Compliance with Corporate Governance Guidelines

The Securities & Exchange Commission Vide Notification No. SEC/CMRRCD/2006-158/134 Admin/44 dated 07.08.2012 advised to Public Limited Company and as per said notification. Our explanation is given below:

Board Size: As per above mentioned Notification the Company has been reformed its Board size and as a result the existing Board size as follows:

 

Sl. no

Name of Director

Designation

1

Mr. Mohammad Murad

Chairman

2

Mrs. Rina Momtaj

Managing Director

3

Mrs. Rehmat Banu

Director

4

Mr. Rahim Murad

Director

5

Ms. Fahra Murd

Director

6

Mr. Mr. Rafiqul Islam Dablu

Independent Director

7

Mr. Mohammad Musa Meah

Independent Director

Independent Director: As per BSEC Notification and for fulfill the Compliance of Corporate Governance Policy , the Company to re-appoint Mr. Rafiqul Islam Dablu as a independent Director for a period of one year which is subject to confirmation from the shareholders in the next Annual General Meeting.

Chairman & CEO: Mr. Mohammad Murad and Mrs.Rina Momtaj will continued their responsibilities as Chairman and Managing Director/ CEO of the Company respectively.

CFO, Head of Internal Audit & Company Secretary: Mr. Mostaque Ahmed & Mr. Anupam Kumer Mondol will continued their responsibilities as CFO/ Head of Internal Audit & as the Company Secretary respectively.

 

Audit Committee: The Company has formed the following Audit Committee through the Board of Directors Meeting on 26.11.2017:

 

(A) Audit Committee :

(1)  Mr. Rafiqul Islam Dablu                    Chairman of the Audit Committee

(Independent Director)

(2)  Mrs. Rehmat Banu                             Member of the Audit Committee

(Director)

(3)  Mr Rahim Murad                                Member of the Audit Committee

(Director)    

Constitution of Audit Committee: As per Board of Director’s Meeting of the Company on 13.09.2018 and as per Notification No. SEC/CMRRCD/2006-158/134 Admin/44 dated 07.08.2012 and the Audit Committee has been formed by the Company which is described above.

 

Chairman of the Audit Committee: Mr. Rafiqul Islam Dablu executed the responsibilities of the Chairman of the Audit Committee.

 

Scope of work of Audit Committee: Audit Committee works as a sub-committee of the Board of Directors. The Committee shall assist the Board of Directors to ensure that the financial statements reflect true and fair view of the state of affairs of the Company and ensure a good monitoring system within the business and they will be responsible to the Board of Directors. The Chairman of the Audit Committee shall remain present in the Annual General Meeting.

 

Review of financial statements by the Audit Committee: Audit Committee reviewing the annual financial statements for the year ended 30th June 2018 and placed its recommendation to the Board of Directors.

 

Role of Audit Committee: Role of audit committee shall include the following

 

  1. Review along with the management the annual financial statements before submission to the Board for approval.
  2. Oversea the financial reporting process.
  3. Monitor choice of accounting policies and principles.
  4. Monitor internal control risk management process.
  5. Performance of external auditors.
  6. Review the adequacy of internal audit function etc.
  7. Review the quarterly and annually audited accounts.

 

The Audit Committee meeting: The Committee met four times during last financial years ended 30th June 2018 to carry out the following tasks

 

  1. Reviewed various reports of Internal Control & Compliance Department on operational, financial procedures and other activities
  2. The Audit Committee reviewed the financial statements for the year ended 30th June 2018
  3. Reviewed and discussed the Management Letter, by the external auditor Malek Siddiqui Wali, Chartered Accountants for the year ended 30th June 2018 on the annual audit on financial statements of Bangladesh Autocars Limited;
  4. Reviewed the quarterly and half-yearly Reports of the Company.

 

Based on the review and above discussions, the Audit Committee is of the view that the internal control and compliance procedures are adequate to presents true and fair view of the activities and financial status of the company and to ensure that its assets are safeguarded properly.

Internal Control and Compliance:

The Board has the ultimate responsibility for establishing an effective system of internal control. The internal control system holds all business risks, including financial, operational and strategic risks.

 

The Compliance statuses of other points are giving below

Condition No.

Title

Compliance Status

Remarks

Complied

Not Complied

1.0

Board of Directors

1.1

Board’s Size: Board members shall not be less than 5 (Five) and more than 20 (Twenty)

Complied

-

-

1.2

Independent Director

 

1.2(i)

Independent Director: At least 1/5th

Complied

-

-

1.2 (ii)

For the purpose of this clause “independent Director” means a Director

Complied

-

-

1.2(ii)( a)

Independent Directors do not hold any share or hold less than one percent (1%) shares

Complied

-

-

1.2 (ii)(b)

Independent Directors do not connected with the company’s sponsor or director or shareholder who holds 1% or more shares

Complied

-

-

1.2 (ii)(c)

Independent Directors do not have any other relationship whether pecuniary or otherwise, with the company or its

subsidiary/associated Company

Complied

-

-

1.2 (ii)(d)

Independent Directors are not the members, Directors or

officers of any stock exchange

Complied

-

-

1.2 (ii)(e)

Independent Directors are not the members, Directors or

officers of any stock exchange or an intermediary of the

capital market

Complied

-

-

1.2 (ii)(f)

Independent Directors are/were not the partners or

executives during preceding 3 (three) years of any statutory audit firm

Complied

-

-

1.2 (ii)(g)

They are not the Independent Directors in more than 3

(three) listed companies

Complied

-

-

 

1.2 (ii)(h)

They are not convicted by a court of competent jurisdiction as a defaulter in payment of any loan to a bank or a non

bank financial institution (NBFI)

Complied

-

-

1.2 (ii)( i)

They are not been convicted for a criminal offence involving moral turpitude

Complied

-

-

1.2 (iii)

The independent Directors shall be nominated by the board of directors

Complied

-

-

1.2 (iv)

Post of independent Directors cannot remain vacant for

more than 90 days

Complied

-

-

1.2 (v)

The board shall lay down a code of conduct of all board

members and annual compliance of the code to be recorded

Complied

-

-

1.2 (vi)

Tenure of office of an independent Directors shall be

for a period of 3 (three) years which may be extended for 1 (one) term only.

Complied

-

-

1.3 (i)

Independent Director shall be knowledgeable individual with integrity

Complied

-

-

1.3 (ii)

The independent Director must have at least 12 (twelve) years of corporate management/ professional experience

Complied

-

-

1.3 (iii)

In special cases above qualification may be relaxed by the commission

Complied

-

-

Remarks

1.4

Positions of Chairman of the Board and Chief Executive Officer shall be filled by different individuals

Complied

-

-

1.5

Directors’ Report to Shareholders

1.5 (i)

Industry outlook and possible future developments in the industry

Complied

-

-

1.5 (ii)

Segment-wise or product-wise performance

Complied

-

-

1.5 (iii)

Risks and concerns

Complied

 

 

1.5 (iv)

A discussion on cost of goods sold, gross profit margin and net profit margin

Complied

-

-

1.5 (v)

Discussion on continuity of any Extra-Ordinary gain or loss

N/A

-

-

1.5 (vi)

Basis for related party transaction- a statement of all related party transactions should be disclosed in the annual report

Complied

-

-

1.5 (vii)

Utilization of proceeds from public issues, right issues and/ or through any others instruments

N/A

-

-

1.5 (viii)

An explanation if the financial results deteriorate after the company goes for IPO, RPO, Rights Offer, Direct Listing etc.

N/A

-

-

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

N/A

-

-

1.5 (x)

Remuneration to directors including independent directors

Complied

-

-

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

Complied

-

-

1.5 (xii)

Proper books of account of the issuer company have been maintained

Complied

-

-

1.5 (xiii)

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.

Complied

-

-

1.5 (xiv)

International Accounting Standards (IAS)/Bangladesh Accounting Standards BAS)/International Financial Reporting Standards (IFRS)/Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there-from has been adequately disclosed.

Complied

-

-

1.5 (xv)

The system of internal control is sound in design and has been effectively implemented and monitored.

Complied

-

-

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 reasons thereof should be disclosed.

Complied

-

-

1.5 (xvii)

Significant deviations from the last year’s operating results of the issuer company shall be highlighted and the reasons thereof should be explained.

Complied

-

-

1.5 (xviii)

Key operating and financial data of at least preceding 5      (five) years shall be summarized

Complied

-

-

1.5 (xix)

If the issuer company has not declared dividend (cash or stock) for the year, the reasons thereof shall be given.

Complied

-

-

1.5 (xx)

The number of Board meetings held during the year and attendance by each director shall be disclosed

Complied

-

-

1.5 (xxi)

Pattern of shareholding shall be reported to disclose the aggregate number of shares

(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);

Complied

-

-


Remarks

1.5 (xxi) b)

Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details);

Complied

-

-

1.5 (xxi) c)

Executives;

N/A

-

-

1.5 (xxi) d)

Shareholders holding ten percent (10%) or more voting interest in the company (name wise details).

Complied

-

-

1.5(xxii)

In case of appointment/re-appointment of a director the company shall disclose the following information to the shareholders:

1.5(xxii) a)

a brief resume of the director;

Complied

-

-

1.5(xxii) b)

nature of his/her expertise in specific functional areas;

Complied

-

-

1.5(xxii) c)

names of companies in which the person also holds the directorship and the membership of committees of the board.

Complied

-

-

2.00

 

Chief Financial Officer, Head of Internal Audit & Company Secretary

2.1

Appointment of CFO, Head of Internal Audit and Company Secretary and defining of their respective roles, responsibilities and duties

Complied

-

-

2.2

Attendance of CFO and the Company Secretary at Board of Directors meeting

Complied

-

-

3

Audit Committee:

 

3 (i)

Audit Committee shall be the sub-committee of the Board of Directors

Complied

-

-

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.

Complied

-

-

3 (iii)

The Audit Committee shall be responsible to the Board of Directors. The duties of the Audit Committee shall be clearly set forth in writing.

Complied

-

-

3.1

Constitution of the Audit Committee

 

3.1 (i)

The Audit Committee shall be composed of at least 3 (three) members.

Complied

-

-

3.1 (ii)

Constitution of Audit Committee with Board Members including one Independent Director

Complied

-

-

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.

Complied

-

-

3.1 (iv)

Filling of Casual Vacancy in Committee

Complied

-

-

3.1 (v)

The Company Secretary shall act as the secretary of the Committee.

Complied

-

-

3.1 (vi)

The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director

Complied

-

-

3.2

Chairman of the Audit Committee

 

-

-

3.2 (i)

Chairman of the Audit Committee shall be an Independent Director

Complied

-

-

3.2 (ii)

Chairman of the audit committee shall remain present in the Annual General Meeting (AGM).

Complied

-

-

3.3

Role of Audit Committee

3.3 (i)

Oversee the financial reporting process

Complied

-

-

3.3 (ii)

Monitor choice of accounting policies and principles.

Complied

-

-

3.3 (iii)

Monitor Internal Control Risk management process.

Complied

-

-

3.3 (iv)

Oversee hiring and performance of external auditors.

Complied

-

-


Remarks

3.3 (v)

Review along with the management, the annual financial statements before submission to the board for approval.

Complied

-

-

3.3 (vi)

Review along with the management, the quarterly and half yearly financial statements before submission to the board

for approval.

Complied

-

-

3.3 (vii)

Review the adequacy of internal audit function.

Complied

-

-

3.3(viii)

Review statement of significant related party transactions submitted by the management

Complied

-

-

3.3 (ix)

Review Management Letters/ Letter of Internal Control weakness issued by statutory auditors.

Complied

-

-

3.3 (x)

When money is raised through Initial Public Offering (IPO)/

 

N/A

-

-

3.4

Reporting of the Audit Committee

3.4.1

Reporting to the Board of Directors

3.4.1 (i)

The Audit Committee shall report on its activities to the Board of Directors.

Complied

-

-

3.4.1 (ii)

The Audit Committee shall immediately report to the Board of Directors on the following findings, if any:- - -

N/A

-

-

3.4.1 (ii) a)

Report on conflicts of interests;

N/A

-

-

3.4.1 (ii) b)

Suspected or presumed fraud or irregularity or material defect in the internal control system;

 

N/A

-

-

3.4.1 (ii) c)

Suspected infringement of laws, including securities related laws, rules and regulations;

 

N/A

-

-

3.4.1 (ii) d)

Any other matter which shall be disclosed to the Board of Directors immediately.

N/A

-

-

3.4.2

Reporting to the Authorities

N/A

-

-

3.5

Reporting to the Shareholders and General Investors

Complied

-

-

4

External/Statutory Auditors:

4 (i)

Appraisal or valuation services or fairness opinions.

N/A

-

-

4 (ii)

Financial information systems design and implementation

N/A

-

-

4 (iii)

Book-keeping or other services related to the accounting records or financial statements.

N/A

-

-

4 (iv)

Broker-dealer services.

N/A

-

-

4 (v)

Actuarial services.

N/A

-

-

4 (vi)

Internal audit services.

N/A

-

-

4 (vii)

Any other service that the Audit Committee determines.

N/A

-

-

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.

 

N/A

-

-

5

Subsidiary Company

5 (i)

Provisions relating to the composition of the Board of Directors of the holding company shall be made applicable

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.

 

N/A

-

-

5 (iii)

The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board.

N/A

-

-

5 (iv)

The minutes of the respective Board meeting of the holding company shall state that they have reviewed the 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

-

-


Remarks

6

Duties of Chief Executive Officer(CEO) and Chief Financial Officer (CFO):

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;

Complied

-

-

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.

Complied

-

-

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.

Complied

-

-

7

Reporting and Compliance of Corporate Governance:

 

-

-

7 (i)

The company shall obtain a certificate from a Professional Accountant/Secretary (Chartered Accountant/Cost 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.

Complied

-

-

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.

Complied

 

-









1.5. Share holding position of Directors & Chief Executive with Sponsor:

SL. No

Name

Share position

1

Mr. Mohammad Murad

353,635

2

Mrs. Rehmat Banu

329,470

3

Mrs. Rina Momtaj

78,067

4

Mr. Rahim Murad

86,432

5

Ms. Fahra Murad

184,328

6

Mrs. Rozina Murad

200,576

7

Late. Mrs. Shirin Banu

40,266

8

Late. Habib Charania

40,266

9

Late. Murad Ali Habib

164,728

 

(c) List of Executive:

SL. No

Name

Designation

1

Mr. Md. Mostaque Ahmed

CFO

2

Mr. Anupam Kumer Mondol

Company Secretary

3

Mr. Shariful Islam

Office Executive

4

Mr. Jenarul Islam

Asst. Engineer

 

(d) List of 10% above Share of the Company as under:

SL. No

Name

Share position

1

Mr. Mohammad Murad

353,635

1.6 Appointment of the Independent Director:-

A.(i) Name: Mr. Rafiqul Islam Dablu, Father’s Name: Late M.A Rahim , Address: 24, MUNICIPAL TANK ROAD, Khulna. Nationality: Bangladeshi, profession: Business, Education Qualification: H.S.C, Date of Brith 01.03.1963.Experience: 26 years.

(ii)Nature his Enterprise: Deepto Enterprise.

1.7 Transaction with related Parties:

The Company has Paid Tk. 276,000 to the Allied Motors, Proprietor Mohammad Murad against rent for use of the premises at 110 Tejgaon Dhaka. There has been no other transaction with related parties in the normal course of business

 

1.8 Statement of  Key Operating for 5 Years:

Particulars

30.06.2018

30.06.2017

30.06.2016

30.06.2015

30.06.2014

 

TK,000

TK,000

TK,000

TK,000

TK,000

 

Paid up Capital

38,625

37,500

36,407

36,407

36,407

 

Reserve, Surplus & Other

9,944

9,944

9,944

9,944

9,944

 

Tax Holiday reserve

6,583

6,583

6,583

6,583

6,583

 

Shareholder Equity

16,590

10,700

7,150

22,153

20,877

 

Sales

109,221

101,412

89,313

77,813

57,113

 

Gross profit/Loss

13,383

11,983

8,544

10,665

11,907

 

Net profit/Loss

7,911

4,741

1,315

2,040

761

 

Provision for WPPF

376

226

62

132

72

 

Total Surplus

(38,563)

(43,328)

(45,786)

(30,782)

(32,058)

 

Provision for Tax

1,883

1,129

487

630

482

 

Number of shares

386

375

364

364

364

 

Earnings per Share-EPS

1.52

0.95

0.22

0.351

0.057

Certification of Chief Executive Officer and Chief Financial Officer to the Board.

In terms of the Notification of Bangladesh Securities and Exchange Commission (BSEC) bearing No. SEC/CMRRCD/2006-158/134/Admin/44, dated 07 August 2012, we, the undersigned Chief Executive officer  and Chief Financial Officer (CFO) do hereby certify

that we have reviewed the financial statements for the year ended 30 June 2018 of Bangladesh Autocars Ltd. to the best of our knowledge and belief:

 

  • (a) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; and

 

(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.

 

  • No transactions entered into by the company during the year which are fraudulent, illegal or violation of the company’s code of conduct.

 

 

Sd/                                                                                               Sd/

Md. Mostaque Ahmed

Chief Financial Officer

Mrs Rina Momtaj

Chief Executive Officer

 

 

Audit Committee

 

Date: September 03, 2018

 

To

The Board of Directors

Bangladesh Autocars  Limited

110 Tejgaon I/A

Dhaka

 

 

 

Subject: Audit Committee Report.

 

 

The Committee reviewed and discussed the procedure and task of the internal audit, financial report preparation and the external auditor’s observations in their reports on the financial statements of the Company for the year ended 30th June 2018.The Committee found adequate arrangement to present a true and fair view of the financial status of the Company and did not final any material deviation, discrepancies or any advance finding in the areas of reporting.

 

 

 

 

Sd/

Rafiqul Islam Dablu

Chairman

Audit Committee