Status of Compliance with Corporate Governance Guidelines

 

ZAHEEN SPINNING LIMITED

CORPORATE GOVERNANCE COMPLIANCE STATUS REPORT

UNDER CONDITION NO. 7.00

 Status of compliance with the conditions imposed by the Bangladesh Securities and Exchange 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 (XVII of 1969):

 

 

Condition No.

Title

Compliance Status (Put

in the Appropriate Column)

Remarks

 

Complied

Not

Complied

1

Boards of Directors

 

 

 

1.1

Board's Size: Boards members should not be less then 5 (five) and more than 20 (twenty).

 

 

 

1.2

Independent  Director:

 

 

 

1.2(i)

At least 1/5th of the total number of directors in the company’s board shall be independent directors.

 

 

1.2(ii)

For the purpose of this clause “Independent Director” means a Director:

 

 

 

1.2(ii)a)

Independent Directors do not hold any share or holds less than one Percent (1%) shares of the total paid- up capital.

 

 

1.2(ii)b)

Independent Directors are not connected with the company’s Sponsor or Director or shareholder who holds one percent (1%) or more shares.

 

 

1.2(ii) c)

Independent Directors do not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary/associated companies.

 

 

1.2(ii) d)

Independent Directors are not members, directors or officers of any stock exchange.

 

 

1.2(ii) e)

Independent Directors are not Shareholder, Directors or officers of any member of stock exchange or an intermediary of the capital market.

 

 

1.2(ii) f)

Independent Directors are not the partners or  executives during the preceding 3 (three) years of the concerned company’s statutory audit firm.

 

 

1.2(ii) g)

They are not the Independent Directors in more than 3 (three) listed companies.

 

 

1.2(ii) h)

They have not been 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).

 

 

1.2(ii) i)

They have not been convicted for a criminal offence involving moral turpitude.

 

 

1.2(iii)

The independent directors shall be appointed by the board of Directors and approved by the shareholders in the Annual General Meeting (AGM).

 

 

1.2(iv)

The post of independent Directors cannot remain vacant of more than 90 (ninety) days.

 

 

 

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.

 

 

 

1.2(vi)

The tenure of office of an independent Directors shall be for 3 (three) Years, which may be extended for 1 (one) term only.

 

 

 

1.3

Qualification of Independent Director (ID)

 

 

 

1.3 (i)

Independent Director shall be knowledge individual with integrity who is able to ensure compliance with financial, regulatory and corporate laws and can make meaningful contribution to business.

 

 

 

1.3 (ii)

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

 

 

 

1.3 (iii)

In special cases the above qualifications may be relaxed subject to approval of the Commission.

N/A

 

 

1.4

Chairman and Chief Executive Officer shall be filled by different individuals. Chairman shall be elected from among the directors. The Board of Directors shall clearly define respective roles and responsibilities of the Chairman and the CEO.

 

 

 

1.5

The Directors’ Report to Shareholders:

The Board of Directors of Zaheen Spinning Limited would like to include the following additional statements in its Report prepared under section 184 of the Companies Act, 1994.

 

 

 

 

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.

 

N/A

 

 

1.5(vi)

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

N/A

 

 

1.5(vii)

Utilization of proceeds from public issues, rights 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 and 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.

 

 

 

 

1.5(xi)

The financial statements prepared by the management of the issuer company present fairly its state of affairs, the result of its operations, cash flows and changes in equity.

 

 

 

 

1.5(xii)

Proper books of account of the issuer company have been maintained.

 

 

 

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.

 

 

 

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.

 

 

 

 

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 reasons 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 reasons thereof should be explained.

 

 

 

1.5(xviii)

Key operating and financial data of at least preceding 5(five) 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.

 

 

 

1.5(xx)

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

 

 

 

1.5(xxi)

The pattern of shareholding shall be reported to disclose the aggregate number of shares.

-

 

 

 

1.5(xxi)a)

Parent / Subsidiary / Associated Companies and other related parties (name wise details).

 

 

 

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).

 

 

 

1.5(xxi)c)

Executives