Icb Capital Management LTD

ICB CAPITAL MANAGEMENT LTD.
INVESTMENT BANKING OPERATIONS
INTRODUCTION
ORIGIN OF THE REPORT
The report on “Investment Banking Operations of ICB Capital Management Limited”

is prepared as a partial requirement of the course Financial Market and Institution,
code: F-304, instructed by M Kismatul Ahsan ,Assistant Professor ,Department of
Finance ,University of Dhaka.
OBJECTIVES
This report focuses the details of the operations of the ICB Capita Management
Company Limited (ICML). The specific objectives are to-
 Explain its function as an Investment Banker.

 Illustrate the details of its Underwriting, Portfolio Management and Issue
Management functions.
 Explain its role in the development of the financial market (both primary and
secondary market) of Bangladesh.
 Analyze the details of the products and services it offers to the general and
institutional investors.
 Show the performance of the company as an investment banker.
 Identify the assets maintained and recorded by the company.
 Analyze the financial condition of the company.
 Compare the financial reports of last five years of the company.
 Identify the factors that may affect the industry in the future.
Investment Banking Operations of ICML

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SCOPE OF THE REPORT
In the whole report we basically wanted to show the details of ICML’S functions. We
described how it actually performs investment banking function in the real world. To
show that we basically emphasized on its three major functions-underwriting, issue
management, portfolio management etc. we then outlined how successfully it is
performing its function throughout the years after its debut in the investment banking
industry in 2002. We also went through detailed analysis of its financial performance
up to last year.
METHODOLOGY
To prepare the report, we collected secondary data. We collected the annual reports
of ICML for the years 2003-2004 to 2006-2007. We also visited the website of ICML
for collecting necessary information. We have also consulted with a Liaison Officer of
ICM for knowing the details of their each function. We have also gone through the
text book to understand those investment banking functions easily.
LIMITATIONS
Although ICML has a perfect and healthy web site, it did not help us much in
preparing the report. The reason is that we needed many internal information of how
they conduct their operations practically that was not available in their website. The
annual report also has not given any practical guideline of their basic operations
where we mainly focused on. Moreover there was time constraint also. So as far as
the limitation is concerned we had tough condition in gathering all the necessary
information.
In spite of the limitations we tried our best to represent the company’s overall
functions and performance as an investment banker.

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INVESTMENT BANKING OF BANGLADESH
Throughout the world the security market can be classified in two categories- primary
and secondary market. The primary market involves with the distribution of newly
issued securities among the investors and the participant in the market place that
work with the issuers to distribute the newly issued securities are called investment
bankers. The process of investment banking is also synonymous to merchant
banking. The process of investment banking is basically leaded by security houses
and commercial banks.
Merchant banks are private financial institutions. Their primary sources of income are
PIPE (Private Investment in Public Entities) financing and international trade. Their
secondary sources of income are consulting, Merger and Acquisition help and
financial market speculation. Because they do not invest against collateral, they take
for greater risks than traditional banks. As they are private they do not take money
from the public and are international in scope, they are not regulated. Anyone
considering dealing with any merchant bank should investigate the bank and its
managers before seeking their help.
Investment bankers typically perform three activities

1. Advising the investor on the time and timing of public offering.
2. Buying the securities from the issuer which is also known as underwriting.
3. Distributing the issue to the public.
ROLE OF INVESTMENT BANKING IN CAPITAL MARKET
Investment banks play a vital role to develop a countries capital market. In

Bangladesh this function is basically played by ICB. But now this part is performed by
the newly established subsidiary company of ICB, ICML.
This investment banks continuously update themselves about the current economic
information and economic cycle. So eventually they learn which may be the best
moment to issue a new security. Without investment bankers help the issuers
needed the go through the costly and time consuming procedure of market analysis.
Moreover this decision can be misleading because of there lack of skill.

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On the other hand it is helpful to determine the stock issue price by an outside
specialist to avoid any sort of biasness and misjudgment.
Investment bankers also help to share the risk involved in issuance of securities.
Because they guarantee the sale of securities and if they cannot sale the securities
to individuals they finance the company though buying the residual amount.
The whole process of issuance is involved with legal and time consuming
procedures. The investment bankers step out and serve the issuing company with
their specialized knowledge.
LAW REGARDING MERCHANT BANK

Merchant banking under a formal legal framework is a relatively new concept in
Bangladesh. SEC formulated a regulation in 1996 on merchant banking. Activities
namely, SEC (Merchant Banker & Portfolio manager) , Regulations 1996.
As per regulation, a merchant bank is allowed to perform four types of operations.
1. Issue management
2. Underwriting
3. Portfolio Management
4. Corporate Advising

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INVESTMENT BANKS IN BANGLADESH
Name of the Banks Authorized Certificate Issue

Functions Date
Industrial Development Leasing Full-fledged MB 22.01.98
Company of Bangladesh Ltd.
Uttara Finance and Investment Do 25.03.98
Limited.
Banco Trans World (Bangladesh) Do 22.01.98
Limited.
Fidelity Assets and Securities Do 22.01.98
Company Ltd
Raspit Securities and Do 22.01.98
Management Limited.
Capital Market Services Limited. Do 25.03.98
Bay Leasing and Investment Do 25.06.98
Limited.
Swadesh Investment Do 26.07.98
Management Limited.
LankaBangla Finance Limited. Do 22.01.98
Grameen Capital Management Do 25.06.98
Limited.
South Asia Capital Ltd. Do 07.12.98
Prime Finance & Investment Ltd. DO 25.01.99
EC Securities Ltd. DO 04.02.99
Mercantile Securities Limited. DO 31.08.99
GSP Finance Company DO 24.08.99
(Bangladesh) Ltd.
Bangladesh Mutual Securities DO 12.09.99
Ltd.
Equity Partners Limited. DO 25.09.2000
Prime Bank Limited. DO 29.03.2001
Arab Bangladesh Bank Ltd. DO 15.05.2001
ICB Capital Management Ltd. Do 16.10.2001
Export Import Bank of Do 08.10.2001
Bangladesh Ltd.
Union Capital Limited Do 10.04.2002

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Investment Corporation of
Bangladesh (ICB)
Background
Investment Corporation of Bangladesh (ICB) is the principle investment Bank in the
public sector of our country. It was established on 1st October 1976 under the
Investment Corporation of Bangladesh Ordinance 1976 (XL-1976) with the goal to
encourage and broaden the base of investment.
Before liberation it was Investment Corporation of Pakistan which provided

underwriting support to industrial enterprises and throughout the East Pakistan. The
establishment of ICB was a major step undertaken by the government to accelerate
the pace of industrialization and develop a well-organized capital market.
After liberation in revised investment policy, which was announced in the December
1975, government announced its decision to reactive the stock exchange and
examine the question of recreation of 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
At a Glance
Date of Establishment 1st October 1976
Status Statuary Corporation
Nature of Business Investment Banking
Capital Structure (as on June 2007) BDT in Crore

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Authorized Capital 100.00
Paid up Capital 50.00
Reserves 122.61
Retained Profit 13.82
Government Loan 4.55
Debenture Loan 41.80
Functions of ICB
Private Placements
ICB is authorized to act as an agent of the issuers and investors for private
placements of securities. Under this arrangement, ICB places securities to
individuals/institutions on behalf of the issuer for which it charges fees. ICB also
acquires shares/securities for its own portfolio both in pre-IPO placement and equity
investment.
Custodian and Banker to the Issues
Act as the custodian of the public issue of Open-end & Closed-end Mutual Funds.
ICB provides professional services. It also acts as the Banker to the issues and
provides similar services through the network of its branches. Fees in this regard are
negotiable.
Mergers and Acquisitions
Companies willing to expand their business through mergers or acquisitions or to

Dis-investment projects that no longer viable into present capacity of operation can
contact the Corporation. ICB provides professional services & advices in respect of
shaping up the cost and financial structures to ensure best possible operational
results. Besides, in case of divestment, the corporation, through network and
established business relationship, bring buyers and sellers together, help them to
negotiate final agreement and advice on the emerging corporate structure.
Corporate Financial Advice
Government enterprises and Companies intending to go public issue often seek

professional & financial advice on corporate restructuring & reengineering. ICB
through its expertise provide such services through its expertise.

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Lease Financing
ICB Provides lease finance mainly for procurement of industrial machinery,

equipment and transport. ICB provides professional advice and financial assistance
to the intending clients. The period of lease, rental, charges, and other terms and
conditions are determined on the basis of type of assets and the extent of assistance
required by the applicants. Since introduction of this scheme was in 1999 good
responses have been received from the intending lessees.
Investment Portfolio of ICB
Being the largest institutional investor ICB contributes significantly to the

development of the country's cap ital market through active portfolio management
which is one of the important functions of ICB.
During 2003-04 a total investment of Tk. 138.93 crore has been made in the
investment portfolio of ICB including Tk.O.2 crore in shares of a company through
Pre-IPO placement, Tk. 7.0 crore in debentures of two companies, Tk. 0.3 crore in
preference shares of a company and Tk. 5.0 crore in bonds of a company.
As a result of favorable market situation in 2003-04 ICB earned Tk. 42.25 crore as
capital gain through sale of securities of Tk. 258.59 crore which was 53.58 per cent
higher than the capital gains of Tk. 27.51 crore made in 2002-03. During 2003-04, an
amount of Tk. 22.95 crore was earned as dividend on shares and interest on
debentures as against Tk. 21.5 crore in 2002-03 registering an increase of 6.74 per
cent. Dividend income has increased because of satisfactory dividend performance
of some companies.
Up to 30 June 2004 ICB made a total investment of Tk 41.08 crore in 27 companies

through purchase of preference shares, debentures, shares against pre-IPO
placement and bonds of Tk.7.3 crore of 3 companies, Tk. 9.5 crore of 3 companies,
Tk. 11.33 crore of 12 companies and Tk. 5.0 crore of a company respectively as well
as through investment of Tk. 7.95 crore in 8 companies as direct equity participation
As on 30 June 2004, the market value of the securities of ICB's investment portfolio
stood at Tk.521.62 crore against the net investment value of Tk. 378.82 crore
resulting in capital appreciation of Tk. 1 42.8 crore.
Advance against Unit Certificates Scheme

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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 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
issued. The rate of interest on the loan is reasonable and competitive.
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 the 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.
Consumer Credit Scheme
As part of business diversification program, ICB has introduced "Consumers Credit

Scheme" in 2003-04 considering at the need of various household commodities of
different employees of govt., semi-govt., autonomous bodies and some established
private sector organizations. Under this scheme one can enjoy minimum Tk 1.0 lac
but maximum 5 lac credit facilities. The rate of interest on the loan is reasonable and
competitive which is fixed by the board of directors of ICB considering the bank rate
and with the guidelines of Bangladesh Bank.
Bank Guarantee scheme
ICB introduced Bank Guarantee scheme in 2002-03. ICB provides (i) Bid Bond for
enabling the business people to participate in any tender or bidding; (ii) Performance
Bond for helping the business community to continue their business smoothly by
fulfilling their obligations promised by them to their clients; and (iii) Customs
Guarantee for solving different disagreements between the customs authority and
the business classes at the initial stage. The maximum limit of guarantee is Tk. 2.00
crore and would be issued against at east 20% cash and 80% easily encashable
securities or against 100% cash margin. Re-guarantee from other financial institution
is required for guarantee against the amount exceeding Tk. 2.00 crore.

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Training
Local Training
During 2003-04, as part of human resource development programme, ICB

endeavored to develop the skill, knowledge and professional competence of its
manpower by arranging various in-house and local training courses. During the year,
26 officers and 09 employees of ICB received local training on different subjects
including Policy towards investment and industrialization, VAT and Taxation,
Performance Measurement of Financial Institutions-a Credit Rating Perspective, Web
page Design and Development, Venture Financing and Factoring, Investment and
Merchant Banking, Managing core risks in banking for Senior Bankers, Corporate
Governance, Institutional Computer Training, Trade Union Training Course for
Organizer, Young Leadership, Development of small and medium enterprises etc..
Foreign Training
During 2003-04, no officer/staff participated in any foreign training course.
Development Activities
Equity support through consortium arrangement

ICB invests in different companies through equity participation singly/under
consortium arrangements by different Banks and financial institutions.
Counseling to the Government

Incase of Govt. divestment program ICB provides professional & financial advice
through analyzing the companies to be privatized and the attitude the prospective
buyers. Government enterprises intending to go public often seek professional
financial advice on corporate restructuring and reengineering, ICB through its
expertise provides such advice.
Term deposit

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ICB receives deposit as term deposit from individuals/institutions offering attractive
and negotiable interest rate which helps to mobilize savings for profitable investment
in securities.
Disinvestment Program
ICB is actively associated with disinvestment process. With a view to off loading of
Govt. share holding through the Stock Market ICB has been entrusted with the
responsibility of selling Govt. owned shares of different listed Companies.
EEF
ICB Capital Management Ltd. acts as project appraising institute for equity
participation of EEF unit of Bangladesh Bank.
Subsidiary’s Information
At suggestions of World Bank and International Monitory Fund (IMF) ICB
Corporation management has decentralized its control over the capital and share
market by introducing three subsidies.
 ICB Capital Management Limited ( ICML)

 ICB Asset Management Company Ltd. (IAMCL)
 ICB Securities Trading Company Ltd. (ISTCL)
ICB Capital Management Limited (ICML)
Underwriting
In order to raise long term debt and equity from the primary market, the Government
bodies, enterprises corporation or companies may seek intermediary assistance from
ICML in the form of underwriting.
Issue Management
To act as the manager to the issue of shares and debentures, ICML provides
professional services in respect of syndicate underwriters and bankers to the issue.

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Besides, it also helps in preparing prospectus, getting their approval from SEC and
arranges publication of the same.
Placement of Shares
ICML acts as a placement agent. Selected percentage of shares of a company is

privately presented to relatives and different financial companies.
Investment Counseling
ICML provides investment counsel to the issuers and investors' including financial
engineering and corporate advisory services.
Managing Investment Accounts
ICML, at its discretion, may grant loan at a ratio of 1:1 against the assets of an
account subject to a maximum limit of Tk.25.0 lac. An accountholder may use
the combined balance of his/her equities and loan to buy shares/securities. It
helps the investors to develop a diversified and balanced portfolio by
minimizing the risk and earning a reasonable return. ICML provides
professional advice and other support services.
ICB Asset Management Company Ltd. (IAMCL)
ICB Asset Management Company Ltd. was created as part of the restructuring
program of ICB under Capital Market Development Program (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. 5.00 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 under Securities &
Exchange Commission (Mutual Fund) Act, 2001 to carry out the mutual fund
activities. The company started its operation from July 01, 2002 upon issuance of
Govt. gazette notification.

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Activities:
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.
MUTUAL FUNDS
ICB Asset Management Company Ltd. has so far floated three 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. 90.00 crore.
Types of Mutual Fund
There are two types of Mutual Fund. They are-
• Open-end Mutual Fund

• Close-end Mutual Funds
Open-end Mutual Fund
Open-end Mutual Funds are allowed for a continuous subscription and redemption.
These schemes do not have a fixed maturity period. Investors can buy or repurchase
these units at any time at NAV basis. Prices are declared by the fund manager on
daily or weekly basis.
There are two open-end mutual funds operated by ICB AMCL. They are-
I. ICB AMCL Unit Fund

II. ICB AMCL Pension Holders’ Unit Fund

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Close-end Mutual Funds
Close-end Mutual Fund is where the shares are initially offered to the public and are
traded in the secondary market.
There are three close-end mutual funds operated by ICB AMCL. They are-
I. ICB AMCL First Mutual Fund

II. ICB AMCL Islamic Mutual Fund
III. ICB AMCL First NRB Mutual Fund
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.
ICB Securities Trading Company Ltd. (ISTCL)
ICB Securities Trading Company Ltd. performs stock brokerage activities. The
Company maintains its activities to become the most active broker of both DSE and
CSE. The Company has started trading of securities for general investors alongside
the institutional investors from the beginning of 2003-2004. ISTCL has obtained
license from SEC to act as the full service Depository participant (DP) in Central
Depository Bangladesh Ltd. (CDBL)
Now we will discuss in details about ICB’s one of the subsidiary ICB Capital Asset
Management (ICML), Leader in Merchant Banking in details in our next segment.

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ICB Capital Management Ltd.
(ICML)
ICML Overview
ICB Capital Management Ltd.(ICML) has been incorporated as a subsidiary of
Investment Corporation of Bangladesh (ICB) to carry out investment banking which
includes underwriting, issue management and portfolio management. A brief
chronicle on ICML is asserted as follows:
Date of Incorporation December 5, 2000
SEC’s Registration Obtained October 16, 2001
Business Commenced July 1, 2002

SEC’s Permission for Branch Operation July 15, 2002
Authorized Capital BDT 100 crore
Paid Up Capital BDT 8 crore

Number of Shareholders 7
Vision
 To initiate new products in the capital market
 To provide innovative and quality service to the customers
 To set high standards of professionalism
 To bring total satisfaction to the clients, sponsors and employees
 To perform operations with high standard and business ethics.
Mission
 To expand merchant banking services with the help latest technology
 To ensure reasonable return on shareholders’ equity
 To help develop and strengthen the capital market and thus accelerate the
pace of industrialization
 To contribute to the national GDP as well as to the growth of national
economy

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 To mobilize savings of small and medium level of investors and channelize
the same to quicken the pace of economic development
 To create demand for and supply of securities in the capital market
 To establish itself as a leading and sound merchant banking institution
Objectives
 To carry out merchant banking activities including issue management,
underwriting and portfolio management with a view to developing a vibrant
capital market
 To widen the scope and area of investment by mobilizing savings of small
and medium level of investors
 To introduce high quality companies to the Bangladesh capital market and to
induce good companies to raise their funds from the capital market leading to
adequate supply of securities in the capital market
 To create demand for quality securities by efficient portfolio management
 To establish perfect combination of high quality buy-sell execution capabilities
and create a large local network among investors and broker community.
Board Committee
The company has a separate Board of Directors consisting of 6(six) members.
Excepting Chief Executive Officer (CEO), all the Directors are non-executive and
independent, two of whom are nominated by ICB, the holding company of ICML and
the other three (50%) are drawn from the private sectors. The managing Director of
ICB is the Chairman of the Board.
Work -Environment
The Company has a excellent working environment, adequate experts and
professionals. It is equipped with necessary logistics to provide fully automated
merchant banking services.

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Functions of
ICML
As a subsidiary of most experienced , pioneer and biggest merchant bank (ICB) in

the country, ICB Capital management Ltd. (ICML) has been performing merchant
banking activities including issue management, underwriting and portfolio
management. Details of the functions are given as follows:
Underwriting
Underwriting is considered as the heart of merchant banking. In order to raise long
term debt and equity from the primary market, the Government bodies, Enterprises,
Corporation or companies may seek intermediary assistance from ICML in the form
of underwriting. ICB Capital Management Ltd. (ICML) has emerged as the leading
underwriting institution in the country. ICML provides underwriting support singly or
through consortium to viable and prospective companies those seek to mobilize
finance by issuing equity and/ or debt instruments. ICML has the capability to render
efficient, prompt and cost effective service in this regard.
Process
There are two practices for underwriting – Outright Buy basis and Best-effort method.
In Bangladesh Outright Buy Method is in Practice. When a company seeks
underwriting help to ICML and it agrees with appropriate terms and conditions, they
bound each other in a contract. ICML communicate with its issuing banks. Generally
ICML serve the both role of Underwriter and Issue manager. After appointing the
bank to the issuer, activities of ICML as an issue manager end. As an underwriter,
ICML collects the share application through the banks then performs the lottery of
share application; at last perform necessary legal activities to enlist the company in
DSE.
There are certain conditions regarding underwriting. In the form of outright buying
method if there is any share left after the public offering the rest amount of share
have to finance by the underwriting company.
Conditions Applied
Government bodies, enterprises, corporation or company have to collect at least 50%
of their issued capital through public offerings.

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Commissions & Fees
ICML charges 50% of initial public offering or 1% of amount underwritten, whichever
is less. If all the shares of the government bodies, enterprises, corporation or
company sold out still they will receive their fees from that particular issuer. From the
year 2003 to 2007 ICML has generated 3.44 million taka revenues as underwriting
fees. Year-wise underwriting fees and comparative percentage contribution in the
total fee income of ICML is as follows:
2003-04 2004-05 2005-06 2006-07

Underwriting Fees 345,000 429,125 1,363,358 1,298,505
Contribution to Total Fee 7.50% 1.70% 10% 5.23%
Income
Year-wise Underwriting Activities

During FY 2003-04, ICML received 10 applications seeking underwriting assistance
of Tk 10.61 crore of which all the 10 applications were approved. Out of 10
companies, 3 companies got approval from SEC and accordingly floated their shares
through initial public offering (IPO). The remaining 7 companies are yet to get
approval from SEC. List of the companies are given in the next page:
Name of the Companies Amount of

Underwriting
Commitment (in crore)
Daffodil Computers Ltd. 0.50
Lafarge Surma Cement Ltd. 0.50
EXIM Bank Ltd. 0.68
Mercantile Insurance Co. Ltd 0.45
First Security Bank Ltd. 1.00
Jamuna Bank Ltd. 2.40
Prime Finance and Investment Ltd. 0.38
Global Insurance Co. Ltd. 3.00
Nitol Insurance Ltd. 1.50
Prime Islamic Life Insurance Ltd. 0.20
10.61

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of Tk. 11.00 crore of which all applications were approved including a right issue.
Among them three companies floated their shares. The remaining companies care
awaiting floating of their shares. List of the companies to which underwriting
commitment was made are as follows:
Name of the Company Amount of Underwriting

Commitment (BDT in crore)
Northern General Insurance Co. Ltd. 1.00
Agrani Insurance Co. Ltd. 0.50
Sonar Bangla Insurance Co. Ltd. 1.00
Green Delta insurance Co. Ltd (Right Share) 1.50
Progati Life Insurance Co. Ltd 0.10
Islami Commercial Insurance Co. Ltd 0.45
Prime Islami Life Insurance Co. Ltd 0.50
Peoples Leasing and Financial Services Ltd. 0.25
Islami Finance and Investment Ltd 0.50
Popular Life Insurance Co. Ltd 0.20
Shahjalal Islami Bank Ltd 5.00
Total 11.00

of Tk. 43.19 crore. All the 12 application were approved by ICML including three right
issues. List of the companies to which underwriting commitment was made are as
follows:
Name of the Company Size of Issue Amount of

underwriting
commitment (in crore
taka)
Janata Bank Ltd. 51.48 1.98
(including premium of tk.8.58 crore)
Provati Insurance Company Ltd. 9.00 0.50
Barger Paints Bangladesh Ltd. 13.91 0.97
S.Alam Cold Rolled Steels Ltd. 12.00 2.00

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Aftab Automobiles Ltd. 33.74 14.24
Uttara Finance and Investments Ltd. 39.60 17.10
Golden Sun Ltd 6.00 1.50
Fareast Finance And Investment Ltd. 7.11 0.30
Industrial Promotion and Development 27.80 2.00
Company of Bangladesh Ltd.
Bangladesh Industrial Finance Company Ltd. 11.10 1.70
Union Capital Ltd. 7.50 0.40

InTech Online Ltd. 4.60 0.50
Total 223.84 43.19

of Tk. 76.68 crore. All the 11 application were approved by ICML including one right
issue. List of the companies to which underwriting commitment was made are as
follows:
Name of the Size of Issue Amount of

Company underwriting
commitment
Shahjalal Islami Bank Ltd 93.58 0.50
The Premier Bank Ltd. 84.50 5.00
Bangladesh Finance & Investment 7.00 0.40
Company Ltd.
Oman Bangladesh Leasing & Finance Co. 12.75 0.50
Ltd.
Baira Life Insurance Co. Ltd 7.59 0.50
Phoenix Finance & Investment Co. Ltd 12.50 1.50
Trust Bank Ltd. 70.00 2.69
(premium Tk. 23.33 crore)
Standard Bank Ltd 65.58 22.65
First Security Bank Ltd. 100.00 5.00
Mudaraba Perpetual Bond of Islami Bank 150.00 37.00
Bangladesh Ltd.
Industrial and Infrastructure Development 7.50 0.94
Finance Company Ltd.
Total 611.00 76.68

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Issue management
To perform the job of an issue manager for the issue of shares and debentures,
ICML renders professional services to the issuers. While performing the function of
manager to the issue, ICML involves itself in preparing prospectus, helping the
issuers in getting the approval of prospectus from SEC and also arranges publication
of prospectus in the daily newspaper.
Process
When an issuer company approaches to ICML to perform the manager to issue
activities, they sequentially carry out the following activities.
 Initially they examine and analyze the financial statements (income

statement, balance-sheet and cash-flow statement) of existing companies
and for the new companies the go through the capital structure (debt
equity ratio), asset position. After that they prepare the Prospectus as per
Public Issue Rules of SEC. Prospectus contains information about the
company’s asset & liabilities, financial positions, profit & losses and it’s
future prospects.

 After preparing the Prospectus they go to Security Exchange Commission
(SEC) for the approval of the prospectus. SEC scrutinizes the prospectus.
(before giving approval)
 Receiving the approval from SEC then ICML arranges the publication of
prospectus in the daily newspaper.
 Then they appoint the bank to the issue (commercial banks) to collect the
application money from the public and they also settle the five working
days in which the applicants will submit the money.
Commission & Fees

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Issue Management fee is maximum 1% on the public offering amount or 20 lac
whichever is less. The fees generated from the act of issue manager for companies
from the FY 2003-04 to 2006-07 are given below:
Particulars 2003-04 2004-05 2005-06 2006-07

Manager to the Issue fees 1500000 1450000 3830000 1222082
Year-wise Issue-Management Activities

During FY 2003-04, ICML received 8 applications to act as Manager to the Issuer
amounting to Tk. 159.50 crore, of which 7 applications amounting Tk. 153. 50 crore
were approved, and 1 application was under consideration. Out of the approved
applications, 2 applications were made for bond issue through private placement and
1 application was cancelled subsequently. List of the companies to which
underwriting commitment was made are as follows:
Name of the Company Nature of Size of Date

Issue Issue
Jamuna Bank Ltd. IPO 19.50 25-02-2004
Prime Finance and Investment Ltd.* IPO Bond: 30.00 17-04-2004
Share: 3.00
Nitol Insurance Co. Ltd. IPO 9.00 12-04-2004
Phoenix Leasing Company Ltd.** IPO 30.00 27-04-2004
Global Insurance Company Ltd. IPO 9.00 06-05-2004
CNS Ltd. IPO 3.00 26-05-2004

Power Grid Company of BD Ltd. IPO 50-00 28-06-2004
Total 153.50
During the FY 2004-05 ICML received 8 assignments to act as an issue manager
amounting 238.68 crore. Among those 4 applications were cancelled subsequently.
For the following companies ICML acted as an issue manager in the mentioned
financial year:
Name of the Company Nature of Issue Size of Issue Date

S. Alam Cold Rolled Ltd. IPO BDT 26.68 14-7-2004
crore
Golden Son Ltd. IPO 20.00 11-8-2004
Union Insurance Co. Ltd. IPO 9.00 20-9-2004
ACI Formulations Ltd. IPO 100.00 25-5-2005
155.68 crore

22
During the FY 2005-06, ICML received 6 applications to act as Manager to the issue
amounting to Tk. 237.31 crore among which 5 applications amounting to Tk.207.31
crore were approved and the remaining 1 application for issuance of bond was
cancelled subsequently. The companies against which ICML acted as Issue Manager
are asserted below:
Name of the Company Nature of Issue Size of Issue Date

Aftab Automobiles Ltd. Right Issue Tk. 33.74 1-8-2005
(including premium of Tk. 22.49 crore
crore)
Uttara Finance and Investments Ltd. Right Issue 39.60 crore 10-6-2005
(including premium of 26.40 crore)
Bangladesh Industrial Finance IPO 11.10 crore 13-4-2006
Company Ltd.
Dhaka Electric Supply Company Ltd. Direct Listing 31.78 crore 16-4-2006
Powergrid Company of Bangladesh Direct Listing 91.09 crore 16-4-2006

Ltd.
Total 207.31 crore
During the FY 2006-07 ICML committed to act as to the issue of 6 companies

amounting 469 crore taka. The following company appointed ICML to conduct the
issue management in that year:
Name of the company Nature of Size of Issue Date of

Issue Signing
Mudaraba Perpetual of Islami Bank of Private 150+150= 5-9-2006
Bangladesh Placement & 300.00 crore
Repeat Public taka
Offering(RPO
)
Industrial and Infrastructure IPO 7.50 27-9-2006
Development Finance Company
Limited
Phoenix Finance and Investments IPO 12.50 crore 7-2-2007
Limited
Plane Vanilla Bond of IDLC Finance Private 30+10= 40 12-2-2007
Limited Placement & crore
RPO

23
Takaful Islami Insurance Limited IPO 9.00 crore 3-4-2007
First Security Bank Limited IPO 100 crore 26-4-2007
Private Placement
In addition to underwriting securities for distribution to the public, securities may be
placed with a limited number of institutional investors such as commercial banks,
insurance companies, investment companies and pension funds.
This process differs from the public offering of securities that we have described so
far. Here certain percentage of total securities are mostly offered to
 Relatives
 Existing Shareholders
 Commercial Bank
 Insurance Company
 Pension Fund
 Mutual Fund
In this method instead of providing prospectus to the potential investors, they serve
“THE MEMORANDUM OF DUEL PROSPECT”. It contains information about the
company’s assets & liabilities, financial positions, profit & losses and its future
prospects. It is also mentionable that the private placement memorandum is not
subject to SEC review rather the investors have their own SHARE DEPARTMENT
where well-knowledged persons are involved in analyzing those statements.
Commission & Fees

Issue Management fee is maximum 1% on the public placements amount or 20 lac
whichever is less.
Year-wise Private Placement Activities

Following companies are issued through Private Placements:
Name of the Company Year
Mudaraba Perpetual Bond of Islami Bank 2006

Bangladesh Limited
Plane Vanilla Bond of IDLC Finance Limited 2007

24
DIRECT LISTING (BOOK BUILDING METHOD)
In this method company securities are offered to the general public through
secondary markets. Generally, well reputed companies in Bangladesh only Govt.
companies go for direct listing.
Process
Issue manager, ICML performs the following activities:
 Initially they examine and analyze the financial statements (Profit- Loss
statements, Balance- Sheet and Cash flow Statements) of the Govt.
companies. After that they prepare the “INFORMATION DOCUMENT”
which contains information about the company’s asset & liabilities,
financial positions, profit & losses and its future prospects.
 Then ICML submit the INFORMATION DOCUMENT to SEC for approval.
 Receiving the approval , they directly place the share in secondary market
through ICB Security Trading Ltd. (ISTL)
 At the first day of trading within a fixed time bracket ICML observe the
trading prices of shares. And then they fixed the lower limit or minimum
price of the share.
Commission & Fees:

Issue Management fee is maximum 1% on the public offering amount or 20 lac
whichever is less.
Company Lists
Following companies are issued through Direct Listing:
Name of the Company Year
Dhaka Electric Supply Company Ltd. 2006

25
Power Grid Company of Bangladesh Ltd. 2006
Meghna Petroleum Ltd. 2007
Jamuna Oil Company Ltd. 2007
Portfolio Management
Portfolio management is the corner stone of ICML’s activities. Being a Leading
merchant banking institution, ICML contributes significantly to the development of the
capital market through active portfolio management. Two types of portfolio are
managed by ICML.
 Investment Portfolio of ICML

 Investment Portfolio of individual investors (Investors’ Scheme)
Investment Portfolio of
ICML
It is ICML’s own portfolio. Investment portfolio of ICML generally builds up by their

paid-up capital, Net Profit and Retained earnings. Decisions are solely taken by
ICML. and they are the only beneficiary if profit is generated from portfolio.
The following table shows comparative summarized position of investment portfolio

of ICML from FY 2002-03 to FY 2006-07
(Tk. in crore)
Particulars 2003-04 2004-05 2005-06 2006-07
Total Investments 8.68 15.58 10.61 15.16

Net Investments 4.23 8.80 5.07 3.47
Capital Gain 1.76 5.61 2.37 6.55

26
Dividend Income .16 .62 .88 1.65
Here In FY 2003-04 the net investment was pretty low compared to next FY 2004-05.
Again on FY 2005-06 the investment decreases and finally on last FY 2006-07 it was
the lowest 3.47 crore
Here In FY 2003-04 the capital gain was pretty low compared to next FY 2004-05.
Again on FY 2005-06 gains decreases and finally on last FY 2006-07 it was the
highest Tk.6.55 crore.
We can also observe similar trend on dividend income in first FY 2003-04 it is the
lowest and FY 2006-07 it is the highest. In FY 2004-05 and FY 2005-06 it was
gradually increasing.
Now the change in Net Investments, Capital Gain and Dividend Income are shown in
graph in figure 1, 2, 3, respectively
Figure: 1
It shows the change in Net
Investment from FY 2003 -04 to Net Investments
FY 2006-07. In 2003-04 it was
9
Tk.4.23 crore. It has more then 8
7
doubled in FY 2004-05 amounting
Amount 6
Tk. 8.80 crore.In FY 2005-06 it has 5
(Tk. in
4
crore) 3
declined 43% from previous year
2
amounting TK.5.07 crore. Last FY 1
0
2006-07 it was lowest TK.3.47 2003-04 2004-05 2005-06 2006-07
crore Years
Figure: 2
Capital Gain
It shows the change in Capital
7
6
Gain from FY 2003 -04 to FY
5
Amount 2006-07. In 2003-04 it was
4
(Tk. in
crore)
3 Tk.1.76 crore. It has more then
2
1 doubled in FY 2004-05
0
2003-04 2004-05 2005-06 2006-07 amounting Tk. 5.61 crore.In FY
Years

27
2005-06 it has declined 58% from previous year amounting TK.2.37 crore. Last FY
2006-07
It was highest Tk. 6.55 crore.
Figure: 3
It shows the change in Dividend Dividend Income
Income from FY 2003-04 to FY 2006- 2
07.In 2003-04 it was Tk.16 lac In 2004- 1.5

Amount
05 it was Tk. 66 lac which almost four ( Tk. in 1
crore)
times greater then previous year. It 0.5
gradually increases in 2006 & 2007. 0

2003-04 2004-05 2005-06 2006-07
Highest was in 2007 amounting Tk1.65
Years
Investors’ Scheme
ICML is mandated to manage investment portfolios of individuals under its Investors’
Scheme. This scheme enables an individual to open an investment account with
minimum deposit of Tk.10,000 (ten thousand) in both ICML Head Office and Branch
Offices. It grants loan at a ratio of 1:1 against the assets of an account subject to a
maximum limit of Tk.25.0 lac. An accountholder may use the combined balance of
his/her equities and loan to buy shares/securities in both primary and secondary
securities markets.. To help the investors to develop a diversified and balanced
portfolio in order to minimize risk and earn a reasonable return, ICML provides
professional advice and other support services.
Types of Accounts:
There are two types of investment accounts. They are:
 Discretionary Account: In this type of account investment decisions

are made by only ICML at their own discretion. This type of account now
doesn’t exist in ICML.
 Non- Discretionary Account: In this type of account investment

decisions are made by account holders. But here ICML is also involved.
Nowadays ICML opens only this kind of account.

28
ICML now have approximately 10,000 members. 7000 accounts at their head office
and around 3000 at different branches.
No. of net operating accounts that of ICML from FY 2003-04 to FY 2006-07 are given
in a table and also the trend have been shown in Figure 5:
Particulars 2003-04 2004-05 2005-06 2006-07
No. of net operative 513 4090 5483 8890

accounts
Figure: 4
No. of Net Operating Accounts

Figure 4 show the trend in No. of Net
9000
Operating Accounts. Here in FY 2003- 8000
7000
04 it was only 513. In FY 2004-05 No. 6000
5000
of account is 4090 which 8 times Number
4000
3000
greater then last year. Next FY the 2000
1000
number increases to 5483 which is 0
2003-04 2004-05 2005-06 2006-07
34% higher then previous and finally in Year
FY 2006-07 it is 8890.
Opening Account
An individual needs minimum deposit of Tk.10,000 (ten thousand) to open an
investment account in both ICML Head Office and Branch Offices. Other
requirements are given below:
 The account holder has to be physically present while opening investment
account.
 Prescribed account opening form has to be filled-up properly.
 Two passport size photographs duly attested by an introducer or by a
gazette officer or any bank official.
 The introducer needs to have an investment account in ICML.In
case of Nominee, signature and the photograph of the nominee is a must

29
 Bank certificates mentioning name, father’s name, mother’s name,
address and account number along with signature has to be attested by
the bank.
 Persons of unsound mind or minors are not eligible to open investment
account
 Maximum two accounts can be opened one in the name of the individual
and another jointly.
No. of accounts that have been opened by ICML from FY 2003-04 to FY 2006-07 are
given in a table and also the trend have been shown in Figure 5:
Particulars 2003-04 2004-05 2005-06 2006-07
No. of accounts 536 3405 1670 3625

opened

30
Figure: 5
It shows the trend in No. of Accounts Opened. Here in FY 2003-04 it was only 536. In
FY 2004-05 No. of account is 3405 No. of Accounts Opened
which 6 times greater then last year.
4000
Next FY the number falls to 1670 3500
3000
which is 50% less then previous and 2500
finally in FY 2006-07 it is 3625. Number 2000

1500
1000
500
Loan disbursed: 0
2003-04 2004-05 2005-06 2006-07
Year
 Margin Loan Ratio:
1:1
 Loan Limit: Maximum 25.00 lac per account.
Total deposits received and Loan disbursed amount from FY 2003-04 to FY 2006-07
are given in a table and also the trend have been shown in Figure 6:
(Tk. in crore)
Particulars 2003-04 2004-05 2005-06 2006-07
Deposits 17.39 41.58 27.63 50.57

Received
Loans 4.09 24.63 39.66 199.82
Disbursed
Figure: 6 Loans Disbursed & Deposits Received
300
Amount (Tk. in crore)
It shows the trend in Loan Disbursed 250
& Deposits Received. During FY 200

150
2003-04 to FY 2005-06 deposit
100
received was higher then loan
50
disbursed. But in FY 2006-07 loan Loan
0 Disbursed
disbursed get higher then deposits 2003-04 2004-05 2005-06 2006-07 Depostis
Years Received
received.

31
Closure of Accounts
In case of closure of an investment account, the account holder has to give a notice
regarding closing of the account. After getting not less than 7 days prior notice, ICML
will take necessary measures to close the account. ICML, after adjusting all dues will
pay withdrawal fund/ securities ( it any) to the client. ICML maintains a suspense
account against the closed account for receiving any future inflows to be distributed
to the closed account.
No. of accounts that have been closed during FY 2003-04 to FY 2006-07 are given in
a table and also the trend have been shown in Figure 7:
No. of Accounts Closed
300 Figure 7 show the trend in

250 No. of Accounts Closed during
200
FY 2004 to 2007. Here in FY
Number 150
100 2003-04 it was only 23. In FY
50 2004-05 No. of account closed
0
2003-04 2004-05 2005-06 2006-07 is 70 which 3 times greater then
Years last year. Next FY the number
increases to 277, the closing
rate was high then previous.
Finally in FY 2006-07 it is 177, less then previous year.
Commission & Fees
Cost of Account Opening Form : Tk. 20.00

Initial Documentation Charge : Tk. 500.00
Brokerage Commission : 0.50% on the value of traded
securities.
Interest on Marginal Loan
Interest Rate : 13.00%

Mode of Charging Interest on : Quarterly
Margin Loan

32
Service Charge
Portfolio Management : 1% per annum with a minimum

Fee/Service Charge charge of Tk.500.00
Mode of Charging Service Charge : Quarterly.
Charge of Security withdrawal : 0.50% on the market value of

from Account securities to be withdrawn from the
account.
Financial/Portfolio Charge : Tk.10.00 per statement
Sectoral Investments
Sectoral Investments at cost under Investors’ Scheme during FY 2003-04 to FY

2006-07 are given below
(Tk. in crore)
Sector 2003- 2004- 2005- 2006-

04 05 06 07
Banks 56.73 98.49 48.67 172.67
Cements 1.3 10.23 3.7 9.81
Ceramics 0.05 0.2 0.01 0.09
Engineering 0.62 4.43 3 13.16
Food and allied 0.82 2.27 0.39 1.48
Fuel and Power 0.47 1.23 6.55 45.83
Insurance 0.76 12.58 11.53 7.3
Investments 1.21 4.86 4.09 26.29
IT 0.6 5.27 2.38 5.02
Pharmaceuticals and 2 26.33 13.77 17.74
chemicals
Services and real estate 0.13 0.64 0.1 0.72
Tannery & Leather 0.43 2.59 0.81 5.8
Textile 1.29 9.12 2.68 4.72
Miscellaneous 0.18 2.6 1.78 3.96
Total 66.6 180.84 99.47 128.85
On the table we can observe that on FY 2003-04 main investor sectors was Bank
around Tk.56 crore was invested in this sector. Other prominent sectors were

33
Pharmaceutical, Cement, and Textile etc. On FY 2004-05 Bank maintained their
leading position and prominent companies remained the same, only Insurance made
its position among them. During FY 2005-06 the picture is quite same. Here also
Bank is the most prominent investment sector but the amount has declined to
Tk.48.67 crore. In this year Insurance sector investment has increased from 6.5% to
11% and a new sector has able to make a mark that is Fuel and Power sector around
Tk.6.55 crore was invested in this sector. Finally during FY 2006-07 Bank holds its
leading position. Fuel and Power sector flourished and Investment sector looked
promising. But the pharmaceuticals and chemicals previous years one of main
investment sectors investment falls,
On Figure: 8 we have shown a comparison of four years investment sector.
Govt./non govt.
Sectoral Investment for 2003-04 employees B anks
Retired Personnel Sectora l Inve stm ent for FY 2004-05C ament
C eramics
Engineers/Doctors/Lawy Engineering
ers
F o o d & A llied
Businessmen/
F uel & P o wer
Agriculturists
Insurance
Housewives/Working
women Investments
Students IT
P harmaceuticals & C hemicals
Workers Services & R eal Estate
T annery
Others
T extile
M iscellaneo us
B anks
B anks Sectoral Investment for FY 2006-07 C ament
Se ctora l Inve stm e nt for FY 2005-06 C ament
C eramics
C eramics
Engineering Engineering
F ood & A llied F o od & A llied
F uel & P ower F uel & P o wer
Insurance Insurance
Investments Investments
IT IT
P harmaceuticals & C hemicals P harmaceuticals & C hemicals
Services & R eal Estate Services & R eal Estate
T annery Tannery
T extile Textile
M iscellaneous M iscellaneous
Bank Sector maintained their top position during these four financial years. At the
beginning most of the investments were done in this sector but later years other
sectors also flourished. During FY 2003-04 to FY 2005-06 Pharmaceutical and
chemicals and textile sector investment was pretty high. But during FY 2006-07 it
falls and Fuel and Power sector become quite prominent.
Classification of Investors

34
Investors of different occupations invested their savings under Investors’ Scheme of
ICML .However, salaried Government and Non- Government employees, retired
personnel, housewives and working women formed the backbone of Investors’
Scheme of ICML. The following table shows the occupation wise classification of the
investment accountholders of ICML who opened accounts during FY 2003-04 to FY
Number of
Accountholders
On the table we can observe that on FY 2003-04 Govt./Non Govt. employees were
dominating. Businessman and Agriculturist and Housewives/Working women were
other two prominent occupations. Student and workers were not defined. During FY
2004-05 the trend remained the same. Govt. /Non Govt. employees were leading.
Student and Workers new two segment were opened. During FY 2005-06 number of
total accountholders decreased compare to past year trend remained the same. In
Occupation 2003-04 2004-05 2005-06 2006-07
Govt./non govt. employees 276 1485 876 1693

Retired Personnel 16 70 16 69
Engineers/Doctors/Lawyers 18 100 28 127
Businessmen/ Agriculturists 147 891 371 868
Housewives/Working women 28 315 232 442
Students 00 155 134 342
Workers 00 2 4 9
Others 51 387 9 75
Total 536 3405 1670 3625
FY 2006-07 numbers of investors increased and number of student investors was
quite compared to previous two years.
On figure 9 we have shown a comparison of the classification of investors of four
years:

35
Figure: 9
Cla ssifica tion of Inve stors FY 2003-04 C la ssifica tio n o f In ve sto rs F Y 2004-05
Go vt./no n go vt. emplo yees G o vt./no n go vt. emplo yees

R etired P erso nnel R etired P ers o nnel
E ngineers/Do cto rs/Lawyers E ngineers /D o c to rs /L awyers
B usiness men/ A griculturists B us ines s m en/ A gric ulturis ts
H o usewives/Wo rking wo men H o us ewives /Wo rking wo m en
S tudents S tudents
Wo rkers Wo rkers
Others O thers
Cla ssifica tion of Inve stors FY 2005-06 C l a ssific a tio n o f I n v e sto rs F Y 2 0 0 6 -0 7

Go vt./no n go vt. emplo yees
G o v t./no n go v t. em plo ye e s
R etired P erso nnel
R etired P ers o nne l
E ngineers /Do cto rs /Lawyers
E nginee rs /D o c to rs /L a wyers
B us ines smen/ A griculturists
B us ines s m e n/ A gric ulturis ts
H o usewives/Wo rking wo men
H o us ewiv e s /W o rk ing wo m en
Students
S tude nts
Wo rkers
W o rk e rs
Others O the rs
Govt. /Non Govt. employees were the major accountholders of the Investors’
Scheme of ICML. Businessman/ Agriculturists are holding the second position and
Housewives/ Working women third. During FY 2006-07 good number of students
opening account under Investors’ Scheme at ICML.
Corporate Advisory Services

Besides the major services provided by the ICML other corporate advisory services
are:
Investment Counseling
To help the investors build diversified and balanced portfolio to minimize risk and
earn a reasonable return, ICML provides professional advice and other support
services. It provides investment counsel to the issuers and investors including
financial engineering and corporate advisory services.

36
Equity and Entrepreneurship Fund (EEF)
ICML has also been rendering consultancy services to the projects under the Equity
and Entrepreneurship Fund (EEF) of Bangladesh Bank. The EEF is the equity fund
provided by the Government of Bangladesh under the management and supervision
of Bangladesh Bank and ICML is acting as the lien bank on behalf of the Bangladesh
Bank. Its services also include financial engineering and other financial advisory
services. The equity is provided to the entrepreneurs who are interested to set-up
Agro-based or Information Technology (IT) industry.
So far they have worked as Lien Banker for fisheries Industry. They have prepared
19 appraisal reports. Bangladesh Bank has stopped this fund activity for a while. In
near future they are planning to issue fund for IT industry and also hand over the full
responsibility of EEF to ICML.
Activities
The activities that are performed by ICML in this regards are discussed below:
 At first the particular agro-based industries (generally fisheries) choose

ICML as their lien banker then Bangladesh Bank asked ICML to prepare
the appraisal report / feasibility report of the company.
 It also prepared the costing report for the particular company. Bangladesh
Bank study that report and then issue funds not necessarily the exact
amount that is quoted by ICML, it can be less.
 Bangladesh Bank also asks Lien Bank to check whether the particular
company has spent 51% of total investment. If they had carry out that
expenditure then only that company will be eligible to receive the 49%
amount on installment basis from Bangladesh Bank.
 51% share of that particular company is kept in ICML under their

protection and power of attorney is given by that company. If due to any

37
reasons they become unable to pay back the loan amount ICML will sell
those shares in the secondary market.
 If Bangladesh Bank faces any problem regarding collecting the loan

amount or any other crises arises they appoint ICML to investigate the
issue.
Commission & Fees

ICML has received TK.20.35 lac as consultancy fee under Bangladesh Bank EEF
Scheme during FY 2003 to FY 2005.
These are the all functions performed by ICML.

38
Performance At a
Glance
(Tk. in crore)
Particulars 2003-04 2004-05 2005-06 2006-07
Resources
Authorized Capital 100.00 100.00 100.00 100.00
Paid-up Capital 8.00 8.00 8.00 8.00
Long Term Loan 10.00 9.38 7.17 4.97
Retained Earning 2.19 6.74 8.63 16.23
Total Asset 28.04 52.04 64.56 101.27
Investment In ICML's Portfolio 8.68 15.58 10.61 15.16
Working Capital 18.56 -6.85 -7.95 -15.01
Total Shareholders Equity 12.89 14.76 16.63 36.23
Issue Management
No of companies 7 4 5 6
Total Amount 113.52 155.68 207.31 469.00
Underwriting
No of companies 10 11 12 11
Total Amount 10.61 11.00 43.19 76.68
Investors Scheme
No of Accounts Opened 536 3405 1670 3625.00
Deposits Received 17.38 41.58 27.63 50.57
Loan Sanctioned 4.07 24.63 39.66 199.82
Investment Made 8.76 50.17 10.79 33.34
Results from Operation

Total Income 4.07 12.78 10.51 17.76
Profit after Tax/Retained Earnings 1.90 5.45 3.07 8.80
Key Financial Ratios and Market Data

Current Ratio 4.83 0.75 0.8 0.75
Net Asset Value per Share 289.77 301.75 297.59 514.99
Return on Investment 21.66% 10.86% 28.45% 26.39%
Return on Asset 6.77% 10.47% 4.57% 11.36%
Return on Equity 15.55% 36.92% 18.49% 36.31%
Earnings per Share (based on retained earnings) 27.36 84.47 107.90 202.90
Debt/Equity Ratio 0.9 0.64 0.43 0.14
Dividend Per Share 10.00 15.00 15.00 16.00
Book Value per Share 152.36 184.47 207.92 302.90

39
Total Asset Position
The graph shows the portion of current

and non current assets used by ICML. In
2003-04 the non current assets were
much less then the current asset but it
gradually builds up and in 2006-07 it was
highest, amounting 562,076,285 BDT.
Asset-Liability-Equity:
The second line graph shows the basic

accounting equation (A=L+E) position in
the company.
Working Capital
In 2003-04 the working capital was

18.56 crore but it decreased over the
next few years as the current liability of
the company grew more then the
current assets.

40
Current Ratio
Current ratio measures the liquidity position of a

company. This graph shows a poor trend in
liquidity situation of ICML. In 2003-04 the ratio
was 4.83:1 which proves excess liquidity but it
laterally dropped to 0.75:1 the next year and in
2006-07 it was 0.75:1 which is 0.75 taka asset is
for 1 taka of liability. Generally the standard for
current ratio is 2:1 that is 2 taka asset for 1 taka
liability.
Net Asset Value per Share
Net asset value per share is an expression

for net asset value that represents a
company's value per share. It is calculated
by dividing the total net asset value of the
company by the number of shares
outstanding. Here in 2006-07 the value
rouse to 514.99 BDT per share.
Income-Profit Composition
The Income-Profit Composition chart is a

comparison of total revenue and profit earned. It
indicates the efficiency of the company to convert
revenue to profit. In FY 2006-07 total income was
17.76 crore and Profit after tax was 8.80 crore.

41
Return on Investment
Return on investment is an accounting ratio

expressing the profit of an organization for a
financial year as a percentage of the
investment. On 2006-07 it was 26.39%. This
means the company has earned return of
26.39 for its 100 taka investment.
Return on Asset
In 2006-07 the return on asset was the

highest at 11.36%. This indicates ICML
has earned 11.36 taka on per 100 taka of
assets.
Return on Equity
Return on Equity the net income of an

organization expressed as a percentage
of its equity capital. Return on equity has
been fluctuating over the few years. In
2003-04 it was 15.55% then 36.92%,
18.49% and at 2006-07 it was 36.31%.

42
Earnings per Share
Earnings per share are the portion of

a company's profit allocated to each
outstanding share of common stock.
EPS serves as an indicator of a
company's profitability. Earnings per
share (based on retained earnings) in
ICML is increasing at an increasing
rate, as shown in the graph.
Debt/Equity Ratio
Debt/equity ratio is a measure of a
company's financial leverage. It indicates
what proportion of equity and debt the
company is using to finance its assets.
Capital-intensive industries tend to have a
debt/equity ratio above 2. But ICML’s ratio
is very poor. It ranges 0.9 to 0.14.
Dividend per Share

In 2003-04, ICML declared dividend of
10 BDT. For the next two years the
dividend was 15BDT and at 2006-07 it
was 16BDT.

43
Conclusion
ICML as a subsidiary of ICB, plays a significant role in the development of capital

market activities of our economy. The company’s overall performance and
achievements are influenced considerably by the trends of economy. In spite of the
challenges on a few fronts, the company has achieved strong growth with its’
remarkable performance in issue management, underwriting and portfolio
management --- major functions of the company. The company is committed to
dedicate all it’s effort to enhance it’s activities to perform operations with high
standards of business ethics.
Foe a sound capital market and for better capital formation, ICML is providing
services from the very beginning of its’ establishment and to mobilize savings and
contributing to our nation throughout.

44
BIBLIOGRAPHY
 Annual Report of ICB Capital Asset Management Ltd. FY 2003-04
 ICB Capital Asset Management Ltd. Brochure for FY 2006-07
 ICB official website www.icb.gov.bd
 ICML official website www.icbcml.com.bd

 ICB AMCL officials website
 ICB STCL officials website

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Icb Capital Management LTD

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ICB CAPITAL MANAGEMENT LTD.

INVESTMENT BANKING OPERATIONS

ORIGIN OF THE REPORT

The report on “Investment Banking Operations of ICB Capital Management Limited”

 Explain its function as an Investment Banker.

Investment Banking Operations of ICML

Investment Banking Operations of ICML

Investment bankers typically perform three activities

ROLE OF INVESTMENT BANKING IN CAPITAL MARKET

Investment banks play a vital role to develop a countries capital market. In

Investment Banking Operations of ICML

LAW REGARDING MERCHANT BANK

Investment Banking Operations of ICML

Name of the Banks Authorized Certificate Issue

Investment Banking Operations of ICML

Before liberation it was Investment Corporation of Pakistan which provided

Investment Banking Operations of ICML

Custodian and Banker to the Issues

Mergers and Acquisitions

Companies willing to expand their business through mergers or acquisitions or to

Corporate Financial Advice

Government enterprises and Companies intending to go public issue often seek

Investment Banking Operations of ICML

ICB Provides lease finance mainly for procurement of industrial machinery,

Investment Portfolio of ICB

Being the largest institutional investor ICB contributes significantly to the

Up to 30 June 2004 ICB made a total investment of Tk 41.08 crore in 27 companies

Advance against Unit Certificates Scheme

Investment Banking Operations of ICML

Advance against Mutual Fund certificates Scheme

Consumer Credit Scheme

As part of business diversification program, ICB has introduced "Consumers Credit

Bank Guarantee scheme

Investment Banking Operations of ICML

During 2003-04, as part of human resource development programme, ICB

During 2003-04, no officer/staff participated in any foreign training course.

Equity support through consortium arrangement

Counseling to the Government

Investment Banking Operations of ICML

 ICB Capital Management Limited ( ICML)

ICB Capital Management Limited (ICML)

Investment Banking Operations of ICML

ICML acts as a placement agent. Selected percentage of shares of a company is

Managing Investment Accounts

ICB Asset Management Company Ltd. (IAMCL)

Investment Banking Operations of ICML

The company is engaged in investment management; more specifically floating and

Types of Mutual Fund

There are two types of Mutual Fund. They are-

• Open-end Mutual Fund

Open-end Mutual Fund

I. ICB AMCL Unit Fund

Investment Banking Operations of ICML

I. ICB AMCL First Mutual Fund

ICB Securities Trading Company Ltd. (ISTCL)

Investment Banking Operations of ICML

Date of Incorporation December 5, 2000

SEC’s Registration Obtained October 16, 2001

Business Commenced July 1, 2002