ANNUAL REPORT 2019 The New Faces of Developing Bangladesh The New Faces of Developing Bangladesh Since 1997 as a government owned non-bank financial institution, the Infrastructure Development Company Limited (IDCOL) portrays an exemplary performance over the years. It started with a nominal paid-up capital of BDT 1 lac only. With an equity contribution of BDT 35 crore from the Government of Bangladesh (GoB), the company’s paid up capital now stands at BDT 650 crore. While Bangladesh is developing, IDCOL is playing a key role in bridging the financing gap for developing large infrastructure, renewable energy and energy efficiency projects. This momentous partaking in investment and operation, ownership and maintenance of new infrastructure facilities, has helped us attaining the success of being a partner of choice and the leader in the private sector energy & infrastructure financing in Bangladesh. Thus in the age of a newer face of Bangladesh, we are contributing from behind to bring smile on the faces of our people too. We believe "When every sector shines, the country shines. As a logical sequence, we find shine on the face of every single citizen. So, we will inevitably work our best on keeping these shines on." ANNUAL REPORT 2019 1 Content 1 • From Stepping Stones to Milestones 20 • Awards and Recognitions 23 Letter of Transmittal 4 • Value Creation Structure 27 2 • Programs and Projects 28 Notice of AGM 5 • Events and Achievements 53 3 8 Integrated Reporting 6-8 Corporate Governance 70-139 • Hall of Fame: Former Chairman 71 4 of IDCOL Board of Directors Company Information 9 • Profile of Shareholders other than 73 Directors • General Information 9 • Credit Rating of IDCOL 9 • Shareholding Structure of IDCOL Board 75 • Organogram 76 5 • Board of Directors 78 Chairman’s Statement 10-11 • Profile of Directors 80 • IDCOL Management 84 6 • Profile of IDCOL Management 86 From the CEO’s Desk 12-15 • Directors’ Report 100 7 • Directors’ Responsibility 114 About IDCOL 16-69 • Status of Compliance with 121 Corporate Governance Guidelines as per • Vision, Mission, Core values 17 SEC notification no. SEC/CMRRCD/ • Performance at a Glance 18 2006-158/134/Admin/44 2 ANNUAL REPORT 2019 • Statement of Compliance with the Good 125 • Disaster Management 168 Governance Guideline issued by • Value Added Statement 170 Bangladesh Bank • Economic Value Added (EVA) Statement 171 • Organizational Highlights 128 • Report on Internal Control over Financial Reporting 129 11 • Audit Committee Report 130 Financial Highlights & Review 172-181 • Report on Internal Control 134 • Key Operating and Finanancial Highlights 173 • Statement on Financial Statements 137 • Horizontal & Vertical Analysis 174 by CEO & CFO • Financial Review 180 • Corporate Governance Disclosure Checklist 138 12 9 Auditor’s Report and Audited 182-242 Financial Statements Risk Management 140-151 • Statement of the Chief Risk Officer 141 13 • Risk Management Report 144 Reporting Checklist 243-264 • Capital Adequacy and 149 Market Discipline (CAMD) • Integrated Report Disclosure Checklist 243 • SAFA Best Presented Accounts Checklist 253 • Status of Compliance with Corporate 256 10 Governance Guidelines as per SEC Sustainability Report 152-171 notification no. SEC/CMRRCD/ • Environmental and Social Compliance 153 2006-158/207/Admin/80 • Corporate Social Responsibility 160 • Human Resource Management 162 ANNUAL REPORT 2019 3 Letter of Transmittal All Shareholders, Subject: Annual Report for the year ended on December 31, 2019 Dear Sir(s), We are pleased to enclose a copy of the Annual Report together with the Audited Financial Statements including the Balance Sheet, Profit and Loss Account, Statement of Changes in Equity and Statement of Cash Flows for the year ended on December 31, 2019 along with notes thereon for your reference and record. Yours sincerely, (M. Maftun Ahmed) Company Secretary 4 ANNUAL REPORT 2019 Notice of the 23rd Annual General Meeting The Twenty-Third Annual General Meeting of the Shareholders of Infrastructure Development Company Limited will be held on Wednesday, 2nd September 2020 at 5:30 p.m. via Zoom App. Agenda for the meeting are: 1. To consider and adopt the Board of Directors’ report of the Company and the Accounts of the Company with the Auditor’s Report thereon for the year ended on 31 December 2019. 2. To declare dividends of the Company for the FY 2019. 3. To consider increase of Company’s paid up capital to Tk. 715 crore. 4. To elect Director(s) in place of those retire in accordance with the regulations 79 and 80 and are eligible for re-election in accordance with the regulation 81 of schedule I of the Companies Act, 1994. 5. To appoint auditor(s) and fixing-up their remuneration for the FY 2020. 6. To approved increase of honorarium for IDCOL Board of Directors to attend meetings. 7. Any other business. You are requested to kindly attend the meeting. By order of the Board of Directors (M. Maftun Ahmed) Company Secretary ANNUAL REPORT 2019 5 Integrated Report – Scope and Its Boundary Integrated Reporting The scope of our Annual Report comprises of activities that have been carried out within the geographical Our 2019 Annual Report has been presented as boundaries of Bangladesh, as IDCOL does not an ‘Integrated Report’ with the aim of articulating have operation or subsidiary in other countries. how IDCOL, as an organization, has effectively Furthermore, there have not been any significant managed its business to deliver consistent value to its changes to the scope, boundary and reporting basis stakeholders. It encompasses the efforts the company since the last reporting date as of December 31, 2019. has undertaken towards contributing to economic prosperity, environmental sustainability and social External Assurance well-being for a brighter and more optimistic future. The company has obtained external assurance on Scope and Reporting Boundary the following reports in the reporting period under consideration: As a forward-looking enterprise, in presenting the Integrated Report, we have referred to the guidelines issued by the Institute of Chartered Accountants Description of Sl. External Assurance of Bangladesh (ICAB) in the form of ‘Integrated Report Reporting Checklist’, which is in congruence with the integrated reporting framework prototype issued by Financial ACNABIN Chartered 1 the International Integrated Reporting Council (IIRC). Statements Audit Accountants In explaining the Company’s operations and financial performance, financial information so disclosed has Financial Statements been extracted from the Audited Financial Statements 2 The Bangladesh Bank for the FY 2019 with relevant comparative information. Comprehensive The financial statements consistently comply with the Audit requirements of the followings: ACNABIN Chartered • International Accounting Standards (IASs) and Financial Accountants and International Financial Reporting Standards Statement of (IFRS); 3 various Donor Foreign Aided Project Funded Projects Audit Department • Companies Act 1994; Audit (FAPAD) • Financial Institutions Act 1993; • Securities and Exchange Rules 1987; The World Bank; 4 Procurement Audit FAPAD and The • Income Tax Ordinance 1984; Bangladesh Bank • Relevant rules and regulations of the Central Bank (Bangladesh Bank); Development Partners Environmental (The World Bank, ADB, • And other applicable laws and regulations of the 5 land. Audit JICA, KFW, DFID, GIZ, etc.) The disclosure of non-financial information has been extracted from internally-maintained records Entity Credit Credit Rating Agency of reported for the statement of financial position, unless 6 otherwise stated that it has been extracted from a Rating Bangladesh (CRAB) reliable source. Tax and VAT Mosharaf Hossain & 7 The Sustainability requirements, as elaborated Consultant Associates separately in our Sustainability Report, adhere to the guidelines issued by the Global Reporting Initiative (GRI)-G4 Framework. Comparability & Materiality To report our corporate governance practices, we have All the information presented in this report is on drawn the current corporate governance practice of the same basis as the 2019 report in terms of the our company based on the consultancy support from measurement methods applied and time frames used. our external consultant i.e. Deloitte India Ltd. Ratios used are comparable across the industry. The 6 ANNUAL REPORT 2019 information provided covers all material matters presented herewith which comprise the discussion, relating to business strategy, risk and areas of critical analysis and disclosures pertaining to stewardship, importance to our stakeholders. The structure of which should be read in conjunction with the audited the report has been further developed as part of our financial statements. In the opinion, the integrated continuous focus on improving communication to report, incorporated in this annual report has been our stakeholders. prepared in accordance with the IIRC’s international reporting framework and addresses the material Availability of the Annual Report matter pertaining to the long term sustainability of The hard copy of the Annual Report is sent to all the the organization and present fairly the integrated shareholders, prior to holding the Annual General performance of IDCOL and the impacts thereof. Meeting, giving due period of notice. Separately, for the benefit of all stakeholders, our report has been made available on the website http://www.idcol.org. Responsibility over the Integrity of the Integrated Report Sd/-