Report on ICB Mutual Fund Deparment

FUNCTIONS OF ICB MUTUAL FUNDS DEPARTMENT:

Mutual portfolio formation and floating decision taken by ICB with the approval of the management EBR department decides holding category considering capital, portfolio risk, income trend, and risk diversified uniform income and growth. After all these decision security to be held are collected from IPO, Debenture issue, Secondary market etc. ICB helps sometime giving security at discount rate or at face value. Then the Fund is registered with SEC and listed with DSE and CSE. However after public issue, the fund portfolio is handed over to funds division for management operation. For purpose the Mutual Fund department has to perform the following activities mainly:

Renunciation and issue of certificate.
Maintain the register of the certificate holders.
Transfer certificate if applied for after verifying transferee signature.
Register the name of the transferee after getting approval from competent authority.
Prepare dividend list and issue and mail dividend warrant as decided by the board.
Record/ correct changes of address if applied.
Reissue certificate after confirming loss and mark transfer restriction of the lost certificate, if applied for and also inform DSE & CSE on revision of the following document submitted by the loser.

REGULATORY SET-UP OF ICB’S MUTUAL FUNDS:

When ICB took the initiative of floating mutual fund in Bangladesh, there was no organized and recognized regulatory set-up for managing of mutual funds in Bangladesh. ICB had to formulate the necessary regulatory set-up and rules for the management of mutual funds. The regulatory set-up for ICB mutual funds is explicitly explained in the ICB Regulation-1977. The main features of this regulatory set-up are mentioned below:

The Corporation may from constitute of ICB mutual funds of such denominations and securities in such each case as the board may determine.
ICB mutual fund certificates will be listed and quoted in the stock exchange in Bangladesh and the board may determine subject to the permission of the stock exchange.
ICB mutual funds certificate shall be movable property and freely transferable.
ICB Mutual Fund certificate will be sold or offered for subscription with the prior consent of the government.

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.

FLOATATION OF NEW MUTUAL FUNDS:

When ICB floats a new mutual fund, it is announced through publication of prospectus in two widely circulated newspapers. An investor has to apply for the shares of new mutual fund by filling in prescribed application form that can be collected from ICB officers and other attorney banks. Sometimes allotment is done by lottery draw.10% of any new mutual fund is served for non-Bangladeshi. Any Bangladeshi living abroad can collect from Bangladesh mission abroad or from authorized bank branches or from web site.

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.

ADVANCES 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 ICB 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:

Ø Investment in Certificates provides the same tax exemptions as an investment qualifying under Section 44 of the Income Tax Ordinance, 1984.
Ø 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.
Ø 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.
Ø 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.

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)

Year	Eight Mutual Funds
Year	1 st	2 nd	3 rd	4 th	5 th	6 th	7 th	8 th
1980-81	20
1981-82	20
1982-83	20
1983-84	25
1984-85	35	21
1985-86	38	23	21
1986-87	41	25.5	22.5	21.5
1987-88	48	28	25.5	23	20
1988-89	49	29	26	23.5	20.5	15.5
1989-90	49	29	26	23	20.5	13.25
1990-91	35	22	19	17	10	6
1991-92	31	22	19	18	11	6
1992-93	31	21	18	17	12	–
1993-94	45	27	22	40	25	16
1994-95	50	40	27	41	28	18
1995-96	60	42	28	41	30	20	18
1996-97	70	45	38	45	35	24	21	18
1997-98	70	30	35	32	22	18	14	12
1998-99	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	62	56	52	33	23	22.50	18
2007-2008	265	75	65	60	45	30	30	25
2008-2009	310	95	85	80	56	37	35	32
2009-2010	400	200	140	125	100	75	70	65

Dividend Performance: (Tk. per Certificate)

Mutual Funds	Financial Year
Mutual Funds	2007-08	2008-09	2009-10
First ICB mutual fund	265.00	310.00	400.00
Second ICB mutual fund	75.00	95.00	200.00
Third ICB mutual fund	65.00	85.00	140.00
Fourth ICB mutual fund	60.00	80.00	125.00
Fifth ICB mutual fund	45.00	56.00	100.00
Sixth ICB mutual fund	30.00	37.00	75.00
Seventh ICB mutual fund	30.00	32.00	70.00
Eighth ICB mutual fund	25.00	32.00	65.00

Dividend Performance

Here we see that, all Mutual Funds’ in every year increases the dividend. It is a good sign for a company and may be growth day by day. It’s very important things for investors. Sometimes it shows the future growth, and the investors are confident on the fund. In every year 1^st ICB Mutual Fund declared the maximum dividend for the share holders.

DETAILS DESCRIPTION OF ICB’S EIGHT MUTUAL FUND:

First ICB Mutual Fund:

The 1^st ICB Mutual Fund was floated at 25^th April, 1980. It is the most attractive mutual fund among the others.

Dividend and Interest income:

The Fund had earned dividend of Tk. 85.70 lac from 47 securities during 2009-2010 of which a sum of Tk. 74.69 lac (87.15 percent) was received in cash within 30June 2010.

Capital Gains on Sale of Investments:

During 2009-10, the Fund earned Tk. 375.65 lac as capital gains by securities of 78 companies as shown in the following table:

Sl. No	Name of the company	No. of Securities sold	Capital gain(taka)
1	Bangladesh Finance & Inv. Co. Ltd.	1650	1101475.18
2	Bangladesh Industrial Fin. Co. Ltd.	100	67413.22
3	Bay Leasing & Investment Ltd.	200	266800.00
4	Delta Brac Housing Fin. Cor. Ltd.	400	683987.48
5	Fidelity Assets & Securities Co. Ltd.	1400	298376.93
6	First Leasing International Ltd.	100	118762.63
7	IPDC	400	68357.24
8	IDLC	700	775449.99
9	ILFSL	200	230701.88
10	National Housing Fin & Investment Ltd	200	198600.00
11	PLFSL	1200	413874.98
12	Phoenix Fin. & Inv. Ltd.	1950	697621.39
13	Premier Leasing & Fin. Ltd.	1700	356453.44
14	Union Capital Ld	4000	505879.20
15	United Leasing Co. Ltd	480	534669.63
16	Al-Arafah Islami Bank Ltd	1500	192477.40
17	Bank Asia Ltd	100	43174.41
18	Brac Bank Ltd	500	284379.37
19	Dhaka Bank Ltd	400	177954.68
20	EXIM Bank Ltd	1800	322914.64
21	Mercantile Bank Ltd	800	139668.34
22	Mutual Trust Bank Ltd	2300	579263.10
23	One Bank Ltd	50	22821.58
24	Premier Bank Ltd	3400	995594.33
25	Shahjalal Islami Bank Ltd	1400	407949.43
26	Social Islami Bank Ltd	300	87963.37
27	Southeast Bank Ltd	1600	308880.64
28	Standard Bank Ltd	300	48704.82
29	First Security Islami Bank Ltd	2600	286869.94
30	EBL First MF	56000	1029550.00
31	Grameen One: Scheme Two	2000	87100.00
32	Trust Bank Ltd	500	182614.70
33	ICB AMCL Second MF	150	25000.00
34	ICB AMCL Second NRB MF	200	23600.00
35	Prime Bank First ICB AMCL MF	2500	36250.00
36	Prime Finance First MF	1000	34000.00
37	Trust Bank First MF	5000	85500.00
38	BSRM Steel Ltd	1500	1149037.50
39	Golden Son Ltd	7000	324150.00
40	Apex Foods Ltd	945	874937.49
41	BATBC	500	167902.45
42	Rahima Food	3500	402436.25
43	BOC	1700	573786.59
44	DESCO	400	314453.88
45	Jamuna Oil	17100	3093632.74
46	Meghna Petroleum	7500	867665.56
47	Padma Oil	200	304900.00
48	Power Grid	200	114209.86
49	Titas Gas	100	50524.10
50	AlltexInd.	1150	72253.38
51	Makson Spinning	1000	88458.80
52	Metro Spinning	3500	236232.40
53	Monno Fabrics	2000	50231.70
54	Prime Textile Spinning Mills	3500	742123.75
55	RN Spinning	300	125800.00
56	The Dhaka Dyeing	14000	675500.00
57	Beximco Pharma	1200	200646.32
58	Glaxo Smithkline BD	4800	3270620.00
59	Imam Button	350	201512.50
60	Marico BD	3400	767300.00
61	Reckitt Benckiser	2700	3176476.37
62	Square Pharma	100	89323.65
63	Lafarge Surma Cement	1000	69019.90
64	Bangladesh Online	1000	103254.30
65	RAK Ceramics BD	400	68300.00
66	Shinepukur Ceramics	600	8479.98
67	Agrani Insurance	2800	265021.44
68	Aisa Insurance	1000	393400.00
69	Asia Pacific General Insurance	1200	427146.00
70	Continental Insurance	1200	368995.72
71	Dhaka Insurance	150	127600.00
72	Green Delta Insurance	100	35900.00
73	Islami Insurance Bd	350	138600.00
74	Mercantile Insurance	100	22712.50
75	Nitol Insurance	450	108985.72
76	Provati Insurance	150	77450.00
77	Rupali Life Insurance	250	378962.50
78	Grameen Phone	19400	3274820.00
79	Bangladesh Shipping Corporation	400	2141750.00
Total			37565167.38

Here we see that, the maximum capital gain came from the company of Grameen Phone Ltd. Total no. of securities 19400 and the amount is Tk. 3,274,820.00

Income, Expenses and Distributable Income:

Particulars	Taka(Lac)	Taka(Lac)
Dividend IncomeInterest income on Bank depositsCapital gain & other income Gross Income…… Total expense…… (commission and brokerage, printing and stationery, postage, Bank charges, provision against investments and others) Net income………… Previous year’s undistributed income Net distributable income Distributable income per certificate	85.707.99375.65	469.34 (423.33)
		46.01331.57
		754.901006.53

Dividend:

The Fund declared dividend at the rate of 400 percent per certificate including 310 percent for the previous year. After making provision of Tk. 300 lac for payment of dividend the Fund had an undistributed income of Tk 454.90 lac. The Year –wise dividend performance of the Fund is shown in the following table:

Year –wise dividend Performance

Financial Year	Dividend Per Certificate	Financial Year	Dividend Per Certificate
1980-81	20	1995-96	55
1981-82	20	1996-97	60
1982-83	20	1995-96	60
1983-84	25	1996-97	70
1984-85	35	1997-98	70
1985-86	38	1998-99	100
1986-87	41	1999-00	125
1987-88	48	2000-01	170
1988-89	49	2001-02	175
1989-90	49	2002-03	180
1990-91	35	2003-04	200
1991-92	31	2004-05	210
1992-93	31	2005-06	210
1993-94	45	2006-07	190 (1B:2)
1994-95	50	2007-08	265
		2008-09	310
		2009-10	400

Portfolio:

During 2009-10, the fund made investments of Tk. 168.43 lac in securities of 24 companies. As on 30 June 2010 the Fund had securities of 122 companies in its portfolio with a total cost of Tk. 887.70 lac, the market value of which was Tk. 7791.87 lac. Details of the portfolio of the Fund as on 30 June 2009 were Tk. 770,047,230.70

The ex-dividend net asset value per certificate of Tk. 100.00 each of First Mutual Fund stood at Tk. 9877.68 as on 30 June 2010.

The opening and closing market price per certificate of First ICB Mutual Fund of Tk. 100.00 each of the fund was Tk.5783.00 and Tk. 8701.00 as respectively in 2009-10.

The number of certificate holders of the fund was 1105 as on 30 June 2010.

Second ICB Mutual Fund:

The 2^nd ICB Mutual Fund was floated at 17 June 1984.

Dividend and Interest income:

The Fund had earned an amount of Tk. 29.67 lac as dividend and interest from 44 securities during 2009-2010 of which, Tk. 26.81 lac (90.50 percent) was received in cash within 30June 2010.

Capital Gains on Sale of Investments:

During 2009-10, the Fund earned Tk. 247.65 lac as capital gains by securities of 79 companies and total capital gain is Tk. 24,765,105.64.

Here, the maximum capital gain came from the company of Grameen Phone Ltd. Total no. of securities 14600 and the amount is Tk. 2,494,140.00

Income, Expenses and Distributable Income:

Particulars	Taka(Lac)	Taka(Lac)
Dividend IncomeInterest income on Bank depositsCapital gains & Other income Gross Income……… Total expense……… (commission and brokerage, printing and stationery, postage, Bank charges, provision against investments and others) Net income………… Previous year’s undistributed income Net distributable income Distributable income per certificate	29.675.21247.65	282.56 (155.10)
		127.43 132.46
		259.89519.78

Dividend:

The Fund declared dividend at the rate of Tk. 200 per certificate of Tk. 100.00 each for the year 2009-10, which was Tk. 95.00 per certificate in the previous year. After making provision of Tk. 100.00 lac for payment of dividend the Fund had an undistributed income of Tk. 159.89 lac .The Year –wise dividend performance of the Fund is shown in the following table

Year –wise dividend Performance

Financial Year	Dividend Per Certificate	Financial Year	Dividend Per Certificate
1984-85	21	1997-98	30
1985-86	23	1998-99	32
1986-87	25	1999-2000	35
1987-88	28	2000-01	40
1988-89	29	2001-02	42
1989-90	29	2002-03	45
1990-91	22	2003-04	50
1991-92	22	2004-05	55
1992-93	21	2005-06	55
1993-94	27	2006-07	62
1994-95	40	2007-08	75
1995-96	42	2008-09	95
1996-97	45	2009-10	200

Portfolio:

During 2009-10, the fund made investments of Tk. 119.06 lac in securities of 24 companies. As on 30 June 2010 the Fund had securities of 120 companies in its portfolio with a total cost of Tk. 612.98 lac, the market value of which was Tk. 1782.44 lac. Details of the portfolio of the Fund as on 30 June 2010 were Tk. 174510768.45

The ex-dividend net asset value per certificate of Tk. 100.00 each of First Mutual Fund stood at Tk. 2788.41 as on 30 June 2010.

The opening and closing market price per certificate of First ICB Mutual Fund of Tk. 100.00 each of the fund was Tk.2244.75 and Tk. 2578.75 as respectively in 2009-10.

The number of certificate holders of the fund was 1093 as on 30 June 2010.

Third ICB Mutual Fund:

The 3^rd ICB Mutual Fund was floated at 19 May 1985.

Dividend and Interest income:

The Fund had earned dividend of Tk. 36.41 lac from 53 securities during 2009-2010 of which a sum of Tk. 32.46 lac (89.15 percent) was received in cash within 30June 2010.

Capital Gains on Sale of Investments:

During 2009-10, the Fund earned Tk. 261.02 lac as capital gains by securities of 76 companies and total capital gain is Tk. 26,102,001.85

Here, the maximum capital gain came from the company of Jamuna Oil Co. Ltd. Total no. of securities 15800 and the amount is Tk. 2,544,718.3

Income, Expenses and Distributable Income:

Particulars	Taka (Lac)	Taka (Lac)
Dividend IncomeInterest income on Bank depositsCapital gains Gross Income…….. Total expense…….. (commission and brokera9ge, printing and stationery, postage, Bank charges, provision against investments and others) Net income……… Previous year’s undistributed income Net distributable income Distributable income per certificate	36.415.38261.02	302.81 (118.43)
		184.38192.51
		376.89376.89

Dividend:

The Fund declared dividend at the rate of Tk. 114.00 per certificate of Tk. 100.00 each for the year 2009-10, which was Tk. 85.00 per certificate in the previous year. After making provision of Tk 140.00 lac for payment of dividend the Fund had an undistributed income of Tk. 236.89 .The Year –wise dividend performance of the Fund is shown in the following table

Year –wise dividend Performance