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A REPORT

On

Financial Performance Analysis on


Mutual Fund of ICB

Financial Performance Analysis on Mutual Fund of ICB

Submitted To:
Professor Md. Shahjahan Khan
Principal
Dhaka City College

Supervised By:
Mohammad Mosharraf Hossain
Lecturer
Department of Business Administration
Dhaka City College.

Submitted By:
Md. Shakhawat Hossain
National University Roll no: 9951505
National University Registration no: 9998403
Academic Session: 2008-2009
Department of Business Administration
Dhaka City College.

Date of Submission: 19th May, 2014.

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Letter of Transmittal

May 19, 2014.


To
Professor Md. Shahjahan Khan
Principal
Dhaka City College
Subject: Submission of Project Report.
Dear Sir,
This is a great pleasure for me to submit the Report on the topics of Financial
Statements and Theoretical Performance Analysis on Mutual Fund of Investment
Corporation Of Bangladesh, as part of my BBA program. It was a tremendous
opportunity as well as highly enlightening experience for me during preparing the
Project Report. I have taken at most care to present this report and this report has been
excellent outlet for combining theoretical and practical aspect in real business
environment. I would request you to accept the Project report and obliged thereby. I
sincerely hope this report could meet your standard and aid you in making vital decision.
I shall be highly encouraged if you are kind enough to receive this report.
Sincerely Yours,

Md. Shakhawat Hossain


National University Roll No. : 9951505
National University Registration No. : 9998403
Academic Session: 2008-2009
Major in Finance
Department of Business Administration
Dhaka City College.

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Acknowledgement

I am expressing gratitude to the Almighty, the Merciful and the Benevolent Allah for His
special kindness to give me the opportunity to complete the report successfully.
I would like to express my respected appreciation to our principal Professor Md.
Shahjahan Khan. At the very outset I would like to thank our coordinator and assistant
professor Md. Shahinur Sobhan and I extended my heartiest gratitude to my teacher and
supervisor Mohammad Mosharraf Hossain, Lecturer, Department of Business
Administration, Dhaka City College, for his sincere advice, guidance, valuable
suggestion to preparing and presenting this report.
I regard, would like to extend my sincere appreciation to all of my teachers for the
invaluable contribution and cooperation in advancing this report and thereby completing
my BBA program ultimately.
I am thankful to my entire class friends who help me during the Project report when
problem arise and also my seniors.

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Executive Summary

Bangladesh is a least industrial country. Its financial system depends on agriculture more
than 60%. Now it can be understand that its industrialization is in infant stage. So, for the
better growth of industrialization, capital market is so important for our country. Because
of this, Investment Corporation Bangladesh has been established in 1976 under the
ordinance no. XL of 1976 with a view to develop capital market, to mobilize savings and
to broaden the base investment and ultimately help growing industrialization in the
country. Because of this reason, ICB has floated Unit fund and Mutual Funds in our
country and dominating the industry.
ICB is- a unique institution in Bangladesh. Financial Condition of ICB is better
compared with others. Its main function is to make market active and efficient. It has
profit making objective also by operating mainly the small & medium investments in the
capital market. So, it is important to evaluate the performance of it. It has skill and
experienced labor force and professional and dedicated management team that enable to
pursue the ICB's goals and objectives. ICB should be concerned about its investors,
because the investors are the risks takers. ICB has great influence in the capital market.
For stabilizing and development of capital market in our country, the ICB is investing
through Investment Scheme, Unit fund and Mutual funds. It also acts as an underwriter
and lease financer. It also includes the scheme of term deposit and loan against Unit
Certificates. The investors are discouraged to invest in the ICB by borrowing from ICB
due to high interest rate.
At the last part, I have tried to give their historical background, objectives, mission,
vision, functions and financial analysis/information on ICB using the ratios and
theoretical description on mutual funds, in this report mainly focused on its financial
analysis, I have also tried to find out the facts from Project report from the organization
and also give some suggestions/recommendation where the corporation could have scope
to improve.

Table of Content
Chapter

Topic

Page

Number
One

Introduction
1.1

Introduction

1.2

Origin of the Report

1.3

Objective of the Report

1.4

Sources & Methods of Data Collection

1.5

Scope of the Report

1.6

Limitations of the Report

Two

Literature review of ICB


2.01

Historical Background of ICB

2.02

Objectives of ICB

2.03

Vision

2.04

Mission

2.05

Functions of ICB

2.06

Basic Function of ICB

2.07

Business Policy of ICB

2.08

Products of ICB

2.09

Recent Milestones of ICB

2.10

Management of ICB

2.11

Board of Directors of ICB

2.12

Organ gram of ICB

2.13

Description of ICB Organ gram

2.14

Division & Dept. of ICB

2.15

Function of Merchandising Division

2.16

Development Activities

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Three

Analysis and Evaluation of the ICB Mutual Funds

3.1

Financial Results of ICB

3.2

Shareholders position

3.3

Financial Analysis

3.4

Financial Ratios and data analysis

Four

Findings, Recommendations & Conclusions


4.1

Problems & Findings of the study

4.2

Conclusion

4.3

Recommendation

4.4

References
Appendix- 1
Appendix- 2
Bibliography

Acronyms:
AGM
HRM
HRD
HR
ICT
EEF
SEC
PMIS
SPO
DECO
MLSS
GM
DGM
IT
MIS

Assistant General Manager


Human Resources Management
Human Resources Development
Human Resources
Information & Communication Technology
Equity & Entrepreneurship Fund
Securities & Exchange Commission
Personnel Management Information System
Senior Principle officer
Data Entry Control Operator
Member of Lower Subordinate Staff
General Manager
Deputy General Manager
Information Technology
Management Information System

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Chapter-1

Introductory Part
1.1: Introduction
1.2: Origin of the Report
1.3: Objectives of the Study
1.4: Sources & Methods of Data Collection
1.5: Scope of the study
1.6: Limitations of the Study

(1.1) Introduction
Bangladesh is one of the least-developed countries in the world with minimum natural
and financial resources. The development of Bangladesh is being hindered due to lack of
insufficient capital. To accelerate the aspect of industrialization through the development
of capital market and broadening the base of investment, The Investment Corporation of
Bangladesh (ICB) was established on 1 October 1976, under The Investment
Corporation of Bangladesh Ordinance, 1976. The establishment of ICB was a major step
in a series of measures undertaken by the Government to accelerate the speed of
industrialization and to develop a well-organized and vibrant Capital Market, particularly
securities market in Bangladesh.
Mutual fund was first introduced in Belgium in 1822. This form of investment soon
spread to Great Britain and France. Mutual funds became popular in the United States in
the 1920s and continue to be popular since the 1930s, especially open-end mutual funds.
Mutual funds experienced a period of tremendous growth after World War II, especially
in the 1980s and 1990s. A mutual fund is a professionally managed kind of collective
investment scheme that pools money from many investors and invests it in stocks, bonds,
short-term money market instruments or other securities. In 1980s in Bangladesh the
Investment Corporation of Bangladesh (ICB) launched by the government the first ever
Mutual Funds for the sake of investors and of the capital market. The first private sector
to take initiative of organizing a mutual fund was Asset & Investment Management
Services of Bangladesh Limited (AIMS) in 1999. Though the mutual fund industry grew
over time there has been only close ended fund since the beginning of the mutual funds.
The country's first ever open-end mutual fund hit market in the first quarter of 2010,
expanding the orbit of stock market and providing share holders a very useful and
convenient investing vehicle. Mutual funds dwell in a small market in Bangladesh. Now
a day, around 25 mutual funds listed in the Dhaka Stock Exchange (DSE) trade at an
average of 2.7 times of their net asset value (NAV).Mutual fund is normally assumed to
be safe investment due to volatility in capital market, but the market capitalization of
mutual fund was comparably lower than other sectors. It has been observed that the
demand for mutual funds fell during July-December 2008 resulting in sharp decline in
prices. The situation improved in the year 2009 as the demand for mutual funds
increased. Mutual funds have emerged as the best in terms of variety, flexibility,
diversification, liquidity as well as tax benefits. Besides, through mutual funds investors
can gain access to investment opportunities that would otherwise be unavailable to them
due to limited knowledge and resources.
This report is originated to fulfill the requirement of the assigned internship report on
Financial Performance Analysis on Mutual Fund of Investment Corporation of
Bangladesh (ICB). In this regard, an organization attachment at Investment Corporation
of Bangladesh has been given to me a period of up to three months. During the internship
period, I have worked almost 50 departments of Investment Corporation of Bangladesh
with the help of the internal supervisor.

(1.2) ORIGIN OF THE REPORT:


Project means receiving practical training through attending particular work theoretically.
Theoretically training means a way through which a person or a trainee can gather
experience about the related subjects and be able to apply his practical experience in the
field of real life action. Theoretically training is necessary to achieve complete
knowledge about something. Thesis program is actually a form of practical training. As a
student of BBA (Regular), major in Finance, project is an academic requirement. For
doing this report, every student is required to collect the information of the institution to
gather practical knowledge and experiences.
For my project I went to the Investment Corporation of Bangladesh (ICB), to collect the
information for preparing the project report. My Supervisor asked me to prepare a project
report on Financial Performance Analysis on Mutual Fund of Investment
Corporation of Bangladesh.

(1.3) OBJECTIVES OF THE REPORT:


The Objectives of the report are:
To fulfill the requirement of BBA (Regular) program as necessitated for major in
Finance Department, of Dhaka City college.
To get aware about the working environment in advance that will help in adjusting
a student with the future working life.
To study about the comparison of different financial ratios in 2013 with the
previous year.
Gathering the experience about the total application & activities of ICB and its
importance through the visit the organization.
To understand the operation and management of investment banking in
Bangladesh.
To relate our theoretical learning with the practical situation.
To learn the practical aspect of the Investment Corporation of Bangladesh.
To gather knowledge of how ICB floats and manages.
To know the product of ICB at the securities market in Bangladesh.

(1.4) SOURCES AND METHODS OF DATA COLLECTION:


For the purpose of preparing this Project report, I have carefully observed all of the
departments of ICB and got some information from the responsible officers at certain
department. Sources of data collection are as follows:
(01.) Primary sources
(02.) Secondary sources
Primary sources:
Primary sources data are those, which are collected from face to face discussion with the
help of the officials of various departments of ICB in charge.
Secondary sources:
Secondary sources of data include:
Ordinance of ICB.
Annual reports of ICB.
Daily Newspapers, journals and books & various write up of Economic &

Business.
Research Library.
Monthly review of DSE & CSE.
General Information.
Materials & documents of ICB.
Bangladesh Bureau of Statistics.

(1.5) Scope of the Report


The scope of the report was basically the operations and practices of Investment
Corporation of Bangladesh, in which I had undertaken the project. The scope of the study
was in the organization, Investment Corporation of Bangladesh (ICB). The study was
confined only on the Head office and gave more concentration on it. The data comparison
was based on published information and an additional survey was performed to get indepth information, as it was the part of the objective of the report. The empirical part
included only published information and current practices of Investment Corporation of
Bangladesh.

(1.6) LIMITATIONS OF THE REPORT


Official secrecy of ICB was also a problem to me.
Relevant papers and documents were not available sufficiently.
At the time of face to face discussion with officials, there were no sufficient

Chairs

and tables.

Inadequate information.
Secrecy of the officials.
Due to time constraint limited analytical tools have been used to draw the

conclusion of the study.


Data summarizing from description contain the chance of being vague.

In the face of these limitations the study has been conducted and the report has been
prepared with the best efforts and integrity.

Chapter-2
Literature review of ICB
2.1: Historical Background of ICB
2.2: Objectives of ICB
2.3: Vision
2.4: Mission
2.5: Function of ICB
2.6: Basic Function of ICB
2.7: Business Policy of ICB
2.8: Products of ICB
2.9: Recent Milestones of ICB
2.10: Management of ICB
2.11: Boards of Directors of ICB
2.12: Organ Gram of ICB
2.13: Description of ICB Organ Gram
2.14: Division & Dept. of ICB
2.15: Function of Merchandising Division
2.16: Development Activities

(2.1) Historical Background of ICB


Investment Corporation of Bangladesh (ICB) is a state owned by corporation and it is
mainly working as an Investment Bank. As a Financial Institution it mobilizes funds from
the surplus units to the deficit units by means of different instruments. After the
independence, the investment in private sector was limited to Tk. 25 lacs by the
investment policy of the Government. This figure was changed to Tk. 3 crores by 1972.
The ceiling has further been raised to Tk. 10 corers in spite of the adequate facilities &
incentives provided to the private sectors encouraging response wasnt for the coming.
One of the reasons among others was the lack of institutional facilities, which provides
underwriting support to industrial enterprise that was required to raise much need equity
fund. Thus, the need for reactivation for capital market, stock market was keenly felt.
The Investment Corporation of Bangladesh was established on 1st October 1976,
under The Investment Corporation of Bangladesh Ordinance, 1976 (NO. XL of 1976).
The establishment of ICB was major step in a series of measures undertaken by the
Government to accelerate the pace of industrialization and to develop a well organized
and vibrant Capital market particularly securities market in Bangladesh. ICB caters to the
need of institutional support to meet the equity gap of the industrial enterprises. In view
of the notional policy of accelerating the rate of savings and investment to foster
enactment of the Investment Corporation of Bangladesh (Amendment) Act, 2000 (No.
XXXIV of 2000), reforms in operational strategies and business policies have been taken
place by establishing and operating subsidiary companies under ICB.

(2.2) Objectives of the ICB


The main objectives of ICB are as follows:
To encourage and broaden the base of investment
To develop the capital market.
To provide for matters ancillary thereto.
To mobilize savings.
To promote and establish subsidiaries for business development.

(2.03) Vision
ICB will be the leading responsible and environment friendly financial institution
operating in such a way that our fellow competitors watch, acknowledge and admire
emulates us as a role model of success.

(2.04) Mission
Being a responsible institution created by law, act in accordance with the
mandates of ordinance for fostering rapid growth of Bangladesh economy.
Being a financial architect, strive to established benchmark of values, attitudes,
behavior and commitments with earnest endeavor in generating optimum profits
and growth for shareholders by efficient use of resources.
Being an innovative solution provider, put emphasis on formulating total
solution to foster mobilization of all domestic & NBR savings into potential
investment.
Being a performance leader, intended to lead by example, operate in the interest
of the customer & committed to do everything in their power to for their
customers everlasting trust.

(2.05) Functions of ICB


In order to achieve the objectives if ICB, the corporation may carry out the following
functions:
Underwriting of initial public offering of shares and debentures
Underwriting of right issue of shares
Direct purchase of shares and debentures including Pre-IPO placement and
equity participation
Providing lease finance to industrial machinery and other equipments singly or
by forming syndicate
Managing investors' Accounts
Managing Open End and Closed End Mutual Funds
Operating on the Stock Exchanges
Providing investment counsel to issuers and investors
Participating in Government divestment Program
Participating in and financing of, joint-venture projects
Dealing in other matters related to capital market operations
Trusty, Custodian, Bank Guarantee
Consumer Credit
Providing Bank Guarantee
Consumer Credit
Providing Bank Guarantee
Providing Consumer Credit

(2.06) Functions of ICB:


asic functions:
Underwriting of initial public offering of shares and debentures
Underwriting of right issue of shares
Managing investors Accounts
Managing Open End and Closed End Mutual Funds
Operating on the Stock Exchange
Providing investment counsel to issuers and investors
Participating in Government divestment program
Participating in and financing of joint-venture projects
Dealing in others matters related to capital market operations
Conducting Computer training programs
Providing advance against ICB Unit and Mutual Fund certificates
To act as trustee and custodian
Providing Bank guarantee
Providing consumer credit
To supervise and control the activities of the subsidiary companies

Continued Activities :
Private placement
Custodian and Banker to the Issues
Mergers and Acquisitions
Corporate Financial Advice
Lease Finance
Portfolio Investment
Advance Against Unit Certificates Scheme
Advance Against Mutual Fund Certificates Scheme
Consumer Credit Scheme

Bank Guarantee Scheme


Training Program
Trustee to the debenture and securitized assets

(2.07) Business Policy of the ICB


The Corporation has adopted a realistic business policy framework within which its
operation is conducted. The corporation in its operating acts on commercial
considerations with regard to the interest of industry and commerce, investment climate,
capital market depositors, investors and to the public interest generally.
The operational policies of the Corporation are as follows:
To act on commercial consideration with due regard to the interest of industry,
commerce, depositors, investors and to the public in general.
To provide financial assistance to projects subject to their economic and
commercial viability.
To arrange consortium of financial institutions including merchant banks to
provide equity support to projects and thereby spread the risk of underwriting.
To develop and encourage entrepreneurs.
To diversify investments.
To induce small and medium savers for investment in securities.
To create employment.
To encourage Investment in IT sector.
To encourage Investment in joint venture capital/project.
To encourage more investment in Agro-based and Information and
communication Technology (ICT) sectors.
To create an employment opportunities.

10

(2.08) Products of ICB


Private Placement
Underwriting
Custodian & Bank to the Issues
Mergers & Acquisitions
Corporate Financial Advice
Lease Financing
Bank Guarantee Scheme
ICB Mutual Fund
ICB Unit Fund
Investors Scheme
Consumer Credit Scheme
Advance against ICB Mutual Fund Certificates Scheme
Venture Capital Financing

(2.09) Recent Milestones of ICB


The Investment Corporation of Bangladesh(Amendment) Act, 6 July 2000
2000
Commencement of Operations by Subsidiary Companies with the 5 December 2000
registrar of joint stock companies & firms
ICB Capital Management Ltd
1 July 2002
ICB Asset Management Company Ltd

1 July 2002

ICB Securities Trading Company Ltd

13 August 2002

Registration as a Trustee with SEC

20 August 2002

Registration as a Custodian with SEC

20 August 2002

Bank Guarantee Scheme

21 June 2003

Advance Against Mutual Fund Scheme

21 June 2003

Consumer Credit Scheme

15 February 2004
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Venture Capital Financing Scheme

26 April 2007

Purchase of own land (Agargaon)

3 March 2008

Equity & Entrepreneurship Fund (EEF)

1 June 2009

Bangladesh Fund

5 May 2011

(2.10) Management of ICB


The head office of the corporation as per the requirement of the ordinance of ICB is
located at Dhaka. The general direction and superintendence of the corporation is created
in a board of directors, which consist of 11 persons including the chairman and managing
director of ICB. The board of directors consists of the following directors:
The chairman to be appointed by the government.
The directors to be appointed by the government from among persons serving

under the government.


One director to be nominated by the Bangladesh Bank.
The managing directors, Bangladesh Shilpa Bank, Ex-Office.
The managing directors, Bangladesh Shilpa Rin Sangstha, Ex-office.
Four other directors to be elected by the share holders other than the

government, BB, BSB, & BSRS.


The managing directors of ICB to be appointed by the government. The board in
discharging its functions acts on commercial consider rations with due regard to the
interests of industry and commerce, investment climate, capital market, depositors,
investors and to the public interest generally and is guided in question policy by the
institutions, if any, given to by government which shall be sole judged as to whether a
question is a question of policy or not.

(2.11) Board of Directors of ICB


Board of Directors who decides the composition of each committee determines the
responsibilities of each committee. The board of directors, the pinnacle body of ICB,
formulates policy guidelines, provides strategic planning & supervises core activities &

12

performance of management while the board of directors remains accountable to the


company & shareholders.

Chairman

Dr. S. M. Mahfuzur Rahman

Managing Director

Md. Fayekuzzaman

Directors

Dr. Md. Zillur Rahman


S.M. Moniruzzaman
Syed Abdul Hamid
Mr. S.M. Aminur Rahman
Mr. Md. Rezaul Karim
Kazi Shofiqul Azam
Mr. Gokul Chand Das
Pradip Kumar Dutta
Dipika Bhattacharjee

Secretary

(2.12) Description of ICB Organ gram


Managing Directors Secretariat controls the total internal activities of Investment
Corporation of Bangladesh and provides the information to the board of directors and
government. It also called the annual general meeting of Investment Corporation of
Bangladesh.
Internal Control & Compliance Division

Audit Department:
Audit department manages the overall audit of Investment Corporation of Bangladesh
and it also prepare internal audit for providing to the government yearly audit officer. It
preserver all the financial transactions for the audit preparation.
Organization & Methods Department:

13

Organization & Methods Department provides the new information about how to change
the organizations overall performances. And it also provides the methodology about how
the organization moves forward.
Inspection & Compliance Department
Inspection & Compliance Department does the internal inspection of different
departments for the accountability of the accounts and human resources, especially those
terms which has some questioned to be faced for accountability.
GM Administration:

Trustee Division
Trustee Division has two departments. These are:
** Trustee Department:
ICB is acting as trustee to the debenture issue and asset-backed securitized bonds. ICB
acted as trustee to the issue of 17 companies of which 7 companies has been redeemed
successfully.
** Custodian Department:
To act as the custodian to the public issue of Open-end & Closed-ended Mutual Funds,
ICB provides professional services. It also acts as the Banker to the issues and provides
similar services through the network of its branches.
Legal Affairs Division
In Legal Affairs Division:
*** Law Department:
This department handles all the legal affair of ICB.
Prepare legal documents, advance agreements, share agreements, demand
promissory notes, memorandum etc.
process litigation cases, prepare legal notice and refer cases to legal advises and
coordinate with legal adviser in the court.
Prepare necessary memos for placement in the board meeting relating litigation
& legal affair.
*** Documentation Department:
14

This department collects all the legal documents of ICB.


Prepare documents, advance agreements, share agreements, memorandum etc.
Ensure the proper documentation.

Establishment Division:
Establishment Division has two departments. These are:
Procurement & service Department

This department deals with purchase and sales office supplies, office
Equipments etc.
Maintain the utility service like telephone bill, electric bill etc.
Examine the quality of the product purchase.
Register and transfer unit certificates
Maintain separate register for unit holder CIP
Verify signature of transfer deed
Issuance dividend warrants and CIP c-Certificates to the holders.
ICB Branches and Bank Branches as per requirement
Coordinate all activities relating to procurement and issue of unit certificates.

Real Estate Department


Introduce new financial products.
Maintaining liaison, with SADF.
Provide creative ideas to diversify the business.
Administration Division
Administration Division has three departments. These are:

Human Resource Management Department


15

Appoints the manpower in the corporation.


Processing of all promotion and retirement.
Controlling of attendance.
To maintain the national salary scale, select the salary, pension, increasing the
annual salary etc.
Arrange training for the employee both in home and abroad.
Maintaining liaison with ICB employees unions.

To give and complete the different steps of training for the officers/personnels
in the corporation.
To organize the seminar/workshop, symposium, if needed take specialist.
Payroll and compensation.
HR - Information system.
Preparing HR Budget.
Adhering to the statutory compliances like PF, ESI and other beneficiary
activities.
According to need, others function given by administration.
According to need, others functions which are given by administration

Discipline, grievance & appeal Department


Make necessary rules, regulation & policies for efficient administration of the
corporation.
Taking action against the employee who gradually violets the rules & regulation
of the corporation.
Maintaining all types of disciplinary action of the corporation.
For making a well trained administration must me selected the rules and
regulation.
Function of personnel discipline.
Take short term and long term development planning for the executive of a
corporation.
Maintained the relation with the ministry.
16

Functions which are all related with the officers union.

Pension & welfare Department


Dealing retirement benefits i.e. gratuity, pension, provident fund etc.
Determine corporations employees pension and gratuity
Monthly pension payment
Pension holders medical alliance define
Future fund fee collection and reserve
Invest pension fund in a profitable field
Savings welfare accounts
Policy Formulation/ Framing of Rules
Interpretation of policy/ rules
Relaxation of rules in individuals cases
Exemption from rules
Facilitating Redressed of grievances
GM Accounts & Finance

Accounts Division
Accounts Division has two departments. These are:
*** Central Accounts Department:
Preparation of salary statements, overtime Statement.
Maintaining liaison with commercial audit and external audit.
Preparation of annual budget and revise it as per requirement.
Preparation of Financial Statement of the corporation.
Arranging call loan & term deposit.
*** Local Accounts Department:
Preparation of salary statements of local officers.
Maintaining liaison with commercial audit and internal audit.
Provide information for preparing annual budget.
17

Finance Division
Finance Division has two departments. These are:
*** Fund Management Department:
There is a decision making board in order to manage different Mutual Funds. As per
boards decision securities are bought under different Mutual Funds. At the same way
securities are sold. In case of new Mutual Fund subscribes for public issue. ICB authority
is made portfolio earlier by its own finance and given it name. After that it is published
on any newspaper as prospectus. By studying this prospectus public response whether
they will buy the Mutual Fund or not.

GM Branch & Subsidiaries

Local Office:
Local Office does the shares related transactions. It does the whole work of an
organization but in a shorter level. It mainly operates the divisional branches situated in
different location of Bangladesh. These branches provide their information to the local
office and local office provide them to head office in a prepared way. These branches are:
Chittagong Branch
Rajshahi Branch
Khulna Branch
Sylhet Branch
Barisal Branch
Bogra Branch

ICML:
Underwriting of initial public offering of shares and debentures
Underwriting of repeat public offering of shares, debentures and bonds
Underwriting of right issue of shares
Issue management
Managing investors account
18

Purchase of shares and debentures including placement and equity


participation
To provide consultancy services for disinvestments programs of the
government
Dealings of others matters related to capital market operation

AMCL:
The activities of the company invigorated the mutual fund industry and already
established itself as one of the fast expanding asset management company up to 30 June
2009,the company floated two open end mutual funds and five closed end mutual funds.

ISTCL:
Provide online trading with DSE and CSE
Provide brokerage service for buying and selling securities.
Work as full service DP in the central depository BD Ltd.
Provide facilities to participate in automatic trading system

ICB Asset Reconstruction Ltd.(Proposed)


ICB Asset Reconstruction Ltd is newly proposed subsidiary of Investment Corporation of
Bangladesh. Investment Corporation of Bangladesh wants to expand its business, as a
result ICB Asset Reconstruction Ltd is proposed as one of the desired business part. In
the fiscal year 2012-13 this business segment will be come to light.
Subsidiary Affairs Division
It is revealed that ICB and its subsidiary companys played considerable role in capital
market of Bangladesh (DSE and CSE). As a single statutory institution it contribution 6-8
% of total turnover in both DSE and CSE Through participation in both the primary and
secondary markets to quicken the pace of industrialization to foster and enlarged a vibrant
and sustainable capital market in the country and thereby facilitating strength economic
condition of Bangladesh.
Branch Affairs Division
Branch Affairs Division co-ordinate the different branches of Investment Corporation of
Bangladesh with the third party or head office. It maintains the legal issues and
19

documentation with the following department for the perpetual work condition of the
branches.
GM ICT & Depository

Hardware & Communication Division


Hardware & Communication division has two departments. These are:
*** Hardware & Communication Department
Servicing of hardware & Software troubleshooting.
Purchase the necessary hardware for different departments.
Providing necessary information about computer to the employee.
Provide services for the hardware problem.
*** Data Admin & MIS Department
Maintaining bulk amount of data.
Providing assistance to the officials for being efficient Computer use.
Provide different information system strategies.
Manage the system between data user & provider.

Software Division
Software Division has two departments. These are:
*** Programming Department
Developing new program.
Establish new and updated program for the data preservation.
Provide higher program for the presentations.
*** System Analysis Department
Maintaining the network system.
Developing new software.
Servicing of hardware & Software troubleshooting.
Maintaining bulk amount of data.
20

Providing assistance to the officials for being efficient Computer use.


Depository Division
In the Depository Division have two departments. These are:
*** Shares Department
To avoid complexity, the function of department is divided into four sections:
1. Funds Portfolio section
2. Investors portfolio section
1.

Funds Portfolio Section

Receiving of IPO shares, making arrangement of filling up of 117 forms and


splitting, up shares information market.
Delivering of sold securities to the transaction department.
Receiving Of bonus and right share, and allocates properly.
2. Investors Portfolio Section
The purchase of shares in the investors accounts.
Receives shares from the transaction department for preservation.
Receives shares and debenture from the companies after registration
Collect bonus or right shares and allocate to accounts accordingly.
*** Security Reconciliation Department
To avoid complexity, the function of department is divided into four sections:
1. Sale and Withdrawal Section
2. Dividend Collection Section

1. Sale and Withdrawal Section


Receive sale and withdrawal order from the investors department.
Examine the actual existence of securities and to get out of the same from the
volt.
Give information to the computer department about salability of the Securities.
Making arrangement for the signature of attorney & filling up of 117 forms.
Send the securities to the investor department in case of withdrawal.
21

2 .Dividend collection Section


Procurement of dividend and interest declared by the different companies

Mutual Funds Division


It has two departments. These are:
*** Unit Fund Department
It is an open-end mutual fund scheme launched in April 1981, through which the small
and medium savers get opportunities to invest their savings in a balanced and relatively
low risk portfolio. ICB has so far declared attractive dividends on units every year
ranging from Tk. 11.50 to Tk. 25.00 per unit. Investment in units enjoys tax benefits,
amount being applicable as per law. However, under the ICBs restructuring program new
unit certificates are being sold by ICBs subsidiary company, the ICB Asset Management
Company Ltd.

Act as manager of unit fund.


Sell and issue unit certificate to the applicant.
Repurchase unit certificate.
Co-ordinate activities of Bank Branches in respect of unit sale and repurchase.
Spilt and consolidate unit certificates is as requested by unit holders.
Issues and distributes Cumulative investment plan (CIP) Certificates.
Cancellation of surrender certificate.
*** Mutual Fund Department
ICB has so far floated eight closed end mutual funds. The First ICB Mutual fund was
floated on 25 April 1980, while the Eighth ICB Mutual Fund was floated on 23 July
1996. The aggregate size of these funds is Tk. 17.50 crore. Dividends declared on the
funds were very attractive ranging from 15.00 to 210.00 per certificate for 2003- 04. One
can invest in such funds through the stock exchanges with which these funds are listed.
Through corporate restructuring, new mutual funds are being floated through ICB Asset
Management Company Ltd. a subsidiary of ICB.
Act as manager of all mutual funds.
Prepare prospectus in connection with the floatation of mutual funds.
Scrutinize the applications for allotment Of Shares against applications made.
22

Arrange for lottery if necessary for allotment.


Issue allotment letters/share certificates.
Arrange refund of excess application money.
Effect transfer and registration of certificates
Issue dividend warrants to the holders of the certificates.
Make correspondences with the branches of the Corporation, Banks and
Certificate holders.
GM Operation
Implementation & Recovery Division
In Implementation & Recovery Division there have two departments. These are:
*** Implementation Department
Disbursement of loan as per sanctioned.
Monitor the progress of the project.
Provide counseling, for solution of any dispute and problems.
*** Recovery Department
Measures operational performance.
Meet the sponsors as the recovery would be smooth.
Identifying the sick project and restructure them.
Assist law department in case of default.

Merchandising Division
Merchandising Division has two departments. These are:
*** Investors Department
The Investors' Scheme was introduced in June 1977. Over the years this scheme has
grown tremendously. ICB, at its discretion, may grant up to two times loan against the
assets of an account subject to a maximum limit of Tk. 3.00 lac. To help the investors to
develop diversified and balanced portfolio to minimize risk and earn a reasonable return,
ICB operates and manages only the old accounts and new accounts are being opened and
managed by the ICB Capital Management Ltd. a subsidiary of ICB.
Opening and maintaining of investors account Sanction loans against deposit in
Investment accounts, provide account loan margin at 1:2 ratio subject to ceiling
23

of Tk.-. 3 Laces at a rate of Interest of 13. 5 %.


Counsel investors in respect of building up their portfolios.
Withdraw funds and shares from investment accounts.
Issue Income tax certificates. Portfolio Statement account statement etc.
Receive direct applications against public issue of shares.
Receive allotment letters from the companies.
Processing of withdrawal of fund.
Calculate quarterly interest of all investors account.
*** Banker To The Issue Department
As part of ICBs, business diversification programs, the corporation introduced bank
guarantee scheme during the year 2002-2003. ICB provides:
Bid Bond for enabling the business people to participate in any tender or
bidding.
Performance Bond for helping the business community to continue the business
smoothly by fulfilling their obligations promised by them to their clients
Customs Guarantee for solving different disagreements between the customs
authority and the business classes at the initial stage. The maximum limit of
guarantee is Tk. 2 crore and would be issued against at least 20% cash and 80%
securities that can be easily liquidated or against100% cash margin. Reguarantee from other financial institution is required for guarantee against the
amount exceeding Tk. 2 crore.
Planning & Research Division
Planning & Research Division has two departments. These are:
*** PRBD Department
PRBD department creates the plans and research for the business possibility of any
project. And it also provide the new era of business, how to create a new venture.
*** Portfolio Management Department
Being the largest institutional investor ICB contributes significantly to the development
of the country's capital market through active portfolio management, which is one of the
important functions of ICB. As on 30 June 2008, the market of securities of ICBs
investment portfolio was Tk.394.35 crore against the net investment value of Tk.421.12
Credit Division
24

Credit Division has three departments. These are:


*** Lien & General Credit Department
Lien & General Credit Department works as an agent.
It works between Investors.
It creates bridge financing.
*** Appraisal Department
Receiving application from the entrepreneurs.
Appraise the proposed project.
Submit the appraisal report to the board and consortium.
Visit the project and make a feasibility, study on the proposed project.
*** Leasing Department
ICB provides lease finance mainly for machinery, equipment and transport. ICB is in a
position to provide professional advice and financial assistance to the intending clients.
The period of lease, rental, and charges and other terms and conditions are determined on
the basis of type of assets and the extent of assistance required by the applicants since
introduction of this scheme in 1999 good responses have been received from the
intending lessees.
GM EEF
The government of Bangladesh set up an Equity Development Fund in the budget 200001 known as Entrepreneur Equity Fund (EEF) with a view to encouraging the investors to
investment in the rather risky but promising to sectors namely software industry and food
processing/ agro-based industry. ICB and Bangladesh Bank signed a sub-agency
agreement in 1st June, 2009 to develop a fund management. During the year 2010-11
ICB made total commitment of EEF assistance of Tk. 803.67 crore to 504 projects.
During 2010-11 a total number of 85 project has been disburse an amount of Tk. 75.07
crore to 78 projects which are agro-based and 7 project as ICT.As a result total amount of
Tk. 84.17 crore has been disburse to 102 projects on 30,june 2011. Therefore opportunity
of employment near 15521 no. of people has been created under this scheme.
EEF Administration Division
EEF Administration Department
EEF Audit & Accounts Department
EEF Recovery & Legal Affairs Division
EEF Implementation & Recovery Department
EEF Legal Affairs Department
25

EEF Appraisal Division


EEF Agro Department
EEF Non-Agro Department
Work Related
ICB is a leading financial institution in Bangladesh. Basically they provide two months
raining to the internee. But their training program is quite different. There is no practical
training or work but the internee can have better understandings about the organization
after completion of the internship or training program.
ICB has more than thirty distinct departments. It has designed a work schedule for the
internee. Based on which each & every internee has to go in different departments or
subsidiary companies.
So basically our main duties & responsibilities were to visit its different divisions &
departments in accordance with the schedule. Then we went to the department that is
depicted in the schedule on that date to gather knowledge & as well as experience.. Then
we closely observed the functions & activities of the department. We also observed that
how the employees of the department perform their respective or assigned functions.
Then we collected our relevant data, if possible either in raw form or in the form of
printed copies.

(2.13) Division & Department of ICB


The entire organization of ICB is functionally divided into two broad groups namely
Wing and Administration Wing.
The functions of Operation wing is involved in the activities related to Project
Financing Research, Computer, Launching of Unit Fund and Mutual Fund. Maintenance
of investors Accounts, Shares, Transaction etc.
The functions of administration Wing is involved with the activities relating to
Administration, Accounts. Implementation and monitoring of projects, recovery, public
issue and Legal matters.
The functions of the two wings are looking after by two General Manager who are
responsible to the Managing Director. All branches are supervised by General Manager
(GM) Administration Division.
The functions of operation wing:
26

The operation wing is involved in the activities related to project financing research,
computer, launching of unit fund and mutual fund, maintenance of investors accounts,
shares, transaction etc.
The functions of administration wing:
The administration wing is involved with the activities relating to administration,
accounts, implementation and monitoring of projects, recovery, public issue and legal
matters. The functions of the two wings are looked after by two General Managers who
are responsible to the Managing Director. All branches are supervised by General
Manager (GM) administration division.
Each wing is functionally sub-divided into divisions which are headed by Deputy General
Manger (DGM). Besides the above two major wings, there are two divisions which are
directed under supervision of Managing Director i.e. audit and methods division
secretarys division.
The description of the division and department is given below:

SL no.
01.

Department
Personnel

Division
Administration

02.

Establishment

03.

Investors

Merchandising

04.

Shares

05.

Transactions

06.

Unit sales

Funds

07.

Unit registration and procurement

08.

Mutual funds

09.

Central accounts

Account and finance

10.

Project loan accounts

27

11.

System analysis

Loan appraisal

12.

Programming

13.

Data management

14.

Loan appraisal

Loan appraisal

15.

Economic and business research

16.

Implementation

Implementation
recovery

17.

Recovery and follow-up

18.

Public issue

Legal affairs

19.

Law

20.

Audit and methods head office

Audit and method

and

Personnel department:

This department deals with the human resource of the organization. The main functions
of this department can be described as follows:
To make necessary rules, regulation, policies for efficient administration of the

corporation.
To recruit personnel for appointment in the corporation.
To handle all personnel matters including confirmation, posting, transfer,

fixation, leaves etc.


Processes all promotion, time-scale encasement etc.
Processes resignation, retirement cases.
Deals with retirement benefits including gratuity, pension, provident fund etc.
Controls attendance.
Handles national pay scale, fixation, increment etc.

28

Deals with all types of disciplinary action.


Prepares long-term and short-term plans for executive development in the

corporation.
Explores more sources of financing of foreign training.
Arranges in service training where, among other, foreign trained officers will in

turn train other will in turn train other officers through lectures.
Arranges training of new recruit institute of the corporation.
Runs training institute of the corporation.
Arranges seminars/symposium/workshops where experts in the line may be
invited to deliver lectures.
Procures training equipment and facilities for training manpower.
Deals with all matters relating to ICB employees union.
Deals with all matters relating to ICB officers association.
Develops appropriate machinery for handling and arrive at a solution.
Establishment department:
This department deals with purchase and sales of office supplies, office equipment etc.
They also maintain the utility service like telephone bill, electricity bill etc.
This department divides cost into two categories: revenue cost and fixed cost. For fixed
cost, depreciation is charged at straight-line basis.
There are two purchase commodities to accomplish the purchase. There remains a quality
control committee to examine the quality of the product purchased. For the purchase of
the products, this department gives tender offer to the listed suppliers. In case of selling
of scraps and wastage, the tender offer is also followed.

(2.14) Function of merchandising division:


Investors:
To enhance the merchandising operation of ICB this department is created. Under this
department, there remains investor scheme which started on 13th June 1977 to collect
funds from the small and middle class investors to boost up the capital market. This
scheme opens a new channel of investment for small and middle investors by establishing
a window for buying and selling securities listed with the stock exchanges. Thus, small
investors may effectively participate in the industrialization of the economy along with
the entrepreneurial group and reap the harvest thereof. Investors scheme has been
introduced with the objective of helping the small investors grow their savings through
investment accounts to be maintained under the scheme. An account under the ICB
investors scheme would help investors to bring reasonable returns on investment in
29

sound company shares which are expected to bring attractive returns for them in the form
of divided and capital appreciation.
The followings are the functions of this department:
Opens and maintains investors accounts for individual investors. Investors
department provides loans to their account holder currently at 1:2 ratios subject
to a ceiling of TK. two lack and confessional rate of interest, presently 13.5%
per annum. The loan is giving to the investor not in cash rather share
certificates.
Investors department receives purchase and sells order of securities in a
prescribed form from the investors.
Some time investors department gives suggestion about purchase and sale
decision of the investors for the betterment of their investment.
Investors department supplies three types of statements to the investors namely
financial statement, portfolio statement and balance sheet.
Buy and sell shares on behalf of the investors both from the primary and
secondary market.
Implement negotiated over-the counter transaction between investment account
holders.
Withdraw funds and shares from investment accounts.
Provide service to investment account holder.
Receive direct applications against public issue of shares.
Prepare a list of applicants and send it to the companies along with applications
and application money.
Receive allotment letters from the companies.
Collect commission as banker to the issue and brokerage commission from the
companies.
Keep financial records of all investment accounts.
Make periodical reconciliation of investment accounts.
Processing of withdrawal of funds.
Confirm fund position of individual accounts.
30

Posting of all transactions.


Calculate quarterly interest of all investors accounts.
Shares department:
Share department is the custodian of all shares held by ICB. This department facilitates
the physical transfer of shares. For performing the above mentioned activities share
department is divided into five sections. These sections are:
Investors portfolio section.
Sales and withdrawals section.
Funds portfolio section.
Securities reconciliation section.
Procurement section.
Investors portfolio section performs the following activities:
Receives shares from transaction department for preservation.
Sends shares and debentures to the company at the time of book closer and
receives shares and debentures after registration.
Collects bonus and right shares from the companies.
Selection of ICB officials to participate in the AGM of different companies.
Sales and withdrawals section do the following jobs:
Receive sales and withdrawals order from investors department.
Examine the actual existence of securities and get them out from the vault.
Send information to the computer department about salability of the securities.
Make arrangement for the signature of the attorney and filling up of 117 forms.
Send securities to the transaction department in case of sale and to the investors
department in case of withdrawals.
The fund portfolio section does the following tasks:
This department deals with the sales and withdrawals of mutual fund portfolio,
unit fund portfolio and ICB portfolio.
31

Providing information to the transaction department about the salability of


securities.
Delivering the sold securities to the transaction department.
Taking up of shares committed by the corporation, if necessary.
The securities reconciliation cell:
The securities reconciliation cell is concerned with the reconciliation of securities to
check any discrepancy arise to the actual number and the amount in the accounts
Procurement section is engaged with the collection of dividends interest etc. declared by
the companies whose shares are held by ICB and its other accounts. This section updates
the statement related to book closure, AGM, dividend declaration etc. After collecting
dividends, this department distributes it to the concerned shareholders and different
portfolios. It transfers bonus and right shares to the investors and fund section after
collection.
Transactions:
Transaction department executes the sales and purchase order of shares of the following
different portfolios: ICB, unit fund, mutual fund and government portfolio and the order
form investors of investment department arid the order form ICBs branches. For the
portfolios order the securities purchase and sale committee take decision every morning
what share should be bough and what should be sold for that day.
The sale and purchase orders of the investors constitute demand for execution in this
regard. Before execution, in case of sale, this department has to get aware about the
physical existence of shares from the share department. The corporation regularly
participates in the trading through online trading system which is added recently (10th
December, 1998).

(2.15) Development Activities


Equity support through consortium arrangement
ICB invests in different companies through equity participation singly/under consortium
arrangements by different Banks and financial institutions.
Counseling to the Government
In case of Govt. divestment program ICB provides professional & financial advice
through analyzing the companies to be privatized and the attitude the prospective buyers.
Government enterprises intending to go public often seek professional financial advice on
corporate restructuring and reengineering, ICB through its expertise provides such
advice.

32

Term deposit
ICB receives deposit as term deposit from individuals/institutions offering attractive and
negotiable interest rate which helps to mobilize savings for profitable investment in
securities.
Disinvestment Program
ICB is actively associated with disinvestment process. With a view to off loading of
Govt. share holding through the Stock Market ICB has been entrusted with the
responsibility of selling Govt. owned shares of different listed Companies.

Chapter-3
Overall Evaluation of the ICB Mutual Funds
3.01: What is the meaning of Mutual Fund?

33

Financial Results of ICB


Total Expenditure
During 2012-13 The total expenditure of the corporation stodd at Tk.454.61 crore as
compared to Tk. 283.05 crore in 2011-12 showing an increasing of 60.61 percent over the
previous year. The major heads of expenditures were interest expanse of Tk. 365.06 crore
which was Tk. 184.69 crore in previous year, showing a increase by 97.66 percent. other
operating expanses was Tk. 37054 crore compared to Tk. 34.97 crore in 2011-12,
registering an increase by 7.33 percent higher than that of the previous year, it was lower
than the budgeted amount. During the year provision of Tk. 1.46 crore was provided
against loans and advances.
Total Income
In 2012-2013 Investmennt Corporation of Bangladesh earned a total income of Tk.
848.75 crore as compared to Tk.668.35 crore earned in 2011-2012 showing an increased
by 26.99 percent. The major heads of income ICB were capital gain, dividend income,
interest income and income from fees and commissions. During 2012-2013 income from
all heads including interest income went up compared to those of the previous year. Of
34

the total income of Tk. 848.75 crore the highest income being the capital gain of Tk.
494.70 crore (58.29 percent) followed by interest income of Tk. 254.93 crore (30.04
percent) dividend and interest income on securities of Tk. 69.88 crore (8.23 percent) fees
and commissions of Tk. 21.50 crore (2.53 percent) and Tk, 3.17 crore (0.04 percent) as
income from other sources. Due to efficient management of portfolio and favourable
market condition income from capital gain stood at Tk. 494.70 crore in 2012-2013, which
was 33.65 percent higher than the capital gain of Tk. 370.50 crore of the previous year.
despite stiff competetion at the market by dnt of prudential cash and fund management,
though the corporation earned gross interest income of Tk. 254.93 crore lower than that
of previous year. Dividend income increased by 36.18 percent in the reporting year
compared to previous year due to satisfactory dividend performance by the companies
selected in the portfolio.
Gross Profit
The gross profit before provision and tax was Tk. 446.16 crore in 2012-13 compared to
Tk. 448.68 crore in 2011-12, showing an increase of 0.56 percent lower than last year.
Net Income
During 2012-13, ICBs net profit after tax increased to Tk. 394.14 crore from Tk. 385.29
crore in 2011-2012 showing an increase of 2.30 percent.
Appropriation of Profit
The board of director of ICB recommended appropriation of Tk. 448.47 crore which
includes net profit of Tk. 394.14 crore of 2012-13 and retained profit of Tk. 54.33 crore
of the previous year.

Shareholding Position
The Shareholding Position as on 30 june 2013 is as follows:
Shareholders

No. of Shareholders No. of shares


the 1
of

9112500

%
Shareholders
27.00

2.State owned commercial 4


banks

7670359

22.73

3.Development
institutions

financial 1

8650460

25.63

4. State owned insurance 2

4170020

12.36

1. Government of
peoples
Republic
Bangladesh

of

35

corporation
5.Denationalised
private 2
commercial Banks

3066270

9.08

6.Private commercial banks 11


& mutual Fund

91483

.27

7.Other institution

72

73247

.22

8.General public

2132

915661

2.71

Total

2225

33750000

100.00

Table: Shareholding Position as on 30 June 2013.

Financial Analysis
The financial results and some key financial ratios of ICB pertaining to profitability,
liqudity and solvency are given in the following table:
Table- Statement of financial results & some key financial ratios
Financial Ratios

2012-13

2011-12

Increase/Decrease(%)

Net Profit to Total Income (%)

46.44

58

(19.93)

Return on Investment (%)

8.01

17.78

(54.95)

Return on Equity (%)

11.74

17.80

(34.04)

Earnings Per Share(Tk.)

116.78

114.16

2.30

Book value per share (Tk.)

656.02

1031.62

(36.41)
36

Dividend yield (%)

2.23

2.51

(11.16)

Dividend Payout Ratio (%)

68.07

42.81

59.00

Price earning ratio (times)

30.57

17.05

79.30

ratio 35.68

49.58

(28.03)

Capital
Adequacy
(percentage)

Financial ratios and data analysis


Return On Investment (ROI)
Return on investment, or ROI, is the most common profitability ratio. There are several
ways to determine ROI, but the most frequently used method is to divide net profit by
total assets.
A performance measure used to evaluate the efficiency of an investment or to compare
the efficiency of a number of different investments. To calculate ROI, the benefit (return)
of an investment is divided by the cost of the investment; the result is expressed as a
percentage or a ratio.

Return on Equity (ROE)


Return On Equity measures of how well a company used reinvested earnings to generate
additional earnings, equal to a fiscal year's after-tax income (after preferred stock
dividends but before common stock dividends) divided by book value, expressed as a
37

percentage. It is used as a general indication of the company's efficiency; in other words,


how much profit it is able to generate given the resources provided by its stockholders.
Investors usually look for companies with returns on equity that are high and growing.
ROE shows how well a company uses investment funds to generate earnings growth.
ROEs between 15% and 20% are generally considered good.
Year 2013
ROE = Net profit / Total Equity
= 11.74%
Interpretation:
ROE 11.74% (2013) are generally considered good. This means ICB generated .1174 of
profit for every 1 taka of shareholders equity last year, giving the stock an ROE of
11.74%.Which lower than past year 17.80% ( 2012).

Dividend yield
The dividend yield or the dividend-price ratio of a share is the company's total annual
dividend payments divided by its market capitalization, or the dividend per share, divided
by the price per share. It is often expressed as a percentage.
Dividend yield is used to calculate the earnings on investment (shares) considering only
the returns in the form of total dividends declared by the company during the year.
Year 2013
Market price per share / Dividend per share = Dividend yield
Interpretation
38

This dividend yield shows that ICB pays out 2.23% in dividends last year relative to its
share price.

Dividend Payout Ratio


The dividend payout ratio measures the percentage of a company's net income that is
given to shareholders in the form of dividends. The percentage of earnings paid to
shareholders in dividends.

Earnings per share (EPS)


Earnings per share are the total earnings divided by the number of shares outstanding.
Companies often use a weighted average of shares outstanding over the reporting term.
EPS can be calculated for the previous year ("trailing EPS"), for the current year
("current EPS"), or for the coming year ("forward EPS"). Note that last year's EPS would
be actual, while current year and forward year EPS would be estimates.
Earnings per share are the amount of earnings per each outstanding share of a
company's stock.
39

Year 2013
EPS = No of . share outstanding Net / Profit
= 120.78
Intrepretation:
For each outstanding share of ICBs stock, they earn 120.78 taka(2013). Higher the EPS,
better the company, it is higher than the past year 2012.

Price earnings ratio


The price-to-earnings ratio (P/E) is a valuation method used to compare a companys
current share price to its per-share earnings.
Year 2013
P/E ratio = Market price per share / EPS
= 30.57 ( Times)
Interpretation:
The PE ratio 30.57 (times) means for every 1 taka of earning investors will pay 30.57
taka. As PE ratio is 30.57 it considered a fair value of stock & means as a growing
company. In general, a high PE suggests that investors are expecting higher earnings
growth in the future compared to companies with a lower PE.

40

Book value per share:


Book value per share indicates the book value (or accounting value) of each share of
stock. Book value is a company's net asset value, which is calculated by total assets
minus intangible assets and liabilities. A relatively high book value per share in relation
to stock price often occurs when a stock is undervalued.
Book Value per Share is a recalculation of book value, wherein the total book value is
divided by the number of shares outstanding. This number is particularly useful in
quickly calculating the price to book ratio.
Year 2013
Book value per share = Total Equity NO / of . outstanding shares
Interpretation:
Traditionally, a company's book value is its total assets minus intangible assets and
liabilities. So the book value per share (2013) 845.35 taka indicates the value remaining
for shareholders after all assets are liquidated and all debtors are paid. Which was in
(2012) 656.02

Debt to equity Ratio


Debt-to-Equity ratio is the ratio of total liabilities of a business to its shareholders' equity.
It is a leverage ratio and it measures the degree to which the assets of the business are
financed by the debts and the shareholders' equity of a business.
Year 2013
41

Debt-to-Equity ratio = Total Debt / shareholders equity


= 31.75%

Capital Adequacy Ratio


Capital Adequacy Ratio, also known as Capital to Risk Assets Ratio, is a ratio of a bank's
capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a
reasonable amount of loss and complies with statutory Capital requirements.

Operating profit margin


Operating profit margin measures the percentage of each sales dollar/ (taka) remaining
after all costs and expenses other than interest, taxes, and preferred stock dividends are
deducted; the pure profits earned on each sales dollar /(taka) .
Operating profit margin = Operating Profit / Sales Operating Profit / Sales
2013
= 4507358923/4,862,723,224
4,387,358,923/4,762,723,224

2012
=

42

= 0.926920 = 0.921187043
(**Note: Sales here as total operating income)
Interpretation
As we know that the operating profit margin high is preferred, here we see that the past
year 2012 operating profit margin is lower than present year 2013.

Current Ratio
Current Ratio it is a measure of liquidity calculated by dividing the firms current assets
by its current liability.
Current Ratio is a liquidity ratio that measures a company's ability to pay short-term
obligations, the higher the ratio, the more liquid the company is. Current ratio is equal to
current assets divided by current liabilities. If the current assets of a company are more
than twice the current liabilities, then that company is generally considered to have good
short-term financial strength. If current liabilities exceed current assets, then the company
may have problems meeting its short-term obligations.
Year 2013
Current Ratio = Current Asset / Current Liability
= 1.22 : 1

43

Total Asset Turnover


Total Asset Turnover indicates the efficiency with which the firm users its assets to
generates sales. The amount of sales generated for every dollar's worth of assets. This is a
measure of how well assets are being used to produce revenue, also called asset turnover.
Total Asset Turnover = sales / total asset
= 4,762,723,224/55,660,371,785
= 0.075667578
Interpretation
The total asset turnover of ICB is 0.075667578 in 2013 shows that it is lower than past
year.

44

Chapter-4
Findings, Recommendations and Conclusions

4.1: Introduction:

45

Findings of the study


Based on the financial analysis segments and the brief description of Financial
Performance Analysis on Mutual Fund of Investment Corporation of Bangladesh
following findings are originated:- The officials are not interested in supplying available data due to confidential
limitations.
Lack of good security hinders the way to make efficient portfolio.
EOR 11.74% (2013) are generally considered good. This means ICB generated .
1174 of profit for every 1 taka of shareholders equity last year, giving the stock an ROE
of 11.74% , which is better than past year 17.80% (2012).
This dividend yield shows that ICB pays out 2.23% in dividends last year relative
to its share price.
For each outstanding share of ICBs stock, they earn 120.78 taka(2013). Higher the
EPS ,better the company, it is higher than the past year116.78 taka(2012), so the ICB is in
better condition.
The PR eretn 30.57 (times) means for every 1 taka of earning investors will pay
30.57 taka. As PE ratio is 30.57 it considered a fair value of stock & means as a growing
company. In general, a high PE suggests that investors are expecting higher earnings
growth in the future compared to companies with a lower PE.
Traditionally, a company's book value is its total assets minus intangible assets and
liabilities. So the book value per share (2013) 845.35 taka indicates the value remaining
for shareholders after all assets are liquidated and all debtors are paid. Which was in
(2012) 656.02 taka
Securities that are included in the Mutual Funds are not reshuffled regularly.
Investor cannot know information due to not arrange for seminar, symposium and
workshop by this Branch.
Lack of expert to solve computer related problem.
Certificate holders sometimes do not get the warding timely. This causes harassment
to the certificate holders.
During preparing the thesis/ Project report on ICB, I have found some problems, which
can affect the fund future and the confidence of the investors. There are some problems
related to fund. They are as follows:
From Capital market point of view:
Dividend is one of the sources of income for the mutual fund. Most of the
companies do not declare dividend up to satisfactory level.
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The rate of supply of fundamentally strong securities is very low.


Political unsteady position also hearts the investors sentiment in the market and
thereby leads to flat the stock market.

Conclusion
To conclude this report it can be said that it was a great opportunity for me to study the
financial activities of the ICB as well as its Mutual fund. ICB plays a vital role to
encourage and broaden the base of investment and thereby to help develop the capital
market in Bangladesh. My main focus of this report is Financial Statements and
Theoretical Performance Analysis on Mutual Fund of Investment Corporation of
Bangladesh. From the analysis, it found that the Companies position is good.
According to CRAB, ICB has minimal credit risk involvement. The main reason behind
this there was no binding in size. The study is the first time for me to get the opportunity
for conducting such an elaborate study in a different field. Hence, I do not know how far I
am successful in writing this report. But it is true; I have tried sincerely to discharge my
duties with Zeal & enthusiasm and to the best of satisfaction. However, I remain to
apologize for any error or omission, which may happen unwillingly.

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Recommendation
Computer shortage is their problem thats why their maximum work related paper is
written or printed copy. For this reason they need to use modern tools & technology of
human resources management.
Information should be available in websites and its all branches.
ICB needs to appoint more skilled people for Personnel Department. It is necessary
to take right decision in right time.
ICBs recruitment advertisement is not so detail oriented. It should contain job
description & job specification, so that the applicants can be easily short listed.
Orders are to be executed quickly.
Though ICB has no own permanent building, it is very important to take a
permanent office building to save cost.
Training program should be arranged for developing of management efficiency.
The organization should be fully computerized.

References
Annual Report of Investment Corporation of Bangladesh (2012-13)
Annual Report of Investment Corporation of Bangladesh (2010-12)
Conversation with various Departmental Assistant General Manager&Senior
Officer
Documents provided by ICB
Report on Performance Evaluation of ICB and Mutual fund
www.icb.gov.bd
www.dsebd.org

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Appendix: 1
List of Abbreviations
(Glossary) AGM

Assistant General Manager

HRM
HRD
HR
ICT

Human Resources Management


Human Resources Development
Human Resources
Information & Communication
Technology
Equity & Entrepreneurship Fund
Securities & Exchange
Commission
Personnel Management
Information System
Senior Principle officer
Data Entry Control Operator
Member of Lower Subordinate
Staff
General Manager
Deputy General Manager
Information Technology
Management Information
System

EEF
SEC
PMIS
SPO
DECO
MLSS
GM
DGM
IT
MIS

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