IDLC Annual Report 2015 PDF

1
IDLC Finance Limited

ann ual re por t 2 0 1 5
Core financial highlights, 2015

Total Assets
Taka in million
Total Assets
Taka 73,434 million
37,784
50,429
58,927
73,434
31,165
24.62% increase
2011 2012 2013 2014 2015
Operating Income
Taka in million
Operating Income
Taka 4,588 million
25.43% increase
2,403
2,761
3,658
4,588
2,160
2011 2012 2013 2014 2015
Net Profit
Taka in million
Net Profit
Taka 1,459 million
17.16% increase
1,246
1,459
713
669
500
2011 2012 2013 2014 2015
2
Cost-to-income Ratio
In percentage
35.92%
In 2015
44%
45%
40%
36%
42%
2011 2012 2013 2014 2015
Capital Adequacy Ratio (CAR)

In percentage
Capital adequacy ratio

14.80%
14.50%
14.80%
13.61%
13.88%
15.43%
In 2015
2011 2012 2013 2014 2015
3
En-route, in control!
We invested years in
L aying IDLC’s
foundations
B
ringing together a team with
an entrepreneurial and positive
mind-set
C
reating our brand equity on the
pillars of trust and respect
D
eveloping our infrastructure and
processes
C
ollaborating and directing our combined
skills and energies in creating a sustainable
growth platform
We invested years for what IDLC is achieving now
D
espite a challenging macroeconomic
environment, our assets grew by Taka
14,507.87 million in 2015
D
espite a situation marked by political
instability, especially in the early part of the
year, our net interest income grew by Taka
529.22 million during the year
D
espite some degree of pessimism, our term
deposit customer franchisee grew by 30.64%
year-on-year
Y
ears of patience, focus and hard work yielded
results that we are proud of
R
eflecting the fact that we are not only
en-route towards our vision of creating the
best financial brand in the country
B
ut also in control of our aspiration to emerge
as a Taka 100 billion enterprise by 2018
4
Integrated report - scope and its boundary
INTEGRATED REPORTING External Assurance
Our 2015 Annual Report has been presented as an ‘Integrated The company has obtained external assurance on the following
Report’ with the aim of articulating how IDLC Finance Limited, as reports in the reporting period under consideraton:
an organisation, has effectively managed its business to deliver
Sl no. Description of Report External Assurance
consistent value to its stakeholders. It encompasses the efforts
the company has undertaken towards contributing to economic 1 Financial Statements ACNABIN, Chartered Accountants,
prosperity, environmental sustainability and social well-being for Audit Report an independent member of Baker
a brighter and more optimistic future. Tilly International
2 Corporate Hoda Vasi Chowdhury & Co.,
SCOPE AND REPORT BOUNDARY Governance Chartered Accountants
As a forward-looking enterprise, in presenting the Integrated 3 Provident Fund Masih Muhith Haque & Co.,
Report, we have referred to the guidelines issued by the Institute Chartered Accountants,
of Chartered Accountants of Bangladesh (ICAB) in the form of Correspondence firm of RSM
‘Integrated Reporting Checklist’, which is in congruence with International
the integrated reporting framework prototype issued by the 4 Gratuity fund Air Consulting, An Actuarial Firm
International Integrated Reporting Council (IIRC).
5 Informations Systems Ernst & Young, LLP
In explaining the Company’s operations and financial Control Review
performance, financial information so disclosed has been 6 Eligibility Compliance of ACNABIN, Chartered
extracted from the Audited Financial Statements for the financial IDLC Finance Limited for Accountants, an independent
year ended 2015 with relevant comparative information. participating in the Investment member of Baker Tilly
The financial statements consistently complying with the Promotion and Financing International
requirements of Facilities (IPFF) project
 Bangladesh Accounting Standards (BASs) and Bangladesh Comparability

Financial Reporting Standards (BFRSs),
All the information presented in this report is on the same basis as
 Companies Act 1994; the 2014 report in terms of the entities covered, the measurement
 Financial Institutions Act 1993; methods applied and time frames used. The information provided
covers all material matters relating to business strategy, risk and
 Securities and Exchange Rules 1987;
areas of critical importance to our stakeholders. The structure of
 The Income Tax Ordinance 1984; the report has been further developed as part of our continuous
 Relevant rules & regulations of Bangladesh Bank (The focus on improving communication to our stakeholders.
Central Bank); Availability of the Annual Report
 And other applicable laws and regulations of the land.
The hard copy of the Annual Report is sent to all the shareholders,
The disclosure of non-financial information has been extracted prior to holding the Annual General Meeting, giving due period
from internally-maintained records reported for the statement of notice. Separately, for the benefit of all stakeholders, our report
of financial position, unless otherwise stated that it has been has been made available in the website http://www.idlc.com.
extracted from a reliable source.
Responsibility over the Integrity of the Integrated Report
The Sustainability requirements, as elaborated separately in our
I acknowledge the responsibility to ensure the integrity of the
Sustainability Report, adhere to the guidelines issued by the
disclosure contained in the Integrated Report presented herewith
Global Reporting Initiative (GRI)-G4 Framework.
which comprise the discussion and analysis, disclosures pertaining
To report our corporate governance practices, we have drawn to stewardship, which should be read in conjunction with the
reference from the revised Corporate Governance Guidelines audited financial statements. In the opinion, the integrated
(CGG) issued by Bangladesh Securities and Exchange report, incorporated in this annual report has been prepared in
Commission (BSEC). accordance with the IIRC’s international integrated reporting
framework and addresses the material matter pertaining to
The scope of our Annual Report comprises of activities that the long term sustainability of the group and present fairly the
have been carried out within the geographical boundaries of integrated performance of IDLC Group and the impacts thereof.
Bangladesh, as IDLC does not have operation or subsidiary in
other countries. Further there have not been any significant sd/-
changes to the scope, boundary and reporting basis since the Arif Khan CFA FCMA
last reporting date as of December, 31 2014. CEO & Managing Director
5
We are pleased to present the IDLC Annual Report
2015. These are the chapters with accompanying
page numbers for easy navigation.
Thematic anchoring and company Measures that matter 57
philosophy Strengths and key performance indicators 58
Integrated report- scope and its boundary 5 Our awards showcase 59
Letter from the Chairman 9
Our business orientation 13

At the helm of our affairs
The world of IDLC 14
Brief profile of the Directors 61
Our philosophies – the backbone of our enterprise 16
Management Committee 66
Our extensive range of products and services 17
Committees of the Board and Management 68
Our organisational chart 18
Senior Executives 72
Our shareholding composition 19
Risk, treasury and governance

The nuts and bolts of our organisation Statement of risk management 75
Performance analysis with the CEO & Managing Director 21
Treasury at IDLC 83
Thematic positioning 24
IDLC’s Statement of corporate governance 86
Key corporate milestones 28
Report on security custodial service of IDLC Finance Limited 100
Stakeholder and materiality 101
Operating and financial review Corporate social responsibility 105
Competitive intensity and our strategic response 31 Our human capital 111
IDLC’s sustainable value creation process 34 Human Resources Accounting (HRA) 114
PESTEL Analysis 35 Event highlights 116
Our business model 37
Strategy and resource allocation 39

Fostering a culture of integrity –
Business segment review Reports and statements
SME division 41 Letter of Transmittal 120
Consumer division 44 Notice of the 31stAnnual General Meeting 121
Corporate division 46 Report of the Audit Committee 122
Structured Finance department 48 Assessment Report on the Going Concern Status of IDLC 124
Green Banking 50 Business environment and its likely impact on the financial
performance of IDLC 125
Capital market operations 53
Key operating and financial highlights 126
Value Added Statement 128 Other financial statements – subsidiary
Market Value Added Statement 129 companies
Economic Value Added Statement 130 IDLC Securities Limited
Contribution to the National Economy 131 Management Committee 229
Highlights as required by Bangladesh Bank 132 Directors’ Report to the Shareholders 230
Statement of Directors' Responsibility for Internal Control, Independent Auditors’ Report 234
Financial Reporting and Corporate Governance 133
Statement of Financial Position 235
Statement of Profit or Loss and Other Comprehensive Income 236

Upholding transparency – Statutory
IDLC Investments Limited
reporting
Management Committee 237
Directors' Report to the Shareholders 135
Directors’ Report to the Shareholders 238
Certification on the compliance with the corporate governance guidelines 143
Independent Auditors’ Report 243
Status of compliance with the corporate governance guidelines (CGG) 144
Statement of Financial Position 244
Statement of compliance with the good gonernance
guidelines issued by the Bangladesh Bank 151 Statement of Profit or Loss and Other Comprehensive Income 245
IDLC Asset Management Limited
Financial statements – IDLC Group and Independent Auditors’ Report 246

IDLC Finance Limited Statement of Financial Position 247
Report of the CEO & Managing Director and the
Chief Financial Officer 155
Independent Auditors’ Report 156 Stakeholders’ corner

Consolidated financial statements- IDLC Group Disclosures under Pillar III- Market Discipline 248
Consolidated Balance Sheet 158 Information for the Stakeholders 255
Consolidated Profit and Loss Account 160 Annual report review checklist 257
Consolidated Cash Flow Statement 162 Corporate governance disclosure checklist 261
Consolidated Statement of Changes in Equity 164 Integrated reporting checklist 263
Financial statements- IDLC Finance Limited Glossary 270
Balance Sheet 166 IDLC’s Presence 272
Profit and Loss Account 168 Proxy Form and Attendance Slip 275
Cash Flow Statement 169
Statement of Changes in Equity 170
Liquidity Statement 172
Notes to the consolidated and separate financial statements 173

Steering through Vision

We will be the best
the right course. financial brand in the
country.
On the anchors
Mission
of our vision We will focus on quality
and mission. growth, superior customer
experience and sustainable
business practices.
8
Letter from the Chairman
Aziz Al Mahmood
Chairman
Dear shareholders,
IDLC delivered a strong performance in 2015 thanks to our robust customer-

focused approach, sound capital allocation strategy and a sustainable growth
platform that enabled us to mitigate earnings volatility and report consistent
growth.
While our net interest income registered an18.32% growth to Taka 3,417.99 million,
“As one of the most
our return on equity stood at 20.39% and asset portfolio grew by a creditable trusted financial brands of
24.62% to Taka 73,434.45million. Though our non-performing loans increased to Bangladesh, we recognize
some extent to 3.06% largely due to a few accounts turning bad, we have made
adequate provision for these in our profit and loss statement. We are actively
that our customers have
pursuing for our funds from these accounts and are confident of arresting the placed their faith on us –
NPLs to a much lower level by the time we end 2016. With a substantial 17.16% and we must uphold this
growth in our net profit to Taka 1,459.22 million, we maintained our philosophy
of sustaining shareholder value and hence have proposed a 25% cash dividend, confidence relentlessly
subject to clearance by shareholders at the ensuing Annual General Meeting. every single day.”
9
It is a very encouraging sign that despite headwinds both

globally and locally, we were able to achieve this performance, Forecasting GDP Growth:FY2016- FY2019
which only goes on to indicate the solidity of our business and 8.5
Axtual Projection
8.0
also our flexibility to adapt to change.
7.5
7.0
6.5
6.0
22%
5.5
5.0
4.5
Total Assets 40
compounded average 2002 2004 2006 2008 2010 2012 2014 2016 2018
Actual GDP Growth Projection
growth per year
(2010-15)
Source: Bangladesh Bank
that brought this metric down to 6.19% in December 2015, lower

public debt-to-GDP and poverty on the decline.
Global economy overview
Except for the first three months of 2015 which saw a virtual
The year 2015 was marked by volatility driven by both domestic standstill, the rest of the past year and the beginning of this
and global macroeconomic events. The mixed economic year (2016) have been much more peaceful, thereby creating an
data emerging from the US (widely considered today to be a environment of unfettered growth.
singular growth engine among the developed markets), return
Coming on the heels of credit de-growth of 1.7% in December
of deflation to Europe, large public debt of Japan and change
2015, the central bank, Bangladesh Bank, expects credit offtake
in the economic landscape in China kept making headlines.
to grow significantly going ahead, as per the monetary policy
Crucially, the US shale gas revolution and dovish reaction of
statement of H2-FY16, that has indicated it to grow at 13%+. In
the OPEC (Organisation of the Petroleum Exporting Countries)
line with this projection, Bangladesh Bank cut repo and reverse
refusing to cut supplies led to crude prices declining to multi-
repo rates by 50 bps each on January 14, 2016, vide MPD Circular
year lows. Moreover, the impact of demand collapsing in
no. 01, indicating an expansionary policy stance. With GDP levels
developed economies and a Chinese economic slowdown was
expected to be restored to 7% and signals from the central bank
evident in the growth numbers of commodity exporting nations
to spur growth through policy rate cuts, we believe that 2016
dependent on oil exports.
could be a better year for business.
The global spotlight is particularly on China, whose domestic
economy is facing a slowdown even as the government is Financial highlights of IDLC
focused on ushering structural changes, moving away from an Our financial returns were bolstered by maintaining a stable net
investment-led to a consumption-driven economy. Therefore, interest margin (NIM), a particularly satisfying accomplishment
any drastic measures by China to revive its economy, as was given the declining interest rate environment that commenced
witnessed in 2015, could see emerging market currencies in 2014 and continued right through 2015. However, with our
becoming volatile, thus impacting flows into emerging markets. high concentration of core deposits and extension of liabilities
Furthermore, the continued fall in commodities and oil would duration through relatively longer-term borrowings, we believe
once again put a strain on oil-producing nations, which could, in our interest rate risk is well-managed.
turn, force sovereign wealth funds (SWF) to pull out money from
emerging markets.
Bangladesh economy review
Bangladesh has been characterized by political protests over

the past two years. However, it is quite a paradox that despite 29.65%
the country’s uncertain political scenario, its GDP has done well Total Deposits
with 2015 projections pegging a growth of 6.3-6.5%, which compounded average
makes it among the top performing markets of the world. The growth per year
all-important garments sector and remittances are once again (2010-15)
projected to constitute a large part of the country’s GDP growth.
Although Bangladesh’s economic growth has been hovering

around 6% for the last few years, it is still below the Bangladeshi
government’s target of over 7%. However recently, an International On account of our robust asset-liability management and having
Monetary Fund (IMF) mission reviewed the state of the economy, witnessed full cycles of rate expansion-contraction, we are
noting that fundamental macro-economic policies are in place. optimistic about preventing material margin compression to the
The mission also emphasized positive economic developments extent possible irrespective of the future interest rates. I must also
including reserves that have been restored, inflation targeting mention that our capital continued to improve in 2015 aided by
10
our strong earnings and we remain well-positioned to support sustain them across their lifecycle. Our priority areas are business
asset enlargement and take advantage of opportunistic market ethics, anti-bribery, anti corruption and human rights. To better
niches to feed quality loan growth through industry-leading TAT reflect the focus which our values have within our organisation
(turnaround times). and the importance we place upon ethics and sustainability,
we continue to remain the only NBFI in our industry to have an
integrated CSR reporting framework which is led by our Annual
2014 2015
Taka in million
Report and Accounts. I am happy to note that our employees are
vibrant examples of our success in ingraining the cultural fabric
of our organisation deep into their conscience. We dovetail our
focus of business growth as much as on our pursuit of serving
the communities we operate. We have chosen to select areas
where, leveraging collaborative and constructive partnerships,
we can create the maximum impact.
3,418
3,658
4,588
As a growing institution, we have become more responsible
2,889
in sharing the benefit of our growth with the communities we

serve with more and more of our resources being invested in
Group Net Group Total such ‘foundation-building’ programs as education, vocational
Interest Income Operating Income training, capacity building and healthcare. I am happy to share
with you that in the past year alone, we actively supported
the work of several organizations by contributing time,
2014 2015
Taka in million
talent, materials and funds to their respective causes. While
the hours, assistance and supplies we gave cannot be fully
enumerated,our financial contributions exceeded Taka 9.93
million in 2015.
2,194
2,940
2,187
2,629
1,246
1,459
Group Profit Group Total profit Group Net profit

40%
before provision before taxation after taxation SME Loans compounded
average growth per year
(2010-15)
Shareholders' Equity
Taka in million
25%
Consumer Loans
4,693
5,363
6,528
7,786
3,980
compounded average
growth per year
(2010-15)
2011 2012 2013 2014 2015
Values drive value
As one of the most trusted financial brands of Bangladesh, we

recognize that our customers have placed their faith on us – and
we must uphold this confidence relentlessly every single day. This
is the context of our corporate values influencing every aspect of
18%
our culture and business activities and we recognize that values Corporate Loans
are best achieved when integrated into day-to-day practices. compounded average
growth per year
It is with this spirit that our vision, mission and ethics are
(2010-15)
developed in conjunction with our operational businesses and
help improve the way we initiate customer relationships and
11
Outlook 2016 Thank you!
In 2016, we have lined-up some initiatives that will not only A business is only as good as its people and every individual
bolster our foundations for pursuing quality growth but also has their particular contribution to the success of the whole.
help us widen our services basket and attract a larger number Therefore, it is everyone in IDLC across all the various business
of customers. divisions, functions and markets that now make up our Group
• One, we are in advanced stages of finalizing our Taka 3,000 that I must thank for what has been achieved in 2015.
million rights issue that should transpire within the first While there are several elements as to why IDLC is different, for me
half of 2016. This mobilization will strengthen our capital the most significant is that we have been successful in creating
base, enhance our regulatory compliance to adhere to a business where the overwhelming majority enjoy coming to
some of the most stringent standards of the world, create work and are passionate in what they do, hence they are more
a much stronger platform for growth and act as a buffer for successful. I am confident that the depth of focused knowledge
absorbing contingencies. and commitment within a conducive, supportive and inspiring
• Two, we have already applied for license for an asset work environment that we have will lead to continued strong
management company with our regulators, with a view performance going forward.
to start full-fledged operations, \thereby completing the
services basket under our capital market operations. I would be remiss if I did not acknowledge that our results are
directly linked to the dedication and commitment of our Board
• Three, we are consolidating our operations by establishing of Directors, management team and staff members. I deeply
large and world-class office spaces (54,307 sq. ft in Motijheel acknowledge the fact that they have enabled me to lead our
and 16,408 sq. ft in Gulshan, both Dhaka) that will provide company and provide value to you, our shareholders. We also
much better and smoother customer service by offering a remain committed to contributing to the development of
holistic range of services under one-roof. We will also benefit Bangladesh’s economy and, in particular, to the financial services
from the synergy created through shared infrastructure and space of our country.
utilities.
• Four, we are widening our geographical coverage across our Beyond other aspects, why I am predominantly excited about
business segments and tapping a larger population base. the future of our institution is that we have, in the past, invested
This is also a part of our de-risking strategy from excessive significantly in our people, processes and infrastructure and
concentration on a particular market/ customer segment. the years ahead will be the time to reap the benefit of these
investments.
• Five, we are focusing on leveraging the continued success
of our SME division and will look at quality growth within Sincerely,
this segment that also provides us with the highest spreads.
• Six, we also expect to report reasonable growth in our sd/-
Consumer business by tapping into a wider segment, Aziz Al Mahmood
especially for home and car loans. For our corporate unit, we Chairman
will focus on controlled growth by refraining from engaging IDLC Finance Limited
in price wars and better managing our NPLs.
• Seven, we will continue to build on our capital market
franchisees (IDLCIL and IDLCSL) with an overall focus on
creating and strengthening a sustainable growth platform
despite external volatilities.
12
Our business orientation
Growth-oriented
Our long-term
Profitable approach to growth is
We are focused flexible and adjustable
on delivering according to market
sustainable year- conditions
on-year growth
Cash generative
We have strong cash
flows and try to achieve
Low risk the right balance
Our best-in-class credit
between reinvestments
quality checks help
back into the business
control NPLs; treasury
and dividend pay-outs
conservatively manage
results in achieving
sustainable returns
Return on capital
Our prudent capital
Aligned interests allocation strategy
Our team is aligned is oriented towards
to embrace the businesses / markets
highest standards of that yield us the highest
ethics and values and returns
ratify to our Code of
Conduct every single
year
13
The world of IDLC

We are a brand that Bangladesh is proud of
IDLC is one of the most trusted and respected non-banking financial

institutions (NBFI) of Bangladesh
The Company is engaged in the country’s economic progress through

fostering entrepreneurship by disbursing loans to SME and arranging
and disbursing loans to corporate customers
IDLC provides a better standard of living to the country’s citizens by

disbursing a wide range of retail loans
The Company ensures the financial security of a large population cross-

section by providing access to high-quality, interest-yielding deposits
We have focused on our niche to remain competitive
The very ethos of IDLC is to walk the path that few choose to
take. Being an entrepreneurial organisation driven by the spirit Total loan book, 2014
of enterprise, the Company’s salubrious risk assessment and Taka in million
appraisal systems enables it to cater to segments of the economy

that are typically considered to be risk-prone.
9,
59
5
It is here where IDLC identifies its niche, provides a wide range

17,905
of targeted and specific solutions and creates the platform for
mutual benefit and growth.
17,519
Take for example IDLC’s SME loan book that has reported a sharp
40% compounded annual growth rate (CAGR) over the past five
years, among the highest in the segment in the country. This
book also reported a growth rate of 24.92% in 2015. Corporate SME Consumer
Or for instance IDLC’s Consumer loans division that grew a
respectable 17.78% in size in 2015, led by good growth in car
We have remained ambitious yet conservative with risk
and home loan financing. Driven by significant 64.86% growth
in fund raised by structured finance department, the Company's We are ambitious, yet recognize that it is discipline that will take
corporate loan book also grew 10.72% during the year under us far. This prudent blend has always let us keep our eyes on
report. qualitative growth and not chase growth for the sake of growth
itself.
Total loan book, 2015
Taka in million
Our ability to weigh and price risks has allowed us to not only
grow our portfolio but do so oriented towards profitable and
balanced growth.
10
,6
In our journey, as in the path of most businesses engaged in

23
22,368 financial services, we reported NPLs, though controlled and

with the necessary provisions provided for under prescribed
regulatory ambits.
20,633
Through this approach, we have grown our loan book, positioned
it towards segments fetching us higher weighted average
risk-return ratios and consolidated our position as a profitably
Corporate SME Consumer
sustainable enterprise.
14
Non-Performing Loans Dividend per Share Cash dividend
In percentage Stock dividend
In percentage
2.09%
1.63%
2.02%
3.06%
2.32%
25%
10%
25%
25%
5%
2011 2012 2013 2014 2015 2013 2014 2015
104 bps increase in 2015 over 2014 Net Asset Value per Share
Taka
We have consistently enriched shareholder value
Beyond its financial assets, a financial institution needs to have

certain intangible qualities if it wants to deliver sustainable
returns to shareholders.
At IDLC, we believe that our ability to spot opportunities faster

than the market and providing for specific needs within this
19
21
26
31
16
niche in the best possible way results in value creation.

2011 2012 2013 2014 2015
Take for example IDLC Purnota. This is a loan within our SME
segment that is exclusively targeted to women entrepreneurs
Return on Shareholders’ Equity
in Bangladesh. In addition to loan disbursements, it provides a
In percentage
comprehensive set of advisory and capacity-building services.
Introduced in June 2015, IDLC Purnota accelerated the growth in
financing extended to women entrepreneurs which closed the
year with a healthy book size of Taka 2,376.61 million.
While we are disciplined in identifying ways where we can add our

financial resources and expertise to our customers’ aspirations so
16.44%
13.31%
20.95%
20.39%
they can become a reality, we also value the investment and trust
13.04%
of our shareholders and workhard towards achieving sustainable

success of our businesses.
2011 2012 2013 2014 2015
Earnings per Share Market Capitalization (in Dhaka Stock Exchange)

Taka Taka in million
15,022
15,987
10,119
2.84
2.66
4.95
5.81
1.99
2011 2012 2013 2014 2015 31-Dec-13 31-Dec-14 31-Dec-15
15
Our philosophies – the backbone of our enterprise
 Grow and develop our talent pool

 Fully leverage the core banking platform
 Optimize distribution points
Strategic  Grow and diversify funding sources

Continue growing the SME portfolio
objectives

 Further grow sales and service capabilities in the Consumer division
 Focus on top-tier clients and maintain industry relationships in the Corporate
segment
 Expand capital market operations and enhance capabilities
 Embrace internationally-accepted corporate governance standards and
sustainable business practices
 Integrity
 Customer Focus
 Trust and Respect
Core Values  Equal Opportunity

 Eco-friendly
 Passion
 Simplicity
In accordance with the approved and agreed Code of Conduct, IDLC employees shall:
 Act with integrity, competence, dignity and in an ethical manner when dealing with
customers, prospects, colleagues, agencies and the public
Code of  Act and encourage others to behave in a professional and ethical manner that will
reflect positively on IDLC employees, their profession and on IDLC at large
conduct and  Strive to maintain and improve the competence of all in the business
ethics  Use reasonable care and exercise independent professional judgment
 Not restrain others from performing their professional obligations
 Maintain knowledge of and comply with all applicable laws, rules and regulations
 Disclose all conflicts of interest
 Deliver professional services in accordance with IDLC policies and relevant technical
and professional standards
 Respect the confidentiality and privacy of customers and people with whom we do
business
 Not engage in any professional conduct involving dishonesty, fraud, deceit or
misrepresentation or commit any act that reflects adversely on our honesty,
trustworthiness or professional competence
IDLC employees have an obligation to know and understand not only the guidance
contained in the Code of Conduct but also the spirit on which it is based.
16
Our extensive range of products and services
Small and Medium Enterprises o Corporate Advisory/ other services:
• Small Enterprise Finance o Merger and Acquisitions

o Joint Venture Matchmaking
o Small Enterprise Loan/ Lease
o Balance Sheet Restructuring
o Seasonal Loan
o Feasibility Study
o IDLC Purnota - Women Entrepreneur Loan
o SME Shachal Loan Consumer Finance
o SME Surakkha
Loans
o Revolving Short Term Loan
o Commercial Space Loan • Home Loans
o Commercial Vehicle Loan • Car Loans
o IDLC Udbhabon • Personal Loans
o SME Deposit • Loan Against Deposit
Deposit
• Medium Enterprise Finance • Flexible Term Deposit Package
o Medium Enterprise Loan/ Lease • Regular Earner Package
o Commercial Vehicle Finance
o Machinery Lease Treasury
o Healthcare Finance o Overnight Borrowing/Placement
o Revolving Short Term Loan o Term Deposits
o SME Deposit o Bonds
o Commercial Space Loan o Debentures
o Commercial Vehicle Loan o Commercial Paper
o Preference Shares
• Supplier and Distributor Finance
o Equity Investments
o Factoring of Accounts Receivable o Treasury Bills/Bonds
o Bill/ Invoice Discounting
o Work Order Financing Capital Markets
o Distributor Financing o IDLC Securities Limited
Corporate Division Products
 Cash Account
o Corporate Finance  Margin Account through IDLC Investments
o Lease Financing Limited and other enlisted merchant banks
o Term Loan Financing  Easy IPO
o Commercial Space Financing  Premium Brokerage for High Networth
Individual (HNIs) and institutional and
o Project Financing
foreign investors
o Short Term Loans(to meet working capital
requirements) Services
o Specialised Products (for meeting seasonal demand)  Trade execution through the Dhaka and
Chittagong stock exchanges
o Green Financing
 Custodial and CDBL services
• Structured Finance Solutions  Bloomberg terminal for foreign clients
 Research and Advisory Services
o Structured Finance Solutions/ Arrangement of Funds:
o Loan/ Lease Syndication o IDLC Investments Limited
o Syndicated Fund raising for Bonds (Zero Coupon and
Coupon Bearing) Products
o Commercial Paper  Margin Loan
o Preference Shares  Discretional Portfolio Management
o Projects/ Infrastructure Finance Services
o Foreign Currency Loans  Corporate Advisory
o Structured Solutions  Issue Management
o Private Placement of Equity Refinancing of Special Funds  Underwriting
o Securitisation of Assets  Research
o Working Capital Syndication
17
Our organisational chart
18
Board of Directors
Audit Committee Executive Committee

CEO & Managing Director
Deputy Managing Director Deputy Managing Director
Human Resources Finance Corporate Division
Strategic Planning Corporate

Information Technology
Treasury Structured Finance

Corporate Social Responsibility
Green Banking
Corporate Affairs
Marketing Communication Consumer Division
Administration
Internal Control & Compliance Liability Operations
Operations
Asset Operations
Credit Risk Management
Capital Market Operation
SME Division
Special Asset Management
IDLC Securities Limited Small Enterprise Finance
IDLC Investments Limited Medium Enterprise Finance
IDLC Asset Management Limited Supplier Finance

Our shareholding composition
As on December 31, 2015
Number of % of total
Sl.No Name of Shareholders
Shares Shares
1 Sponsors/Directors:
The City Bank Limited (CBL) 60,854,056 24.21
Transcom Group 33,515,443 13.33
Eskayef Bangladesh Limited 20,109,375 8.00
Transcraft Limited 10,088,022 4.01
Bangladesh Lamps Limited 3,318,046 1.32
Sadharan Bima Corporation (SBC) 19,151,663 7.62
Mercantile Bank Limited 18,852,538 7.50
Reliance Insurance Co. Limited 17,595,702 7.00
Sub-Total 149,969,402 59.66
2 General
Institutions other than Sponsors/Directors:
Bangladesh Fund 8,040,750 3.20
ICB 5,813,612 2.31
LR Global 2,873,900 1.14
Other Institutions/Corporates 34,291,599 13.64
Sub total 51,019,861 20.30
Individuals :
General Public (Individuals) 50,377,924 20.04
Sub total 50,377,924 20.04
Total Holdings 251,367,187 100
2015
In percentage
20.04%
20.30% 59.66%
Sponsors/Directors Institutions other than Individuals

Sponsors/ Directors
19
Analysing vital As a major outcome of our

ability to identify industry
industry signs. trends ahead of the others,
one of the most significant
Turning towards initiatives of 2015 was our
launch of IDLC Purnota, a
the right path. loan product for women
entrepreneurs and a
holistic platform to give
them the wings to grow.
20
Performance analysis with the
Arif Khan CFA FCMA

Thank you for addressing the shareholders. How was 2015 as a year for
IDLC?
It gives me great pleasure to report a year of strong performance by IDLC. The
year 2015 was a memorable one for IDLC, a year of record net profit and revenues
achieved in an environment that was characterized by high competitive intensity
and certain macroeconomic headwinds. However, the story of IDLC is not about
a single year of growth or a couple of years of consistent performance. It is about
the path we are on and the clear line of sight of what we want to become. We
seek to emerge as the most respected financial brand in Bangladesh and the only
route to accomplish this is through sustainable growth, which is at the heart of
our strategy. “Propelled by the power of
What is our positioning in the Bangladesh economy?
our strategy and the passion
of our people, IDLC’s story
You will see that our commitment to Bangladesh, its economy and its people, runs
deep. Our strategy aligns with and supports the Government’s pathway towards is one of continuity and
stability, focus on achieving annual GDP growth rates of more than 7% and progress.”
21
progress to create a diversified and knowledge-based economy.

Our plans emphasize developing local talent, supporting local
businesses and, above all, pursuing sustainable growth. We are
humbled to have been recognised as an exemplar of efficiency
Taka
and consistent performance in the country’s highly-competitive
financial services industry and our brand stands out for trust and
transparency. We will continue to remain at the vanguard of
73,434
million
leading the non-banking financial services space in our country Total Asset base
by focusing on the interests of our customers.
Your last point was interesting. Can you elaborate a bit

on this?
Our strategy is resilient by design, sets us apart and keeps us
firmly on the path of sustainable growth. We seek growth with
a passion, but only the right kind of growth that generates
sustainable profits. You can see this reflected in our deposit base
which has grown at a respectable 29.65% compounded annual
rate (CAGR) over the past five years, helping sustainably feed our
loan book that has also reported a steadfast 21.04% CAGR over Taka
the same period. Despite achieving this loan book growth – from
Taka 21,254.20 million in 2010 to Taka 55,211.82 million in 2015, 47,625
we have managed to control our non-performing loans (NPL) at million
acceptable levels. This is the root of our sustainability strategy Deposit base
where pursuing quality growth has ensured that we serve our
stakeholder ecosystem well and generate value for all.
How has the Company managed to sustain its net

interest margin in a falling interest rate regime?
This is an interesting question and needs a careful analysis. To What was the reason behind the falling interest rates?
me, the net interest margin is not only a critical business health
Excess liquidity in the market comprised the primary reason
indicator but also a barometer of how we are treating our
behind the fall in interest rates. The overall credit growth stood
customer/ consumer ecosystem. Our focus on improving service
at 13.5% in 2015, which was not enough to mop-up the excess
for all our customers, our strong businesses in corporate and
liquidity. However, the central bank of Bangladesh, Bangladesh
consumer loans and our leading presence in serving small and
Bank, recognizes the pressing need to foster economic growth
medium-sized enterprises (SMEs) have yielded strong results. We
and credit offtake to not just boost GDP growth but also lift
have fully embraced the granularity of SME and mid-corporate
millions out of poverty. Hence, we see that it has adopted an
businesses, recognising the fact that big-ticket loans are
expansionary stance to foster economic growth and credit offtake
relatively easy for our competitors to target and therefore subject
by lowering the repo and reverse repo rates by 50 bps each to
to diminishing returns. Besides, through our ability to price risk
6.75% and 4.75%, respectively, already effective from January 14,
2016. The central bank has envisaged that economic growth will
be 7% over the next few years and as per its monetary policy
statement for H1-FY16, it has forecasted private sector credit
growth at 14.8% and public sector credit growth at 18.7%, taking
Taka the average to about 16%. As there is generally a lag between
rate cuts and transmission by the banking system, we expect the
3,418 situation of excess liquidity to continue in the first half of 2016,
hopefully easing off in the later part.
million
Net Interest Income
What was the key development of 2015?
Aligned with our strong point of identifying niches and catering
to specific customer requirements, we saw a great opportunity to
create a product specifically targeting women entrepreneurs in
well in what is traditionally thought of as a risk-prone segment, the SME space. According to our research, the women segment
we are able to draw out relatively better premiums from the provided us with an excellent opportunity to leverage our
SME segment while keeping a strong eye on collections and already strong SME franchisee and add value to their business.
customer accounts. In effect, we are creating mutually-beneficial, We, in fact,went beyond the product to see what holistic value
long-term relationships with a host of business owners who, we could add to our customer’s business. Hence, IDLC Purnota
cumulatively, represent the engine of trade and commerce in the is also about capacity-building and is a holistic services platform
growing economy of Bangladesh. as well by which women-run enterprises can also get insights
into running the business efficiently and optimally, thereby
strengthening viability.
22
Taka
22,368 20.39%
million
Return on equity
SME finance portfolio
Green financing is also an emerging area of widespread interest.
Yes, that’s right. The Bangladesh Bank is an active participant

in the promotion of inclusive and environmentally-sustainable
financing. We have created a dedicated Green Banking Unit as
Taka
a major priority sector promoting the yet nascent green banking
concept in Bangladesh. I am pleased to report that our Green
Banking Unit has achieved some major success by financing five 1,459
solar power projects with a cumulative capacity of 377 MW to million
widen electricity coverage. Moreover, another solar nano grid Net profit
project is expected to produce 300 kW of electricity catering to
20,000 people living in off-grid areas. This apart, the unit has also
provided green finance to five LEED-certified green buildings
with high environmental consciousness. FMO, a Dutch bilateral
private sector development bank with an investment portfolio
of eight billion Euros, is supporting our green financing goal by
providing long-term loans and valuable business advice. At the How do you read the Bangladeshi economy as we move
close of 2015, our consolidated green financing book stood at ahead?
Taka 617.04 million which is expected to double by the end of 2016.
Bangladesh’s strong fundamentals – relatively low debt, strong
foreign exchange reserves and ample liquidity – support counter-
cyclical spending that we hope will restart the capex cycle.
Besides, the evidence of growing imports of textile machinery
is testimony of capex plans at least in this sector and will be a
Taka boost to local employment and GDP growth as the industry
has a dominant share in the economic composition. Besides,
617 the Bangladesh Bank’s continued focus on inclusive financing
million for farm and non-farm SMEs including green initiatives in the
Green banking portfolio export-oriented textiles, apparel and leather sectors and the
creation of the Export Development Fund to support exporters is
likely to open a new medium to long-term re-financing window
for the industry participants.
What does the future hold for us?

Can you elucidate on our focus on cost control?
We follow a corporate strategy based on measured growth and
Our culture of continuous improvement is interwoven into every discipline to deliver sustained profitability and strong operating
aspect of our enterprise – from sales to compliance to credit. We performance. We are sustaining strong liquidity and our capital
also devote significant time, energy and resources to identify and position is at industry-leading levels. As a customer-centric
implement process improvements across business functions. enterprise, we continue to invest in world-class customer service
On account of our centralized organisational structure, we are infrastructure and are measuring progress in customer satisfaction.
able to put into practice most of these productivity initiatives As one of Bangladesh’s leading NBFIs, our competitive standing
simultaneously. The incremental cost savings associated and reputation stem from our ambition to be the best financial
with our continuous improvement initiatives are invested in brand in the country. Our operational acumen, financial strength,
our technological capabilities in order to reinforce customer risk management framework, governance and performance
experience (by ensuring quick creditworthiness and document are directly attributable to a discipline that regularly brings
checks and sanctioning loans in reduced time frames) and prosperity to our shareholders and customers. Propelled by the
providing higher value-added products and services, as we go power of our strategy and the passion of our people, our story is
forward. one of continuity and progress. Our values are uncompromised
and the value we deliver continues to rise.
23
Strategy
In control of an active present.
En-route towards a brighter future.
At IDLC, our strategy of growth through a Bangladesh-centric approach has held us in good stead over the years.
We have made a conscious decision to pursue and stimulate growth from our position of strength within Bangladesh — a growing
market of vast business potential. The country’s 160-million-strong population is largely under-banked, un-served and under-served
and that in itself represents a huge opportunity for widening our circle of influence. With the government’s focus on inclusive growth,
climate-resilient development and fostering policy-driven progress, the country’s GDP is set to grow into a higher trajectory of 7% over
the foreseeable future.
We are a Bangladeshi NBFI, proud of our roots and here to serve the local people and businesses with world-class products and
exceptional standards of customer service. To this effect, as a customer-centric enterprise, we have a 34 (32 branches, 2 booths) strong
branch network covering all the major pockets of the nation and staying in close proximity to our customers.
Location of the Corporate Head Office and branches of the IDLC Group
Dhaka District Map
Bhulta
Tongi
Mohakhali
Bhulta
IDLC’s Presence
24
Competency
In control of our growth
En-route towards strengthening profitable capital allocation
At IDLC, our three business divisions of SME, Corporate and Consumer are adequate insurance towards representing a risk-mitigated
lending portfolio. Within these, we are identifying opportunities to further deepen our relationships by exploring new customer
requirements and micro-market niches.
In line with providing competitive interest rates and serve customers to the best of our abilities, we transmitted the benefits of declining
deposit rates to the lending portfolio while prudently ensuring the sustenance of our spreads. In our pursuit of quality growth, we kept
an eye on collections and NPLs as well.
Going into the future, we expect to leverage our robust SME presence and cater to the specialized needs of this segment through
well-structured products and customized services. We also see a lot of business emerging out of loan syndication and corporate bonds
and this will remain a high focus area in 2016. Aligned with the government’s focus on promoting green banking, our dedicated Green
Banking Unit will also scout for relevant opportunities and expects to double its loan book this year.
36%
Total SME customers
compounded
average growth per
year (2010-15)
After 10 years of working in South Korea, Mr. Mohammad Sohidul Islam decided to return to his motherland and start
something of his own, something which would add value to his beloved country. Hence in 2008, he started his dream,‘Asian
Fashion’, an importer and wholesaler of ready-made garments in Keranigonj. Mostly seasonal in nature, his business soars
in particular periods such as Eid and the winters and thus creates a unique revenue stream which is different from those
of traditional businesses.
As an importer, Mr. Islam requires a large sum of money to import ready-made garments in bulk. This large funds
requirement led him to search for a financing facility from banks/financial institutions. To his dismay, he found that
traditional products offered by banks/financial institutions did not match with his revenue stream. Because of spike in
cash flow patterns, traditional equal monthly instalment financing facility failed to meet his requirements. What he needed
was a customized service, not readily available with most financial institutions.
Fortunately, he found a perfect solution at IDLC. The company provided him a loan with a structured repayment facility
which would allow him to pay bullet payments during high income periods. IDLC always emphasizes on customer
centricity and this allows us to provide customized solutions to our customers and help them achieve their financial goals
and aspirations.
25
Prudence
In control of our today
En-route towards securing our tomorrow
At IDLC, we have adopted a comprehensive view of risk.

We are risk-aware and our growth strategies strike the right balance between being ambitious and disciplined. We manage and
mitigate risk through an effective framework, closely controlled practices and a strong risk-management culture that guides each and
every employee.
Our risk teams collaborate with the other teams to ensure that risk is weighed and priced judiciously to ensure that we find the right
solutions for both our customers and our shareholders. As we move ahead, we are looking to create greater awareness and the culture
of risk ownership where managers are directly responsible for their respective accounts and business heads for the division’s Profit and
Loss account.
Resourcefulness
In control of our destiny
En-route towards creating the most preferred workplace
At IDLC, we provide an energetic, vibrant and inspiring work environment for our people to achieve their true potential.
We promote a culture of meritocracy. We also invest in our resources and expose them to both domestic and international training and
also deputing them to seminars and symposiums for knowledge enhancement. Our exclusive women’s group, IDLC Ladies Forum, is a
vibrant example of how seriously we take meritocracy and ensure that their voice is heard and grievances, if any, addressed.
With a view to strengthen the culture of accountability, every single member of our staff has to sign, every year, our Code of Conduct
which holds them as client relationship custodians. Besides, we offer leading remuneration standards and other benefits including
medical insurance, gratuity etc that makes us a preferred choice among employees.
28%
Number of Employees
compounded average
growth per year
(2010-15)
26
Sustainability
In control of our liability
En-route towards reinforcing our reliability.
At IDLC, we are fuelling Balance Sheet strength through creating a low-cost and sustainable deposit base. While almost 81% of our
liability basket consists of customer term deposits with average maturity of 9-12 months, the rest of the funds are mobilized through
refinancing opportunities of the Bangladesh Bank and treasury borrowings at relatively lower rates.
Our deposit products not only help clients ensure their future security but also get an exposure to invest their idle funds into interest-
yielding instruments. Our term deposit additions stood at Taka 10,798.37 million in 2015, representing a growth of 30.64% year-on-year.
This is a clear reflection of the large number of mandates from clients who have reposed their faith in IDLC based on our offerings and
service standards.
33%
Net Term Deposit additions
compounded average
growth per year
(2010-15)
Credit Rating
Emerging Credit Rating Limited (ECRL) has affirmed AAA (Pronounced as Triple A) long term credit rating and ECRL-1 short
term credit rating to the IDLC Finance Ltd (From here on referred to as IDLCFL) based on audited financials of FY2009-2013 and
other available information up to the date of rating. The outlook on the rating is Stable. The ratings are consistent with ECRL's
methodology for this type of financial institutions. ECRL considered financial performance, capital base, asset composition,
asset quality, earning trends, profitability, management experience and prospect of the industry while assigning the rating.
Date of Declaration Valid Till Rating Action Long Term Rating Short Term Rating Outlook
May 09, 2012 May 08, 2013 Initial AAA ECRL-1 Stable
May 09, 2013 May 08, 2014 Surveillance AAA ECRL-1 Stable
May 09, 2014 May 08, 2015 Surveillance AAA ECRL-1 Stable
April 15, 2015 April 14, 2016 Surveillance AAA ECRL-1 Stable
27
Key corporate milestones
1985 Incorporation of the Company Commencement of corporate finance and

merchant banking operations 1999
23 May 15 Jan
1986 Commencement of the

leasing business
Opening of the first retail focused
branch at Dhanmondi
2004
22 Feb 29 Jan
1990 Establishment of a branch in Chittagong,

the main port city of Bangladesh
Opening of the Gulshan Branch
2004
1 Oct 29 Jun
1993 Listed on the Dhaka Stock Exchange Limited Launched investment management
services, ‘Cap Invest’ 2004
20 Mar 22 Nov
1995 Licensed as a Non-Banking Financial

Institution under the Financial Institutions
Opening of the first SME-focused
branch at Bogra 2006
7 Feb Act, 1993 2 Jan
1996 Listed on the Chittagong

Stock Exchange Limited
Opening of the Uttara branch
2006
25 Nov 6 Apr
1997 Commencement of home finance and short

term finance operations
Relocation of the Company’s Registered and
Corporate Head Office at own premises at 2006
27 May 57, Gulshan Avenue 1 Jul
1998 Licensed as a merchant banker by the

Bangladesh Securities and Exchange
Commencement of operations of IDLC
Securities Limited, a wholly-owned 2006
22 Jan Commission subsidiary of IDLC 18 Sep
28
2007 Launching of discretionary portfolio
management services under ‘Managed
IDLC started operations at Mirpur
2011
14 Mar Cap Invest’ 15 Jun
2007 Company name changed to ‘IDLC Finance

Limited’ from ‘Industrial Development
Opening of the Tongi branch
2011
5 Aug Leasing Company of Bangladesh Limited’ 9 Aug
2009 Opening of the Sylhet branch

Commencement of operations of IDLC
2011
Investments Limited, a wholly-owned
6 Jan subsidiary of IDLC 16 Aug
2009 Opening of the Gazipur SME booth Opening of the Jessore branch
2012
26 Aug 18 Jan
2010 Commencement of operations

at Narayanganj
Change of logo and rebranding of IDLC
2012
3 Feb 11 Mar
2010 Inauguration of the Savar branch Opening of the Khulna Branch

2014
24 Feb 8 Jun
2010 Inauguration of a second branch in

Chittagong at Nandankanon
Opening of the Bhulta Branch
2014
8 Aug 18 Oct
2010 IDLC entered Comilla Opening of the Natore Branch

2014
27 Oct 10 Nov
2010 IDLC inaugurated its Narsingdi branch Soft opening of Kushtia Branch

2015
23 Dec 21 Dec
Soft o pening of Mymensingh Branch

2015
28 Dec
2010 Opening of the Keraniganj branch
27 Dec Soft opening of Habiganj Branch

2015
29 Dec
29
As an enterprise that is
focused on long-term
Adjusting
sustainability, we constantly
adjust our sails according to
our pace
wind speeds. As such, in of growth.
2015, while on the one hand
we grew our SME portfolio En-route
on the back of our deep
understanding of the sector to brighter
and higher potential margins
it offered us, we focused on
horizons.
consciously optimising our
Corporate loan book, a
segment that gave out early
signs of trouble, especially
because of the typically
higher loan size.
30
Competitive intensity and our strategic response
Operating in the financial services industry, IDLC is exposed to In the following pages, we have provided a detailed analysis of
several risks both internally as well as externally, some of which the competitive intensity we face while operating in Bangladesh’s
are beyond its control. However, with over three decades of rich dynamic financial services industry and our responses to
experience, the company has witnessed several industry cycles minimise the impact of these risks on our business model, to
and hence has developed and fine-tuned a risk identification and the extent possible. We have done so through depicting our risk
mitigation framework that protects the company from adverse framework through Michael Porter’s risk analysis structure as well
risks, enhances operating viability and ensures the sustenance as the SWOT analysis.
of its business.
lry Sup
e riva plier
•
titiv Mod pow
ompe
er
C inpu ate to lo er
cial t of w su
finan skille the p
d eshi n d res bu p lier
n g la e io
t it
ourc siness in power
e Ba omp
s: Th ls of c es clud a
e kn s the m
t it o r h le v e a c e
mpe by hig the s
p
of co arked ing in igh ow-h ain
ber y is m perat oah ow
Num d u s t r
N B F Is o d tu e and
• e s in 3 lo w
servic nd 3 cost
is
nks a hing
56 ba switc op
with T h e v id e r s the t
in g cost: r v ic e pro lo n gs to a nks
h e e b
Switc ion o
fs LC b w
• c e ntrat o u gh ID e r e are fe
n T h h
co
erenc
e: rs, t
ovide lity re
ty diff ervice pr e qua rs a
Quali o f s f s e r v ic
u s tome n
•
quart
il e
in ter
m s o
nally,
c m oe n
ts
heno
m p arable
y: T r aditio r e c e nt p r e d u ced
nt ran
we
co e ar ha
s
loyalt er, th loans
mer owev ice w ticket ne
se pr
•
Custo
a b ly lo yal; h
ity a n d in t e n
a c r o s s b ig
ea t of ere
d
Thr
n lly
reaso liquid pecia ent try
cess al, es I s
of ex at de NB F u s
y to a
g r e ind
loyalt ents s and rvices of new
segm k e ,
a ll ban ial s ility her
for
n ew financ possib furt
of ed he ion
ber wd s. T etit
n um dy cro e year comp
A a re
• alre t th ing
the the las tensify
r i n
ove nts, out
t r a r u led
en ot be
n
can
Buy
er p
owe
• r
Buye
rs/ c
equ u
ation stomers
sens sinc have
itive e big typic
• corp ally
orat
SME
s ha es te a high
they ve tr nd t pow
ar aditio o be er in
extre
coup e begin nally mely he
t
le n ing b e en le rate Threat of substitute products
are b d with to e
n ss ra
te se
ecom exc joy m
•
Big ing m ess liqu ore
acce
nsitiv
e
ticke ore p
rice
idity
a nd f ss to ; howev
cust t c sens requ finan er, • Low threat within the NBFI Industry. However, if we
ome onsu itive ent ce
extre rs' p
o
mer price and consider loan products from banks as substitute
me p wer loan wars
• rice is s (m ,
Rece com at the h a products then the threat is high.
nt e petit ighe inly ho
amid x c ess li io n fro s t leve m e lo
sign quid m in
dust
l cur ans) • Additionally, for some segments, there exists a
ifica ity re r
nt ra d u c ry pa ently w high threat of substitute products (for instance
te cu
t by
ed t
he p r t ic ipan ith
ban owe ts for commercial vehicle loans where some of the
ks r of
dep
osito vehicle suppliers themselves offer the vehicles in
rs
instalments, removing the need to get a financier
involved
31
SWOT analysis
STRENGTH
Strengths Strengthening our enterprise further
The IDLC Brand

Three decades of impeccable track record as a
responsible, proactive and customer-focused financial Continue to invest in the brand
service provider
High standing among local brands Strengthen our image as a responsible and reputed NBFI
Customer centricity
Need based products and superior service standards Continuous innovation in product and services suite
Investments in processes and technology to achieve stronger

Quick decision-making (lowest loan TAT in the industry)
efficiency
Transparent and ethical Train new recruits on our code of ethics and values
Launch new non-financial services and expand the horizon for existing
Training, counselling and business facilitation services
business facilitation services
Infrastructure
World-class core banking software Reap the benefits offered by our sustainable growth platform
Continue to expand strategically by covering unreached regions and

Strategically located branches
populations
Continue investments in processes and technology to achieve superior

Uninterrupted service delivery infrastructure
efficiency; enable higher levels of process automation
Corporate governance and compliance

Stringent regulatory adherence Continue to abide by the law of the land in both letter and spirit
Collaborative and proactive approach towards Continue to collaborate with regulators, peers and other industry
regulatory and industry reform initiatives participants and adopt best practices
Respectable institutional shareholding; experienced and

professional Board of Directors
Visionary management with direct ownership
Human resources
Continue investing in people as they are the principal driving force of

Competent and empowered human resources
the company
Continue need-based training programs and promote leadership from

Focused on continuous training and development
within
Highest levels of integrity Educate new employees on IDLC moral codes, values and ethics
A winning culture fostered through years of embracing Continue to innovate and improve; continue to uphold the culture of
best-in-class practices trying new things without the fear of failure
Strong financial footing

Increase capital through the rights issue to further strengthen our
Solid capital base
capital base, which will strengthen of growth platform
Continue good practices, utilize bonds to minimize asset liability

Efficient asset liability management
mismatch
Continue to deliver superior financial results and maintain shareholder

Sound and steady ROA and ROE
return
32
WEAKNESS
Weaknesses Addressing our weaknesses
Introduce new fee-based services

Dependency on interest income as a major revenue Continue to diversify through subsidiaries - IDLCIL, IDLCSL and
source - a limitation of being an NBFI IDLCAMC. Introduce fee-based products like 'Easy Invest', among
others
Dependency on term lending in the absence of

Continue innovating our product suite and focus on niche markets
transactional accounts - a limitation being an NBFI
Continue to grow the loan portfolio in the distant branches

Portfolio concentration in Dhaka and adjacent areas as
Continue to focus on the SME vertical
most of the distant branches are established in the last
Reach new areas with home loan products to build a sustainable
4-5 years
portfolio
OPPORTUNITY
Opportunities Capitalizing on opportunities
With the establishment of our AMC business, IDLC will have the full
Providing 360-degree financial services to all customer
range of wealth management services to offer through its subsidiaries.
segments - deposit products, loans, brokerage,
We also expect to capitalize on the reputation of the IDLC brand to
investment management and advisory
offer customers customized and comprehensive financial solutions
Green financing
Opportunity for co-branding and business partnerships
THREAT
Threats Countering threats
Intense competition in corporate lending driving
commercial banks to focus more on SME and consumer Continue providing best-in-class services to all customers
financing
New industry entrants providing stiff competition Innovate, automate and invest to reduce loan TAT further
Chose customer/ market segments carefully by identifying niche

opportunities
Excess liquidity and lack of investment opportunities
driving sector participants towards unhealthy price wars Extend our presence to all parts of the country. Create a market for
to grab the best customers home loan and continue to invest in supplier finance
Promote fee based products like 'Easy Invest' more
33
IDLC’s sustainable value creation process

With a vision that is anchored on the sustainability of our Sustainability objectives
business enterprise, we uphold the highest regard to our entire • Enhance the sense of transparency and governance
stakeholder ecosystem – by being honest and open to our
employees, by being reasonable to our customers, by being fair • Be open to communicating our plans and progress on an
among our competitors and by being true to our shareholders ongoing basis
by contributing to value creation in their hands. • Engage in fair dealings
• Ensure simplicity of terms and conditions and covenants in
IDLC’s sustainability value chain
our contracts with our customers
Sustainability anchors
Sustainability outcome
• Vision
• Economic value
• Mission
• Social value
• Values
• Environmental value
• Code of Conduct
Business Value Chain of IDLC
-Regulatory Compliance -World class Core -Accounting Standards -HR Workforce Planning
-Corporate Governance Banking Software -Financial Accounting -Recruitment and
Framework -Decision Support Selection
-Management
-Credit Risk System Accounting -Employee Training and
Management Process -Process Automation Development
-Comparative Reporting
-Operational Risk -Highest Security for Decision-Making -Performance Appraisal
Management process standards and Reward
Management
-Internal Control -Technology Audit
-Career Development
-Risk Auditing
and Succession Planning
Governance and Risk Management

activities
Support
Technological Developments
Human Capital Management

Finance and Accounting
Margin
activities
Market
Primary
Services to
Fund Raising Development and Fund Marketing and
Stakeholders
Product planning Management Sales
-Deposit Collection -Customer Needs -Investment Strategy -Strong Front Line -Transparent
-Capital Accretions Survey and and Process Sales Force communication with
Segmentation -Liquidity -Marketing all stakeholders
-Other sources of
financing including -Design and Management Communications -Continuous
Loans and Central Development of -Feasibility Customer
Banks refinancing Products Assessment of Relationship
Schemes -Development of Delivery Channels Management
Policies and Branch Set Up -Customer Feedback
-Procedures and -Customer Service and Improvement
Practices and Complaint -Investment advisory
Handling support
34
PESTEL analysis
Macroeconomic factors Impact on the Industry IDLC Front
P – Political
Growing political stability in the country Most of the businesses are coming Increase in NPL in 2015 was attributable mainly to
since the second quarter of 2015 after a out of the slump suffered due to the businesses suffering from political instability.
tumultuous couple of years. political instability in the earlier years. However, things got better in the last few months
Businesses are yet to pick up pace in of 2015 and 2016 promises to be a better year.
Macro level strategy to create a stable
terms of generating profit. Resultantly, Our focus will remain on quality acquisition and
political front is progressively creating
NPL remains a grave concern for most regularizing default accounts. NPL is also expected
a conducive environment for business
financial institutions. to improve if political stability remains for the rest
and economic prosperity.
of the year
E – Economic
In FY15, Bangladesh witnessed the By the end of the third quarter of - IDLC will continue to grow strongly in the SME
highest GDP growth rate over the FY15, the private sector credit growth segment where margins are still good despite
last eight years. The country’s GDP was around 13.8% compared with the growing liquidity in the system
grew 6.55% in fiscal 2014-15, in spite the Monetary Policy target of 14.3%
of the political turmoil witnessed for the same period. This provided - Once the expected results of the expansionary
during the beginning of 2015. The a challenging scenario for financial monetary policy materialize, new avenues for
Bangladesh Government is hopeful institutions as excess liquidity forced financing will open up and IDLC will be ready
of achieving a GDP growth of 7% for down prices and margins. Moreover, to capitalize on it
the fiscal year 2015-16. However, the Bangladeshi companies are taking
International Monetary Fund (IMF) advantage of low cost foreign - Investments made in 2015 and earlier on
has forecasted a GDP growth of 6.3%, financing with depressed global people and processes are expected to provide
lowering from its previous projection rates. The Government’s investment- benefits, going forward
of 6.5%. All the international trade promotion agency has allowed private
bodies are expecting to see a strong firms to borrow about $8.6 billion
growth in the coming years. However, through foreign funding at low rates in
private sector investments remain the last seven years.
subdued for the time being and
little improvement is experienced in
the implementation of the Annual
Development Plan (ADP).
S – Social
The country was able to achieve the Businesses need to be more receptive The rise of the middle-class and the general
lower middle income status in 2015, to customer needs and demands. improvement in living standards create more
with a per capita income of $1,314, With wider availability of information opportunities for consumer financing (including
and resultantly the standard of living to customer segments, market home loans) and small business financing. IDLC is
has improved. With the advancement inefficiencies are being reduced greatly prepared to capitalize on this opportunity with its
in communication technology and and the quality of service is beginning vast range of products and services suitable to a
increase in internet penetration, to emerge as the core differentiator wide cross-section of the population.
individuals are now becoming more
aware of market variables.
T – Technological
Technological advancement has High dependency on technology - Technology has long been a priority
made customers more sophisticated to meet customer demands mean investment area for IDLC leading to the
and has altered expectation levels. further investments in technology are company having a world-class core banking
Customers worldwide are doing required to keep pace with competitors software
away with physical interaction and and improve operational efficiency.
- More and more processes are being
are more comfortable to interact and Technology leverage is also important
automated. For instance, IDLC launched
be served digitally. However, such a for managing customer information
online credit appraisal, which is an end-to-end
transformation is taking place slowly and stringently adhering to regulatory solution originating from lead management
in Bangladesh. requirements to loan approval and is designed to increase
efficiency and reduce TAT further
- Investment in technological advancement

will continue going forward
35
Macroeconomic factors Impact on the Industry IDLC Front
E – Environmental
There has been increasing global - Increased regulatory focus on - IDLC is committed to sustainable development
focus on promoting green and sustainable financing through the creation of long-term value
e n v i r o n m e n t a l l y - r e s p o n s i b l e - Separate refinancing fund - Value for our stakeholders, value for the
businesses and sustainable financing. earmarked by the central bank environment and value for the community
This has shaped up as an outcome for green financing offers a - Our focused green banking unit has been
of the increasing threat on the good window of opportunity performing admirably since its launch in 2014
environment. to strengthen green financing
activities
L – Legal
Industries are faced with tighter rules - Increased focus on the application - IDLC's history of strict legal and regulatory
and regulations and application of of loan loss provisioning and compliance places it in a good position within
laws are more uniform and stringent, capital adequacy the financial services industry
translating into a more level playing
- Close communication is maintained with
field. - Focus on strengthening the
regulators and trade bodies
foundation of financial
institutions through strict - Separate compliance team ensures
implementation of stress testing compliance across the Group
36
Our business model
IDLC Finance Limited is one of Bangladesh’s fastest-growing • The company enjoys a healthy CRR that is much above the
Non-Bank Financial Institutions (NBFI) with its Assets Under limits stipulated by the Bangladesh Bank
Management (AUM) reporting a 19% CAGR over the past five
IT
years. The company’s business model has been structured
around meeting customer needs – both on the lending and • IDLC possesses a robust IT backbone that enhances
deposit front – and meeting their growth expectations on the business sustainability not just in terms of facilitating quick
basis of trust and respect. decision making but also with regards to quicker loan TAT
thanks to a leverage of technology
As an enterprise that has pioneered the Bangladeshi NBFI
• A strong IT infrastructure also results in enhancing
industry, the company has consistently created value for its
transparency, helps detect bad accounts early and also
entire stakeholder ecosystem. Leading the critical anchors
enables environmental preservation through the optimized
of fostering the sense of governance and transparency, IDLC
use of paper etc.
presents integrated reporting of its business model that include
such key facets as: • Investments in IT stood at 1.17% and 1.47% of income in
2014 and 2015, respectively
• Inputs
• Business activities Product and business exposure
• Output
• The company offers a wide range of lending products
• Outcomes
across corporate and SME clients and for retail customers
A brief description of each of these is provided below. that enables it to meet the tailor-made requirements of a
wide demographic
Inputs
• On the deposit side, IDLC offers a wide range of long and
Acquaintance with the business medium term savings products that enables it to meet
• IDLC enjoys almost 31 years of rich experience in the NBFI the financial security and liquidity goals of a number of
business consumers
• During this tenure, the company has witnessed several • IDLC also operates two wholly-owned subsidiaries (IDLCIL
market cycles and created a business model that is not just and IDLCSL) that offers a vast range of capital market
resilient but also risk-mitigated products and solutions
• The company’s rich intellectual capital accretion is reflected Business activities
in the low turn-over rate of its employees
IDLC Group provides financial solutions as non-banking financial
Resources institution through IDLC Finance Limited and capital market
• One of the company’s significant competitive advantages solutions through its subsidiaries. IDLC Finance as an NBFI, offers
comprises its robust human resource pool loans across its three well-structured and focused divisions:
• The company recruited a net 682 members during 2015 • Corporate: This segment effects lending to a large number
with the result that its total workforce grew to 1,227 of corporate customers across Bangladesh in a variety of
members by the close of the year industries and sectors. The typical loan size categorised
under this division is Taka 37.49 million and above
• Constant productivity enhancement programmes have
resulted in a better output from employees. Our human • SME: IDLC is among the fastest growing NBFIs in the
resources are highly sought-after in the market and IDLC country’s SME segment. Assets under this division have
prides itself in being able to consistently recruit high- grown at 24.92% year-on-year and loan size is typically
calibretalent and make it even better through unlocking classified as between Taka 2.70 million
our human resource potential. • Consumer: The Company offers retail and home loans under
Financial capital this segment, thereby meeting the lifestyle requirements
of its customers. Average loan sizes under this segment
• The company possesses an experienced asset-liability
comprises of Taka 3.58 million for Home Loan and Taka 1.76
management team that is continually appraising and
million for Car Loan
analysing key trends including interest rates
• Capital markets: IDLC Investments and IDLC Securities
• The result of this is that the company has been able to
are two of IDLC’s fully-owned subsidiaries engaged in
report a healthy and sustainable net interest margin (NIM)
providing brokerage, merchant banking and a wide range
of 4.14% during 2015
of capital market services
37
Area of Innovation Scope for Innovation Primarily responsible team

Increase efficiency in the hiring process Human Resources Team
Improve incentive structure to drive performance Human Resource with help from senior line
management in business divisions
People Automate people management processes through use
of HR Management software for employee on-boarding,
Human Resources and Technology teams
objective setting, performance appraisal, compensation
management etc.
Conduct Market research Products and marketing teams in coordination
Introduce new innovative products with sales, operations and credit risk
management and technology teams
Product Innovate by tinkering with existing products
Introduce non-financial services
Improve customer on-boarding experience
Introducing New Service platforms and reduce customer Business Solutions Team comprising of high
service time level members from different departments
Processes including business and operations
Increase efficiency through process improvements
Increase process and information security Technology Team
Innovation • Prevailing interest rate regime, especially governed by

policy rates as stipulated by the Bangladesh Bank from time
Towards providing the financial solutions mentioned so far, IDLC
to time
nurtures its spirit of innovation through its three integral pillars-
People, Product and Processes. The table above articulates the • Political upheavals that impact economic and consumption
scope of innovation of each of these pillars and the respective demand
team which are engaged in this: • Slowdown in the economy, measured by the gross
domestic product (GDP), that might lead to deceleration
Outputs and push back in the investment plans of corporates and
other businesses
The company possesses a considerable product suite, described
in page 17 under: “Our extensive range of products and services.” • A general decline in the risk-taking appetite of the country,
impacting its entrepreneurial capabilities
Outcomes • Attractive alternative investment avenues might dull the

market for deposit products
Some of the company’s key financial and non-financial outcomes
include the following: In summation, at IDLC, our business model is anchored on the
following 12 pillars:
• Overall assets have grown at a 22% CAGR over the past five
years, and 24.62% in 2015. This growth is among the fastest • Profitable
in the NBFI space in the country • Growth-oriented
• Overall deposits have grown at a 29.65% CAGR over the • Risk mitigated
past five years, among the fastest in the NBFI sector in the
country • Niche based
• Most notably, the SME division asset base has grown • Customer-centric
consistently over the past few years from Taka 14,333.64 • Balanced
million in 2013 to Taka 17,905.47 million in 2014 to Taka • Technologically proactive
22,368.39 million in 2015
• Cash generative
• The company has been able to maintain its NIM at between
3-5% sustainably over the past few years • Financially well-capitalized
• Average loan turnaround time remains amongst the best in • Geographically well-spread
the industry, ensuring high levels of customer service • Highly compliant
• Collaborative and team-oriented
External factors
Though we have created an operating model that is secure,

scalable and sustainable, some of the key external factors that
influence our business include the following:
38
Strategy and resource allocation
Aligned with our focus on enhancing shareholder communication and
reporting our progress and prospects on an ongoing basis, we detail
below our strategy, resource allocation approach and our future plans
in a Q&A format for lucid appraisal.
Q. Where does the organisation intend to go and how does it

expect to get there?
* People: At IDLC we have one of the finest human resource
teams in the industry, marked by their intellect, ability to
spot opportunity, energy, dynamism and loyalty to our
A. In-synch with our overarching ambition of emerging as the

best financial brand in the country, we are focused on two
key elements that are core to our long-term strategy: *
long-term goals.
Products: We offer the widest range of financial products

for an NBFI operating in Bangladesh that suits a wide
* Focus on governance and transparency range of customer preferences and requirements. Besides,
* Customer service our ability to remain close to our customers enables us to
Though our vision is a statement that encourages us to do proactively respond to their requirements.
better and go the extra mile every single day, this philosophy is * Processes: We have stringent and time-tested processes
governed by the principal framework that we will do so within the that help us provide superior customer services and that
ambit of the highest standards of corporate governance that we too in compliance with our predefined creditworthiness
have chosen for ourselves, going beyond the recommendations checks and other operational standards. The result of our
of regulatory bodies. We also uphold the faith and trust that our rigorous processes is reflected in the fact that we have been
shareholders have reposed in us and will focus on propagating able to control our NPL levels within our expectations even
and embracing those business initiatives that are financially- as we focus on optimising these as we go forward.
accretive and grow our capacity to pay increasing dividends on
a consistent basis.
Q. What is our resource allocation plan to be able to execute
our strategy?
Q. What are the organisation’s short, medium and long-term

objectives?
A. At IDLC, we are continually on the lookout for recruiting
exceptional talent that fits with our long-term
A. Unambiguously, our short term goal is to position our

enterprise well enough to capture the prospects of a stable
and growing economy. The FY2016 GDP growth projection is
corporate goals and plans. We not only offer industry-leading
remuneration standards and other benefits but are also focused
on helping them advance their careers through exposing them
slated at about 7%, which not only makes our country one of the to knowledge enhancement sessions and reputed symposiums
fastest-growing nations of the world but this growth also throws and seminars. Though at the present point of time we believe
up a lot of opportunities in the financial services space. we are well-staffed to execute our long-term plans, we will
Our medium-term goal is to sustain our net interest margins not only continue to fill for natural attrition but also create
(NIM) even as we are witnessing a downward pressure on a pipeline of talent even as we focus on setting progression
deposit rates that are forcing the lending rates along the same planning in place.
way too. We intend to do so through our unwavering focus on
ALCO and quicker re-pricing of our deposit products even as we
hold our lending rates to the extent possible. We also realise that
Q. How will we measure the efficacy of our short, medium
and long-term plans?
we cannot be out-priced by the market and hence in addition

to attractive lending products and solutions, we will ensure that
our robust customer service standards continues to remain our
A. This is an interesting point and the outcome of our short,
medium and long range plans will be the most evident
in our numbers. While during the short term we are focused
key differentiator. on growing both our deposit and lending base we have kept
a strong eye on the quality of this growth which is measured
Our long-term vision is to emerge as the best financial brand in in our NPLs. Our stated target is to bring our overall NPLs to
Bangladesh. This is our statement of purpose, unreachable as it under 3% in 2016 and below even as we go forward. During
might be, but continuing to help us navigate our operations and 2016, we also intend to sustain our spread between deposit and
our enterprise towards this direction. lending to 2015 levels despite operating in a falling rate regime.
Q. What are the strategies we have in place that will help us Our well-enunciated long-term target is to reach an AUM base
achieve these objectives? of Taka 10,000 million over the next 5-7 years. As stated earlier,
our quality of human resources has given us the confidence of
A. At IDLC, we have our three Ps firmly in place that has helped

created a robust platform for sustainable growth. These
three Ps include:
enunciating these plans of sustainable progress.
39
Q. What are the changes required of our business model to

enable us to meet our chosen strategies and enhance our
organisation’s ability to adapt to change?
them navigate through their business challenges has together
ensured that we remain one of Bangladesh’s most respected and
trusted NBFIs.
A. Since we have amassed considerable expertise in

understanding the growth and risk profiles of our SME
customers, we intend to focus aggressively on this space since
Q. What is the role of innovation in creating and sustaining
our competitive advantage and how does Technology
help in doing so?
it is not only relatively less competitive but also demands high
levels of customer service that we are well-equipped to provide.
The other change that we expect to mandate in our business A. Innovation is at the core of everything we do at IDLC. We
believe the only way to sustain our competitive advantage is
to do everything better today than how we used to do it before-
model is look for quality opportunities in our corporate division
since this segment is marked by high ticket loans and are and such a feat can only be achieved through embracing innovative
more prone to delinquencies. Having said that we are actively thinking at all levels of the organisation. While we already talked
appraising opportunities in our structured finance division even about continually innovating new products to address the specific
as we refine our go-to-market strategies with regards to our needs of the customers, innovation takes a greater view at IDLC
home and car loans segment. Importantly, we will continue to and revolves around and aims to improve the management of the
tweak our business model to not only enhance relevance in a three P’s of our sustainable business platform – People, Products
dynamic market but also infuse enhance levels of sustainability and Processes. It is imperative to continually improve the way we
across our enterprise. manage our Human Resources – through innovative compensation
management, performance based incentive structure and efficient
Q. What are the identified risk and opportunities and the risk
management framework that we have in place to absorb
any contingencies?
training and development infrastructure. The responsibility to
ensure this is entrusted with the senior line management and the
Human Resources department of the company. Product innovation
is managed by products team under each of the business units
A. By the very nature of our business, we provide growth

capital to large segments of our customers that, in turn,
exposes us to certain inherent risks associated with default.
of the organisation. Finally, process innovations are brought
about with coordination among different teams like Operations,
Technology, Business, and Risk Management etc.
However to mitigate this key risk, we have some extremely
stringent credit checks in place which has to be fully met by a Technology plays one of the most important parts in our pursuit
potential customer with a view to get loan sanction. Matching for continuous improvement through innovation. In this day and
our assets and liabilities is also a top priority. Besides, we are well age technology is continually changing the rules of competition,
capitalised with a cash reserve ratio (CRR) over what is stipulated rendering many traditional business strategies and processes
by the regulatory authorities. We realise that the recent spurt in obsolete. IDLC is a front runner in the industry in terms of
our NPLs might create a cause for concern. However according utilising technological advancement for increasing business and
to our carefully considered view, this is not a significant process efficiency. In addition to using a world class core banking
challenge since the incremental NPLs are mostly on account of software, IDLC has implemented a host of automated systems
few accounts turning bad and these are adequately provided for like Online Credit Appraisal System, Online Service Portal,
as per regulatory requirement. We are in regular contact with the sales-force performance management system etc. A high level
said clients for pending funds release. Business Solutions Team, comprising of members from different
departments work tirelessly to ensure that real business needs
Q. What differentiates our organisation and what is our source

of competitive advantage?
are addresses and operational efficiency is increased through
implementing technological upgrades.
A. Our ear-on-the-ground approach has enabled us to

continually innovate new products to meet newer customer
requirements. For instance, in 2015, we launched IDLC Purnota,
Q. Finally, how does the organisation develop its intellectual
capital?
A.
an exclusive platform for women entrepreneurs in our country We expose our human resources to an inspiring work
created not only to access loans but also draw from a network environment and a culture that fosters and encourages
of value-added services to help women grow their business. collaboration, sharing and teamwork. We expect the highest
Interestingly, this upcoming segment was largely untapped and standards of ethics and behaviour out of one another and have a
our first mover’s advantage will enable us to capitalise on its ‘no-compromise’ stance to any deviations. We contribute to the
progressive growth potential. We believe that our core source development of our human resources by providing them with
of advantage is our superior customer service that represents ongoing as well as specific training. In fact, the number of hours
a strong edge in a highly competitive business environment. of training at our company has increased by 19.77% to 21,583.47
Our ability to meet and exceed customer expectations, ensure total man hours in 2015, indicating our focus on sharpening our
quicker loan disbursement (for qualified customers) and help talent pool.
40
Business segment review
SME (Small and Medium Enterprises) division
IDLC’s SME division is a priority business segment for the This unique product is a first-of-its-kind in Bangladesh and we
Company. Sound business strategies, focused customer hope it will help boost the ICT sector and thereby increase
acquisition efforts, high-quality service and a superior risk- employment and grow contribution to the national economic
adjusted appetite enabled SME portfolio CAGR of 40% over output.
the last five years, clearly one of the fastest growth rates in
the industry. Significant investments in human resources and It has been discovered that a vast portion of SME clients are new
infrastructure – the two most critical building blocks – have to banking. Hence, in order to make the process of repayment
resulted in the creation of a robust structure that will facilitate easier, a new wing under the name of CCMC (central customer
sustainable growth, going forward. monitoring cell) has been introduced. The function of this team
is to actively monitor loan performance, communicate with
In one of the most pioneering initiatives in the sector, the SME clients on an ongoing basis and provide early warning signals.
division launched a pilot under the automated credit appraisal The team welcomes new clients and also keeps a track of the
system, a mechanism that will not only reinforce the quality of relationship managers’ customer service levels.
our services but also save paper and contribute to environmental
preservation. The system will be synced with a data warehousing During the year 2015, the SME division signed a MoU with the
system and front end customer relationship management which SME Foundation to reenergise the light engineering sector
will facilitate lead management, prospect management and in Old Dhaka. To date, over 30 clients have received financing
help in information-driven business decisions. through this window. We also signed-up for two refinancing
schemes offered by Bangladesh Bank, one for start-ups and the
At the SME division, our vision is to be the best SME financier other for marginalized dairy farmers. We have financed over 130
in the country. We will continue to innovate and launch newer clients through the two refinancing schemes in 2015.
products and services to serve the SME market, which is both
underserved and un-served in many areas. We believe that To further strengthen our distribution network and widen our
technology is at the forefront of our priorities and by the end footprint, three new branches were inaugurated in Habiganj,
of 2016 we hope to integrate online appraisal system into Mymensingh and Kushtia. Habiganj has been an economically-
smartphones to be used by all our relationship managers for vibrant catchment due to its excellent connectivity with the rest
faster and more accurate decision-making. We will continue to of the country. The government intends to establish a special
focus on extending the ambit of non-financial services and invest economic zone (SEZ) that will further foster the region’s growth
significantly in the capacity development of our talent pool. and development potential. The government has recently
declared Mymensingh as a new division. The city is the divisional
Core developments headquarters and connects five districts. In alignment with
our strategic positioning of business centres and the need to
The year 2015 witnessed a host of new products and services come closer to growth pockets, we inaugurated a new branch
added to the SME basket. A thorough diagnostic test was run in Mymensingh. Kushtia is one of the most important business
by the IFC (International Finance Corporation) to gauge the level zones of the Khulna division, widely considered as the country’s
of services offered by the division to women entrepreneurs. agro hub, and our establishment of a branch in Kushtia will
Thereafter, a comprehensive solution for women entrepreneurs enable us to capitalise on the growth potential.
under IDLC Purnota was launched in June 2015. Along with
subsidised financial products, women entrepreneurs are also Key financials
offered various non-financial value-added services including
business facilitation services that help them obtain/ renew all
kinds of regulatory documents. Moreover, Purnota insurance SME Loan Portfolio
Taka in million
provides coverage from unwanted events such as road bullying,
rape and death during pregnancy, at a minimal cost. Also, the
Purnota Club arranges training and health awareness programs
among women entrepreneurs across Bangladesh.
In spite of its excellent performance over the past and tremendous

growth potential in the future, the IT sector has traditionally
been avoided by the banking sector due to an inherent lack of
10,178
17,905
22,368
14,334
understanding of the business model and unpredictable revenue

6,870
patterns. To target this particular segment, IDLC, in collaboration

with BASIS (Bangladesh Association of Software and Information
Services), launched IDLC Udbhabon, a comprehensive solution 2011 2012 2013 2014 2015
for ICT (information-communication-technology) entrepreneurs.
41
NBFIs disbursed a total of Taka 1.16 trillion in 2015, exceeding

SME Loan Disbursments
the target set by the Bangladesh Bank by 10.79% and thus served
Taka in million
60 SME sectors in such industries as light engineering, handicraft,
flower and fish processing, handloom, rice mills, jamdani,
Rajshahi silk, khadi, biogas and compost fertilizer, among others.
However, private sector credit growth remained gloomy and fell

short of targets at the close of 2015. Excess liquidity was a constant
phenomenon for all the major players in the banking sector. Lack
of credit demand forced the financial industry to reduce both
12,053
15,656
10,392
7,498
4,485
lending as well as deposit rates. At the year end, average deposit

rates fell way below the inflation rate and thus turned real
return rates negative. To spur investments, entrepreneurs were
2011 2012 2013 2014 2015 insistent on getting financing facilities at single digit interest
rates. The average lending rate fell throughout the year and
stood at 11.18% in December 2015 and is expected to decline
SME Division Active Customer Base to single digits, going forward. In this prevailing scenario, only
those banks/ NBFIs with strong fundamentals, good corporate
governance frameworks, highly qualified human capital, robust
asset quality and regular innovation will triumph.
As a front-line player in SME financing, IDLC’s SME division has

played a significant role in fostering growth and has created
consistent value for shareholders.
Macro developments impacting our business

6,638
9,325
5,222
7,619
3,462
• The year 2015 witnessed a gloomy start resulting from

three months of continuous political blockages and this
2011 2012 2013 2014 2015 instability has cost the Bangladesh economy a loss in GDP
of $2.2 billion (World Bank). Despite this loss, the fiscal year
Sector review – defining the potential of SMEs in 2014-15 ended with a GDP growth of 6.51% (Bangladesh
Bureau of Statistics). Moreover, the second half of 2015 was
Bangladesh
much better with a 9% y-o-y growth in garment exports.
The financial sector of Bangladesh has reported a great 2015 • Market liquidity is at an all-time high with idle funds of over
despite the gloomy start amidst the political chaos. Rise in Taka 100,000 crore (Bangladesh Bank data) resulting in
remittance inflows broke all previous records and led to sound lower interest rates that, in turn, encouraged entrepreneurs
growth of foreign currency reserves. With a y-o-y growth of to avail more facilities from financial institutions.
2.47% in remittance inflows, foreign currency reserves stood
• The government’s initiative of setting-up 100 special
at $27.5 billion in December 2015. Exports, especially by the
economic zones resulted in increasing trends in foreign
readymade garments sector (RMG), has witnessed a y-o-y
direct investments. The uptrend in GDP growth continued
growth of 8%. By October 2015, reserves had touched a level
to attract foreign investors resulting in a 23.5% growth in
of $27 billion, enough to support imports for seven months. On
net foreign direct investments in 2015 (Bangladesh Bank).
the other hand, because of a sharp downturn in oil prices from
This surge in FDI growth will stimulate the demand for
over $100 a barrel to a low of $30, punctuated by the concurrent
ancillary goods and services offered by SMEs.
decline in international commodity prices, imports witnessed a
de-growth in 2015. Overall, a vibrant environment prevailed in • Continued focus by the central bank on the development
the financial sector much through the year. of SMEs shall create further opportunities, going forward.
• Technological upgrades, particularly in agro and other
The biggest game-changer in the financial services sector
manufacturing sectors, will have a visibly positive impact
comprised mobile financial services. Real-time money transfers
on efficiency and, in turn, foster local demand and exports.
became easier in remote areas thanks to mobile financial
services. On the other hand, the emergence of RTGS (real-time Business trends that are driving our business
gross settlement) made internet banking even more important
and widespread. National Payment Gateway, a strong initiative • Flexibility and quick turnaround time: Thanks to the rich
by the Bangladesh Bank, has enabled withdrawals from any ATM experience accumulated over the last decade, we are
regardless of the bank, thereby enhancing user convenience. familiar with almost all kinds of SME businesses that operate
in the economy. Our products are tailor-made to cater to all
Small and medium enterprises (SMEs), the bedrock and engine kinds of business models and requirement and are able to
of Bangladesh’s economic growth, did well throughout 2015. disburse an unsecured loan within five working days.
Realising its potential, both the government and the Bangladesh
• Customer centricity: SME entrepreneurs are at the centre
Bank are putting significant emphasis on SMEs by providing
of every decision made and our strategies are aligned such
various stimulation initiatives. Put together, all the banks and
that our customers receive the best possible experience.
42
Towards this end, we have introduced business facilitation • Increasing trends in NPL has been a major risk for the
services in our aim of becoming partners in growth and SME division. However, with a strong relationship-centric
not just financiers. We strongly believe that going beyond business model, the division is overcoming this challenge
just providing funds can indeed help us reach world- and expects to bring the levels down to targeted levels in
class levels. Currently, we assist our clients in obtaining/ 2016 and beyond.
renewing all kinds of regulatory documents, along with
providing training on a wide range of subjects such as Outlook 2016
digital marketing and book keeping, among others.
On the back of the political stability witnessed in the country for
• Strategic positioning of business centres: With a radius of last few months of 2015 and the expansionary monetary policy
50-km per branch, we now cover more than 70% of the adopted by the Central Bank, 2016 promises to be a significant
densely populated areas of Bangladesh. Within the year year in terms of economic growth in Bangladesh. Both private
2020, we aim to grow this metric to at least 90%. and public sector investments are expected to flourish, positively
• Careful appraisal and proactive monitoring: Seasoned impacting the SME entrepreneurs spread throughout the
credit analysts with an eye for detail have helped us reach country. IDLC is well positioned to support these SME businesses
a sustainable, quality portfolio. Concurrently, dedicated with quick and hassle free financing. To better enable us to
teams actively communicate with clients on an ongoing provide the SMEs with world class service, below are some of the
basis to ensure the detection of early warning signals. initiatives to be taken in 2016:
Risks impacting our business and their mitigation • Focus on business growth along with maintaining asset
strategies quality and strengthening the IDLC SME brand in SME
financing.
• With the average lending rate declining gradually and
• Strengthen human capital to increase productivity to
moving towards single digits on account of sluggish private
optimal levels through extensive training and coaching.
sector credit growth and excess liquidity, we will focus
on strengthening our relationships and exploring newer • Expand our footprint by establishing new branches and
avenues for financing. exploring new business opportunities in markets of our
existing presence.
• Our HR policies and corporate culture is highly appreciated
• Implement online credit appraisal across all our branches
by our employees and we always endeavour to keep them
which will not only hasten decision-making but also reduce
motivated and happy. We regularly tweak our organisational
the loan turnaround time.
structure to accommodate new leaders within the division
and reward the best performers. • Launch new products and modify the existing basket to
align with market demand.
• We depend significantly on the various refinancing
• Implement web/ app-based client service tool to better
schemes offered by the central bank and other international
serve our customers as well as create an institutional
organisations. It is hence imperative for us to ensure that
memory.
we operate smoothly even in the absence of such schemes.
• Tie-up with local and multi-lateral agencies to work towards
• A larger number of banks and NBFIs are turning their the development of marginal sectors with significant
attention towards the SME segment, realizing its embedded growth potential.
importance and growth potential. To remain competitive,
• Introduce a customer loyalty program based on customer
we are continuously embracing innovation in terms of
segmentation.
products, processes and distribution networks.
• Establish an objective-based performance evaluation
• As the SME loan portfolio grows bigger, exposure to model for all SME sales staff.
operational risks increase. In consultation with our
operations and compliance teams, our processes are
continuously reviewed and altered to ensure zero leakages.
43
Consumer division
IDLC’s Consumer division is one of the key drivers of sustainability. (including fresh graduates and experienced resources with
The division enjoys a proven track record in Bangladesh’s lateral entry) throughout the year. Today, the division has
consumer finance industry and enjoys a high recall for its a solid employee base with expertise in sales, customer
superior service standards, high levels of transparency, dedicated service, customer acquisition and vendor relationship
sales force and robust customer experience. The division has not management and products & marketing, among others. It
only been a frontline player in the national consumer market but ensured continuous training and development initiatives,
has also contributed to the corporate bottom-line significantly clear communication strategies with proper guidance and
over the last few years. The division’s two-pronged functions year-round employee engagement to retain the qualified
include funds mobilization for the company as per requirements and dedicated team members as well as to enhance
and grow the asset business sustainably. productivity.
Core developments • The division empowers its people with the objective
of developing their decision-making, leadership and
The Consumer division offers term deposit products to cater entrepreneurial capabilities.
to the needs of various individuals as well as institutions. It also • During the course of the year, over 45 training and
offers consumer loans to its targeted customer segments. As a development initiatives were conducted for the employees.
result of continuous and focused efforts, the division possesses a
significant market-share in home loans and car loans businesses. Performance strength
The division has been able to consistently grow its home and
car loan portfolios due to its sound business strategy, faster loan • In 2015, the Consumer division invested significant efforts
processing time and other unique selling propositions. towards increasing the customer acquisition through its
outstation (out of Dhaka city) branches by embracing
On account of these factors, the division registered the highest- several new initiatives. As a result, some of these branches
ever volume of home loan disbursement in a Calendar year performed quite well including those in Sylhet, Khulna,
in 2015. Yet another landmark was achieved when the asset Bogra and Savar. The division expects to widen its
portfolio crossed the Taka 2,000 crore mark during the same geographical coverage to venture into other potential
year. It must be noted that very few players (including banks and territories in the current and coming years.
NBFIs) have been able to achieve such a milestone. Moreover, this
remarkable achievement was not at the cost of compromising Key financials
quality of the book. Rather, the division ensured business
sustainability by on-boarding decent profile customer segments
based on its robust credit quality and third-party checks. Consumer Loan Portfolio
Taka in million
Product strength
• In the year 2015, the consumer division launched a variable
rate car loan to meet the needs of the customers and widen
its product basket
• During the year under report, the division introduced the
country’s most transparent variable rate home and car
loans pricing model with the interest rate aligned with the
12,950
17,519
20,633
9,851
8,428
benchmark rate. At IDLC, we consider the Cost of Fund

Index (CoFI) for NBFIs, which is published and updated on
the website of Bangladesh Bank on a regular basis. This chart
is available for all, accessible from anywhere in the world 2011 2012 2013 2014 2015
through the web and is highly transparent. At the time of
rate revision (of these variable rate loans), customers enjoy
the outcome of the updated CoFI (as per policy), which Number of Loan Customers of Consumer Division
is added to the spread, offered to respective customer
segments. This spread remains unchanged throughout the
tenor of the loan.
• The division introduced pre-owned (registered) car loans
and a few other product solutions in response to the
demands of the marketplace.
• Based on the prevailing market environment and business
strategy, the division focused on variable rate products
6,013
7,803
5,169
7,402
3,525
(rather than fixed rate products) during the year.
People strength:
• The Consumer division’s pride is its people. The division 2011 2012 2013 2014 2015
emphasized on recruiting the best possible talent
44
• Though the non-performing loan levels has increased
Consumer Loan Disbursments
Taka in million
slightly year-on-year, the division is closely working on
optimizing this metric, the results of which should be
reflected in the medium to long-term.
Macro developments that are driving our business
• Quick turnaround time (TAT) with seamless processes: We
have oriented our business towards ensuring rapid turnaround
time by embracing seamless processes starting from loan
initiation to sanction to disbursement, which enables us to
take decisions and provide service delivery faster in our overall
6,258
8,382
4,201
8,587
2,867
intent of building a strong pool of satisfied customers.

• Transparency: We value long-term relationships with our
2011 2012 2013 2014 2015 customers and always keep our product pricing, terms
conditions and documentation transparent. These values
are helping us strengthen customer confidence and
Term Deposits Balance acquire the prospect of earning repeat business.
Taka in million • Strong resource base: Our focused, passionate and
customer-centric teams with in-depth industry knowledge
has enabled us to grow and manage our business
successfully even in tough market cycles.
• Extensive network: We operate our consumer business in
7 branches across Bangladesh that enables us to remain
close to our customers and offer products and services as
per their tailor-made requirements.
46,174
29,164
22,008
35,241
16,828
• Wide product range: We possess a dynamic product suite

that enables us to cater to various retail customers both in
terms of deposits as well as loan products. This expansive
bouquet allows us to cater to a wide cross-section of
2011 2012 2013 2014 2015 customers and meet their aspirations.
Risks impacting our business and their mitigation strategies
Number of Deposit Customers of Consumer Division
• Though the country’s real estate sector is one of the anchors
of economic development and citizen wellbeing, the industry
has been suffering due to a sharp drop in sales over the last
few years. However, IDLC remains a front-line player in the
market and is well positioned to capitalise on any upsurge in
the market, signs of which has been seen recently.
• In recent years, competitive pressures have increased
manifold, especially in the retail lending business and
several banks and financial institutions have entered
6,343
6,681
6,355
6,153
the market. We remain committed to overcome these

5,456
challenges through concentrating on our key strengths of

fast Turn Around Time (TAT) and superior service level.
2011 2012 2013 2014 2015 Initiatives planned for 2016
• Establish two new branches outside Dhaka to expand our
Key trends impacting our business geographical coverage and come closer to our customers.
• Increase financing for meeting construction requirements by
• With high levels of liquidity in the markets, the consumer
launching specific and targeted products, thereby widening
lending rate is also witnessing a downward spiral. Moreover,
our customer base.
the division is also facing uneven competition with other
players offering lower-priced interest rates just to attract • Emphasize on portfolio retention, especially in the wake of
rate-sensitive customers. Hence, new home loan customer rising competitive intensity.
acquisition has become a challenge due to this rate war. • Increase employee productivity.
• Besides, the takeover of our existing loan portfolio by • Assign profit-based targets to branch managers.
players offering significantly lower rates of interest has
• Introduce new home loan products by concentrating on
become a major threat. Hence, portfolio retention will be
special rates of interest.
the division’s major challenge this year.
• Restructure our existing organogram to make the business
• Retaining key resources is also going to be another
flow more efficient. Assign different projects and job
challenge due to the high sectoral focus by competitors.
responsibilities to enhance current job role across key
• Since the overall cost of funds is declining, other banks and positions.
NBFIs are focusing on the retail business (especially home
• Develop effective employee retention plans by proper
loans) in the recent months with a distinctive central focus
guidance and motivating them towards career advancement.
on loan takeover.
45
Corporate division
Overview that include apparels and accessories, textiles, pharmaceuticals

and healthcare, building and construction, food and beverages,
IDLC’s Corporate division has made significant inroads into telecommunications, financial services, iron and steel and micro
the confederation of local corporate conglomerates, large finance institutions, among others. Our diversified and rightly
corporate houses and multinationals. This was made possible balanced portfolio helps mitigate concentration risks and
by our integrated relationship management approach, strong ensures the sustenance of a quality credit portfolio.
customer orientation, innovative product offerings and superior
service delivery. Progressively, the division has also widened its High workplace standards: Our division’s time-tested workplace
geographical coverage, deepening its niche market comprising practices emphasised our reform agenda on the pillars of
established corporate houses and upcoming enterprises. In corporate governance. We have set the highest quality threshold
parallel, the division also diversified its product basket to cater and continually raise the bar in terms of regulatory compliance
to specific customer funding requirements comprising, but not and accountability and always look for ways to strengthen
limited to: our relationship with both our internal as well as external
stakeholders.
• Establishment of greenfield projects
Strong resource base: Our core strength is reflected in the
• Capacity augmentation programmes
intellect, dynamism and energy of our workforce that comprises
• Commercial space acquisition a mix of experience and youth. The division’s strategic initiatives
• Meeting seasonal demand through working capital serve their quest for exposure on market and business
mechanisms. Besides, career progression is encouraged through
Our wide array of products includes simple lease finance, term
regular ongoing training programmes and other professional
loans, working capital finance (with suitable tenor), asset finance,
development tools.
project finance, green finance under Bangladesh Bank schemes
and participation in syndication arrangements, among others. Strategic alliance: Our division works closely with other banks,
NBFIs and developmental organisations along with IDLC’s own
The robust infrastructure and resources that we have created
subsidiaries and business units to ensure the delivery of full-
helped our operations remain relatively insulated from
fledged and the most cost-effective financing solutions to our
economic headwinds and even domestic unrest (most visible
clients.
during the beginning of 2015). Resultantly, our division posted
positive growth during the year under review. In the backdrop Key financials
of our focus on sustainable growth is embedded our integrated
relationship approach, deep understanding of business
Corporate Loan Portfolio
dynamics and customer risk profile and the growth aspirations
Taka in million
of our clients.
Our expertise and innovative solutions to partner our customers

in their journey is supported by several USPs including:
 Faster service
 Customised solutions
 Competitive rates
10,213
10,623
7,963
9,595
6,332
 In-depth industry knowledge

 Transparency
 Trust and credibility
2011 2012 2013 2014 2015
Key strengths
Unique client approach: Our distinguished client approach has Corporate Loan Disbursments
enabled us to break the typical myth associated with being a non- Taka in million
banking financial institution. As an outcome, our Corporate clients

have come to respect and trust our tailor-made solutions (within
the regulatory ambit) delivered within the shortest possible time,
backed by quick financing decisions from the management.
We also take pride in sharing the latest market developments,
sustainable business practices and prevalent low-cost financing
avenues to remain as the most preferred growth partner for our
4,806
6,504
5,421
6,484
clients rather than being a mere financial associate.

4,032
Diversified portfolio and solid customer base: Our Corporate

portfolio is well-diversified across major sectors and industries 2011 2012 2013 2014 2015
46
 With the hope that domestic consumption will gain
Corporate Division Active Customer Base
in number pace, constraints on investments will ease, interest rates
will remain low and structural reforms will be actively
implemented as envisaged; business outlook will be
positive in the coming days
Key business risks
Political risk: Amidst the political turmoil and changes in

Government policies, regular business and new projects face
several challenges. As part of its mitigation measure, the Corporate
227
239
248
244
256
division continuously monitors the external environment to take
proactive measures to protect its operations.
2011 2012 2013 2014 2015
Business risks: In the realm of excessively liquid money markets
and downward pressure on interest rates, the sustenance of a
Key trends influencing the market competitive rate remains a challenge for NBFIs. However, the
Corporate division manages an efficient and well-balanced
 Bangladesh’s GDP is projected to grow at 7% on the back
portfolio by providing both short and long-term credit.
of improvement in most of the major economic indicators
like export earnings, domestic demand, foreign exchange Credit risks: The division’s integrated relationship management
reserves and inflation, among others team coupled with a strong credit risk management department
 However, two important prerequisites to achieve the and effective credit analysis helps in the prudent selection of
targeted GDP growth comprising political stability and clients which ensure continued growth and profitability and
investment growth pose as major challenges; should these preservation of the credit portfolio quality.
remain steady, they can provide significant economic
Operational risks: The division’s robust reporting hierarchy helps
upturn, going forward
in proper supervision and enables the staff to understand and
• While private sector credit growth recorded an upward perform their tasks timely and accurately. Moreover, we also
trend by the end of 2015, banks are still facing a liquidity leverage software inputs for strengthening execution efficiency.
glut, which is forcing downward pressure on both the
deposit and lending rates. The preservation of the spread
Outlook 2016
between the two will be key to profitability growth
 The upward trend in credit growth indicates the import  Focus on need-based financing to fuel the growth appetite
of capital machinery, especially for core sector industries, of our corporate clients
which portray the start of the investment-production cycle,  Foster business growth by providing long and short term
adding to economic momentum financing among some of the country’s fastest growing
 In an already-saturated and hyper competitive sector corporate houses
characterised by the availability of cheaper local and  Review the targeted niche market and growth sectors
foreign credit options, banks will emerge more creative influenced by the macro and micro economic indicators
in their intermediary functions through engaging in non- and Government policies
traditional investment products like commercial papers
 Structure bundled solutions comprising traditional as well
(CP), sub-bonds and preference shares, among others
as non-traditional financing products
 An absence of developed and stable capital markets for
 Initiate strategic alliances with banks and developmental
equity financing has opened numerous avenues of funding
organisations to tap various business avenues to serve
opportunities for banks and NBFIs
corporate clients with cost-effective solutions
 The Government’s initiative to set up Special Economic
 Continue to invest in people resources and technology to
Zones (SEZ) across the country backed by infrastructure
enhance productivity
and utility support and its ambition to create a number of
mega infrastructure projects will act as a catalyst to spur  Explore green financing avenues to promote sustainable
both private and public sector investments business practices among existing as well as potential
clients
 Growing awareness on the need for sustainable business
practices through the adoption of energy-efficient and  Attain operational efficiency within the framework of
eco-friendly manufacturing processes will bolster green regulations to render flexible and delightful client services
financing opportunities across sectors  Achieve stable but quality growth through maintaining low
NPLs
47
Structured Finance department

(Unit of the Corporate Division)
Providing Innovative Financing Solution to Customers Our Key Competence - Making us a valued partner of our clients
The Structured Finance Department (SFD) is a specialized business • Successfully leveraging strategic relationships in order
unit of IDLC under the Corporate Division and it was established to provide the most appropriate and comprehensive
with a purpose to facilitate syndication arrangements, arranging structured financial solutions to clients
onshore as well as offshore financing, agency and trusteeship • Concentrating on niche customers diverse needs and
services and corporate advisory services. The department providing unique solutions through a multiproduct portfolio
commenced operations through loan syndication in the year • Experienced and highly knowledgeable team members
2000 to meet the increasing demands for large industrial and with excellent track record in pioneering transactions and
infrastructure project financing. Over the years, the department providing innovative customer-centric financial solutions
has continued to arrange syndication deals in the form of term • Strong network with corporate houses and in-house
loans and working capital facilities. industry research help in the selection of the right clientele,
At present, SFD is involved in deals that necessitate various modes which ensures growth and profitability as well as the
of financing. Being one of the leading structured finance solution preservation of a quality credit portfolio
providers of the country, the department arranges financing • Focusing on new products that include short term fund
through a wide range of products that include term-loans (both arrangement through commercial paper, arrangement
local and foreign currency), working capital facilities, Investment of zero-coupon bond for corporate houses and foreign
Promotion and Financing Facility (IPFF), subordinated bonds currency sourcing through IPFF and multilateral agencies
for Tier-II regulatory capital requirement of commercial banks, • Support from the IDLC management coupled with a strong
zero-coupon bond, commercial paper, etc. The department also Corporate Governance framework.
provides corporate advisory services depending on the needs of • Reputation of IDLC contributes immensely for booking loan
the customers. syndication deals from large corporate houses of the country.
Business and Financial Overview
Particulars 2011 2012 2013 2014 2015

Total Funds Taka 2,280 million Taka 11,895 million Taka 10,510 million and
Taka 9,550 million Taka 6,375 million
Raised and USD 30 million and USD 40 million USD 10.20 million
Total Fee Income Taka 2.64 million Taka 30.62 million Taka 47.39 million Taka 65.98 million Taka 60.03 million
Number of Deals 1 2 4 4 10
United Commercial Bank
Karnafuly Dry
Limited, Fareast Spinning
Dock Limited;
BSRM Steel Mills Industries Limited,
Summit Bibiyana ECPV Chittagong The City Bank
Major Clients and Best Holdings Confidence Steel Limited,
Power Project Limited Tier-2 bonds and
Ltd. KYCR Coil Industries
Mercantile Bank
Limited, Bangla Trac
Tier-2 bonds
Limited and ACI Limited
Key Business Trends – A Story of Opportunity in

SFD Fee income
Taka in million Bangladesh
• Bangladesh has proven to be resilient with a growth of

around 6% per annum over the last 5 years even though
it has been facing unbalanced political situation. However,
being an emerging economy, Bangladesh is continuing
on its growth path and hence, industrial and large project
financing has become one of the key drivers of this transition.
• Bottlenecks created due to the several challenges have
30.62
47.39
65.98
60.03
2.64
resulted in a negative impact on various projects undertaken

by the public sector, thereby indirectly affecting the
2011 2012 2013 2014 2015 private sector as well. It is imperative that economic
48
conditions contribute positively to the overall infrastructure • Interest Rate Fluctuations: Fluctuation in interest rates
development of the country. creates a significant project risk, compelling companies to
• With the development of the country in recent decades, resist taking large syndicated loans. In order to mitigate the
the demand for large infrastructure projects (transportation, risk, upper and lower bands for interest rates are structured
communication, water & energy, etc.) is increasing rapidly. The to give adequate cushion to both clients and lenders against
structured finance team realizes that large-scale financing is fluctuations, thus creating a mutually-beneficial situation.
required for such projects, thereby providing opportunities • Natural Calamities: Bangladesh is prone to cyclones, floods
for business. The Public-Private Partnership (PPP) projects and hurricanes, which adversely impacts the implementation
also play a vital role in the demand for syndicated financing of projects. As part of the mitigation measure, the SFD team
of large infrastructure projects. ensures that projects are insured to cover most of the risks
• High liquidity supports project financing and results in associated with natural calamities and other such incidents
increasing investments in large projects. Liquidity is an such as fire, etc.
important factor for the department for booking deals that Looking Back - Achievements in 2015
result in successful fund arrangements.
In 2015, SFD realized sluggish business income because of adverse
• Economic development has created an appetite for large-
market scenario. While many other players in the industry were
scale projects. Currently, the large projects require various
struggling to survive, the department focused on new products
forms of financing collaborations for successful fund
and managed to end up at a point which was satisfactory for
arrangements. The incorporation of Islamic Financing
2015. A significant portion of fee income was due to arranging
commonly known as ‘Hire Purchase under Shirkatul Melk’
Tier-II subordinated bonds for commercial banks. The department
(HPSM), IPFF (Bangladesh Bank/ World Bank) and foreign
arranged Taka 5.00 billion in the form of coupon bearing Tier-II
currency financing in loan syndication has helped the
subordinated bonds for one of the largest banks in the country
department to diversify its modes of financing. In addition,
in order to fulfill their regulatory capital requirement under the
a vibrant capital market is essential for structuring different
BASEL-II framework. The department also arranged Taka 3.55
products such as coupon bearing bonds, zero coupon
billion as commercial paper for 4 (four) eminent corporate houses
bonds, convertible bonds, etc.
of the country.
• With a growing economy, institutions require corporate
advisory services and providing the required services has In addition to the regular business, the SFD sponsors several
been the added source of business development for the knowledge sharing events. The department arranged “IDLC
department. The department’s various services include Presents - BLUEPRINTS 1.0” which is a platform where participants
preparation of feasibility studies, business plans, mergers & can apply their financial knowledge into analysis and decision
acquisitions, valuations, among others. These services not making, work with templates of actual financial models, get
only expands growth opportunities but also opens up a fee opportunities to interview professionals, and build their skills as
income/earning possibility. aspiring financial analysts.
Key Risks and Mitigation Measures Impacting the Business Several networking activities had been arranged from the
• Changes in Government Policies: Major changes in department to engage and strengthen the relationship among
government policies create an adverse effect on businesses. our customers. The purpose of arranging all these activities is to
Due to changes in the political situation, different projects nurture and sustain the relationship with the customers.
face difficulties during implementation and operation.
In addition, changes in tax and duty structures impact Moving Forward – Strategies for 2016
businesses that indirectly affect the business of the In 2016, the department will strive to expand its product portfolio
department. As a part of the mitigation measure, the SFD and include all possible structured finance products. It also plans
team continuously monitors the trends in government to introduce new products like asset securitization and corporate
policies and works together with large corporate houses to advisory services for mergers and acquisitions. The department
better assess the situation and find appropriate mitigation also intends to provide support to banks through its advisory
measures. services on compliance-related issues regarding BASEL-III accord.
• Lack of Availability of Required Infrastructure: Unavailability
of proper infrastructure hampers business growth. As a The department is also planning to introduce an Islamic bond
mitigation measure, the department actively engages in (Sukuk) to support clients who prefer the Islamic banking
due diligence to ensure the availability of the required framework. For 2016, the department will also focus on
infrastructure well before undertaking the fund arrangement developing new products, smaller deals, arrangement of foreign
process for such projects. currency financing, product-wise cross-selling programs, and
green banking products in the financing mix.
• Selection of Equipment Suppliers: Most projects face
implementation challenges on account of inappropriate The vision of the department is to be the most-preferred partner
selection of equipment suppliers. To mitigate this risk, the in loan syndication in Bangladesh and to achieve its goal, the
department engages an independent engineer/ consultant department intends to fortify its human resources, accelerate its
for projects. Hence, the department ensures constant project productivity, introduce new products in the market and develop
monitoring and provides a third eye perspective to lenders the best in class operating culture to give its clients an outstanding
through the independent engineer/ consultant. service experience that will be inimitable in the country.
49
Green Banking
(Unit of the Corporate Division)
Overview Declaration. It is considered as first binding international legal

instrument to address the issue acknowledged by 170 countries.
Sustainable development and preservation of environment are The creation of UNFCCC (United Nation Framework Convention
now recognized globally as overriding imperatives to protect on Climate Change), UNEP FI (United Nation Environment
our planet from the ravages inflicted on it by mankind. Various Program for Financial Institution), Earth Summit, Signing of
global initiatives are underway to counter the ill effects of Kyoto Protocol strengthen the commitment of international
development such as global warming and climate change. community.
Banks and financial institutions can play a major and decisive
role in these global efforts to make our planet a better place to Bangladesh, the largest delta in the world, is vulnerable
live in. Green Banking is comparatively a new development in to the impacts of climate change. In order to undertake
the financial world. It is a form of banking taking into account appropriate adaptation and mitigation measures, government
the social and environmental impacts and its main motiveis of Bangladesh institutionalize it through NAPA (National
to protect and preserve environment. As providers of finance, Adaptation Program of Action), CDMP (Comprehensive Disaster
banks can ensure that businesses adopt environment-friendly Management Program), ECR (Environmental Conservation
practices. Incentives by way of offering cheaper funds, one stop Rules) etc. The creation of SREDA (Sustainable and Renewable
solution and availability of grant for initial boosting for adopting Energy Development Authority) and implication of clean energy
green technologies will have a long term beneficial impact on in Renewable Energy Policy, Sixth Five Year Plan etc embedded
the environment. The sole objective for such initiative is to the path towards sustainability.
reduce carbon footprint from banking activities as well as from
financed projects. Understanding the gravity of the situation, Bangladesh Bank
created a refinance scheme of Taka 200 crore for financing
Focusing sustainable growth: national and environment friendly products comprising five different items
international initiatives of Renewable Energy and Waste Management back in 2009.
Later in 2011, Bangladesh Bank provided all FIs with a guideline
The motto “Going Green” came in front in late 19th century when on Environmental Risk Management which was subsequently
mankind first realized that over exploitation of natural resources revised in 2015 with Environmental and Social Risk Management
and environmental degradation shall dim the effect of rapid Guideline. Also the number of green products eligible for
industrialization. It was first institutionalize in 1992 through Rio refinance extended to 50 from just five within 2015.
IDLC’s road map towards sustainability
Much before mandating Green Banking in the banking and financial sector of Bangladesh, IDLC had voluntarily adopted the codes of
environmentally and socially responsible business by actively becoming members with the United Nations Global Compact (UNGC)
and United Nations Environment Program Finance Initiative (UNEP FI), back in 2010. With the issuance of the Green Banking policy
guidelines by the Bangladesh Bank, a number of new avenues opened up for IDLC in its quest to become green. The policy required
much more than just pursuing ‘Green’ projects and technologies and resorting to initiatives that manage our environmental impact; it
meant a total change in the organization’s DNA.
Awareness and
Green
capacity building
Establishment of Finance
Internal
Green Banking
Client
Unit Monitoring,
Policy Stakeholders Green
Reporting &
Formulation Marketing
Disclosure
50
Establishment of Green Banking Unit (GBU) covenants in the facility agreements. This project will not only
satisfy the Central Bank’s requirements, but also enable IDLC
In 2013, a Green banking Unit (GBU) was formed comprising to comply with internationally acceptable risk management
representatives from different relevant department to roll out standards.
the designated task. Later on, dedicated personnel was recruited
to carry on with the green motto. Separate GBU with technical Thirty of IDLC’s employee was trained by a series of workshop
person can be considered as first step for our journey towards titled “Strengthening capacity and knowledge on Environmental
sustainability. and Social Risk and Opportunity Management (ESROM) among
Financial Institutions in Bangladesh”. The workshop was a joint
Formulation of policy and framework initiative of several development financial institutions like DEG,
FMO, OeEB, Proparco, UNEPFI and their five Bangladeshi FI
IDLC green unit formulated Green Banking Policy in line with IFC
partners – IDLC Finance Limited, Brac Bank, Eastern Bank, Dutch-
Performance Standard, ADB Safeguard Policy and Bangladesh
Bangla Bank, and The City Bank.The objective of this program was
Bank guideline in 2014. During the formulation assistance
to develop capacity for bankers with respect to environmental
were provided by FMO, a Dutch development bank, and FI
and social issues, identification of risks and opportunities and
Konsult, IDLC’s appointed consultant for this project. Policy and
finding innovative & bankable green products for the financial
framework defined IDLC’s target and its approach towards green
market.
growth.
IDLC promoting ESMS throughout the organization
In-house environment management
Training and capacity development
Apart from financing green products, it is essential to implement
similar ideas in branches and offices. Being inspired by such Capacity development of in-house human resources is a
agenda, IDLC stepped in to establish first ever Green Branch precondition for rolling out green finance and marketing. Hence
which is pursuing for LEED certification on commercial interior. a total of 29 trainings were conducted throughout the year and
Chittagong Regional office is in process of attaining prestigious more than 500 people were trained among which 261 was IDLC
LEED certification from USGBC (United State Green Building employee. Trainings were provided mostly on salient features of
Council). EDS (Environmental Design Solution) has been green banking and its products and 17 of IDLC’s branches were
appointed to carry on the responsibility. Together, both of the reached by last year. Speakers included in house resource persons
parties are practicing sustainable design methods to make the as well as personnel from different professional institutes, DFIs,
office equipped with energy and resource efficient features. It is consultants like from USAID, IFC, FMO, EDS etc.
to be noted that, after availing certification, this would be the first
case where a financial institution attained LEED certification for In House Capacity Development & Trainings
any of their branch in Bangladesh.
Green marketing and awareness development
Incorporation of environmental risk in CRM and ESMS Lack of awareness regarding the benefits of green projects
(environmental and social management system) and loosely regulated industries that overlook gross level non-
compliance are some of the major challenges in implementing
In compliance to a part of the Green Banking Policy, the FIs has
green banking. To overcome this challenge, IDLC along with its
to abide by the instructions defined in the detailed guidelines
partners such as USAID CCEB, IFC, FMO, EDS Global hosted several
on Environmental Risk Management (ERM). In order to assess
sessions to create awareness and thus market demand of green
a prospective borrower from both environment risk and credit
products. The objective was to create the market demand related
perspective, the FIs has to integrate environmental risks in the
to clean energy and green industry development and offer IDLC’s
checklists, audit guidelines and reporting formats. In this regard,
one stop solution to do so. Senior executives from Bangladesh
IDLC has already made credit appraisal process much more
Bank, BKMEA, Khulna and Chittagong Chamber of Commerce and
stringent from an Environment and Social (E&S) perspective
Industry, Development Partners had enlighten the dais.
– evaluating all the environmental and social factors such as
project impacts on the environment and the community in the
Green Marketing
long run, prior to approving a loan.
Product promotion and green events
Taking this approach one step further, IDLC is in the process of
adopting an extensive Environmental and Social Management Focusing on the objective to provide one stop solution to
System (ESMS) across the organization with assistance from the clients through financial services, arrangement of fund
FMO, a Dutch development bank, and FI Konsult, IDLC’s appropriate to the nature of transaction, advisory services
appointed consultant for this project. The overall goal of this for appointment of consultants and service providers; green
project is to help IDLC identify customers with potentially high desk signed MoU with Spectrum Lanka Consultants Ltd and
environmental and social risks; enable them to evaluate the E&S Rudra Communication Ltd. Furthermore, mandate signing was
performance of such customers through its due diligence and performed for two state-of-the art tunnel kiln bricks projects
credit appraisal process; and make those customers, especially having a capacity of producing 3 Lac bricks per day. IDLC also
those who are not complying with local E&S regulations, behave participated in different market expo and program organized by
more responsibly through the use of environmental or social IDCOL, Exponet etc to showcase green products.
51
Product Promotion and Green Events where IDLC’s contribution has been mentioned wholeheartedly.
IFC is also publishing a newsletter on IDLC’s drive towards clean
Green finance energy financing as a role model in the industry. Green desk
provided lecture in different programs and workshop arranged
Last year, IDLC’s investment in clean energy and sustainability
by BLFCA, USAID, BKMEA, GIZ etc. Six of IDLC’s employee has
projects picked up in a fascinating manner.As per Bangladesh
been certified as Certified Energy Auditor (CEA) by Association
Bank Green Refinance Scheme, IDLC is also offering 50 products
of Energy Engineers USA. They received acknowledgement and
under green financing umbrella covering the sectors like
certification from the governor of Bangladesh Bank which is a
renewable energy, waste management, non-fire block brick,
firm step for providing better services.
auto brick kiln, green industry, fire and safety measures, industrial
energy efficiency and recycling etc. In the year 2015, IDLC have IDLC Green Desk participated in a daylong conference titled
managed to disburse as much as Taka 525.8 Million under Green “Green Inclusive Finance Conference: Extending the impact
Financing umbrella, despite the unstable economic condition. of investing” organized by FMO, Hivos and NpM, Platform
The number is almost 18 times greater than the previous for Inclusive Finance at The Hague, Netherlands on 22nd
year which only indicates IDLC’s drive towards sustainability. September, 2015. At the conference, the entire Dutch sector for
Bolstered by such strong growth figures, IDLC is ready to take the inclusive finance, worldwide green finance experts, consultants,
challenge of meeting 5% direct green financing, a target set for MFIs, NGOs gathered. Besides, green desk also participated in an
all the banks and non-banking financial institutions from January exposure tour to China to explore and form appropriate financial
2016 by Bangladesh Bank to ensure financing environment- solution for modern brick manufacturing industry.
friendly projects.
Leading daily newspaper has covered IDLC’s activity throughout
Special attention has been given to few niche sectors such as the year along with electronic media. Being the pioneer in green
green industry, compliance management and clean energy. financing, IDLC also signed a statement with UNEP FI to extend
Partnership with relevant stakeholders to promote these products financial service for energy efficient projects along with 100
accelerated the growth of green business. Another beauty is this others FIs all over the globe.
product is the gathering of all business unit under one umbrella
as green finance is eligible for large corporates to small business. Recognition and Exposure
Despite of different challenges related to lowering of commercial
rate of interest, limited refinance amount, availability of foreign IDLC believes that it is not possible for a single organization
currency lending; IDLC’s green desk is still leading the market to change an entire society, but at least fresh start is needed
from front with its utmost sincerity and service quality. somewhere and we are proud to be able to take the first
step in initiating a change in the way we think. , IDLC harbors
Few financed green projects by IDLC a very positive outlook for the future of green banking and
sustainability. We believe that being a financial institution, we
Recognition and exposure are in a uniquely advantageous position to influence our clients
and stakeholders, and steer the changes for the betterment of
IDLC’s green finance has been recognized by FMO through their
the society. Strengthened by this understanding and aided by
newsletter. Apart from that, Dutch Newspaper P+ published
well-formulated policies and guidelines and a strong team, IDLC
a cover story on green conference at The Hague, Netherlands
is well set to become “Greener” in 2016.
52
Capital market operations
IDLC Finance Limited’s capital market operations have so far been covered by its two wholly-owned subsidiaries, IDLC Securities
Limited (IDLC SL) and IDLC Investments Limited (IDLC IL). Going forward, the Capital Market Operations will further be strengthened by
the newly formed IDLC Asset Management Limited. Though the Group’s capital market businesses were significantly impacted in the
melt down of 2010 and the challenges that were brought forth by several global events, the operations have come out stronger since
then with the full absorption of the impairment losses suffered on account of certain open exposures in the margin lending portfolio.
Today, all the businesses have created robust platforms in terms of technology, processes, practices and human resources and are
rightly positioned to capture the upturn as and when the political climate becomes harmonious and stable.
Subsidiary review - IDLC Securities Limited

Brokerage services
Overview trading infrastructure
IDLC SL, one of the top brokerages of Bangladesh, commenced  Culture of confidentially and secured custodianship of
operations in 2006. The Company provides brokerage services clients’ assets
to more than 13,900 retail, institutional and foreign investors  Performance management model that drives business and
through sophisticated and reliable trading platforms of both the its quality
Dhaka and Chittagong stock exchanges. It also serves around
2,500 customers of its enlisted merchant banks as a panel broker. It Key Achievement in 2015
possesses a proven track record of delivering quality-led customer  Scaled up size of the business without additional capital
services in strict compliance with prevailing rules and regulations. investment
It maintains high standards for both corporate and employee
 Tuned up business model to achieve higher efficiency
ethics.
 Expanded sell side research coverage
The Company also offers premium brokerage services to High
Net Worth (HNWs), Institutional and foreign investors. Premium  Deciphered knowledge into business growth through
brokerage services is a prime bundle of research and advisory Dealers Knowledge Advancement Program (DKAP)
support in addition to execution brokerage.  Enhanced retail and strategic sales effort
Moreover, the Company has the most reliable online trading  Consolidated foreign sales operation
system under its in-house developed Order Management Unit
 Revamped operational risk management process
(OMU), which was launched in 2010 with the principal objective
is to facilitate those investors who prefer online trading, thereby Key Financials 2015
democratizing market access.  Average daily turnover of IDLCSL increased by 6.1% to Taka
Products 261 million despite 15.4% decline in market average daily
turnover. Thus, market share increased to 3.1% from only
 Cash Account
2.5% of previous year
 Margin Account through IDLC Investments Limited and
 Net brokerage income increased by 18% to Taka 203 million
other enlisted merchant banks
 Profit before tax and provision increased by 50.6% to Taka
 Easy IPO
147.5 million
 Premium brokerage for HNWs, Institutions and Foreign
 Net profit increased by 147% to Taka 96.1 million
Investors
 Shareholder’s equity grew by 10.3% to Taka 1,025.3 million
Services
 Trade execution through the Dhaka and Chittagong stock Shareholders' Equity
exchanges Taka in million
 Custodial and CDBL services

 Bloomberg terminal for foreign clients
 Research and advisory services
Key strengths
 Strong Brand Equity
1,025
 Skilled traders with professional market insights

830
890
929
750
 Dedicated relationship manager for every investor

 Top notch sell side research team
2011 2012 2013 2014 2015
 Wider branch network with reliable and user friendly online
53
Net Profit after Tax Contribution to total Trade

Taka in million 2011
81
60
39
96
49% 51%
2012 2013 2014 2015
Cash Margin
(164)
Risk and mitigation strategies

 Political uncertainty risks: This is an inherent business
2011
risk and we mitigate it through constantly assessing the
environment and embracing steps that are in the best
interest of our enterprise.
Key business trends
 Regulatory risks: We are proactive in our adaptation of
 Until 2010, major portion of IDLC-SL business was dependent all the statutory rules and guidelines issue by the capital
on margin loan. As a strategic and future-facing move, market regulator from time to time. We have also reinforced
margin loans were scaled down by 74% from January 2011 our internal controls, training programs and knowledge
level. However, we stabilized our business by enhancing sessions for enhanced compliance improved internal
focus on cash investments accounts. control, training and educating people for compliance.
 Resultantly, cash account contribution to total trade  Investment risks: We align our investment management
increased to 77% in 2015 from only 49% of 2011. portfolio to current market trends and endeavor to report
a performance that is in line with the expectations of our
investees.
Contribution to total Trade  Retention risks: We protect the value of our intellectual
capital by engaging in ongoing performance management
2015
and ensuring that our pay scales and other benefits are best
in class and aligned with the industry standards.
23%  Technology obsolescence risks: We are cognizant of
technology becoming archaic and to remain aligned with
the latest technology developments (in our broad intent to
serve our customers better), we are also closely monitoring
77% the changes to adopt the appropriate and best fit in
technology.
Cash Margin
54
Subsidiary review - IDLC Investments Limited
Merchant banking During 2015, IDLC Investments broadened its DPM product
basket through the initiation of ‘Easy Invest’, a monthly
 One of the leading merchant banking enterprises of investment scheme that focuses on building a long-term
Bangladesh and a wholly-owned subsidiary of IDLC Finance portfolio with small regular investments (as little as Taka 3,000).
Limited IDLC Investments is pioneer in launching this innovative product
 Product suite: Investment banking (IPO, RPO, rights issue, in the Bangladesh capital market.
corporate advisory on pre-IPO capital raising, underwriting,
Over the last nine years, the DPM team generated an average
pre-IPO placement of forthcoming IPOs and mergers and
return of 23% and the current portfolio AUM stands at Taka 555
acquisitions), research, discretionary portfolio management
million.
(DPM) and margin loans
 Managed nine (9) IPOs to raise a cumulative Taka 6,515 Our primary strength lies in our ability to effectively manage our
million as of December 31, 2015 overall portfolio to generate consistent returns for our clients.
We have a diversified product basket suitable for different
 Assisted in raising a total of Taka 16,820 million for clients so
investor risk grades and our fund managers embrace appropriate
far
diversification strategies to maximize the return potential and
 Discretionary portfolio management (DPM) services offer minimize downside risk.
a full-fledged package comprising portfolio management
services through its ‘MAXCAP’, ‘Profit-Loss Sharing Scheme’, One of our major challenges comprises the ongoing volatility in
‘Capital Protected Scheme’, ‘Portfolio Advisory Service’ and the capital markets along with systemic risks arising from political
‘Easy Invest’ products or regulatory/ legislative changes. Since our DPM service is in its
early stage of growth from a product life cycle perspective, there
Overview of the Company
exists significant potential to raise awareness about this unique
IDLC Finance commenced its merchant banking operations product and grow portfolio size.
in 1999 through participating in underwriting of IPOs. The
Margin loans: During 2004, IDLC Finance launched a margin
Company managed its first IPO as issue manager in 2003. It also
lending product, ‘Cap Invest’ and since then, we have been
managed the first IPO under the book-building method in the
considered as one of the top portfolio managers in the
capital market history of Bangladesh. Aligning with regulatory
Bangladesh capital markets. Subsequently, this business was
requirements, the merchant banking operation was carved-
transferred to IDLC Investments. Since the market crash of 2010,
out and transferred to IDLC Investments Limited, a fully-owned
IDLC Investments has reduced its margin loans significantly.
subsidiary of IDLC Finance, which was established in 2011.
During these times, we took the challenge of counselling our
Services
clients to build a constructive and risk-mitigated portfolio. Our
Investment banking: advisory includes knowledge sharing on the market scenario,
stock analysis, effects of leverage, effective risk management
 Initial public offering (IPO) and the importance of disciplined portfolio management.
 Repeat public offering (RPO) Accordingly, we empowered our clients with multiple value-
added services (VAS) and put in our best efforts to not take any
 Rights issue management
further additional provisions in the year 2015. Our sound human
 Corporate advisory on pre-IPO capital raising resource strategy, well-documented processes, cutting-edge
 Underwriting technology and high-quality research reports have been key for
our clients to realize their wealth management aspirations.
 Arranging pre-IPO placement/ capital raising of IPOs,
substantial share acquisition and take over and equity Key Financials 2015
valuation
Discretionary portfolio management (DPM): IDLC Investments Operating
has been offering DPM services for the last nine years with Income
a consistent track record. DPM manages funds on behalf of Taka
investors, formulating appropriate investment strategies,
constructing and re-balancing portfolios, monitoring market
306 Net Profit
million before Tax
perspectives on a regular basis, actively managing risk profiles
and optimally diversifying portfolios. Currently, we offer a Taka
variety of investment products with different risk-return profiles, 192
including: Operating million
Profit
 MAXCAP Taka
Net Profit
 Profit-Loss Sharing Scheme 225 after Tax
 Capital Protected Scheme million Taka
 Portfolio Advisory Service 119
 Easy Invest million
55
Return on portfolio investment  Considering high market volatility, IDLC Investments

prudently effected a decline of its margin lending exposure
• During 2015, our operating income and operating profit
to Taka 1,444.32 million in 2015, down from Taka 2,020.44
stood at Taka 306.17 million and Taka 225.48 million,
million in 2014
respectively.
• NPAT grew from Taka 53.08 million in 2014 to Taka 119.32  To capitalise on selected market opportunities, investment
million in 2015, representing a robust 125% growth. exposure amplified by 60.1% to Taka 184.21 million in 2015,
up from Taka 113.63 million in the previous year
• Higher net interest income (NII) and investment income
assisted healthy bottom line growth too.  Higher profitability assisted retained earnings to be positive
• Higher operating profit and lower-than-usual provisions in 2015
significantly boosted NPAT
Key strengths
Investment banking Our key strength lies on a strong brand image and adoption
Our investment banking division also performed well during of the highest ethical standards and rigorous compliance.
2015. Revenues stood at Taka 18.06 million during the year with We understand our clients’ needs and cater to these
significant contribution from corporate advisory fees (67%) and accordingly, meeting and even exceeding their expectations.
issue management fees (26%). Regular customer counselling on the basis of our research
recommendations assists us in maintaining a balance between
the upside potential and downside risk factors. Going forward,
Asset combination
we intend to reinforce process efficiency, leveraging our strong
co-ordination capabilities with regulatory authorities and
Margin Loan Investment Other Assets
ensuring continuous value creation for our clients.
Overcoming key challenges

A few of the key challenges that impact our business include
depressed secondary markets and the long-drawn IPO process
alongside conservative valuations. Bringing well-governed
companies to the market through regular advising has been
crucial for the company as market volatility continues to take a
2,020.4
1,444.3
toll. Reaping the benefits of our key strengths, we are actively

419.1
452.6
113.6
184.2
looking at ways to overcome these challenges in the shortest

possible time.
2014 2015
Subsidiary review - IDLC Asset Management Limited

IDLC Asset Management Limited (AML) was incorporated The principal objective of the company is to carry out the
in Bangladesh on 19 November 2015 vide registration no. business of asset management, primarily, through launching and
C-127068/2015 as a private company limited by shares under the managing mutual funds to cater to the diverse needs of investors.
Companies Act, 1994. The registered office of the Company is Besides, institutional fund management, IDLC AML also aims at
situated at D.R. Tower (4th Floor), 65/2/2, Bir Protik Gazi Dostogir creating avenues for alternative investments through private
Road, Paltan, Dhaka. It is a subsidiary Company of IDLC Finance equity and venture capital.
Ltd that holds 99.99% ownership of the Company.
56
Measures that matter
Building a business with sustainable profitability and growth requires a sound
strategy, precise execution and accurate measurement. At IDLC, we regularly
measure our performance against our ambition of emerging as the most trusted
financial brand in Bangladesh, using a range of key performance indicators.
Return on Equity (ROE)
ROE is calculated as the profit attributable to equity shareholders

as a percentage of average shareholders’ equity. As a means
to grow our ROE, we focus on enlarging our business where
risk-adjusted returns are maximized and capital is efficiently 40.02%
deployed. Cost-to-income
ratio, 2014
20.39% Basic Earnings Per Share (EPS)

ROE, 2015 EPS is a measure of profits attributable to equity shareholders
divided by the weighted average number of the equity shares in
circulation during the year.
Taka 5.81
20.95% EPS, 2015
ROE, 2014
Calculated by dividing operating expenses by operating income,

cost-to-income ratio is a key metric denoting the efficiency –and
hence health – of an enterprise. Towards enhancing this ratio,
we increasingly deploy technology and specialist teams and Taka 4.95
techniques to do more with less, thus becoming more efficient EPS, 2014
while still investing in our businesses.
35.92%
Cost-to-income ratio,
2015
57
Strengths and key performance indicators

At IDLC, our strategy is to focus on businesses where we possess a differentiated proposition and which have the capacity to deliver
high quality and sustainable earnings over time. The Company is focused on three core divisions: SME, Corporate and Consumer.
IDLC’s two wholly-owned subsidiaries, IDLC Securities Limited and IDLC Investments Limited are engaged in providing a wide range
of brokerage and capital market solutions.
Going forward, our priority is to continue to maximise the opportunity for each of these three divisions and our subsidiary businesses
in a range of market conditions. Our overall strategic objectives include:
Key performance
Description Progress
indicator
Drive sustainable profits We focus on businesses and  Operating profit and cash flow from operations increased
activities that enable us to despite mixed conditions for our businesses
generate recurring and sustainable
cash flows and profits.  Strong growth witnessed in the SME sector; we are focused
on strengthening frontline sales capacity, information
systems and infrastructure
 Decent growth in the Corporate and Consumer businesses

on the back of rolling out new client products and solutions
Build client franchisee We develop and maintain strong  Our loan book/ advances increased by a respectable 17.30%
on the foundations of customer-facing relationships that in 2015, representing sustained growth, a significant
relationships deliver repeat business prospects achievement in a volatile economic environment
and help generate recurring income
while also enabling us to favourably  Concurrently, our deposit base enhanced 30.14% in 2015,
strengthen our brand equity maintaining its growth pattern
through word-of-mouth goodwill.
Strengthen prudence We maintain strong funding,  Continued to maintain a strong capital position while
in our decisions capital and liquidity positions at efficiently deploying capital for loan book augmentation
and efficiency in our all times and are committed to
operations maintaining loan book/ portfolio  Maintained a diverse and relatively low-cost funding
quality. position (with growing lines of credit through refinancing
windows) with prudent maturity profile
 Maintained a good level of liquidity while improving

Balance Sheet efficiency
 Our proposed rights issue will not only strengthen our

capital position but will also provide the platform for
sustainable growth
Maintain quality of As a frontline, shareholder-centric  Though we reported 3.06% NPL levels in 2015, higher
growth as opposed to enterprise, we have our own than our earlier averages, this was due to only a few select
merely volume growth. internal targets with regards to our accounts turning bad for which we have fully provided for
non-performing loans (NPL).
 We continue to pursue for our pending funds with these
accounts and are hopeful of the same
 Through tighter creditworthiness checks, we expect to

restore our NPLs back to our historical averages and even
focus on our long-term target of moderating them to 2%
or below
Consistently deliver We aim to generate sustainable  Maintained respectable return on equity (RoE) despite a
shareholder returns long-term growth in dividend yields challenging year, particularly in the capital markets
and shareholder returns.  Proposed 2015 dividend of 25% cash
58
Our awards showcase
15th ICAB National Awards for “Best Presented Annual 15th ICAB National Awards for “Best Presented Annual Reports 2014”
Reports 2014” Financial Services - First Prize Corporate Governance Disclosures - Third Prize
SAFA Best Presented Annual Report Awards 2013 2nd ICSB National Awards 2014
SAARC Anniversary Award for Corporate Silver Prize
Governance Disclosures - First Runner Up
SAFA Best Presented Annual

Report Awards 2014
SAARC Anniversary Award
for Corporate Governance
Disclosures - First Runner Up
Financial Services Sector -
First Runner Up
SAFA Best Presented Annual Report Awards 2013

Financial Services Sector - Certificate of Merit
59
Rising far above. At IDLC, we believe that as

we rise above the
Seeing the big competition and lead the
sector, we are in a far
picture clearly. better position to have a
macro perspective of the
industry. We see signs of
economic recovery and
green shoots and expect to
capitalise on this
improving situation
through our robust
product and services
basket, stringent focus on
processes and superior
standards of customer
service.
60
Brief profile of the Directors
Aziz Al Mahmood
Chairman of the Board of Directors
(Nominated by The City Bank Limited)
Aziz Al Mahmood had his graduation from London. Having finished his academic career,
he joined the Partex Star Group at a comparatively early age. But from him age was won
over by the attributes of his in-born leadership quality, exposure to reputed academic
environment, family grooming and pragmatic outlook that was remarkable from his very
childhood. The Group’s Board of Directors along with the corporate rank and file found his
presence in a unique equation. He demonstrated an appreciable skill in helping the Group’s
ascendancy to more corporate efficacy and elevation to newer heights.
The Family legacy and his own inherent qualities gave him a great sense of value and
direction. An industrial entrepreneur, Mr. Mahmood has set up and successfully executed
several industrial undertakings in Bangladesh.
Mr. Mahmood is presently the Managing Director of Danish Condensed Milk (BD) Limited,
Danish Milk Ltd., Danish Foods Ltd., Danish Distribution Network Ltd., Rubel Steel Mills Ltd.,
Danish Dairy Ltd., Ferrotechnic Ltd., Shubornobhumi Housing Ltd., VOICETEL Ltd. and Sky
Telecommunication Ltd. In addition, he is a also Director of number of companies of Partex
Star Group.
He is actively engaged with a number of social and philanthropic organizations of national
stature, without forgetting his root of origin.
Md. Shahidul Ahsan

Director and Chairman of the Executive Committee
(Nominated by Mercantile Bank Limited)
Md. Shahidul Ahsan has established himself as an icon in the business sector of the country
with global reputation of being reliable in various business sectors and the proud Chairman
of Ahsan Group. He is also the Chairman of AG Limited, AG property Developments Limited,
AG Agro Industries Limited, Regent Holdings Development Limited, AG High-Tech Limited,
AG Ceramics Limited, RNS Corporation, Friends Traders, AG Fashion and Textile Limited
and AG Ship Breaking Industries. He is the Sponsor Director of Mercantile Bank Limited,
Mercantile Bank Securities Limited, Swadesh Life insurance company Ltd and National
Credit Ratings Limited (NCRL). He is also the sponsor shareholder of Meghna Bank Ltd. On
different occasions he held high level positions in the Board of Directors of the bank and
NCRL. He had been the Vice Chairman and also the Chairman of Executive Committee of the
bank several times. At present, he is an honourable member of the Executive Committee
and also one of the Vice Chairman of Mercantile Bank Limited. He is the Chairman of the
Trustee Board of AG Foundation and is also actively associated with many other Educational
and Social Institutions as a donor founder.
Mr. Ahsan's contribution towards helping the poor and other needy groups is remarkable,
leading to significant contribution towards the economy, the society and the country at
large. Presence in several industries ensures mitigation of unemployment and positive
contribution in GDP; as well as he pays a very high amount of income tax to government
exchequer.
61
A.K.M. Shahidul Haque

Independent Director and
Chairman of the Audit Committee
A.K.M. Shahidul Haque is the former Managing Director & CEO of Mercantile Bank Limited
and Midland Bank Limited.
He completed his B.A.(Hons) and M.A. from the University of Dhaka and started his banking
career as a Probationary Officer with Rupali Bank Limited in 1977 and worked in different
capacities including Head of a number of Branches. During his 37 years banking career, he
held important positions with challenging assignments. Prior to joining as the Managing
Director & CEO of Midland Bank Limited in 2013, he also served as the Managing Director
and CEO of Mercantile Bank Limited from 2010 to 2012. He also played very vital roles in
Prime Bank Limited and National Bank Limited in different capacities.
Mr. Haque attended a number of high profile training programs, seminars, and workshops,
both at home and abroad, which has widened his experience as a banker. He has completed
an academic course on "Leadership and Innovation” from Judge Business School, University
of Cambridge, UK. He was an in-house faculty member of Mercantile Bank Limited and
also used to deliver lectures on banking at BIBM and at other training institutes of different
banks, on invitation.
During his versatile banking career he proved himself competent, enthusiastic, capable and
worthy to perform the strenuous job of a banker. He has traveled to a number of countries
including USA, UK, UAE, KSA, Bahrain, Singapore, Malaysia, China, India, and Nepal. He
has received various accolades such as “Rafiqul Islam Banking Award” as Best Banker and
“SHILPACHARIA’ Award. His active participation in the Liberation War of Bangladesh in 1971
is commendable.
Meherun Haque
Director
Meherun Haque is the daughter of Mr. Deen Mohammad, a leading industrialist and
Chairman of Phoenix Group. Mrs. Haque was Vice-Chairperson of The City Bank Limited.
62
Faruq M. Ahmed
Director
Faruq M. Ahmed is the Additional Managing Director, Chief Risk Officer and Chief Anti
Money Laundering Compliance Officer (CAMLCO) of The City Bank Limited.
Mr. Ahmed started his career with AB Bank Limited in 1984 as probationary Officer and his
last position held in the bank was Deputy Managing Director. During his services with AB
Bank Limited he served in different capacities at home and abroad. He was posted at the
Mumbai operation of AB Bank Limited as Country Manager. Thereafter, he headed the SME
division and Credit Risk Management division of the bank.
He received Bangladesh Bank Gold Medal and BCCI (erstwhile) Gold Medal in the Banking
Diploma examination, 1987 for securing the first position.
A regular columnist on banking and economic issues in the national dailies, Mr. Ahmed has
authored 16 books so far on economy and banking, share market, accounting, travel and
literature. He received IFIC Bank Literary award and Chitta Ranjan Saha Memorial award of
Bangla Academy for his translation work in 2011.
Mr. Ahmed was the Deputy Managing Director of Mercantile Bank Limited before joining
The City Bank Limited.
S. M. Mashrur Arefin
Director
S. M. Mashrur Arefin started his career as a Management Trainee in ANZ Grindlays Bank,
Dhaka in 1995. He worked as Head of Credit & Collections for Standard Chartered Bank,
Qatar. He also worked for ANZ Banking group in Melbourne, Australia and worked as
Director & Head of Retail Banking for American Express Bank, Bangladesh and was the
Head of Consumer Banking of Eastern Bank Limited and Head of Retail/Priority Banking of
Citibank N.A. Bangladesh. He is an M.A. in English from University of Dhaka, Bangladesh and
MBA from Victoria University, Melbourne, Australia.
Mr. Arefin is a director of CBL Money Transfer Sdn. Bhd, Malaysia and of City Bank Capital
Resources Limited. He is also a current Director of the Bangladesh Malaysia Chamber of
Commerce & Industry.
Mohammad Mahbubur Rahman, FCA

Director
Mohammad Mahbubur Rahman is a Fellow member of the Institute of Chartered

Accountants of Bangladesh (ICAB).
Before joining The City Bank Limited, Mr. Rahman served for the World Bank as Financial
Management Specialist in the South Asia Region. He also served for Leads Corporation
Limited as CFO and Grameenphone Limited for a period of 5 years in various capacities
including Additional General Manager and Head of Revenue Accounting Department and
Financial Control.
Mr. Rahman also served in various important roles in Finance and Accounts division in
several multinationals, local corporate and development organizations. He is presently
responsible as the Chief Financial Officer (CFO) with The City bank Limited.
63
Md. Kamrul Hassan, FCA

Director
(Nominated by Transcom Group of Companies)
Md. Kamrul Hassan is a Fellow member of the Institute of Chartered Accountants of

Bangladesh. He has 27 years of experience in the key position of Finance and Accounts in
home and abroad.
Mr. Hassan started his career with Transcom Group in 1987. Thereafter, he left Transcom and
worked for a multinational company in Libya for 3 years. Further in 1994, he was employed
by Transcom Group, one of the largest business conglomerates in the country and at
present holding the position of Executive Director-Finance. He is also a Director of National
Asset Management Limited.
Mr. Hassan got training on "Total Management System" organized by NICC, held in Tokyo,
Japan as a nominee of Bangladesh Employers' Federation (BEF).
Md. Rezaul Karim

Director
(Nominated by Sadharan Bima Corporation (SBC)
Md. Rezaul Karim is the Managing Director of Sadharan Bima Corporation (SBC).
He started his career at SBC in 1981 as a Trainee officer. During his career with SBC, he
attended a number of training and workshops on insurance related matters both at
home and abroad. Mr. Karim is also a nominated Director of Investment Corporation of
Bangladesh (ICB), National Housing Finance and Investments Limited (NHFIL), Central
Depository Bangladesh Limited (CDBL), National Tea Company Limited (NTCL) and
Bangladesh Insurance Academy. He is also a Director of Asian Re-insurance Corporation,
Bangkok, Thailand.
Atiqur Rahman
Director
(Nominated by Reliance Insurance Limited)
Atiqur Rahman joined Transcom Group, one of the largest business conglomerates in the
country as Group Finance Director in 1991.
He is also in the Board of Directors of the following Companies:
Transcom Beverages Limited (Franchisee of PEPSICO, USA)
Transcom Foods Limited (Franchisee of PIZZA HUT & KFC, USA)
Transcom Electronics Limited (Samsung & Whirlpool)
Bangladesh Lamps Limited (PHILIPS & Transtec lighting products)
Transcom Distribution Co. Limited (Pharma, Diagnostics, Heinz, Garnier, Loreal, Fritolays)
Eskayef Bangladesh Limited (formerly SmithKline & French–manufacturers of Pharma
products)
Mediastar Limited (Publishers of leading Bangla daily PROTHOM ALO)
Trinco Limited (Sponsor Shareholder of Reliance Insurance Ltd. & The Daily Star)
Transfin Trading Limited (Sponsor Shareholder of Reliance Insurance Limited & The
Daily Star)
Transcom Consumer Products Limited (PepsiCo Snack Franchisee)
Ayna Broadcasting Corporation Limited (FM Radio)
Mr. Atiqur Rahman is the Chairman of Heritage Agro Farms Limited and Director of Monipur
Tea Co. Limited, Marina Tea Co. Limited and M. Rahman Tea Co. Limited
Mr. Rahman is a Director of IDLC Finance Limited nominated by Reliance Insurance Limited since
October 2015.
64
Monower Uddin Ahmed
Independent Director
Monower Uddin Ahmed, having finished his university education, joined the Central
Government in 50's as Assistant Central Labour Commissioner, for a stint. Thereafter, he
moved to Carew and Company, as head of Labour Relations, on to GlaxoSmithKline as head
of personnel.
Before retiring from British American Tobacco Company (BAT), he was serving as a Member
of the Company's Board. Mr. Ahmed, on retirement from the BAT, set up Monower
Associates, an HR and Management Consulting house, which he currently manages as
CEO and Lead Consultant. He represented the Bangladesh employers in quite a few ILO
conferences in Europe, North Africa, Southeast and South Asian countries.
Arif Khan CFA FCMA

Arif Khan has been working for 25 years in the financial services sector in various local,
multinational and government organisations. He started his career with AB Bank Limited as
Probationary Officer in 1991.
Mr. Khan played a vital role in the development of capital market as ‘Commissioner’ of
Bangladesh Securities & Exchange Commission (BSEC) during the last 5 years.
Mr. Khan holds the Chartered Financial Analyst (CFA) Charter and is a member of the CFA
Institute, USA. He is also a Fellow Member (FCMA) of the Institute of Cost and Management
Accountants of Bangladesh (ICMAB). He obtained his Master’s in Business Administration
(MBA) from Institute of Business Administration (IBA), Dhaka University and also obtained
M. com from Dhaka University in Finance and Banking.
Currently he is the President of Institute of Cost & Management Accountants of Bangladesh
(ICMAB) and also the President of CFA Society Bangladesh.
65
Management Committee
M. Jamal Uddin Ahmed Rashid Bilquis Jahan

Deputy Managing Director Head of SME Group Head of Human Resources
Md. Mesbah Uddin Ahmed Md. Saifuddin Asif Saad Bin Shams Mir Tariquzzaman
Head of Corporate Managing Director, IDLC SL Head of Credit & Collection Chief Technology Officer
66
Arif Khan CFA FCMA Md. Moniruzzaman, CFA Mohammad Jobayer Alam, CFA
CEO & Managing Director Managing Director, IDLC IL Head of Strategic Planning
Md. Morshedul Quader Khalili H. M. Ziaul Hoque Khan, FCA Md. Masud K Majumder, ACA Ataur Rahman Chowdhury
Head of Internal Control & Compliance Deputy Managing Director Group Chief Financial Officer Head of Operations
67
Committees of the Board & Management

As per DFIM Circular Letter No. 18, dated October 26, 2011 of Committee is to oversee IDLC in accordance with its Constitution
Bangladesh Bank on the policy regarding the responsibility and under the Financial Institutions Act, 1993.
accountability of the Board of Directors, Chairman and Chief
The Committee is responsible for all aspects of the ongoing
Executive Officer/ Managing Director of the Financial Institutions,
operations of IDLC. It delegates day-to-day operations to the
the Board of Directors of IDLC formed two sub-Committees of
Executive Officer. An important feature of good governance is a
the Board:
clear segregation of the responsibilities and accountability of the
• Executive Committee; and committee from those of the Executive Officer.
• Audit Committee. ManCom is always aware of IDLC’s operations, keeps an eye on
the big picture, monitors the strategic plan and if and whether
All other Committees of IDLC are formed under the jurisdiction
the goals are being met. It needs to be satisfied that current
of the management.
events are in accordance with IDLC policies and objectives within
Executive Committee (EC) the overall budget.
The matter related to ordinary business operations of the The Management Committee is tasked with making key decisions
Company and the matters that the Board of Directors authorises for the Company’s management and operations under the
from time to time are vested on this Committee. official delegation of authority from the Board. The Committee
Composition of Executive Committee comprises senior executives who are from various key functions
and operations of the Company.
In compliance with the referred circular, the EC consists of five
members. The members are as follows: Composition of Management Committee (ManCom)
Chairman Arif Khan CFA FCMA, CEO & Managing Director
Mr. Md. Shahidul Ahsan, Director nominated by Mercantile H. M. Ziaul Hoque Khan, FCA, Deputy Managing Director
Bank Limited M. Jamal Uddin, Deputy Managing Director
Members Mir Tariquzzaman, Chief Technology Officer (CTO)
Faruq M. Ahmed, Director nominated by The City Bank Asif Saad Bin Shams, Head of Credit and Collection
Limited
Bilquis Jahan, Group Head of Human Resources
Md. Rezaul Karim, Director nominated by SadharanBima
Ahmed Rashid, Head of SME Division
Corporation
Mesbah Uddin Ahmed, Head of Corporate
A. K. M. Shahidul Haque, Independent Director
Ataur Rahman Chowdhury, Head of Operations
Arif Khan CFA FCMA, CEO & Managing Director
Mohammad Morshedul Quader Khalili, Head of Internal Control
Audit Committee (AC) & Compliance
The Committee is empowered, among other things, to examine Md. Masud K. Majumder, ACA, Group Chief Financial Officer
any matter relating to the financial affairs of the Company
and to review all audit and inspection reports, internal control Mohammad Jobayer Alam, CFA, Head of Strategic Planning
systems and procedures, accounting policies and adherence to Md. Saifuddin, Managing Director, IDLC Securities Limited
compliance requirements, among others.
Md. Moniruzzaman, CFA, Managing Director, IDLC Investments
Composition of Audit Committee Limited
The AC consists of five members. The members are as follows: Credit Evaluation Committee (CEC)
Chairman CEC evaluates all projects/ proposals of financing activities of the
A. K. M. Shahidul Haque, Independent Director Company from the risk point of view.
Members Scope of the committee
Mahbubur Rahman, FCA, Director nominated by The City Bank CEC holds the rights to:
Limited  Approve an appraisal report as per the proposed terms and
Kamrul Hassan, FCA, Director nominated by Transcom Group conditions for consideration of the sanctioning authority;
 Request for additional information;
Md. Rezaul Karim, Director nominated by Sadharan Bima
Corporation  Request evidence regarding any information provided;
 Suggest changes in or inclusion of terms and conditions
Monower Uddin Ahmed, Independent Director
regarding the client’s liability with IDLC Finance Limited or
Management Committee (ManCom) any other financial institutions or banks;
The Management Committee is a group elected among the  Suggest changes in terms and conditions concerned with
management staff to take responsibility of the governance repayment including repayment schedule, transfer price,
and strategic direction of IDLC. The role of the Management late payment interest rate, true rate and effective rate;
68
 Suggest to change or increase security; transparent procedure for setting policies on the overall human
 Suggest to change the loan amount; resource strategy of the Group.
 Suggest increasing the equity participation of the client; The responsibility of the committee is to ensure wide, equal
 Suggest providing an additional guarantor; and opportunity and transparency in terms of suitable recruitment,
compensation on the basis of merit, qualification and
 Decline a financial proposal based on overall risk assessment.
competence, adequate training and development facilities,
Composition of Credit Evaluation Committee (CEC)
performance evaluation and promotion based on individual
Arif Khan CFA FCMA, CEO & Managing Director performance and contribution and other benefits-related issues
H. M. Ziaul Hoque Khan, FCA, Deputy Managing Director with regards to the Company’s operating results and comparable
market statistics.
M. Jamal Uddin, Deputy Managing Director
The principal purpose of the Committee is to assist the
Asif Saad Bin Shams, Head of Credit and Collection management in fulfilling its corporate governance and oversight
Head of Business Units responsibilities in relation to establishing people management
and remuneration policies.
Asset Liability Management Committee (ALCO)
Composition of HR and Compensation Committee
The main responsibilities of the ALCO are to look after the
financial market activities, manage liquidity and interest rate risk Arif Khan CFA FCMA, CEO & Managing Director
and understand market position and competition among other H. M. Ziaul Hoque Khan, FCA, Deputy Managing Director
activities. In carrying out its responsibilities, the ALCO convene
M. Jamal Uddin, Deputy Managing Director
periodical meetings and regularly reviews the decisions of the
meetings with due consideration of the market situation. Mir Tariquzzaman, Chief Technology Officer (CTO)
Composition of ALCO Asif Saad Bin Shams, Head of Credit and Collection
Chairman Bilquis Jahan, Group Head of Human Resources
Arif Khan CFA FCMA, CEO & Managing Director Head of Business units
Members Corporate Governance Committee

H. M. Ziaul Hoque Khan, FCA, Deputy Managing Director The Committee ensures that the Corporate Governance practice
M. Jamal Uddin, Deputy Managing Director within the Company is as required by the Bangladesh Securities
Asif Saad Bin Shams, Head of Credit and Collection and Exchange Commission (BSEC) and the Bangladesh Bank. The
Committee also recommends and advises course of action in the
Ahmed Rashid, Head of SME Division
areas where there is a scope of improvement.
Mesbah Uddin Ahmed, Head of Corporate
Composition of Corporate Governance Committee
Md. Masud K. Majumder, ACA, Group Chief Financial Officer
Mohammad Jobayer Alam, CFA, Head of Strategic Planning Arif Khan CFA FCMA, CEO & Managing Director
H. M. Ziaul Hoque Khan, FCA, Deputy Managing Director
Member and Organiser
H S Tareq Ahmed, Head of Treasury Asif Saad Bin Shams, Head of Credit and Collection
Internal Control Committee Mohammad Morshedul Quader Khalili, Head of Internal Control
and Compliance
The Internal Control Committee addresses operational risks and
frames and implements policies to encounter such risks. The Md. Masud K. Majumder, ACA, Group Chief Financial Officer
Committee assesses operational risks across the Company as Mohammad Jobair Rahman Khan, Head of Statutory Reporting &
a whole and ensures that an appropriate framework exists to Group Company Secretary
identify, assess and manage operational risks.
BASEL Implementation Committee
Composition of Internal Control Committee
The Basel Implementation Committee is responsible for the
Arif Khan CFA FCMA, CEO & Managing Director
implementation of Basel Accord for Financial Institution (BAFI) at
H. M. Ziaul Hoque Khan, FCA, Deputy Managing Director IDLC. Managing risk based capital adequacy is the most important
responsibility of the Committee. The Basel Implementation
Desk (BID) of the Risk Management Department manages Basel
and Compliance
activities. The results of risk based capital analysis along with
Md. Masud K. Majumder, ACA, Group Chief Financial Officer recommendations are placed in the Committee meeting by the
Head of business units BID where important decisions are made to maintain minimum/
regulatory capital and manage related risks.
HR and Compensation Committee
The BASEL Implementation Committee Charter states that the
IDLC’s HR and Compensation Committee was formed on 24 Committee has the following responsibilities
May 2007 to provide a forum for discussion on the Company’s
various HR related issues. The main role and function of the  Apply the action plan of BASEL-II and review thereof;
HR and Compensation Committee is to assist the human  Communicate issues related to the implementation of
resource department in developing and administering a fair and BASEL-II to the management;
69
 Assist in carrying out the quantitative impact study (QIS), if Mohammad Jobayer Alam, CFA, Head of Strategic Planning
necessary;
Heads of Business Units
 Engage in capacity building and training according to the
training need assessment (TNA) for the concerned officials; Central Compliance Unit (CCU)
and Central Compliance Unit (CCU) is a committee responsible for
 Establish a planning and supervisory review as required by supervising the Anti-Money Laundering (AML) and Anti-Terrorism
Pillar-II of BASEL-II framework. activities (ATA) at IDLC Finance Limited, formed on November 1,
2012. The CCU was constituted as per the “Guidance Notes on
The reviews of the BASEL Implementation Committee include
Prevention of Money Laundering and Terrorist Financing” issued
 Review of action taken in previous BIU meetings by Bangladesh Financial Intelligence Unit, Bangladesh Bank, BFIU
 Economic and market status and outlook Circular no.04 dated September 16, 2012.
 Credit, market and operational risks related to capital Objective of CCU
adequacy
 To ensure compliance of regulatory rules and regulations
 Review of BASEL implementation status
related to AML and ATA;
 Action taken
 To implement and enforce IDLC’s AML policies to prevent
Composition of BASEL Implementation Committee money laundering and terrorist financing;
Arif Khan CFA FCMA CEO & Managing Director  To ensure effective implementation of AML and ATA
program across the company effectively.
H. M. Ziaul Hoque Khan, FCA, Deputy Managing Director
Functions
Asif Saad Bin Shams, Head of Credit and Collection
Functions of the Committee are as follows:
and Compliance  Keeping updated with changes in regulations regarding the
combatting of money laundering and terrorist financing,
Md. Masud K. Majumder, ACA, Group Chief Financial Officer and accordingly adopting changes to IDLC’s AML and ATA
Mohammad Jobair Rahman Khan, Head of Statutory Reporting & compliance policy.
Group Company Secretary  Supervising money laundering and terrorist financing
control procedures of the company so as to ensure legal
Integrity Committee and regulatory requirements.
Integrity Committee of IDLC was formed on October 22, 2013  Issuing necessary instructions across the company in line
in accordance with Bangladesh Bank’s letter no. HR-1(O&D) with company policy and Bangladesh Bank directives.
Focal-1/2013-2 dated October 10, 2013 to abide by the code of  Ensuring that proper KYC along with effective risk
integrity and good governance in line with National Integrity assessment and control procedures are in place.
Strategy of Bangladesh.  Providing advisory services to business and operational units
Functions on various issues linked with alleged money laundering
activities or transactions.
Functions of the Committee are as follows:
 Maintaining ongoing awareness on evolving money
 Create awareness on code of integrity and good governance laundering risks and their compliance procedures through
across the company; formal and informal training, workshop and seminars.
 Identify the scopes where efficiency of employee can be  Development of adequate testing procedures to detect and
developed and arrange appropriate training in this regards; prevent lapses in compliance.
 Amend existing policies and procedures as per  Monitoring business activities of branches through AML
requirements; and ATA self-assessment procedure and provide corrective
 Evaluate and reward the respective employees for integrity measures.
and good work; Composition of Central Compliance Unit
 Improve e-governance system; H. M. Ziaul Hoque Khan, FCA, Deputy Managing Director
 Develop complaint management system; Asif Saad Bin Shams, Head of Credit & Collection
 Implement code of conduct;
Composition of Integrity Committee & Compliance
Headed by H. M. Ziaul Hoque Khan, FCA, Deputy Managing Md. Masud K. Majumder, ACA, Group Chief Financial Officer
Director, the Committee consists of the following members:
Risk Management Forum (RMF)
Mir Tariquzzaman, Chief Technology Officer (CTO)
The Risk Management Forum was formed on April 15, 2013 in
Asif Saad Bin Shams, Head of Credit and Collection accordance with the Bangladesh Bank’s DFIM Circular no. 01 dated
Bilquis Jahan, Group Head of Human Resources April 07, 2013 to introduce proactive risk management procedures
in line with the international best practices framework.
& Compliance Functions
Md. Masud K. Majumder, ACA, Group Chief Financial Officer  Design overall risk management strategy
70
 Communicate views of the Board and senior management IDLC Ladies Forum (IDLCLF)
regarding the risk management culture and risk appetite
IDLC has launched its first Ladies Forum through a formal
across the Company
ceremony with the participation of all the female employees
 Prepare risk management policies and procedures from different levels of positions, working areas and distribution
 Monitor the prescribed/ threshold limits of risk appetite set points to address their views, problems and opinions to facilitate
by the regulator and/ or by the Company itself a better working environment for them.
 Develop and observe the use of models to measure and Composition of IDLC Ladies’ Forum
monitor risks
President
 Develop and oversee implementation of stress testing
 Oversee the capital management functions in accordance Bilquis Jahan, Group Head of Human Resources
with the risk-based capital adequacy measurement accord, Executive Committee
i.e. BASEL-II/ III
Comprises 12 women employees representing different divisions
 Determine the most cost-effective way to minimise risks and branches of the Group
 Highlight risks in portfolios and deficiencies of the
Secretary
Company on a timely manner and report the analyses to
the Managing Director as well as the Board of Directors with Ayesha Haque, Head of CSR
specific recommendations and suggestions Members
 Review market conditions, identify external threats
All the women employees of the Group
and provide commensurate recommendations for
precautionary measures This Forum will provide all women employees the opportunity
 Develop overall information system/ MIS to support the risk for networking and provide a common platform to share and
management functions of the Company raise various issues and problems like discrimination, harassment,
negative attitude towards women and any other issue that may
Composition of Risk Management Forum (RMF)
affect women employees within the Company. This will enable
Headed by H. M. Ziaul Hoque Khan FCA, Deputy Managing IDLC’s management to better understand and address these
Director, the Committee consists of the following members: issues and develop strategies accordingly.
Asif Saad Bin Shams, Head of Credit and Collection
Bilquis Jahan, Group Head of Human Resources
Ataur Rahman Chowdhury, Head of Operations
Shafayet Hossain, Head of Special Asset Management
and Compliance
Md. Masud K. Majumder, ACA, Group Chief Financial Officer
H S Tareq Ahmed, Head of Treasury
Mohammad Jobair Rahman Khan, Head of Statutory Reporting &
Group Company Secretary
Mohammad Jobayer Alam, CFA, Head of Strategic Planning
Risk Analysis Unit (RAU)

Concurrent with the formation of the RMF, the IDLC Risk Analysis
Unit was formed to act as the secretariat of the Risk Management
Forum with the responsibility for identifying and analysing various
types of risks appropriately and in a timely manner. The Head of
Internal Control and Compliance acts as the Head of RAU.
Functions
 RAU identifies and analyses all sorts of risks appropriately
and in a timely manner
 Collect all relevant data related to the risk indicators from
different sources and information systems
 Assess the quality, completeness and correctness of this
data
 Identify and quantify the risks and their exposures to
material loss
 Prepare a risk management paper on a monthly basis
 Conduct periodic stress testing
71
Senior Executives
Indrajit Mallick M. Maksudul Hoque Shafayet Hossain Ifham Siddiqui

Head of Chittagong Region Head of Administration Head of Special Asset Head of Branches
Management
Laila Nasrin H S Tareq Ahmed Mohammad Jobair Rahman Khan, ACA Kazi Farhan Zahir
Head of Software Solutions Head of Treasury Head of Statutory Reporting & Head of Structured Finance
Adnaan Ahsan Khondokar Abu Sayem Ansari Rashedul Huq Mahjebeen Binte Rahman
Head of Small Enterprise Head of Consumer Asset Head of Products, Marketing & Head of Credit, Consumer Division
Finance Customer Service, Consumer Division
72
Rajib Kumar Dey Farzana Islam Lisa Firuj Hossain Mahbub-ul-Kader
Managing Director Senior Relationship Manager Assistant General Manager Assistant General Manager
IDLC Asset Management Limited Corporate Division Operations Internal Control & Compliance
Shamima Akter Lovely Md. Masud Sajjad Mohammad Abdul Hannan Md. Abu Musha
Head of Human Resources Assistant General Manager Head of Medium Enterprise Head of Legal
Capital Market Operation Consumer Division Finance
73
Riding the At IDLC, we believe that the

‘growth at all costs’ mantra
potential. is not for us. We would
rather bypass an
With a keen opportunity to grow rather
than suffer the
eye on the consequences later. In this

context, pursuing quality
road. growth is not only the most

sustainable route to grow
but also ensures that we
continue to keep our NPL
levels well below average
industry standards.
74
Statement of risk management
At IDLC , the approach to risk is grounded on the strong practices 1.1 Credit risk:
of Corporate Governance that are intended to strengthen IDLC’s
Credit risk is the potential for loss arising from the failure of a
enterprise risk management framework and also the position of
client, its counter-party or related parties to meet their contractual
the Company to adapt to the changing regulatory environment
obligations. Such loss can have impact on the financial
in an effective and efficient manner. The governance of risk
profitability of the organisation as well as the community and
management starts with our Board, which plays the pivotal role of
stakeholders of IDLC. At IDLC, credit risk may arise on account of
reviewing and approving risk management policies and practices.
the following:
The company’s governance structure provides the protocol
 Default risk
and responsibilities for decision-making on risk management
issues and ensures their adequate implementation. IDLC’s  Credit concentration risk
risk management capabilities are interlaced around a strong  Recovery risk
management structure and information system, an effective risk-  Counter-party risk
rating system and robust policies. The primary objective of risk
 Related-party risk
management is to protect the Company’s financial strength and
 Environmental risk
reputation and ensure efficient capital deployment to support
business activities and enhance shareholder value. In addition 1.2 Market risk:
to embracing the best practices of the industry for assessing,
Market risk is the risk of loss arising from changes in market
identifying and measuring risk, IDLC considers Guidelines for
variables such as interest rates, security prices, equity index
Managing Core Risks of Financial Institutions issued by the
levels, exchange rates, commodity prices and general credit
Bangladesh Bank vide FID Circular Number 10 dated September
spreads. For ease of management and in keeping with regulatory
18, 2005. Strong inter-departmental communication link on risk
requirements, market risk in IDLC is further categorized into
factors and a culture of collaboration in decision-making among
interest rate risk and equity risk.
the revenue-producing units, independent control and support
functions, committees and the senior management help the 1.3 Liquidity and funding risk:
organisation in effective management of organisational risk. Liquidity risk is the risk of being unable to meet our payment
Effective risk management coupled with the adoption of BASEL- obligations on maturity, due to liquidity crisis. Risk of loss caused
II recommendations benefit IDLC by augmenting capitalization by the failure to borrow funds from the market at an acceptable
and optimizing costs to risk and funding. price to fund actual or proposed commitments is recognised as
funding risk.
1. Risk Types:
1.4 Operational risk:
At IDLC, ‘risk’ is the potential of creating loss for the company
Operational risk comprises of risk of loss inherent in day to day
as well as for its stakeholders. Such loss is not necessarily
operation of the organisation and caused by inadequate or
quantifiable. A wrong doing does not necessarily make an
inappropriate internal processes, inadequate or inappropriate
instant effect on organisational reputation and financial picture.
systems, absence of right people at right place, mistakes of
Sometimes an error affects the financials of more than the year
people whether such mistakes are deliberate, accidental or
of occurrence. Thus, risks are diverse in term of its effect. Risks
natural and by any other external reason. The following diagram
are also diversified in term of their source. A loss may occur due
presents operational risk of IDLC in a simple manner:
to poor selection of borrower. A loss might be caused by the
absence of strong collection force. Thus, IDLC runs the risk of
creating diversified losses for itself or for its stakeholders during The risk of loss System
People intentionally or Risk
its day-to-day operations. Risk unintentionally caused The risk of loss
by an employee,for caused by piracy,
The risks are in congruence with Bangladesh Bank guidelines. example an error or a theft, failure,
misdeed, or involving breakdown or
employees such as disruption in
disputes. technology, data or
Credit information.
Risk Market
Environmental Process
Risk Risk The risk related to
Risk
the execution and
Money maintenance of
The risk of loss on account of
Liquidity transactions and the
Laundering various aspects of
damage to physical property or
Risk at Risk assets from natural or unnatural
Risk running a business. causes. This category includes the
IDLC External
risk presented by actions of
Risk external parties such as the
Compliance Operational perpetration of fraud or in the case
of the regulators the execution of
Risk Risk change that would alter the
Company’s ability to continue
Strategic Reputation operating in certain markets.
Risk Risk
75
1.5 Money Laundering and Terrorist Financing Risk: profitability due to revenue volatility and reduced earning
spreads, credit rating and reputation. Risk of over-trading may
Money laundering and terrorist financing risk is an inevitable lead to insufficient capital.
risk of doing business as a financial institution. For IDLC,
money laundering and terrorist financing risk takes two broad 1.6.2 Project risk:
dimensions:
If projects undertaken by the Company are not viable and
a. Business risk - the risk that IDLC may be used for money feasible because of an adverse market environment, the
laundering or terrorism financing Company may run the risk of being encumbered by such
projects.
b. Regulatory risk - the risk that IDLC fails to meet regulatory
obligations under the Money Laundering Prevention Act 1.6.3 Technology risk:
2012 and Anti-Terrorism Act 2009 (amended in 2013).
Technology risk is associated with the failure in identifying
IDLC has been managing money laundering and terrorist opportunity for implementing new technology as well as failure in
financing risk since its inception. In this regard, the company implementing new technology. If business units cannot identify
follows the requirements laid down by the various guidelines scope to implement new technology which might differentiate
and circulars issued by the Bangladesh Financial Intelligence our products and services, they might lose out market position
Unit (BFIU). to other service providers. On the other hand, technology which
is not actually compatible with the organisation’s function is
The IDLC compliance program for combating money laundering
implemented, it not only brings forth operational challenges but
and terrorism financing consists of the following components:
also runs the risk of monetary wastage.
 Development, implementation and execution of internal
policies, procedures and controls to identify and report 1.7 Compliance Risk:
instances of money laundering and terrorism financing;
Compliance risk is defined as the current or prospective risk of
 Creation of structure and sub-structure within the legal sanction and/or material financial loss that an organisation
organisation, headed by a Central Compliance Unit (CCU), may suffer as a result of its failure to comply with laws, its own
for AML and CFT compliance; regulations, code of conduct, and standards of the best practice
 Appointment of an AML/CFT Compliance Officer, known as as well as from the possibility of incorrect interpretation of laws
the Chief Anti Money Laundering Officer (CAMLCO), to lead or regulations. The guidelines articulate the respective roles of
the CCU; the board, senior management and compliance function units
in managing compliance risks and also require formulation of a
 Independent audit function including internal and external
written compliance risk management policy.
audit function to test the programs; and
 Ongoing employee training programs. Historically, IDLC has always fostered a compliance oriented
culture. This has been reinforced in a variety of ways, ranging
Robust KYC policies and procedures are in place, including policies
from formal requirements to sign declarations of compliance
for customer identification, acceptance, risk assessment and
with the IDLC code of conduct (which requires compliance
enhanced due diligence. The CCU and its members ensure that
with the law and regulations) to repeated communications
money laundering and terror financing issues (such as suspicious
from senior management stressing the need to do business in
transactions) are raised and escalated to the appropriate level of
a compliant manner. In general, compliance risk management is
management in a timely manner while periodic internal audits
embedded in the day to day to business processes and practices
provide an independent check as to whether relevant policies
of the company. With the introduction of the Integrated
and procedures are being complied with on a regular basis. Last,
Risk Management Guidelines, the overall management of
but not least, regular AML/CFT trainings aim at ensuring that
compliance risk will be reviewed and appropriate changes, to
employees are, and remain, aware of anti-money laundering and
ensure conformity with the guidelines, implemented.
terrorist financing regulations.
In 2015, IDLC carried out its first ever self-assessment of money 1.8 Reputation risk:
laundering and terrorist financing risk and the related report was Reputation risk may be defined as the risk of loss arising from
submitted to the BFIU. The IDLC Guidance Notes on prevention damages to an organisation's reputation. Reputation risk may
of Money Laundering and Terrorist Financing were also amended manifest itself in a variety of ways:
to reflect the risk self-assessment.
 Loss of revenue;
1.6 Strategic Risk:
 Increased operating expense;
Strategic risk is the risk of loss arising from inappropriate strategic  Capital or regulatory costs;
decision. Strategic risks include:
 Erosion/destruction of shareholder value.
1.6.1 Business volume risk: The guidelines lay out the respective roles of the board and the
senior management in managing reputation risk and also require
At IDLC, business volume risk may arise from declining business financial institutions to implement a sound and comprehensive
volumes and market share, from competitive pressures and loss risk management process to identify, monitor, control and report
of leadership position and from over-trading, which may affect all reputational risks.
76
While the Board of IDLC retains ultimate responsibility for and has been approved by the Board. Thus, environmental
managing reputation risk, senior management remains and social risks are actively considered along with the general
responsible for implementing an appropriate reputation risk credit risks while assessing a prospective borrower. Currently,
management process. Elements of the company’s reputational IDLC maintains a general environmental due diligence checklist
risk management process include: and 10 sector-specific environmental due diligence checklists.
The environmental risk rating (EnvRR) is formulated through
 An organisational culture that continuously stresses on the compilation of the two checklists. EnvRR can either be
the importance of compliance with laws, regulations and low, moderate or high. In case of high EnvRR for any proposal,
internal polices. post-facto approval is secured from the Executive Committee.
 Establishment of a set of non‐financial reputational risk In addition to national laws and regulations, IDLC has also
indicators and implementation of a process for monitoring voluntarily adopted the principles of the UN Global Compact
these and any other matters that might give rise to potential (UNGC) and the UN Environment Programme Finance Initiative
reputational risk issues. (UNEP FI).
Maintenance of a healthy, non-antagonistic relationship


2. Risk management strategies:
with various media organisations.
 Restrictions on general release of information to the public, 2.1 Risk Management Framework:
press without approval from senior management
1.9 Environmental and Social Risk: 1 Integrating risk management principles with
the company’s core values
IDLC is also focusing on 'mother planet and its sustainability',

shifting from the traditional financing approach. In this regard,
the company is making its credit appraisal process to be
Maintaining those values via actions
2
much more stringent from an Environment and Social (E&S)
perspective – evaluating all the environmental and social factors
such as project impacts on the environment and the community 3 Performing risk analysis
in the long run, prior to approving a loan.
Being the only listed member of UNEP FI, IDLC has been following Implementation of various strategies
the Environmental Risk Management guideline 2011 provided to minimise risks 4
by Bangladesh Bank. Taking this approach one step further, IDLC
is in the process of adopting an extensive Environmental and
Building of screening systems to encourage early
Social Management System (ESMS) across the organisation with 5 warnings related to prospective risks
assistance from FMO, a Dutch development bank, and FI Konsult,
IDLC’s appointed consultant for this project.
Periodic analysis of the
The overall goal of this project is to: management programme. 6
 Help IDLC identify customers with potentially high
environmental and social risks; 2.2 Integrated risk management approach:
 Enable them to evaluate the E&S performance of such At IDLC, risk data is integrated into the strategic decision-making
customers through its due diligence and credit appraisal framework of the Company and the risk tolerance degrees
process; and of various departments and divisions are taken into account
in decision making process. Another part of our Integrated
 Make those customers, especially those who are not Risk Management is managing diversified risks by different
complying with local E&S regulations, behave more teams in an integrated manner. At IDLC, Treasury department
responsibly through the use of environmental or social manages market risk and liquidity risk whereas Credit Risk
covenants in the facility agreements. Management is responsible for managing credit risk. Operational
risk management is the responsibility of our Internal Control &
This project will not only satisfy the Central Bank’s requirements,
Compliance team. These teams co-ordinate with the Senior
but also enable IDLC to comply with internationally acceptable
Management team, Corporate Affairs department and Finance
risk management standards. Furthermore, execution of green
department to manage legal, compliance and strategic risk.
banking policy, which is in line with IFC Performance Standard,
ADB Safeguard Policy and Bangladesh Bank guideline, is
2.3 Risk management and control principles:
considered as another milestone towards sustainability.
The five pillars that support IDLC’s approach to achieving an
1.9.1 Environmental risk rating: appropriate balance between risk and return include the following:
IDLC complies with the Environmental Risk Management Protecting IDLC’s financial strength by controlling risk exposures
(ERM) Guidelines for Banks and Financial Institutions in and circumventing potential risk concentration at the level
Bangladesh issued by the Bangladesh Bank in January, 2011. of individual exposures, at specific portfolio levels and at an
ERM Guidelines have been incorporated in IDLC’s credit policy aggregate firm-wide level across all risk types.
77
2. Protecting our reputation through a sound risk culture for different products are analyzed every year to incorporate
characterized by a holistic and integrated view of risk, changes in market variables and the learnings from collection
performance and reward and by ensuring thorough history. Such periodic modification of policies helps IDLC cope
compliance with our standards and principles, particularly with the current market situation and changes in the industry. A
our Code of Conduct. monthly meeting is held between the Credit Risk Management
(CRM), Special Assets Management (SAM) and the collection
3. Complete management accountability whereby team, highlighting learnings from special clients. This helps
business management, as opposed to risk control, own all IDLC formulate better policies to improve its assets, works as an
risks assumed throughout the firm and are responsible for effective screening system and provides early warnings to IDLC
the continuous and active management of all exposures to about a client/ industry.
ensure the right balance between risk and return.
2.5 Different policies customized for different market
4. Independent control functions which monitor the
effectiveness of the business’s risk management capabilities segments:
and also oversee risk- taking activities. IDLC’s credit management processes are designed with the
5. Comprehensive and transparent risk disclosure to aim of combining an appropriate level of authority in its credit
senior management, the Board of Directors, shareholders, approval processes with timely and responsive decision-making
regulators, rating agencies and other stakeholders and customer service. The process for each division is tailored
to the risk profile and service requirements of its customers and
2.4 Periodic analysis of Policies and Guidelines: product portfolio. A Board-approved credit policy is adequately
documented among business divisions and is strictly adhered to
All IDLC, policies are periodically modified. IDLC’s credit policy pre-sanction. Key parameters associated with credit structuring
is generally reviewed within two years of each approval. IDLC’s and approval are periodically reviewed to ensure continued
credit policy has been last reviewed in 2015, just one year after relevance.
the preceding review. Product Programme Guidelines (PPG)
3. Credit Risk Management:

3.1 Credit Risk Management Process:
Measuring the firm’s current and potential

Approving transactions and setting and
1 communicating credit 5 credit exposure and losses resulting out of
counter-party default.
Use of credit risk including collateral Reporting of credit exposures to the senior
2 6 management, the Board and regulators.
Communication and collaboration with other

Monitoring compliance with
3 established credit exposure limits 7 independent control and support functions
such as operations, legal and compliance.
Assessing the likelihood that a counter-party

4 will default on its payment obligations.
78
3.2 Segregation of credit appraisal from loan origination: loan. This process allows the management to monitor changes
and trends in risk levels and manage risks to optimize returns.
The credit appraisal and measurement process leads to approval
or rejection of a credit proposal. At IDLC, credit appraisal 3.5 Credit risk measurement in general:
process is segregated from loan origination. This ensures the
independence and integrity of the credit decision-making 3.5.1 Ongoing active monitoring and management of
process. An independent Credit Risk Management (CRM) credit risk positions:
department scrutinizes projects from a risk-weighted perspective
and assists the management in creating a high-quality credit CRM’s research team regularly reviews market conditions and
portfolio that maximizes returns from risk assets. Moreover, The our exposure to various industrial sub-sectors. Thus, we aim to
Credit Evaluation Committee (CEC) regularly meets to review proactively identify Counter-parties that highlight the likelihood
market and credit risks related to lending and recommends and of problems well in advance in order to effectively manage credit
implements appropriate measures to counter associated risks. exposure and maximize recovery. Also, collection team and
relationship manager provide negative feedback of business
3.3 Multiple level of credit authorities: condition and payment status of a particular client via early
warning report. Ongoing active monitoring and management
At IDLC, credit approval authorities vary on the basis of the size of credit risk positions is an integral part of our credit risk
of the proposed credit exposure, expected cash flows, borrower management activities.
credit worthiness and the security offered. Multiple levels of
credit approval authorities range from the CEO and Managing 3.5.2 Stress testing:
Director to the Board. The credit limit, which is proposed in the
credit application, serves as a basis to determine the appropriate IDLC embraces stress- testing guidelines issued by the Bangladesh
credit risk approval level. All assigned credit authorities are Bank since 2010. These guidelines were revised for NBFIs in June
reviewed in credit policy. 2012,with subsequent amendment thereon, after a thorough
analysis of situational requirements and future perspectives.
3.4 Client specific credit risk measurement: Stress-testing quantifies exposures to plausible, yet extreme
and unusual market movements and enables us to identify,
3.4.1 Client’s payment history review: understand and manage our potential vulnerabilities and risk
concentrations. IDLC deploys regular stress-tests to calculate
At IDLC, payment behavior of individual client is scrutinized
credit exposures, including potential concentrations that would
prior to loan approval. CIB reports are collected from the Credit
result from applying shocks to credit risk factors (interest rates
Information Bureau (CIB) of the Bangladesh Bank. CIB report
and equity prices for instance). These shocks include a wide
contains existing loan status of a client. The reports are scrutinized
range of moderate and extreme market movements. Stress-
by the CRM to assimilate the liability condition and repayment
tests are regularly conducted jointly with the firm’s market
behavior of the client. Depending upon the report, opinions are
and liquidity risk functions and are reported quarterly to the
taken from the client’s banks. Suppliers’ and buyers’ opinion are
Bangladesh Bank. The suggested recommendations from the
taken to understand the market position and to understand the
test are in implementation and are modified and monitored
repayment behavior of the proposed customer.
regularly and thoroughly.
3.4.2 Internal rating system:
4. Credit risk mitigation:
IDLC has internal Risk Grading Model (RGM) to facilitate informed
IDLC employs various credit risk mitigation techniques to
decision-making. This helps to promote corporate safety and
organize credit exposure and reduce losses. These techniques
soundness. RGM model measures credit risks and categorizes
are used consistently and reviewed periodically to meet
individual and group credit on the basis of the risk. IDLC
operational management risk associated with their legal,
possesses different internal rating tools to assess the credit risk
practical and timely enforcement. A key focus of IDLC’s credit
on Corporate, SME and Retail Banking clients. Both quantitative
risk management approach is to avoid undue concentrations in
and qualitative factors are analyzed to assess the credit risk. The
the credit portfolio whether in terms of counter-party, groups,
specific factors analyzed depend on the type of the counter-party.
sectors or products. The Company’s portfolio management
Credit officers use peer analysis, industry comparisons, external
supports a comprehensive assessment of concentrations within
ratings, research and the judgment of credit specialists. At the
its credit risk portfolio for provision of subsequent risk-mitigating
time of initial credit approval and review, relevant quantitative
actions and diversification across geographical boundaries,
data (such as financial statements and financial projections)
sectors, borrower groups and products. The analysis is also used
and qualitative factors relating to the counter-party are used in
to determine strategies for both portfolio and individual counter-
assigning a credit rating. IDLC uses a rating scale ranging from 1-8
parties within the portfolio based on their risk/ reward profile and
whereby the 1-3 risk rates are tagged as satisfactory and above
potential. The use and approach to credit risk mitigation varies
satisfactory and the 4-5 risk rates are tagged as average risks. Any
by product type, customer and business strategy. Mitigation
client whose rating is less than 6 may not be considered for the
techniques used include:
79
Table : Risk Mitigation Technique
IDLC possesses a set of Board-approved prudential limits to address counter-party concentration

risks. These allow higher exposure to better-rated customers and lower exposure to lower-rated
Credit limit (individual and group)
customers.
IDLC’s credit review gives focus on the asset to be financed and the expected cash flow in order
to minimize the probability of losses from late and delinquent payments.
Borrower credit-worthiness is determined on the basis of their reliability and ability to make
timely payments. Measures of reliability include credit payment history, references from current
Sustainable cash flow and past suppliers and qualitative character of the management/ owners. Projected cash flows
are also used to demonstrate the ability of the applicant to generate enough revenue and cash
flow to make payments within the prescribed terms and conditions.
Collateral is security in the form of an asset or third-party obligation that serves to mitigate
inherent risks of credit loss due to exposure by either substituting the borrower default risk or
improving recoveries in the event of a default.
The principle types of collateral includes cash and cash equivalent instruments, properties
Collateral (residential, commercial and industrial), capital funds, plant and equipment. Realizable value of
the collateral is computed on a conservative view of current market prices, suitably discounted
for price volatility and the lack of a ready market for assets. All realization costs are taken into
account as well. Collaterals taken by IDLC are well-documented to ensure that credit risk
mitigation is legally effective and enforceable.
IDLC holds guarantees, letters of credit (LC) and similar instruments from third parties, which
enable it to claim the settlement in the event of default on the part of the counter-party. Guarantor
Risk transfer
counter-parties include banks, parent companies, shareholders and associated counter-parties.
5. Operational risk management: Under the new framework, the Internal Control and Compliance
(ICC) department will act as a separate line of defence against
Managing operational risks requires timely and accurate operational risks. In line with regulatory requirements, ICC is
information as well as a strong control culture. At IDLC, we seek responsible for the following:
to manage our operational risks through:
 Assess compliance with applicable laws and regulations,
 Training, supervision and development of our human codes and guidelines, internal procedures and policies.
resource
 Timely audits are conducted where compliance with
 Active participation of the senior management in identifying laws/ regulations/ guidelines is critical and appropriate
and mitigating key operational risks recommendations for enhancement in processes and
controls are enunciated.
 Independent control and support functions that monitor
operational risks on a daily basis; we have instituted  Track transactions and report any suspicious transactions
extensive policies and procedures and implemented to the local designated authority. It also imparts training on
controls designed to prevent the occurrence of events anti-money laundering in order to enable staff to mitigate
leading to operational risks compliance risks as recommended by local regulators.
 Proactive communication between our revenue-producing  Act as a contact point within IDLC and deliver timely advice
units and our independent control and support functions in relation to compliance queries emanating within the
Company.
 Building a network of systems throughout the firm to
facilitate the collection of data used in analyzing and  A complaint cell has been formed, in line with the DFIM
assessing our operational risk exposure circular 13/2011 to ensure prompt settlement of complaints.
 Appropriate internal control measures are put in place to At IDLC, proper credit administration includes efficient and
address operational risks. effective operations related to monitoring, documentation,
contractual requirements, legal covenants and collaterals,
Starting from Q4 of 2015, IDLC has started to implement an
among others; accurate and timely report to the management
operational risk management framework. Under the framework,
and compliance with management policies and procedures and
Unit Operational Risk Managers (UORM) have been appointed
applicable rules and regulations. All businesses of IDLC are
for the various departments and divisions. Separate forums at
audited to assess control adequacy and effectiveness from
mid-management and senior management level have been
a process perspective. The Company gathers information of
created for discussion and resolution of Operational Risk issues.
different risks from reports and plans that are published within the
80
institution (like audit reports, regulatory reports, management by the internal audit is taken into consideration by statutory
reports, business plans and operations plans, among others). A auditors for the purpose of forming an opinion on the Company’s
careful review of these documents reveals gaps that can present financial statements. As part of their statutory duties, external
potential risks. The data from the reports are then categorized auditors also conduct yearly independent process reviews and
into internal and external factors and converted into the report directly to the Audit Committee.
likelihood of potential loss to the institution. work performed
6. 2015 at a glance: IDLC’s Credit Profile

6.1 Sector-wise Industrial Exposure:
IDLC enjoys a well-diversified industrial portfolio in which the credit risk is spread across different sectors of the economy, as detailed
below:
Sectoral Exposure -31 December 2015 Apparels & Accessories Healthcare Services Textiles Export
In percentage
4%
10%
Agro Based Industry Iron & Steel Textiles Local
4%
6%
Building Materials, Cement, Information Technology
6% Glass,Ceramics, Pipes
0%
0%
Leather & Leather Products
Chemicals
7%
5% Packaging
Construction & Contractors
1%
1% Power & Energy
1%
2%
Education
3% Pharmaceuticals
2% Enginering
Paper & Paper Products
3% Food and Beverage
2% 11% Financial Services
Furniture & Related Products
3%
0%
Service
2% 1% Household Products &
Home Appliances Professional Service
6% 6% Hospitality & Leisure Services
2% 2%
Tele Communications
10% Housing & Real Estate
Transport
6.2 Credit Risk concentration limits
As on December 31, 2015, no regulatory and prudential limits were exceeded with respect to credit concentration risks. IDLC complies
with the following regulatory prudential limits: credit exposure to a single customer or any group of closely-related customers shall
not exceed 30% of its capital base. Large credit concentrations, notably concentrations over 15% of the Company’s capital base, are
reported:
(i) Quarterly to the Risk Management Committee.

(ii) Quarterly to the central bank.
6.3 Top - 10 Group Exposure
Table : Top - 10 Group Exposure Taka in million
Client Rank Group Exposure % of IDLC’s equity
Client - 1 593.42 8.81%

Client - 2 572.57 8.50%
Client - 3 533.57 7.92%
Client - 4 401.11 5.95%
Client - 5 399.75 5.93%
Client - 6 389.25 5.78%
Client - 7 359.96 5.34%
Client - 8 355.57 5.28%
Client - 9 353.29 5.24%
Client - 10 272.74 4.05%
81
6.4 Top - 10 Sectoral Exposure
Table : Top - 10 Sectoral Exposure Taka in million

Sectors Net Exposure % of Total Industrial Portfolio*
Food and Beverage 3,519.67 10.61%
Housing & Real Estate 3,252.09 9.80%
Apparels & Accessories 3,245.35 9.78%
Service 2,266.87 6.83%
Iron & Steel 2,151.35 6.48%
Transport 2,142.83 6.46%
Agro Based Industry 2,059.84 6.21%
Household Products & Home Appliances 2,057.21 6.20%
Building Materials, Cement, Glass,Ceramics, Pipes 1,639.01 4.94%
Textiles Export 1,447.22 4.36%
* Industrial Portfolio comprises of loans and advances which are categorised as industrial sectors as per Bangaldesh Bank sectorial
guideline, which excludes loans and advances to individuals. Industrial Portfolio has a total of Taka 33,180.64 million which is 62% of
the total portfolio of IDLC Finance Limited of Taka 53,857.71 million.
Classification of loans, advances and leases for IDLC Finance Limited Taka in million
2015 2014
Standard (STD) 51,073.62 43,633.22
Unclassified [UC]
Special Mention Account (SMA) 1,137.07 800.51
Total Unclassified (STD+SMA) 52,210.69 44,433.72

Sub-Standard (SS) 309.47 178.84
Classified Doubtful (DF) 478.66 90.72
Bad/ Loss (BL) 858.89 645.42
Total Classified (SS+DF+BL) 1,647.03 914.98
Total Outstanding 53,857.71 45,348.70
Classification of loans, advances and leases for IDLC Group Taka in million
2015 2014
Standard (STD) 51,991.52 44,902.67
Unclassified [UC]
Special Mention Account (SMA) 1,137.07 800.51
Total Unclassified (STD+SMA) 53,128.59 45,703.18
Sub-Standard (SS) 745.68 629.64
Doubtful (DF) 478.66 90.72
Classified Bad/ Loss (BL) 858.89 645.42
Total Classified (SS+DF+BL) 2,083.23 1,365.78
Total Outstanding 55,211.82 47,068.96
82
Treasury at IDLC
Assuring Liquidity, Ensuring Profitability
Overview
Treasury Division has been playing an enhanced strategic role in the notable balance sheet growth of IDLC over the past few years.
It has also established itself as a key profit generating unit through diversified investments in money market, bonds and commercial
papers and thus making a significant contribution to IDLC group revenue.
Treasury performs a pivotal role in many activities beyond day-to-day fund management. It is responsible for developing and maintaining
relationships with both the internal and external stakeholders. The department ensures the efficient functioning of following areas:
Funding and Financial Risk Investment Management

Capital Management Management Management Advice
Short Term and Long-term Liquidity profile analysis Investment in money Conducting ALCO
liquidity planning market instruements (Asset-Liability
Interest rate gap analysis
Funding diversification Investment in Committee) meeting
Contingency funding
Business growth planning Government Securities Providing valuable
monitoring inputs to senior
Long term investment in
private bonds management through
Capital Planning analytical reporting
Strategic investments
Our Competitive Drivers: Economy and Business Environment in 2015:
As the manager of the largest balance sheet of the Financial 2015 started with political uncertainty, making business
Institutions (FIs) industry, we consider following attributes as our environment challenging for banks and FIs. However, the
core competencies: situation eased up as time progressed and witnessed improved
investment sentiment in the last quarter of 2015 ;
– Average inflation declined gradually and came down to

6.19% in December 2015;
– Due to lack of growth in loans and advances, most of the banks
Agility
invested their excess funds in government securities (GSEC)
that triggered sharp fall in yields of GSEC. Yields on treasury
bills and bonds fell by nearly 300 bps across all tenors;
Empowerment Experience – Foreign exchange reserves rose to a record high of $27.5

billion at the end of 2015. Taka remained stable against USD
till Q3 and witnessed little depreciation in Q4;
– Excess liquidity in money market persisted for the whole
Competency year of 2015, dragging down the call money rate to 3.29%
in December from 8.57% in January.
Funding and Liquidity Management:

Process and Teamwork Treasury Department is responsible for the development,
Technology
execution and regular updating of IDLC’s funding plan. The plan
reflects projected business growth, development of the balance
sheet, future funding needs and maturity profiles as well as the
Relationship effects of changing market conditions. Treasury Department is
Management
also responsible for managing liquidity. The objective of effective
liquidity management is to ensure that we can efficiently meet
contractual obligations arising from customer deposit maturities
83
or pre-mature encashment and other commitments under both

As of December 31, 2014
normal operating conditions and stressed situation. To achieve
In percentage
this objective, we ensure that funding mix is optimized in terms
of product category and maturity. Diversification of funding mix 10%
is an important element of our liquidity risk management frame 10%
work. Our funding mix include retail deposit, money market
borrowing, re-financing schemes of Bangladesh Bank, Zero
Coupon Bond and Long Term Taka and USD Loan.
We also undertake an extensive review of liquidity risk 80%

management through structural liquidity analysis to measure
the liquidity situation with a broader time span. It is calculated
showing maturing liabilities as cash outflows and maturing
Treasury Borrowing BB Refinance Customer Deposit
assets as cash inflows under corresponding time buckets to
find GAP under various time buckets. IDLC’s liquidity position is
reviewed regularly to ensure adherence to prudential limits set Money Market Desk: IDLC’ money market desk is devoted to
by Bangladesh Bank or ALCO. In order to strengthen our liquidity manage liquidity and funding and generating revenue from
risk management we have established below framework. money market transactions. This desk has been generating
sizable amount of profit through money market transactions.
Money market desk assumes following major responsibilities:
Basic
Policies – Maintaining CRR, SLR and other regulatory ratio at optimum
and risk level
limits – Managing interbank borrowing (Call Loan, STL, Bank
Risk Management Deposit)
Reporting of Funding
– Sourcing fund at competitive rates and deploying surplus
funds profitably
Liquidity – Investing in money market instruments
Contingency Performance
Plan Monitoring Asset Liability Management (ALM) at IDLC:
Asset Liability Management involves evaluating, monitoring and

managing key balance sheet risks. IDLC has an approved policy
Managing our Cost of Funds (CoF):
guideline on Asset Liability Management (ALM) to best address
In 2015, market interest rate was in declining trend throughout the key balance sheet issues and risks . Asset Liability Management
the year as excess liquidity piled up in the banking sector. In Committee (ALCO) comprised of senior management of IDLC has
general, IDLC’s balance sheet is positioned to benefit from lower the main responsibility to ensure that an effective ALM system is
interest rates. At the outset of last year, our maturity profile were in practice to manage balance sheet risks.
such that in response to lower market rates, our liabilities would
ALCO holds the responsibility of:
be re-priced to a greater degree than our assets. We took the
opportunity of low interest rate environment and lowered our • Ensuring systematic management process for tracking the
deposit rates several times in 2015. Customer deposit being the Balance Sheet risks in a timely manner;
major source of funding, reduction in interest rate on deposits
• Reviewing and managing potential liquidity risks and
had a significant impact on overall cost of fund, which reduced
interest rate risks proactively which may arise from market
by nearly 165 bps. We also received approximately Taka 300
movements, regulatory changes and/or changes in
crore under various refinancing schemes of Bangladesh Bank in
economic/political environment;
2015, which helped us keeping our CoF lower.
• Ensuring compliance with the regulations of Bangladesh
Bank in respect of statutory obligations involved within the
As of December 31, 2015 parameters of Balance Sheet Risks;
In percentage • Reviewing and formulating pricing strategy for both the
deposit products and asset products.
11%
We have built a robust ALM system over the years to measure,
8%
manage, and monitor different aspect of the major balance sheet
risks (liquidity risk and Interest rate risk). We have a dedicated
ALM desk that provides input to the Asset Liability Management
Committee (ALCO). It tracks, analyzes and reports Balance Sheet
81% movements to senior management and ALCO. In addition to
that, it also monitors the economic outlook and major changes
in the operating environment to predict future interest rate
Treasury Borrowing BB Refinance Customer Deposit movement.
84
Base Rate System is exhibited at all branches along with on the website for being
transparent in the pricing of floating rate lending products. The
To promote transparency in product pricing and encourage monthly base rates of IDLC Finance Limited for the year 2015 are
healthy competition in the economy, Bangladesh Bank has as shown below:
enhanced its policy support with the inclusion of Base Rate
System. It captures all the elements of lending rates that are
In percentage Regular Adjusted
common across all categories of borrowers. Consolidating the
monthly data of the FIs, Bangladesh Bank prepares and publishes
14.57
14.05
a monthly weighted average Cost of Fund Index (CoFI) on its
13.43
13.59
13.39
13.49
13.31
13.15
website. It serves as a reference rate for pricing variable interest
12.57
12.67
12.48
12.02
rate loan products. However, the actual lending rates charged to
13.94
13.48
the borrowers is the Base Rate plus borrower-specific charges,
13.18
13.01
12.87
12.79
12.82
12.73
12.23
which include product-specific operating costs, risk premium
12.15
12.03
11.69
and tenor premium. In compliance with the "Guidelines on the
Base Rate System for Non-Bank Financial Institutions" issued
by Bangladesh Bank (DFIM Circular No.-6) on August 20, 2013,
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
IDLC reviews the Base rate on a monthly basis which is approved
by the Asset Liability Management Committee (ALCO) and is
reviewed by the Board on quarterly basis. The Base rate of IDLC
85
IDLC's Statement of corporate governance

Corporate governance represents a strategy for companies IDLC considers that its corporate governance practices comply
to ensure a framework of control for its administrative and with all the aspects of the revised Corporate Governance
management practices. This is achieved through procedures Guideline (CGG) Notification No. SEC/ CMMRRCD/2006-158/
that are aligned with recognised standards that respond to Admin/44, dated August 07, 2012, issued by the Bangladesh
the interests of shareholders and other stakeholders. Proper Securities and Exchange Commission (BSEC) and all aspects
governance ensures fairness, transparency and accountability of Bangladesh Bank’s DFIM Circular No. 7, dated September
and safeguards the interests of all stakeholders, especially the 25, 2007. In addition to establishing the highest standards of
minority shareholders. Empirical research also suggests that corporate governance, IDLC also embraces best governance
corporations that adhere to good governance practices are practices across all its activities. The independent role of the Board
not only more sustainable but also tend to generate higher of Directors, separate and independent role of the Chairman and
profitability. Chief Executive Officer, distinct roles of the Company Secretary,
Chief Financial Officer and Chief Compliance Officer and
different Board Committees enable IDLC to achieve excellence
in corporate governance.
As a listed Company, IDLC must comply with the BSEC’s revised

CGG, which require the Company to provide a statement in the
Annual Report disclosing the extent to which it has complied
with the BSEC Corporate Governance circulars. The status
of compliance shall be certified by a practicing Professional
Accountant/ Secretary. The tables summarising IDLC’s
compliances are provided in Annexure-III and Annexure-IV of the
Directors’ Report. A certificate on compliance with the Corporate
Governance Guideline certified by practicing professional
accountants is enclosed on Page No. 143 of this Annual Report.
BOARD OF DIRECTORS, CHAIRMAN AND CEO
Board of Directors
The Board of IDLC considers that its constitution should

IDLC’s six core areas emphasise its effective corporate comprise Directors with an appropriate mix of skill, experience
governance strategy as demonstrated in the diagram. The and personal attributes that allow the Directors individually and
company’s corporate governance model is rigorously aligned the Board collectively to discharge their responsibilities and
with its well-articulated vision, mission, goals and objectives. duties under the law efficiently and effectively, understand the
business of the Company and assess the performance of the
The Company’s Board of Directors are responsible for proper management.
governance, which includes setting out the Company’s
strategic aims, providing the necessary leadership to implement The composition of the Board embraces diversity. The Directors
such aims, supervising the management of the business and possess a wide range of local and international experience,
reporting to shareholders on their stewardship. The Board expertise and specialized skills to assist in decision-making and
is collectively accountable to the Company’s shareholders leading the Company for the benefit of its shareholders.
for good governance to facilitate efficient and effective Nomination Committee
management towards delivering long-term shareholder value
within appropriately established risk parameters. The Nomination Committee is responsible for composition,
balance and expertise of the Board as a whole and appraising the
IDLC is committed to continually review all its corporate contribution of individual Directors, including a review of their
governance policies and guidelines to ensure transparency in its time commitment and attendance records.
practices and the delivery of the highest ethical standards and
quality information to its stakeholders on an ongoing basis. The Board, as a whole, decides on the nomination of any Board
member and composition of the Board and its committees.
The sustenance of effective corporate governance remains
IDLC’s policy on appointment of Directors
a key priority of IDLC’s Board. To exercise clarity about the
Directors’ responsibilities towards shareholders, corporate In relation to the selection and appointment of new Directors,
governance must be dynamic and remain focused on the the existing Board of Directors possess the following duties and
Company’s business objectives and create a culture of openness, responsibilities:
transparency and accountability. Keeping this in mind, clear
structures and ownership supported by well-understood  Regularly review the size and composition of the Board and
policies and procedures to guide the activities of the Company’s the mix of expertise, skills, experience and perspectives that
management have been instituted and institutionalised. may be desirable to permit the Board to execute its functions;
86
 Identify any competencies not adequately represented practices. The Board determines the corporate governance
and agree to the process necessary to be assured that arrangements for the Company. As with all its business activities,
a candidate nominated by the shareholders with those the Board is proactive with regards to corporate governance
competencies is selected; and puts in place those arrangements that it considers are in the
 The Directors are appointed by the shareholders in the best interest of the Company and its shareholders and consistent
Annual General Meeting (AGM). Casual vacancies, if any, are with its responsibilities to other stakeholders.
filled by the Board in accordance with the stipulations of The Board duly complies with the guidelines issued by the
the Companies Act, 1994, and the Articles of IDLC; Bangladesh Bank regarding the responsibility and accountability
 The CEO & Managing Director is appointed by the Board of the Board, its Chairman and Chief Executive/ Managing
subject to the consent of the shareholders in the Annual Director, vide DFIM Circular No. 7 dated September 25, 2007.
General Meeting (AGM) and approval of Bangladesh Bank;
The Board of Directors is in full control of the Company’s affairs
 Any change in the members of the Board requires and is also fully accountable to shareholders. It firmly believes
intimation to the Bangladesh Bank, all scheduled banks that the success of the Company hinges on the credible
and Financial Institutions (FIs), Bangladesh Securities and corporate governance practices embraced by it. Taking this
Exchange Commission (BSEC) and the stock exchanges. into consideration, the Board of Directors set out its strategic
Retirement and re-election of Directors focus and supervises the business and the related affairs of the
Company. The Board also formulates the strategic objectives and
As per IDLC’s Articles of Association, one-third of the Directors are policy framework for the Company. In discharging the above
required to retire from the Board every year, comprising those responsibilities, the Board carries out, inter alia, the following
who have been in office the longest since their last election. A functions as per the charter of the Board and Bangladesh Bank’s
retiring Director shall be eligible for re-election. DFIM Circular No. 7, dated September 25, 2007:
Composition of the Board, ensuring adequate number of
Stakeholders Responsibilities reserved to the Board
Non-Executive Directors and their independence
Approval of business strategy and vision in
IDLC’s Board comprises twelve (12) Non-Executive Directors line with efforts to drive shareholder value
including three (3) Independent Directors and one (1) Executive creation.
Director, the CEO & Managing Director as on reporting date. Approval of business plans, assuring that
Directors possess a wide range of skills and experience over an sufficient resources are available to implement
array of professions, businesses and services. and monitor the strategy.
Approval and monitoring of major
All the Non-Executive Directors are nominated by their respective
investments or divestitures and strategic
institutions except for the Independent Directors. All the
commitments.
Directors bring forth independent judgment and considerable
knowledge to perform their roles effectively. The Board of Determination of capital structure and
Directors ensures that the Company’s activities are always dividend policy.
conducted with adherence to stringent and the highest possible Approval and monitoring of financial
ethical standards and in the best interests of all stakeholders. reporting.
Shareholders Oversight of risk management, internal
None of the directors of the Board, except the CEO & Managing controls and compliance systems as per the
Director, are involved in the day-to-day operations of the Bangladesh Bank’s ‘Core Risk Guideline’.
Company; rather, they provide their valuable insights and Recommendation for appointment or removal
guidance to the management in the meeting of the Board and of external auditors and determination of the
its committees. remuneration and terms of appointment of
Adequate number of Independent Directors in the Board and the auditors.
their independence Approval of annual budgets including major
capital expenditure proposals.
As per the revised Corporate Governance Guideline of Bangladesh Regular review of financial performance and
Securities and Exchange Commission (BSEC), at least one-fifth of overdue situations.
the total directors of the Board shall be Independent Directors.
Monitoring the adequacy, appropriateness
Thus, in compliance with the guideline, three (3) Directors out of
and operations of internal controls.
the total twelve (12) Directors are independent, having no share
Ensure that technology and information
or interest in IDLC. Independence of the respective Independent
systems are sufficient to operate the
Directors is confirmed during selection and appointment of the
organisation effectively and sustain
Directors and they remain committed to continue with such
competitiveness.
independence throughout their tenure.
Benchmarking value creation for customers,
Role and responsibilities of the Board clients and partners.
Customers Reinforcement of the corporate culture and
The Board is committed to the Company to achieve superior
core values and ensuring that the Company
financial performance and long-term prosperity, while meeting
remains an employer of choice.
stakeholder expectations of sound corporate governance
87
Stakeholders Responsibilities reserved to the Board Responsibilities of the Chairman

Review and approval of the CEO and The Chairman of the Board shall be responsible for the
Executive Management team’s arrangements, management, development and effective performance of the
remuneration and benefits. Board of Directors and provides leadership to the Board for all
Employees
Oversight of succession planning for the CEO, aspects of the Board’s functions. The Chairman is responsible for
Executive Management team and such other leadership of the Board. In particular, s/he will:
Executives as the Board may deem fit.
Oversight of the management of social,  Ensure effective operations of the Board and its committees
economic and environmental concerns in conformance with the highest standards of corporate
consistent with the delivery of sustainable governance;
outcomes for stakeholders and achievement  Ensure effective communication with shareholders, host
Community
of the Company’s incident and injury-free governments and other relevant constituencies and ensure
vision. that the views of these groups are understood by the Board;
Reinforcement of reputation, brand and  Set the agenda, style and tone of Board discussions to
community relations. promote constructive debate and effective decision-
Review of the size and composition of the making;
Board.
 Ensure that all Board Committees are properly established,
Directors Director’s nomination, selection, removal, composed and operated;
succession planning and remuneration.
 Support the CEO & Managing Director in strategy
Review of the Board’s performance.
formulation and, more broadly, provide support and give
The Chairman of the Board and the CEO of the Company are advice;
different individuals  Ensure an effective relationship among Directors, acting as
The Chairman of the Board is not the Chief Executive of the the principal conduit for communication and issues relating
Company. The Chairman and the CEO & Managing Director are to business strategy, planned acquisitions and corporate
different individuals. The role of the Chairman and the CEO & governance;
Managing Director are independent and separate.  Establish a harmonious and open relationship with the CEO
& Managing Director;
Role and responsibilities of the Chairman as defined by the Board
 Ensure that Board Committees are properly structured and
The Chairman runs the Board. The Chairman serves as the primary all corporate governance matters are fully addressed; and
link between the Board and the management and works with
 Encourage active engagement by all members of the Board.
the CEO and Company Secretary to set the agenda for Board
meetings. It is the Chairman’s responsibility to provide leadership Annual evaluation of the CEO & Managing Director by the Board
to the Board and ensure that the Board works effectively and At the beginning of each year, the Board engages in extensive
discharges its responsibilities as Directors of the Company. The discussions with the CEO & Managing Director and sets financial
role and responsibilities of the Chairman of the Board is defined and non-financial goals. The annual financial budget and job
and set by the Board. objectives are discussed, reviewed and finalised by the Board at
Role of the Chairman the start of the financial year. The business and financial targets
are evaluated each quarter with actual achievements, by the
The Chairman’s primary role is to ensure that the Board is Board. The non-financial achievements are also reviewed by
effective in its task of setting and implementing the Company’s the Board in each quarter. Moreover, an annual assessment and
direction and strategy. The Chairman is appointed by the Board. evaluation of the achievements of pre-agreed targets are made
The principal features of the role of the Chairman comprise the at the close of the year along with deviations and reasons for
following: deviations.
 Providing leadership to the Board; Continuing development program of Directors

 Taking responsibility for the Board’s composition and
All Directors are expected to make an informed contribution
development;
based on an understanding of IDLC’s business model and the key
 Ensuring proper information for the Board; challenges facing the Group as a whole. The Chairman ensures
 Planning and conducting Board meetings effectively; that all Directors receive a full, formal and tailored induction on
joining the Board, facilitated by the senior management and
 Getting all Directors involved in the Board’s work;
comprising:
 Ensuring the Board’s focus on key tasks;
 A formal corporate induction, including an
 Engaging the Board in assessing and improving its
introduction to the Board, and a detailed overview of
performance;
IDLC, its strategy, operational structures and business
 Overseeing the induction and development of Directors; activities;
and
 The roles and responsibilities of a Director, including
 Supporting the CEO & Managing Director.
statutory duties and responsibilities;
88
 A comprehensive induction programme tailored by also free to recommend inclusion of any matter in the agenda
the Chairman and meetings with senior executives for discussions, subject to the permission of the Chairman of the
across IDLC and sessions with IDLC’s business divisions; meeting. The Company Secretary and the Chief Financial Officer
and always attend the Board meetings and the senior management
is invited to attend the Board meetings to provide additional
 A detailed induction programme across risk, focusing inputs of the items being discussed by the Board and make
on risk appetite and the Group’s risk profile necessary presentations, if required.
Appraisal of performance of the Board Directors’ remuneration
Both new and existing Directors are provided with the Code Directors are not entitled to any remuneration other than
of Conduct for the Board members on general aspects of their attending the meeting of the Board and its committees.
Directorship and industry-specific matters. Moreover, the Board
is immediately informed of any new rules, regulations and/ or Bangladesh Bank vide its DFIM Circular No. 13 dated November
changes in existing regulations. The Board is also always kept 30, 2015, re-fixed the maximum limit of remuneration to
updated on any development and changes in the business the Directors for attending meetings of the Board and its
environment, risk and industry outlook to assist them to carry committees at Taka 8,000 per meeting per Director. The Board
out their duties as Directors. of IDLC adopted the said enhanced remuneration on December
24, 2015. Till then, the remuneration was Taka 5,000 per meeting
Evaluation of the Board’s performance is conducted by analysing per Director.
the performance of the projects and proposals approved by it. A
quarterly review of classified and non-performing loans is always The details of attendance along with the amount of remuneration
made by the Board to find out deviations and embrace course of of Directors in the meeting of the Board and its committees are
corrections, if required. enclosed in Annexure-II of the Directors’ Report. The amount of
remuneration paid to the Directors is also disclosed in Note No.
Financial and accounting knowledge and expertise of Directors 30 of the audited financial statements.
IDLC’s Board of Directors consists of members who possess a Number of Board meetings held in 2015
wide variety of knowledge and experience in finance, economy,
management, business administration, marketing and law. The number of meetings of the Board and its committees held
This ensures that together, they formulate the right policy for during the accounting year and the attendance of the Directors
the development of the business while having the specialised at those meetings and their respective remuneration are
skills and the ability to foresee developments across a larger disclosed in Annexure-II of the Directors’ Report on Page No. 142.
perspective and with enough independence to audit the
management in a balanced manner. The number of Directors required to constitute a quorum is six
(6), out of the twelve Directors. During 2015, a total of sixteen (16)
Among them, two Directors are Fellow members of the Institute Board meetings were held.
of Chartered Accountants of Bangladesh (ICAB). They normally
provide guidance in matters applicable to accounting and Directors’ report on preparation and presentation of financial
audit-related issues to ensure compliance and reliable financial statements and corporate governance
reporting. The Companies Act, 1994, requires the Directors to prepare
Respective qualifications of the Directors are appended in financial statements for each accounting year. The Board of
Directors’ profile on Page No. 61-65 of this Annual Report. Directors accepts the responsibility for the preparation of
the financial statements, maintaining adequate records for
Holding of Board meetings safeguarding the assets of the Company, preventing and
detecting fraud and/ or other irregularities, selecting suitable
As advised by the Bangladesh Bank, the meeting of the Board of accounting policies and applying those policies consistently
a financial institution shall be held at its Corporate Head Office and making reasonable and prudent judgments and estimates
(CHO) or in the town in which its CHO is located. In compliance where necessary.
with this directive, the meeting of the Board of Directors is
normally held at the registered Corporate Head Office of the The Board of Directors are also responsible for the
Company. The meeting is held frequently, at least once a quarter, implementation of the best and the most suitable corporate
to help the Board discharge its responsibilities and functions as governance practices. A separate statement of the Directors’
mentioned above. The meeting is scheduled well in advance responsibility for financial reporting and corporate governance
and the notice of each Board meeting is given in writing to each is given on Page No. 133 of this Annual Report.
Director by the Company Secretary.
Role of the Company Secretary
Process of holding Board meetings
The Company Secretary acts as a mediator between the
The Company Secretary prepares the detailed agenda for the Company, its Board of Directors, stakeholders, the government
meeting. The Board papers comprising the agenda, explanatory and regulatory authorities. He has expertise in corporate laws,
notes and proposed resolutions are circulated to the Directors capital markets, security laws and corporate governance. He
well in advance for their review. The members of the Board also advises the Board of Directors on the kind of practices to
have complete access to all the information of the Company, be adopted in upholding high levels of corporate governance.
enabling them to work efficiently. The members of the Board are
89
The Company Secretary ensures that the best management During the year under review, fourteen (14) meetings of the
practices and work ethics are embraced to create value for the Executive Committee were held. The Company Secretary acts as
Company. He represents the Company among internal and the secretary of the Executive Committee.
external stakeholders, co-ordinates the policies of the Company,
fulfills the management function and provides guidance on IDLC’s VISION, MISSION AND STRATEGIES
strategic decisions for the improvement and growth of the
Board-approved vision and mission statements of the Company
Company.
The Board of Directors, at its 193rd meeting held on May 13, 2012,
In compliance with the Corporate Governance guidelines,
redefined the Company’s vision, mission, strategic objectives
the Company Secretary has a defined role and responsibilities
and value statements. Adhering to our value statements, we are
approved by the Board.
driving towards our vision.
Committees of the Board
Our vision, mission, strategic objectives and value statements are
The Board has established two permanent Committees to assist, depicted on Page No. 16 of this Annual Report.
advice and make recommendations to the Board on matters
Strategies to achieve the Company’s business objectives
falling within their respective responsibilities as per BSEC and
Bangladesh Bank guidelines. Aligned with our focus on enhancing shareholder communication
and reporting our progress and prospects on an ongoing basis,
Each Committee is governed by a formal charter approved by
we describe our strategy, resource allocation approach and our
the Board, setting out its objectives, responsibilities, structures
future plans to achieve our business objectives on Page34-40 of
and operations. The membership of the Board committees, as at
this Annual Report.
the date of authorisation of the financial statements 2015, is set
out in the table below: AUDIT COMMITTEE
Position in the sub- Appointment of members and composition of the Audit
committee of the Board Committee
Members of the Board of Directors
Executive Audit
IDLC’s Audit Committee is a sub-committee of the Board formed
committee committee
in compliance with the requirements of DFIM Circular No. 13,
Aziz Al Mahmood, Chairman of the dated 26 October 2011 of the Bangladesh Bank and relevant
- -
Board BSEC notification(s) and international best practices on corporate
Md. Shahidul Ahsan Chairman - governance.
A.K.M. Shahidul Haque, Composition of the Audit Committee consisting of an

Member Chairman
Independent Director Independent Director and Non-Executive Directors
Meherun Haque - -
In compliance with the DFIM Circular No. 13, dated 26 October
Faruq M. Ahmed Member - 2011 of the Bangladesh Bank and Corporate Governance
guidelines of BSEC, the Committee consists of five (5) non-
S. M. Mashrur Arefin - - executive members of the Board including an Independent
Mohammad Mahbubur Rahman, Director who is the Chairman of the Committee. The quorum of
- Member the meeting shall not be filled until and unless the Independent
FCA
Director attends the meeting. The Company Secretary acts as the
Md. Kamrul Hassan, FCA - Member secretary of the Audit Committee.
Md. Rezaul Karim Member Member Qualification of members including the Chairman
Atiqur Rahman - - Mr. A. K. M. Shahidul Haque, one of the Independent Directors,
Monower Uddin Ahmed, is the Chairman of the Audit Committee, possessing 37 years
- Member
Independent Director of vast banking experience. Among others, two members,
Mr. Kamrul Hassan and Mr. Mohammad Mahbubur Rahman,
Arif Khan, CEO & MD (Ex-officio) Member -
are Fellow members of the Institute of Chartered Accounts of
Executive Committee Bangladesh (ICAB). They also possess significant experience in
finance and accounting.
A five (5) member Executive Committee, comprising Board
members, is responsible for strategic and operational plans of All the members of the Committee are ‘financially literate’ as
the business. Matters related to the Company’s ordinary business defined by the revised corporate governance guidelines. The
operations and matters that the Board of Directors, from time to qualifications of the members of the Committee are addressed in
time, authorise, are vested in this committee in accordance with detail in their brief profile on Page No. 61-65 of this Annual Report
the Statement of General and Operational Policies established Terms of reference of Audit Committee – empowering to
and sustained by the Board of Directors. This committee assists investigate employees and retain external counsel
IDLC in taking prompt decisions and reacts swiftly to changes
in the marketplace as they occur. The rules of the Executive This role is further expounded on and clarified in the Terms of
Committee is framed by the Board. Reference (ToR) of the Audit Committee, which was revised in
90
light of directives contained in DFIM Circular No. 13 dated 26 3. Placing recommendations to the Board of Directors
October, 2011 issued by the Bangladesh Bank. According to regarding the appointment of external auditors.
the revised ToR of the Audit Committee, its principal duties and  In respect of compliance with existing regulations
responsibilities include the following:
Reviewing whether the rules and regulations set by
 In respect of internal control regulatory authorities (Bangladesh Bank and other
1. Evaluating whether the management: regulatory bodies) as well as internal policies and guidelines
approved by the Board of Directors are being complied
a. Has an appropriate internal control and compliance
with.
culture with regards to risk management;
b. Has clearly defined the duties and responsibilities  Miscellaneous
of its officials;
1. Placing quarterly reports before the Board of Directors on
c. Has full control over the operations of the rectification/ correction status of errors, fraud, forgery and
Company; other irregularities identified by internal auditors, external
2. Reviewing the appropriateness of management auditors and the Bangladesh Bank inspection teams;
information system (MIS) including information
technology system and its use; 2. Undertaking development functions through implementing
an improved infrastructure and reporting system; and
3. Reviewing whether the management is complying
with the recommendations made by internal and 3. Performing all other supervisory activities as assigned
external auditors; by the Board as well as evaluating its own efficiency on a
4. Reviewing existing risk management procedures regular basis.
to ensure that processes are effectively run within
Accessibility of Head of Internal Audit to the meeting of the
the Company; and
Audit Committee
5 Reviewing all fraud, forgery and internal control
weaknesses discovered by internal, external or The Head of Internal Control and Compliance has direct access
regulatory auditors and thereafter keeping the to the Audit Committee, which in turn is directly accountable to
Board of Directors informed of all discoveries and the Board.
subsequent corrective measures.
Holding of the Audit Committee meeting during 2015
 In respect of financial statements
As per the Terms of Reference, the Audit Committee is required
1. Reviewing whether financial statements were to hold at least four (4) meetings in a year. During the year ended
prepared in compliance with all directives and 31 December 2015, the Committee held six (6) meetings. The
guidelines prescribed by the Bangladesh Bank and details of the meetings held and members’ attendance in the
other applicable standards meetings are disclosed in Annexure II of the Directors’ Report.
2. Engaging in discussions with external auditors and the
Quorum of the Audit Committee meetings
management prior to the finalisation of the financial
statements The number of Directors required to constitute a quorum is two
3. Attending and answering questions related to (2). Of them, one shall be an Independent Director. The Company
accounts and audit at the AGM Secretary shall act as the secretary of the Committee.
 In respect of internal audit The Audit Committee and Internal Control and Compliance
1. Reviewing the activities and organisational structure IDLC’s Internal Control and Compliance (ICC) department is
of internal audit and ensuring that there is no barrier tasked with reviewing the Company’s system of internal controls
or limitation to the performance of an independent including the conduct of regular audits of all operational units.
internal audit; ICC is operationally independent in that its members are not
involved in the Company’s operational activities and that the
2. Assessing the efficiency and effectiveness of internal audit;
Head of ICC (HoICC), in addition to his direct reporting line
3. Assessing whether the management is appropriately
to the CEO & Managing Director, also has access to the Audit
considering compliance of recommendations
Committee.
made by the internal auditors with regards to the
observations identified by them; and The Audit Committee is responsible for approving the
4. Placing recommendations before the Board of annual audit plan of ICC and reviewing the plan’s subsequent
Directors in case of change of accounting policies. implementation.
 In respect of external audit The internal audit reports or summaries thereof prepared by the
ICC are reviewed on a regular basis by the Committee.
1. Appraising the audit procedures and reviewing the
management letter submitted by external auditors; Reporting of the Audit Committee
2. Assessing whether the management has appropriately The Audit Committee reports directly to the Board of Directors
considered the observations and recommendations and under certain circumstances, can also report to the BSEC.
made by the external auditors; and
91
Immediate reporting to the Board of Directors  Reviewed the Bangladesh Bank Inspection Report on IDLC’s
The Audit Committee shall immediately report to the corporate head office as of June 30, 2014 and management
Board of Directors in the following cases responses to the report;
 On conflict of interest;  Reviewed the Bangladesh Bank Core Risk Inspection Report
as of June 30, 2014 and management response to the
 Suspected and presumed fraud or irregularity or report;
material defect in the internal control system;  Reviewed Ernst & Young LLP’s report on information system
 Suspected infringement of laws, including securities- controls of IDLC;
related laws, rules and regulations; and  Reviewed the audit plan of the Internal Control and
Compliance Department for the year 2015;
 Any other matter which should be disclosed to the
Board of Directors immediately.  Reviewed the management letter issued by external
auditors, ACNABIN, Chartered Accountants, on annual
No such issues arose at IDLC during the year ended 31 December audit of financial statements of IDLC for the year ended
2015. December 31, 2014;
Immediate reporting to the Bangladesh Securities and  Reviewed quarterly and half-yearly unaudited financial
Exchange Commission statements of IDLC for the year 2015;
 Reviewed amendments made to the risk-based guidance
If the Audit Committee has reported to the Board of Directors
notes on Prevention of Money Laundering and Terrorist
about anything that has a material impact on the financial
Financing of IDLC; and
conditions and results of operations of and where the Audit
Committee finds that such rectification has been unreasonably  Reviewed amendments made to the policy guidelines on
ignored, the Audit Committee shall report such findings to the Asset Liability Management (ALM) of IDLC.
BSEC, upon reporting of such matters to the Board of Directors INTERNAL CONTROL AND RISK MANAGEMENT
for three such instances or completion of a period of 9 (nine)
months from the date of first reporting to the Board of Directors, Internal control
whichever is earlier.
IDLC has adopted the definition of internal control provided by
No such circumstances arose during the year ended 31 the Committee of Sponsoring Organisations of the Treadway
December 2015. Commission (COSO) in its Internal Control — Integrated
Framework. Accordingly, the Company defines internal control
Objectives and activities of the Audit Committee as a process, affected by its Board of Directors, management
and other personnel, which is designed to provide reasonable
Objectives of the Audit Committee
assurance regarding the achievements of objectives relating to
The Audit Committee shall assist the Board of Directors to ensure the effectiveness and efficiency of operations, reliability of both
that the financial statements reflect a true and fair view of the external and internal financial and non-financial reporting and
state of affairs of the Company. The committee will also ensure compliance with applicable laws and regulations. The control
good monitoring systems within the business. system applies across the IDLC Group to all divisions and
departments of its operations.
The principal functions of the Audit Committee are to exercise
oversight over IDLC’s risk management, financial reporting and The Company’s internal control system consists of five inter-
regulatory compliance functions. related components:
Activities during 2015  The control environment
Over the year, six (6) meetings of the Audit Committee were The control environment refers to the orientation, awareness and
held. Key issues discussed and/ or resolved in the meetings of actions of those in the governance and management roles with
the Audit Committee include the following: regards to the Company’s internal control and its importance in
the entity. Elements under IDLC’s control environment include:
 Discussed with the external auditors and management
prior to the finalization of financial statements of IDLC for  Active participation by those charged with governance
the year ended December 31, 2014 as per Bangladesh Bank as evidenced through regular meetings of its Board of
circular number 13 dated October 26, 2011; Directors and Audit Committee;
 Reviewed draft audited financial statements of IDLC for  The communication and fostering of an environment that
the year ended December 31, 2014 as per clause no. 3.3 consistently requires integrity and ethical behaviour as
(v) of Corporate Governance Guidelines (CGG) issued by evidenced by regular communication and confirmation
Bangladesh Securities and Exchange Commission; of its Code of Conduct and zero tolerance for illegal or
unethical behavior;
 Reviewed expression of interest of the Audit Firms and
recommended for appointment of ACNABIN, Chartered  A formal well-defined organisational structure, setting out
Accountants, as statutory auditors for the year 2015; key areas of authority and responsibility and appropriate
reporting lines that is relevant to the nature and size of the
 Reviewed the report of Audit Committee for incorporation
Company’s business;
in the Annual Report 2014;
92
 Human resource policies that demonstrate the Company’s A prudently designed management structure, clearly
commitment towards recruiting employees who meet defined responsibilities, delegation of authorities, risk
established standards of competence and ethical behavior. awareness, establishment of accountability at each level
 Risk assessment and a system of periodic reporting and performance
monitoring represent the key elements of the internal
Risk assessment refers to the process(es) with which the control framework employed at IDLC.
Company identifies and assesses risks in the achievement of
its objectives. A changing external and internal environment Identification of key risks IDLC is exposed to – both internally
means that risk assessment is a dynamic process and must and externally
occur at all levels of the organisational structure, ranging from Risk is the element of uncertainty or the possibility of loss that
branch and department level reviews of portfolios, functions prevails in any business transaction in any place, in any mode
and operations to Management Committee (ManCom) and and at any time. Risk is an integral part of the financing business.
ALCO meetings at the very top level of the management. Risk management entails the adoption of several measures to
 Control activities strengthen the ability of an organisation to cope with the vagaries
of the complex business environment in which it operates.
Control activities are the policies and procedures that help
ensure that the management directives are carried out. IDLC always concentrates on delivering high value to its
Control activities have various objectives and are applied stakeholders through appropriate trade-off between risk and
throughout the Company at all levels and in all functions. return. In addition to the industry best practices for assessing,
These include activities such as authorisation, reviews, identifying and measuring risks, IDLC also considers guidelines
reconciliations and verifications. for managing core risks of financial instructions issued by
Bangladesh Bank, vide FID Circular No. 10, dated September 18,
 Information and communication 2005 for management of risks and, more recently, DFIM Circular
No. 03 dated 24 January 2016.
The information and communication component facilitates
the functioning of the other components by providing A well-structured and proactive risk management system is in
information that is necessary for the attainment of Company place within the Company to address risks relating to:
objectives and by establishing a continuous process for  Credit risk;
collecting, sharing and disseminating necessary information
 Market risk;
from both within and outside the Company. Towards this
 Liquidity risk;
end, the Company has established information systems that
deal with internally-generated data as well as external events,  Operational risk; and
activities and conditions relevant to business decision-  Money laundering and terrorist financing risk.
making to produce operational, functional and compliance- The new Integrated Risk Management Guidelines for Financial
related information. In addition to Flexcube, our other Institutions specify a number of additional risks that financial
customised software have greatly enriched the capabilities institutions are now required to manage and report in a more
of the Company’s information systems. In a more general structured manner. The key among these are:
sense, the IDLC culture encourages sharing of information
and opinions across the management hierarchy and among Strategic risk
different businesses, functions and departments.
Strategic risk has been defined as the risk of potential losses
 Monitoring that might arise from adverse business decisions, sub-standard
execution and failure to respond adequately to changes in the
Monitoring ensures that controls are operating as intended business environment. The guidelines set out the respective
and that they are appropriately modified in response to roles of the Board of Directors, senior management and business
changing conditions. At IDLC, this is achieved through units in managing strategic risks, identify the minimum steps to
a variety of measures including ongoing monitoring be followed in the strategic risk management process and also
which occurs in the course of, and as a part of, day-to- suggest measures for strategic risk control.
day operations as well as separate management reviews,
evaluations and periodic internal audits of various IDLC has been managing strategic risks ever since its inception.
departments and business functions. This is evident from the Company’s constantly evolving business
model over the years. The Company has a clear strategic vision
Although the Board of IDLC is primarily responsible for as to what it wants to become and a mission statement that
ensuring that the Company has an adequate and effective enumerates the steps required to achieve its vision. Strategic
control system in place, ultimately, all employees are issues are discussed at a variety of forums including meetings
accountable for managing internal controls. Business and of the Management Committee and of the IDLC Board. Over the
operational units, particularly department heads, are in- past few years, a separate Strategic Planning department has
charge of ensuring that internal controls are established, been instituted to assist senior management in this regard. The
well-documented and maintained across his/ her culmination of all these efforts are reflected in annual strategy
department. The Internal Control and Compliance (ICC) and budget sessions, where the Company sets outs its plans for
department acts as a second line of defence through the next year. With the introduction of the new guidelines, more
conducting tests on the efficiency and effectiveness of the changes will be made to the strategic risk management process
control systems through audit. as and when required.
93
Compliance risk eliminate the risk of failure to achieve the policies, goals and
objectives of the Group. The Board therefore believes that it
Compliance risk is defined as the current or prospective risk of can provide only reasonable, rather than absolute, assurance
legal actions and/or material financial losses that an organisation regarding effectiveness against material mis-statements of
may suffer as a result of its failure to comply with laws, its own management and financial information or against financial
regulations, code of conduct and standards of the best practice losses and fraud.
as well as from the possibility of incorrect interpretation of laws
or regulations. The guidelines set out the respective roles of Subject to the caveats of reasonable assurance mentioned
the Board, senior management and compliance function units above, the Board confirms that it has reviewed and assessed the
in managing compliance risks and also require formulation of a Group’s system of internal controls with regards to its adequacy
written compliance risk management policy. and effectiveness in providing reasonable assurance regarding
the achievement of objectives relating to the effectiveness and
Historically, IDLC has always fostered a compliance-oriented efficiency of operations, reliability of both external and internal
culture. This has been reinforced in a variety of ways, ranging financial and non-financial reporting and compliance with the
from formal requirements to sign declarations of compliance applicable laws and regulations.
with the IDLC Code of Conduct (requiring compliance with
the laws and regulations) to ongoing communication from the The Board is of the view that the system of internal controls in
senior management stressing the need to do business under place is sound and adequate to provide reasonable assurance
the highest levels of compliance. In general, compliance risk regarding the objectives mentioned in the preceding paragraphs.
management is embedded in the day-to-day management
of business processes and practices of the Company. With the In order to address and mitigate the risks prudently, at IDLC, the
introduction of the Integrated Risk Management Guidelines, following committees are operational, about which details are
the overall management of compliance risk is reviewed given on page 68-71 of this Annual Report:
and appropriately amended to ensure conformity with the  Credit Evaluation Committee (CEC): To evaluates all
guidelines. projects/ proposals of financing activities of the Company
Reputation risk from the risk point of view.
 Risk Management Forum (RMF): To introduce proactive
Reputation risk may be defined as the risk of loss arising from risk management procedures in line with international best
damages to an organization's reputation. The guidelines set out practices framework.
the respective roles of the Board and the senior management in
managing reputation risk and also require financial institutions to  Risk Analysis Unit (RAU): To act as the secretariat of the Risk
implement a sound and comprehensive risk management process Management Forum with responsibility for identifying and
to identify, monitor, control and report all reputational risks. analysing the various types of risks appropriately and in a
timely manner.
IDLC has already established a set of non‐financial reputational  Central Compliance Unit (CCU): Responsible for supervising
risk indicators and put in place a structured process for the anti-money laundering (AML) and anti-terrorism
monitoring these and any other matters that might give rise to activities (ATA) at IDLC.
potential reputational risks. Till date, no material reputational risk
issue involving the Company has been identified. ETHICS AND COMPLIANCE
Environmental and social risk The IDLC Group remains committed to upholding the highest
IDLC is focused on sustainability, shifting from the traditional standards of ethics and compliance by its employees. This
financing approach. In this regard, the Company is strengthening commitment is reflected in its Code of Conduct that covers,
its credit appraisal process to be much more stringent from an among other issues, the following areas:
environment and social (E&S) perspective, evaluating all the  Their relationship with and responsibilities to IDLC;
environmental and social factors such as project impacts on
the environment and the community in the long run, prior to  Their relationship with and responsibilities to customers;
sanctioning a loan.  Compliance with laws and regulations;
A detailed discussion of these risks and the strategies adopted  Acting in a professional and ethical manner;
to manage and mitigate these are given in the Statement of Risk  Protection of business assets;
Management on page no 77 of the report. The adequacy of the  Disclosure of conflicts of interest; and
system of internal controls is reviewed by the Board of Directors
 Prohibition of any conduct involving dishonesty, fraud,
as well.
deceit or misrepresentation including insider trading.
Acknowledgment of Directors’ responsibility in respect of The complete Code of Conduct can be read on page 16 of this
internal control of IDLC Annual Report.
IDLC’s Board of Directors acknowledges its overall responsibility Dissemination of the statement of ethics and Code of Conduct
for maintaining the adequacy and effectiveness of the Group’s
system of internal controls. The Board is of the view that the All IDLC employees are required to sign an annual declaration
internal control framework is designed to manage the Group’s confirming that they have read and understood the Code of
risks within an acceptable risk profile, rather than completely Conduct.
94
Board’s commitment to establishing highest level of ethics and (b) The Board’s Code of Conduct shall not have any effect in
compliance within IDLC relation to the activities of a Board member undertaken
other than in an official capacity, except and in so far as
The IDLC Board acknowledges its responsibility for ensuring that otherwise indicated; and
the Company’s business activities are conducted in accordance
with the highest standards of ethics and compliance. (c) Where a Board member acts as a representative of the
Board at the meeting of another public body or Committee,
The Board views adherence to ethical standards and compliance he/ she must, when acting in that capacity, comply with the
as an integral part of the broader corporate governance Board’s Code of Conduct, except and in so far as it conflicts
framework and seeks to adopt a holistic approach in ensuring with any other legal obligations to which he/ she may be
its implementation. As part of this, it has instituted a number of subject to.
approaches to underline its commitment to high standards of
ethical behavior: General obligation
 Setting down standards of expected behavior through the The Code of Conduct for Board members of the Company
formulation and communication of a Code of Conduct; includes:
 Installing a system of internal controls, which is reviewed, A. Prudent conduct and behaviour
evaluated and updated on an ongoing basis;
 Positioning Company policies and procedures on ethical Each Board member should seek to use due care in the
foundations to ensure that ethical considerations are performance of his/ her duties, be loyal to the Company, act in
integrated in the day-to-day decision-making, activities and good faith and in a manner that such a Board member reasonably
processes; believes to be not opposed to the best interests of the Company.
 Establishing a clearly-defined organisational structure that A Board member shall seek to:
assigns responsibility and authority for the conduct of
i. Make reasonable efforts to attend Board and Committee
organisational functions while at the same time ensuring
meetings;
accountability for individual actions;
 Establishing a variety of monitoring mechanisms including ii. Dedicate time and attention to the Company;
the creation and empowerment of an operationally
iii. Seek to comply with all applicable laws, regulations,
independent internal audit team with reporting
confidentiality obligations and corporate policies of the
responsibilities to the audit committee; and
Company;
 Ensuring instant action with zero tolerance for identified
instances of unethical and/ or non-compliant behaviour. iv. Act in the best interest of and fulfill their fiduciary obligations
to, the Company’s shareholders; and
Code of Conduct for Board members
v. Use due care and diligence in performing their duties of
The Board of Directors of IDLC is committed to the highest
office and in exercising their powers attached to that office
standards of conduct in their relationship with IDLC employees,
customers, members, shareholders, regulators and the public. B. Business opportunities
This refers to conducting our business in accordance with
all applicable laws and regulations and also represents our In carrying out their duties and responsibilities, the Board
commitment to the spirit of the law. Our actions should reflect members shall avoid:
IDLC’s values, demonstrate ethical leadership and promote a work
(i) Appropriating corporate business opportunities for
environment that upholds IDLC’s reputation for integrity, ethical
themselves that are discovered through the use of
conduct and trust. This Code is intended to provide a statement of
Company property or information or their position as Board
the fundamental principles applicable to our Directors.
member;
Our Directors are encouraged to bring forth questions about (ii) Using Company property or information or their position as
particular circumstances that may involve one or more of the Board member, for personal gain; and
provisions of this Code to the Chairman of the Board.
(iii) Competing with the Company.
In compliance with the revised corporate governance guidelines C. Conflict of interest
issued by the BSEC, the Board shall lay down the Code of Conduct
of all Board members and annual compliance of the Code has to Each Board member shall endeavour to avoid having his or her
be recorded. private interests interfere with:
Scope of the Code of Conduct (i) The interests of the Company; and
(a) A member must observe the Board’s Code of Conduct (ii) His or her ability to perform his or her duties and
whenever he/ she: responsibilities objectively and effectively.
 Conducts the business of the Board; and/or The Board members shall avoid receiving or permitting members
of their immediate family to receive improper personal benefits
 Acts as a representative of the Board. from the Company, including loans from or guarantees of
obligations by the Company.
95
A Board member shall make a full disclosure to the entire Board To abide by the code of integrity and good governance in
of any transaction or relationship that such a member reasonably line with the National Integrity Strategy of Bangladesh, IDLC
expects could give rise to an actual conflict of interest with the constituted an ‘Integrity Committee’, composition and functions
Company and seek the Board’s authorisation to pursue such of which in detail are given on page 70 of this Annual Report.
transactions or relationships.
Existence of effective anti-fraud programmes and controls
D. Company property through whistle-blower mechanism
In carrying out their duties and responsibilities, the Board In recent times, the Company has come to identify the risk
members shall endeavour to ensure that the management of fraud as one of the emerging issues in the overall risk
is using the Company’s assets, proprietary information and management framework. Planned anti-fraud initiatives include
resources to be used by the Company and its employees only for the introduction of a whistle-blower mechanism. A whistle-
legitimate business purposes. blower policy has already been formulated and placed before
the senior management for review and approval. Additionally,
E. Confidential information emphasis is placed on strengthening existing processes or
The Board members shall maintain confidentiality of information activity levels and anti-fraud controls are embedded within the
entrusted to them in carrying out their duties and responsibilities, overall system of internal controls.
except where disclosure is approved by the Company or legally Redress of investor’s complaints
mandated or if such information is in the public domain.
IDLC has a formal complaint management process that is open
The Company’s confidential and proprietary information shall to all stakeholders including both investors and customers. A
not be inappropriately disclosed or used for the personal gain dedicated complaints cell is headed by a senior member of the
or advantage of any Board member other than the Company. management for dealing with complaints. Complaints may also
These obligations apply not only during a Board member’s term be dropped at complaint boxes kept at all IDLC branches or can
but thereafter as well. be submitted online on the IDLC website: www.idlc.com.
F. Fair dealing
HUMAN CAPITAL
In carrying out their duties and responsibilities, the Board
IDLC considers its human resources as its most important asset.
members shall endeavour to deal fairly and should promote
We mobilize people and teams through engaging them with
fair dealing by the Company, its employees and agents with
leading and cutting-edge financial industry practices and also
customers, suppliers and employees.
as an attractive employer. IDLC offers a broad spectrum of
G. Compliance with laws and regulations opportunities for both professional and personal development
as well as a work environment that is characterized by respect,
In carrying out their duties and responsibilities, the Board trust, cooperation and collaboration. We do so because the
members shall comply and endeavour to ensure that the knowledge, skills and enthusiasm of our employees are a major
management is causing the Company to comply with all force that enables us to achieve consistent growth. IDLC believes
applicable laws, rules and regulations. its human resource is the most important driver of building and
running the Company. Each and every employee is considered,
In addition, if any Board member becomes aware of any
developed and motivated to contribute optimally towards the
information that he/ she believes constitutes evidence of material
achievement of corporate goals.
violation of any securities or other laws, rules and regulations
applicable to the Company or the operation of its business, by the Human resources policy
Company or any employee or another Board member, then such
a Board member should bring such information to the attention Disclosure of general description of the policies and practices
of the CEO & Managing Director of the Company. codified and adopted by the Company with respect to human
resource development and management, including succession
H. Insider trading planning, merit-based recruitment process, performance
appraisal system, criteria for promotion and reward and
The Board members shall not engage in insider trading with
motivation, training and development, grievance management
respect to the purchase and sale of the Company’s securities.
and counselling are well-defined in the report “Our Human
The Board members shall not buy or sell securities while in Capital” on page 111-115 of this Annual Report.
possession of material non-public information about the issuer
Organizational chart
of that security, whether the issuer is IDLC or any another
company. IDLC’s organizational chart outlines the internal structure of
the Company. It emphasises on the roles, responsibilities and
The Board members shall also not pass such information to
relationships between individuals within the Company. It is
someone who may buy or sell securities. The Code of Conduct
used to depict the structure of IDLC as a whole as well as the
for Board members sets forth guidelines for conduct and they
Company segregated by divisions and departments.
affirm compliance with the Code on an annual basis.
The organizational chart is shown on page 18 of this Annual
Accordingly, IDLC’s Board designed the Code of Conduct for all
Report.
the members of the Board and its annual compliance has been
recorded for 2016.
96
Structure performance and contribution and other benefits-related
issues with regards to the Company’s operating results and
The Company’s management structure comprises the CEO & comparable market statistics.
Managing Director and the Management Team (ManCom).
The ManCom is responsible for developing organisational and The Composition, responsibilities and process of holding of the
business strategies, embracing innovation and ensuring that meeting of the committee is stated on page 69 of this Annual
the Company conforms to the best governance and operating Report.
practices. The ManCom is also responsible for organisational
IDLC Ladies’ Forum (IDLCLF)
effectiveness and the development of IDLC’s values and culture.
The ManCom is responsible for managing IDLC’s performance IDLC has launched its first Ladies Forum through a formal
and key business issues in line with the Company’s long-term ceremony with the participation of all the female employees
strategy and for talent and performance management. The from different levels of positions, working areas and distribution
ManCom is chaired by the CEO & Managing Director and the points to address their views, problems and opinions to facilitate
team meets face-to-face on a regular basis. a better working environment for them.
Management Committee (ManCom) This Forum provides all women employees the opportunity for
networking and provide a common platform to share and raise
The Management Committee is a group elected among the various issues and problems like discrimination, harassment,
management staff to take responsibility of the governance negative attitude towards women and any other issue that
and strategic direction of IDLC. The role of the Management may affect women employees within the Company. This will
Committee is to oversee IDLC in accordance with its constitution enable IDLC’s management to better understand and address
under the Financial Institutions Act, 1993. these issues and develop strategies accordingly. More about the
committee is described in page 71 of this Annual Report.
The Committee is responsible for all aspects of the ongoing
operations of IDLC. It delegates day-to-day operations to the COMMUNICATION AND RELATIONSHIP WITH
Executive Officer. A significant feature of good governance is a SHAREHOLDERS
clear segregation of the responsibilities and accountability of the
committee from those of the Executive Officer. It is the Company’s policy that all external communication by
the Company will:
ManCom is always aware of IDLC’s operations, keeps an eye on
the big picture, monitors the strategic plan and if and whether  Be factual and subject to internal vetting and authorization
the goals are being met. It needs to be satisfied that current before issue;
events are in accordance with IDLC policies and objectives
 Not omit material information; and
within the overall budget.
 Be expressed in a timely, clear and objective manner.
Performance review
IDLC strongly believes that all stakeholders should have access to
The CEO is responsible for setting financial targets as well as
complete information on its activities, performance and product
operational and management goals for the members of the
initiatives.
ManCom. Both short-term and long-term goals form part of
the performance management of all senior executives. Long- Communication through quarterly reports
term goals are directly linked with the Company’s vision. Short-
The Company reports to its shareholders four times a year
term goals are generally directly linked to the objectives of the
through quarterly and half-yearly reports and a detailed Annual
Company. The CEO and the Evaluation Committee conduct a
Report.
detailed review of the performance of senior executives against
these goals on an annual basis at the end of each year. Communication through AGM
Remuneration of senior executives All shareholders have the right to attend the Annual General
Meeting where they can meet and communicate with the
Remuneration of all senior executives are based on performance
Directors and express their views regarding the Company’s
measured against financial and individual targets.
business, its future prospects and other matters of interest. The
HR and Compensation Committee shareholders are always encouraged to attend the meetings or,
if they are unable to attend, to appoint proxies.
IDLC’s HR and Compensation Committee was established on 24
May 2007 to provide a forum for discussion on the Company’s Communication through website
various HR-related issues. The principal role and function of
The Company’s website www.idlc.com displays, inter-alia, the
the HR and Compensation Committee is to assist the human
Annual Reports, half yearly reports, quarterly reports, monthly
resource department in developing and administering a fair and
business reviews, product offerings, recent announcements,
transparent procedure for setting policies on the Group’s overall
presentations and event updates.
human resource strategy.
All disclosures required by the Bangladesh Securities and
The responsibility of the committee is to ensure wide, equal
Exchange Commission, Listing Regulations of the Dhaka
opportunity and transparency in terms of suitable recruitment,
Stock Exchange Limited and the Chittagong Stock Exchange
compensation on the basis of merit, qualification and
Limited and the Bangladesh Bank in the form of Price Sensitive
competence, adequate training and development facilities,
Information (PSI) are made adequately and promptly. In addition
performance evaluation and promotion based on individual
97
to ensuring timely compliance, this also enables dissemination achieves its strategic objectives. It meets regularly to determine
of information to all stakeholders and the public through print the Company’s strategic direction, to review the Company’s
and online media. operating and financial performance, to set the Company’s
risk appetite and to provide oversight that the Company is
ENVIRONMENTAL AND SOCIAL OBLIGATION adequately resourced and effectively controlled. The specific
At IDLC, we believe in the concept of a sustainable business, duties of the Board are clearly set out in its Terms of Reference
one that integrates good governance, environmental issues and (ToR) that address a wide range of corporate governance issues
social concerns with its business strategies to maximize value and list those items that are specifically reserved for decision by
for stakeholders. IDLC’s sustainability model is based on the 3P the Board. Matters requiring Board approval include:
approach – People, Planet and Profit:
 Group strategy, business plans and performance
 People, our stakeholders with whom we engage for our monitoring;
business and the community where we live;  Financial reporting and controls, capital structure and
 Planet, our surrounding environment and the planet; dividend policy;
 Profit, our profit-generating capacity for long-term  Group risk appetite and framework and risk management
sustenance; policies;
 Corporate governance; and
CSR
 Others (shareholder documentation, Board and
committee succession planning, constitution of Board
Profit People Planet committees,Board effectiveness review, committee reports
and key business policies).
Accordingly, IDLC has aligned its CSR (corporate social In pursuit of business sustainability and within the ambit of
responsibility) initiatives to deliver on this commitment and our integrated reporting framework, our governance structure,
aid community empowerment and responsible environmental stewarded by our well-composed Board (as detailed above with
management in a sustainable manner. regards to their core responsibilities), helps in value creation over
the medium and long term. Some of the drivers that enable us to
At IDLC, we are also focusing on the Earth and its sustainability,
generate consistent value include the following:
shifting from the traditional financing approach. In this regard,
we are making our credit appraisal process to be much more  Our robust organizational leadership structure is composed
stringent from an Environmental and Social (E&S) perspective of diversity that enables us to foster and converge a
– evaluating all the environmental and social factors such as range of opinions and perspectives that are aligned with
project impacts on the environment and the community in the long-term interests of the Company. Our highest
the long run, prior to approving a loan. Being the only listed levels of compliance with all the statutory and regulatory
member of UNEP FI, we have been following Environmental requirements and un-compromised stance with regards to
Risk Management guideline 2011 by Bangladesh Bank. Taking ethics in our day-to-day business have led to the creation
this approach one step further, IDLC is in the process of of a robust governance structure that ultimately delivers
adopting an extensive Environmental and Social Management sustainable stakeholder value;
System (ESMS) across the organization with assistance from
FMO, a Dutch development bank, and FI Konsult, IDLC’s  We embrace a wide range of both generic as well as specific
appointed consultant for this project. The overall goal of this processes to take strategic decisions and also establish and
project is to help IDLC identify customers with potentially high monitor the culture of the organization on an ongoing basis,
environmental and social risks, enable them to evaluate the E&S including its attitude to risk and mechanisms for addressing
performance of such customers through its due diligence and integrity and ethical issues. As a core demonstration of our
credit appraisal processes and make those customers, especially seriousness with regards to governance and compliance
who are not in compliance with local E&S regulations, behave with the laws of the land, we ensure that all our members
more responsibly through the use of environmental or social thoroughly understand our comprehensive Code of
covenants in the facility agreements. This project will not only Conduct and sign it at the beginning of every year, ratifying
satisfy the Central Bank’s requirements but also enable IDLC their alignment with our ethics and philosophies;
to comply with internationally-acceptable risk management
 During the course of business, we take a wide range of
standards. Furthermore, execution of the green banking policy,
actions including analysing key financial metrics, aligning
which is in line with IFC Performance Standard, ADB Safeguard
resources with our growth aspirations and forecasting key
Policy and Bangladesh Bank guidelines is considered as yet
risks that might impact our business over the long-term
another milestone towards sustainability.
and their potential mitigation strategies. These help us
In pursuance of these policy and practices, a detailed description influence course corrections, if any, in the path to achieving
of specific activates undertaken by IDLC is given on page 105- our goals and objectives as well as monitor the strategic
110 of this Annual Report. direction of the organization within the ambit of our overall
risk management framework;
IDLC’s overall Governance
 Our robust organizational culture, ethics and values,
At IDLC, the Board of Directors are responsible to shareholders for nurtured over the years with care and sensitivity, is visible in
ensuring that the Company is appropriately managed and that it the strength of our relationships with key stakeholders. We
98
are not only the financial destination of choice among our  One of the agenda of our Board is also to gauge the levels
customers who have reposed their faith and trust in us but of innovation fostered within the enterprise even as the
also an employer of choice among our members due to an diversity of our Board enables us to understand the key
inspiring, engaging, motivating and enriching workplace trends shaping the market / industry and convert these into
that we provide to all our employees. Our high standards relevant business opportunities. Our women entrepreneur
of governance and the attractiveness of our long-term empowerment product, IDLC Purnota, is an excellent case
structural growth prospects have made us an investment in point demonstrating our ability to innovate a solution
of choice among a broad range of shareholders and other around a pressing need – that of ensuring viability among
reputed financial participants in the market; women in business;
 In our focus on reinforcing our governance culture and  Our best-in-class remuneration and incentives structures
framework, we are implementing ongoing governance are continually aligned with the market, ensuring that
practices that go beyond the stipulated legal requirements. our pay and benefit structures are among the best in the
For instance, our focus on green banking not only fosters industry. These not only enable us to attract and retain core
the development of green assets and environment friendly talent but also keep our workforce motivated and engaged
practices but, in fact, aims to create an overall compliant enough for the organisation to reach its short, medium and
corporate culture by helping clients understand and long range goals and objectives, thus fostering a win-win
mitigate key environmental and social risks in their long- relationship.
term plans and manufacturing facilities;
99
Report on security custodial service of

Under rule 10(2) of the Securities and Exchange Commission (Security Custodial
Service) Regulation 2003
IDLC Finance Limited is a registered Security Custodian vide IDLC Finance Limited as a Security Custodian confirms that
registration license no SC-06/2007 dated May 24, 2007 issued proper internal audit and evaluation process are in place to
by Bangladesh Securities and Exchange Commission. The major ensure the following
responsibilities of the Security Custodian are as follows:
• Secure and appropriate custodial service
• Custody of client’s securities • No unwarranted change in the assets, records, agreements
• Collection, book keeping and communication of gain, etc. occur
income, profit, stake on behalf of clients • Each client receives his/her due dividends, bonus share,
• Collection, communication, dissemination and book right share, interest, principal etc. in a timely manner
keeping of any declaration, published or publicly available • Prevent loss, theft, damage due to natural calamity
information, statement etc. of securities issuer
As on December 31, 2015, IDLC Finance Limited is the custodian
• Administer client’s security and account of 241,410,161ordinary shares of RAK Ceramic (Bangladesh)
To facilitate these service IDLC Finance Limited has also obtained Limited held by RAK Ceramics, PSC, UAE and 7 individual
Custody Depository participant License vide registration license sponsor shareholders. IDLC Finance Limited has entered into an
no. BSEC/Registration/ CDBL-DP-414, dated December 17, 2014 agreement during 2014 with RAK Ceramics PSC, UAE regarding
issued by Bangladesh Securities and Exchange Commission. providing security custodian service.
100
Stakeholder and materiality
STAKEHOLDER IDENTIFICATION
Identification of stakeholders is the key to understanding the expectations from the Company and as such helps pave the pathway
towards delivering value and fulfilling those expectations. While shareholders, customers, suppliers and employees are the prime
stakeholders; the regulators, local community, and the environmentally interested groups complete stakeholder circle of IDLC.
ENGAGEMENT WITH STAKEHOLDERS
The first step of Stakeholder Engagement process for IDLC is to establish the three pronged sustainability dimension- economic, social
and environmental. The key stakeholders are hence aligned with these dimensions and sustainable business objectives are identified
by understanding correlated stakeholder expectations. By gauging these objectives, IDLC has formulated strategies through aligning
the business model with the value creation process that targets stakeholders’ expectations. This is summarized in the table below:
Sustainability Key Stakeholders

Sustainable Business Objectives How IDLC Addresses this
Dimension Targeted
Economic Shareholders  Maximising shareholder wealth  Being strategically focused, planning
by declaring sound returns well ahead to counter challenges and
annually identifying opportunities.
 Continuing to uphold sound
governance practices and effective risk
management infrastructure.
 Reinforcement of the internal controls,
compliances.
Customers  Provide quality product/service  Spreading the geographical
that meets absolute needs of boundaries through opening more
customers branches across the nation.
 Careful management of  Molding existing service suites to cater
operations so as to protect to diversified customer requirements.
customer interest especially of
 Continuously innovating in product
depositors
suite and operational process to meet
customer requirements in the most
efficient manner.
Suppliers/Service  Adhere to proper procurement  Rigorously following internal
Providers regulations while maintaining procurement policy and upgrading
a good business relationships the policy regularly to ensure strong
with the service providers control and fair treatment of suppliers.
Regulators  Ensure compliance with all  Putting in place processes, practices
regulatory guidelines and and controls to ensure compliance
directives with applicable rules and regulations
imposed by local and international
laws and regulations.
 Maintaining sound relation with
regulators.
 Always thriving to achieve global best
practices.
101
Sustainability Key Stakeholders

Sustainable Business Objectives How IDLC Addresses this
Dimension Targeted
Social Employees  Continuously encouraging  Engaging employees in activities and
employees and working sports other than business as usual,
towards creating a healthy, to achieve a balanced productive
ethical and supportive work environment which is beneficial to
environment both employees and IDLC
 Nurturing human capital to  Investing in a wide range of training
ensure sustained collaboration programs for every member of the
with the Company human capital to ensure personal and
professional growth
Local Communities  Adding value to the society  Implementing programs and initiatives
targeted at marginalized communities
 Conducting business without
and underprivileged to address the
causing disruptions in the
requirement of society in education/
society
skills development, healthcare and
overall poverty alleviation
 Enhancing financial access to
marginalized population
 Most importantly, adding value to
the society by being a good and
transparent corporate citizen.
Environmental Environmentally  Conducting business without  Implementing Green Banking practices
interested groups/ harming the environment and ensuring compliance through
Non-Government Green Reporting to Bangladesh Bank
Organisations
 Holding a rigid control on energy
consumption to reduce wastage
In consideration of the above, IDLC has engaged with regulators, management and employees to identify their preferences, concerns
and expectations from IDLC.
Stakeholders
Engagement Process Key Issues raised by Stakeholders
Engaged
Regulators  One-on-one Meetings  Corporate Governance, Ethics and Compliance
 All local regulations  Anti-corruption measures implemented by the organisation
 Circular issued by  Responsibility of the organisation towards the environment and the
Bangladesh Bank on Green community
Banking & CSR
Management Discussions  Corporate Governance, Ethics and Compliance
 Anti-corruption measures implemented by the organisation
 Financial Performance
 Creating an enabling environment for all IDLC staff
 Non-discrimination, Diversity and Equal Opportunities
 Social obligations through capacity development of the
underprivileged and women empowerment
 Environmental obligations through in-house management, CSR and
Green Banking initiatives
 Superior customer experience through continuous improvement
Employees Discussions  Remuneration and Benefits
 Career Growth and Development Opportunities
 Fair Treatment
 Safe and Healthy Work Environment
 Work-life Balance
 Employee Grievance Management
102
MATERIALITY AND MATERIAL ASPECTS IDENTIFIED THROUGH STAKEHOLDER ENGAGEMENT
It is through the Stakeholder Engagement Process that the Materiality for reporting is identified. This essentially covers matters that
substantively affect the organisation’s ability to create value over the short, medium and long-term based on a threshold prescribed
by the GRI guidelines. As per the GRI guidelines, the threshold for identifying these reportable subjects is termed as ‘materiality’ and
the subjects identified is termed as the ‘Aspects’. Based on the issues raised by stakeholder during the engagement process, the
following Material Aspects have been identified and included in this report:
 Economic
 Biodiversity
 Compliance
 Employment, Occupational Health and Safety
 Training and Education
 Diversity and Equal Opportunity
 Equal Remuneration for Women and Men
 Non-discrimination
 Local Communities
 Anti-corruption
 Marketing Communications
 Customer Privacy
BOUNDARY DEFINED FOR EACH MATERIAL ASPECT

The report details how IDLC addresses the material issues stated above and how these significantly influence performance both
within and outside the organisation.
Category Aspects Material within the Organisation Material outside the Organisation
Economic  Economic Performance Yes N/A
 Procurement Practices
Environmental  Energy Yes Yes
 Biodiversity Any negative influence on protected This aspect is material for the
 Compliance and/or high biodiversity areas caused environment, and for communities
by IDLC’s operations may lead to living close to protected and/or high
fines / sanctions / loss of license to biodiversity areas.
operate / negative publicity.
Social
I. Labour Practices and Decent Work
Employment and Occupational Health and Safety Yes N/A
Training and Education Yes NA
Diversity and Equal Opportunity Yes Yes

This aspect is material for communities
where IDLC creates job opportunities
through its operations / branch
networks.
Equal Remuneration for Women and Men Yes N/A
II. Human Rights

Child Labour Yes N/A
Security Practices Yes N/A
103
Category Aspects Material within the Organisation Material outside the Organisation
Non-discrimination Yes Yes
This aspect is material for communities
where IDLC creates job opportunities
through its operations /branch
networks.
III. Society/ Local Communities
Local Communities NA Yes

This aspect is material for local
communities where IDLC has
operations or investments in projects.
Anti-corruption Yes Yes
This aspect is material for IDLC’s
customers and other stakeholders.
IV. Product Responsibility
Customer Health and Safety Yes Yes
This aspect is material for IDLC’s

customers.
Marketing Communications Yes Yes
This aspect is material for IDLC’s existing
and potential customer groups.
Customer Privacy Yes Yes

Maintaining privacy of sensitive This aspect is material for IDLC’s
customer information is one of the customers.
major priorities of IDLC staff and a
significant part of its employee Code
of Conduct.
IDLC is committed to continually review all corporate governance policies and guidelines to ensure transparency in its practices and
delivery of high standards and quality information to its stakeholders.
Therefore, through continuous improvements and aiming to attain the sustainability business objectives by maintaining communication
with all the key stakeholders, IDLC envisions to uphold and realize its sustainable business practices best clarified and anchored by its
sustainability positioning statement.
IDLC is committed to sustainable development by creating long-term value – value for our stakeholders, value for the environment
and value for the community.
104
Corporate social responsibility
IDLC focuses on responsible business practices and our strategy TRANSFORMING LIVES THROUGH SKILLS DEVELOPMENT
over the long run does not only focus on making profit but also
contributing to the economic development and betterment of Education, training, employment and income enable the
the community. disadvantaged to graduate out of poverty and discover real and
effective solutions for the future.
IDLC’s business strategies are based on the fundamental concept
of sustainability, integrating strong governance, environmental Skills Development and Sustainable Livelihood for
issues and social concerns to create maximum value for Underprivileged Women
stakeholders. Simply put, IDLC’s sustainability model is based on
According to Paul Polman, CEO of Unilever, 2015 was a
the 3P approach - People, Planet and Profit:
remarkable year for humanity and the planet-“The meet of
 People, our stakeholders with whom we engage for our world leaders to adopt the UN Sustainable Development Goals
business and the community where we live and the COP21 Paris Agreement gave us the opportunity to
pursue a more sustainable and equitable future”, he mentioned
 Planet, our surrounding environment
“we need to continue to do more and maintain our stance as
 Profit, our profit-generating capacity for long-term inequality of every kind is rife across the world”. Against this
sustenance. backdrop, IDLC continued with its flagship project comprising
Accordingly, IDLC has aligned its CSR initiatives to deliver on this skills development of marginal women and their subsequent
commitment, enhance community empowerment and steward placement in the RMG (ready-made garments) sector as
responsible environmental management in a sustainable machine operators.
manner.
IDLC’s Sustainability Position Statement:
IDLC is committed to sustainable development by creating long-

term value – value for stakeholders, value for the environment
and value for the community at large.
Guiding principles
IDLC’s CSR activities are regulated by the Sustainable Finance Certificate award program
Department of the Bangladesh Bank. We are also members of
the United Nations Global Compact (UNGC), the United Nations Project snapshot
Environment Programme Finance Initiative (UNEP FI) and the CSR Duration Jun 2013 – Dec 2016
Center (local network of UNGC in Bangladesh). IDLC is the first Beneficiaries Marginalized women from North Bangladesh
and only signatory to the UNEP FI from Bangladesh till date. We Commitment  Contribute to women socio-economic
have also embraced their guiding principles in upholding human empowerment for an equitable society
rights, labour standards, responsible environmental management  Establish a replicable model to address the
and anti-corruption policies and practices. Recently, IDLC has also demand-supply gap of skilled manpower in
endorsed the UNEP FI Declaration “MOBILISING 100 FINANCIAL Bangladesh
INSTITUTIONS FOR ENERGY EFFICIENCY” at the COP 21-CMP11 Partners  Far East Knitting and Dyeing Industries
Paris 2015, held in Paris UN Climate Change Conference, thereby Limited from the RMG sector as industry
further reinstating its commitment to energy-efficient funding partner
practices and exploring new frontiers.
 Gazipur Technical School and College (GTSC)
under the Directorate of Technical Education,
Focus area
Government of Bangladesh as training
IDLC has identified its CSR focus areas in consonance with its partner
organizational vision, mission, values and expertise. With its CSR  TVET (Technical and Vocational Education
initiatives, IDLC is contributing to socio-economic transformation and Training) Reform Project of ILO as
of the underprivileged through better education, capacity technical consultant
development, income-generating opportunities and other
 Care Bangladesh as community partner in
forms of assistance, leading to empowerment. It is also engaged
North Bengal
in providing health and hygiene facilities for the rural and urban
Project activities  Through GTSC, facilitate two months of
poor, financing environment-friendly projects, and adopting
institutional training and one month of on-
green banking initiatives in terms of both in-house management
the-job training at Far East factory, subject
and external activities such as tree plantation, engaging people
to which they are assessed, certified and
through environmental awareness campaigns and contributing
recruited as machine operators
to broad philanthropic initiatives.
105
Project snapshot Towards economic and social security and a decent

Duration Jun 2013 – Dec 2016 standard of living
Achievements  A total of 176 students have been trained
among whom 61 have been employed at Far In Bangladesh, individuals with intellectual disability are still
East as machine operators viewed as dependents rather than being recognized for their
astute capabilities to train and be absorbed in appropriate
 A female who earlier had no income now
income-generating activities.
earns between Taka 7,000 - Taka 10,000 per
month
Recognizing this untapped population, IDLC partnered with
 Regular salaries and disposable income have a number of NGOs with an objective to provide education,
allowed these workers to save for the future skills training and, where possible, healthcare facilities to
and supplement to the family’s income underprivileged children and adolescents. Therefore, we are
eventually empowering them to either be absorbed in the
working population or become self-employed.
A brief account of the various initiatives is mentioned below:
• SEID Trust has been IDLC’s partner since 2011 and working
with over 400 children with physical and mental disabilities
including autism. These children, afflicted by autism, cerebral
palsy, Down’s syndrome and intellectual and multiple
disabilities, are often deprived of their fundamental rights.
This project will not only facilitate their social rehabilitation
and acceptability, but will also empower them with income-
generating skills. The 12-month training course has focused
Healthcare session of trainees on two areas: tailoring (cutting and sewing) and embroidery
and block/ batik/ tie-dye.
All project costs, including monthly stipend and trainee
accommodation, initial orientation in North Bengal and • Shishu Bikash Chhaya, an orphanage based in Old Dhaka,
transportation costs, remuneration for technical trainers accommodates and grooms around 25 boys and has been
and operational expenses and material costs of the training IDLC’s partner since 2013.
sessions are jointly sponsored by Far East and IDLC. The training • IDLC has been working with Ahsania Mohila Mission since
machinery was provided by ILO with funding from the European 2012 through sponsoring two female students who are
Union. Besides technical training, the project also focuses on currently enrolled for an Honors degree in Bangla and a
issues such as factory rules and regulations, labour rights, gender Diploma in Nursing. The Mission houses underprivileged
issues, worker-management relations and occupational health girls and supports their education up to completion of
and safety standards. H.S.C. (Higher Secondary Certificate).
Trainees at Gazipur training centre MoU signing ceremony with SEID Trust
A healthcare session is also included for the trainees, in

partnership with the Training & Assistance for Health & Nutrition FACILITATING CURATIVE AND PREVENTIVE HEALTHCARE
Foundation, focusing on female health and hygiene issues such
As part of its commitment towards the larger community, IDLC
as health and nutrition, personal hygiene, timing of marriage and
is implementing a project in collaboration with BGMEA, BSRM
first pregnancy, safe delivery of the baby and the importance of
Foundation and TAHN Foundation, christened ‘Enhancing
breastfeeding for both mothers and newborns, among others.
Infant Care and Breastfeeding Skills of Female Garment Factory
Training & Assistance for Health & Nutrition (TAHN) Foundation
Workers in Chittagong’. The project aims to enhance infant care
has conducted a three-day training session for each batch of
and raise awareness on the importance of breastfeeding among
trainees. TAHN Foundation specializes on awareness and training
female garment factory workers by developing community-
of marginal female groups in Dhaka and Chittagong on female
based peer counsellors and support systems.
health and hygiene issues.
106
IDLC and BSRM Foundation are the partial sponsors of the extended assistance to NIBPS by purchasing a blood culture
project. TAHN Foundation provides training and development to machine and relevant accessories at DMCH.
community peer counsellors and supervisors who are engaged
in creating awareness and educating female RMG workers and DMCH’s burn unit is currently the largest such facility in
influential members of their families. Each counsellor is expected Bangladesh to treat burn victims and provides treatment to
to spread awareness among 50 households. 400-500 patients at a time on any given day. A major reason of
casualty among burn victims is infection and to prevent this, the
Project snapshot patient’s blood needs to be examined on a regular basis. Due to
Activities Enhance infant care and raise awareness the absence of such a facility at DMCH, the blood samples are
on the importance of breastfeeding among sent to other hospitals, a process that is both costly and time
female garment factory workers by developing consuming. With the in-house facility, the burn unit can provide
community-based peer counsellors and support faster and much better service to burn patients and thereby
systems. reduce casualties.
The project will train and develop eight (8) Upon consultation with the Department of Microbiology and
community peer counsellors and one (1) local National Institute of Burn and Plastic Surgery (NIBPS) of DMCH,
supervisor who will be engaged in creating IDLC purchased automated blood culture equipment and
awareness and educating female RMG workers relevant accessories for the DMCH Burn Unit. The equipment was
and influential members of their families installed and operational at the DMCH during the first week of
(husband and mother-in-law). July 2015.
Expected  100% households with pregnant and
On 23 June 2015, a small event was held at IDLC Corporate Head
outcome lactating mothers in the peer counsellors’
Office to handover the work order for procurement of the machine
coverage areas will receive information
to the Head of the Department of Burn and Plastic Surgery and
leaflets
Project Director of National Institute of Burn and Plastic Surgery,
 At least 60% of these mothers will initiate DMCH, Prof. Md. Abul Kalam. Selim R. F. Hussain, the then CEO
breastfeeding within one hour of birth of and Managing Director of IDLC, along with the Management
their babies Committee were present at the handover ceremony.
 At least 60% of these mothers with infants
below six months of age will breastfeed World Mental Health Day 2015
exclusively for six months
IDLC, as part of its CSR initiative, sponsored an event organized
 At least 60% of these mothers will initiate
by Innovation for Wellbeing Foundation (IWF) to commemorate
appropriate complementary feeding after
the World Mental Health Day 2015.
babies complete six months
 All the babies of the enrolled garment
factory mothers will have their growth
monitored
Other initiatives
With an aim to strengthen and enlarge IDLC’s CSR activities in the
areas of healthcare for both communities and individuals in 2015,
several other small initiatives and events were conducted.
Inauguration Ceremony of World Mental Health Day

A mass gathering to celebrate the World Mental Health Day was
organized by IWF on 9 October 2015 at Dhanmondi Robindra
Shorobor, Dhaka. The theme for the Mental Health Day was
‘Dignity in Mental Health’. Widespread positive response was
received from a large section of the community who expressed
IDLC extends assistance to the National Institute of Burn and Plastic
solidarity with the movement for mental health.
Surgery (NIBPS) of Dhaka Medical College Hospital (DMCH)
IDLC assists National Institute of Burn and Plastic Surgery Dignitaries, academicians, celebrities, artists, students and
activists were present on the occasion. Mr. Ziaul Hoque Khan,
(NIBPS) of Dhaka Medical College Hospital (DMCH)
CEO-designate of IDLC, and other officials were present to
reinstate IDLC’s commitment towards raising awareness of what
IDLC, as part of its CSR focus and commitment to contribute
can be done to ensure that people with mental health problems
towards greater environmental and social sustainability, recently
can live with dignity.
107
Among others, the Vice Chancellor of Dhaka University, Professor raising awareness. He appreciated IDLC’s efforts in both raising
Dr. AAMS Arefin Siddique; Chairman, Department of Educational awareness and donating blood for such a noble cause and
and Counselling Psychology, DU, Professor Shaheen Islam; Vice hoped other corporate houses would come forward with more
Chairman of Rangs Group, Mr. Amanullah Chowdhury and such initiatives as well.
Director Finance of Bangla Vision, Md. Ashraf Uddin Ahmed, FCA
were present. Moreover, popular cricketers Habibul Bashar and On behalf of IDLC, Mr. Nasar Hassan Khan, GM and Head of
Taskin Ahmed and singers Haidar Ali and Krishnokoli and her Consumer Division; Mr. Ifham Siddiqui, AGM Consumer Division;
band were part of the occasion. Mr. Enam Ahmed Chowdhury, Head of the Sylhet branch and
other officials from both IDLC Dhaka and Sylhet were present.
Blood Donation Program at IDLC’s Sylhet branch Moreover, to facilitate blood collection and registration, a six-
member team from Bangladesh Thalassemia Samity and Hospital
As part of its commitment to sustainability, IDLC organized a was present during the program.
blood donation program on 21 November 2015 at its Sylhet
branch. A total of 103 blood bags were collected and subsequently
donated to the Bangladesh Thalassemia Hospital.
IDLC regularly organizes blood donation programs across its
branches in partnership with the Bangladesh Thalassemia Samity ENVIRONMENTAL INITIATIVES
and Hospital, whereby both IDLC staff and external stakeholders
IDLC’s environmental initiatives are conducted under the
donate blood for the treatment of patients suffering from
banner of both CSR and Green Banking. While CSR is more
thalassemia. Thalassemia is a blood disorder passed from
focused on external initiatives such as awareness campaigns,
parents to children and causes the body to make fewer healthy
tree plantation and public events, Green Banking is aligned with
red blood cells and less hemoglobin than normal. According to
green financing, environmental and social risk management
the Bangladesh Thalassemia Foundation, there are more than 10
and in-house environmental management, in coordination with
million carriers in the country.
different departments.
Environmental awareness among school children
Environmental challenges in developing countries normally

revolve around such issues as lack of access to potable water
and sanitation, air pollution, deforestation, unhygienic waste
disposal and irresponsible use and exploitation of natural
resources. Instead of relying on government interventions solely,
we as individual citizens also cannot deny our responsibilities in
improving the overall situation.
One of the methods of ensuring this objective is through

responsible personal behavior and practices by engaging
children. The rationale behind targeting school children is that
IDLC Staffs Donating blood at Syllhet branch they are more receptive to new ideas, thoughts and practices.
The Chief Guest at the occasion, Dr. Md. Murshed Ahmed With this conviction, IDLC joined hands with LEADS (a social
Chowdhury, Principal M.A.G. Osmani Medical College and organization of TRK Consultancy Services), and initiated a
Dean, Faculty of Medicine, Shahjalal University of Science campaign titled ‘Our Environment Our Resource’ in January
and Technology stated that thalassemia can be prevented by 2013, by engaging children from different schools in Dhaka. The
initiative ended in 2015.
Campaign snapshot
Target audience Children of Class VI and VII
Topics and content  Environmental pollution: How we are causing air, water, land and noise pollution and possible mitigation
measures
 Responsible resource consumption: What we can do to reduce exploitation and wastage of natural and
national resources like electricity, water and natural gas, among others
 3R principle: How we can adopt the principles of reduce, reuse and recycle in our daily lives to reduce
wastages and make resource utilization more efficient
108
Campaign snapshot
Target audience Children of Class VI and VII
Activities The campaign is conducted through four sessions/ activities:
 Planning workshop with school teachers, explaining campaign objectives and modus operandi. Thereafter,
the teachers act as coordinators within their respective schools.
 Initial session with 50 children from each school is conducted through multimedia presentations, group
activities and experience-sharing. After the session, each student is assigned the task to share this
knowledge with their families, friends, classmates and neighbours. Moreover, stickers and posters with
responsible messages and tri-colour waste bins for source separation of waste materials are provided for
use within the school premises.
 Follow-up session with 100 children from each school. Fifty participants from the initial session(s) and 50
new students (each participant in the initial session brings over one friend). Tasks assigned in the initial
session are accounted for during the follow-up session and students share their experience of practicing
these lessons and communicating it to others.
 Posters with appropriate slogans are exhibited by the students, reflecting innovative solutions/ measures
in addressing these issues. There is also a ‘Highest Communicator’ award for the student who has
communicated better practices to the maximum number of people.
Achievements In 2015, IDLC, jointly with LEADS, conducted the second phase of the Environment Awareness Campaign
with 1,500 students of Viqarunnisa Noon School, Agrani Government Girls High School, BAF Shaheen School,
Shaheed BirUttam Ltd., Anwar College, Ramizuddin Cantonment College, Azampur Government Primary
School, Dhaka Residential Model School and St. Joseph’s Higher Secondary School.
Highlights of the campaign was inaugurated by Mr. M. Jamal Uddin GM and Head of
Corporate of IDLC on 30 October 2015. On 31 October, 2015, a
IDLC, in collaboration with partner LEADS, organized a poster, prize distribution and cultural ceremony was held, where Dr. Md.
slogan and recycle competition on 30 and 31 October, 2015, Anwar Hossain Howlader, Director (Joint Secretary), Department
of Environment, was present as Chief Guest. Mr. M. Ataur Rahman
Chowdhury, DGM & Head of Operations of IDLC, was present
during the award ceremony. Also present at the occasion was
Ms. RominaDewan, Executive Director of LEADS, along with
other officials from IDLC and LEADS.
Piloting environmental awareness in Chittagong
Upon the huge positive response received in Dhaka and several

requests from IDLC branches located outside Dhaka, in August
2015, IDLC’s CSR team piloted a small initiative at Chittagong.
Mr. Jamal Uddin, DMD at the opening of the exhibition The basic aim was to create awareness and enhance knowledge
of school children outside Dhaka city on topics related to the
at Bangladesh Shilpakala Academy. More than 350 students
environment, its conservation and preservation.
from Dhaka schools participated in the competition under four
categories – poster, slogan, recycle and highest communicator.
The competition arranged for the students to learn from the
campaign, which was done for the second time this year, on
issues such as environmental pollution and mitigation and
efficient resource utilization by adopting 3R principal of reduce,
reuse and recycle. The competition entries were judged by
veteran artist, Professor Mustafa Manwar; renowned artist and
academician, Dr. Muhammad Enamul Haque and Mehbuboor
Rahman, Manager, Green Banking Desk of IDLC. The exhibition
Environment Awareness Competition - Second Phase Chittagong School Environment Awareness Pilot Session
109
Five sessions were conducted at Chittagong at four schools: St.

Placid’s School, Ramkrishna Mission High School, Chittagong
Collegiate School and KhajaAjmeri High School, whereby a total
of 435 students actively participated in the event.
IDLC associated with Karnafuly Leo Club of Chittagong Division

and Youths Voice Foundation, a local volunteering club, to ensure
the effective execution of the campaign. Both organizations
supported the event by providing volunteers and logistics.
Contributing to reducing our carbon footprint
Tree plantation
Darail Bazar Noshkori Para
IDLC stands by the storm-affected victims of Bogra
IDLC, as part of its CSR activities, coordinated a housing

rehabilitation initiative for the storm-affected people of Bogra.
A destructive storm struck Bogra and adjacent areas in late April
2015. Many families became homeless, among which 13 families
suffered the worst as their houses were razed to the ground.
IDLC stood by these families by rebuilding their houses and even
provided emergency relief fund to one of the residents who was
pregnant. The team of IDLC Bogra was actively engaged in the
Tree plantation at Trishal, Mymensingh entire process.
IDLC regularly conducts plantation activities across the country

to contribute to the reduction of its carbon footprint. In 2015,
IDLC sponsored a plantation program under which 1,000
saplings were planted at Trishal, Mymensingh, on the roadside
of Jatiyo Kobi Kazi Nazrul Islam. The plantation was conducted
with support from JatioKobi Kazi Nazrul Islam University and
Toru Pallab, a voluntary organization managed by renowned
Bangladeshi environmentalists.
Extended responsibilities
Blanket distribution
Catastrophe of the storm
IDLC Bogra team helps distribute blankets
IDLC distributes blankets and warm clothes every winter among

Rehabilitation of households
the underprivileged in areas most affected by the extreme cold.
In 2015, IDLC distributed a total of 450 blankets. Among these,
300 blankets were given to the underprivileged of North Bengal
by IDLC’s officials and 150 blankets to Mokshudpur, Goplaganj,
with the help of Dishari Foundation. The distribution was carried
out by IDLC officials at Bogra, Rangpur and Gaibandha.
110
Our human capital
Human are our strength
Human capital - our core strength We are dedicated to construct an outstanding service-oriented
culture as well as maintain a strong work-life balance. Moreover,
Effective human resource management has proven to be a by encouraging employee engagement, we foster the spirit of
critical component in the success of a business. IDLC is focused teamwork and collaboration with a strong focus on quality in our
on recruiting the best resources and implementing programs to day-to-day operations.
develop and retain high quality human resources. IDLC continues
to implement human resource management policies and Our resources are precious to us
practices that are aimed at growing and developing employees
At IDLC, we are powered by talent. We consider our human
and ensuring their active contribution towards the achievement
resources as the most important asset and mobilize people
of corporate goals. Effective human resources have also been
and teams by engaging them in cutting-edge financial industry
linked to superior Company performance. IDLC believes that
practices. An attractive employer, we offer a broad spectrum of
its human resources are critical in building and running the
opportunities for both professional and personal development
Company. Each and every employee is considered, developed
as well as encourage a work environment that is characterized by
and motivated to contribute optimally towards the achievement
respect, trust, cooperation and collaboration. We do so because
of corporate goals.
the skills and enthusiasm of our employees are a major force that
helps us achieve sustainable results.
Staff strength of IDLC Group as of December 31, 2015
Being in the business for the past 31 years, we have provided
challenging career prospects to young and enthusiastic
professionals. IDLC’s human Resource Department continuously
works towards attaining the goal of attracting, retaining, growing
and inspiring talent.
The right people in the right place at the right time

While the goal is to provide the best candidate for the Company’s
needs, it is also important that we place people in the right
1,060
138
positions at the right time. This requires us to emphasize on

29
the efficiency of our hiring and staffing processes even as we

IDLCFL IDLCSL IDLCIL continue to look for ways to create efficiencies in our hiring
methodologies. We also recognize the need to use further
analytics in our recruitment efforts to enable us to understand our
Employment category workforce needs, levels and the effectiveness of our recruitment
1% strategies. The purpose of IDLC’s merit-based recruitment and
In percentage
selection process is to ensure that vacancies are filled by the
9%
most competent incumbents. IDLC provides equal employment
opportunities to all applicants without any bias to race, religion,
17% gender, age, disability or any other criteria permissible by the
statutory laws of the country. Recruitment and selection is based
73% solely on job-related criteria. The recruitment and selection
process is consistently applied and promotes fairness, diversity
and transparency. The process complies with all state laws,
regulations and policies.
Core Management Midlevel Management Non Recruitment status of last three years
Staff Management Management
Our Human Resource Department (HRD) mission 208

IDLC’s HRD is committed to work strategically with diverse
business segments in identifying and responding to the evolving 108
business needs.
As a strategic business partner, IDLC’s HRD creates a work

682
environment that thrives on diversity, high individual and
organizational productivity and performance, continuous
improvement and exceptional customer service. 2013 2014 2015
111
Performance appraisal their performance. Employers who want to harness the full
value of their employees and foster loyalty and retention find
Performance appraisals can benefit employees and organizations that training is a winning prospect for all involved. Training
by clarifying goals and expectations, and creating an environment programs strengthen knowledge and awareness of leadership.
of open communication. The best performance appraisals offer IDLC recognizes the contribution of training towards enhancing
positive feedback and advice for improvement and typically efficiency and profitability. The Company’s training policy
consist of a conversation between the management and the applies to all employees and aims at ensuring that appropriate
employees. training is imparted to enable individuals to reach a satisfactory
performance level.
IDLC is a performance-driven Company. Our performance
appraisal is the single-most important tool that enables the IDLC develops and delivers high-quality learning and provides
Company to measure the performance of an individual and plan other suitable initiatives in response to the needs of individual
his/ her career progression accordingly. At IDLC, the sole motive employees. While we emphasize on training and development
of the performance appraisal system is to maximize efficiency opportunities, employees are also encouraged to take
of the Company’s objectives with the guidance to achieve each responsibility for their own development. Since we consider our
member’s career aspirations. The performance appraisal system employees as our most valuable asset, we invest considerable
is fully structured to assess the competency of all full-time time and effort for their personal and professional development.
employees. This extensive process starts with the circulation of We assist our employees to be the best through providing
appraisal forms, approved by the management. relevant training and workshops both at home and abroad.
Promotion
Promotion opportunities are the life-blood of staffing and Number of Trainings in 2015
retention. Without the proper use of incentives and coaching,
employees are likely to refrain from maintaining relationships
with a business for an extended period of time. Competitors
take the best talent from other companies by offering individuals
enhanced pay and benefits. Promotions and bonuses to the
personnel help in ensuring that they do not feel the need to
leave their employers.
At IDLC, promotions signify our management’s commitment

59
26
97
to recognize and reward outstanding performers. It motivates
7
employees to aspire for advancement opportunities within

Foreign In House Customised Public
the Company. It also contributes to employee satisfaction and Program
retention. Employee promotion is made by examining all factors
necessary to determine the best qualifications and capabilities to
fill the position. Number of Attendees in 2015
15
Employees are considered for promotion based on the
following criteria: 315
 Growth in the role dimension and complexity
 Individual performance track record 663
 Market liquidity
 Attitude and behavior
 Vintage
Rewards that drive employee motivation 2241
IDLC always recognizes the efforts of individuals who aspire to

make a difference. Our employees receive a performance bonus Foreign In House Customised Public Program
annually in acknowledgement of their individual contribution,
hard work and dedication. Moreover, we also give ‘spot awards’
to appreciate those who have the spirit to take on new challenges
and contribute to areas outside their regular responsibilities. Grievance management and counseling
A reward is a recognition of employee contribution that has IDLC focuses on providing a prompt and impartial resolution
exceeded expectations. It may or may not be accompanied by to grievances brought forward by employees based on any
monetary value. At IDLC, employees are especially rewarded by kind of discrimination and deprivation. IDLC seeks to establish
the management to motivate and inspire - to walk the extra mile. an environment of equal employment where advancement
Developing our people through training and appreciation are solely on the basis of merit, talent and
competency. If an employee experiences a situation which is not
A workforce consisting of individuals eager to learn and grow in alignment with the core values of the Company, he/ she is at
is a sure sign of a company hiring well. Employees engaged liberty to bring this to the notice of the management through
in their jobs and careers seek to know more about their the mandate of this policy. Employees are assured that their
company and the industry and to learn skills that will improve complaints will be addressed without delay and judiciously by
112
the management. On the other hand,employees are motivated days, picnics,celebrations on the birth of a child, iftar parties,
through proper counselling and encouraged to have a healthy Pitha Utshab, Childrens’ Day, Pohela Boishakh Celebration and
conversation should any grievances arise. sporting events that help in creating stronger employee bonding.
We arrange various employee engagement programs including
Succession planning team building sessions that enhance employee commitment
IDLC’s management possesses succession plans to provide and sense of belongingness towards the Company. Additionally,
leadership continuity and avoid extended and costly vacancies IDLC also fulfils its corporate social responsibility for community
in key positions, recognizing that changes in management are and societal uplift.
inevitable. Our succession plan is designed to identify and Communication and employee satisfaction
prepare candidates for high-level management positions that
become vacant due to retirement, resignation, death or new IDLC considers communication as a critical success factor for a
business opportunities. It is IDLC’s policy to assess the leadership rapidly-growing knowledge-based business. Communication
needs of the Company in a way that ensures the selection of is given importance in the sense that it helps create a robust
qualified leaders which matches its mission and goals. network and ensures cooperation whenever required. We
emphasize on formal as well as informal communication.
HR and Compensation Committee Managers have a key role to play in effective communication that
IDLC’s HR and Compensation Committee is a forum for the brings new ideas to contribute to better business performance.
discussion of various HR-related issues of the Company. The Additionally, IDLC also provides the opportunity to conduct face-
main role and function of the Committee is to assist HRD in to- face meetings through the use of ‘live Internet meetings’.
developing and administering a fair and transparent procedure This net-based communication tool allows employees to talk
for setting policies on the overall human resources strategy of frequently and also get an opportunity to familiarize themselves
the Company. with new technologies.
The Committee’s responsibility is to ensure that the Company Moreover, IDLC ensures communication from the executive
has a wide scope for equal opportunity and transparency in team through different media and also encourages employee
terms of: feedback through group discussions, employee surveys and
email dialogue.
 Suitable recruitment
IDLC Ladies Forum (IDLC LF)
 Compensation on the basis of merit, qualification and
competence IDLC ‘Ladies Forum’ addresses its female employee’s views,
 Adequate training and development facilities problems and opinions to facilitate a good working environment
for women through the participation of all women employees
 Performance appraisal and promotions based on from different levels of positions, working areas and distribution
individual performance and contribution points.
In addition, the Committee looks into any other benefits-
related issues regarding the Company’s operating results and Gender Analysis
comparable market statistics.
In percentage
Fostering a healthy workplace

13.
One of our goals is to move towards a comprehensive approach

12%
to creating a healthier workplace. This is in our best interests

as individuals and the institution as a whole. Employees enjoy
favourable working hours so that they can ensure a balance
between professional and personal interests. IDLC ensures that
the workplace health and safety complies with internal health 86.88%
and safety policies and procedures. It also develops, coordinates
and implements strategies to prevent workplace injuries and
illnesses and sets standards for health and safety training. In Male Female
this regard, it organizes training on fire fighting and vaccination
programs. Moreover, a physician visit our premises weekly Composition/ hierarchy of IDLC LF is as follows:
for consultation on health issues of the employees, if needed.
IDLC covers hospitalization insurance to ensure holistic medical  President - Head of Human Resource
security of its employees and also,group life insurance schemes
 Executive Committee comprises 11 women employees
cover the unforeseen risk of death as well. Moreover, special
representing different divisions and branches of the Group
accidental issues related to the employee and his/ her family
members are reviewed by the HR and Compensation Committee  Secretary - Head of CSR
to compensate them in any way possible.  Members - All the women employees of the Group
Life at IDLC This forum provides all women employees the opportunity to
network and also provides a common platform to share and raise
IDLC is focused on its employees as well as on the business and various issues and problems like discrimination, harassment,
overall social environment. Throughout the year, it arranges negative attitude towards women and any other issues that
multiple events including employee birthday celebrations, family may affect them within the Company. This enables IDLC’s
113
management to better understand and address these issues and Ethical standards
develop strategies accordingly.
IDLC adheres to the highest ethical standards and considers it to
Automating human resource processes be a key business priority. The management expects employees
to fully embrace statutory compliances. Each employee is
With a growing number of employees across different regions,
required to read and sign the Code of Conduct every year as a
efficient HR management is becoming a significant challenge. As
sign of recurrence to the principles enshrined in it. Additionally,
such, technology-driven solutions are the need of the moment
IDLC encourages employees to act with integrity and spread the
to bring in place more robust processes to increase efficiency,
message of social responsibility to the community.
maximize productivity and ensure precision and security. In line
with that, IDLC’s HR Department has an automated system in
place for better people management in the Group.
Human Resources Accounting (HRA)

Human Resource Accounting involves accounting for the of employees. However, we are taking benefits of HR accounting
Company’s management and employees as human capital that concepts and using HR accounting information (such as
provides future benefits. In the HRA approach, expenditures per employee cost to the company, expected service life of
related to human resources are reported as assets on the balance employees, per capita productivity and its growth over periods
sheet as opposed to the traditional accounting approach and many more) in making important management decisions
which treats costs related to the Company’s human resources that will benefit the long-term strategic goals and profitability
as expenses on the income statement that reduce profit. HRA of the Company.
suggests that in addition to the measures themselves, the Per Employee Productivity*
process of measurement has relevance in decision-making
involving organizations. Taka in million
So we can say HRA is the process of identifying and measuring data

2015 2014 2013 2012 2011
about human resources and communicating this information
to the interested parties. It is an attempt to identify and report
Number of FTE
the investment made in human resources of the Company that 1,227* 742 642 609 559
(person)
are currently not accounted for in the conventional accounting
practices.
Operating cost 1.34 1.97 1.94 1.74 1.63
Objectives and benefits
The aim of HR accounting is to depict the potential of the Training cost 0.009 0.018 0.016 0.003 0.020
employees in monetary terms which mainly helps in decision
making of ascertaining how much investment the company has Operating profit 2.40 2.96 2.36 2.21 2.23
made on its employees and how much return it can expect from
this investment. It furnishes cost/value information for making Gross turnover 7.68 11.05 10.75 9.04 8.09
management decision about acquiring, allocating, developing
and maintaining human resources in order to attain cost Operating Income 3.74 4.93 4.30 3.95 3.86
effectiveness. It allows management personnel to monitor and
effectively use human resources. And it also provides valuable Profit Before Tax 2.14 2.95 2.06 2.06 2.18
information to the investors interested in making long term
investments in service sectors companies. Profit After Tax 1.19 1.68 1.04 1.17 0.89
Financial reporting standards
* In 2015, IDLC recruited 429 Full Time Employees (FTE) to
While the IFRS do not currently have standards requiring HRA, it
strengthen its sales team structure. However, it should be noted
could be argued that they are moving closer to providing more
that this recruitment marks a transition in the way IDLC’s sales
flexible approaches to accounting measurements and reporting.
streams work – the increase in the number of FTEs and the
For example, the international standards IAS 38 Intangible Assets
subsequent increase in Operating Cost for Employees is greatly
and IFRS 3 on Business Combinations allows for the recognition
offset by savings accrued in other operating expenses that would
of the intangible asset goodwill, which indicates a willingness
have incurred had IDLC pursued with the earlier way of sales
to allow for valuation of assets that are not traditional tangible
and customer acquisition. To put it into context, total Operating
assets, such as human resources.
Expenditure for IDLC increased by 13% in 2015 over 2014 despite
Practice in IDLC number of employees increasing by 65% (from 742 to 1,227) in
In IDLC we are following conventional accounting practices and, the same period.
as there are no HR specific accounting standards, we are not
capitalizing any HR cost in order to amortize it over service life
114
Per Employee Productivity Operating Income
Profit Before Tax
Taka in million
Profit After Tax
3.86
2.18
0.89
3.95
2.06
4.30
2.06
1.04
2.95
1.68
3.74
2.14
1.19
1.17
4.93
2011 2012 2013 2014 2015
Practice in Bangladesh require adherence to a strict set of globally accepted Accounting

Standards in specific financial statements in acceptable format
In Bangladesh the concept of Human Resources Accounting
reported to the public.
has not yet been introduced as a requirement by any statutory
authority or any regulatory bodies. However, as opposed to As a result, disclosure of such information has become voluntary
external financial reporting, managerial reporting does not to our business management.
115
Event highlights
Stockholders of IDLC Finance Limited approved 25% stock dividend & IDLC wins First position under "Financial Services Sector" in the 15th ICAB
10% Cash dividend for the year 2014 at the 30th Annual General Meeting National Award for "Best Presented Annual Reports 2014"
(AGM) held at Radisson BLU Water Garden Hotel, Dhaka.
IDLC Finance Ltd. launched "IDLC Purnota", a structured service to meet IDLC Finance Limited and BASIS, the national trade body for Software
both financial and non-financial needs of women entrepreneurs across & IT Enabled Service Industry of Bangladesh jointly launched IDLC
Bangladesh. Udhbhabon - a comprehensive financial and non-financial solution for
ICT Entrepreneurs
IDLC wins First Runner up award in the SAARC Anniversary Awards IDLC Finance Limited successfully participated in the REHAB Winter Fair
for Corporate Governance Disclosures 2013. 2015, held from December 23 to 27, 2015 at Bangabandhu International
Conference Center (BICC).
116
IDLC Finance Ltd. was the title sponsor for “IDLC Finance Ltd. Presents IDLC Finance Ltd. & The City Bank Ltd. jointly arranges Term Loan Facility
Blueprints 1.0, National Financial Modelling Competition” of North South of USD 12.25 Million (Taka 961.40 Million) for Far East Spinning Industries
University Finance Club Ltd.
IDLC Finance Ltd. signed syndication fund raising agreement of USD 26 IDLC Signs MoU with Spectrum Lanka Technology Solutions Limited to
Million (Taka 2,080 Million) for AG Ceramics Ltd. promote Green Products.
IDLC Investment Ltd. signs Issue Management Agreement with Mir IDLC Finance Limited (IDLC) signed a Term Loan Facility Agreement with
Akhter Hossain Ltd. (MAH) Saudi-Bangladesh Industrial & Agricultural Investment Company Limited
(SABINCO) for Taka 400.0 million
117
IDLC Signs MoU with Rudra Communication Ltd to accelerate Green IDLC Finance Limited Participated in Banking Fair Bangladesh 2015
Finance.
IDLC celebrates Children's Day IDLC Ladies Forum celebrates Women's Day 2015
IDLC family embraces winter with Pitha Uthshab

IDLC welcomes Bengali New Year 1422 with celebrations
118
Powered by With an improving
macro-economic scenario,
the economic the engines of the
growth engines. Bangladeshi economy –

remittances, exports etc –
Identifying our are humming again with
projections of 7% GDP
window of growth in FY16. Powered
by a stable political regime,
opportunity. we hope to catalyse
entrepreneurship in our
country and ensure that its
citizens live better lives.
Because we firmly believe
that what is good for the
country is also good for us.
119
Letter of Transmittal
All Members/Shareholders,
Bangladesh Bank,
Registrar of Joint Stock Companies and Firms,
Bangladesh Securities and Exchange Commission,
Dhaka Stock Exchange Limited, and
Chittagong Stock Exchange Limited.
Dear Sir(s):
ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2015
Enclosed please find a copy of the Annual Report along with the audited Financial Statements including consolidated and separate
Balance Sheet as at December 31, 2015 and Income Statements, Cash Flow Statements and Statement of Changes in Equity for the
year ended December 31, 2015 along with the notes thereon of IDLC Finance Limited and its subsidiaries (IDLC Securities Limited, IDLC
Investments Limited and IDLC Asset Management Limited) for your kind perusal and record.
Thank you.
Yours faithfully,
Sd/-
Mohammad Jobair Rahman Khan
120
Notice of the 31st Annual General Meeting
Notice is hereby given to all the Members of IDLC Finance Limited (IDLC) that the 31st Annual General Meeting of the Company will be held on
March 30, 2016 (Wednesday) at 10:00 a.m. at “Utshab”, Radisson BLU Water Garden Hotel, Airport Road, Dhaka Cantonment, Dhaka 1206, to
transact the following business:
Ordinary Agenda:
A01631-01 Approval for appointment of the new CEO & Managing Director of the Company;
A01631-02 Adoption of Directors’ Report, Auditors’ Report and Audited Financial Statements for the year ended December 31, 2015;
A01631-03 Approval of dividend for the year 2015 as recommended by the Board;
A01631-04 Election of Directors in place of those retiring by rotation including the confirmation of appointment of Independent Director;
A01631-05 Appointment of Auditors of the Company until the conclusion of the next Annual General Meeting (AGM) and fixation of their
remuneration.
Special Agenda:
AS01631-01 Approval for enhancement of Authorized Capital of the Company at Taka 1,000 crore by amending the Clause V of the Memorandum
and Article 7 of the Articles of Association of the Company, subject to the approval of the appropriate authorities.
Proposed Special Resolution
To consider and, if deem fit, to adopt the following resolution as a ‘Special Resolution’ with or without any modification, addition and alternation:
“Resolved that the existing Clause V of the Memorandum of Association and Article 7 of the Articles of Association of the Company be hereby is
approved to replace with the new Clause V and Article 7, respectively, as follows, subject to the approval of appropriate authorities:
Clause V of the Memorandum of Association:

Existing:
The Authorized Capital of the company is Tk. 4,000,000,000 divided into 400,000,000 shares of Tk.10 each.
Amended proposed:
The Authorized Capital of the company is Tk. 10,000,000,000 divided into 1,000,000,000 shares of Tk.10 each.
Article 7 of the Articles of Association:

Existing:
The Authorized Capital of the company is Tk. 4,000,000,000 divided into 400,000,000 shares of Tk.10 each.
The Authorized Capital may be increased from time to time by a resolution of the company in general meeting.
Amendment proposed:
The Authorized Capital of the company is Tk. 10,000,000,000 divided into 1,000,000,000 shares of Tk.10 each.
The Authorized Capital may be increased from time to time by a resolution of the company in the general meeting.”
By order of the Board
Sd/-
Mohammad Jobair Rahman Khan
Dated: March 08, 2016
Notes: Association of the Company. The proxy form, duly completed

and stamped, must be deposited at the office not later than 72
 The “Record Date” for the AGM is Sunday, March 13, 2016.
hours before the time scheduled for holding the meeting.
The Members whose names would appear in the Register of
Members of the Company and/or in the Depository on the  Pursuant to Article 81 of the Articles of Association, a corporate
‘Record Date’ will be eligible to attend the 31stAGM and entitled member of the Company, by resolution of the Board of
to the Dividend as mentioned above. Directors or other Governing Body of such body corporate, may
authorize such person as it thinks fit, to act as representative at
 Members are requested to update their respective BO Accounts
any meeting of the members of the Company.
with 12 Digit Tax Payer’s Identification Number (TIN), bank
account, mailing address and contact number through their  Annual Report, Attendance Slip and Proxy Form along with
respective Depository Participant (DP) before the ‘Record the Notice will be sent to all the Members by Courier Service/
Date’. Advance Income Tax (AIT) @15% (instead of 10%) will be Post. The Members may also collect the Proxy Form from the
deducted from eligible cash dividend, if anyone fails to update Registered Office of the Company.
his/her BO Account with the 12 Digit TIN before the Record Date.  Members/proxies are requested to register their entry at the AGM in
 A Member may appoint a proxy to attend and vote in his/her the counter at the entrance of the AGM venue from 9.00 a.m. on March
place by filling proxy form as per Article 103 of the Articles of 30, 2016.
evsjv‡`k wmwKDwiwUR A¨vÛ G·‡PÄ Kwgk‡bi wb‡`©kbv Abyhvqx Avmbœ evwl©K mvaviY mfvq †Kvb cÖKvi Dcnvi/Lvevi/†Kvb ai‡bi Kzcb cÖ`v‡bi eë¯’v _vK‡ebv|
121
Report of the Audit Committee

Scope of work of the Audit Committee In addition to the above regular activities, the department also
carried out following development functions during the year:
The scope of the Audit Committee of IDLC Finance Limited is
determined by its Terms of Reference (ToR) which, in turn, are • Partnered with Bangladesh Financial Intelligence Unit
shaped by directives from its principal regulators, Bangladesh in training Branch Anti-Money Laundering Compliance
Bank and the Bangladesh Securities and Exchange Commission Officers (BAMLCOs) of all the Financial Institutions in Dhaka
(BSEC). These include, but are not limited to, exercising oversight and Chittagong region;
over: • Initiated Cash Transaction Reporting;
 The internal control system of the company • Coordinated external IT review conducted by Ernst & Young
LLP;
 Financial reporting
• Initiated U.S. Foreign Account Tax Compliance Act (FATCA)
 The Internal Control and Compliance department
reporting on behalf of the company;
 Compliance with regulatory requirements
• Represented Bangladeshi non-banking financial institutions
The Committee is authorized to investigate any matter within its in Asia Pacific Group on Money Laundering (APG) evaluation
terms of reference, access all documents and information of the on Anti-Money Laundering and Combating the Financing
company, seek information from any director or employee of the of Terrorism;
Group and co-opt any resource (including external professional
• Conducted Anti Money Laundering and Terrorist Financing
assistance) it sees fit in order to fulfill its duties. However, the
risk assessment for the company;
Committee has no executive function and its primary objective
is to review and challenge, rather than assume responsibility for • Developed risk-based guidance notes on prevention of
any matters within its remit. money laundering and terrorist financing of the company;
• Coordinated Operational Risk Management activities in the
The Committee presents a summary of its activities to
company.
shareholders and other interested parties by means of this report,
and the committee Chairman attends all general meetings of All this enable the Committee to evaluate major risk areas, issue
the Company’s shareholders to answer any questions on the broad level guidance for management so as to ensure effective
committee’s activities. controls are in place and to provide accurate, appropriate and
timely information to the Board of Directors, regulatory bodies
Review of financial statements by the Audit Committee and shareholders.
The Audit Committee reviewed the annual financial statements External audit
for the year 2015 and placed its recommendations to the Board
of Directors. ACNABIN, Chartered Accountants, a partnership firm in
Bangladesh and an independent member of Baker Tilly
Review of the activities of the Internal Control and International, acted as the external auditors to the company
Compliance (ICC) throughout the year. The external auditors are not engaged by
the company on any material non-audit work such as:
Major activities of the ICC department during the year were as
follows: • Appraisal or valuation services or fairness opinions;
• Financial information systems design and implementation;
• Execution of risk-based annual audit plan 2015;
• Book-keeping or other services related to the accounting
• Review of internal control system to create robust control
records or financial statements;
mechanism;
• Broker-dealer services;
• Issuance of timely responses to inquiries by regulators and
other government agencies ; • Actuarial services; and
• Coordination of regulatory inspections and external audit; • Internal audit services.
• Coordination of management responses to the external Independence of External Auditor
audit and regulatory inspection reports;
As a policy, the Committee prohibits the external auditors from
• Complaint cell management;
performing any work that they may subsequently need to
• Monitoring of anti-money laundering compliance audit, or which might otherwise create a conflict of interest. The
procedures; Committee also monitors the balance between audit and non-
• Conducting of workshops and trainings on anti-money audit related functions to ensure that auditor independence can
laundering and anti-terror financing regulations in different be shown to be maintained.
branches as part of overall awareness building efforts;
The Audit Committee appraised the expertise, resources,
• Coordination of Risk Analysis Unit activities; and independence and objectivity of the external auditors and also
• Facilitation of Audit Committee meetings. reviewed their effectiveness as external auditors before reaching
122
the recommendation to the Board that their re-election should • Reviewed Audit Plan of Internal Control and Compliance
be proposed to shareholders. Department for the year 2015;
• Reviewed the internal audit reports issued by the Internal
Resolutions of the Audit Committee meeting
Control and Compliance department during the year;
The Committee met six (6) times during the year 2015 and • Reviewed the Management Letter issued by external
carried out the following tasks: auditors, ACNABIN, Chartered Accountants, on annual audit
of financial statements of IDLC Finance Limited for the year
• Discussed with the external auditors and management
ended December 31, 2014;
prior to finalization of financial statements of IDLC Finance
Limited for the year ended December 31, 2014 as per • Reviewed quarterly and half-yearly unaudited financial
Bangladesh Bank circular number 13 dated October 26, statements of IDLC Finance Limited for the year 2015;
2011; • Reviewed amendments made to the Risk Based Guidance
• Reviewed draft audited financial statements of IDLC Finance Notes on Prevention of Money Laundering and Terrorist
Limited for the year ended December 31, 2014 as per clause Financing of IDLC Finance Limited; and
no. 3.3 (v) of Corporate Governance Guidelines (CGG) issued • Reviewed amendments made to the Policy Guidelines on
by Bangladesh Securities and Exchange Commission; Asset Liability Management (ALM) of IDLC Finance Limited.
• Reviewed expression of interest of the Audit Firms and Based on the review and above discussions, the Audit Committee
recommended for appointment of ACNABIN, Chartered is of the view that the internal control and compliance procedures
Accountants as statutory auditors for the year 2015; are adequate to present a true and fair view of the activities and
• Reviewed the report of Audit Committee for incorporation financial status of the company and to ensure that its assets are
in the Annual Report 2014; safeguarded properly.
• Reviewed the Bangladesh Bank Inspection Report on

corporate head office of IDLC as of June 30, 2014, and
management responses to the report; Sd/-
• Reviewed the Bangladesh Bank Core Risk Inspection Report A. K. M. Shahidul Haque
as of June 30, 2014 and management response to the Chairman, Audit Committee
report;
• Reviewed Ernst & Young LLP’s report on information
systems’ controls of IDLC Finance Limited;
123
Assessment report on the Going

Concern Status of IDLC
Going concern is a fundamental accounting concept that Increasing trend of investment portfolio and performance growth
underlies the preparation of financial statements of companies.
IDLC has reported excellent growth in its operating performance.
Under the going Concern concept, it is assumed that a Company
The Company’s investment in long term finance, short-term
will continue in operation and that there is neither the intent nor
finance, real estate finance and car loans have increased by
the need to either liquidate it or to cease trading.
26.27%, 46.78%, 16.08%, and 38.58%, respectively, in 2015 as
The purpose of this going concern statement is to bring together compared with 2014.
the requirements of Company law, accounting standards and
Operating indications
Listing Rules on going concern.
Strengthening of Human Capital
The management of IDLC has made this assessment based on
the accounting period ended on or after December 31, 2015. During the year 2015, the Company has recruited 682 new
employees which resulted in a massive increase in human
The management’s assessment of whether the Company is a
resource by 65.36% to a count of 1,227 at the end of the year
going concern involves making appropriate inquiries including
2015, in comparison to 742 at the end of the year 2014.
review of budgets and future outcome of inherent risks involved
in the business. Business expansion
Considering the following major indicators, IDLC’s management IDLC is continuously expanding its segment geographically by
has reached the conclusion that the financial statement for the opening new branches (three new branches) in 2015 at different
year 2015 is prepared based on going concern assumption: places considering economic significance. The Company has also
strengthened its product/ service line by increased marketing
FINANCIAL INDICATIONS efforts and extensive investments.
Fixed term debt with realistic renewal or repayment.
Corporate environment and employee satisfaction
At the close of financial year 2015, total borrowing from other
There exists a healthy corporate environment in the Company.
banks and financial institutions was Taka 10,586 million. Based on
This is reflected in our Statement of Corporate Governance and
our past experience, it can be said that there is every possibility
Report on our Human Capital.
that a major part of the debt would be renewed further or can be
repaid from our existing cash flow. Other indications
Less reliance on short-term borrowing Maintenance of Capital Adequacy Ratio (CAR)
At the end of 2015, total short-term borrowings were Taka 800 As per the DFIM Circular Number 14, dated December 28, 2011 of
million, representing 8% of total borrowings. This indicates that the Bangladesh Bank prudential Guidelines on Capital Adequacy
the Company has least reliance on short-term borrowings. and Market Discipline for Financial Institutions has come into
force from January 01, 2012. As per the guidelines, Financial
Continuous financial support by lenders/ depositors
Institutions (FIs) are required to maintain a minimum CAR @ 10%.
The Company enjoys a good track record and reputation in
In each quarter of 2015, IDLC Finance Limited as well as the
the settlement of its obligation with its lenders/ depositors.
Group had CAR above the minimum requirements of 10%.
The Company was able to increase the level of confidence of
depositors, which resulted in a significant increase of 30.14% in Details are given in note No. 13.1 of the financial statements on
total deposits in 2015. page no. 207 and at “Disclosure under Pillar III-Market Discipline”
on page no. 248.
Positive key financial ratios
Strong equity base
The Company’s financial ratios indicate sound financial strength
and prospects and are evident from financial highlights given on As on 31 December 2015, total equity of IDLC stands at Taka 7,786
page no. 127 of this Annual Report. million (Taka 6,528 million in December 31, 2014), representing
an increase of 19% over last year and reflects the Company’s
Consistent payment of dividends
long-term viability.
IDLC has been paying dividend consistently to its shareholders
Strong CAMEL rating
over the years. We refer to financial highlights on page no. 126 of
this Annual Report to show our steady dividend payment records. CAMEL rating is used by the Bangladesh Bank as a tool for
evaluating the strength and performance of a non-banking
Moreover, the Company has declared Cash dividend @ 25% (Taka
financial institution. The composite rating adjudged by the
2.5 per Share) in 2015, while in the year 2014 Stock dividend @ 25
Bangladesh Bank signifies satisfactory performance of IDLC.
% (one Bonus Share for every four Ordinary Shares held) and cash
The report contained no adverse material observations of the
dividend @ 10% (Taka 1 per Share) was declared, which reflects
Bangladesh Bank on the activities of the Company.
the Company’s long-term operational viability.
Changes in government policy
Credibility in payment of obligations
The management anticipates no significant changes in
IDLC has strong credibility in terms of payment of its obligations
legislation or government policy, which may materially affect the
to lenders. The Company is particular in fulfilling the terms
business of the Company.
of loan agreements and has never defaulted, even in terms of
convenience.
124
Business environment and its likely impact
on the financial performance of IDLC
Some statements in this annual report such as IDLC’s plans, anticipation, beliefs, expectations etc. are forward-looking. These statements
involve uncertainties and actual achievements may differ from plans and expectations due to changes in the business environment.
Following are some major factors that may affect the business environment:
 Change in the country’s general economic conditions

 Natural calamities and political disturbances.
 Changes in commodity price levels.
 Further volatility in interest rates.
 Further volatility in capital markets.
 Changes in government policies.
 Changes in corporate income tax rate and VAT.
 Changes in Monetary policies of the Bangladesh Bank:
• Increase in provisioning requirements;
• Increase in statutory liquidity reserves and cash reserve requirements by the Bangladesh Bank;
• Change in the Bangladesh Bank’s re-financing scheme.
125
Key operating and financial highlights-

Taka in million
Particulars 2011 2012 2013 2014 2015 Growth
Financial Performance
Lease and term loans disbursed 8,517.37 12,304.15 16,895.49 17,473.48 22,140.06 26.71%
Housing finance disbursement 2,585.54 2,735.85 4,421.49 5,895.91 5,954.43 0.99%
Short term finance portfolio 821.09 581.28 603.62 735.40 1,079.41 46.78%
Lease finance assets 4,546.94 5,479.27 6,358.33 6,281.83 6,016.18 -4.23%
Real estate finance assets 6,979.00 8,262.15 11,169.99 14,822.12 17,205.95 16.08%
Total assets 29,518.81 35,748.17 48,534.84 57,159.52 71,768.71 25.56%
Long term liabilities 25,298.91 30,986.62 42,884.40 50,470.64 63,590.66 26.00%
Term deposit balance 16,828.27 22,008.20 29,163.88 35,241.00 46,174.48 31.02%
Net current assets 3,676.20 2,796.51 2,681.76 2,777.57 5,924.28 113.29%
Operational Performance
Operational income 2,042.68 1,955.48 2,573.22 3,326.18 3,960.85 19.08%
Operational expenses 672.21 822.03 1,021.25 1,236.79 1,393.76 12.69%
Financial expenses 2,359.22 3,087.77 4,127.32 4,530.35 4,827.09 6.55%
Profit before tax 912.63 1,032.57 1,406.12 2,029.13 2,275.52 12.14%
Net profit after tax 804.22 589.20 811.01 1,153.54 1,243.82 7.83%
Financial Ratio
Debt equity ratio (Times) 8.16 8.38 9.50 9.04 9.65 0.61
Average effective tax rate (%) 41.57 42.94 42.32 43.15 45.34 2.19
Financial expenses coverage ratio (Times) 1.39 1.33 1.34 1.45 1.47 0.02
Current ratio (Times) 1.31:1 1.21:1 1.14:1 1.13:1 1.22:1 0.09
Return on total assets (%) 2.93 1.81 1.92 2.18 1.93 (0.25)
Non performing loan ratio (%) 2.32 2.09 1.63 2.02 3.06 1.04
Return on shareholders’ equity (%) 27.51 16.76 19.24 22.37 20.01 (2.35)
Earnings per share* 3.20 2.34 3.23 4.59 4.95 0.36
Shareholders’ equity 3,220.51 3,809.72 4,620.72 5,693.82 6,736.55 18.31%

* Prior years’ number of shares have been adjusted to reflect Bonus share issued in 2014.
126
Key operating and financial highlights-
IDLC Group
Taka in million
Particulars 2011 2012 2013 2014 2015 Growth
Financial Performance
Total assets 31,164.54 37,783.87 50,429.38 58,926.59 73,434.45 24.62%
Long term liabilities 25,298.82 32,491.65 43,951.28 51,370.79 64,154.04 24.88%
Term deposit balance 16,828.27 22,008.20 29,063.88 35,240.30 46,038.68 30.64%
Operational Performance
Operational income 2,159.87 2,403.24 2,761.46 3,657.72 4,587.90 25.43%
Operational expenses 913.46 1,058.11 1,243.41 1,463.65 1,647.79 12.58%
Financial expenses 2,364.39 3,102.88 4,137.61 4,543.10 4,833.19 6.39%
Profit before tax 1,216.60 1,252.19 1,325.20 2,186.53 2,628.50 20.21%
Net profit after tax 500.28 712.82 669.47 1,245.51 1,459.22 17.16%
Financial Ratios
Debt equity ratio (Times) 6.83 7.05 8.40 8.03 8.43 0.40
Financial expenses coverage ratio
1.51 1.40 1.32 1.48 1.54 0.06
(Times)
Return on total assets (%) 1.72 2.07 1.52 2.28 2.20 (0.07)
Return on shareholders’ equity (%) 13.04 16.44 13.31 20.95 20.39 (0.56)
Earnings per share* 1.99 2.84 2.66 4.95 5.81 0.85
Dividend per share 2.50 3.00 3.00 3.50 2.50 (1.00)
Price earnings ratio (Times) 27.41 15.95 15.12 12.06 10.96 (1.10)
Dividend yield (%) 1.81 3.26 4.77 4.69 3.93 (0.75)
Dividend payout ratio (%) 49.47 52.08 72.09 56.51 43.07 (13.44)
Average effective tax rate (%) 58.88 43.07 49.48 43.04 44.48 1.45
Equity Statistics
Number of shares (No.) 99,000,000 123,750,000 160,875,000 201,093,750 251,367,187 25.00%
Year end market price per share (Taka) 138.50 91.90 62.90 74.70 63.60 -14.86%
Net asset value per share (Taka)* 15.84 18.67 21.33 25.97 30.97 19.27%
Market capitalization 13,711.50 11,372.63 10,119.04 15,021.70 15,986.95 6.43%
Market value addition 98.29 44.49 29.57 42.24 32.63 -22.76%
Shareholders’ equity 3,980.47 4,693.29 5,362.76 6,527.83 7,785.96 19.27%
* Prior years’ number of shares have been adjusted to reflect bonus share issued in 2014.
Reasons for major deviations from earlier years have been explained in the Directors’ Report on page no. 135
127
Value Added Statement

for the year ended December 31, 2015
Value added is the wealth created by IDLC through extending lease financing, short-term finance (factoring of accounts receivable and
work order financing), housing finance, merchant banking and corporate finance.
The Value Added Statement shows the total worth created and how it was distributed to meet certain obligation and the portion
retained for the continued operation and expansion of the Company.
Dec. 31, 2015 Dec. 31, 2014

% %
Taka Taka
Value added
Operating revenue 8,354,699,891 7,499,882,290

Cost of borrowing (4,827,091,642) (4,530,353,027)
3,527,608,249 2,969,529,263
Other income 433,242,052 356,650,721
3,960,850,301 3,326,179,984
Provisions (291,570,010) (60,259,653)
Operating expenses excluding staff costs and depreciation. (513,702,436) (483,127,835)
Value added 3,155,577,855 100% 2,782,792,496 100%
Distribution of value addition
To Employees
as remuneration 755,609,881 24% 642,751,643 23%
To Government 1,031,699,212 33% 875,596,287 31%

as taxes
To Shareholders 628,417,968 20% 703,828,125 25%

as stock dividend (cash and stock)
Retained in the business 739,850,795 23% 560,616,441 20%

as capital and revenue reserve 615,402,154 20% 449,706,891 16%
as depreciation 124,448,641 4% 110,909,550 4%
3,155,577,855 100% 2,782,792,496 100%
Number of employees 1,060 593

Value added per employee 2,976,960 4,692,736
2015 2014
In percentage In percentage
20% 23%
24% 33%
23% 25% 31%

20%
To To To Retained in the To To To Retained in the

Employees Government Shareholders business Employees Government Shareholders business
128
Market Value Added (MVA) Statement
Market value added statement reflects the Company's performance evaluated by the market through the share price of the company.
This statement shows the difference between the market value of a company and the capital contributed by investors. In other words,
it is the sum of all capital claims held against the company plus the market value of debt and equity.
The higher the MVA the better indication. A high MVA indicates the company has created substantial wealth for the shareholders. A
negative MVA means that the value of management's actions and investments are less than the value of the capital contributed to the
company by the capital market (or that wealth and value have been destroyed).
The following statement shows how the MVA has been calculated for the year ended December 31, 2015 and 2014:
Taka in million
2015 2014
Market value of shares outstanding 15,987 15,022

Book value of shares outstanding 7,786 6,528
Market value added 8,201 8,494
Market Value Added (MVA) Statement

Market Value Added Book Value of Shares Outstanding
8,201
8,494
15,987
15,022
7,786
6,528
2015 2014
129
Economic Value Added (EVA) Statement

"Economic Value-Added is the surplus generated by an entity after meeting an equitable charge towards providers of capital. It is the
post-tax return on capital employed (adjusted for the tax shield on debt) less the cost of capital employed. Companies which earn
higher returns than cost of capital create value, and companies which earn lower returns than cost of capital are deemed harmful for
shareholder value.
The aim of EVA is to provide management with a measure of their success in increasing shareholder's wealth: a better measure than
profit of how much the company had made for shareholders.
EVA has been calculated by the following formula:
EVA = Net Operating Profit – Taxes – Cost of Capital
Taka
2015 2014
Net operating profit 2,567,089,343 2,089,390,956

Provision for taxes (1,031,699,212) (875,596,287)
Net Operating Profit after Tax (NOPAT) 1,535,390,131 1,213,794,669
Charges for capital

Capital employed 7,240,313,834 6,081,130,977
Cost of equity (%) 9.36% 10.56%
Capital charge 677,693,375 642,167,431
Economic Value added 857,696,756 571,627,238
Capital employed as on December 31

Shareholders' equity 6,736,546,722 5,693,820,351
Accumulated provision for doubtful accounts and future losses 1,160,433,026 889,827,568
Average shareholders' equity* 7,240,313,834 6,081,130,977
* Average shareholders equity has been derived from average of current year and previous years.
130
Contribution to the National Economy
IDLC aspires to be one of the major contributors in the economy catalysed our lending to small and medium enterprises (SME),
of Bangladesh both in monetary and non-monetary terms. thereby helping accelerate both direct and indirect job creation.
IDLC was established in 1985 as the first leasing company in
the country and with its pioneering role has established and Focus on SME Financing
popularized lease finance as an alternative and secured source
of long term finance. The NBFI sector continues to be the second SMEs are the key drivers of any economy, while narrowing
largest financial sector in the country with an asset size of around income inequality and supporting poverty alleviation.
Taka 438 billion as on September 30, 2015. IDLC is the largest Researchers estimate presence of approximately six million SMEs
employer, financial service provider and tax payer among the in Bangladesh, making up 75% of the domestic economy, while
non-banking financial institutions in the country. Some of our accounting for 80% of industrial employment and 25% of the
specific contributions to the national economy are highlighted total workforce. Under this milieu, IDLC initiated SME financing
below: back in 2006, and is now among the top five financial service
providers to small businesses in Bangladesh. Today it comprises
Taxes to Government more than 38% of the total customer lending of IDLC. We are
also committed to the development of women entrepreneurs
In 2015, IDLC deposited Taka 822.26 million to the Government across the country by extending Women Entrepreneur Loan and
exchequer as corporate income tax. Also, Taka 549.17 million non-financial services for women through IDLC Purnota.
was collected and deposited to the Government exchequer as
withholding tax, VAT and Excise Duty. SME Division Active Customer Base
In number
Deposited to the Government Exchequer
Taka in million
Advance Corporate Tax

Withholding tax, VAT &
Excise Duty
6,638
9,325
5,222
7,619
3,462
465
415
696
509
822
549
2011 2012 2013 2014 2015

2013 2014 2015
Environment friendly technologies
Employment Generation Sustainable economic growth and a healthy environment are
In number
interlinked. Keeping this in mind, IDLC is also offering 50 products
under green financing umbrella covering the sectors like
Renewable Energy, Waste Management, Non Fire Block Brick, Auto
208 Brick Kiln, Green Industry, Fire & Safety measures, Industrial Energy
Efficiency, Recycling Industry etc. In the year 2015, IDLC have
108 managed to disburse as much as Taka 525.8 million under Green
Financing umbrella, despite the unstable economic condition.
The number is almost 18 times greater than the previous year
682 which only indicates IDLC’s drive towards sustainability.
Details of Green Banking initiatives are enunciated in the

2013 2014 2015 segment on ‘Green banking, in page no. 50.
Supporting community through various CSR activities:

Employment generation
At IDLC, commitment to social welfare and community has
We create economic impact by creating employment and giving been part of its corporate culture, and IDLC is much reputed
appropriate training to the employees. As on December 31, for its contributions towards environmental and community
2015 IDLC group has more than 1,200 well trained permanent development. We support stimulate economic growth by
staff members. During 2015, the group paid Taka 744.16 million investing in programs that enable economic development
as salaries and allowances to its employees and spent Taka with a social purpose. Detail of our activities in this area has
10.53million for both local and foreign trainings. Moreover, at been discussed on page no. 105 in chapter “Corporate Social
a time when job creation is a top priority for government, we Responsibility at IDLC”
131
Highlight as required by Bangladesh Bank

as on December 31
Sl. no. Particulars 2015 2014
1 Paid-up capital Taka in million 2,514 2,011
2 Total capital Taka in million 7,172 6,059
3 Surplus/(shortage) capital Taka in million 1,806 1,514
4 Total assets Taka in million 71,769 57,160
5 Total deposits Taka in million 47,760 36,596
6 Total loans, advances and leases Taka in million 53,858 45,349
7 Total contingent liabilities and commitments Taka in million 1,226 1,665
8 Loans to deposit ratio (total loans/total deposits) % 1.13 1.24
9 % of classified loans against total loans % 3.06 2.02
10 Profit after tax and provision Taka in million 1,244 1,154
11 Classified loans, advances and leases during the year Taka in million 1,647 915
12 Provisions kept against classified loans, advances and leases Taka in million 233 (2)
13 Provision surplus / (deficit) against classified loans, advances and leases Taka in million - -
14 Cost of fund % 9.36 10.56
15 Interest earning assets Taka in million 69,325 55,036
16 Non-interest earning assets Taka in million 2,444 2,123
17 Return on investment (ROI) % 2.39 2.66
18 Return on assets (ROA) % 1.93 2.18
19 Income from investment Taka in million 273 54
20 Operating profit per share Taka 10.21 8.31
21 Earnings per share Taka 4.95 4.59
22 Price earning ratio Times 12.85 14.82
132
Statement of Directors’ Responsibility for Internal Control,
Financial Reporting and Corporate Governance
 Responsibility for financial statements creation and delivery of value to our stakeholders, particularly
in an economic environment that remains both uncertain and
The Directors are responsible for ensuring that the Company challenging.
keeps proper books of accounts of all the transactions and
prepares financial statements, which give a true and fair view of At our Company, the Board’s primary role is to provide leadership,
the state of its affairs and profit/ loss for the year. ensure that it is appropriately managed and deliver long-term
shareholder value. It also sets the Group’s strategic objectives
The Board of Directors accepts responsibility for the integrity and provides direction as a whole. A number of key decisions
and objectivity of the financial statements. It ensures that the are reserved for and may only be made by the Board, which
estimates and judgments relating to the financial statements enables it and the executive management to operate within a
were made on a prudent and reasonable basis so that they reflect clear governance framework.
in a true and fair manner, the form and substance of transactions
and reasonably present the Company’s true state of affairs. At IDLC, we have also established and embraced - both in letter
and spirit - our Code of Conduct, signed by each and every
The Board of Directors confirm that the International Financial member as an acceptance to adhere to the principles of the Code
Reporting Standard (IFRS) and International Accounting during all business dealings. The Code also sets out guidance on
Standards, as adopted in Bangladesh by the Institute of Chartered best practices in the form of principles and provisions on how
Accountants of Bangladesh, have been adhered to, subject to we should adopt and follow good governance practices. It has
any material departure being disclosed and explained in the been the Board’s view that the Company’s governance regime
notes to the accounts. has been fully-compliant with the best practices set out in the
Code during the year under review.
The Board also confirms that the Company keeps accounting
records, which disclose with reasonable accuracy, the financial
Opinion of external auditors
position of the Company, and which enables it to ensure that
the financial statements comply with the requirements of the The auditor of the Company, ACNABIN, Chartered Accountants,
Companies Act, 1994, Securities and Exchange Rules, 1987, have carried out annual audit to review the system of internal
Financial Institutions Act, 1993, and Listing Regulations of Dhaka controls, as they consider appropriate and necessary, for
Stock Exchange Limited and Chittagong Stock Exchange Limited expressing their opinion on the financial statements. They have
and amendments thereto. also examined the financial statements made available by the
management together with all the financial records, related data,
 Responsibility for internal control systems minutes of shareholders and Board meetings, relevant policies
and expressed their opinion.
To ensure this, the Company has taken proper and sufficient
care in installing a system of internal control, which is reviewed, Moreover, in compliance with the conditions of the Corporate
evaluated and updated on an ongoing basis. The internal control Governance Guidelines issued by Bangladesh Securities and
and compliance department of the Company conducts periodic Exchange Commission (BSEC) vide their notification no. SEC/
audits to provide reasonable assurance that the established CMRRCD/2006-158/134/Admin/44, dated 07 August 2012, on
policies and procedures of the Company were consistently behalf of Hoda Vasi Chowdhury and Co., Chartered Accountants,
followed. Sabbir Ahmed FCA, Partner, examined the compliance with
the said conditions of Corporate Governance and certified
 Responsibility for Corporate Governance that IDLC Finance Limited has complied with the conditions
At IDLC, we view the governance and oversight of our distinctive of Corporate Governance stipulated in the above mentioned
business model and prudent strategy as key to the ongoing BSEC’s notification dated 07 August 2012.
133
The future As an enterprise that

believes in enhancing
is clear. transparency with ongoing
The future communication with its

stakeholders on its
is bright. performance and prospects,
IDLC has always presented a
fair and true picture of its
operations. This has not only
built shareholder trust and
faith but has also enabled
them to have a better clarity
on the Company’s future –
that is clear and bright.
134
Directors’ Report to the shareholders of
Dear Shareholders, The Bangladesh Bank has taken an expansionary stance in its
latest monetary policy statement by targeting higher Broad
The Board of Directors of IDLC Finance Limited takes pleasure Money, Domestic Credit, Public Sector Credit and Private Sector
in presenting the audited financial statements of the Company Credit in June 2016 compared to the actual growth achieved in
for the year ended December 31, 2015; the Auditor’s Report, December 2015. To spur investment further to achieve higher
along with IDLC Group’s performance; issues in regard to the GDP growth rate, the Bank has cut its policy rate by 50 basis
Companies Act, 1994, and guidelines issued by the Bangladesh points after keeping the rate steady for three years.
Securities and Exchange Commission (BSEC), the Bangladesh
Bank and the Bangladesh Accounting and Financial Reporting
Standards.
BANGLADESH ECONOMY REVIEW
In FY15, Bangladesh witnessed the highest growth rate in the

last eight years. The country’s GDP grew by 6.55% in the last
fiscal year 2014-15, in spite of political turmoil in the beginning
of 2015. The country was also able to achieve the lower middle
income status in 2015, with a per capita income of $1,314.
Overall, with such a high growth rate, Bangladesh is now the
second fastest growing nation in South Asia, only behind
India. Over the years, the Government and the Central Bank
have guided the real estate and financial sectors into inclusive, Source: Monetary Policy Statement, Jan-Jun 2016, Bangladesh Bank
environmentally sustainable output activities with the objective
of achieving macroeconomic stability and growth. This has Inflation based on the consumer price index (CPI) maintained
helped the economy to maintain a surplus of 6% annual a declining trend in 2015. Point-to-point inflation fell to 6.1% in
average real GDP growth for almost a decade. December 2015, which can be attributed to depressed global
commodity markets. Moreover, food occupies about 60% of the
consumption basket and the price of food is falling all over the
Forecasting GDP Growth:FY2016- FY2019
8.5
world. However, non-food inflation is showing an upward trend
8.0
Axtual Projection since October 2014. The pay rise in the Government sector is
7.5 likely to push up prices but the expected fuel price adjustment in
7.0 the country may pull it down again.
6.5
6.0
5.5
5.0
4.5
40
2002 2004 2006 2008 2010 2012 2014 2016 2018
Actual GDP Growth Projection
Source: Monetary Policy Statement, Jan-Jun 2016, Bangladesh Bank
The budget outlay increased by 17.8% in 2015-16. The overall

fiscal deficit including foreign grants in FY15 was about
4.7% of GDP. However, there is little improvement in the
implementation of the Annual Development Plan (ADP). Even
then, the size of the ADP in FY16 is estimated to increase by
Source: Monetary Policy Statement, Jan-Jun 2016, Bangladesh Bank
27.5% relative to the ADP of FY15. By the end of the third
quarter of 2015, the private sector credit was around 13.8% Imports grew higher than exports in 2014-15, which showed a
compared to the Monetary Policy target of 14.3% for the same sluggish trend. Imports stood at $40.7 billion with 9.4% growth
period. However, Bangladeshi companies are taking advantage and export increased to $31.2 billion with a mere 3.4% growth.
of low cost foreign financing with depressed global rates. The Political unrest, compliance issues in the RMG sector, a slow
Government’s investment-promotion agency has allowed global economy and low demands in Europe with the fall in
private firms to borrow about $8.6 billion through foreign Euro were some of the main reasons for the dip in the export
funding at low rates in the last seven years.
135
proceeds. The Bangladesh Bank expects about 8% growth in of our market is about $40 billion whereas the equity market
both imports and exports in next fiscal year, in the backdrop of capitalization is about $33 billion. Interestingly, the top ten
record low oil prices and depressed global commodity markets. market cap companies represent about 43% of equity market
capitalization and all 12 listed MNCs represents about 32.5% of
Remittance, which is an important part of the country’s growth, equity market capitalization. Bangladesh equity market is very
grew to $15.3 billion in 2014-15 compared to $14.2 billion in 2013- small in size compare to our neighbors and peers- our market
14. With an increasing number of Bangladeshi workers going cap to GDP is about 17% where the same ratio is much higher for
abroad, despite concerns regarding the possible slowdown of the countries like India (72%), Philippines (61%), Thailand (98%),
development activities in the Middle East due to loss of revenue Malaysia (72%) and Indonesia (39%).
on the decline of oil prices, the Bangladesh Bank estimates about
5% growth of remittance proceeds in 2015-16. 2015 was a tough year for the stock market as the year started
with political turmoil on the cards and investors were mostly
While the trade deficit mitigated in 2014-15, the current account inactive during first few months of the year. The prime index,
surplus also widened at the end of the fiscal year and stood at DSEX, fell by 6.3% in 2015 compared to a rise of 13.5% in 2014.
about $2 billion because of increased remittances. However, Daily average trade in DSE was Taka 4.2 billion in 2015 compared
the surplus in the balance of payments decreased from $5.5 to about Taka 5.0 billion in 2014. The DSEX traded between
billion in FY14 to $4.4 billion in FY15, mainly resulting from errors index value of minimum 3,959.7 and maximum 4,969.7 in 2015.
and omissions. Foreign reserves increased to $27.5 billion in Pharmaceuticals became the leader followed by Bank sector
December 2015 which is sufficient to meet more than 7 months towards the end of the year in terms of market cap; both the
of import payments. sectors rose to the top due to loss of market cap of Telecom
The financial sector is yet to pick up pace. Asset quality of state- sector, the long standing leader of our stock market.
owned commercial banks is a major concern for the sector. Falling
IDLC’S PERFORMANCE
interest rates for both lending and borrowing has brought down
call money rates in the backdrop of low credit demand, excess The year 2015 proved to be a pivotal year in our efforts to
liquidity in the banking system and falling yield of government optimize our business model for driving future growth. Despite
securities. The Bangladesh Bank has started implementing new several challenges on the political and economic fronts that
provisions related to lending and the banks’ exposure to stock led to sluggish industrial growth and weak consumption, IDLC
markets which are expected to prevent excessive risk-taking by reported a respectable performance during the year under
banks. report, a testimony of its robust business model.
The company reported Net Interest Income of Taka 3,418 million,

and Net Income after Tax of Taka 1,459 million in 2015, which
contributed to the shareholders’ equity 20.39% for the year. This
demonstrates effective deployment of capital and resources as
IDLC Finance Limited continues to outperform its peers in this
area. Amid efforts to enhance our future growth prospects,
we remained vigilant in strengthening the balance sheet and
maintaining a solid credit profile. Total assets increased by over
24.6% to Taka 73,434 million at December 31, 2015. Asset quality
remains a top priority, with our performance measures of non-
performing asset and reserves exceeding the averages of our
peer group.
We believe the stage has been set for the Company and its
Source: Monetary Policy Statement, Jan-Jun 2016, Bangladesh Bank operating subsidiaries to deliver meaningful growth and acquire
market share while maintaining the excellent asset quality that
The Bangladesh Government is hopeful of achieving a GDP has been the hallmark of IDLC Finance Limited for many years.
growth of 7% for the fiscal year 2015-16. However, several
international bodies also projected GDP growth of Bangladesh As a pioneer in the non-bank financial institution (NBFI) sector of
in 2015-16. International Monetary Fund (IMF) has forecasted Bangladesh, IDLC represents a shining example of institutional
a GDP growth of 6.3% lowering from its previous projection excellence. Besides being a catalyst in fostering the country’s
of 6.5%. World Bank is more optimistic of GDP growth and economic and developmental progress, the Company has helped
forecasted a growth of 6.7% raising the forecast from 6.4%. Asian entrepreneurs realise their dreams and achieve their goals and
Development Bank (ADB) also forecasted a GDP growth of 6.7% enabled consumers to live a better quality of life. The Company’s
in 2015-16. All the international trade bodies are expecting to see sustainable and consistent success in shareholder value creation
a strong growth in the coming years. The 7th five year plan by the is hence a result of concerted efforts to emerge as a role model
government has set up an optimistic target of GDP growth of in the sector that it stewards and it does so through a time-tested
7.2% in the fiscal year 2016-17 and 7.4% in the fiscal year 2017-18. business strategy and a corporate culture that nurtures governance
and environmental and social responsibility. The Company is also
Capital Market Review of Bangladesh 2015 anchored by a passionate and professional team that is focused
on achieving long-term corporate plans while at the same time
With more than 550 securities including stocks, corporate bonds,
are assured of sound prospects for career advancement.
treasury bonds and mutual funds, the total market capitalization
136
A wide and vibrant product basket with a balanced focus on the IDLC’s Treasury demonstrated remarkable performance in both
Corporate, Retail and SME sectors, a holistic solutions suite for managing liquidity and keeping the cost of funds at reasonable
capital markets under three wholly-owned subsidiaries (IDLC levels. In 2015, market interest rate was at a declining trend
Securities Limited, IDLC Investments Limited and IDLC Asset throughout the year as excess liquidity piled up in the financial
Management Limited) and high levels of operational efficiency sector. Customer deposits constitutes 81% of the funding basket
has enabled the Company to emerge as a point of reference in of IDLC. As such, the reduction in interest rate on deposits, by
Bangladesh’s NBFI sector and capital markets space. During 2015, nearly 165 bps, had a significant impact on overall cost of fund.
IDLC reinforced its presence as a sector leader in the country and To reap the benefit from this, the deposit rates were strategically
strengthened its positioning as a customer-centric non-banking re-priced several times over the year. Continued emphasis was
financial institution. placed on utilization of refinancing facilities of the Bangladesh
Bank that further helped curtail the cost of funds.
The Company’s SME division continued to grow at a steady
pace on the back of robust customer relationships and swift The IDLC Group’s consolidated performance in 2015 has been
loan processing and turnaround times. The division disbursed summarized below:
Taka 15,656 million in 2015 and registered a portfolio growth of
24.92% to Taka 22,368 million. Refinancing receipts amounted Taka in million
to Taka 3,020 million in 2015, making IDLC one of the largest IDLC Group
participants of the refinancing programs of the Bangladesh Bank Particulars
and other low-cost fund providers. 2015 2014 Growth (%)
Net interest income 3,417.99 2,888.77 18.32%

Our focus on driving entrepreneurship among women resulted
in disbursements (under women entrepreneur loans) growing Other operating income 1,169.91 768.95 52.14%
40% to Taka 2,004 million during the year under report. IDLC Total operating income 4,587.90 3,657.72 25.43%
has launched two new SME Products: IDLC Purnota and
IDLC Udbhabon; and three new refinancing schemes - IDLC Total operating expenses 1,647.79 1,463.65 12.58%
Pinion, IDLC Startup Financing, and IDLC Dairy Financing – in Profit before provisions 2,940.11 2,194.07 34.00%
partnership with SME Foundation and Bangladesh Bank that
Provision for loans/
further enhanced the SME profile. 311.61 7.55 4027.28%
investments *
The Consumer division, IDLC’s largest unit in terms of customer Profit before taxes 2,628.50 2,186.53 20.21%
base and funds under management, increased its loan and
Provision for taxes 1,169.28 941.02 24.26%
deposit portfolio to Taka 20,633.41 million and Taka 46,174
million, respectively, in 2015, registering a respectable 17.78% Net profit after taxation 1,459.22 1,245.51 17.16%
and 30.64% growth, respectively, over the last year. Aligned with
*As instructed by Bangladesh Bank (BB), the Company started
the dynamic business environment, we continued to embrace a
to follow BB’s provisioning policy for financial institution from
shift in focus from rate-sensitive corporate clients to individuals
September, 2014 instead of its internal stringent provisioning
(retail) who are less rate-sensitive, in mobilizing deposits. Backed
policy, which resulted in a substantial fall in provision for loan
by the continued structural reforms and continuous training of
losses by an amount of Taka 241.15 million in the year 2014.
employees, the division has sustainably added value to its home
Nullifying the impact of this one-off decrease in 2014, year-on-
and car loan facilities.
year growth in provision for loans and investments is in effect
In 2015, the Structured Finance Department (SFD), which is a around 25%, commensurate with the growth in asset portfolio in
segment of Corporate Division, attained a satisfactory fee income the period under consideration.
of Taka 60.03 million. While many other players in the industry
This is a useful synopsis of the Company performance during the
were struggling to survive, SFD arranged subordinated bonds
past year from the Management’s point of view and narrates how
for commercial banks, arranged Taka 5.00 billion in the form of
The IDLC Group operates sustainably through the Company’s
coupon bearing subordinated bonds for one of the largest banks
engagement with its key stakeholders. The review also provides
in the country and also arranged Taka 3.55 billion as commercial
a glimpse of the future performance of the Company as well.
paper for 4 (four) eminent corporate houses of the country. The
Corporate Division (overall), has attained a 10.72% growth in The IDLC Group’s net interest income and operating income
cumulative divisional portfolio to Taka 10,623 million by the end witnessed an escalation of 18.32% and 25.43%, respectively,
of the year. in 2015. Correspondingly, operating expenses witnessed
a restrained growth of 12.58% despite recruiting 682 new
Despite the market vulnerabilities, both IDLC Investments
employees (majority of which were recruited to strengthen the
Limited (IDLCIL) and IDLC Securities Limited (IDLCSL), IDLC’s
sales organization and, in turn, brought reduction in business
wholly-owned subsidiaries operating in the capital markets,
acquisition cost) and conducting several training sessions
demonstrated a resilient performance during the year under
towards capacity building; the benefits of this exercise are
report. IDLCIL attained an impressive net profit after tax of Taka
expected to accrue in the future. Profit before provision increased
119.32 million while IDLCSL achieved a strong growth in net
by 34% as against a 25.43% increase in operating income, mainly
profit of 147.02% to Taka 96.08 million in 2015.
on the back of lower increase in operating expenses.
137
Comparison of actual and budgeted performance Quarterly performance - IDLC Group

of IDLC Group.
Taka in million Taka in million
2015
IDLC Group Particulars
Particulars Q1 Q2 Q3 Year 2015
Actual Budget Variances (%)
Net interest income 784.28 864.29 843.19 3,417.99
Net interest income 3,418 4,018 -14.93%
Other operating income 217.67 283.55 405.94 1,169.91
Other operating income 1,170 968 20.80%
Total operating income 1,001.95 1,147.84 1,249.13 4,587.90
Total operating income 4,588 4,986 -7.99%
Total operating expenses 359.83 405.63 445.00 1,647.79
Total operating expenses 1,648 1,854 -11.11%
Profit before provisions 642.12 742.20 804.12 2,940.11
Profit before provisions 2,940 3,133 -6.14%
Provision for loans/ 216.33 (204.08)** 169.08 311.61
Provision for loans/
312 318 -2.13% investments
investments
Profit before taxes 425.79 946.28 635.04 2,628.50
Profit before taxes 2,629 2,814 -6.60%
Provision for taxes 278.62 275.75 301.92 1,169.28
Provision for taxes 1,169 1,278 -8.50%
Net profit after taxation 147.17 670.53 333.13 1,459.22
Net profit after taxation 1,459 1,536 -5.01%
**Decrease in the provision for loans/investments in Q2 was
The IDLC group came just short of achieving the budgeted driven by decline in required provision for Diminution in the
Net profit after Tax of Taka 1,536 million in 2015. However, this Value of Investments, This reduction in Diminution in the value
information should be considered in light of the fact that during of investment was a combined result of increase in the market
the budgeting exercise the political and economic situation value of investment held in the company’s proprietary portfolio
was envisioned to remain stable and improving throughout as well as the changes brought about by Department of Financial
the year. In reality the country experienced significant political Institutions and Markets (DFIM) Circular No. 05 dated May 11,
upheaval in Q1 2015 which adversely impacted the operating 2015 titled “Provision against unrealized loss for diminution of
performance of most of the businesses. Despite this setback value of investment in Mutual fund Units”.
in Q1, the IDLC group realigned its targets and experienced
considerable improvement in the operating performance in The above table depicts that Net Profit after Tax of the IDLC
subsequent quarters, finishing the year with a Net profit after Tax Group improved significantly from Q2 onwards after the initial
just 5% short of budget. setback experienced in Q1. As mentioned earlier, the country
Quarterly disclosed financial performance and 2015 financial experienced significant political upheaval in Q1 2015 which
performance: adversely impacted the operating performance of most of the
businesses. However, the IDLC group remained proactive in its
As stipulated by law, the Company is required to publish the strategy throughout this tumultuous period and resultantly,
financial performance of its 1st, 2nd and 3rd quarters. The quarterly when socio-political scenario improved thereafter, was able to
financial performance and the yearly performance are indicated deliver strong profit in subsequent quarters.
in the following table:
CONTRIBUTION TO THE ECONOMY OF BANGLADESH
Quarterly performance - IDLC Finance Limited
IDLC aspires to be one of the major contributors to the economy of
Taka in million
Bangladesh through its contribution to the national exchequer, as
2015 well as through creation of employment (both direct and indirect).
Particulars
Q1 Q2 Q3 Year 2015 In 2015, IDLC deposited Taka 822.26 million to the Government
exchequer as corporate income tax. Also, Taka 549.17 million
Net interest income 736.44 805.12 780.80 3,196.67 was collected and deposited to the Government exchequer as
withholding tax, VAT and excise duty.
Other operating income 153.61 189.05 221.11 764.18
Moreover, a total of 682 people were recruited in different
Total operating income 890.05 994.16 1,001.91 3,960.85
positions across the Group.
Total operating expenses 301.09 345.40 378.35 1,393.76
RISK MANAGEMENT
Profit before provisions 588.96 648.76 623.56 2,567.09
At IDLC, we believe that getting risk management right is an
Provision for loans/ essential component of success. The identification, evaluation
171.47 (158.95)** 150.38 291.57
investments and management of risk, together with the way we respond
to changes in the external operating environment are key to
Profit before taxes 417.49 807.72 473.18 2,275.52
sustainable growth and underpin the robustness of our business
Provision for taxes 249.46 241.64 262.51 1,031.70 plans and strategic objectives, protecting our license to operate
and our reputation and helping create a long-term source of
Net profit after taxation 168.03 566.07 210.67 1,243.82 competitive advantage.
138
Risk management is embedded in IDLC’s organisational The BASEL Implementation Desk (BID) specifically carries out
structure, operations and management systems. Business risks risk-based capital analysis and places it to the BIU along with
across the Group are addressed in a structured and systematic recommendations to facilitate enhanced decision-making for
way through a predefined risk management structure. This maintaining minimum/regulatory capital and managing related
ensures that the Board’s assessment of risk is informed by risk risks.
factors and mitigating controls originating from and identified
by the Group’s assets, functional departments and operations, Late in 2015, IDLC initiated implementation of an operational
including the Company’s subsidiaries. Moreover, IDLC possesses risk management framework. Under the framework, Unit
a detailed risk management system with procedures in place to Operational Risk Managers (UORM) have been appointed for
support risk evaluation across the Group. The risks associated the various departments and divisions. Separate forums at mid-
with the delivery of the business plan and annual work programs management and senior management level, known as Business
and the associated mitigation measures are maintained in asset Operational Risk Group (BORG) and Company Operational Risk
or project risk matrices and registers. Group (CORG) have been created for discussion and resolution
of Operational Risk issues. In addition to its usual responsibilities,
IDLC possesses different committees for risk management. the Internal Control and Compliance (ICC) department will act
The Credit Evaluation Committee (CEC) and Asset and Liability as a separate line of defence against operational risks under the
Committee (ALCO) is constituted by the Company’s senior new framework.
management team which regularly reviews issues related to
the markets, credit and liquidity and, accordingly, recommend Details about our risk management policies and practices are
and implement appropriate measures to proactively identify discussed in the ‘Statement of risk management report’ on page
and mitigate risks. IDLC possesses an approved Asset Liability no 75.
Management (ALM) policy under the responsibility of the ALCO,
CORPORATE AND FINANCIAL REPORTING FRAMEWORK
together with a robust ALM software and dedicated ALM desk to
generate necessary MIS for improving ALCO’s decision-making The Directors of IDLC, in conformance with the BSEC Notification
abilities. No. SEC/CMRRCD/2006-158/134/Admin/44 dated August 7,
2012, confirm compliance with the financial reporting framework
The Company’s Credit Risk Management (CRM) department
for the following:
independently scrutinizes projects from a risk-weighted
perspective and assists relevant departments in setting business  The financial statements, prepared by the management of
development priorities. These are aligned with the Company’s IDLC make a fair presentation of its activities, operational
risk appetite while optimizing the risk-return trade-off derived details and results, cash flow information and changes in
from relevant risk exposures. equity structure.
The CRM team also clearly defines exceptionally high-risk sectors  Proper books and accounts of the Company have been
and prohibits lending to those projects which the Company maintained.
does not ascribe to, including those which represent negative
environmental, social or ethical standards.  Appropriate accounting policies, including International
Accounting Standards (IASs)/International Financial
At an individual exposure level, a risk grading model (RGM) Reporting Standards (IFRSs) as adopted by Institute of
is used to promote corporate safety and sustainability by Chartered Accountants of Bangladesh (ICAB) as applicable in
facilitating informed decision-making. At the portfolio level, the Bangladesh, have been consistently applied in preparation
Company actively tracks the quality of its loans by analyzing risk of the financial statements. Any change or deviation has
migration and assessing trends in non-performing assets. Such been adequately disclosed.
indicators prompt timely decision-making by the relevant risk
management committees and help preserve the quality of loans  Accounting estimates are based on reasonable and prudent
and advances. To further enhance the risk mitigation measures, judgment.
IDLC is now collaborating with International Finance Corporation
 Internal control processes have been properly designed and
(IFC) to implement a world class Credit Risk Grading system for
effectively implemented and monitored.
assessment of SME Credits. Such systems are envisioned to be
implemented for other products and customer segments of the  No significant doubt exists upon the Company’s ability to
company also. continue as a going concern.
IDLC’s Credit Administration Department (CAD) and Internal KEY OPERATIONAL AND FINANCIAL INFORMATION
Control and Compliances (ICC) department are responsible
for assessing operational risks across the Company and also Key operational and financial information over the last five
ensure an appropriate framework to identify, assess and manage years, as per the requirements of SEC/CMRRCD/2006-158/134/
operational risks. Admin/44 dated August 7, 2012, has been presented on page
no. 126-127.
IDLC has also established a BASEL Implementation Unit (BIU)
responsible for implementing Capital Adequacy and Market Highlights of the Company’s operations as per the DFIM Circular
Discipline (CAMD) instructions of the Bangladesh Bank across No. 11 dated December 23, 2009, have also been presented on
the Company and managing risk-based capital adequacy. page no. 132.
139
RELATED PARTY TRANSACTIONS AUDITORS
Disclosure of all related party transactions, including basis for The auditors of the Company, ACNABIN, Chartered Accountants,
such transactions, has been provided in Note 37 of financial has completed their second years of audit as the statutory
statements on page no 217. auditors of the Company, as appointed at the 30thAnnual General
Meeting. As per the stipulation of FID Circular No. 03, dated
SHAREHOLDING PATTERN March 02, 1999, they are eligible for reappointment for three
consecutive years. On the basis of the proposal of the Board’s
IDLC’s shareholding pattern as on December 31, 2015,is disclosed
Audit Committee, the Board recommends the appointment
as per the revised CGG of BSEC in Annexure-I of this report on
of ACNABIN, Chartered Accountants, as the auditors of the
page no. 141.
Company for the year 2016 at an existing remuneration of Taka
BOARD MEETINGS AND ATTENDANCE BY THE DIRECTORS 400,000 (Taka four lac only).
During the year 2015, a total of sixteen meetings of the Board STATUS OF COMPLIANCE
were held. Attendance by the Directors and remuneration to the
Status of compliance with the conditions imposed by the
Directors has been summarised in Annexure-II of this report on
Bangladesh Securities and Exchange Commission’s Notification
page no. 142.
No. SEC/CMRRCD/2006-158/134/Admin/44, dated August
PROPOSED DIVIDEND 7, 2012, along with a certificate from a practicing Chartered
Accountant has been enclosed in Annexure-III on page no. 143.
The Board has proposed cash dividend @25% (Taka 2.50) per
We also enclose a statement of compliance on the good
share for the year 2015.
governance guidelines issued by the Bangladesh Bank as
DIRECTORS Annexure-IV on page no. 151.
A brief profile of all directors, including newly appointed/ On behalf of the Board of Directors,
re-appointed, are provided in the section “Brief Profile of the Sd/-
Directors” of this report on page no. 61-65. Further disclosure is Aziz Al Mahmood
given in page no. 217, which encompasses names of companies Chairman
in which they hold directorship. The directors also lend their IDLC Finance Limited
expertise as members of two permanent Committees of the
Board as per BSEC and Bangladesh Bank Guidelines; the details of
which are appended in the “Statement of Corporate Governance”
on page no. 90.
As per Article 116 of the Articles of Association of the Company,

the following Directors will retire from the office of the Company
at the 31stAnnual General Meeting:
 Mr. Faruq M. Ahmed, Director Nominated by The City Bank

Limited
 Mr. Md. Kamrul Hassan, FCA, Director Nominated by

Transcom Group of Companies
 Mr. Md. Shahidul Ahsan, Director Nominated by Mercantile

Bank Limited
 Mr. Md. Rezaul Karim, Director Nominated by Sadharan Bima

Corporation
However, they are also eligible for re-election.
140
Annexure-I
Shareholding pattern as on December 31, 2015 as required by the revised Corporate
Governance Guidelines issued by BSEC
No. of shares % of total shares

Particulars Remarks
Held of IDLC
Shares Held by:
Directors, their spouses and minor children* 35,687 0.0014
Chief Executive officer (CEO) and his spouse and minor children Nil
Chief Financial Officer (CFO) and his spouse and minor children Nil
Company Secretary (CS) and his spouse and minor children Nil
Head of Internal control and Compliance (HICC) Nil
Executives (Top five person other than CEO, CFO, CS, HICC):
1. H. M. Ziaul Hoque Khan, FCA, Deputy Managing Director Nil
2. M. Jamal Uddin, Deputy Managing Director Nil
3. Mir Tariquzzaman, Chief Technology Officer Nil
4. Asif Saad Bin Shams, Head of Credit and Collection Nil
5. Bilquis Jahan, Head of Human Resources 3,553 0.0001
Shareholders holding 10% or more voting right:
The City Bank Limited 60,854,056 24.2092
Transcom Group 33,515,443 13.3333
Total 94,369,499 37.5425
*All the Directors except Independent Directors are Directors nominated by institutions and they do not hold any shares in their personal name.
141
142
Annexure-II
Meeting attended by the Directors of IDLC Finance Limited during 2015
Board of Directors Meeting Executive Committee Meeting Audit Committee Meeting

Total BOD Total EC Total AC Total
meeting Attendance Remuneration meeting Attendance Remuneration meeting Attendance Remuneration Remuneration
Name of Director Held Meeting as % of total paidt for Held Meeting as % of total paid for Held Meeting as % of total paid for paid for the
during Attended meeting attending the during Attended meeting attending the during Attended meeting attending the year 2015
Director’s held meeting Director’s held meeting Director’s held meeting
tenure tenure tenure
(Taka) (Taka) (Taka) (Taka)
Mr. Anwarul Huq * 12 12 100 60,000 - - - - 5 5 100.00 25,000 85,000
Mr. Rubel Aziz 16 9 56.25 48,000 10 7 70.00 35,000 6 3 50.00 15,000 98,000
Mr. Md. Shahidul Ahsan 16 13 81.25 68,000 4 4 100.00 20,000 - - - - 88,000
Mr. Farooq Sobhan 16 11 68.75 58,000 - - - - 3 3 100.00 15,000 73,000
Mr. Aziz Al Kaiser 16 2 12.5 10,000 - - - - - - - - 10,000
Ms. Meherun Haque 16 6 37.5 30,000 - - - - - - - - 30,000
Mr. Hossain Mehmood 16 14 87.5 73,000 - - - - - - - - 73,000
Mr. Faruq M. Ahmed 16 10 62.5 50,000 14 11 78.57 55,000 - - - - 105,000
Mr. Md. Kamrul Hassan, FCA 16 16 100 83,000 - - - - 6 6 100.00 30,000 113,000
Mr. Atiqur Rahman ** 2 2 100 13,000 - - - - - - - - 13,000
Mr. Md. Rezaul Karim 16 2 12.5 10,000 14 3 21.43 15,000 6 - - - 25,000
Mr. Syed Abu Naser Bukhtear
8 7 87.5 35,000 7 7 100.00 35,000 - - - - 70,000
Ahmed***
Mr. Monower Uddin Ahmed 16 12 75 60,000 - - - - 3 3 ***** 100.00 15,000 75,000
Mr. A.K.M. Shahidul Haque **** 5 4 80 23,000 5 5 100.00 25,000 - - - - 48,000
Total Remueration paid 621,000 185,000 100,000 906,000
Noted: Remuneration paid for attending the meeting are exclusive of VAT amount
Leave of absence was granted to the Directors those who could not attend at the meeting.
* Nomination of Mr. Anwarul Huq withdrew on September 17, 2015.
** Mr. Atiqur Rahman was appointed as Director in place of Mr. Anwarul Huq on October 13, 2015.
*** Mr. Syed Abu Naser Bukhtear Ahmed, Independent Director, resigned on June 30, 2015.
**** Mr. A.K.M. Shahidul Haque was appointed as Independent Director in place of Mr. Syed Abu Naser Bukhtear Ahmed on August 12, 2015.
***** Mr. Monower Uddin Ahmed chaired the meeting in absense of Mr. Farooq Sobhan, Chairman of the Audit Committee.
Annexure-III
Certificate on Compliance of Conditions of Corporate Governance Guidelines to the Shareholders of IDLC Finance Limited
We have examined the compliance of condition of corporate governance guidelines of the Bangladesh Securities and Exchange
Commission (“BSEC”) by IDLC Finance Limited (the “Company”) as stipulated in the BSEC notification no SEC/CMRRCD/2006-158/134/
Admin/44 dated 7thAugust 2012 and subsequent modification SEC/CMRRCD/2006-158/147/Admin/48 dated 21 July as 2013 as at 31st
December 2015.
The Company’s Responsibilities
Those charged with governance and management of the Company are responsible for complying with the conditions of corporate
governance guidelines as stated in the aforesaid notification and reporting of the status of compliance in the annual report.
Our Responsibilities
Our examination for the purpose of issuing this certification was limited to the checking of procedures and implementations thereof,
adopted by the Company for ensuring the compliance of conditions of corporate governance and correct reporting of compliance
status on the attached statement on the basis of evidence gathered and representation received.
Conclusion
To the best of our information and according to the explanations given to us, we certify that the Company has complied with the
conditions of corporate governance stipulated in the above mentioned BSEC notification and reported thereon.
Sabbir Ahmed, FCA

Partner
Hoda Vasi Chowdhury & Co
Chartered Accountants
ICAB Enrolment Number 770
Status of Compliance with the Corporate

Governance Guidelines (CGG)
Status of Compliance with the conditions imposed by Bangladesh Securities and Exchange Commission’s (BSEC) Notification No. SEC/
CMRRCD/2006-158/134/Admin/44, dated August 07, 2012, issued under section 2CC of the Securities and Exchange Ordinance, 1969,
is presented below:
(Report under Condition No. 7.00)

Compliance Status as on
Condition No. Title December 31, 2015 Remarks
Not (if any)
Complied
Complied
Board’s Size: Refer to ‘IDLC’ Corporate Governance
1.1 (number of Board members - minimum 5 and √ Report on page no. 86 of this Annual Report
Maximum 20)
IDLC Finance Limited being a financial
institution, such size of the Board shall be
limited to 9 to 11, as per FID Circular No. 9,
dated September 11, 2002.
1.2 Independent Directors
1.2(i) At least one fifth (l/5) of the total number of √ Refer to ‘IDLC’ Corporate Governance
Directors shall be Independent Directors Report on page no. 86 of this Annual Report
1.2 (ii) Independent Director means a Director:
1.2(ii)(a) Who either does not hold share in the √ None of the Independent Directors hold
company or holds less than one (1%) shares of any share of the company
the total paid up shares of the company
1.2(ii)(b) Who is not sponsor of the Company and is √ None of the Independent Directors not
not connected with any sponsor or director or connected with any sponsor or director or
shareholder who holds one percent or more shareholder of the company
shares of the Company
1.2(ii)(c) Who does not have any other relationship, √ Refer to the note no. 37 of “Audited Financial
whether pecuniary or otherwise, with Statement”
the company or its subsidiary/associated
companies
1.2(ii)(d) Who is not a member, director or officer of √

any stock exchange;
1.2(ii)(e) Who is not a shareholder, director or officer √

of any member of stock exchange or an
intermediary of the capital market;
1.2(ii)(f) Who is not a partner or an executive or was not √
a partner or an executive during the preceding
3 (three) years of the concerned company’s
statutory audit firm;
1.2(ii)(g) Who shall not be an independent director in √
more than 3 (three) listed
companies;
1.2(ii)(h) Who has not been convicted by a court √ Such declaration was given during
of competent jurisdiction as a defaulter in appointment
payment of any loan to a bank or a Non-Bank
Financial Institution (NBFI);
1.2(ii)(i) Who has not been convicted for a criminal √

offence involving moral turpitude.
144
Not (if any)
Complied
Complied
1.2(iii) Independent Director(s) shall be appointed by √
the Board of Directors and approved by the
Shareholders in the Annual General Meeting
(AGM);
1.2(iv) The post of independent director(s) cannot √ No such vacancy created
remain vacant for more than 90 (ninety) days.
1.2(v) The Board shall lay down a code of conduct of √ The Board at its 238th meeting held on
all Board members and annual compliance of December 24, 2015 recorded its annual
the code to be recorded. compliance 2016 with the Code of
Conduct.
1.2(vi) The tenure of office of an independent director √
shall be for a period of 3 (three) years, which
may be extended for 1 (one) term only.
1.3 Qualification of Independent Director(ID)
1.3(i) Independent Director shall be a knowledgeable √ Qualification of respective Independent

individual with integrity who is able to ensure Director is disclosed in Director’s Profile page
compliance with financial, regulatory and no. 61-65 of this Annual Report
corporate laws and can make meaningful
contribution to business.
1.3(ii) The person should be a Business Leader/ √

Corporate Leader/ Bureaucrat/University
Teacher with Economics or Business Studies
or Law background/ Professionals like
Chartered Accountants, Cost & Management
Accountants, Chartered Secretaries.
The independent director must have at least
12 (twelve) years of corporate management/
professional experiences.
1.3(iii) In special cases the above qualifications may No such deviation occurred
be relaxed subject to prior approval of the
Commission.
1.4 Chairman of the Board and Chief Executive √ Refer to the page no. 86 of Corporate
Officer: Governance of this Annual Report
The positions of the Chairman of the
Board and the Chief Executive Officer of
the companies shall be filled by different
individuals. The Chairman of the company
shall be elected from among the directors
of the company. The Board of Directors
shall clearly define respective roles and
responsibilities of the Chairman and the Chief
Executive Officer.
1.5 Directors Report to Shareholders shall include following additional statements on:
1.5(i) Industry outlook and possible future √ Refer to the ‘‘Directors’ Report” on page
developments in the industry no. 135-136 of this Annual Report
1.5(ii) Segment-wise or product-wise performance √ Refer to the ‘‘Directors’ Report” on page
no. 136-138 of this Annual Report
1.5(iii) Risks and concerns √ Refer to the ‘‘Directors’ Report” on page
1.5(iv) Discussion on Cost of Goods sold, Gross Profit √ IDLC being a Financial Institution such
Margin and Net Profit Margin formation of P&L is not followed rather
format prescribed by Bangladesh Bank is
followed
145
Not (if any)
Complied
Complied
1.5(v) Discussion on continuity of any Extra-Ordinary No such item exists
gain or loss
1.5(vi) Statement of all related party transactions √ Refer to the ‘‘Directors’ Report” on page
no. 140 & 217 of this Annual Report
1.5(vii) Utilization of proceeds from public issues, No such item existed
rights issues and/or through any others
instruments
1.5(viii) An explanation if the financial results No such events occurred
deteriorate after the company goes for Initial
Public Offering (IPO), Repeat Public Offering
(RPO), Rights Offer, Direct Listing, etc.
1.5(ix) If significant variance occurs between √ Refer to the ‘‘Directors’ Report” on page
Quarterly Financial performance and no. 138 of this Annual Report
Annual Financial Statements the
management shall explain about the variance
on their Annual Report.
1.5(x) Remuneration to directors including √ Refer to the ‘‘Directors’ Report” on page
independent directors no. 140 of this Annual Report
1.5(xi) The financial statements prepared by the √ Refer to the ‘‘Directors’ Report” on page
management of the issuer company present no. 139 of this Annual Report
fairly its state of affairs, the result of its
operations, cash flows and changes in equity.
1.5(xii) Proper books of account of the issuer √ Refer to the ‘‘Directors’ Report” on page
company have been maintained. no. 139 of this Annual Report
1.5(xiii) Appropriate accounting policies have been √ Refer to the ‘‘Directors’ Report” on page
consistently applied in preparation of the no. 139 of this Annual Report
financial statements and that the accounting
estimates are based on reasonable and
prudent judgment.
1.5(xiv) International Accounting Standards (IAS)/ √ Refer to the ‘‘Directors’ Report” on page
Bangladesh Accounting Standards (BAS)/ no. 139 of this Annual Report
International Financial Reporting Standards
(IFRS)/Bangladesh Financial Reporting
Standards (BFRS), as applicable in Bangladesh,
have been followed in preparation of the
financial statements and any departure there-
from has been adequately disclosed.
1.5(xv) The system of internal control is sound in √ Refer to the ‘‘Directors’ Report” on page
design and has been effectively implemented no. 139 of this Annual Report
and monitored.
1.5(xvi) There are no significant doubts upon the √ No such issue revised
issuer company’s ability to continue as a
going concern. If the issuer company is
not considered to be a going concern, the
fact along with reasons thereof should be
disclosed.
1.5(xvii) Significant deviations from the last year’s √ Refer to the ‘‘Directors’ Report” on page
operating results of the issuer company no. 137 of this Annual Report
shall be highlighted and the reasons thereof
should be explained.
1.5(xviii) Key operating and financial data of at least √ Refer to the ‘‘Directors’ Report” on page
preceding 5 (five) years shall be summarized. no. 126-127 of this Annual Report
1.5(xix) If the issuer company has not declared Not applicable, as the Company declared
dividend (cash or stock) for the year, the cash dividend @25% for 2015
reasons thereof shall be given.
146
Not (if any)
Complied
Complied
1.5(xx) The number of Board meetings held during √ Refer to the ‘‘Directors’ Report” on page
the year and attendance by each director shall no. 140 of this Annual Report
be disclosed.
1.5(xxi) The pattern of shareholding shall be reported √ Refer to the ‘‘Directors’ Report” on page
to disclose the aggregate number of shares no. 141 of this Annual Report
(along with name wise details where stated
below) held by:-
1.5(xxi)(a) Parent/Subsidiary/Associated Companies and √ Refer to the ‘‘Directors’ Report” on page
other related parties (name wise details); no. 141 of this Annual Report
1.5(xxi)(b) Directors, Chief Executive Officer, Company √ Refer to the ‘‘Directors’ Report” on page
Secretary, Chief Financial Officer, Head of no. 141of this Annual Report
Internal Audit and their spouses and minor
children (name wise details);
1.5(xxi)(c) Executives ; √ Refer to the ‘‘Directors’ Report” on page
no. 141 of this Annual Report
1.5(xxi)(d) Shareholders holding ten percent (10%) or √ Refer to the ‘‘Directors’ Report” on page
more voting interest in the company (name no. 141 of this Annual Report
wise details).
1.5(xxii) In case of the appointment/re-appointment of a director the company shall Information regarding the Directors’ is
disclose the following information to the shareholders:- disclosed in brief profile of the Directors’
1.5(xxii)(a) A brief resume of the director; √ refer to the ‘‘Directors’ Report” onon page
1.5(xxii)(b) Nature of his/her expertise in specific √
functional areas;
1.5(xxii)(c) Names of companies in which the person also √
holds the directorship and the membership of
committees of the board.
2.0 Chief Financial Officer (CFO), Head of Internal Audit and Company Secretary (CS)
2.1 The company shall appoint a Chief Financial √ Refer to the Corporate Governance Report
Officer (CFO), a Head of Internal Audit (Internal on page no. 88 of this Annual Report.
Control and Compliance) and a Company
Secretary (CS). The Board of Directors should
clearly define respective roles, responsibilities
and duties of the CFO, the Head of Internal
Audit and the CS.
2.2 Requirement to attend the Board Meetings √ Refer to the Corporate Governance Report
The CFO and the Company Secretary of the on page no. 88 of this Annual Report.
companies shall attend the meetings of the
Board of Directors, provided that the CFO
and/or the Company Secretary shall not
attend such part of a meeting of the Board
of Directors which involves consideration
of an agenda item relating to their personal
matters.
3.0 AUDIT COMMITTEE:

3.0(i) The company shall have an Audit Committee √ Refer to the Corporate Governance Report
as a sub-committee of the Board of Directors. on page no. 90-92 of this Annual Report.
147
Not (if any)
Complied
Complied
3.0(ii) The Audit Committee shall assist the Board √ Refer to the Corporate Governance Report
of Directors in ensuring that the financial on page no. 91-92 of this Annual Report.
statements reflect true and fair view of
the state of affairs of the company and in
ensuring a good monitoring system within
the business.
3.0(iii) The Audit Committee shall be responsible to √ Refer to the Corporate Governance Report
the Board of Directors. The duties of the Audit on page no. 91-92 of this Annual Report.
Committee shall be clearly set forth in writing.
3.1 Constitution of the Audit Committee:

3.1(i) The Audit Committee shall be composed of at √ Refer to the Corporate Governance Report
least 3 (three) members. on page no. 91 of this Annual Report.
3.1(ii) The Board of Directors shall appoint members √ Refer to the Corporate Governance Report
of the Audit Committee who shall be directors on page no. 91 of this Annual Report.
of the company and shall include at least 1
(one) Independent Director.
3.1(iii) All members of the audit committee should √ Refer to the Corporate Governance Report
be “financially literate” and at least 1 (one) on page no. 91of this Annual Report.
member shall have accounting or related
financial management experience.
3.1(iv) Filling of casual vacancy in the Audit No such vacancy created
Committee
3.1(v) The company secretary shall act as the √ Refer to the Corporate Governance Report
secretary of the Committee on page no. 91 of this Annual Report.
3.1(vi) The quorum of the Audit Committee meeting √ Refer to the Corporate Governance Report
shall not constitute without Independent on page no. 91 of this Annual Report.
Director
3.2 Chairman of the Audit Committee

3.2(i) The Board of Directors shall select 1 (one) √ Refer to the Corporate Governance Report
member of the Audit Committee to be on page no. 90-92 of this Annual Report.
Chairman of the Audit Committee, who shall
be an independent director.
3.2(ii) Chairman of the audit committee shall remain √ Refer to the Corporate Governance Report
present in the Annual General Meeting (AGM) on page no. 90-92 of this Annual Report.
3.3 √ Refer to the Corporate Governance Report
Role of Audit Committee: (Bold the line)
on page no. 90-92 of this Annual Report.
3.3(i) Oversee the financial reporting process √ Refer to the Corporate Governance Report
on page no. 90-92 of this Annual Report.
3.3(ii) Monitor choice of accounting policies and √ Refer to the Corporate Governance Report
principles on page no. 90-92 of this Annual Report.
3.3(iii) Monitor Internal Control Risk management √ Refer to the Corporate Governance Report
process on page no. 90-92 of this Annual Report.
3.3(iv) Oversee hiring and performance of external √ Refer to the Corporate Governance Report
auditors on page no. 90-92 of this Annual Report.
3.3(v) Review along with the management, the √ Refer to the Corporate Governance Report
annual financial statements before submission on page no. 90-92 of this Annual Report.
to the board for approval
148
Not (if any)
Complied
Complied
3.3(vi) Review along with the management, the √ Refer to the Corporate Governance Report
quarterly and half yearly financial statements on page no. 90-92 of this Annual Report.
before submission to the board for approval
3.3(vii) Review the adequacy of internal audit √ Refer to the Corporate Governance Report
function on page no. 90-92 of this Annual Report.
3.3(viii) Review statement of significant related party √ Refer to the Corporate Governance Report
transactions submitted by the management on page no. 90-92 of this Annual Report.
3.3(ix) Review Management Letters/ Letter of √ Refer to the Corporate Governance Report
Internal Control weakness issued by statutory on page no. 90-92 of this Annual Report.
auditors
3.3(x) Declaration to Audit Committee by the √ No such event occurred
company regarding utilization of IPO/RPO,
Right issue money.
3.4 Reporting of the Audit Committee:
3.4.1(i) The Audit Committee shall report on its √ Refer to the Corporate Governance Report
activities to the Board of Directors. on page no. 90-92 of this Annual Report.
3.4.1 (ii) The Audit Committee shall immediately report to the Board of Directors on the following findings, if any:-
3.4.1(ii)(a) Report on conflicts of interests ; No such event occurred
3.4.1(ii)(b) Suspected or presumed fraud or irregularity or No such event occurred

material defect in the internal control system;
3.4.1(ii)(c) Suspected infringement of laws, including No such event occurred
securities related laws, rules and regulations;
3.4.1(ii)(d) Any other matter which shall be disclosed to No such event occurred
the Board of Directors immediately.
3.4.2 Reporting to the Authorities – No such event occurred
Reported to the Board of Directors about
anything which has material impact on the
financial condition and results of operation
3.5 Reporting to the Shareholders and General No such event occurred
Investors
Report on the activities carried out by the
Audit Committee, including any report made
to the Board of Directors under condition
3.4.1 (ii)
4.0 EXTERNAL / STATUTORY AUDITORS:
The issuer company should not engage its external/statutory auditors to perform the following services of the company;
namely:-
4.0(i) Appraisal or valuation services or fairness √ ACNABIN chartered Accountants
opinions. declared such independence during their
4.0(ii) Financial information systems design and √ appointment
implementation.
4.0(iii) Book-keeping or other services related to the √
accounting records or financial statements.
4.0(iv) Broker-dealer services. √
4.0(v) Actuarial services. √
4.0(vi) Internal Audit service √

4.0(vii) Any other services that the Audit Committee √
determines
4.0(viii) No partner or employees of the external audit √

firms shall possess any share of the company
they audit at least during the tenure of their
audit assignment of that company.
149
Not (if any)
Complied
Complied
5.0 SUBSIDIARY COMPANY:
5.0(i) Provisions relating to the composition of the √ Refer to the ‘‘Directors’ Report” on page
Board of Directors of the holding company no. 234, 243 & 246 of this Annual Report
shall be made applicable to the composition
of the Board of Directors of the subsidiary
company.
5.0(ii) At least 1 (one) independent director on the √
Board of Directors of the holding company
shall be a director on the Board of Directors of
the subsidiary company.
5.0(iii) The minutes of the Board meeting of the √
subsidiary company shall be placed for review
at the following Board meeting of the holding
company. Refer to the ‘‘Directors’ Report” on page
5.0(iv) The minutes of the respective Board meeting √ no. 234, 243 & 246 of this Annual Report
of the holding company shall state that they
have reviewed the affairs of the subsidiary
company also.
5.0(v) The Audit Committee of the holding company √
shall also review the financial statements,
in particular the investments made by the
subsidiary company.
6.0 Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO):
The CEO and CFO shall certify to the Board that:-
6.0(i) They have reviewed financial statements √ Refer to the ‘‘Report of the CEO & MD and
for the year and that to the best of their CFO” to the Board on page no. 155 of this
knowledge and belief: Annual Report
6.0(i)(a) These statements do not contain any √ Refer to the ‘‘Report of the CEO & MD and
materially untrue statement or omit any CFO” to the Board on page no. 155 of this
material fact or contain statements that might Annual Report
be misleading;
6.0(i)(b) These statements together present a true √ Refer to the ‘‘Report of the CEO & MD and
and fair view of the company’s affairs and CFO” to the Board on page no. 155 of this
are in compliance with existing accounting Annual Report
standards and applicable laws.
6.0(ii) There are, to the best of knowledge and belief, √ Refer to the ‘‘Report of the CEO & MD and
no transactions entered into by the company CFO” to the Board on page no. 155 of this
during the year which are fraudulent, illegal or Annual Report
violation of the company’s code of conduct.
7.0 REPORTING AND COMPLIANCE OF CORPORATE GOVERNANCE:

7.0(i) The company shall obtain a certificate √ The certificate is enclosed with this Annual
from a practicing Professional Accountant/ Report on page no. 143
Secretary (Chartered Accountant/Cost
and Management Accountant/Chartered
Secretary) regarding compliance of conditions
of Corporate Governance Guidelines of the
Commission and shall send the same to the
shareholders along with the Annual Report on
a yearly basis.
7.0(ii) The directors of the company shall state, in √ Refer to the ‘‘Directors’ Report” on page
accordance with the Annexure attached, in no. 140 of this Annual Report
the directors’ report whether the company
has complied with these conditions.
150
Annexure-IV
Statement of compliance with the good governance guidelines issued by
the Bangladesh Bank
Bangladesh Bank vide, DFIM Circular No. 7, dated 25 September 2007, issued a policy on the responsibility & accountability of the
Board of Directors, Chairman & Chief Executive of financial institution. The Board of Directors of the Company has taken appropriate
steps to comply with the guidelines.
A status report on compliance with those guidelines is stated below:
Sl. No. Particulars Status of Compliance
1. Responsibilities and authorities of the Board of Directors:
The Board of Directors should focus mainly on the policy matters and evaluation of the performance of the institution, such as:
(a) Work-planning and strategic management:
(i)The Board shall determine the Vision/ Mission of the institute. In order to enhance
operational efficiency and to ensure business growth, they shall chalk out strategies and
work-plans on annual basis. Complied
The Board shall review such strategies on quarterly rests and shall modify accordingly,
if required. If any structural modification is required, shall bring those changes with
consultation with the management.
(ii) The Board shall have its analytical review incorporated in the Annual report as regard Complied
to the success/failure in achieving the business and other targets as set out in its annual
work-plan and shall apprise the shareholders on future plans and strategies.
(iii) The Board will set the Key Performance Indicator (KPI)s for the CEO and other senior Complied
executives and will appraise those on half yearly basis.
(b) Formation of sub-committee:

Executive Committee may be formed in combination with directors of the Company for
rapid settlement of the emergency matters (approval of loan/lease application, write- Complied
off, rescheduling etc.) arisen from the regular business activities. Except the Executive
Committee and Audit Committee, no other committee or sub-committee can be formed,
even in temporary basis.
(c) Financial management:
(i) Annual budget and statutory financial statements shall be adopted finally with the Complied
approval of the Board.
(ii) Board shall review and examine in quarterly basis various statutory financial statements
such as statement of income-expenses, statement of loan/lease, statement of liquidity, Complied
adequacy of capital, maintenance of provision, legal affairs including actions taken to
recover overdue loan/lease.
(iii) Board shall approve the Company’s policy on procurement and collection and shall
also approve the expenditures according to policy. The Board to the maximum extend Complied
shall delegate the authority on the Managing Director and among other top executives for
approval of expenditure within budget.
(iv) The Board shall adopt the process of operation of bank accounts. To ensure Complied
transparency in financial matters, groups may be formed among the management to
operate bank accounts under joint signatures.
(d) Management of loan/lease/investments:
151

(i) Policy on evaluation of loan/lease/investment proposal, sanction and disbursement
and its regular collection and monitoring shall be adopted and reviewed by the Board Complied
regularly based on prevailing laws and regulations. Board shall delegate the authority of
loan/lease/investment specifically to management preferably on Managing Director and
other top executives.
(ii) No director shall interfere on the approval of loan proposal associated with him. The Complied
director concerned shall not give any opinion on that loan proposal.
(iii) Any large loan/lease/investment proposal must be approved by the Board. Complied
(e) Risk management:
Risk Management Guideline framed in the light of Core Risk Management Guideline shall
Complied
be approved by the Board and reviewed by the Board regularly.
(f) Internal control and compliance management:
An Audit Committee as approved by the Board shall be formed. Board shall evaluate the
reports presented by the Audit Committee on compliance with the recommendation of Complied
internal auditors, external auditors and Bangladesh Bank Inspection team as well.
(g) Human resource management:
Board shall approve the policy on Human Resources Management and Service Rule. The
Chairman and directors of the Board shall not interfere on the administrative job in line
with the approved Service Rule.
Complied
Only the authority for the appointment and promotion of the Managing Director/Deputy
Managing Director/ General Manager and other equivalent position shall lie with the
Board incompliance with the policy and Service Rule. No director shall be included in any
Executive Committee formed for the purpose of appointment and promotion of others.
(h) Appointment of CEO:
The Board shall appoint a competent CEO for the institution with the prior approval Complied
of the Bangladesh Bank and shall approve the proposal for increment of his salary and
allowances.
(i) Benefits offer to the Chairman:
For the interest of the business, the Chairman may be offered an office room, a personal Complied
secretary, a telephone at the office and a vehicle subject to the approval of the Board.
2 Responsibilities of the Chairman of the Board of Directors:

(a) Chairman shall not participate in or interfere into the administrative or operational Complied
and routine affairs of the Company as he has no jurisdiction to apply executive
power;
(b) The minutes of the Board meetings shall be signed by the Chairman; Complied
(c) The Chairman shall sign-off the proposal for appointment of Managing Director and Complied
increment of his salaries & allowances;
152
3 Responsibilities of Managing Director:

(a) Managing Director shall discharge his responsibilities on matters relating to financial,
business and administration vested by the Board upon him. He is also accountable Complied
for achievement of financial and other business targets by means of business plan,
efficient implementation of administration and financial management;
(b) For day to day operations, Managing Director shall ensure compliance with the rules
and regulation of the Financial Institutions Act, 1993 and other relevant circulars of Complied
Bangladesh Bank;
(c) All recruitment/promotion, except those of DMD, GM and equivalent positions shall Complied
be vested upon the Managing Director. He shall act such in accordance the approved
HR Policy of the institution;
(d) Managing Director may re-schedule job responsibilities of employees; Complied
(e) Except for the DMD, GM and equivalent positions, power to transfer and to take
Complied
disciplinary action shall vested to the Managing Director.
(f) Managing Director shall sign all the letters/statements relating to compliance of polices
and guidelines. However, Departmental/Unit heads may sign daily letters/statements as Complied
set out in DFIM circular no. 2 dated 06 January 2009 if so authorized by MD.
153
Accelerating pace. At IDLC, our financial

statements reflect as much
Gaining momentum. the strength of our present
as the optimism in our
future. Having already
invested in our people,
infrastructure and
processes, we are now
ready to reap the benefits
of these strategic early
investments as we go
forward.
154
Report of the CEO & Managing Director and the Chief
Financial Officer
to the Board of Directors of IDLC Finance Limited
We have reviewed accompanying consolidated financial statements of IDLC Finance Limited and its subsidiaries (the “Group”) as well
as the financial statements of IDLC Finance Limited (“the Company”) which comprise the consolidated and the separate balance sheet
as on December 31, 2015, profit and loss account, statement of changes in equity, cash flow statement for the year then ended, and a
summary of significant accounting policies and other explanatory notes.
These financial statements have been prepared and presented fairly in accordance with Bangladesh Accounting Standards (BAS)
and Bangladesh Financial Reporting Standards (BFRSs), the Financial Institutions Act 1993, the rules and regulations issued by the
Bangladesh Bank, the Companies Act 1994 and other applicable laws and regulations.
The Company has taken proper and sufficient care in installing a system of internal control, which is reviewed, evaluated and updated
on an ongoing basis. The Internal Control and Compliance Department of the Company conducts periodic audits to provide reasonable
assurance that the established policies and procedures of the Company were consistently followed.
Based on the internal control system of the Company and our review of these financial statements, we certify that to the best of our
knowledge and belief:
i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be
misleading;
ii) these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting
standards and applicable laws;
iii) no transactions entered into by the company during the year which are fraudulent, illegal or violation of the company’s code of
conduct.
iv) proper books of account as required by law have been kept by the Group and the Company;
v) the expenditure incurred was for the purposes of the Group and the Company’s business;
vi) adequate provisions have been made for leases and advances and other assets which are, in our opinion, doubtful of recovery.
Sd/- Sd/-
CEO and Managing Director Chief Financial Officer
Dated: February 18, 2016
155
Independent Auditor's Report
To the Shareholders of IDLC Finance Limited
We have audited the accompanying consolidated financial statements of IDLC Finance Limited and its subsidiaries (the “Group”) as
well as the separate financial statements of IDLC Finance Limited (“the Company”) which comprise the consolidated and the separate
balance sheet as at 31 December 2015, profit and loss account, statement of changes in equity, cash flow statement for the year then
ended and a summary of significant accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of the consolidated financial statements of the Group and also the separate financial
statements of the Company that give a true and fair view in accordance with Bangladesh Financial Reporting Standards (BFRS), the
Financial Institutions Act 1993, the rules and regulations issued by Bangladesh Bank, the Securities and Exchange Rules 1987, the
Companies Act 1994 and other applicable laws and regulations and for such internal control as management determines is necessary
to enable the preparation of 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 the consolidated financial statements of the Group and the separate financial statements
of the Company based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements of the Group and the separate financial statements of the Company are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements of the Group and the separate financial statements of the Company. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the consolidated financial statements of the Group and
separate financial statements of the Company, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation of consolidated financial statements of the Group and separate financial statements
of the Company that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements of the Group and also the separate
financial statements of the Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements of the Group and the separate financial statements of the Company give a true
and fair view of the consolidated financial position of the Group and the separate financial position of the Company as at 31 December
2015, and of the consolidated and the separate financial performance and cash flows of the Group and the Company for the year then
ended in accordance with Bangladesh Financial Reporting Standards (BFRS) and comply with the applicable sections of the Financial
Institutions Act 1993, the rules and regulations issued by Bangladesh Bank, the Companies Act 1994, the Securities and Exchange Rules
1987 and other applicable laws and regulations.
156
Report on Other Legal and Regulatory Requirements
We also report that:
i. We have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the
purposes of our audit and made due verification thereof and found satisfactory;
ii. in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our
examination of those books;
iii. the consolidated balance sheet and consolidated profit and loss of the Group and the separate balance sheet and profit and loss
statement of the Company together with annexed notes from 1 to 43 dealt with by the report are in agreement with the books
of account;
iv. the expenditure incurred was for the purpose of the Group and the Company’s business;
v. the consolidated financial statements of the Group and those of the Company have been drawn up in conformity with the
Financial Institution Act 1993 and in accordance with the accounting rules and regulations issued by Bangladesh Bank to the
extent applicable to the Company;
vi. the record submitted by the parent company and the subsidiary companies have been audited and consolidated properly in the
financial statements;
vii. the records and accounts of the branches have been properly maintained and consolidated in the financial statements;
viii. adequate provisions have been made for leases and advances and other assets which are, in our opinion, doubtful of recovery and
Bangladesh Bank’s instructions in this regard have been followed properly;
ix. statements sent to Bangladesh Bank have been checked on sample basis and no inaccuracy has come to our attention;
x. taxes and other duties collected and deposited to Government treasury by the Company as per Government instructions found
satisfactory;
xi. nothing has come to our attention that the Company has adopted any unethical means i.e. ‘window dressing’ to inflate the profit
and mismatch between the maturity of assets and liabilities;
xii. proper measures have been taken to eliminate the irregularities mentioned in the inspection report of Bangladesh Bank and the
instructions issued by Bangladesh Bank and other regulatory authorities have been complied properly;
xiii. the internal control and the compliance of the Company is satisfactory, and effective measures have been taken to prevent
possible fraud, forgery and internal policies are being followed appropriately;
xiv. the Company has complied with relevant laws pertaining to capital, reserve and net worth, cash and liquid assets and procedure
for sanctioning and disbursing loans/ leases found satisfactory;
xv. the consolidated financial statements of the Group and the separate financial statements of the Company conform to the
prescribed formats and standards set in the accounting regulations issued by Bangladesh Bank after consultation with the
professional accounting body of Bangladesh;
xvi. we have reviewed over 80% of the risk weighted assets of the Group and the Company during the course of our audit and we have
spent over 1,500 person hours for the audit of books and accounts of the Group and the Company;
xvii. all other issues which are important for the stakeholders of the Company have been adequately disclosed in the audit report;
Dhaka, ACNABIN
18 February 2016 Chartered Accountants
157
IDLC Finance Limited and Its Subsidiaries
Consolidated Balance Sheet

as at December 31, 2015
31.12.2015 31.12.2014
Particulars Note
Taka Taka
PROPERTY AND ASSETS
Cash 3 891,869,744 728,913,992
In hand (including foreign currencies) 3.1 366,000 316,000
Balance with Bangladesh Bank and its agent (including foreign currencies) 3.2 891,503,744 728,597,992
Balance with other banks and financial institutions 4 12,543,322,538 7,256,039,490

Inside Bangladesh 4(a) 12,543,322,538 7,256,039,490
Outside Bangladesh 4(b) - -
Money at call and short notice 5 - -
Investments 6 3,392,468,561 2,636,025,841

Government 300,000,000 300,000,000
Others 3,092,468,561 2,336,025,841
Loans and advances 7 55,211,824,250 47,068,955,362

Loans, cash credit, overdraft etc. 55,211,824,250 47,068,955,362
Bills purchased and discounted - -
Fixed assets including land, building, furniture and fixtures 8(c) 537,098,683 380,542,124
Other assets 9 857,870,414 856,111,439
Non-banking assets - -
Total Assets 73,434,454,190 58,926,588,248
LIABILITIES AND CAPITAL

Liabilities
Borrowings from other banks, financial institutions and agents 10 10,585,582,747 9,198,032,173
Deposits and other accounts 11 47,624,565,293 36,595,119,049
Current accounts and other accounts etc. - -
Bills payable - -
Savings bank deposits - -
Term deposits 46,038,675,236 35,240,301,090
Bearer certificate of deposits - -
Other deposits 1,585,890,057 1,354,817,959
Other liabilities 12 7,438,343,943 6,605,605,660

Total liabilities 65,648,491,983 52,398,756,882
158
31.12.2015 31.12.2014
Particulars Note
Taka Taka
Capital / Shareholders' equity
Paid-up capital 13 2,513,671,870 2,010,937,500
Share premium 14 3,750,000 3,750,000
Statutory reserves 15 1,482,722,671 1,233,958,647
General reserves 16 1,000,000,000 1,000,000,000
Dividend equalisation reserves 46,500,000 46,500,000
Retained earnings 2,739,315,501 2,232,683,265
Total equity attributable to equity holders of the company 7,785,960,042 6,527,829,412
Non-controlling interest 2,165 1,954
Total liabilities and Shareholders' equity 73,434,454,190 58,926,588,248
OFF - BALANCE SHEET ITEMS

Contingent liabilities 17.1 618,488,520 965,240,778
Acceptances and endorsements - -
Letters of guarantee 118,488,520 465,240,778
Irrevocable letters of credit - -
Bills for collection - -
Indemnity bond - -
Corporate guarantee 500,000,000 500,000,000
Other commitments 17.2 607,054,854 699,924,252

Documentary credits and short term trade related transactions - -
Forward assets purchased and forward deposits placed - -
Un-drawn note issuance and revolving underwriting facilities - -
Un-drawn formal standby facilities, credit lines - -
Un-disbursed contracted loans and leases 607,054,854 699,924,252
Total Off-Balance Sheet items including contingent liabilities 1,225,543,374 1,665,165,030

Net Assets Value (NAV) per share 30.97 25.97
The annexed notes 1 to 43 form an integral part of these consolidated financial statements.
Sd/- Sd/- Sd/- Sd/-

Chairman Director CEO & Managing Director Company Secretary
This is the consolidated balance sheet referred to in our separate report of even date.
Dhaka, ACNABIN
159
Consolidated Profit and Loss Account

2015 2014
Particulars Note
Taka Taka
Interest income 19 8,251,180,347 7,431,871,158

Interest on deposits and borrowings etc. 20 (4,833,191,104) (4,543,097,395)
Net interest income 3,417,989,243 2,888,773,763
Investment income 21 372,098,181 48,365,964
Commission, exchange and brokerage 22 356,949,912 359,076,106
Other operating income 23 440,864,639 361,507,263
Total operating income 4,587,901,975 3,657,723,096
Salaries and allowances 24 899,165,319 749,662,409

Rent, taxes, insurance, electricity, etc. 25 135,714,936 121,724,427
Legal expenses 26 16,102,123 8,632,327
Postage, stamp, telecommunication, etc. 27 35,021,731 34,123,344
Stationery, printing, advertisements, etc. 28 85,711,998 115,003,057
Managing Director's salary and benefits 29 11,493,667 13,060,000
Directors' fees 30 1,409,400 1,132,750
Auditors' fees 31 690,000 690,000
Charges on loan losses - -
Depreciation and repair of Company's assets 32 178,307,014 164,341,322
Other expenses 33 284,171,561 255,278,412
Total operating expenses 1,647,787,749 1,463,648,048
Profit before provision 2,940,114,226 2,194,075,048
Provision for loans/investments 12.7(ii)
General provision 49,183,322 45,031,836

Specific provision 276,007,148 (55,344,909)
Provision for diminution in value of investments (13,579,695) 17,861,794
Other provisions - -
Total provision 311,610,775 7,548,721
Total profit before taxation 2,628,503,451 2,186,526,327
Provision for taxation

Current tax 12.2 1,171,629,363 959,575,652
Deferred tax 9.5 (2,350,493) (18,558,222)
1,169,278,870 941,017,430
Net profit after taxation 1,459,224,581 1,245,508,897
160
2015 2014
Particulars Note
Taka Taka
Attributable to:
Shareholders of the Company 1,459,224,380 1,245,508,797
Non-controlling interest 201 100
1,459,224,581 1,245,508,897
Appropriations to:
Statutory reserves 248,764,024 230,707,003

General reserves - 188,750,000
Dividend etc. - -
248,764,024 419,457,003
Retained surplus 1,210,460,356 826,051,794
Earnings Per Share (EPS) 36 5.81 4.95
The annexed notes 1 to 43 form an integral part of these consolidated financial statements.
Sd/- Sd/- Sd/- Sd/-

This is the consolidated profit & loss account referred to in our separate report of even date.
Dhaka, ACNABIN
161
Consolidated Cash Flow Statement

2015 2014
Particulars Note
Taka Taka
A) Cash flows from operating activities
Interest received 7,265,516,269 6,680,026,625

Interest paid (2,212,191,438) (2,418,998,453)
Dividend received 96,282,352 40,805,382
Fees and commission received 356,949,912 359,076,106
Paid to employees and suppliers (1,502,411,831) (1,329,683,793)
Payment of income tax (822,263,674) (695,710,617)
Received from other operating activities 704,398,111 363,130,219
Cash generated from operating activities before changes in operating assets and liabilities 3,886,279,701 2,998,645,469
Increase/(decrease) in operating assets and liabilities

Lease receivable 265,654,756 76,496,366
Long-term finance (5,278,801,586) (2,804,999,034)
Real estate finance (2,383,834,215) (3,652,126,335)
Car loan (693,235,866) (1,017,759,216)
Personal loan 19,086,626 23,654,351
Loan against deposit (1,389,646) 127,887,279
Margin loan to portfolio investors 463,395,053 1,394,966,775
Short term finance (344,010,256) (131,782,937)
Investment in marketable securities (87,711,139) (935,762,941)
Other assets 794,171,349 201,629,478
Term and other deposits 11,029,446,244 6,407,679,965
Net drawdown of short term loan (40,000,000) (1,290,000,000)
Payable and accrued expenses (2,626,981,541) (1,547,480,875)
Deferred liability-employee gratuity 4,462,019 6,256,142
Portfolio investors' fund (2,323,273) (315,683,978)
Deferred tax liability (5,687,038) (10,206,563)
Interest suspense account 181,528,850 43,607,230
1,293,770,336 (3,423,624,293)
Net cash flows from/(used in) operating activities 5,180,050,037 (424,978,824)
B) Cash flows from investing activities
Purchase of fixed assets (313,654,913) (122,318,386)

Disposal of fixed assets 24,004,794 9,473,570
Investment in non marketable securities (668,731,581) (913,709,884)
Net cash used in investing activities (958,381,700) (1,026,554,700)
162
2015 2014
Particulars Note
Taka Taka
C) Cash flows from financing activities

Drawdown of term loans 4,165,756,728 4,109,392,162
Repayment of term loans (2,738,206,155) (2,449,252,439)
Share money in arrear 10 -
Dividend paid (198,980,120) (79,570,244)
Net cash flow from financing activities 1,228,570,463 1,580,569,479
D) Net increase in cash and cash equivalents (A+ B + C) 5,450,238,800 129,035,955

E) Effects of exchange rate changes on cash and cash equivalents - -
F) Cash and cash equivalents at beginning of the year 7,984,953,482 7,855,917,527
G) Cash and cash equivalents at end of the year (D+E+F) 13,435,192,282 7,984,953,482
Cash and cash equivalents at end of the year

Cash in hand (including foreign currencies) 3.1 366,000 316,000
Balance with Bangladesh Bank and its agent bank(s) 3.2 891,503,744 728,597,992
13,435,192,282 7,984,953,482
163
164
Consolidated Statement of Changes in Equity

Attributable to equity holders of the company

Non-
Dividend controlling Total equity
Paid-up Share Statutory General Retained
Particulars equalisation Total interest
capital premium reserves reserves earnings
reserves
Taka Taka Taka Taka Taka Taka Taka Taka Taka

Balance at January 1, 2015 2,010,937,500 3,750,000 1,233,958,647 1,000,000,000 46,500,000 2,232,683,265 6,527,829,412 1,954 6,527,831,366
Dividend for 2014:
10% cash dividend - - - - - (201,093,750) (201,093,750) - (201,093,750)
25% stock dividend 502,734,370 - - - - (502,734,370) - - -
Changes in accounting policy - - - - - - - - -
Restated balance 2,513,671,870 3,750,000 1,233,958,647 1,000,000,000 46,500,000 1,528,855,145 6,326,735,662 1,954 6,326,737,616
Surplus/(deficit) on account of
revaluation of properties - - - - - - - - -
revaluation of investments - - - - - - - - -
Currency translation differences - - - - - - - - -
Net gain and losses not recognised in the
profit and loss accounts - - - - - - - - -
Non controlling interest - - - - - - - 10 10
Net profit for the year 2015 - - - - - 1,459,224,380 1,459,224,380 201 1,459,224,581
Appropriation to reserves - - 248,764,024 - - (248,764,024) - - -
Balance at December 31, 2015 2,513,671,870 3,750,000 1,482,722,671 1,000,000,000 46,500,000 2,739,315,501 7,785,960,042 2,165 7,785,962,207
Consolidated Statement of Changes in Equity

Attributable to equity holders of the company

Non-
Dividend controlling Total equity
Particulars Paid-up Share Statutory General Retained
equalisation Total interest
reserves
Balance at January 1, 2014 1,608,750,000 3,750,000 1,003,251,644 811,250,000 46,500,000 1,889,256,471 5,362,758,115 1,854 5,362,759,969
Dividend for 2013:
5% cash dividend - - - - - (80,437,500) (80,437,500) - (80,437,500)
25% stock dividend 402,187,500 - - - - (402,187,500) - - -
Changes in accounting policy - - - - - - - - -
Restated balance 2,010,937,500 3,750,000 1,003,251,644 811,250,000 46,500,000 1,406,631,471 5,282,320,615 1,854 5,282,322,469
revaluation of properties - - - - - - - - -
revaluation of investments - - - - - - - - -
Currency translation differences - - - - - - - - -
Net gain and losses not recognised in the
profit and loss accounts - - - - - - - - -
Net profit for the year 2014 - - - - - 1,245,508,797 1,245,508,797 100 1,245,508,897
Appropriation to reserves - - 230,707,003 188,750,000 - (419,457,003) - - -
Balance at December 31, 2014 2,010,937,500 3,750,000 1,233,958,647 1,000,000,000 46,500,000 2,232,683,265 6,527,829,412 1,954 6,527,831,366
165
Balance Sheet
31.12.2015 31.12.2014
Particulars Note
Taka Taka
PROPERTY AND ASSETS

Cash 3 891,769,744 728,813,992
In hand (including foreign currencies) 3.1 266,000 216,000
Balance with Bangladesh Bank and its agent (including foreign currencies) 3.2 891,503,744 728,597,992

Inside Bangladesh 4(a) 11,804,324,866 6,846,398,723
Outside Bangladesh 4(b) - -
Investments 6 2,770,947,105 2,112,315,829

Government 300,000,000 300,000,000
Others 2,470,947,105 1,812,315,829
Loans and advances 7 53,857,714,206 45,348,701,212

Loans, cash credit, overdraft etc. 53,857,714,206 45,348,701,212
Bills purchased and discounted - -
Fixed assets including land, building, furniture and fixtures 8(c) 502,363,356 343,557,415
Other assets 9 1,941,591,577 1,779,727,856
Non-banking assets - -
Total Assets 71,768,710,854 57,159,515,027
LIABILITIES AND CAPITAL

Liabilities
Borrowings from other banks, financial institutions and agents 10 10,550,165,864 9,136,412,565
Deposits and other accounts 11 47,760,365,293 36,595,819,049
Current accounts and other accounts etc. - -
Bills payable - -
Savings bank deposits - -
Term deposits 46,174,475,236 35,241,001,090
Bearer certificate of deposits - -
Other deposits 1,585,890,057 1,354,817,959
Other liabilities 12 6,721,632,975 5,733,463,062

Total liabilities 65,032,164,132 51,465,694,676
Capital/Shareholders' equity
Paid-up capital 13 2,513,671,870 2,010,937,500
Share premium 14 3,750,000 3,750,000
Statutory reserves 15 1,482,722,671 1,233,958,647
General reserves 16 1,000,000,000 1,000,000,000
Dividend equalisation reserves 46,500,000 46,500,000
Retained earnings 1,689,902,181 1,398,674,204
Total equity 6,736,546,722 5,693,820,351
Total liabilities and Shareholders' equity 71,768,710,854 57,159,515,027
166
31.12.2015 31.12.2014
Particulars Note
Taka Taka
OFF - BALANCE SHEET ITEMS
Contingent liabilities 17.1 618,488,520 965,240,778

Acceptances and endorsements - -
Letters of guarantee 118,488,520 465,240,778
Irrevocable letters of credit - -
Bills for collection - -
Indemnity bond - -
Corporate guarantee 500,000,000 500,000,000
Other commitments 17.2 607,054,854 699,924,252

Documentary credits and short term trade related transactions - -
Forward assets purchased and forward deposits placed - -
Un-drawn note issuance and revolving underwriting facilities - -
Un-drawn formal standby facilities, credit lines - -
Un-disbursed contracted loans and leases 607,054,854 699,924,252
Total Off-Balance Sheet items including contingent liabilities 1,225,543,374 1,665,165,030

Net Assets Value (NAV) per share 26.80 22.65
The annexed notes 1 to 43 form an integral part of these financial statements.
Sd/- Sd/- Sd/- Sd/-

This is the balance sheet referred to in our separate report of even date.
Dhaka, ACNABIN
167
Profit and Loss Account

2015 2014
Particulars Note
Taka Taka
Interest income 19 8,023,764,544 7,379,533,073

Interest on deposits and borrowings etc. 20 (4,827,091,642) (4,530,353,027)
Net interest income 3,196,672,902 2,849,180,046
Investment income 21 272,881,617 53,935,424
Commission, exchange and brokerage 22 58,053,730 66,413,793
Other operating income 23 433,242,052 356,650,721
Total operating income 3,960,850,301 3,326,179,984
Salaries and allowances 24 744,116,214 629,691,643

Rent, taxes, insurance, electricity, etc. 25 93,372,106 79,197,000
Legal expenses 26 13,536,662 7,229,630
Postage, stamp, telecommunication, etc. 27 26,929,463 26,215,029
Stationery, printing, advertisements, etc. 28 81,059,657 108,450,028
Managing Director's salary and benefits 29 11,493,667 13,060,000
Directors' fees 30 1,041,900 828,000
Auditors' fees 31 517,500 517,500
Charges on loan losses - -
Depreciation and repair of Company's assets 32 155,451,391 139,251,289
Other expenses 33 266,242,398 232,348,909
Total operating expenses 1,393,760,958 1,236,789,028
Profit before provisions 2,567,089,343 2,089,390,956
Provision for loans/investments 12.7(ii)

General provision 54,798,590 41,984,250
Specific provision 233,364,352 (1,576,823)
Provision for diminution in value of investments 3,407,068 19,852,226
Other provisions - -
Total provision 291,570,010 60,259,653
Total profit before taxation 2,275,519,333 2,029,131,303
Provision for taxation
Current tax 12.2 1,037,681,898 887,838,416
Deferred tax 9.5 (5,982,686) (12,242,129)
1,031,699,212 875,596,287
Net profit after taxation 1,243,820,121 1,153,535,016
Appropriations to:
Statutory reserves 248,764,024 230,707,003

General reserves - 188,750,000
Dividend etc. - -
248,764,024 419,457,003
Retained surplus 995,056,097 734,078,013
Earnings Per Share (EPS) 36 4.95 4.59
The annexed notes 1 to 43 form an integral part of these financial statements.
Sd/- Sd/- Sd/- Sd/-

This is the profit & loss account referred to in our separate report of even date.
Dhaka, ACNABIN
168
Cash Flow Statement

2015 2014
Particulars Note
Taka Taka
A) Cash flows from operating activities

Interest received 7,051,307,900 6,619,710,738
Interest paid (2,206,091,976) (2,406,254,085)
Dividend received 39,909,767 27,208,743
Fees and commission received 58,053,730 66,413,793
Paid to employees and suppliers (1,269,312,317) (1,125,879,478)
Payment of income tax (717,106,282) (611,598,018)
Received from other operating activities 654,317,306 378,298,811
Cash generated from operating activities before changes in operating assets and liabilities 3,611,078,128 2,947,900,504
Increase/(decrease) in operating assets and liabilities
Lease receivable 265,654,756 76,496,366
Long-term finance (5,278,801,586) (2,804,999,034)
Real estate finance (2,383,834,215) (3,652,126,335)
Car loan (693,235,866) (1,017,759,216)
Personal loan 19,086,626 23,654,351
Loan against deposit (1,389,646) 127,887,279
Loan to subsidiaries 97,310,669 852,300,000
Short term finance (344,010,256) (131,782,937)
Investment in marketable securities 10,100,305 (675,095,082)
Other assets 620,799,446 447,826,154
Term and other deposits 11,164,546,244 6,308,379,965
Net drawdown of short term loan (40,000,000) (1,170,000,000)
Payable and accrued expenses (2,516,948,125) (1,667,950,103)
Inter-company payables 99,999,990 -
Deferred tax liability (5,687,038) (10,206,563)
Interest suspense account 181,528,850 43,607,230
1,195,120,154 (3,249,767,925)
Net cash flow from/(used in) operating activities 4,806,198,282 (301,867,421)
B) Cash flows from investing activities
Purchase of fixed assets (294,404,534) (110,118,507)
Disposal of fixed assets 23,046,548 8,280,729
Investment in non marketable securities (668,731,581) (913,709,884)
Net cash used in investing activities (940,089,567) (1,015,547,662)
C) Cash flows from financing activities
Drawdown of term loans 4,165,756,728 4,047,772,554
Repayment of term loans (2,712,003,428) (2,449,252,439)
Dividend paid (198,980,120) (79,570,244)
Net cash flow from financing activities 1,254,773,180 1,518,949,871
D) Net increase in cash and cash equivalents (A+ B + C) 5,120,881,895 201,534,788

E) Effects of exchange rate changes on cash and cash equivalents - -
F) Cash and cash equivalents at beginning of the year 7,575,212,715 7,373,677,927
G) Cash and cash equivalents at end of the year (D+E+F) 12,696,094,610 7,575,212,715
Cash and cash equivalents at end of the year

Cash in hand (including foreign currencies) 3.1 266,000 216,000
Balance with Bangladesh Bank and its agent bank(s) 3.2 891,503,744 728,597,992
12,696,094,610 7,575,212,715
169
170
Statement of Changes in Equity

Dividend
equalisation Total
Particulars capital premium reserves reserves earnings
reserves
Taka Taka Taka Taka Taka Taka Taka

Balance at January 1, 2015 2,010,937,500 3,750,000 1,233,958,647 1,000,000,000 46,500,000 1,398,674,204 5,693,820,351
Dividend for 2014:
10% cash dividend - - - - - (201,093,750) (201,093,750)
25% stock dividend 502,734,370 - - - - (502,734,370) -
Changes in accounting policy - - - - - - -
Restated balance 2,513,671,870 3,750,000 1,233,958,647 1,000,000,000 46,500,000 694,846,084 5,492,726,601
Surplus/(deficit) on account of revaluation of properties - - - - - - -
Surplus/(deficit) on account of revaluation of investments - - - - - - -
Currency translation differences - - - - - - -
Net gain and losses not recognised in the profit and loss accounts - - - - - - -
Net profit for the year 2015 - - - - - 1,243,820,121 1,243,820,121
Appropriation to reserves - - 248,764,024 - - (248,764,024) -
Balance at December 31, 2015 2,513,671,870 3,750,000 1,482,722,671 1,000,000,000 46,500,000 1,689,902,181 6,736,546,722
Statement of Changes in Equity

Dividend
equalisation Total
Particulars reserves
Taka Taka Taka Taka Taka Taka Taka
Balance at January 1, 2014 1,608,750,000 3,750,000 1,003,251,644 811,250,000 46,500,000 1,147,221,191 4,620,722,835
Dividend for 2013:
5% cash dividend - - - - - (80,437,500) (80,437,500)
25% stock dividend 402,187,500 - - - - (402,187,500) -
Changes in accounting policy - - - - - - -
Restated balance 2,010,937,500 3,750,000 1,003,251,644 811,250,000 46,500,000 664,596,191 4,540,285,335
Surplus/(deficit) on account of revaluation of properties - - - - - - -
Surplus/(deficit) on account of revaluation of investments - - - - - - -
Currency translation differences - - - - - - -
Net gain and losses not recognised in the profit and loss accounts - - - - - - -
Net profit for the year 2014 - - - - - 1,153,535,016 1,153,535,016

Appropriation to reserves - - 230,707,003 188,750,000 - (419,457,003) -
Balance at December 31, 2014 2,010,937,500 3,750,000 1,233,958,647 1,000,000,000 46,500,000 1,398,674,204 5,693,820,351
171
172
Liquidity Statement
Not more than 1-3 months 3-12 months Above 5 years

1-5 years term Total
Particulars 1 month term term term term
Taka Taka Taka Taka Taka Taka
Assets
Cash in hand ( including balance with Bangladesh Bank) 891,769,744 - - - - 891,769,744
Balance with other banks and financial institutions 2,054,324,866 9,550,000,000 200,000,000 - - 11,804,324,866
Money at call and short notice - - - - - -
Investments 1,150,083,105 - 700,000,000 673,000,000 247,864,000 2,770,947,105
Loans & advances 3,445,219,218 3,829,248,550 10,905,354,376 25,466,360,015 10,211,532,047 53,857,714,206
Fixed assets including land, building, furniture and fixtures 11,025,252 21,602,808 88,908,117 186,998,898 193,828,281 502,363,356
Other assets - 388,858,024 402,550 - 1,552,331,003 1,941,591,577
Non-banking assets - - - - - -
Total assets 7,552,422,185 13,789,709,382 11,894,665,043 26,326,358,913 12,205,555,331 71,768,710,854
Liabilities
Borrowing from Bangladesh Bank, other banks and financial institutions & its agents 2,009,000,000 554,200,000 2,024,700,000 5,347,000,000 615,265,864 10,550,165,864
Deposits 6,200,100,709 15,857,763,469 17,926,517,542 6,885,547,144 890,436,429 47,760,365,293

Other accounts - - - - - -
Provision and other liabilities 280,518,341 561,036,682 2,913,343,224 1,806,301,703 1,160,433,026 6,721,632,975
Total liabilities 8,489,619,050 16,973,000,150 22,864,560,765 14,038,848,847 2,666,135,319 65,032,164,132
Net Liquidity Gap (937,196,865) (3,183,290,768) (10,969,895,722) 12,287,510,066 9,539,420,012 6,736,546,722

IDLC Finance Limited and Its subsidiaries
Notes to the consolidated and separate

financial statements
As at and for the year ended December 31, 2015
1. Company and its activities
1.1 Legal status and nature of the Company
IDLC Finance Limited (The Company “IDLC”) was incorporated in Bangladesh as a public limited company on 23 May 1985 under
the Companies Act, 1913 in its earlier name of Industrial Development Leasing Company of Bangladesh Limited. The Company
changed its name in August 2007. The registered office of the company is situated at Bay’s Galleria (1st Floor), 57 Gulshan Avenue,
Gulshan 1, Dhaka. The Company is registered as a Financial Institution under the Financial Institutions Act, 1993.
The Company went for public issue of its shares in 1993. Its shares are listed in both the Stock Exchanges in Bangladesh.
1.2 Principal activities and nature of operation
When incorporated, the Company started with lease and term financing, as its core businesses. It expanded its activities into
‘Short-Term Finance’ (factoring of accounts receivable and work order financing) and ‘Real Estate Finance’ operations in 1997.
It also started car loan and personal loan services to individuals in 2004 and 2007, respectively.
1.3 Subsidiary companies
1.3.1 IDLC Securities Limited (IDLC SL)
IDLC Securities Limited, a wholly owned subsidiary company of IDLC Finance Limited, was incorporated on 19 April 2006 as a
private limited company under Companies Act 1994 with authorised share capital of Taka 25 crore. The Company had started
its operation from September 2006. The main objective of the Company is to act as a member of stock exchanges to operate
the central depository system (CDS) and to carry on the business of brokers, jobbers or dealers in stocks, shares, securities,
commodities, commercial papers, bonds, obligations, debentures etc.
1.3.2 IDLC Investments Limited (IDLC IL)
As required by the Bangladesh Securities & Exchange Commission (BSEC), the Company formed a separate subsidiary on 19
May 2010 in the name and style “IDLC Investments Limited” to transfer its merchant banking activities. As per Securities and
Exchange Commission (Merchant Banker and Portfolio Manager) Rules, 1996, the services of issue management, portfolio
management, underwriting of shares and securities advisory services fall under the purview of merchant banking operation.
The Company obtained license from the Bangladesh Securities and Exchange Commission (BSEC) on 02 August 2011 and
commenced its business on 16 August 2011.
1.3.3 IDLC Asset Management Limited (IDLC AML)
IDLC Asset Management Limited, another wholly owned subsidiary company of IDLC Finance Limited, was incorporated on 19
November 2015 as a private limited company under Companies Act 1994 with authorised share capital of Taka 25 crore. The
Company has applied to Bangladesh Securities and Exchange Commission (BSEC) for issuance of registration certificate to
operate as an asset manager as per Securities and Exchange Commission (Mutual Fund) Regulation, 2001. After obtaining the said
registration from BSEC, the company will start its business operations.
The main objective of the Company is to carry out the business of asset management, primarily, through launching and managing
mutual funds to cater diverse needs of investors. Beside institutional fund management IDLC AML also aims to facilitate alternative
investments in terms of private equity and venture capital.
2. Basis of preparation and significant accounting policies
2.1 Statement of compliance
The financial statements have been prepared on a going concern basis following accrual basis of accounting except for cash
flow statement and investment in marketable securities which are stated at market value in accordance with International
Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) as adopted in Bangladesh by the
Institute of Chartered Accountants of Bangladesh as Bangladesh Accounting Standards (BASs) and Bangladesh Financial
Reporting Standards (BFRSs), except the circumstances where local regulations differ, and the Companies Act 1994, the
173
Financial Institutions Act, 1993, Securities and Exchange Rules, 1987, the Listing Regulations of Dhaka & Chittagong Stock
Exchanges and other applicable laws and regulations.
The presentation of the financial statements has been made as per the requirements of DFIM Circular No: 11, dated 23
December 2009 issued by the Department of Financial Institutions and Markets (DFIM) of Bangladesh Bank. The activities
and accounting heads mentioned in the prescribed form, which are not applicable for the financial institutions, have been
kept blank in the financial statements.
2.2 Basis of measurement
This financial statements have been prepared based on Bangladesh Accounting Standards (BAS) and Bangladesh Financial
Reporting Standards (BFRS) and no adjustment has been made for inflationary factors affecting the financial statements. The
accounting policies, unless otherwise stated, have been consistently applied by the Company and are consistent with those
of the previous year.
2.3 Disclosure of deviations from few requirements of BAS/BFRS due to mandatory compliance of Bangladesh Bank’s
requirements
Bangladesh Bank (the local Central Bank) is the prime regulatory body for Non-Banking Financial Institutions (NBFI) in
Bangladesh. Some requirements of Bangladesh Bank’s rules and regulations contradict with those of financial instruments
and general provision standards of BAS and BFRS. As such the Company has departed from those contradictory requirements
of BAS/BFRS in order to comply with the rules and regulations of Bangladesh Bank.
2.3.1 As per FID circular No. 08 dated 03 August 2002 investment in quoted shares and unquoted shares are revalued at the
year end at market price and as per book value of last audited balance sheet respectively.
Provision should be made for any loss arising from diminution in value of investment. As such the Company measures and
recognises investment in quoted and unquoted shares at cost if the year end market value (for quoted shares) and book
value (for unquoted shares) are higher than the cost except investment in mutual funds. At the year end the Company’s
market value and book value of quoted and unquoted shares was lower than the cost price by Taka 102.97 million in case of
the separate financial statements and in case of the consolidated financial statements the same is lower than cost by Taka
111.54 million. In order to comply with the requirement specified in DFIM Circular No. 11 and DFIM Circular No. 05 of 11 May
2015, the company has charged the incremental amount of difference in market value and cost price of marketable securities
to the profit and loss account. However as per requirements of BAS 39 investment in shares falls either under “at fair value
through profit and loss account” or under “available for sale” where any change in the fair value at the year end is taken to
profit and loss account or revaluation reserve respectively.
2.3.2 As per FID circular No. 08 dated 03 August 2002, FID circular No. 03, dated 03 May 2006 and FID circular No. 03 dated 29
April 2013 a general provision at 0.25% to 5% under different categories of unclassified loans (good/standard loans) has to
be maintained. However such general provision cannot satisfy the conditions of provision as per BAS 39. At the year end the
Company has recognised an accumulated general provision of Taka 433.52 million (out of accumulated total provision of
Taka 1,213.38 million) and in case of separate financial statements the same is Taka 435.26 million (out of accumulated total
provision of Taka 1,160.43 million) under liabilities
2.3.3 Bangladesh Bank has issued templates for financial statements which shall strictly be followed by all banks and NBFIs. The
templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income (OCI) nor are the
elements of Other Comprehensive Income allowed to be included in the Single Comprehensive Income (SCI) Statement. As
such the company does not prepare the other comprehensive income statement. However the company does not have any
elements of OCI to be presented.
2.3.4 As per Bangladesh Bank guidelines financial instruments are categorized, recognized and measured differently from those
prescribed in BAS 39. As such some disclosures and presentation requirements of BFRS 7 and BAS 32 have not been made in
the accounts.
2.4 Directors’ responsibility statement
The Board of Directors takes the responsibility for the preparation and presentation of these financial statements.
2.5 Date of authorisation
The Board of directors has authorised this financial statements for public issue on February 18 , 2016.
2.6 Presentation and functional currency and level of precision
The financial statements are presented in Bangladesh Taka (Taka) currency, which is the Company’s functional currency. All
financial information presented in Taka has been rounded off to the nearest Taka.
174
2.7 Use of estimates and judgments
The preparation of financial statements in conformity with Bangladesh Accounting Standards (BAS) and Bangladesh Financial
Reporting Standards (BFRS) requires management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenue and expenses. It also requires disclosures of contingent assets and liabilities at the date of the
financial statements.
The most critical estimates and judgments are applied to the following:
- Provision for impairment of loans, leases and investments
- Gratuity
- Useful life of depreciable assets
The estimates and associated assumptions are based on historical experience and various other factors that are believed to
be reasonable under the circumstances, the result of which form the basis of making the judgments about carrying values of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
However, the estimates and underlying assumptions are reviewed on an ongoing basis and the revision is recognised in the
period in which the estimates are revised. In accordance with the guidelines as prescribed by BAS 37: “Provisions, Contingent
Liabilities and Contingent Assets”, provisions are recognized in the following situations:
Provision
Provisions are liabilities that are uncertain in timing or amount. Provisions are recongnized when: the Group has a present
legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required
to settle the obligation; and the amount has been reliably estimated.
Contingent Liability
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by
the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or
the Group has a present obligation as a result of past events but is not recognized because it is not likely that an outflow of
resources will be required to settle the obligation; or the amount cannot be reliably estimated. Contingent liabilities normally
comprise legal claims under arbitration or court process in respect of which a liability is not likely to occur.
Contingent Assets
A contingent asset is possible asset that arises from past events and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Group. Contingent assets are
never recognized, rather they are disclosed in the financial statements when they arise.
2.8 Basis of consolidation of operations of subsidiaries
The financial statements of the Company and its subsidiaries, as mentioned in note No. 1.3.1, 1.3.2 and 1.3.3 have been
consolidated in accordance with Bangladesh Financial Reporting Standard 10 “Consolidated Financial Statements”. The
consolidation of the financial statement has been made after eliminating all material inter company balances, income and
expenses arising from inter company transactions.
The total profits of the Company and its subsidiaries are shown in the consolidated profit and loss account with the
proportion of profit after taxation pertaining to non-controlling shareholders being deducted as ‘Non-controlling Interest’.
All assets and liabilities of the Company and of its subsidiaries are shown in the consolidated balance sheet. The interest of
non-controlling shareholders of the subsidiary are shown separately in the consolidated balance sheet under the heading
‘Non-controlling Interest’.
2.9 Branch accounting
The Company has twenty three branches and two SME booths, with no overseas branch as on 31 December 2015. Accounts
of the branches are maintained at the head office from which these accounts are drawn up.
2.10 Accounting for leases
As Lessor
As per Bangladesh Accounting Standard (BAS) 17: “Leases”, all leases are treated as finance lease since assets leased under
agreements are transferred substantially to customers with all the risks and rewards associated with ownership, other than
legal title and all leases are full payout leases.
175
In accordance with the said standard, the aggregate lease receivables including un-guaranteed residual value throughout
the primary lease term are reported as gross lease receivables while the excess of gross lease receivables over the total
acquisition cost including interest during the period of acquiring the lease assets constitutes the unearned lease income.
The balance of the unearned lease income is amortised to revenue on a monthly basis over the primary lease term yielding
a constant rate of return over the period.
At present, the company does not have any operating lease arrangement with any lessee.
As Lessee
All assets are recognized as fixed assets including land, building, furniture and fixture against their obligation as liability.
Lease payments of finance lease are included two components, mainly finance charge and redemption of principal payment
(obligation under finance lease).
2.11 Accounting for term finance & other finances
Books of accounts for term finance operation are maintained based on the accrual method of accounting. Outstanding
loans, along with the accrued interest thereon, for short-term finance, and unrealised principal for long-term finance, real
estate finance, car loans and other finances are accounted for as term finance assets of the Company. Interest earnings are
recognised as operational revenue periodically.
As required by the Bangladesh Securities and Exchange Commission (BSEC), Merchant Banking activities of financial
institutions are to be carried out by forming a separate subsidiary. Accordingly, the Company has formed a fully owned
separate subsidiary, IDLC Investments Limited (IDLC IL) and commenced its operation on 16 August 2011. Therefore, up to 15
August 2011, the Merchant Banking activities of the Company was accounted for by the Company and thereafter, the entire
Merchant Banking activities was transferred to and accounted for by IDLC IL.
2.12 Accounting for Margin Loan
Margin Loan to Portfolio investors is given at an agreed ratio (Not more than the ratio prescribed by BSEC) between investors
deposit and loan amount to purchase securities against respective investor account. The investors are to maintain the margin
as per set rules and regulations. The margin is monitored on daily basis as it is changes due to changes in market price of
share. If the margin falls below the minimum requirement, the investors are required to deposit additional fund to maintain
the margin as per rules otherwise the securities are sold to bring the margin to the required level.
2.13 Investment in securities
Investment in marketable ordinary shares has been shown at cost or market price, whichever is lower, on an aggregate
portfolio basis. Investment in non-marketable shares has been valued at cost or intrinsic value whichever is lower. Full
provision for diminution in value of shares as on closing of the year on an aggregate portfolio basis is made in the financial
statements as required by Bangladesh Bank DFIM circular No. 02 dated 31 January 2012.
2.14 Property and equipment
i) Recognition and measurement
Own assets
Items of own fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. The
cost of an asset comprises its purchase price and any directly attributable costs of bringing the assets to its working condition
for its intended use as per Bangladesh Accounting Standard (BAS) 16: ‘’Property, Plant and Equipments’’.
Leasehold assets
Leasehold assets of which the company assumes substantially all the risks and rewards of ownership are accounted for as
finance leases and capitalised at the inception of the lease at fair value of the leased property or at the present value of the
minimum lease payments, whichever is lower as per Bangladesh Accounting Standard (BAS) 17: “Leases”. The corresponding
obligation under the lease is accounted for as liability.
ii) Subsequent expenditure on fixed assets
Subsequent expenditure is capitalised only when it increases the future economic benefit from the assets and that cost can
be measured reliably. All other expenditures are recognised as an expense as and when they are incurred.
iii) Depreciation
Depreciation is charged to amortise the cost of assets, over their estimated useful lives, using the straight-line method in
accordance with BAS-16: “Property, Plant and Equipment”. Full depreciation is charged on additions irrespective of date
176
when the related assets are put into use and no depreciation is charged from the month of disposal. Asset category wise
depreciation rates are as follows:
Items Name Rates

Furniture and fixtures 12.50%
Building 2.50%
Electrical equipment 20.00%
Curtain and carpets 33.33%
Office equipment 20.00%
Office decoration 20.00%
Telephone and telex 33.33%
Motor vehicles 25.00%
Leasehold motor vehicles 25.00%
Computers 20.00%
Software (Office Operation) 33.33%
Software (Business Operation) 20.00%
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale proceeds
and the carrying amount of the asset and is recognised in the profit and loss account.
Depreciation methods, useful lives and residual values, if any are reviewed at the balance sheet date.
2.15 Intangible assets and amortisation of intangible assets
Recognition & Measurement
Intangible assets comprise the value of computer software. Intangible assets acquired separately are measured on initial
recognition at cost and are carried at cost less accumulated amortisation and accumulated impairment losses, if any.
Amortisation
Amortisation is calculated using the straight line method to write down the cost of intangible assets to their residual values
over their estimated useful lives based on the management best estimates of 3 or 5 years.
Subsequent expenditure
Subsequent expenditure on software assets is capitalised only when it increases the future economic benefits in the
specifications to which it relates. All other expenditure is expensed as incurred.
2.16 Revenue recognition
Revenue is recognized only when it is measurable and probable that the economic benefits associated with the transaction
will follow to the company and in accordance with Bangladesh Accounting Standard (BAS) 18: “Revenue” unless otherwise
mentioned or otherwise guided by the separate BAS/BFRS.
Interest income from loans and other sources is recognised on an accrual basis of accounting on effective interest method.
Lease income
Finance lease income is allocated over the lease term on a systematic and rational basis. This income allocation is based on a
pattern reflecting a constant periodic return on net investment in the finance lease. The unearned lease income is recognised
on installment date as revenue on an accrual basis over the terms of the lease. However, lease income is not recognised if
capital or interest receivable is in arrears for more than three months.
Interest on real estate finance
Interest on real estate finance is recognised as revenue on an accrual basis and no interest on real estate finance is accounted
for as revenue where any portion of capital or interest is in arrear for more than nine months.
Interest on term loans and short term finance
Interest on term loan and short term finance are recognised as revenue on an accrual basis and interest income on term loan
is not recognised where any portion of interest is in arrear for more than three months.
177
Portfolio management fee

Portfolio management fees are recognised on the market value of the clients portfolio on monthly basis and charged to
clients balance on quarterly basis.
Issue management & Corporate advisory fee
Issue management and corporate advisory fees are recognised according to the stage of completion of services as agreed
and defined in issue management and corporate advisory agreement between company and clients.
Brokerage commission
Brokerage commission is recognised as income when selling or buying order is signed and trade is executed.
Dividend income
Dividend is recognised as income when the right to receive income is established.
Profit or loss on sale of securities
Profit or loss arising from the sale of securities is accounted for only when the securities are sold/offloaded.
Fee based revenues
Fee on services rendered by the company are recognised as and when services are rendered.
2.17 Interest suspense account
Lease income earned, interest on term finance (car loans, personal loans) overdue beyond three months period and interest
on real estate finance overdue beyond nine months period and interest on short term finance overdue beyond permitted
credit term plus ninety days period are not recognised as revenue and credited to interest suspense account.
2.18 Accounts receivable
Accounts receivable at the balance sheet date is stated at amounts which are considered realisable. Specific allowance is
made for receivable considered to be doubtful for recovery.
2.19 Securitization
Securitization of various leases/loans result in sale of these assets to Special Purpose Vehicles (‘SPVs’), which, in turn issue
securities to investors. Financial assets are partially or wholly derecognized when the control of the contractual rights in the
securitized assets is lost.
2.20 Borrowing cost
Borrowing costs are recognised as expense in the year in which they are incurred unless capitalisation is permitted under
Bangladesh Accounting Standard (BAS) 23: “Borrowing Costs”.
2.21 Cash flow statements
The cash flow statement is prepared using the direct method as stipulated in Bangladesh Accounting Standard (BAS) 7: “Cash
Flow Statements”, and in accordance with the instruction of Bangladesh Bank.
2.22 Conversion of foreign currency transactions
Foreign currency transactions are translated into Taka at rates prevailing at the respective dates of transactions, while foreign
currency monetary assets at the end of the year are reported at the rates prevailing on the balance sheet date. Exchange
gains or losses arising out of the said conversions are recognised as income or expense for the year after netting off.
2.23 Provision for doubtful accounts and future losses
Provision has been made at estimated rates on outstanding exposures, based on aging and continuous review of the
receivables, as per the Bangladesh Bank Provisioning policy. A general provision has been made by the company to cover
unforeseen losses on all leases, loans and investments excluding those for which a specific provision has been made. The
provision is considered adequate to meet any probable future losses.
During 2014, the Company changed its accounting estimate with respect to bad debt provision calculation for its loans and
advances to comply with Bangladesh Bank Directive. The company used to follow an internal provisioning policy which was
more conservative and stringent than Bangladesh Bank’s provisioning policy up to June 30, 2014. Bangladesh Bank vide its
letter No. DFIM(S) 1055/30/2014/1374 dated June 29, 2014 advised the company to keep provision in line with the policy
circulated by Bangladesh Bank (FID circular-8, dated August 03, 2002). Accordingly, provision in this accounts has been
maintained considering the Bangladesh Bank’s provisioning policy disregarding the company’s internal provisioning policy.
178
As a result of the change in estimate, excess provision of Taka 194,844,479 kept in the previous year’s accounts has been
released in 2014. However, provision maintained as at the end of 2014 would have been higher by Taka 241,152,715 if the
Company’s earlier policy for maintaining provision would have been followed, instead of Bangladesh Bank’s provisioning
policy.
2.24 Write off
Write-off describes a reduction in recognised value. It refers to recognition of the reduced or zero value of an asset. Generally
it refers to an investment for which a return on the investment is now impossible or unlikely. The item’s potential return is
thus cancelled and removed from (“written off”) the Company’s balance sheet.
Recovery against debts written off/provided for is credited to revenue. Income is recognized where amounts are either
recovered and/or adjusted against securities/properties or advances there-against or are considered recoverable.
2.25 Employees’ benefit obligation
2.25.1 Defined contribution plan
The Company operates a contributory provident fund scheme for its permanent employees. Provident fund is administered
by a Board of Trustees and is funded by equal contributions both by the employees and the Company at a predetermined
rate. The contributions are invested separately from the Company’s asset.
2.25.2 Defined benefit plan
The Company also operates a funded gratuity scheme (which is a defined benefit scheme as specified in BAS 19). Gratuity fund
is administered by a Board of Trustees and Company contributions are invested separately from company assets. Employees are
entitled to gratuity benefit after completion of minimum years of service with the Company. The gratuity is calculated on the
last basic pay and is payable at the rate of one month’s basic pay for every completed year of service up to ten years of service,
one and half months basic pay for every completed year of service up to fifteen years of service and two months basic pay for
more than fifteen years of service. The company is contributing to the fund as prescribed by actuarial valuation report.
2.25.3 Other employees benefit obligation
The Company operates a group life insurance scheme for its permanent employees.
The Company also has real estate loan for its permanent employees. Employees are entitled to real estate loan after
completion of minimum five years of services with the Company.
2.26 Taxation
Tax expense comprises current and deferred tax.
2.26.1 Deferred tax
The Company accounts for deferred tax as per Bangladesh Accounting Standard (BAS) 12: “Income Taxes”. Deferred tax is
provided using the balance sheet method for all temporary timing differences arising between the tax base of assets and
liabilities and their carrying value for financial reporting purposes. Tax rate prevailing at the balance sheet date is used to
determine deferred tax.
2.26.2 Current tax
Provision for current tax is made on the basis of the profit for the year as adjusted for taxation purpose in accordance with the
provision of Income Tax Ordinance, 1984 and amendments made thereto from time to time.
2.27 Impairment of long-lived assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the
book value of the assets may not be recovered. Accordingly, the Company estimates the recoverable amount of the assets.
Impairment losses, if any, is recognised in the profit and loss account when the estimated recoverable amount of an asset is
less than its carrying amount.
2.28 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash at bank, term deposits and investment in call loan that are readily
convertible to a known amount of cash (with less than three months maturity) and that are subject to an insignificant risk of
change in value.
2.29 Bank loans
Bank loans are recorded at the proceeds received. Interest on bank loans is accounted for on accrual basis and charged to
profit and loss account.
179
2.30 Earnings Per Share (EPS)
The Company calculates earnings per share in accordance with Bangladesh Accounting Standards (BAS) 33: “Earnings Per
Share” which has been shown in the face of the Profit and Loss Account and the computation is stated in note 36.
2.31 Related party disclosure
As per Bangladesh Accounting Standards (BAS) 24: “Related Party Disclosures”, parties are considered to be related if one of
the party has the ability to control the other party or exercise significant influence over the other party in making financial
and operating decisions. The Company carried out transactions in the ordinary course of business on an arm’s length basis at
commercial rates with its related parties. Related party disclosures have been given in note 37.
2.32 Statutory reserves
As per Financial Institutions Regulation 1994, every Non Banking Financial Institution (NBFI) is required to transfer at least 20%
of it’s current year’s profit to the fund until such reserve fund equals to it’s paid up share capital and share premium (if any). In
conformity with the above requirement, IDLC transfers 20% of net profit to statutory reserve before declaration of dividend.
2.33 Determination and presentation of operating segment
After incorporation, the company started with lease and loan as its core financing business. By times, it diversified its business
into investment banking business and brokerage business. The company has decided it’s various operating segment
considering nature of segmental business. Thus four operating segments of the Group are reported and presented. Profit
and loss account of above operations and other operation have been prepared in accordance with Bangladesh Accounting
Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS), and results of its operation has been combined, item
by item, with the financial results of the Company.
Compliance with Bangladesh Financial Reporting Standard
As on January 01, 2010, the Company determines and presents operating segments based on information that is internally
provided to the Company’s Management Committee (ManCom), which is the Company’s Chief Operating Decision Maker
(CODM). This is due to the adoption of the Bangladesh Financial Reporting Standard (BFRS) 8: “ Operating Segments”. Since
the adoption of this BFRS only affects presentation and disclosure aspects, there is no impact on the earning per share.
An operating segment is a component of the Company that engages in business activities from which it may earn revenue
and incur expenses, including revenues and expenses that relate to transactions with the Company’s other components,
whose operating results are regularly reviewed by the Company’s ManCom to make decisions about resources allocated to
the segments and assess its performance and for which discrete financial information is available.
For the separate financial statements, the Company has determined one reportable segments such as core financing
business and for the consolidated financial statements, the subsidiaries of the Company have been determined to be a
separate reportable segment in addition to the other segments. Thereafter, for the separate financial statements, the
Company has one reportable segment which is core financing business and for the consolidated financial statements, the
subsidiaries of the Company (IDLC Securities Limited, IDLC Investments Limited and IDLC Asset Management Limited) have
been determined to be three separate reportable segments in addition to the core financing business.
Information about operating segment has been presented in note 34.
2.34 Proposed dividend
Proposed dividend has not been recognised as a liability in the balance sheet in accordance with Bangladesh Accounting
Standards (BAS) 10: “Events after the Reporting Period”.
2.35 Events after the balance sheet date
All material events occurring after the balance sheet date has been considered and where necessary, adjusted for or disclosed
in note 42.
2.36 Contingent liabilities and contingent assets
The Company does not recognize contingent liability and contingent asset but discloses the existence of contingent
liability in the financial statements. A contingent liability is a probable obligation that arises from past events whose existence
will be confirmed by occurrence or non-occurrence of uncertain future events not within the control of the Company or a
present obligation that is not recognized because outflow of resources is not likely or obligation cannot be measured reliably.
180
2.37 Liquidity statement
The liquidity statement has been prepared in accordance with remaining maturity grouping of Assets and Liabilities as of the
close of the year as per following bases:
a) Balance with other bank and financial institutions are on the basis of their maturity term.
b) Investments are on the basis of their residual maturity term.
c) Loans, advances and leases are on the basis of their repayment/maturity schedule
d) Fixed assets are on the basis of their useful lives.
e) Other assets are on the basis of their adjustment terms.
f) Borrowings from other banks and financial institutions as per their maturity/repayment terms.
g) Deposits and other accounts are on the basis of their maturity term and behavioral past trends.
h) Other long term liabilities on the basis of their maturity terms.
i) Other liabilities are on the basis of their settlement terms.
2.38 Status of compliance of Bangladesh Accounting Standards and Bangladesh Financial Reporting Standards
In addition to compliance with local regulatory requirements, in preparing the Consolidated Financial Statements and
Separate Financial Statements, IDLC applied following BAS and BFRS:
Name of the BAS BAS No. Status

Presentation of Financial Statements 1 Applied *
Inventories 2 N/A
Statements of Cash Flow 7 Applied
Accounting Policies, Changes in Accounting Estimates and Errors 8 Applied
Events after the Reporting Period 10 Applied
Construction Contracts 11 N/A
Income Taxes 12 Applied
Property, Plant and Equipment 16 Applied
Leases 17 Applied
Revenue 18 Applied
Employee Benefits 19 Applied
Accounting for Government Grants and Disclosure of Government Assistance 20 N/A
The Effects of Changes in Foreign Exchange Rates 21 Applied
Borrowing Costs 23 Applied
Related Party Disclosures 24 Applied
Accounting and Reporting by Retirement Benefit Plans 26 N/A
Separate Financial Statements 27 Applied
Investment in Associates and Joint Ventures 28 N/A
Financial Reporting in Hyper-inflationary Economics 29 N/A
Interests in Joint Ventures 31 N/A
Financial Instruments: Presentation 32 Applied *
Earnings per share 33 Applied
Interim Financial Reporting 34 Applied
Impairment of Assets 36 Applied
Provisions, Contingent Liabilities and Contingent Assets 37 Applied
Intangible Assets 38 Applied
Financial Instruments: Recognition and Measurement 39 Applied *
Investment Property 40 N/A
Agriculture 41 N/A
181
Name of the BFRS BFRS No. Status
Share Base payment 2 N/A
Business combination 3 N/A
Insurance Contracts 4 N/A
Non-current assets held for sale and discontinued operation 5 N/A
Exploration for and Evaluation of Mineral Resources 6 N/A
Financial Instruments: Disclosures 7 Applied *
Operating Segments 8 Applied
Consolidated Financial Statements 10 Applied
Joint Arrangement 11 N/A
Disclosure of Interest in Other Entities 12 N/A
Fair Value Measurement 13 Applied *
N/A= Not Applicable

* As the regulatory requirements differ with the standards, relevant disclosures have been made in accordance with
Bangladesh Bank’s requirements (please see note 2.3).
2.39 BASEL II & its implementation
To cope with the international best practices and to make the capital more risks sensitive as well as more shock resilient,
guidelines on ‘Basel Accord for Financial Institutions (BAFI)’ have been introduced from January 01, 2011 on test basis by
the Bangladesh Bank. At the end of test run period, Basel Accord regime has started and the guidelines namely “Prudential
Guidelines on Capital Adequacy and Market Discipline for Financial Institutions (CAMD)” have come fully into force from
January 01, 2012 with its subsequent supplements/revisions. Instructions regarding Minimum Capital Requirement (MCR),
Adequate Capital, and Disclosure requirement as stated in these guidelines have to be followed by all FIs for the purpose
of statutory compliance. As per CAMD guidelines, Financial Institutions should maintain a Capital Adequacy Ratio (CAR) of
minimum 10%. In line with CAMD guideline’s requirement, IDLC has already formed BASEL Implementation Unit (BIU) to
ensure timely implementation of BASEL II accord.
2.40 Financial risk management
IDLC always concentrates on delivering high value to its stakeholders through appropriate trade off between risk and return.
A well structured and proactive risk management system is in place within the Company to address risks relating to credit,
market, liquidity, operations and money laundering and terrorist financing. In addition to the industry best practices for
assessing, identifying and measuring risks, IDLC also considers guidelines for managing core risks of financial instructions
issued by the Country’s Central Bank, Bangladesh Bank, vide FID Circular No. 10 dated September 18, 2005 for management
of risks and, more recently, DFIM Circular No. 03 dated 24 January 2016.
Credit Risk
To encounter and mitigate credit risk the company employed multilayer approval process, policy for maximum exposure limit
of sector and groups, policy for customers' assets maximum exposure limit, mandatory search for credit report from Credit
Information Bureau, looking into payment performance of customer before financing, annual review of clients, adequate
insurance coverage for funded assets, vigorous monitoring and follow up by Special Assets Management Team, strong follow
up of compliance of credit policies by Internal Control and Compliance Department (ICCD), taking collateral, seeking external
legal opinion, maintaining neutrality in politics and following arm’s length approach in related party transactions, regular
review of market situation and industry exposure etc.
The Credit Evaluation Committee (CEC) regularly meets to review the market and credit risk related to lending and recommend
and implement appropriate measures to counter associated risks. The CEC critically reviews projects from risk point of view.
An independent Credit Risk Management Department is in place, at IDLC, to scrutinize projects from a risk-weighted point of
view and assist the management in creating a high quality credit portfolio and maximize returns from risk assets.
182
Market Risk
The Asset Liability Committee (ALCO) of the Company regularly meets to assess the changes in interest rate, market
conditions, carry out asset liability maturity gap analysis, re-pricing of products and thereby takes effective measures to
monitor and control interest rate risk. IDLC has also strong access to money market and credit lines at a competitive rate
through good reputation, strong earnings, financial strength and credit rating.
Liquidity Risk
Liquidity requirements are managed on a day-to-day basis by the Treasury Division which is responsible for ensuring that
sufficient funds are available to meet short term obligations, even in a crisis scenario, and for maintaining a diversity of
funding sources. Treasury Division maintains liquidity based on historical requirements, anticipated funding requirements
from operation, current liquidity position, collections from financing, available sources of funds and risks and returns.
Operational Risk
Appropriate internal control measures are in place, at IDLC, to address operational risks. IDLC has also established an internal
control & compliance department (ICCD) to address operational risk and to frame and implement policies to encounter such
risks. This department assesses operational risk across the Company as a whole and ensures that an appropriate framework
exists to identify, assess and manage operational risk. The function of ICCD is to exercise constant vigilance against leakage
erosion of Shareholders’ value by identifying, assessing, measuring, managing and transfering operational risk resulting from
inadequate or failed internal processes, people and systems or from external events. To that end, a new operational risk
management and assurance framework has been introduced in the company in the last quarter of 2015.
Money Laundering and Terrorist Financing Risk
In IDLC, money laundering and terrorist financing risk takes two broad dimensions:
i) Business risk i.e. the risk that IDLC may be used for money laundering or terrorism financing &
ii) Regulatory risk i.e. the risk that IDLC fails to meet regulatory obligations under the Money Laundering Prevention Act 2012
and Anti-Terrorism Act 2009 (amended in 2013).
To mitigate the risks, IDLC, while adhering to various guidelines and circulars issued by the Bangladesh Financial Intelligence
Unit (BFIU), put in place a strict compliance program consisting of the following components:
a) Development and implementation of internal policies, procedures and controls to identify and report instances of money
laundering and terrorism financing;
b) Creation of structure and sub-structure within the organisation, headed by a Central Compliance Unit (CCU), for AML and
CFT compliance;
c) Appointment of an AML/CFT Compliance Officer, known as the Chief Anti Money Laundering Officer (CAMLCO), to lead
the CCU;
d) Independent audit function including internal and external audit function to test the programs;
e) Ongoing employee training programs.
Additional risks required to be addressed under new regulatory requirements

DFIM Circular No. 03 of 2016, introduced the Integrated Risk Management Guidelines for Financial Institutions (“the
guidelines”). These guidelines will supplement, and not replace, existing risk management guidelines.
The new Integrated Risk Management Guidelines for Financial Institutions specify a number of additional risks that financial
institutions are now required to manage in a more structured manner. Key among these are:
Strategic Risk
Strategic risk has been defined as the risk of possible losses that might arise from adverse business decisions, substandard
execution and failure to respond properly to changes in the business environment. The guidelines set out the respective
roles of the board of the directors, senior management and business units in managing strategic risks, identify the minimum
steps to be followed in the strategic risk management process and also suggest measures for strategic risk control.
IDLC has been managing strategic risks ever since its inception. This is evident from the constantly evolving business model
of the company over the years. The company has a clear strategic vision as to what it wants to be and a mission statement
that states what it will do to achieve its vision. Strategic issues are discussed at a variety of forums including meetings of the
Management Committee and of the IDLC Board. Over the past few years, a separate Strategic Planning department has been
set up to assist senior management in this regard. The culmination of all these efforts are reflected in annual Strategy and
Budget sessions, where the company sets outs its plans for the next year. With the introduction of the new guidelines, more
changes will be made to the strategic risk management process as and when required.
183
Compliance Risk
Compliance risk is defined as the current or prospective risk of legal sanction and/or material financial loss that an organisation
may suffer as a result of its failure to comply with laws, its own regulations, code of conduct, and standards of the best practice
as well as from the possibility of incorrect interpretation of laws or regulations. The guidelines set out the respective roles of
the board, senior management and compliance function units in managing compliance risks and also require formulation of
a written compliance risk management policy.
Historically, IDLC has always fostered a compliance oriented culture. This has been reinforced in a variety of ways, ranging
from formal requirements to sign declarations of compliance with the IDLC code of conduct (which requires compliance
with the law & regulations) to repeated communications from senior management stressing the need to do business in
a compliant manner. In general, compliance risk management is embedded in the day to day to business processes and
practices of the company. With the introduction of the Integrated Risk Management Guidelines, the overall management of
compliance risk will be reviewed and appropriate changes, to ensure conformity with the guidelines, implemented.
Reputation Risk
Reputation risk may be defined as the risk of loss arising from damages to an organization’s reputation. The guidelines set out
the respective roles of the Board and senior management in managing reputation risk and also require financial institutions to
implement a sound and comprehensive risk management process to identify, monitor, control and report all reputational risks.
IDLC has already established a set of non‐financial reputational risk indicators and put in place a process for monitoring
these and any other matters that might give rise to potential reputational risk issues. Till date, no material reputational risk
issue involving the company has been identified.
Environmental and Social Risk
IDLC is also focusing on ‘mother planet and its sustainability’, shifting from the traditional financing approach. In this
regard, the Company is making its credit appraisal process to be much more stringent from an Environment and Social
(E&S) perspective – evaluating all the environmental and social factors such as project impacts on the environment and the
community in the long run, prior to approving a loan. Being the only listed member of UNEP FI, we have been following
Environmental Risk Management guideline 2011 by Bangladesh Bank. Taking this approach one step further, IDLC is in
the process of adopting an extensive Environmental and Social Management System (ESMS) across the organization with
assistance from FMO, a Dutch development bank, and FI Konsult, IDLC’s appointed consultant for this project. The overall
goal of this project is to help IDLC identify customers with potentially high environmental and social risks; enable them to
evaluate the E&S performance of such customers through its due diligence and credit appraisal process; and make those
customers, especially those who are not complying with local E&S regulations, behave more responsibly through the use of
environmental or social covenants in the facility agreements. This project will not only satisfy the Central Bank’s requirements,
but also enable IDLC to comply with internationally acceptable risk management standards. Furthermore, execution of green
banking policy which is in line with IFC Performance Standard, ADB Safeguard Policy and Bangladesh Bank guideline is
considered as another milestone towards sustainability.
184
IDLC Finance Limited IDLC Group
31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
3. Cash
3.1 Cash in hand (including foreign currencies)

In local currency 266,000 216,000 366,000 316,000
In foreign currency - - - -
266,000 216,000 366,000 316,000
3.2 Balance with Bangladesh Bank and its agent
(including foreign currencies)
In local currency 891,503,744 728,597,992 891,503,744 728,597,992
In foreign currency - - - -
891,503,744 728,597,992 891,503,744 728,597,992
891,769,744 728,813,992 891,869,744 728,913,992
3.3 Cash Reserve Requirement (CRR) and Statutory Liquidity Reserve (SLR)
Cash Reserve Requirement and Statutory Liquidity Reserve have been calculated and maintained in accordance with
Financial Institution Act, 1993 & Financial Institution Regulations, 1994 and FID Circular No. 06 dated November 06, 2003 and
FID Circular No. 02 dated November 10, 2004.
Cash Reserve Requirement (CRR) has been calculated at the rate of 2.5% on Total Term Deposits which is preserved in
current account maintained with Bangladesh Bank. ‘Total Term Deposit’ means Term or Fixed Deposit, Security Deposit
against Lease/Loan and other Term Deposits, received from individuals and institutions (except Banks & Financial Institutions)
Statutory Liquidity Reserve (SLR) has been calculated at the rate of 5.0% on total liabilities, including CRR of 2.5% on Total Term
Deposit. SLR is maintained in liquid assets in the form of cash in hand (notes & coin in Taka), balance with Bangladesh Bank
and other banks and Financial Institutions, investment at call, unencumbered treasury bill, prize bond, savings certificate &
any other assets approved by Bangladesh Bank.
a) Cash Reserve Requirement

Required reserve 924,154,000 722,528,000 924,154,000 722,528,000
Actual reserve maintained 926,773,000 727,550,000 926,773,000 727,550,000
Surplus/(deficit) 2,619,000 5,022,000 2,619,000 5,022,000
b) Statutory Liquidity Reserves

Required reserve (including CRR) 2,363,244,000 1,945,093,000 2,363,244,000 1,945,093,000
Actual reserve maintained (including CRR) (Note: 3.3.1) 2,366,624,205 1,983,699,498 2,366,624,205 1,983,699,498
Surplus/(deficit) 3,380,205 38,606,498 3,380,205 38,606,498
Total required reserves 2,363,244,000 1,945,093,000 2,363,244,000 1,945,093,000

Actual reserve held 2,366,624,205 1,983,699,498 2,366,624,205 1,983,699,498
Total surplus 3,380,205 38,606,498 3,380,205 38,606,498
3.3.1 Actual reserve maintained (including CRR)
The City Bank Limited 2,448,360 4,591,457 2,448,360 4,591,457

Standard Chartered Bank 45,764,126 4,198,898 45,764,126 4,198,898
Citibank N.A. 56,822,253 49,347,292 56,822,253 49,347,292
Investment in Government Securities 300,000,000 300,000,000 300,000,000 300,000,000
Bangladesh Bank 861,589,466 725,561,851 861,589,466 725,561,851
NRB BANK Limited 300,000,000 - 300,000,000 -
185

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
South Bangla Agriculture & Commerce Bank Limited 200,000,000 - 200,000,000 -

EXIM Bank Limited 200,000,000 200,000,000 200,000,000 200,000,000
Standard Bank Limited 200,000,000 400,000,000 200,000,000 400,000,000
Union Bank Limited 200,000,000 - 200,000,000 -
Al-Arafah Islami Bank Limited - 300,000,000 - 300,000,000
2,366,624,205 1,983,699,498 2,366,624,205 1,983,699,498
4. Balance with other banks and financial institutions
4(a) Inside Bangladesh
Current deposits in local currency

Woori Bank limited 46,884 43,705 46,884 43,705
Uttara Bank Limited - 80,331 - 80,331
Bank Al- Falah Limited 2,092 5,132 2,092 5,132
One Bank Limited - - 3,652,991 5,476,000
National Bank Limited 3,133,723 832,838 3,133,723 832,838
Bank Asia Limited 1,236,518 617,792 1,236,518 617,792
State Bank of India 92,183 1,207,182 92,183 1,207,182
Commercial Bank of Ceylon PLC 2,160,441 4,781,776 3,649,952 6,274,605
The Hong Kong and Shanghai Banking
Corporation (HSBC) 8,238 3,736,971 3,647,990 3,913,111
Citibank N.A. 9,650,322 82,915,645 9,650,322 82,915,645
Standard Chartered Bank (241,443,871) (5,001,248) (150,970,941) 108,985,276
Mutual Trust Bank Limited 1,874,281 1,762,418 1,874,281 1,762,418
Dutch Bangla Bank Limited 13,971,908 4,955,112 13,971,908 4,955,112
BRAC Bank Limited 28,500,017 11,471,727 29,296,671 12,092,543
Dhaka Bank Limited 1,962,625 3,681,722 1,962,625 3,681,722
United Commercial Bank Limited - 72,954 - 72,954
NRB Bank Limited - - 1,998,213 -
Mercantile Bank Limited 7,550 9,850 7,550 9,850
IDLC Investments Limited 108,607,166 103,026,585 - 103,026,585
(53,908,585) 226,743,983 (60,465,700) 348,496,292
Short-term deposit accounts
Pubali Bank Limited - 79,490 - 79,490
Prime Bank Limited 1,073,876 144,297 1,073,876 144,297
Dutch Bangla Bank Limited - - 1,411,494 1,686,048
The City Bank Limited 593,013 1,801,187 593,013 1,801,187
BRAC Bank Limited - 28,648 4,261,007 4,947,685
Southeast Bank Limited 4,152,722 13,993,222 4,152,722 13,993,222
186
31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
Citibank N.A. 731,487 1,874,515 731,487 1,874,515

Standard Chartered Bank 662,591 (1,332,473) 662,591 5,794,267
Commercial Bank of Cylon PLC 989,473 3,065,854 3,271,833 21,383,988
One Bank Limited - - 298,363,993 230,034,004
Eastern Bank Limited - - 766,100 749,390
NRB Bank Limited 30,289 - 30,289 -
8,233,451 19,654,740 315,318,405 282,488,093
Fixed Deposits
Al-Arafa Islami Bank Limited 700,000,000 300,000,000 700,000,000 300,000,000
LankaBangla Finance Limited - - 278,969,833 -
Jamuna Bank Limited - 500,000,000 - 500,000,000
Meghna Bank Limited - 300,000,000 - 300,000,000
NRB BANK Limited 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000
NRB Commercial Bank Limited 700,000,000 - 700,000,000 -
Phoenix Finance & Investments Limited - 100,000,000 - 100,000,000
South Bangla Agriculture & Commerce Bank Limited 1,400,000,000 1,300,000,000 1,400,000,000 1,300,000,000
Union Bank Limited 1,800,000,000 1,100,000,000 1,800,000,000 1,100,000,000
ONE Bank Limited 1,000,000,000 - 1,000,000,000 -
Meghna Bank Limited 200,000,000 - 200,000,000 -
Midland Bank Limited 800,000,000 - 800,000,000 -
The Farmers Bank Limited 400,000,000 - 550,000,000 -
Dhaka Bank Limited 800,000,000 200,000,000 800,000,000 200,000,000
NRB Global Bank Limited 250,000,000 200,000,000 250,000,000 200,000,000
Standard Bank Limited 1,200,000,000 400,000,000 1,200,000,000 400,000,000
Union Capital Limited - 100,000,000 - 100,000,000
Export Import Bank of Bangladesh Limited 1,600,000,000 1,100,000,000 1,600,000,000 1,100,000,000
Trust Bank Limited - - 2,500,000 2,500,000
Standard Chartered Bank - - 7,000,000 22,555,105
11,850,000,000 6,600,000,000 12,288,469,833 6,625,055,105
11,804,324,866 6,846,398,723 12,543,322,538 7,256,039,490
4(b) Outside Bangladesh - - - -

Total balance 11,804,324,866 6,846,398,723 12,543,322,538 7,256,039,490
4.1 Maturity grouping of balance with other banks and financial institutions:
Payable on demand (53,908,585) 226,743,983 246,619,254 348,496,291

Up to 1 month 2,108,233,451 1,019,654,740 2,108,233,451 1,282,488,094
Over 1 month but not more than 3 months 9,550,000,000 4,950,000,000 9,809,170,000 4,972,555,105
Over 3 months but not more than 6 months 200,000,000 350,000,000 376,799,833 350,000,000
Over 6 months but not more than 1 year - 300,000,000 2,500,000 302,500,000
Over 1 year but not more than 5 years - - - -
Over 5 years - - - -
11,804,324,866 6,846,398,723 12,543,322,538 7,256,039,490
187

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
5 Money at call and short notice - - - -
6 Investments
Government securities
Treasury bill - - - -
National Investment bonds - - - -
Bangladesh Bank bill - - - -
Government notes/bonds 300,000,000 300,000,000 300,000,000 300,000,000
Prize bonds - - - -
Others - - - -
300,000,000 300,000,000 300,000,000 300,000,000
Other investments
Investment in non marketable ordinary shares (Note: 6.1) 7,864,000 7,864,000 7,864,000 7,864,000
Investment in preference shares (Note: 6.2) - 31,268,419 - 31,268,419
Investment in debenture and bonds (Note: 6.3) 913,000,000 613,000,000 913,000,000 613,000,000
Investment in commercial papers (Note: 6.4) 400,000,000 - 400,000,000 -
Investment in marketable securities (Note: 6.5) 1,150,083,105 1,160,183,410 1,771,604,561 1,683,893,422
Other investments - - - -
Gold etc. - - - -
2,470,947,105 1,812,315,829 3,092,468,561 2,336,025,841
2,770,947,105 2,112,315,829 3,392,468,561 2,636,025,841
6.1 Investment in non marketable ordinary shares

No. of Shares
Credit Rating Agency of Bangladesh Limited 17,198 1,719,800 1,719,800 1,719,800 1,719,800
* The Bangladesh Rating Agency Limited (BDRAL) 61,442 6,144,200 6,144,200 6,144,200 6,144,200
7,864,000 7,864,000 7,864,000 7,864,000
* Previously the name was Dan & Bradstreet Rating Agency Bangladesh Limited
6.2 Investment in preference shares
12.75% cumulative redeemable preference shares of ECPV Limited - 1,268,419 - 1,268,419

14.06% cumulative redeemable preference shares of
Fiber @ Home Limited - 30,000,000 - 30,000,000
- 31,268,419 - 31,268,419
6.3 Investment in bonds
Mercantile Bank Limited 300,000,000 300,000,000 300,000,000 300,000,000

United Commercial Bank Limited 300,000,000 - 300,000,000 -
913,000,000 613,000,000 913,000,000 613,000,000
6.4 Investment in commercial papers
GPH Ispat Limited 100,000,000 - 100,000,000 -

Flamingo Fashions Limited 300,000,000 - 300,000,000 -
400,000,000 - 400,000,000 -
188
6.5 Investment in marketable securities
Details of marketable securities are given below:

Market price Market price
Business Segments No. of Cost price at the end of No. of Cost price at the end
shares the year shares of the year
Taka Taka Taka Taka
Mutual Funds 25,048,887 179,205,692 137,122,077 38,136,280 315,894,985 256,898,973
Banks 13,957,144 314,360,678 329,174,055 16,661,781 397,720,527 456,193,504
Textiles 6,620,114 235,252,808 171,236,050 9,127,915 331,444,672 241,768,643
Pharmaceuticals & Chemicals 3,790,452 360,510,015 360,129,302 5,623,952 500,489,657 496,826,003
Fuel & Power 1,239,164 50,753,916 39,450,737 3,480,089 209,431,870 193,137,205
Financial Institutions 161,700 9,999,997 9,999,997 263,294 13,162,019 12,946,223
Cement - - - 30,711 3,460,832 2,291,041
1,150,083,105 1,047,112,218 1,771,604,561 1,660,061,592
All investments in marketable securities are valued on an aggregate portfolio basis, at the lower of cost and market value, at
the balance sheet date.
Market price for securities not listed as on reporting date, has been shown at cost for calculation purpose.
As on December 31, 2015 there was Taka 111,542,969 gross unrealised loss on consolidated investment in marketable
listed securities and Taka 102,970,887 gross unrealised loss on investment by IDLC Finance Limited in marketable securities,
incremental provision for which has been kept in profit and loss account.

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
6.6 Maturity grouping of investments

On demand - - - -
Up to 1 month 1,150,083,105 1,160,183,410 1,771,604,561 1,683,893,422
Over 1 month but not more than 3 months - - - -
Over 3 months but not more than 6 months - - - -
Over 6 months but not more than 1 year 700,000,000 300,000,000 700,000,000 300,000,000
Over 1 year but not more than 5 years 673,000,000 446,068,419 673,000,000 446,068,419
Over 5 years 247,864,000 206,064,000 247,864,000 206,064,000
2,770,947,105 2,112,315,829 3,392,468,561 2,636,025,841
7 Loans and advances

Inside Bangladesh
Lease receivable (Note: 7.1) 6,016,178,662 6,281,833,418 6,016,178,662 6,281,833,418
Long-term finance (Note: 7.2) 25,376,857,760 20,098,056,174 25,376,857,760 20,098,056,174
Real estate finance (Note: 7.3) 17,205,949,953 14,822,115,738 17,205,949,953 14,822,115,738
Car loans (Note: 7.4) 2,490,010,308 1,796,774,442 2,490,010,308 1,796,774,442
Personal loan (Note: 7.5) 120,402,599 139,489,225 120,402,599 139,489,225
Short term finance (Note: 7.6) 1,079,413,610 735,403,354 1,079,413,610 735,403,354
Loan to subsidiaries (Note: 7.7) 232,500,000 329,810,669 - -
Loan against deposit (LAD) 507,159,933 505,770,287 507,159,933 505,770,287
Margin loan to portfolio investors (Note: 7.8) - - 1,586,669,766 2,050,064,819
Interest receivable (Note: 7.9) 829,241,380 639,447,905 829,181,658 639,447,905
53,857,714,206 45,348,701,212 55,211,824,250 47,068,955,362
Outside Bangladesh - - - -
53,857,714,206 45,348,701,212 55,211,824,250 47,068,955,362
189

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
7.1 Lease receivable

Balance at January 1 6,281,833,418 6,358,329,784 6,281,833,418 6,358,329,784
Add: Addition during the year 2,641,959,950 2,444,371,482 2,641,959,950 2,444,371,482
8,923,793,368 8,802,701,266 8,923,793,368 8,802,701,266
Less: Realisation during the year 2,907,614,706 2,520,867,848 2,907,614,706 2,520,867,848
Balance at December 31 6,016,178,662 6,281,833,418 6,016,178,662 6,281,833,418
7.1a Lease receivable
Gross lease receivable 7,388,574,715 7,769,256,866 7,388,574,715 7,769,256,866

Less: Unearned lease income 1,372,396,053 1,487,423,448 1,372,396,053 1,487,423,448
6,016,178,662 6,281,833,418 6,016,178,662 6,281,833,418
7.1.1 Aging analysis of lease receivable

31.12.2015 31.12.2014
Amount in Tk. % of total Amount in Tk. % of total
Up to one year 2,516,206,306 41.82 2,628,193,123 41.84

Above one year to three years 2,755,440,510 45.80 3,520,481,403 56.04
Above three years to five years 742,170,337 12.34 133,158,892 2.12
More than five years 2,361,510 0.04 - -
6,016,178,662 100.00 6,281,833,418 100.00

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
7.2 Long-term finance

Add: Disbursement during the year 16,783,873,236 12,862,187,397 16,783,873,236 12,862,187,397
36,881,929,410 30,155,244,537 36,881,929,410 30,155,244,537
Less: Realisation during the year 11,505,071,650 10,057,188,363 11,505,071,650 10,057,188,363
7.3 Real estate finance
This represents loans to individuals, employees under the Company’s real estate loan scheme and corporate bodies for
purchase and construction of apartments and homes in urban areas for periods ranging from 5 to 20 years.

Add : Disbursement during the year 7,341,329,186 5,929,833,255 7,341,329,186 5,929,833,255
22,163,444,924 17,099,822,658 22,163,444,924 17,099,822,658
Less : Realisation during the year 4,957,494,971 2,277,706,920 4,957,494,971 2,277,706,920
190
7.3.1 Aging analysis of real estate finance
31.12.2015 31.12.2014
Amount in Tk. % of total Amount in Tk. % of total
Up to one year 1,502,435,404 8.73 1,247,031,941 8.41

Above one year to three years 2,986,922,269 17.36 3,573,359,675 24.11
Above three years to five years 3,061,103,902 17.79 2,456,979,951 16.58
More than five years 9,655,488,378 56.12 7,544,744,171 50.90
17,205,949,953 100.00 14,822,115,738 100.00

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
7.4 Car loans
Balance at January 1 1,796,774,442 779,015,226 1,796,774,442 779,015,226

Add : Disbursement during the year 1,233,246,144 1,254,825,593 1,233,246,144 1,254,825,593
3,030,020,586 2,033,840,819 3,030,020,586 2,033,840,819
Less : Realisation during the year 540,010,278 237,066,377 540,010,278 237,066,377
7.5 Personal loan
Balance at January 1 139,489,225 163,143,576 139,489,225 163,143,576

Add : Disbursement during the year 46,052,934 49,355,706 46,052,934 49,355,706
185,542,159 212,499,282 185,542,159 212,499,282
Less : Realisation during the year 65,139,560 73,010,057 65,139,560 73,010,057
Balance at December 31 120,402,599 139,489,225 120,402,599 139,489,225
7.6 Short term finance
Factoring of account receivable 1,079,413,610 735,403,354 1,079,413,610 735,403,354
7.7 Loan to Subsidiaries
Balance at January 1 329,810,669 1,182,110,669 - -

Add : Disbursement during the year 2,365,500,000 3,088,000,000 - -
2,695,310,669 4,270,110,669 - -
Less : Realisation during the year 2,462,810,669 3,940,300,000 - -
Balance at December 31 232,500,000 329,810,669 - -
7.7.1 Loan to IDLC Investments Limited
Balance at January 1 329,810,669 1,182,110,669 - -

Add : Disbursement during the year 2,260,500,000 3,088,000,000 - -
2,590,310,669 4,270,110,669 - -
Less : Realisation during the year 2,462,810,669 3,940,300,000 - -
Balance at December 31 127,500,000 329,810,669 - -
7.7.2 Loan to IDLC Securities Limited
Balance at January 1 - - - -
Add : Disbursement during the year 105,000,000 - - -
105,000,000 - - -
Less : Realisation during the year - - - -
Balance at December 31 105,000,000 - - -
191

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
7.8 Margin loan to portfolio investors
Balance at January 1 - - 2,050,064,819 3,445,031,594

Add : Disbursement during the year - - 3,905,626,925 5,719,406,213
- - 5,955,691,744 9,164,437,807
Less : Realisation during the year - - 4,369,021,978 7,114,372,988
Balance at December 31 - - 1,586,669,766 2,050,064,819
Margin loan to portfolio investors are provided by the subsidiaries of the Company as part of their normal business
activities and the Group considers this as having similar characteristics of retail/personal lending. Based on detailed
review, the Group note that shortfall, if any on individual client’s portfolio and margin lending exposure are temporary in
nature and any potential shortfall is expected to be recouped in near future. Moreover, the Group has also continuing its
recovery efforts by requesting those clients to bring in additional fund to cover shortfall. Nevertheless, the Group is closely
monitoring this matter and if it become obvious that additional provision is required it shall be provided for in due course.
However, required provision has been made for shortfall in negative equity existed as at 31 December 2015.
7.9 Interest Receivables
Lease receivable 132,831,082 117,395,141 132,831,082 117,395,141

Long-term finance 367,341,830 267,351,844 367,341,830 267,351,844
Real estate finance 233,497,512 183,767,438 233,497,512 183,767,438
Car loan 24,114,627 16,459,513 24,114,627 16,459,513
Personal loan 2,678,663 2,955,063 2,678,663 2,955,063
Loan against deposit (LAD) 49,595,894 51,518,906 49,595,894 51,518,906
Loan to Subsidiaries 59,722 - - -
Short term finance 19,122,051 - 19,122,051 -
829,241,380 639,447,905 829,181,658 639,447,905
7.10 Net loans, advances and leases
Gross performing loans, advances and leases (Note: 7) 53,857,714,206 45,348,701,212 55,211,824,250 47,068,955,362
Less:
Non-performing loans, advances and leases (Note: 7.15(x)(a)) 1,647,025,660 914,978,350 2,083,231,906 1,365,778,217
Interest suspense (Note: 12.6) 281,071,948 99,543,098 281,071,948 99,543,098
Provision for loans and advances/investments (Note: 12.7 (i)) 1,160,433,026 889,827,568 1,213,384,055 922,737,832
3,088,530,634 1,904,349,016 3,577,687,909 2,388,059,147
50,769,183,572 43,444,352,196 51,634,136,341 44,680,896,215
7.11 Residual maturity grouping of loans, advances and leases
Repayable on demand 3,445,219,218 3,324,092,975 3,445,219,218 3,324,092,975

Over 1 month but not more than 3 months 3,829,248,550 3,299,958,436 3,829,248,550 3,299,958,436
Over 3 months but not more than 1 year 10,905,354,376 8,554,212,279 12,259,464,420 10,274,466,429
Over 1 year but not more than 5 years 25,466,360,015 22,395,754,806 25,466,360,015 22,395,754,806
Over 5 years 10,211,532,047 7,774,682,716 10,211,532,047 7,774,682,716
53,857,714,206 45,348,701,212 55,211,824,250 47,068,955,362
192
31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
7.12 Loans, advances and lease on the basis of significant concentration
a) Loans, advances and lease to the institutions in

41,938,678 68,169,621 41,938,678 68,169,621
which Directors have interest
b) Loans, advances and lease to Chief Executive and
32,033,894 36,818,279 32,033,894 36,818,279
other senior executives
c) Loans, advances and lease to customer groups:
i) Real estate finance 16,622,483,197 13,934,506,152 16,622,483,197 13,934,506,152
ii) Car loan 2,514,124,934 1,796,774,442 2,514,124,934 1,796,774,442
iii) Personal loan 117,720,280 135,400,441 117,720,280 135,400,441
iv) Loan against deposit (LAD) 556,755,828 505,772,152 556,755,828 505,772,152
v) Small and medium enterprises 19,237,358,875 15,182,384,565 19,237,358,875 15,182,384,565
vi) Special program loan (BB refinancing scheme) 3,889,144,681 3,165,499,851 3,889,144,681 3,165,499,851
vii) Staff loan 137,151,017 142,998,805 137,151,017 142,998,805
viii) Industrial loans, advances and leases (Note- 7.12 (d)) 10,476,443,101 9,405,818,967 10,476,443,101 9,405,818,967
ix) Other loans and advances 232,559,722 974,557,937 1,586,669,766 2,694,812,087
53,783,741,634 45,243,713,312 55,137,851,678 46,963,967,462
53,857,714,206 45,348,701,212 55,211,824,250 47,068,955,362
d) Details of Industrial loans, advances and leases
i) Agricultural industries 458,196,142 560,234,439 458,196,142 560,234,439
ii) Textiles, Apparels & Accessories 2,133,360,743 1,532,097,171 2,133,360,743 1,532,097,171
iii) Food and beverage 817,370,788 716,436,001 817,370,788 716,436,001
iv) Pharmaceuticals 499,146,829 934,020,849 499,146,829 934,020,849
v) Leather & leather products, chemicals 49,216,353 74,428,059 49,216,353 74,428,059
vi) Power, energy & engineering 1,820,878,667 1,202,562,555 1,820,878,667 1,202,562,555
vii) Real estate & Home appliances, cement, ceramics 1,262,302,234 1,201,953,399 1,262,302,234 1,201,953,399
viii) IT & services 2,804,625,101 2,406,659,114 2,804,625,101 2,406,659,114
ix) Transportation 209,318,088 299,006,414 209,318,088 299,006,414
x) Other industries 422,028,157 478,420,966 422,028,157 478,420,966
10,476,443,101 9,405,818,967 10,476,443,101 9,405,818,967
7.13 Loans, advances and leases -geographical location wise
Inside Bangladesh:
Urban:
Dhaka 39,433,161,282 34,031,050,547 40,787,271,325 35,751,304,697
Chittagong 5,827,205,657 5,036,382,374 5,827,205,657 5,036,382,374
Bogra 1,663,823,978 1,403,049,220 1,663,823,978 1,403,049,220
Sylhet 1,334,978,751 1,002,129,645 1,334,978,751 1,002,129,645
Savar 1,117,794,744 723,243,662 1,117,794,744 723,243,662
Comilla 1,361,217,684 1,054,901,948 1,361,217,684 1,054,901,948
Jessore 1,198,066,639 1,009,985,135 1,198,066,639 1,009,985,135
Narsingdi 804,672,409 909,581,762 804,672,409 909,581,762
Bhulta 304,552,358 40,715,845 304,552,358 40,715,845
Khulna 519,098,656 126,166,675 519,098,656 126,166,675
Natore 289,437,594 11,494,399 289,437,594 11,494,399
Kustia 3,704,454 - 3,704,454 -
53,857,714,206 45,348,701,212 55,211,824,250 47,068,955,362
Outside Bangladesh: - - - -
53,857,714,206 45,348,701,212 55,211,824,250 47,068,955,362
193

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
7.14 Details of large loan/investments
There were no clients with outstanding amount and classified loans/investments exceeding 15% of total capital of the financial institution.
Total capital of the financial institution was Taka 6,736.54 million as at 31 December 2015 (Taka 5,693.82 million in 2014)
7.15 Particulars of loans, advances and leases
i) Loans, advances and leases considered good in respect

of which the financial institution is fully secured 14,132,325,070 12,293,309,555 15,486,435,114 14,013,563,705
ii) Loans, advances and leases considered good against
which the financial institution holds no security other
than the debtors’ personal guarantee 6,451,139,394 5,432,496,353 6,451,139,394 5,432,496,353
iii) Loans, advances and leases considered good
secured by the personal undertaking of one
or more parties in addition to the personal
guarantee of the debtors 33,274,249,742 27,622,895,304 33,274,249,742 27,622,895,304
53,857,714,206 45,348,701,212 55,211,824,250 47,068,955,362

iv) Loans, advances and leases adversely classified;
provision not maintained there against - - - -
v) Loans, advances and leases due by directors or officers of
the financial institution or any of them either separately
or jointly with any other persons [Note-7.12 (b) & (c) (vii)] 169,184,911 179,817,084 169,184,911 179,817,084
vi) Loans, advances and leases due from companies or firms
in which the directors of the financial institution have
interest as directors, partners or managing agents or in
case of private companies, as members 41,938,678 68,169,621 41,938,678 68,169,621
vii) Maximum total amount of advances including
temporary advances made at any time during
the year to directors or managers or officers of
the financial institution or any of them either
separately or jointly with any other person. 169,184,911 179,817,084 169,184,911 179,817,084
viii) Maximum total amount of advances including
temporary advances granted during the year to
the companies or firms in which the directors of
the financial institution have interest as directors,
partners or managing agents or in the case of private
companies, as member 41,938,678 68,169,621 41,938,678 68,169,621
ix) Due from bank and financial institutions 915,573,368 370,721,115 915,573,368 370,721,115
x) Classified loans, advances and leases
a) Classified loans, advances and leases on which
interest has not been charged (Note-7.16) 1,647,025,660 914,978,350 2,083,231,906 1,365,778,217
b) Provision on doubtful loans, advances and leases 316,215,887 278,210,853 336,256,652 225,499,921
Provision on bad loans, advances and leases (24,645,877) (217,951,200) (24,645,877) (217,951,200)
Total provisions charged during the year 291,570,010 60,259,653 311,610,775 7,548,721
c) Amount of written off loans, advances and leases 20,969,551 134,839,395 20,969,551 134,839,395
Total amount realised against loans and leases
previously written off 15,494,827 16,612,443 15,494,827 16,612,443
d) Provision kept against loans and advances
classified as bad debts (24,645,877) (217,951,200) (24,645,877) (217,951,200)
194
31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
e) Interest credited to Interest Suspense Account (Note-12.6) 281,071,948 99,543,098 281,071,948 99,543,098
xi) Cumulative amount of written off loans, advances and leases
Amount written off during the year 20,969,551 134,839,395 20,969,551 134,839,395
489,407,791 468,438,240 489,407,791 468,438,240
The amount of written off loans, advances and leases
for which law suits have been filed 1,125,678,239 1,087,557,927 1,125,678,239 1,087,557,927
7.16 Classification of loans, advances and leases
Unclassified:
Standard including staff loan 51,073,616,191 43,633,217,814 51,991,519,989 44,902,672,097
Special Mention Account (SMA) 1,137,072,355 800,505,048 1,137,072,355 800,505,048
52,210,688,546 44,433,722,862 53,128,592,344 45,703,177,145
Classified:
Sub-standard 309,472,197 178,840,085 745,678,443 629,639,952
Doubtful 478,658,959 90,720,823 478,658,959 90,720,823
Bad/Loss 858,894,504 645,417,442 858,894,504 645,417,442
1,647,025,660 914,978,350 2,083,231,906 1,365,778,217
53,857,714,206 45,348,701,212 55,211,824,250 47,068,955,362
7.17 Particulars of required provision for loans, advances and leases
Base for Rate

Status
provision (%)
General Provision
Loans and leases (Excluding SMA) 33,900,493,256 1.00% 339,004,933 292,038,153 337,264,989 295,913,475
Loans and leases SME-STD (Excluding SMA) 17,173,122,935 0.25% 42,932,807 36,073,506 42,932,807 36,073,506
Special Mention Account (SMA) 1,066,574,471 5.00% 53,328,724 37,126,372 53,328,724 37,126,372
435,266,464 365,238,031 433,526,520 369,113,353
Base for Rate

Status
provision (%)
Specific provision
Sub-standard 144,835,530 20% 28,967,106 17,507,648 83,658,079 29,555,825
Doubtful 215,418,730 50% 107,709,365 16,061,464 107,709,365 16,061,464
Bad/Loss 521,565,062 100% 521,565,062 428,474,973 521,565,062 428,474,973
658,241,533 462,044,085 712,932,506 474,092,262
Required provision for loans, advances and leases 1,093,507,997 827,282,116 1,146,459,026 843,205,615
Required provision for diminution in value of investments 66,925,029 62,545,452 66,925,029 79,532,217
Total provision required 1,160,433,026 889,827,568 1,213,384,055 922,737,832
Total provision maintained (Note - 12.7 (i)) 1,160,433,026 889,827,568 1,213,384,055 922,737,832
Excess/(short) provision at 31 December - - - -
195

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
8. Fixed assets including land, building, furniture and fixtures

a. Cost
Add: Addition during the year 294,404,534 110,118,507 313,654,913 122,318,386
1,096,144,880 826,698,487 1,266,417,492 979,317,962
Less: Disposal/Adjustments during the year (53,976,593) (24,958,141) (57,971,776) (26,555,385)
1,042,168,288 801,740,346 1,208,445,716 952,762,577
b. Accumulated depreciation
Add: Charged during the year 124,448,641 110,909,550 145,375,918 133,964,255
582,631,572 479,938,935 717,596,372 595,239,895
Less: Disposal/Adjustments during the year (42,826,641) (21,756,004) (46,249,339) (23,019,442)
539,804,931 458,182,931 671,347,033 572,220,453
c. Written down value (a-b) 502,363,356 343,557,415 537,098,683 380,542,124
A schedule of fixed assets including land, building, furniture and fixtures is given in Annexure-A
9. Other assets
Investment in subsidiary companies (Note: 9.1) 1,549,999,790 1,449,999,800 - -

Accounts receivable (Note: 9.2) 151,953,151 134,216,033 543,115,832 595,251,317
Advances, deposits and prepayments (Note: 9.3) 236,904,873 193,476,458 270,343,161 213,112,156
Inter - company receivables (Note: 9.4) 402,550 - - -
Deferred tax asset (Note: 9.5) 2,331,213 2,035,565 25,735,421 29,071,966
Investment in stock exchange (Note: 9.6) - - 18,676,000 18,676,000
1,941,591,577 1,779,727,856 857,870,414 856,111,439
9.1 Investment in subsidiary companies
IDLC Securities Limited (Note: 9.1.1) 49,999,900 49,999,900 - -

IDLC Investments Limited (Note: 9.1.2) 1,399,999,900 1,399,999,900 - -
IDLC Asset Management Limited (Note: 9.1.3) 99,999,990 - -
1,549,999,790 1,449,999,800 - -
9.1.1 Out of the total of 4,000,000 ordinary shares issued and paid up, IDLC Finance Limited holds 3,999,992 (including bonus
shares issued in 2008, 2009 and 2010) ordinary shares of Taka 100 each.
9.1.2 Out of the total of 14,000,000 ordinary shares issued and paid up, IDLC Finance Limited holds 13,999,999 ordinary shares
of Taka 100 each.
196
31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
9.1.3 Out of the total of 10,000,000 ordinary shares issued, IDLC Finance Limited holds 9,999,999 ordinary shares of Taka 10 each.
9.2 Accounts receivable
Interest receivable (Note: 9.2.1) 143,215,263 120,374,430 156,482,419 121,794,530

Other receivables (Note: 9.2.2) 8,737,888 13,841,603 386,633,413 473,456,787
151,953,151 134,216,033 543,115,832 595,251,317
9.2.1 Interest receivable
Interest receivable, fixed deposit 119,792,361 110,976,528 133,059,517 112,396,628

Interest receivable, commercial paper 420,833 - 420,833 -
Receivable from investment in government bonds 1,464,916 1,464,916 1,464,916 1,464,916
Receivable from investment in bonds 21,537,153 7,932,986 21,537,153 7,932,986
143,215,263 120,374,430 156,482,419 121,794,530
9.2.2 Other receivables
Accrued other income 6,116,529 11,220,244 6,116,529 11,220,244

Others 2,621,359 2,621,359 380,516,884 462,236,543
8,737,888 13,841,603 386,633,413 473,456,787
9.3 Advances, deposits and prepayments
Deposits and prepayments 2,771,351 1,966,351 3,061,351 2,274,351

Advance against expenses 234,133,522 191,510,107 267,281,810 210,837,805
236,904,873 193,476,458 270,343,161 213,112,156
Advances, deposits and prepayments are considered good but not secured by collateral.
9.4 Inter - company receivables
This represents receivables from subsidiary

companies
IDLC Securities Limited - - - -

IDLC Investments Limited - - - -
IDLC Asset Management Limited 402,550 - - -
402,550 - - -
197
9.5 Deferred tax
Deferred tax has been calculated based on deductible/taxable temporary difference arising due to difference in the carrying amount
of the assets and its tax base in accordance with the provision of Bangladesh Accounting Standard (BAS) 12: “Income Taxes”.
IDLC Finance Limited Subsidiaries

(Taxable)/ Carrying (Taxable)/
Carrying
deductible amount at deductible
amount at Tax base Tax base
temporary balance temporary
balance sheet
difference sheet difference
Deferred tax liability is arrived at as follows:

2015
Assets (excluding land):
Fixed assets net of depreciation as
on December 31, 2015 - - - - - -
Total - - - - - -

on December 31, 2014 316,598,945 303,217,680 (13,381,265) - - -
Total 316,598,945 303,217,680 (13,381,265) - - -
Applicable tax rate (2014: 42.5%) 40%
Deferred tax liability as on

- -
December 31, 2015
Deferred tax liability as on
December 31, 2014 (5,687,038) -
Deferred tax (expenses)/income
accounted for during the year 5,687,038 -
Deferred tax asset is arrived at as follows:

2015
on December 31, 2015 (IDLC FL) 475,404,886 481,232,919 5,828,032 - - -
on December 31, 2015 (IDLC SL) - - - 22,307,362 45,829,362 23,522,000
on December 31, 2015 (IDLC IL) - - - 12,427,965 21,607,699 9,179,734
Total 475,404,886 481,232,919 5,828,032 34,735,327 67,437,061 32,701,734
Liabilities:
Employee gratuity as on
December 31, 2015 (IDLC SL) - - - 13,200,215 - 13,200,215
December 31, 2015 (IDLC IL) - - - 7,876,928 - 7,876,928
Total - - - 21,077,143 - 21,077,143
Loss on sale of secondary shares (IDLC SL) - - - 41,551,844 - 41,551,844

Loss on sale of secondary shares (IDLC IL) - - - - - -
Total - - - 41,551,844 - 41,551,844
Grand Total - - - 62,628,987 - 62,628,987
198
IDLC Finance Limited Subsidiaries
(Taxable)/de- Carrying (Taxable)/
Carrying
ductible amount at deductible
amount at Tax base Tax base
temporary balance temporary
balance sheet
difference sheet difference
2014

on December 31, 2014 (IDLC SL) - - - 21,308,054 41,111,958 19,803,904
on December 31, 2014 (IDLC IL) - - - 15,676,655 20,668,737 4,992,082
Total - - - 36,984,709 61,780,695 24,795,986
Liabilities:
December 31, 2014 (IDLC SL) - - - 10,153,706 - 10,153,706
December 31, 2014 (IDLC IL) - - - 6,461,419 - 6,461,419
Total - - - 16,615,125 - 16,615,125
Loss on sale of secondary shares (IDLC FL) 20,355,651 - 20,355,651 - - -

Loss on sale of secondary shares (IDLC SL) - - - 84,395,823 - 84,395,823
Loss on sale of secondary shares (IDLC IL) - - - 38,165,925 - 38,165,925
Total 20,355,651 - 20,355,651 122,561,748 - 122,561,748
Grand Total 20,355,651 - 20,355,651 139,176,873 - 139,176,873
Applicable tax rate for IDLC FL (2014: 42.5%) 40.00%

Applicable tax rate for IDLC SL 35.00%
Applicable tax rate for IDLC IL 37.50%
Applicable tax rate for loss on sale
of secondary shares 10.00% 10.00%
Deferred tax asset as on December 31, 2015 2,331,213 23,404,208

Deferred tax asset as on December 31, 2014 2,035,565 27,036,401
Deferred tax income accounted for during the year 295,648 (3,632,193)
Net deferred tax (expense)/income 5,982,686 (3,632,193)
2015: Consolidated deferred tax income was Taka 2,350,493 which includes Taka 5,982,686 for deferred tax income of IDLC Finance
Limited, Taka 1,916,786 and Taka 1,715,407 for deferred tax expense of IDLC Securities Limited & IDLC Investments Limited respectively.
2014: Consolidated deferred tax income was Taka 18,558,222 which includes Taka 12,242,129 for deferred tax income of IDLC
Finance Limited, Taka 3,865,057 and Taka 2,451,036 for deferred tax income of IDLC Securities Limited & IDLC Investments Limited
respectively.
199

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
9.6 Investment in stock exchange

DSE membership at cost - - 15,225,000 15,225,000
CSE membership at cost - - 3,451,000 3,451,000
- - 18,676,000 18,676,000
IDLC Securities Limited has received the following shares from DSE and CSE against the membership under demutualization
scheme of the stock exchanges
Stock Exchange Type of Shares Number of Shares Face Value

Dhaka Stock Exchange Limited Floated (40%) 2,886,042 10
Blocked (60%) 4,329,064 10
7,215,106
Chittagong Stock Exchange Limited Floated (40%) 1,714,932 10

Blocked (60%) 2,572,398 10
4,287,330
Valuation of membership has been shown at cost in the accounts.
10. Borrowings from other banks, financial institutions and agents
Inside Bangladesh (Note- 10.1) 10,550,165,864 9,136,412,565 10,585,582,747 9,198,032,173

Outside Bangladesh - - - -
10,550,165,864 9,136,412,565 10,585,582,747 9,198,032,173
10.1 Inside Bangladesh

Secured long term loans
Long-term loans
Commercial Bank of Ceylon PLC 105,000,000 165,000,000 105,000,000 165,000,000
Woori Bank 300,000,000 - 300,000,000 -
405,000,000 165,000,000 405,000,000 165,000,000
Total secured long-term loans 405,000,000 165,000,000 405,000,000 165,000,000
Unsecured long-term loans
Bond and Debenture
Sadharan Bima Corporation - 20,000,000 - 20,000,000
A K Khan & Co Limited 331,598,635 625,333,064 331,598,635 625,333,064
Universal Jeans Limited 76,124,572 143,556,718 76,124,572 143,556,718
Central Depository Bangladesh Limited 30,449,830 57,422,688 30,449,830 57,422,688
BRAC EPL Stock Brokerage Limited 18,574,396 35,027,839 18,574,396 35,027,839
Long-term loans
Kreditanstalt fÜr Wiederaufbau (KfW) 99,769,118 113,681,048 99,769,118 113,681,048
The Hong Kong & Shanghai Banking Corporation Limited - 1,480,834 - 1,480,834
Bangladesh Bank (Small Enterprise Refinancing Program) 3,148,726,835 2,045,829,445 3,148,726,835 2,045,829,445
Bangladesh Bank New Entrepreneur Refinancing Scheme 49,900,000 - 49,900,000 -

Bangladesh Bank (Home Loan Refinancing Program) 687,612,296 747,130,401 687,612,296 747,130,401
200
31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
Bangladesh Bank (Agro Loan Refinancing Program) 1,712,434,975 1,231,976,652 1,712,434,975 1,231,976,652
Bangladesh Bank (JICA Refinancing Program) 520,406,109 563,054,420 520,406,109 563,054,420

SME Foundation 85,000,000 30,000,000 85,000,000 30,000,000
Nederlandse Financierings-Maatschappij voor
Ontwikkelingslanden N.V. ("FMO") 932,160,000 1,242,880,000 932,160,000 1,242,880,000
Investment Promotion & Financing Facilities (IPFF) 272,409,098 294,039,456 272,409,098 294,039,456
Investment Corporation of Bangladesh (ICB) - - 35,416,883 61,619,608

Saudi Bangladesh Industrial & Agricultural
Investment Company Limited 400,000,000 - 400,000,000 -
Total unsecured long-term loan 8,365,165,864 7,151,412,565 8,400,582,747 7,213,032,173
Short-term and Call loans
Short-term loans
Citi Bank N.A. - 370,000,000 - 370,000,000
Bank Alfalah Limited - 100,000,000 - 100,000,000
Standard Chartered Bank 800,000,000 650,000,000 800,000,000 650,000,000
Commercial Bank of Ceylon PLC - 100,000,000 - 100,000,000
800,000,000 1,220,000,000 800,000,000 1,220,000,000
Call Loans
Agrani Bank Limited 160,000,000 100,000,000 160,000,000 100,000,000
BASIC Bank Limited - 200,000,000 - 200,000,000
Meghna Bank Limited - 200,000,000 - 200,000,000
The Premier Bank Limited - 100,000,000 - 100,000,000
Pubali Bank Limited 140,000,000 - 140,000,000 -
Jamuna Bank Limited 150,000,000 - 150,000,000 -
Mercantile Bank Limited 330,000,000 - 330,000,000 -
Mutual Trust Bank Limited 200,000,000 - 200,000,000 -
980,000,000 600,000,000 980,000,000 600,000,000
Total short-term and call loans 1,780,000,000 1,820,000,000 1,780,000,000 1,820,000,000
Total Borrowings 10,550,165,864 9,136,412,565 10,585,582,747 9,198,032,173
10.2 Security against borrowings from other banks and financial institutions
Secured 1,205,000,000 1,385,000,000 1,205,000,000 1,385,000,000

Unsecured 9,345,165,864 7,751,412,565 9,380,582,747 7,813,032,173
10,550,165,864 9,136,412,565 10,585,582,747 9,198,032,173
Secured loans are covered by first equitable mortgage of all present and future immovable properties and by floating
charges on movable assets of the Company ranking pari-passu among the lenders. The Company has a Pari Passu Security
Sharing Agreement (PPSSA) among the secured lenders stipulating the procedure in the sharing of the security provided
by the Company. Loans repayable within one year have been placed under current liabilities. Details of loans are as follows:
201

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
10.3 Maturity grouping of borrowings from other banks and financial institutions
Payable on demand 980,000,000 600,000,000 980,000,000 600,000,000

Up to 1 month 1,029,000,000 463,412,565 1,029,000,000 463,412,565
Over 1 month but within 3 months 554,200,000 1,012,800,000 554,200,000 1,012,800,000
Over 3 months but within 1 year 2,024,700,000 1,972,200,000 2,024,700,000 1,972,200,000
Over 1 year but within 5 years 5,347,000,000 4,388,600,000 5,382,416,883 4,450,219,608
Over 5 years 615,265,864 699,400,000 615,265,864 699,400,000
10,550,165,864 9,136,412,565 10,585,582,747 9,198,032,173
11. Deposits and other accounts
Current accounts and other accounts etc. - - - -

Bills payable - - - -
Savings bank deposits - - - -
Term deposits (Note: 11.1) 46,174,475,236 35,241,001,090 46,038,675,236 35,240,301,090
Bearer certificate of deposits - - - -
Refundable deposits (Note: 11.2) 1,585,890,057 1,354,817,959 1,585,890,057 1,354,817,959
47,760,365,293 36,595,819,049 47,624,565,293 36,595,119,049
11.1 Term deposits
This represents deposits received from institutions and individuals for a period not less than three months period.

Add: Deposits received during the year 28,341,598,510 20,683,947,858 28,341,598,510 20,683,947,858
63,582,599,600 49,847,827,940 63,581,899,600 49,747,827,940
Less: Matured/encashed during the year 17,408,124,363 14,606,826,850 17,408,124,363 14,506,826,850
Inter - company deposit - - 135,100,000 700,000
11.1.1 Rate of interest
Rate of interest on term deposit receipts ranges from 6.50% to 11.73% (2014: 8.40% to 12.50%).
11.2 Refundable deposits
The Company takes deposits from the clients of lease and loan on signing of agreement, refundable at the end of the
contract period. Balance at December 31 stands as under:
Deposits against loan and lease rental 338,834,885 353,056,882 338,834,885 353,056,882
Deposits against financing as per term of
agreements (Security deposits) 1,247,055,171 1,001,761,077 1,247,055,171 1,001,761,077
1,585,890,057 1,354,817,959 1,585,890,057 1,354,817,959
Security deposits are interest bearing while deposits against loan and lease are non interest bearing.
202
31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
11.3 Group-wise break-up of deposits and other accounts
Government - - - -
Bank 9,840,213,670 6,949,313,548 9,840,213,670 6,949,313,548
Other institutions 19,995,060,669 13,365,328,999 19,859,260,669 13,364,628,999
Individuals 17,925,090,954 16,281,176,502 17,925,090,954 16,281,176,502
47,760,365,293 36,595,819,049 47,624,565,293 36,595,119,049
11.4 Maturity analysis of deposits
Maturity analysis of Term deposits

Payable on demand - - - -
Up to 1 month 6,161,453,193 3,734,143,655 6,161,453,193 3,734,143,655
Over 1 month but within 6 months 25,601,028,463 20,349,062,942 25,601,028,463 20,349,062,942
Over 6 months but within 1 year 7,843,506,215 6,980,485,376 7,843,506,215 6,980,485,376
Over 5 years but within 10 years 855,074,528 542,475,507 855,074,528 542,475,507
Above 10 years 21,427,821 538,304 21,427,821 538,304
46,174,475,236 35,241,001,090 46,038,675,236 35,240,301,090
Maturity analysis of Refundable deposits

Payable on demand 27,845,166 37,662,874 27,845,166 37,662,874
Up to 1 month 10,802,351 7,052,326 10,802,351 7,052,326
Over 1 month but within 6 months 164,310,816 103,191,549 164,310,816 103,191,549
Over 6 months but within 1 year 175,435,516 118,844,503 175,435,516 118,844,503
Over 5 years but within 10 years 13,934,080 16,555,474 13,934,080 16,555,474
1,585,890,057 1,354,817,959 1,585,890,057 1,354,817,959
12 Other liabilities
Payable and accrued expenses (Note: 12.1) 3,366,220,090 3,247,186,683 3,771,971,305 3,759,339,122
Provision for income tax (Note: 12.2) 1,806,301,703 1,485,726,087 1,925,191,210 1,575,825,521
Inter-company payables (Note: 12.3) 99,999,990 - - -
Deferred liability-employee gratuity (Note: 12.4) - - 21,077,143 16,615,124
Portfolio investors' fund (Note: 12.5) - - 218,042,064 220,365,337
Interest suspense account (Note: 12.6) 281,071,948 99,543,098 281,071,948 99,543,098
Provision for doubtful accounts and future losses (Note: 12.7 (i)) 1,160,433,026 889,827,568 1,213,384,055 922,737,832
Unpaid dividend 7,606,218 5,492,588 7,606,218 5,492,588
Deferred tax liability (Note: 9.5) - 5,687,038 - 5,687,038
6,721,632,975 5,733,463,062 7,438,343,943 6,605,605,660
203

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
12.1 Payable and accrued expenses
Receipt against leases 335,375,876 315,044,853 335,375,876 315,044,853

Liabilities for expenses 2,677,881,192 2,217,828,677 3,083,425,809 2,593,893,052
Liabilities for other finance 352,963,022 714,313,153 353,169,620 850,401,217
3,366,220,090 3,247,186,683 3,771,971,305 3,759,339,122
12.2 Provision for income tax
Provision
Less: Adjustment during the year - - - -
4,522,486,911 3,634,648,495 5,018,323,425 4,058,747,773
Add: Provision made during the year 1,037,681,898 887,838,416 1,171,629,363 959,575,652
5,560,168,809 4,522,486,911 6,189,952,788 5,018,323,425
Settlement of previous year's tax liability - - - -
Advance tax
Add: Payment made during the year:
Under sections 64 and 74 of ITO, 1984 604,155,360 523,623,300 664,144,614 570,917,190
Deduction at source 110,881,922 85,979,718 156,050,060 122,738,427
Others 2,069,000 1,995,000 2,069,000 2,055,000
717,106,282 611,598,018 822,263,674 695,710,617
3,753,867,106 3,036,760,824 4,264,761,578 3,442,497,904
Less: Adjustment during the year - - - -
3,753,867,106 3,036,760,824 4,264,761,578 3,442,497,904
Net balance at December 31 1,806,301,703 1,485,726,087 1,925,191,210 1,575,825,521
12.3 Inter-company payables
IDLC Securities Limited - - - -

IDLC Investments Limited - - - -
IDLC Asset Management Limited (Note: 12.3.1) 99,999,990 - - -
99,999,990 - - -
12.3.1 This amount is (TK. 99,999,990) payable to IDLC Asset Management Limited for contribution in capital by IDLC Finance Limited.
12.4 Deferred Liability-employee gratuity
Balance at January 1 - - 16,615,124 10,358,982

Add: Addition during the year - - 8,524,048 7,094,477
- - 25,139,172 17,453,459
Less: Payment during the year - - 4,062,029 838,335
Balance at December 31 - - 21,077,143 16,615,124
204
31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
12.5 Portfolio investors' fund
This represents the balance of deposits made with the IDLC Investments Limited by the portfolio investors to take
margin loan and buy marketable securities. The balance of fund has been arrived at as follows:
Balance at January 1 - - 220,365,337 536,049,315

Add: Deposit and share sold by clients - - 2,191,420,201 1,855,196,750
- - 2,411,785,538 2,391,246,065
Less: Purchase of share and deposit withdraw by clients - - 2,193,743,474 2,170,880,728
Balance at December 31 - - 218,042,064 220,365,337
12.6 Interest suspense accounts
On lease finance 82,342,236 36,256,031 82,342,236 36,256,031

On real-estate finance 57,033,620 18,980,655 57,033,620 18,980,655
On term finance 132,378,128 34,505,533 132,378,128 34,505,533
On car loan 4,630,154 1,129,686 4,630,154 1,129,686
On personal loan 1,752,803 1,542,354 1,752,803 1,542,354
On short term finance 2,935,007 7,128,839 2,935,007 7,128,839
281,071,948 99,543,098 281,071,948 99,543,098
12.7 Provision for loans and advances/investments
12.7(i) Balance at January 1 889,827,568 957,891,200 922,737,832 1,043,512,396
Provision required for the year 316,215,887 278,210,853 358,858,683 281,996,859

Provision released during the year (24,645,877) (217,951,200) (47,247,909) (274,448,138)
Provision charged for the year (Note: 12.7(ii)) 291,570,010 60,259,653 311,610,775 7,548,721
Write off during the year 20,964,551 128,323,285 20,964,551 128,323,285
Balance at December 31 1,160,433,026 889,827,568 1,213,384,055 922,737,832
12.7(ii) Provision charged for the year
General provision 54,798,590 41,984,250 49,183,322 45,031,836

Specific provision 233,364,352 (1,576,823) 276,007,148 (55,344,909)
Provision for diminutions in value of investments 3,407,068 19,852,226 (13,579,695) 17,861,794
Other Provisions - - - -
291,570,010 60,259,653 311,610,775 7,548,721
12.7(iii) Product wise break up of provision
Lease 355,794,492 291,138,999 355,794,492 291,138,999

Long- term finance 409,746,466 318,768,381 409,746,466 318,768,381
Real estate finance 232,236,527 168,044,304 232,236,527 168,044,304
Car loan 32,601,551 22,260,594 32,601,551 22,260,594
Investment in shares 66,925,029 62,545,452 66,925,029 79,532,217
Personal Loan 6,848,488 6,275,074 6,848,488 6,275,074
Short term finance 39,870,455 11,923,765 39,870,455 11,923,765
Loan against Deposit 9,250,976 5,572,892 9,250,976 5,572,892
205

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
Loan to subsidiaries 2,325,597 3,298,107 (9,495,510) (8,523,000)

Other assets 4,833,446 - 4,833,446 -
Margin loan - - 64,772,136 27,744,606
1,160,433,026 889,827,568 1,213,384,055 922,737,832
13. Share capital

Authorised
400,000,000 ordinary shares of Taka 10 each 4,000,000,000 4,000,000,000 4,000,000,000 4,000,000,000
Issued, subscribed and paid-up

251,367,187 ordinary shares of Taka 10 each 2,513,671,870 2,010,937,500 2,513,671,870 2,010,937,500
(2014: 201,093,750 ordinary shares of Taka 10 each)
The company increased its paid-up share capital from Taka 2,010,937,500 to Taka 2,513,671,870 by issuing 50,273,437
bonus shares to the shareholder as approved in 30th Annual General Meeting (AGM) held on 30 March 2015.
Paid-up share capital as on December 31, 2015 comprises the following:
Composition of shareholding
31.12.2015 31.12.2014
Sl. No. Name of the Shareholders % of Number of
Taka Taka
holding shares
1 SPONSORS/DIRECTORS
The City Bank Limited (CBL) 24.21 60,854,056 608,540,560 502,832,460
Transcom Group 13.33 33,515,443 335,154,430 268,123,550
Eskayef Bangladesh Limited 8.00 20,109,375 201,093,750 160,875,000
Transcraft Limited 4.01 10,088,022 100,880,220 80,704,180
Bangladesh Lamps Limited 1.32 3,318,046 33,180,460 26,544,370
Sadharan Bima Corporation (SBC) 7.62 19,151,663 191,516,630 153,213,310
Mercantile Bank Limited 7.50 18,852,538 188,525,380 150,820,310
Reliance Insurance Co. Limited 7.00 17,595,702 175,957,020 140,765,620
59.66 149,969,402 1,499,694,020 1,215,755,250
2 GENERAL
Institutions
Bangladesh Fund 3.20 8,040,750 80,407,500 64,326,000
ICB 2.31 5,813,612 58,136,120 -
LR Global 1.14 2,873,900 28,739,000 -
Other Institution/Corporate 13.64 34,291,599 342,915,990 258,324,790
Sub-Total 20.30 51,019,861 510,198,610 322,650,790
Individuals
General Public (Individuals) 20.04 50,377,924 503,779,240 472,531,460
Sub-Total 20.04 50,377,924 503,779,240 472,531,460
Total Holdings 100.00 251,367,187 2,513,671,870 2,010,937,500
The shares were listed with Dhaka Stock Exchange Limited on March 20, 1993 and with Chittagong Stock Exchange Limited on
November 25, 1996 and quoted at Taka 63.60 at Dhaka Stock Exchange Limited and Taka 62.10 at Chittagong Stock Exchange
Limited respectively on December 31, 2015.
206
31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
13.1 Capital Adequacy Ratio (CAR)
As per the Section 4(GHA) of the Financial Institutions Rule, 1994 and subsequently updated vide DFIM Circular No. 5,
dated July 24, 2011, the minimum paid-up capital of the Financial Institution (FI) shall be Taka 100 crore; provided that the
sum of paid-up capital and reserves shall not be less than the minimum capital required under the Risk-Based Assets of the
company, criteria determined by the Bangladesh Bank.
The surplus eligible capital of the Company as well as the Group at the close of business on December 31, 2015 were Taka
180.60 crore and Taka 266.45 crore, respectively.
Core Capital ( Tier-1)/ Shareholders' Equity

Paid-up capital (Note: 13) 2,513,671,870 2,010,937,500 2,513,671,870 2,010,937,500
Share premium (Note: 14) 3,750,000 3,750,000 3,750,000 3,750,000
Statutory reserves (Note: 15) 1,482,722,671 1,233,958,647 1,482,722,671 1,233,958,647
General reserves (Note: 16) 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000
Dividend equalization reserves 46,500,000 46,500,000 46,500,000 46,500,000
Retained earnings 1,689,902,181 1,398,674,204 2,739,315,501 2,232,683,265
Non-controlling interest - - 2,165 1,954
A) Sub-Total 6,736,546,722 5,693,820,351 7,785,962,207 6,527,831,366
Supplementary capital (Tier -II)

General Provision (Unclassified loans up to specified
limit + SMA + off-balance sheet exposure)* 435,266,464 365,238,031 433,526,520 369,113,353
Assets Revaluation Reserves up to 50% - - - -
Revaluation Reserve for Securities up to 45% - - - -
All others preference shares - - - -
Others (if any other item approved by Bangladesh
Bank) - - - -
B) Sub-Total 435,266,464 365,238,031 433,526,520 369,113,353
C) Total eligible capital 7,171,813,186 6,059,058,382 8,219,488,727 6,896,944,719
Total assets including off-balance sheet exposures 72,994,254,228 58,824,680,057 74,659,997,564 60,591,753,278
D) Total risk weighted assets 53,658,280,573 45,452,641,230 55,549,824,700 47,560,018,230
E) Required capital based on risk weighted assets

(10% of D) 5,365,828,057 4,545,264,123 5,554,982,470 4,756,001,823
F) Surplus (C-E) 1,805,985,129 1,513,794,259 2,664,506,257 2,140,942,896

Capital Adequacy Ratio (%) 13.37 13.33 14.80 14.50
* Limited to 1.25% of RWA as per CAMD guideline.
207

31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
14. Share premium
This represents premium amount over par value of shares received against issue of 75,000 shares in 1993 @Taka 50 per share.
15. Statutory reserves

Add: Transferred on appropriation of profit 248,764,024 230,707,003 248,764,024 230,707,003
16 General reserves
Balance at January 1 1,000,000,000 811,250,000 1,000,000,000 811,250,000

Add: Transferred on appropriation of profit - 188,750,000 - 188,750,000
17. Business commitments and contingencies
In the normal course of business, the Company makes various commitments and incurs certain contingent liabilities. No material losses
are anticipated as a result of these transactions. These contingent liabilities and business commitments are quantified below:
17.1 Contingent liabilities

Acceptances and endorsements - - - -
Letters of guarantee (Note: 17.1.1) 118,488,520 465,240,778 118,488,520 465,240,778
Irrevocable letters of credit - - - -
Bills for collection - - - -
Indemnity bond - - - -
Corporate guarantee (Note: 17.1.2) 500,000,000 500,000,000 500,000,000 500,000,000
618,488,520 965,240,778 618,488,520 965,240,778
17.1.1 Money for which the Company is contingently liable in respect of guarantee given in favour of:
Directors or officers - - - -
Government - - - -
Banks and other financial institutions - - - -
Others 118,488,520 465,240,778 118,488,520 465,240,778
118,488,520 465,240,778 118,488,520 465,240,778
17.1.2 The company is contingently liable on behalf of IDLC Securities Limited for the guarantees given below in favour of:
Dhaka Stock Exchange Limited 450,000,000 450,000,000 450,000,000 450,000,000

Chittagong Stock Exchange Limited 50,000,000 50,000,000 50,000,000 50,000,000
500,000,000 500,000,000 500,000,000 500,000,000
208
31.12.2015 31.12.2014 31.12.2015 31.12.2014
Taka Taka Taka Taka
17.2 Other commitments

Documentary credits and short term trade related transactions - - - -
Forward assets purchased and forward deposits placed - - - -
Un-drawn note issuance and revolving underwriting - - - -

Un-drawn formal standby facilities, credit lines - - - -
Lease and term finance commitments outstanding at December 31 162,974,679 187,914,553 162,974,679 187,914,553
Real estate finance commitments outstanding at December 31 443,430,175 511,809,699 443,430,175 511,809,699
Car loan commitments outstanding at December 31 450,000 - 450,000 -

Personal loan commitments outstanding at December 31 200,000 200,000 200,000 200,000
607,054,854 699,924,252 607,054,854 699,924,252
31.12.2015 31.12.2014
Contracts/ Contracts/
Disbursement Disbursement
sanction sanction
Taka Taka Taka Taka
17.2.1 Sanction and Disbursements

On December 31, the Company had following amounts of sanction and disbursement :
Lease and term finance 374,779,300 211,804,621 1,004,454,616 816,540,063

Real estate finance 1,468,571,000 1,025,140,825 1,419,186,940 907,377,241
Car loans 2,700,000 2,250,000 - -
Personal loans 500,000 300,000 500,000 300,000
Loan Against Deposit (LAD) - - - -
1,846,550,300 1,239,495,446 2,424,141,556 1,724,217,304
17.2.2 Capital expenditure commitments
There was no capital expenditure contracted but not incurred or provided for at December 31, 2015 (2014: nil). There was
no material capital expenditure authorised by the Board but not contracted for at December 31, 2015 (2014: nil).
17.2.3 Unacknowledged debt

The Company had no claim, legal or others, which has not been acknowledged as debt at the balance sheet date.

2015 2014 2015 2014
Taka Taka Taka Taka
18. Income statement
Income
Interest, discount and similar income (Note: 18.1) 8,240,123,894 7,406,259,754 8,510,383,676 7,439,431,740
Dividend income (Note: 21) 39,909,767 27,208,743 96,282,352 40,805,382
Commission, exchange and brokerage (Note: 22) 58,053,730 66,413,793 356,949,912 359,076,106
Other operating income (Note: 23) 433,242,052 356,650,721 440,864,639 361,507,263
8,771,329,443 7,856,533,011 9,404,480,579 8,200,820,491
209

2015 2014 2015 2014
Taka Taka Taka Taka
Expenses
Interest on deposits and borrowings etc. (Note: 20) 4,827,091,642 4,530,353,027 4,833,191,104 4,543,097,395
Administrative expenses (Note: 18.2) 1,003,069,919 893,530,569 1,218,240,270 1,074,405,381
Other operating expenses (Note: 33) 266,242,398 232,348,909 284,171,561 255,278,412
Depreciation on assets (Note: 32) 124,448,641 110,909,550 145,375,918 133,964,255
6,220,852,600 5,767,142,055 6,480,978,853 6,006,745,443
2,550,476,843 2,089,390,956 2,923,501,726 2,194,075,048
18.1 Interest, discount and similar income
Interest income (Note: 19) 8,023,764,544 7,379,533,073 8,251,180,347 7,431,871,158

Gain on sale of marketable securities (Note: 21) 91,251,323 (20,360,651) 134,095,302 (39,526,750)
Income from investment in bonds (Note: 21) 125,108,027 47,087,332 125,108,027 47,087,332
8,240,123,894 7,406,259,754 8,510,383,676 7,439,431,740
18.2 Administrative expenses
Salary and allowances (Note: 24) 744,116,214 629,691,643 899,165,319 749,662,409

Rent, taxes, insurance, electricity, etc. (Note: 25) 93,372,106 79,197,000 135,714,936 121,724,427
Legal expenses (Note: 26) 13,536,662 7,229,630 16,102,123 8,632,327
Postage, stamp, telecommunication, etc. (Note: 27) 26,929,463 26,215,029 35,021,731 34,123,344
Stationery, printing, advertisement, etc. (Note: 28) 81,059,657 108,450,028 85,711,998 115,003,057
Managing Director's salary and fees (Note: 29) 11,493,667 13,060,000 11,493,667 13,060,000
Directors' fees (Note: 30) 1,041,900 828,000 1,409,400 1,132,750
Auditors' fees (Note: 31) 517,500 517,500 690,000 690,000
Repair of Company's assets (Note: 32) 31,002,750 28,341,739 32,931,096 30,377,067
1,003,069,919 893,530,569 1,218,240,270 1,074,405,381
19. Interest income
This represents interest income from the following products:
Lease finance 869,982,131 983,182,446 869,982,131 983,182,446

Real estate finance 2,384,903,511 2,078,186,608 2,384,903,511 2,078,186,608
Term finance 3,256,098,864 3,035,888,380 3,256,098,864 3,035,888,380
Short term finance 167,977,395 118,132,103 167,977,395 118,132,103
Car loan 335,404,732 216,741,171 335,404,732 216,741,171
Personal loan 22,875,803 27,150,019 22,875,803 27,150,019
Margin loan to portfolio investors - - 193,932,594 103,105,282
Loan to subsidiaries 15,418,406 75,326,052 - -
Income against pre-funding for foreign trade - - - 148,567
7,052,660,842 6,534,606,779 7,231,175,030 6,562,534,576
Interest on balance with other banks and financial institutions 906,813,445 758,236,832 955,715,060 782,647,120
Call loan 337,694 - 337,694 -
Loan against deposit 63,952,563 86,689,462 63,952,563 86,689,462
8,023,764,544 7,379,533,073 8,251,180,347 7,431,871,158
210
2015 2014 2015 2014
Taka Taka Taka Taka
20. Interest on deposits and borrowings etc.
Interest on term deposits 4,157,547,965 3,747,672,138 4,157,547,965 3,747,672,138

Interest on borrowings 432,761,932 403,586,151 438,861,394 416,330,519
Interest on secured zero coupon bonds 80,933,077 128,905,588 80,933,077 128,905,588
Interest on security deposit 90,002,307 73,667,678 90,002,307 73,667,678
Interest on call loan 65,846,361 176,521,472 65,846,361 176,521,472
Others - - - -
4,827,091,642 4,530,353,027 4,833,191,104 4,543,097,395
21. Investment income
Gain/(loss) on sale of marketable securities 91,251,323 (20,360,651) 134,095,302 (39,526,750)

Dividend income 39,909,767 27,208,743 96,282,352 40,805,382
Income from investment in bonds 125,108,027 47,087,332 125,108,027 47,087,332
Income from investment in commercial paper 16,612,500 - 16,612,500 -
272,881,617 53,935,424 372,098,181 48,365,964
22. Commission, exchange and brokerage
Agency fees 10,241,666 6,666,666 10,241,666 6,666,666

Arrangement fees 47,330,846 59,251,666 47,330,846 59,251,666
Commission & brokerage - 69,594 216,028,793 186,797,240
Documentation fees - - 66,000 51,500
Custodial fees 481,218 425,867 481,218 425,867
Portfolio management fees - - 43,081,388 56,874,021
Corporate advisory fees - - 18,062,486 22,760,119
Settlement charges - - 21,657,515 26,249,027
58,053,730 66,413,793 356,949,912 359,076,106
23. Other operating income
Application, processing and documentation fees 262,662,932 246,105,532 262,662,932 246,105,532

Loan settlement and others 94,937,948 51,144,861 94,937,948 51,144,861
Transfer price/gain at the time of expiry of lease 1,285,446 2,781,628 1,285,446 2,781,628
Service charges 31,543,073 23,845,537 31,543,073 23,845,537
Gain/(Loss) on disposal of fixed assets 11,896,596 5,078,591 12,282,357 5,937,626
Account opening & BO account maintenance fees - - 2,715,300 2,629,400
IPO service charge - - 71,519 8,826
Miscellaneous income 30,916,057 27,694,572 35,366,064 29,053,853
433,242,052 356,650,721 440,864,639 361,507,263
24. Salaries and allowances 744,116,214 629,691,643 899,165,319 749,662,409
211

2015 2014 2015 2014
Taka Taka Taka Taka
24.1 Salaries and allowances
Salaries and allowances of IDLC Finance Limited include annual contribution of Taka 52,906,228 to Provident Fund and
Taka 23,427,718 to Gratuity Fund. Salaries and allowances of IDLC Group include annual contribution of Taka 61,721,230
to Provident Fund and Taka 31,951,766 to Gratuity Fund.
25. Rent, taxes, insurance, electricity, etc.
Rent, rate and taxes 58,949,023 49,836,353 93,502,420 83,704,972

Insurance 5,971,434 4,290,799 6,861,862 5,300,338
Power and electricity 28,451,649 25,069,848 35,350,654 32,719,117
93,372,106 79,197,000 135,714,936 121,724,427
26. Legal expenses
Renewal and registration 7,772,700 4,514,465 9,213,516 5,480,720

Other professional charges 5,763,962 2,715,165 6,888,607 3,151,607
13,536,662 7,229,630 16,102,123 8,632,327
27. Postage, stamp, telecommunication, etc.
Postage 1,052,379 1,885,305 1,550,771 2,203,599

Telecommunication and internet etc. 25,877,084 24,329,724 33,470,960 31,919,745
26,929,463 26,215,029 35,021,731 34,123,344
28. Stationery, printing, advertisements, etc.
Stationery & printing 48,440,195 39,630,115 51,200,129 43,061,252

Advertisement and publicity 32,619,462 68,819,913 34,511,869 71,941,805
81,059,657 108,450,028 85,711,998 115,003,057
29. Managing Director's salary and benefits
Basic pay 5,116,667 6,000,000 5,116,667 6,000,000

Allowances 3,377,000 3,960,000 3,377,000 3,960,000
Bonus 2,500,000 2,500,000 2,500,000 2,500,000
Company's contribution to provident fund 500,000 600,000 500,000 600,000
11,493,667 13,060,000 11,493,667 13,060,000
30. Directors' fees
Honorarium for attending meeting 1,041,900 828,000 1,409,400 1,132,750

Incidental expenses for attending meeting - - - -
1,041,900 828,000 1,409,400 1,132,750
30.1 Directors' fees
Bangladesh Bank vide its DFIM Circular No. 13 dated November 30, 2015, re-fixed the maximum limit of remuneration to
the directors for attending meeting of the Board and its committees at Taka 8,000 per meeting per director. The Board of
IDLC Finance Limited adopted the said enhanced remuneration on December 24, 2015. Till then, the said remuneration
was Taka 5,000 per meeting per director.
212
2015 2014 2015 2014
Taka Taka Taka Taka
31. Auditors' fees
Annual statutory audit fees (including VAT) 460,000 460,000 632,500 632,500
Other audit fees (including VAT) 57,500 57,500 57,500 57,500
517,500 517,500 690,000 690,000
32. Depreciation and repair of company's assets
Freehold assets (Note: 8 & 8 (a)) 124,448,641 110,909,550 145,375,918 133,964,255
Repair and maintenance

For premises & vehicles 5,942,081 7,706,585 7,213,029 9,408,057
For computers and computers accessories 25,060,669 20,635,154 25,718,067 20,969,010
31,002,750 28,341,739 32,931,096 30,377,067
155,451,391 139,251,289 178,307,014 164,341,322
33 Other expenses
Bank charges 2,656,621 3,028,133 2,656,621 3,028,133

Books and periodicals 206,139 272,871 272,042 350,881
Car expenses 23,562,578 22,252,523 26,054,733 26,011,282
Donations and subscriptions 9,934,870 12,843,412 12,804,210 15,230,049
Medical & welfare expenses 12,508,139 8,103,931 13,586,763 8,809,973
Entertainment expenses 12,942,328 13,224,956 15,107,671 15,267,760
Consultancy fees 4,908,431 4,607,190 4,908,431 4,904,690
Office service expenses 64,172,438 59,211,046 77,664,904 71,874,714
Training expenses 10,529,349 12,769,065 11,296,688 13,274,252
Travel and conveyances 15,165,189 14,402,390 16,626,705 15,699,966
CDBL charges 500 500 450,226 123,343
Loss on disposal of lease assets 246 1,126 246 1,126
Howla and Laga charge - - 17,019,734 17,544,261
Portfolio management charge 24,704,909 18,572,073 - -
Sales commission 55,047,545 40,917,738 55,047,545 40,917,738
Repossession fees and others 29,903,116 22,141,955 30,675,042 22,240,244
266,242,398 232,348,909 284,171,561 255,278,412
213
34. Operating Segment Report
For the year 2015
Revenue and profit Core Investment

Brokerage
financing banking Total
business
business business
External revenue
Net interest income 3,196,672,902 149,689,441 71,626,900 3,417,989,243
Investment income 272,881,617 47,546,829 51,669,735 372,098,181
Commission and brokerage 58,053,730 107,572,298 216,028,793 381,654,821
Other operating income 433,242,052 1,362,704 6,259,883 440,864,639
Inter-segment revenue/interest expense (15,418,406) 9,913,705 (19,200,208) (24,704,909)
Total segment revenue 3,945,431,895 316,084,977 326,385,103 4,587,901,975
Other operating expenses 1,269,312,317 72,219,025 185,585,398 1,527,116,740

Major non-cash expenses:
Depreciation 124,448,641 8,469,064 12,458,213 145,375,918
Provision for future losses 291,570,010 33,559,086 (13,518,321) 311,610,775
Inter-segment expense (24,704,909) - - (24,704,909)
Total segment expense 1,660,626,059 114,247,175 184,525,290 1,959,398,524
Reportable segment profit before tax 2,284,805,837 201,837,802 141,859,813 2,628,503,451
For the year 2014
Revenue and profit Core Investment

Brokerage
financing banking Total
business
business business
External revenue
Net interest income 2,849,180,046 (46,922,059) 86,515,776 2,888,773,763
Investment income 53,935,424 256,446 (5,825,906) 48,365,964
Commission and brokerage 66,413,793 124,506,740 186,727,646 377,648,179
Other operating income 356,650,721 881,272 3,975,270 361,507,263
Inter-segment revenue/interest expense (75,326,052) 124,787,275 (68,033,296) (18,572,073)
Total segment revenue 3,250,853,932 203,509,674 203,359,490 3,657,723,096
Other operating expenses 1,125,879,478 64,179,799 158,196,590 1,348,255,867

Major non-cash expenses:
Depreciation 110,909,550 7,798,763 15,255,942 133,964,255
Provision for future losses 60,259,653 (49,982,078) (2,728,855) 7,548,721
Inter-segment expense (18,572,073) - - (18,572,073)
Total segment expense 1,278,476,608 21,996,484 170,723,678 1,471,196,770
Reportable segment profit before tax 1,972,377,324 181,513,190 32,635,813 2,186,526,327
214
Segment assets and liabilities
For the year 2015

Core Investment Asset
Brokerage
financing banking management Total
business
business business business
External Assets
Total Assets 71,768,710,854 2,026,473,465 1,557,586,248 100,445,675 75,453,216,242
Inter-segment assets (1,782,962,062) (35,800,000) (99,999,990) (100,000,000) (2,018,762,052)
Total Segment Assets 69,985,748,792 1,990,673,465 1,457,586,258 445,675 73,434,454,190
External liabilities
Total liabilities 65,032,164,132 532,314,387 564,151,158 445,675 66,129,075,352
Inter-segment liabilities (247,621,097) (127,500,000) (105,059,722) (402,550) (480,583,369)
Total Segment Liabilities 64,784,543,035 404,814,387 459,091,436 43,125 65,648,491,983
For the year 2014

Core Investment Asset
Brokerage
financing banking management Total
business
business business business
External Assets
Total Assets 57,159,515,027 2,505,585,754 1,407,212,472 - 61,072,313,253
Inter-segment assets (1,779,810,469) (2,998,632) (362,915,904) - (2,145,725,005)
Total Segment Assets 55,379,704,558 2,502,587,122 1,044,296,568 - 58,926,588,248
External liabilities
Total liabilities 51,465,694,676 478,024,803 1,162,583,715 - 53,106,303,194
Inter-segment liabilities (12,521,107) (692,726,573) (2,298,632) - (707,546,312)
Total Segment Liabilities 51,453,173,569 (214,701,770) 1,160,285,083 - 52,398,756,882
35. Tax expenses
35.1 Current tax
Provisions for current tax has been made on the basis of the profit for the year as adjusted for taxation purposes in
accordance with the provisions of Income Tax Ordinance, 1984 and amendments made thereto. The current tax rate for
the Company is 40% ( In 2014 the rate was 42.5%) on taxable income. Adequate provision has been made for disputed tax
against which appeal has been made and decision is pending.
35.2 Deferred tax
Deferred tax is provided using the balance sheet method for all temporary differences arising between the tax base of
assets and liabilities and their carrying values for financial reporting purposes as per Bangladesh Accounting Standard- 12:
"Income Taxes".
215
2015 2014 2015 2014
Taka Taka Taka Taka
35.3 Average effective tax rate
The average effective tax rate is calculated below as per Bangladesh Accounting Standard 12: "Income Taxes":
Tax expenses 1,031,699,212 875,596,287 1,169,278,870 941,017,430

Accounting profit before tax 2,275,519,333 2,029,131,303 2,628,503,451 2,186,526,327
Average effective tax rate 45.34% 43.15% 44.48% 43.04%
36. Earnings Per Share (EPS)
Earnings Per Share as shown in the face of the Profit and Loss Account is calculated in accordance with Bangladesh
Accounting Standard 33: "Earnings Per Share".
Basic earnings per share has been calculated as follows:
Earnings attributable to ordinary shareholders

(Net profit after tax) 1,243,820,121 1,153,535,016 1,459,224,380 1,245,508,797
Weighted average number of ordinary shares
outstanding during the year 251,367,187 251,367,187 251,367,187 251,367,187
Basic Earnings Per Share 4.95 4.59* 5.81 4.95*
*Previous year's earnings per share has been restated considering current year's number of shares outstanding.
No diluted earning per share is required to be calculated for the year as there was no convertible securities for dilution
during the year.
216
37 Related party disclosure
a. Particulars of Directors and their interest in different entities as on December 31, 2015:
Name of the firms/companies in (%) of Holding/

which interested is the proprietor, Status in Interest in the
SL no. Name of the Director Status in IDLC
partner, director, managing agent, interested entity concern as on
guarantor, employee etc. 31.12.15
1. Mr. Rubel Aziz Chairman The City Bank Limited Chairman 2.50%
Partex Beverage Limited Managing Director 1.00%
Partex Plastics Limited Managing Director 35.00%
Partex Plastics Furniture Limited Managing Director 37.50%
Partex Air Limited Managing Director 35.00%
Fotoroma Limited Managing Director 35.00%
Partex Properties Limited Managing Director 85.00%
Partex Foundry Limited Managing Director 40.00%
Partex Ceramics Limited Managing Director 35.00%
Partex Jute Mills Limited Managing Director 75.00%
Partex Chemicals Limited Managing Director 35.00%
Partex Corp Limited Managing Director 35.00%
Swiftline Automation Limited Managing Director 85.00%
Partex Shipyards Limited Managing Director 25.00%
Plastic Accessories Limited Managing Director 37.50%
Star Foods Limited Managing Director 40.00%
Job Overseas Limited Managing Director 98.00%
Partex Corporate Limited Managing Director 50.00%
Partex Aviation Limited Managing Director 50.00%
Partex Petro Limited Managing Director 85.00%
Sattar Glass Factory Limited Managing Director 83.33%
Partex Foods Limited Managing Director 80.00%
Partex Feed Mills Limited Managing Director 80.00%
Sakhi Fisheries Limited Managing Director 90.00%
Partex Bateries Limited Managing Director 80.00%
Partex Coal Limited Managing Director 50.00%
Amber Cotton Mills Limited Director 2.08%
Partex Real Estate Limited Director 15.00%
Partex Rotor Limited Director 35.00%
Partex Sugar Mills Limited Director 15.00%
Partex Denim Limited Director 15.00%
Partex Rotor Spinning Mills Limited Director 37.50%
Partex Energy Limited Director 37.50%
Dhakacom Limited Director 15.00%
Partex Spinning Mills Limited Director 25.00%
2. Mr. Md. Shahidul Ahsan Director AG Agro Industries Limited Chairman 70.00%
AG Property Developments Limited Chairman 60.00%
Regent Holding Developments
Chairman 70.00%
Limited
AG High Tech Limited Chairman 45.00%
AG Limited Chairman 50.00%
AG Ceramics Limited Chairman 70.00%
AG Green Property Development Limited Chairman 70.00%
AG Fashion & Textile Limited Chairman 40.00%
217

AG Ship Breaking Industries Proprietor 100.00%
M/s. Friends Traders Proprietor 100.00%
R.N.S. Corporation Proprietor 100.00%
Mercantile Bank Limited Sponsor Director -
Mercantile Bank Securities Limited Sponsor Director -
National Credit Ratings Limited Sponsor Director -
Swadesh Life Insurance Company Limited Sponsor Director -
Meghna Bank Limited Sponsor Shareholder -
3. Mr. Farooq Sobhan Independent Bangladesh Enterprise Institute President -

Director
Centre for Corporate Social Chairman of the
-
Responsibility (CSR) Board of Trustees
4. Mr. Aziz Al Kaiser Director The City Bank Limited Director 2.91%
Partex Star Group Vice Chairman -
Star Particle Board Mills Limited Managing Director 75.00%
Partex PVC Industries Limited Managing Director 75.00%
Partex Furniture Industries Limited Managing Director 75.00%
Partex Laminates Limited Managing Director 75.00%
Partex Limited Managing Director 75.00%
Corvee Maritime Co. Limited Managing Director 75.00%
Partex Builders Limited Managing Director 75.00%
Fairhope Housing Limited Managing Director 75.00%
Star Adhesives Limited Managing Director 85.00%
New Light Star Apparels Limited Managing Director 85.00%
Partex Cables Limited Managing Director 85.00%
Partex Aromarine Logistics Limited Managing Director 50.00%
Rubel Steel Mills Limited Director 15.00%
Danish Condensed Milk (BD) Limited Director 15.00%
Danish Foods Limited Director 15.00%
Danish Milk Bangladesh Limited Director 15.00%
Danish Distribution Network Limited Director 15.00%
Danish Dairy Firm Limited Director 15.00%
Voice Tel Limited Director 25.00%
Sky Telecomunication Limited Director 23.00%
Suburna Bhumi Housing Limited Director 50.00%
GSP Finance Company (BD) Limited Share Holder 5.80%
5. Ms. Meherun Haque Director - - -
Representative
6. Mr. Hossain Mehmood Director The City Bank Limited Director of A-1 2.00%
Polymer Ltd.
The City General Insurance Company
Share Holder 3.03%
Limited
Hossain Dyeing & Printing Mills
Managing Director 20.33%
Limited
Mehmud Industries (Pvt) Limited Managing Director 30.00%
Anwar Silk Mills Limited Managing Director 19.67%
218
Anwar Ispat Limited Chairman 33.33%
AGI Automobile Limited Chairman 33.22%
Anwar Cement Limited Director 8.06%
Khaled Iron & Steel Mills Limited Director 6.76%
A-1 Polymer Director 29.97%
Anwar Jute Spinning Mills Limited Director 20.81%
Anwar Galvanizing Limited Director 5.68%
AG Automobiles Limited Director 17.00%
Anwar Cement sheet Limited Director 33.31%
Anwar Integrated Steel Plant Limited Director 33.33%
Anwar Export & Import Company Proprietor 100.00%
AMD, CRO &

Chief Anti Money
7. Mr. Faruq M. Ahmed Director The City Bank Limited -
Laundering
Compliance Officer
City Brokerage Limited Director -
City Bank Capital Resources Limited Director -
Director Executive Director -

Transcom Group of Companies -
Nominated Finance
8. Mr. Md. Kamrul Hassan, FCA
by Transcom
National Asset Management Limited Director 9.00%
Group
9. Mr. Md. Rezaul Karim Director Sadharan Bima Corporation MD -

Director-
Investment Corporation of Bangladesh -
Nominated by SBC
Central Depository Bangladesh Director-
-
Limited Nominated by SBC
National Housing Finance & Director-
-
Investments Limited Nominated by SBC
Director-
National Tea Company Limited -
Nominated by SBC
Director-
Bangladesh Insurance Academy. -
Nominated by SBC
10. Mr. Atiqur Rahman Director Transcom Limited -

M. Rahman Tea Co. Limited 10.40%
Monipur Tea Co. Limited Group Finance 6.10%
Marina Tea Co. Limited Director 11.10%
W. Rahman Jute Mills Limited 1.10%
Heritage Agro Farms Limited 5.00%
Reliance Insurance Limited - -
Independent
11. Mr. A.K.M. Shahidul Haque - - -
Director
Independent CEO & Lead

12. Mr. Monower Uddin Ahmed Monower Associates 100.00%
Director Consultant
219
b. Significant contract where the Company is party and wherein Directors have interest - Nil
c. Related party transactions
Parties are considered to be related if one party has the ability to control the other party or exercises significant influence over the
other party in making financial and operational decision and include associated companies with or without common Directors and
key management positions. The Company has entered into transaction with other related entities in normal course of business that
fall within the definition of related party as per Bangladesh Accounting Standard 24: “ Related Party Disclosures.” Transactions with
related parties are executed on the same terms, including interest rate and collateral, as those prevailing at the time for comparable
transactions with other customers of similar credentials and do not involve more than a normal risk.
Details of transactions with related parties and balances with them as at December 31, 2015 were as follows:
Balance (as at
Balance as
December 31,
Transaction at January 1, Addition Adjustment
Name of the related party Relationship 2015) receivable/
nature 2015
(payable)
Taka Taka Taka Taka
The City Bank Limited Term Deposit Sponsor shareholder (700,000,000) (1,300,000,000) - (2,000,000,000)
Subordinated Bond Sponsor shareholder 313,000,000 - - 313,000,000
Sadharan Bima Corporation Debenture Sponsor shareholder (20,000,000) - 20,000,000 -

Mercantile Bank Limited Term Deposit Shareholder - (500,000,000) - (500,000,000)
Subordinated
Bond Shareholder 300,000,000 - - 300,000,000
Transcom group Lease/Loan Shareholder 43,383,827 - (21,430,300) 21,953,527
Term Deposit Shareholder (620,767,776) (401,418,627) 279,719,907 (742,466,497)
Reliance Insurance Limited Term Deposit Shareholder (176,500,000) (268,000,000) - (444,500,000)
(860,883,949) (2,469,418,627) 278,289,606 (3,052,012,970)
d. Share issued to Directors and executives without consideration or exercisable at a discount - Nil
e. Lending policy to related parties
Related parties are allowed Loans and Advances as per General Loan Policy of the Company.
f. Loans, advances and leases to Directors and their related concern
Name of the related party Transaction nature Classification status Provision kept Security amount
Transcom group Lease/Loan Standard 221,424 2,110,950
g. Investment in the Securities of Directors and their related concern - Nil
38. Receivable from Directors

The Company does not have any receivable from any of the Directors of the Company as at December 31, 2015.
39. Disclosure on Audit committee
a. Particulars of audit committee
The Audit Committee of the Board was duly constituted by the Board of Directors of the Company in accordance with
the Bangladesh Bank's DFIM circular no. 13 dated October 26, 2011 and Bangladesh Securities and Exchange Commission
notification ref. no. SEC/CMRRCD/2006-158/129/Admin/43, dated July 03, 2012.
The Audit Committee of the Board of Directors is consisted of the following 4 (four) members of the Board:
Name Status at the Company Status at the Committee

Farooq Sobhan Independent Director Chairman
Md. Rubel Aziz Director Member
Md. Kamrul Hassan, FCA Director Member
Md. Rezaul Karim Director Member
220
The company secretary is to act as the Secretary of the Audit Committee.
b Meetings held by the committee during the year by date:
Meeting No Held on
41st 25-Feb-2015
42nd 25-Mar-2015
43rd 6-May-2015
44th 8-Jul-2015
45th 27-Jul-2015
46th 13-Oct-2015
c. Six meetings of the audit committee were held during the year 2015 where it carried out the following tasks:
i) Discussed with the external auditors and management prior to finalization of financial statements of IDLC Finance Limited
for the year ended December 31, 2014 as per Bangladesh Bank circular number 13 dated October 26, 2011;
ii) Reviewed draft audited financial statements of IDLC Finance Limited for the year ended December 31, 2014 as per clause no.
3.3 (v) of Corporate Governance Guidelines (CGG) issued by Bangladesh Securities and Exchange Commission;
iii) Reviewed expression of interest of the Audit Firms and recommended for appointment of ACNABIN, Chartered Accountants
as statutory auditors for the year 2015;
iv) Reviewed the report of Audit Committee for incorporation in the Annual Report 2014;
v) Reviewed the Bangladesh Bank Inspection Report on corporate head office of IDLC as of June 30, 2014, and management
responses to the report;
vi) Reviewed the Bangladesh Bank Core Risk Inspection Report as of June 30, 2014 and management response to the report;
vii) Reviewed Ernst & Young LLP’s report on information systems’ controls of IDLC Finance Limited;
viii) Reviewed Audit Plan of Internal Control and Compliance Department for the year 2015;
ix) Reviewed the Management Letter issued by external auditors, ACNABIN, Chartered Accountants, on annual audit of financial
statements of IDLC Finance Limited for the year ended December 31, 2014;
x) Reviewed quarterly and half-yearly unaudited financial statements of IDLC Finance Limited for the year 2015;
xi) Reviewed amendments made to the Risk Based Guidance Notes on Prevention of Money Laundering and Terrorist Financing
of IDLC Finance Limited;
xii) Reviewed amendments made to the Policy Guidelines on Asset Liability Management (ALM) of IDLC Finance Limited.
40. Foreign remittance
There were no foreign remittance during the year 2015.
41 Number of employees
he Company paid an aggregate amount more than Taka 36,000 per annum to 262 employees and more than Taka 3,000
T
per month to 798 employees who were in employment for full year or part of the year.
42 Subsequent events
42.1 Dividend for the year 2015

The Board of Directors at the 241st Board Meeting held on February 18, 2016, recommended to the shareholders a cash
dividend only @ 25% i.e. Taka 2.50 per share (amounting to Taka 628,417,968). This will be considered for approval by the
shareholders at the 31st Annual General Meeting (AGM) to be held on March 30, 2016.
42.2 Issuance of IDLC Infrastructure & SME Zero Coupon Bond
Shareholders of IDLC Finance Limited in its 30th Annual General Meeting held on March 30, 2015 approved the proposal for
issuance of Zero coupon bonds worth Taka 5.0 billion. Subsequently, IDLC obtained consent from Bangladesh Securities and
Exchange Commission (BSEC) on September 22, 2015 and ‘No Objection’ from Bangladesh Bank on December 21, 2015 for
issuance of zero coupon bonds named “IDLC Infrastructure & SME Zero Coupon Bonds” for Taka 5.0 billion in two tranches.
Consequently, the first tranche of the zero coupon bonds worth Taka 1.8 billion was issued on January 25, 2016 to a number
of institutional and individual investors.
221
43. General
43.1 The Company publishes its quarterly accounts as per the Bangladesh Securities and Exchange Commission (BSEC)
Notification No. SEC/CMRRCD/2008-183/Admin/03-34, dated September 27, 2009.
43.2 The Company does not have any restriction on distribution and payment of dividends.
43.3 During the year under report, no matters were submitted to a vote of shareholders of the Company.
43.4 Previous year’s figures have been rearranged where necessary to conform to current year’s presentation.
Sd/- Sd/- Sd/- Sd/-

222
Fixed assets including land, building, furniture and fixtures - for 2015 Annexure - A
Cost Depreciation
Written down
Disposal/ value at
Balance at Addition Balance at Balance at Charged Adjustment Balance at
adjustment December 31,
Asset category January 1, during December 31, January 1, for during December 31,
during Rate 2015
2015 the year 2015 2015 the year the year 2015
the year %
Free hold assets:

Land 26,958,470 - - 26,958,470 - - - - - 26,958,470
Building 56,530,000 148,989,303 - 205,519,303 2.50 12,012,625 3,586,011 - 15,598,636 189,920,667
Furniture and fixtures 47,620,175 4,554,475 (699,387) 51,475,263 12.50 26,884,132 4,974,720 (551,494) 31,307,358 20,167,905
Electrical equipment 56,930,484 2,919,231 (2,797,806) 57,051,909 20.00 42,241,088 6,228,780 (1,840,255) 46,629,612 10,422,297
Curtain and carpets 2,950,331 893,806 (833,267) 3,010,870 33.33 1,941,970 649,450 (643,440) 1,947,980 1,062,889
Office equipment 71,685,605 6,867,067 (1,342,676) 77,209,996 20.00 56,719,832 11,969,880 (1,342,211) 67,347,501 9,862,495
Office decoration 71,253,775 5,606,589 (1,625,153) 75,235,211 20.00 51,482,341 8,259,554 (1,613,421) 58,128,473 17,106,738
Computers 94,466,277 19,871,561 (15,600) 114,322,238 20.00 53,135,654 9,945,283 (7,280) 63,073,657 51,248,581
Software (Office Operation) 22,755,059 3,138,155 - 25,893,214 33.33 12,605,001 4,253,759 - 16,858,760 9,034,454
Software (Business Operation) 132,395,647 - - 132,395,647 20.00 68,404,417 26,479,129 - 94,883,546 37,512,101
Telephone and telex 8,940,339 1,442,097 (712,850) 9,669,586 33.33 6,829,150 1,423,734 (599,842) 7,653,042 2,016,543
Motor vehicles 209,254,184 100,122,251 (45,949,853) 263,426,582 25.00 125,926,721 46,678,341 (36,228,697) 136,376,365 127,050,217
Total 2015 801,740,346 294,404,534 (53,976,593) 1,042,168,288 458,182,931 124,448,641 (42,826,641) 539,804,931 502,363,356
223
Fixed assets including land, building, furniture and fixtures - for 2014
224
Cost Depreciation
Written down
Disposal/ value at
during
2014 the year 2014 Rate 2014 the year the year 2014 2014
the year %
Free hold assets:

Land 26,958,470 - - 26,958,470 - - - - - 26,958,470
Building 56,530,000 - - 56,530,000 2.50 10,599,375 1,413,250 - 12,012,625 44,517,375
Electrical equipment 52,934,817 4,509,407 (513,740) 56,930,484 20.00 35,489,198 7,102,680 (350,790) 42,241,088 14,689,396
Office equipment 59,277,249 12,483,956 (75,600) 71,685,605 20.00 44,306,900 12,465,852 (52,920) 56,719,832 14,965,773
Office decoration 62,506,479 9,817,334 (1,070,038) 71,253,775 20.00 43,520,270 8,795,986 (833,915) 51,482,341 19,771,434
Computers 75,019,461 19,446,816 - 94,466,277 20.00 46,660,256 6,475,398 - 53,135,654 41,330,623
Motor vehicles 181,384,659 47,194,025 (19,324,500) 209,254,184 25.00 102,853,134 39,732,992 (16,659,405) 125,926,721 83,327,463
712,842,567 110,118,507 (21,220,728) 801,740,346 365,291,972 110,909,550 (18,018,591) 458,182,931 343,557,415
Lease hold assets:
Motor vehicles 3,737,413 - (3,737,413) - 25.00 3,737,413 - (3,737,413) - -
Total 2014 716,579,980 110,118,507 (24,958,141) 801,740,346 369,029,385 110,909,550 (21,756,004) 458,182,931 343,557,415
Details of disposals/adjustments - for 2015
Profit/(loss)
Accumulated Sale price/
Cost Book value on Mode of disposal Buyer
Asset category depreciation adjustment
disposal
Taka Taka Taka Taka Taka

Free hold assets :
Furniture and fixtures 699,387 (551,494) 147,893 108,083 (39,810) As per policy of the Company Employees/Outsider
Electrical equipment 2,797,806 (1,840,255) 957,551 980,035 22,484 As per policy of the Company Employees/Outsider
Curtain and carpets 833,267 (643,440) 189,827 214,810 24,983 As per policy of the Company Employees
Office decoration 1,625,153 (1,613,421) 11,732 - (11,732) As per policy of the Company Outsider
Office equipment 1,342,676 (1,342,211) 465 8,320 7,855 As per policy of the Company Employees/Outsider/Adjusted
Telephone and telex 712,850 (599,842) 113,008 118,666 5,658 As per policy of the Company Employees/Outsider/Adjusted
Motor vehicles 45,949,853 (36,228,697) 9,721,156 21,616,633 11,895,477 As per policy of the Company Employees/Outsider
Total 2015 53,976,593 (42,826,641) 11,149,952 23,046,548 11,896,596
225
Consolidated fixed assets including land, building, furniture and fixtures - for 2015
226
Cost Depreciation
Written down
Disposal/ value at
during
2015 the year 2015 Rate 2015 the year the year 2015 2015
the year %
Free hold assets:

Land 26,958,470 - - 26,958,470 - - - - - 26,958,470
Building 56,530,000 148,989,303 - 205,519,303 2.50 12,012,625 3,586,011 - 15,598,636 189,920,667
Office equipment 108,203,412 8,144,881 (3,079,895) 113,268,398 20.00 87,141,923 16,522,230 (3,010,405) 100,653,748 12,614,651
Office decoration 93,385,392 8,933,943 (1,625,153) 100,694,182 20.00 70,138,522 11,007,473 (1,613,421) 79,532,573 21,161,609
Computers 110,375,115 23,747,561 (15,600) 134,107,076 20.00 66,065,571 11,698,399 (7,280) 77,756,690 56,350,386
Motor vehicles 239,277,556 108,168,751 (47,680,353) 299,765,954 25.00 144,656,477 52,839,226 (37,645,213) 159,850,490 139,915,464
Total 2015 952,762,579 313,654,913 (57,971,776) 1,208,445,716 572,220,454 145,375,918 (46,249,339) 671,347,033 537,098,683
Consolidated Fixed assets including land, building, furniture and fixtures - for 2014
Cost Depreciation
Written down
Disposal/ value at
during Rate 2014
2014 the year 2014 2014 the year the year 2014
the year %
Free hold assets:

Land 26,958,470 - - 26,958,470 - - - - - 26,958,470
Building 56,530,000 - - 56,530,000 2.50 10,599,375 1,413,250 - 12,012,625 44,517,375
Office equipment 95,422,890 13,044,122 (263,600) 108,203,412 20.00 69,169,509 18,213,323 (240,910) 87,141,922 21,061,490
Office decoration 84,638,097 9,817,334 (1,070,038) 93,385,393 20.00 58,303,935 12,668,502 (833,915) 70,138,522 23,246,871
Computers 88,913,031 21,462,084 - 110,375,115 20.00 57,968,618 8,096,951 - 66,065,569 44,309,546
Motor vehicles 205,958,031 52,894,025 (19,574,500) 239,277,556 25.00 116,357,847 45,062,200 (16,763,572) 144,656,475 94,621,081
853,262,163 122,318,386 (22,817,972) 952,762,577 457,538,227 133,964,255 (19,282,029) 572,220,453 380,542,124
Lease hold assets:
Motor vehicles 3,737,413 - (3,737,413) - 25.00 3,737,413 - (3,737,413) - -
Total 2014 856,999,576 122,318,386 (26,555,385) 952,762,577 461,275,640 133,964,255 (23,019,442) 572,220,453 380,542,124
227
Pedalling At IDLC Finance, we are

proud of the performance of
together. our two subsidiaries – IDLC
Securities Limited and IDLC
Initiating our Investments Limited. These
companies not only enable
virtuous our Group, as a whole, to
provide a comprehensive
cycle. range of financial services to
suit a diverse set of
requirements but also add
to our financial strength on
a consolidated basis.
This year we have added
another subsidiary, IDLC
Asset Management Limited,
to further strengthen our
capital market operations.
228
IDLC Securities Limited
(A fully owned subsidiary of IDLC Finance Limited)
Management Committee (ManCom)
Standing from left
Md. Masud Karim Majumder, ACA Mohammad Jobair Rahman Khan, ACA Md. Momin Uddin
Group Chief Financial Officer Head of Statutory Reporting & Head of International &
Group Company Secretary Institutional Sales
Sitting from left
Golam Ahad Chowdhury Md. Saifuddin Shamima Akter Lovely

Head of Trading & Business Managing Director Head of HR, Capital Market
Development Operations
229
Directors’ Report
To the Shareholders of IDLC Securities Limited
compared with a rise of 13.5% in 2014. Daily average trades in the

DSE amounted to Taka 4.2 billion in 2015 compared with about
Taka 5 billion in 2014. The DSEX traded between index value of
minimum 3,959.7 and maximum of 4,969.7 in 2015.
Despite the unfavorable market environment, it is with great

pleasure that I inform that IDLC SL made a profit of Taka 96.1
million, which is 147% higher than Taka 38.9 million reported in
2014. A better performance in both brokerage and investment
incomes made this stellar growth possible. While net brokerage
income rose by 18% to Taka 203 million, net investment income
witnessed a turnaround from a loss of Taka 5.8 million in
2014 to a profit of Taka 51.7 million in 2015. This boosted the
Company’s earnings further. Even though daily average turnover
of the markets dropped by 16%, the average daily turnover
of your Company rose by 6.1%. This resulted in an increase in
market share to 3.1%in 2015 and was achieved thanks to a rise
in our customer base and effective performance management
strategies.
It was a difficult year for the brokerage business due to political

and economic hiccups. During the year, about 1,400 accounts
were closed, which was higher than usual. Despite the
Mr. A. K. M. Shahidul Haque challenges, IDLC SL came out on top by adding more than 2,500
new accounts and retaining customers through an enduring
Chairman focus on service. Currently, IDLC SL has around 14,000 clients
including 226 institutional and foreign clients. Moreover, the
Dear Shareholders, Company serves about 2,500 customers as a panel broker of its
enlisted merchant banks.
It is with immense pleasure that the Board of IDLC Securities
Limited (IDLC SL) presentsthe Directors’ Report, the audited Operational highlights of 2015
financial statements of the Company for the year ended
December 31, 2015 and the Auditor’s Report thereon along 2012 2013 2014 2015
with a capital market overview, the Company’s performance and
other matters in compliance with the Companies Act, 1994, and
the guidelines issued by the Bangladesh Securities and Exchange Number of accounts at
Commission. 7,988 8,984 10,756 12,854
the beginning
In Bangladesh, with more than 550 securities including stocks, Accounts opened
corporate bonds, treasury bonds and mutual funds, the total 1,186 1,858 3,062 2,514
during the year
market capitalization is about $40 billion whereas the equity
market capitalization is about $33 billion. Interestingly, the top- Accounts closed
(190) (86) (964) (1,408)
10 market-cap companies represent about 43% of the equity during the year
market capitalization and all 12 listed MNCs represent about Numberof accounts at
32.5% of the equity market capitalization. The country’s equity 8,984 10,756 12,854 13,960
year end
marketsare still very small in size comparedwith our neighbours
and peers. While our market-cap-to-GDP is only about 17%, Growth (year-on-year) 12% 20% 20% 9%
the same ratio is much higher for countries like India (72%), the Composition of client base:
Philippines (61%), Thailand (98%), Malaysia (72%) and Indonesia
(39%). We believe there is ample scope for the market to grow Individual 8,652 10,406 12,530 13,602
significantly over time with the listing of new equity in the Institutional and
coming days. In this attractively-placed environment, IDLCSL is 148 159 199 226
foreign
positioning itself to capture a significant share of this emerging
growth, going ahead. NRB 184 191 125 132
The year 2015 was a tough one for the stock markets as the year Total 8,984 10,756 12,854 13,960
started with political insurgency and the ensuing turmoil and
We serve more than 16,000 clients including margin accounts of
investors remained mostly inactive during first few months of
some merchant banks.
the year. In response, the prime index, DSEX, fell by 6.3% in 2015
230
Principal operational achievements of 2015 Net brokerage income
 Enhanced business scale without additional capital Amount in Taka Million
investments
 Aligned the business model on the path of higher
operational efficiency
 Widened sell-side research coverage
 Established dealers knowledge advancement program
(DKAP) with a view to enhance training and provide
191.19
152.24
131.60
171.97
203.01
stronger customer service
 Augmented retail and strategic sales efforts
 Consolidated foreign sales operations 2011 2012 2013 2014 2015
 Reviewed and restructured our operational risk
management process Net profit after tax
Taka in million
Financial highlights of 2015
Taka in million 2011 2012 2013 2014 2015 Growth
Net brokerage income* 191.2 152.2 131.6 172.0 203.0 18.02%
81
60
39
96
Net interest income 67.6 86.2 103.9 86.4 71.6 -17.13%
Income from share (93.8) 7.2 30.9 (5.8) 51.7 991.38% 2012 2013 2014 2015
market investment
Operating expenses 188.9 148.3 135.7 155.9 181.0 16.11%
Net profit before tax & (21.0) 94.9 131.2 97.9 147.5 50.64%
provision
Net Profit after Tax (164.1) 80.6 59.9 38.9 96.1 147.04%
Return on total assets -11.2% 7.1% 4.5% 2.7% 6.5% 3.80

(164)
Total shareholders equity 750.0 830.4 890.3 929.2 1,025.3 10.34%
Return on equity -17.6% 10.2% 7.0% 4.3% 9.8% 5.50

2011
*Net brokerage income equals brokerage commission minus
laga, howla charges plus other operating income
Return on total assets (%)
IDLC SL’s total turnover rose to Taka 63.8 billion in 2015, which
was the highest ever during the last four years. This metric grew
by 8.8% despite the dampened market sentiment. Net brokerage
4.51%
2.69%
6.48%
7.11%
income grew by 18% in 2015 and rose to Taka 203 million, which
was the highest in the last five years. Net profit before tax and
provisions witnessed a stellar growth of 50.6% in 2015 to Taka 2011 2012 2013 2014 2015
147.5 million,the highest over the last five years. Net profit after
tax reached Taka 96.1 million which is 147% higher than the
profit of 2014. Both return on assets(RoA) and return on equity
-11.22%
(RoE) bounced back in 2015. RoA and ROE stood at 6.5% and
9.8%, respectively, in 2015.
Total turnover of IDLC SL

Return on equity (%)
Amount in Taka Million
10.19%
6.96%
4.28%
9.83%
2011 2012 2013 2014 2015

74,952.35
53,542.66
44,617.62
58,597.64
63,781.88
-17.60%
2011 2012 2013 2014 2015
231
Human resource development approach will be beneficial not only for IDLCSL but for the entire
investment industry of Bangladesh as well.
IDLCSL believes that its quality human resourcesare crucial
pillars of its growth. The Company continues to develop and Top-five risks impacting our business and key mitigation
implement strong human resource policies to motivate its strategies
employees and ensure their optimum contribution not only to
corporate performance but also in attaining the highest ethical Risk Mitigation strategy
standards and goals. With a strong belief that human resources Political uncertainty Balancing between scale of the business
infuse a significant competitive edge, we continue to recruit the and uncertainty
best talent available in the industry. We also conduct diverse Regulatory risk Improve internal control, training and
training and motivational programmes to develop and retain a mentoring employees for enhancing
high-quality human resource base. compliance
At the end of 2015, the total number of employees stood at Investment risk Prudent investment exposure
138as compared with 115 in 2014. management
Retention of skilled Performance and motivation
Number of Employees human resources management
Shift in technology We are closely monitoring technological
changes to adopt the appropriate
technology and remain contemporary
with regards to the prevailing standards
Outlook 2016
At IDLC SL, we intend to:
 Scale-up the business with the target of capturing a larger

115
138
109
market share
80
73
 Capitalize on sell side research to bring maximum synergy

2011 2012 2013 2014 2015 for institutional, foreign and retail segments
 Enhance sales and marketing of premium brokerage
As part of IDLCSL’s human resource development initiatives, a
services
significant number of employees attended different training
programmes during the year, including both managerial  Continue to focus on sales and fund management capacity
development and technical competency-building modules. building
During 2015, as many as 1,253 employees were trained in- Books of accounts
house which included DKAP (dealer knowledge awareness
program). Some 36 employees attended 15 public/local At IDLC Securities, proper books of accounts have been
trainingprogrammesand 100 employees were trained in maintained. The appropriate accounting policies have been
twocustomized trainingprogrammes. consistently applied in the preparation of financial statements
and accounting estimates are based on reasonable and
Major HR initiatives of 2015 prudent judgment. International Accounting Standards
 Development of a new MIS for performance management (IAS)/ Bangladesh Accounting Standards (BAS)/ International
Financial Reporting Standards (IFRS)/ Bangladesh Financial
 Introduction of a KPI-based performance appraisal for core Reporting Standards (BFRS), as applicable in Bangladesh, have
business and business support employees been followed in the preparation of the financial statements
 Enlarged the number of customized training programmes and any departure there-from has been adequately disclosed.
The financial statements prepared by the management of IDLC
 Continued with the interviews for recommended employees Securities Limited present fairlyits state of affairs, the result of its
for promotion operations, cash flows and changes in the shareholders’ equity.
 Enhanced the quality of orientation and training plans for
Internal control
the new recruits
 Launch of DKAP The system of internal control is sound in design and has been
effectively implemented and monitored.
DKAP (dealer knowledge advancement program):
Distribution of profits
DKAP is a unique platform for traders to enhance their fund
management capabilities and knowledge. It represents a holistic Considering Company’s investment opportunities and growth
learning approach between the research and trading teams. The potentials and comparative cost benefit analysis of paying out
sessions include in-depth discussion on company fundamentals, dividend and overall better tax management, the Board of IDLC
the economy, industry dynamics and also covers regulatory Securities Limited decided not to declare any dividend to the
updates. The ultimate goal of DKAP is to promote knowledge- shareholders of the Company for 2015.
based brokerage by leveraging sellside research. This pioneering
232
Appointment of auditors Appreciation
In terms of Article 102 of the Articles of Association of the I would like to thank the Board and colleagues for their continued
Company, the Company shall, at each Annual General Meeting support and unstinted cooperation and on their behalf express
(AGM), appoint an auditor or auditors to hold office until the my sincere appreciation to the entire IDLC Securities team.
next AGM. The shareholders of IDLC Finance Limited at its 30th I would like to acknowledge the exceptional efforts of our
meeting appointed ACNABIN, Chartered Accountants, as the employees who worked hand-in-hand to meet the challenges
group auditors for the company and its subsidiaries as well of a difficult year. They were called upon to embrace major
for2015. Accordingly, the auditors of the Company, ACNABIN, difficulties, at the same time maintaining the highest standards
Chartered Accountants, has completed their second year of of service to our clients.
audit of the Company. They are eligible for re-appointment as
On behalf of the Board, I would like to thank our loyal customers
Auditors of the Company for the year 2016 and they have also
and honorable shareholders for their trust reposed in us. The
offered themselves for re-appointment. The Board recommends
members of the Board would also like to thank the Bangladesh
to appoint ACNABIN Chartered Accountants, to the shareholders
Securities and Exchange Commission, the Dhaka and Chittagong
at the AGM as the auditors of the Company for the year 2016
stock exchanges and the Central Depository Bangladesh Limited,
at an existing remuneration of Taka 75,000 (Taka Seventy Five
who have remained as partners in the growth of our Company.
Thousand only)
For and on behalf of the Board of Directors,
Going concern
Sd/-
There is no significant doubt on IDLC Securities Limited’s ability
to continue as a going concern. A. K. M. Shahidul Haque
Chairman
233
Independent Auditor’s Report

To the Shareholders of IDLC Securities Limited
We have audited the accompanying financial statements of IDLC Securities Limited which comprise the Statement of Financial Position
as at 31 December2015 and the related Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in
Equity and Statement of Cash Flows for the year then ended and a summary of significant accounting policies and other explanatory
information.
Management’s Responsibilities for the Financial Statements

Management is responsible for the preparation of the financial statements that give a true and fair view in accordance with Bangladesh
Financial Reporting Standards (BFRS) and for such internal control as management determines is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with Bangladesh Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the
entity’s preparation of financial statements of the company that give a true and fair view 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.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
Opinion
In our opinion, the financial statements referred to above give a true and fair view of the financial position of IDLC Securities Limited
as at 31 December 2015 and of the results of its operations and its cash flows for the year then ended in accordance with Bangladesh
Financial Reporting Standards (BFRS).

We as required by the Companies Act, 1994, the Securities and Exchange Rules, 1987 and other applicable laws and regulation further
report that:
(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the
purposes of our audit and made due verification thereof;
(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our
(c) the statement of financial position of the Company dealt with by the report are in agreement with the books of account maintained
by the Company; and
(d) the expenditure incurred was for the purpose of business of the Company.
Dhaka, ACNABIN
234
Statement of Financial Position

As at 31 December 2015
31.12.2015 31.12.2014
Particulars
Taka Taka
ASSETS
Non-Current Assets 40,983,362 39,984,054

Property, plant and equipment 20,157,408 18,874,904
Intangible asset 2,149,954 2,433,150
Investment in Stock Exchanges 18,676,000 18,676,000
Current Assets 1,516,602,887 1,367,228,419

Advances, deposits and prepayment 25,757,288 19,617,699
Investment in marketable securities 437,308,107 410,084,478
Accounts receivable 68,639,314 161,266,159
Short term loan to IDLC Investments Limited - 349,300,000
Margin loan to clients 33,740,272 29,622,050
Cash and cash equivalents 934,149,947 378,413,287
Deferred tax assets 17,007,960 18,924,746
Total Assets 1,557,586,249 1,407,212,473
EQUITY AND LIABILITIES
Equity 1,025,271,862 929,187,670

Share capital 400,000,000 400,000,000
Retained earnings 625,271,862 529,187,670
Liabilities
Current Liabilities 532,314,387 478,024,803

Accounts payable 353,578,464 362,898,644
Short term loan from IDLC Finance Limited 105,000,000 -
Liabilities for expenses 23,231,816 16,110,841
Provision for income tax 50,504,107 85,496,997
Provision for diminution in value of investments - 13,518,321
Total Liabilities 532,314,387 478,024,803

Total Equity and Liabilities 1,557,586,249 1,407,212,473
Sd/- Sd/- Sd/- Sd/-

Chairman Director Managing Director Company Secretary
This is the consolidated balance sheet referred to in our separate report of even date.
Dhaka, ACNABIN
235
Statement of Profit or Loss and Other

Comprehensive Income
For the year ended 31 December 2015
2015 2014
Particulars
Taka Taka
Operating income
Brokerage commission income 216,028,793 186,727,646
Brokerage commission expense (17,019,734) (17,544,261)
Net brokerage commission income (a) 199,009,059 169,183,384
Interest income 74,303,438 96,785,580
Interest expense (2,676,538) (10,418,370)
Net interest income (b) 71,626,901 86,367,210
Net investment income (c ) 51,669,735 (5,825,906)
Other operating income (d) 3,999,466 2,786,794
Total operating income (A=a+b+c+d) 326,305,161 252,511,481
Operating expenses
Salaries & allowances 99,962,409 74,009,906
Rent, taxes, insurance, electricity, etc. 43,960,205 43,470,026
Legal expenses 4,541,975 3,328,384
Postage, stamp, telecommunication, etc. 7,373,694 7,307,261
Stationery, printing, advertisements, etc. 3,812,149 5,153,664
Directors' fee and meeting expenses 135,750 143,750
Audit fee 86,250 86,250
Depreciation and amortization 12,458,213 15,255,941
Other expenses 8,693,235 7,153,086
Total operating expenses (B) 181,023,879 155,908,268
Operating profit (A-B) 145,281,282 96,603,214
Non-operating income 2,260,417 1,337,044
Profit before provisions and tax 147,541,699 97,940,257
Provision for diminution in value of investments 13,518,321 2,728,854
Profit before provision for income tax 161,060,020 100,669,111
Current tax 63,059,043 65,637,237
Deferred tax expense/(income) 1,916,786 (3,865,057)
Net profit 96,084,191 38,896,931
Other comprehensive income - -
Total Comprehensive Income 96,084,191 38,896,931
Sd/- Sd/- Sd/- Sd/-

This is the Statement of Profit or Loss and Other Comprehensive Income referred to in our
separate report of even date.
Dhaka, ACNABIN
236
(A fully owned subsidiary of IDLC Finance Limited)
Management Committee (ManCom)
Standing from left
Md. Masud Karim Majumder, ACA A.H.M. Nazmul Hasan Abul Ahsan Ahmed Mohammad Jobair Rahman Khan, ACA
Group Chief Financial Officer Head of Margin Loan Head of Discretionary Head of Statutory Reporting &
& Operations Portfolio Management Group Company Secretary
Sitting from left
Shamima Akter Lovely Md. Moniruzzaman, CFA Rubayet-E-Ferdous

Head of HR, Capital Market Managing Director Chief Operating Officer
Operations
237
Directors’ Report
To the Shareholders of IDLC Investments Limited
advisory on pre-IPO capital raising, underwriting, pre-IPO

placement/capital raising for forthcoming IPOs and merchant
banking services in substantial share acquisitions and takeovers
and equity valuations, among others.
Our key strength lies in our ability to value and position the
target company in the financial markets correctly, devise the best
financial structure, showcase the enterprise to the right investors
and round-up the entire process smoothly and efficiently,
leveraging our strong co-ordination with regulatory authorities,
thereby ensuring growth and continuous value-creation for the
company going public.
As of December 31, 2015, IDLC IL had managed nine (9) IPOs as the
issue manager and helped raise Taka 6,515 million. By managing
IPOs, RPOs, rights issues, private placements and capital raising
activities, IDLC IL helped raise Taka 16,820 million for its clientele
so far. The Company has also provided underwriting services to
fifty three (53) issuers till December 2015.
Currently, IDLC IL is working as the issue manager for 14 IPO-

bound companies. During 2015, IDLC IL signed two issue
management and four corporate advisory agreements. IDLC IL
also signed an agreement for issue management services with
Farooq Sobhan Robi Axiata Limited, Bangladesh’s second largest mobile telecom
operator, and Mir Akhtar Hossain Limited, one of the country’s
Chairman largest and most experienced engineering construction
companies. The corporate advisory signings include that of
Dear Shareholders, merger and acquisition, equity valuation, advisory services and
capital raising. During the year under report, IDLC IL also signed
The Directors have the pleasure in presenting to the members two underwriting deals. Besides, two of our IPOs – Bengal Poly
of IDLC Investments Limited the Directors’ Report, the audited and Paper Sack Limited and Runner Automobiles Limited are
financial statements for the year ended December 31, 2015 and with the BSEC, awaiting approvals.
auditor’s report thereon along with the capital market overview,
the Company’s performance and other matters in compliance During 2015, IDLC IL acted as the issue manager for Tosrifa
with the Companies Act, 1994, and Corporate Governance Industries Limited which obtained IPO approval from the
guidelines of the Bangladesh Securities and Exchange BSEC. Tosrifa, a 100% export-oriented garment manufacturing
Commission. company, raised Taka 639 million through its IPO.
The Company's principal activities encompass investment We also provided corporate advisory services to Runner
banking (issue management, underwriting and corporate Automobiles to raise capital from existing as well as other
advisory), discretionary portfolio management and margin shareholders. Runner Automobiles raised Taka 326 million
lending. It also generates top-notch equity research and through this issuance. Additionally, IDLC IL raised capital of Taka
publishes it on Bloomberg. 405 million and Taka 100 million for Far East Spinning Industries
Limited and Fashion Forum Limited, respectively.
IDLC Investments provides a high standard of professional and
personalised services to its local and NRB customers. The Company The key challenges for investment banking include extensive
possesses a proven track record of catering to a diverse set of and dynamic regulatory changes, sluggish primary markets
client needs while concurrently maintaining strict compliance and stringent regulatory reviews. Bangladesh Securities and
with the country’s laws and the highest ethical standards. IDLC Exchange Commission (Public Issue) Rules 2015 was gazetted
Investments is positioned as one of the top-ranking merchant on December 28, 2015, which requires a higher level of
banking enterprises in the country, renowned for its quality disclosures and due diligence. IDLC IL focuses on overcoming
investment banking and portfolio management services. these challenges by leveraging its strong brand equity and
transparent relationship with regulators, investors and other
Operational highlights: stakeholders.
Investment banking: In 2016, the investment banking team expects to emphasise
more on corporate advisory, mergers and acquisitions and equity
IDLC Investments Limited (IDLC IL) possesses a rich experience in
valuation, apart from signing new initial public offerings.
investment banking, focusing on initial public offers (IPO), repeat
public offerings (RPO), rights issue management, corporate
238
Research new loans up to our targeted levels. Most of the margin loan
clients who were active during the bull-run had negative equity
At IDLC IL, our buy-side research team is focused on facilitating
portfolios. Several of those accounts are written-off as well. Many
quality investment decisions under proprietary and discretionary
learned, albeit the hard way, the ill-effects of margin loans when
portfolio investments. Our qualified team analyzes and provides
market returns turned negative. They not only lost money but
investment recommendations on stocks, enabling fund
also had to bear high interest expenses. Moreover, new entrants
managers to generate attractive and sustainable returns. While
the blue chip index, the DS30, returns stood at +19.88% on into the market were also few and far between.
December 31, 2015 from the start of the year, our recommended Risk management
scrips posted a hefty +66.54% return during the same period,
thereby outperforming the index in 2015. IDLC IL continues to remain proactive and prudent with regards
to its risk management tools and is widely considered as an
Discretionary portfolio management (DPM): industry trendsetter. We introduced the concept of mark-to-
IDLC IL’s discretionary portfolio management (DPM) service was market (MTM) earlier through which we were able to protect
launched in 2007 as “Managed Cap Invest”, which was subsequently client equity levels. We adopted different types of netting
re-branded as “MAXCAP” in 2010 to reflect its more accurate policies as well to reduce the loan burden, provided alerts to
identity. We have an experienced team of fund managers who customers to book unrealized gains and supported them with
manage funds on behalf of our investors by developing appropriate research-intensive recommendations. It is a matter of pride that
investment strategies, monitoring market performance regularly, none of the competitors are able to match up to us today. This
diversifying the portfolio and actively managing risk. According to has empowered us with a distinctive competitive advantage.
their desired risk-return profiles, our clients can choose from a wide
variety of investment products including “MAXCAP”, “Profit-Loss Financial highlights
Sharing Scheme”, “Capital Protected Scheme”, “Portfolio Advisory The year 2015 proved to be one of resurgence for IDLC IL with
Service” and the newly launched “Easy Invest”. the Company attaining a net operating income of Taka 225
"Easy Invest" is a monthly investment scheme aimed at building a million, which is a significant improvement from Taka 6.7 million
long-term portfolio with small investments (as little as Taka3,000) reported in 2014. Consequently, the Company registered a profit
at regular intervals, thereby reducing market volatility risks and after tax of Taka 119 million, representing a growth of 125%,
generating sustainable returns. We have received overwhelming year-on-year. The following table demonstrates the breakdown
response from all over the country for the product. of revenue streams from different products.
We have nine years worth of strong track record in generating A1: Portfolio operations Taka in million
average annual returns of 23% and have assets under
management (AUM) of Taka 555 million. We target to hit AUM Operational income 2015 2014 2013
of Taka 1,200 million in 2016 and Taka 2,500 million within 2018.
Net interest income 149.69 (46.92) (160.88)
Margin loan product: Portfolio management
67.79 75.45 60.25
In December 2004, IDLC Finance launched a margin lending services
product, ”Cap Invest”,and since then, we have been considered Settlement and
21.66 26.25 22.09
as one of the top portfolio managers in the capital markets of transaction fees
Bangladesh. Subsequently, this business was transferred under
Documentation fees 0.07 0.05 0.03
a fully-owned subsidiary company, under the name of “IDLC
Investments Limited”. Since the market crash of 2010, IDLC Total operational
239.20 54.82 (78.51)
Investments has significantly reduced its margin loans to reduce revenue
customer risk profiles in volatile markets and also align with the
The year 2015 also reflected a turnaround in our income for
regulatory framework of capital adequacy, single obligor limits
portfolio operations as our net interest income stood at Taka
and capital market exposure limits of the parent company.
149.69 million from a negative Taka 46.92 million in 2014 on
Cap Invest - activities in 2015 account of non-recognition of interest income from negative
equity clients (due to uncertainty in the recovery of principal and
During the year 2015, we undertook client counselling services
interest).
to emphasise the need for building a constructive portfolio by
minimizing market risks to the extent possible. We informed During 2015, portfolio management services represented the
them regarding the projected market scenario, stock analysis, principal revenue stream across both Cap Invest and DPM,
the effects of leverage, the importance of effective risk control followed by settlement and transaction fees.
and the significance of disciplined portfolio management in
order to build long-term wealth. As a means to this, we provided A2: Investment banking
Taka in million
them with different types of value-added services (VAS). We
also gave our best efforts to circumvent the need for additional Investment banking 2015 2014 2013
provisions in the year 2015. Overall, our focused human resource Issue management fees 4.61 9.50 3.50
strategy, contemporary processes and technology and high-
Underwriting 1.28 2.76 0.92
quality research reports have been instrumental for us to meet
our clients’ wealth management goals. Corporate advisory fees 12.17 10.50 13.52
However, it was witnessed that the appetite for margin loans Total revenue from
18.06 22.76 17.95
was almost absent among clients. Thus, we could not disburse investment banking
239
2015 2015
26% 32%
67% 7%
68%
Issue Management Corporate Advisory Underwriting General & administrative Salary and
Fees Fees expenses Allowances
2014 2014
42%
36%
46%
64%
12%
Corporate Advisory Issue Management Underwriting General & administrative Salary and
2013 2013
20%
41%
5%
59%
76%
Corporate Advisory Issue Management Underwriting General & administrative Salary and
Revenue from investment banking stood at Taka 18.06 million The company incurred a total cost of Taka 80.68 million during
in 2015 where significant contribution came from corporate 2015, under which 68% was incurred on salary and allowances
advisory fees (67%) followed by issue management fees (26%). and the rest was for general and administrative purposes. In
2014,the company incurred a total cost of Taka 71.98 million
B) Operational expenses
Taka in million
where 64% of this was incurred on salary and allowances and the
rest on general and administrative expenses (36%).
Operational expenses 2015 2014 2013
Human resource development
IDLC IL strongly believes that its human resources are its most
Salary and allowances 55.09 45.96 43.29
precious assets and recognizes them as building blocks for the
Company to perform sustainably. IDLC IL continues to develop
General and administrative and implement proper human resource policies to motivate its
25.60 26.02 29.49
expenses employees and ensures their optimum contribution towards
the achievement of common goals. As our resources represent
Total operational expenses 80.69 71.98 72.78 a significant competitive edge, the Company continues its policy
of recruiting the best professionals and implementing diverse
240
training and motivational programs to develop and retain high- As part of IDLC IL’s human resource development program, a
quality, performance-oriented personnel. large number of employees underwent training, which included
both managerial development and technical modules. During
In 2014, the Company revamped its operational model by
2015, 30 participants were trained in four different local training
centralizing most of its functions. The benefits of this measure
programs.
trickled into 2015, which saw further improvement to the model.
We also continued to embrace a lean structure and refrained Outlook and strategies
from fresh recruitments in the event of natural attrition, choosing
Maintain leadership position in investment banking,ensuring
to focus on enhancing productivity instead. Resultantly, there
market share accretion for investment banking deals.
was a reduction of headcount from 34 to 29 during the year.
Position the Company as a thought leader through our superior
Number of permanent employees:
fundamental and technical research. Leverage this backbone to
No. of employees 2015 2014 2013 increasingly advocate the value-based investment philosophy
among our clients and the community at large.
Male 24 31 39
Female 5 3 5 Embrace a conservative approach for the margin loan basket
with a greater focus on risk management.
Provide exclusive and comprehensive research and advisory

2015 services through a dedicated relationship manager (RM) for High
In percentage Net Worth Investor (HNI) portfolio clients.
Shift focus to discretionary portfolio management (DPM) due to

17% the low appetite for margin loans. Launch “Easy Invest”, a new
portfolio management product that is expected to strengthen
the Company’s presence in the portfolio management business.
Books of accounts
Proper books of accounts of IDLC Investments Limited have
73% been maintained. Appropriate accounting policies have been
consistently applied in preparation of the financial statements.
Female Male The accounting estimates are based on reasonable and prudent
judgment. International Accounting Standards (IAS)/Bangladesh
Accounting Standards (BAS)/International Financial Reporting
Standards (IFRS)/Bangladesh Financial Reporting Standards
2014 (BFRS), as applicable in Bangladesh, have been followed in the
In percentage preparation of the financial statements and any departure there
from has been adequately disclosed. The financial statements
9% prepared by the management of IDLC Investments Limited
present fairly its state of affairs, the result of its operations, cash
flows and changes in equity.
Internal control
The system of internal control is sound in design and has been
91% effectively implemented and monitored.
Distribution of profit for 2015:

Female Male
The Company reported a profit of Taka 119,320,268 in the year
2015. Considering Company's investment opportunities and
growth potentials and comparative cost benefit analysis of
paying out dividend and overall better tax management, the
2013
board of IDLC Investments Limited decided not to declare any
In percentage
dividend to the shareholders of the Company for 2015.
11% Appointment of Auditors
In terms of Article 18.2 of the Articles of Association of the
Company, the Company shall, at each annual general meeting,
appoint an auditor or auditors to hold office until the next annual
general meeting. The Auditors of the Company, ACNABIN,
Chartered Accountants, has completed their second year as the
89% Auditor of the Company. They are eligible for re-appointment as
Auditors of the Company for the year 2016 and they have also
Female Male offered themselves for re-appointment. The Board recommends
to appoint ACNABIN, chartered Accountants to the shareholders
at the AGM as the auditors of the company for the year 2016
241
at an existing remuneration of Taka 75,000 (Taka Seventy five In conclusion, on behalf of the Board, I would like to thank our
thousand only). loyal clients and honourable shareholders for their continued
faith and support. Taking this opportunity, the members of the
Going concern
Board would also like to thank the Bangladesh Securities and
There are no significant doubts upon the IDLC Investments Exchange Commission, Dhaka and Chittagong stock exchanges
Limited ability to continue as a going concern. and Central Depository Bangladesh Limited who continued to
remain our partners in growth.
Appreciation
For and on behalf of the Board of Directors,
I would like to thank my Board colleagues for their continued
support and on their behalf would like to express my heartiest
gratitude to the entire team of IDLC Investments Limited. It
Sd/-
would be unfair to not acknowledge the exceptional efforts of
our employees who worked in praiseworthy partnerships to Farooq Sobhan
meet the many challenges of a difficult year. They were called Chairman
upon to embrace some major challenges while concurrently IDLC Investments Limited
maintaining the highest standards of service to our clients.
They met the challenges and we thank each of them for their
extraordinary performance.
242
To the Shareholders of IDLC Investments Limited
We have audited the accompanying financial statements of IDLC Investments Limited which comprise the Statement of Financial
Position as on 31 December 2015 and the related Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes
in Equity and Statement of Cash Flows for the year then ended and a summary of significant accounting policies and other explanatory
information.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with Bangladesh Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor’s judgment including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation of the financial statements of the company that give a true and fair view 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.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
Opinion
In our opinion, the financial statements referred to above give a true and fair view of the financial position of IDLC Investments Limited
as on 31 December 2015 and of the results of its operations and its cash flows for the year then ended in accordance with Bangladesh
Financial Reporting Standards (BFRS).

We as required by the Companies Act, 1994, The Securities and Exchange Commission Act, 1993 and the Securities and Exchange Rules,
1987and other applicable laws and regulation further report that:
by the Company; and
Dhaka, ACNABIN

31.12.2015 31.12.2014
Particulars
Taka Taka
ASSETS
Non-Current Assets 18,824,213 23,788,310

Property, plant and equipment 11,714,571 15,048,194
Intangible asset 713,394 628,461
Deferred tax asset 6,396,248 8,111,655
Current Assets 2,062,350,408 2,529,393,141

Investment in marketable securities 184,213,349 113,625,534
Margin loans to portfolio clients 1,444,322,328 2,020,442,769
Account receivables 322,077,683 315,683,662
Cash and bank balance 49,354,891 32,027,480
Advance, deposits & prepayments 7,681,000 18,000
Advance income tax 54,701,156 47,595,696
Total Assets 2,081,174,621 2,553,181,451
Equity 1,462,322,307 1,343,002,039

Share capital 1,400,000,000 1,400,000,000
Retained Earnings/(Loss) 62,322,307 (56,997,961)
Liabilities
Non-Current Liabilities 43,293,811 68,081,027

Deferred liabilities - gratuity payable 7,876,929 6,461,419
Term loan from Investment Corporation of Bangladesh 35,416,883 61,619,608
Current Liabilities 575,558,502 1,142,098,385

Short-term loan 127,500,001 679,110,670
Portfolio investors' fund 218,042,064 220,365,337
Account payables 29,421,846 149,903,710
Liabilities for expenses 12,735,903 9,307,487
Provision for diminution in value of investments - 3,468,442
Provision for margin loan 64,772,134 27,744,606
Total Liabilities 618,852,314 1,210,179,412

Total Equity and Liabilities 2,081,174,621 2,553,181,451
Sd/- Sd/- Sd/- Sd/-

This is the Statement of Financial Position referred to in our separate report of even date
Dhaka, ACNABIN
244
Statement of Profit or Loss and Other

Comprehensive Income
For the year ended 31 December 2015
2015 2014
Particulars
Taka Taka
Operating income 306,171,272 78,722,400

Interest income/(loss) 149,689,441 (46,922,059)
Income from portfolio management services 67,786,298 75,446,094
Settlement and transaction fees 21,657,515 26,249,027
Documentation charges 66,000 51,500
Income from investment banking 18,062,486 22,760,119
Investment Income 47,546,829 256,446
Other income 1,362,704 881,272
Operating expense (80,688,089) (71,978,562)
General & administrative expenses (72,219,025) (64,179,799)
Depreciation on property, plant and equipment (8,189,047) (7,507,760)
Amortization on IT software (280,016) (291,003)
Profit before provision for diminution in value of investments and margin loan 225,483,184 6,743,838
Provision for diminution in value of investments 3,468,442 (738,422)
Provision on margin loan (37,027,528) 50,720,500
(33,559,086) 49,982,078
Profit before income tax 191,924,098 56,725,916

Provision for income tax (72,603,829) (3,648,964)
Current tax (70,888,422) (6,100,000)
Deferred tax (expense)/income (1,715,407) 2,451,036
Net profit 119,320,268 53,076,952
Other comprehensive Income - -
Total comprehensive income 119,320,268 53,076,952
Sd/- Sd/- Sd/- Sd/-

This is the Statement of Profit or Loss and Other Comprehensive Income referred to in our
separate report of even date.
Dhaka, ACNABIN
245

To the Shareholders of IDLC Asset Management Limited
We have audited the accompanying financial statements of IDLC Asset Management Limited which comprise the Statement of
Financial Position as at 31 December 2015 and the related Statement of Changes in Equity and Statement of Cash Flows for the period
from 19 November 2015 to 31 December 2015 and a summary of significant accounting policies and other explanatory information.

Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with
Bangladesh Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to
the entity’s preparation of financial statements that give a true and fair view 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. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
Opinion
In our opinion, the financial statements referred to above give a true and fair view of the financial position of IDLC Asset Management
Limited as at 31 December 2015 and its cash flows for the period from 19 November 2015 to 31 December 2015 in accordance with
Bangladesh Financial Reporting Standards (BFRS).

We as required by the Companies Act, 1994, the Securities and Exchange Rules, 1987, Financial Institution Act, 1993 and other applicable
laws and regulation further report that:
by the Company; and
Dhaka, ACNABIN
20 January 2016 Chartered Accountants
IDLC Asset Management Limited

31. 12. 2015
Particulars
Taka
ASSETS
Non-Current Assets 445,675

Preliminary expenditure 380,000
Pre-operating expenses 65,675
Current Assets
Share money in arrear 100,000,000
Total Assets 100,445,675
Equity
Share capital 100,000,000
Liabilities
Current Liabilities 445,675

Payable to IDLC Finance Limited 402,550
Provision for audit fee 43,125
Total Equity and Liabilities 100,445,675
Sd/- Sd/-
Director Director
This is the Statement of Financial Position referred to in our separate report of even date
Dhaka, ACNABIN
20 January 2016 Chartered Accountants
247
Disclosures under Pillar III- Market Discipline

A) Scope of application Quantitative Disclosures
Qualitative Disclosures b) The amount of Tier 1 capital, with separate disclosure of:
a) The name of the top corporate entity in the group to which Amount in
this guidelines applies. Particulars
crore Taka
 IDLC Finance Limited Paid-up capital 251.37
b) An outline of differences in the basis of consolidation for Non-repayable share premium account 0.38
accounting and regulatory purposes, with a brief description of
the entities within the group (a) that are fully consolidated; (b) Statutory reserves 148.27
that are given a deduction treatment; and (c) that are neither General reserves 100.00
consolidated nor deducted (e.g. where the investment is risk-
weighted). Retained earnings 273.93
 The IDLC Group has three wholly owned subsidiaries: IDLC Minority interest in subsidiaries 0.00
Securities Limited, IDLC Investments Limited and IDLC Non-cumulative irredeemable preference shares -
Asset Management Limited, which are fully consolidated.
Dividend equalization account 4.65
c) Any restrictions, or other major impediments, on transfer of
funds or regulatory capital within the group. Total Tier 1 capital 778.60
 Not applicable.
c) The total amount of Tier 2 capital 43.35
Quantitative Disclosures d) Other deductions from capital -
e) Total eligible capital 821.95
d) The aggregate amount of capital deficiencies in all subsidiaries
not included in the consolidation that are deducted and the C) Capital Adequacy
name(s) of such subsidiaries. Qualitative Disclosures
 Not applicable. a) A summary discussion of the FI’s approach to assessing the
B) Capital structure adequacy of its capital to support current and future activities.
Qualitative Disclosures  Risk Weighted Assets (RWA) and Capital Adequacy Ratio (CAR)
a) Summary information on the terms and conditions of the IDLC has adopted Standardized Approach for computation
main features of all capital instruments, especially in the case of of Capital Charge for Credit Risk and Market Risk while Basic
capital instruments eligible for inclusion in Tier 1 or in Tier 2. Indicator Approach for Operational Risk. Total Risk Weighted
Assets (RWA) of the Company is determined by multiplying
 Tier 2 capital includes: the capital charge for market risk and operational risk
i) General provision up to a limit of 1.25% of Risk by the reciprocal of the minimum capital adequacy ratio
Weighted Asset (RWA) for Credit Risk; i.e. 10% and adding the resulting figures to the sum of risk
weighted assets for credit risk. Total RWA is then used as
ii) Revaluation reserves: denominator while total Eligible Regulatory Capital as on
numerator to derive Capital Adequacy Ratio.
50% Revaluation reserve for fixed assets;
 Strategy to achieve the required Capital Adequacy
45% Revaluation reserve for securities;
Operational level
iii) All other preference shares.
Immediate measures
Conditions for maintaining regulatory capital:
 Asking unrated Corporate clients to have credit rating
The calculation of Tier 1 capital, and Tier 2 capital, shall be subject
from External Credit Assessment Institutions (ECAIs)
to the following conditions:
recognized by Bangladesh Bank;
i) The amount of Tier 2 capital will be limited to 100% of the
 Rigorous monitoring of overdue contracts to bring
amount of Tier 1 capital;
those under 90 days overdue;
ii) 50% of revaluation reserves for fixed assets and 45% of
 Assessing incremental effect of capital charge over
revaluation reserves for securities are eligible for Tier 2
the expected net income from financing before
capital.
sanctioning any appraisal, which could be one of the
criteria for taking financing decision.
248
Continuous measures: against good loans (other than SME-Standard loan/
lease, 5% against SMA loan/ lease, 20% against sub-
 Concentrating on SME clients having exposure up to
standard loan/ lease, 50% against doubtful loan/ lease
Taka 1 crore as this will carry 75% fixed risk weight (for
and 100% against bad/loss loan/ lease after deducting
regular contracts only);
the amount of interest expenses and value of eligible
 Financing clients having good credit rating; securities from the outstanding balance of classified
accounts.
 Using benefit of credit risk mitigation by taking eligible
financial collaterals against transactions;  Discussion of the FI’s credit risk management policy.
 Focusing more on booking high spread earning assets  Implementation of various strategies to minimize risk:
and thus increasing retained earnings.
 To encounter and mitigate credit risk the following
Strategic level: control measures are taken place at IDLC:
 Injecting fresh capital by issuing right shares, if required.  Looking into payment performance of customer
before financing;
Amount in crore
Particular  Annual review of clients;
Taka
 Adequate insurance coverage for funded assets;
b) Capital requirement for Credit Risk 469.33
 Vigorous monitoring and follow up by Special Assets
c) Capital requirement for Market Risk 31.14
Management and collection Team;
d) Capital requirement for Operational Risk 55.04
 Strong follow up of compliance of credit policies by
(e) Total and Tier 1 capital ratio: Credit Administration Department;
 For the consolidated group; and  Taking collateral and performing valuation and legal
vetting on the proposed collateral;
 For stand alone
 Seeking legal opinion from internal and external
Particular Consolidated Stand Alone lawyer for any legal issues;
 Maintaining neutrality in politics and following arm’s

CAR on Total capital basis (%) 14.80 13.37 length approach in related party transactions;
CAR on Tier 1 capital basis (%) 14.02 12.55  Regular review of market situation and industry
exposure;
D) Credit Risk
 Sector-wise portfolio is maintained within specific
Qualitative Disclosures limits to ensure diversification of loan assets.
(a) The general qualitative disclosure requirement with respect In addition to the industry best practices for assessing,
to credit risk, including: identifying and measuring risks, IDLC also considers
 Definitions of past due and impaired (for accounting Guidelines for Managing Core Risks of financial
purposes) institutions issued by the Country’s Central Bank,
Bangladesh Bank; vide FID Circular No. 10 dated
As per the Bangladesh Bank’s Prudential Guideline on September 18, 2005 for management of risks.
Capital Adequacy and Market Discipline for Financial
Institutions, the unsecured portion of any claim or  Approved Credit Policy by the Board of Directors
exposure (other than claims secured by residential The Board of Directors has approved the Credit Policy
property) that is past due for 90 days or more, net of for the company where major policy guidelines, growth
specific provisions (including partial write-off) will be strategy, exposure limits (for particular sector, product,
risk weighted as per risk weights of respective balance individual company and group) and risk management
sheet exposures. For the purpose of defining the strategies have been described/stated in detail. Credit
net exposure of the past due loan, eligible financial Policy is regularly updated to cope up with the changing
collateral (if any) may be considered for Credit Risk global, environmental and domestic economic scenarios.
Mitigation.
 Separate Credit Risk Management (CRM) Department
 Description of approaches followed for specific and
general allowances and statistical methods; An independent Credit Risk Management (CRM)
Department is in place, at IDLC, to scrutinize projects from a
Specific and General provisions are maintained risk-weighted point of view and assist the management in
according to the relevant Bangladesh Bank guideline. creating a high quality credit portfolio and maximize returns
For Example, 0.25% provision is maintained against from risk assets. Research team of CRM regularly reviews
SME-Standard loan/ lease, 1% provision is maintained market situation and exposure of IDLC in various industrial
249
sub-sectors. CRM has been segregated from Credit  Credit Quality and Portfolio Diversification
Administration Department in line with Central Bank’s
IDLC believes in diversification in terms of products as well as
Guidelines. CRM assess credit risks and suggest mitigations
sectors. To mitigate the Credit Risk, the company diversifies
before recommendation of every credit proposal while
its loan exposure to different sectors confirming the Central
Credit Administration confirms that adequate security
Bank’s requirements. Threshold limit is set for any sector
documents are in place before disbursement.
so that any adverse impact on any industry has minimum
 Special Assets Management and Collection Team effect on IDLC’s total return. Central Bank’s instructions are
strictly followed in determining Single Borrower/Large Loan
A strong Law and Recovery Team monitors the performance
limit. Significant concentration of credit in terms of groups
of the loans & advances, identify early signs of delinquencies
or geographical location is carefully avoided to minimize risk.
in portfolio, and take corrective measures to mitigate risks,
improve loan quality and to ensure recovery of loans in a  Early Warning System
timely manner including legal actions.
Performance of loans is regularly monitored to trigger early
 Independent Internal Control and Compliances warning system to address the loans and advances whose
Department (ICC) performance show any deteriorating trend. It enables the
company to grow its credit portfolio with ultimate objective
Appropriate internal control measures are in place at IDLC.
to protect the interest of stakeholders.
IDLC has also established Internal Control and Compliances
Department (ICC) to ensures, compliance with approved  NPL Management
lending guidelines, Bangladesh Bank guidelines,
IDLC measures its loan portfolio in terms of payment arrears.
operational procedures, adequacy of internal control and
The impairment levels on the loans and advances are
documentation procedures. ICC frames and implements
monitored regularly.
policies to encounter such risks.
As per FID Circular No.3 dated March 15, 2007:
 Credit Evaluation
1. Loan/Lease, classified as bad/loss and with 100% provision,
The Credit Evaluation Committee (CEC) regularly meets to
can only be written-off.
review the market and credit risk related to lending and
recommend and implement appropriate measures to 2. Approval from the Board of Directors has to be taken before
counter associated risks. The CEC critically reviews projects write-off.
considering the current global financial crisis and its
probable impact on the project. 3. The financial institutions should constantly try to recover
the loan/lease written-off amount. If legal action has not
Risk Grading Model (RGM) helps a Financial Institution to been taken against the client, legal charges should be
understand the various dimensions of risks involved in placed before the write off.
transactions related to small business clients who are plying
their businesses in various geographical locations across 4. To expedite the legal settlement or collection of the
the country. IDLC has been developing and managing RGM due amount, third party agents can be appointed by the
to promote the safety and soundness of the Company by financial institutions.
facilitating informed decision-making. This model measures 5. A separate ledger should be maintained for the written off
credit risk and differentiate individual credits and groups of loans/leases and the accumulated written off value should
credits by the risk they pose. This allows management and be disclosed separately under the heading of “notes to the
examiners to monitor changes and trends in risk levels. The account” in the annual report/balance sheet of the financial
process also allows the management to manage risk to institutions.
optimize returns.
6. Even if the loan/lease has been written off, the client should
To mitigate credit risk, IDLC search for credit report from be classified as defaulter and reported to CIB accordingly.
the Credit Information Bureau (CIB) of Bangladesh Bank.
The report is scrutinized by CRM and CEC to understand Detail records for all such write off accounts are meticulously
the liability condition and repayment behavior of the client. maintained and followed up.
Depending on the report, banker’s opinions are taken from  Counter-party Credit Rating
client’s banks. Suppliers’ and buyers’ opinion are taken
to understand the market position and reputation of our IDLC is taking initiatives to rate the Corporate Clients of the
proposed customers. company immediately by the External Credit Assessment
Institutions (ECAIs)/Rating Agencies duly recognized by the
 Credit Approval Process Central Bank. As on December 31, 2015, 697 clients with
To ensure both speedy service and mitigation of credit risk, the total net exposure of Taka 1,789.45 crore were eligible for
approval process is maintained through a multilayer system. credit rating. Among these 697 clients, 168 clients having
Depending on the size of the loan, a multilayer approval net exposure of Taka 885.80 crore had valid credit ratings.
system is designed. As smaller loans are very frequent and That is, about 49.5% of ratable exposure was rated. We are
comparatively less risky, lower sanctioning authority is set optimistic of getting more counter party ratings by 2016.
to improve the turnaround time and associated risk. Bigger  Methods used to measure Credit Risk
loans require more scrutiny as the associated risk is higher.
So sanctioning authority is higher as well. As per the directives of Bangladesh Bank, ‘The Standardized
approach’ is applied by the company to measure its Credit Risk.
250
Quantitative Disclosures Beside these, total consumer finance (which includes individual
Car Loan and Personal Loan, Loan against Deposit) amounts
(b) Total gross credit risk exposures broken down by major
to Taka 307.77 crore and Loan to subsidiaries amounts to Taka
types of credit exposure
158.67 crore. Therefore, the total industry exposure amounts to
Particulars Amount in crore Taka Taka 5,521.18 crore.
Leasing 601.62 (e) Residual contractual maturity breakdown of the whole
Long-term finance 2,537.69 portfolio, broken down by major types of credit exposure.
Real estate finance 1,720.59
Car loan 249.00 Amount in
Particulars
Personal loan 12.04 crore Taka
Short term finance 107.94
Repayable on demand 344.52
Loan against deposit 50.72
Margin loan to portfolio investors 158.67 Over 1 month but not more than 3 months 382.92
Interest receivable 82.92 Over 3 months but not more than 1 year 1,225.95
Total 5,521.18 Over 1 year but not more than 5 years 2,546.64
(c) Geographical distribution of exposures, broken down in Over 5 years 1,021.15
significant areas by major types of credit exposure
Total 5,521.18
Area Amount in crore Taka
(f) Gross Non Performing Assets ( NPAs)
Dhaka 4,078.73
Chittagong 582.72 Non Performing Assets ( NPAs) to Outstanding Loans &
advances
Bogra 166.38
Sylhet 133.50 Amount in
Savar 111.78 Particulars
crore Taka
Comilla 136.12 Non Performing Assets ( NPAs) 164.70
Jessore 119.81
Outstanding Loans & advances 5,385.77
Narsingdi 80.47
Non Performing Assets (%) 3.06%
Bhulta 30.46
Khulna 51.91 Movement of Non Performing Assets (NPAs)
Natore 28.94
Kustia 0.37 Amount in
Particulars
crore Taka
Total 5,521.18
Opening balance 91.50
(d) Industry or counterparty type distribution of exposures,
broken down by major types of credit exposure Additions 90.45
Reductions 17.24
Sector Amount in crore Taka
Agriculture 114.71 Closing balance 164.70
Cement and Allied Industry 55.78 Movement of specific provisions for NPAs
Electronics and Electrical Products 75.92
Food Production and Processing Ind. 255.52 Amount in
Particulars
crore Taka
Garments and Knitwear 240.28
Glass, Glassware and Ceramic Industries 28.54 Opening balance 46.20
Housing 1,749.36 Provisions made during the period 27.21

Iron, Steel and Engineering 240.69 Write-off (2.22)
Jute and Jute-Products 19.67 Write-back of excess provisions (5.38)
Leather and Leather-Goods 3.19
Closing balance 65.82
Paper, Printing and Packaging 84.28
Pharmaceuticals and Chemicals 77.46 E) Equities: banking book positions
Plastic Industry 44.75 Qualitative Disclosures
Power, Gas, Water & Sanitary Service 48.46
a) The general qualitative disclosure requirement with respect
Ship Manufacturing Industry 0.16 to equity risk, including:
Telecommunication and IT 50.99
Differentiation between holdings on which capital gains are
Textile 204.35
expected and those taken under other objectives including
Trade and Commerce 952.19 for relationship and strategic reasons; and
Transport and Aviation 114.81
 Total equity shares holdings are for capital gain
Others 693.63
purpose.
Total 5,054.74
251
Discussion of important policies covering the valuation All Requirement is 10% of the said value which stand to Taka
and accounting of equity holdings in the banking book 15.57 crore.
positions. This includes the accounting techniques and
valuation methodologies used, including key assumptions F) Interest rate in the banking book
and practices affecting valuation as well as significant Qualitative Disclosures
changes in these practices.
a) The general qualitative disclosure requirement including
 Quoted shares are valued at cost prices and if the total the nature of interest risk and key assumptions, including
cost of a particular share is lower than the market value assumptions regarding loan prepayments and behavior of
of that particular share, then provision are maintained non-maturity deposits
as per terms and condition of regulatory authority. On
the other hand, unquoted share is valued at cost price Interest rate risk in the banking book arises from mismatches
or book value as per latest audited accounts. between the future yield of an assets and their funding cost.
Assets Liability Committee (ALCO) monitors the interest
Quantitative Disclosures rate movement on a regular basis. IDLC measure the
b) Value disclosed in the balance sheet of investments, as well Interest Rate Risk by calculation Duration Gap i.e. a positive
as the fair value of those investments; for quoted securities, Duration Gap affect company’s profitability adversely with
a comparison to publicly quoted share values where the the increment of interest rate and a negative Duration Gap
share price is materially different from fair value. increase the company’s profitability with the reduction of
interest rate.
Amount in crore Taka
Quantitative Disclosures
Particulars Cost Price Market Price b) The increase (decline) in earnings or economic value (or
relevant measure used by management) for upward and
Quoted shares 166.83 155.63 downward rate shocks according to management’s method
for measuring interest rate risk broken down by currency (as
Unquoted shares 166.11 -
relevant).
c) The cumulative realized gains/(losses) arising from sales Maturity wise Distribution of Assets-Liabilities
and liquidations in the reporting period
Amount in crore Taka
 Gain of Taka 13.41 crore
d) Over 1 Over 2 Over 3 Over 6

1 to 30/31
Particulars month months months months
day (One
to 2 to 3 to 6 to 1
Amount in month)
Particulars months months months year
crore Taka
Total unrealized gains (losses) 6.69 1 2 3 4 5 6
Total latent revaluation gains (losses) -

A. Total Rate
Any amounts of the above included in Tier - Sensitive 400.22 708.66 377.97 410.73 426.70
2 capital. Liabilities (A)
e) Capital requirements broken down by appropriate equity B. Total Rate

groupings, consistent with the FI’s methodology, as well as Sensitive 457.33 771.99 419.78 429.76 937.75
the aggregate amounts and the type of equity investments Assets (B)
subject to any supervisory provisions regarding regulatory
capital requirements C. Mismatch 57.11 63.33 41.81 19.03 511.06
 Specific Risk Market value of investment in equities is

D. Cumulative
Taka 155.68 crore. Capital Requirement is 10% of the 57.11 120.44 162.26 181.29 692.34
Mismatch
said value which stand to Taka 15.57 crore.
 General Risk-Market value of investment in equities is E. Mismatch (%) 14.27% 8.94% 11.06% 4.63% 119.77%
Taka 155.68 crore.
252
Interest Rate Risk - Increase in Interest Rate rates. In the normal course of business, IDLC tries to minimize
Amount in crore Taka the mismatches between the duration of interest rate
sensitive assets and liabilities. Effective Interest Rate Risk
Minor Moderate Major Management is done as under:
Magnitude of Shock
Market analysis
2% 4% 6%
Market analysis over interest rate movements are reviewed
Change in the Value of Bond by the Treasury of the company. The type and level of
(12.64) (25.27) (37.91)
Portfolio mismatch interest rate risk of the company is managed and
monitored from two perspectives, being an economic value
Net Interest Income 13.85 27.69 41.54 perspective and an earning perspective.
Revised Regulatory Capital 822.96 824.17 825.38 GAP analysis
Risk Weighted Assets 5,558.22 5,558.22 5,558.22 ALCO has established guidelines in line with central
Bank’s policy for the management of assets and liabilities,
Revised CAR (%) 14.81% 14.83% 14.85% monitoring and minimizing interest rate risks at an
acceptable level. ALCO in its regular monthly meeting
G) Market risk analyzes Interest Rate Sensitivity by computing GAP i.e. the
difference between Rate Sensitive Assets and Rate Sensitive
Qualitative Disclosures (a) Liability and take decision of enhancing or reducing the GAP
according to prevailing market situation aiming to mitigate
Views of BOD on trading/investment activities
interest rate risk.
All the Market Risk related policies/guidelines are duly
Continuous Monitoring
approved by BOD. The BOD sets limit and review and
updates the compliance on regular basis aiming to mitigate Company’s treasury manages and controls day-to-day
the Market risk. trading activities under the supervision of ALCO that ensures
continuous monitoring of the level of assumed risks.
Methods used to measure Market risk
Equity Risk Management
Market Risk is the probability of losing assets in balance
sheet and off- balance sheet position arising out of volatility Equity Risk is the risk of loss due to adverse change in
in market variables i.e. interest rate, exchange rate and prices market price of equities held by the Company. Equity Risk is
of securities. In order to calculate the market risk for trading managed by the following fashion:
book purposes the company uses Standardized (rule based)
Approach where capital charge for interest rate risk, price IDLC minimizes the Equity Risks by Portfolio diversification as
and foreign exchange risk is determined separately. per investment policy of the company. The entire portfolio is
managed by IDLC Investments Limited.
Market Risk Management system
b) Quantitative Disclosures
Policies and processes for mitigating market risk
The capital requirements for Market Risk:
A Policy for managing Market Risk has been set out by the
Board of Directors of the company where clear instructions
Amount in
has been given on Loan Deposit Ratio, Whole Sale Particular
Taka crore
Borrowing Guidelines, Medium Term Funding, Maximum
Cumulative Outflow, Liquidity Contingency Plan, Local
Interest rate risk -
Regulatory Compliance, Recommendation/Action Plan etc.
Treasury manages the Market Risk with the help of Asset
Liability Management Committee (ALCO) and Asset Liability Equity position risk 31.14
Management (ALM) Desk in the following fashion:
Foreign Exchange Position and Commodity risk (if any). -
Interest Risk Management
Treasury Division reviews the risks of changes in income of

the Company as a result of movements in market interest
253
H) Operational Risk Potential external events
Qualitative disclosure (a) No such potential external event exist to rise operational
risk of IDLC at the time of reporting.
Views of Board on system to reduce Operational Risk:
Polices and procedures for mitigating operational risk:
All the policies and guidelines of internal control and
compliances are duly approved by the Board. The Board IDLC has also established Internal Control and Compliances
delegates its authority to Executive Committee and to Department (ICC) to address operational risk and to frame
ManCom members as per company policy of delegation and implement policies to encounter such risks. ICC
of authority. Audit Committee of the Board directly assesses operational risk across the Company as a whole
oversees the activities of internal control and compliance and ensures that an appropriate framework exists to
as per good governance guideline issued by Securities and identify, assess and mange operational risk.
Exchange Commission.
Approach for calculating capital charge for operational risk:
Performance gap of executives and staffs:
Opreational risk is defined as the risk of loss resulting
IDLC’s recruitment strategy is based on retaining and from inadequate or failed internal processes, people and
attracting the most suitable people at all levels of the system or from external events. IDLC uses basic indicator
business and this is reflected in our objective approach approach for calculation capital charge against operational
to recruitment and selection. The approach is based on risk i.e. 15% of average positive annual gross income of the
the requirements of the job (both now and in the near company over last three years.
future), matching the ability and potential of the individual.
Quantitative Disclosures (b)
Qualification, skills and competency form our basis for
nurturing talent. We are proud to state that favorable Capital requirement for operational risk
job responsibilities are increasingly attracting greater
participation from different level of employees in the IDLC Amount in crore
family. We aim to foster a sense of pride in working for IDLC Particular
Taka
and to be the employer of choice. As such there exists no
Capital requirement for operational risk: 55.04
performance gap in IDLC.
254
Information for the Stakeholders
IDLC is very much concern of the stakeholders’ interest on the company including the potential investors. IDLC with 30 years of
financial expertise helps its clients to decide in taking right financial decisions. The following historical information will help our
current and potential investors for their decision making:
Financial calendar to the stakeholders
Events for the year 2015 2014
Publication of Financial Statements for the 1st Quarter May 07, 2015 May 13, 2014
Publication of Financial Statements for the Half-year July 28, 2015 July 22, 2014
Publication of Financial Statements for the 3 Quarter
rd
October 14, 2015 October 23, 2014
Annual Financial statements approved by the Board February 18, 2016 February 25, 2015
Date of Record March 13, 2016 March 09, 2015
Dispatching notice for the Annual General meeting March 08, 2016 March 05, 2015
Dispatching of Annual Report March 15, 2016 March 15, 2015

Holding of Annual General Meeting March 30, 2016 March 30, 2015
Transfer/ payment of Dividend April 30, 2016 April 30, 2015
Comparative Shareholding Structure of IDLC as on December 31
2015 2014
Types of Share Holders
Number of Shares % of Shares Number of Shares % of Shares
Sponsor/Director 149,969,402 59.66 121,575,525 60.46
Institutions 51,019,861 20.30 32,265,079 16.04
Individuals 50,377,924 20.04 47,253,146 23.50
Total shares held 251,367,187 100.00 201,093,750 100.00
Top ten shareholders of IDLC as on December 31
2015 2014
Sl. No. Name of the shareholders
Number of % of Issued Number of % of Issued
shares held shares shares held shares
1 The City Bank Limited (CBL) 60,854,056 24.21 50,283,246 25.00
Transcom Group 33,515,443 13.33 26,812,355 13.33
2 Eskayef Bangladesh Limited 20,109,375 8.00 16,087,500 8.00
3 Transcraft Limited 10,088,022 4.01 8,070,418 4.01
4 Bangladesh Lamps Limited 3,318,046 1.32 2,654,437 1.32
5 Sadharan Bima Corporation (SBC) 19,151,663 7.62 15,321,331 7.62
6 Mercantile Bank Limited 18,852,538 7.50 15,082,031 7.50
7 Reliance Insurance Co. Limited 17,595,702 7.00 14,076,562 7.00
8 Bangladesh Fund 8,040,750 3.20 6,432,600 3.20
9 ICB 5,813,612 2.31 - -
10 LR Global 2,873,900 1.14 - -
255
Equity statistics of IDLC important to the stakeholders:
Particulars 2015 2014 2013 2012 2011
Number of shares in issue (No.) 251,367,187 201,093,750 160,875,000 123,750,000 99,000,000
Net asset value per share (Taka) 30.97 25.97 21.33 18.67 15.84
Market Capitalization (Taka in million) 15,986.95 15,021.70 10,119.04 11,372.63 13,711.50
Market value addition per share (Taka) 32.63 42.24 29.57 44.49 98.29
Shareholders’ equity (Taka in million) 7,785.96 6,527.83 5,362.76 4,693.29 3,980.47
IDLC’S shares as on December 31
Particulars 2015 2014 2013 2012
Highest (Taka) 64.00 75.70 64.50 93.90

Lowest (Taka) 61.60 73.70 62.50 91.40
Closing (Taka) 63.60 74.70 62.90 91.90
Shares traded (No.) 942,103 685,710 244,400 27,000
Market Turnover (Taka in million) 59.55 51.42 15.47 2.49
Economic and Financial indicators
FY 2014-15 (P)* FY 2013-14 FY 2012-13 FY 2011-12 FY 2010-11

Economic Growth
GDP at Current Market

15,136.00 13,436.70 11,989.20 10,552.00 9,158.30
Prices (Taka in Billion)
GDP Growth Rate (%) 6.51 6.06 6.01 6.52 6.46

Source- Bangladesh Bureau of Statistics, Selected Economic Indicators: Bangladesh Bank
*(P) indicates provisional figure while Bangladesh Bureau of Statistics declared GDP Growth Rate at Constant Market Price to be
6.55% during FY 2014-15
December 2015 2014 2013 2012 2011

Rate of Inflation (Consumer Price Index)
General 6.19 6.99 7.53 7.69 10.63

Food 6.05 7.91 7.93 7.33 10.4
Source: Major Economic Indicators: Bangladesh Bank
Share Market
All Share Price Index – DSE 4,630 4,865 4,266.60 4,219.30 5,257.60
Market Capitalization (Taka

31,597,600 3,259,247 2,647,791 2,403,556 2,616,731
in million)
Source: Major Economic Indicators: Bangladesh Bank
256
Annual report review checklist
Particulars Page number
Corporate Objectives, Values & Structure
Clarity and presentation:
Vision and Mission
Overall strategic objectives 16
Core values and code of conduct/ethical principles 16
Profile of the Company 173
Director’s profiles and their representation on Board of other companies & Organization Chart 61, 18
Management Report and analysis including Director’s Report / Chairman’s Review/CEO’s Review etc.
9-12, 21-23,
A general review of the performance of the company
135-140
Description of the performance of the various activities / products / segments of the company and its group
22, 136
companies during the period under review.
A brief summary of the Business and other Risks facing the organization and steps taken to effectively manage
139
such risks
A general review of the future prospects/outlook. 12, 23
Information on how the company contributed to its responsibilities towards the staff (including health & safety) 11
Information on company's contribution to the national exchequer & to the economy 131, 138
Sustainability Reporting
Social Responsibility Initiatives ( CSR) 105
Environment related Initiatives 50
Environmental & Social Obligation 50, 105
Integrated Reporting 5, 263
Appropriateness of Disclosure of Accounting policies and General Disclosure

Disclosure of adequate and properly worded accounting policies relevant to Assets, liabilities, Income and
173
expenditure in line with best reporting standards.
Any Specific accounting policies 173
Impairment of Assets 179
Changes in accounting policies/Changes in accounting estimates 175
Accounting policy on subsidiaries 175
Segment Information
Comprehensive segment related information bifurcating Segment revenue, segment results and segment capital
214
employed
Availability of information regarding different segments and units of the entity as well as non-segmental entities/
214
units
Segment analysis of:
Segment Revenue 214
Segment Results 214
Turnover 214
Operating profit 214
Carrying amount of Net Segment assets 214
257
Financial Statements (Including Formats)

Disclosures of all contingencies and commitments 208
Comprehensive related party disclosures 217
Disclosures of Remuneration & Facilities provided to Directors & CEO 212
166, 244, 235,
Statement of Financial Position / Balance Sheet and relevant schedules
247
Income Statement / Profit and Loss Account and relevant schedules 168, 236, 245
Statement of Changes in Equity / Reserves & Surplus Schedule 164, 170
Disclosure of Types of Share Capital 159, 166
Statement of Cash Flow 162, 169
Consolidated Financial Statement (CFS) 158-165
Extent of compliance with the core IAS/IFRS or equivalent National Standards 181
Disclosures / Contents of Notes to Accounts 173
Information about Corporate Governance

Board of Directors, Chairman And CEO 61, 86
Audit Committee (Composition, role, meetings, attendance, etc.) Internal Control & Risk Management 90
Ethics And Compliance 94
Remuneration and other Committees of Board 68, 86, 96-97
Human Capital 96
"Communication To Shareholders & Stakeholders
- Information available on website 97
- Other information"
Environmental And Social Obligations 98
Management Review And Responsibility 94
Disclosure by Board of Directors or Audit Committee on evolution of Quarterly Reports 138, 123
Risk Management & Control Environment

Description of the Risk Management Framework 75
Risk Mitigation Methodology 77
Disclosure of Risk Reporting 81
Stakeholders Information
Distribution of shareholding (Number of shares as well as category wise, e.g. Promoter group, FII etc.) 19
Shares held by Directors/Executives and relatives of Directors/Executives 217, 141
Graphical/ Pictorial Data:

Earnings per Share 15
Net Assets 15
Stock Performance 15
Shareholders’ Funds 11
Return on Shareholders Fund 15
258
Horizontal/Vertical Analysis including following.
Operating Performance (Income Statement)
Total Revenue 126, 127
Operating profit 126, 127
Profit Before Tax 126, 127
Profit after Tax 126, 127
EPS 126, 127
Statement of Financial Position (Balance Sheet)

Shareholders Fund 126, 127
Property Plant & Equipment 223
Net Current Assets 126, 127
Long Term Liabilities/Current Liabilities 126, 127
Profitability/Dividends/ Performance and Liquidity Ratios

Gross Profit Ratio 160, 168
Earning before Interest, Depreciation and Tax 160, 168
Price earning ratio 127
Current Ratios 126
Return on Capital Employed 126, 127
Debt Equity Ratio 126, 127
Statement of Value Added and Its Distribution

Government as Taxes 128
Shareholders as dividend 128
Employees as bonus/remuneration 128
Retained by the entity 128
Market share information of the Company’s product/services 129
Economic value added 130
Additional Disclosures
Separate
Sustainability Development Reporting Report pub-
lished
Human Resource Accounting 114
Other disclosures:
27, 31-40,
Competitive intensity, SWOT & PESTEL Analysis, Business Model, Resource and Strategy, etc.
57-58
Custodial service 100
Statekeholder and materiality 101
Specific Areas for Banking Sector

Details of Advances portfolio Classification wise as per the direction issued by the central bank of the respective
195
countries
259

Disclosure for Non Performing assets:
251
Movements in NPA
Movement of Provisions made against NPA 251

187, 189, 191,
Maturity Pattern of Key Assets and Liabilities (ALM)
202
Business Ratio/Information:
Statutory Liquidity Reserve (Ratio) 185
Return on Average Asset 127, 128
Cost/ Income ratio 3
Net Asset Value Per Share 127
Profit per employee 115
Capital Adequacy ratio 3, 207
Operating profit as a percentage of working funds 132
Cash Reserve Ratio / Liquid Asset ratio 185
Dividend Cover ratio 127, 128
Gross Non-Performing assets to gross advances / Non-Performing Loans (Assets) to Total Loans (Assets 132
Details of credit concentration / Sector vise exposures

The break-up of “Provisions and contingencies’ included in the Profit and Loss Account 82, 251
Disclosure under regulatory guidelines 133
Details of Non-Statutory investment portfolio 189
Disclosure in respect of assets given on operating & finance lease 175
Disclosures for derivative investments N/A
Bank's Network : List of Centers or Branches 272
260
Corporate governance disclosure checklist
Page Number
l. BOARD OF DIRECTORS, CHAIRMAN AND CEO
1.1 Company's policy on appointment of directors disclosed. 86
Adequate representation of non executive directors i.e. one third of the board, subject to a minimum
1.2 87
of two
At least one independent director on the board and disclosure / affirmation of the board on such
1.3 87
director's independence.
1.4 Chairman to be independent of CEO 88
Responsibilities of the Chairman of the Board appropriately defined and disclosed. Disclosure of
1.5 88 & 87
independence of Non Executive Directors
1.6 Existence of a scheme for annual appraisal of the boards performance and disclosure of the same. 89
1.7 Disclosure of policy on annual evaluation of the CEO by the Board. 88
Disclosure of policy on training (including details of the continuing training program) of directors
1.8 and type and nature of training courses organized for directors during the year Existence of a 88
scheme for annual appraisal of the boards performance
At least one director having thorough knowledge and expertise in finance and accounting to
1.9 provide guidance in the matters applicable to accounting and auditing standards to ensure reliable 89
financial reporting.
Disclosure of number of meetings of the board and participation of each director (at least 4 meetings
1.10 142
are required to be held)
Directors issue a report on compliance with best practices on Corporate Governance that is reviewed
1.11 133 & 143
by the external auditors
2 VISION / MISSION AND STRATEGY

Company's vision / mission statements are approved by the board and disclosed in the annual
2.1
report.
16 & 34 & 90
2.2 Identification of business objectives and areas of business focus disclosed
2.3 General description of strategies to achieve the company's business objectives
3 AUDIT COMMITTEES
3.1 Appointment and Composition 90
Whether the Audit Committee Chairman is an independent Non - Executive Director and
3.1.1 90
Professionally Qualified
Whether it has specific terms of reference and whether it is empowered to investigate / question
3.1.2 90
employees and retain external counsel
3.1.3 More than two thirds of the members are to be Non Executive Directors 90
All members of the audit committee to be suitably qualified and at least one member to have expert
3.14 90
knowledge of finance and accounting.
3.1.5 Head of internal audit to have direct access to audit committee 91
The committee to meet at least four times a year and the number of meetings and attendance by
3.1.6 142
individual members disclosed in the annual report.
3.2 Objectives & Activities

Statement on Audit Committee's review to ensure that internal controls are well conceived properly
3.2.2 122
administered and satisfactorily monitored
Statement to indicate audit committees role in ensuring compliance with Laws, Regulations and
3.2.3 122
timely settlements of Statutory dues
3.2.4 Statement of Audit committee involvement in the review of the external audit function 122
Ensure effective coordination of external audit function 122
Ensure independence of external auditors 122
To review the external auditors findings in order to be satisfied that appropriate action is being taken 122
261
Page Number
Nothing in this
regard was
Review and approve any non-audit work assigned to the external auditor and
assigned to the
external auditors
Statement on Audit committee involvement in selection of appropriate accounting policies that are
3.2.5 123
in line will applicable accounting standards and annual review.
Statement of Audit Committee involvement in the review and recommend to the board of directors,
3.2.6 123
annual and interim financial releases
3.2.7 Reliability of the management information used for such computation 122 & 123
4 I NTERNAL CONTROL & RISK MANAGEMENT

4.1 Statement of Director's responsibility to establish appropriate system of internal control 92
Narrative description of key features of the internal control system and the manner in which the
4.2 92- 94
system is monitored by the Board, Audit Committee or Senior Management.
4.3 Statement that the Director's have reviewed the adequacy of the system of internal controls 92
4.4 Disclosure of the identification of risks the company is exposed to both internally & externally 93-94
4.5 Disclosure of the strategies adopted to manage and mitigate the risks 93-94
5 Ethics and Compliance

Disclosure of statement of ethics and values, covering basic principles such as integrity,
5.1
conflict of interest, compliance with laws and regulations etc. 94-96
Dissemination / communication of the statement of ethics & business practices to all directors and
5.2 94-96
employees and their acknowledgement of the same
Board's statement on its commitment to establishing high level of ethics and compliance within the
5.3 95
organization
Establishing effective anti-fraud programs and controls, including effective protection of whistle
5.4 96
blowers, establishing a hot line reporting of irregularities etc.
6 Remuneration Committee
6.1 Disclosure of the charter (role and responsibilities) of the committee 97
Disclosure of the composition of the committee (majority of the committee should be non-executive
6.2 69
directors, but should also include some executive directors)
Disclosure of key policies with regard to remuneration of directors, senior management and
6.3 69 & 97
employees
6.4 Disclosure of number of meetings and work performed 69
6.5 Disclosure of Remuneration of directors, chairman, chief executive and senior executives. 142 & 212
7 HUMAN CAPITAL
Disclosure of general description of the policies and practices codified and adopted by the company
with respect to Human Resource Development and Management, including succession planning,
7.1 96- 97 & 111-114
merit based recruitment, performance appraisal system, promotion and reward and motivation,
training and development, grievance management and counciling.
7.2 Organizational Chart 18
8.1 Communication to Shareholders & Stakeholders

Disclosure of the Company's policy / strategy to facilitate effective communication with shareholders
8.2 97
and other stake holders
Disclosure of company's policy on ensuring participation of shareholders in the Annual General
97
Meeting and providing reasonable opportunity for the shareholder participation in the AGM.
9 Environmental and Social Obligatoins

Disclosure of general description of the company's policies and practices relating to social and
9.1 98-99
environmental responsibility of the entity
9.2 Disclosure of specific activities undertaken by the entity in pursuance of these policies and practices 98-99
262
Integrated reporting checklist
Page
Sl. No. Particulars Chapter/ Section reference
reference
1 Elements of an Integrated Report
1.1 Organizational overview and external environment
An integrated report should disclose the main activities of the 173 Note 1: Company and its activities
organization and the environment of which it operates.
An integrated report should identify the organization's mission and 8
vision, and provides essential context by identifying matters such as:
• The organization's:
culture, ethics and values 16 Our philosophies – the backbone
of our enterprise
ownership and operating structure including size of the organization, 19, 24, 272 Our shareholding composition,
location of its operations) IDLC's presence
principal activities and markets 173 Note 1: Company and its activities
competitive landscape and market positioning (considering factors 31 Competitive intensity and our
such as the threat of new competition and substitute products or strategic response
services, the bargaining power of customers and suppliers, and the
intensity of competitive rivalry)
position within the value chain 34 IDLC’s sustainable value creation
process
• Key quantitative information analysis
The number of employees, revenue and number of countries in 2, 57 Core financial highlights, 2015,
which the organization operates highlighting, in particular, significant Measures that matter
changes from prior periods
• Significant factors affecting the external environment and the 35 PESTEL analysis
organization's response
 The legitimate needs and interests of key stakeholders 101 Stakeholder and Materiality
 Macro and micro economic conditions, such as economic stability, 10, 21, 135 Global and Bangladesh review
globalization, and industry trends in Letter from the Chairman,
Performance analysis with CEO &
Managing Director, Director's Report
 Market forces, such as the relative strengths and weaknesses of 32 SWOT analysis
competitors and customer demand
 The speed and effect of technological change 35 PESTEL analysis- Technological
 Societal issues, such as population and demographic changes, 35 PESTEL analysis- Social
human rights, health, poverty, collective values and educational
systems
 Environmental challenges, such as climate change, the loss 36 PESTEL analysis- Environmental
of ecosystems, and resource shortages as planetary limits are
approached
 The legislative and regulatory environment in which the 36 PESTEL analysis- Legal
organization operates
 The political environment in countries where the organization 35 PESTEL analysis- Political
operates and other countries that may affect the ability of the
organization to implement its strategy
1.2 Governance
An integrated report should show how does the organization's 86, 39 Statement of Corporate
governance structure support its ability to create value in the short, Governance, Strategy and
medium and long term. resource allocation- What are the
organisation’s short, medium and
long-term objectives?
An integrated report needs to provide an insight about how such
matters as the following are linked to its ability to create value:
263
Page
reference
• The organization's leadership structure, including the skills and 61, 68 Brief profile of the directors,
diversity Committees of the Board &
Management
• Specific processes used to make strategic decisions and to establish 86-99 Statement of Corporate
and monitor the culture of the organization, including its attitude to Governance
risk and mechanisms for addressing integrity and ethical issues
• Particular actions those charged with governance have taken to 92-94 Statement of Corporate
influence and monitor the strategic direction of the organization Governance- Internal Control &
and its approach to risk management Risk Management
• How the organization's culture, ethics and values are reflected in its 94-96 Statement of Corporate
use of and effects on the capitals, including its relationships with key Governance- Ethics and
stakeholders compliance
• Whether the organization is implementing governance practices 94-96 Statement of Corporate
that exceed legal requirements/ Key Policies Governance- Ethics and
compliance
• The responsibility those charged with governance take for 96, 98 Statement of Corporate
promoting and enabling innovation Governance-Human Capital:
Structure and IDLC’s overall
Governance
• How remuneration and incentives are linked to value creation in the 39 Strategy and resource allocation-
short, medium and long term, including how they are linked to the What is our resource allocation
organization's use of and effects on the capitals. plan to be able to execute
our strategy?
1.3 Stakeholder Identification/ relationships
An integrated report should identify its key stakeholders and provide 101 Stakeholder and Materiality
insight into the nature and quality of the organization's relationships
with its key stakeholders, including how and to what extent the
organization understands, takes into account and responds to their
legitimate needs and interest
Capitals
An integrated report needs to provide insight about the resources 34, 25 IDLC’s sustainable value creation
and the relationships used and affected by the organization, which process, Competency
are referred to collectively as the capitals and how the organization
interacts with the capitals to create value over the short, medium and
long term
An integrated report need to identify the various forms of capitals 34 IDLC’s sustainable value creation
which are essential for the success of its business operations. Eg: process
financial, manufactured, intellectual, human, social and relationship,
and natural,
1.4 Business model
An integrated report need to describe the business model, including 37 Our business model
key:
• Inputs
• Business activities
• Outputs
• Outcomes
Identification of critical stakeholder and other 101 Stakeholder and Materiality
•Connection to information covered by other Content Elements, such 58 Strengths and key performance
as strategy, risks and opportunities, and performance (including KPls indicators
and financial considerations, like cost containment and revenues).
264
Page
reference
 Inputs - An integrated report shows how key inputs relate to the 37 Our business model- Input
capitals on which the organization depends, or that provide a
source of differentiation for the organization, to the extent they
are material to understanding the robustness and resilience of the
business model.
 Business activities
An integrated report describes key business activities. This can include:
How the organization differentiates itself in the market place 40 Strategy and resource allocation-
What differentiates our
organisation and what is our
source of competitive advantage?
How the organization approaches the need to innovate 38 Our business model- Table for
innovation
How the business model has been designed to adapt to change 39-40 Strategy and resource allocation-
What are the changes required of
our business model to enable us
to meet our chosen strategies and
enhance our organisation’s ability
to adapt to change?
 Outputs - An integrated report identifies an organization's key 38, 17 Our business model- Outputs,
products and services. Our extensive range of products
and services
 Outcomes: An integrated report describes key outcomes, including: 38 Our business model- Outcomes
Both internal outcomes, and external outcomes, Both positive
outcomes and negative outcomes
When material, an integrated report discusses the contribution made 40, 111 Strategy and resource allocation-
to the organization's long term success by initiatives such as process Finally, how does the organisation
improvement, employee training and relationships management. develop its intellectual capital?,
Our human capital- Developing
our people through training
1.5 Performance
An integrated report needs to explain the extent to which the 10-11 Letter from the Chairman-
organization has achieved its strategic objectives for the period and Financial highlights of IDLC,
what are its outcomes in terms of effects on the capitals?
An integrated report should contain qualitative and quantitative

information about performance that may include matters such as:
Quantitative indicators with respect to targets and risks and 32 SWOT Analysis
opportunities, explaining their significance, their implications, and the
methods and assumptions used in compiling them
The state of key stakeholder relationships and how the organization 101 Stakeholder and Materiality
has responded to key stakeholders' legitimate needs and interests
The linkages between past and current performance, and between 10 -12, 21-23, Letter from the Chairman,
current performance and the organization's outlook. Performance analysis with the
CEO & Managing Director,
KPls that combine financial measures with other components 57, 58 Measures that matter, Strengths
or narrative that explains the financial implications of significant and key performance indicators
effects on other capitals and other causal relationships may be
used to demonstrate the connectivity of financial performance with
performance regarding other capitals. In some cases, this may also
include monetizing certain effects on the capitals.
265
Page
reference
Include instances where regulations have a significant effect on N/A
performance (e.g., a constraint on revenues as a result of regulatory rate
setting) or the organization's non- compliance with laws or regulations
may significantly affect its operations.
1.6 Risks and opportunities
An integrated report should explain what are the specific risks and 32, 75 SWOT Analysis, Statement of Risk
opportunities that affect the organization's ability to create value over Management
the short, medium and long term, and how is the organization dealing
with them?
This can include identifying:
The specific source of risks and opportunities, which can be internal, 32, 75 SWOT Analysis, Statement of Risk
external or, commonly, a mix of the two. Management
The organization's assessment of the likelihood that the risk or 75 Statement of Risk Management
opportunity will come to fruition and the magnitude of its effect if it
does.
The specific steps being taken to mitigate or manage key risks or to 77 Statement of Risk Management-
create value from key opportunities, including the identification of the risk mangement strategies
associated strategic objectives, strategies, policies, targets and KPls.
1.7 Strategy and resource allocation

An integrated report should describe it strategic direction (Where does 39 Strategy and resource allocation
the organ ization want to go and how does it intend to get there)
An integrated report need to identify:
The organization's short, medium and long term strategic objectives 39 Strategy and resource allocation
The strategies it has in place, or intends to implement, to achieve those 39 Strategy and resource allocation
strategic objectives
The resource allocation plans it has to implement its strategy 39 Strategy and resource allocation
How it will measure achievements and target outcomes for the short, 39 Strategy and resource allocation
medium and long term. This can include describing:
 The linkage between the organization's strategy and resource
allocation plans, and the information covered by other Content
Elements, including how its strategy and resource allocation plans:
- relate to the organization's business model, and what changes 39-40 Strategy and resource allocation-
to that business model might be necessary to implement chosen What are the changes required of
strategies to provide an understanding of the organization's ability our business model to enable us
to adapt to change ' to meet our chosen strategies and
enhance our organisation’s ability
to adapt to change?
- are influenced by/respond to the external environment and the 40 Strategy and resource allocation-
identified risks and opportunities affect the capitals, and the risk What are the identified risk
management arrangements related to those capitals and opportunities and the risk
management framework that
we have in place to absorb any
contingencies?
What differentiates the organization to give it competitive advantage 40 Strategy and resource allocation-
and enable it to create value, such as: What is the role of innovation
in creating and sustaining our
competitive advantage and how
does Technology help in doing so?
• the role of innovation
• how the organization develops and exploits intellectual capital
• the extent to which environmental and social considerations have
been embedded into th organ ization's strategy to give it a competitive
advantage
266
Page
reference
• Key features and findings of stakeholder engagement that were used
in formulating its strate and resource allocation plans.
1.8 Outlook
An integrated report should explain what challenges and uncertainties 12, 23, 43, 47, Letter from the Chairman,
is the organization likely to encounter in pursuing its strategy, and 48, 49 Performance analysis with the
what are the potential implications for its business model and future CEO& Managing Director, Business
performance? reviews of SME, Consumer,
Corporate & Structured Finance.
An integrated report should highlight anticipated changes over time
and provides information on:
• The organization's expectations about the external environment the 38, 33, 35 Our business model- External
organization is likely to face in the short, medium and long term factors, SWOT Analysis, PESTEL
Analysis
• How that will affect the organization 33, 35 SWOT Analysis, PESTEL Analysis
• How the organization is currently equipped to respond to the critical 33, 35 SWOT Analysis, PESTEL Analysis
challenges and uncertainties that are likely to arise.
The discussion of the potential implications, including implications for
future financial performance may include:
• The external environment, and risks and opportunities, with an 38, 33, 35 Our business model- External
analysis of how these couId affect the achievement of strategic factors, SWOT Analysis, PESTEL
objectives Analysis
• The availability, quality and afford-ability of capitals the organization 34, 101 IDLC’s sustainable value creation
uses or affects including how key relationships are managed and why process- Value Chain, Stakeholder
they are important to the organization's ability to create value over and Materiality
time.
An integrated report may also provide lead indicators, KPls or 58, 140 Strengths and key performance
objectives, relevant information from recognized external sources, and indicators, Directors' Report to
sensitivity analyses. If forecasts or projections are included in reporting the shareholders of IDLC Finance
the organization's outlook, a summary of related assumptions is useful. Limited- Comparison of actual
Comparisons of actual performance to previously identified targets and budgeted performance of
further enables evaluation of the current outlook. IDLC Group.
Disclosures about an organization's outlook in an integrated report 5 Integrated report - scope and its
should consider the legal or regulatory requirements to which the boundary
organization is subject.
1.9 Basis of preparation and presentation
An integrated report should answer the question: How does the 5 Integrated report - scope and its
organization determine what matters to include in the integrated boundary
report and how are such matters quantified or evaluated?
An integrated report describes its basis of preparation and

presentation, including:
A summary of the organization's materiality determination process 103 Materiality & material aspects
identified through stakeholder
engagement
• Brief description of the process used to identify relevant matters, 102 Stakeholder and Materiality-
evaluate their importance and narrow them down to material matters Stakeholder Engagement process
table
• Identification of the role of those charged with governance and key 5 Integrated report - scope and its
personnel in the identification and prioritization of material matters. boundary- Responsibility over the
Integrity of the Integrated Report
 A description of the reporting boundary and how it has been 5 Integrated report - scope and its
determined boundary
267
Page
reference
 A summary of the significant frameworks and methods used to 5, 139 Integrated report - scope and its
quantify or evaluate material matters boundary, Directors' Report to
the shareholders of IDLC Finance
Limited- Corporate and financial
reporting framework
2 Responsibility for an integrated report
An integrated report should include a statement from those charged 133 Statement of Directors’
with governance that includes: Responsibility for Internal Control,
Financial Reporting and Corporate
Governance
An acknowledgment of their responsibility to ensure the integrity of 5 Integrated report - scope and its
the integrated report boundary
An acknowledgment that they have applied their collective mind to 5 Integrated report - scope and its
the preparation and presentation of the integrated report boundary
Their opinion or conclusion about whether the integrated report is 5 Integrated report - scope and its
presented in accordance with the Framework boundary
3 Other Qualitative Characteristics of an Integrated Report
Consistency and comparability
The information in an integrated report should be presented:
On a basis that is consistent over time 89 Statement of corporate
governance- Directors’ report
on preparation and presentation
of financial statements and
corporate governance
Presenting information in the form of ratios 126-127 Key operating and financial
highlights
Reporting quantitative indicators commonly used by other 132 Highlight as required by
organizations with similar activities, particularly when standardized Bangladesh Bank
definitions are stipulated by an independent organization
Connectivity of information
An integrated report should show a holistic picture of the combination, 4, 13 En-route, in control!, Our business
interrelatedness and dependencies between the factors that affect the orientation
organization's ability to create value over time.
Content elements 2 Core financial highlights, 2015
268
Page
reference
Past, Present & Future 9, 21, 135 Letter from the Chairman,
Performance analysis with
the CEO & Managing Director,
Directors' Report to the
Shareholders of IDLC Finance
Limited
Finance and other information 57, 126-127 Measures that matter, Key
operating and financial highlights
Materiality
An integrated report should disclose information about matters that 101 Stakeholder and Materiality
substantively affect
the organization's ability to create value over the short, medium and 34 IDLC’s sustainable value creation
long term process- Value Chain
Assurance on the Report

The policy and practice relating to seeking assurance on the report 133 Statement of Directors’
Responsibility for Internal Control,
Financial Reporting and Corporate
Governance
the nature and scope of assurance provided for this particular report 156, 234, 243, Independent Auditor's Report To
246 the Shareholders of IDLC Finance
Limited, IDLC Securities Limited,
IDLC Investments Limited, IDLC
Asset Management Limited
any qualifications arising from the assurance, and the nature of the N/A
between the organization and the assurance providers
269
Glossary
Terms
Terms Meaning
Accrual Basis Recognizing the effects of transactions and events when they occur, without waiting for
receipt or payment of cash or cash equivalent.
Amortisation Amortization is the systematic allocation of the depreciable amount of an intangible asset
over its useful life.
Cash Basis Recognizing the effects of transactions and events when receipt or payment of cash or cash
equivalent occurs.
Cash Equivalents Short-term highly liquid investments that are readily convertible to known amounts of cash
and which are subject to an insignificant risk in change in value.
Consolidated Financial Statements Financial Statements of a Group presented as those of a single Company.
Depreciation Depreciation is the allocation of the depreciable amount of an asset over its estimated useful
life. Depreciation for the accounting period is charged to net profit or loss for the period either
directly or indirectly.
Executions Advances granted to clients under leasing, hire purchase, installment sales and loan facilities.
Fair Value Fair value is the amount for which an asset could be exchanged or a liability settled between
knowledgeable, willing parties in an arm’s length transaction.
Finance Lease A lease that transfers substantially all the risk and rewards incident to ownership of the asset to
the lessee. Title may or may not eventually be transferred.
Gross Dividend The proportion of profit distributed to shareholders inclusive of tax withheld.
Gross Portfolio Total rental receivable of the advances granted to clients under leasing, hire purchase,
installment sales and loan facilities.
Intangible Asset An intangible asset is an identifiable non-monetary asset without physical substance held for
use in the production or supply of goods or services, for rental to others, or for administrative
purposes.
Interest Cost The sum of monies accrued and payable to the sources of borrowed working capital.
Interest in Suspense Interest income of non-performing portfolio; these interests are accrued but not considered
as part of income.
Investment Property Investment property is property (land or a building - or part of a building - or both) held (by
the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or
both, rather than for use in the production or supply of goods or services or for administrative
purposes; or sale in the ordinary course of business.
Lease A lease is an agreement whereby the lessor conveys to the lessee in return for a payment or
series of payments the right to use an asset for an agreed period of time.
Non-controlling interest (Minority Part of the net results of operations and of net assets of a subsidiary attributable to interests
Interest) who are not owned, directly or indirectly through subsidiaries, by the parent.
Net Portfolio Total rental receivable excluding interest of the advances granted to clients under leasing, hire
purchase, installment sales and loan facilities.
Non-Performing Portfolio Facilities granted to clients which are in default for more than the period recommended by
Bangladesh Bank.
Paid up Capital All amounts received by the Company or due and payable to the Company (a) in respect of the
issue of shares (b) in respect of calls on shares.
Provision Amounts set aside against possible losses on net receivable of facilities granted to clients, as a
result of them becoming partly or wholly uncollectible.
Related Parties Parties are considered to be related if one party has the ability to control the other party or
exercise significant influence over the other party in making financial or operating decisions.
270
Terms Meaning
Related Party Transactions A transfer of resources or obligations between related parties, regardless of whether a price
is charged.
Segmental Analysis Analysis of information by segments of an enterprise, specifically the different industries and
the different geographical areas in which it operates.
Shareholders’ Funds (Equity) Total of issued and fully paid ordinary share capital and reserves.
Subsidiary Company Subsidiary is a company that is controlled (power to govern the financial and operating policies
of an enterprise so as to obtain benefits from its activities) by another Company known as the
parent.
Value Addition Value of wealth created by providing leasing and other related services considering the cost
of providing such services.
Ratios
Ratio Method of computation Indication
Cost to Income Ratio Operating expenses excluding provision for Efficiency of cost management in generating
bad and doubtful debts as a percentage of total income.
operating income, net of interest cost.
Debt to Equity Total debts divided by equity. The extent to which debt contributes to fund
(Gearing) Ratio total assets, compared to the contribution
from equity.
Dividend Cover Profit attributable to ordinary shareholders Number of times dividend is covered by
divided by gross dividends of ordinary shares. current year’s distributable profits.
Dividend Per Share (DPS) Value of the dividend proposed and paid out to Share of current year’s dividend distributable
ordinary shareholders divided by the number of to an ordinary share in issue.
ordinary shares in issue.
Earnings Per Share (EPS) Profit attributable to ordinary shareholders Share of current year’s earnings attributable
divided by the weighted average number of to an ordinary share in issue.
ordinary shares outstanding during the year.
Interest Cover Earnings before interest and tax divided by Ability to cover or service interest charges of
interest charges. the debt holders.
Market Capitalization No. of ordinary shares in issue multiplied by Total market value of all ordinary shares in
market value of a share. issue.
Net Asset Value per Ordinary Share Ordinary shareholders’ funds divided by the Book value of ordinary shares.
number of ordinary shares in issue.
Non-Performing Total gross non-performing portfolio divided by Percentage of total gross non-performing
Facilities Ratio total gross portfolio. portfolio against the total gross portfolio.
Price Earning Ratio Market price of a share divided by Earnings Per Number of years that would be taken to
(PER Ratio) Share (EPS). recoup shareholders’ capital outlay in the
form of earnings.
Return on Assets (ROA) Net profits expressed as a percentage of average Overall effectiveness in generating profits
total assets. with available assets; earning power of
invested total capital.
Return on Equity (ROE) Net profit, less preference share dividends if any, Earning power on shareholders’ book value of
expressed as a percentage of average ordinary investment (equity).
shareholders’ funds.
271
IDLC’s Presence
CORPORATE HEAD OFFICE DILKUSHA BRANCH
Bay’s Galleria (1st Floor), 57 Gulshan Avenue, Dhaka 1212 Eunoos Trade Centre, (Level 13), 52-53 Dilkusha C/A, Dhaka 1000
Telephone : +880 (2) 883 4990 (Auto Hunting) Telephone : +880 (2) 956 0111 (Auto Hunting)
Facsimile : +880 (2) 883 4377 Facsimile : +880 (2) 956 3620
E-mail : mailbox@idlc.com E-mail : idlcdlk@idlc.com
CHITTAGONG BRANCH DHANMONDI BRANCH
World Trade Center (5th Floor) House No. 39A (3rd Floor)
102-103 Agrabad Commercial Area, Chittagong 4100 Road No. 14A, Dhanmondi, Dhaka 1209
Telephone : +880 (31) 711 034, 713 742, 251 0117-8 Telephone : +880 (2) 5815 7632
Facsimile : +880 (31) 715 895 Facsimile : +880 (2) 5812 3161 Ext-122
E-mail : idlcctg@idlc.com E-mail : idlcdhn@idlc.com
GULSHAN BRANCH BOGRA BRANCH
Taj Marriot (1st Floor), 25 Gulshan Avenue, Dhaka 1212 Sairul Complex (1st& 2nd Floor), Sherpur Road, Sutrapur, Bogra 5800
Telephone : +880 (2) 988 6837(Auto Hunting), 988 7196, Telephone : +880 (51) 699 17, 698 38
Facsimile : +880 (2) 883 4148 FFacsimile : +880 (51) 698 39
E-mail : idlcgln@idlc.com E-mail : idlcbog@idlc.com
UTTARA BRANCH SYLHET BRANCH
Monsur Complex (3rd Floor), Plot No. 59/A, Road No. 7, Sector No. 4 Casablanca (2nd Floor)
Uttara Model Town, Dhaka 1230 982 Dargah Gate, Sylhet 3100
Telephone : +880 (2) 893 2340, 891 9036 Telephone : +880 (821) 710 321, 710 324, 710 352, 728 241-3
E-mail : idlcuttara@idlc.com E-mail : idlcsyl@idlc.com
GAZIPUR SME BOOTH IMAMGANJ SME BOOTH
Rahmat Tower (2 Floor), Holding No. 1034, Outpara
nd
57/58 Mitford Road (3rd Floor) Chowk Bazar, Dhaka 1100
Joydebpur, Gazipur 1700 Telephone : +880 (2) 734 3766-7
Telephone : +880 (2) 926 3503, 926 3505 E-mail : idlcimg@idlc.com
Facsimile : +880 (2) 926 3569
E-mail : idlcgaz@idlc.com
SAVAR BRANCH NARAYANGANJ BRANCH
Alam Plaza (2nd Floor), 122/B Jaleshwar, Savar, Dhaka 1340 Sattar Tower (4th Floor), 50 S. M. Maleh Road, Tanbazar
Telephone : +880 (2) 774 4961-3 Narayangonj 1400
E-mail : idlcsavar@idlc.com Telephone : +880 (2) 764 8213-6
Facsimile : +880 (2) 764 8217
E-mail : idlcngonj@idlc.com
COMILLA BRANCH NANDANKANON BRANCH
Artisan Nasir Center (3rd Floor) A. K. Mansion (1st Floor)
437 Nazrul Avenue, Kandirpar 17 J.C. Guha Road
Comilla 3500 Nandankanon, Chittagong 4100
Telephone : +880 (81) 64 907-8, 72881 Telephone : +880 (31) 612 732, 612 715
Facsimile : +880 (81) 64907-8 (Ext-110), 72 881 (Ext-110) Facsimile : +880 (31) 612 762
E-mail : idlccomilla@idlc.com
NARSHINGDI BRANCH KERANIGANJ BRANCH
T Hussain Tower, Holding No. 382 A K Tower (1st Floor)
Kalibari road, Narshingdi Bazar, Narshingdi. Nagar Mahal Road, Nadidhara Ispahani
Telephone : +880 (2) 945 2075-6 East Aganagar, South Keraniganj, Dhaka 1310
Facsimile : + 880 (2) 945 2078 Telephone : +880 (2) 776 3805-6
E-mail : idlcnrsd@idlc.com E-mail : idlckeranigonj@idlc.com
272
MIRPUR BRANCH TONGI BRANCH
Khan Plaza (1 Floor)
st
Banesa Complex (Ground Floor)
Plot No. 6, Main Road No. 1, Mirpur 10, Dhaka 1216 26, Anarkoli Road, Tongi, Gazipur 1710
Telephone : +880 (2) 805 1845, 805 2492 Telephone : +880 981 7647, 981 7648, 981 7649
E-mail : idlcmirpur@idlc.co E-mail : idlctongi@idlc.com
JESSORE BRANCH BHULTA BRANCH
Rashid Center (2 & 3 Floor)
nd rd
Hazi A Aziz Super Market (2nd Floor)
7/A, R. N. Road, Jessore 7400 Mouza: Golakandail, P.O: Bhulta, P.S.: Rupganj
Telephone : +880 (421) 608 92, 608 93, 608 94, 608 95 District: Narayanganj 1460
Facsimile : +880 (421) 608 96 Telephone : +8809609994352
E-mail : idlcjessore@idlc.com E-mail : idlcbhulta@idlc.com
KHULNA BRANCH NATORE BRANCH
Syed Ali Hossain Tower Lily Plaza (2nd Floor), Holding No. 838
(Ground Floor), 181 Khan A Sobur Road, Khulna 9100 Kanaikhali, Natore 6400
Telephone : +8809609994352 Telephone : +8809609994352
E-mail : idlckhulna@idlc.com E-mail : idlcnatore@idlc.com
KUSHTIA BRANCH MYMENSINGH BRANCH

Momtaz Tower (2 Floor)
nd
Swapnaneer Tower (1st Floor)
5/1 Jaliram Agarwala Lane, Roxy Goli, Kushtia-7000 27 C.K Gosh Road,
E-mail: idlckustia@idlc.com Mymensingh 2200
E-mail: idlcmymensingh@idlc.com
HABIGANJ BRANCH
Shankar City (1st Floor)
Ram Krisna Mission Road
Ghatia Bazar, Habiganj 3300
E-mail: idlchabiganj@idlc.com
IDLC SECURITIES LIMITED DOHS MOHAKHALI BRANCH

(A wholly owned subsidiary of IDLC) House No. 109, Park Road
HEAD OFFICE Block A, New DOHS
36 Dilkusha Commercial Area (13th floor), Dhaka 1000, Mohakhali, Dhaka 1206
Bangladesh. Telephone : +880 (2) 871 5081, 871 5287
Telephone : +880 (2) 957 1842 (Auto Hunting) Facsimile : +880 (2) 871 4510
Facsimile : +880 (2) 957 4366 E-mail : idlcsldohs@idlc.com
E-mail : securities@idlc.com
CHITTAGONG BRANCH SYLHET BRANCH
Ayub Trade Centre (6 Floor)
th
Casablanca (2nd Floor)
1269/BSk. Mujib Road, Agrabad Commercial Area 982 Dargah Gate, Sylhet 3100
Chittagong 4100 Telephone : +880 (821) 728 241-3
Telephone : +880 (31) 251 4051-52 Facsimile : +880 (821) 728 244
Facsimile : +880 (31) 251 4059 E-mail : idlcslsylhet@idlc.com
E-mail : idlcslctg@idlc.com
GULSHAN BRANCH UTTARA BRANCH
South Avenue Tower (5 Floor) th
Monsur Complex (4th Floor)
Unit No. 502, House No. 50, Road No. 3 Plot No. 59/A, Road No. 7, Sector No. 4
7 Gulshan Avenue, Dhaka 1212 Uttara Model Town, Dhaka 1200
Telephone : +880 (2)-988 3898, 988 9861 Telephone : +880 (2) 895 9392, 895 9046
E-mail : idlcslgulshan@idlc.com E-mail : idlcsluttara@idlc.com
273
GAZIPUR BRANCH DHANMONDI BRANCH

Rahmat Tower (2 Floor)
nd
Concord Royal court (2nd Floor) House No. 275/G (old) 40 (new)
Holding No. 1034, Mouza, Outpara, Gazipur 1700 Road No. 27 (old), 16 (new), Dhanmondi R/A, Dhaka 1209.
Telephone : +880 (2) 926 3503, 926 3505 Tel : +880 (2) 910 2991-3
Facsimile : +880 (2) 926 3539 Fax : +880 (2) 910 2622
E-mail : idlcslgazipur@idlc.com Email : idlcsldhn@idlc.com
NARAYANGANJ BRANCH KHATUNGANJ BRANCH
Sattar Tower (Ground Floor) Golden Park, M h No. 3/A (4th Floor)
50, S. M. Maleh Road, Tanbazar Narayangonj 1400 RamjoyMohajan Lane, Khatunganj,
Telephone : +880 (2) 763 2891, 763 2894 p. S.: Kotwali, Chittagonj-4100
Facsimile : +880 (2) 763 2896 Telephone : +880 (31) 286 6491-3
E-mail : idlcslng@idlc.com Facsimile : +880 (31) 286 6464
E-mail : idlcslkg@idlc.com
IDLC INVESTMENTS LIMITED

(A wholly owned subsidiary of IDLC)
HEAD OFFICE
Eunoos Trade Centre, Level 21, 52-53 Dilkusha C/A, Dhaka 1000
Telephone : +880 (2) 957 1170 (Auto Hunting)
Facsimile : +880 (2) 957 1171
E-mail: merbank@idlc.com
274
IDLC FINANCE LIMITED
Bay’s Galleria (1st Floor)
57 Gulshan Avenue, Gulshan-1 Dhaka-1212
Tel: +88 02 8834990, Fax : 8834377
E-mail : mailbox@idlc.com
PROXY FORM
I/We ...................................................................................................of...............................................................................................................
........................................................................................................................ being a member of IDLC Finance Limited and a holder of .................
.......................................... shares hereby appoint Mr./ Ms. ....................................................................................................................................
of................................................................... as my/ our proxy to vote for me/us and on my/our behalf at the 31st Annual General Meeting of the
Company to be held on March 30, 2016 (Wednesday) and at any adjournment thereof.
Signed this day of March 2016

Signature Signature
Name : Revenue Name :
(Proxy) Stamp of (Member)
Taka 20 Folio/BO ID No
NOTE :
a) This form of proxy, duly completed, must be deposited at least 72 hours before the meeting at the Company’s registered office. Proxy is invalid if not
signed and stamped as explained above.
b) Signature of the shareholders should agree with the specimen signature registered with the Company and Depository Register.
IDLC FINANCE LIMITED

Bay’s Galleria (1st Floor)
57 Gulshan Avenue, Gulshan-1 Dhaka-1212
Tel: +88 02 8834990, Fax : 8834377
E-mail : mailbox@idlc.com
ATTENDANCE SLIP
I hereby record my attendance at the 31st Annual General Meeting of IDLC Finance Limited as a holder of.............................................................
........................................................................................................................................................................................... shares of the Company.
Signature
Name :
(Member/ Proxy)
Folio/BO ID No.
NOTE :
Signature of the shareholders should agree with the specimen signature registered with the Company and Depository Register.

IDLC Annual Report 2015 PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

IDLC Annual Report 2015 PDF

Uploaded by

Copyright:

Available Formats

1

IDLC Finance Limited

Core financial highlights, 2015

2011 2012 2013 2014 2015

2011 2012 2013 2014 2015

2011 2012 2013 2014 2015

Capital Adequacy Ratio (CAR)

Capital adequacy ratio

2011 2012 2013 2014 2015

We invested years for what IDLC is achieving now

 Bangladesh Accounting Standards (BASs) and Bangladesh Comparability

Thematic anchoring and company Measures that matter 57

philosophy Strengths and key performance indicators 58

Integrated report- scope and its boundary 5 Our awards showcase  59

Letter from the Chairman  9

Our business orientation 13

Risk, treasury and governance

Stakeholder and materiality 101

Operating and financial review Corporate social responsibility  105

PESTEL Analysis 35 Event highlights 116

Our business model  37

Strategy and resource allocation 39

Consumer division 44 Notice of the 31stAnnual General Meeting  121

Corporate division  46 Report of the Audit Committee 122

Contribution to the National Economy  131 Management Committee  229

Statement of Profit or Loss and Other Comprehensive Income  236

IDLC Asset Management Limited

Financial statements – IDLC Group and Independent Auditors’ Report 246

Independent Auditors’ Report 156 Stakeholders’ corner

Consolidated Balance Sheet  158 Information for the Stakeholders 255

Consolidated Statement of Changes in Equity  164 Integrated reporting checklist  263

Financial statements- IDLC Finance Limited Glossary 270

Balance Sheet  166 IDLC’s Presence  272

Cash Flow Statement  169

Statement of Changes in Equity  170

Liquidity Statement  172

Notes to the consolidated and separate financial statements  173

Steering through Vision

IDLC delivered a strong performance in 2015 thanks to our robust customer-

It is a very encouraging sign that despite headwinds both

that brought this metric down to 6.19% in December 2015, lower

Bangladesh economy review

Bangladesh has been characterized by political protests over

Although Bangladesh’s economic growth has been hovering

in sharing the benefit of our growth with the communities we

Group Profit Group Total profit Group Net profit

Values drive value

As one of the most trusted financial brands of Bangladesh, we

Outlook 2016 Thank you!

The world of IDLC

IDLC is one of the most trusted and respected non-banking financial

The Company is engaged in the country’s economic progress through

IDLC provides a better standard of living to the country’s citizens by

The Company ensures the financial security of a large population cross-

We have focused on our niche to remain competitive

appraisal systems enables it to cater to segments of the economy

It is here where IDLC identifies its niche, provides a wide range

In our journey, as in the path of most businesses engaged in

22,368 financial services, we reported NPLs, though controlled and

We have consistently enriched shareholder value

Beyond its financial assets, a financial institution needs to have

At IDLC, we believe that our ability to spot opportunities faster

niche in the best possible way results in value creation.

Thematic anchoring and company Measures that matter 57

philosophy Strengths and key performance indicators 58

Integrated report- scope and its boundary 5 Our awards showcase 59

Letter from the Chairman 9

Our business orientation 13

Stakeholder and materiality 101

Operating and financial review Corporate social responsibility 105

PESTEL Analysis 35 Event highlights 116

Our business model 37

Strategy and resource allocation 39

Consumer division 44 Notice of the 31stAnnual General Meeting 121

Corporate division 46 Report of the Audit Committee 122

Contribution to the National Economy 131 Management Committee 229

Statement of Profit or Loss and Other Comprehensive Income 236

Financial statements – IDLC Group and Independent Auditors’ Report 246

Independent Auditors’ Report 156 Stakeholders’ corner

Consolidated Balance Sheet 158 Information for the Stakeholders 255

Consolidated Statement of Changes in Equity 164 Integrated reporting checklist 263

Financial statements- IDLC Finance Limited Glossary 270

Balance Sheet 166 IDLC’s Presence 272

Cash Flow Statement 169

Statement of Changes in Equity 170

Liquidity Statement 172

Notes to the consolidated and separate financial statements 173