Introduction & Company overview of ICB

Investment Corporation of Bangladesh (ICB) is a statutory corporation. It’s of Government of

the People’s Republic of Bangladesh. ICB was established on 1 October 1976. It was established
under No. 40 of Investment Corporation of Bangladesh Ordinance of the year 1976.

Figure 1: Logo of ICB

Source: Annual Report, ICB, 2019

ICB is mainly an investment bank. Currently, it is only operating in Bangladesh. It has been
established to accelerate the pace of industrialization. Another prime motive behind the
establishment of the Investment Corporation of Bangladesh is to develop a sound securities
market within this region. ICB is one of the largest investors in the share market of Bangladesh.

General information
Basic functions

Some of the basic functions of this organization are the following.

 Investing in the share market.

 Providing loans and advances.
 Acting as a manager, trustee, custodian of mutual funds, etc.

It’s the most successful state-owned corporation in Bangladesh comparing the amount of
profitability. As per the annual report of 2018-19, the profit before tax generated by the
Investment Corporation of Bangladesh is 60,72,32,957tk.

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Vision and mission

The vision of this organization is to be the leading responsible as well as the innovative financial
organization that contributes and shares the rewards of the growing economy of Bangladesh.
With this aim, they are trying to fulfill the mission of transforming ICB into a responsible
institution, financial architect as well as an innovative solution provider in the economy of
Bangladesh. Providing performance leadership by exploration in the capital market is also one of
their missions.

Strategic objectives of ICB

Figure 2: Core values of ICB

Source: Annual Report, ICB, 2019

The strategic objectives of this organization are the following.

1. Maximize the value of stakeholders through effective financial strategy.

2. Providing an applicable customer strategy.
3. Promoting and establishing an efficiently effective business strategy.
4. Developing and applicable financial strategy.
5. Developing and applying efficiently effective strategies in the sector of Information and
communication technology, risk, human resources, and governance.

Products and services of ICB

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The products and services provided by the Investment Corporation of Bangladesh are given
below.

1. Share placement and private equity.

2. Margin loan accounts.
3. Unit fund by ICB.
4. Portfolio management.
5. Operations in the stock market.
6. Project financing in the form of investment in preference shares, debenture financing,
advance against equity, lease financing, investment in Bond, etc.

Subsidiaries

The subsidiaries of ICB includes ICB Capital Management Limited, ICB Asset Management Co.
Limited and ICB Securities Trading Co. Limited.

Key management personnel

The chairman of the board of directors of this corporation is Dr. Mujib Uddin Ahmed. The
managing director is MD Abul Hussain. The other directors of the board are ABM Rahul Azad,
Joardar Israil Hossain, Md. Abdul Matin, Md. Ataur Rahman Prodhan, Mohammad Shams-Ul
Islam, Md. Abdus Salam Azad, Syed Shahriyar Ahsan. And, the secretary of the board is MD
Rafique Ullah.

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Comparison based on data analysis and interpretations
In this section, thorough data analysis will be done through a comparative summary of the
Annual Reports of ICB of the financial years 2016-2017. 2017-2018 and 2018-2019 respectively.
Also, interpretations from these data will be covered in the process.

The differences in the years

Corporate information

Compare to the annual reports of the previous two years, ICB updated their information in 2018-
19 that, upon the repeal of the Investment Corporation of Bangladesh Ordinance 1976, all
assets, rights, powers, authorities and privileges, and all property movable and immovable,
cash and bank balances, funds and all other interests and rights in, or arising out of, such
property and all other rights, intellectual property and rights, and all books of accounts,
registers, records and all other relating deeds and documents of the abolished Investment
Corporation of Bangladesh has been transferred to and vested in, the Corporation. All loans,
liabilities, and obligations of whatever kind of the abolished corporation have been transferred
and vested in, the Corporation and the above loan liabilities and obligations shall be the loans,
liabilities, and obligations of the Corporation. All investment instruments of the abolished
Corporation or its subsidiaries, units issued by mutual funds, etc. have been handed over or
transferred in the Corporation in the manner that those investments or issued instruments, etc. are
of invested or issued by the Corporation and its subsidiaries. Upon repeal of the Investment
Corporation of Bangladesh Ordinance, 1976, constituted Board, prepared regulations, issued
notices, orders, approvals, recommendations, accepted all plan or initiatives, all approved
budgets and acts done and existed immediately before the repeal of the Ordinance, shall deem to
be constituted, prepared, issued, approved under this Act subject to being consistency with
provisions of the Act and shall be effective until the end of the tenure or repeal or amendment
under this Act.

Principal activities

In 2018, ICB added the Purchase of Debenture and Bond in its principal activities as per the
annual report of 2018-19.

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Provision against other assets.

Provision against other assets maintained Tk. 270,057,377.00 in 2016-17, Tk. 28,07,41,636.00 in
2017-18, as per assessment of the management in 2018-19.

Reporting period

The reporting period of the financial statements covers one fiscal year from 01 July 2016 to 30
June 2017, 01 July 2017 to 30 June 2018 & 01 July 2018 to 30 June 2019 respectively.

Cash and cash equivalents

ICB changed the term in 2019 that the cash flow statement will be prepared following BRPD
circular no.14 dated 25 June 2003.

Depreciation

Fixed assets are recorded at historical cost less accumulated depreciation as per IAS-16
“Property, Plant and Equipment”. Depreciation is charged on a straight-line method using the
rates on all fixed assets Land, Building, Renovation, Office Building Furniture and Fixtures,
Office equipment, Electrical equipment, Air Conditioner & Refrigerator, Computer Hardware,
Carpets and Curtains, Telephone Installation, Motor vehicles, Library Book, and Others are 10,
20%, 10%, 20%, 20%, 20%, 20%, 20%, 20%, 20%, and 10% respectively.

Impairment

ICB changed the term here in 2018 as per the annual report of 2018-19 as, to comply with the
para 9 of IAS 36 “Impairment of Assets” as of balance sheet-date (30 June 2019), we have
assessed impairment of any class of assets considering the information as per para 12 of IAS
36. They also added that their impairment assessment revealed no indication of impairment of
any kind of assets based on the external and internal source of information.

Other Employees Benefit (Incentive Bonus)

The provision of Tk. 112.20 million, Tk. 9,47,29,600 and Tk.48,882,671.00 had been made for
incentive bonus of the three respective years.

Statement of liquidity

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Here, ICB added in 2017 and changed the method in the way that deposits & other accounts are
based on their maturity term and behavioral past trend. Another long-term liability is based on
their maturity term. Provisions & the other liabilities are based on their settlement.

Compliance of International Accounting Standard (IAS) and International Financial

Reporting Standard (IFRS)

IAS-1, IAS-7, IAS-8, IAS-10, IAS-12, IAS-16, IAS-19, IAS-23, IAS-24, IAS-27, IAS-32, IAS-
33, IAS-34, IAS-36, IAS-37, IAS-38, and IFRS-7, IFRS-8 IFRS-9, IFRS-10, IFRS-13, IFRS-15,
IFRS-16 have been followed by ICB to prepare the financial statements.

Off-balance sheet items

ICB started showing off-balance sheet items under the general function of the Corporation,
liabilities against bank guarantee which guarantee has been given to DSE and CSE in favor of
ISTCL, have been shown as off-balance sheet items. Provision for off-balance sheet items is
made as per BRPD circular No. 8 of 7th August 2007 and 10 of September 18, 2007, from 2016.

Under the general function of the Corporation, liabilities against bank guarantee which guarantee
has been given to DSE and CSE in favor of ISTCL, have been shown as Off-Balance Sheet
items. Provision for off-balance sheet items is made as per BRPD circular No. 8 of 7 th
August 2007 and 10 of September 18, 2007, from 2017.

Under the general function of the Corporation, liabilities against bank guarantee which
guarantee has been given to DSE and CSE in favor of ISTCL, have been shown as Off-
Balance Sheet items. Provision for off-balance sheet items is made as per BRPD Circular No.
14 dated 23 September 2012 from 2018.

Accounting for changes in accounting estimates

ICB added in the annual report of 2018-19 that IAS 8 states that the effect of a change in an
accounting estimate is to be applied prospectively by inclusion in the current accounting period
and, if relevant, in a future accounting period. The carrying amount of assets, liabilities, or
equity may be changed following a change in accounting estimates in the period of the change.

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General analysis of financial statements
Key Financial Ratios

The changes in the key financial ratios for ICB solo, ICB with its subsidiaries in the accounting
period 2018-19 & 2017-18 & 2016-17 respectively can be summarized as follows.

Net Profit to total Income (%) 2.42, 24.56 & 4.50, 24.46 & 26.57 29.05

Return on Total Investment (%) 0.89, 11.73 & 1.54, 10.72 & 7.16, 7.91 & 8.69, 9.37

Return on Total Equity (%) 1.16, 11.73 & 1.93, 10.94

Earnings Per Share (Tk.) 0.42, 5.41 & 0.86, 5.97

Book Value Per Share (Tk.) 36.53, 48.65 & 45.03, 57.56 & 5.54, 6.95

Dividend Yield (%) 0.86, 2.31 & 0.86, 2.31 & 2.00, 2.00

Dividend Payout Ratio (%) 238.75, 64.75 & 116.02, 58.65 & 63.17, 50.38

Price-Earnings Ratio (Time) 276.72, 28.08 & 134.47, 25.44 & 31.53, 25.15

Current Ratio 1.18: 1, 1.10: 1 & 1.24: 1, 1.16: 1 & 1.25: 1, 1.33: 1

Debt Equity Ratio 49.76, 14.58 & 41.81, 14.38 & 0.02: 100, 0.02: 100

Quick Ratio 0.16: 1, 0.16: 1 & 0.18: 1, 0.19: 1 & 0.21: 1, 0.24: 1

Capital Adequacy Ratio (%) 16.84, 23.50 & 19.61, 26.10 & 25.76, 29.16

Net Operating Cash flow per Share (NOCFPS) 0.59, 1.74 & (0.30), 2.64 & 51.97, 51.94

Net Asset Value (NAV) Per Share 36.13, 46.08 & 44.57, 54.54 & 63.78, 74.15.