On Mithun Knitting and Dyeing (CEPZ) Ltd a leading and emerging at first stages textile
This Report focuses specially on the role of company secretary’s functions such as (i) statutory duties (ii) duties to the directors (iii) duties to the full time managerial authority (iv) duties to the shareholders and the public (v) duties towards the office and the staff (vi) other duties and responsibility. Besides the above, report has covered three parts. (a) I:-Corporate governance / Secretarial practice, (b) II:- Corporate finance, Investment & taxation and (c) III: – Human resources management and administration. Part discussed about the issue of corporate governance practice in Bangladesh, benefits and limitations. It also has covered corporate governance guideline issued by SEC under order no.SEC/CMRRCD/2006-158/Admin/02-08 dated the 20th February, 2006. Besides the above, it has discussed about the procedures of director’s appointment, retirement, board meeting, and notice. b) –II has discussed about the corporate finance that means overall finance procedures. Total finance is coming from export proceeds. Without export, MKDL utilize the bank loan facilities for meeting up emergency requirement. This part has covered also about the accounting procedures, vouching systems that are direct related to the corporate finance. Final section is c) –III, has discussed about the HRM and administration. This part has focused on the HRM procedures and administration of MKDL.
1.01 Origin of the Report:
The Internship program of ICSMB helps to the qualified students to familiarize with the corporate environment.
For completing internship program prepared report on Mithun Knitting and Dyeing (CEPZ) Ltd a leading and emerging at first stages textile unit on its three major area-1. Corporate Governance/Company Secretarial Practice 2.Corporate Finance, Investment & Taxation and 3.Human Resource Management & Administration Specified by ICSMB.
1.02 Objective of the Study:
To fulfill the partial requirement of course.
· To gather operational knowledge of company’s secretarial matters, finance & accounts and human resource management functions.
· To familiarize myself with the practical aspects of the respective areas.
· To sort out problems with effective solutions.
- To analyze the existing structure of Mithun Knitting and Dyeing ( CEPZ ) Ltd
Secretarial matters finance & accounts and human resource management functions.
· To learn about Company Law, Corporate Law & Listing Regulation etc.
· To make recommendation in acceleration the practice regarding.
1.03 Coverage of the Study:
- The study mainly covers Corporate Governance/Secretarial Matters, Finance & Accounts functions, Investment, Taxation and Human Resource Management functions of Mithun Knitting and Dyeing ( CEPZ ) Ltd
1.04 Methodology of the Study:
The report has been written on the basis of both primary and secondary sources.
These sources are explained in brief below chronologically:
- The primary source of data contains information provided by the Company Secretariat, the Board Secretariat, the top management, higher executives and officials of different levels of Mithun Knitting and Dyeing ( CEPZ ) Ltd
Secondary data is collected from various publications and periodicals like-
· Annual Reports
· Company Brochures
· Memorandum of Association of MKDL
· Articles of Association of MKDL
· Company operations.
1.05 Scope of the Study:
While preparing the report great opportunity to have real life knowledge about the major three areas-
1. Corporate Governance/Secretarial Matters,
2. Finance & Accounts functions, Investment, Taxation and
- 3. Human Resource management functions of Mithun Knitting and Dyeing (CEPZ) Ltd . This report covers the functions done in the corporate secretariat, FAD (Finance & Accounts Division) and HRD (Human Resources Division) of Mithun Knitting and Dyeing ( CEPZ ) Ltd . I have tried my best to present my report through a detail analysis using various data, graphs, tables, accounting tools and references etc.
1.06 Limitations of the Study:
The problems, which I faced during my internship period, are enumerated below:
- I am working in senior position in Masafi Group and side by side is studding in EMBA (DU). As a result time constraint is major obstacle to prepare the report properly.
· The time frame of internship is three months which is really short to fulfill the study on three major areas.
· Although all the concern officials of Mithun Knitting and Dyeing ( CEPZ ) Ltd
Provided valuable information but most of the time suffered a lot to collect information due to their busy activities.
In the above stated limitations have tried best to put forward my sincere and honest efforts to overcome those limitations and present a needful internship report
OVERVIEW OF THE COMPANY
· 2.01 Background of Mithun Knitting and Dyeing ( CEPZ ) Ltd
.Mithun Knitting and Dyeing (CEPZ) Ltd is country’s leading Knit composite unit which located in CEPZ. Company’s year of incorporation was 1991 as a Private Ltd company as per companies act 1913 and commercial operation was started in September, 1993. It had gone IPO and converted as a Public Ltd company changing its status. It was listed with DSE & CSE in June 1994 and 2001 respectively. It was enlisted as a member of CDBL in 2006.
Post office para, Chuadanga
South Avenue Tower (6th floor), House # 50, Road # 07, Gulshan Avenue, Dhaka -1212
LOCATION OF FACTORY
Plot no. 44-46, Sector -4, Chittagong Export Processing Zone. Bangladesh.
YEAR OF INCORPORATION
Circular Knitting, Dyeing, Finishing and Knit Garments.
Single jersey, Interlock, Rib, French Terry, Flat Knit, Collar & Culf, Rib with Lycra etc and knit Garments of all sorts.
5.70 MT Fabrics and 5,000 pcs Garments per day.
LEGAL FORM OF COMPANY
Public Limited Company
LISTING WITH STOCK EXCHANGES
Listed with Dhaka Stock Exchange in June, 1994
Listed with Chittagong Stock Exchange in June, 2001
NO OF SHAREHOLDERS
969 ( As on June 30, 2007 )
Mostly through local garments manufacturing unit against local back to back LC and direct overseas export.
NO OF EMPLOYMENT
Officer and staff 90, Floor level workers 408, total 498.
ORIGIN OF MACHINERY
Italy, Sweden, Korea, China, Singapore, Hong Kong, Japan.
BOARD OF DIRECTOR
Rabeya khatun, Chairman
Md. Mozammel Haque, Managing Director
Md, Rabiul Haque, Director
Md. Rafiqul Haque , Director
Md. Mahabub – Ul – Haque, Director
Md.Atiqul Haque, Director
Salim Raza, Independent Director
S.M Shahidul Arefin
KM Alam & Co.
80, Motijheel C/A, 4th Floor
Dhaka – 1000.
Basic Bank Ltd
14, Kakrail, Dhaka.
- Business is and always has been a dynamic and diversification process. Company strive to be at the fore front of change in Fashion and trend setting while in continuous pursuit of quality and commitments through total customer focus in all operational area.
- Products are being best of available quality. Products for premium market segments integrate diversification / product range expansion.
- Care for value of money.
- Faith in individual potential and respect for human values.
- Encouraging innovation for constant improvements to achieve excellence in all functional areas.
- Striving for technological development and research for quality product and better packing.
- Accepting changes as a way of life.
- Strict adherence to financial and administrative principles.
- To be the market leader in product range and market segment.
- To provide our customers with products of latest technology.
- To develop the employees to achieve real potential.
- To provide shareholders with steady asset growth and return on investment above Industry norm
- To grow revenue and profit at a rate above the Industry norm.
That is why company has based on production and marketing philosophy on three basic principles – Stability, Quality and Efficiency.
Mithun Knitting and Dyeing (CEPZ) Ltd (MKDL) is committed to manufacturing, delivering & servicing of high quality fabrics to its customers. The objective of MKDL is to continuously improve its products and services to better satisfy the needs of its customers.
All employees of MKDL are expected to conform to this Corporate Quality Policy and to understand the Quality needs to customers. The management is committed to supply all resources and logistic to attain the Corporate Quality Policy.
Vision: Stability, Quality and Efficiency of products which will ultimately maximize the company’s wealth.
Mission: mission is to continuous improving the quality of products for export market by providing comforts and conveniences at affordable prices.
Consumers: Company lives up to the expectations of a responsible organization by contributing to the improvement in the quality of life of our customers through outstanding products and services.
Employees: Company respects each other as individual and encourage cross functional teamwork while providing opportunities for career development.
Shareholders: Company provides a responsible return to shareholders while safeguarding investment.
Suppliers: Company develops suppliers to partners in progress and share.
Competitors: Company respects competitors and recognizes contribution to market value.
Community: Company conducts business by conforming to the ethics of country and share the social responsibility of the less fortune.
Corporate Focus: Vision, mission and objective/philosophy are to emphasize on the quality of product, process and services leading to growth of the company imbibed with good governance practice.
Corporate Governance: Corporate Governance is now an emerging issue in Bangladesh. There is a tendency for boards to focus more on compliance than performance in order to cover legal, regulatory and other risks. The directors believe that an appropriate balance should be maintained between the conformance and performance roles of the board.
At MKDL, Corporate Governance emphasizes the enhancement of shareholder value while adopting practices based on transparency and accountability of the society. The board of Director ensures that the activities of the company are always conducted in accordance with the highest ethical standards, in the best interest of all stakeholders and preservation of the environment.
I. The Board of Director
The Board of Directors of MKDL comprises of six Directors including Chairman. The Board of Directors endeavors to exercise effective control over the company in formulating and implementing policies and ensuring their effective implementation.
All the Directors have access to the advice and services of the company Secretary, who is responsible to the Board for ensuring that the Board procedures are followed and that applicable rules and regulations are complied with.
II. Independent Directors:
Mr. Salim Raza is Independent Director. He posses extensive business knowledge and experience.
III. Management Committee:
The day to day management of the company is entrusted with the managing director and the management committee. The managing Director is the Chairman of the management committee.
IV. Business Development Committee:
The main objective of the committee is to review and analyze the entire gamut of the business activities.
V. Inventory Monitoring Committee:
Inventory monitoring committee maintains the inventory position of the company and review the inventory situation.
VI. RESPONSIBILITIES TO CUSTOMERS:
The company maintains a country wide marketing network and provides a wide choice of products and brands to its customers, to whom it also provides easy payment opportunities.
VII. SHREHOLDERS’ ROLE:
The directors have always recognized the import role played by the shareholders of the company in assisting the board to implement proper corporate governance.
VIII. AUDIT COMMITTEE:
In order to review and monitor internal controls in the company and ascertain whether such controls are effective, the directors have appointed an Audit committee comprised by an Executive Committee and one non executive director of the company and headed by a non executive director. The company secretary assumes the role of secretary to the committee. The Chief Financial Officer and Head of Internal Audit attend meetings by invitation.
IX. FINANACIAL REPORTING AND TRANPARENCY:
Financial statements have been prepared as per Bangladesh Accounting standard laid down by the Institute of Chartered Accountants of Bangladesh.
Financial data is circulated as appropriate within and outside the organization. Management accounts are distributed to all management committee. Members while products, channel and divisional profitability statements are distributed to all key and senior managers as well as department heads so that their comments can be ascertained.
The timely publication of half yearly and annual financial statements, with comprehensive details beyond the statutory requirements, has been a salient feature of our financial reporting system. The financial statements included in this annual report have been audited by Messers K.M Alam & Co., Chartered Accountants.
XI. INTERNAL CONTROL:
Directors are responsible for instituting the system of internal controls to ensure the effective implementation of all policies and decisions of the board. This framework is designed to provide reasonable but not assurance that the assets of the company are safeguard, proper records maintained and reliable information is recorded and provided in respect of both assets and liabilities.
XII. Corporate Social Responsibility:
The Board of Director is also awoken of the corporate social responsibilities ( CSR) specialty in the areas of gender equality, race – religion-religion equality, non employment of child labor , human rights, environmental, pollution, social marketing, social activities right to form and participate in union under ILO convention, employment of disables, as per BEPZA rules of Chittagong EPZ etc.
Focus of the internship is to know the existing share department, finance department and finally personal department. After study and analyze the above three major areas then I will start to implement these three sectors A) Corporate Governance / Company Secretary, B) Corporate Finance, Investment and taxation C) HRD & Administration in local, foreign, multinational private or public companies.
Corporate Governance / Company Secretarial Practice
A) Corporate Governance / Company Secretary
Mithun Knitting & Dyeing Lt(MKDL ) is a leading entity’s of Bangas Tallu Group. It has gone IPO in 1994 and listed with Dhaka Stock Exchange in same year. Company is trying to follow Corporate Governance issue which has published under notification no. SEC/ CMRRCD/2006-158/Admin/02-08, dated the 20th February’06.
The Corporate Governance issues are illustrated below:
Corporate Governance (CG) : CG is the system by which company’s are directed and controlled by the management in the best interest of the stakeholders and others, ensuring better and timely financial reporting.
Principles of Corporate Governance: (As per identification of Cadbury report)
Company is trying to follow these three principles
By applying CG, company has got the following Benefit.
- Risk reduces & Controlling
- Create confidence of stakeholders & others
- Bring transparency in capital market.
- Create accountability
- Increase coordination
- Decrease dependency on family based business
- Disclose transparent Directors report as per companies’ act 1994.
- Disclose independent audit report
- Disclose true & Fairview of financial report
- Disclose properly annual report as per IAS 1
- Disclose clearly notes to the accounts.
- Assessing risk
- Stimulate performance
- Ultimate protection of interest of shareholder
As per corporate governance guideline company has formed the under mentioned Committee:
- Audit Committee
- Director’s remuneration committee
- Employees remuneration & Incentive committee
- Employee recruitment & disciplinary committee
Problem to implement CG issue in MKDL
- Disclosure shy
- Family based corporation
- Lack of technical skilled Independent non executive director
- Low audit fee
- Absence of Institutional Investor
- Week regulatory framework
- Lack of technical people.
Corporate Governance guideline explanation as per SEC notification
No SEC/CMRRCD/2006-158/Admin/02-08 dated the 20th February, 2006; whereas the Securities and Exchange Commission deems it fit that the consent already accorded by the Commission, or deemed to have been accorded by it, or to be accorded by it in future, to the issue of capital by the companies listed with any stock exchange in Bangladesh, should be subject to certain further condition.
1. BOARD OF DIRECTORS :
The number of the board members of the company should not less than 5 and not more than 20.
As per SEC CG guideline, board size is within limit.
All companies should encourage effective representation of independent directors on their Board of Directors so that the Board, as a group, includes core competencies considered relevant in the context of each company. For this purpose, the companies should comply with the following:
(i) At least one tenth (1/10) of the total number of the company’s board of directors subject to minimum of one should be independent directors.
Company also has employed one independent director for specified period.
Explanation: For the purpose of this clause “ Independent Director” means a director who does not hold any share in the company or who holds less than one percent ( 1% ) shares of the company, who is not connected with the company’s promoters or directors or shareholder who holds one percent (1% ) or more than one percent (1% ) shares of the total paid- up shares of the company on the basis of family relationship; who does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary associated companies, who is not a member, director or officer of any stock exchange, or an intermediary of the capital market.
ii) The independent director(s) should be appointed by the elected directors.
1.3) Chairman of the Board and Chief Executive
The position of the Chairman of the Board and the Chief Executive Officer of the companies should preferably be filled by different individuals. The Chairman of the company should be elected from among the directors of the company. The Board of Directors should clearly define respective roles and responsibilities of the Chairman and the Chief Executive Officer.
Chairman and Chief Executive officer is same person who has elected by BOD by taking permission from proper authority.
1.4) The Directors Report to Shareholders
The directors of the companies should include following additional statements in the Directors Report prepared under section 184 of the Companies Act, 1994
(a) The financial statements prepared by the management of the issuer companies present fairly its state of affairs, the result of its operations, cash flows and changes in equity.
(b) Proper books of account of the issuer company have been maintained.
(c) Appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment.
(d) International Accounting Standards, as applicable in Bangladesh, have been followed in preparation of the financial statement and any departure there from has been adequately disclosed.
(e) The system of internal control is not sound so much in design and need more monitored.
(f) There are no significant doubts upon the issuer company’s ability to continue as a going concern the fact along with reasons thereof should be disclosed.
(g) Significant deviations from last year in operating results of the issuer company has been highlighted and reasons thereof should be explained.
(h) Key operating and financial data of at least preceding three years have been summarized.
(i) If the issuer company has not declared dividend ( cash or stock) for the year the reasons thereof can be given.
(j) The number of Board meeting held during the year and attendance by each director has been disclosed.
(k) The patterns of shareholding should be reported to disclose the aggregate number of shares ( along with name wise details where stated below ) held by:-
(i) Present/ Subsidiary/Associated companies and other related parties (name wise details).
(ii) Chief Executive Officer, Company Secretary , Chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details ) are holding any shares.
(iii) Executives ; and
(iv) Shareholders holding ten present (10%) or more voting interest in the company ( name wise details ).
Explanation: For the purpose if this clause the expression “ executive” means top the salaried employees of the company, other than the Directors, Chief Executive Officer. Company Secretary, Chief Financial Officer and Head of Internal audit.
CHIEF FINANCIAL OFFICER (CFO), HEAD OF INTERNAL AUDIT AND COMPANY SECRETARY:-
The company has appointed a Chief Financial Officer (CFO) , a Head of Internal Audit and a Company Secretary , The Board of Directors has clearly defined respective roles, responsibilities and duties of the CFO, the Head of Internal Audit and the Company Secretary,
Requirement to Attend Board meetings
The CFO and the company Secretary of the company are attending meetings of the Board of Directors, provided that the CFO and/ or the Company Secretary are not attended such part to a meeting of the board of Directors which involves consideration of an agenda item relating to the CFO and / or the Company Secretary.
The company has an Audit Committee as a sub- committee of the Board of Directors.
The Audit Committee has 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 good monitoring system within the business.
The Audit Committee shall be responsible to the Board of Directors . The duties of the audit committee has clearly been explained set forth in writing.
Constitution of Audit Committee
(i) The Audit Committee has composed with 3 (three) members.
(ii) The Board of Directors have appointed members of the audit Committee who are directors of the company and include one independent directors.
(iii) When the term of service members expires or there is any circumstance causing any Committee member to be unable to hold office until expiration of the term of service, thus making the number of the Committee members to be lower than the prescribed number of 3 (three) persons the Board of Directors shall appoint the new Committee member(s) to fill up the vacancy(ies) immediately or not later than 1 (one) month from the date of vacancy (ies) in the Committee to ensure continuity of work of the Audit Committee.
Chairman of the Audit Committee
(i) The Board of Directors have selected 1 (one) member of the Audit Committee whom is Chairman of the Audit Committee.
(ii) The Chairman of the Audit Committee have knowledge , understanding ,experience in accounting and finance.
Reporting of the Audit Committee
3.3.1 Reporting to the Board of Directors
(i) The Audit Committee shall report in its activities to the board of Directors .
(ii) The Audit Committee should immediately report to the Board of Directors in the following findings, if any:-
(a) Report on conflicts of interests;
(b) Suspected or presumed fraud or irregularity or material defect in the internal control system;
(c) Suspected infringement of laws, including securities related laws, rules and regulations; and
(d) Any other matter which should be disclosed to the Board of Directors immediately.
3.3.2 Reporting to the authorities
If the Audit Committee has reported to the Board of Directors about anything which has material impact on the financial condition and result of operation and has discussed with the Board of Directors and the management that any rectification is necessary and if the Audit Committee finds that such rectification has been unreasonably ignored the Audit committee shall report such finding to the Commission , upon reporting of such matters to the Board of Directors for three times or completion of a period of 9 (nine) months from the date of first reporting to the Board of Directors, Whichever is earlier.
3.4 Reporting to the Shareholders and General Investors
Report on activities carried out by the Audit Committee, including any report made to the Board of Directors under condition 3.3.1(ii) above during the year, have signed by the Chairman of the Audit Committee and disclosed in the issuer company.
REPORTING THE COMPLIANCE IN THE DIRECTORS REPORT
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.
Status of compliance with the conditions imposed by the Securities and Exchange Commission notification no.SEC/CMRRCD/2006-158/Admin/02-08 dated 20th February, 2006 issued under section 2CC of the Securities and Exchange Ordinance, 1969:
|Cond.no.||Title||Compliance Status||Explanation for non compliance|
|1.1||Board’s size: Board members should not be less than 5(Five) and more than 20(twenty)||Complied|
|1.2(i)||Independent Director: at least 1/10||Complied|
|1.2(ii)||Appointment of independent Director by elected Director||Complied|
|1.3||Chairman of the Board and Chief Executive Officer should preferably be filled by different individuals||Complied|
|1.4(a)||Fairness of financial statement||Complied|
|1.4(b)||Maintenance of proper books of Accounts||Complied|
|1.4(c)||Appropriate accounting policies applied consistently||Complied|
|1.4(d)||International accounting policies standards, as applicable in Bangladesh have been followed in preparing the financial statements||Complied|
|1.4(e)||Sound and effective internal control system||Complied|
|1.4(f)||Ability to continue as going concern||Complied|
|1.4(g)||Significant deviations from last year in operating results||Complied|
|1.4(h)||Summary of key operating and financial data||Complied|
|1.4(i)||If dividend has not been declared, the reason thereof||Complied||N/A|
|1.4(k)||Pattern of share holding||Complied|
|2.1||Appointment of a CFO and Head of internal Audit and accompany Secretary||Complied|
|2.2||Attend the Board Meeting by CFO and Company Secretary||Complied|
|3.00||Constitution of audit committee||Complied|
|3.1(i)||The audit committee should be composed of at least three members||Complied|
|3.1(ii)||Members of audit committee should be appointed by the Board who are directors and one should be in depended||Complied|
|3.1(iii)||Board of Director should fill u[ the vacancy within one month of the vacancy in the audit committee||Complied|
|3.2(ii)||Chairman of the audit committee should have a professional qualification or knowledge, understanding and experience in accounting and finance||Complied|
|3.3.1(i)||Reporting to the Board of Director of the Audit Committee||Complied|
|3.3.1(ii)(a)||Report of conflict of interest||Not applicable|
|3.3.1(ii)(b)||Reporting of any fraud or irregularity or material defect in internal control system||Not applicable|
|3.3.1(ii)(c)||Reporting of infringement of laws, including securities related laws , rules and regulations||Not applicable|
|3.3.1(ii)(d)||Reporting of any others matter to sthe Board of Director||Not applicable|
|3.3.2||Reporting to the Authorities:
If the audit Committee has reported to the Board of Directors about anything which has material impact on the financial condition and results of operation and being ignored by the Board 0f Directors, the Audit Committee should report such findings to the Commission
|3.4||Reporting to the shareholders:
Report on activities carried by the Audit Committee including any report made to the Board of Directors under condition 3.31(ii) and the Disclosure of which should be made in the Annual Report
|4.00(i)||Non-engagement of External/Statutory Auditors in appraisal or valuation||Complied|
|4.00(ii)||Non-engagement of External/Statutory Auditors in designing in financial information system||Complied|
|4.00(iii)||Non-engagement of External/Statutory Auditors in book-keeping or others services related to the accounting records of financial statement||Complied|
|4.00(iv)||Non-engagement of External/Statutory Auditors in broker dealer services||Complied|
|4.00(v)||Non-engagement of External/Statutory Auditors in actuarial services||Complied|
|4.00(vi)||Non-engagement of External/Statutory Auditors in internal audit services||Complied|
|4.00(vii)||Non-engagement of External/Statutory Auditors in any other services||Complied|
Appointment of Directors:
1. Notwithstanding anything contained in the articles of a company-
(a) the subscribers of the memorandum was the directors of the company until the first director are appointed.
(b) the directors of the company have been elected by the members from among their number in general meeting; and
(c) Any casual vacancy occurred was filled up by BOD.
(2) As per Contained in the articles of a company and companies act one third of the whole number of directors are retiring whose period of office is liable to determination at any time by retirement of directors rotation.
Consent of Candidate for Directorship U/S 93: As per act
( 1) Every person, proposed as a candidate for the office of a director shall sign, and file with the company, his consent in writing to act as a director.
(2) A person shall not act as a director of the company unless he has , within thirty days of his appointment, signed and filed with the Registrar his consent in writing to act as such director.
Disqualifications of Directors U/S 94: According to act, company follows following rules and regulation
(01).A person shall not be capable of being appointed director of a company, if-
(a) he has been found to be of unsound mind by a competent court and the findings is in force; or
(b) He is an undercharged insolvent; or
(c) He has applied to be adjudicated as an involvement and his application is pending; or
(d) He has not paid any call in respect of shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call; or
(e) He is a minor.
(02) A company may in its articles provide additional grounds for disqualification of a director.
Notice of the meetings: Notice of every meeting of the Board of directors of the company shall be given in writing to every director for the time being in Bangladesh and at his in Bangladesh.
Meeting of Board:
In the case of every company a meeting of its Board of directors shall be held at least once in every three months and at least four such meetings shall be held in every year. 8 Board meeting was held in year 2008.
Qualifications of director:
1. Without prejudice to the restrictions imposed by section 92 , it shall be the duty of every director to held qualification share to be specified in the articles and, if he is not already qualified, he shall obtain his qualification within sixty days after his appointment, or such shorter time as may be fixed by the articles .
2. If, after the expiration of the period mentioned in sub-section (1) any unqualified person acts as director of the company, he shall be liable to a fine not exceeding two hundred taka for everyday between the expiration of the said period and the last day in which if is proved that he acted as a director ( both days inclusive).
Validity of Act of Director:
The acts of a director shall be valid notwithstanding any defect that may afterwards be discovered in his appointment of qualification.
Provided that nothing in this section shall be deemed to give validity to acts done by a director after the appointment of such director has been shown to be invalid.
Ineligibility of Bankrupt to Act as Director:
(1) If any person being an un discharged insolvent acts as director or managing agent or manager of any company , he shall be liable to imprisonment for a term not exceeding five thousand taka or to both.
(2)In this section the expression “company” includes a company incorporated outside Bangladesh which has an established place of business within Bangladesh.
Appointment and terms and office of Alternate Directors
(1) The Board of Directors of a company may, if so authorized by its articles or by a resolution passed by the company in general meeting , appoint an alternate director, to act for a director hereinafter in this section called the original director during his absence for a continuous period of not less than three months from Bangladesh.
(2) An alternate director appointed under sub-section(1) shall not hold office as such for a period longer than that permissible to the original director in whose place he has been appointed and shall vacate the office, immediately after he receives information that the original director has returned to Bangladesh.
(3) If the term of office of the original director is determined before he so returns to Bangladesh any provision for automatic re-appointment of retiring directors in default of another appointment shall apply to the original and not to the alternate director.
Avoidance of Provisions Relating Liability of Directors:
Save as provided in this section, any provision, whether contained in the articles of a company or in any contract with a company or otherwise, hereafter in this section referred to as the said provision, for exempting any director, manager or officer of the company or not, employed by the company as auditor from, or for indemnifying him against, any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty inter relation to the company shall be void;
Provided that –
(a) Nothing in this section shall operate to deprive any person of any exemption or right to be identified in respect of anything done or omitted to be done by him while the said provision was in force before the commencement of this act ; and
(b)A company may, in pursuance of the said provision indemnify any such director, manager, officer or auditor against any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favors or in connection with any application under section 396 of this Act in which relief is granted to him by the court.
Loan of Director:
(I)No company, hereafter in this section referred to as the lending company, shall make any loan or give any guarantee or provide any security in connection with a loan made by a third party to-
(a)any director of the lending company;
(b) any firm in which any director of the lending company is a partner;
(c)any private company of which any director of the lending company is a director or member; or
(d) any public company, the managing agent , manger or director where of is accustomed to act in accordance with the directors or instructions of any director of the lending company:
provided that noting in this section shall apply to the making of a loan or giving of any guarantee or providing any security by a lending company, if-
(i) such company is a banking company or a private company not being a subsidiary of a public company, or if such company as a holding company makes the loan or gives the guarantee or provide the security to its subsidiary; and
(ii)the loan is sanctioned by the Board of Directors of any company and approved by the general meeting and, in the balance sheet, there is a specific mention of the , guarantee or security, a s the case may be:
provided further that, in no case the total amount of the loan shall exceed 50% of the paid value of the shares held by such director in his own name.
(I) In the event of any contravention of sub-section(1) every person who is a party to such contravention including in particular any person to whom a loan is made is on whose belief of guarantee is given to or security provided shall be punishable with the fine which extend to five thousand taka or simple imprisonment for six months in lieu of fine and shall be liable jointly and severally to the lending company for the repayment of such loan or for making good any sum which the lending company may be called up to pay under the guarantee given or security provided by the lending company.
(II)This section shall apply to any transaction represented by a book debt which was from its inception in the nature of loan or an advance.
Director not to Hold Office of Profit:
No director or firm of which such directors a partner of private company of which such director is a Director shall , without the consent of the company in general meeting, hold any office of profit under the company except that of a managing director or manager or a legal or technical adviser or a banker.
Explanation- For the purposes of this section, the office of managing agent shall not be deemed to be an office of profit under the company.
Sanction of Directors Necessary for Certain Contracts:
Except with the consent of the directors, a director of the company, or the firm of which he is a partner of any partner of such firm or the private company of which he is a member or director , shall not enter into any contract for the sale, purchase or supply of goods and materials with the company.
Removal of Directors:
(1) the company may by extraordinary resolution remove any share-holder director before the expiration of his period of office and may by ordinary resolution appoint another person in his stead and the person so appointed shall be subject to retirement at the same time as if he had become a director on the day on which the director in whose place he is appointed was last elected director.
(2) a director so removed shall not be re-appointed a director by the Board of Directors.
Functions of a Company Secretary:
A company registered under Companies Act is a persona juris, cannot act by itself like a natural person and as it is a miniature republic, which is composed of its members, who are its shareholders and real owners. It is managed on democratic principles by the elected representative of the members, who are called directors and collectively expressed as the Board of directors. The company can be run and managed either by the Board of Directors itself or by the Board of Directors with the help of Managing Director or Chief Executive. Board of Directors of a corporate management is the brain of the Company and the Company Secretary is the ears, eyes and hands.
Company Secretary performs and entrusted with the following duties and responsibilities: The functions of accompany secretary , their nature and volume, depend on the nature and size of the business of the company. A large diversified company with geographically decentralized, multi-plant operations may have large number or corporate legal problems requiring a separate full fledged legal department. The secretary may be placed in charge of the legal department and his function may be the supply of centralized legal services to the various units of the company. But in a small company the secretary is likely to be involved only in the routine jobs of day to day administration of company and secretarial functions as per Companies Act and directives of Securities & Exchange Commission.
The functions performed by a secretary will also depend upon his ability and personality. If the secretary is highly trained and experienced and possesses a good personality, he will be able too earn the confidence of the directors, The directors will depend more and more on the secretary. The functions of the secretary will not be limited to routine affairs of company management. He will be able to contribute in the formulation of company policies and strategies. From the position of a mere routine secretary, he raises himself to the status of an executive secretary.
The company secretary is performed the following major duties:
In regard to- company affairs
(1)Dealing with Members, Shareholders and meet their queries.
(2)Convene the Board and Shareholders meeting in time .
(3)Watch that the notices are dispatched properly and timely.
(d) Make sure that the quorum is present before business of the Board or Shareholders is transacted at the meeting
(e) Prepare minutes of the meeting timely and correctly obtaining signature of the chairman of the meeting and circulating the same among the Members of the Board and therefore maintain minutes book.
(f) Make arrangement for inspection of minutes and provide copies therefore if so requested by the members.
(g) Taking all necessary measures including preparation of Annual Report to conduct the General Meeting in time according to the Companies Act, Rules and Regulation of Securities and Exchange Commission (SEC) and Stock Exchanges.
(h) Preparing Annual Report for the Shareholders.
(i) File all Returns like List of members and Summary of Share Capital (Schedule-X), Particulars of Directors (Form-XII) in case of any change in the Board of Directors, Authenticated Balance Sheet and Profit & Loss Account, Consent to act as Director, Change of Address , Return of Allotment, Change in Capital , Special Resolution, etc as and when required.
(j) Arrange for audit and preparation of financial report as per Companies act, IAS and ISA.
(k) Compliance of SEC, DSE, CSE and other govt. authorities requirement.
(l) Submission of periodical report like Annual report, Half-yearly Financial Report, Monthly various report in time according to the regulation of the SEC, DSE and CSE.
(m) Duty to see various deeds , contracts and agreements whether these are properly framed worded and terminologically in order before vetting and submission before the Board for approval.
(n) Company Secretary is one of the signatory of such agreements, contracts and deeds at least a knowledgeable witness .
(o) Corporate Governance according to the SEC Notification.
(p) Maintain the statutory registers like
i. Register of Members
ii. Register of Transfer of shares
iii Register of Directors
iv Register of Mortgage and Charges
v Register of Dividend
vi Register of Contract with Director
vii Minutes Books
i) Supervise maintenance of Computerized Share Management System ( for non demated shares ) and measures of transfer of public shares according to the regulation of SEC, DSE, and CSE.
ii) Supervise maintenance of Share Management System under Central Depository System (CDS) for demated shares like Dematerialization , Rematerialization , Freeze and Freeze Release Request etc.
iii) Supervising in regard to issue of dividend warrant , bonus shares certificate and in case of demated shares crediting bonus shares to the respective BOID holder in time.
iv) Submission of report about completion dividend distribution as per SEC, DSE and CSE Rules and Regulation.
v) Submission of monthly shareholding report to SEC according to prescribed format.
CORPORATE FINANCE, INVESTMENT AND TAXATION
Following sections shows the financial statements that are prepared and published by Mithun Knitting and Dyeing (CEPZ) Ltd. for the year ended June 2008:
Analysis of the financial statements:
|Five Years positions at a glance||Taka in thousand|
|Figure in Million Taka|
|Issued and paid up capital||50,000||50,000||50,000||50,000||50,000|
|Reserve and surplus||33,226||28,814||24,622||24,273||25,047|
|Long term loan||44,080||63,622||83,154||27,275||36,031|
|Fixed Assets ( Net )|