Corporate Governance

Status of compliance with the conditions imposed by the Commission's Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012 issued under section 2CC of the Securities and Exchange Ordinance, 1969:

Condition
No.
Title Compliance Status
(Put √ in the appropriate column)
Remarks
(if any)
Complied Not Complied
1. BOARD OF DIRECTORS:
1.1 Board size : Board members should not be less than 5(five) and more than 20(twenty)
1.2 Independent Directors
1.2 (i) Independent Director : at least 1/5th
1.2 (ii) a) Holding / Holding less than 1% share N/A
1.2 (ii) b) Connection with the Company's Management N/A
1.2 (ii) c) Relationship N/A
1.2 (ii) d) Not a member / Director of stock exchanges N/A
1.2 (ii) e) Not a Shareholder/Director/officer of any member of stock exchanges N/A
1.2 (ii) f) Not a partner /executive / was not a partner of company's audit firm N/A
1.2 (ii) g) Who shall not be a Independent Director more than 3 companies N/A
1.2 (ii) h) Not defaulter by a court N/A
1.2 (ii) i) Not convicted for a criminal offence N/A
1.2 (iii) Shall be appointed by the Board of Directors and approved by the shareholders the AGM
1.2 (iv) The post can not vacant more than 90 days N/A
1.2 (v) The Board lay down a code of conduct of all Board of members and annual compliance of the to be recorded N/A
1.2 (vi) Tenure of Independent Director shall be 3 years which may be extended for 1 year N/A
1.3 Qualification of Independent Director (ID)
1.3 (i) Financial Knowledge
1.3 (ii) Professional experience
1.3 (iii) Relaxed of qualification N/A
1.4 Chairman of the Board and Chief Executive Officer
1.5 The Director's Report to Shareholders
1.5 (i) Industry outlook and possible future developments in the industry
1.5 (ii) Segment-wise or product-wise performance
1.5 (iii) Risks and concerns
1.5 (iv) A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin
1.5 (v) Discussion on continuity of any Extra-Ordinary gain or loss
1.5 (vi) Basis for related party transactions- a statement of all related party transactions should be disclosed in the annual report
1.5 (vii) Utilization of proceeds from public issue, rights issue and /or through any others instruments
1.5 (viii) An explanation if the financial results deteriorate after the company goes for IPO, Repeat IPO, Rights Offer, Direct Listing etc.
1.5 (ix) If significant Variance occurs between Quarterly Financial performance and Annual financial Statements the management shall explain about the variance on their Annual Report.
1.5 (x) Remuneration to Directors Including Independent Directors N/A
1.5 (xi) The financial statements prepared by the management of the issuer company present fairly its state of affairs, the results of its operation, cash flows and changes in equity.
1.5 (xii) Proper books of accounts of the issuer company has been maintained
1.5 (xiii) Appropriate accounting policies has been consistently applied in preparation of the financial statement and that the accounting estimated are based on reasonable and prudent judgment.
1.5 (xiv) International Accounting standard (IAS) /Bangladesh Accounting standard (BAS) / International Financial Reporting Standard / Bangladesh Financial Reporting Standard, as applicable in Bangladesh, have been followed in preparation of the financial statements and departure there-from has been adequately disclosed
1.5 (xv) The system of internal control is sound in design and has been effectively implemented and monitored.
1.5 (xvi) There are no significant doubts upon the issuer company's ability to continue as a going concern. If the issuer company is not considered to be a going concern, the fact along with reason thereof should be disclosed.
1.5 (xvii) Significant deviations from the last year's operating results of the issuer company shall be highlighted and the reason thereof should be explained.
1.5 (xviii) Key operating and financial data of at least preceding 5 years shall be summarized.
1.5 (xix) If the issuer company has not declared dividend (cash or stock) for the year, the reasons thereof shall be given. N/A
1.5 (xx) The number of Board meeting held during the year and attendance by each director shall be disclosed.
1.5 (xxi) The pattern of shareholding shall be reported to disclose to aggregate number of share (along with name wise details where stated below) held by :-
1.5 (xxi) a) Parent/Subsidiary/Associated companies and other related parties (name wise details) : √d>
1.5 (xxi) b) Director, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouse and minor children (name wise details) :
1.5 (xxi) c) Executives;
1.5 (xxi) d) Shareholders holding ten percent (10%) or more voting interest in the company (name wise details) :
1.5 (xxii) a) A brief resume of the Director
1.5 (xxii) b) Nature of his/her expertise in specific functional areas;
1.5 (xxii) c) Name of companies in which the person also holds the directorship and the membership of committees of the board.
2 CHIEF FINANCIAL OFFICER (CFO), HEAD OF INTERNAL AUDIT AND COMPANY SECRETARY (CS)
2.1 Appointment
The Company shall appoint a Chief Financial Officer (CFO), a Head of Internal Audit (Internal Control and Compliance), a Company Secretary and Responsibilities.
2.2 Requirement to attend the Board Meetings
3 Audit Committee
3 (i) Audit Committee as a sub-committee of the Board of Directors
3 (ii) The Audit Committee shall assist the Board of Directors in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business.
3 (iii) The Audit Committee shall be responsible to the Board of Directors.
3.1 Constitution of Audit Committee
3.1 (i) The Audit Committee shall be composed of at least 3 (three) members
3.1 (ii) The Board of Directors shall members of the audit committee who shall be directors of the company and shall include at least 1 (one) independent director
3.1 (iii) All members of the audit committee should be "financially literate" and at least 1 (one) member shall have accounting or related financial management experience
3.1 (iv) Duration and Re-appointment
3.1 (v) The Secretary shall act as the secretary of Committee
3.1 (vi) The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director
3.2 Chairman of the Audit Committee
3.2 (i) The Board of Directors shall select 1 (one) member of the Audit Committee to be Chairman of the Audit Committee, who shall be an independent director
3.2 (ii) Chairman of the Audit Committee shall remain present in the AGM
3.3 Role of Audit Committee
3.3 (i) Oversee the financial reporting process
3.3 (ii) Monitor choice of accounting policies and principals
3.3 (iii) Monitor Internal Control Risk Management process
3.3 (iv) Oversee hiring and performance of external auditors
3.3 (v) Review along with the management, the annual financial statements before submission to the Board for approval.
3.3 (vi) Review along with the management, the quarterly & half yearly financial statements before submission to the Board for approval.
3.3 (vii) Review the accuracy of internal audit function
3.3 (viii) Review the statement of significant related transaction submitted by the management.
3.3 (ix) Review management letters/ Letter of Internal Control weakness issued by statutory auditors.
3.3 (x) When money is raised through initial IPO/RPO/Right Issue the company shall disclose to the Audit Committee
3.4 Reporting of the Audit Committee
3.4.1 Reporting to the Board of Director
3.4.1 (i) The Audit Committee shall report on its activities to the Board of Directors
3.4.1 (ii) a) Report on conflicts of interests
3.4.1 (ii) b) Suspected or presumed fraud or irregularity or material defect in the internal control system
3.4.1 (ii) c) Suspected infringement of laws, including securities related laws, rules and regulations
3.4.1 (ii) d) Any other matter which shall be disclosed to the Board of Directors
3.4.2 Reporting to the Authorizes N/A
3.5 Reporting to the Shareholders
4 EXTERNAL /STATUTORY AUDITORS:
4 (i) Appraisal or valuation services or fairness opinions
4 (ii) Financial information systems design and implementation
4 (iii) Book-keeping or other services related to the accounting records or financial statements
4 (iv) Broker-dealer services
4 (v) Actuarial services
4 (vi) Internal audit services
4 (vii) Any other service that the Audit Committee determines
4 (viii) No partner or employees of the external audit firms shall possess any share of the company they audit at least during the tenure of their audit assignment of that company
4(ix) Audit/Certification services on Compliance of Corporate Governance as required under clause (i) of Condition No.7
5 SUBSIDIARY COMPANY:
5 (i) Provisions relating to the composition of the Board of Directors of the holding company shall be made applicable to the composition of the Board of Directors of the subsidiary company N/A
5 (ii) At least 1 (one) independent director on the Board of Directors of the holding company shall be a director on the Board of Directors of the subsidiary company N/A
5 (iii) The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company N/A
5 (iv) The minutes of the respective Board meeting of the holding company shall state that they have reviewed that affairs of the subsidiary company also. N/A
5 (v) The Audit committee of the holding company shall also review the financial statements, in particular the investments made by the subsidiary company N/A
6 DUTIES OF CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO), The CEO and CFO shall certify to the Board that:-
6 (i) They have reviewed financial statements for the year and that to the best of their knowledge and belief:
6 (i) a) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading
6 (i) b) These statements together present a true and fair view of the company's affairs and are in compliance with existing accounting standards and applicable laws
6 (ii) There are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violation of the company's code of conduct
7 REPORTING AND COMPLIANCE OF CORPORATE GOVERNANCE:
7 (i) The company shall obtain a certificate from a practicing Professional Accountant/Secretary (Chartered Accountant/Cost and Management Accountant/Chartered Secretary) regarding compliance of conditions of Corporate Governance Guidelines of the Commission and shall send the same to the shareholders along with the Annual Report on a yearly basis.
7 (ii) The Directors of the company shall state, in accordance with the Annexure attached, in the directors report whether the company has complied with these conditions