ANNUAL REPORT 2020 - IIDFC

ANNUALREPORT 2020Towards Financial Sustainability

Page- 01IIDFC Limited ANNUAL REPORT-2020

Look backIndustrial and Infrastructure Development Finance Company (IIDFC) Limited is a leading Non-Bank Financial Institution (NBFI), promoted by wide array of financial institutions like ten commercial banks, from both public sector and private sector, three insurance companies and Investment Corporation of Bangladesh (ICB). The Board of Directors of IIDFC consists of senior bankers, insurance personalities, successful entrepreneurs and retired civil servants with high professional and academic background having experience in private and public sector operation. The management of IIDFC consists of highly qualified, experienced and competent professionals.

IIDFC was incorporated in Bangladesh on 19 December 2000 as a Public Limited Company. The Company was licensed under the Financial Institutions Act 1993 by Bangladesh Bank on 23 January 2001 and started operation from May 2001. The registered office of the Company is situated at Metropolitan Chamber Building (6th Floor), 122-124, Motijheel C/A, Dhaka, Bangladesh.

Page- 02 IIDFC Limited ANNUAL REPORT-2020

CORPORATE PROFILE

Public Limited Company, incorporated withRJSC under the Companies Act 1994 videincorpora�on number C-42115(1474)/2000

CorporateStatus

Head Office: Metropolitan Chamber Building(6th Floor), 122-124 Mo�jheel CommercialArea, Dhaka, Bangladesh

Address

Dhaka, Cha�ogram, U�ara, Gazipur,Keraniganj, Narayanganj and Savar

BranchLoca�on

SME Finance, Corporate Finance, Structured Finance,Carbon Finance, Home Loan, Auto Loan, WomenEntrepreneurship Development, Green Finance,Factoring and Work Order Finance

MajorBusiness

Area

ContactDetails

PABX: 09611-01-6647; +880-2223-38-2342;+880- 9552185;FAX: +880-2-9568987, Email: [email protected]: www.iidfc.com, Hotline: 16647

Number ofBranches

7(Seven) Branches


SUBSIDIARIES OF IIDFC

IIDFC Securi�es LimitedA TREC Holder of Dhaka Stock Exchange Limited

CORPORATE STATUS:Public Limited Company, incorporated with RJSC under the Companies Act 1994 on 28 March 2010 vide incorpora�on number C-83521/10.

CONTACT DETAILS:Registered Address: Head Office, located at PFI Tower (3rd Floor), 56-57 Dilkusha C/A Dhaka-1000, Bangladesh.PABX: +880-2-9560526, FAX: +880-2-9570756Email: info@iidfcsecuri�es.com, Website: www.iidfcsecuri�es.com

NUMBER OF BRANCHES & EXTENSION OFFICE: 2 (two) Branches and 1 (one) extension office of Head office.

BRANCH & EXTENSION OFFICE LOCATION:Dhaka, Cha�ogram, Gulshan and Nikunja.

MAJOR BUSINESS AREA:Stock Broker, Stock Dealer and Depository Par�cipant (DP) for dealing of sharesand securi�es, commercial papers, bonds, debentures, debenture stocks, etc.

CORPORATE STATUS:Public Limited Company, incorporated with RJSC under the Companies Act 1994 on 30 November 1995 vide incorpora�on number C-H.C 2097

CONTACT DETAILS:Registered Address: Head Office located at PFI Tower (3rd Floor), 56-57 Dilkusha C/A Dhaka-1000, Bangladesh.PABX: +880-2-9514637-8, FAX: +880-2-9514641Email: [email protected], Website: www.iidfccapitalltd.com

BUSINESS: Merchant Banking and Advisory Service

MAJOR BUSINESS AREA:Por�olio Management, Issue ManagementUnderwri�ng and Corporate Advisory Service

IIDFC Capital LimitedA full-fledged Merchant Bank


CORE FINANCIAL HIGHLIGHTS

0

5000

10000

15000

20000

25000

19,61521,516

20,664

17,09318,909

15,272

IIDFC (Solo) IIDFCL (Consolidated)

2018 2019 2020

Investment (BDT in Million)( Loans and Leases)

-200

-100

0

100

200

300231.98

273.06

98.02

(68.16)

76.31

(88.84)


2018 2019 2020

Profit Before Tax (BDT in Million)

-200

-100

0

100

200

300

151.98 176.39

34.94

(85.31)

26.21

(88.63)


2018 2019 2020

Profit A�er Tax (BDT in Million)

-2

-1

0

1

21.27

1.47

0.27

(0.49)

0.20

(0.51)


2018 2019 2020

Earnings Per share (BDT)


CORE FINANCIAL HIGHLIGHTS

0

500

1000

1500

2000

2500

1,978 2,063

2,286 2,202 2,192 2,104


2018 2019 2020

Equity (BDT in Million)

0

5

10

15

2016.48 17.20 17.48

12.67

16.75

12.11


2018 2019 2020

Net Asset Value (NAV) Per Share

-10

-5

0

5

108.26

9.22

1.61

(3.80)

1.26

(4.13)


2018 2019 2020

Return on Average Equity (%)


No�ce of the 20th Annual General Mee�ng 07Integrated Report 08Profile of the Company 10 Vision & Mission 11 Strategic Business Objec�ves 12 Core Values 13 Ethical Principles 14 Shareholding Structure 15 Milestone Events 16 Products and Services 17Directors’ Report 19From the Desk of CEO 24Brief Profile of Directors 27Management Commi�ee 39Senior Execu�ves & Line Managers 40Risk Management & Control Environment 42Financial Highlights 49 Key Opera�ng & Financial Highlights 50 Sector-wise Exposure 51 Sources of Fund & Our Bankers 52Disclosure on Capital Adequacy & Market Discipline 53Sustainability Report 60 Corporate Social Responsibility (CSR) Ini�a�ves of IIDFC 63 Environmental Repor�ng 65 Obliga�ons to the Society and Environment 66 Contribu�on Towards Achieving SDGs 67Corporate Governance 69 Board of Directors 70 Management Commi�ee and its Sub-Commi�ees 77 Ethics and Code of Conduct Guideline 78Reports & Financial Statements 83 Report of the Managing Director and the Chief Financial Officer 84 Independent Auditor’s Report 85 Consolidated Financial Statements Consolidated Balance Sheet 91 Consolidated Profit & Loss Account 93 Consolidated Cash Flow Statement 94 Consolidated Statement of Changes in Equity 95 Financial Statements-IIDFC Limited Balance Sheet 96 Profit & Loss Account 98 Cash Flow Statement 99 Statement of Changes in Equity 100 Liquidity Statement 101Reports & Financial Statements- Subsidiary Companies IIDFC Capital Limited 146 IIDFC Securi�es Limited 166Photographs from IIDFC’s Album 193Proxy Form 207

TABLE OF CONTENTS


No�ce of the 20th Annual General Mee�ng

No�ce is hereby given to all shareholders of the Company that the 20th Annual General Mee�ng of Industrial and Infrastructure Development Finance Company Limited will be held on Sunday, 26 December 2021 at 11.30 a.m. through video conference (ZOOM) to discuss the following businesses:

l. To adopt the Audited Financial Statements for the year ended 31 December 2020 along with Auditor's Report and Directors' Report thereon;

2. To approve dividend for the year 2020;3. To elect/re-elect Directors of the Company re�red by rota�on;4. To appoint Auditors for the year 2021 and fix their remunera�on; and5. To transact any other business with the permission of the Chair.

By order of the Board

Dated, Dhaka Lingkon Mondal, FCA02 December 2021 Company Secretary (CC)

NOTES:1. Members holding shares on the date of the Annual General Mee�ng will be en�tled to the

dividend.

2. A member en�tled to a�end and vote at the Annual General Mee�ng may appoint a proxy to a�end and vote in his/her behalf. The Proxy Form, duly filled-in and stamped, must be submited at least 72 hours before the �me scheduled for holding the Annual General Mee�ng through video conference (ZOOM).

3. Members are requested to no�fy change of address, if any, to the Company.

Sd/-


For be�er understanding of all stakeholders including shareholders, employees, customers, suppliers, business partners, local communi�es, regulators and policy-makers, we are delighted to publicize “Integrated Report” with the Annual Report 2020 of IIDFC Limited and its fully owned subsidiaries namely IIDFC Securi�es Limited and IIDFC Capital Limited.

PurposeIIDFC publishes the report annually. An integrated report is a concise communica�on about how an organiza�on’s strategy, governance, performance and prospects, in the context of its external environment, lead to the crea�on of value over the short, medium and long-term. The primary purpose of this report is to explain how an organiza�on creates value over �me. Therefore, it contains relevant informa�on, both financial and other issues.

RecipientAn integrated report benefits all stakeholders, including shareholders, employees, customers, suppliers, business partners, local communi�es, regulators and policy-makers, interested in an organiza�on’s ability to create value over �me. Integrated repor�ng is also an important tool in improving the understanding of the rela�onship between financial and non-financial factors that determine a company’s performance and of how a company creates sustainable value in the longer term.

Range of the reportThe report covers the period of one year from 01 January 2020 to 31 December 2020. It includes the primary ac�vi�es of IIDFC, our business mix, key support areas and subsidiaries’ opera�ons. The report ranges beyond financial repor�ng and includes non-financial performance, opportuni�es, risks and outcomes a�ributable to or associated with our key stakeholders, which have a significant influence on our ability to create value. We also present informa�on relevant to the way we create value for other key stakeholders, including our staff, clients, regulators and society.

Our integrated repor�ng process, as well as the contents of this report, is guided by the Integrated Repor�ng Checklist of the Ins�tute of Chartered Accountants of Bangladesh (ICAB) which resemblance with the Interna�onal Integrated Repor�ng Council (IIRC)-a global alliance of regulators, investors, companies, standard se�ers, the accoun�ng professionals and NGOs.

In line with requirements of the following regulators and legisla�ons, we are explaining Company’s opera�ons and financial performance in the Audited Financial Statements for the year ended 31 December 2020:

i. Interna�onal Financial Repor�ng Standard (IFRS)ii. Financial Ins�tu�ons Act 1993iii. Defined rules and regula�ons of Bangladesh Bankiv. Securi�es and Exchange Commission Rules 1987v. The Companies Act 1994vi. Other applicable laws and regula�ons prevailing in Bangladesh.

Key concepts Value crea�onValue crea�on is the consequence of how we apply and leverage our capitals in delivering financial performance and value for all stakeholders while making tradeoffs.

MaterialityWe apply the principle of materiality in assessing what informa�on is to be included in our integrated report. This report focuses par�cularly on those issues, opportuni�es and challenges that impact materially on IIDFC and its ability to be a sustainable business en�ty that consistently delivers value to shareholders and our key stakeholders.

Our capitalsOur relevance as a Financial Ins�tu�on today and in future as well as our ability to create long-term values are interrelated and fundamentally dependent on the forms of capital available to us, how we use them in value adding ac�vi�es and the value we deliver.

Financial

Our Shareholders’ Equity and funding from investors and clients that are used to support our business and opera�onal ac�vi�es, including credit extension.

PersonnelOur human resources invest their collec�ve knowledge, skills and experience to enable innova�ve and compe��ve solu�ons for our clients.

Infrastructure Our business structure and opera�onal processes, including our physical and digital infrastructure, our products, as well as our informa�on technology that provides the framework and mechanics of how we do business and create value.

Intellectual PropertyOur brand value, research & development, innova�on capacity and reputa�on.

Uniformity and ConsistencyIn order to draw meaningful conclusions about the trends of IIDFC’s financial performance and posi�on over �me, we prepared the financial statements for the year 2020 on the same basis as we prepared in the year 2019. We applied same accoun�ng policies, standards and calcula�ng methods consistently from one period to another in order to improve the reliability and relevance of financial statements. We also complied similar accoun�ng policies of the same line of business of the Country.

Outside Assurance Associates of IIDFCIn addi�on to the internal assurance from management and the Board, we got confidence from the cer�fica�on of:

M M Rahman & Co., Chartered Accountants, for Cer�fica�on of the Auditors Report of the Financial Statements.

FAMES & R, Chartered Accountants, for Cer�fica�on of both the Auditors Report of the Provident Fund and Gratuity Fund Financial Audit.

Na�onal Credit Ra�ng Limited for both the En�ty Ra�ng and Bond Ra�ng.

Dissemina�on and Availability of Auditors’ Report for the StakeholdersIn compliance with the regulatory requirement, we disseminate Auditors’ Report to the Shareholders, Board of Directors, Employees, Government and its Agencies, Depositors, Investors, Suppliers and other Stakeholders both the hard and so� copy, as the case may be, before holding Annual General Mee�ng. We also make available the so� copies of Financial Statements, both present and past, in our website (www.iidfc.com) for easy access of the Stakeholders.

Management AcknowledgementThe Management acknowledges its responsibility of:-i. ensuring the integrity of this integrated report, which in the Management’s opinion addresses all the issues

that are material to IIDFC;ii. applying collec�ve minds to the prepara�on and presenta�on of the integrated report for fair presenta�on

of the integrated performance of IIDFC; andiii. preparing the contents of this report based on the checklist of the SAFA which resemblance with the IIRC.

INTEGRATED REPORT


For be�er understanding of all stakeholders including shareholders, employees, customers, suppliers, business partners, local communi�es, regulators and policy-makers, we are delighted to publicize “Integrated Report” with the Annual Report 2020 of IIDFC Limited and its fully owned subsidiaries namely IIDFC Securi�es Limited and IIDFC Capital Limited.

PurposeIIDFC publishes the report annually. An integrated report is a concise communica�on about how an organiza�on’s strategy, governance, performance and prospects, in the context of its external environment, lead to the crea�on of value over the short, medium and long-term. The primary purpose of this report is to explain how an organiza�on creates value over �me. Therefore, it contains relevant informa�on, both financial and other issues.

RecipientAn integrated report benefits all stakeholders, including shareholders, employees, customers, suppliers, business partners, local communi�es, regulators and policy-makers, interested in an organiza�on’s ability to create value over �me. Integrated repor�ng is also an important tool in improving the understanding of the rela�onship between financial and non-financial factors that determine a company’s performance and of how a company creates sustainable value in the longer term.

Range of the reportThe report covers the period of one year from 01 January 2020 to 31 December 2020. It includes the primary ac�vi�es of IIDFC, our business mix, key support areas and subsidiaries’ opera�ons. The report ranges beyond financial repor�ng and includes non-financial performance, opportuni�es, risks and outcomes a�ributable to or associated with our key stakeholders, which have a significant influence on our ability to create value. We also present informa�on relevant to the way we create value for other key stakeholders, including our staff, clients, regulators and society.

Our integrated repor�ng process, as well as the contents of this report, is guided by the Integrated Repor�ng Checklist of the Ins�tute of Chartered Accountants of Bangladesh (ICAB) which resemblance with the Interna�onal Integrated Repor�ng Council (IIRC)-a global alliance of regulators, investors, companies, standard se�ers, the accoun�ng professionals and NGOs.

In line with requirements of the following regulators and legisla�ons, we are explaining Company’s opera�ons and financial performance in the Audited Financial Statements for the year ended 31 December 2020:

i. Interna�onal Financial Repor�ng Standard (IFRS)ii. Financial Ins�tu�ons Act 1993iii. Defined rules and regula�ons of Bangladesh Bankiv. Securi�es and Exchange Commission Rules 1987v. The Companies Act 1994vi. Other applicable laws and regula�ons prevailing in Bangladesh.

Key concepts Value crea�onValue crea�on is the consequence of how we apply and leverage our capitals in delivering financial performance and value for all stakeholders while making tradeoffs.

MaterialityWe apply the principle of materiality in assessing what informa�on is to be included in our integrated report. This report focuses par�cularly on those issues, opportuni�es and challenges that impact materially on IIDFC and its ability to be a sustainable business en�ty that consistently delivers value to shareholders and our key stakeholders.

Our capitalsOur relevance as a Financial Ins�tu�on today and in future as well as our ability to create long-term values are interrelated and fundamentally dependent on the forms of capital available to us, how we use them in value adding ac�vi�es and the value we deliver.

Financial

Our Shareholders’ Equity and funding from investors and clients that are used to support our business and opera�onal ac�vi�es, including credit extension.

PersonnelOur human resources invest their collec�ve knowledge, skills and experience to enable innova�ve and compe��ve solu�ons for our clients.

Infrastructure Our business structure and opera�onal processes, including our physical and digital infrastructure, our products, as well as our informa�on technology that provides the framework and mechanics of how we do business and create value.

Intellectual PropertyOur brand value, research & development, innova�on capacity and reputa�on.

Uniformity and ConsistencyIn order to draw meaningful conclusions about the trends of IIDFC’s financial performance and posi�on over �me, we prepared the financial statements for the year 2020 on the same basis as we prepared in the year 2019. We applied same accoun�ng policies, standards and calcula�ng methods consistently from one period to another in order to improve the reliability and relevance of financial statements. We also complied similar accoun�ng policies of the same line of business of the Country.

Outside Assurance Associates of IIDFCIn addi�on to the internal assurance from management and the Board, we got confidence from the cer�fica�on of:

M M Rahman & Co., Chartered Accountants, for Cer�fica�on of the Auditors Report of the Financial Statements.

FAMES & R, Chartered Accountants, for Cer�fica�on of both the Auditors Report of the Provident Fund and Gratuity Fund Financial Audit.

Na�onal Credit Ra�ng Limited for both the En�ty Ra�ng and Bond Ra�ng.

Dissemina�on and Availability of Auditors’ Report for the StakeholdersIn compliance with the regulatory requirement, we disseminate Auditors’ Report to the Shareholders, Board of Directors, Employees, Government and its Agencies, Depositors, Investors, Suppliers and other Stakeholders both the hard and so� copy, as the case may be, before holding Annual General Mee�ng. We also make available the so� copies of Financial Statements, both present and past, in our website (www.iidfc.com) for easy access of the Stakeholders.

Management AcknowledgementThe Management acknowledges its responsibility of:-i. ensuring the integrity of this integrated report, which in the Management’s opinion addresses all the issues

that are material to IIDFC;ii. applying collec�ve minds to the prepara�on and presenta�on of the integrated report for fair presenta�on

of the integrated performance of IIDFC; andiii. preparing the contents of this report based on the checklist of the SAFA which resemblance with the IIRC.


Profile of the Company


VISION OF IIDFC: “To deliver utmost financial solutions with innovation, creative values and service excellences in order to ensure superior financial performance and maximum stakeholders’ value”

MISSION OF IIDFC:Our competent and motivated team will ensure best financial services with

a commitment for:

Offering innovative products and services Creating an exciting and stimulating work environment Improving the quality of life in the communities we serve Maintaining high ethical standards, integrity and compliance Optimizing return growth and creating value for shareholders Ensuring synergy by utilizing expertise both from private and public sector Mobilizing private sector resources through large scale project implementation


STRATEGIC BUSINESS OBJECTIVESStrategic business objec�ves are statements that indicate cri�cal or important organiza�onal strategy to achieve long term goal. The strategic objec�ves of IIDFC are as follows:

• To be a fully compliant Financial Ins�tu�on• To achieve sustainable and incremental por�olio growth • To have branch network in major ci�es of the country • To maintain high quality por�olio• To op�mize return on investment • To diversify the por�olio, focusing on SME finance • To digi�ze the opera�on • To bring professionalism through efficient HR management• To ensure be�er working environment• To ensure adequate capital base as per BASEL requirement• To strengthen the brand value • To maximize the return to shareholders


CORE VALUESCore values are the fundamental beliefs of an organiza�on, guiding principles that dictate behavior and help to understand the difference between right and wrong. It also helps a company to determine whether it is in the right path and fulfilling its goals by crea�ng extraordinary customer services. The core values of IIDFC are -

Providing extraordinary customer services Offering innova�ve products/services towards value addi�on for customer To ensure con�nuous efforts for innova�on Working for stakeholders value addi�ons Partnering customers for na�onal and industrial growth To ensure full dedica�on for Total Quality Management Improve and maintain workplace safety To ensure financial sustainability and stable growth To ensure excellent manpower and full u�liza�on of HR To streamline core business processes Striving for full compliance To ensure good corporate culture Ensuring transparency and full disclosure repor�ng To create a performance-focused culture To ensure efficient resource management To improve produc�vity with cross-func�onal teams Inves�ng for employee reten�on and capacity building To ensure ICT driven opera�on To diversify the growth opportunity and improve revenue streams


The Ethical Principles of financial ins�tu�ons are those principles which are intended to be applied in all kinds of affairs rela�ng to customers, shareholders, employees and other stakeholders which assure sustainability of exis�ng reputa�on and reliability as well as intend to maximize the customer loyalty. The broad ethical principles of IIDFC can be elaborated as -

Principle 1: CompetenceIndividuals across IIDFC have to develop and maintain the relevant knowledge, skills and behaviour to ensure that their ac�vi�es are conducted professionally and proficiently. This includes ac�ng with diligence, as well as obtaining, and regularly upda�ng, the appropriate qualifica�ons, training, exper�se and prac�cal experience.

Principle 2: Integrity All concerns across the organiza�on shall be honest and open in all their dealings. This includes behaving in an accountable and trustworthy manner, and avoiding any acts that might damage the reputa�on or bring discredit to the industry at any �me.

Principle 3: FairnessOrganiza�ons and individuals across the Company shall act responsibly and embrace a culture of fairness and transparency. Transparency means that the Company provides the general public and the markets with all relevant informa�on on its strategy, assessments and policy decisions as well as its procedures in an open, clear and �mely manner and fairness is to make full disclosure about a product or service before it is provided to the customer.

Principle 4: Confiden�alityOrganiza�ons and individuals across IIDFC shall protect the confiden�ality and sensi�vity of informa�on provided to them. This includes using it for its intended purposes only and not divulging informa�on to any unauthorized persons, including third par�es, without the necessary consent from those involved unless disclosure is required by law or regula�on.

Principle 5: Objec�vityAll individuals across the Company shall not allow any conflict of interest, bias or undue influence of others to override their business and professional judgement. They shall declare, to those concerned, all ma�ers that could impair their objec�vity.

ETHICAL PRINCIPLES


SHAREHOLDING STRUCTURE

Sonali Bank Ltd. 7.70%

Janata Bank Ltd. 7.70%

AB Bank Ltd. 1.54%

Bank Asia Ltd. 7.70%

Na�onal Life InsuranceCo. Ltd. 7.70%

The City Bank Ltd.7.70%

Mutual Trust Bank Ltd.7.70%

7.70%

ONE Bank Ltd.7.70%

Southeast Bank Ltd.6.01%

Mr. Md. Ma�ul Islam3.43%

Praga� Insurance Ltd.7.70%

Eastland Insurance Co. Ltd.6.01%

Investment Corpora�on of Bangladesh7.70%

BRAC Bank Ltd. 6.01%

Public Sector 23.10%

Private Sector 76.90%


2000 Incorpora�on with RJSC, Bangladesh.2001 Issuance of License by Bangladesh Bank as Non-Bank Financial Ins�tu�on. Commencement of commercial opera�on.2003 Launching of first ever Zero Coupon Bond by IIDFC in Bangladesh.

2004 Syndica�on of 1st commercial loan of BDT 100 crore for BRAC.2006 Term Loan Syndica�on for Warid Telecom Interna�onal Ltd. [BDT 300 Crore] signed in Abu Dhabi.

2008 Opening of 2nd Branch in Cha�ogram on 28 August 2008.

2009 Commencing opera�on of Brokerage Services. Signed agreement with the World Bank & Govt. of Denmark for delivery of 250,000 tons of Carbon Emission Reduc�ons (CER) generated by IIDFC’s CDM Project for environment-friendly brick manufacturing. Forma�on of IIDFC Capital Limited. IIDFC’s CDM project got recogni�on at the 15th Global Climate Conference (COP 15) held at Copenhagen, Denmark. Introduc�on of first ever ACI Conver�ble Zero Coupon Bond in Bangladesh (BDT 100 Crore).

2010 IIDFC was awarded “HSBC-Daily Star Climate Change Mi�ga�on Award-2010” for developing the best climate change mi�ga�on project in the Country.

2011 Signing of agreement between IIDFC and Na�onal Small Industries Corpora�on Ltd. (NSIC), India for the development of small industries in Bangladesh. Organizing a SME Technology Fair by IIDFC and NSIC on 2011 to accommodate collabora�on between SMEs of the two countries. First ever CDM Project in the brick manufacturing sector of Bangladesh got registered with UNFCCC (August 18, 2011) with IIDFC ac�ng as the Bundling Agent and Focal Point.2012 Signing of a US$ 6 million loan facility with the Asian Development Bank (November 15, 2012) to improve industrial energy efficiency in 6 different sectors of Bangladesh.

2014 Arranged Term Loan Facility of BDT 1,000.4 million and USD 6.35 million for Fiber @ Home under syndica�on arrangement, which is first ever World Bank Financing in IT sector through IPFF cell of Bangladesh Bank.

2015 Arranged BDT 3,420.00 million through issuance of 8 (eight) Commercial Papers ( both in secured and unsecured mode) for different economic sectors i.e. Tex�le, Automobile, Steel & Iron and ICT sector. Arrangement of Tier II Capital for Social Islami Bank Limited through issuance of SIBL Mudaraba Subordinated Bond of BDT 3,000.00 million. IIDFC entered into an Agreement (CERPA) with ADB to sell 160,000 tons of Emissions Reduc�on during 2016-2020 generated by its 2 Energy Efficient Brick Manufacturing CDM projects on 09 April, 2015.

2016 IIDFC became a Par�cipatory Financing Ins�tu�on in the “PPP Financing Partnership Program” through signing a MoU with “PPP Authority” on November 3, 2016. Opening of 3rd Branch at U�ara, Dhaka on May 05, 2016. Invited by the World Bank, IIDFC par�cipated in the Carbon Expo 2016 held in Cologne, Germany and showcased the benefits of its Clean Development Mechanism (CDM) Brick Manufacturing project and emphasized on the necessity of large-scale GHG mi�ga�on projects in Bangladesh. IIDFC par�cipated in the BRICS Annual Financial Summit held in Goa, India on October 14-16, 2016 and focused on the scopes of future collabora�on between the financial ins�tu�ons of BRICS member countries.

2017 Opening of 4th& 5th Branch at Keraniganj and Gazipur on April 30, 2017 and May 23, 2017 respec�vely.

2018 IIDFC signed Master Facility Agreement (MFA) with Bangladesh Bank as PFI (Par�cipatory Financial Ins�tu�on) in IPFF-II (Investment Promo�on and Financing Facility II) project. The project is facilitated by Bangladesh Bank and Funded by the World Bank (IDA). Opening of 6th & 7th Branch in Narayanganj and Savar on January 28, 2018 and March 27, 2018 respec�vely.

2019 IIDFC became a financing partner to the syndica�on facility of BDT 250.00 million under IPFF II raised for Bangladesh Technocity Limited. The Governor of Bangladesh Bank handed over the IPFF II Fund cheque to the Managing Director of IIDFC Ltd.

2020 IIDFC Ltd. successfully arranged IPFF II Fund and Commercial Fund of BDT 3.95 billion jointly with NDB Capital Limited for Meghna Industrial Economic Zone Limited (MIEZL)- the first private sector economic zone under BEZA. IIDFC also par�cipated for BDT 366.98 million in the syndica�on facility under IPFF.

MILESTONE EVENTS


SME FinanceIIDFC promotes entrepreneurs of co�age, micro, small and medium enterprise sector in manufacturing, trading and service industries through its different products under SME Finance Scheme. The aim is to provide quality services to the entrepreneurs with poten�al and innova�ve ideas.

• Term Loan• Lease Finance• Women Entrepreneur Finance• Factoring and Work Order Finance• Working Capital Loan• Commercial Vehicle Loan• Commercial Rental Business Loan (Abashan)• Commercial Space Loan

Corporate FinanceUnder the umbrella of Corporate Finance Department, IIDFC offers a wide range of financial products and services for corporate clients to support the exis�ng industries as well as for promo�ng new ventures and infrastructure development projects.

• Project Finance• Lease Finance• Short Term Loan/Working Capital Loan• Long Term Loan• Commercial Auto Loan• Work Order Finance• Par�cipa�on in Syndicated Loan• Green Finance

Structured FinanceIIDFC’s Structured Finance Department leads the syndica�on market and has acted as Arranger to a number of large syndica�on facili�es. Structured Finance encompasses syndicated fund arrangement including cross-border syndica�on and other financial advisory services.

• Loan Syndica�on• Working Capital Syndica�on• Arrangement of Fund through Zero Coupon and Coupon Bearing Bond• Arrangement of Commercial Paper• Arrangement of Conver�ble and Non-conver�ble Preference Shares • Corporate advisory service

Consumer Finance IIDFC provides secured and unsecured consumer loan in the form of home loan, auto loan, loan for household durables and loan against deposit based on the creditworthiness, collateral quali�es and other financial parameter of the borrower.

• Home Loan• Auto Loan• Loan against Deposit• Loan for Household Durables

PRODUCTS AND SERVICES


Carbon Finance & Green Finance IIDFC introduced Carbon Finance, a market based mechanism to support and finance environment friendly technologies and ini�a�ves in the country, back in 2007. It pioneered the introduc�on of HHK technology in the brick making sector and has been managing 2 (two) emissions trading projects registered with the UN since then. The projects have so far reduced emission of 200,000 tons of CO2. IIDFC also works with Energy Efficiency, Renewable Energy and Waste Management financing through different specialized funds.

• Clean Development Mechanism (CDM) project prepara�on, valida�on, monitoring and verifica�on support• Emissions Trading• Energy Efficiency Improvement Consul�ng• Green Finance

Deposit SchemesIIDFC collects fund through term deposit from both individual and ins�tu�onal investors. It offers a�rac�ve returns to the depositors assuring top most security of their money. The depositors are also allowed to take loan against deposits. IIDFC also offers long term savings in the form of Millionaire Savings Scheme (MSS) and Monthly Deposit Scheme (MDS) for different tenure with a�rac�ve return at the maturity.

• Monthly Earning Scheme• Quarterly Earning Scheme• Half Yearly Earning Scheme• Yearly Deposit• Half yearly Deposit• 2 years and above deposit• Double Money Program• Triple Money Program• Monthly Deposit Scheme• Millionaire Savings Scheme

PRODUCTS AND SERVICES


1. I would like to wish all of you good health and happiness.

I have the honor to present to you the Audited Financial Statements of the Company for FY 2020 with the following integral components, namely, Balance Sheet as at 31st

December 2020, Profit and Loss Account, Cash Flow Statement, Statement of Changes in Equity for the year ended 31st December 2020, Liquidity Statement as on same date and the Auditors’ observa�ons thereon.

2. At this stage, a few words about the unprecedented global crisis due to the COVID-19 Pandemic may not be out of place. The resultant lock down beginning from March 2020 started to affect the Bangladesh economy and impacted the total sector of bank and NBFI. The crisis resulted in economic contrac�on of a size and number never experienced before. It badly affected the loan recovery as well as the interest charges on loans and advances and Bangladesh Bank had to declare a moratorium of 12 months from January to December 2020 on monthly and quarterly installment payments.

3. Bangladesh registered a GDP growth of 5.24 percent in FY 20, which is lower than the projected GDP of 8.20 percent FY 20. This reduc�on of the growth in GDP was mainly impacted by COVID -19 and a long-term lockdown of the total country. Higher growth of government borrowing from the banking system narrowed down the sources of credit to the private sector. Besides, the main target of the government during this period was to survive and protect the health sector and control the spreading of corona virus which is one of the severe pandemics in the history of the world.

Introduc�on

COVID-19 Scenario

Economic Scenario

DIRECTORS’ REPORT


Overall Performanceof IIDFC

Basic Accoun�ngPrinciples

Important observa�onsof the Auditors

4. The basic accoun�ng principles followed in the prepara�on of the financial statements were:

• Income from Lease Finance and Direct Finance are recorded on the accrual method of accoun�ng whereas fee-income of Structured Finance is recognized on cash basis.

• Investment in marketable and non-marketable securi�es is shown at cost and separate provision made for the diminu�on of their value.

• The Loans and Advances at gross amount are shown as ‘assets’ while ‘Interest Suspense’ and ‘Loan Loss Provision’ against classified advances are shown as liabili�es. Interest Suspense is deducted from interest income and ‘Loan Loss Provision’ is shown as expenses in the Profit and Loss Account.

• The financial statement of the Company and its subsidiaries has been consolidated in accordance with Bangladesh Financial Repor�ng Standards.

• The con�ngent liabili�es of Le�ers of Guarantee and LC commitments have been shown as Off-Balance Sheet items.

5. The Auditors’ Report is unqualified. Some of their important observa�ons are as follows:

• The Company maintained a total provision of TK. 804,254,455 against loans and advances �ll 31 December 2020. A back-log of non-performing loans and advances iden�fied in 2020 were also needed to be provided. As a result, a total TK. 189.00 crore were required to be kept as addi�onal provision and interest suspense for wiping out this back-log for which Bangladesh Bank approved a five-year plan. Accordingly, IIDFC kept TK. 10.00 crore of provision and interest suspense in 2020 and the rest of the amount would be required to be kept within next four years. The details of the provision and interest suspense have been presented in note-13.

Other important points:

• the expenditures incurred and payments made were for the purpose of the Company’s business for the year;

• the Company has complied with relevant laws pertaining to capital, reserve, and net worth, cash and liquid assets and procedure for sanc�oning and disbursing loans/leases found sa�sfactory;

• We have reviewed risk weighted assets of the Company over 80 percent and we have spent around 1080 person hours for the audit of the books and accounts of the Company;

• the internal control and the compliance of the Company is sa�sfactory, and effec�ve measures have been taken to prevent possible material fraud, forgery and internal policies are being followed appropriately;

• proper measures have been taken to eliminate the irregulari�es men�oned in the inspec�on report of Bangladesh Bank and the instruc�ons which were issued by Bangladesh Bank and other regulatory authori�es have been complied properly as disclosed to us by management; and

• all other issues which in our opinion are important for the stakeholders of the Company have been adequately disclosed in the audit report.

6. The overall slowdown of the ac�vi�es in the private sector experienced in 2020 was also felt by IIDFC. The Company’s por�olio of loans and advances experienced contrac�on in 2020. The por�olio decreased by 19.24 percent to Tk. 1,527.23 crore in 2020 from Tk. 1,890.88 crore in 2019. Company’s consolidated opera�ng income stood at Tk. 36.34 crore at the end of 2020 as compared to Tk. 88.84 crore in 2019, a reduc�on of profit by 59.10 percent. The opera�ng income included income from investment, commission, exchange and brokerage. Company’s non-consolidated opera�ng income in 2020 stood at Tk. 23.05 crore including income from investment and others, registering 70.26 percent reduc�on from Tk. 77.50 crore in 2019. The NPL rate increased from 9.06 percent in 2019 to 23.42 percent in 2020.


7. IIDFC’s Non-Consolidated Profit before Provisioning and Tax was Tk. (1.87) crore in 2020 as against Tk. 49.17 crore in 2019. IIDFC’s Consolidated Profit before Provisioning and Tax was Tk. 0.27 crore in 2020 as against Tk. 51.39 crore in 2019. The addi�onal Tk. 10 crore of provision and interest suspense as required by Bangladesh Bank resulted in a Net Loss of Tk. 8.53 crore in 2020 as against the Net Profit of Tk. 3.49 crore in 2019.

8. The total disbursement of fund during the year was Tk. 201.04 crore as against Tk. 793.85 crore in 2019 registering a contrac�on of 74.68 percent. The year was a challenging one for genera�ng new businesses as COVID-19 was the main barrier for total economy and prime target clients had be�er interest rate offers on financing facili�es from the banks.

9. The total disbursement by the Corporate Finance Department in 2020 was Tk. 137.06 crore and at the end of the year, the corporate por�olio stood at Tk. 726.48 crore which is a decrease of Tk.318.07 crore and 30.45 percent in por�olio size from the previous year. The department’s loss of business resulted in reduc�on of the overall por�olio of IIDFC as this department is the largest contributor to the company’s revenue with a share of 47.57 percent of the total business por�olio of IIDFC Ltd.

10. GoB’s decision to start the process of curbing the lending rates of the banks to a maximum 9.00 percent p.a. provided the corporate houses with added leverage to bargain for lower interest rates. There were opportuni�es for providing corporate loans to corporate clients with weaker financial bases, but the department decided to put emphasis on credit worthiness, business reputa�on and financial strength of the clients to solidify the quality of the por�olio.

11. In 2020, the total disbursement of the SME Department was Tk. 19.01 crore which was Tk. 164.89 crore in 2019. Although total SME disbursement experienced 88.48 percent contrac�on, the total SME por�olio was not decreased by the same higher percentage mainly for implemen�ng Bangladesh Bank’s deferral Circular. At the end of 2020, the total SME por�olio stood at Tk. 548.69 crore as compared to Tk. 576.21 crore in 2019.

12. The total disbursement of the Structured Finance Department in 2020 was Tk. 36.69 crore as against Tk. 25.00 crore in 2019. The total por�olio of the department stood at Tk. 245.54 crore at the end of 2020 as against Tk. 203.77 crore in 2019. As most of the big business houses refrained from making large investments, scope for arranging syndica�on for large financing requirements was rather low. The department was successful in landing two syndica�on deals, funds for which will be arranged under IPFF II of World Bank.

13. The year 2020 was an especially challenging �me for treasury management as the compe��on was overwhelming. Even then, the Treasury Department managed to fulfill its obliga�ons and meet up all its commitments in a �mely and efficient manner. The dependency on bank borrowing was Tk 552.21 crore in 2020 as against Tk. 634.62 crore in 2019 which was a reduc�on by 12.99 percent compared to previous year. The public deposits on 31 December 2020 stood at Tk. 566.08 crore against Tk. 644.97 crore in 31 December 2019.

14. IIDFC has been successfully con�nuing its Clean Development Mechanism (CDM) project �tled “Improving Kiln Efficiency in the Brick Making Industry in Bangladesh” since 2011. The project had 6 (Six) opera�onal HHK Brick Manufacturing Units using HHK Technology. Under an Agreement with the Asian Development Bank (ADB), these 6 units achieved Carbon Emission Reduc�on of 77,628 tons during 2016-2017, against which ADB made the total payment of USD 620,980 in 2020 a�er comple�on of the detailed verifica�on process. IIDFC’s share in this was USD 232,884 equivalent to Tk. 1.97 crore. The cer�fica�on process for another 65,603 tons of CER generated by the 6 units during the period from January 2018 to March 2020 have been completed, but the payment for the CER generated is yet to be reimbursed by ADB.

Por�olio of CorporateFinance Department

Por�olio of SMEFinance Department

Por�olio of StructuredFinance Department

Func�on of TreasuryDepartment

Func�on of CarbonFinance


IIDFCSecuri�es Limited

IIDFCCapital Limited

Human Resources

Credit Ra�ng

Shareholders’Equity

15. Of the two subsidiaries, IIDFC Securi�es Limited had an opera�ng income of Tk. 15.65 crore in 2020 of which Tk. 7.92 crore was from Brokerage Commission and Tk. 6.40 crore from interest income. The Average daily turnover in customers' account was Tk.12.56 crore as compared to Tk. 7.24 crore in the preceding year. Percentage of trade volume during the year was 1.94% of DSE’s total trade volume as against 1.51 % of DSE’s total trade volume in the preceding year.

16. The other subsidiary, IIDFC Capital Limited recorded net interest income of Tk. 1.46 crore; income from merchant banking services was Tk. 1.30 crore; income from investment was Tk. 63.51 lacs & Other Income was Tk. 16.51 lacs; i.e. a total income of Tk. 3.57 crore as against total Expenses of Tk. 3.29 crore (including loans & advances wri�en off amoun�ng to Tk. 1.64 crore) The Company's net profit in 2020 was Tk. 22.48 lacs as against the net profit of Tk. 20.80 lacs in 2019.

17. In December 2020, the number of employees of the Company was 134, two less than the previous year. Despite new recruitment of 08 employees in various posi�ons, the number of employees decreases due to resigna�on of 10 execu�ves from Corporate Finance, SME, SAM, Legal Department etc. Apart from following a comprehensive recruitment policy for iden�fying the best among the available candidates, we allow our employees to par�cipate in the training programs offered by Bangladesh Bank, Bangladesh Bank Training Academy, Financial Excellence Limited, BIBM, Infrastructure Development Company Limited (IDCOL), INTIMATE, BIAC, ICAB, ACTIVA, ICB. During 2020, as many as 42 staff members par�cipated in the various Training programs, Workshop, Conference, Discussion mee�ng & Seminar to upgrade their professional skill and knowledge.

18. IIDFC’s credit ra�ng indicates its financial strength over the long term as well as the short term period. As per the credit ra�ng report prepared by Na�onal Credit Ra�ngs Limited (NCRL), IIDFC’s long term credit ra�ng is AA+ (Double AA+) which indicates the company’s strong capacity to meet its financial obliga�ons and the low risk associated with this company. The Short Term Ra�ng is ST-1 which indicates strong and the highest rated capacity for �mely serving of financial commitment. The summary of IIDFC’s credit ra�ngs for the year 2020 & 2019 is given below:

19. The Shareholders’ Equity, which was Tk. 219.16 crore on December 31, 2019, stood at Tk. 210.42 crore as on December 31, 2020. The Consolidated Shareholders’ Equity, which was Tk. 228.59 crore on December 31, 2019, stood at Tk. 220.19 crore as on December 31, 2019. The Capital Adequacy Ra�o stands at 14.46 percent which is be�er than the target set by the Central Bank of Bangladesh at 10.00 percent for NBFIs.

SURVEILLANCE ENTITY RATING-2020Long Term

AA+ (Double A Plus)Short Term

ST-1Stable

December 31, 2021SURVEILLANCE ENTITY RATING-2019

Long TermAA+ (Double A Plus)

Short TermST-1

Date of Ra�ng Declara�onNovember 26, 2020

OutlookValidity

Date of Ra�ng Declara�onJune 26, 2019


20. The summary of the non-consolidated key financials of the Company as on December 31, 2020 as compared to December 31, 2019 are as follows:

21. As there was no sufficient distributable profit at the year end, the Board did not recommend any dividend for the year 2020.

22. By opera�on of Ar�cle 99 of the Company’s Ar�cles of Associa�on, the representa�ve Directors of the following Companies shall stand re�red from office at this 20th Annual General Mee�ng:

All the above Directors are eligible for re-elec�on and have expressed their interest for being re-elected as Directors. The Board may recommend for their re-appointment as Directors. The issue may be placed before the AGM for necessary approval.

23. The Company’s exis�ng Auditors, M/s. M M Rahman & Co., Chartered Accountants shall re�re at the forthcoming Annual General Mee�ng. Being eligible for re-appointment, they have expressed their interest for re-appointment for the year 2021. The Board recommended the reappointment of M/s. M M Rahman & Co., Chartered Accountants for the year 2021 on a revised fee of BDT 400,000.00 (excluding VAT) only subject to approval of Bangladesh Bank. The audit fee for 2020 was Tk. 375,000.00 (excluding VAT).

24. The Directors would like to express their gra�tude to the esteemed shareholders, valued clients, the Bangladesh Bank, the Bangladesh Securi�es and Exchange Commission, the Na�onal Board of Revenue, the Registrar of Joint Stock Companies, the Dhaka Stock Exchange and other regulatory bodies for the co-opera�on extended to the Company during the year. The Directors also express their apprecia�on of the dedica�on and hard work of the management team and other staff members of the Company.

Compara�veFinancials

Proposed Dividend

Appointmentof Auditors’

Apprecia�on

Particulars 2020Profit before provision & tax (18,690,787)

70,150,880(211,202)

(88,630,465)32,271,341

(56,359,124)

----

(56,359,124)

2019491,688,759415,376,868

50,102,64226,209,249

130,023,941156,233,190

5,241,8501,000,000

117,720,000123,961,85032,271,341

Figures in Taka

Less: Provision for Loans and AdvancesLess: Provision for taxProfit after provision & taxAdd: Retained earnings brought forwardProfit available for appropriationLess: Appropriations:

Statutory ReserveGeneral ReserveStock Dividend for the year 2018

Total AppropriationsProfit available for dividend distribution

Serial Name Nominated by01020304

Mr. Md. Matiul IslamMr. Md. Sazzad HossainMr. Kamal Uddin AhmedMr. Md. Kazim Uddin

SelfBank Asia LimitedEastland Insurance Co. LimitedNational Life Insurance Co. Limited

Thank you

On behalf of Board of Directors

Md. Ma�ul IslamChairman


Dear Shareholders and Stakeholders

The year 2020 was especially challenging for IIDFC Ltd. as the economy of Bangladesh was severely impacted by COVID-19 pandemic, which in turn had nega�ve impact on the Bank & Financial Ins�tu�on Sector of the country.

Due to con�nuous lockdown and severe spread of COVID, we were in closed mood of the business during major period of 2020. As a result, many of the customers of IIDFC were not able to repay the loans and advances in due �me. Consequently, IIDFC faced a business loss a�er tax of BDT 8.86 crore. Besides, as a part of five years planning of absorbing the unabsorbed provision and interest suspense, we have taken a por�on of the required provision in 2020 as approved by Bangladesh Bank.

There were also policy uncertain�es as the government was pondering over implemen�ng lending rate cap and deposit rate cap over all financial and depository products. The compe��on in this very saturated industry along with the bearish scenario in the capital market also took their tolls.

Considering the overall economic challenges, the management of the company emphasized on consolida�on rather than expansion so as to retain the growth a�ained in the previous year and also to maintain a healthy por�olio.

Now, on the backdrop of this scenario, I have the honor and pleasure to present to you the Annual Report for the year ended December 31st, 2020 along with assessment of the business climate from the perspec�ve of both Bangladesh and the World.

Global Economy

The global economy is projected to grow at 6.0 percent in 2021 and 4.9 percent in 2022.The 2021 global forecast is unchanged from the April 2021 World Economic Outlook, but with offse�ng revisions. Prospects for emerging market and developing economies have been marked down for 2021, especially for Emerging Asia. By contrast, the forecast for advanced economies is revised up. These revisions reflect pandemic developments and

From the Desk of CEO


changes in policy support. The 0.5 percentage-point upgrade for 2022 derives largely from the forecast upgrade for advanced economies, par�cularly the United States, reflec�ng the an�cipated legisla�on of addi�onal fiscal support in the second half of 2021 and improved health metrics more broadly across the group.

Although recent vaccine approvals have raised hopes of a turnaround in the pandemic later this year, renewed waves and new variants of the virus pose concerns for the outlook. Amid excep�onal uncertainty, the global economy is projected to grow at 5.5% in 2021 and 4.2% in 2022.

The global economy is climbing out from the depths to which it had plummeted during the Great Lockdown in 2020. With the COVID-19 pandemic con�nuing to spread, many countries have slowed reopening and some are reinsta�ng par�al lockdowns to protect suscep�ble popula�ons. While recovery in China has been faster than expected, the global economy’s long ascent back to pre-pandemic levels of ac�vity remains prone to setbacks.

Economy of Bangladesh

Bangladesh has an impressive track record of growth and poverty reduc�on. It has been among the fastest growing economies in the world over the past decade, supported by a demographic dividend, strong ready-made garment (RMG) exports, and stable macroeconomic condi�ons. Con�nued recovery in exports and consump�on will help growth rates pick up to 6.4 percent in fiscal year 2021-22.

Bangladesh, being one of the poorest na�ons at birth in 1971 with per capita GDP tenth lowest in the world, reached lower-middle-income status in 2015. It is on track to graduate from the UN’s Least Developed Countries (LDC) list in 2026. Poverty declined from 43.5 percent in 1991 to 14.3 percent in 2016, based on the interna�onal poverty line of $1.90 a day (using 2011 Purchasing Power Parity exchange rate). Moreover, human development outcomes improved along many dimensions.

Challenges

Bangladesh, like other countries, faces the daun�ng challenge of fully recovering from the COVID-19 pandemic which has constrained economic ac�vi�es and reversed some of the gains achieved in the last decade. The COVID-19 pandemic decelerated economic growth

in 2020. The pace of poverty reduc�on slowed down, exports declined, inequality increased across several dimensions and the poverty rate in 2020 increased to 18.1 percent from 14.4 percent. Nevertheless, strong remi�ance inflows and a rebound in export market has helped the economy to start recovering gradually.

To recover fully and materialize its ambi�ous growth of achieving upper-middle income status, Bangladesh needs to address the challenge of containing COVID-19. Vaccina�ng the popula�on will reduce the incidence of the disease and mortality and enable the full resump�on of economic ac�vi�es. Bangladesh also needs to address the challenge of crea�ng employment opportuni�es through a compe��ve business environment, increased human capital and skilled labor force, efficient infrastructure, and a policy environment that a�racts private investments.

Other development priori�es include diversifying exports beyond the RMG sector; deepening the financial sector; making urbaniza�on more sustainable and strengthening public ins�tu�ons. Addressing infrastructure gaps would accelerate growth and reduce spa�al dispari�es in opportuni�es across regions and within ci�es. Addressing vulnerability to climate change and natural disasters will help Bangladesh to con�nue to build resilience to future shocks. Pivo�ng towards green growth would support the sustainability of development outcomes for the next genera�on.

IIDFC’s Performance

IIDFC’s Revenue from interest income in 2020 was Tk. 195.15 crore compared to Tk. 249.69 crore in 2019. The net interest income a�er deduc�on of Cost of Fund experienced at Tk. 17.46 crore in 2020 compared to Tk. 72.97 crore in 2019 which indicates a decreasing trend because of pandemic situa�on.

The business por�olio of the company in 2020 decreased to Tk. 1,527.24 crore in 2020 from Tk. 1,890.88 crore in 2019. Company’s consolidated opera�ng income stood at Tk. 36.34 crore at the end of 2020 from Tk. 88.84 crore in 2019. Company’s non-consolidated opera�ng income stood at Tk. 23.05 crore in 2020 from Tk. 77.50 crore in 2019.

The NPL rate increased from 9.06% in 2019 to 23.42% in 2020. IIDFC’s Consolidated Profit before Provision and Tax was Tk. 0.27 crore in 2020 as against Tk. 51.39 crore in 2019 and Profit a�er tax was Tk. (8.53) crore in 2020


as against Tk. 3.49 crore in 2019 represen�ng a reduc�on in profit due to COVID-19. IIDFC’s Non-Consolidated Profit before Provision and Tax was Tk. (1.86) crore in 2020 as against Tk. 49.17 crore in 2019 and Profit a�er tax was Tk. (8.86) crore in 2020 as against Tk. 2.62 crore in 2019.

Concluding Remarks

In a par�cular challenging �me, IIDFC Ltd. managed to persist due to prudent strategies and decisions. The ma�er which will significantly influence the future of the industry as well as IIDFC Ltd. is the global pandemic which has been rampaging through the earth for most part of 2020. This crisis has significantly weakened business climate and has created new impediments for all the sectors including the financial sector. We believe, this challenging �me can be overcome with prudent decision making and good strategic maneuvers.

On this note, I would like to express my gra�tude to our honorable chairman and respected members of the Board of Directors, for the support and guidance provided throughout the turbulent year of 2020. I would also like to thank all our stakeholders for their con�nuous support. Last but not the least, I would like to thank all my colleagues at IIDFC for their sincere efforts and all out supports during the year 2020.

Md. Golam Sarwar BhuiyanManaging Director


BRIEF PROFILE OF THEDIRECTORS


Mr. Md. Matiul Islam, FCAChairman, IIDFC Limited

Mr. Md. Matiul Islam, widely known amongst his friends and colleagues as the “Doyen of Banking” started his service career, at the age of 22, in the Civil Service of Pakistan in 1952 and retired in 1993 after 41 years of active service of which 17 years were in the Government of Pakistan, 2 years in the private sector in Pakistan, 6 years in the Government of Bangladesh as Secretary, Ministry of Finance and Industry and the rest 16 years in the World Bank and UNIDO. He piloted the entry of Bangladesh in IMF, World Bank and the ADB as a member. In the World Bank he represented the Government of Bangladesh in the Executive Board as an Alternate Executive Director and in UNIDO in Vienna, he was the Head of World Bank-UNIDO Cooperative Programme and was UNIDO’s Country Director in New Delhi for around 6 years.

Since mid-90s and until today, he has been actively associated with the private sector in Bangladesh. He was instrumental in promoting a number of financial institutions including a commercial bank, namely, Arab Bangladesh Bank, International Leasing and Financial Services Ltd., National Housing and Investment Ltd. & Industrial and Infrastructure Development Finance Company (IIDFC) Ltd. He also promoted Credit Rating Agency of Bangladesh (CRAB). His accomplishment in the private sector in Bangladesh earned him The DHL– Daily Star “Lifetime Achievement Award” and such titles as a Legend and Role Model from his peers.

Mr. Islam completed his B.Com from Dhaka University securing First Class First and Masters in Public Administration from Harvard University, USA. He is also a Fellow of the Institute of Chartered Accountants of Bangladesh. Mr. Islam is currently the Chairman of the Financial Institutions’ Promoters’ Association (FIPA) and Chairman of the Board of Trustees of the Bangladesh Institute of Governance and Management (formerly Civil Service College), Agargaon, Dhaka.


Mr. Md. Ataur Rahman ProdhanVice Chairman, IIDFC LimitedCEO & Managing DirectorSonali Bank Limited

Mr. Md. Ataur Rahman Prodhan has been CEO & Managing Director of Sonali Bank Limited since August 28, 2019. Prior to this, he was CEO & Managing Director of Rupali Bank Limited, which was preceded by his brief stint as Managing Director of Probashi Kollyan Bank.

Mr. Prodhan is a man with distinctive vision, dynamism, commitment & innovative ideas. He also has an illustrious banking career. He joined Sonali Bank as Financial Analyst in 1984 and rose steadily through the ranks to become the Deputy Managing Director in January, 2014. During his long career, he held many important executive roles, including Head of Sonali Bank Local Office which is considered to be the ultimate of corporate banking, given its sheer size and range of businesses and services. He had also been CEO of Sonali Bank (UK) Limited, situated in London, from March, 2012 through May, 2015. As Deputy Managing Director, he held the positions of Head of HR and Head of Credit, among others, successfully till he became Managing Director of Probashi Kollyan Bank.

A consummate professional, Mr. Prodhan earned laurels and appreciations from the authority all through his career for his extra ordinary performances. His hands-on approach has resulted in capturing numerous success for expanding the business of the Bank.

Mr. Prodhan graduated with honors and completed his M.Com. in Management from Dhaka University in 1980 and 1981 respectively. He took part in many training programs and seminars at home and abroad. A profound philanthropist, Mr. Prodhan is engaged in many humanitarian activities. He is a Rotarian and the past president of Rotary Club, Lalmonirhat. As Executive member of Rangpur Bivag Samity he plays vital role in different social activities for that region. He established a primary school (Aftab Uddin Prodhan govt. primary school) in the name of his father Late Aftab Uddin Prodhan and also a high school (Amanatullah Prodhan secondary school) in the name of his grandfather Late Amanatullah Prodhan.

He has been elected as a member of the Senate of Dhaka University in 2018, commanding highest ever votes in the history of Senate election. He was born in the district of Lalmonirhat in 1960. His hobby is travelling, swimming and reading books.

Mr. Prodhan also holds the following ex officio positions at home and abroad: Chairman, Bangladesh Foreign Exchange Dealers Association (BAFEDA), Primary Dealers, Bangladesh Limited (PDBL); Vice-Chairman, Institute of Bankers, Bangladesh (IBB), IIDFC Limited; Director, Sonali Exchange Co. Inc., New York, Padma Bank Limited, Investment Corporation of Bangladesh (ICB), Sonali Investment Limited, Central Depository Bangladesh Limited (CDBL), Sonali Intellect Limited and Member, Senate, Dhaka University, Governing Board, Bangladesh Institute of Bank Management (BIBM), Finance Committee, Dhaka University, Organizing Committee, World Peace Conference-2021, Dhaka Club Limited.


Mr. Md. Abdus Salam Azad FFDirector, IIDFC LimitedCEO & Managing DirectorJanata Bank Limited

Mr. Md. Abdus Salam Azad, a freedom fighter, joined as CEO & Managing Director of Janata Bank Limited on December 05, 2017. Prior to his joining as a CEO & Managing Director, he was Deputy Managing Director who also held the current charge of CEO & MD of this bank. He also served as Deputy Managing Director of Bangladesh Krishi Bank.

Mr. Azad, son of late Ansar Ali and late Shurja Banu Nesa, hails from Char Nabipur under Sirajganj District and was born on April 30, 1958. After completion of Master’s in English Language & Literature from the University of Rajshahi in 1981 (held in 1983), he began his banking career as Senior Officer in Janata Bank in 1983.

During his long 36 years’ journey in the banking industry, Mr. Azad held the managerial post for 28 years from the grass root level to executive level. His resplendent banking career covered all the arenas of banking activities. He is a well-reputed, progressive, dynamic and a visionary banker. Presently, he is the Chairman of Investment Corporation of Bangladesh (ICB) Audit Committee and Janata Exchange Company Srl (JEC), Italy. Besides, he is also the director of the Board of ICB, Padma Bank Limited, Janata Capital & Investment Limited (JCIL), Janata Exchange Company Inc (JEC), USA, Primary Dealers Bangladesh Limited (PDBL) and member of the Governing Board of Bangladesh Institute of Bank Management (BIBM), Institute of Bankers Bangladesh (IBB) and Executive Committee- SWIFT User Group of Bangladesh.

Mr. Azad is a Diplomaed Associate of the Institute of Bankers’ Bangladesh. He has undergone extensive training programmes at home and abroad and visited Italy, Kingdome of Saudi Arabia, United Arab Emirates, Singapore, Malaysia and Thailand.

He participated in our glorious Liberation War in 1971 as a valiant freedom fighter after successful completion of the training programme in India for that purpose.

Mr. Azad is married to Mrs. Khaleda Mustary who is a housewife. They are blessed with a daughter, Sal Sabil Sahmi and a son, Shakir Ayman Azad.


Mr. Md. Abul HossainDirector, IIDFC LimitedManaging Director, ICB

Md. Abul Hossain has been serving as the Managing Director of Investment Corporation of Bangladesh since 21 August 2019, the core public sector investment bank of the country. Mr. Hossain has more than 31 years of diversified experience in investment banking, specialized and commercial banking, Islamic banking, Asset management and ICT works. He started his career as a System Analyst/ Senior Principal Officer of ICB in 1998 and served in different positions in the same organization. Prior to his joining in ICB, he acted as the Managing Director of Karmasangsthan Bank. He also served as the Managing Director (Additional Charge) and Deputy Managing Director of Bangladesh Krishi Bank.

Currently, he is contributing his professional expertise as a Board member of British American Tobacco Bangladesh Co. Ltd. (BATBC), Unilever Consumer Care Limited (UNILEVERCL), Standard Bank Limited, National Tea Company Limited (NTC), Apex Tannery Limited, United Power Generation & Distribution Company Limited (UPGDCL), Apex Footwear Limited, Heidelberg Cement Bangladesh Limited and Padma Bank Limited. In addition to perform his professional duties, Mr. Hossain is actively involved in different philanthropic activities of various national, social, cultural, religious and volunteer organizations.

BRIEF PROFILE OF THE DIRECTORS



Mr. Selim R. F. HussainDirector, IIDFC LimitedManaging Director & CEOBRAC Bank Limited

Selim R. F. Hussain is a Bangladeshi career banker with over 35 years of experience in South Asian financial institutions.

Selim started his banking career with the two largest multi-national banks in Bangladesh, first ANZ Grindlays Bank and later Standard Chartered Bank, and worked there for twenty-four years. In 2010, he moved to the largest Non-Banking Financial Institution in Bangladesh, the IDLC Finance Group, as their Managing Director. He headed IDLC Finance and was also the Chairman of IDLC Investment Limited and IDLC Securities Limited for six years. At the end of 2015, Selim joined BRAC Bank Limited as its Managing Director and CEO and has been there since.

During his tenure in IDLC Finance, Selim was the Chairman of IDLC Investment Ltd and IDLC Securities Ltd, a Board Director at the Credit Rating Agency of Bangladesh (CRAB) and the Vice Chairman of the Bangladesh Leasing and Finance Co Association (BLFCA). Selim currently serves on the Governing Board of the Association of Banks in Bangladesh as its Vice-Chairman. He is a member of the Governing Board of the SME Foundation in Bangladesh, an apex institution established by the Government of Bangladesh to spearhead SME development. Selim is a Board Director of IIDFC, a Non-Banking Financial Institution, BRAC EPL Investments Ltd, BRAC EPL Stock-Brokerage Ltd and BRAC IT Services Ltd. He is Chairman of the Board Audit Committee of bKash Ltd, the largest mobile financial service in Bangladesh. He is also on the Governing Board of the Financial Alliance for Women, a network of international financial institutions dedicated to championing the female economy.

Selim graduated from Dhaka University – from where he has an Honors degree in Accounting from the Business Faculty and an MBA from the Institute of Business Administration. He loves travelling, trying out different cuisine and is a passionate Cricket and Football enthusiast.


Mr. Shah Syed Abdul Bari is the Managing Director & CEO of National Bank Limited (NBL), a first generation private commercial bank in the country, since April 28, 2021. Prior to this, he was Deputy Managing Director (DMD) of NBL who also hold the current charge of Managing Director of the Bank. Mr. Bari joined in NBL as Senior Executive Vice President in December 2015 and subsequently was promoted to DMD in May 2016. As DMD, he held the position of Head of HR and Head Treasury, among others, successfully till becoming Managing Director of the bank. He also served as the CAMELCO of NBL.

Mr. Bari has long 38 years of professional experience in banking industry in different capacities. After obtaining Bachelor and Master’s degree in Social Welfare from the University of Dhaka, Mr. Bari joined in Arab Bangladesh Bank in 1983 and served there for 12 years. He later worked in American Express Bank Limited from February, 1996 to April 2002, in Prime Bank from April 2002 to May 2005 and in Mercantile Bank from May 2005 to December 2015. Mr. Bari has attended various local and overseas training courses and workshops.


Mr. Syed Mahbubur Rahman is the Managing Director & CEO of Mutual Trust Bank Limited (MTB). Prior to joining MTB, he was the Managing Director & CEO of Dhaka Bank Limited. Before joining Dhaka Bank Limited, he served BRAC Bank Limited as Managing Director & CEO and Deputy Managing Director (DMD). He also served Prime Bank Limited as Deputy Managing Director. He is the Immediate Past Chairman of the Association of Bankers, Bangladesh Limited (ABB). He was accorded with ‘The Asian Banker Leadership Achievement Award’ for Bangladesh for his achievement in the period from 2011 to 2013.

After completing Master of Business Administration (MBA) from Institute of Business Administration of the University of Dhaka, he started his career with Saudi-Bangladesh Industrial & Agricultural Investment Co. Ltd. (SABINCO) as a Monitoring Officer (Officer in Charge of Monitoring) in 1988. He served Industrial Leasing & Development Co. (BD) Limited (IDLC) as Manager, Monitoring from 1993 to 1996. He also served ANZ Grindlays Bank, Bangladesh as Manager, Corporate Banking from 1996 to 1998 and Standard Chartered Bank as Relationship Manager, Corporate Banking from 1998 to 2000. In 2002, he joined Citibank N.A. as Resident Vice President and left the bank in 2008 when he was a Director of the bank and was serving as the Head of Financial Institutions Group.

Mahbub has attended various local and overseas training courses and workshops, and frequently delivers lectures in the field of finance, banking and management. He has a happy family with his wife and two lovely daughters.

Mr. Shah Syed Abdul BariDirector, IIDFC LimitedManaging DirectorNational Bank Limited

Mr. Syed Mahbubur RahmanDirector, IIDFC LimitedManaging Director & CEOMutual Trust Bank Limited



Sheikh Mohammad Maroof is the Additional Managing Director and Head of Wholesale Banking of City Bank Limited. He has an extensive experience of over 24 years in the Banking industry. He started his career with American Express Bank, Bangladesh, as a Management Trainee in 1995. He also worked as the Director and Head of Treasury and FMS in American Express Bank, Bangladesh. Prior to joining City Bank, He worked for Eastern Bank Limited as the Head of Treasury from 2005 to 2007. He is also a Director of City Brokerage Limited, City Bank Capital Resources Limited & Venture Investment Partners Bangladesh Ltd. (VIPB). Mohammad Maroof has a post graduate degree (Masters in Commerce) in Finance from University of Dhaka.

Mr. Md. Monzur MofizDirector, IIDFC LimitedAdditional Managing Director,ONE Bank Limited

Mr. Md. Monzur Mofiz, Additional Managing Director of ONE Bank Ltd. joined the Bank on July 01, 2019. Mr. Mofiz, a professional banker and a dynamic leader having 29 years of service experience. In 1993, he started his banking career with Sonali Bank Ltd. and subsequently, he served AB Bank Ltd., The City Bank Ltd. and Dutch-Bangla Bank Limited. He entered job market in 1992 with Padma Architect and Engineers Ltd. as a Structural Engineer. His long career in Bank is enriched with corporate banking, credit risk review, strategic planning, business development along with team building and leadership. Besides, he served in Ministry of Education, Govt. of Bangladesh.

Mr. Mofiz, a graduate in Civil Engineering from Bangladesh University of Engineering and Technology (BUET) did his MBA with major in Finance from IBA, University of Dhaka. He attended many high profile Training courses, Workshops and Seminars at home and abroad. He enjoys reading, travelling etc.

Mr. Sheikh Mohammad MaroofDirector, IIDFC LimitedAdditional Managing Directorand Head of Wholesale BankingThe City Bank Limited



Mr. Md. Sazzad HossainDirector, IIDFC LimitedDeputy Managing DirectorBank Asia Limited

Mr. Md. Sazzad Hossain having experience of more than three decades started his banking career way back in 1987 as a Probationary Officer in Pubali Bank, Bangladesh. He has been involved in various leadership roles through understanding of banking procedures along with comprehensive understanding of industry and regulatory laws and regulations. He has acquired expertise in corporate and commercial banking, marketing knowledge of foreign currency, developing processes that reduce the time taken in processing loan applications, profit & loss management, strategic planning, market risk, special assets, debt restructuring, securities and credit including management exploring almost every avenue of banking profession.

Mr. Sazzad comes from reverend Muslim family of Mymensingh and had his graduation with Honours and Post-Graduation degree in Finance and M.Com in Finance & Banking from the University of Dhaka. He has attended many training program here and abroad.

Prior to joining Bank Asia Limited, he worked in Eastern Bank and NCC Bank in the capacity of Head of Branch. After joining Bank Asia, he was assigned as Senior Vice President & Head of Branch at Corporate Branch, Executive Vice President and Head of Branch at MCB, Dhilkusha and Scotia Branches. Before his elevation as Deputy Managing Director, he was Senior Executive Vice President and Head of Internal Control and Compliance Department in Bank Asia.

Presently, he is holding the position of Chief Credit Officer and Deputy Managing Director of Bank Asia Ltd. in Bangladesh.


Syed M. Altaf Hussain is son of Syed M Wares Ali, who was a renowned business person during the then British and Pakistani periods. Altaf Hussain is the current Chairman of Pragati Insurance Limited (PIL). He is one of the principal entrepreneurs, a sponsor Director and founding Chairman of the company. He was again elected Chairman of the leading insurance company in December 2015 and is continuing in the position till date.

Altaf Hussain is Member and Convener of the Board Finance Committee of Pragati Life Insurance Limited and represents the company as a Director in four renowned and reputed Public Listed Companies of Bangladesh.

Altaf Hussain is a member of the Bangladesh Insurance Association (BIA) and that of the Executive Committee of the Bangladesh Association of Publicly Listed Companies (BAPLC).

He has a long and distinguished career with over 36 years of experience in the fields of Food Grains, Crop Nutrition, Cargill’s Food Ingredients and Bio-Industrial Business, Business Development, Real Estate, Resorts & High-Rise Building Construction, Technology, Business Operations and Financial Institutions. He is Chairman of the Editorial Board of The Dainik Janata (Daily National Newspaper) & WW Properties.

He is Vice Chairman of National Housing Finance and Investments Limited (NHFIL), Director of Industrial and Infrastructure Development Finance Company Limited (IIDFC) and Co-Chairman of Jamuna Resort Limited.

He is former Chief Advisor of ATDP-II projects funded by the USAID along with Cargill Technical Services and former Director of National Tea Company Limited (NTCL).

As Chairman and CEO of WW Grains Corp. Representing Cargill Inc., USA in Bangladesh, he pioneered large-scale trading of Food Grains and Fertilizer Commodities over four decades. Through his work, he has spent considerable time traveling internationally in order to attend various conferences and seminars. He obtained his Engineering degree from the University of Texas and has successfully completed Grain Marketing & Agroceutical courses from North Dakota State University and the Harvard Business School.

He is a member of the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), Dhaka Chamber of Commerce and Industry (DCCI), American Chamber of Commerce in Bangladesh (AmCham), Australia Bangladesh Chamber of Commerce and Industry (ABCCI), Switzerland- Bangladesh Chamber of Commerce & Industry (SBCCI) and a Graduate Member of National University of Singapore Alumni Association.

Several social, governmental and educational institutions, both at home and abroad, have acknowledged his agro-based expertise. He has earned a very good name and fame in the business community for his honesty, integrity, sincerity of purpose, perseverance, endurance, patience, dedication, hard work, and high degree of sense of responsibility.

Altaf Hussain is a member of Gulshan Club Limited, Kurmitota Golf Club, Gulshan Society and Baridhara Society.


Mr. Syed M. Altaf Hussain Director, IIDFC LimitedChairman, Pragati Insurance Ltd.



Mr. Kamal Uddin AhmedDirector, IIDFC LimitedDirectorEastland Insurance Co. Ltd.

Mr. Kamal Uddin Ahmed, a professional businessman from Chittagong has been serving the private sector economy in Bangladesh for last three and half decades.

The former First Vice President of Bangladesh Chamber of Commerce & Industry (FBCCI) - Mr. Ahmed was one of the key entrepreneurs and former Chairman of the Social Islami Bank Limited, a joint venture Islami Bank (and current Director). He is the Chairman of ‘Alif Group of Companies’, a well-reputed business conglomerate of the country, which has business interests in bulk commodities, properties & real estates, insurance, agro processing and services. He is also the Director of Holy Crescent Hospital (Pvt.) Ltd.

Mr. Ahmed was the President of Chittagong Chamber of Commerce & Industry (CCCI) and Chittagong Stock Exchange Limited (CSE) and also served in International Chamber of Commerce (ICC), Bangladesh as a Director. In 1998-99 and 1999-2000, Bangladesh government nominated him ‘Commercially Important Person’ (CIP). He was the key organizer to form Chittagong Port Users’ Forum and led the same as Convener. He also possesses strong voice to privatize Chittagong Port and member of the citizens group to monitor the development of the City as well.

Mr. Ahmed played the leading role among the Bangladesh delegations twice in the annual conference of Islamic Chamber in Iran and Malaysia two times held in Putrajaya. He also took part with government delegations to many countries. As a business leader of FBCCI & CCCI he also led numerous business delegations to overseas. Mr. Ahmed visited number of countries including United States, United Kingdom, Australia, Switzerland, Belgium, France, Germany, Korea, India, Pakistan, United Arab Emirates, Iran, Saudi Arabia, Italy, China, Singapore, Indonesia, Hong Kong and Japan, Malaysia, Turkey and Brunei Darussalam.

Mr. Ahmed is the member of many international charities & organizations and as part of social commitment, involved with many local social & cultural organizations such as Lions Club, Diabetic Hospital and also School for the Shelter less Children for their education.


Mr. Md. Kazim Uddin is a renowned person in Life insurance sector in Bangladesh. He started life Insurance career in May 1987 in the Development-side in National Life Insurance Co. Ltd.

Mr. Kazim is a popular motivational speaker in Life Insurance industry in Bangladesh.

He worked in National Life Insurance Company in various Senior Positions. Prior to being the Chief Executive Officer he had been serving as Deputy Managing Director in the same company. National Life is a leading Life Insurance Company in the Life Insurance Market of Bangladesh.

Mr. Kazim obtained higher training both at home and abroad. He completed his MBA from the University of Cumilla. Mr. Kazim travelled various countries and participated in many life insurance Seminars and Training sessions.

Mr. Md. Golam Sarwar Bhuiyan joined IIDFC Limited as Managing Director on April 01, 2018. Prior to joining IIDFC, he had been working as Deputy Managing Director and Managing Director (CC) of National Finance Limited. He was CEO of AIBL Capital Management Limited and Managing Director of BMSL Investment Limited. He has been elected as Vice Chairman of Bangladesh Leasing & Finance Companies Association (BLFCA) for 2020 and 2021.

Mr. Bhuiyan is an MBA from Institute of Business Administration (IBA), University of Dhaka. Earlier, he completed graduation in International Relations from the same University. He has 35 years’ of experience in NBFI and investment banking industries. He started his career in Micro Industries Development Assistance and Services (MIDAS) and worked there as General Manager and Head of Consultancy, Research & Training. Mr. Bhuiyan is an International Certified Trainer in the field of Entrepreneurship Development and Small Business Management. He also worked in MIDAS Financing Ltd. as Sr. General Manager (Credit & Investment) and for GSP Finance Co. Bangladesh Ltd. as Chief Operating Officer (COO).

Mr. Bhuiyan has long experience and expertise in the fields of SME development, corporate financing, credit administration and special asset management, merchant banking, portfolio management, sub-sector analysis, business consultancy and training. He is a Life Member of Dhaka University Alumni Association, IBA Alumni Association, MBA Club Ltd. He is also associated with many educational institutions and social organizations.


Mr. Md. Golam Sarwar BhuiyanManaging Director, IIDFC Ltd.Director (Ex Officio)

Mr. Md. Kazim UddinDirector, IIDFC LimitedChief Executive OfficerNational Life Insurance Co. Ltd.


Se�ng (from le�):

1. Abu Shadat Mohammad Shahin Head of Corporate Finance

2. Md. Golam Sarwar Bhuiyan Managing Director

3. Lingkon Mondal, FCA Chief Financial Officer (CFO) & CS (CC)

Standing (from le�):

1. Shahnaj Sultana Head of Treasury

2. Md. Samiur Rahman VP- Structured Finance

3. Mohammad Neazur Rahman Head of Operat ions

4. Jyonto Kumar Biswas Head of IT

5. Md. Mijanur Rahman Head of ICC

6. Md. Arifur Rahman Head of SAM

7. Md. Mushfiqur Rahman Head of CRM

8. Kazi Dilruba Akter Head of SME

MANAGEMENTCOMMITTEE


Kanij FatemaSVP- Head of Savar Branch

Mohammad AbdullahAVP- SAM Department

Sanjoy KarmakerAVP- Accounts & Finance

Al Rajib MahmoodAVP- Accounts & Finance

Kabir HossainAVP- Incharge of CAD

KMH Arif AkhandAVP- SME Department

Kazi Md. Faisal RobinAVP-Head of Cha�ogram Branch

SENIOR EXECUTIVES &

LINE MANAGERS


Md. Mosarraf HossainAVP- Head of Liability Department

Md. Saidur RahmanAVP- SME Department

Arnab SahaDeputy Manager- Head of PMC

A.N.M. Foyzur RahmanDeputy Manager

Incharge of Narayanganj Branch

Md. Rashed UddinAVP- Head of Legal

Md. Mehedi HasanSr. Manager - Head of Keraniganj Branch

Mohammad Mahbub Alam RonyAVP- Head of U�ara Branch

Md. AurangazebSr. Manager- Head of Gazipur Branch

SENIOR EXECUTIVES &

LINE MANAGERS


RISK MANAGEMENT &CONTROL ENVIRONMENT


Risk ManagementForum (RMF)

Risk Analysis Unit(RAU)

Risk ManagementFramework of IIDFC

Reporting of RiskManagement Activities

. Headed by CRO and comprised of core departmental heads. Responsible for designing overall risk management strategy

. Act as the secretariat of the Risk Management Forum (RMF). Responsible for identifying and analyzing all sorts of risks on a timely manner

. Prepares the Risk Management Paper (RMP) on a monthly basis. Arranges monthly meeting of Risk Management Forum (RMF)

a) Risk Management Forum (RMF): IIDFC have an effec�ve Risk Management Forum (RMF) which was formed as per the DFIM Circular No. 1 dated April 07, 2013. It is headed by the Chief Risk Officer (CRO) and comprised of core department heads and Risk Analysis Unit (RAU) as follows:

Sl. Name Designation Position in RMF

1.

2.

3.

4.

5.

6.

7.

Managing Director

SEVP & Head of Corporate

EVP & Chief Financial Officer

EVP & Head of Treasury

SVP & Head of SME

AVP & Head of CRMD

Deputy Manager & Risk Analysis Unit (RAU)

Chief Risk Officer

Member

Member

Member

Member

Member

Member Secretary

Mr. Md. Golam Sarwar Bhuiyan

Mr. Abu Shadat Mohammad Shahin

Mr. Lingkon Mondal

Ms. Shahnaj Sultana

Ms. Kazi Dilruba Akter

Mr. Md. Mushfiqur Rahman

Mr. Hafiz Ullah Khan

Risk Management Framework:

Managing risk is one of the primary concerns of the Banks and NBFIs opera�ng in Bangladesh. With a view to a�ain an effec�ve risk management and control system, the management of Industrial and Infrastructure Development Finance Company (IIDFC) ensures that the risk management framework is entrenched into the overall business process, culture, prac�ces and structure of the company. The company rigorously follows ongoing best market prac�ces as well as the “Integrated Risk Management Guidelines for Financial Ins�tu�ons” issued by the Bangladesh Bank.

Risk Management Framework of IIDFC is as follows:

RISK MANAGEMENT & CONTROL ENVIRONMENT


Key responsibili�es of the RMF includes the following:

i. Designing overall risk management strategy; ii. Communica�ng views of the Board and senior management regarding the Risk Management Culture and

Risk Appe�te all over the organiza�on;iii. Prepaing risk management policies and procedures;iv. Overseeing the Capital Management func�ons in accordance with the Risk Based Capital Adequacy

Measurement Accord i.e. BASEL-II;v. Developing and overseeing implementa�on of stress tes�ng;vi. Determining the most cost-effec�ve way to minimize the risks;vii. Developing overall informa�on system/MIS to support risk management func�ons; andviii. Reviewing the market condi�ons, iden�fying the external threats and providing with recommenda�ons for

precau�onary measures accordingly.

i. Collec�ng all relevant data related to the risk indicators from different models and informa�on system at the earliest;

ii. Assessing the quality, completeness and correctness of those data;iii. Iden�fying and quan�fying the risks and their exposures to material loss;iv. Preparing Risk Management Paper (RMP) on monthly basis; andv. Conduc�ng periodic Stress Tes�ng.

b) Risk Analysis Unit (RAU): Risk Analysis Unit (RAU) of IIDFC is responsible solely for iden�fying and analyzing all sorts of risks in an appropriate and �mely manner. RAU acts as the secretariat of the Risk Management Forum (RMF). However, it is independent from all other units/divisions of the organiza�on. RAU of IIDFC is responsible exclusively for the followings:

c) Repor�ng of Risk Management Ac�vi�es: RAU of IIDFC prepares a Risk Management Paper (RMP) with a detailed analysis including trend analysis of all categories of risk with adequate updated data every month. The RMP is placed in the monthly mee�ng of the Risk Management Forum. A�er detailed discussion, RMF recommends some specific ac�on plans for mi�ga�ng the iden�fied risks. The updated data of any given month is collected by RAU by the 15th of the following month. The mee�ng of RMF is usually conducted within 20th of the same month. The Risk Management Paper along with the Minutes of the RMF mee�ng (both hard copy and so� copy) is then submi�ed to the Department of Financial Ins�tu�ons & Markets (DFIM) of Bangladesh Bank by the end of that month.


Disclosure of the Risk Repor�ng:

Risk Analysis Unit (RAU) of IIDFC prepares the Risk Management Paper (RMP) on a monthly basis and submit it to the Department of Financial Ins�tu�ons and Market (DFIM) of Bangladesh Bank. RMP is comprised of a variety of risk indicators ranges from growth in credit por�olio and NPL to Credit-Deposit Ra�o and Deposit-Withdrawal concentra�on. Some major risk indicators from the RMP for the last two years are provided below:

Risk IndicatorsSL No. 2020 2019 Total Credit Por�olio

Total Disbursement

Sector-Wise HHI Score

Product Wise HHI Score

Common Directors' Exposure

Percentage of Total Por�olio

Total NPL in Amount

Total NPL in Percentage

Provision Required

Provision Held

Provision Surplus

Cost of Fund (General)

Base Rate

Total Capital Market Exposure (December)

SLR Required (December)

SLR Maintained (December)

SLR Surplus (December)

CRR Required (December)

CRR Maintained (December)

CRR Surplus (December)

Credit U�liza�on Ra�o (December)

Top-10 Deposit Amount (December)

Percentage of Total Deposit

Top-10 Withdrawal Amount (December)

Capital Adequacy Ra�o (December)

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

15,272,371,452

2,010,426,293

685

6,281

2,519,416,775

16.50%

3,576,185,480

23.42%

1,738,024,115

892,179,870

(845,844,245)

9.10%

11.40%

1,617,756,345

328,355,644

355,800,891

27,445,247

84,306,007

106,205,288

21,899,281

88.81%

393,000,000

3.85%

540,858,954

14.46%

18,908,807,903

7,938,534,555

640

6,572

3,556,229,390

18.81%

1,713,393,210

9.06%

888,459,034

888,584,034

125,000

10.95%

13.15%

1,623,612,414

378,908,847

406,863,299

27,954,452

169,634,250

177,275,664

7,641,414

90.95%

1,780,000,000

14.00%

2,138,093,625

14.10%


Departments Key roles / functions to mitigate credit risk

Credit Risk Management(CRM)

Credit Administration Department (CAD)

Special Asset Management (SAM)

• Scru�nizing the credit proposals received from all business units (Corporate, SME

and Branch) to iden�fy risks and compliance issues.

• To ensure that credit proposals have been properly analyzed and memos have

been prepared complying all the necessary rules, regula�ons, circulars,

guidelines vested by the concerned regulatory authori�es.

• Analyzing credit proposals by iden�fying risks and mi�ga�on thereof. Thorough

scru�nizing of the loan proposals and set appropriate facility structure as well as

covenants suitable for the related business.

• Ensuring that Internal Credit Policy and Internal Credit Circulars are being

complied with properly.

• Periodic review of different types of credit facili�es as per Credit Policy.

• Maintaining effec�ve follow up and supervision and taking all possible measures

in �me to avoid non-performance of assets.

• Analysis of Early Alert Report and classified loan review.

• Performing any other du�es as per requirement of the management.

• Prepara�on of sanc�on advice s�pula�ng all the required terms and condi�ons

applicable for the related credit facili�es.

• To prepare security documents and ensure that all security documenta�on

complies with the terms of approval to control loan disbursements.

• To maintain control as well as preserve all security documents.

• To monitor insurance coverage to ensure appropriate coverage is in place over

assets pledged/hypothecated as collateral, and is properly assigned to IIDFC.

• To monitor borrowers compliance with covenants and agreed upon terms and

condi�ons, and general monitoring of account performance.

• To provide the respec�ve departments with all circulars and guidelines issued by

regulatory authority

• To monitor and maintain the files of classified accounts with support from

concern RMs and also review all documenta�ons, mee�ng between the

customer and RM as well as to prepare Classified Loan Review Report to CRMD to

update the status of the ac�on/recovery plan.

• To ini�ate legal ac�ons for any default accounts, Special Asset Management

Department will place recommenda�ons in consulta�on with Business unit(s)

and approval of Managing Director.

• To ini�ate write off of loans with recommenda�on of business unit(s) and

submi�ng before the Board for approval.

• To assist RM in collec�ng overdue from overdue clients.

Risk Mi�ga�on Methodology:

1. Credit Risk: It is the risk that may arise from inability and/or reluctance of the clients to make periodic repayment of installment/interest against the credit facili�es on due �me. With a view to mi�gate such credit risk, IIDFC ensures the roles of following departments:


Department / Committee

Key roles / functions to mitigate liquidity risk

Treasury

ALCO

1. To provide quick finance to the company by making effec�ve cash

management.

2. Financial planning and forecas�ng of cash flows.

3. Borrowing of funds/ deposit mobiliza�on.

4. Financial assets management.

1. To analyze the informa�on rela�ng to money market posi�on and compe��on.

2. To formulate policy regarding management of liquidity and interest rate risk of

the Company.

3. To set guidelines for establishment of effec�ve methods of Asset Liability

Management.

4. To set guidelines for op�mum u�liza�on of the financial resource of the

Company.

5. To set limits for liquidity, interest rate, exchange rate and equity pricing risks.

6. To assess and iden�fy the possible sources of risk in connec�on with funding

and lending ac�vi�es.

7. To evaluate the strength of exis�ng risk management tools and find out

possible ways of improvement.

8. To monitor compliance in accordance with the regula�ons of Bangladesh Bank

in respect of statutory obliga�ons and ensure �mely submission of reliable and

relevant informa�on.

2. Liquidity Risk: Liquidity risk arises when liquid assets are insufficient to meet maturing financial obliga�ons. It may also arise due to organiza�on’s inability to se�le its liability. Liquidity risk management is the main concern of ALCO. The ALCO of IIDFC consists of Managing Director, Chief Financial Officer, Company Secretary, Treasury, Business Units, CRM and Accounts. In order to mi�gate liquidity risk, IIDFC ensures following roles of Treasury department and ALCO:


Department Key roles / functions to mitigate operational risk

Internal Control &Compliance (ICC)

1. To verify con�nuing adequacy and applicability of credit risk management

policies and procedures, provide an independent assessment of the credit

por�olios' existence, quality and value, the integrity of the credit process, and

promotes detec�on of problems rela�ng thereto.

2. To prepare annual audit plan to be approved by the Audit Commi�ee of the

Board according to which the audits are to be carried out. The frequency of

audits and the individual audit areas should be s�pulated in the Company’s

plan.

3. To prepare a comprehensive audit report.

4. To verify the self-assessment report on AML/CFT issues prepared by branch,

assessing risks and visi�ng the branch on the basis of risks impacts and inform

the ma�er to the central compliance unit (CCU).

5. To perform Independent Tes�ng Procedures according to BFIU, Bangladesh

Bank checklist, examining the An�-Money Laundering & terrorist financing

ac�vi�es, ra�ng based on examina�on and finally report to the central

compliance unit (CCU).

6. To monitor the swi� correc�on of any problems detected in the audit as well as

the implementa�on of its recommenda�ons in a suitable form, and if necessary

to schedule a follow-up audit.

3. Opera�onal Risk: Opera�onal risk is the possibility of economic losses a�ributable to the deficiencies of internal control and Corporate Governance. Such deficiencies can occur due to human error, inadequate internal process, failed technical system, internal fraud etc. To mi�gate opera�onal risk, IIDFC ensures the following roles of Internal Control & Compliance (ICC) department:


FINALCIALHIGHLIGHTS


BDT in million

2019 2019

Operational Revenue 2,542.21 2,656.59

Opera�onal Expenses 2,050.52 2,142.65

Opera�ng Profit 491.69 513.94

Profit a�er Tax 26.21 34.94

Total Leases, Loans & Advances 18,908.81 20,663.84

Provision for Investments 888.58 976.11

Leased Finance/Advances 2,334.71 2,334.71

Direct/Term finance 16,574.10 15,985.95

Margin loan - 2,343.18

Investment in Shares/Deventureand Bond 659.72 1,063.39

Shareholders’ Equity 2,191.55 2,286.10

Reserve & Surplus 883.55 978.10

Paid up Capital 1,308.00 1,308.00

Total nos. of Shares(in quan�ty) 130.80 130.80

Book Value Per Share (BDT) 16.75 17.48

Earnings Per share (BDT) 0.20 0.27

Dividend Per Share (BDT) - - -

Return on Average Equity (%) 1.26

2020

2,007.45

2,026.14

(18.69)

(88.63)

15,272.37

892.18

2,038.30

13,234.07

677.83

2,104.16

366.39

1,737.77

173.77

12.11

(0.51)

(4.13)

2018

2,503.10

2,113.75

389.35

151.98

19,614.72

566.59

2,774.86

16,839.86

-

632.41

1,977.64

777.64

1,200.00

120.00

16.48

1.27

0.90

8.26 1.61

2020

2,141.86

2,139.15

2.71

(85.31)

17,093.26

1,149.34

2,038.30

12,660.31

2,394.65

1,069.80

2,202.03

464.26

1,737.77

173.77

12.67

(0.49)

-

(3.80)

2018

2,644.27

2,200.60

443.67

176.39

21,516.37

653.71

2,774.86

16,241.31

2,500.20

1,019.12

2,063.45

863.30

1,200.00

120.00

17.20

1.47

-

9.22

Particulars/Year

Profit and Loss Account

IIDFCL (Solo) IIDFCL (Consolidated)

Balance Sheet

Ra�os

KEY OPERATING AND FINANCIAL HIGHLIGHTS

-


SECTOR-WISE EXPOSURE

1,327,092,003

2,243,125,080

575,374,405

498,553,283

679,104,942

51,073,580

902,906,410

309,411,565

340,596,412

209,621,580

261,989,554

1,107,520,631

131,633,310

-

878,060,559

606,049,642

574,021,427

789,602,774

1,014,518,068

2,171,002,962

15,272,371,452

8.69%

14.69%

3.77%

3.26%

4.45%

0.33%

5.91%

2.03%

2.23%

1.37%

1.72%

7.25%

0.86%

0.00%

5.75%

3.97%

3.76%

5.17%

6.64%

14.22%

100.00%Total

Tex�les

Garments

Jutes & Jute Related Goods

Food Items Producer/Processing Industries

Plas�c Industries

Lather & Lather Goods

Iron, Steel and Engineering

Chemical and Pharmaceu�cals

Cement/Clingker and Allied Industries

Service Sector (Hotel, Hospital, Clinic, Tourism, etc.)

Paper, Prin�ng & Packaging

Telecommunica�on and IT Industries

Glass and Ceramic Industries

Shipping and Building Industries

Electronics and Electrical Goods

Power, Gas, Water and Sanitary

Transport and Communica�on

Real Estate and Housing

Merchant Banking

Others

Agricultural Sector 601,113,264 3.94%

1,144,052,285

2,691,424,851

597,230,487

639,945,522

708,275,992

52,871,876

1,511,632,761

757,599,215

328,686,754

277,093,460

274,374,315

1,247,141,601

152,424,778

-

1,154,072,815

886,141,097

661,286,597

859,674,220

2,022,437,891

2,251,272,502

18,908,807,903

6.05%

14.23%

3.16%

3.38%

3.75%

0.28%

7.99%

4.01%

1.74%

1.47%

1.45%

6.60%

0.81%

0.00%

6.10%

4.69%

3.50%

4.55%

10.70%

11.91%

100.00%

691,168,883 3.66%

Sector-wise Loans & Advances: Year 2020 Year 2019

Industrial Sector:

Year 2020 Year 2019


SOURCES OF FUND & OUR BANKERS

SOURCES OF FUND

Deposit : 65.00%Overdra�s : 8.00% Long Term Loan : 16.00% Short Term Loan : 3.00% Refinance from Bangladesh Bank : 8.00%

Year 2020

Deposit : 67.12%Overdra�s : 9.04% Long Term Loan : 13.53% Short Term Loan : 4.91% Refinance from Bangladesh Bank : 5.40%

Year 2019

OUR BANKERSAB Bank LimitedAgrani Bank LimitedBank Asia LimitedBRAC Bank LimitedCommercial Bank of Ceylon PLCEastern Bank LimitedJanata Bank LimitedLankan Alliance Finance LimitedMidland Bank LimitedModhumo� Bank LimitedMutual Trust Bank LimitedNCC Bank LimitedNRB Commercial Bank LimitedOne bank LimitedPubali Bank LimitedShahjalal Islami Bank Limited Shimanto Bank LimitedSocial Islami Bank LimitedSonali Bank LimitedSouth Bangla Agriculture and Commerce Bank LimitedSoutheast Bank LimitedThe City Bank LimitedTrust Bank LimitedUnion Bank LimitedUnion Capital LimitedUnited Commercial Bank LimitedU�ara Bank LimitedWoori Bank

Principal BranchHead Office

Principal Office Branch and Agrabad BranchGulshan BranchMo�jheel Office

Head OfficeHead Office, Principal Branch

Head officeHead Office

Head Office and othersPrincipal Branch

Foreign Exchange BranchHead Office

Principal BranchPrincipal Branch

Foreign Exchange BranchHead Office

Principal BranchLocal Office Branch

Head OfficeRK Mission Road Branch

Principal BranchMo�jheel Branch

Head Office and othersHead Office

Head Office and othersLocal Office Branch

Head Office


DISCLOSURE ON CAPITAL ADEQUACY & MARKET DISCIPLINE

Capital Adequacy Ra�o:

The capital adequacy ra�o (CAR) measures the amount of capital any financial ins�tu�on retains compared to its risk and risk weighted assets. It determines how effec�vely any financial ins�tu�on can sustain in case of a reasonable amount of loss or how efficiently it can protect the organiza�on against probable financial risks. The CAR is important to shareholders because it is an important measure of the financial soundness of a financial ins�tu�on.

Two types of capital are measured with the CAR, first the �er 1 capital, can absorb a reasonable amount of loss without forcing the bank to cease its trading and the second type, �er 2 capital, can sustain loss in the event of liquida�on. Tier 2 capital provides compara�vely less protec�on to its depositors and creditors.

The CAR provides shareholders with a be�er understanding of the risks a financial ins�tu�on is taking with the equity they provide. A bank that con�nually takes more risks than it can reasonably sustain leaves poten�al shareholders with a sense that their equity investments are more at risk. A financial ins�tu�on must maintain a professional level of risk management and sound lending prac�ce to a�ract the capital that acts as its first line of defense against loss, both expected and unforeseen.

Significance of Capital Adequacy:

Capital is backbone of any business specially, financial ins�tu�on where capital sufficiency is a prime factor to consider when assessing the safety and soundness of business. Minimum capital level is significantly important for a Financial Ins�tu�on so that adequate protec�on against risk can be ensured. A strong Capital Management Policy protects an organiza�on by iden�fying and mi�ga�ng risks, as well as establishes a base of confidence by depositors, creditors, and other stakeholders.

Capital Adequacy gives an over-view on a Financial Ins�tu�on’s strength and stability and adequate capital provides assurance to the stakeholders on the company’s ability to provide consistent services and financial supports. Capital Adequacy is a basis for measurement of capital that FI needs to hold for ensuring that no excess leverage is taken that could lead to insolvency. Capital Adequacy measurement is expressed as the Capital Adequacy Ra�o (CAR), also known as Capital to Risk Weighted Assets Ra�o.

CAR is a measure of a financial ins�tu�on’s eligible capital expressed as a percentage of its risk weighted asset. The objec�ve of CAR is built around the Market Discipline, whereby depositors’ and creditors get a standardized measurement on the extent to which their wealth is exposed to risk, and thereby establish confidence on the Financial Ins�tu�on’s con�nuity and strength. The CAR measurement is also directed towards making a financial ins�tu�on’s capital more risk sensi�ve and shock absorbent. Basel II guidelines: According to the capital adequacy guideline, the following three points are important to be followed:

(i) Minimum Capital: Minimum capital requirements to be maintained by a bank against credit, market, and

opera�onal risks. (ii) Capital Growth: Process for assessing the overall capital adequacy aligned with risk profile of a bank as well

as capital growth plan. (iii) Public Disclosure: Framework of public disclosure on the posi�on of a bank’s risk profiles, capital adequacy,

and risk management system. This forms the basis of Market Discipline.


Capital Ratio Statutory Limit

(i) Core Capital Ratio

(ii) Total Capital (Core + Supplementary)

(Core Capital/ Risk-adjusted Assets)

>= 5%

(Total Capital/ Risk-adjusted Assets) >= 10%

Two Levels of Regulatory Capital Requirement: As per guideline, two tiers of capital is required to be kept i.e. Tier 1 Capital and Tier 2 Capital. Core Capital: Tier 1 Capital, also called the ‘Core Capital’, is the core measure of a bank’s financial strength from a regulator’s point of view. Banks have to maintain at least 50% of required capital as Tier 1 capital. Supplementary Capital: Tier 2 Capital is called the ‘Supplementary Capital’ and represents other elements which fall short of some of the characteris�cs of the core capital but contribute to the overall strength of a financial ins�tu�ons. According to Bangladesh Bank’s Guideline for NBFI, the computa�on of the two capital grades are subject to the following condi�ons.

(i) Tier 2 Capital amount will be limited to 100% of the amount of Tier 1 Capital.

(ii) 50% of revalua�on reserves for fixed assets and 45% for securi�es, and 10% of revalua�on reserves for

equity instruments are eligible for Tier 2 Capital.

(iii) General provision in the Tier 2 Capital can be up to a limit of 1.25% of Risk Weighted Asset for Credit Risk.

Common capital ra�os as per the regulatory requirements are as follows:

Effec�ve risk management is considered as a central part of the financial and opera�onal management of any company, whereby company sustainability and consistent profit genera�on are ensured. Only by adop�ng and strengthening risk management measures can the company deal with the complex and dynamic business environment. Group Risks are managed on an integrated basis. Risk management is incorporated in the Group decision making with regards to strategic planning.

Effec�ve Risk Management

The risks which form the basis for effec�ve risk management are: credit, market, opera�onal, and liquidity risks. Credit Risk: Credit risk is a risk that the FI will not be able to recover the money it has owed. It occurs due to failure of the counter party to meet its obliga�ons to pay the company in accordance with the agreed terms. The risk depends on the financial strength of the party owing to the bank as well as market factors that affect the value of assets used as lien against the loan. Credit risk calcula�on recognizes and adjusts for two factors:

(i) On Balance Sheet credit exposures refer to the credit risks that the various assets in the balance sheet are exposed to. These assets are weighted according to the degree of the risks exposed.

(ii) Off Balance Sheet credit exposures refer to the credit risks on the credit equivalent amounts of the various off balance sheet items.


Market Risk: Market risk is the poten�al for loss in earnings or in economic value of the FI’s asset por�olio due to adverse changes in financial market rates or prices. The preferred approach to calcula�ng this risk is VaR (Value at Risk). Opera�onal Risk: Opera�onal risk is the risk of a change in value caused by the fact that actual losses, incurred for inadequate or failed internal processes, people and systems, or from external events (including legal risk), differ from the expected losses. The risk can be deliberate, accidental or natural. The FI’s objec�ve is to minimize the opera�onal risk exposure within a framework of policies and procedures. Risk Weighted Assets (RWA) is a Financial Ins�tu�on’s assets or off-balance-sheet exposures, weighted according to risk. By adjus�ng the amount of each asset for an es�mate of how risky it is, a rough measurement of the company’s financial stability can be determined. Liquidity Risk: Liquidity risk is the risk that a company or bank may be unable to meet short term financial demands. This usually occurs due to the inability to convert a security or hard asset to cash without a loss of capital and/or income in the process.

Capital Adequacy for IIDFC Limited

At IIDFC, Capital Management Policy sets out the principles and guidelines for effec�ve and prudent capital planning, usage, and management of it. The policy defines the minimum criteria for ensuring that adequate capital is kept and effec�ve management is performed. Capital Adequacy is explicitly followed in adherence to the statutory compliance and regulatory requirements of Basel II guidelines, affected by Bangladesh Bank from 1st January 2010. The guidelines are prudently followed to safeguard the IIDFC’s ability to con�nue as a going concern, by establishing a strong capital base, and to maintain high credit ra�ng as well as the confidence of the investors and creditors. At IIDFC, capital planning is done in alignment with the company’s risk appe�te and profile. Capital goals are set to incorporate both normal and stressful business condi�ons. As such, the goals take into considera�ons current and future regulatory requirements and economic condi�ons, and the expecta�ons of stakeholders. Capital targets accommodate forward looking viewpoints on economic outlook, company’s current financial condi�on, and future uncertain�es inherent in capital planning. In line with this objec�ve, capital base is set at 1% higher than the minimum CAR. This ensures full compliance as well as a buffer against capital loss during stressful situa�ons. The company emphasizes on strong capital management through the followings: (i) Maintaining regulatory requirements of capital.

(ii) Supply and demand forecast of capital to support business strategy and con�nuity.(iii) Incorporate rolling capital plan covering a �me horizon of two to three years. (iv) Internal Controls and Governance to manage company’s risk, performance and capital.

Capital strategies are periodically reviewed to ensure that strong governance and process framework are in place for effec�ve risk management. Material capital risk is assessed periodically which supports the company’s internal capital adequacy requirements. The scope of applica�on of such guidelines applies to ‘Solo’ as well as to the ‘Consolidated’ basis. (i) ‘Solo Basis’ refers to all posi�on of the FI and its local and overseas branches/offices.

(ii) ‘Consolidated Basis’ refers to all posi�on of the FI (including its local and overseas branches/offices) and its subsidiary companies engaged in financial (excluding insurance) ac�vi�es like merchant banks, brokerage firms, discount houses, etc. Since IIDFC has subsidiary companies, the guidelines apply to both ‘Solo’ and ‘Consolidated’ basis.


‘Solo’ and ‘Consolidated’ basis. Breakdown of each category of eligible capital is given below.

(A) Core Capital of IIDFC Limited is as follows:

Particulars Solo Basis Consolidated Basis

2020 2020

General provision (unclassified loans up tospecific limit + SMA+ Off B/S exposure) 179.54

50% of Assets Revaluation Reserve -10% of Securities Revaluation Reserve -All other preference shares -Other (if any item approved by Bangladesh Bank)

-

Total 179.54

2019

312.19

----

312.19

476.27

---

-476.27

2019

616.16

---

-616.16

(B) Supplementary Capital of IIDFC Limited is as follows: Amount in Million

Particulars

Solo Basis Consolidated Basis

2020 2019 2020 Fully paid -up capital/capital lien with BB 1737.77 Statutory reserve 371.95Non -repayable share premium account (Share money deposit)

General reserve 50.80Retained earning (56.35)Minority interest in subsidiary -

-

Non -cumulative irredeemable preference share

-

Dividend equalization account - Other (if any item approved by BB) share money deposit

-

Less: Shortfall in provisions required against investment in shares

-

Less: Book value of Goodwill - Total 2,104.16

1,308.00371.95

310.81

50.80149.99

- -

- -

-

- 2,191.55

1737.77

371.95

67.8024.35

0.15 -

-

--

-

-2,202.02

2019

1,308.00371.95

310.81

67.80227.38

0.15 -

--

-

-2,286.09

Amount in Million


Risk Management At IIDFC Limited, disciplined risk management is considered as the key to organiza�onal success. With that objec�ve in mind, strong management structure and risk management system, along with robust policies are developed to allow the company to manage the internal and external, and regulatory environments. A robust risk management framework is built to effec�vely cover the necessary requirements of managing risk. Establishment and oversight of the Group’s risk management framework lies with the Company’s Board of Directors. The risk management policies are established to iden�fy and analyze the risks faced by the Group, to set appropriate risk control standards, and to monitor the risks and adhere to defined policies. Protocols and responsibili�es are clearly delineated such that decision making with regards to risk management are taken posi�vely. IIDFC contemplate on having the industry prac�ces of iden�fying, measuring and controlling risks. The Risk management policies and systems are reviewed regularly to reflect changes in market condi�ons and opera�ons. The Group, through its training and management standards and procedures, aims to develop a disciplined and construc�ve control environment in which all employees understand their roles and obliga�ons. By implemen�ng rigorous risk management policy, risk adjusted returns are maximized, while ensuring that the company remains within its desired risk appe�te. Emphasis is given on establishing a risk management culture which takes into account the underlying asser�ons: (i) Risk considered must be in line with the company’s goals, and also must support the company’s risk appe�te. (ii). Responsibility of iden�fying and taking risks within the organiza�on lies with every employee. The company carries the overall responsibility of ensuring that the risk-taking within the organiza�on is disciplined and focused. Accountability is ensured by taking risk agreed by the respec�ve company authori�es and also assuring that the risks taken are transparent, controlled, reported and falls within the appropriate infrastructure and resource. Future risk emergence is iden�fied and necessary steps taken to an�cipate its impacts. Effec�ve Risk Management Policy and Controls are founded to use the risk as a compe��ve advantage. Con�nuous improvement of the risk management approaches and methodologies to enhance current risk policies. Analyze and establish any new or improved policy to strengthen the company’s risk management posi�on. Ensuring consistent statutory compliance with regards to capital adequacy and risk management. In accordance with the Basel II guidelines, IIDFC takes precau�onary methods against credit, market, opera�onal, and liquidity risks. (i) Credit Risk: Credit Risk is effec�vely measured and managed through a framework of policies and procedures. All credit exposures undergo proper approving authority as a mean of effec�ve management of counter party credit risk. A defined structure is established for delega�on of credit approval authority and for monitoring compliance with appe�te. Proper due diligence is applied to review the credit applica�ons. Defined processes and procedures are used to support credit underwri�ng ac�vi�es at levels of the business. As a part of proper underwri�ng standards, appropriate valua�ons of collaterals are done for secured credits. A counter party is also required to have an approved limit in place, prior to draw down of funds. Every credit party is subject to credit ra�ng, and the ra�ng is ac�vely monitored as a part of effec�ve credit risk management. Account level ac�vity along with limit u�liza�on monitoring is set as a part of risk trigger-mechanism. This helps to iden�fy early alert situa�ons based on which the company can take proper ac�ons. Poten�al problem accounts are iden�fied, inves�gated, controlled and monitored. Past dues and impaired exposures are defined in accordance with the relevant Bangladesh Bank regula�ons. Specific and general provisions are computed periodically in accordance with the Bangladesh Bank regula�ons. The Group writes off a loan or an investment debt security balance, and any related allowances for impairment losses, when Group Credit determines that the loan or security is non-collectable. This determina�on is made a�er considering informa�on such as the occurrence of significant changes in the borrower’s / issuer’s financial posi�on such that the borrower/issuer can no longer pay the obliga�on, or that proceeds from collateral will not be sufficient to pay back the en�re exposure.


(ii) Market Risk: Market Risk management is set as per the parameters defined in the policy. The objec�ve of the Group’s market risk management is to manage and control market risk exposures set within the acceptable parameters, thereby ensuring solvency while op�mizing the Group’s risk return strategy. Sufficient oversight and repor�ng are conducted for management of market risk profile. Overall authority for market risk rests with the ALCO. Se�ng market liquidity as the primary factor for determining the level of limits for por�olio trading, ALCO provides limits for each type of risk in aggregate and for individual por�olios. (iii) Opera�onal Risk: Opera�onal Risk framework is designed to ensure opera�onal risk iden�fica�on, assessment, control and monitoring at business and group level. Management of opera�onal risks is an integral part of the roles played by business and the func�onal teams. The Risk Management Division oversees whether the opera�onal risk exposures fall within the policy. Defined standards of measurement are also outlined which plays one of the cri�cal roles of ensuring that the risks are managed within the acceptable tolerance limits. The policies and standards are also reviewed periodically to keep the framework updated. The types of events that could result in material opera�onal risk loss or business disrup�ons are as follows:

a. Internal and external fraud b. Damage to physical assets c. Business process disrup�ons and system failures d. Failure in service execu�ons and deliveries, as well as process management e. Liquidity Risk is managed by the ALCO team within the pre- defined liquidity limits set by and in compliance

with the policies and regulatory requirements. The Treasury Department oversees the implementa�on of policies and other controls rela�ng to liquidity risks while managing the liquidity posi�on of the company on a day to day basis.

RWA figure is calculated on the basis of credit, market, and opera�onal risks. Total RWA is determined by first mul�plying the amount of capital charge for market risk and opera�onal risk with the reciprocal of the minimum CAR. The resul�ng figure is added to the sum of the risk weighted assets for credit risk.

Calcula�on of Risk Weighted Assets

Capital Adequacy Ratio (CAR) = (Core Capital +Supplementary Capital)/RWA

Particulars

Solo Basis Consolidated Basis (Amount in million)

2020 2020 Credit Risk

1. On B/S 14,312.0350.89

416.101,017.21

15,796.23

2019

16,168.8750.89

659.72873.68

17,753.16

15,099.9550.89

708.171,232.60

17,091.61

2019

17,003.0350.89

1,063.391,097.57

19,214.88

2. Off B/S

Market Risk Operational Risk Total RWA


Capital Adequacy

Particulars

Solo Basis Consolidated Basis 2020 2020

Core Capital 2104.16179.54

2,283.7015,796.23

14.4613.32

1.141,579.62

704.08

2019 2,191.55

312.192,503.74

17,753.1614.1012.34

1.761,775.32

728.42

2,202.03476.27

2,678.3017,091.61

15.6712.88

2.791,709.16

969.14

2019 2,286.10

616.162,902.26

19,214.8815.1011.90

3.211,921.49

980.77

Supplementary Capital Total Eligible Capital Risk Weighted Assets Capital Adequacy Ratio Core Capital to RWA Supplementary Capital to RWA Minimum Capital Requirement (10% of RWA) Excess capital over regulatory requirement

Capital Adequacy Ra�o (CAR) of IIDFC is more than the Bangladesh Bank’s CAR requirement of 10%. The status in line with the IIDFC’s approach for being compliant and to establish investors’ confidence. Moreover IIDFC is ge�ng prepared for the BASEL-III requirement which is currently applicable for Bank but may be applicable for Non-Banking Financial Ins�tu�ons in near future.

(Amount in million)


SUSTAINABILITYREPORT


Being an integral part of repor�ng the organiza�on’s performance, sustainability report facilitates the organiza�on to reflect its impact on a wide range of sustainability ma�ers. IIDFC’s sustainability report focuses on environmental and social performance caused by its opera�onal ac�vi�es.

Building and maintaining trust in the businesses sector is essen�al to accomplishing a sustainable economy. Decisions taken by the business have crucial impact on different stakeholders. Sustainability report represents the organiza�on’s values and governance model, and demonstrates its strategy and its promise towards a sustainable global economy. Although these sustainability issues were previously neglected by poli�cal, ins�tu�onal and business communi�es, this repor�ng has become an integrated part of any organiza�on in today’s world. Sustainable development has guided companies to modify their strategic management, changing the focal point from only financial dimension to the considera�on of mul�ple factors from different stakeholders.

Four aspects of annual sustainability report are as follows:

a. Corporate Social Responsibility Ini�a�ves; b. Environmental Repor�ng; c. Obliga�ons to the society and environment; and d. Integrated Repor�ng.


Around 30,000 tons ofCO2 emission werereduced in 2020.

Adopted 3R (Reduce,Reuse, Recycle) principle

aiming environmentalconservation

Replaced the ligh�ngsystems of Head Office

and Branches withenergy saving LEDs

Manpower increasedby 21%

Sectoral Exposureincreased in CSR

Expenditure


CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES OF IIDFC

Corporate social responsibility (CSR) is a self-regula�ng business model that forces an organiza�on to be accountable to its stakeholders. Prac�cing CSR ac�vi�es helps the organiza�on to achieve its mission in the long run. IIDFC’s CSR ac�vi�es are performed in line with its social responsibili�es to the different stakeholders, such as, shareholders, employees, government, depositors, investors, borrowers, suppliers and communi�es. From the last few decade, users of accoun�ng informa�on have demanded more informa�on not only rela�ng to economic ac�vi�es but also to the impact of an ins�tu�on’s ac�vi�es on society. Corporate social responsibility (CSR) surfaced through social responsibility accoun�ng (SRA) as a mean for a�aining social responsiveness.

IIDFC performed the following CSR ac�vi�es in the year 2020:

Dona�on of Tk. 25,000.00 on 10 August 2020 to support Corona affected people


Distribu�on of blanket by IIDFC to Cold Stricken Area of Bangladesh

Distribu�on of blanket by IIDFC to Cold Stricken Area of Bangladesh


Environmental repor�ng is an essen�al tool to communicate and fulfill the organiza�ons' accountability towards environmental burden. This repor�ng framework works as a bridge where the rela�onship between an organiza�on and its stakeholders is connected. An environmental disclosure consists of three categories, namely, involuntary, mandatory, and voluntary disclosures. Environmental report summarizes the informa�on on environmental performance, such as, impact on the environment, performance in managing those impacts and contribu�on to ecological and sustainable development. Combining climate change through Clean Development Mechanism (CDM) project in brick making sector is facilitated by IIDFC.

GHG Emission Reduc�on and Energy Efficiency Carbon Finance: A Market Based Mechanism for Comba�ng Climate Change

To reduce the emission of greenhouse gas, IIDFC has been successfully con�nuing its contribu�on by opera�ng its Clean Development Mechanism (CDM) project �tled “Improving Kiln Efficiency in the Brick Making Industry in Bangladesh”. The project has introduced energy efficient Hybrid Hoffman Kiln (HHK) technology in the sector back in 2007 jointly with UNDP and the World Bank. The CDM project designed under the Kyoto Protocol and regulated by the United Na�ons Framework Conven�on on Climate Change (UNFCCC) was also ini�ated to support the diffusion of environment-friendly technology in the brick making sector of the country, which is ordinarily known as one of the main air polluters.

At present, the project consists of 5 opera�onal HHK brick factories which has helped to reduce around 30,000 tons of CO2 eq. emissions during 2020.

IIDFC distributed revenues among the brick manufacturers, who contributed to reduce 77,628 tons of emission reduc�ons during 2016-2017 on December 2020. Total USD 620,980 was received from ADB.

ENVIRONMENTAL REPORTING

IIDFC Chairman Md. Ma�ul Islam poses at an event at MTB Centre in Dhaka, when he distributed “Carbon Revenue” Cheques among six brick manufacturers for reducing carbon dioxide emissions by 77,628 tonnes between 2016 and 2017 by using HHK Technology.


OBLIGATIONS TO THE SOCIETY AND ENVIRONMENT

The verifica�on of the CO2 reduc�ons during 2018-19 period was also carried out and resulted in cer�fica�on of 65,603 tons of emission reduc�ons from UNFCCC. These Cer�fied Emission Reduc�ons are commi�ed to the Asian Development Bank (ADB) in exchange of valuable foreign currency which will be shared with the par�cipa�ng brick factories. IIDFC has carried out all the necessary monitoring, repor�ng, and coordina�ng ac�vi�es with the Verifier (UN GHG auditor) using its own resources. This has helped to reduce the opera�onal cost of the project

In addi�on to the monitoring ac�vi�es related to the verifica�on, IIDFC has been coordina�ng occupa�onal health safety and environmental safeguard ac�vi�es. The factories ensure maintaining certain standards to comply with safeguard due diligence of ADB in their workplace under supervision of IIDFC, which is very rare in this sector. Moreover, as part of monitoring of environmental impacts on project surroundings a range of tests including ambient air, water quality and noise level has been conducted. While most of the test results have been sa�sfactory, necessary ini�a�ves have been taken to redress the abnormality.

Protec�ng and serving the public interest is the obliga�ons of any organiza�on. The objec�ve of the organiza�on is not only to maximize the profits but also to serve and protect the interests of all stakeholders.

This repor�ng improves the transparency of corporate ac�vi�es and their impact towards reducing environmental changes. Under the environment and social obliga�ons, IIDFC helps prevent financing in environment hazardous industries and/or investors. It has been operated for a long �me by a separate department of IIDFC for financing in Clean Development Mechanism projects and energy efficiency improvement projects. IIDFC’s service coverage includes building agent in small scale CDM projects, consultancy in large scale CDM projects, coordina�ng and managing en�ty in programma�c CDM.

IIDFC has se�led its obliga�ons towards the society and environment through various ini�a�ves.


CONTRIBUTION TOWARDS ACHIEVING SDGS

GOAL 7:Affordable andClean Energy

IIDFC’s Clean Development Mechanism project has introduced environment friendly HHK technology in the brick making sector of the Country.

GOAL 8:Decent Work andEconomic Growth

The focus of financial ac�vi�es of IIDFC is to create jobs and to bring sustainable economic growth to the people. IIDFC has been a trusted partner in crea�ng young entrepreneurs by offering a range of products under the Small and Medium Enterprise Finance sec�on. Moreover, under the CDM project a significant number of permanent jobs including women employment have been created, which has enabled significant improvement of the lifestyles for the rural people.

GOAL 9:Industry, Innova�onand Infrastructure

IIDFC has con�nued its support towards industrial and infrastructural development of the country through its innova�ve financial products for the last 19 years. IIDFC believes that innova�ve business ideas are key to gain sustainable industrial growth for the country and community.

GOAL 10:Reduced inequality

The core of the policies and regula�ons of IIDFC is to provide equal opportunity to everyone regardless of who they are and where they come from. IIDFC acknowledges the necessity of regula�ons in financial markets and ins�tu�ons to reduce income inequality as a global challenge that requires global a�en�on.

GOAL 11:Sustainable Ci�esand Communi�es

IIDFC has incorporated necessary due-diligences in the financing procedures to ensure sustainable growth of industry and infrastructures.

GOAL 13:Climate Ac�on

IIDFC’s CDM Project has directly mi�gated emission of around 30,000 tons of CO2 in 2020. With a view to limi�ng the global mean temperature under 1.5 degrees and thus avoid the worst effects of climate change IIDFC shall remain open to collaborate with development financial ins�tu�ons and other relevant organiza�ons to bring innova�ve and sustainable technologies to Bangladesh and expand par�cipa�on in carbon trading market.


INTEGRATED REPORTING Integrated repor�ng is also an important tool in improving the understanding of the rela�onship between financial and non-financial factors that determine a company’s performance and of how a company creates sustainable value in the longer term. This report is intended for all stakeholders, including shareholders, employees, customers, suppli-ers, business partners, local communi�es, regulators and policy makers. IIDFC’s integrated report follows the guidelines of Integrated Repor�ng Checklist of the Ins�tute of Chartered Accountants of Bangladesh (ICAB) which resembles the Interna�onal Integrated Repor�ng Council.

Integrated repor�ng has two major concepts, i.e. value crea�on and materiality. Integrated repor�ng also showcases how a company u�lizes its capital to add value to business. Further discussion on integrated repor�ng is furnished on “Integrated Report” (Page- 08)


CORPORATE GOVERNANCECorporate Governance is a combina�on of policies, prac�ces and processes within the organiza�on through which it is operated and controlled. The main objec�ve of Corporate Governance is to minimize conflicts of interest among stakeholders so that stakeholders’ value is maximized.

Corporate Governance deals with the interac�ons among various stakeholders (Shareholders, Board of Directors and Management) in shaping corporate performance. At IIDFC, the Board of Directors provide strategies and policies to promote transparent business models, responsible lending policies and prudent investment guidelines to be followed by the management for performance excellence.

IIDFC reviews its governance tools and guidelines regularly to ensure that these remain appropriate and in line with regulatory requirements and changing business environment. The Board of Directors regularly follows developments in this regard and adopt appropriate Corporate Governance prac�ces and policies to excel stakeholders’ benefit.


Chairman Mr. Md. Matiul Islam, FCA

Vice Chairman Mr. Md. Ataur Rahman ProdhanCEO & Managing Director, Sonali Bank Limited

Directors Mr. Md. Abdus Salam AzadCEO & Managing Director, Janata Bank Limited

Mr. Md. Abul HossainManaging Director, Investment Corpora�on of Bangladesh

Mr. Selim R.F. HussainManaging Director & CEO, BRAC Bank Limited

Mr. Shah Syed Abdul BariManaging Director, Na�onal Bank Limited

Mr. Syed Mahbubur RahmanManaging Director & CEO, Mutual Trust Bank Limited

Mr. Sheikh Mohammad MaroofAddi�onal Managing Director, The City Bank Limited

Mr. Md. Monzur MofizAddi�onal Managing Director, ONE Bank Limited

Mr. Md. Sazzad HossainDeputy Managing Director, Bank Asia Limited

Mr. Syed M. Altaf HussainChairman, Praga� Insurance Limited

Mr. Kamal Uddin AhammedDirector, Eastland Insurance Company Limited

Mr. Md. Kazim UddinCEO, Na�onal Life Insurance Company Limited

Managing Director Mr. Md. Golam Sarwar Bhuiyan


The Board of IIDFC is responsible for formula�on of overall planning, policies, strategies and managing the Company as well as overseeing its general business ac�vi�es. The Board’s ac�ons and decisions are taken in the best interests of the Company, which include the interest of shareholders, employees, customers and other stakeholders. Its aim is to create sustainable value for the stakeholders. The Board approves annual budget, business plan and provide guidance on regular basis. To address the affairs of the Company, the Board is guided by: i. Corporate Governance Code of Bangladesh Securi�es and Exchange Commission (BSEC); ii. The Companies Act 1994; iii. Memorandum and Ar�cles of Associa�on of IIDFC; iv. Rules and regula�ons issued by Bangladesh Bank; and v. Other relevant laws and regula�ons.

Mee�ng of the Board

The Board held 06 (Six) mee�ngs in the year under repor�ng. Mee�ngs were conducted in compliance with the Companies Act 1994. The ac�ons and decisions were taken for the best interest of the Company and Stakeholders. Directors’ a�endance in the above Board Mee�ngs is shown in Appendix-A (Page- 200)

The Chairman

Role and responsibili�es

The Chairman plays a crucial role for proper func�oning of the Board of Directors. The role and responsibili�es of the Chairman are outlined in compliance with DFIM Circular No 07 dated 25 September 2007 issued by Bangladesh Bank and Corporate Governance No�fica�on issued by BSEC.

The prime role and responsibili�es of the Chairman are:

i. planning and conduc�ng Board mee�ng under his leadership to ensure proper informa�on to the Board; ii. suppor�ng Managing Director to reach the goal through formula�on of necessary business strategy; iii. ensuring effec�ve communica�on with the Shareholders, Board of Directors, employees, Government and its

agencies, depositors, investors, suppliers and other stakeholders; iv. linking Member of the Board and management along with Company Secretary to fix agenda of Board

Mee�ng; and v. engaging all the Board members ac�vely.

The Chairman, however, does not par�cipate in or interfere into the administra�ve or opera�onal affairs of the Company since he does not personally possess the jurisdic�on to apply execu�ve authority.


Roles and responsibili�es of Board

The Board of Directors is appointed to act on behalf of the Shareholders to formulate policy, guideline and oversee the affairs of the Company. They are directly accountable to the Shareholders and Stakeholders. The Directors present a report each year before the Shareholders in the Annual General Mee�ng (AGM) on the performance of the Company. The report also includes industry outlook and possible future developments, internal and external risk factors, threat to sustainability, etc. The Board carries out its role and responsibili�es based on the Bangladesh Bank’s DFIM Circular no. 07 dated 25 September 2007. The key role and responsibili�es of the Board are:

Roles of the Board of Directorsa) Establish vision, mission and values

i. Determine Company's vision and mission to guide and set its current opera�ons and future development strategy.

ii. Determine the values to be promoted in the Company.iii. Determine and review Company’s goals.iv. Determine Company’s policies.

b) Set strategy and structurei. Review and evaluate present and future opportuni�es, threats and risks in the external environment and

current and future strengths, weaknesses, opportuni�es and risks rela�ng to the Company.ii. Determine business strategies that support Company’s plan.iii. Ensure that the Company's organiza�onal structure and capability are appropriate for implementa�on of

those strategies.

c) Delegation of Authorityi. Delegate authority to management, monitor and evaluate the implementa�on of policies, strategies and

business plans.ii. Determine monitoring criteria to be used by the Board.iii. Ensure that internal controls are effec�ve.

d) Exercise accountability to Shareholders and Stakeholdersi. Ensure that communica�ons both to and from Shareholders and Stakeholders are effec�ve.ii. Safeguard the interests of Shareholders and Stakeholders.iii. S�mulate goodwill of the Company to support Shareholders and Stakeholders.

Responsibili�es of DirectorsThe prime responsibili�es of the Directors are:

i. overseeing implementa�on of IIDFC’s strategic objec�ves, corporate governance framework and corporate culture by the management;

ii. ensuring Company's prosperity through direc�ng Company's affairs as well as mee�ng interests of its Shareholders and Stakeholders;

iii. overseeing implementa�on of risk management, internal control and compliance system in line with Bangladesh Bank’s Core Risk Guidelines;

iv. approval and monitoring of investments of the Company; v. reviewing of opera�onal budget and performance of the Company, approval of budget, financial statements,

purchase or acquisi�on of property or assets;vi. recommenda�on for appointment or removal of external auditors and determina�on of the terms of

appointment of the external auditors;vii. appointment of Managing Director and fixa�on of his/her terms of appointment including package and

facili�es subject to Bangladesh Bank’s approval;viii. approving budget of CSR and taking steps for proper implementa�on;ix. reviewing Company’s Human Recourse Policy;x. selec�on, nomina�on and removal of directors.

The Board duly complies with the guidelines issued by Bangladesh Bank, BSEC, the Companies Act 1994, the Financial Ins�tu�ons Act 1993 and other applicable rules and regula�ons.


The Managing Director

The Managing Director (MD) of IIDFC performs his du�es with the highest level of integrity and transparency for the benefit of the shareholders and other stakeholders. He also carries out business and affairs of the Company in an ethical manner and in full compliance with the relevant laws and regula�ons. As chief execu�ve of the company he is primarily responsible for overseeing Company’s day-to-day opera�ons. The MD discharges his responsibili�es in terms of the financial, business and administra�ve authori�es vested upon him by the Board and in compliance with DFIM Circular No 07 dated 25 September 2007 issued by Bangladesh Bank. Furthermore, he is responsible for mapping medium to long-term plans and implements the policies and decisions of the Board, as well as coordinates the development and implementa�on of business and corporate strategies. MD is accountable to the Board and its Commi�ees to run and manage the Company in accordance with approved policies, principles and strategies established by the Board of Directors and rules, regula�ons and guidelines of Bangladesh Bank and other regulatory authori�es.

The Audit Commi�ee

The Audit Commi�ee of IIDFC assists the Board in fulfilling its overall responsibili�es for financial repor�ng process, internal control system, audit process and the Company’s adherence with related laws and regula�ons and the code of conducts. The Commi�ee carries out its func�ons based on the Terms of Reference (ToR) as men�oned in the Bangladesh Bank’s DFIM Circular # 13, dated October 26, 2011. The Commi�ee cons�tuted by the Board and consists of 6 (six) members and plays its role accordingly. They have adequate exper�se and have good understanding about IIDFC’s opera�ons and related risk associates therewith. The Chairman of the Audit Commi�ee is a dis�nguished banker with high level of experience in this area. The commi�ee reviews the plan of internal and external auditors, the effec�veness of audit, and the independence and objec�vity. In 2020, the commi�ee held 4 (four) mee�ngs.

The Composi�on of members of the Audit Commi�ee is as follows:

Mr. Md. Abdus Salam AzadCEO & Managing Director, Janata Bank Limited

Member

Mr. Md. Abul HossainManaging Director, Investment Corpora�on of Bangladesh

Member

Mr. Shah Syed Abdul BariManaging Director, Na�onal Bank Limited

Member


Member

Mr. Kamal Uddin AhammedDirector, Eastland Insurance Company Ltd

Member

AuditCommittee

of the Board

Mr. Syed Mahbubur RahmanManaging Director & CEO, Mutual Trust Bank Limited

Chairman


Role of the Audit Commi�ee

a) Internal Control i. Evaluate whether management is se�ng the appropriate compliance culture by communica�ng the

importance of internal control and risk management ensuring that all employees understand their role and responsibili�es.

ii. Review of the appropriateness of Management Informa�on System (MIS) including Informa�on Technology (IT) system and its applica�on.

iii. Review whether internal control strategies recommended by internal and external auditors have been implemented by the management.

iv. Evaluate the exis�ng risk management procedures for ensuring an effec�ve internal check and control system.

v. Reports rela�ng to fraud, forgery, deficiencies in internal control or other similar issues detected by internal and external auditors and inspectors of the regulatory authori�es and place it before the board a�er reviewing the correc�ve measures taken by the management.

b) Financial Repor�ng i. Review the audited financial statements with management and the external auditors to ensure that the

financial statements are fairly presented in conformity with the accoun�ng standards set by the regulatory authori�es in all material aspects.

ii. Regular mee�ng with management and the external auditors to review the financial statements before finaliza�on.

iii. A�ends in AGM to answer the ques�ons regarding financial statements and audit.

c) Internal Audit

i. Review the ac�vi�es of the internal audit team in rela�on to organiza�onal structure and ensure that no unjus�fied restric�ons or limita�ons are made.

ii. Examines the efficiency and effec�veness of internal audit func�on. iii. Review whether the findings and recommenda�ons made by the internal auditors are duly considered by the

management. iv. Recommenda�on to the Board regarding change of accoun�ng policies. v. Evaluate adequacy and effec�veness of IIDFC’s system of internal controls and risk management procedures.

d) External Audit

i. Review the ac�vi�es of the external auditors and their audit reports. ii. Review whether the findings and recommenda�ons made by the external auditors are duly considered by the

management or not. iii. Recommenda�on to the Board regarding appointment of external auditors.

e) Regulatory Compliance

Review whether the laws and regula�ons enacted by the regulatory authori�es (Bangladesh Bank and other regulatory agencies) and internal regula�ons approved by the Board have been complied with.

f) Miscellaneous

i. Placement of reports before the Board of Directors regarding rectification/correction status of errors, fraud, forgery and others irregulari�es iden�fied by internal & external auditors and Bangladesh Bank’s inspec�on team on quarterly basis.

ii. Performs other supervisory ac�vi�es as assigned by the Board of Directors along with evalua�ng Commi�ee’s own efficiency on regular interval.


Execu�ve Commi�ee of the BoardThe Board of Directors of IIDFC has formed the Execu�ve Commi�ee of the Board with five members in its 226th Mee�ng held on September 29, 2020. The Company Secretary acts as the secretary of the Commi�ee.

Role of the Execu�ve Commi�ee

The key role and responsibili�es of Execu�ve Commi�ee are:

i) To decide or act in those cases as instructed by the Board of Directors that are not specifically assigned on full board through the Financial Ins�tu�ons Act 1993 and other laws and regula�ons.

ii) To take all necessary decision within power delegated by the Board of Directors including the following:a. Approval of all business proposals/investments (non-syndica�on) to clients up to BDT 150.00 million.b. All renewal, change of fees, rate review, restructuring and extension of moratorium period for the exis�ng

facility.c. Any amount of waiver of interest expense, overdue interest, interest capitalized, penal interest and other

charges.d. Change of collateral/ security or replacement of the exis�ng one with new security/ collateral.e. Release of collateral security for adjustment of par�al facility amount.f. Change of leased assets, if the proposed new asset is of the same/superior quality and value.g. Directorship change and name change of the borrowing concern.h. Change in the signatory for any purpose.i. Approval of Credit Line/Term Loan, Overdra� and Security overdra� with Bank's and FI's.j. Approval of opening and reloca�on of office/ branch within the country.

iii) To act in accordance with the direc�ons and requirements as defined by the Board from �me to �me. iv) To review and update this Terms of Reference and recommend to the Board necessary changes, if any, for

approval.

v) All decisions taken in the Execu�ve Commi�ee should be ra�fied in the next board mee�ng.

The Composi�on of the Execu�ve Commi�ee is as follows:

Mr. Selim R.F. HussainManaging Director & CEO, BRAC Bank Limited

Chairman

Mr. Sheikh Mohammad MaroofAMD & Head of WB, The City Bank Limited

Member

Mr. Md. Sazzad HossainDeputy Managing Director, Bank Asia Limited

Member

Mr. Syed M. Altaf HussainChairman, Praga� Insurance Limited

Member


Member

ExecutiveCommittee

of the Board


SME Credit Commi�ee of the Board

In order to widen the financing coverage and to take opportunity of untapped business segment IIDFC started SME Financing business back in 2006. In line with this the Board of Directors of IIDFC has formed the approval authority of SME Financing ini�ally with four members in its 64th Mee�ng held on August 17, 2006 with SME loan approval authority up to BDT 5.0 million. Later, the number of commi�ee members revised to five and current approval authority of the commi�ee is up to BDT 50.00 million for fresh loan and BDT 100.00 million for renewal/repeat facility of exis�ng loan. The member of the commi�ee provides valuable contribu�ons in the func�oning of the commi�ee ac�vi�es effec�vely and has adequate understanding about SME business. The Head of CRM acts as the member secretary of the commi�ee.

Roles of the SME Credit Commi�ee

Key roles and responsibili�es of SME Credit Commi�ee are: i. Approval of fresh SME loan/lease (including home loan) upto BDT 50.00 million ii. Approval of renewal of exis�ng loan/lease facili�es upto BDT 100.00 million. iii. All renewal, change of fees, rate review, restructuring, waiver of interest expense, overdue interest, interest

capitalized, penal interest and other charges of SME / Home Loans approved by the SME Credit Commi�ee. iv. Extension of moratorium period for the exis�ng facility, change of collateral/security or replacement of the

exis�ng one with new collateral/security and release of collateral security for adjustment of par�al facility amount of SME / Home Loans approved by the SME Credit Commi�ee.

v. Change of leased assets, if the proposed new asset is of the same/superior quality and value of SME Loans approved by the SME Credit Commi�ee.

vi. All decisions taken in the SME Commi�ee should be ra�fied in the next Board mee�ng.


Managing Director - Head of the Commi�ee

Head of Corporate Finance - Member

CFO & Company Secretary - Member

Head of Treasury - Member

Head of SME - Member

Head of Structured Finance - Member

Head of SAM - Member

Head of Opera�ons - Member

Head of CRM - Member

Head of IT - Member

Head of ICC - Member

Management Commi�ee (MANCOM)

Managing Director- Head of the Commi�ee

Head of Corporate Finance- Member

CFO & Company Secretary- Member

Head of Treasury- Member Secretary

Head of SME- Member

Head of Structured Finance- Member


Asset Liability Management Commi�ee

Managing Director- Head of the Commi�eeHead of Corporate Finance- MemberCFO & Company Secretary- MemberHead of SME- Member Head of CRM - Member

BASEL Implementa�on Unit

Managing Director- Chief Risk OfficerHead of Corporate Finance- MemberCFO & Company Secretary- Member

Head of Treasury- MemberHead of SME- Member

Head of Opera�ons - MemberHead of CRM - Member Secretary

Risk Management Forum

CAMLCO- Head of the Commi�ee

Head of Corporate Finance- Member

Head of SME- Member

Head of Treasury- Member


DCAMLCO- Member Secretary

Central Compliance Unit

MANAGEMENT COMMITTEE AND ITS SUB-COMMITTEES

Besides this, IIDFC has other Commi�ees, such as- Credit Appraisal Commi�ee, Procurement Commi�ee, Tender Evalua�on Commi�ee, Ethics Commi�ee, ICT Steering Commi�ee, ICT Security Commi�ee and ICT Risk Management Commi�ee etc. according to Bangladesh Bank circular and guideline.


IIDFC has a Code of Conduct to guide all employees in discharging their du�es and in dealing with customers, colleagues and related authori�es. It also sets out the standards of good financial transac�on prac�ces that all employees must observe. As per the ‘Ethics and Code of Conduct Guidelines’ for IIDFC’s employees, all have to maintain the code of conduct and demonstrate highest ethical standards. These are the core values that IIDFC’s personnel must follow. Any known or suspected incidents of illegal/unacceptable/undesirable conduct are viewed with zero tolerance. Our core behaviors encourage our employees to speak up and have open and honest conversa�ons.

Code of Conduct for EmployeesThe following issues must be addressed:

Ensure pleasant working environment in terms of well defined compensa�on package, goal orientated and performance based job descrip�on;

Provide scope for both professional and career development of the employees; Well designed and well maintained working environment as well as procedures to make it reasonably and

promptly responsive to the customer needs, along with compliance of legal and regulatory requirements; Appropriate training for the employees so that they can discharge their du�es efficiently; Addressing of other issues which will uphold and embolden the image of the company in an ethical way.

Employee Compliance and Responsibili�es

The employees should: Protect all confiden�al informa�on, whether it relates to the company itself or the co-workers, customers,

suppliers or others the company does business with. Protect all company assets including: informa�on, intellectual property, physical, technological and financial

assets and business rela�onships. Comply with Company’s rules in public communica�ons, including the use of electronic communica�ons and

social media. Be accurate and complete in recordkeeping and comply with all internal controls, policies and procedures. Be cau�ous about the intellectual property rights of others. Not provide any informa�on to third party without prior approval of competent authority. Not accede to or use customers' informa�on excep�ng related business purposes. Protect the confiden�ality and security of customer informa�on. Not disclose any informa�on of govt. agencies without prior approval of competent authority. Keep informa�on about the purchase of goods or services confiden�al and price quoted, methods, business

policy etc. of the vendors should not be disclosed. Adhere to proper e�que�e and dress code. Follow all company procedures regarding document maintenance, reten�on and destruc�on. Assume informa�on is confiden�al unless it known otherwise. Refrain from ac�ng on the company's behalf in any transac�on or rela�onship where the employees' families

have a significant personal connec�on or financial interest. Act in a way so that their ac�vi�es outside IIDFC are not reflected adversely on IIDFC or triggers a conflict of

interest. Handle their personal finances responsibly, ethically and in compliance with the law. Refrain from seeking or provide recommenda�ons of fellow employees, customers or suppliers of IIDFC

without authoriza�on.

ETHICS AND CODE OF CONDUCT GUIDELINE


Refrain from using their posi�ons at IIDFC to gain any type of personal benefit or advantage in a business decision or transac�on.

Know when it's appropriate to give and accept gi� and when it's not and should keep in mind that some gi�s are not appropriate under any circumstances.

Apply own judgment and ethical concerns in using organiza�on's phones, electronic mail or compu�ng systems for personal requirement.

Refrain from using company Le�er Head for personal correspondence. Be aware of the responsibili�es they have toward IIDFC even a�er the end of employment. Treat others with dignity, and respect the diversity of cultures, backgrounds and experiences that make up

the workforce. Report immediately about viola�ons, harassment or discrimina�on policies whenever these came to their

knowledge. Be alert to and report any ac�vity that could pose a threat to the physical security of employees or individuals

doing business in the Company. Do their part to promote a safe, alcohol-free and drug-free workplace. Feel free to be involved in the poli�cal process and exercise their rights as a ci�zen, but must make sure

poli�cal ac�vi�es and contribu�ons comply with the law and company policies. Refrain from involving the company in any poli�cal ac�vi�es or using company resources in connec�on with

poli�cal ac�vi�es. Comply with all applicable environmental laws and regula�ons. Cooperate as directed with any inves�ga�on, inquiry, examina�on or li�ga�on related to the company's

business. Report any breach in "IIDFC Code of Conduct and Ethics" and reach out to the ethics commi�ee for guidance.


Human Capital

An organiza�on runs with ac�ve par�cipa�on of its employees who contribute in their own way towards the organiza�on’s success and produc�vity. Employees spend maximum part of their day in workplace and strive hard to achieve the goals and objec�ves of the organiza�on. Employees ought to be mo�vated from �me to �me so that they develop a sense of a�achment towards their organiza�on and deliver their best. Knowledge and exper�se which employees develop in due course of �me can be well applied for further increase in produc�vity of organiza�ons.

Management of Human Capital

Human Capital management plays an important role in increasing the efficiency of employees. Accordingly, IIDFC considers its human resources as the most valuable capital of the Company as they are playing vital role in achieving IIDFC’s mission, vision, goals and objec�ves. To ensure long term sustainability, IIDFC has a special focus on skill and merit-based recruitment and selec�on process, highly compe��ve remunera�on package, adequate training and development programs, career growth with succession planning, high performance culture and pleasant working atmosphere.

IIDFC applies human capital management for:i. hiring the right talent; ii. orien�ng human resources to the organiza�on;iii. training employees in order to constantly upgrade their skills; iv. retaining employees; v. making employees self-sufficient and prepare them for facing adverse condi�ons; andvi. developing skill of employees which help them stand apart from the rest.

Merit Based Hiring

Merit based hiring is a process of determining whether job seekers have the skills, abili�es and knowledge deemed to be most suitable for the job. IIDFC applies following process for appoin�ng human resources on merit basis:

i. proper evalua�on and verifica�on of minimum qualifica�ons specifically related to the du�es and responsibili�es of the individual posi�on;

ii. examina�on of knowledge, skills, and abili�es through wri�en test and viva-voce;iii. relevant experiences, degrees, competencies, professional qualifica�ons are considered as added

qualifica�on for appointment; iv. in case there are no applicants who clearly exceed the minimum qualifica�ons, the ma�ers are forwarded to

the top management for review and considera�on. A decision may be made to re-adver�se the vacancy, if management think it fit;

v. suitable candidates are short-listed and are invited to a wri�en test and/or interview, a�er which a short-list is made for preparing a panel;

vi. Prior to making the final assessment, HR team conducts background checks. A final assessment is based on all of the above;

vii. HR issues job offer le�er to the successful candidate, which includes the job �tle, type of contract, terms and condi�ons, salary, benefits and the date of joining; and

viii. the selected candidate/s must accepts the job offer and return the signed copy to IIDFC.


Remunera�on & Benefits

IIDFC offers a�rac�ve salary and benefit packages to its employees’ along with other benefits which include:i. Par�cipatory Provident Fund; ii. Gratuity Scheme;iii. Leave fare assistance;iv. Earn leave encashment;v. Interest free car loan with a�rac�ve allowance, where applicable;vi. Staff loan at a concessional rate;vii. Health insurance for the employees and their spouses and children;viii. Group Life insurance for the employees;ix. Maternity leave;x. Mobile allowance;xi. Training both in home and abroad; andxii. Study leave.

Performance evalua�on

IIDFC applies process of evalua�ng the performance and qualifica�ons of the employees in terms of the requirements of the job for which s/he is employed, for the purposes of administra�on including placement, selec�on for promo�ons etc. It has performance based evalua�on system and reflected through financial rewards and other ac�ons which require differen�al treatment among the members of a group as dis�nguished from ac�ons affec�ng all members equally. The main purposes of performance evalua�on are:

i. Company’s objec�ves;ii. Day-to-day performance;iii. Professional development; andiv. Rewards and incen�ves.

The performance appraisal system of IIDFC is an annual process which includes:i. Assessment of the financial or non-financial targets;ii. Assessment of the competencies of the individual in achieving job requirement;iii. Assessment of overall performance.

Training for Human Resource Development

Human Resources Development is focused on in-house training for both on the job and off the job for staff members. Specialized training programs in the areas of loans & advances, informa�on technology, marke�ng, accounts etc. are also organized by IIDFC both in-house and outdoor on need basis. Extended training programs are organized to meet demand for new and specialized skills. IIDFC also organizes training programs abroad for the deserving officials who have good performance record with long bondage plan with the Company. IIDFC designs its courses, programs etc. regularly to meet the requirement of new skills arising out of various direc�ves, guidelines of Bangladesh Bank and other regulatory bodies.

Promo�on, increment and incen�ve

IIDFC always values efficiency as a tool of strength of Human Capital. Accordingly, the Board of Directors approved and enacted various mo�va�onal benefits and policies besides regular pay scale in order to ensure maximum efficiency of employees for maximizing job sa�sfac�on. IIDFC have promo�on, increment and incen�ve bonus plan for eligible execu�ves to mo�vate, inspire and help to develop them for greater achievement of the individual and organiza�onal goals as a whole.


Succession Planning

Succession planning known as "replacement planning," ensures that businesses con�nue to run smoothly even a�er key staff members move on to new opportuni�es, re�re or pass away. IIDFC apply succession planning for:

i. informing the employees that there is a chance for advancement which can lead to higher sa�sfac�on;ii. informing that the company is planning for future opportuni�es reinforces career development among

employees;iii. keeping be�er track of the value of employees so that posi�ons can be filled internally when opportuni�es

arise; andiv. encouraging employees to think of themselves as partners for achieving company’s vision.

Organogram

IIDFC introduced an organogram to illustrate the rela�onships among departments, superiors, and subordinates vividly and briefly on a top-down approach with a view to show the correla�on among organiza�onal units.


REPORTS &FINANCIAL STATEMENTS


Sd/- Sd/-Md. Golam Sarwar Bhuiyan Lingkon Mondal, FCAManaging Director EVP- Chief Financial Officer

Report of the Managing Director and the Chief Financial Officer

02 December 2021

The Board of Directors IIDFC Limited

Subject: Declara�on on Financial Statements for the year ended on 31 December 2020.

Dear Sirs,

Pursuant to the condi�on No. 1(5) (xxvi) imposed vide the Commission’s No�fica�on No. BSEC/CMR-RCD/2006-158/207/Admin/80, dated 03 June 2018 under sec�on 2CC of the Securi�es and Exchange Ordinance, 1969, we do hereby declare that:

1) The Financial Statements of IIDFC Limited for the year ended on 31 December 2020 have been prepared in compliance with Interna�onal Accoun�ng Standards (IAS) or Interna�onal Financial Repor�ng Standards (IFRS), as applicable in the Bangladesh and any departure there from has been adequately disclosed;

2) The es�mates and judgments related to the financial statements were made on a prudent and reasonable basis, in order for the financial statements to reveal a true and fair view;

3) The form and substance of transac�ons and the Company’s state of affairs have been reasonably and fairly presented in its financial statements;

4) To ensure above, the Company has taken proper and adequate care in installing a system of internal control and maintenance of accoun�ng records;

5) Our internal auditors have conducted periodic audits to provide reasonable assurance that the established policies and procedures of the Company were consistently followed; and

6) The management’s use of the going concern basis of accoun�ng in preparing the financial statements is appropriate and there exists no material uncertainty related to events or condi�ons that may cast significant doubt on the Company’s ability to con�nue as a going concern.

In this regard, we also cer�fy that:

i) We have reviewed the financial statements for the year ended on 31 December 2020 and that to the best of our knowledge and belief:

a) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; and

b) these statements collec�vely present true and fair view of the Company’s affairs and are in compliance with exis�ng accoun�ng standards and applicable laws.

ii) There are, to the best of knowledge and belief, no transac�ons entered into by the Company during the year which are fraudulent, illegal or in viola�on of the code of conduct for the company’s Board of Directors or its members.


Independent Auditor's Reportand

Audited Consolidated and Separate Financial Statementsof

Industrial and Infrastructure Development Finance Company Limited (IIDFCL).As at and for the year ended 31 December 2020


Report on the Audit of the Consolidated and Separate Financial Statements

Independent Auditor's ReportTo the Shareholders of Industrial and Infrastructure Development Finance Company Limited

Opinion

We have audited the consolidated financial statements of Industrial and Infrastructure Development Finance Company Limited and its subsidiaries (the “Group”) as well as the separate financial statements of Industrial and Infrastructure Development Finance Company Limited (the “Company”), which comprise the consolidated and separate balance sheets as at 31 December 2020 and the consolidated and separate profit and loss accounts, consolidated and separate statements of changes in equity and consolidated and separate cash flow statements for the year then ended, and notes to the consolidated and separate financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements of the Group and 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 2020, and of its consolidated and separate financial performance and of its consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as explained in note 02.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our report. We are independent of the Group and the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), Bangladesh Securities and Exchange Commission (BSEC) and Bangladesh Bank, and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Institute of Chartered Accountants of Bangladesh (ICAB) Bye Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The process for estimating the provision loans and advances portfolio associated with credit risk is significant and complex.

For the individual analysis, these provisions consider the estimates of future business performance and the market value of collateral provided for credit transactions.

We tested the design and operating for effectiveness of key controls focusing on the following:

• Tested the credit appraisal, loan disbursement procedures, monitoring and provisioning process.

• Identification of loss events, including early warning and default warning indicators.

• Reviewed quarterly Classification of Loans (CL).

RiskMeasurement of provision for loans and advances

Our response to the risk


For the collective analysis, these provisions are manually processed that deals with voluminous databases, assumptions and calculations for the provision estimates of complex design and implementation.

At year end the Company reported total gross loans and advances of BDT 15,272,371,452 (2019: BDT 18,908,807,903) and provision for loans and advances of BDT 804,254,455 (2019: BDT 757,137,429).

Our substantive procedures in relation to the provision for loans and advances portfolio comprised the following:

• Reviewed the adequacy of the companies general and specific provisions.

• Assessed the methodologies on which the provision amounts based, recalculated the provisions and tested the completeness and accuracy of the underlying information.

• Finally assessed the appropriateness and presentation of disclosures against relevant accounting standards and Bangladesh Bank guidelines.

Risk Our response to the risk


Our audit procedures have a focus on IT systems and controls due to the pervasive nature and complexity of the IT environment, the large volume of transactions processed in numerous locations daily and the reliance on automated and IT dependent manual controls.

Our areas of audit focus included user access management, developer access to the production environment and changes to the IT environment. These are key to ensuring IT dependent and application-based controls are operating effectively.

We tested the design and operating effectiveness of the Group’s IT access controls over the information systems that are critical to financial reporting. We tested IT general controls (logical access, changes management and aspects of IT operational controls). This included testing that requests for access to systems were appropriately reviewed and authorized. We tested the Group’s periodic review of access rights. We inspected requests of changes to systems for appropriate approval and authorization. We considered the control environment relating to various interfaces, configuration and other application layer controls identified as key to our audit.

IT systems and controls


We focused on this area because the Company and its subsidiaries (the “Group”) operates in a legal and regulatory environment that is exposed to significant litigation and similar risks arising from disputes and regulatory proceedings. Such matters are subject to many uncertainties and the outcome may be difficult to predict.

These uncertainties inherently affect the amount and timing of potential outflows with respect to the provisions which have been established and other contingent liabilities.

Overall, the legal provision represents the Group’s best estimate for existing legal matters that have a probable and estimable impact on the Group’s financial position.

We obtained an understanding, evaluated the design and tested the operational effectiveness of the Group’s key controls over the legal provision and contingencies process.

We enquired to those charged with governance to obtain their view on the status of all significant litigation and regulatory matters.

We enquired of the Group’s internal legal counsel for all significant litigation and regulatory matters and inspected internal notes and reports. We also received formal confirmations from external counsel.

We assessed the methodologies on which the provision amounts are based, recalculated the provisions, and tested the completeness and accuracy of the underlying information.

We also assessed the Group’s provisions and contingent liabilities disclosure.

Legal and regulatory matters



Where deficiencies were identified, we tested compensating controls or performed alternate procedures. In addition, we understood where relevant, changes were made to the IT landscape during the audit period and tested those changes that had a significant impact on financial reporting.

Other InformationManagement is responsible for the other information. The other information comprises all of the information in the Annual Report other than the consolidated and separate financial statements and our auditors’ report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated and Separate Financial Statements and Internal ControlsManagement is responsible for the preparation and fair presentation of the consolidated financial statements of the Group and also separate financial statements of the Company in accordance with IFRSs as explained in note 02, and for such internal control as management determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, management is responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group and the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s and the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial StatementsOur objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.


As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other Legal and Regulatory Requirements

In accordance with the Companies Act, 1994, the Securities and Exchange Rules 1987, the Financial Institutions Act, 1993 and the rules and regulations issued by Bangladesh Bank, we also report that:

(i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof;

(ii) in our opinion, proper books of accounts 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 account together with the annexed notes dealt with by the report are in agreement with the books of account and returns;


(iv) the expenditures incurred were for the purpose of the Company’s business for the year;

(v) the financial statements of the Company have been drawn up in conformity with the Financial Institutions Act, 1993 and in accordance with the accounting rules and regulations which were issued by Bangladesh Bank to the extent applicable to the Company;

(vi) adequate provisions have been made for loans, advances, leases, investment and other assets which are, in our opinion, doubtful of recovery and Bangladesh Bank’s instructions in this regard have been followed properly;

(vii) the financial statements of the Company conform to the prescribed standards set in the accounting regulations which were issued by Bangladesh Bank after consultation with the professional accounting bodies of Bangladesh;

(viii) the records and statements which were submitted by the branches have been properly maintained and recorded in the financial statements;

(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 were collected and deposited in the Government treasury by the Company as per Government instructions found satisfactory based on test checking;

(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 which were issued by Bangladesh Bank and other regulatory authorities have been complied properly as disclosed to us by management;

(xiii) based on our work as mentioned above under the auditor’s responsibility section, the internal control and the compliance of the Company is satisfactory, and effective measures have been taken to prevent possible material 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) we have reviewed over 80% of the risk weighted assets of the Company and we have spent around 1,201 person hours for the audit of the books and accounts of the Company;

(xvi) the Company has complied with relevant instructions which were issued by Bangladesh Bank relevant to classification, provisioning and calculation of interest suspense;

(xvii) the Company has complied with the Financial Institutions Act, 1993 in preparing these financial statements; and

(xviii) all other issues which in our opinion are important for the stakeholders of the Company have been adequately disclosed in the audit report.

Name of Firm : M M Rahman & Co. Chartered Accountants

Signature of the Auditor :

Name of the Auditor : Syed Mahmud Ahmad FCA Senior Partner

Enrolment No. 586

DVC : 2112150586AS218510

Dhaka, 15 December 2021


As at 31 December 2020

Industrial and Infrastructure Development Finance Company LimitedConsolidated Balance Sheet

2020 2019PROPERTY & ASSETS Notes BDT BDTCash 3.aIn Hand (including foreign currencies) 55,591 57,711Balance with Bangladesh Bank and its Agent Bank(s)

(including foreign currencies) 112,172,320 177,275,664

112,227,911 177,333,375

Balance with Other Banks and Financial Institutions 4.a

Inside Bangladesh 816,649,237 888,721,800Outside Bangladesh - -

816,649,237 888,721,800Money at Call and Short Notice 5 - -

Investments 6.a

Government - -

Others 1,069,803,296 1,063,387,353

1,069,803,296 1,063,387,353Loans & Advances 7.aLease Receivables 1,973,962,239 2,268,262,576

Advance for Lease Finance 64,339,980 66,448,175

Direct/ Term Finance 12,528,643,630 15,939,703,867

Secured Overdraft 33,047,599 9,147,811

Bills Discounted and Purchased 98,616,851 37,097,428

Margin Loans 2,394,645,273 2,343,177,259

17,093,255,572 20,663,837,116Fixed assets including premises, furniture & fixtures etc. 8.a 78,757,044 44,860,036

Other Assets 9.a 2,005,228,153 1,748,958,456

Non-banking assets 10 12,287,820 -

Total Assets 21,188,209,033 24,587,098,136

LIABILITIES & CAPITALBorrowings from other banks, financial institutions & agen 11.a 5,549,341,748 6,359,673,230

Deposits & Other Accounts 12.a

Current Deposits & Other Accounts, etc. - -

Bills Payable - -

Savings Bank Deposits - -

Term Deposits 10,211,531,784 12,707,981,706Bearer Certificate of Deposits - -Other Deposits 2,366,560 2,366,560

10,213,898,344 12,710,348,266

Other Liabilities 13.a 3,222,941,184 3,230,980,579

Total Liabilities 18,986,181,276 22,301,002,074Capital/ Shareholders' EquityPaid up Capital 14 1,737,770,680 1,308,000,000

Statutory Reserve 15 371,950,483 371,950,482

General Reserve 16.a 67,800,000 67,800,000

Share Money Deposit 17 - 310,809,600

Stock Dividend 18.a - 117,720,000

Retained Earnings 19.a 24,354,513 109,664,078

Total Equity attributable to Shareholder of the Company 2,201,875,676 2,285,944,161Non-controlling Interest 19.a.3 152,081 151,901

Total Liabilities & Shareholders' Equity 21,188,209,033 24,587,098,136



Industrial and Infrastructure Development Finance Company LimitedConsolidated Balance Sheet

Sd/-Chairman

Sd/-Director

Sd/-Managing Director

Sd/-Company Secretary

The annexed notes 1 to 45 form an integral part of these financial statements

2020 2019Notes BDT BDT

OFF-BALANCE SHEET ITEMS

Contingent liabilities 20Letters of guarantee 203,549,122 203,549,122

Letters of credit - -

Irrevocable letter of credit - -

Bills for collection - -

Other contingent liabilities - -

203,549,122 203,549,122

Others commitments:Money at call and short notice - -

Forward assets purchased and forward deposits placed - -

Undrawn note issuance and revolving underwriting facilities - -

Undrawn formal standby facilities, credit lines and other commitments - -

- -

Total off-balance sheet items including contingent liabilities 203,549,122 203,549,122

Name of Firm : M M Rahman & Co. Chartered AccountantsSignature of the Auditor :

Name of the Auditor : Syed Mahmud Ahmad FCA Senior PartnerEnrolment No. : 586 DVC : 2112150586AS218510



For the year ended 31 December 2020

Industrial and Infrastructure Development Finance Company LimitedConsolidated Profit and Loss Account


A. OPERATING INCOME

Interest income 21.a 1,972,317,738 2,541,045,561Interest paid on deposits, borrowings etc. 22.a (1,778,410,567) (1,768,153,938)Net interest income 193,907,171 772,891,623

Income from investment 23.a 43,691,563 42,596,121Commission, exchange and brokerage 24.a 92,228,681 55,762,484

Other operating income 25.a 33,619,975 17,186,031

Total operating income 363,447,390 888,436,259

B. OPERATING EXPENSESSalaries & allowances 26.a 216,103,788 235,485,026Rent, taxes, insurance, electricity etc. 27.a 19,305,563 47,683,367Legal expenses 28.a 6,134,572 7,753,345Postage, stamp, telecommunications etc. 29.a 5,499,328 5,249,644Stationery, printing, advertisement etc. 30.a 4,033,219 5,075,742Managing director's salary and fees 31 6,853,981 7,791,837Directors' fees 32.a 830,000 960,400Auditor's fees 33.a 776,250 776,250Loans & advances written-off 34.a 20,968,297 7,798Repair, depreciation and amortization of company's assets 35.a 33,233,380 16,633,470Other expenses 36.a 46,996,492 47,080,071Total operating expenses 360,734,870 374,496,950

C. Profit/(Loss) before provision (A-B) 2,712,520 513,939,309D. Provision for loans & advances 37.a

Specific provision 126,932,081 333,887,318General provision (7,729,766) (1,492,742)Provision for diminution in value of investments (48,324,978) 83,521,449Other provision - -Total provision 70,877,337 415,916,025

E. Profit/(Loss) before taxes (C-D) (68,164,817) 98,023,284F. Provision for tax:

Current tax 38.a 19,556,695 63,175,944Deferred tax (2,412,126) (95,188)Total provision 17,144,569 63,080,756

G. Profit/(Loss) after taxes (E-F) (85,309,386) 34,942,529

Attributable to:Shareholders of the company (85,322,311) 34,941,656Non-controlling interest 12,925 873

(85,309,386) 34,942,529Less: AppropriationsStatutory reserve - 5,241,850General reserve - 1,000,000

- 6,241,850Retained surplus/(Deficit) (85,309,386) 28,700,679

Earnings per share (EPS) 39.a (0.49) 0.27

Sd/-Chairman

Sd/-Director









Industrial and Infrastructure Development Finance Company LimitedConsolidated Cash Flow Statement

2020 2019BDT BDT

A CASH FLOW FROM OPERATING ACTIVITIESInterest receipts in cash 1,996,725,789 2,566,671,410Interest payments in cash (1,845,030,611) (2,194,150,336)Dividend receipts in cash 19,250,916 22,544,215Cash payments to employees (209,728,907) (229,451,317)Cash payments to suppliers (7,012,691) (7,609,317)Income taxes paid (60,604,174) (59,240,190)Receipts from other operating activities 132,356,336 91,756,742Payments for other operating activities (76,452,497) (105,770,804)Cash generated from operating activities (50,495,839) 84,750,404Increase/(Decrease) in operating assets and liabilitiesStatutory depositsLoans and advances 3,584,968,437 862,935,545Changes in other assets (246,062,576) (607,760,293)Borrowings from other banks (824,106,622) 885,781,262Borrowings from other corporate and financial institutions (1,750,554,747) (781,410,718)Deposits from customers (799,118,995) (1,300,444,568)Changes in other liabilities (13,131,804) 161,813,191

(48,006,307) (779,085,581)Net cash (used in)/from operating activities (98,502,146) (694,335,177)

B CASH FLOW FROM INVESTING ACTIVITIESProceeds from sale of securities 406,601,979 250,237,172Payments for purchase of securities (442,905,389) (330,229,528)Purchase of property, plant and equipment (4,378,085) (18,749,226)Payment against lease obligation - -Proceeds from sale of property, plant and equipment 764,534 1,331,013Net cash used in investing activities (39,916,961) (97,410,569)

C CASH FLOW FROM FINANCING ACTIVITIESDividend paid - -Share Money Deposit 1,241,080 187,698,640Net cash from/(used in) financing activities 1,241,080 187,698,640

D Net increase/(decrease) in cash and cash equivalents (A+B+C) (137,178,027) (604,047,107)

E Effects of exchange rate changes on cash and cash equivalents - -

F Cash and cash equivalents at beginning of the year 1,066,055,175 1,670,102,281

G Cash and cash equivalents at end of the year (D+E+F) 928,877,148 1,066,055,175

Cash and cash equivalents at end of the yearCash in hand 55,591 57,711Balance with Bangladesh Bank and its agent bank(s) 112,172,320 177,275,664Balance with other banks and financial institutions 816,649,237 888,721,800Money at call and short notice - -

928,877,148 1,066,055,175

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Industrial and Infrastructure Development Finance Company LimitedBalance Sheet

2020 2019PROPERTY & ASSETS Notes BDT BDT

Cash 3

In Hand (including foreign currencies) 4,597 7,463Balance with Bangladesh Bank and its Agent Banks - -

(including foreign currencies) 112,172,320 177,275,664

112,176,917 177,283,127Balance with other Banks and Financial Institutions 4

Inside Bangladesh 666,594,745 671,932,857

Outside Bangladesh - -

666,594,745 671,932,857Money at Call and Short Notice 5 - -

Investments 6

Government - -

Others 677,827,534 659,724,965

677,827,534 659,724,965Loans & Advances 7

Lease Receivables 1,973,962,239 2,268,262,576Advance for Lease Finance 64,339,980 66,448,175

Direct/ Term Finance 13,102,404,783 16,527,851,913

Secured Overdraft 33,047,599 9,147,811

Bills Discounted and Purchased 98,616,851 37,097,428

15,272,371,452 18,908,807,903Fixed assets including premises, furniture & fixtures etc. 8 75,506,128 41,816,181

Other Assets 9 3,227,334,214 2,957,496,371

Non-Banking Assets 10 12,287,820 -

Total Assets 20,044,098,810 23,417,061,404

LIABILITIES & CAPITALBorrowings from other banks, financial institutions & agents 11 5,522,107,909 6,346,214,531

Deposits & Other Accounts 12

Current deposits & Other Accounts, etc. - -

Bills Payable - -

Savings Bank Deposits - -

Term Deposits 10,211,531,784 12,707,981,706

Bearer Certificate of Deposits - -

Other Deposits 2,366,560 2,366,560

10,213,898,344 12,710,348,266

Other Liabilities 13 2,203,930,518 2,168,947,183

Total Liabilities 17,939,936,771 21,225,509,980

Capital/ Shareholders' EquityPaid-up Capital 14 1,737,770,680 1,308,000,000

Statutory Reserve 15 371,950,483 371,950,483

General Reserve 16 50,800,000 50,800,000

Share Money Deposit 17 - 310,809,600

Proposed Stock Dividend 18 - 117,720,000

Retained Earnings 19 (56,359,124) 32,271,341

Total Shareholders' Equity 2,104,162,039 2,191,551,424

Total Liabilities & Shareholders' Equity 20,044,098,810 23,417,061,404



Industrial and Infrastructure Development Finance Company LimitedBalance Sheet

2020 2019OFF-BALANCE SHEET ITEMS Notes BDT BDT

Contingent liabilities 20

Letters of guarantee 203,549,122 203,549,122

Letters of credit - -

Irrevocable letter of credit - -

Bills for collection - -

Other contingent liabilities - -

203,549,122 203,549,122

Others commitments:Money at call and short notice - -

Forward assets purchased and forward deposits placed - -

Undrawn note issuance and revolving underwriting facilities - -

Undrawn formal standby facilities, credit lines and other commitments - -

- -Total off-balance sheet items including contingent liabilities 203,549,122 203,549,122

Sd/-Chairman

Sd/-Director









Industrial and Infrastructure Development Finance Company LimitedProfit and Loss Account


A. OPERATING INCOME

Interest income 21 1,951,500,767 2,496,909,474Interest paid on deposits, borrowings etc. 22 (1,776,917,850) (1,767,162,412)Net interest income 174,582,917 729,747,062

Income from investment 23 25,856,102 29,044,925Commission, exchange and brokerage 24 - -Other operating income 25 30,089,753 16,252,526


B. OPERATING EXPENSESSalaries & allowances 26 172,203,670 184,435,083Rent, taxes, insurance, electricity etc. 27 4,659,667 29,966,616Legal expenses 28 4,839,771 6,448,760Postage, stamp, telecommunications etc. 29 3,502,939 3,170,415Stationery, printing, advertisement etc. 30 3,509,752 4,438,902Managing director's salary and fees 31 6,853,981 7,791,837Directors' fees 32 632,000 678,400Auditor's fees 33 454,250 454,250Repair, depreciation and amortization of company's assets 35 29,693,209 14,261,265Other expenses 36 22,870,320 31,710,227Total operating expenses 249,219,559 283,355,755

C. Profit/ (Loss) before provision (A-B) (18,690,787) 491,688,759

D. Provision for loans & advances 37Specific provision 121,401,836 333,887,318General provision (7,729,766) (1,492,742)Provision for diminution in value of investments 12.1 (43,521,190) 82,982,292Total provision 70,150,880 415,376,868

E. Profit before taxes (C-D) (88,841,667) 76,311,891

F. Provision for taxCurrent tax 38 2,000,000 50,000,000Deferred tax 38.1 (2,211,202) 102,642Total provision (211,202) 50,102,642

Profit after tax (88,630,465) 26,209,249Less: AppropriationsStatutory reserve - 5,241,850General reserve - 1,000,000

- 6,241,850Retained surplus/(Deficit) (88,630,465) 19,967,399Earnings per share (EPS) 39 (0.51) 0.20

Sd/-Chairman

Sd/-Director









Industrial and Infrastructure Development Finance Company LimitedCash Flow Statement

2020 2019BDT BDT

A CASH FLOW FROM OPERATING ACTIVITIES:Interest receipts in cash 1,932,761,299 2,475,528,199Interest payments in cash (1,828,170,326) (2,129,490,590)Dividend receipts in cash 8,030,163 12,023,003Cash payments to employees (179,057,651) (192,226,920)Cash payments to suppliers (7,012,691) (7,609,317)Income taxes paid (43,727,075) (46,654,821)Receipts from other operating activities 47,915,692 33,274,448Payments for other operating activities (34,040,659) (70,595,418)Cash generated from operating activities (103,301,248) 74,248,585Increase/(decrease) in operating assets and liabilitiesStatutory depositsLoans and advances - -Loans and advances to other customers 3,636,436,451 705,914,414Changes in other assets (269,837,844) (654,326,886)Borrowings from Other Banks (824,106,622) 885,781,262Borrowings from other Corporate & FIs (1,707,533,569) (703,240,971)Deposits from customers (788,916,352) (1,271,027,540)Changes in other liabilities 34,983,335 159,284,687

81,025,399 (877,615,034)Net Cash from Operating Activities (22,275,849) (803,366,449)

B CASH FLOW FROM INVESTING ACTIVITIES:Investments In Subsidiary - -Proceeds from sale of securities 406,601,979 250,237,172Payments for purchase of securities (454,592,015) (313,278,647)Purchase of property, plant and equipment (2,179,517) (17,071,825)Payment against lease obligation - -Proceeds from sale of property, plant and equipment 760,000 1,332,642Net cash used in investing activities (49,409,553) (78,780,658)

C CASH FLOW FROM FINANCING ACTIVITIES:Dividend paid - -Share Money Deposit 1,241,080 187,698,640Net cash from financing activities 1,241,080 187,698,640

D Net increase/(decrease) in cash and cash equivalents (A+B+C) (70,444,322) (694,448,466)E Effects of exchange rate changes on cash and cash equivalents - -

F Cash and cash equivalents at beginning of the year 849,215,984 1,543,664,450

G Cash and cash equivalents at end of the year (D+E+F) 778,771,662 849,215,984Cash and cash equivalents at end of the yearCash in hand 4,597 7,463Balance with Bangladesh Bank and its agent bank(s) 112,172,320 177,275,664Balance with other banks and financial institutions 666,594,745 671,932,857Money at call and short notice - -

778,771,662 849,215,984

Sd/-Chairman

Sd/-Director







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As at and for the year ended 31 December 2020

Industrial and Infrastructure Development Finance Company LimitedNotes to the Consolidated and Separate Financial Statements

1.0 Reporting entity and its activities 1.01 Company’s profile Industrial and Infrastructure Development Finance Company (IIDFC) Limited, a public limited company was incorporated on 19th December, 2000 as a development financial institution to boost investment specially in the spectrum of industrial and infrastructure development. The Company was licensed by Bangladesh Bank on the 23rd January, 2001 to start financing business in Bangladesh. The registered office of the Company is situated at Chamber Building (6th &7th Floor), 122-124, Motijheel C/A, Dhaka-1000, Bangladesh. 1.02 Principal activities and nature of operation IIDFC offers financial services that include promotion and term financing of financially viable industrial undertakings & infrastructure projects, lease financing for all type of machineries and equipments including vehicles for industrial and commercial purposes, financial packaging for syndicated fund arrangement including cross-border syndication, acquisition or takeover of public sector enterprises, financial or otherwise, stated for privatization and SME financing. The Company is also involved in factoring finance, work-order finance, bill discounting and home loan etc. 1.03 Subsidiary companies IIDFC Securities Limited IIDFC Securities Limited (the Company), a wholly owned subsidiary company of Industrial and Infrastructure Development Finance Company (IIDFC) Limited was incorporated as a public limited company in Bangladesh bearing certificate of incorporation no. C-83521/10 dated 28/03/2010 under the Companies Act- 1994 having its registered office at PFI Tower (Level-3), 56-57, Dilkusha C/A, Dhaka-1000. The main objectives of the Company for which it was established are to carry out of the business of securities management and stock brokerage, custodian services, investment and asset management, portfolio management, capital market operations and other non-banking financial services including advisory services, mergers and acquisitions, equity investment, joint venture sourcing, corporate finance and restructuring, financial and socio economic consultancy, corporate research and project, studies, privatization and other related services. IIDFC Capital Limited IIDFC Capital Limited (the Company) is a public company, limited by shares was incorporated in Bangladesh on 30th November 1995 vide certificate of incorporation no. C-H.C 2097 in the name of South Asia Capital Limited which was acquired by Industrial and Infrastructure Development Finance Company (IIDFC) Limited a non-banking financial institution on 10th December 2009 and renamed as IIDFC Capital Limited. The principal activities of the Company for which it was established include the business of issue management, portfolio management, corporate counselling, investment counselling, capital structuring, etc. 2.0 Basis of preparation and significant accounting policies 2.01 Basis of preparation The Financial Statements have been prepared on the basis of going concern concept and basically on accrual method under historical cost convention in accordance with Generally Accepted Accounting Principles (GAAP) and after due compliance with International Accounting Standards(IAS)/International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and adopted by The Institute of Chartered Accountants of Bangladesh (ICAB) vide letter no 1/1/ICAB-2017 dated 14 December 2017, the Financial Institution Act,1993, the Companies Act, 1994 and other applicable laws and regulations. Statement of complianceThe consolidated financial statements and separate financial statements of the Company 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 recorded in cost price(Comparing with market value) in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRSs) as adopted in Bangladesh by the Institute of Chartered Accountants of Bangladesh, except the circumstances where local regulations differ, and the Companies Act, 1994, the Financial Institutions Act, 1993, Bangladesh Securities and Exchange Commission guidelines 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.


The requirements of accounting standards as per IFRS that have been departed to comply with Bangladesh Bank requirements have been disclosed in detail. However, this departure with IFRS has been made by following all of the relevant provisions of IAS-1 and the details disclosures are given in Note-2.01.01 by following the provision of IAS-1 (Presentation of Financial Statements).

2.01.01 Disclosure of departure from few requirements of IFRS due to mandatory compliance of Bangladesh Bank’s requirements

SLNature of departure

Title of IFRS/IAS Treatment of IFRS/IAS

Treatment adopted as per Bangladesh Bank

Financial or presentation effect of

the departure

1

2

4

3

Measurement of provision for leases, loans and advances (financial assets

measured at amortized

cost)

IFRS 9 Financial

Instruments

An entity shall assess at the end of each reporting period whether there is any

objective evidence that a financial asset or group of financial assets measured at amortized cost is impaired. If any such evidence exists, expected credit losses are required to be measured through a loss allowance at an amount equal to: a) the 12-month expected credit losses (expected credit losses that result from

those default events on the financial instrument that are possible within 12 months after the reporting date); or

b) full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the

financial instrument).

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/SMA loans) has to

be maintained irrespective of objective evidence of impairment on

lease, loans and advances. Also provision for sub-standard

investments, doubtful investments and bad losses has to be provided

at 20%, 50% and 100% respectively for investments depending on the

duration of overdue.

In Financial Statements, as at 31 December 2020,

accumulated provision for leases, loans and

advances stand at BDT 804.25 million

Valuation of Investments

in quoted and unquoted

shares

IFRS 9 Financial

Instruments

Investment in shares falls either under at “fair value through profit/ loss (FVTPL)" or “fair value through other comprehensive income (FVTOCI)” where any change in

the fair value in case of FVTPL at the year-end is taken to profit or loss, and

any change in fair value in case of FVTOCI is taken to other comprehensive

income.

As per FID circular No. 08, dated 03 August 2002, DFIM Circular No. 02,

January 31, 2012; investments 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; however in case of any unrealized

gain, no such gain can be recognized and investments are

recognized at cost only.

During this year total market value of all shares are less than the cost price of all shares. In Financial

Statement, as at 31 December 2020, Provision for diminution in value of investments stands BDT

87.92 million.

Recognition of interest income for SMA and classified

lease, loans and advances

IFRS 9 Financial

Instruments

Income from financial assets measured at amortized cost is recognized through effective interest rate method over the

term of the investment. Once a financial asset is impaired, investment income is recognized in profit and loss account on

the same basis based on revised carrying amount.

As per FID circular No. 03, dated 03 May 2006, once an investment on

leases, loans and advances is termed as "Special Mention

Account (SMA)", interest income from such investments are not allowed to be recognized as income, rather the respective

amount needs to be credited as a liability account like: interest

suspense account.

As at 31 December 2020, in Financial Statements

interest suspense account was BDT 421.23 million whereas last year was

Taka 368.35 million. This amount has been shown in

other liabilities

Presentation of cash and

cash equivalent

IAS 7 Statement of Cash Flows

Cash equivalent are short term, highly liquid investments that are readily

convertible to known amounts of cash and only include those investments which

are for a short tenure like: 3 months or less period.

In the light of above, balance with Bangladesh Bank and fixed term deposits

should be treated as investment asset rather than cash equivalent as it is illiquid asset and not available for use in day to

day operations.

Bangladesh Bank has issued templates for financial statements

vide DFIM Circular No. 11, dated 23 December 2009 which will strictly

be followed by all banks and NBFIs. The templates of financial statements provided detail

presentation for statement of cash flows.

Financial Statements for 2020 and corresponding

year 2019 have been prepared as per guideline

(DFIM Circular No. 11, dated 23 December 2009)

of Bangladesh Bank.


6

5

8

7

Measurement of deferred tax asset

IAS 12 Income Tax

A deferred tax asset shall be recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be

utilized.

As per DFIM circular No. 7, dated 31 July 2011, no deferred tax asset

can be recognized for any deductible temporary difference

against lease, loans and advances.

During this year there is no impact in the financial statements due to this

departure as the Company did not consider any deductible temporary

difference against leases, loans and advances.

Preparation of Statement of Cash Flows

IAS 7 Statement of Cash Flows

The Cash flow statement can be prepared using either the direct method or the indirect method. The presentation is selected to present these cash flows in a manner that is most appropriate for the

business or industry. The method selected is applied consistently.

As per DFIM Circular No. 11, dated 23 December 2009, Cash flow

statement has been guided by the Bangladesh Bank which is the mixture of direct and indirect

method.

Financial Statements of 2020 and corresponding


(DFIM Circular No. 11 dated 23 December 2009)

of Bangladesh Bank.

Current/Non-current distinction

IAS-1 Presentation of Financial Statement

As per Para 60 of IAS-1 “Presentation of Financial statement” An entity shall

present current and non-current assets and current and non-current liabilities as separate classification in its statement of

financial position.

As per DFIM Circular No. 11, dated 23 December 2009, Bangladesh Bank has issued templates for financial statements which is applicable for all the Financial

Institutions. In this templates there is no current and non-current segmentation of assets and

liabilities




of Bangladesh Bank. Moreover, the liquidity

statement shows the aging profile of all financial

assets and liabilities from where current/non-current

portion of assets and liabilities can be obtained.

Presentation and

disclosure of Financial

Statements and Financial Instruments

IAS 1 "Presentation of Financial Statements"

IFRS 9 “Financial

Instruments” & IFRS 7 "Financial

Instruments: Disclosure"

Other Comprehensive Income (OCI) is a component of financial statements or the elements of OCI are to be included in a single Other Comprehensive Income

statement.

IAS 1 requires separate line item for intangible assets on the face of statement

of financial position.

IFRS 7 requires specific presentation and disclosure relating to all financial

instruments.

Bangladesh Bank has issued templates for financial statements

vide DFIM Circular No. 11, dated 23 December 2009 which will 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 include in a Single Comprehensive

Income Statement. Intangibles assets are not separately presented on the face of statement of financial position; rather it is presented along

with the line item of fixed assets.As per Bangladesh Bank

guidelines, financial instruments are categorized, recognized and

measured differently from those prescribed in IFRS-9. As such some

disclosure and presentation requirements of IFRS 7 has not

been made in the accounts.




of Bangladesh Bank.


10

9

12

11

13

14

Off-balance sheet items

IAS 1 Presentation of Financial Statements

There is no concept of off-balance sheet items in any IFRS; hence there is no

requirement for disclosure of off-balance sheet items on the face of the balance

sheet.

As per DFIM Circular No. 11, dated 23 December 2009, off-balance sheet items (e.g. letter of credit, letter of guarantee etc.) must be

disclosed separately on the face of the balance sheet.




of Bangladesh Bank.

Impairment of Margin Loan (Loans and receivables)

IFRS 9 Financial

Instruments

Measurement after initial recognition at amortized cost and recording of changes

through profit and loss.

As per Bangladesh Securities and Exchange Commission (BSEC)

Circular No. SEC/CMR-RCD/2009-193/196 dated 28

December 2016, and BSEC/S-RI/policy/3/2020/68 dated 12

January 2020 ,provisions for the unrealized loss of margin loan to be

kept by 31 December 2022.

There is no such impact for this. However, we have

been maintaining provision for unrealized

loss (if any) of margin loan in the portfolio at higher

rate than the requirement.

Complete set of financial statements


As per IAS 1: "Presentation of Financial Statements’’ complete set of financial

statements are i) statement of financial position,

ii)statement of profit or loss and other comprehensive income,

iii) statement of changes in equity, iv) statement of cash flows,

v) notes, comprising significant accounting policies and other explanatory

information andvi) statement of financial position at the

beginning of preceding period for retrospective restatement.

As per DFIM Circular No. 11, dated 23 December 2009, complete set of

financial statements are i) balance sheet,

ii) profit and loss account, iii) statement of cash flows,

iv) statement of changes in equity, v) statement of liquidity,

vi) notes, comprising significant accounting policies and other

explanatory information.




of Bangladesh Bank.

There is no financial impact for this departure in the financial statements.

Intangible asset


As per IAS 1: "Presentation of Financial Statements’’ para 54: the statement of financial position shall include separate

line item for intangible assets.

As per DFIM Circular No. 11, dated 23 December 2009, there is no option for separate line item for intangible asset in the balance

sheet.However, we present intangible

asset in the balance sheet as part of fixed assets and provide details in annexure-A as separate line item.

Financial Statements for 2020 and corresponding



of Bangladesh Bank.There is no financial

impact for this departure in the financial statements.

Other comprehensive

income


As per IAS 1: "Presentation of Financial Statements’’ Other Comprehensive

Income (OCI) is a component of financial statements or the elements of OCI are to

be included in a single OCI statement.

Bangladesh Bank has issued templates for financial statements which will strictly be followed by

financial institutions. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income

(OCI) nor are the elements of OCI allowed to be included in a single

OCI statement. As such the financial institution does not prepare

the other comprehensive income statement. However, elements of

OCI, if any, are shown in the statements of changes in equity.


year 2019 have been prepared as per the

guideline and templates issued by Bangladesh

Bank.

There is no financial impact for this departure in the financial statements.

Disclosure of presentation

of profit

N/A There is no requirement to show appropriation of profit in the face of

statement of comprehensive income.

As per DFIM circular no 11, dated 23 December 2009, an appropria-tion of profit should be disclosed in the face of profit and loss account




of Bangladesh Bank.There is no financial

impact for this departure in the financial statements.


2.01.02 Investments in shares and securitiesAs per requirements of IFRS-9 'Financial Instruments: Recognition and Measurement' investments in shares and securities generally falls either under "at fair value through Profit and Loss Account" or under "FVOCI (Fair Value through Other Comprehensive Income)" where any change in the fair value at the year-end is taken to Profit and Loss Account or Revaluation Reserve Account respectively.

Bangladesh Bank: As per FID circular No. 08 dated 03 August 2002 & DFIM circular No. 02 dated 31 January 2012 of Bangladesh Bank investments in quoted shares and unquoted shares are revalued at the year end at market price and as per book value of last audited statements of financial position (balance sheet) respectively. Provision should be made for any loss arising from diminution in value of investments.

Relevant disclosure on departure has been presented in the note -2.01.01(2) 2.01.03 Provision on loans and advancesAs per IFRS-9 'Financial Instruments' an entity should start the impairment assessment by considering whether objective evidence of impairment exists for financial assets that are individually significant. For financial assets which are not individually significant, the assessment can be performed on an individual or collective (portfolio) basis.

Bangladesh Bank: 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/special mention account) has to be maintained.

Relevant disclosure on departure has been presented in the note -2.01.01(1) 2.01.04 Financial instruments - presentation and disclosureIn several cases Bangladesh Bank guidelines categorise, recognize, measure and present financial instruments differently from those prescribed in IFR-9. As such some disclosure and presentation requirements of IFRS 7 'Financial Instruments: Disclosures' cannot be made in the accounts.

Relevant disclosure on departure has been presented in the note -2.01.01(6) 2.01.05 Financial guarantees As per IFRS-9 financial guarantees are contracts that require an entity to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantee liabilities are recognized initially at their fair value, and the initial fair value is amortized over the life of the financial guarantee. The financial guarantee liability is subsequently carried at the higher of this amortized amount and the present value of any expected payment when a payment under the guarantee has become probable. Financial guarantees are included within other liabilities.

Bangladesh Bank: As per the requirements of DFIM circular No. 11 dated 23 December 2009, financial guarantees such as L/C, L/G will be treated as off balance sheet items. No liability is recognized for the guarantee except the cash margin.

2.01.06 Cash and cash equivalents

Cash and cash equivalents items should be reported as cash item as per IAS 7 'Statement of Cash Flows'.

Bangladesh Bank: Some cash and cash equivalent items such as ‘money at call and on short notice’, T-bills, Prize bond are not shown as cash and cash equivalent. Money at call and on short notice is shown as face item in statement of financial position (Balance sheet) and T-bills, Prize bonds are shown in Investment.

2.01.07 Non-Banking assets

As per the requirements of DFIM circular No. 11 dated 23 December 2009, non- banking assets generally arises from non-payment of receivables (claims) by/from clients which is to be presented separately mentioning the holding period of each types of asset. Presented value of non banking assets will not be more than market price of them and income generating non banking assets will have to be presented separately in the Financial Statements.

2.01.08 Statement of cash flows

Statement of cash flows can be prepared either in "Direct Method" or "Indirect Method". The presentation is selected to present these cash flows in a manner that is most appropriate for the business or industry. The method selected is applied consistently.

Bangladesh Bank: As per the requirements of DFIM circular No. 11 dated 23 December 2009, statement of cash flows is a mixture of direct and indirect method.


2.01.09 Balance with Bangladesh Bank (CRR)Balance with Bangladesh Bank should be treated as other assets as it is not available for use in day to day operations as per IAS 7.

Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents.

2.01.10 Off-balance sheet items "There is no concept of off balance sheet items in any IFRS; hence there is no requirement of disclosure relating to such items.

Bangladesh Bank: As per the requirements of DFIM circular No. 11 dated 23 December 2009, off balance sheet items e.g. L/C, L/G

must be disclosed separately in the face of the statement financial position (balance sheet)." 2.01.11 Disclosure of appropriation of profit"There is no requirement to show appropriation of profit in the face of the statement of comprehensive income.

Bangladesh Bank: As per the requirements of DFIM circular No. 11 dated 23 December 2009, an appropriation of profit should be disclosed in the face of statement of comprehensive income."

2.01.12 Other comprehensive income"As per IAS 1 ‘Presentation of Financial Statements’, Other Comprehensive Income is a component of financial statements or the elements of Other Comprehensive Income are to be included in a separate Other Comprehensive Income (OCI) Statement.

Bangladesh Bank:Bangladesh Bank has issued templates for financial statements which will strictly be followed by all financial institutions. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income; and the elements of Other Comprehensive Income are also not allowed to be included in a single Other Comprehensive Income (OCI) Statement. As such the company does not prepare the Other Statement of Comprehensive Income. However elements of OCI, if any, are shown in the statement of changes in equity. "

Relevant disclosure on departure has been presented in the note -2.01.01(13)

2.01.13 Loans and advance net of provisionLoans and advances should be presented as net of provisions.

Bangladesh Bank:As per the requirements of DFIM circular No. 11 dated 23 December 2009, provision on loans and advances are presented separately as liability and cannot be netted off against loans and advances.

[Also refer to Note-2.17 Compliance of International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs)]

Relevant disclosure on departure has been presented in the note -2.01.01(1)

2.02 Basis of consolidationThe financial statements of the company and its subsidiaries have been consolidated in accordance with International Financial Reporting Standards 10 ‘Consolidated Financial Statements’.

All intra–group balances, transactions, income and expenses are eliminated in full.

"Subsidiaries are fully consolidated from the date on which control is transferred to the company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

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 minority shareholders being deducted as Non-controlling interest.

All Assets and Liabilities of the company and its subsidiaries are shown in the consolidated Balance Sheet. The interest of non-controlling shareholder of the subsidiaries are shown separately in the consolidated Balance Sheet under the heading Non-controlling interest. "

2.03 Integral components of financial statements"The Financial Statements of the Company comprise of (As per DFIM Circular No. 11 dated 23 December 2009) the following components:

1. Consolidated and Separated balance sheet as at December 31, 2020;2. Consolidated and Separated Profit and Loss A/C for the year ended December 31, 20203. Consolidated and Separated statement of Cash Flows for the year ended December 31, 2020;


4. Consolidated and Separated Statement of Changes in Equity for the year ended December 31, 2020;5. Liquidity Statement as at December 31, 2020 &6. Notes to the Consolidated and Separated Financial Statements for the year ended December 31, 2020. "

2.04 Use of estimate & judgments"The preparation of Financial Statements inconformity with Generally Accepted Accounting Principles 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.

Provisions and accrued expenses are recognized in the Financial Statements in line with the International Accounting Standard (IAS) No. 37 ‘Provisions, Contingent Liabilities and Contingent Assets’ when:

a) the company has a present obligation, legal or constructive result of a past event,b) it is probable that an outflow of resources embodying economic benefits will be required to settle that obligation; and c) a reliable estimate can be made of the amount of the obligation.

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 from the basis of making the judgments about carrying values of assets and liabilities which 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 recognized in the period in which the estimates are revised."

2.05 Statement of cash flowsThe statement of cash flows has been prepared using the Direct Method as mentioned in line with International Accounting Standard 7 ‘Statement of cash flows’.

2.06 ConsistencyIn accordance with the IFRS framework for the presentation of Financial Statements together with International Accounting Standard 1 ‘Presentation of Financial Statements 'and International Accounting Standard 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’, IIDFC Ltd. applies the accounting disclosure principles consistently from one period to the next.

2.07 Reporting periodThese Financial Statements cover one calendar year from 01 January to 31 December 2020.

2.08 Presentation currencies The figures of the financial statements are presented in Bangladeshi Currency (BDT) and have been rounded off to the nearest integer.

2.09 Books of accounts of branch (including Corporate Branch)The Company has 7 (seven) branches including head office (principal branch) so far as on 31 December 2020. Books of Accounts of the branches are maintained at the Head Office of the Company.

2.10 Assets and basis of their valuation2.10.01 Cash and cash equivalentsCash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank highly liquid financial assets.

2.10.02 Investment in securities Investment in marketable ordinary shares as well as investment in non-marketable shares have been shown at cost. Adequate provision for diminution in value of shares has been made as per Bangladesh Bank guidelines. Market value of securities has been determined on the basis of the value of securities at the last trading day of the period (last trading day for the year was 30 December 2020).

2.10.03 Loans, advances and provisionsLoans and advances are stated at gross amount. General provisions on unclassified loans and Off-Balance Sheet Items, specific provisions for classified loans and interest suspense account thereon are shown under other liabilities. Provision is made on the basis of quarter end against classified loans and advances review by the management and instruction contained in FID Circular no. 08 dated 3 August 2002, FID circular no. 03 and dated 03 May 2006.

a) Interest on loans and advancesInterest is calculated on a daily product basis but charged and accounted for on accrual basis. Interest is calculated on unclassified loans and advances and recognized as income during the year. Interest on classified loans and advances is kept in suspense account as per Bangladesh Bank instructions and such interest is not accounted for as income until realized from borrowers. Interest is not charged on bad and loss loans as per guidelines of Bangladesh Bank.


b) Provision for loans and advancesProvision for loans and advances are made on quarter basis as well as year-end review by management following instructions contained in FID circular No. 08 dated 03 August 2002, FID circular No. 03, dated 03 May 2006 and FID circular No. 03, dated 29 April 2006 issued by Bangladesh Bank. General Provision on unclassified loans and advances and specific provision on classified loans & advances are maintained as per circular issued by Bangladesh Bank as mentioned above at the rate of 0.25% for standard-SME, 1% for standard, 5% for SMA, 20% for SS and 50% for DF and 100% for BL.

c) Presentation of loans and advancesLoans and advances are shown at gross amount as assets while interest suspense and loan loss provision against classified advances are shown as liabilities in the statement of financial position.

d) Write off loans and advancesAs per FID Circular No. 03 dated 15 March 2007 & DFIM Circular No. 02 dated 01 April 2019 loans and advances/investments should be written off . These written off however will not undermine/affect the claim amount against the borrower. Detailed memorandum records for all such written off accounts are meticulously maintained and followed up.

e) Securities against loanLease Assets: Assets under the lease agreement is taken as security against lease.

Term Finance: Land, building, machineries and relevant assets are tried to be taken as security.Working capital and trading loan: Goods are taken as security in the form of pledge and hypothecation along with land and building if any, as mortgage.

House building loan: Land and building are taken as security in the form of mortgage.

Overdraft: FDRs are taken as pledge against the loans taken by clients against their Fixed Deposits. Public sector loan: In most cases Govt. Guarantee is taken and no other security is taken for government loan and agricultural.

2.10.04 Property, plant and equipment

2.10.04.01 Owned assets

Own property, plant and equipment are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable costs associated with bringing the assets to its working condition for its intended use as per International Accounting Standard 16 ‘Property, Plant and Equipment’.

2.10.04.02 Leased assets

Leasehold assets are accounted for as Finance Lease and capitalized at the inception of the lease at the fair value of the leased property or at the present value of the minimum lease payments, whichever is lower as per International Accounting Standard-17 & IFRS-16 ‘Leases’. The corresponding obligation under the lease is accounted for as Liability.

2.10.04.03 Subsequent expenditure on property, plant and equipmentSubsequent expenditure is capitalized only when it increases the future economic benefits from the assets. All other expenditures are recognized as an expense as and when they are incurred.

2.10.04.04 Depreciation on property, plant & equipment Depreciation on fixed assets is charged consistently on straight-line method at following rates throughout the estimated useful life of the assets. On newly acquired assets depreciation is charged for the full year irrespective of date of acquisition while no depreciation is charged on the assets disposed of during the year.

Sl. No. Category of Fixed assets Rate of Depreciation

1 Motor vehicles 20% 2 Furniture & fixtures 10% 3 Office equipments 18% 4 Right-of-use Assets Lease term

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 concerned asset and is recognized accordingly in the Statement of Comprehensive Income (Profit and Loss Account).


2.10.04.05 Intangible assets

The Company’s intangible assets include the value of computer software.

An intangible asset is recognized only when its cost can be measured reliably and it is probable that the expected future economic benefits that are attributable to it will flow to the Company.

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses.

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortized over the useful economic life. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and they are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is presented as a separate line item in the statement of comprehensive income (profit and loss account).

Amortization is calculated using the straight–line method to write down the cost of intangible assets to their residual values over their estimated useful lives, like software is amortized over 5 years 6 months.

2.10.04.06 Other assetsOther assets include all other financial assets and fees and unrealized income receivable, advance for operating and capital expenditure and stocks of stationery and stamp. Details are shown in Note-9. Receivables are recognized when there is a contractual right to receive cash or another financial asset from another entity.

2.10.04.07 Non-banking assets

Non-banking assets are acquired on account of the failure of a borrower to repay the loan in time after receiving the decree from the court regarding the right and title of the mortgage property. There are no assets acquired in exchange for loan during the period of financial statements.

2.10.04.08 Right-of- use assets (IFRS-16)

"IIDFC recognises a right of use asset and a lease liability from the beginning of 2020. The right of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right of use asset is depreciated using the straight line methods from the commencement date (from the beginning of 2020) to the earlier of the end of the useful life of the right of use asset or the end of the lease term. In addition, the right of use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

"The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date (from the beginning of 2020), discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, IIDFC’s incremental borrowing rate. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in IIDFC’s estimate of the amount expected to be payable under a residual value guarantee, or if IIDFC changes its assessment of whether it will exercise purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right to use asset, or is recorded in profit or loss if the carrying amount of the right to use asset has been reduced to zero.

2.11 Basis for valuation of liabilities and provisions

2.11.01 Provision for tax a. Current tax

Provision for Current Tax is made on the basis of the profit for the period as adjusted for taxation purpose in accordance with the provision of Income Tax Ordinance, 1984 and amendments made thereof.

b. Deferred tax

The company has adopted a policy of recognition of deferred tax in accordance with International Accounting Standard 12 ‘Income Taxes’. Deferred tax is provided using the liability method for all temporary timing differences between the carrying amount of assets and liabilities for financial reporting purposes and the amount used for tax purposes. The amount of deferred tax is determined at the effective income tax rate prevailing at the Balance Sheet date.


2.11.02 Employees' benefit obligation Defined contribution plan

The Company started operating from January, 2003 an approved contributory provident fund scheme for its employees as per provident fund rules. The fund consists of subscription of all participatory employees and contribution from the company at a predetermined rate. The fund is administered by a Board of Trustees and invested separately from the Company's assets.

Defined benefit plan The Company started operating from January, 2002 an approved gratuity scheme as per gratuity rules which is administered by a Board of Trustees and invested separately from the Company's assets.

Other benefit program for employees

The Company operates a group life insurance scheme for its permanent employees. The Company also has loan facilities at reduced rate for its permanent employees.

2.12 Write-off

Write-off describes a reduction in recognized value. It refers to recognized or the zero value of an assets. Generally it refers to an investment for which a return on the investment is now impossible or unlikely. The items potential returns is thus calculated and removed (written-off) from the balance sheet of the Company.

2.13 Capital and shareholders’ equity

2.13.01 Capital management

The company has a capital management process for measuring, deploying and monitoring its available capital and assessing its adequacy. This capital management process aims to achieve four major objectives; exceed regulatory thresholds and meet long-term internal capital targets, maintain strong credit rating, manage capital levels commensurate with the risk profile of the company and provide the company’s shareholder with acceptable returns.

Capital is managed in accordance with the board approved capital management planning from time to time. Senior management develops the capital strategy and oversees the capital management planning of the company. The company's finance and risk management department are key to implementing the company's capital strategy and managing capital. Capital is managed using both regulatory control measure and internal matrix.

2.13.02 Paid-up capital

Paid up share capital represents total amount of share capital that has been paid in full by the ordinary shareholder. In the event of winding-up of the company, ordinary shareholder (s) rank after all other shareholders and creditors.

2.13.03 Statutory reserve

As per the Financial Institution Regulations 1994, every Non Banking Financial Institution (NBFI) is required to transfer at least 20% of its current year's profit after tax to the statutory reserve fund until such reserve fund equals to its paid up share capital and share premium (if any). To comply the above requirement, IIDFC transferred 20% of net profit to statutory reserve before declaration of dividend.

2.13.04 Dividends on ordinary shares

Dividends on ordinary shares are recognized as a liability and deducted from equity when they are approved by the Company’s shareholders. Dividends for the year that are approved after the reporting date are disclosed as an event after the reporting date.

2.14 Contingent liabilities and contingent assets

A contingent liability is –

Any possible obligation that arises from the past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or any present obligation that arises from past events but is not recognized because:

• it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

• the amount of the obligation cannot be measured with sufficient reliability.Contingent liabilities are not recognized but disclosed in the financial statements unless the possibility of an outflow of resources embodying economic benefits is reliably estimated.

Contingent assets are not recognized in the financial statements as this may result in the recognition of income which may never be realized.


2.15 Materiality, aggregation and off setting

Each material item as considered by management significant has been displayed separately in the financial statements. No amount has been set off unless the Company has legal right to set off the amounts and intends to settle on net basis. Income and expenses are presented on a net basis only when permitted by the relevant accounting standards.

The values of any asset or liability as shown in the statement of financial position (balance sheet) are not off-set by way of deduction from another liability or asset unless there exist a legal right therefore. No such incident existed during the year.

2.16 Revenue recognitionRevenue is only recognised when it meets the following five steps model framework.

a) identify the contract (s) with a customers;b) identify the performance obligations in the contract;c) determine the transaction price;d) allocate the transaction price to the performance obligations in the contract;e) recognise revenue when (or as) the entity satisfies a performance obligation.

Interest income from loans and other sources is recognised on an accrual basis of accounting.

2.16.01 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 instalment 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.

2.16.02 Income from direct finance

Direct finance operation consists of long term, short term and working capital finance, books of account for which are maintained based on the accrual method of accounting. Interest earnings from direct finance are recognized as operational revenue periodically.

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 is 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.

2.16.03 Income from structured finance

Income from structured finance is recognized as and when received.

2.16.04 Income from treasury operations

Incomes from treasury operations are recognized on accrual basis.

2.16.05 Dividend income

Revenue is recognized when the Company's right to receive the payment is established, which is generally at the time of shareholders' approval date for payment of dividend.

2.16.06 Other operating income

Other operational income is recognized as and when received. Such income comprises of the following:

a. Appraisal and documentation fees;b. Commitment fees;c. Supervision fees;d. Delinquent charge; e. Miscellaneous receipts;

f.Portfolio management fee

Portfolio management fees are recognised on the market value of the clients' portfolio on monthly basis and charged to client's balance on quarterly basis.

g.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.

h.Brokerage commission

Brokerage commission is recognised as income when selling or buying order is signed and trade is executed.


i.Profit or loss on sale of securities andProfit or loss arising from the sale of securities is accounted for only when the securities are sold/offloaded.

j.Fee based revenues

Fees on services rendered by the company are recognised as and when services are rendered.

2.17 Interest accrual on loans and leases

Interest income on interest bearing loans and leases are recorded at the time of proceeds received from a particular company. Accrued interest on company loan and leases is accounted for on accrual basis in the Profit and Loss Account under at the implicit rate of interest.

2.18 Earnings per share

Earnings per shares is calculated by dividing the profit or loss attributable to ordinary shares of the IIDFC by the weighted average number of ordinary shares outstanding during the year. IIDFC calculates EPS in accordance with International Accounting Standard -33 ‘Earnings per Share’ which has been shown in the profit and loss account.

Diluted Earnings per share is not applicable for the year as there is no scope for dilution during the year 2020.

2.19 Presentation of operating segments

The segment reporting of IIDFC as per IFRS 8 has been presented in Note -40 named "Operating Segment Report" as on reporting date.

2.20 Contingent assets & liabilities

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.

Contingent Liabilities

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.

2.21 Liquidity statements

As per DFIM circular No. 09 dated 20 October 2015 & DFIM circular No. 21 dated 20 December 2011 the liquidity statement has been prepared in accordance with remaining maturity grouping of Assets and Liabilities as of the close of the reporting period as per following bases:

• Balance with other company and financial institutions are on the basis of their maturity term;• Investments are on the basis of their residual maturity term;• Loans and Advances are on the basis of their repayment /maturity schedule;• Property, plant and equipment are on the basis of their useful lives;• Other assets are on the basis of their adjustments terms;• Borrowings from other company and financial institutions are on the basis of their maturity/repayment schedule;• Deposits and other accounts are on the basis of their maturity terms and past behavioural trends &• Other liabilities are on the basis of their settlement terms.

2.22 Events after the reporting period Events after the reporting period requires additional disclosures or adjustments based on material information about the company. As per International Accounting Standards IAS-10: 'Events after the reporting period' the events after the reporting date are reflected in the financial statements' note no. 44 .

2.23 Going concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying financial statements do not include any adjustments should the company be unable to continue as a going concern.


2.24 Compliance report on International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS)

In addition to compliance with local regulatory requirements, in preparing the Consolidated Financial Statements and Separate Financial Statements, IIDFC applied following IAS and IFRS:

N/A= Not applicable* As the regulatory requirements differ with the standards, relevant disclosures have been made in accordance with Bangladesh Bank's requirements.

Name of the IAS IAS No. StatusPresentation of Financial Statements

Inventories

Statements of Cash Flow

Accounting Policies, Changes in Accounting Estimates and Errors

Events after the Reporting Period

Income Taxes

Property, Plant and Equipment

Leases

Employee Benefits

Accounting for Government Grants and Disclosure of Government Assistance

The Effects of Changes in Foreign Exchange Rates

Borrowing Costs

Related Party Disclosures

Accounting and Reporting by Retirement Benefit Plans

Separate Financial Statements

Investment in Associates and Joint Ventures

Financial Reporting in Hyperinflationary Economics

Interests in Joint Ventures

Earnings Per Share

Interim Financial Reporting

Impairment of Assets

Provisions, Contingent Liabilities and Contingent Assets

Intangible Assets

Investment Property

Agriculture

1

2

7

8

10

12

16

17

19

20

21

23

24

26

27

28

29

31

33

34

36

37

38

40

41

Applied *

N/A

Applied

Applied

Applied

Applied

Applied

Applied

Applied

N/A

Applied

Applied

Applied

N/A

Applied

N/A

N/A

N/A

Applied

Applied

Applied

Applied

Applied

N/A

N/A

Name of the IFRS IFRS No StatusShare Based payment

Business combination

Insurance Contracts

Non-current assets held for sale and discontinued operation

Exploration for and Evaluation of Mineral Resources

Financial Instruments: Disclosures

Operating Segments

Financial Instruments

Consolidated Financial Statements

Joint Arrangement

Disclosure of Interest in Other Entities

Fair Value Measurement

Revenue from Contracts with customers

Leases

2

3

4

5

6

7

8

9

10

11

12

13

15

16

N/A

N/A

N/A

N/A

N/A

Applied *

Applied

Applied *

Applied

N/A

N/A

Applied *

Applied

Applied


2.25 Capital adequacy and market discipline

To cope with the international best practices and to make up the capital more risks sensitive as well as more shock resilient, a road map was issued in August 2010 on implementation of Basel Accord in the FIs. Being well pursuant with the road map, prudential guidelines namely ‘Capital Adequacy and Market Discipline for Financial Institutions’ had been introduced by Bangladesh Bank from December, 2011. The guidelines came into force from 1 January, 2012 with necessary supplements/revisions. Instructions in respect of Minimum Capital Requirement, Adequate Capital and Disclosures requirement as stated in the guidelines have been followed for the purpose of statutory compliance.

As per prudential guideline IIDFC calculated Minimum Capital Requirement (MCR) by dividing the total capital by the sum of risk weighted assets against credit risk, market risk, and operational risk under pillar-I.

Pillar – I: Minimum capital requirementCredit RiskThe calculation of capital requirement against credit risk is more elaborate and risk sensitive. The Accord gives a choice of some sophisticated approaches to address risks, and adoption of a Particular approach depends on the risk measurement capabilities and robustness of the systems in place in a Financial Institution. A Standardized Approach has been the preliminary choice of FIs for the credit risk calculation.

Market riskMarket risk is defined as the risk of losses in on and off-balance-sheet positions arising from movements in market prices. The risks subject to this requirement are:

• The risks pertaining to interest rate related instruments and equities in the trading book;• Foreign exchange risk and commodities risk throughout the FI.

The capital charges for interest rate related instruments and equities applied to the current trading book items prudently valued by IIDFC. The capital charges for foreign exchange risk and for commodities risk applied to IIDFC's total currency and commodity positions, subject to some discretion to exclude structural foreign exchange positions.

Operational riskThe accord introduces for the first time a capital charge for operational risk. The framework presents three methods for calculating operational risk capital charges in a continuum of increasing complexity and risk sensitivity. These methods are the Basic Indicator approach (a fixed percentage of gross income amount), Standardized approach (sum of a certain percentage of FI’s income in each business line) and Internal Measurement approach (Statistical measure of FIs operational loss based on its historical loss data). But initially, Basic Indicator Approach has been applied for calculating the capital charge against operational risk.

2.26 Stress testingStress Testing is an important risk management tool that is used by the Financial Institutions as part of internal risk management and through the Basel II capital adequacy framework, is promoted by Bangladesh Bank. Stress Testing alerts Financial Institutions management to adverse unexpected outcomes related to a variety of risks and provides an Indication of how much capital might be needed to absorb losses should large shock occur. Stress Testing supplements other risk management approaches and measures playing particularly important role in:

- Providing forward-looking assessment of risk;- Overcoming limitations of models and historical data;- Supporting external and internal communication;- Feeding into capital and liquidity planning procedures;- Informing the setting of an FI’s risk tolerance; and- Facilitating the development of risk mitigation or contingency plans across a range of stressed conditions.

Stress Testing guideline have been issued by Bangladesh Bank to provide a structured way of assessing the vulnerability of financial institutions to extreme but plausible market conditions. The guidelines enable institutions to accurately assess risk and define the “risk appetite” of the organization and also provide critical information to senior management for decision around capital allocation and contingency planning.

IIDFC exercise stress testing on its portfolio on quarterly basis and submit its stress testing report as per format prescribed by Bangladesh Bank on regular basis.


2.27 Financial risk managementIIDFC 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, IIDFC 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 18 September 2005 for management of risks and, more recently, DFIM Circular No. 03 dated 24 January 2016.

Credit RiskTo encounter and mitigate credit risk the company employed multilayer approval process, policy for maximum exposure limit of sector or 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 Appraisal Committee (CAC) regularly meets to review the market and credit risk related to lending and recommend and implement appropriate measures to counter associated risks. The CAC critically reviews projects from risk point of view. An independent Credit Risk Management Department is in place, at IIDFC, 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.

Market RiskThe 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. IIDFC 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 RiskLiquidity 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 RiskAppropriate internal control measures are in place, at IIDFC, to address operational risks. IIDFC has also established an Operational Risk Management (ORM) 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 mange operational risk. The function of the ORM department is to exercise constant vigilance against erosion of Shareholders' value by identifying, assessing, measuring and managing operational risk resulting from inadequate or failed internal processes, people and systems or from external events.

Money Laundering and Terrorist Financing RiskIn IIDFC, money laundering and terrorist financing risk takes two broad dimensions:

(a). Business risk which is the risk that IIDFC may be used for money laundering or for the financing of terrorism and

(b). Regulatory risk which is the risk that IIDFC fails to meet regulatory obligations under the Money Laundering Prevention Act, 2012 (subsequently amended in 2015) and the Anti-Terrorism Act, 2009 (subsequently amended in 2012 and 2013).

To mitigate the risks, IIDFC, while adhering to various guidelines and circulars issued by the Bangladesh Financial Intelligence Unit (BFIU), has in place a strict compliance program consisting of the following components:

(a). Internal policies, procedures and controls, which are continually updated as and when required, to identify and report instances of money laundering and terrorism financing;

(b). A dedicated structure and sub-structure within the organisation, headed by a Central Compliance Unit (CCU), for proactively managing 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 functions, including internal and external audit, to test the programs;

(e). Ongoing employee training programs.

Additional risks required to be addressed under regulatory requirements DFIM Circular No.03 of 2016, introduced the Integrated Risk Management Guidelines for Financial Institutions ("the guidelines"). These guidelines supplement, and do not replace, existing risk management guidelines.

The 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.

IIDFC 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 IIDFC 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.

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 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, IIDFC 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 IIDFC 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. Concerned departments are kept informed of latest legal and regulatory requirements by the ICC and Corporate Affairs departments. A consideration of compliance (or any potential non-compliance) with laws and regulations is a standard part of the company's regular decision making processes. Wherever deemed necessary, appropriate legal advice is sought from qualified internal and/or external legal counsel.

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.

IIDFC 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 & Social Risk As the best financial brand in promoting sustainable business practices, IIDFC have adopted Environmental & Social Risk Management System as one of its integral parts of Credit Risk Assessment to compute environmental & social risks from our financial footprints. IIDFC is one of the front runners to add “Environmental & Social Management System (ESMS)” within its framework, a global standard to minimize environmental & social risks from the organizational activities.


2020 2019BDT BDT

3 CashCash in hand (Note 3.1) 4,597 7,463Balance with Bangladesh Bank and its agent bank (Note 3.2) 112,172,320 177,275,664Total 112,176,917 177,283,127

3.1 Cash in hand

3.2 Balance with Bangladesh Bank

3.3

Required reserve 84,306,010 169,634,250 Actual reserve held 112,172,320 177,275,664 Surplus / (Deficit) 27,866,310 7,641,414

3.4

Required reserve 328,355,640 378,908,847 369,924,336 406,863,299

Surplus / (Deficit) 41,568,696 27,954,452 3.4.1 Actual Reserve held for SLR

Cash in hand 4,597 7,463 Balance with Bangladesh Bank and its agent bank(s) 112,172,320 177,275,664 Balance with other banks and financial institutions (Note-3.4.1.1) 257,747,419 229,580,172

369,924,336 406,863,299

3.4.1.1 Balance with other banks and financial institutions (SLR)

National Credit & Commerce Bank Ltd. - 21,903,104Social Islami Bank Ltd. 21,818,000 -Standard Bank Limited 55,929,419 -Modhumoti Bank Ltd. - 10,370,500Union Bank Ltd. 180,000,000 197,306,568Total 257,747,419 229,580,172

3.a Consolidated cashIIDFCL 4,597 7,463IIDFC Securities Limited 25,816 29,447IIDFC Capital Limited 25,178 20,801Sub-Total 55,591 57,711Balance with Bangladesh Bank and its agent bank(s) (Note-3) 112,172,320 177,275,664Total 112,227,911 177,333,375

4 Balance with other Banks and Financial Institutions

Inside Bangladesh Current Accounts:National Credit & Commerce Bank Ltd. 2,822 434Southeast Bank Ltd. - 3,560Social Islami Bank Ltd. 128 128BRAC Bank Ltd. - 2,775,341Bank Alfalah Ltd. - 21,220Midland Bank 845 1,535Trust Bank Ltd. 7,395 -Commercial Bank of Ceylon PLC - 27,697Total 11,190 2,829,915

Cash in hand represents the amount under "imprest system of petty cash" to meet petty expenses both for head office as well as branch offices.

SLR has been calculated at the rate of 5.00% of total demand and time liabilities, including CRR of 1.50% on Total Term Deposits. SLR ismaintained in liquid assets in the form of Cash in Hand, balance with Bangladesh Bank, balance with other Banks & Financial Institutions,unencumbered Treasury Bills, Prize Bond, Savings Certificates & any other assets approved by Bangladesh Bank.

Balance with Bangladesh Bank is a non-interest bearing account maintained with Central Bank to meet the Cash Reserve Requirement (CRR).CRR (note 3.3) and Statutory Liquidity Reserve (note 3.4) have been calculated and maintained in accordance with The Financial Regulations1994 and FID Circular No. 06 dated 6th November, 2003 and FID Circular No. 02 dated 10th November, 2004.

Actual reserve held (Note-3.4.1)

CRR has been calculated at the rate of 1.50% on Total Term Deposits which is preserved in current account maintained with Bangladesh Bankin compliance with FID circular no. 6 dated 6th November, 2003, FID Circular No. 02 dated 10th November, 2004 and DFIM Circular Letter No.03, dated 21 June 2020 . Total Term Deposits means Term or Fixed Deposits, Security Deposit against Lease/Loan and other Term Depositsreceived from individuals and institutions (except Banks and Financial Institutions).

Cash Reserve Requirement and Statutory Liquidity Reserve have been calculated and maintained in accordance with Financial Institutions Act,1993 & Financial Institutions Regulations, 1994, FID Circular No. 06, dated 06 November 2003, FID Circular No. 02 dated 10 November 2004,DFIM Circular Letter No. 01, dated 12 January 2017 and DFIM Circular Letter No. 03, dated 21 June 2020.

Cash Reserve Requirement (CRR)

Statutory Liquidity Reserve (SLR)


2020 2019BDT BDT

Short-Term Deposit AccountsSoutheast Bank Ltd. 1,771,278 128,116Social Islami Bank Ltd. 223,550 2,278Bank Asia Ltd. 41,285,337 98,818,916AB Bank Ltd. 3,057 3,057The City Bank Ltd. 2,383 142,402Janata Bank Ltd. 4 1,004Pubali Bank Ltd 10,433 27,378ONE Bank Ltd. 27,127 28,962Sonali Bank Ltd. - 82,588Total 43,323,169 99,234,701

Fixed Deposits Receipts (FDR Placement)Bangladesh Commerce Bank Ltd. 10,000,000 10,000,000National Credit & Commerce Bank Ltd. - 21,903,104BRAC Bank EPL 70,000,000 -Modhumoti Bank Limited - 10,370,500NRB Commercial Bank Ltd. 49,357,177 41,323,580Union Bank Limited 322,028,956 334,065,760Union Capital Limited 44,126,833 43,600,000Standard Bank Limited 55,929,420 52,217,797South Bangla Agriculture & Commerce Bank Limited - 29,987,500Fareast Finance & Investment - 6,400,000Social Islami Bank Ltd. 71,818,000 20,000,000Total 623,260,386 569,868,241

Sub Total 666,594,745 671,932,857

Outside Bangladesh - -Grand Total 666,594,745 671,932,857

4.1 Maturity grouping of Balance with other Banks and Financial InstitutionsOn demand 253,219,338 254,844,253Less than 3 months 189,964,158 191,183,163More than 3 months but less than 1 year 159,414,280 160,437,246More than 1 year but less than 5 years 63,996,969 65,468,195Above 5 years - -Total 666,594,745 671,932,857

4.a Consolidated Balance with other Banks and Financial Institutions

IIDFCL 666,594,745 671,932,857IIDFC Securities Limited (Note-4.a.1) 132,153,222 207,271,322IIDFC Capital Limited (Note-4.a.2) 17,901,270 9,517,621Total 816,649,237 888,721,800

4.a.1 IIDFC Securities LimitedSoutheast Bank Ltd. 188,250 1,379,745NCC Bank Ltd. 1,954 16,351,711IIDFC Ltd - 20,000,000One Bank Ltd. 131,963,018 169,539,866Total 132,153,222 207,271,322

4.a.2 IIDFC Capital LimitedSoutheast Bank Ltd. 2,992,959 2,843,921ONE Bank Ltd. 14,908,311 6,598,243Bangladesh Commerce Bank Ltd. - 75,457Total 17,901,270 9,517,621

5 Money at Call and Short NoticeBanks - -Non-Bank Financial Institutions - -Total - -

6 InvestmentsGovernment SecuritiesTreasury Bill - -National Investment Bond - -Bangladesh Bank Bill - -Government Notes/ Bond - -Prize Bond - -Others - -Sub Total - -


2020 2019BDT BDT

Other InvestmentsPreference Shares - -Debenture and Bond (Note-6.1) 58,000,000 54,750,000Investments in Shares (Note-6.2) 607,328,034 604,974,965Investments IPO (Note-6.3) 12,499,500 -Gold etc. - -Sub Total 677,827,534 659,724,965

Total investments 677,827,534 659,724,965

6.1 Debenture and BondOpening Balance 54,750,000 52,500,000

4,250,000 5,750,000 1,000,000 3,500,000

Closing Balance 58,000,000 54,750,000

6.2 Investments in SharesQuoted SharesBank Company 74,582,478 50,249,888 Non-Banking Company 36,341,025 36,981,624 Mutual Fund 4,665,290 31,917,816 Other Company 388,439,243 330,675,638

504,028,036 449,824,966

Un-quoted Shares MTB Unit Fund 53,299,999 53,299,999 HFAML Unit Fund 50,000,000 51,850,000 IDLC Growth Fund - 50,000,000

103,299,999 155,149,999 607,328,034 604,974,965

6.3 Investments IPOMir Akter Hossain Limited 12,499,500 -

12,499,500 -

6.4 Cost Price Vs Market Price of Quoted Investments

Bank Company 74,582,478 60,292,809 14,289,669Non-Banking Company 36,341,025 36,505,142 (164,117)Mutual Fund 4,665,290 4,093,677 571,613Other Company 388,439,243 315,210,993 73,228,250Total 504,028,036 416,102,621 87,925,415

6.5 Maturity grouping of InvestmentsOn demand 237,891,288 232,998,896Less than 3 months 153,928,320 150,762,682More than 3 months but less than 1 year 182,309,691 174,397,775More than 1 year but less than 5 years 103,698,235 101,565,612Above 5 years - -Total 677,827,534 659,724,965

6.a Consolidated InvestmentsIIDFCL 677,827,534 659,724,965IIDFC Securities Limited (Note - 6.a.1) 301,440,583 349,321,890IIDFC Capital Limited (Note - 6.a.2) 90,535,179 54,340,498Total 1,069,803,296 1,063,387,353

All investments in marketable securities are valued on an aggregate portfolio basis, at the lower of cost and market value as at 31st December2020. At the end of the reporting year, total cost price of the listed securities was BDT. 504,028,036 where as the market price was BDT.416,102,621 resulting a required provision of BDT. 87,925,415

Total Investment in Shares

Add: Addition/ adjustment during the yearLess: Adjustment during the year

Cost Price (A) Market Price (B) Required Provision (C=A-B)

Total

31st December 2020


2020 2019BDT BDT

6.a.1 Investment of IIDFC Securities LimitedQuoted SharesBank Company 88,072,267 88,906,018 Non-Banking Company 17,768,411 31,458,966 Insurance Company 16,602,567 23,541,959 Mutual Fund 5,705,402 28,698,463 Other Company 143,433,416 146,857,964

271,582,063 319,463,370

Un-quoted Shares IAMCL2NDNRB Unit Fund 998,100 998,100 Dhaka Stock Exchange Limited 28,860,420 28,860,420

301,440,583 349,321,890

6.a.1.1 Cost Price Vs Market Price of Quoted Investments

Bank Company 88,072,267 65,334,920 22,737,347Non-Banking Company 17,768,411 19,168,385 (1,399,973)Insurance Company 16,602,567 10,064,543 6,538,024Mutual Fund 5,705,402 5,130,000 575,402Other Company 143,433,416 112,004,165 31,429,251Total 271,582,063 211,702,013 59,880,050

6.a.2 Investment of IIDFC Capital LimitedQuoted SharesBank Company 559,047 559,047 Non-Banking Company 21,579,921 8,042,351 Insurance Company 1,754,199 -Mutual Fund 612,135 12,584,302 Other Company 66,029,877 33,154,798

90,535,179 54,340,498

Un-quoted Shares - - 90,535,179 54,340,498

6.a.2.1 Cost Price Vs Market Price of Quoted Investments

Bank Company 559,047 430,000 129,047Non-Banking Company 21,579,921 21,360,340 219,581Insurance Company 1,754,199 2,041,033 (286,834)Mutual Fund 612,135 610,000 2,135Other Company 66,029,877 55,927,930 10,101,947Total 90,535,179 80,369,303 10,165,877

7 Loans & Advances

Inside Bangladesh:Lease Receivables 12.93% 1,973,962,239 2,268,262,576Advance for Lease Finance 0.42% 64,339,980 66,448,175Total Lease Finance 13.35% 2,038,302,219 2,334,710,751Direct/ Term Finance 85.79% 13,102,404,783 16,527,851,913Secured Overdraft 0.22% 33,047,599 9,147,811Bills Discounted and Purchased (Note-7.8) 0.65% 98,616,851 37,097,428Total Other Finance 86.65% 13,234,069,233 16,574,097,152Sub Total (Note-7.1) 100.00% 15,272,371,452 18,908,807,903

Outside Bangladesh:Gross Lease Receivables - -Less: Unearned Lease Income - -Net Investment - - -Advance for Lease Finance - - -Direct/ Term Finance - - -Secured Overdraft - - -Factoring Finance - - -Margin Loan - - -Sub Total - - -

Total 100.00% 15,272,371,452 18,908,807,903

Total


Required Provision (C=A-B)

31st December 2020

Total


31st December 2020

Cost Price (A) Market Price (B)

Cost Price (A) Market Price (B) Required Provision

(C=A-B)


2020 2019BDT BDT

7.1 Details of Loans & AdvancesLease FinanceCorporate Clients 6.10% 931,590,691 1,046,088,643Small & Medium Enterprises (SME) 7.25% 1,106,711,529 1,288,622,108

Sub Total 13.35% 2,038,302,220 2,334,710,751

Direct / term financeSyndication Finance 16.08% 2,455,406,175 2,037,667,042Corporate clients 41.47% 6,333,251,506 9,399,386,152Small & Medium Enterprises (SME) 24.62% 3,760,517,233 4,478,905,959Home Loan 3.41% 521,079,231 574,320,866Bills Discounted and Purchased 0.65% 98,616,851 37,097,428Secured Overdraft 0.22% 33,047,599 9,147,811Employee Loan 0.21% 32,150,638 37,571,895

Sub Total 86.65% 13,234,069,232 16,574,097,152

Grand Total 100% 15,272,371,452 18,908,807,903

7.2 Maturity grouping of loans & advancesOn demand 1,211,365,840 1,499,798,773Less than 3 months 3,635,906,433 4,501,635,946More than 3 months but less than 1 year 5,652,361,020 6,998,219,567More than 1 year but less than 5 years 3,525,568,064 4,365,025,398Above 5 years 1,247,170,094 1,544,128,219Total 15,272,371,452 18,908,807,903

7.3 Sector/ Industry-wise Loans & AdvancesAgricultural sector 3.94% 601,113,264 691,168,883Industrial sector:Textiles 8.69% 1,327,092,003 1,144,052,285Garments 14.69% 2,243,125,080 2,691,424,851Jutes & jute related goods 3.77% 575,374,405 597,230,487Food items producer/processing industry 3.26% 498,553,283 639,945,522Plastic industries 4.45% 679,104,942 708,275,992Lather and lather goods 0.33% 51,073,580 52,871,876Iron, steel and engineering 5.91% 902,906,410 1,511,632,761Chemicals and pharmaceuticals 2.03% 309,411,565 757,599,215Cement/ clinker and allied industries 2.23% 340,596,412 328,686,754Service sector (Hotel, hospital, clinic, tourism, etc.) 1.37% 209,621,580 277,093,460Paper, printing and packaging 1.72% 261,989,554 274,374,315Telecommunication and IT industries 7.25% 1,107,520,631 1,247,141,601Glass and ceramic industries 0.86% 131,633,310 152,424,778Shipping and ship building industries 0.00% - -Electronics and electrical goods 5.75% 878,060,559 1,154,072,815Power, gas, water and sanitary 3.97% 606,049,642 886,141,097Transport and communication 3.76% 574,021,427 661,286,597Real estate and housing 5.17% 789,602,774 859,674,220Merchant banking 6.64% 1,014,518,068 2,022,437,891Others 14.22% 2,171,002,962 2,251,272,502Total 100.00% 15,272,371,452 18,908,807,903

7.4 Geographical Location-wise Loans & AdvancesInside BangladeshDhaka Division 84.68% 12,932,889,066 16,145,804,808Chittagong Division 14.01% 2,140,383,300 2,557,354,709Barisal Division 0.01% 1,711,937 1,401,925Rajshahi Division 0.46% 70,985,741 64,129,036Khulna Division 0.83% 126,401,408 140,117,425Sub Total 100.00% 15,272,371,452 18,908,807,903

Outside Bangladesh - - -

Total 100.00% 15,272,371,452 18,908,807,903


2020 2019BDT BDT

7.5 Classification of Loans & advances as per Bangladesh Bank circular

Unclassified 2020 2019 2020 2019Standard 69.39% 89.89% 10,598,166,351 16,997,162,642Special Mention Account (SMA) 7.19% 1.05% 1,098,019,622 198,252,051Sub Total 76.58% 90.94% 11,696,185,972 17,195,414,693

ClassifiedSub-standard (SS) 0.13% 2.87% 20,145,502 542,205,361Doubtful (DF) 1.23% 1.22% 188,019,996 230,135,899Bad/ Loss (BL) 22.05% 4.98% 3,368,019,982 941,051,950Sub Total 23.42% 9.06% 3,576,185,480 1,713,393,210

Total 100% 100% 15,272,371,452 18,908,807,903

7.6 Details of Large Loans & Advances

Number of Clients 13 10Outstanding Amount 4,606,833,482 4,078,007,087Classified Amount 360,621,264 360,621,264Measures taken for recovery - -

7.7 Particulars of Loans & Advances

4,484,301,081 6,627,882,035

6,817,519,964 7,676,744,664

3,364,638,645 3,978,461,263

- -

- -

573,761,125 588,148,04632,150,637 37,571,895

- -

9. Due from banking companies - -

charged as follows: a. (Decrease) / increase in provision 113,672,070 332,394,576 b. Amount of loans & advances written off - -

- - d. Interest credited to interest suspense account 56,098,240 162,605,138

11. Loans & advances written off: a. Current year 69,770,310 128,718,575 b. Cumulative to date 599,068,975 529,298,665 c. Amount of written off loans for which law suits have been filed 599,068,975 529,298,665

7.8 Bills Discounted and PurchasedInside Bangladesh 98,616,851 37,097,428Outside Bangladesh - -Total 98,616,851 37,097,428

7.9 Maturity grouping of Bills Discounted and PurchasedWithin 1 month 1,205,011 453,298Over 1 month but within 3 months 33,550,455 12,620,922Over 3 months but within 6 months 23,432,119 8,814,633Over 6 months 40,429,266 15,208,575Total 98,616,851 37,097,428

4. Loans & advances adversely classified for which provision has not been maintained

5. Loans & advances due by the directors or officers of the company or any of them either separately or jointly with any other persons

7. Maximum total amount of loan & advances including temporary loans & advances made at any time during the year to directors of managers or officers of the company or any of them either separately or jointly with any other person

2. Loans & advances considered good against which the company holds no security others than the debtor's personal guarantee

6. Loans & advances due from companies or firms in which the directors of the company have interest as directors, partners or managing agent or in case of private companies as members

As per DFIM circular No.-10, dated 5 September, 2011, outstanding amount exceeding 15% of total capital of the company is treated as LargeLoans & Advances. Total capital of the company was BDT 2,104,162,039 as on 31 December, 2020 whereas BDT 2,191,551,424 as on 31December, 2019.

1. Loans & advances considered good in respect of which the company is fully secured

3. Loans & advances considered good secured by the personal undertaking of one or more parties in addition to the personal guarantee of the debtors

10. Amount of classified loans & advances on which interest has not been

8. Maximum total amount of loans & advances including temporary loans & advances granted during the year to the companies of firms in which the directors of the company have interest as directors, partners of managing agents or in the case of private companies, as members

c. Amount of collection against written of loans & advances


2020 2019BDT BDT

7.a Consolidated Loans & Advances

IIDFCL 15,272,371,452 18,908,807,903IIDFC Securities Limited ( Note-7.a.1) 1,764,165,093 1,613,640,304IIDFC Capital Limited (Note-7.a.2) 630,480,180 729,536,955

17,667,016,725 21,251,985,162Less: Inter Company Loans & Advances IIDFC Securities Limited 573,761,153 573,787,454 IIDFC Capital Limited - 14,360,592

573,761,153 588,148,046Total 17,093,255,572 20,663,837,116

7.a.1 Loans & Advance of IIDFC Securities Limited

Margin Loan 1,764,165,093 1,613,640,304

7.a.2 Loans & Advance of IIDFC Capital Limited

Margin loan 630,480,180 729,536,955

8 Fixed assets including premises, furniture & fixtures etc.Own FinanceA. CostMotor Vehicles 20,296,115 21,666,245Furniture & Fixtures 34,276,248 32,514,991Office Equipments 46,784,794 46,468,038Right-of-use asset 60,618,988 -Total 161,976,145 100,649,274

B. Less: Accumulated DepreciationMotor Vehicles 15,944,102 14,042,819Furniture & Fixtures 17,663,959 14,381,786Office Equipments 37,929,319 34,522,828Right-of-use asset 17,894,505 -Total 89,431,885 62,947,433

C. Written Down Value at the end of the year (A-B) 72,544,260 37,701,841

Lease FinanceD. CostFurniture & Fixtures - -Office Equipments - -Motor Vehicles - -Total - -

E. Less: Accumulated DepreciationFurniture & Fixtures - -Office Equipments - -Motor Vehicles - -Total - -

F. Written Down value at the end of the year (D-E) - -

G. Total of premises, furniture & fixtures etc. (C+F) 72,544,260 37,701,841

8.1 Intangible asset - computer software (Details in Annexure-1)

Cost 13,029,967 8,907,176Add: Addition during the year 101,504 4,122,791Less: Accumulated amortization 10,169,603 8,915,627H. Net book value at the end of the year 2,961,868 4,114,340

I. Grand total of Fixed assets including premises, furniture & fixtures etc.(G+H) 75,506,128 41,816,181

Details of Property, Plant & Equipments has been presented in Annexure-I

8.a Consolidated fixed assets including premises, furniture & fixtures etc.(Details in Annexure-1.a)

IIDFCL 75,506,128 41,816,181IIDFC Securities Limited (Note-8.a.1) 2,849,604 2,476,004IIDFC Capital Limited (Note-8.a.2) 401,312 567,851Total 78,757,044 44,860,036


2020 2019BDT BDT

8.a.1 Fixed assets including premises, furniture & fixtures etc. of IIDFC Securities LimitedA. CostMotor vehicles 358,141 358,141Furniture & fixtures 13,516,752 12,568,181Office equipments 15,062,085 13,925,442

Total 28,936,978 26,851,764

B. Less: Accumulated depreciationMotor vehicles 358,141 358,141Furniture & fixtures 12,296,606 11,047,077Office equipments 13,432,627 12,970,542

Total 26,087,374 24,375,760C. Written down value at the end of the year (A-B) 2,849,604 2,476,004

8.a.2 Fixed assets including premises, furniture & fixtures etc. of IIDFC Capital LimitedA. CostMotor vehicles 1,250,000 1,250,000Furniture & fixtures 819,914 819,914Office equipments 3,889,912 3,889,912Total 5,959,826 5,959,826

B. Less: Accumulated depreciationMotor vehicles 1,249,994 1,249,994Furniture & fixtures 819,896 766,216Office equipments 3,488,634 3,375,775

Total 5,558,524 5,391,985C. Written down value at the end of the year (A-B) 401,302 567,841

8.1.a Consolidated intangible asset (Details in Annexure-1.a)IIDFCL 2,961,868 4,114,340IIDFC Securities Limited - -IIDFC Capital Limited 10 10

2,961,878 4,114,350

9 Other assetsInvestment in shares of subsidiary companies:In Bangladesh 1,534,862,970 1,534,862,970Outside Bangladesh - -Advance rent and advertisement - -

18,739,468 21,381,275Security deposits 2,531,527 9,685,115

2,830,367 2,200,638Balance with BO account 2,702,601 1,060,434Others (Note 9.1) 1,665,667,281 1,388,305,939Total 3,227,334,214 2,957,496,371

9.1 OthersInterest receivable 508,639,759 416,801,371Advance for travelling 36,826 51,826Deferred Tax (Note 9.1.1) 9,583,503 7,361,069Advance for suppliers 5,284,889 6,086,568Advance tax 671,376,121 627,649,046Commission on bank guarantee 215,425 215,425Others receivable 470,530,758 330,140,633Total 1,665,667,281 1,388,305,939

9.1.1 Deferred tax

9.a Consolidated other assetsIIDFCL 3,227,334,214 2,957,496,371IIDFC Securities Limited (Note-9.a.1) 271,532,664 273,487,827IIDFC Capital Limited (Note-9.a.2) 106,224,245 117,837,228

3,605,091,123 3,348,821,426Less: Inter company investment IIDFC Securities Limited 999,874,970 999,874,970 IIDFC Capital Limited 599,988,000 599,988,000

1,599,862,970 1,599,862,970Total 2,005,228,153 1,748,958,456

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 International Accounting Standard (IAS) 12: "Income Taxes".

Interest accrued on investment, commissions and other receivables

Preliminary expenses, renovation, development and prepaid expenses


2020 2019BDT BDT

9.a.1 Other assets of IIDFC Securities LimitedCost of TREC holding 85,978,830 85,978,830Advance rent 1,819,240 1,285,000Stamp in hand 9,585 14,553Security deposits 363,956 361,856Advance tax 158,402,527 141,525,428Others 24,958,526 44,322,160Total 271,532,664 273,487,827

9.a.2 Other assets of IIDFC Capital LimitedLicense fee 30,196,209 30,196,209Security deposits 200,000 200,000Advance tax 49,034,251 48,002,361Deferred tax assets 77,017 72,540Others 26,716,768 39,366,118Total 106,224,245 117,837,228

10 Non-banking assets 12,287,820 -

This represents assets owned under the ‘Certificate of Ownership’ given by the competent court under section 33(7) of Artha Rin Adalat Ain 2003.

11 Borrowings from other banks, financial Institutions & agents

Inside Bangladesh:Refinance against SME and other loans from Bangladesh Bank 1,274,193,454 1,016,910,979From other scheduled Banks (Note - 11.1) 4,247,914,455 5,329,303,552Sub Total 5,522,107,909 6,346,214,531

Outside Bangladesh - -

Total 5,522,107,909 6,346,214,531

11.1 From other scheduled banks & financial institutions

Long term loanEastern Bank Ltd. - 450,150,000Social Islami Bank Limited 211,882,884 78,726,114Pubali Bank Ltd. 1,039,232,428 709,327,532Uttara Bank Ltd. 655,025,096 646,938,557National Credit and Commerce Bank Ltd. 128,520,891 161,015,920Trust Bank Ltd. 337,969,553 357,068,750Midland Bank Limited 170,825,258 170,316,248Sub-Total 2,543,456,110 2,573,543,121Short term loan, overdraft and money at call & short noticeUnion Bank Limited 141,315,000 147,058,000Sonali Bank Limited 120,000,000 120,000,000Mutual Trust Bank Limited 500,252,252 413,882,996South Bangla Agriculture & Commerce Bank Ltd. 230,000,000 500,000,000Lankan Alliance Finance Limited 50,000,000 50,000,000Public Bank 502,894,867 1,004,820,564Woori Bank 159,996,226 159,998,871BRAC EPL Limited - 100,000,000NRB Commercial Bank Ltd. - 120,000,000Uttara Bank Ltd - 30,000,000United Commercial Bank Limited - 110,000,000

Sub-Total 1,704,458,345 2,755,760,431

Grand Total 4,247,914,455 5,329,303,552

Security against borrowings from other banks, financial institutions and agents

Secured 3,745,019,588 4,324,482,988Unsecured 502,894,867 1,004,820,564Total 4,247,914,455 5,329,303,552

Maturity grouping of borrowings from other banks, financial institutions and agentsPayable on demand 1,315,360,916 1,650,211,574Up to 1 month 895,495,251 1,123,460,954Over 1 month but within 6 months 645,662,586 810,028,533Over 6 months but within 1 year 430,441,724 540,019,021Over 1 year but within 5 years 217,408,255 272,753,747Over 5 years 743,545,723 932,829,723Total 4,247,914,455 5,329,303,552

Security is covered by first equitable mortgage of all present and future immovable properties and by floating charges on movable assets of theCompany ranking pari-passu among the lenders. The Company has a Pari Passu Security Sharing Agreement (PPSSA) among the securedlenders stipulating the procedure in the sharing of the security provided by the Company. Loans repayable within one year have been placedunder current liabilities. Details of loans are as follows:


2020 2019BDT BDT

11.a Consolidated borrowings from other banks, financial Institutions & agentsInside Bangladesh

IIDFCL 5,522,107,909 6,346,214,531IIDFC Securities Limited (Note-11.a.1) 600,994,992 577,651,667IIDFC Capital Limited (Note-11.a.2) - 23,955,078

6,123,102,901 6,947,821,276Less: Inter company borrowings IIDFC Securities Limited 573,761,153 573,787,454 IIDFC Capital Limited - 14,360,592

573,761,153 588,148,046Total 5,549,341,748 6,359,673,230

11.a.1 Borrowings of IIDFC Securities Limited

Inside BangladeshIIDFC Ltd. 573,761,153 573,787,454ONE Bank Limited 27,233,839 22,334NCC Bank Limited - 83,867Investment Corporation of Bangladesh - 3,758,012Total 600,994,992 577,651,667

11.a.2 Borrowings of IIDFC Capital Limited

IIDFC Ltd. - 14,360,592Investment Corporation of Bangladesh (ICB) - 9,594,486Standard Bank Ltd. - -Total - 23,955,078

12 Deposits & other accountsDeposits from banks and financial institutions (Note-12.1) 4,550,732,003 6,258,265,572Deposits from customers 5,660,799,781 6,449,716,134Sub-Total 10,211,531,784 12,707,981,706Other deposit 2,366,560 2,366,560Grand Total 10,213,898,344 12,710,348,266

12.1 Deposits from banks and financial institutions

Agrani Bank Limited 200,000,000 200,000,000AB Bank Ltd. 100,000,000 200,000,000BRAC Bank Limited 840,000,000 1,000,000,000The City Bank Ltd. 850,000,000 850,000,000Sonali Bank Limited 190,000,000 200,000,000Janata Bank Limited 200,000,000 200,000,000Mercantile Bank Limited 30,732,003 28,265,572Shahjalal Islami Bank Limited 930,000,000 1,400,000,000Shimanto Bank Limited 600,000,000 400,000,000National Credit & Commerce Bank Limited 260,000,000 230,000,000Modhumoti Bank Ltd. 350,000,000 1,100,000,000United Commercial Bank Limited - 450,000,000

4,550,732,003 6,258,265,57212.2 Maturity grouping of deposits & other accounts

Payable on demand - -Up to 1 month 556,673,438 692,733,864Over 1 month but within 6 months 2,636,392,318 3,280,771,298Over 6 months but within 1 year 4,042,717,591 5,030,826,311Over 1 year but within 5 years 2,620,823,913 3,261,397,710Over 5 years but within 10 years 357,291,084 444,619,082Over 10 years - -Total 10,213,898,344 12,710,348,266

12.a Consolidated Deposits & Other Accounts

IIDFCL 10,211,531,784 12,707,981,706IIDFC Securities Limited - -IIDFC Capital Limited (Note-12.a.1) - -Sub Total 10,211,531,784 12,707,981,706Other Deposit 2,366,560 2,366,560Total 10,213,898,344 12,710,348,266

12.a.1 Deposits & Other Accounts of IIDFC Capital Limited

Deposits from Banks - -Deposits from Customers - -Total - -

IIDFC maintains the highest level of commitment to depositors in terms of repayment, customer service and best returns from their investment.


2020 2019BDT BDT

13 Other LiabilitiesFinance loss reserve (Note 13.1) 892,179,870 888,584,034Deferred tax 671,924 660,692Interest suspense account (Note 13.2) 421,232,974 368,350,000Lease rental advance 20,108,022 24,423,211Provision for current tax (Note 38) 657,279,245 655,279,245Liabilities for financial expenses 97,588,480 148,840,957Liabilities for expenses 921,980 16,764,107Liabilities for other finance 76,416,303 66,044,937Lease liability 37,531,720 -Total 2,203,930,518 2,168,947,183

13.1 Finance Loss Reserve

Specific Provision on Classified Loans & AdvancesOpening Balance 616,519,312 376,016,620

(66,555,044) (93,384,626)Add: Specific provision provided during the year 121,401,836 333,887,318Closing balance 671,366,104 616,519,312

Provision for diminution in value of InvestmentsOpening Balance 131,446,605 48,464,313Add: Provision during the year (43,521,190) 82,982,292Closing Balance 87,925,415 131,446,605

Opening balance 140,618,117 142,110,859Add: General provision provided during the year (7,729,766) (1,492,742)Closing Balance 132,888,351 140,618,117

Total 892,179,870 888,584,034

Particulars of required provision for Loans and Advances

Status of classification Base for provision Rate Unclassified (General provision)Standard - other than SME 7,697,550,794 1.0% 76,975,508 120,222,186Standard - SME 2,822,735,422 0.25% 7,056,839 12,262,434Special mention account (SMA) 1,039,693,585 5.0% 51,984,679 8,133,497Total 11,559,979,801 136,017,026 140,618,117Classified (Specific provision)Sub-standard (SS) 21,411,597 20.0% 4,282,319 63,696,699Doubtful (DF) 76,674,755 50.0% 38,337,378 62,207,108Bad/ loss (BL) 1,471,461,978 100.0% 1,471,461,978 490,490,505Total 1,569,548,330 1,514,081,674 616,394,312

Required provision for Investments 87,925,415 131,446,605

Total provision required 1,738,024,115 888,459,034

Total provision made 892,179,870 888,584,034

Excess /(Shortage) provision made (845,844,245) 125,000

13.2 Interest suspense accountOpening Balance 368,350,000 241,078,811Add: Amount transferred to interest suspense account during the year 56,098,240 162,605,138Less: Amount written-off during the year (3,215,265) (35,333,949)Closing Balance 421,232,974 368,350,000

13.a Other Liabilities

IIDFCL 2,203,930,518 2,168,947,183IIDFC Securities Limited (Note-13.a.1) 746,481,344 744,957,540IIDFC Capital Limited (Note-13.a.2) 272,529,322 317,075,855

3,222,941,184 3,230,980,579Less: Inter company liabilities IIDFC Securities Limited - - IIDFC Capital Limited - -Total 3,222,941,184 3,230,980,578

General Provision on unclassified Loans & Advances

Less: Provision fully provided loans & advances written-off during the year


2020 2019BDT BDT

13.a.1 Other Liabilities of IIDFC Securities Limited

Provision for loans & advances-margin loan 46,217,086 47,267,496Provision for current tax 145,530,377 128,653,278Payable to clients 129,482,272 140,810,501Payable to merchant Banks (City Bank Capital,SEB Capital & IIDFC Capital) 3,531,902 295,673Payable to DSE 512,295 205,416Interest suspense account 402,509,112 411,656,855Liability for expenses 5,605,623 3,802,101Reserve for risk fund 1,116,667 1,016,667Provision for diminution in value of investments 11,976,010 11,249,553Total 746,481,344 744,957,540

13.a.2 Other liabilities of IIDFC Capital Limited

Finance loss reserve 188,802,548 216,476,663Provision for diminution in value of investment 10,165,877 15,696,122Current tax liability 49,620,750 48,941,154Liability for financial expenses 635,694 488,540Liability for expenses 5,322,527 1,471,382Payable to Brokerage & Others 17,981,926 34,001,994Total 272,529,322 317,075,855

14 Share CapitalAuthorized Capital(500,000,000 shares of Tk. 10 each) 5,000,000,000 5,000,000,000Subscribed & Paid-up Capital:

1,737,770,680 1,308,000,000Paid-up Share Capital as on 31 December, 2020 comprises the followingsPublic SectorName of Shareholders No. of Shares Value PercentageSonali Bank Limited 13,380,903 133,809,030 7.70%Janata Bank Limited 13,380,903 133,809,030 7.70%Investment corporation of Bangladesh 13,380,903 133,809,030 7.70%

40,142,709 401,427,090 23.10%Private sectorAB Bank Ltd. 2,667,923 26,679,230 1.54%Bank Asia Ltd. 13,380,903 133,809,030 7.70%BRAC Bank Ltd. 10,449,259 104,492,590 6.01%City Bank Ltd. 13,380,903 133,809,030 7.70%Mutual Trust Bank Ltd. 13,380,903 133,809,030 7.70%National Bank Ltd. 13,380,903 133,809,030 7.70%ONE Bank Ltd. 13,380,903 133,809,030 7.70%Southeast Bank Ltd. 10,449,259 104,492,590 6.01%Eastland Insurance Co. Ltd. 10,449,259 104,492,590 6.01%National Life Insurance Co. Ltd. 13,380,903 133,809,030 7.70%Pragati Insurance Ltd. 13,380,903 133,809,030 7.70%Mr. Md. Matiul Islam 5,952,338 59,523,380 3.43%

133,634,359 1,336,343,590 76.90%

Total 173,777,068 1,737,770,680 100.00%

14.1 Capital adequacy

Paid up capital 1,737,770,680 1,308,000,000Required capital as per Bangladesh Bank 1,000,000,000 1,000,000,000Excess/(Shortage) capital 737,770,680 308,000,000

As per BSEC’s directive no. BSEC/SRI/Policy/3/2020/68 dated 12 January 2020; loans loss reserve has been maintained including interestsuspense for BDT 448,726,198 which is equivalent to 37.01%.

Loan loss reserve has been maintained following the BSEC directive no. SEC/CMRRCD/2009-193/196 dated 28 December 2016 andsubsequent directive number BSEC/SRI/policy/3/2020/68 dated 12 January 2020.

(173,777,068 shares of Tk. 10 each)

As per sub-section 3(Ga)of section 4 of the Financial Institutions Regulations 1994 and DFIM Circular No. 05 dated 24 July 2011 and DFIMCircular No. 09 dated 24 June 2014 the minimum paid up capital of the Financial Institution shall be Taka 100 crore. Provided that the sum ofpaid up capital and reserves shall not be less than the minimum capital determined under the Risk Based Assets of the Company.


2020 2019BDT BDT

14.2 Capital adequacy and market discipline

Tier-1 (Core Capital)

Fully paid-up capital/ capital lien with BB 1,737,770,680 1,308,000,000Statutory reserve 371,950,483 371,950,483Non-repayable share premium account (share money deposits) - 310,809,600General reserve 50,800,000 50,800,000Retained earnings (56,359,124) 149,991,341Minority interest in subsidiaries - -Non- cumulative irredeemable preference shares - -Dividend equalization account - -Other (if any item approved by Bangladesh Bank)Sub-Total 2,104,162,039 2,191,551,424

Deductions from tier-1(Core capital)

- -Shortfall in provisions required against classified assets - -Shortfall in provisions required against investment in share - -Remaining deficit on account of revaluation of investments - -in securities after netting off any other surplus on the securities - -Any investment exceeding the approved limit - -Investments in subsidiaries which are not consolidated - -Other (if any) - -Sub-Total - -

Total eligible Tier-1 capital 2,104,162,039 2,191,551,424

2. Tier-2 (Supplementary capital)

179,536,479 312,185,416Assets revaluation reserves up to 50% - -Revaluation reserve for securities up to 50% - -All other preference shares - -Other ( if any item approved by Bangladesh Bank) - -Sub-Total 179,536,479 312,185,416Deductions, if any - -

Total eligible Tier-2 capital 179,536,479 312,185,416

A Total capital 2,283,698,518 2,503,736,840

B Total risk weighted asset 15,796,231,196 17,753,159,829

C Required capital 1,579,623,120 1,775,315,983

D Surplus / (Deficit) 704,075,398 728,420,857Capital adequacy ratio (CAR) 14.46% 14.10%On core capital (Tier-1) 13.32% 12.34%On supplementary capital (Tier-2) 1.14% 1.76%

15 Statutory reserveOpening balance 371,950,483 366,708,633Add: Addition during the year - 5,241,850Closing balance 371,950,483 371,950,483

16 General reserveOpening Balance 50,800,000 49,800,000Add: Addition during the year - 1,000,000Closing balance 50,800,000 50,800,000

General provision (Unclassified up to special limit+SMA+ off balance sheet

As per Capital Adequacy and Market Discipline for Financial Institutions guideline of Bangladesh Bank, IIDFC calculated Minimum CapitalRequirement (MCR) by dividing the total capital by the sum of risk weighted assets against credit risk, market risk, and operational risk under pillar-I. IIDFC maintain Capital Adequacy Ratio (CAR) of minimum 10%.

Book value of goodwill and any value of any contingent assets which are shown

General reserve represents reserve for mitigating general and contingent situation which are unforeseen or uncertain relating to the Company and its stakeholders.

In compliance with the clause no 6 of Financial Institutions Regulations, 1994, Financial Institution is required to transfer at least 20% of it's profitafter tax and before appropriation of dividend in a particular year, if the financial institution's sum of Share Premium Account (if any) and StatutoryReserve is less than the paid up capital of that financial institution. Accordingly, 20% of current year's profit after tax has been transferred toStatutory Reserve Account.


2020 2019BDT BDT

16.a Consolidated general reserve

IIDFCL 50,800,000 50,800,000IIDFC Securities Limited 17,000,000 17,000,000IIDFC Capital Limited - -

67,800,000 67,800,00017 Share Money Deposit

Opening balance 310,809,600 123,110,960Add: Addition during the year (Note. 17.1) 1,241,080 187,698,640Less: Transfer as Right share and include in Paid-up Capital (312,050,680) -Closing balance - 310,809,600

17.1 Share Money Depots for Right Share:Janata Bank Limited - 29,316,440AB Bank Limited - 5,845,200The City Bank Limited - 29,316,440Mutual Trust Bank Limited - 29,316,440Sonali Bank Limited - 29,316,440Investment Corporation of Bangladesh(ICB) - 29,316,440Bank Asia Limited - 29,316,440National Bank Limited - 29,316,440Pragati Insurance Limited - 29,316,440National Life Insurance - 29,316,440Mr. Md. Matiul Islam 1,241,080 11,800,000One Bank Limited - 29,316,440

1,241,080 310,809,600

18 Stock dividendOpening balance 117,720,000 -Add: Stock dividend for 2018 - 117,720,000Less: Converted into paid up capital (117,720,000) -Closing balance - 117,720,000

18.a Consolidated stock dividendIIDFC Limited - 117,720,000IIDFC Securities Ltd. - -IIDFC Capital Limited - -

- 117,720,000

19 Retained earningsOpening balance 32,271,341 238,023,941Less: Non-divisible profit - -Net profit during the year (88,630,465) 26,209,249Less: Statutory reserve - (5,241,850)Less: General reserve - (1,000,000)Less: Stock Dividend for the year 2018 - (117,720,000)Less: Stock Dividend for the year 2017 - (108,000,000)Less: Stock Dividend Distributed for the year 2016 - -Closing balance (56,359,124) 32,271,341

19.a Consolidated Retained earnings

IIDFCL (56,359,124) 32,271,341IIDFC Securities Limited (Note-19.a.1) 107,688,520 106,615,458IIDFC Capital Limited (Note-19.a.2) (26,961,958) (29,209,975)

Sub-Total 24,367,438 109,676,824Less: Non-controlling interest 12,925 12,746Total 24,354,513 109,664,078

The Board of Directors of IIDFC decided and approved to issue 1:3 (One share for every existing three shares) Right Share among existingShareholders at face value of BDT 10 per share and without any premium. Out of total Shareholders, above Shareholder paid his respectiveamount before 31st December 2020.


2020 2019BDT BDT

19.a.1 Retained earnings of IIDFC Securities LimitedOpening balance 106,615,458 99,963,137Add: Prior year adjustment - -Add: Net profit during the year 1,073,062 6,652,321Less: Stock dividend - -Closing balance 107,688,520 106,615,458

19.a.2 Retained earnings IIDFC Securities Ltd.

Opening balance (29,209,975) (31,290,934)Net profit during the year 2,248,017 2,080,959

Closing balance (26,961,958) (29,209,975)

19.a.3 Non-controlling interestShare capital 137,030 137,030Retained earnings 12,925 12,746General reserve 2,126 2,126Closing balance 152,081 151,901

Name of subsidiary company

Amount of share capital Right of IIDFC Share of IIDFC Non-controlling

share capital IIDFC Securities Limited 1,000,000,000 99.9875% 999,874,970 125,030IIDFC Capital Limited 600,000,000 99.9980% 599,988,000 12,000

1,600,000,000 1,599,862,970 137,030Non-Divisible Profit - (65,000,000) -Total 1,600,000,000 1,534,862,970 137,030

20 Contingent liabilities & capital expenditure commitments

Letter of guarantee:Money for which the company is contingently liable in respect of guarantees given favouring:Directors - -Government - -Banks and other financial institutions - -Others (Note-20.1) 203,549,122 203,549,122Sub Total 203,549,122 203,549,122

Letter of credit:For import of equipments under lease finance - -Sub-Total - -

Total 203,549,122 203,549,122

20.1 OthersBank Guarantee-Non Funded 203,549,122 203,549,122

203,549,122 203,549,122

20.2 Capital expenditure commitments

21 Interest incomeInterest income from balance with other banks & financial institutions 2,038,130 1,847,973Interest income from lease finance 172,547,995 319,659,818Interest income from direct/ term finance 1,729,375,798 2,045,378,365Interest income from FDR placement 45,672,314 125,935,984Interest income from bills discounted & purchased 1,866,530 4,087,334Total 1,951,500,767 2,496,909,474

21.a Consolidated interest income

IIDFCL 1,951,500,767 2,496,909,474IIDFC Securities Limited (Note-21.a.1) 63,964,490 91,884,852IIDFC Capital Limited (Note-21.a.2) 14,882,419 19,827,761

2,030,347,676 2,608,622,087Less: Inter company transaction IIDFC Securities Limited 57,776,993 63,668,220 IIDFC Capital Limited 252,945 3,908,306

58,029,938 67,576,526Total 1,972,317,738 2,541,045,561

There was no capital expenditure contracted but not incurred or provided for as on 31 December, 2020, or no capital expenditure authorized by the Board but not contracted as on 31 December, 2020.

In the normal course of business, the Company makes various commitments and incurs certain contingent liabilities. No material losses areanticipated as a result of these transactions. These contingent liabilities and business commitments are quantified below:


2020 2019BDT BDT

21.a.1 Interest income of IIDFC Securities Limited

Interest income from margin loan 51,451,816 76,174,700Interest Income from FDR 4,401,859 7,066,641Interest Income from Staff loan 132,394 -Interest income from balance with other banks 7,978,421 8,643,510Total 63,964,490 91,884,852

21.a.2 Interest income of IIDFC Capital Limited

Interest income from margin loan 14,882,419 19,827,761Interest income from balance with other banks & financial institutions - -Total 14,882,419 19,827,761

22 Interest paid on deposits, borrowings etc.

Interest on depositsFixed deposits 460,101,719 683,410,026Short-term deposits 813,325,010 622,108,364Other deposits - -

1,273,426,729 1,305,518,390Interest on borrowingsFor borrowings from other banks, financial institutionsLong term loan 308,284,602 270,735,998Overdraft facilities 137,458,455 158,831,682Money at call and short notice 53,865,705 32,076,342

499,608,762 461,644,022Interest on lease rent 3,882,359 -

Total 1,776,917,850 1,767,162,412

22.a Consolidated interest paid on deposits, borrowings etc.

IIDFCL 1,776,917,850 1,767,162,412IIDFC Securities Limited (Note-22.a.1) 59,269,710 64,659,746IIDFC Capital Limited (Note-22.a.2) 252,945 3,908,306

1,836,440,505 1,835,730,464Less: Inter company transaction IIDFC Securities Limited 57,776,993 63,668,220 IIDFC Capital Limited 252,945 3,908,306

58,029,938 67,576,526Total 1,778,410,567 1,768,153,938

22.a.1 Interest paid on deposits, borrowings etc. of IIDFC Securities Limited

Interest on borrowing from IIDFC Ltd . 57,776,993 63,668,220Interest on borrowing from bank & other financial institutions 1,492,717 991,526Total 59,269,710 64,659,746

22.a.2 Interest paid on deposits, borrowings etc. of IIDFC Capital Limited

Interest on borrowing from bank & other financial institutions 252,945 3,908,306Interest on Demand Loan - -Total 252,945 3,908,306

23 Income from investmentCapital gain 12,026,882 10,768,139Interest income from Bond & Others 4,250,000 5,750,000Interest income from Unit Fund 1,549,056 503,783Dividend income 8,030,163 12,023,003Total 25,856,102 29,044,925

23.a Consolidated income from investment

IIDFCL 25,856,102 29,044,925IIDFC Securities Limited (Note-23.a.1) 11,484,084 15,591,785IIDFC Capital Limited (Note-23.a.2) 6,351,377 (2,040,589)Total 43,691,563 42,596,121

23.a.1 Income from investment of IIDFC Securities Limited

Dividend income 11,220,753 10,521,212Capital gain on investment in securities 263,331 5,070,573Total 11,484,084 15,591,785


2020 2019BDT BDT

23.a.2 Income/(Loss) from investment of IIDFC Capital Limited

Dividend income 1,813,240 1,933,034Capital gain/(loss) on investment in securities 4,538,137 (3,973,623)Total 6,351,377 (2,040,589)

24 Commission, exchange and brokerageCommission on securities trading - -Total - -

24.a Consolidated income from commission, exchange and brokerageIIDFCL - -IIDFC Securities Limited 79,208,518 49,995,949IIDFC Capital Limited 13,020,163 5,766,535Total 92,228,681 55,762,484

25 Other operating incomeSyndication fee income 20,083,276 4,754,348Bank guarantee income - 7,491Carbon finance income 136,012 -Application & processing fees 341,177 5,116,622Transfer fees 103,996 71,978Notice charge 321,440 510,820Profit from sale of fixed assets 760,000 608,360Cancellation charges 236,882 526,493Other income 8,106,970 4,656,414Total 30,089,753 16,252,526

25.a Consolidated other operating incomeIIDFCL 30,089,753 16,252,526IIDFC Securities Limited (Note-25.a.1) 1,879,120 550,267IIDFC Capital Limited (Note-25.a.2) 1,651,102 383,238Total 33,619,975 17,186,031

25.a.1 Other operating income of IIDFC Securities LimitedBO & trading accounts maintenance income 480,654 402,603Income against CDBL charges - 75,537Gain on disposal of assets 12,866 52,627Cheque dishonour charges 39,000 19,500Others 1,346,600 -Total 1,879,120 550,267

25.a.2 Other operating income of IIDFC Capital Limited

Non Operating Income 1,651,102 383,238Underwriting commission - -Service Charge & Commission - -Total 1,651,102 383,238

26 Salaries & allowancesBasic salary 85,529,499 89,495,987Allowances 53,267,765 58,552,410Festival bonus 12,050,375 13,103,301Incentive bonus - 14,253,738Company's contribution provident fund 6,971,853 7,192,836Group insurance 2,284,178 1,836,811Retirement benefits & gratuity 12,100,000 -Total 172,203,670 184,435,083

Salaries and allowances of IIDFC Limited include annual contribution to Provident Fund and Gratuity Fund. This Provident Fund and GratuityFund is also applicable for IIDFC group also.

IIDFC Limited operates a funded gratuity scheme (which is a defined benefit scheme as specified in IAS 19). Gratuity fund is administered by aBoard of Trustees and Company contributions are invested separately from company assets. Employees are entitled to gratuity benefit aftercompletion of a minimum years of service with the Company. The Company is contributing to the fund as per yearly requirement based onpresent employees status and payment requirement.

26.a Consolidated salaries & allowances



2020 2019BDT BDT

26.a.1 Salaries & allowances of IIDFC Securities Limited

Basic salary 16,517,394 18,396,498Allowances 10,775,683 12,351,784Bonus 1,409,362 3,031,022Company's contribution to provident fund 1,575,647 1,722,546Group insurance 958,941 891,243Retirement benefits & gratuity 393,170 1,722,547Total 31,630,197 38,115,640

26.a.2 Salaries & allowances of IIDFC Capital LimitedBasic salary 5,495,364 5,495,364Allowances 4,885,792 5,086,501Bonus 915,894 915,894Company's contribution provident fund 549,540 549,540Group Insurance 225,565 225,989Cleaning staff salary 36,000 -Retirement benefits & gratuity 161,766 661,015Total 12,269,921 12,934,303

27 Rent, taxes, insurance, electricity etc.Rent, rate and taxes 857,303 25,861,186Insurance payment 591,817 275,392Electricity, gas and water 3,210,547 3,830,038Total 4,659,667 29,966,616

27.1 Disclosure related to rent,rate and taxes:Actual rent expenses 22,634,167 -Less: Reclassification of rent expenses (as per IFRS-16: Leases) 21,776,864 -

-Rent expense as reported 857,303

27.a Consolidated rent, taxes, insurance, electricity etc.


27.a.1 Rent, taxes, insurance, electricity etc. of IIDFC Securities LimitedRent, rates and taxes 12,109,281 14,623,022Insurance 4,871 2,455Electricity, gas and water 1,019,917 1,440,217Total 13,134,069 16,065,694

27.a.2 Rent, taxes, insurance, electricity etc. of IIDFC Capital LimitedRent, rates and taxes 1,340,890 1,511,867Insurance 58,822 27,918Electricity, gas and water 112,115 111,272Total 1,511,827 1,651,057

28 Legal expensesProfessional charges 1,260,051 2,158,175Legal expenses 3,579,720 4,290,585Total 4,839,771 6,448,760

28.a Consolidated legal expensesIIDFCL 4,839,771 6,448,760IIDFC Securities Limited 1,051,051 949,235IIDFC Capital Limited 243,750 355,350Total 6,134,572 7,753,345

29 Postage, stamp, telecommunications etc.Postage and courier 108,751 112,677Phone, fax & internet 3,394,188 3,057,738Total 3,502,939 3,170,415

In addition the above mentioned change in rent expense, implementation of IFRS-16 has resulted in charging of depreciation against Right-of-use asset as disclose in Annexure-1 and of interest expense on lease rent as disclosed in note-22.

29.a Consolidated postage, stamp, telecommunications etc.IIDFCL 3,502,939 3,170,415IIDFC Securities Limited 1,687,128 1,792,010IIDFC Capital Limited 309,261 287,219Total 5,499,328 5,249,644


2020 2019BDT BDT

30 Stationery, printing, advertisement etc.Printing & stationery 2,589,983 3,200,073Advertisement 919,769 1,238,829Total 3,509,752 4,438,902

30.a Consolidated stationery, printing, advertisement etc.IIDFCL 3,509,752 4,438,902IIDFC Securities Limited 409,708 562,330IIDFC Capital Limited 113,759 74,510Total 4,033,219 5,075,742

31 Managing director's salary and feesBasic salary 3,300,000 3,300,000House rent allowance 1,650,000 1,650,000Medical allowance 165,000 165,000Entertainment allowance 165,000 165,000Festival bonus 550,000 550,000Car allowance ( Note-36.1 ) 556,206 648,709Employee Provident Fund 330,000 -Group insurance 68,775 68,775Incentive bonus - 750,000Leave fare assistance - 275,000Earned leave - 161,333Others 69,000 58,020Total 6,853,981 7,791,837

32 Directors' FeesDirectors' fees 632,000 678,400Others Benefits - -Total 632,000 678,400

32.a Consolidated directors' fees

IIDFCL 632,000 678,400IIDFC Securities Limited 96,800 144,000IIDFC Capital Limited 101,200 138,000Total 830,000 960,400

33 Auditor's fees 454,250 454,250

33.a Auditor's feesIIDFCL 454,250 454,250IIDFC Securities Limited 161,000 161,000IIDFC Capital Limited 161,000 161,000Total 776,250 776,250

34 Loans & advances written-offLoans & advances written-off during the year - -Interest waived - -Total - -

34.a Consolidated loans & advances written-offIIDFCL - -IIDFC Securities Limited 4,613,296 7,798IIDFC Capital Limited 16,355,001 -Total 20,968,297 7,798

35 Repair, depreciation and amortizations of company's assetsRepair of company's assets:Furniture & fixtures 31,076 244,020Software's - -Office equipments 553,575 1,093,145Sub Total 584,651 1,337,165

Depreciation of company's assetsDepreciation of Fixed assets including premises, furniture & fixtures 27,854,582 11,163,944Sub Total 27,854,582 11,163,944

Amortization of intangible assetsComputer software 1,253,976 1,760,156

Total repair and depreciation of company's assets 29,693,209 14,261,265

The Company pays fees to its Directors for attending the Board Meeting and its Committee Meetings as permitted by the Bangladesh Bank.As per DFIM Circular # 03, dated February 24, 2010 Directors/Committee Members have been paid fees @ Tk. 5,000.00 for attending eachmeeting. At present, Directors/Committee Members are paying fees @ Tk. 8,000.00 for attending each meeting as per DFIM Circular # 13,dated November 30, 2015.


2020 2019BDT BDT

35.a Consolidated repair, depreciation and amortization of intangible assets

Repair of company's assetsIIDFCL 584,651 1,337,165IIDFC Securities Limited 1,487,045 245,741IIDFC Capital Limited 66,153 9,029

2,137,849 1,591,935

Depreciation of Fixed assets including premises, furniture & fixturesIIDFCL 27,854,582 11,163,944IIDFC Securities Limited 1,820,434 1,887,753IIDFC Capital Limited 166,539 194,850

29,841,555 13,246,547Amortization of intangible assetsIIDFCL 1,253,976 1,760,156IIDFC Securities Limited - 34,832IIDFC Capital Limited - -

1,253,976 1,794,988Total repair and depreciation of assets 33,233,380 16,633,470

36 Other expensesOffice maintenance 2,919,098 2,631,496Travelling & conveyance 12,588,861 13,861,030Meeting expenses 1,223,555 3,589,658Entertainment 310,709 527,351Car running & maintenance expenses 3,435,510 5,300,563Bank charge & excise duty 835,743 1,085,672Training expenses 311,158 974,193NID Verification Charge 7,011 -Membership fees & subscriptions 370,000 438,359Books & periodicals 37,995 82,700Capital issue expenses - 2,186,600Donation and CSR Purpose 826,500 1,032,605Project expenses 4,180 -Total 22,870,320 31,710,227

36.1 Motor car/Motor cycle maintenance Expense

36.a Consolidated other expensesIIDFCL 22,870,320 31,710,227IIDFC Securities Limited 22,695,603 13,817,178IIDFC Capital Limited 1,430,569 1,552,666Total 46,996,492 47,080,071

37 Provision for loans & advancesProvision for classified loans & advances 121,401,836 333,887,318Provision for unclassified loans & advances (7,729,766) (1,492,742)Provision for diminution in value of investments (43,521,190) 82,982,292Provision for off-balance sheet items - -Total 70,150,880 415,376,868

37.a Consolidated provision for loans & advancesProvision for classified loans & advances 126,932,081 333,887,318Provision for unclassified loans & advances (7,729,766) (1,492,742)Provision for diminution in value of investments (48,324,978) 83,521,449Provision for off-balance sheet items - -Total 70,877,337 415,916,025

38 Provision for tax

Provision for current taxOpening balance 655,279,245 605,279,245Add: Provision made during the year 2,000,000 50,000,000

-Less: Settlement during the year - -Closing balance 657,279,245 655,279,245

Provisions for current tax has been made on the basis of the profit for the year as adjusted for taxation purposes in accordance with theprovisions of The Income Tax Ordinance, 1984 and amendments made thereto. The current tax rate for the Company is 40% on taxableincome. Adequate provision has been made for disputed tax against which appeal has been made and decision is pending.

As per Bangladesh Bank DFIM circular no # 12 dated 18 November 2015, Expenses regarding Motor Car / Motor Cycle maintenance breakupis given below:

During the year 2020, total car maintenance and running cost of the Company was TK. 3,991,716 which was TK. 5,949,272 in the Y2019. Thetotal costs includes fuel cost for running vehicles and maintenance costs for full year.


2020 2019BDT BDT

38.1 Provision for deferred taxOpening balance (6,700,381) (6,803,023)Add: Provision made during the year (Note-38.2) (2,211,202) 102,642Less: Deferred tax no more required-transferred to current tax - -Less: Settlement during the year - -Closing balance (8,911,583) (6,700,381)

38.2 Deferred tax expense/(income)

Change in Deferred Tax Liability 11,232 280,982Change in Deferred Tax Asset (2,222,434) (178,340)

(2,211,202) 102,64238.a Consolidated provision for tax

Opening balance 823,616,510 760,535,754Add: Provision made during the year 19,556,695 63,175,944Add: Deferred tax during the year (2,412,126) (95,188)

17,144,569 63,080,756Closing balance 840,761,079 823,616,510

39 Earnings per share (EPS)

Basic Earnings Per Share has been calculated as follows:Earnings attributable to ordinary shareholders (Net Profit after Tax) (88,630,465) 26,209,249Number of ordinary shares outstanding during the year 173,777,068 130,800,000Basic earnings per share (in BDT) (0.51) 0.20

39.a Consolidated Earnings per share (EPS)

Basic earnings per share has been calculated as follows:

Earnings attributable to ordinary shareholders (Net Profit after Tax) (85,309,386) 34,942,529Number of ordinary shares outstanding during the year 173,777,068 130,800,000Basic earnings per share (in BDT) (0.49) 0.27

No diluted earnings per share is required to be calculated for the period, as there was no convertible securities for dilution during the period.

No diluted earnings per share is required to be calculated for the period, as there was no convertible securities for dilution during the period.

Earnings Per Share as shown in the face of the Profit and Loss Account is calculated in accordance with International Accounting Standard(IAS) 33: "Earnings Per Share".

Deferred tax is provided using the balance sheet method for all temporary differences arising between the tax base of assets and liabilitiesand their carrying values for financial reporting purposes as per International Accounting Standard (IAS) 12: "Income Taxes".

Earnings Per Share as shown in the face of the Profit and Loss Account is calculated in accordance with International Accounting Standard(IAS) 33: "Earnings Per Share".


40 Related party transactions

Outstanding Balance Outstanding Balance2020 2019BDT BDT

AB Bank Ltd. Sponsor Shareholder 3,057 3,057

AB Bank Ltd. Sponsor Shareholder 100,000,000 200,000,000

Bank Asia Ltd. Sponsor Shareholder 42,339,131 98,818,916

BRAC Bank Limited Sponsor Shareholder 840,000,000 1,000,000,000

BRAC Bank Ltd. Sponsor Shareholder - 2,775,341

Janata Bank Ltd. Sponsor Shareholder 4 1,004

Janata Bank Ltd. Sponsor Shareholder 200,000,000 200,000,000

Mutual Trust Bank Limited Sponsor Shareholder 500,252,252 413,882,996

ONE Bank Ltd. Sponsor Shareholder - 28,962

Sonali Bank Limited Sponsor Shareholder - 120,000,000

Sonali Bank Limited Sponsor Shareholder 190,000,000 200,000,000

Sonali Bank Ltd. Sponsor Shareholder - 82,588

Southeast Bank Ltd. Sponsor Shareholder - 3,560

Southeast Bank Ltd. Sponsor Shareholder 1,771,278 128,116

The City Bank Ltd. Sponsor Shareholder 2,383 142,402

The City Bank Ltd. Sponsor Shareholder 850,000,000 850,000,000Term Deposit

Call Loan

Term Deposit

STD/SND Account

Current Account

SND Account

STD/SND Account

Term Deposit

Current Account

STD/SND Account

Term Deposit

Overdraft

STD/SND Account

STD/SND Account

Term Deposit

STD/SND Account

Nature of Loan/LeaseName of the 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 and operational decisions and include associated companies with or without common directors and key managementpositions. The Company has entered into transactions with other entities in the normal course of business that fall within the definition ofrelated party as per International Accounting Standards- 24 ' Related Party Disclosure'. Transactions with related parties are executed on thesame terms, including interest rate and collateral, as those prevailing at the time of comparable transactions with other customers of similarcredentials and do not involve more than normal risk.

Nature of Transactions


41 Operating Segment Report

Revenue income Net interest income 174,582,917 4,694,780 14,629,474 193,907,171Investment income 25,856,102 11,484,084 6,351,377 43,691,563Commission and brokerage - 79,208,518 13,020,163 92,228,681Other operating income 30,089,753 1,879,120 1,651,102 33,619,975Inter-segment revenue (58,029,938) - - (58,029,938)Total Segment Revenue (A) 172,498,834 97,266,502 35,652,116 305,417,452

Other operating expenses 162,081,063 19,188,904 32,309,496 213,579,463Major non-cash expensesDepreciation 29,108,558 1,820,434 166,539 31,095,531Provision for future losses 70,150,880 726,457 - 70,877,337Inter-segment expense adjustment - 57,776,993 252,945 58,029,938Total Segment Expense (B) 261,340,501 79,512,788 32,728,980 373,582,269

Reportable segment profit before tax (A-B) (88,841,667) 17,753,714 2,923,136 (68,164,817)

Revenue income Net interest income 729,747,062 27,225,105 15,919,455 772,891,622Investment income 29,044,925 15,591,785 (2,040,589) 42,596,121Commission and brokerage - 49,995,949 5,766,535 55,762,484Other operating income 16,252,526 550,267 383,238 17,186,031Inter-segment revenue/interest expense _adjustment (67,576,526) - - (67,576,526)Total Segment Revenue (A) 707,467,988 93,363,106 20,028,639 820,859,732

Other operating expenses 201,517,964 8,192,406 13,254,828 222,965,198Major non-cash expensesDepreciation 14,261,265 1,922,585 194,850 16,378,700Provision for future losses 415,376,868 539,157 - 415,916,025Inter-segment expense Adjustment - 63,668,220 3,908,306 67,576,526Total Segment Expense (B) 631,156,097 74,322,368 17,357,984 722,836,449

Reportable segment profit before tax (A-B) 76,311,890 19,040,738 2,670,655 98,023,283

Segment Assets Total Assets 20,044,098,810 2,472,166,982 845,567,364 23,361,833,156Inter-segment assets (573,761,153) (573,761,153) - (1,147,522,306)Total Segment Assets 19,470,337,657 1,898,405,829 845,567,364 22,214,310,850

Segment Liabilities Total liabilities 17,939,936,771 1,347,476,336 272,529,322 19,559,942,429Inter-segment liabilities (573,761,153) (573,761,153) - (1,147,522,306)Total Segment Liabilities 17,366,175,618 773,715,183 272,529,322 18,412,420,123

Total Segment Equity 2,104,162,039 1,124,690,646 573,038,042 3,801,890,727

Amount in BDT

Segment Revenue and profit

For the year 2020

Core Financing Business

Brokerage House

Business

Merchant Banking Business

Total Business as a Group

Revenue and profit

For the year 2019


Brokerage House

Business



Segment assets and liabilities

For the year 2020


Brokerage House

Business




Segment Assets Total Assets 23,417,061,404 2,446,226,793 911,820,958 26,775,109,155Inter-segment assets (588,148,050) (573,787,454) (14,360,592) (1,176,296,096)Total Segment Assets 22,828,913,354 1,872,439,339 897,460,366 25,598,813,059

Segment Liabilities Total liabilities 21,225,509,980 1,322,609,207 341,030,933 22,889,150,120Inter-segment liabilities (588,148,046) (573,787,454) (14,360,592) (1,176,296,092)Total Segment Liabilities 20,637,361,934 748,821,753 326,670,341 21,712,854,028

Total Segment Equity 2,191,551,420 1,123,617,586 570,790,025 3,885,959,032

42 Board meetings

Serial Number No. Meeting Date of Meeting1 224th Meeting 29-Jan-202 225th Meeting 22-Jul-203 226th Meeting 29-Sep-204 227th Meeting 23-Nov-205 228th Meeting 17-Dec-206 229th Meeting 29-Dec-20

Serial Number No. Meeting Date of Meeting

43 Disclosure on Audit committee

a. Particulars of audit committee

Name Status in the board

Status in the committee

1. Mr. Syed Mahbubur Rahman Director Chairman CEO & Managing Director, Mutual Trust Bank Limited

2. Mr. Md. Abdus Salam Azad Director Member CEO & Managing Director, Janata Bank Limited

3. Mr. Md. Abul Hossain Director Member Managing Director, ICB

4. Mr. Choudhury Moshtaq Ahmed Director Member Managing Director, National Bank Limited

5. Mr. Md. Monzur Mofiz Director Member AMD & Head of Business, ONE Bank Limited

6. Mr. Kamal Uddin Ahammed Director Member Director, Eastland Insurance Company Limited

b.

38th Meeting 25-Aug-2039th Meeting 29-Sep-2040th Meeting 1-Dec-2041st Meeting

1234 30-Dec-20

Other engagement

During the year total number of Board Meetings was 06, which was held at the following dates:

In pursuance of the directives of Bangladesh Bank vide DFIM circular no 10 dated 18 September 2005 & DFIM circular No. 13 dated 26October 2011, the Board of Directors in its meeting Constituted an Audit Committee. Presently, the Audit Committee members are:

The company Secretary of IIDFC Limited is acting as the secretary of the Committee

Meetings held by the committee during the year

Segment assets and liabilities

For the year 2019


Brokerage House

Business




c. In the meeting amongst other the committee has discussed the following issues during the year 2020

i) The audit committee reviewed the Financial Statements for the year ended 31 December 2019.

ii) Reviewed and discussed the Management Letter provided by the external auditor M/s. Hoda Vasi Chowdhury & Co. for the year ended 31 December 2019 on the annual audit of Financial Statements of IIDFC Limited.

iii) Reviewed and discussed the Bangladesh Bank inspection report on Internal Control and Compliance and management's response to thereon.

iv) Reviewed and discussed the Bangladesh Bank detailed Inspection Report 2018 and management's response to the report.

v) Reviewed various reports like stress testing, Basel, Risk Management Paper etc. and all reports provided by ICC Department.

vi) Implementation of Core Risk Management Guidelines including Internal Control and Compliance Risk and status of compliance

thereof. vii) The status of recovery of classified loan and providing the necessary instruction to the management to reduce NPL.

viii) Reviewed financial performance of IIDFC all over the year and recommended to take necessary action for improving

performance of the company. 44 Others Disclosure 44.1 Un-acknowledged debt The Company has no claim against it which has not been acknowledged as debt at the balance sheet date.

44.2 Employees' information A total number of 136 employees were employed in IIDFC as of 31 December 2020. All the employees received salary more than

BDT 36,000.00 p.a. during the period 2020. 44.3 Written-off of accounts During the year under review, total two loans & advances were written-off having outstanding of BDT. 69,770,310. Again BDT

128,718,575 was written-off in the corresponding previous years.

44.4 Subsequent events No subsequent events are occurred after the balance sheet date.

44.5 Directors' responsibility statement The Board of Directors take the responsibility for the preparation and presentation of these financial statements.

44.6 Date of authorization for issue The consolidated financial statements as well as separate financial statements were authorized for issue by the Board of Directors

on its meeting held on 02/12/2021. 45 General Disclosure 45.1 The figures appearing in this financial statements have been rounded off to the nearest integer.

45.2 Last year's figures have been rearranged wherever it is found necessary to conform the current year's presentation.


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HighlightsIndustrial and Infrastructure Development Finance Company Limited

Annexure-2

2020 2019Amount in BDTParticularsSl.

1 Paid-up capital 1,737,770,680 1,308,000,000

2 Total capital 2,104,162,039 2,191,551,424

3 Capital surplus 366,391,359 883,551,424

4 Total assets 20,044,098,810 23,417,061,404

5 Total deposits 10,213,898,344 12,710,348,266

6 Total leases, loans and advances 15,272,371,452 18,908,807,903

7 Total contingent liabilities and commitments 203,549,122 203,549,122

8 Credit deposit ratio 149.53% 148.77%

9 Percentage of classified loans against total loans and assets 23.42% 9.06%

10 Profit after tax and provision (88,630,465) 26,209,249

11 Amount of classified loan during year 3,576,185,480 1,713,393,210

12 Provisions kept against classified loans 671,366,104 616,519,312

13 Provision surplus against classified loans 0 125,000

14 Cost of fund 8.80% 10.74%

15 Interest earnings assets 15,938,966,197 19,580,740,760

16 Non- interest earnings assets 4,092,844,793 3,836,320,644

17 Return on investment (ROI) 12.6% 13.0%

18 Return on assets (ROA) -0.44% 0.33%

19 Income from investment 1,977,356,868 2,525,954,400

20 Earnings per share (0.51) 0.20

21 Net Income per share (0.51) 0.20

22 Price earnings ratio N/A N/A


IIDFC Capital Limited


Employees ofIIDFC Capital Limited


Report on the Audit of the Financial Statements

Independent Auditor's ReportTo the Shareholders of IIDFC Capital Limited

Opinion

We have audited the financial statements of IIDFC Capital Limited (the company), which comprise the statement of financial position (balance sheet) as at 31 December 2020, and the statement of profit or loss and other comprehensive income (profit and loss account), statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the company as at 31 December 2020, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs).

Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Institute of Chartered Accountants of Bangladesh Bye Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements that give a true and fair view in accordance with IFRSs, 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.

In preparing the financial statements, management is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the company's financial reporting process.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Independent Auditor's ReportTo the Shareholders of IIDFC Capital Limited

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit 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 company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on other legal and regulatory requirements

In accordance with the Companies Act 1994, we also report the following:

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 examination of these books; and

c) The statement of financial position (balance sheet) and statement of profit or loss and other comprehensive income (profit and loss account) dealt with by the report are in agreement with the books of account.

Auditor's Signature : Sd/-Name of Engagement Partner : Md. Moktar Hossain, FCA, Senior PartnerEnrollment No. : 728Firm's Name : S. F. AHMED & CO., Chartered AccountantsFirm's Reg. No. : 10898 E.P. under Partnership Act 1932

Document Verification Code (DVC) : 2107190728AS788222Dated, 01 July 2021



IIDFC Capital LimitedStatement of Financial Position (Balance Sheet)

2020 2019BDT BDT

AssetsNon-current assetsProperty, plant and equipment 4 401,302 567,841Intangible assets 5 10 10Deferred tax assets 6 77,017 72,540Total non- current assets 478,329 640,391

Current assetsMargin loans to clients 7 630,480,180 729,536,955Investment in quoted securities 8 90,535,179 54,340,498Advances and receivables 9 106,147,228 117,764,692Cash and cash equivalents 10 17,926,448 9,538,422Total current assets 845,089,035 911,180,567Total assets 845,567,364 911,820,958

Equity and liabilitiesEquityShare capital 11 600,000,000 600,000,000Retained earnings 12 (26,961,958) (29,209,975)Shareholders' equity 573,038,042 570,790,025

LiabilitiesNon-current liabilityTerm loan 13 - 23,955,078Total non-current liability - 23,955,078

Current liabilitiesAccruals and payables 14 5,322,527 1,471,382Payable to stock broker 15 17,981,926 34,001,994Customers' deposits 16 635,694 488,540Investment diminution reserve 17 10,165,877 15,696,122Loan loss reserve 18 188,802,548 216,476,663Provision for income tax 19 49,620,750 48,941,154Total current liabilities 272,529,322 317,075,855Total liabilities 272,529,322 341,030,933Total equity and liabilities 845,567,364 911,820,958

These financial statements should be read in conjunction with the annexed notes

Notes

For and on behalf of Board of Directors of IIDFC Capital Limited

Sd/-Chairman

Sd/-Director


Sd/-Chief Executive Officer

Dhaka, BangladeshDated, 01 July 2021

S. F. Ahmed & Co.Chartered Accountants

DVC : 2107190728AS788222

Sd/-



IIDFC Capital LimitedStatement of Profit or Loss and Other Comprehensive Income (Profit and Loss Account)

2020 2019BDT BDT

Operating incomeInterest income 20 14,882,419 19,827,761Interest expense 21 (252,945) (3,908,306)Net interest income 14,629,474 15,919,455

Income from investment 22 6,351,377 (2,040,589)Income from merchant banking services 23 13,020,163 5,766,535Other income 24 1,651,102 383,238

21,022,642 4,109,184


Operating expensesSalaries and allowances 25 12,269,921 12,934,303Rent, taxes, insurance and electricity 26 1,511,827 1,651,057Professional and legal expenses 27 243,750 355,350Postage, stamp and telecommunications 28 309,261 287,219Stationery, printing and advertisement 29 113,759 74,510Directors' fees 30 101,200 138,000Auditor's fee 31 161,000 161,000Repairs and depreciation of company's assets 32 232,692 203,879Other expenses 33 1,430,569 1,552,666Total operating expenses 16,373,979 17,357,984Loans and advances written off 34 16,355,001 -

Provision for loans and advancesDiminution in value of investment in securities 17 (5,530,245) -Loan loss reserve 18 5,530,245 -

- -

Profit before tax 2,923,136 2,670,655Income tax expenseCurrent tax 35 679,596 590,575Deferred tax (income)/expenses 6 (4,477) (879)

675,119 589,696

Profit for the year 2,248,017 2,080,959

Earnings per share (EPS) 36 0.04 0.03

These financial statements should be read in conjunction with the annexed notes

Notes


Sd/-Chairman

Sd/-Director





DVC : 2107190728AS788222

Sd/-




Sd/-Chairman

Sd/-Director




IIDFC Capital LimitedStatement of changes in equity

Share capital

Retainedearnings Total

BDT BDT BDT

Year 2020Balance at 01 January 2020 600,000,000 (29,209,975) 570,790,025Net profit for the year - 2,248,017 2,248,017

Balance at 31 December 2020 600,000,000 26,961,958) 573,038,042

Year 2019Balance at 01 January 2019 600,000,000 (31,290,934) 568,709,066Net profit for the year - 2,080,959 2,080,959Balance at 31 December 2019 600,000,000 (29,209,975) 570,790,025

Particulars




Sd/-Chairman

Sd/-Director




IIDFC Capital LimitedStatement of cash flows

2020 2019BDT BDT

A. Cash flows from operating activitiesNet profit before tax 2,923,136 2,670,655

Depreciation and amortisation 166,539 194,8503,089,675 2,865,505

(Increase)/Decrease in current assets:Advances and receivables 11,617,464 29,152,809Increase/(Decrease) in current liabilities:Accruals and payables 3,851,145 (53,862)Payable to stock broker (16,020,068) 2,962,605Customers' deposits 147,154 (33,850,225)Investment diminution reserve (5,530,245) -

(27,674,115) -(33,608,665) (1,788,673)

Net cash from/(used in) operating activities (A) (30,518,990) 1,076,832

B. Cash flows from investing activitiesAcquisition of property, plant and equipment - (381,969)Investment in quoted securities (36,194,681) 18,319,191Margin loans to clients 99,056,775 14,516,301Net cash from investing activities (B) 62,862,094 32,453,523

C. Cash flows from financing activitiesReceipt/(repayment) of term loan (23,955,078) (37,847,385)Net cash from financing activities (C) (23,955,078) (37,847,385)

D. 8,388,026 (4,317,030)E. Cash and cash equivalents at the beginning of the year 9,538,422 13,855,452F. Cash and cash equivalents at the end of the year 17,926,448 9,538,422

Cash and cash equivalents have been arrived at as under:Cash in hand 25,178 20,801Cash at bank 17,901,270 9,517,621

17,926,448 9,538,422

Adjustment for non-cash item:

Loan loss reserve

Net changes in cash and cash equivalents (A+B+C)


1. Reporting entity 1.1 Company profile IIDFC Capital Limited (the company) is a public company, limited by shares. The company was

incorporated in Bangladesh vide certificate of incorporation no. C-H.C 2097 dated 30 November 1995 in the name of South Asia Capital Limited which was acquired by Industrial and Infrastructure Development Finance company Limited (IIDFC), a non-banking financial institution on 10 December 2009 and renamed as IIDFC Capital Limited. The company obtained license from Bangladesh Securities and Exchange Commission (BSEC) vide its registration certificate no. MB 41/2010 dated 26 April 2010 to carry out its merchant banking operations.

1.2 Nature of business The principal activities of the company for which it was established include the business of issue

management, portfolio management, corporate counseling, investment counseling, capital structuring, and other services as mentioned in the Memorandum and Articles of Association of the company.

2. Basis of accounting 2.1 Statement of compliance The financial statements have been prepared in compliance with the requirement of the International

Financial Reporting Standards (IFRSs) which also cover International Accounting Standards (IASs), the Companies Act 1994, Bangladesh Securities and Exchange (Merchant Banker and Portfolio Manager) Rules 1996 and other applicable laws and regulations.

2.2 Basis of measurement The financial statements have been prepared on accrual basis of accounting following going

concern concept under historical cost convention.

2.3 Functional and presentation currency The financial statements are presented in Bangladesh Taka (BDT), which is both functional and

presentation currency of the company.

2.4 Use of estimates and judgments The preparation of the financial statements requires management to make judgments, estimates

and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods.

2.5 Reporting period The financial statements cover one year from 1 January 2020 to 31 December 2020.

2.6 Date of authorisation The audited financial statements for the year ended 31 December 2020 were authorised by the

Board of Directors in its 40th meeting dated 30 June 2021.

2.7 Components of financial statements a. Statement of financial position (balance sheet); b. Statement of profit or loss and other comprehensive income (Profit and loss account); c. Statement of changes in equity; d. Statement of cash flows; and e. Summary of significant accounting policies and other explanatory information.


IIDFC Capital LimitedNotes to the financial statements


3. Significant accounting policies The accounting policies set out below have been applied consistently, if not stated otherwise to all

periods presented in these financial statements. 3.1 Revenue recognition

Interest income Income from interest on margin loan is recognised on an accrual basis. Such income is calculated

based on daily margin loan balance of the respective margin loan holder's account.

Fees and commission income Fees and commission income are recognised when the corresponding services are provided. Fees

and commission income presented in the financial statements include the following:

i) Management fee charged on the market value of customers' portfolios; ii) Trading commission charged to customers' trading in the secondary capital market; iii) Settlement fee charged to customers' trading in the secondary capital market; iv) Documentation fees charged to clients for opening accounts with the company; and v) Underwriting commission. Dividend income Dividend income is recognised when the right to receive dividend is established. Usually this is the

dividend declaration date for equity securities. Finance income Finance income comprises interest income on bank deposit. Interest income is recognised as it

accrues, using the effective interest method. 3.2 Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial

liability or equity instrument of another entity. Non-derivative financial instruments comprise investments in shares, margin loans, receivables, cash and cash equivalents, term loans, trade payables, customer deposits and share capital.

3.2.1 Financial assets Financial assets refer to assets that arise from contractual agreements on future cash flows or

from owning equity instruments of another entity. The company initially recognises receivables on the date when they are originated. All other

financial assets are recognised initially on the date at which the company becomes a party to the contractual provisions of the transaction.

The company derecognises a financial asset when the contractual rights or probabilities of receiving the cash from the assets expires, or it transfers the rights to receive the contractual cash flows from the financial assets in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred.

Financial assets include cash and cash equivalents, accounts receivable, margin loans and investment in quoted securities.




Cash and cash equivalents Cash and cash equivalents comprise cash in hand, bank deposits and other short term highly

liquid investments with original maturities of three months or less and overdrafts which were held and available for use by the company without any restriction, and there was insignificant risk of changes in value of these current assets.

Accounts receivables Accounts receivables are recognised at original invoiced amount. They are stated at netted off

provision for bad and doubtful debts and written off, if any. Margin loan Margin loan is provided to clients to facilitate investment in equity securities. They are initially

classified as financial assets at fair value and subsequently measured at amortised cost. Investment in quoted securities Investment in quoted securities (such as stock/ shares, bonds, etc.) are securities those are

officially listed (quoted) on a stock exchange for public trading. They are measured at cost and subsequent to initial measurement any fall in value of investment below cost is recognised in profit or loss and a reserve for the fall in value is created.

3.2.2 Financial liabilities A contractual obligation to deliver cash or another financial assets to another entity or to exchange

financial instruments with another entity under conditions that are potentially unfavorable. The company initially recognises financial liabilities on the transaction date at which the entity

becomes a party to the contractual provisions of the liability. The Entity recognises such financial liability when its contractual obligations arising from past events are certain and the settlement of which is expected to result in an outflow from the entity of resources embodying benefits.

The entity derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired.

Financial liabilities as presented in these financial statements comprise loans and borrowings, accounts payable and other payables.

Loans and borrowings Loans and borrowings are recognised initially at fair value less attributable transaction costs.

Subsequently these borrowings are stated at amortised cost using the effective interest method. Accounts payable Accounts payables are recognised at fair value. Offsetting financial assets and a financial liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the entity has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.




3.3 Property, plant and equipment 3.3.1 Recognition and measurement Tangible fixed assets are accounted for according to IAS 16: Property, plant and equipment at

historical cost or revaluation less accumulated depreciation and the capital work-in-progress is stated at cost. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Maintenance, renewals and betterments that enhance the economic useful life of the property, plant and equipment or that improve the capacity, quality or reduce substantially the operating cost or administration expenses are capitalised by adding it to the related property, plant and equipment.

3.3.2 Subsequent costs Subsequent costs are included in the assets' carrying amount or recognised as a separate asset,

as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during the financial period in which they are incurred. In compliance with the provisions of the Companies Act 1994, adjustment is made to the original cost of fixed assets acquired through foreign currency loan at the end of each financial year by any change in liability arising out of expressing the outstanding foreign loan at the rate of exchange prevailing at the date of balance sheet.

3.3.3 Depreciation Depreciation on property, plant and equipment is charged using straight-line method. Full year's

depreciation is charged on items in the year of their acquisition and no depreciation is charged in the year of disposal. Rates of depreciation on various classes of property, plant and equipment are as under:

Category of asset Rate (%) Motor vehicles 20 Furniture and fixtures 10 Office equipment 18 3.4 Intangible assets Intangible assets are accounted for according to IAS 38: Intangible assets. Intangible assets acquired

separately are initially recognised at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Intangible assets include software which is amortised @ 18%.

3.5 Statement of cash flows Statement of cash flows is prepared under indirect method in accordance with IAS 7: Statement of cash

flows. 3.6 Income tax Income tax expense comprises current and deferred tax. Income tax expense is recognised in the

statement of profit or loss and other comprehensive income in accordance with IAS 12: Income taxes. 3.6.1 Current tax The company qualifies as a “Merchant Bank” as defined in income tax laws. The applicable tax

rate for the company is 37.5%.




3.6.2 Deferred tax Deferred tax is recognised using the balance sheet method, providing for temporary differences

between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets and liabilities, and they relate to income taxes levied by the same tax authority on the same taxable entity. The deferred tax asset/income or liability/expense does not create a legal obligation to, or recoverability from, the income tax authority.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the deductible temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

3.7 Employee benefit The company maintains a defined contribution plan (provident fund) and a retirement benefit obligations

(gratuity fund) and group insurance benefits for its eligible permanent employees. 3.7.1 Defined contribution plan (provident fund) Defined contribution plan is a post employment benefit plan under which the company provides

benefits for all of its permanent employees. The recognised employees' provident fund is being considered as defined contribution plan as it meets the recognition criteria specified for this purpose. All permanent employees contribute 10% of their basic salary to the provident fund and the company also makes equal contribution.

The company recognises contribution to defined contribution plan as an expense when an employee has rendered required services. The legal and constructive obligation is limited to the amount it agrees to contribute to the fund. Obligations are created when they are due.

3.7.2 Retirement benefit obligations (gratuity fund) The company maintains gratuity scheme for all its eligible permanent employees. Gratuity shall be

admissible for all employees who rendered services to the company for a continuous period of, at least, five years and the amount of gratuity shall be computed at the rate of one month's basic pay for each completed year of service.

3.7.3 Group insurance benefits The permanent employees of the company are covered under a group insurance scheme and the

group insurance company provides group life, group hospitality and OPD services.

3.8 Lease renta The company has adopted IFRS 16: leases from 1 January 2019 to account for its leases for office

space. The leases were previously accounted for under IAS 17, where the leases were classified as operating lease.

Under IFRS 16, a lessee shall recognise a right-of-use asset and a lease liability for all leases except where the leases are either short-term or the leases are for low value assets. Presently, leases of the company are for short-term or low value assets. Therefore, the company decided to recognise the lease payments associated with these leases as an expense on a straight line basis.

3.9 Departure from IFRS Investment in quoted securities is recognised and measured in accordance with the policy disclosed in

note 3.2.1. This is, however, a departure from IFRS 9 since equity securities within the scope of IFRS 9 are required to be measured at fair value in the statement of financial position, where the changes in value need to be recognised either in statement of profit or loss or other comprehensive income.






2020 2019BDT BDT

4. Property, plant and equipment Motor vehicle 6 6Furniture and fixtures 18 53,698Office equipment 401,278 514,137

401,302 567,841Details are shown in Annex A.

5. Intangible assetsSoftware (Annex-A) 10 10

10 10

6. Deferred tax assetsOpening balance 72,540 71,661Add: Addition during the year (note 6.1) 4,477 879Closing balance 77,017 72,540

6.1 Adjustment during the year

Written down value at

31 Dec 2020(A)

Tax base(B)

Deductible temporary

difference at 31 Dec 2020

(C=B-A)

At31 Dec 2019

(D)

Property, plant and equipment 401,302 606,679 205,377 193,439 Tax rate 37.50% 37.50%Deferred tax asset 77,016 72,540 Addition during the year (D-C) 4,477 879

7. Margin loans to clientsOpening balance 729,536,955 744,053,256Add/ (Less): Addition/(Recovery) during the year (99,056,775) (14,516,301)Closing balance 630,480,180 729,536,955

8. Investment in quoted securitiesOpening balance 54,340,498 72,659,689Add/(Less): Increase/(Decrease) during the year 36,194,681 (18,319,191)Closing balance 90,535,179 54,340,498

Particulars Cost price Fair marketvalue

Diminution value

Investment in quoted securities 90,535,179 80,369,302 (10,165,877)

9. Advances and receivablesAdvances (note 9.1) 79,988,303 78,398,570Receivable from customers (note 9.2) 5,499,173 5,249,173Receivable from brokerage houses (note 9.3) 20,659,752 34,116,949

106,147,228 117,764,692

Particular




2020 2019BDT BDT

9.1 AdvanceIncome tax 46,551,637 46,019,610Tax deduction at source (TDS) 1,002,285 859,800AIT on dividend 1,480,329 1,122,951Security deposit with CDBL 200,000 200,000License fee 30,196,209 30,196,209Others Advanced 557,843 -

79,988,303 78,398,570

9.2 Receivable from clientsUnderwriting commission 1,399,173 1,149,173Issue management fees 4,100,000 4,100,000

5,499,173 5,249,1739.3 Receivable from broker houses

IIDFC Securities Ltd 20,652,407 34,116,949United Financial Trading Co. Ltd. 7,345 -

20,659,752 34,116,949

10. Cash and cash equivalentsCash in hand 25,178 20,801Bank balance in current account with:Southeast Bank Ltd 2,992,959 2,843,921ONE Bank Ltd 14,908,311 6,598,243Bangladesh Commerce Bank Ltd - 75,457

17,901,270 9,517,62117,926,448 9,538,422

11. Share capitalAuthorized 100,000,000 ordinary shares of BDT 10 each 1,000,000,000 1,000,000,000

Issued, subscribed and paid up60,000,000 ordinary shares of BDT 10 each 600,000,000 600,000,000

1 IIDFC Limited 59,998,800 10 599,988,0002 Mr. Md. Matiul Islam 1,150 10 11,5003 Mr. S.M. Anisuzzaman 10 10 1004 Mr. Md. Shamim Ahmed 10 10 1005 Ms. Ashrafun Nessa 10 10 1006 Mr. A.T.M. Nasir Uddin 10 10 1007 Mr. Lingkon Mondal 10 10 100

60,000,000 600,000,000

AmountBDT Name of shareholder Number of

sharesFace valueper share




2020 2019BDT BDT

12. Retained earningsOpening balance (29,209,975) (31,290,934)Add: Net profit for the year 2,248,017 2,080,959Closing balance (26,961,958) (29,209,975)

13. Term loanLoan from IIDFC Ltd (note 13.1) - 14,360,592Loan from ICB (note 13.2) - 9,594,486

- 23,955,07813.1 Loan from IIDFC Ltd

Opening balance 14,360,592 15,000,000Less: Repayment during this year 14,360,592 639,408Closing balance - 14,360,592

13.2 Loan from ICBOpening balance 9,594,486 46,802,463Add: Addition during this year - -Less: Repayment during this year 9,594,486 37,207,977Closing balance - 9,594,486

14. Accruals and payablesFinancial charges - 802,462Gratuity fund 161,766 380,061Audit fee 126,000 126,000CDBL charges 181,653 10,435Withholding income tax 92,209 92,156Withholding VAT 55,138 41,617Internet expenses - 6,000Cheque Issued In Transit 2,713,654 -IPO Subscription Account 1,938,600 -Others 53,507 12,651

5,322,527 1,471,38215. Payable to stock broker

IIDFC Securities Ltd 17,981,926 34,001,99417,981,926 34,001,994

16. Customers' depositsNon-margin discretionary account (NMDA) 590,793 481,141Safe investment account (SI) 767 (1,576)Receivable - trading account 44,134 8,975

635,694 488,540

17. Investment diminution reserveOpening balance 15,696,122 15,696,122Provision increase/(decrease) during the year (5,530,245) -Closing balance 10,165,877 15,696,122

18. Loan loss reserveOpening balance 216,476,663 216,476,663Add: Addition during this year 21,885,246 -Less: Adjustment during this year (49,559,361) -

188,802,548 216,476,663




2020 2019BDT BDT

19. Provision for income taxOpening balance 48,941,154 48,350,579Add: Provision made during the year (note 35.1) 679,596 590,575Closing balance 49,620,750 48,941,154

20. Interest incomeInterest on margin loan 14,882,419 19,827,761

14,882,419 19,827,76121. Interest expense

Term loan _ 3,622,223 Demand loan 252,945 286,083

252,945 3,908,30622. Income from investment

Gains/(Loss) on sale of securities 4,538,137 (3,973,623)Dividend income 1,813,240 1,933,034

6,351,377 (2,040,589)

23. Income from merchant banking servicesPortfolio management service 873,830 2,914,663 Security trading services 3,029,103 2,574,161 BO account maintenance services 67,230 68,350 Underwriting commission services 250,000 209,361 Corporate advisory services 8,800,000 _

13,020,163 5,766,53524. Other operating income

Interest income from bank deposit 1,274,851 366,616Others cash collection 376,251 16,622

1,651,102 383,23825. Salaries and allowances

Basic salary 5,495,364 5,495,364Allowances 3,895,537 3,895,144Festival bonus 915,894 915,894 Employers' contribution to provident fund 549,540 549,540 Group insurance 225,565 225,989 Retirement benefits and gratuity 161,766 661,015 Leave fare assistance 457,947 457,947 Earned leave encashment 532,308 733,410 Cleaning staff salary 36,000 -

12,269,921 12,934,30326. Rent, taxes, insurance and electricity

27. Professional and legal expenses

Rent, rates and taxes 1,340,890 1,511,867 Electricity bill 112,115 111,272 WASA, gas and other bills 58,822 27,918

1,511,827 1,651,057

243,750 355,350




Amount Rate Tax liability

Dividend income 1,738,240 20.00% 347,648347,648

The company has no taxable income other than dividend income as computed based on tax laws.

2020 2019BDT BDT

28. Postage, stamp and telecommunicationsPostage and courier 51,673 27,447 Newspapers, books, magazines etc. 1,580 5,599 Phone, fax and internet 256,008 254,173

309,261 287,21929. Stationery, printing and advertisement

Printing and stationery 99,584 70,676 Advertisement expenses 14,175 3,834

113,759 74,51030. Directors' fees

Directors' fees 101,200 138,000 101,200 138,000

31. Auditor's feesStatutory audit 161,000 161,000

161,000 161,000

32. Repairs and depreciation of company's assetsRepair & maintenance of company's assets:Office equipment 53,153 4,829 Electricity and lighting 13,000 4,200

66,153 9,029Depreciation of company's assets:Furniture and fixtures 53,680 81,991 Office equipment 112,859 112,859

166,539 194,850232,692 203,879

33. Other expensesOffice maintenance 68,469 58,797 Travelling and conveyance 15,835 205,412 Entertainment 57,985 81,689 Car running and maintenance expenses 186,218 266,663 Bank charge and excise duty 79,216 31,512 Registration, government fees and charges 634,360 409,084 Security service expenses 114,298 216,429 Uniform and liveries 14,800 14,800 CDBL transaction fee 98,926 162,255 Book building bidding fees 27,195 13,725 Other expenses 133,267 92,300

1,430,569 1,552,666

34. Loan and bad debts written-off 16,355,001 -

35. Income tax expenseCurrent year's tax expense (note 35.1) 347,648 590,575 Previous year's tax expense 331,948 -

679,596 590,57535.1 Current year tax expense




Sd/-Chairman

Sd/-Director





36. Related party disclosure

IIDFC Limited Parent company Long term loan Principal -

Long term loan Interest -

Total -

IIDFC Securities Limited

Sister concernTrade receivable 20,652,407Trade payable 17,981,926

Net Amount 2,670,481

2,670,481

37. Others37.1

37.2

37.3

Grand Total

Figures in these notes and in the annexed financial statements have been rounded off to thenearest BDT.

Previous period's figures have been rearranged, wherever considered necessary, to conform tocurrent period's presentation without causing any impact on the operating results for the periodand value of assets and liabilities at the end of that period as shown in the financial statementsunder reporting.

These notes form an integral part of the annexed financial statements and accordingly are to beread in conjunction therewith.

During the year, the company carried out a number of transactions with related parties in itsnormal course of business. The names of the related parties and nature of the transactions havebeen set out in accordance with the provisions of IAS 24: Related party disclosures are detailedbelow:

Name of party Relationship Transactions during the year

Outstanding balance at 31 December 2020

36. Earnings per share (EPS)Net profit/(loss) after tax 2,248,017 2,080,959 Weighted average number of ordinary shares 60,000,000 60,000,000 EPS 0.04 0.03


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IIDFC Securities Limited


Employees ofIIDFC Securit ies Limited



Independent Auditor's ReportTo the Shareholders of IIDFC Securities Limited

Opinion We have audited the financial statements of IIDFC Securities Limited (the company), which comprise the statement of financial position (balance sheet) as at 31 December 2020, and the statement of profit or loss and other comprehensive income (profit and loss statement), statement of changes in equity, and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the company as at 31 December 2020, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs). Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibility in accordance with this requirements and the IESBA Code and the Institute of the Chartered Accountants of Bangladesh Bye Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of management and those charged with governance for the financial statements Management is responsible for the preparation and fair presentation of the financial statements that give a true and fair view in accordance with IFRSs, 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. In preparing the financial statements, management is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the company's or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the company's financial reporting process. Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.



Independent Auditor's ReportTo the Shareholders of IIDFC Securities Limited

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud

or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that

are appropriate in the circumstances, but not for the purpose of expressing on opinion on the effectiveness of the company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and,

based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on other legal and regulatory requirements In accordance with the Companies Act 1994, we also 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 examination of these books; and (c) the statement of financial position (balance sheet) and statement of profit or loss and other

comprehensive income (profit and loss statement) dealt with by this report are in agreement with the books of account.

Auditor's Signature : Sd/-Name of Engagement Partner : Md. Moktar Hossain, FCA, Senior PartnerEnrollment No. : 728Firm's Name : S. F. AHMED & CO., Chartered AccountantsFirm's Reg. No. : 10898 E.P. under Partnership Act 1932

Document Verification Code (DVC) : 2107120728AS131670Dated, 01 July 2021



IIDFC Securities LimitedStatement of Financial Position (Balance Sheet)

Notes 2020 2019 BDT BDT Assets

Non-current assetsProperty, plant and equipment 4 2,849,604 2,476,004Cost of TREC holding 6 85,978,830 85,978,830Deferred tax assets 7 1,093,000 896,552

89,921,434 89,351,386Current assetsAdvance against corporate income tax 8 158,402,527 141,525,428Advances, deposits and prepayments 9 16,323,149 22,997,606Margin loan to clients 10 1,764,165,093 1,613,640,304Receivable from stock exchange 11 8,458,581 16,218,306Other receivables 12 1,266,992 5,856,551Investment in securities 13 301,440,583 349,321,890Other assets 14 9,585 14,553Cash and cash equivalents 15 132,179,038 207,300,769

2,382,245,548 2,356,875,407Total assets 2,472,166,982 2,446,226,793Equity and liabilitiesEquityShare capital 16 1,000,000,000 1,000,000,000Retained earnings 17 107,690,648 106,617,586General reserve 17,000,000 17,000,000Total equity 1,124,690,648 1,123,617,586Non-current liabilitiesLong term loan 18 573,761,153 577,545,466

573,761,153 577,545,466Current liabilitiesPayable to gratuity fund 19 393,170 1,722,547Short-term loan - bank overdraft 20 27,233,839 106,201Payable to clients 21 129,482,272 140,810,501Accounts payable 22 3,531,902 295,673Accrued expenses 23 4,412,813 1,830,379Payable to stock exchange 24 512,295 205,416Loan loss reserve 25 448,726,198 458,924,351Provision for diminution in value of investment in securities 26 11,976,010 11,249,553Provision for corporate income tax 27 145,530,377 128,653,278Other liabilities 28 1,916,307 1,265,842

773,715,183 745,063,741Total liabilities 1,347,476,335 1,322,609,207Total shareholders' equity and liabilities 2,472,166,982 2,446,226,793

These financial statements should be read in conjunction with annexed notes.

For and on behalf of Board of Directors of IIDFC Securities Limited

Sd/-Chairman

Sd/-Director





DVC : 2107120728AS131670

Sd/-

See annexed report of the date



IIDFC Securities LimitedStatement of Profit or Loss and Other Comprehensive Income (Profit and Loss Statement)

Notes 2020 2019BDT BDT

Operating income

Brokerage commission 29 79,208,518 49,995,949Interest income 30 63,964,490 91,884,852

31 263,331 5,070,573Dividend income 32 11,220,753 10,521,212Other operating income 33 1,879,120 550,267Total operating income 156,536,212 158,022,853Operating expensesInterest expense 34 59,269,710 64,659,746Direct costs 35 15,662,227 4,672,050Salaries and allowances 36 30,671,256 37,224,397Rent, insurance, electricity, etc. 37 13,134,069 16,065,694Legal and professional expenses 1,051,051 949,235Postage, stamp, telecommunications, etc. 38 1,687,128 1,792,010Stationery, printing, advertisement, etc. 39 409,708 562,330Directors' fees 40 96,800 144,000Auditor's fee 161,000 161,000Loans and advances written off 41 4,613,296 7,798Repair and maintenance 42 1,487,045 245,741Depreciation 43 1,820,434 1,887,753Amortisation of intangible asset 5 - 34,832 Other expenses 44 7,992,317 10,036,371Total operating expenses 138,056,041 138,442,957Operating profit 18,480,171 19,579,896

26 (726,457) (539,157)

Profit before tax 17,753,714 19,040,739Income tax expenseCurrent tax (16,877,099) (12,585,369)Deferred tax (expense)/income 196,447 196,951

(16,680,652) (12,388,418)Net profit for the year 1,073,062 6,652,321

Basic earnings per share 45 0.011 0.067

These financial statements should be read in conjunction with annexed notes.

Provision for diminution in value of investment in securities

Gains on sale of securities


Sd/-Chairman

Sd/-Director





DVC : 2107120728AS131670

Sd/-





Sd/-Chairman

Sd/-Director





IIDFC Securities LimitedStatement of Changes in Equity

ParticularsShare capital

Retained earnings

General reserve Tatal

BDT BDT BDT BDT

Year 2020Balance at 01 January 2020 1,000,000,000 106,617,586 17,000,000 1,123,617,586 Net profit for the year - 1,073,062 - 1,073,062

Balance at 31 December 2020 1,000,000,000 107,690,648 17,000,000 1,124,690,648

Year 2019Balance at 01 January 2019 1,000,000,000 99,965,265 17,000,000 1,116,965,265 Net profit for the year - 6,652,321 - 6,652,321

Balance at 31 December 2019 1,000,000,000 106,617,586 17,000,000 1,123,617,586



IIDFC Securities LimitedStatement of Cash Flows

2020 2019BDT BDT

A Cash flows from operating activitiesReceipt of interest 63,964,490 91,143,211Interest paid on borrowings (16,860,285) (64,659,746)Receipt of brokerage commission 79,208,518 49,995,949Receipt of dividend 11,220,753 10,521,212Gains on sale of securities 263,331 5,070,573Payment to employees (30,671,256) (37,224,397)Receipts from other operating activities 1,879,120 550,267Payment for other operating activities (42,411,838) (35,175,386)Income tax paid (16,877,099) (12,585,369)

49,715,734 7,636,314

Increase/(decrease) in operating assets and liabilitiesAdvances, deposits and prepayments (10,202,643) (29,417,028)Receivable from stock exchange 7,759,725 18,975,492Other receivables 4,589,559 (1,562,082)Other assets (191,480) 374Payable to gratuity fund (1,329,377) 56,703Payable to clients (11,328,229) 46,257,276Accounts payable 3,236,229 (8,550,414)Accrued expenses (1,830,380) (16,172,473)Payable to stock exchange 306,879 (285,263)Loan loss reserve (10,198,153) (1,269,161)Provision for diminution in value of investment in securities 726,457 539,157Other liabilities 17,527,564 12,894,160

(933,849) 21,466,741Net cash from/(used in) operating activities 48,781,885 29,103,055

B Cash flows from investing activitiesInvestment in shares 47,881,307 (35,270,072)Margin loan to clients (150,524,789) 142,504,830Acquisition of property, plant and equipment (2,198,568) (1,295,432)Disposal of property, plant and equipment 4,534 (1,629)Net cash from/(used in) investing activities (104,837,516) 105,937,697

C Cash flows from financing activitiesIssue of share capital - -Receipt/(repayment) of term loans (19,066,100) (40,322,362)Net cash from/(used in) financing activities (19,066,100) (40,322,362)

D Net changes in cash and cash equivalent (A+B+C) (75,121,731) 94,718,390E Opening cash and cash equivalent 207,300,769 112,582,379F Closing cash and cash equivalent 132,179,038 207,300,769

Cash generated from/(used in) operating activities

Net changes in operating assets and liabilities


Sd/-Chairman

Sd/-Director






1. Reporting entity 1.1 Company profile IIDFC Securities Limited (the company) is a public company, fully owned subsidiary company of

Industrial and Infrastructure Development Finance Company Limited (IIDFC). The company was incorporated in Bangladesh vide certificate of incorporation no C-83521/10 Dated 28 March 2010 in the name IIDFC Securities Limited. The company obtained license from Bangladesh Securities and Exchange Commission (BSEC) vide its Stock broker registration certificate no. 3.1/DSE-238/2011/455 dated 05 January 2011, Stock Dealer registration certificate no. 3.1/DSE-238/2011/456 dated 05 January 2011, Depository Participation license no. SEC/Registration/CDL-DP-292 dated 03 February 2011 to carry out its operations.

1.2 Nature of business The principal activities of the company include business of stock dealer, stock broker and depository

participant (DP) for dealing of shares and securities, commercial papers, bonds, debentures, debenture stocks, etc. The company is a member of Dhaka Stock Exchanges (membership no. 238) and full service depository participant of Central Depository Bangladesh Limited (CDBL).

As a stock broker and stock dealer, the company caters services to the institutional and individual investors for trading of securities under Bangladesh Securities and Exchange Commission (Stock-Dealer, Stock-Broker and Authorised Representative) Rules 2000 and to extend margin loan facilities to the investors under Margin Rules 1999.

2. Basis of accounting 2.1 Statement of compliance The financial statements have been prepared in compliance with the requirement of the International

Financial Reporting Standards (IFRSs) which also cover International Accounting Standards (IASs), the Companies Act 1994, Bangladesh Securities and Exchange Commission (Stock Dealer, Stock Broker and Authorised Representative) Rules 2000 and other applicable laws and regulations.

2.2 Basis of measurement These financial statements have been prepared on accrual basis of accounting following going

concern concept under historical cost convention. 2.3 Functional and presentation currency These financial statements are presented in Bangladesh Taka (BDT), which is both functional and

presentation currency of the company. 2.4 Use of estimates and judgments The preparation of the financial statements requires management to make judgments, estimates

and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods.

2.5 Reporting period The financial statements cover one year from 1 January 2020 to 31 December 2020.


IIDFC Securities LimitedNotes to the financial statements


2.6 Date of authorisation The audited financial statements for the year ended 31 December 2020 were authorised by the Board

of Directors on 30 June 2021 2.7 Components of financial statements a. Statement of financial position (balance sheet); b. Statement of profit or loss and other comprehensive income (profit and loss statement); c. Statement of changes in equity; d. Statement of cash flows; and e. Summary of significant accounting policies and other explanatory information. 3. Significant accounting policies The accounting policies set out below have been applied consistently, if not stated otherwise to all

periods presented in these financial statements. 3.1 Revenue recognition IFRS 15 deals with revenue recognition and establishes principles for reporting useful information to

users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity´s contracts with customers. Revenue is recognised when a entity fulfills the performance obligations regarding the contract of supplying the goods or rendering of service. The standard replaces all existing requirements of IAS 18 Revenue and IAS 11 Construction contracts and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2018 thus the company adopted IFRS 15 with a date of the said initial application.

Brokerage commission Brokerage commission income are recognised when the corresponding services are provided.

Brokerage commission income presented in the financial statements include the following: i) Management fee charged on the market value of customers' portfolios; ii) Trading commission charged to customers' trading in the secondary capital market; iii) Settlement fee charged to customers' trading in the secondary capital market; iv) Documentation fees charged to clients for opening accounts with the company; and v) Underwriting commission. Interest income from margin loan Interest income from margin loan is recognised on an accrual basis. Such income is calculated

on the basis of daily product of margin loans to the clients and charged at the end of the quarter.

However, since the unrecovered margin loan was transferred to a separate interest free-blocked account, no interest on the same amount was recognised during the reporting year.

Gains or losses on investment in securities Gains or losses on investment in securities is recognised based on the different between cost

and fair value of securities at the closing trade date of Dhaka Stock Exchange at the year end of the company.




Income from bank deposit Income from bank deposit comprises interest income on bank deposit. Interest income is

recognised as it accrues, using the effective interest method. Dividend Dividend income is recognised as income when it is actually received. 3.2 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Non-derivative financial instruments comprise investments in shares, margin loans, receivables, cash and cash equivalents, term loans, trade payables, customer deposits and share capital.

3.2.1 Financial assets Financial assets refer to assets that arise from contractual agreements on future cash flows or

from owning equity instruments of another entity. The company initially recognises receivables on the date when they are originated. All other

financial assets are recognised initially on the date at which the company becomes a party to the contractual provisions of the transaction.

The company derecognises a financial asset when the contractual rights or probabilities of receiving the cash from the assets expires, or it transfers the rights to receive the contractual cash flows from the financial assets in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred.

Financial assets include cash and cash equivalents, accounts receivable, margin loans and investment in quoted securities.

Cash and cash equivalents Cash and cash equivalents comprise cash in hand, bank deposits and other short term highly

liquid investments with original maturities of three months or less and overdrafts which were held and available for use by the company without any restriction, and there was insignificant risk of changes in value of these current assets.

Accounts receivables Accounts receivables are recognised at original invoiced amount. They are stated at netted off

with payable with DSE, provision for bad and doubtful debts and written off, if any.

Margin loan Margin loan is provided to clients to facilitate investment in equity securities. They are initially

classified as financial assets at fair value and subsequently measured at amortised cost.

Investment securities Investment in quoted securities is recognised and measured in accordance with IRFS 9:

Financial Instruments, where any changes in value are recognised in statement of profit or loss. However, the loss on remeasurement of listed securities as on 31 December 2010 and onward is recognised following the directives no. BSEC/CMRRCD/2009-193/196 dated 28 December 2016, where the authority allowed to defer the recognition of loss up to 31 December 2022.

Investment in unquoted shares is valued at cost.




3.2.2 Financial liabilities A contractual obligation to deliver cash or another financial assets to another entity or to

exchange financial instruments with another entity under conditions that are potentially unfavorable.

The company initially recognises financial liabilities on the transaction date at which the entity becomes a party to the contractual provisions of the liability. The Entity recognises such financial liability when its contractual obligations arising from past events are certain and the settlement of which is expected to result in an outflow from the entity of resources embodying benefits.

The entity derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired.

Financial liabilities as presented in these financial statements comprise loans and borrowings, accounts payable and other payables.

Loans and borrowings Loans and borrowings are recognised initially at fair value less attributable transaction costs.

Subsequently these borrowings are stated at amortised cost using the effective interest method.

Accounts payable Accounts payables are recognised at fair value. Offsetting financial assets and a financial liabilities Financial assets and financial liabilities are offset and the net amount presented in the

statement of financial position when, and only when, the entity has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

3.3 Property, Plant and equipment 3.3.1 Recognition and measurement Tangible fixed assets are accounted for according to IAS 16 Property, plant and equipment at

historical cost or revaluation less accumulated depreciation and the capital work-in-progress is stated at cost. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Maintenance, renewals and betterments that enhance the economic useful life of the property, plant and equipment or that improve the capacity, quality or reduce substantially the operating cost or administration expenses are capitalised by adding it to the related property, plant and equipment.

3.3.2 Subsequent costs Subsequent costs are included in the assets' carrying amount or recognised as a separate

asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during the financial period in which they are incurred. In compliance with the provisions of the Companies Act 1994, adjustment is made to the original cost of fixed assets acquired through foreign currency loan at the end of each financial year by any change in liability arising out of expressing the outstanding foreign loan at the rate of exchange prevailing at the date of balance sheet.




3.3.3 Depreciation Depreciation on property, plant and equipment is charged using straight-line method. Full

year's depreciation is charged on items in the year of their acquisition and no depreciation is charged in the year of disposal. Rates of depreciation on various classes of property, plant and equipment are as under:

Category of asset Rate (%) Furniture and fixtures 10 Office decoration 10 Motor Vehicle 20 Office equipment 18 3.4 Intangible assets Intangible assets are accounted for according to IAS 38 Intangible assets. Intangible assets

acquired separately are initially recognised at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Intangible assets include software which is amortised @ 18%.

3.5 Statement of cash flows Statement of cash flows is prepared under indirect method in accordance with IAS 7 Statement of

cash flows. 3.6 Income tax Income tax expense comprises current and deferred tax. Income tax expense is recognised in the

statement of profit or loss and other comprehensive income in accordance with IAS 12 Income taxes.

3.7 Current tax Provision for current income tax for the year is made in accordance with the Income Tax Ordinance,

1984 and subsequent amendments made thereto from time to time. 3.8 Deferred tax Deferred tax is recognised using the balance sheet method, providing for temporary differences

between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets and liabilities, and they relate to income taxes levied by the same tax authority on the same taxable entity. The deferred tax asset/ income or liability/ expense does not create a legal obligation to, or recoverability from, the income tax authority.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the deductible temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

3.9 Employee benefit The company maintains a defined contribution plan (provident fund) and a retirement benefit

obligations (gratuity fund) and group insurance benefits for its eligible permanent employees.




3.9.1 Defined contribution plan (provident fund) Defined contribution plan is a post employment benefit plan under which the company

provides benefits for all of its permanent employees. The recognised employees' provident fund is being considered as defined contribution plan as it meets the recognition criteria specified for this purpose. All permanent employees contribute 10% of their basic salary to the provident fund and the company also makes equal contribution.

The company recognises contribution to defined contribution plan as an expense when an employee has rendered required services. The legal and constructive obligation is limited to the amount it agrees to contribute to the fund. Obligations are created when they are due.

3.9.2 Retirement benefit obligations (gratuity fund) The company maintains gratuity scheme for all its eligible permanent employees. Gratuity

shall be admissible for all employees who rendered services to the company for a continuous period of, at least, five years and the amount of gratuity shall be computed at the rate of one month's basic pay for each completed year of service.

3.9.3 Group insurance benefits The permanent employees of the company are covered under a group insurance scheme

and the group insurance company provides group life, group hospitality and OPD services.

3.10 Lease rental The company has adopted IFRS 16: leases from 1 January 2019 to account for its leases for office

space. The leases were previously accounted for under IAS 17, where the leases were classified as operating lease.

Under IFRS 16, a lessee shall recognise a right-of-use asset and a lease liability for all leases except where the leases are either short-term or the leases are for low value assets. Presently, leases of the company are for short-term or low value assets. Therefore, the company decided to recognise the lease payments associated with these leases as an expense on a straight line basis.

3.11 Departure from IFRS Investment in securities : Investment in quoted securities is recognised and measured in accordance with the policy

disclosed in note 3.2.1. This is, however, a departure from IFRS 9 since equity securities within the scope of IFRS 9 are required to be measured at fair value in the statement of financial position, where the changes in value need to be recognised either in statement of profit or loss or other comprehensive income.






2020 2019 BDT BDT

4. Property, plant and equipment

Cost:Opening balance 26,851,764 27,975,219 Add: Addition during the year 2,198,569 1,295,432

29,050,333 29,270,651 Less: Disposal/adjustment during the year 113,355 2,418,887 Closing balance (A) 28,936,978 26,851,764 Depreciation:Opening balance 24,375,760 24,908,523 Add: Charge for the year 1,820,435 1,887,753

26,196,195 26,796,276 Less: Adjustment during the year 108,821 2,420,516 Closing balance (B) 26,087,374 24,375,760 Written down value (A-B) 2,849,604 2,476,004

Details of property, plant and equipment are shown in Annex A.

5. Intangible asset

Cost:Opening balance 1,666,831 1,666,831 Add: Addition during the year - -

1,666,831 1,666,831 Less: Disposal/adjustment during the year - - Closing balance (A) 1,666,831 1,666,831 Depreciation:Opening balance 1,666,831 1,631,999 Add: Charge for the year - 34,832

1,666,831 1,666,831 Less: Disposal/adjustment during the year - - Closing balance (B) 1,666,831 1,666,831 Written down value (A-B) - - Detail of intangible asset are shown in Annex A.

6. Cost of TREC holding

Opening balance 85,978,830 85,978,830Add/(Less): Adjustment made during the year - -Closing balance 85,978,830 85,978,830

1.

2.

In pursuance to section 3.1.4 of the scheme of demutualisation of Dhaka Stock Exchange Ltd (DSE), 7,215,106ordinary shares of BDT 10 each were allotted by DSE in favour of IIDFC Securities Limited. Out of total sharesallotted, 2,886,042 ordinary shares of BDT 28,860,420 being 40% of total ordinary shares allotted were issuedand credited to BO account of IIDFC Securities Limited for BDT 28,860,420 and value of cost of DSE membershiphas been adjusted to that extent. The remaining 4,329,064 shares being 60% ordinary shares of 7,215,106 ofBDT 43,290,640 were credited to the "DSE Demutualisation Blocked Account" maintained by DSE. As per thataforesaid scheme, these 60% shares will be off-loaded in the following manner:

25% has already been sold to the strategic investors by Dhaka Stock Exchange Ltd in 2018.

Except shares allotted in favour of strategic investors, 35% shares held in blocked account shall be sold out to the general public/ institutional investors.

The shares under blocked account as indicated above will be recognised and accounted for upon recovery.




2020 2019 BDT BDT

7. Deferred tax assets/ liabilities

Particulars

Carrying amount of

assets/ liabilities

Tax base

(Taxable)/ deductible temporary difference

(Taxable)/ deductible temporary difference

BDT BDT BDT BDT

Furniture and fixtures 589,212 1,774,589 1,185,377 799,925 Office decoration 630,934 2,768,310 2,137,376 1,891,374 Office equipment 1,629,456 1,367,558 (261,898) (431,941)Motor vehicle - 286,513 286,513 286,513 Computer software - 15,707 15,707 15,707

2,849,602 6,212,677 3,363,075 2,561,578

Applicable tax rate 32.50% 35%Deferred tax assets/(liabilities) 1,093,000 896,552

8. Advance against corporate income tax Advance tax paid 17,462,856 17,462,856 Income tax withheld by DSE (note 8.1) 107,885,368 94,723,177 Income tax withheld from dividend income 24,407,276 22,255,769 Income tax withheld from SND account 8,647,027 7,083,626

158,402,527 141,525,428

8.1 Income tax withheld by DSE

Stock Dealer transaction 2,478,914 2,381,500 Stock Broker transaction 105,406,454 92,341,676

107,885,368 94,723,177

9. Advances, deposits and prepaymentsAdvance against office rent 1,819,240 1,285,000 Advance against securities bidding (note 9.1) 12,499,500 - Advance to IIDFC Limited - 20,000,000 Advance to employees - 17,000 Advance against right offer - 378,750 Security deposits (note 9.2) 363,956 361,856 Advance to supply and service (note 9.3) 625,000 355,000 Staff loan 1,015,453 - Others - 600,000

16,323,149 22,997,606

The amount has been withheld by Dhaka Stock Exchange Ltd from the amounts of transactions undersection 53 BBB of the Income Tax Ordinance 1984.

Deferred tax assets have been recognised and measured in accordance with the provision of IAS 12 Income Tax.Deferred tax assets are attributable to the following:




9.1 Advance against securities biddingMir Akther Hossain 12,499,500 -

12,499,500 -

9.2

CDBL 100,000 100,000 C and F Tower, Chittagong 233,856 233,856 BTCL 15,000 15,000 Elite security services Ltd 13,000 13,000 Alpine fresh water 2,100 -

363,956 361,856

9.3 Advance to supply and serviceTuheen & Associates 625,000 -Ether Architects - 355,000

625,000 355,000

10. Margin loan to clientsRegular (note 10.1) 783,592,953 620,705,346 Unrecovered interest-free blocked account (note 10.2) 980,572,140 992,934,958

1,764,165,093 1,613,640,304 10.1 Regular

(a)

(b)

10.2

11. Receivable from stock exchange

Receivable from DSE -Broker: Categories A, B, G and N 8,224,948 - Category Z 233,633 15,768,621 OTC 449,685

8,458,581 16,218,306 12. Other receivables

Accrued income on FDR - 2,943,724 Receivable from clients against CDBL charges - 107,350 Zenith Annual Income Fund - 1,574,485 Receivable against Mutual Fund (note 12.1) 1,230,992 1,230,992 Receivable with IIDFC Capital Ltd 36,000 -

1,266,992 5,856,551

12.1 Receivable against Mutual Fund AIMS First Guaranteed Mutual Fund 733,274 733,274 Grameen Mutual Fune ONE 497,718 497,718

1,230,992 1,230,992

The above amount is receivable against liquidation of mutual fund.

Unrecovered interest-free blocked account: Under the bailout program for long outstanding negativeequity margin loan accounts, the company sold out the securities available in these accounts andrecovered the outstanding margin loan as much as possible. Up to 31 December 2020, unrecoveredmargin loan of BDT 980,572,140/- under this program was transferred to a separate interest-free blockedaccount.

This represent loan facilities extended to the customers for trading of listed securities in thesecondary capital market as per Margin Rules 1999.

Security deposits

Unrealized accrued interest income on negative equity margin loan has not been recognised asrevenue. It has been kept separately in a memorandum account.

2020 2019 BDT BDT




2020 2019 BDT BDT

13. Investment in securitiesDetails of investment in securities as on 31 December 2020 are as under :Quoted 271,582,063 319,463,370 Un-quoted 29,858,520 29,858,520

301,440,583 349,321,890 QuotedFurther details are as under :

88,072,267 88,906,018 16,602,567 23,541,959 17,768,411 31,458,966 10,808,556 9,099,626 7,301,450 12,082,738 5,070,999 5,070,999 20,739,635 26,369,640 30,746,304 30,746,304 37,264,187 36,073,323 642,210 642,210 5,705,402 28,698,463 2,712,530 4,940,924 24,314,351 18,084,471 3,728,194 3,747,730 105,000 - 271,582,063 319,463,370

28,860,420 28,860,420 Unit Fund (ICB AMCL 2nd NRB) 998,100 998,100

29,858,520 29,858,520

QuotedFurther details are as under :

Cost price Market price Unrealized a b c=a-b

BDT BDT BDT 88,072,267 65,334,920 22,737,347 16,602,567 10,064,543 6,538,024 17,768,411 19,168,385 (1,399,973) 10,808,556 8,719,640 2,088,916 7,301,450 6,514,200 787,250 5,070,999 2,781,608 2,289,392 20,739,635 12,102,919 8,636,715 30,746,304 26,309,110 4,437,194 37,264,187 29,584,500 7,679,687 642,210 535,348 106,862 5,705,402 5,130,000 575,402 2,712,530 8,083,339 (5,370,809) 24,314,351 14,340,979 9,973,371 3,728,194 2,919,522 808,673 105,000 113,000 (8,000) 271,582,063 211,702,013 59,880,050

Textile

Pharmaceutical and chemicals

Others

Fuel and power

Telecommunication

Textile

Bank

Ceramics

Insurance

Service and real estate

EngineeringFuel and power

Food and allied products

Telecommunication Mutual funds

Cement

Travel and leisure

Financial institution

Food and allied products

Insurance

Others

Cement

Bank

Engineering

Mutual funds

Dhaka Stock Exchange Limited

Ceramics

Pharmaceutical and chemicals

Financial institution

Unquoted shares:

Service and real estate

Travel and leisure




14. Other assets

Stamp in hand 9,585 14,553 9,585 14,553

15. Cash and cash equivalents

Cash in hand (note 15.1) 25,816 29,447

Bank balanceShort-term deposit account (note 15.2) 132,153,222 143,570,822 Fixed deposit account (note 15.3) - 63,700,500

132,179,038 207,300,769

2020 2019BDT BDT

15.1 Cash in handHead office 11,111 20,552 Gulshan branch 6,760 4,460 Chittagong branch 2,227 4,435 Nikunja branch 5,718

25,816 29,447

15.2 Short-term deposit account

126,948,962 141,488,410 ONE Bank Ltd A/C no. 0015025351012 (Dealer account) 46,506 193,201 ONE Bank Ltd A/C no.0013000001721 (IPO account) 4,964,681 503,847 Southeast Bank Ltd A/C no. 3113100000722 (Admin account) 188,250 1,379,745 NCC Bank Limited A/C no. 00310325001228 (Admin account) 1,954 1,711 One Bank Ltd A/C no. 0013000002145 (Investment account) 2,869 3,907

132,153,222 143,570,822

15.3 Fixed deposit accountONE Bank Ltd A/C no. 001414007292 - 27,350,500 NCC Bank Ltd A/C no. 0330047367 - 16,350,000IIDFC Ltd - 20,000,000

- 63,700,500

16. Share capital

16.1

500,000,000 ordinary shares of BDT 10 each 5,000,000,000 5,000,000,000

16.2 Issued, subscribed and paid-up capital

100,000,000 ordinary shares of BDT 10 each fully paid-up 1,000,000,000 1,000,000,000

Shareholding position of the company as at 31 December is as under:

No of % of shares holding Price

99,987,497 99.99 10 999,874,970 999,874,970 12,438 0.01 10 124,380 124,380

13 0.00 10 130 130 13 0.00 10 130 130 13 0.00 10 130 130 13 0.00 10 130 130 13 0.00 10 130 130

100,000,000 100 1,000,000,000 1,000,000,000

shareholders

IIDFC Limited

Mr. Lingkon Mondal Mr. Anisuz Zaman Chowdhury

Mr. Sayed Husain JamalMr. Md. Asaduzzaman Khan

Authorised capital

Mr. S. A Chowdhury Mr. Md. Matiul Islam

Name of Amount (BDT)

ONE Bank Ltd A/C no. 0015025351004




17. Retained earnings

Opening balance 106,617,586 99,965,265 Add: Net profit for the year 1,073,062 6,652,321 Closing balance 107,690,648 106,617,586

18. Long-term loan

Term loan-up to 8 years (note 18.1) 437,640,757 445,535,836 Term loan-up to 8 years (note 18.2) 136,120,396 128,251,618

Investment Corporation of Bangladesh (ICB)Term loan-up to 1.5 years - 3,758,012

573,761,153 577,545,466

2020 2019BDT BDT

18.1 Term loan-up to 8 years

Opening balance 445,535,836 445,535,836Less: Paid during the year 7,895,079 -Closing balance 437,640,757 445,535,836

18.2 Term loan-up to 8 years

Opening balance 128,251,618 138,015,934 Add/(less): Addition during the year 7,868,778 (9,764,316)Closing balance 136,120,396 128,251,618

19.Opening balance 1,722,547 1,665,844 Add: Addition during the year 393,170 1,722,547

2,115,717 3,388,391 Less: Paid during the year 1,722,547 1,665,844 Closing balance 393,170 1,722,547

20. Short-term loan - bank overdraft

ONE Bank Limited, A/C no.0015025351029 - 22,334 ONE Bank Limited, A/C no.0017170000312 27,233,839 -

- 83,867 27,233,839 106,201

21. Payable to clients

129,482,272 140,810,501

22. Accounts payableIIDFC Capital Limited 2,670,488 114,955 Southeast Bank Capital Services Ltd 180,718 180,718 City Bank Capital Resources Ltd 680,696 -

3,531,902 295,673

IIDFC Limited

Payable to gratuity fund

NCC Bank Limited, A/C no.00310120005111

The company operates a funded gratuity scheme, provision in respect of which is made annually covering all its

The company has been maintaining a consolidated customer account against payable to clients with ONE BankLimited only for the deposits of money received from and payments to customers as per section 8A (1) ofSecurities Exchange Commission Rules 1987.




23. Accrued expensesFinancial expenses (ICB) - 2,610CDBL charges 68,049 135,143 Office rent 429,525 1,019,959 Electricity 51,953 68,131 Water and sewerage - 21,294 Audit fee 161,000 161,000 Online and data communication charges 110,305 134,042 Security charges - 31,026 Telephone bills BTCL 10,392 50,603 Plantation 3,360 19,450 Fresh water 2,654 4,934 Payable to printing 44,673 - Payable to supply & service (note 23.1) 1,113,959 14,192 Agent commission 1,404,498 150,695 Driver's salary - 17,300 Leave fare assistance 1,012,445 -

4,412,813 1,830,379

2020 2019BDT BDT

23.1

Ahmed Masuque & Co 14,192 14,192 Charu Kaj 1,099,767 -

1,113,959 14,192

24.Payable to DSE broker:

Categories A, B, G and N 512,295 27,953 Category Z - 176,969 OTC - 494

512,295 205,416

25. Loan loss reserveLoan loss account (note 25.1) 46,217,086 47,267,496 Interest income loss account (note 25.2) 402,509,112 411,656,855

448,726,198 458,924,351 25.1 Loan loss account

Opening balance 47,267,496 47,398,219Add: Addition during the year - -

47,267,496 47,398,219Less: Adjustment during the year 1,050,410 130,723Closing balance 46,217,086 47,267,496

25.2 Interest income loss account

Opening balance 411,656,855 412,795,293Add: Addition during the year - -

411,656,855 412,795,293Less: Adjustment during the year 9,147,743 1,138,438Closing balance 402,509,112 411,656,855

Payable to supply and service

During the year, total seventy (78) number of negative equity accounts has been written off against loanloss reserve for reducing unrealized loss (negative equity) of margin loan for BDT 10,198,153/-. The abovewritten off is allowable expenses as per section 29 (I) (XV) of ITO 1984.

Payable to DSE - broker and dealer




2020 2019 BDT BDT

26. Provision for diminution in value of investment in securities

Opening balance 11,249,553 10,710,396Add: Provision made during the year 726,457 539,157

11,976,010 11,249,553Less: Write back of provision - -Closing balance 11,976,010 11,249,553

26.1 Un-realised loss and provision

Unrealised loss (note 13) 59,880,050 101,256,100Provision made up to 2020 11,976,010 11,249,553Percentage of provision against requirement 20.00% 11.11%

27. Provision for corporate income taxOpening balance 128,653,278 114,473,537Add: Provision made during the year 16,877,099 12,585,369

145,530,377 127,058,906Add: Adjustment during the year - 1,594,372Closing balance 145,530,377 128,653,278

28. Other liabilities

Reserve for risk fund 1,116,667 1,016,667VAT deduction at source 158,549 83,425Income tax deducted at source 513,805 60,300Others 127,286 105,450

1,916,307 1,265,842

29. Brokerage commission

Commission on securities trading 79,161,768 49,951,979Commission on IPO processing 46,750 43,970

79,208,518 49,995,949

As per BSEC’s directive no. BSEC/SRI/Policy/3/2020/68 dated 12 January 2020, totalamount of provision against unrealized loss of margin loan to be kept by 31 December 2022.In this connection, an amount of Tk.11,976,010/- has been made as provision which isequivalent to 20% of total unrealized loss of Tk. 59,880,050/- against year ending balance ofinvestment in securities. However, no cash dividend can be paid during the year in terms ofsaid directive as the company has availed this facility.

Provision for corporate income tax is made on accounting profit for the year after adjustments fortaxable allowances and disallowances as per tax laws.

25.3 Un-realised loss and provision

Un-realised loss (Negative equity) against margin loan 1,212,494,748 1,237,683,489Provision made up to 2020 448,726,198 458,924,351Percentage of loan loss reserve 37.01% 37.08%

As per BSEC’s directive no. BSEC/SRI/Policy/3/2020/68 dated 12 January 2020, total amount of provisionagainst unrealized loss of margin loan to be kept by 31 December 2022. In this connection, an amount ofTk. 448,726,198 has been made as loan loss reserve which is equivalent to 37.01% of unrealized loss(negative equity) of Tk. 1,212,494,748/- against year ending balance of margin loan. However, no cashdividend can be paid during the year in terms of said directive as the company has availed this facility.




30. Interest income

Margin loan 51,451,816 76,174,700Bank deposit 7,978,421 8,643,510FDR 4,401,859 7,066,641Staff loan 132,394 -

63,964,490 91,884,85231. Gains on sale of securities

Gains from trading of securities 6,826,366 11,013,808Loss from trading of securities (6,563,035) (5,943,235)

263,331 5,070,573

2020 2019 BDT BDT

32. Dividend incomeIncome from DSE 2,705,664 2,705,665Income from dealer account 8,515,089 7,815,547

11,220,753 10,521,21233. Other operating income

BO account maintenance fee 303,000 315,100Sale of account opening form 86,500 26,500BO account opening charges 81,350 28,650Notice pay received 9,804 32,353Charges for dishonored cheques 39,000 19,500Gains on disposal of assets 12,866 52,627Income against CDBL charge - 75,537Forfeiture balance from PF accounts 1,346,600 -

1,879,120 550,26734. Interest expense on borrowing fund

IIDFC Limited 57,776,993 63,668,220Investment Corporation of Bangladesh (ICB) - 636,040ONE Bank Limited 609,883 183,522NCC Bank Limited 882,834 171,964

59,269,710 64,659,74635. Direct costs

Laga charges 6,555,592 4,370,599Howla charge 2,700 50CDBL charges 43,711 71,596Agent commission 9,060,224 229,806

15,662,227 4,672,05036. Salaries and allowances

Basic 16,517,394 18,396,498House rent 8,258,705 9,198,278Festival bonus 1,409,362 3,031,022 Conveyance 1,485,197 1,926,870 Medical 825,857 919,817Entertainment 205,924 306,819Company's contribution to provident fund 1,575,647 1,722,546Gratuity expense 393,170 1,722,547

30,671,256 37,224,397




37. Rent, insurance, electricity, etc.

Office rent and service charge 11,754,646 14,352,674Electricity 799,966 1,176,030Renewal and registration fees 354,635 270,348Water and sewerage 219,951 264,187Insurance on fixed assets 4,871 2,455

13,134,069 16,065,694

2020 2019 BDT BDT

38. Postage, stamp, telecommunications, etc.

Data communication expenses 1,044,194 983,823Mobile 460,803 519,085Internet expenses 128,500 151,200Telephone 10,213 120,000SMS service 23,158 -Postage and courier 12,382 14,328Stamp charges 7,878 3,574

1,687,128 1,792,01039. Stationery, printing, advertisement, etc.

Printing and stationery 358,648 379,940Paper, ribbon and cartridge 39,100 156,445Table stationery 3,770 4,195Business promotion expenses - 13,763Advertisement 8,190 7,987

409,708 562,33040. Directors' fees

Fees 79,200 115,200VAT 8,800 16,000Tax 8,800 12,800

96,800 144,000

Each director is paid for BDT 7,200 (excluding tax & VAT ) per board meeting attended.

41. Loans and advances written off Loans and advances written off during the year 4,613,296 7,798

4,613,296 7,798

42. Repair and maintenance

Office equipment 647,210 157,796 Furniture and fixtures 148,290 6,875 Electric and lighting materials 335,888 27,807 Renovation and decoration 204,916 -Computer accessories 85,678 3,250 Computer software 65,063 50,013

1,487,045 245,741

During the year 2020, fourteen (14) number of inactive BO accounts which carry minimum debitbalance was charged as written off loan loss for an amount of BDT due to avoid annual BO chargeby CDBL. In addition, twelve (12) number of accounts were written off as loan loss for reducingunrealized loss (negative equity) of margin loan

Due to relocation of Head Office of our company from Eunoos Trade Center, Level-07, 52-53Dilkusha C.A. Dhaka-1000 to PFI Tower, 3rd Floor, 56-57 Dilkusha C.A, Dhaka-1000, repairs andmaintenance expenses increased considerably.




43. Depreciation Office equipment 462,085 272,794 Office decoration 947,039 876,939 Furniture and fixtures 411,310 379,879 Motor vehicle - 358,141

1,820,434 1,887,753

2020 2019 BDT BDT

44. Other expenses

Office maintenance (note 44.1) 2,175,552 2,214,284 Car allowance and maintenance 1,109,667 1,577,866 Leave fare assistance 1,606,494 1,430,394 Leave encashment 1,224,475 1,736,000 Others allowance 958,941 891,243 Entertainment 359,068 1,775,703 Reserve for risk fund 100,000 100,000 Bank charge 341,770 119,580 Travelling and conveyance - local 95,890 150,288 Training expenses 13,200 19,800 Newspaper and magazine 6,090 14,963Books and periodicals 1,170 6,250

7,992,317 10,036,371 44.1 Office maintenance

Casual staff salary 1,578,000 1,562,000 Security charges 52,085 178,692 Cleaning charges 79,958 84,732 Uniform, etc 70,193 53,986 Plantation 1,650 8,000 Fresh water 3,886 2,000 Others 389,780 324,874

2,175,552 2,214,284

45. Earnings per share (EPS)

Basic earnings per share has been calculated as under:

1,073,062 6,652,321Weighted average number of ordinary shares 100,000,000 100,000,000Basic earnings per share 0.011 0.067

Particulars Weighted average

Number of share outstanding during the year 365 100,000,000 100,000,000 100,000,000 100,000,000

Earnings per share (EPS) is calculated in accordance with BAS 33 Earnings per share. Thecalculation of basic earnings per share as at 31 December 2020 was based on the profitattributable to ordinary shareholders and weighted average number of ordinary shares outstandingfor the year ended 31 December 2020.

Earnings attributable to ordinary shareholders net profit/(loss) after tax

No. of Ordinary Shares


46. Books of account of branch offices

47.

47.1 Related party transactions during the year:

Nature of relationship

Nature of transaction

2020 2019 BDT BDT

Parent companyInterest and principal repayment of loan

17,803,294 111,328,578

Sister concernShare trading and others

1,789,074,700 1,185,770,501

47.2

Parent company Long term loan 573,761,153 577,545,466

Sister concern Accounts payable - 114,955

48. Employees' information

49. General

49.1

49.2

49.3

The company has two (2) branches each at Dhaka and Chattogram. In addition, the company has a oneextension office of Head Office at Nikunja, Dhaka. Books of account of the branches are maintained atHead Office based on which the accounts are consolidated.



IIDFC Limited

IIDFC Limited

Name of the related party

Nature of relationship

Nature of transaction

2020 2019 BDT BDT

Name of the related party

Related party balances as at year ended:

In accordance with IAS 24 related party disclosures, amount of transactions during the period andoutstanding balances as of the end of report period with the entity's related parties are disclosed asfollows:

Related party disclosures

A total number of 29 employees were employed in IIDFC Securities Ltd as on 31 December 2020. Eachof the employees received salary more than BDT 36,000 per annum during the year 2020.

These notes form an integral part of the annexed financial statements and accordingly are to beread in conjunction therewith.

Previous year's figures have been re-arranged, wherever considered necessary, to confirm tocurrent year's presentation without causing any impact on the operating results for the year andvalue of assets and liabilities at the end of that year as shown in the financial statements underreporting.Figures in these notes and annexed financial statements have been rounded off to the nearestBDT.




Sd/-Chairman

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Large Industries financed by IIDFC

Rangpur Metal Industries Limited, Olipur, Shaestaganj, Habiganj (Habiganj Industrial Park)

Hamid Weaving Mills Limited, Shilmandi, Narsingdi


Euro Bangla Glass Industries Limited, Kaliganj, Gazipur


Small & Medium Enterprises (SME) financed by IIDFC

Nazrul Pipe Industries Ltd, Demra, Dhaka

Express Leather Products Limited, Gazipur


FM Plas�c Industries Ltd, Shibpur, Narsingdi


Workshop and Seminar

A Workshop �tled “Documenta�on for mortgage of property” held at Head Office

A Training �tled “ICT Security Awareness” held on 15 December 2020 at Head Office


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INDUSTRIAL AND INFRASTRUCTURE DEVELOPMETFINANCE COMPANY LIMITED

Metropolitan Chamber Building (6th Floor), 122-124 Mo�iheel C/A, Dhaka-1000

PROXY FORM

I/we...................................................................................................................................................................................................

of.......................................................................................................................................................................................................

.............................being a member of Industrial and Infrastructure Development Finance Company Limited do hereby appoint

as proxy to a�end and vote for me/us and on my/our behalf in the 20th Annual General Mee�ng of the company to be held

Mr./Mrs./Ms......................................................................................................................................................................................

of........................................................................................................................................................................................................

on Sunday, 26 December 2021 at 11.30 a.m. through video conference (ZOOM) and any adjournment thereof.

As witness my/our hand this ................................................................day of ........................................................................2021.

.................................................. ....................................

Signature of Shareholder Signature of Proxy

RevenueStamp ofTk. 20.00

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ANNUAL REPORT 2020 - IIDFC

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