ICB

Internship Report
The Contribution of ICB Unit Fund And Mutual Fund

On
Submitted To Mrs. Shehely Parvin Lecturer & Supervisior Department of Marketing The University of Marketing.
Submitted By Muhammad Rashed Khan MBA 6Th Batch Roll-175; Sec-A Department of Marketing The University of Dhaka.
Date of Submission: October 15, 2006.
October 15, 2006 Mrs.Shehely Parvin Lecturer & Supervisor Internship Program Department of Marketing University of Dhaka Dear Madam: I am glad to submit my Internship Report for the Internship Program (MBA 6 th, 2006), herewith. I considered your remarks and instructions very carefully while preparing this report. I tried my level best to follow your schedule, format and discipline. I tried to comprehend all the areas related to this report. This has certainly enhanced my knowledge base with a practical orientation. Thank you for your consideration.
Sincerely Yours,
Muhammad Rashed Khan MBA 6TH BATCH ROLL - 175 Department of Marketing University of Dhaka
Acknowledgement
Internship is a part of MBA program. This report is based on knowledge gathered from the internship program. I have realized that partial knowledge is very much essential for Professional life and it is totally different from academic knowledge. This knowledge helps us to develop professional life and practical skills. In preparing this report first of all I express my deep gratitude to Mrs. Shehely Parvin, Lecturer of Marketing Department, University of Dhaka, who guided me properly by giving direction at different times to prepare this report. It is her guided supervision that resulted in successful completion and timely submission of the report. I have received commendable support from all the employees of all departments of ICB. I am very much grateful to my organizational supervisor Mrs. Nasrin Sultana, Assistant General manager, to give the opportunity to work at ICB. She has given me all kind official support to complete the report perfectly. At last my gratefulness to almighty Allah who has blessed me and given me strength to prepare this report successfully and smoothly. Thanks all.
TABLE OF CONTENTS
CHAPTER ONE : Introductory Part
1.1. 1.2. 1.3 1.4 1.5 ORIGIN OF THE REPORT OBJECTIVES OF THE SUTDY METHODOLOGY OF THE STUDY IMPORTANCE OF THE STUDY LIMITATIONS Pg. 7 8 8 9 9 11 12 13 13 14 14 16 17 18 18 19 20 23 24 25 27 27 29
CHAPTER TWO: ICB at a glance

2.1. 2.2 2.3 2.4 2.5 2.6 2.7 2.8 HISTORICAL BACKGROUND OF ICB OBJECTIVE OF THE ICB BUSINESS POLICE OF THE ICB SOURCES OF CAPITAL OF ICB SHARE CAPITAL OWNERSHIP PATTERN FUNCTION OF ICB SHARE PRICE TRANSFER OF SHARES
CHAPTER THREE : Organizational Structure of ICB

3.1 3.2 3.3 3.4 3.5 3.6 DIVISION & DEPARTMENT OF ICB MANAGEMENT OF ICB ORGAN GRAM OF CORPORATION BRANCHES & DEPARTMENTAL HEADS OF THE ICB ADMINISTRATIVE, HUMAN RESOURCE ICB MILESTONES
CHAPTER FOUR : Overall Evaluation of ICB Unit Fund

4.1 4.2 4.3 4.4 4.5 INTRODUCTION DETAILS DESCRIPTION OF THE ICB UNIT FUND STATEMENTS OF GROSS SALE REPURCHASE AND NET SALE OF UNITS SOURCES OF THE INCOME OF THE FUND YEAR WISE DIVIDEND PAYMENT PERFORMANCE
30 30 30 37 38
CHAPTER FIVE:Overall Evaluation of the ICB Mutual Fund 43

5.1 5.2 5.3 5.4 5.5 5.6 WHAT IS MUTUAL FUND TYPES OF MUTUAL FUND OBJECTIVE OF MUTUAL FUND ADVANTAGES OF MUTUAL FUND LAUNCHING OF ICB MUTUAL FUND DETAILS DESCRIPTION OF THE ICB MUTUAL FUND 44 44 45 45 46 47
5.7 5.8 5.9
MANAGEMENT OF THE FUND DECLARATION OF DIVIDEND PERFORMANCE EVALUATION OF ICB MUTUAL FUND
50 50 51 74 75 77 79
CHAPTER SIX : PROBLEMS AND FINDINGS

6.1 6.2 6.3 PROBLEMS RELATED TO ICB UNIT FUND & MUTUAL FUND RECOMMENDATIONS CONCLUSION
BIBLIOGRAPHY
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Chapter-1
Introductory Part
1.1: Origin of the report 1.2: Objectives of the Study 1.3: Methodology of the Study 1.4: Importance of the Study 1.5: Limitations
Chapter 1
Origin of the Report:

Internship means receiving practical training through attending particular work physically. Practically training means a way through which a person or a trainee can gather experience about the related subjects and be able to apply his theoretical experience in the field of real life action. Practical training is necessary to achieve complete knowledge about some thing. Internship program is actually a form of practical training. As a student of MBA, major in marketing, internship is an academic requirement. For doing internship every student is required to work in a selected institution to enhance ones practical knowledge and experiences. For my internship I was sent to the Investment Corporation of Bangladesh (ICB), under the supervision of Mrs. Shehely Parvin, Lecturer, Department of Marketing, and the University of Dhaka. My Supervisor asked me to prepare a report on one or two specific departments of ICB.Thats why I have chosen the topic Performance of ICB Unit Fund and Mutual fund.I have done the internship at ICB from 09.07.2006 to 09.10.2006.
1.2 Objective of the Study:

The Objectives of the report are: a. To fulfill the requirement of MBA program as necessitated by Marketing Department, Faculty of Business Studies, Dhaka University. b. To analyze the performance of ICB, its Image and its role in the capital market of Bangladesh. c. To relate our theoretical learning with the practical situation. d. To learn the practical aspect of the Investment Corporation of Bangladesh.
e. To get aware about the working environment in advance that will help in adjusting a student with the future working life. f. To review the over all performance of ICB Unit fund & Mutual fund. g. To gather knowledge of how ICB floats and manages the Mutual Fund and Unit Fund. h. To focus on the overall performance of the ICB Mutual Fund and Unit Fund. i. To know the product of ICB at the securities market in Bangladesh.
1.3. Methodology of the Study:

Methodology can be termed as underlying principles and rules of organization that work at the background of the study. It clarifies the problem involving the research in an ordered and systematic way. For this study data and other information can be collected by the following ways:
1.4.
Importance of the Study:
There are a number of situations in which the evaluation of portfolio performance becomes necessary and important, such as a) Self Evaluation: To evaluate how well one has done as individual
investor with a view to refining ones skills and improving ones performance over period of time. b) Evaluation of Managers: To evaluate portfolio managers by an
investment company or asset management company in order to compare performance of these managers among several such managers each running a separate fund or sub-fund within an organization or the performance of portfolio manager over a number of years. c) Evaluation of Mutual Fund: To evaluate the various mutual funds
operating in the country in order to take decision by the investor which , if any , of these should be chosen for investment or to evaluate the efficacy by the
individuals or organization who engage external agencies for portfolio advisory services and d) Evaluation Groups: To evaluate the academics or researchers the
performance of a whole group of investors and compare it with another group of investors who use different techniques or who have different skills or access to different information. Thus, one important reason for doing performance evaluation is to help in correcting errors of portfolio management and improving the performance over a period of time. But data constraint is a common problem in evaluating performance of any portfolio. On the other hand, by law mutual funds must publicity disclose their operating results. The accepted advantages of the Mutual Funds diversification and professional management are appealing to many who have no time to devote to selecting and managing a portfolio. But there is a difficulty in choosing a consistency successful fund among as number of mutual funds with differing sizes, availability, market prices, objectives etc. This study of evaluating mutual fund performance would help identify the best performing mutual fund for the investors, as well as show how the fund managers have dine their professional services
1.4.1 Sources and Methods of Collecting Primary data:
i)
Personal Interview: This is the most effective way to collect primary data. Through this process the Trainee can confront a number of officials of ICB and share holders. I interviewed them by asking financial operation of ICB.
ii)
Briefing Session: In case of corporate organization, this method is very useful. During internship period we visited different departments of ICB and took part briefing session .The head of departments gave briefs the
trainees which were very much useful for us and we gathered some valuable information from their briefing.
iii)
By Observation: This process is very useful for gathering primary data. This process is very costly, time consuming. Through this process limited but accurate data can be collected.
1.4.2 Sources and Methods of Collecting Secondary data:

The secondary data had been collected with several relevant articles of the ICB. These are given below: ICB Annual Report (2004-05). Annual Report of Mutual Fund (2004-05). Annual Report of Unit Fund (2004-05). Others materials of the Investment Corporation. Other sources.
1.5 Limitations of this Study:

In preparing this report I faced some limitations. During this Internship I worked all the departments of ICB one after another for twelve weeks. ICB is a large autonomous corporation, but three months study time is too short in an organization like ICB and this was the main limitation of my Internship Program. Other constraints that I faced during the course of my internship are as follows: 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.
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Chapter -2
ICB (Investment Corporation of Bangladesh) At a Glance
Chapter Contents
2.1: 2.2: 2.3: 2.4: 2.5: 2.6: 2.7: 2.8:
Historical Background of ICB Objectives of the ICB Business Policy of the ICB Sources of Capital of ICB Share Capital Ownership Functions of ICB Share Price Transfer of Share
Pattern
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Chapter-2
ICB at a Glance 2.1 Historical Background of ICB
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: a. To encourage and broaden the base of investments. b. c. To develop the capital market. To mobilize savings.
d. To promote and establish subsidiary companies for business development. e. To provide for matters ancillary thereto.
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2.3 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: a. To provide financial assistance to projects subjects to their economic and commercial viability. b. To arrange equity and loans singly or through consortium of financial institutions including banks. c. Equity Support to projects and there by spreads the risks of understanding. d. To develop and encourage entrepreneurs. e. To diversify investments. f. To inspire small and medium savers for investment in securities. g. To create employment opportunities. h. To encourage more investment in Agro-based and Information and Communication Technology (ICT) sectors.
2.4: Sources of Capital of ICB:

Every organization has some sources of capital. It may be from own sources or may be other sources. In case of Investment Corporation of Bangladesh it is a public limited company issuing shares to the public, loans and debentures are the main sources of ICB. The present capital structures are given to following;
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Capital Structure
As on 30th June, 2005 (TK. In Crore) Authorized Capital 100.00 Paid up Capital 50.00 Reserves 84.11 Retained Profit 5.36 Long term Govt. Loan 5.25 Debentures 61.80 Others 24.89 Total 231.41
14
2.5 Share Capital Ownership Pattern Classification of shareholder as on 1 January, 2005
15
2.6 Functions of ICB

The functions of ICB are given below:
Functions of ICB
Direct purchase of shares and debentures including placement and equity participation Participating in and financing of joint-venture companies Providing lease finance singly and through syndication Managing existing investment accounts Managing Mutual funds and Unit funds. Managing Portfolios of existing shares Conducting computer training programmers Providing advance against ICB Unit and Mutual Fund certificates To act as Trustee and Custodian Providing Bank Guarantee Providing Consumer Credit Operating on the stock exchanges. Providing investment counseling to issuers and investors. Participating in and financing of joint venture projects. Dealing in other matters related to capital market operation. Introducing new business products suiting market demand To supervise and control the activities of the subsidiary companies.
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2.7 Share Price

ICB s Share price varied from lowest Tk. 122.00 to highest Tk. 219.50 in the stock exchanges during the year. As on 30 June 2005, the market price of per share was Tk. 200.00 and Tk. 201.25 in the DSE and CSE respectively.
2.8 Transfer of Shares

A total of 36269 shares of ICB were transferred during 2004-2005 as against 16085 shares transferred in 2003-2004 registering an increase of 125.48 percent. The rate of share transfer is increased by 125.48 percent from previous year. This is the sign of positive performance of ICB.
17
Chapter-3
Organizational Structure of ICB
3.1: 3.2: 3.3: 3.4:
Divisions and Department Of ICB. Management of ICB. Organ gram of Corporation. Branches and Departmental Heads of the ICB.
3.5:
Administration and Human Resource.
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Chapter-3
Organizational Structure of ICB

3.1: 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 is looking after by two General Manager 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 Manager besides the above two major wings there are two divisions which are direct under supervision of Managing Director i.e. Audit and Methods Division ,Secretarys Division .The description of the Division and Department are given below.
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3.1.1: Direct Supervision under Managing Director:

1) Secretarys Division
a) b)
Secretarys Department Public Relation Department
2) Audit and Methods Division
Head Office Control Department
3.1.2: Wings under Supervision of General Manager (operation):
1)
Loan Appraisal Division:
a)
Loan Appraisal Department
b)
EBR Department
2)
Fund Division:
a) b) c) Unit Sales Department Unit Registration and Procurement Department Mutual Fund Department
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3)
Merchandising Division:
a) b) c) Investors Department Shares Department Transaction Department
4)
Computer Division:
a) b) c) System Analysis Department Programming Department Data Management Department
3.1.3 Wings under Supervision of General Manager (Administration):
1) Administration Division:
a) Personal Department. b) Establishment Department.
2)
Accounts and Finance Division:

A) General Accounts Department. B) Project Loan Accounts Department.
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3)
Legal Affairs Division

a) b) Law Department Public Issue Department
4) Implementation and Recovery Division

a) b) Implementation Department Recovery and Follow up Department
5) Branches: There are seven branches of ICB .These are Located in

various places of Bangladesh such as:
a) b) c) d) e) f) g)
Chittagong Branch Rajshahi Branch Khulna Branch Barisal Branch Sylhet Branch Bogra Branch Local office Dhaka
3.2: 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 created in a board of directors, which consists of persons including the chairman and managing director of ICB
22
The board of directors consists of the following directors: a) b) c) d) e) f) 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 shareholders other than the government, BB, BSB and BSRS.
The managing director of ICB to be appointed by the government.
g)
3.3: Organogram of Corporation:
3.4
Braches and Departmental Heads of the ICB

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Branch Heads
Mr. Md. Abdur Rouf Deputy General Manager , Local Office, Dhaka Mr. Moynal Haq Khan Manager, Sylhet Branch Mr. Kamal Hossain Gazi Manager, Khulna Branch Mr. Md. Emdad Hossain Mollah Assitant General Manager, Barisal Branch
Mr. Monoranjan Chakma Assitant General Manager, Chittagong Branch Mr. Gazi Mostafa Haq Manager, Rajshahi Branch Mr. Md. Hamidul Islam Manager, Bogra Branch
Departmental Heads
Serial No. 1
Departments
Department Heads Mrs. Dipika Bhattacharjee Mrs. Kamrun Nahar Mrs. Jubaida Nasrin Mr. Tarek Nizamuddin Ahmed Mr. Muhammad Enayetur Rahman Mr. Abu Taher Md. Ahmedur Rahman
Secretary's Department Audit & Methods Department Loan Appraisal Department Planning, Research & Business Development Management Information Department Securities Analysis Department
2 3 4
24
Unit Sales Department Unit Registration & Procurement Department Mutual Fund Investors' Department Shares Department System Analysis Department Programming Department Personnel Department Establishment Department Central Accounts Department Project Loan Accounts Department Law Department
Public Issue Department Trusty Department Project Implementation Department
Mr. Md. Nazrul Islam Khan Mr. Md. Zahirul Islam Ms. Dilroze Habib Mr. Abu Md. Yousuf Ms. Monowara Begum Mr. Md. Abul Hossain Mr. Md. Abul Hossain Ms. Nasreen Sultana Mr. Mashiur Rahman Mr. Nasir Uddin Ahmed
8 9 10 11 12 13 14 15 16
17 18
19 20
Mr. Md. Ayub Ali Ms. Tanjina Chowdhury

Ms. Tahmina Begum Mr. Mohammad Altaf Hossain
21
Mr. Mojibur Rahman Faraji
21
Recovery & Follow-up Department
Mr. Kafil Uddin Ahmed Chowdhury Mr. Mohammed Ismail Hossain
22
Branch Control Department
3.5 Administrative, Human Resource

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Investment Corporation of Bangladesh (ICB) providing different categories of financial and banking services. Nature of different division/departments vary, such that Economic and Business Research (EBR) Department requires teamwork, Loan Appraisal division requires professional work, Funds division needs chain work. Managing Director is entrusted with authority to transact the regular business of the organization; he may delegate some authority to the officials of the corporations. However most of the policy decision are taken by the different committee with the approval of managing director and where required of the Board. It is the discretionary authority of the Board to constitute the executive committee and to nominate its Chairman to assist the Board in the discharging of the function stated under the ordinance. The Board may appoint such other committee as it thinks fit to assist it in the efficient discharge of its functions. So far, board has appointed two such committees-Economic and Business Research committee and loan appraisal committee headed by General Manager.
3.6
ICB Milestones
Date/Establishment Commencement
Milestones
Date of Establishment/ Commencement ICB lnvestors'Scheme First ICB Mutual Fund ICB Unit Fund Second ICB Mutual Fund Third ICB Mutual Fund Fourth ICB Mutual Fund Fifth ICB Mutual Fund Sixth ICB Mutual Fund
1st October 1976 13th June 1977 25th April 1980 10th April 1981 17 June 1984 19 May 1985 6 June 1986 8 June l987 16 May 1988
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Nomination as the country's Nodal DFI in SADF Seventh ICB Mutual Fund Eighth ICB Mutual Fund Purchase of own Land & Building Participation in Equity of SARF Advance Against ICB Unit Certificates Scheme Lease Financing Scheme
7 May 1992 30Junel995 23 July 1996 11 December 1997 16 January 1998 12 October 1998 22 April 1999
"The Investment Corporation of Bangladesh (Amendment) Act, 2000" passed in the Jatiya 5 and 6 July 2000 Sangsad (Parliament) and Honourable President's assent thereof Formation and Registration of 5 December 2000 3 Subsidiary Companies of ICB ComputerTraining Program Commencement of business operations of the subsidiary companies ICB Capital Management Ltd ICB Asset Management Company Ltd. ICB Securities Trading Company Ltd. Registration as a Trustee with SEC Registration as a Custodian with SEC Bank Guarantee Scheme Advance Against ICB Mutual Fund Certificate Scheme 01 July 2002 01 July 2002 13 August 2002 20 August 2002 20 August 2002 21 June 2003 21 June 2003 25 March 2001
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Consumers Credit Scheme
15 February 2004
Chapter- 4
Overall Evaluation of ICB Unit Fund

4.1 4.2 4.3 4.4 4.5 4.6 Introduction Details Description of ICB Unit Fund Statements of Gross sale Repurchase and Net Sales of Units. Sources of Income of the Fund. Year wise Dividend payment performance. Occupation wise Classification of UnitHolders.
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Chapter-4
Overall Evaluation of ICB Unit Fund
4.1 Introduction
Sponsored by the Government of Bangladesh, ICB Unit Fund was established on April 10, 1981. Its main objective is to mobilize savings through sale of its units to small investors and invest these funds in marketable securities. The scheme provides a potential source of equity and debt to industrial and commercial concerns and thus contribute to the industrial development of the country. Unit fund is an open ended Mutual Fund. It provides an opportunity to the unit holders to invest their funds in a well managed and diversified portfolio with a high degree of security of capital and reasonable yearly returns. ICB units are securities within the meaning of Trust Act. 1882.
4.2. Details Description of the ICB Unit Fund

What is Unit Fund? 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 Issue, Transfer and Surrender of Unit Certificates (I) Units are available in 1, 5, 10, 50, 100, 500, 1000, & 5000 denominations. The names with addresses of the holders are recorded and dividends are dispatched to them accorded and dividends are dispatched to them accordingly.
29
(II) Units may be transferred through prescribed transfer form duly filled in and signed by the transferor and transferee. No stamp duty is required for such transfers. (III) Units may be encased by way of surrendering the certificates along with the prescribed surrender forms duly filled in and signed by the registered holders and no prior notice is required. The certificates are required to be surrendered at the prevailing Repurchase Price.
Registration Number
Units are issued as registered certificates. An existing Unit holder is required to mention the previous registration number on the specified column of the application form when he/she intends to buy Units again.
Price Fixation
Charges in sale and repurchase prices of units are notified through the newspapers and price of a Unit is fixed periodically by ICB as its fund manager. Among others, valuation of the assets of the Fund are taken into consideration while fixing price of a unit.
Advance against Unit Certificates Scheme

Advance against ICB Unit Certificates Scheme was introduced in 1998, especially designed for the ICB unit holders to meet their emergency fund requirements. One can borrow maximum of Tk. 85 per unit by depositing his/her unit certificates under lien arrangement from any of the ICB offices where from such unit certificates were purchased. The rate of interest on the loan is reasonable and competitive.
Public Participation
The Fund is divided into units which are generally known as "ICB Unit". Each Unit bears a certain value in the assets of the Fund. The Unit holders are the owners of the fund and only they are benefited from it. Unit certificates can be purchased in single or joint name (s). At present maximum of 10,000 Units can be purchased in a single or joint name(S) at a time. Units are not sold to institutions.
30
Professional Counseling
Professional Counseling is rendered to the prospective & existing investors who are eager to purchase ICB Units through ICB offices and authorized Bank branches.
Advantages of Investment in Unit Fund:

Investment in Unit Funs offers the following advantages: h) i) j) k) l) m) n) Investment in Unit certificates is secured. It enjoys liquidity. It is transferable. Bank Loan is available against pledge of units. It offers attractive regular return. Investment allowance for Income Tax is available. Dividend is Income Tax exempted..
Investment by Bangladeshi Citizens Abroad

The Bangladeshi citizens living abroad may invest in certificates on fulfillment of the following terms and conditions: (I) The value of Units purchased is to be remitted through bank channel, (II) The money invested in Units and benefits thereon are not allowed to be repatriated, (III) The investors must mention their local and bank addresses in Bangladesh for convenience of registration of Units.
Investment by Foreigners Residing in Bangladesh

The foreign nationals residing in Bangladesh may also invest in Unit Certificates, provided they produce certificates to the effect that money being invested are their own savings and is not borrowed as loan or overdraft from any bank. These
31
certificates are to be collected from a Gazetted Officer or a Banker not below the rank or Deputy General Manager.
Fund Management
The responsibility of managing the fund rests on ICB for which management fee @ Tk. 1.25 per Unit (net outstanding) is charged. The Corporation also discharges the responsibility of loading and unloading of securities in and from the portfolio in the interest of the Unit holders. It is also the custodian of all assets of the fund.
Dividend
The total income earned on investment/ deployment of funds, net of expenditures incurred, in a financial year is distributed among the unit holders as dividend. Dividend is normally declared at the end of July each year by the Board of Directors of ICB. Dividend Warrants are dispatched soon after declaration of dividend. Since launching of the scheme in 1981 till FY 1997-98 the rates of yearly dividend declared/ paid are as under: Financial Year 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 Rate of dividend per unit (Tk.) 15.00 16.00 16.25 17.00 20.00 21.00 24.0 24.00 25.00 25.00 Financial Year 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-2001 Rate of dividend per unit (Tk.) 16.70 17.00 17.40 17.50 17.00 17.50 14.00 12.00 12.00 12.00
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1990-91
18.00
2001-2002 2002-2003 2003-2004 2004-2005
12.30 12.30 11.50 11.50
Tax Benefits
(I) Investment in Units enjoys the benefit of Investment Allowance under Sec. 44 of Income Tax ordinance 1984. (II) Units are treated as approved securities in accordance with the Section 2993 of the Companies Act., 1994 and Insurance Act, 1938. These are also treated as Securities as per Sec. 20 of the Trust Act, 1882.
Cumulative Investment Plan (CIP)

Under this scheme a holder instead of receiving dividend may reinvest such dividend income accrued for purchasing Unit at a concessional rate. In such case, Units are issued at Tk. 1.00 less than the opening price of the financial year.
Duplicate Dividend Warrants

Incase dividend warrants are not received in time, it should be communicated to ICB head office immediately. Duplicate warrants are issued subject to completion of required formalities and execution of an Indemnity Bond on non-judicial stamp as applicable.
Change of Address
Unit holders should immediately communicate any charge of address to the issuing offices so that no problem arises in dispatching dividends and surrendering the certificates.
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Transaction Hours
Transactions are held during banking hours every day excepting Thursday and holidays. Transactions do not take place during the month of July each year due to book-closure.
Where Units are Available

Units are sold/purchased at ICB Head Office and at its Branches at Dhaka, Chittagong, Rajshahi, Khulna, Sylhet, Barisal and Bogra. Fifty seven branches of Sonali Bank, Agrani Bank, Janata Bank, Rupali Bank Ltd., Uttara Bank Ltd., Pubali Bank Ltd., IFIC Bank Ltd., Bangladesh Krishi Bank, Prime Bank Ltd., Dhaka Bank Ltd., Bangladesh Shipla Rin Shangstha, United Commercial Bank Ltd., The City Bank Ltd., and Estern Bank Ltd. locate at important cities all over the country, are also engaged in selling and repurchasing of unit certificates.
4.3: Statements of Gross sale Repurchase and Net Sale of Units

Issue and Repurchase of Units
During FY 2004-05, 1728270 Units of Tk.17.97 crore were issued under the
Cumulative Investment Plan(CIP) while 19,76,294 Units of Tk. 20.79 crore were repurchased .The following table shows the comparative position of gross issue (CIP) , repurchase and net issue of Units during 2004-2005 and 2003-2004:
34
Position of Units issue (CIP), repurchase and net Issue

partic ulars Unit Gross Issue 17,28,270 Repurchas e Net Issue 19,76,294 (2,48,024 ) Amoun t 1797.40 2078.92 Unit 17,10,155 18,16,132 Amoun t 1744.36 1859.81 2004-05 2003-04 Cumulative up to 30 June 2005 Unit 8,21,16,65 2 4,12,50,14 Amount 92,319.1 7 45,372.4 1 46946.76
(281.52) (1,05,977 )
1 (115.46) 4,08,66,51 1
Graphical Presentation of Gross Issue, Repurchase & Net Issue of Units
5.4: Sources of the Income of the Fund

Dividend and Interest Income
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In FY 2004-05 the Fund earned dividend amounting to Tk. 25.66 crore from 138 companies and interest on Debenture amounting to Tk. .84 crore from 8 companies resulting in total dividend and interest income of Tk.26.50 crore of which 76.26% i.e Tk. 20.21 crore was received in cash , The total dividend and interest income during 2002-03 was Tk. 30.42
Capital gains on Sale of Investment

During FY 20034-2005 the Fund Capital gains of Tk. 33.95 crore by selling
securities of 58 companies as compared to Tk. 24.96 crore of capital gain made in FY 2002 -2003 through sale of securities of 62 companies.
Interest on Bank deposits:

In 2004-05 the Fund earned Tk. 2.20 crore as interest on bank deposits which was Tk. 3.07 crore in 2002-2003.
Premium Income on Gross Sale of Units:

In 2004-05 the Fund earned Tk. 0.69 crore as premium on gross issued Units as against Tk. 0.68 crore in 2003-2004.
Income and Expenditure:

During the year under review , the Fund earned a total income of Tk. 63.35 crore by way of dividend , interest on debenture securities , capital gains , interest on bank deposits , premium on sale of units and others , After deducting the total expenses of Tk. 13.64 crore on account of management fee, interest on current account with ICB , commission and brokerage , printing and stationary , postage , Bank charges ,provision against investment and others the fund had a net income of Tk . 49.71 crore , the Fund had a net distributed income of Tk. 11.33 crore , the Fund had a net
36
distributed income of Tk.61.04 crore in aggregate and Tk. 14.94 per Unit . As on 30 June, 20045 the Fund had 40866511 outstanding units against 4,11,14,535 Units at the same date of the preceding year.
4. 4: Year wise dividend Payment Performance

Dividend Declared: The Board of Director of ICB in its meeting held on 29 July,
2005 declared dividend at the rate of 11.50 per unit, involving tk. 46, 99, 64,877.00 for 2004-2005. The unit holders whose names appeared in he register on 30 June, 2005 were entitled to this dividend. The rest amount of Tk. 14, 04, 48,208.00 would be carried forward as undistributed income.
Table shows dividend performance and dividend yield of the Fund for the period from 1989-90 to 2004-2005.
Financial Dividend per Dividend Yield on opening price
37
Year
1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2002-03 2003-04 2004-05
Unit (Taka)
25.00 18.00 16.70 17.00 17.40 17.50 17.00 17.50 14.00 12.00 12.00 12.00 12.30 12.30 11.50
(percentage)
23.14 15.65 14.65 15.18 15.54 15.35 14.53 14.58 11.66 10.53 11.01 11.11 11.39 11.60 10.65
Portfolio:
As on 30 June 2005 the net Investment of the Fund at cost price stood at Tk. 604.59 crore in 266 securities , the market value of which was Tk. 626.63 crore .
38
Details of the portfolio are given in Annex-5
Summary of investments as on 30 June 2005
SL.no. (A) Share
Parties 1. Listed companies 2.Non listed companies (under guaranteed return) 1. Investment in SARF ( in foreign currency ) 1. Listed companies 2. Non listed companies
No.of securities 237 22 2
Total Cost 58740.83 827.37 408.99
Total market value 60433.33 827.37 459.74
(B) Debenture Total Investment
4 1 266
266.07 216.00 60459.26
726.77 216.00 62663.21
4.5 Occupation-wise classification of Unit holders

Classification of Unit holders: The number of Unit holders as on 30 June, 2005 was 34,720 whose occupation wise classification is as follows:
SL.no Occupation / Institution Govt.& Non- Govt. Employees Business man and agriculturists Engineers and Doctors, Lawyers etc. Retired person (all categories) Defense personal House wives Others Bangladeshis Residing Abroad No. of Unit holders
Percentage 58.75 9.45 8.88 8.27 6.31 3.15 2.85 1.14
1 2 3 4 5 6 7 8
18,84 3,005 2,823 2,630 2,005 1,002 907 362
39
9 10
Workers and Students Institutional Provident Fund
Total
340 42 31800
1.07 0.13 100
It may be observed from the above the table that out of the total Unit holders as on 30 June 2005. Public and Private sector employees accounted for maximum of 58.75 percent who are mainly of small and medium size income group. It indicates that the Unit Fund has been succeeded in attracting small and medium size savers.
Chapter-5
Overall Evaluation of the ICB Mutual Fund
40
5.1: 5.2: 5.3: 5.4: 5.5: 5.6: 5.7: 5.8: 5.9:
What is Mutual Fund? Types of Mutual Fund Objectives of Mutual Fund Advantages of Mutual Fund Launching of Mutual Fund Details Description of Mutual Fund Objectives of the Study Importance of the Study Dividend Declaration of Mutual Fund
5.10: Performance Evaluation of the Mutual Fund
Chapter-5 Overall Evaluation of the ICB Mutual Fund
ICB Mutual Fund

41
Introduction
It is a recognized principle that diversification of investment reduces risk. An individual may not have the time, expertise and resources to undertake such diversification. Here arises the advantage of a Mutual Fund. Mutual Funds pool the savings of a great number of investors and make investments in a wide array of securities. In Bangladesh ICB has pioneered Mutual Funds for the sake of investors and of the capital market. Countrys first Mutual Fund the First ICB Mutual Fund was floated on 25th April 1980. Since then ICB has, over the years, floated 8 Mutual Funds with the total capital of Tk. 17.50 crore . ICB Mutual Funds continued to command the confidence and attraction of investors as lucrative and rewarding investment in terms of steady dividend performance. ICB has been able to declare attractive dividends on its Mutual Funds during 20032004 as previous year. Among the 8 Mutual Funds the highest dividend of 200.00 percent was declared on the First ICB Mutual Fund followed by 50.00 percent on the Second and Third ICB Mutual Funds, with lowest being 14.00 percent declared on the Eighth ICB Mutual Fund during the year under review .The rates of dividends or the previous year ranged from 13.50 to 180.00 percent. In 2003-2004 the market prices of all the Mutual Funds on Dhaka Stock Exchange Ltd & Chittagong Stock Exchange Ltd were above their par values reflecting strong performance of he Funds. Average dividend yield on these 8 listed Mutual Funds worked to Tk 11.19 per certificate based on opening price. The rate of dividend declared by First ICB Mutual Funds ranked first amongst all the listed companies that declared dividend during 2003-04. ICB has been succeeded to a greater extent in broad basing equity ownership through Mutual Funds as is evident form the number of certificate holders which was over 33646 as on 30 June 2004.
5.1: What is Mutual Fund?

Mutual Funds are also known as close ended Mutual Funds. The issued capital of a Mutual Fund is limited, that is, a Mutual Fund offers a limited number of certificates for sale to the public. The amount of capital and the number of certificates of each Mutual Fund remains unchanged. ICB Mutual Funds are independent of one another.
42
A Mutual Fund being listed is traded on the Stock Exchanges. Price of Mutual Fund certificates after IPO is determined on the Stock Exchanges through interaction of supply and demand. The market price of a Mutual Fund certificates is available in Stock exchange quotations and in newspapers. .
5.2: Types of Mutual Fund:

Any Mutual Fund could be of either of the following two kinds 1) Open-end Mutual Fund 2) Close-end Mutual Fund
Open-end Mutual Fund:

Open-end investment company is a fund that continues to sale and repurchases their shares after their initial public offering. They stand ready to sell additional number of shares and thus keep going larger. The open-end fund company can by or sale their own shares.
Close-end Mutual Fund:

A close-end investment company operates like any other public firm. Their stock are traded on regular secondary market and the market price of its shares is determined by the supply and demand. It has a definite target amount for the founds and can not sell more shares after its initial offering. Its growths in terms of number of shares are issued like any other companys new issues listed and quoted it stock exchange.
5.3Objective of Mutual Fund:

The objective of any fund would fit into one of three broad categories.
i) Income: The emphasis is on producing a steady flow of dividend

payment.
43
ii) Capital gain: The manager concentrates on increasing the value of

principal through appreciation of the stocks held.
iii) Income and capital gain: Some combination of the first two
approaches.
5.4:
Advantages of Mutual Fund:

Mutual Fund substantially minimizes the investment risk of small investors through diversification in which funds are spread out into various sectors, companies, securities as well as entirely different market.
Mutual Fund mobilizes the savings of small investor and channels them into lucrative investment opportunities. As a result, Mutual Fund adds liquidity to the market.
Mutual Fund provides the small investors access to the whole market that at an individual level, would be difficult if not impossible to achieve. Because funds are professionally managed, investors are relieved from the emotional strain associated with the day to day management of the fund. The investors save a great deal in transaction costs given that s/he has access to a large number of securities by purchasing a single share of a Mutual Fund.
The investors can pick and chase a Mutual Fund to match his/her particular needs. Mutual Fund is the only vehicle which operates simultaneously both at the demand as well as the supply side of the market. On the supply side, the Mutual Fund being itself security at the SEC introduces a good and reliable instrument in the capital market for the small but astute investor.
Mutual Fund is one of the most strictly regulated investment vehicles. The laws governing Mutual Fund require exhaustive disclosure to the SEC as well as the general public. The laws also entail continuous regulations of fund operations by the Trustee.
44
5.5: Launching of ICB Mutual Fund:

Launch Mutual Fund in different period with different paid up capital.
Mutual Fund Date of Floatation Paid up capital (Tk. In lack) First ICB Mutual Fund Second ICB Mutual Fund Third ICB Mutual Fund Fourth ICB Mutual Fund Fifth ICB Mutual Fund Sixth ICB Mutual Fund Seven ICB Mutual Fund Eighth ICB Mutual Fund 25 April,1980 17 June,1984 19 May,1985 6 June, 1985 8 June, 1987 16 May,1988 30 June,1995 23 July,1996 50.00 50.00 100.00 100.00 150.00 500.00 300.00 500.00
Source: ICB Annual Report 2003-2004
45
5.6: Details Description of the ICB Mutual Fund Consolidated Portfolio Statement:
As on 30 June 2005cost price and market price of eight Mutual Funds were Tk. 4815.15 lac and Tk 5864.83 lac respectively. A consolidated statement of the portfolio of the Funds is given in the following table:
Consolidated position of portfolios of ICB Mutual Funds as on June 2004

Sl.no Particulars 1st Mutual Fund 2nd Fund 3rd Fund 4th Fund 5th Fund 6th Fund 7th Mutual Fund 8th Mut ual Fun 1 2 3 No. of Companies No. of Securities Total investment 4 at cost Market Value(30 June 2005) 1115.61 337.55 421.26 446.84 573.46 872.41 1014.71 49 49 363.35 56 58 282.49 69 70 382.00 75 76 367.72 86 87 506.59 117 116 858.70 111 116 1000.74 d 113 117 105 3.5 6 108 2.9 9
Mutual Mutual
Mutual Mutual Mutual
Price Movement and Transactions

During the year under review, certificates of eight Mutual Funds were actively traded on the floor of the Dhaka Stock Exchange Ltd and Chittagong Stock Exchange Ltd. The highest and lowest price of the eight Mutual Funds certificates on Dhaka Stock Exchange Ltd and position of total transaction during 2003-04 are shown in the following table:
46
Market prices of ICB Mutual Funds and Transactions during 2004-05

Sl . no Mutual Funds Number 1 2 3 4 5 6 7 8 First ICB Mutual Fund Second ICB Mutual Fund Third ICB Mutual Fund Fourth ICB Mutual Fund Fifth ICB Mutual Fund Sixth ICB Mutual Fund Seven ICB Mutual Fund Eight ICB Mutual Fund 2555.00 600.00 710.00 500.00 320.00 210.00 190.00 175.00 1530.00 392.00 365.00 325.00 207.00 144.25 130.00 124.25 3069 2247 8258 7586 7590 59420 25132 43723 Amount(Tk. In lac) 57.10 10.94 43.59 30.36 20.09 100.73 39.74 64.44 Highes t market Lowest market Annual transaction
price(taka)* price(taka)*
How to Buy existing Mutual Funds

An investor can purchase any of the existing eight ICB Mutual Funds certificates through the Stock Exchanges at the prevailing Market Price. However, if an investor buys Mutual Fund certificates through the Stock Exchanges he/she must be careful to submit the certificates along with duly filled-in transfer deed at ICB Head Office to ensure that the certificates are registered in his/her name.
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Advance against Mutual Fund certificates Scheme

Advance against ICB Mutual Fund certificates Scheme was introduced in 2003, designed for the ICB Mutual Fund Certificate holders to meet their emergency fund requirement. One can borrow maximum of 50% value of last one year's weighted average market price of certificates at time of borrowing by depositing his/her certificates under lien arrangement from any of the ]CB offices. The rate of interest on the loan is reasonable and also competitive.
Management Fee, Charge etc.

At present management fee @ 1% on the paid up capital of the Fund is charged annually. No amount is charged on account of custodial and trust services. Part of operating expenses are charged to the respective Mutual Funds on pro rata basis
Assets of ICB Mutual Funds

ICB Mutual Funds Certificates holders shall have unfettered ownership in the assets of the Fund to which they are related. In case of winding up of the Corporation the assets belonging to any ICB Mutual Fund shall not be treated as the assets of the Corporation.
Tax Concessions
(a) Investment in Certificates provides the same tax exemptions as an investment qualifying under Section 44 of the Income Tax Ordinance, 1984. (b) Capital gains received on investment in the Fund Certificates shall not be included in the total income of a Certificate holder within the limits specified in the Income Tax Ordinance, 1984. (c) Dividends received on investment in the Fund will be treated as dividend income under Income Tax Act, and will be exempted from tax with the limits specified in the Act.
48
(d) The Fund incomes are to be exempted from all taxes as granted by the Government as per SRO No 80-L/80 dated April, 1980.
5.7: Management of the Funds

There is a decision making board in order to manage different Mutual Funds. As per board s 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.
5.8: Declaration of Dividend

The net income received on investments of Funds on account of dividend, bonus, interest, capital gain etc. are distributed amongst the Certificate holders as per decision of the Board of Directors of ICB. Board declares such income in the form of dividend at the end of July each year. Dividends declared by ICB in the past on the Mutual Funds were very attractive. The year-wise per certificate dividend performance of the Funds is given below.
Rate of the Dividend per Certificate (Taka) FY Funds 1 st 20 20 20 25 35 38 41 48 49 49 35 31 21 23 25.5 28 29 29 22 22 21 22.5 25.5 26 26 19 19 21.5 23 23.5 23.5 17 18 20.5 20.5 10 11 15.5 13.25 6 6 2 nd 3 rd 4 th 5 th 6 th 7 th 8 th
1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92
49
1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-2001 2001-2002 2002-2003
31.5 45 50 60 70 70 100 125 170 175 180
21 27 40 42 45 30 32 35 40 42 45
18 22 27 28 38 35 38 40 45 50 50
17 40 41 41 45 32 35 36 38 40 40
12 25 28 30 35 22 20 21 23 24 24
16 18 20 24 18 15 16 17 18 21 14 13 13.5 14 18 12 12 12.5 13
17.50 14.50 13.50 17.50 14.50 13.50
5.9: Performance Evaluation of ICB Mutual Funds

Mutual Funds substantially lower the investment risk of small investors, through diversification, in which funds are spread out in to various sectors . Because of funds are professionally managed, investors are relived from he emotional strain associated with the management of the fund. For the betterment of small and medium investors up to September,2005 ICB floated eight close ended Mutual Fund , with total paid up capital of Tk 17.50 crore and going to float the ninth very soon. These funds are very popular with the small and medium investors because of having scope of capital gain as well as attractive return in terms of dividend. It is not an easy task for the portfolio manager to manage the mutual funds, because its performance is directly related with become attractive investment decision. Now we will analyze the past performance of the eight mutual funds and try to evaluate them. the security market and many macro economic variable . But due to the efficient management of ICB officials , they (MF)
Different Types of ICB Mutual Funds

50
Different types of ICB mutual funds are available for consumers. These funds lunched in different period of time and different rate of interests are given on the mutual funds. These are shortly described below:
First ICB Mutual Fund

The 1st ICB Mutual Fund was floated at 25th April, 1980. It is the most attractive mutual fund among the others.
Dividend Income:
The Fund had earned dividend of Tk. 36, 82,374.00 from 26 securities during 20042005 of which a sum of Tk. 28,93,974.00(78.59 percent) was received in cash within 30 June 2005 .
Capital Gains on Sale of Investments:

During 2004-05 the Fund earned Tk. 64, 05,456.00 as capital gains by securities of 8 companies as shown in the following table:
Sl. No Name of the company 1 2 3 4 5 6 7 8 One Bank Ltd Mercantile Bank Ltd National Tea Co. Ltd Padma Oil Company Ltd Beximco Pharmaceuticals Ltd Glaxco Smithkline Bangladesh Ltd Renata Ltd Agni Systems Ltd
No.of Securities sold 500 500 8100 3900 25000 3000 870 4000 Total
Capital gain(taka) 57,000.00 51,625.00 45,21,236.00 568,500.00 69,600.00 3,54,100.00 6,64,395.00 19,000.00 64,05,456.00
Income, Expenses and Distributable Income
51
During the year under review , the Fund earned a gross income of Tk. 1,02,33,593.00 by way of dividend income of Tk. 36,82,374.00,interest income of Tk. 1,12,581.00 on bank deposits , interest of Tk. 31,576.00 on current account with ICB , capital gains of k. 64.05.456.00 and other income of Tk. 1606.00. After deducting the total expense of Tk. 6, 88,980.00 incurred as staff expenses, management fee, printing and stationary ,postage and telegrams , provision against investment and others , the net income of the fund stood at Tk. 95,44,61300. Taking into account the previous years undistributed income of Tk. 2, 23, 18,775.00 the Fund had net distributable income of Tk.3,18,63,388.00 as on June 2004 resulting in distributable income per certificate of Tk. 637.27 for 2003-2004.
Dividend:
The Fund declared dividend at the rate of Tk.200.00 per certificate of Tk. 100.00 each for the year 2004-05 as compared to Tk. 180.00 declared in the previous year. After making provision of Tk. 1,00,00,000.00 for payment of dividend the Fund had an undistributed income of Tk. 2,18,63,388.00 .The Year wise dividend performance of the Fund is shown in the following table; Year wise dividend Performance Financial Year 1995-96 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 Dividend Per Certificate 60.00 70.00 70.00 100.00 125.00 170.00 175.00 180.00 200.00
52
Portfolio:
As on 30 June 2005 the Fund had securities of 49 companies in its portfolio with a total cost of Tk. 363.35 lac. During 2003-2004 the Fund made additional investment of tk. 43.88 lac in securities of 17 companies .The market value of the portfolio as on 30 June 2004 was Tk. 1115.61 lac . The ex-dividend net asset value per certificate of Tk. 100.00 each of First Mutual Fund stood at Tk . 2067.26 as on 30 June 2004. The market price per certificate of Tk. 100.00 each of the fund was Tk.1672.50 and Tk. 2500.00 as on 2 July 2003 and 30 June 2004 respectively. The number of certificate holders of the fund was 1066 as on 30 June 2004.
53
Second ICB Mutual Fund

Dividend Income and Interest Income:
The Fund had earned dividend and interest income of Tk. 14,05173.00 from 31 securities during 2004-2005 of which a sum of Tk. 11,02,979.00(78.49 percent) was received in cash within 30 June 2005 .

During 2003-2004, the Fund earned Tk. 40, 81,887.00 as capital gains by securities of 8 companies as shown in the following table. Statement of Capital Gains during 2004-2005 Sl. no 1 2 3 4 5 6 7 8 Name of the company Mutual Trust Bank Ltd Standard Bank Ltd One Bank Ltd Padma Oil Company Ltd Wata Chemicals Ltd Delta Millers Ltd Bangladesh Online Ltd Agni Systems Ltd No.of Securities sold 5000 3400 500 12500 1520 15340 500 2000 Total Capital gain(taka) 4,45,000.00 2,44,800.00 57500.00 29,75,475.00 46,339.00 2,98,823.00 5550.00 8400.00 40,81,887.00
54

During the year under review , the Fund earned a gross income of Tk. 55,64,740.00 by way of dividend income of Tk. 14,05,173.00,interest income of Tk. 73,852.00 on bank deposits , interest of Tk. 31,576.00 on current account with ICB , capital gains of Tk. 40,81,887.00 and other income of Tk. 3828.00. After deducting the total expense of Tk. 16,26,236.00 incurred as staff expenses , management fee , printing and stationary ,postage and telegrams , provision against investment and others , the net income of the fund stood at Tk. 39,38,504.00. Taking into account the previous years undistributed income of Tk. 56,25,496.00.00 the Fund had net distributable income of Tk.95,64,000.00.00 as on June 2004 resulting in distributable income per certificate of Tk. 191.28 for 2004-05.
Dividend:
The Fund declared dividend at the rate of Tk.50.00 per certificate of Tk. 100.00 each for the year 2004-2005as compared to Tk. 45.00 declared in the previous year. After making provision of Tk. 25,00,000.00 for payment of dividend the Fund had an undistributed income of Tk. 70,64,000.00 .The Year wise dividend performance of the Fund is shown in the following table; Year wise dividend Performance Financial Year 1995-96 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 Dividend Per Certificate 42.00 45.00 30.00 32.00 35.00 40.00 42.00 45.00 50.00
Portfolio:
55
As on 30 June 2005 the Fund had securities of 58 companies in its portfolio with a total cost of Tk. 282.35 lac. During 2003-2004 the Fund made additional investment of tk. 69.36 lac in securities of 14 companies .The market value of the portfolio as on 30 June 2004 was Tk. 337.55 lac .
The ex-dividend net asset value per certificate of Tk. 100.00 each of First Mutual Fund stood at Tk 364.82 as on 30 June 2004. The market price per certificate of Tk. 100.00 each of the fund was Tk.430.00 and Tk. 599.25 as on 2 July 2003 and 30 June 2004 respectively. The number of certificate holders of the fund was 1074 as on 30 June 2004.
Third ICB Mutual Fund

The Fund had earned dividend and interest income of Tk. 14, 70,937.00 from 39 securities during 2004-2005 of which a sum of Tk. 11,97,774.00(81.43 percent) was received in cash within 30 June 2004 .

During 2004-2005, the Fund earned Tk. 37,85,917.00 as capital gains by securities of 21 companies as shown in the following table.
56
Statement of Capital Gains during 2004-2005 Sl. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Name of the company Rupali Bank Ltd Mutual Trust Bank Ltd One Bank Ltd First Lease International Ltd Mercantile Bank Ltd ICB Amcl First Mutual Fund Janata Insurance Company Ltd Phoenix Insurance Company Ltd Eastland Insurance Company Ltd Central Insurance Company Ltd Estern Cables Ltd B.A.T.B.C. Ltd BOC Bangladesh Ltd Beximco Pharmaceuticals Ltd Orion Infusion Ltd Altex Industries Ltd Metro Spinning Ltd Aramit Ltd Bangladesh Online Ltd Agni Systems Ltd Monno Ceramic Industries Ltd No.of Securities sold 3300 10000 500 400 1000 4800 940 2860 500 1000 1000 1600 14450 6000 19960 6850 20000 10000 1000 3000 2000 Total Capital gain(taka) 60,920.00 8,99,000.00 58,000.00 12450.00 1,02,750.00 1,96,437.50 78,570.00 5,00,033.20 65,000.00 76500.00 2,11,500.00 55,904.00 1,25,604.00 95,820.00 3,36,525.60 75,692.70 50,000.00 3,94200.00 12,650.00 13700.00 3,64,660.00 37,85,917.00
57

During the year under review , the Fund earned a gross income of Tk. 53,22,780.00 by way of dividend and interest income from investment in securities of Tk. 14,70,937.00,interest income of Tk. 65090.00 on bank deposits , capital gains of Tk. 37,85,917.00 and other income of Tk. 836.00. After deducting the total expense of Tk. 12,02,195.00 incurred as staff expenses , management fee , printing and stationary ,postage and telegrams , provision against investment and others , the net income of the fund stood at Tk. 41,20,585.00. Taking into account the previous years undistributed income of Tk. 1,09,52,993.00 the Fund had net distributable income of Tk.1,50,73,578.00 as on June 2004 resulting in distributable income per certificate of Tk. 150.74 for 2003-2005.
Dividend:
The Fund declared dividend at the rate of Tk.50.00 per certificate of Tk. 100.00 each for the year 2004-2005 as compared to Tk. 45.00 declared in the previous year. After making provision of Tk. 50,00,000.00 for payment of dividend the Fund had an undistributed income of Tk. 1,00,73,578.00 .The Year wise dividend performance of the Fund is shown in the following table; Year wise dividend Performance Financial Year 1995-96 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 Dividend Per Certificate 28.00 38.00 35.00 38.00 40.00 45.00 50.00 50.00 50.00
58
Portfolio:
As on 30 June 2005 the Fund had securities of 70 companies in its portfolio with a total cost of Tk. 382.00 lac. During 2003-2004 the Fund made additional investment of tk204.32 lac in securities of 28 companies .The market value of the portfolio as on 30 June 2004 was Tk. 421.26 lac . The ex-dividend net asset value per certificate of Tk. 100.00 each of Third ICB Mutual Fund stood at Tk 243.87. as on 30 June 2004. The market price per certificate of Tk. 100.00 each of the Third ICB Mutual fund was Tk.465.00 and Tk. 698.50 as on 3 July 2004 and 30 June 2005 respectively. .
Fourth ICB Mutual Fund

The Fund had earned dividend and interest income of Tk. 15, 76,586.00 from 44 securities during 2004-2005 of which a sum of Tk. 13, 68,492.00(86.80 percent) was received in cash within 30 June 2005.

During 2004-2005, the Fund earned Tk. 71, 44,243.00 as capital gains by securities of 9 companies as shown in the following table. Statement of Capital Gains during 2004-2005 Sl. No Name of the company 1 2 3 4 5 6 7 8 Mutual Trust Bank Ltd One Bank Ltd First Lease International ltd BATBC Ltd Padma Oil Company Ltd Eastern Lubricant Blenders Ltd Glaxco Smithkliny Bangladesh Ltd Bangladesh Online Ltd No.of Securities sold 5000 500 400 25000 5100 350 31850 1000 Capital gain(taka) 1,75,000.50 58,500.00 12,425.00 24,12,860.00 9,58,698.00 8,113.00 29,12,827.00 11,150.00
59
Monno Ceramic Industries Ltd
3400 Total
5,94,669.50 71,44,243.00

During the year under review , the Fund earned a gross income of Tk. 87,96,577.00 by way of dividend and interest income from investment in securities of Tk. 15,76,586.00,interest income of Tk. 74,054.00 on bank deposits , capital gains of Tk. 71,44,243.00 and other income of Tk. 1,694.00. After deducting the total expense of Tk. 17,97,616.00 incurred as staff expenses , management fee , printing and stationary ,postage and telegrams , provision against investment and others , the net income of the fund stood at Tk. 69,98,961.00. Taking into account the previous years undistributed income of Tk. 65,38,919.00.00 the Fund had net distributable income of Tk1,35,37,580.00.00 as on June 2004 resulting in distributable income per certificate of Tk. 135.38 for 2004-05
Dividend:
The Fund declared dividend at the rate of Tk.45.00 per certificate of Tk. 100.00 each for the year 2004-2005 as compared to Tk. 40.00 declared in the previous year. After making provision of Tk. 45, 00,000.00 for payment of dividend the Fund had an undistributed income of Tk. 90, 37,580.00.
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The Year wise dividend performance of the Fund is shown in the following table: Year wise dividend Performance Financial Year 1995-96 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 Dividend Per Certificate 41.00 45.00 32.00 35.00 36.00 38.00 40.00 40.00 45.00
Portfolio:
As on 30 June 2005 the Fund had securities of 76 companies in its portfolio with a total cost of Tk. 367.72 lac. During 2003-2004 the Fund made additional investment of tk. 60.89 lac in securities of 18 companies .The market value of the portfolio as on 30 June 2005 was Tk. 446.84 lac .
The ex-dividend net asset value per certificate of Tk. 100.00 each of Fourth ICB Mutual Fund stood at Tk 278.60 as on 30 June 2004. The market price per certificate of Tk. 100.00 each of the fund was Tk.361.25 and Tk. 500.00 as on 9July 2003 and 30 June 2004 respectively. The number of certificate holders of the fund was 2335 as on 30 June 2005
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Fifth ICB Mutual Fund

Capital Gains on Sale of Investments;

During 2004-2005, the Fund earned Tk. 37, 64131.00 as capital gains by securities of 14 companies as shown in the following table. Statement of Capital Gains during 2004-2005 Sl. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Name of the company Mutual Trust Bank Ltd Standard Bank Ltd One Bank Ltd First Lease International ltd Mercantile Bank Ltd ICB Amcl First Mutual Fund BATBC Ltd BOC Bangladesh Ltd Padma oil company Ltd Beximco Pharmaceuticals Ltd Wata chemicals Ltd Padma Textile Mills Ltd Bata Shoe company BD Ltd Monno Ceramic Industries Ltd Total 37,64,131.00 No.of Securities sold 9050 4000 2300 3000 1000 1500 22350 1650 5600 5000 860 10000 500 1060 Capital gain(taka) 4,62,687.50 2,88,000.00 1,93,800.00 20,175.00 1,03,375.00 71,000.00 10,71,831.50 16,745.00 11,37,676.00 43,650.00 29,540.00 87,500.00 64,785.00 1,73,366.00

During the year under review , the Fund earned a gross income of Tk. 56,55,251.00 by way of dividend and interest income from investment in securities of Tk.
62
18,08,054.00,interest income of Tk. 83,066.00 on bank deposits , capital gains of Tk. 37,64,131.00 . After deducting the total expenses of Tk. 25,04,152.00 incurred as staff expenses , management fee , printing and stationary ,postage and telegrams , provision against investment and others , the net income of the fund stood at Tk. 31,51,099.00. Taking into account the previous years undistributed income of Tk. 17,15,944.00 the Fund had net distributable income of Tk 48,67,043.00.00 as on June 2004 resulting in distributable income per certificate of Tk. 32.45 for 2004-2005.
Dividend :
The Fund declared dividend at the rate of Tk.24.00 per certificate of Tk. 100.00 each for the year 2004-2005 Which was also Tk. 24.00 per certificate paid the previous year. After making provision of Tk. 36, 00,000.00 for payment of dividend the Fund had an undistributed income of Tk. 12, 67,043.00. The Year wise dividend performance of the Fund is shown in the following table: Year wise dividend Performance Financial Year 1995-96 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 Dividend Per Certificate 30.00 35.00 22.00 20.00 21.00 23.00 24.00 24.00 24.00
Portfolio:
As on 30 June 2005the Fund had securities of 87 companies in its portfolio with a total cost of Tk. 506.59 lac. During 2003-2004 the Fund made additional investment
63
of tk. 193.99 lac in securities of 27 companies .The market value of the portfolio as on 30 June 2004 was Tk. 573.46 lac . The ex-dividend net asset value per certificate of Tk. 100.00 each of Fifth ICB Mutual Fund stood at Tk 162.49 as on 30 June2005 The market price per certificate of Tk. 100.00 each of the fund was Tk.222.25 and Tk. 320.00 as on 2 July 2003 and 30 June 2005 respectively. The number of certificate holders of the fund was 4114 as on 30 June 2005.
Sixth ICB Mutual Fund

The Fund had earned dividend and interest income of Tk. 36, 10,443.00 from 62 securities during 2004-2005 of which a sum of Tk. 28,45,492.00(78.81 percent) was received in cash within 30 June 2005.

During 2004-2005, the Fund earned Tk. 74, 78,323.00 as capital gains by securities of 17 companies as shown in the following table.
64
Statement of Capital Gains during 2004-2005 Sl. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Name of the company Mutual Trust Bank Ltd One Bank Ltd ICB Amcl First Mutual Fund Kornophuly Insurance co. Lrd BATBC Ltd Agricultural Marketing co. Ltd. BOC Bangladesh Ltd Beximco Pharmaceuticals Ltd Glaxco Smithkline BD Ltd ACI Ltd Cohinoor Chemicals Company Ltd IBN sina Pharmaceuticals Ltd Wata chemicals Ltd Delta Millers Ltd Eastern Housing Ltd Agni systems Ltd Bata Shoe company BD Ltd No.of Securities sold 10000 500 16300 1000 2,14,700 350 24550 6000 5000 5000 1500 500 260 1020 2200 2000 2000 Total Capital gain(taka) 620050.00 56500.00 368275.00 87500.00 4716993.00 120140.00 714117.50 56470.00 25750.00 133010.00 212595.00 166300.00 9011.50 14849.00 58862.00 10400.00 107500.00 74,78,323.00

During the year under review , the Fund earned a gross income of Tk. 1,12,16,455.00 by way of dividend and interest income from investment in securities of Tk. 36,10,443.00,interest income of Tk. 1,27,667.00 on bank deposits , capital gains of Tk. 74,78,323.00 and other income of Tk 22.00. After deducting the total expenses of Tk. 32,80,867.00 incurred as staff expenses , management fee , printing and stationary ,postage and telegrams , provision against investment and others , the net income of the fund stood at Tk. 79,35,588.00. Taking into account the previous years undistributed income of Tk. 31,91,873.00 the Fund had net distributable income of Tk 1,11,27,461.00.00 as on June 2004 resulting in distributable income per certificate of Tk. 22.25 for 2004-2005.
Dividend :
65
The Fund declared dividend at the rate of Tk.17.50 per certificate of Tk. 100.00 each for the year 2004-2005 Which was also Tk. 17.50 per certificate paid the previous year. After making provision of Tk. 87,50,000.00 for payment of dividend the Fund had an undistributed income of Tk. 23,77,461.00 The Year wise dividend performance of the Fund is shown in the following table; Year wise dividend Performance Financial Year 1995-96 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 Dividend Per Certificate 20.00 24.00 18.00 15.00 16.00 17.00 17.50 17.50 17.50
Portfolio:
As on 30 June 2005 the Fund had securities of 118 companies in its portfolio with a total cost of Tk858.70 lac. During 2003-2004 the Fund made additional investment of tk. 506.29 lac in securities of 32 companies .The market value of the portfolio as on 30 June 2004 was Tk872.41 lac . The ex-dividend net asset value per certificate of Tk. 100.00 each of Sixth ICB Mutual Fund stood at Tk 109.24 as on 30 June 2005. The market price per certificate of Tk. 100.00 each of the fund was Tk.160.00 and Tk. 194.50 as on 2 July 2003 and 30 June 2005 respectively. The number of certificate holders of the fund was 10076 as on 30 June 2005.
Seventh ICB Mutual Fund

66
The Fund had earned dividend and interest income of Tk. 41,48,814.00 from 68 securities during 2004-2005 of which a sum of Tk. 31,72,871.00(76.47 percent) was received in cash within 30 June 2005.

During 2004-2005, the Fund earned Tk. 68,69,872.00 as capital gains by securities of 18 companies as shown in the following table. Statement of Capital Gains during 2004-2005 Sl. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 19 Name of the company No.of Securities sold Mutual Trust Bank Ltd 18600 Standard Bank Ltd 4500 One Bank Ltd 3100 First Lease International Ltd 200 Bank Asia Ltd 950 Mercantile Bank Ltd. 3400 ICB Amcl First Mutual Fund 13700 Janata Insurance Company 20 Ltd Prime Insurance Company Ltd 1500 BATBC Ltd 193950 BOC Bangladesh Ltd 46800 Beximco Pharmaceuticals Ltd 12000 Orion Infusion Ltd 8660 Square Pharmaceuticals Ltd 552 Dandy Dyeing Ltd 600 Aramit Ltd 7500 Agni systems Ltd 4000 Standard Ceramic Industries 200 Ltd Total Capital gain (taka) 9,17,412.50 3,24,000.00 1,91,364.00 13,450.00 1,28,250.00 3,53,028.00 2,56,137.00 920.00 39,105.00 34,76,877.50 7,77,433.50 1,35,050.00 88,571.40 70700.10 4,650.00 69000.00 14600.00 9322.00 68,69,872.00

During the year under review , the Fund earned a gross income of Tk. 1,11,61,404.00 by way of dividend and interest income from investment in securities of Tk. 41,48,814.00,interest income of Tk. 1,42,718.00 on bank deposits , capital gains of 67
Tk. 68,69,872.00. After deducting the total expenses of Tk61,43,903.00 incurred as staff expenses , management fee , printing and stationary ,postage and telegrams , provision against investment and others , the net income of the fund stood at Tk. 50,17,501.00. Taking into account the previous years undistributed income of Tk20,16,119.00 the Fund had net distributable income of Tk 70,33,620.00.00 as on June 2004 resulting in distributable income per certificate of Tk. 23.45 for 2004-05.
Dividend:
Portfolio:
As on 30 June 2005 the Fund had securities of 116 companies in its portfolio with a total cost of Tk 1000.74 lac. During 2003-2004 the Fund made additional investment of tk. 465.44 lac in securities of 40 companies .The market value of the portfolio as on 30 June 2004 was Tk 1014.70lac .
68
The ex-dividend net asset value per certificate of Tk. 100.00 each of Seventh ICB Mutual Fund stood at Tk 113.15 as on 30 June 2005. The market price per certificate of Tk. 100.00 each of the fund was Tk.140.00 and Tk. 180.00 as on 2 July 2003 and 30 June 2005 respectively. The number of certificate holders of the fund was 3335 as on 30 June 2005.
Eighth ICB Mutual Fund


During 2004-2005, the Fund earned Tk 85, 90,117.00 as capital gains by securities of 24 companies as shown in the following table.
69
Statement of Capital Gains during 2004-2005 Sl. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Name of the company N C C Bank Ltd Mutual Trust Bank Ltd Standard Bank Ltd One Bank Ltd First Lease International Ltd Bank Asia Ltd Mercantile Bank Ltd. ICB Amcl First Mutual Fund United Insurance Company Ltd Phoenix Insurance Company ltd Eastern Cables Ltd Singer Bangladesh Ltd BATBC Ltd BOC Bangladesh Ltd Padma Oil company Ltd Beximco Pharmaceuticals Ltd ACI Ltd Beximco Infusion Ltd Orion Infusion Ltd Square Pharmaceuticals Ltd Mithun Knitting and Dyeing Ltd Delta Millers Ltd Dandy Dyeing Ltd Agni systems Ltd No.of Securities sold 1000 19600 8000 3100 100 700 2500 17750 10 1720 3910 557 134900 36700 1500 4000 500 1000 7140 908 2140 600 50 6000 Total Capital gain(taka) 34,920.00 10,61,000.00 5,76,000.00 1,93,136.00 3900.00 94,500.00 2,52,537.00 2,05,700.00 1541.30 87,185.00 1,96,594.00 1,39,989.00 39,69,070.00 8,41,001.00 1,66,500.00 56,720.00 6,720.00 1,15,510.00 65,829.00 4,24,326.50 65,077.40 7,158.00 400.00 24,800.00 85,90,117.00
70

During the year under review , the Fund earned a gross income of
Tk1,31,77,777.00dividend and interest income from investment in securities of Tk. 44,73,928.00 ,interest income of Tk. 1,13,710.00 on bank deposits , capital gains of Tk. 85,90,117.00. After deducting the total expenses of Tk 46,32,708.00 incurred as staff expenses , management fee , printing and stationary ,postage and telegrams , provision against investment and others , the net income of the fund stood at Tk85,45,069.00. Taking into account the previous years undistributed income of Tk 22,29,488.00 the Fund had net distributable income of Tk 1,07,74,557.00 as on June 2004 resulting in distributable income per certificate of Tk. 21.55 for 2003-2004.
Dividend:
Portfolio:
71
As on 30 June 2005the Fund had securities of 117 companies in its portfolio with a total cost of Tk 1053.56 lac. During 2003-2004 the Fund made additional investment of tk. 445.09 lac in securities of 39 companies .The market value of the portfolio as on 30 June 2004 was Tk 1082.99 lac . The ex-dividend net asset value per certificate of Tk. 100.00 each of Seventh ICB Mutual Fund stood at Tk 113.43 as on 30 June 2005. The market price per certificate of Tk. 100.00 each of the fund was Tk.136.00 and Tk. 167.25 as on 3 July 2003 and 30 June 2005 respectively.
72
Chapter-6 Problems & Findings

6.1 Problems Related to ICB Unit Fund & Mutual Fund 6.2 Recommendations 6.3 Conclusion
73
Chapter-6 Problems & Findings

6.1 Problems
6.1.1Problems Related to ICB Unit Fund
Bangladesh is a least developed country. Its economy depends on agriculture more than 60%. Now it can be understood that its industrialization is in infant stage. So, for the better growth of industrialization, capital market is so important of our country. Because of this, ICB 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 (close ended) in our country and dominating the industry. Unit funds are managed and run by a professional management team , the success and growth of the unit funds depend future profitability and investors confidence also depend on the management performance . During the internship at 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: 1. Reserve is an important part of any business. For the funds, reserve is kept of the future uncertainty ,funds liquidation and use for buying securities without borrowing costly capital . Reserve is kept from income as un-distributable income . But the question is , how much a fund may keep reserve from income. I think ICBs reserve policy for the close end funds is not correct . Because it keeps huge amount of reserve from funds. 2. The dividend policy of Unit Fund is not fair. Because, if we see dividend rate and earnings of the funds, it will become clear to us.
74
3. Using of costly borrowing capital for the investment on securities is another factor causing problem for high expenditure of maintenance of fund, which affects the income of funds. 4. Management of ICB is sometimes inefficient in taking bold decision and has failed to stabilize the capital market.
6.1.2: Problem Related to the ICB Mutual Fund:

Mutual funds are managed and run by a professional management team , the success and growth of the mutual funds depend future profitability and investors confidence also depend on the management performance . During the internship at 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 depositors Point of view: o The services provided by the related personnel are not prompt. It is taking more than required time for giving the service. o Same laggard procedure is also taking place at the time of execution of order. o Withdrawal of any funds of securities is also very lengthy and complicated process and inefficiently managed. From Portfolio investment point of view: ICB has not yet done any systematic analysis for measuring how they are doing. ICB has not identified any key variables to size up all its diversified performance.
75
From Capital market point of view: o Dividend is one of the sources of income for the mutual fund. Most of the companies do not declare dividend up to satisfactory level. o The rate of supply of fundamentally strong securities is very low. o Political unsteady position also hearts the investors sentiment in the market and thereby leads to flat the stock market. o Using costly borrowing capital for the investment on securities is another factor causing problem for high expenditure of maintenance of funds, which affects the income of funds.
6. 2: Recommendations
6.2.1 Recommendations ICB Unit Funds are suggested are on the basis of the problems. These are:
1. Reserve should be kept at a minimum level but not more than 25% of a funds income. 2. Dividend policy should be fair so that the investors may be satisfied .Dividend policy should be earnings basis, not year basis. 3. Investing by costly borrowing funds should be reduced. 4. Orders are to be executed quickly. 5. Unnecessary documentation and levels in the process of withdraw or securities should be eliminated.
6.2.2 Recommendations ICB Mutual Funds are suggested are on the basis of the problems. These are:
1. The interest of making portfolio of proposed funds and the existing ICB unit mutual fund profitable and attractive, it is imperative to design balance portfolio of
76
securities. As the supply of securities is not adequate, I think, the portfolio is envisaged to be designed and developed from the following sources: Shares of multinational companies Shares of public enterprises Primary issue of securities by companies Secondary market operation.
Share of public enterprises means government has been pursuing policy of divesting 49% shares of government enterprises of public subscription. In this regard govt. should reserve 30% of all new issues in all cases for ICB. 2. 3. Reserve should be kept at a minimum level; it may vary fund to fund, but not more than 25% of a funds income. Investing in costly borrowing funds should be reduced. Management may look for sources of less costly funds and reduce expenses and increase income. 4. ICB should fix redemption date of each fund. I may redeem 1st, 2nd, and 3rd mutual fund. Because these funds are established for more than 15 years. 5. ICB may take initiative and decision to float more funds for the stabilization of capital market and for gaining of investors confidence to invest in the capital market. 6. 7. 8. ICB should reduce interest rate. Orders are to be executed quickly. Training program should be arranged for developing of management efficiency.
77
6.3 Conclusion:
ICB is a unique name in our country as an investment Bank. It has skill and experienced labor force and professional and dedicated management team that enable to pursue the ICBs goals and objectives. ICB is helping to the industrial growth in our country by mobilizing the small savings from investors to the capital market. ICB should be concerned about its investors, because the investors are the risks takers. ICB has great influence in the capital market. ICB should play its important role for gaining of the investors confidence on the capital market and further industrial growth in our country and the development and stabilization of the capital market in country There remains a huge gap between institutional investors and general investors. Institutional investors are far ahead from the general investors in respect of technical know-how, knowledge and risk taking propensity. ICB as an institutional investor manages its portfolio by doing three major activities: asset allocation, weighting shift across major asset classes and securities selection within asset classes. In financial terms it means ensuring maximum return with minimum level of risk. At present the gap between the institutional investors and general investors, ICB should concentrate well in portfolio management to uplift the interest of the general investors.
78
Bibliography
1.
Investment Corporation of Bangladesh (ICB) 2003-2004. Annual Report. Dhaka ICB. Investment Corporation of Bangladesh (ICB) 2002-2003. Annual Report. Dhaka ICB. Investment Corporation of Bangladesh (ICB) 2003-2004. Annual Report of Unit Fund, Dhaka ICB. Investment Corporation of Bangladesh (ICB) 2003-2004. Annual Report of Mutual Fund, Dhaka ICB. Ahmed, MF. H.R. Khan and M.S Islam 1993, Industrial Financing Through Capital market in Bangladesh-A Study on the Demand Side (Dhaka: The Asian Foundation and The Bureau of Economic research, University of Dhaka, June, P-47.
2.
3.
4.
5.
6.
Sharpe, W.F. (1978), Investments (Englewood Cliffs), New Jersey: Prentice-Hall, Inc). I. M Pandey (1998), Financial Management, P-97-107. s
7.
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Internship Report

The Contribution of ICB Unit Fund And Mutual Fund

Date of Submission: October 15, 2006.

CHAPTER TWO: ICB at a glance

CHAPTER THREE : Organizational Structure of ICB

CHAPTER FOUR : Overall Evaluation of ICB Unit Fund

CHAPTER FIVE:Overall Evaluation of the ICB Mutual Fund 43

5.7 5.8 5.9

CHAPTER SIX : PROBLEMS AND FINDINGS

Origin of the Report:

1.2 Objective of the Study:

1.3. Methodology of the Study:

Importance of the Study:

1.4.1 Sources and Methods of Collecting Primary data:

1.4.2 Sources and Methods of Collecting Secondary data:

1.5 Limitations of this Study:

2.1: 2.2: 2.3: 2.4: 2.5: 2.6: 2.7: 2.8:

2.2 Objectives of the ICB

2.3 Business Policy of the ICB

2.4: Sources of Capital of ICB:

2.5 Share Capital Ownership Pattern Classification of shareholder as on 1 January, 2005

2.6 Functions of ICB

2.7 Share Price

2.8 Transfer of Shares

Organizational Structure of ICB

3.1: 3.2: 3.3: 3.4:

Administration and Human Resource.

Organizational Structure of ICB

3.1.1: Direct Supervision under Managing Director:

Secretarys Department Public Relation Department

2) Audit and Methods Division

Head Office Control Department

3.1.2: Wings under Supervision of General Manager (operation):

Loan Appraisal Division:

Loan Appraisal Department

3.1.3 Wings under Supervision of General Manager (Administration):

Accounts and Finance Division:

Legal Affairs Division

4) Implementation and Recovery Division

5) Branches: There are seven branches of ICB .These are Located in

3.2: Management of ICB

3.3: Organogram of Corporation:

Braches and Departmental Heads of the ICB

Mr. Md. Ayub Ali Ms. Tanjina Chowdhury

Mr. Mojibur Rahman Faraji

Recovery & Follow-up Department

Mr. Kafil Uddin Ahmed Chowdhury Mr. Mohammed Ismail Hossain

Branch Control Department

3.5 Administrative, Human Resource

Consumers Credit Scheme

Overall Evaluation of ICB Unit Fund

4.2. Details Description of the ICB Unit Fund

Advance against Unit Certificates Scheme

Advantages of Investment in Unit Fund:

Investment by Bangladeshi Citizens Abroad

Investment by Foreigners Residing in Bangladesh

2001-2002 2002-2003 2003-2004 2004-2005

12.30 12.30 11.50 11.50

Cumulative Investment Plan (CIP)

Duplicate Dividend Warrants

Where Units are Available

4.3: Statements of Gross sale Repurchase and Net Sale of Units

Position of Units issue (CIP), repurchase and net Issue