Meghna Cement Mills PLC.
Meghna Cement Mills PLC.
1.1 This guideline is to assist the Boards of Directors of Meghna Cement
Mills Limited’ (the Company) in making the audit committee established,
effective & efficient and to assist the directors who will be
appointed in the audit committee in carrying out their respective roles
duly and result oriented.
1.2 It is required that the board would
consider the constitution of the audit committee in particular
circumstances, proportionate to the tasks, and in accordance with the
size, complexity and risk profile of the Company.
1.3 The audit
committee has the particular role, acting independently from the
executive, to ensure that the interests of shareholders are properly
protected in relation to financial reporting and internal control.
1
4 Nothing in this guideline would be interpreted as a departure from the
principle of the board of directors’ functions as all directors would
still remain equally responsible for the Company’s affairs as a matter
of law.
1.5 The audit committee, like other committee to which
particular responsibilities are delegated, will remain a committee of
the board. Any disagreement with the board, including disagreement
between the audit committee’s members and the rest of the board, would
be resolved at board level.
1.6 This Code contains recommendations
about the conduct of the audit committee’s relationship with the board,
with the executive management and with the internal and the external
auditors.
1.7 The audit committee will be required to intervene if
there are signs of something been seriously missed or omitted. If they
are uneasy about the explanations of management and/or auditors about
any particular financial reporting or policy or any decision, they may
seek independent advice from the professionals in that respect.
1.8
Under these guidelines, the audit committee would have wide-ranging,
time- consuming and sometimes intensive work to do.
1.9 The Company
management will need to make the necessary resources available to the
audit committee in accordance with its requirements.
2.1 The board would establish the audit committee by appointing qualified members in the committee;
3.1 The board would establish the audit committee with
at least three members including
two independent directors. The independent directors to
be considered as independent as per the
BSEC Guidelines and by the Board having relevant financial
experience.
3.2 The Company Secretary will act as the Secretary of
the Committee.
3.3 Appointments would be made for a period of up to
three years in a row;
3.4
The term of the Audit Committee may be extendable by no more than one
additional three-year’s period/term, or so long as the committee members
continue to be independent, whichever is earlier.
4.1
The Board of Directors will select 0l (one) member out of the Audit
Committee to be the Chairman of the Audit Committee, who will be an
independent director.
4.2 Chairman of the audit committee will be required to remain
present in the Annual General Meeting (AGM).
5.1 The role and responsibilities of the audit committee will be as
follows:
a. To oversee of the financial reporting process and
to monitor the fairness of the financial statements of the Company and
announcements relating to the Company’s financial performance and
reviewing of the financial reporting;
b. To monitor the Company’s
internal control and management process and to review the effectiveness
of its functions;
c. to make recommendations to the board, for it
to put to the shareholders for their approval in general meeting;
d.
to report to the Board of Directors on how it has discharged its
responsibilities.
a. To monitor the accounting policies, principles
and guidelines as adopted by the company for the time being and from
time to time.
b. To oversee appointment and performance of the
statutory auditors.
c. To review the annual financial statements,
the quarterly and half yearly financial statements before submission to
the board for approval.
d. To review the adequacy of internal audit
function.
e. To review statement of significant related party
transactions submitted by the management.
f. To review the
management reports/ management letters/ letter of internal control
weakness, if any has been issued by the statutory auditors to the
company.
g. To oversee that in case of any money being raised
through any public offering or rights issue the Company will disclose it
to the Audit Committee about the uses / applications of funds by major
category (capital expenditure, sales and marketing expenses, working
capital, etc.), on a quarterly basis, as a part of their quarterly
declaration of financial results.
If used for the purposes other
than those stated in the offer document / prospectus, to review on an
annual basis, the statement of utilization of funds as raised by issuing
of offer document / prospectus. Such statement of utilization of funds
has to be prepared by the management of the Company.
6.1 The audit committee would review the terms of engagement and the
remuneration as to be paid to the external auditors in respect of their
audit services.
6.2 The audit committee would review that the
engagement letter issued to the external auditor at the start of each
audit, ensuring that it has been updated to reflect changes in
circumstances arising since the previous year.
6.3 The audit
committee would satisfy itself that the auditors provide appropriate,
effective and high-quality audit service towards the Company.
6.4
The audit committee to review and monitor the external auditor’s
independence, objectivity and the effectiveness of the audit process.
7.1 It is for the Chairman of the Audit Committee, in consultation with
the other members of the Committee, to decide the frequency and timing
of its meetings.
It is recommended that there would be no fewer
than
three Audit Committee meetings during the financial year. It is also
recommended that Audit
Committee meetings to be held to coincide with the key dates within the
financial reporting and auditing cycle of the Company.
7.2
No one other than the audit committee’s chairman and members is
entitled to be present at a meeting of the audit committee. It is for the audit committee to decide
if non-members would attend
in a particular meeting or a particular agenda item on invitation of the
audit committee.
7.3 Sufficient time has to be allowed to the audit
committee to enable to review and discuss on the matters placed before
the audit committee. A sufficient interval would be allowed between
audit committee meetings and main board meetings to allow any work
arising from the audit committee meeting to be carried out and reported
to the board as appropriate.
7.4 The audit committee would, at
least annually, meet the external and internal auditors, to discuss
matters relating to the issues arising in course of the audit.
7.5
Meetings of the audit committee be considered as formal. However, the
Chairman of the Audit Committee may call informal ones, if deems
required. The Audit Committee to keep in touch on a continuing basis
with the key management personnel involved in the Company’s governance,
including the board chairman, the chief executive, the finance director,
the external auditors, the head of internal audit and the Company
Secretary.
7.6 The quorum of the Audit Committee will be with at
least 3 (three) members and with at least l(one) independent director.
8.1 The role of the audit committee is for the board to decide and to
the extent that the audit committee undertakes tasks on behalf of the
board, the results would be reported to, and considered by, the board.
In doing so it would identify any matters in respect of which it
considers that action or improvement is needed, and make recommendations
as to the steps necessary to be taken.
8.3 The audit committee
would review annually its terms of reference and its own effectiveness
and recommend any necessary changes to the board. The board would also
review the audit committee’s effectiveness annually.
8.4 The audit
committee would report to the board on how it has discharged its
responsibilities, including:
a. The significant issues that
it considered in relation to the financial statements and how these
issues were addressed;
b. Its assessment of the effectiveness of
the external audit process and its recommendation on the appointment or
reappointment of the external auditor(s);
c. Any other issues on
which the board has requested the committee’s opinion.
8.5
Where there is any disagreement between the audit committee and the
board, adequate time would be made available for discussion of the issue
or issues with a view to resolving the disagreement(s).
8.6 Where
any such disagreements between the audit committee and the board, cannot
be resolved, the audit committee would have the right to report the
issue to the shareholders as part of the report on its activities in the
annual report.
9.1 The audit committee would be provided with sufficient resources to
discharge its duties effectively and smoothly.
9.2 The audit
committee would have access to the services of the company’s secretariat
division on all audit committee matters including: planning the audit
committee’s work, drawing up meeting agendas, maintenance of minutes,
drafting of material about its activities for the annual report,
collection and distribution of information and provision of any
necessary practical support.
9.3 The Company Secretary would ensure
that the audit committee receives required support, information and
papers in a timely manner to enable full and proper consideration to be
given to the issues.
9.4 The board would make funds available to
the audit committee to enable it to take independent legal, accounting
or other advice when the audit committee reasonably believes it
necessary to do so.
10.1 The board of directors may allow any remuneration, if necessary, to
the members of the audit committee for-the additional services and
responsibilities as the member of the Audit Committee.
10.2 In
allowing the remunerations to the members of the audit committee due
consideration has to be given to the time as given by the audit
committee members, the skills they bring to bear and the onerous duties
they take on, as well as the value of their work to the Company.
10.3
As the Chairman’s responsibilities are more responsive and the time
involvement will generally be more than the other members of the audit
committee so if any remuneration being allowed to the Chairman, then
this has to be considered duly and be reflected in the quantum of his or
her remuneration.
11.1 The audit committee would review and report to the board on the
significant financial reporting issues, interim reports, any
announcement and related formal statements.
11.2 It is solely the
management’s responsibility to prepare complete and accurate financial
statements and disclosures in accordance with financial reporting
standards and applicable rules and regulations. However, the audit
committee would consider the significant accounting policies, any
changes thereto and any significant estimates, considerations and
judgments.
11.3 In course of the review, the audit committee, if is
not satisfied with any aspect of the draft financial reporting by the
Company, will report its views to the board immediately.
11.4 The
audit committee would review related information presented with the
financial statements, including the business review, and statements
relating to the audit and management.
11.5 If requested by the
board, the audit committee may also review the content of the annual
report and accounts and advise the board on whether, taken as a whole,
it is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Company’s performance, business
model and strategy.
11.6 The audit committee would review
arrangements by which staff of the Company may, in confidence, raise
concerns about possible improprieties in matters of financial reporting
or other matters.
11.7 The audit committee’s objective would be to
ensure that arrangements are in place for the proportionate and
independent investigation of such matters and for appropriate follow-up
action.
11.8 The Audit Committee will submit written statement
/report on its activities to the Board of Directors from time to
time.
11.9 The Audit Committee will immediately report to the Board
of Directors on the any of the following findings:
a) reports
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;
d) any other matter which the audit committee
deemed necessary to be disclosed to the Board of Directors immediately.
12.1 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 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, then the Audit Committee will report on such finding to the Bangladesh Securities & Exchange Commission (BSEC), upon reporting of such matters to the Board of Directors for three times or completion of a period of 6 (six) months from the date of first reporting to the Board of Directors, whichever is earlier.
13.1 Report on activities carried out by the Audit Committee, including any report made to the Board of Directors under Clause no. 11.9 above during the year, will be signed by the Chairman of the Audit Committee and disclosed in the annual report of the issuer Company.