC is now able to offer its customers, integrated and customized financial solutions all under one roof. The Companys wide array of products and services range from retail products, such as home and car loans, corporate and SME products including lease and term loans, structured finance services ranging from syndications to capital restructuring and a complete suite of merchant banking and capital market services. The subsidiaries of IDLC finance Limited are IDLC Securities Limited IDLC Securities Limited, a fully owned subsidiary of IDLC, offers full-fledged international standard brokerage service for retail and institutional clients. It has seats on both Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. IDLC Investments Limited As advised by the Securities & Exchange Commission (SEC), the Company formed a separate subsidiary on May 19, 2010 in the name and style IDLC Investments Limited to transfer its existing merchant banking activities. The Company has applied to the SEC to transfer the existing merchant banking license of IDLC Finance Limited in the name of IDLC Investments Limited. After getting approval from SEC, the companys existing merchant banking services will be provided by its wholly owned subsidiary, IDLC Investments Limited.

1.1 IDLC at a Glance

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Registered Name of the Company: Type of Business: Legal Form:

IDLC Finance Limited. Financial Institution. (Leasing company) Licensed as Financial Institution under Financial Institutions Act, 1993 on February7, 1995.

Year of Establishment:

IDLC commenced its journey in 1985 and get licensed in 1995.

Company Registration No: Bangladesh Bank License No: Registered Office:

C 14218/1992 of 1984-1985. BCD (Non-banking)/Dhaka/2/1995. Bays Galleria (1st Floor) 57 Gulshan Avenue, Gulshan 1, Dhaka 1212 Tel: +880 (2) 883 4990 (Auto Hunting) Facsimile: +880 (2) 883 4377, 883 5887 E-mail: mailbox@idlc.com

Corporate Website: Principal Bankers:

www.idlc.com Standard Chartered Bank Citibank N.A.

Major Stock Brokers:

Lanka Bangla Securities Limited SES Securities Limited IDLC Securities Limited

Memberships:

Bangladesh Leasing & Finance Companies Association.

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Asian Financial Services Association. Bangladesh Merchant Bankers Association. Bangladesh Association of Publicly Listed Companies. The Institute of Bankers, Bangladesh. Chambers of Commerce & Industry.

1.2 Mission
Their mission is to be one of the top three financial institutions in terms of profitability and brand image through quality growth and superior client services.

1.3 Vision
To be the most preferred financial institution in the country by exceeding stakeholders expectations.

1.4 Corporate Philosophy

Discharge their functions with proper accountability for actions and results and bind ourselves to the highest ethical standards.

1.5 Strategic Objectives

Create high quality and strategically balanced portfolios;
Provide a range of financial products and services to our customers under one roof;

Strengthening our position in capital market operation;

Balanced diversification of funding sources;

Maximize corporate value through sustained high quality growth

Strengthening corporate governance practices.

1.6 Core Values

Integrity: walk the talk, no hidden agenda; never compromise their code of conduct. 3

 Customer: we live for our customers. Focus: we keep promises; we are honest, transparent & compliant. Trust & Respect: we respect the environment and our culture. Environment Friendly: be direct, simple & consistent, no jargons, transparent. Simplicity: be direct, simple & consistent, no jargons, transparent. Passion: one team one goal, exceed customer expectation, deep understanding of our

market.
Equal Opportunity: Gender/age/racial/religious equality and meritocracy.

1.7 Methodology
We have used different data collection method for conducting the study:
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 Observation: Through observation we gained adequate knowledge about the company

and its operations.

Personal meeting and discussion with respective person: We had meeting and

discussion with the administrative manager and officers of different departments for relevant and extensive information regarding this study.
Secondary data: Secondary data is our main source of information. Data required for

our study is mainly collected from IDLC website and IDLC annual report of 2010.

1.8 Scope of the Study

The study is concentrated on the following area: Acquire knowledge about the operation and prospect of the company. Acquire detailed knowledge about the planning and organizing procedure of IDLC. Gain knowledge about the HR practice of IDLC. Gather detailed knowledge about the financing sector in Bangladesh. Comparing the theoretical knowledge of the course with the practice in the actual world.

1.9 Limitation
While preparing the report we had to face many difficulties: As we were outsider we did not have access to many confidential documents and information which would have enriched the report to some great extent. Lack of time for such vast study. Lack of information available on the internet. Some personnel were reluctant in providing appropriate information required for the study.

2.0 Committee Structure

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2.1 Executive Committee

A five member Executive Committee headed by a director is responsible for strategic and operational plan of the business. The matter related to ordinary business operations of the Company and the matters that the Board of Directors, from time to time authorize, are vested in this Committee in accordance with the Statement of General and Operational Policies established and made by the Board of Directors. This Committee assists IDLC in taking prompt decisions and reacts swiftly to changes in the market-place as they occur. The Rules of the Executive Committee is framed by the Board.

2.2 Audit Committee

As per the requirement of Bangladesh Banks good governance guideline and SEC notification on Corporate Governance, Board of Directors of IDLC formed an Audit Committee as the subcommittee of the Board. Objectives of the Audit Committee The Audit Committee of IDLC was formed with the following major objectives:
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 To ensure that proper and adequate internal controls are in place; To provide the Board of Directors with a clear understanding of where enterprise risk lies; and
Assist the Board of Directors in discharging its responsibilities towards the stakeholders

of the company. Role of the Audit Committee The role of the Audit Committee clearly lays down its authority, responsibility and specifi c duties. The Committee is empowered, among other things, to examine any matter relating to the financial affairs of the Company and to review all audit and inspection programs, internal control systems and procedures, accounting policies and adherence to compliance requirements, etc. This ensures that a sound control system is in place, which is well managed, providing accurate, appropriate and timely information to the Board of Directors and stakeholders.

2.3 Management Committee (ManCom)

The Management Committee is a group elected among the management staffs to take responsibility for the governance and strategic direction of IDLC. The role of the Management Committee is to oversee IDLC in accordance with its Constitution under the Financial Institution Act 1993. The Committee is responsible for all aspects of the ongoing operation of IDLC. It delegates day-to-day operations to the Executive Officer. An important feature of good governance is a clear segregation of the responsibilities and accountability of the Committee from those of the Executive Officer. ManCom is always aware of IDLCs operations, keeps an eye on the big picture, monitor the strategic plan and that goals are being met. It needs to be satisfied that what is happening is in accordance with IDLC policies and objectives, within the overall budget.

2.4 Credit Evaluation Committee (CEC)

The CEC evaluates all projects/proposals of financing activities of the Company from the risk point of view. The Committee is headed by the CEO & Managing Director and consists of five members.

2.5 Internal Control Committee (ICC)

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Internal Control Committee addresses operational risk and frames and implements policies to encounter such risks. The Committee assesses operational risk across the Company, as a whole, and ensures that an appropriate framework exists to identify, assess and manage operational risk.

2.6 Asset Liability Management Committee (ALCO)

The Asset Liability Committee (ALCO) of the Company assesses the changes in interest rate, market conditions, carries out asset liability maturity gap analysis, re-pricing of products and thereby takes effective measures to monitor and control interest rate risk.

2.7 HR & Compensation Committee

The Chairman of the Committee liaises with the Board to ensure that the Committee is appropriately briefed on matters relating to employees. The HR & Compensation Committee Charter states that the Committee has the following responsibilities: Monitor succession planning for members of the Executive Management Team;
Review and approve strategy and principles for people management, including: Career,

skills and leadership development and continuing education programs;

Employee remuneration and benefit programs to be adopted across the Group;

Employee share ownership, superannuation and pension plans;

Review and approve any individual employee remuneration arrangement materially

diverging from Group policy or practice; Review and make recommendations to the Board on remuneration; Perform other functions referred to the Committee by the Board.

2.8 Corporate Governance Committee

The committee ensures the corporate governance practice within the organization as required by the SEC and Bangladesh Bank. The committee also recommends and advises course of actions in the areas where there is a scope of improvement.

2.9 Ethics and Compliance Committee

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The committee supervises the ethical business practices of the different units of the company. It also ensures the compliance with the stated conduct and code of ethics of the company.

2.10 BASEL implementation Committee

The Basel Implementation Committee is responsible for the implementation of Basel Accord for Financial Institution (BAFI) in IDLC. Managing risk based capital adequacy is the most important responsibility the committee. The Basel Implementation Desk (BID) of the Risk Management Department manages the Basel activities. The results of risk based capital analysis along with recommendation are placed in the committee meeting by the BID where important decisions are made to maintain Minimum/Regulatory Capital and manage related risk.

2.11 IDLC Product and Service

Loan Product: Lease Finance Term Finance
Domestic Factoring of Accounts Receivable

Bill/Invoice Discounting Work Order Finance Corporate Real Estate Finance Real Estate Developer Finance Home Loans with Home Loan Shield Home Equity Loans Car Loans for Individuals Personal Loan Machinery Loan Business Loan Investment Product: Common Equity investments Preferred Equity Investments Bonds Liabilities Product:
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 Term Deposit Schemes Debentures

Securitized Bonds

Corporate Service: Project Finance Appraisal Project Loan Syndication Working Capital Arrangement Syndication Agency services Refinancing arrangements Corporate Financial Advisory
Securitization of Receivables

Trusteeship Management Professional supports to SMEs Merchant Banking and Portfolio Management Services: Capital Investment Max Capital Investment IPO Advisory Issue Management Underwriting Investment Advisory Placement of Equity, Debentures and Bonds

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3.0 Planning in IDLC

Definition of Planning includes: Defining the organizations objectives or goals Establishing an overall strategy for achieving those goals Developing a comprehensive hierarchy of plans to integrate and coordinate activities. A plan tells us: Where we are going Why we are going there How to get there How to know when we have arrived

3.1 Reason for Planning

Managers engage in planning because of the changing environment to: Provide direction Reduce the impact of change Minimize waste and redundancy Set the standard to facilitate control

3.2 Strategic and Operational Planning

Strategic Plan - A strategic plan is a practical, action-oriented guide. It is based on an analysis of internal and external factors. It directs operational planning and resource allocation. It is issue-oriented and usually spans multiple years. A strategic plan: Provides a common direction for everyone in the organization and helps to ensure that actions taken are mission-driven and consistent with the organizations core beliefs and values.
Assists the organization to build on strengths and address barriers that might impede

progress. Provides an opportunity to identify alternative courses of action and choose the best course of action from among them

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The major components of a strategic plan are: Mission - The mission statement answers the question "Why does our organization exist?" It identifies who the organization exists to serve, what it does, and why. The mission serves as a guide for the rest of the plan. Vision - The vision statement answers the question "What is our ideal future?" It is a statement of the shared and idealized view of the future state, given that the organization carries out its mission. The vision also serves as a guide for the rest of the plan. Guiding Principles - Guiding principles answer the question "What beliefs that we hold direct our actions?" These are normative statements. They may relate to beliefs about people in general, persons served, employees, the methods by which services are delivered, or general philosophy. These may be linked to action (for example, we believe that every family is unique, therefore we are committed to individualized planning and service delivery). Analysis - The analysis answers the questions, What can move us forward?" and "What is likely to deter us?" The analysis includes an assessment of both internal and external factors. Internally, it is important to examine strengths and prior accomplishments that can provide the foundation for future success. It is also important to examine organizational weaknesses, barriers, gaps, and any other factors that might present obstacles to implementation of the plan. Externally, it is important to examine opportunities that can be seized and potential challenges. These might include economic, political, social, and technological conditions, competition, attitudes, and the like. Operational Plan - An operational plan specifies what needs to be accomplished within a given time period to move in the key directions specified in the strategic plan. It identifies in greater detail what can be done within the time period (usually one year or less). It guides the activities of everyone in the organization; that is, everyone should be able to see how their efforts are leading to successful accomplishment of the plan. An operational plan:
Links strategic plans to daily operations so that the day-to-day work of the organization

is consistent with the mission, will lead to the vision, and will address the key strategic directions.

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 Requires that the organization be realistic about the scope of work to be undertaken by linking planned actions to available resources. Provides for ongoing assessment of progress and identification of barriers so they can be addressed in a timely manner. Provides a basis for accountability. The components of an operational plan: Outcomes - Outcomes are the most important results that the organization plans to achieve during the year. The outcomes should be under the control of the organization and be realistic. They should focus on the "big picture." Purpose - The purpose statement specifies why the organization plans to do the proposed work during the year. This statement helps to explain the intent behind the desired outcomes and why it is important to achieve these outcomes. Products - Products are the tangible results that will be in hand at the end of the year if the plan is successfully carried out (for example, a policies and procedures manual, or training curriculum). Major Actions - Major actions describe what the organization will do to achieve the desired outcomes for the year. Major actions are derived from the key directions and strategies included in the strategic plan. They are statements that describe in measurable terms what will be accomplished during the year. Action Plans - Action plans are developed for each major action. The plans lay out in detail exactly what steps are to be taken with respect to the major action. For each action step, it is important to identify who is responsible. If there is more than one responsible person, a lead person should be identified. For each action step, the start and target completion dates should be identified, keeping in mind that some steps cannot start until others are completed.

3.3 Planning Process

Role and Responsibilities of the Board The Board is committed to the Company seeking to achieve superior financial performance and long term prosperity, while meeting stakeholders expectations of sound corporate governance practices. The Board determines the corporate governance arrangements for the Company. As with all its business activities, the Board is proactive in respect of corporate governance and
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puts in place those arrangements which it considers are in the best interest of the Company and its shareholders, and consistent with its responsibilities to other stakeholders. The Board of Directors is in full control of the Companys affairs and is also fully accountable to the shareholders. They firmly believe that the success of the Company largely depends on the credible corporate governance practices adopted by the Company. Taking this into consideration, the Board of Directors of IDLC set out its strategic focus and oversees the business and related affairs of the Company. The Board also formulates strategic objectives and policy framework for the Company. Chairman of the Board The Chairman of the Board is elected to the offi ce of Chairman by the directors. The Board considers that the Chairman is independent. Role of the Chairman The Chairman runs the Board. The Chairman serves as the primary link between the Board and management, and works with the CEO and Company Secretary to set the agenda for Board meetings. It is the Chairmans responsibility to provide leadership to the Board and ensure that the Board works effectively and discharges its responsibilities as directors of the Company. Chairman of the Board & CEO of the company are different person The Chairman of the Board is not the Chief Executive of the Company. The role of Chairman and the CEO & Managing Director are independent and separate. Role of the CEO & Managing Director The CEO & managing Director performs three fundamental roles in IDLC:
First, CEO as a leader establishes and directs the vision and mission of the team. In this

capacity, the CEO is the source of visionary strength of the Company and keeps it on a consistent track to achieving the vision; Second, CEO is a project manager. In this role, the CEO is responsible for directing the operational activities of the Company by scheduling the utilization of the Companys resources, including people and capital equipment. In this way, the CEO gets things done through the efforts of the people in the Company. The CEO is responsible for

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establishing and executing the Companys operating plan that is necessary to achieve the Companys objectives; Third, CEO is a coach, and as such picks the people for the management team and improves the performance of people through ongoing counseling. As a coach, the CEO works with people to help them become greater contributors by helping them improve their efficiency and effectiveness. Whenever a plan needs to be initiated or a plan needs to be changed or make further modification- the board of directors held the board meeting in this regard: Holding of the Board meeting The meeting of the Board of Directors of IDLC is normally held at the Registered and Corporate Head Office of the Company. The meetings are held frequently, at least once in a quarter, to discharge its responsibilities and functions as mentioned above. Meeting is scheduled well in advance and the notice of each Board meeting is given, in writing, to each director by the Company Secretary. Process of holding Board meeting The Company Secretary prepares the detailed agenda for the meeting. The Board papers comprising the agenda, explanatory notes and proposed resolutions are circulated to the directors in advance for their review. The members of the Board have complete access to all information of the Company enabling them to work efficiently. The members of the Board are also free to recommend inclusion of any matter in the agenda for discussions. The Company Secretary and Chief Financial Officer always attends the Board meeting and other senior management is invited to attend Board meeting to provide additional inputs to the items being discussed by the Board and make necessary presentations. There are procedures, at IDLC, for keeping the Board up-to-date with the Companys activities and relevant external developments. These includes senior management presenting significant matters to the Board and it being able to seek further information on any issue relating to performance, strategy, outlook, etc. Independent Decision Making Any director may seek external, independent, professional advice at the Companys expense. The policy of the Board is that external advice will be made available to all directors, unless the
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Chairman of the Board determines otherwise. It is expected that a director will consult the Chairman of the Board, Managing Director or Company Secretary before obtaining external advice. Role of the Company Secretary Appointed by the Board, the Company Secretary works with the Chairman of the Board to monitor and enhance corporate governance processes and to ensure that Board policies and procedures are followed.

3.4 Senior Management

Structure The Companys management structure comprises the CEO & Managing Director and the Management Team (ManCom). The ManCom is responsible for developing organizational and business strategy and sponsoring innovation and development of best practices across the company. The ManCom is also responsible for organizational effectiveness and the development of IDLCs values and culture. The ManCom is responsible for managing IDLCs performance and key business issues in line with the companys long term strategy and for talent and performance management. The ManCom is chaired by the CEO & Managing Director and the team meets face to face on a regular basis. Performance Review The CEO is responsible for setting financial targets as well as operational and management goals for the members of the ManCom. Both short term and long term goals form part of the performance management of all senior executives. Long term goals are directly linked to the vision of the company. Short term goals are generally directly linked to objectives of the company. The CEO and Evaluation Committee conduct a detailed review of the performance of senior executives against these goals on an annual basis at the end of each year.

3.5 Decision Making

A set of eight steps that includes identifying a problem, selecting a solution and evaluating the effectiveness of the solution.

8-Step Decision Making Process

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Identification of a problem

Identification of decision criteria

Allocation of weights to criteria Evaluation of decision effectiveness Development of alternatives

Analysis of alternatives

Selection of alternative

Implementation of alternative

3.6 Circumstances of Decision Making

Certainty
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The implication that the outcome of every possible alternative is known. Uncertainty A condition under which there is not full knowledge of the problem and reasonable probabilities for alternative outcomes cannot be determined. Risk The probability that a particular outcome will result from a given decision. IDLC has a very efficient risk management system to analyze the risk associated with a decision making.

3.7 Major Risks at IDLC

Major Risks that IDLC identifies detrimental to its return and market reputation is as follows: Credit Risk Credit risk is the possibility that a borrower or counter party will fail to meet agreed obligations. Thus managing credit risk for efficient management of a financial institution (FI) has become the most crucial task. Given the fast changing, dynamic global economy and the increasing pressure of globalization, liberalization, and consolidation it is essential that FIs have robust credit risk management policies and procedures those are sensitive and responsive to these changes. At IDLC, credit risk may arise in the following forms: Default risk Exposure risk Recovery risk Counter party risk Related party risk Legal risk Political risk

Market Risk

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Market risk refers to the risk of fluctuation in a variety of markets such as interest rates, prices of securities where the values of assets and liabilities can change and there exists the risk of incurring losses. Liquidity Risk Liquidity risk arises when a company is unable to meet the short term obligation to its lenders and stakeholders. This arises from the adverse mismatch of maturities of assets and liabilities. Operational Risk Operational risk is the potential loss arising from a breakdown in companys systems and procedures, internal control, compliance requirements or corporate governance practices that results in human error, fraud, failure, damage of reputations, delay to perform or compromise of the companys interests by employees. Operational risk may also arise from the following: Turnover of trained staff; Risk of insider dealings; Leakage of sensitive information; Shortcomings of organizational structure; Risk of falling in credit ratings; Money laundering; Changes in statutory requirements; Technological obsolescence; Business volume risks At IDLC, business volume risk may arise in the form of risk of falling business volumes and market share, risk of being overtaken and losing leadership position and risk of over trading which may affect profitability due to volatile revenues and reduced spread earnings, credit rating and reputation. Risk of over trading may lead to insufficient capital.

3.8 Steps to manage risk

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Here is an overview of some of the crucial steps carried out by IDLC to ensure successful risk management program: Integrating risk management policies into the companys top priority; Maintaining those values via actions; Performing risk analysis; Implementation of various strategies to minimize it; Building of screening systems to encourage early warnings related to prospective risk;
Periodic analysis of the management program.

Managers in IDLC generally make the decision in group. The process of making group decision has some advantages: Make more accurate decisions Provides more complete information Offers a greater diversity of experiences and perspectives Generates more alternatives Increases acceptance of solution Increases legitimacy of decision.

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3.9 Decision Making Style

There are four types of decision making styles: 1. Directive Style 2. Analytic Style 3. Conceptual Style 4. Behavioral Style High Analytic Tolerance for Ambiguity Directive Behavioral Conceptual

Low Rational Way of thinking Intuitive

As IDLC is a financial organization making decision is largely dependent on the analysis of the information and data processing. As a result there decision making style is quite analytic. Analytic style characterizes the high tolerance for ambiguity combined with a rational way of thinking of individuals who prefer to have complete information before making a decision.

4.0 Organizing process in IDLC

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4.1 Organizational Structure

CEO & Managing Director Additional Managing Director Deputy Managing Director Sr. Executive Vice President Executive Vice President Sr. Vice President Vice President Sr. Assistant Vice President First Assistant Vice President Assistant Vice President Manager Assistant Manager Management Trainee Senior Executive Officer Executive Officer Probationary Officer Officer Assistant Officer Junior Officer

Figure: Corporate Hierarchy of IDLC

4.2 Departmentalization
Departmentalization refers to grouping of activities. There are five ways of grouping activities:
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 Functional: Groups employees based on worked performed and similar functionalities

(e.g. engineering, accounting, information systems, human resources etc.).

Product: Groups employees based on major product areas in the corporation (e.g.

womens footwear, mens footwear, apparel and accessories etc.).

Customer: Groups employees based on customer problems and needs (e.g. wholesale,

retail, government etc.).

Geographic: Groups employees based on location served (e.g. north, south, Midwest,

east etc.).
Process: Groups employees based on the basis of work or customer flow (e.g. testing,

payment etc.). According to our study IDLC follows Functional way of departmentalization. It has different departments for different set of functions. IDLC has an Operations Department for maintaining smooth operation of the company and customer feedback. It has a Credit department for distribution of loan and a Collection department for collecting the loans allotted. IDLC also has a well equipped IT department for computerized operation and an HR department for developing an efficient human capital. As we can see all these departments are developed according to the functions performed, we can easily conclude that Functional Departmentalization is being followed by IDLC.

4.3 Centralization and Decentralization

Centralization: A function of how much decision making authority is pushed down to

lower levels in an organization. The more centralized an organization the higher the level at which decisions is made.
Decentralization: The pushing down of decision making authority to the lowest level

of an organization. In IDLC major decisions are handled by the manager himself. But in case of regular decisions manager is very open for suggestions from staffs. From this sort of situation we can say IDLC is highly centralized with a bit of moderate attitude from the manager.

4.4 Span of Control

Span of control refers to the number of subordinates a manager can direct efficiently and effectively. Traditionally it was believed that at most 6 people are efficient and effective under a manager. But things have changed now a day. Organizations have become more dynamic and complex. Managers work with 30-40 people under him/her. The managers in IDLC normally
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operate 10-12 people under them. But for the efficient operation of the organization these people are trained very well to cope with the pace of the manager.

5.0 HR Practice in IDLC

IDLC Human Resources values are based upon a number of important principles and capture qualities that each employee is encouraged to embody as an essential part of our success: Expertise Assure quality and drive innovation; Listen to learn from each other champion continuous improvement; Be accountable keep commitments; Client Focus; Share our vision; share our passion;
Strive for our clients profitability and satisfaction;

Be a trusted partner; Respect Think and act as a team; Optimize the value of our global community; Deliver results and celebrate success;

5.1 Strength of IDLC- Its Human Resources

IDLC believes that its human resources are its greatest assets and recognizes them as building blocks on which Companys performance and development are based. IDLC continues to implement human resources management policies and practices which are aimed at growing and developing employees and ensuring their contribution towards the achievement of corporate goals. As IDLC s human resources give the organization a significant competitive edge, the company is focused on recruiting the best resources and implementing programs to develop and retain high quality human resources.

5.2 Ethical Standards

IDLC adheres to the highest ethical standards and believes. This is a key to business success. The company prioritizes statutory compliance and has a set of Code of Ethics for employees,

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who are required to read and sign these documents every year, as a sign of reiteration and commitment to the principles enshrined in it.

5.3 Training & Development

While maintaining high recruitment standards, the Company also provides need based inhouse, local and overseas training to its employees. This is done with a view to enhance human resources capacity by continuously upgrading their skill, abilities and knowledge and also to meet organizational needs to face future challenges in the ever changing financial services industry. As part of IDLCs Human Resource Development Program, a large number of employees were sent to different training programs, which included both managerial development and technical modules. During 2010, 245 employees were trained locally in 67 training courses while 42 employees were sent on overseas training programs spread over 13 different modules. In addition, 11 customized training courses were arranged where 319 employees participated.

5.4 Compensation & Reward

It is a cornerstone of our ethos that IDLC is a meritocracy, where all employees are recognized and rewarded on the basis of their performance, effort, contribution and achievements. The companys performance management and personal development processes are being rolled out through the extended group. They are based on the following principles:
that employees have a clear understanding of how they contribute to the business and

have clear personal objectives, aligned to the business strategy and objectives;
career pathways that identify key capabilities and behaviors at different competency

levels across core career paths;

personal development, training and succession planning to support personal growth; an annual review of performance that drives decisions about pay and career

progression. IDLC provides its employees with a competitive compensation package. The company has implemented a strict performance based reward system and evaluates staff performance evaluation twice a year. IDLC is a performance driven organization and career development opportunities are based on merit and performance. A detailed compensation survey was carried out by an independent consultant in the year 2010, to assess and evaluate the current pay level

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of IDLC vis a vis the market. The survey results helped us make necessary adjustments to ensure that IDLC employees are fairly paid and which is also competitive in the market.

5.5 Work environment & culture at IDLC

As a leading company IDLC embraces diversity and respect for different cultures and local requirements. Employees of both genders, from different regions, cultures, ethnic groups, generations and backgrounds contribute their skills and different perspectives to improving our solutions and delivering to our clients. Employees work in a positive, friendly and respectful environment and are able to maintain a good work life balance. IDLC aims to maintain healthy workplace and environmental conditions which permit employees to work to maximum effectiveness and to their full potential. IDLC employees enjoy one of the best office premises and environments within the country. The Company has created an environment of trust and support within the organization which encourages employees to work well together as a team and at the same time, to be innovative and creative. IDLC appreciates effective internal communications and free flow of ideas, fairness, commitment, teamwork and highest standards of professional excellence and integrity.

5.6 Employee Health & Safety

Employee health and safety are our main priorities. Keeping this in mind, IDLC regularly arranges routine health check-up for employees. The Company provides hospitalization insurance coverage to ensure medical security of its staff. In addition, the Company has group life insurance scheme for its permanent staff to cover the unforeseen risk of death. We also liaise with staff regarding our policies and practices so that we can continue to maintain a healthy, safe and enjoyable environment. All accidents and incidents are reviewed at HR & Compensation committee meeting, along with lost time incidents, accident forms, health and safety trends etc.

5.7 Staff Strength

IDLC has provided challenging career opportunities for young professionals over the last 25 years. The Companys Human Resources Departments goal is to attract, retain, develop and motivate the most competent people. The staff strength of the Company as on December 31, 2010 and for the previous two years is summarized below:

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Category Core Management Staffs Management Staffs Executive Officers Support Staffs Total

2010 10 82 73 188 353

2009 9 60 49 135 253

2008 11 54 43 99 207

5.8 Non-discriminatory policy and equal opportunities employer

IDLC is an equal opportunity employer. It always values employees right and dignity. We always practice equal treatment to all existing and potential employees irrespective of their race, religion, age and gender. It is our Companys policy to ensure equal opportunity in recruitment, selection, promotion, development, training and rewards.

5.9 Communication & employee satisfaction

IDLC recognizes that, as a rapidly changing, knowledge-based business, communication is a critical ingredient for success. We place emphasis on both formal and informal communication. The managers have a key role to play in communication. Managers are accessible, encourage collaboration and the development of ideas that contribute to business performance and continuous improvement. In addition to face-to-face meetings, we encourage the use of Live Internet Meetings which allow business management to talk frequently to employees, without the need to bring them together in one place. We have an active program to ensure communication from Executive Team through a variety of media and encourage employee feedback and comment though methods including group discussions, employee surveys and email dialogue.

6.0 Conclusion

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