ICB Mutual Fund

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.

ICB Mutual Funds

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. 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.

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.

Management of the Funds

The Mutual Funds are managed by ICB as fund manager for which receives commission
@1% .

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.
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.

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)

ICB Mutual
FY 1 st 2 nd 3 rd 4 th 5 th 6 th 7 th 8 th
Funds
1980-1981 20
1981-1982 20
1982-1983 20
1983-1984 25
1984-1985 35 21
1985-1986 38 23 21
1986-1987 41 25.5 22.5 21.5
1987-1988 48 28 25.5 23
1988-1989 49 29 26 23.5 20.5 15.5
1989-1990 49 29 26 23.5 20.5 13.25
1990-1991 35 22 19 17 10 6
1991-1992 31 22 19 18 11 6
1992-1993 31.5 21 18 17 12 -
1993-1994 45 27 22 40 25 16
1994-1995 50 40 27 41 28 18
 1995-1996 60 42 28 41 30 20 18
1996-1997 70 45 38 45 35 24 21 18
1997-1998 70 30 35 32 22 18 14 12
1998-1999 100 32 38 35 20 15 13 12
1999-2000 125 35 40 36 21 16 13.5 12.5
2000-2001 170 40 45 38 23 17 14 13
2001-2002 175 42 50 40 24 17.50 14.50 13.50
2002-2003 180 45 50 40 24 17.50 14.50 13.50
2003-2004 200 50 50 45 24 17.50 15 14
2004-2005 210 55 52 48 27 18.50 16 15
2005-2006 210 55 52 48 27 18.50 16 15
2006-2007 190(1B:2,240) 62 56 52 33 23 22.50 18

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.

(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.
Investment Corporation of Bangladesh:
Objectives

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.

Business Policy

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.
 Basic 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

Information Technology and Management

The advanced and user-friendly ICT system deployed by ICB has won appreciation of all
its stake holders. The comprehensive computer strategy encompassing all the features of
an effective and intelligent structure employs modern and appropriate hardware and
software. The system is also equipped with built-in flexibility for rapid transformation
and adjustment as and when the situation warrants. The above developments and efforts
have helped ICB to computerize its overall activities in an orderly manner. Utmost
priority is given to recruitment of skilled and qualified manpower to run the system
smoothly with time bound approach.

Sufficient numbers of computers, printers and other hardwares are procured every year.
Computer personnel working in ICB has developed a large number of customized
software in-house which are being used regularly. In addition, some software requiring
sophisticated and extraneous, inputs have also been procured from outside sources. These
software handle a wide array of activities of various departments at the head office and of
the branches. The important ones of these software are Merchandising Operation
Management System, Mutual Funds Scrip and Ownership Management System, Stock
Exchange Index Publication, IPO Management System, Personnel Management
Information System, Project Information Management System, Meeting Minutes Storage
& Retrieval, Law Suits Tracking, Unit Sale and Repurchase Management System,
Financial Feasibility Analysis for Projects, Accounting Application (General Ledger,
Staff Loan, Payroll, Unit Lien, FDR/TDR, Lease Finance, Project Loan, Fixed Asset
Management, Inventory), Unit Reconciliation, Mutual Fund Reconciliation, Share
Reconciliation and Telephonic Transaction and Inquiry System (TTIS).

As a result of dematerialization of securities in growing numbers related to bigger

number of companies under CDS, scrip-less trading is increasing quite fast. The relevant
software have been modified accordingly.

ICB has taken broad band internet connection to get access to internet for its head office
and branch

IT Planning Process in ICB

ICB has emerged as one of the leaders in computerization and software developers in
Bangladesh . ICB initiated computerization programme in 1985. Thus it is one of the very
first local financial institutions to adopt computers and computing software systems in
Bangladesh . Since then ICB has been continuously upgrading the system according to
specific long-term plans to keep pace with modern financial world. When planning for
long-term sustainable IT framework throughout the organization the prime factors ICB
always considered are:

• IT friendly process that is easily adaptable to computer technologies.

• A solid computerization environment and platform of choices which will serve for a
long time and can be easily tailored for future enhancements/up gradation.

• A solid hardware and network platform that is stable, scalable and have high
performance with a special focus on future business diversification, mean-time-to-
response.

• Scope of future enhancement both in terms of business process and in terms of IT

infrastructure so that ICB can always keep pace with the fast changing world of financial
operations.

• A separate division dedicated to IT with enough expertise to carry on future

enhancement and development process and system support.
Computer hardware installation
In 1998 latest model multi users & Multi tasking computer and high-speed network
systems were installed. The systems comprise of Two Unix Servers with Pentium Pro
multiprocessors, One RAID (Redundant Array of Independent Disk) Subsystems, Two
Windows NT Servers and 90 PCs. are procured phase by phase to cater to the need of
customers. The system has been upgraded by the latest available technology. The new
set-up is a cluster server system consisting of two powerful servers.

Network Systems
Four (Two 48 ports and Two 24 ports) network switches are installed for networking of
four floors and two backbone switches are used to interconnect the Four network
switches.

RDBMS Software
As most of the systems of ICB is data entry with high transaction rate and high MIS
payload, Oracle7 was chosen as the RDBMS system. Now Oracle 10g, the latest version
of Oracle is being used.

Computerization of Branch Offices

Oracle based customized software's are installed in the ICB branch offices. Necessary
training was given to officers of branches offices for smooth operations of the installed
software.

Customized Software
Thirteen (13) customized software's have been developed for total automation of
Operational activities of ICB.

Web-page and Tele-banking

ICB's own web-page was launched and TTIS (Telephonic Transaction and Inquiry
System) Software was installed to provide better service to the investors of all levels at
home and abroad. Many Investors have done registration with the Investor's Department
to get the service.

Internet
Head office and branch offices are connected with internet. Any department or branch
office can download required information from website web server.

Manpower Support
Corporation has built up a strong technical and managerial manpower setup in its IT area.
To cope with the latest development in IT, extensive training is being given to the IT
personnel regularly.

With all these in mind, in 1996 ICB decided to restructure and refurnish its IT
infrastructure in a whole new way taking advantage of the-then latest technologies with
an estimated financial involvement of Tk. 3.00 crore (approx.). Today's ICB
computerization is the result of the above systematic planning.

Future Roadmap
A great deal of planning effort of the Corporation has been towards future IT structure
and related operations. In the roadmap the following goals have been set

• The computerization plan should put emphasis on selection of hardware, network

technology and platform software like RDBMS choice management support.

• Establishing ICB firmly on IT industry not only as a consumer but also as a formidable
IT solution provider especially in the financial sector. ICB believes its huge experience
over the years and infrastructure are something that can be offered in the financial arena
of Bangladesh and abroad on business basis in the future.

• ICB is in the line of a unified system with end-to-end operational activity solution and
MIS. With this in mind there is a plan for future integration and re-engineering of the
existing software system into an integrated Enterprise Resource Planning (ERP).

• ICB is planning to connect all its branch operation online with its head office system.
Online integrated branch banking with the central data depository in head office based on
a strong WAN connection is the next in line.

• ICB is planning to provide web-based online services to its clients. The online system
will incorporate a business-to-client service for end-users and a business-to-business
service for corporate sector and other business associates.

• In the long run, ICB may consider establishing a separate business entity on IT, if
found viable .

ICB Asset Management Company Ltd.

 BASIC FACTS
Backgrund
ICB Asset Management Company Ltd. was created as part of the restructuring
programme of ICB under Capital Market Development Programme (CMDP) initiated by
the Government of Bangladesh and the Asian Development Bank. The Company was
incorporated as a public limited company with an authorized capital of Tk. 100 crore and
a nominal paid up capital of Tk. 2.00 lac, which was subsequently increased to Tk. 7.50
crore, under the Companies Act, 1994 with the Registrar of Joint Stock Companies and
Firms on December 05, 2000. The Company obtained license on October 14, 2001 from
the Securities and Exchange Commission(SEC) under
to carry out the mutual fund
activities. The company started its operation from July 01, 2002 upon issuance of Govt.
gazette notification.

Business
The company is engaged in investment management; more specifically floating and
managing both open-end and closed end mutual funds, provident funds etc. The company
is dedicated towards development of mutual fund industry as well as the capital market of
Bangladesh.

Capital Structure
(Taka in Lacs)
Particulars June 30, 2008 June 30, 2007
Authorized Capital 10000.00 10000.00
Paid up Capital 500.00 500.00
Reserve 740.00 490.00
Retained Profit 377.03 475.95
Total 1617.03 1465.95

MUTUAL FUNDS
ICB Asset Management Company Ltd. has so far floated five closed-end mutual funds
and two open-end Mutual Funds through which the small and medium savers get
opportunities to invest their savings in a balanced and relatively low risk portfolio. The
aggregate size of these funds is around Tk. 230.00 crore.

Closed-end Mutual Funds:

The closed-end mutual funds are, namely, ICB AMCL First Mutual Fund of Tk. 10.00
crore, ICB AMCL Islamic Mutual Fund of Tk. 10.00 crore and ICB AMCL First NRB
Mutual Fund of Tk. 10.00 crore, ICB AMCL Second NRB Mutual Fund of Tk. 100.00
crore and Prime Finance First Mutual Fund of Tk. 20.00 crore. One can invest in the
closed-end mutual funds through the stock exchanges. Islamic mutual fund is a
specialized mutual fund. The business of the fund should be in consistence with the
Sharia` Law. With a view to tapping the savings of Non-Resident Bangladeshis (NRBs)
for investment in the country’s capital market ICB Asset Management Company Ltd.
launched ICB AMCL First NRB Mutual Fund and ICB AMCL Second NRB Mutual
Fund. These funds received spectacular response from the investors. The Company plans
to launch another specialized closed-end mutual fund for NRBs named ICB AMCL Third
NRB Mutual Fund of Tk. 100.00 crore and convensional Mutual Fund named ICB
AMCL Second Mutual Fund of Tk. 50.00 crore which is under active consideration of
SEC.

Open-end Mutual Funds:

The open-end mutual funds are, namely, ICB AMCL Unit Fund of Tk. 70.00 crore and
ICB AMCL pension Holders' Unit Fund of initial capital of Tk. 10.00 Crore. Investors
have shown overwhelming interest in all the mutual funds. ICB AMCL Unit Certificates
and ICB AMCL pension Holders' Unit Certificates are sold and repurchased on the
counters of ICB AMCL Head Office and the branch Offices of ICB. ICB AMCL pension
Holders' Unit Certificates are sold exclusively to the retired pension holders. ICB extends
loan facility against lien of units. Some other banks and financial institution also extends
loan facility against lien of units.