INTERNSHIP REPORT

GSP Finance Company (Bangladesh) Limited

Abstract
Corporate Governance/ Company Secretarial Practice
Corporate Finance, Investment & Taxation
Human Resource Management & Administration

Sujan Biswas
Registration Number: CS-2615
Date of Submission: 27th June 2018

The Institute of Chartered Secretaries of Bangladesh

Padma Life Tower (8th Floor),
115 Kazi Nazrul Islam Avenue,
Bangla Motor, Dhaka-1000, Bangladesh.
 Letter of Transmittal

June 27, 2018

The Secretary
The Institute of Chartered Secretaries of Bangladesh
Padma Islami Life Tower (7th& 8th Floor)
115 Kazi Nazrul Islam Avenue
Bangla Motor, GPO Box no. 3100,
Dhaka-1000, Bangladesh

Subject: Submission of Internship Report

Dear Sir,

I am pleased to submit the internship report on GSP Finance Company (Bangladesh)

Limited to fulfill the mandatory requirement of completion of my internship to become an
Associate Member of the Institute of Chartered Secretary of Bangladesh. Upon
successfully completion of the internship program I have prepared the internship report
as per the guidelines of the institute

According the guidelines of internship, I have covered the following areas as practiced in
United Commercial Bank Limited in details:

1. Organizational overview
2. Corporate Governance and Secretarial Practice
3. Corporate Finance, Investment & Taxation
4. Human Resources Management and Administration

I hope this report will satisfy the requirements for my internship enabling me to become
an Associate Member of the Institute of Chartered Secretaries of Bangladesh.

Sincerely yours

Sujan Biswas
Registration Number: CS-2615
Institute of Chartered Secretaries of Bangladesh (ICSB)

Page 1 of 88
 Preface of the report

The business around the globe is getting more and more complex and competitive day
by day. The Regulators and general public are concerned about governance, ethics,
probity, accountability and good practice is higher than ever before. To supplement the
emerging newer regulatory laws and rules together, it is becoming a tough task for the
corporate management to cope and combat unless effectively dilled.

To establish the good Corporate Governance in the Corporate Management in

Bangladesh the Institute of Chartered Secretaries and Managers of Bangladesh (ICSMB)
was established in 1997 u/s 28 of Companies Act, 1994 with the consent of Ministry of
Commerce of Bangladesh. After more than a decade the National Parliament of
Bangladesh has unanimously passed the Chartered Secretaries Act 2010 on June 7,
2010. After the promulgation of the Act the Institute of the Chartered Secretaries and
Managers of Bangladesh (ICSMB) has been transformed as the Institute of Chartered
Secretaries of Bangladesh (ICSB). The Institute is instrumental in promoting good
corporate governance norms and practices as well as creating conducive environment
and acceptability of Government policies on trade, commerce and industry. The Institute
is working under the administrative control of Ministry of Commerce, Government of
Bangladesh.

The Chartered Secretaries Act 2010 has for the first time introduced the concept of a
member of the Institute of Chartered Secretaries of Bangladesh (ICSB) to be in the
practice of Chartered Secretary ship. This is an independent line of work as distinct from
conventional employment of company secretary. Such practice shall also eventually
ameliorate public harassment at the doors of various authoritarian public outfits.

The qualified Chartered Secretary who intends to be a member of ICSB has to fulfill the
Compulsory requirement of completion of internship in a listed company for the period of
three months at least and should submit a report of internship after successfully
completion of internship. The Institute has the intention to make its member as
competent through gathering such practical knowledge and experience by attaching with
a listed company.

The Institute allowed me to complete the Internship from the GSP Finance Company
(Bangladesh) Limited. I would like to convey my gratitude to the all council members,
Secretary and staffs of the institute as well as the authority of GSP Finance Company
(Bangladesh) Limited, to help me to do my internship on Corporate Governance/
Company Secretarial practice, Corporate Finance- Investments & Taxation, Human
Resource Management & Administration of GSPB.

Page 2 of 88
 Acknowledgment

It is my privilege that upon qualifying all examinations of the Chartered Secretary

Course, ICSB has asked me to complete the internship with a listed company to fulfill the
mandatory requirement for membership of the institution. Then I confirmed the ICSB to
complete my Internship with GSP Finance Company (Bangladesh) Limited. ICSB has
allowed me to do the internship in GSP Finance Company (Bangladesh) Limited.

Firstly, I would like to express my heartfelt gratitude to my supervisor Mr. Md. Mizanur
Rahman FCS, Deputy Managing Director & Company Secretary of GSP Finance Company
(Bangladesh) Limited for giving me time despite of his busy schedule. I am indebted to
him for allowing me to do my internship in GSP Finance Company (Bangladesh) Limited,
a listed finance company. His supervision and advice helped me right from the internship
program formulation stage to complete through collection and analysis of the relevant
data for the said program. I am indebted to him for all his assistance and guidance.

My admiration goes to all of the respondents of GSP Finance Company (Bangladesh)

Limited for spending their valued time and also providing me data, information which
were essential for the completion of the report.

I would like express my due respect to my course teachers who had great contribution to
make successful to qualify the Chartered Secretary course. I shall remember their
contribution for accomplishment of my study in ICSB.

I am grateful to ICSB Authority for their suggestions and guidance during my internship.

Best regards,

_________________________

Sujan Biswas
Registration No. CS-2615

Page 3 of 88
 Executive summary

Corporate governance involves a set of relationships among the company’s

management, its board of directors, shareholders, auditors and other stakeholders.
These relationship, which involve various rules and incentives provide the structure
through which the objectives of the company are set and the means of attaining these
objectives as well as monitoring performance and determined. Thus the key assets of
good corporate governance include transparency of corporate structure and operations;
the accountability of managers and boards of shareholders and corporate responsibility
towards shareholders.

The importance of corporate governance of banks remains crucial given their

contribution in economic growth through financial development. This paper has shed
light on the structures of corporate governance of GSP Finance Company (Bangladesh)
Limited involving its ownership structure, Board issues, Executive aspects, disclosures
and audit practice along with their associated limitations.

GSP Finance Company (Bangladesh) Limited has established correspondent relationship

with various banks and financial institutions in home & abroad. GSP Finance Company
(Bangladesh) Limited is fully committed to conduct its business activities in an
economically, environmentally and socially sustainable manner. In pursuit of its business
growth the company will invariably adhere to good corporate governance practice, sound
risk management policies, attractive deposit scheme, prudent credit policies and in order
to support long term growth and profitability of the bank for the benefit of all
stakeholders.

Finally, the issue of corporate governance of financial institutions must get due
importance along with the decision of financial liberalization would only add to the woes
of thousands of depositors along with inefficient banking system.

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 Table of Contents
Letter of Transmittal ................................................................................... 1
Preface of the report ................................................................................... 2
Acknowledgment ........................................................................................ 3
Executive summary ..................................................................................... 4
Chapter – 01 ............................................................................................... 9
Prelude ....................................................................................................... 9
1.1 Introduction .................................................................................... 10
1.2. Significance of the study: ................................................................ 10
1.3. Scope of the study: ........................................................................ 10
1.4. Methodology: ................................................................................ 10
1.5. Limitation of the study:................................................................... 11
Chapter – 02 ............................................................................................. 12
An overview of GSP Finance Company (Bangladesh) Limited .................... 12
2.2. The company at a glance: ............................................................... 13
2.2.1. Vision: .................................................................................... 13
2.2.2. Mission: .................................................................................. 13
2.2.3. Strategic Objectives:................................................................. 13
2.2.4. Core Values: ............................................................................ 14
2.3. Products/Services of the company: .................................................. 14
2.3.1. Financial segments: .................................................................. 14
2.3.2. Deposit schemes: ..................................................................... 14
2.4. GSP Investments Limited (A Subsidiary of GSP Finance Company
(Bangladesh) Limited): .............................................................................. 15
2.5. Legal Form: ................................................................................... 15
2.6. Stages of Incorporation of the company:........................................... 16
2.7. Memorandum of association (MOA): ................................................. 16
2.8. Articles of Association (AA): ............................................................ 17
Chapter – 03 ............................................................................................. 18
Secretarial Practices & Corporate Governance .......................................... 18
3.1. Introduction: ................................................................................. 19
3.2. Company Secretariat: ..................................................................... 20
3.2.1. Board secretariat: ..................................................................... 20
3.2.2. Share Division:......................................................................... 20
3.3. Organogram of secretarial Department: ............................................ 21
3.4. The main duties of a company secretary: .......................................... 21

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 3.5. Responsibilities of a company Secretary:........................................... 22
3.6. Reporting Lines for the Company Secretary: ...................................... 23
3.7. Functions of the Company Secretary: ............................................... 23
3.8. Company Secretary’s duty relating to Statutory Accounts: .................. 24
3.9. Submission of Returns and Reports: ................................................. 25
3.10. Functions relating to share management: ......................................... 26
3.10.1. Company’s paid up capital and shareholders: ............................... 26
3.10.2. Company's Issue of Shares: ....................................................... 26
3.11. Meetings of the company: ............................................................... 28
3.11.1. Notice for the meeting: ............................................................. 29
3.11.2. Statutory Meeting ..................................................................... 29
3.11.3. Annual General Meeting (AGM)................................................... 29
3.11.4. Board Meeting .......................................................................... 32
3.11.5. Extra-Ordinary General Meeting (EGM) & Special Resolution: ......... 33
3.11.6. Committee Meeting: ................................................................. 33
3.12. Board of Directors: ......................................................................... 35
3.12.1. Functions of the Board of Members: ............................................ 35
3.12.2. Directors’ Share Qualification: .................................................... 35
3.12.3. Directors Appointment: ............................................................. 35
3.12.4. Directors’ retirement:................................................................ 36
3.13. Corporate Governance: ................................................................... 37
3.13.1. Reward of Corporate Governance: ................................................. 37
3.13.2. Role of Company Secretary in Good Corporate Governance............ 37
Chapter: 4 ................................................................................................. 55
Corporate Finance, Investment and taxation ............................................ 55
4.1. Treasury Division of GSP Finance company (Bangladesh) Ltd: ............. 56
4.1.1. Major Functions of Treasury Division: .......................................... 56
4.1.2. Treasury Product: ..................................................................... 56
4.2. Overview of the Finance & Accounts Department................................ 57
4.2.1. Accounting Policies of GSP Finanance: ......................................... 58
Chapter: 05 ............................................................................................... 63
Corporate Financial Accounting................................................................. 63
05.1. Statement of Compliance: ............................................................... 64
05.2. Basis of Measurement: ................................................................... 64
05.3. Basis of Consolidation: .................................................................... 64
05.3.1. Use of Estimates and Judgments ................................................ 64

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 05.3.2. Reporting Period ....................................................................... 64
05.3.3. Cash Flow Statement ................................................................ 64
05.3.4. Statement of Changes in Equity ................................................. 65
05.3.5. Liquidity Statement .................................................................. 65
05.3.6. Significant Accounting Policies .................................................... 65
05.4. Financial Reports of GSP Finance Company (Bangladesh) Ltd.: ............ 65
05.4.1. Compliance with Laws .............................................................. 71
Chapter: 06 ............................................................................................... 72
Human Resources management & Administration .................................... 72
06.1. General Administration Overview: .................................................... 73
06.2. HRM of GSP Finance Company (Bangladesh) Limited: ......................... 73
06.2.1. HRD of the Company: ............................................................... 74
06.2.2. Role of HR Department: ............................................................ 74
06.2.3. Human Resources Planning of GSP Finance Company (Bangladesh)
Limited .............................................................................................. 75
06.3. Performance Appraisal .................................................................... 79
06.3.1. Role of Performance Appraisal:................................................... 79
06.3.2. Steps in Appraising Performance: ............................................... 79
06.3.3. Appraisal Methods of GSP Finance: ............................................. 80
06.4. Motivation: .................................................................................... 80
06.4.1. Features of Motivation: ............................................................. 80
06.4.2. Motivation strategy: .................................................................. 80
06.4.3. Compensation: ......................................................................... 81
06.5. Reward plans of GSP Finance Company (Bangladesh) Ltd.: ................. 81
06.6. Promotion Policy: ........................................................................... 81
06.7. Employee Benefits of GSP Finance: .................................................. 81
06.8. Disciplines:.................................................................................... 82
06.9. Features of HR of GSP Finance Company (Bangladesh) Limited at a
glance: ................................................................................................... 82
Chapter: 07 ............................................................................................... 83
Findings, Recommendation and Conclusion .............................................. 83
07.1. Findings: ....................................................................................... 84
07.1.1. Company Secretarial Practice & Corporate Governance: ................ 84
07.1.2. Corporate Finance & Accounts: ................................................... 84
07.1.3. Human Resources & Other Issues: .............................................. 84
07.1.4. CSR Activities: ......................................................................... 85

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07.2. Recommendations:......................................................................... 86
07.3. Conclusion: ................................................................................... 87
07.4. References: ................................................................................... 88

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Chapter – 01
Prelude

Page 9 of 88
1.1 Introduction
The person who has qualified in the all course papers of the professional course on
Chartered Secretary have to complete a minimum three months’ internship in a listed
company to become an Associate Member of the Institute of Chartered Secretaries of
Bangladesh (ICSB). The person needs to submit an Internship Report based on his
gathered knowledge and experience.

I have completed my internship in the Company Secretariat of GSP Finance Company

(Bangladesh) Limited which is one of the fastest growing financial institution in the
Country and a Public Limited Company. GSP Finance Company (Bangladesh) Limited is
listed in both Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE).

During this Internship period I have received orientation on Corporate Governance &
Secretarial Practice, Corporate Finance, Investment & Taxation and Human Resource
Management & Administration of GSP Finance Company (Bangladesh) Limited. The
report has been prepared in accordance with the guidelines of ICSB.

1.2. Significance of the study:

The Corporate Governance, Company Secretarial Practices, Corporate Financial
Management, Investment & Taxation, Human Resource Management and Administration
are the key areas of the organization which shall define the organization’s goal. The
Board of Directors as well as the top management should have the transparent focus on
these areas to fix the organization’s task. In a world of changing competitive
environment companies have to comply with all the legal, statutory including other rules
and regulations with disclosures.

1.3. Scope of the study:

The study is limited only to GSP Finance Company (Bangladesh) Limited. For this study,
the following areas have been covered by the study:

The present management practice of the company.

 Organizational structure
 Nature of Activity
 Secretarial practices
 Corporate Governance
 Regulatory matter of the company
 Portfolio of the company
 Financial evaluation
 Human Resource Management activities.
 To evaluate and analysis the "Annual Report -2017" of the company.

1.4. Methodology:
Methodology is a system of methods used in a particular area of study or activity. This
study has been completed with the help of Mr. Md. Mizanur Rahman, Deputy Managing
Director & Company Secretary of the company. Following methodologies were used in
collecting data and information.

Primary sources

Page 10 of 88
  A structure questionnaire was formed to collect responses from
respondents.
 Face to Face conversion with the dealing officials

Secondary resources

 Website of the company

 Annual report of company
 Different circular & publication of company

1.5. Limitation of the study:

Three months’ period of time is very short to work in depth of some topics like
Secretarial Practice, Human Resource and Capital Structure. All information is not
disclosed for confidential and business strategic purposes. It would be better for me if I
got the chance to work for longer period to study and detailed analysis of all the
Corporate Governance, Company Secretarial Practices, Corporate Financial Management,
Investment & Taxation and Human Resource Management issues.

I believe every study does have certain limitations and this study is also not free from
those sorts of limitations.

Page 11 of 88
 Chapter – 02
An overview of GSP
Finance Company
(Bangladesh)
Limited

Page 12 of 88
2.2. The company at a glance:
GSP Finance Company (Bangladesh) Limited is a Financial Institution (FI) incorporated in
Bangladesh on October 29,1995 as a public limited company under the Companies Act
1994. The Company received its certificate of commencement of business on January 14,
1996 and its license on March 04, 1996 as required under Section 4(1) of the Financial
Institutions Act 1993. The Company went into commercial operation on April 17, 1996.
The Company also got a separate license from Bangladesh Securities and Exchange
Commission on August 24, 1999 for working as a Merchant Bank. GSP Finance Company
(Bangladesh) Limited was listed with Chittagong and Dhaka Stock Exchanges on March
14, 2012 and March 28, 2012 respectively.

Pursuant to the requirement of Bangladesh Securities and Exchange Commission, GSP

Finance Company (Bangladesh) Limited formed a subsidiary in the name of “ GSP
Investments Limited “ with a view to separate its Merchant Banking operation which was
approved by Bangladesh Securities and Exchange Commission vide their letter no. SEC/
Reg./MB/SUB-16/2011/113 dated August 14, 2014. GSP Investments Limited duly
incorporated with the RJSC, Dhaka as a private limited company with an authorized and
paid up capital of Tk. 500 million and Tk. 250 million respectively.

2.2.1. Vision:
To be a premier financial institution in Bangladesh with strong commitment to the
development of the society and the national economy.

2.2.2. Mission:
 High quality financial services with state of the art technology.
 Working closely with our clients.
 Maximizing return on equity.
 Maintaining a high standard of professional ethics.
 Securing a sustainable growth strategy

2.2.3. Strategic Objectives:

 Create high quality investment portfolio.
 Strengthening our position in capital market operation.
 Continuous diversification for maximization of shareholders’ value.
 Maintain long-term business relationship with our clients.
 Retaining most dynamic people with good aptitude.
 Responding quickly to new opportunities.
 Balanced diversification of funding sources.
 Strengthening corporate governance practices.

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2.2.4. Core Values:
 Integrity
 Commitment
 Transparency
 Service Excellence
 Business Ethics
 Teamwork
 Prudent risk taking
 Clients Focus
 Friendly Environment
 Equal opportunity
 Trust & Respect

2.3. Products/Services of the company:

The company is entitled to carry out business with the following product and services:

2.3.1. Financial segments:

 Lease Finance
 Term Finance
 Working Capital Finance
 Bridge/ equity finance
 Syndication finance
 SME finance

2.3.2. Deposit schemes:

 Monthly income deposit
 Quarterly income deposit
 Half yearly income deposit
 Yearly income deposit
 Double income deposit

Page 14 of 88
2.4. GSP Investments Limited (A Subsidiary of GSP Finance
Company (Bangladesh) Limited):

 Issue Management
 Underwriting
 Portfolio Management
 Margin Loan
 Advisory Services on securities
 Securities Trading Services

2.5. Legal Form:

A public limited company incorporated in Bangladesh on October 29, 1995 under the
Companies Act 1994. The Company licensed as Financial Institution under Financial
Institutions Act 1993 on March 04, 1996 and also got a separate license from
Bangladesh Securities and Exchange Commission on August 24, 1999 for working as a
Merchant Bank. The Company was listed with Dhaka and Chittagong Stock Exchanges in
2012.

Company Registration No : C-29591 (879) / 95

Bangladesh Bank License No : AvtcÖt(A-e¨vswKs)wefvM/XvKv/10/96

GSP Investments Limited - : (A Subsidiary of GSPB) MB- 88/2014

License No

Registered Office : 1, Paribagh, Mymensingh Road,

Dhaka-1000, Bangladesh.

Tel: +880-2-9674306, 9674425 (Auto Hunting); Fax: +880-2-

9674194

Membership : 1. Bangladesh Leasing & Finance Companies Association (BLFCA)

2. Bangladesh Association of Publicly Listed Companies (BAPLC)
3. Bangladesh Merchant Bankers Association (BMBA)
4. Foreign Investors Chamber of Commerce & Industry (FICCI)
5. Bangladesh-Malaysia Chamber of Commerce and Industry
(BMCCI)

Principal Bankers : 1. BASIC Bank Ltd.

2. Commercial Bank of Ceylon PLC
3. Dutch- Bangla Bank Ltd.
4. Mutual Trust Bank Ltd.
5. Shahjalal Islami Bank Ltd.
6. Southeast Bank Ltd.
7. Standard Bank Ltd.
8. The City Bank Ltd.

Page 15 of 88
2.6. Stages of Incorporation of the company:
The Promoters’ dream came true when the Company Secretary starts the incorporation
activities. After getting the name clearance from the office of Registrar of Joint Stock
Companies and Firms (RJSC). The Following Documents needed to be taken regarding as
documentation for completing the Company formation:

1. Memorandum of Association of the Company.

2. Articles of Association of the Company.
3. Declaration on Registration of Company.
4. Notice of situation of Registered Office.
5. List of persons who consenting to be Directors.
6. Particulars of Directors’, Manager and Managing Agents and any change therein.
7. Declaration before commencing Business in case of Company filling statement in
lieu of prospectus.
8. Agreement to take Qualification Shares in proposed Company.
9. Evidence of Name Clearance.
10. Special Adhesive Stamps and Treasury Challan from Bangladesh Bank to Treasury
of collecting the Stamps.
11. Approval from Bangladesh Bank.

GSP Finance Company (Bangladesh) Limited (FI) established under the Financial
Institutions Act 1993 and incorporated as a Public Limited Company under Companies
Act, 1994 on October 29, 1995. The company started its commercial operations on April
17, 1996.

2.7. Memorandum of association (MOA):

The Memorandum of Association is considered as the constitution of a company. It
provides the foundation to the structure or the building of the company. The
memorandum of association is defined as a company’s charter. It defines the limitations
of a company’s powers.

The Memorandum of Association of GSP Finance provides name, place of business,

object and limited liability of members and the capital of the company. The name of the
company shall be a concrete one, separate from any other company's name. There
should be mentioned a specific place of business of the company popularly known as
Registered Office. The object of the company should include all present a future areas of
activities so that no legal complications arise on this. The Memorandum should be signed
by each subscriber in the presence of a witness who shall attest the signature

The Memorandum of Associatin of GSP Finance Company (Bangladesh) Ltd. is well

drafted. Unless rare exceptions, it need few alterations only due to mitigate the demand
of business and time.

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2.8. Articles of Association (AA):
The articles of association are a document that specifies the regulations for a company's
operations, and they define the company's purpose and lay out how tasks are to be
accomplished within the organization, including the process for appointing directors and
how financial records will be handled. Articles of association often identify the manner in
which a company will issue stock shares, pay dividends and audit financial records and
power of voting rights. This set of rules can be considered a user's manual for the
company because they outline the methodology for accomplishing the day-to-day tasks
that must be completed.

The articles of GSP Finance Company (Bangladesh) Limited governs the administration in
that it spells out all internal regulations such as the directors, their appointment, conduct
of Board meetings, share transfer, books of accounts, audit etc. The articles can't go
beyond the terms of the Memorandum and it constitutes an agreement between the
company and its shareholders.

Share capital of the company:

Authorized, Issued, Subscribed and Paid-up share capital of GSP Finance Company
(Bangladesh) Limited is stated below:

Authorized share capital : BDT 2,000.00 Million

200,000,000 ordinary shares of Tk. 10 each

Issued, Subscribed and Paid up Capital : BDT 1,046.00 Million

104,632,695 ordinary shares of Tk. 10 each

Domestic Shareholding Position : 75.61% (% of shareholding

2017)

Foreign Shareholding Position : 24.39% (% of shareholding

2017)

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 Chapter – 03
Secretarial Practices
& Corporate
Governance

Page 18 of 88
3.1. Introduction:
Company Secretary is a term that be visualized if we see and realize that it begins with
the floatation of the company and ends with its liquidation (if required). The Directors
are the brains of the Company but the Company Secretary is its ears, eyes and hands
for implementing the policies as well complied with rules and regulations. A company
secretary’s role in a company is very important. Apart from acting as a link between the
board of the organization and the various stakeholders, government and other
regulatory authorities, he/she also carry out all the duties like maintaining records,
endorsing legal requirements, responding to board correspondences, communicating
with various officials and much more. It is no denying the fact that, a company secretary
performs a complex, multifaceted and essential roles in any organization.

A Company Secretary is:

 An expert in Company, Corporate and Securities Laws

 A vital link between the company and its:
 Board of Directors
 Owners (Members/Shareholders)
 Government and Regulatory Authorities
 A custodian and conscience seeker of the company
 A compliance officer of the company
 Corporate Planner and Strategic Manager

As per SEC Notification dated 20.02.2006, No. SEC/CMRRCD/2006-158/Admin/02- 08,

the company must appoint a Company Secretary and the Board of Directors should
clearly define respective duties, responsibilities and role of the Company secretary. The
management of company lies with the Board of Directors and the Board relies on
Company Secretary. Company Secretary is the head or chief of corporate secretariat. He
is duly bound to be present before the Board with any information as called for. He will
monitor the implementation of Board decisions. The Company Secretary should attend
meetings of the Board of Director.

Mr. Md. Mizanur Rahman is the Company Secretary of GSP Finance Company
(Bangladesh) Limited. He is also the Deputy Managing Director of the company.

Fairness, Transparency, Accountability and Responsibility are the minimum standard of

acceptable corporate behavior today. The financial institution, through its Board of
Directors, Committees, endeavors to strike and deliver the highest governing standards
for the benefit of its stakeholders. In fact, Corporate Governance leads to the good
governance and good governance is an integral part of the sustainable economic
development of a country. At GSP Finance Company (Bangladesh) Ltd. due importance is
given to major parameters of corporate governance such as board system and
independence, function of the board, sub-committees, internal control over financial
reporting, transparency, disclosures and compliance etc; all its operational activities are
guided by these key principles of good governance.

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3.2. Company Secretariat:
Company Secretariat is the flow line of all information to and from the Board of
Directors. In the age of free economy, Company Secretary maintains a clear and distinct
relation and liaison among investors, financiers, bankers, donors, correspondents and
many others of the market economy.

There are two wings of Company Secretariat

1. Board Secretariat
2. Share Division

3.2.1.Board secretariat:
It is the vital wing of the Company Secretariat. One of its main tasks of the Board
Secretariat is to convene, conduct and conclude meeting of the Directors and
Shareholders. It also maintains public relationship with specialized bodies/ regulators like
Bangladesh Bank, Stock Exchanges, Securities and Exchange Commission, Investment
Corporation of Bangladesh, different Banks, Registrar of Joint Stock Companies and
Firms etc.

3.2.2.Share Division:
Share division is directed under the Board Secretariat. The activities of share division
are:

I. Supervision and maintenance of Computerized Share Management System (for

paper shares) and take care in regard to transfer of public shares according to
the regulation of SEC, DSE and CSE.
II. Supervision, taking care and maintenance of Share Management System under
Central Depository System (CDS) (for electronic shares) like Dematerialization,
Remateriali-zation, Freeze and Freeze Release Request etc.
III. Necessary measures and supervision in regard to payment of dividend
(cash/stock), issuance of shares certificate, crediting bonus shares to the
respective BOID holder within the prescribed time frame.
IV. Submission of reports about payment of dividend as per BSEC, DSE and CSE
Rules and Regulation.
V. Submission of monthly shareholding report to SEC according to prescribed format

Page 20 of 88
3.3. Organogram of secretarial Department:

Company
Secretary

Board Share
secretariat Division

Deputy
Company Mnager
Secretary

Assitant
Assitant
Comany
Manager
Secretary

Officer

Figure 1 Organogram of Secretarial Department of GSP Finance Company (Bangladesh)

Ltd.

3.4. The main duties of a company secretary:

The Secretary though appointed and salaried, is not just an employee of the
organization. Rather he is the custodian of the interests of the company. So, under all
cannons, it is his prime duty to protect the safeguard such interests of the company at
all levels: legal, statutory, administrative, arbitrational and all other policy matters.

He is under direct control of Board of Directors, So, it is his duty to

1. Dealing with Members, Shareholders and meet their queries.

2. Convene and Management of the meeting of the Board of Directors and Members
(general meeting) of the Company.
3. Make sure that the quorum is present before business of the Board or Members is
transacted at the meeting.
4. Prepare minutes of the meeting(s) timely and correctly, obtaining signature of the
Chairman of the meeting, circulating the same among the Members of the Board
and therefore preserving in the minute’s book.
5. Make arrangement for inspection of minutes and provide copies thereof if so
requested by the members.
6. 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 Bangladesh Securities and Exchange Commission (BSEC) and Stock
Exchange(s).
7. Preparing Annual Report for the Members (shareholders).

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 8. Filing of Returns namely a. List of members and Summary of Share Capital
(Schedule-X), b. Particulars of Directors (Form-XII) in case of any change in the
Board of Directors, c. Authenticated Balance Sheet and Profit and Loss Account,
d. Consent to act as Director, e. Change of Address, f. Return of Allotment, g.
Change in Capital, h. Special Resolution, etc as and when required to the
Government Authority.
9. Arrange for audit and preparation of financial report as per Companies Act., IAS
and ISA.
10. Compliance of BSEC, DSE, CSE and other govt. authority’s requirement.
11. Arrange to Submit in time the periodical report like Quarterly Report, Annual
Report, Monthly various report according to the regulation of the BSEC, DSE and
CSE.
12. 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.
13. CS is one of the signatory of such agreements, contracts and deeds and at least a
knowledgeable witness.
14. Ensure compliance of Corporate Governance according to the BSEC Notification.
15. Maintaining 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

3.5. Responsibilities of a company Secretary:

The Company Secretary must provide directors with guidance in their duties,
responsibilities, and powers and make directors aware of all laws and regulations
relevant to the company. The company secretary is closely involved in preparing the
schedule of board and committee meetings for the year. He prepares the agendas for
these meetings in conjunction with the chairperson and key executives.

The company secretary must ensure that the directors and management operate within
an authority framework approved by the board and reviewed and updated from time to
time. The Company Secretary is responsible personally and concurrently with the
company for any lapses, frauds or wrong doing in the course of his employment He is
responsible for maintaining strict secrecy of the affairs of the Board as also any and
every other matters of the company. He is responsible to maintain the statutory time
requisite for circulation of notices of shareholders meeting. He is responsible to file
various statutory returns in due time. The Company Secretary is responsible for the
maintenance of various statutory and statistical registers such as Register of share
application, Register of members, Register of transfer of shares, Register of directors,
managers and managing agents, Register of particulars of contracts, where directors are
interested, Annual lists of members and summary of capital to be contained in a
separate part members register, Register of mortgages and charges, etc.

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3.6. Reporting Lines for the Company Secretary:
Company Secretary occupies a pivotal position in the management and administration of
the company. In the course of his job, the Company Secretary works as the bridge
between policy and implementation. His relationship with the Board and his placement in
the organization makes him the de-facto second-in-command after the chief executive
officer of the company. The Company Secretary has other executive or administrative
duties; he reports to the Managing Director. The Company Secretary does not report to
a director (except the Chairman) on any matter unless responsibility for that matter has
been delegated to the Director by the Board.

3.7. Functions of the Company Secretary:

Company Secretary occupies a pivotal position in the management and administration of
the company. In the course of his job, the Company Secretary works as the bridge
between policy and implementation. His relationship with the Board and his placement in
the organization makes him the de-facto second-in-command after the chief executive
officer of the company.

The Company Secretary of GSP Finance Company (Bangladesh) Limited performs so

many functions. Some of them are listed below:

1. Arranges and convenes Board Meeting

2. Attends meeting of the Board of Directors
3. Prepares minutes of the meetings times and get approval in the subsequent
Board meeting
4. Manages all sorts of jobs in relation to share department
5. Sends annual and half yearly report to the members timely
6. Convenes Annual General Meeting (AGM) timely
7. Send notices of different meetings timely
8. Ensures notices of meetings are dispatched properly and timely
9. Oversees the requisite quorum in the meeting
10. Files different returns and statements with different statutory bodies
11. Arranges meeting for share transfer, transmission, split and duplicate certificate
issue and get the approval of those
12. Functions in respect of legal and statutory
13. Functions relating to appointment of Auditor
14. Arranges for Induction of new Board member
15. Maintains different statutory and statistical registers etc.

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3.8. Company Secretary’s duty relating to Statutory Accounts:
Company Secretary GSP Finance Company (Bangladesh) Limited properly checked and
finalized of Statutory Accounts as under:

 To receive Draft Accounts from Accounts Department

 Go through in details in Accounts and ensure disclosure properly taken place in
the Accounts in the form of notice
 Call Statutory Auditors to take up the audit
 Provide all information and explanations as requested by the Auditors
 Ask Auditors to submit Draft Accounts
 Arrange Meeting with the Audit team to discuss on the Draft Accounts
 Call Board Meeting to consider Draft Audited Accounts:
1. To oversee whether any gross mistake/ miss presentation made
2. Appropriation of profits
3. Dividend
4. Transfer to General reserve
 Sent the Draft Report & Accounts to Auditors mentioning the appropriation of
profits with relevant Board Resolutions. He also asks the Auditors to submit the
final Report & Accounts
 Authorization of Balance Sheet, Profit & Loss Accounts under section 189 of the
Companies Act 1994.
 Publication of Annual Report and Accounts
 Circulation the Annual Report & Accounts to the Shareholders at; least 14 days
before the AGM
 To approve Audited Accounts in the AGM by the Members.
 To submit the Audited Accounts with the Register of Joint Stock Companies and
Finns to fulfill statutory requirements.

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3.9. Submission of Returns and Reports:
Since every company is bound to submit several returns to the statutory authorities
concerned within stipulated time, the GSP Finance Company (Bangladesh) Limited also
submits some returns to the same. Of them, some are yearly and some are occasionally.
Generally, the following returns and documents to be filled with the concerned bodies/
authorities/ institutions:

SL. Compliance, Reports and Reference Required Time (Within)

No. Returns by
01 Annual General Meeting for listed BSEC BSEC 6 month
Company’s Notification
dated 22-10-
01
02 Annual General Meeting for non- Section 81 Companies 9 month
listed Company’s Act
03 Annual Report LR 22 BSEC, DSE 14 days before
BSEC Rules & CSE AGM
12(4)
04 Audio visual of Annual General BSEC Order BSEC, DSE 3 working days
Meeting dated 27-07- & CSE
11
LR 26
05 Audited Financial Report Section-190 RJSC 30 days
after AGM
06 Audited Financial Report within 120 BSEC Rules BSEC, 14 days
days from the date of FY end. 12(3a) LR 18 DSE & CSE
Report should be prepared in
accordance with IAS standard
07 Board Meeting date especially for LR 19 BSEC, DSE Before 7 W. days
adoption of Accounts and & CSE
declaration of dividend.
08 Board Meeting date especially for LR 16 BSEC, DSE Before 3 W. days
adoption of Quarterly Financial & CSE
Reports.
09 Consent of Directors to Act Section 92 RJSC 30 days After
(Form IX) appointment

10 Dividend Payment Report BSEC Order BSEC, 7 days after 30

09-02-2010 DSE & CSE days from the
LR 28 & 29 date of AGM
11 Intimation of Auditors Section Auditor Within 7 days
210(2) after AGM
12 List of Members and Summary of Section 36 RJSC 21 days
share Capital (Schedule X) after AGM
Attendance, Minutes of General BSEC order BSEC, Within 14 days
13 Meeting dated 04-10- DSE & CSE
01 and LR
27
14 Particulars of Directors Section 115 RJSC 14 days after
Form XII change
15 Price Sensitive Information SEC BSEC, 30 minutes
Notification DSE & CSE of taking decision
dated and and publish
24-08-1995 newspaper immediately
and 19-12- publication
2000
16 Quarterly Financial Report - 1st,2nd BSEC dated BSEC, 45, 30, 30 days
& 3rd 27-09-2009 DSE & CSE after end of Qtr
LR 17 and
newspaper
publication
17 Record Date Notice LR 23 DSE & CSE 14 market days

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 prior to record
date
18 Return of Allotment Section- 151 RJSC 60 days from the
date of allotment
19 Shareholding of Sponsor/Director BSEC BSEC Monthly within
and owners of 10% & above Notification 10th of the
dated month.
29/08/2004
20 Special/Extra Ordinary Resolution Section 88 RJSC 15 days after
passing
21 Summary of shareholding Listing BSEC, DSE 30 days
Regulation 20 & CSE After 30th June
and 31st Dec.
22 Transfer of shares of BSEC BSEC, DSE, 7 days after
Director/Sponsor/Officer /Financial Notification CSE transfer
Beneficiary 25-03-2001
23 DBI (Department of Bank Bangladesh After inspection
Inspection) Form 23 Bank
24 DBI (Department of Bank Bangladesh After inspection
Inspection) Form 23 Bank
RJSC=Registrar of Joint Stock Companies BSEC= Bangladesh Securities and Exchange
Commission
DSE=Dhaka Stock Exchange, CSE=Chittagong Stock Exchange, LR=Listing Regulation

3.10. Functions relating to share management:

3.10.1. Company’s paid up capital and shareholders:
Checking and verification of records and continuous monitoring of record keeping
process of shares under Paid-up Capital.

 Electronic Shares:
1. Controlling, monitoring & supervision of functions of Vedas (Versatile
Engine for Depository Accounting System) work station of Share Division
established under Central Depository System of CDBL.
2. Monitoring the functions of collection of various types of data about
electronic Shares & Shareholders from Vedas.
3. Supervision of posting of data collected from Vedas to Share Accounting
System.
 Paper Shares:

Controlling & monitoring of the functions of Share Accounting System (SAS) the Back
Office Software of the company's Share Division

 Transmission of Shares:
a. Collection of Legal Opinion of Lawyers on various document submitted by
the successors of decease Shareholders.
b. Board's approval for Transmission I Transfer of Shares to Successors of
deceased shareholders
 Dematerialization of Shares:

Responsible for verification and Authorization of entire functions of the Division related
with Dematerialization of Share i.e conversion of Paper Shares into Electronic Shares

3.10.2. Company's Issue of Shares:

Responsible for supervising, monitoring, checking and verifying all related works for
company's Issuance of Bonus Shares and Right Shares.

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  Cash Dividend:
i. Supervising, Monitoring, Checking and Verification of all related functions
of payment of Cash Dividend to Shareholders. Related functions are:
ii. Calculation of deduction of Income-Tax at source
iii. Distribution of Cash Dividend.
iv. Newspaper announcement of delivery date of Cash Dividend.
v. Delivery of Cash Dividend Warrants through Counters.
vi. Dispatch of Cash Dividend by Courier.
vii. Report on payment of Cash Dividend to SEC

 Fulfillment of Regulatory Requirements:

As an issuer of listed Securities, company's Share Division is responsible for fulfillment /

meeting-up all kind of Regulatory requirements of the following organizations:

a. Bangladesh Bank.
b. Securities and Exchange Commission
c. Dhaka Stock Exchanges Limited
d. Chittagong Stock Exchanges Limited
e. Registrar of Joint Stock Companies and Firms

 Distribution of various important company's documents to Shareholders:

Share Division is responsible for distribution of following documents through recorded

addresses of Shareholders:

a) Annual Report (Yearly basis)

b) Rights Share Offer Document (Declaration basis)
c) Cash Dividend Warrants (Declaration basis)
d) Payment Advice (Declaration basis)
e) Half-Yearly (Un-audited) Account

Share Division print total delivery (Shareholders) list & address slips and also conduct
the following functions;

a) Selection of Courier Service

b) Monitoring of delivery status of dispatched documents.
c) Collection of POD and Return Document from Courier Service to meet-up
Shareholders query regarding their documents.

 Sale/ Buy of Sponsor Shares by Directors and Sponsors:

a. Obtain permission of Board of Directors
b. Prepare of Declaration Documents for Sale / Buy.
c. Flashing of News of Sale / Buy of Shares by Sponsors / Directors in DSE /
CSE News.
d. Execution of Sale/ Buy.
e. Submission of Sale/buy completion report to BSEC.
f. Arrangement of collection of sale value of Shares

 Preparation of Memorandum for Board / EC Meetings:

a. Approval of Transmission/Transfer of Shares.

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 b. Permission of Issuance of duplicate Share Certificates.
c. Allotment of Bonus Shares / Rights Shares.
d. Informative Memo on New SEC Notifications, Directives and Orders.

 Pledge of Sponsor/ Directors Shares:

a. No Objection on Pledge of sponsor shares from Board of Directors.
b. Execution of pledge of Sponsor-Shares.
c. Reporting to BOD on Sponsor/ Directors Pledged Shares

 Maintenance of different Statutory and Statistical Registers

Section 181 of the Companies Act 1994 requires a Company to maintain such books as
will give a true and fair view of Company's financial affairs. To maintain proper accounts,
books and returns, Companies are required not only to maintain financial books but
some statutory and statistical books are required to maintain by a Company. The
Statutory Books are maintained by GSP Finance Company (Bangladesh) Limited as
follows:

a. Register of Member U/S 34

b. Index of Member U/S 35
c. Annual list of Members and Summery of Share Capital U/S 36
d. Minute Book U/S 89
e. Register of Directors, Managers and Managing Agents U/S 115
f. Register of Contracts in which a Director and Directors are interested U/S
130
g. Register of Mortgages and Charges U/S 174

Besides above various statutory books, the following statistics books are maintained by
Southeast Bank Limited:

a. Register of Share Transfers

b. Dividend Book of Share holders
c. Agenda Book of Meeting
d. Directors' Attendance Book
e. Registered of Sealed Documents
f. Registered of Power of Attorney
g. Register of Share Certificates
h. Register of Share Warrants

GSP Finance Company (Bangladesh) Limited preserves books of Accounts and Vouchers
for last 12 years as per section 181 of the Companies Act 1994

3.11. Meetings of the company:

Meeting refers to group discussion. It is an assembly of people, where matters are
moved or forwarded, discussed and resoled, which makes an effective meeting. There
are four types of company meetings categorically different by their character and nature
as mentioned below:

1. Statutory Meeting
2. Annual General Meeting (AGM)
3. Board Meeting

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 4. Extra-Ordinary General Meeting (EGM)

3.11.1. Notice for the meeting:

Meeting Notice maintained by the company by following way

Types of Meeting Notice Period

Statutory Meeting 21 days

Annual General Meeting (AGM) 14 days

Board Meeting No specific time limit

Extra-Ordinary general Meeting (EGM) & 21 days

Special Resolution

Committee Meeting No specific time limit

3.11.2. Statutory Meeting

This is the first meeting of the shareholders of the company after its incorporation.
Statutory meeting is held once in the life time of a company. Statutory meeting, under
section 83 of the Companies Act 1994, is to be held within a period of not less than one
month and not more than six months from the date of receipt of the Certificate of
Commencement of Business of a public limited company. It affords the shareholders an
early opportunity to know about the formation of the company, issue of shares, public
subscription towards its share capital, the properties acquired, its development projects
and immediate prospects, possibility of its success and the cash position of the company.
The Statutory Meeting to be convened by a notice of 21 clear days.

3.11.3. Annual General Meeting (AGM)

Annual General meeting is a recurrent affair of every public limited company every year.
It deals with normal business of the company and provides a forum for the shareholders
to meet at least once in a year to discuss company affairs. It enables the ordinary
shareholders to exercise their rights and privileges of their membership and
proprietorship of the company and ultimate control over its management. As per
Companies Act 1994 (u/s 81(1)), a company must hold its first AGM within a period of
not more than eighteen months from the date of its incorporation. This meeting should
ordinarily be held on a working day and during working hours at a specified place as per
notification with at least fourteen (14) days’ notice. The directors are empowered to
convene such a meeting by a resolution of the Board. GSP Finance strictly follows the
rules and regulation related to AGM. In this regards the following procedure is taken by
the Company Secretary of GSP Finance Limited:

1. The Secretary examines all types of statutory requirements and provisions in

the Articles of Association
2. The Secretary also examines the requirements of the Company and Stock
Exchanges.
3. The Secretary obtains the authority from the Board for calling a meeting of
Board of directors for passing resolution regarding:
a. Approval of annual accounts

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 b. Approval of Directors report
c. Authorizing the Chairman to sign the Directors report on behalf of
Board
d. Deciding the names of directors who are to sign the balance sheet and
profit and loss account
e. Fixation of the date and place of the AGM
f. Authorizing the Secretary to send notice of meeting to the members
together with annual accounts, directors report, proxy form and
attendance slip
g. Fixing the date of closing the register of members
h. Giving instructions to the Company Secretary for preparation of
dividend warrant etc.

3.11.3.1. Secretarial activities before AGM in the company:

After the Board Meeting, Secretary must inform the SEC & Stock Exchange in writing
about the recommended dividend within a half an hour over telephone and Fax and the
period of book closure at least Fourteen (14) days prior to such book closure.

To arrange for publication of notice in at least two national dailies (one in Bangla
and another in English) immediately after the day of the Board Meeting.
To prepare Annual Report.
To collect Auditors Report
To arrange for printing of Annual Reports.
To dispatch notice of the Meeting and the Annual Reports to the members,
Directors, Auditors, Stock Exchanges SEC at least 14 days prior to the AGM
To keep the ready, the list of members as on the date of the meeting for the
purpose of attendance and dividend entitlement.
To prepare reply of the questions, if any which are sent by the shareholders
To check proxies with the Register of Members.
To prepare a details agenda for meeting in counseling with the Chairman
To prepare dividend list
To arrange for printing of dividend warrants.
To prepare a list of retiring directors and obtain their consent to act.
To inform the Auditors about reappointment and obtain their consent.
To prepare a list of items to be remove to the meeting place.
To arrange dais, banner, chairs for smooth conduction of meeting and arrange
snacks for attendance.

3.11.3.2. Secretary's Functions at the time of AGM

The Secretary will invite the Chairman & Directors to take their seat on the Dias.
The Chairman to welcome the members to the meeting.
The Chairman to ensure that the proper quorum is present, and then the
Chairman to declare that proper quorum being present the meeting is duly
convened.
The Chairman will request one (Maulana) to read out verses from the Holy Quran
The Chairman to ask the Secretary to read the Notice of the AGM or Notice
deemed to be read.
The Chairman then to deliver his speech on the assumption that Directors Report,
Auditors Report and Accounts deemed to be read

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3.11.3.3. Secretary's Functions after AGM
After the meeting, the Company Secretary is required to perform works with view of
compliance with the requirements of the Companies Act 1994, SEC Stock Exchange etc.
The following activities are done by the Company Secretary:

To prepare minutes of the proceedings.

To get the minutes of the meeting signed by the Chairman of the meeting or the
Chairman of the next Meeting.
To affix the minutes of the meeting in the minutes Books
To send information of appointment /reappointment of Directors
To send information of the Auditors within seven (7) days.
To file particulars of Director with the Registrar of Joint Stock Companies within
stipulated time.
To file Annual list of Members and Summary of Share Capital (Annual Return) in
the format prescribed on Schedule -X of the Companies Act 1994.
To file Annual Accounts 3 Copies with the Registrar of Joint Stock Companies
within stipulated time.
To open separate bank account known as Dividend Account and deposit the total
amount of dividend payable.
To get the dividend warrants signed by the authorized signatories.
To dispatch dividend warrants to the members entitled to within sixty (30) days
from the date of the meeting.
To pay income tax payable to the concerned authority with prescribed return
which this is deducted at source from the dividend of shareholders.
To arrange for taking any other action decided in the meeting by the shareholders
Compliance Report: Compliance report is to submit before the BSEC within 7 days
after 30 days of declaration of final dividend in a prescribed form of SEC by the
secretarial department. The compliance report was submitted accordingly by the
company.
Record Date: The Shareholders whose names will appear in Member's register of
the Company or in the Depository on the Record date will be eligible to attend the
Annual General Meeting & receive dividend of the Company. The Record Date for
the 23rd AGM of the company was February 26, 2018.
Quorum: The quorum requisite for AGM is subject to the provisions of the articles
of the company. Regulation Companies Act, however, provides that the quorum
necessary for the transaction of business at the Board meeting may be fixed by
the directors, and unless so fixed, it shall be three when the number of directors
exceeds three.
Proxy: Proxy is allowed in the AGM of GSP Finance Company (Bangladesh) Ltd.
Reports and Returns: After the 23rd AGM is held, like other Public Limited
Companies, the Company Secretary of GSP Finance Company (Bangladesh) Ltd
liable to make out and file various returns and reports with the Registrar of Joint
Stock Companies and other regulating bodies. GSP Finance submits the following
documents as per section 36 of the Companies Act 1994 to the Registrar of Joint
Stock Companies & Firms.
a. Schedule - X
b. Annual Report for the year ended (Three Copies)
c. One Binding Book of Shareholders
d. Consent of Director to Act (FORM IX)
e. Particular of Director (Form XII)

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 f. Notice by Auditor FORM 23(B)

3.11.4. Board Meeting

It means the meetings of Board of Directors. It is an in-house event. Directors are the
elected representatives of the shareholders and the control and administration of the
company affairs vested in them. The Board of Directors has been given wide discretion
to frame rules and regulations regarding the conduct of Board meeting. The power to
convene Board meetings normally vested in the Chairman of the Board. The Managing
Director, manager or Secretary, at any time, summon a meeting of the Board on the
requisition of a Director. It may be held anywhere unless otherwise in the articles. The
Board meeting may be held as frequently as necessary. Generally, the under mentioned
business to be discussed in a Board Meeting which are stated below:

 Approve the last Board Meeting Minutes

 Matters arising out of earlier Meeting
 Approve the various policies, administrative and operational issues of the
company.
 Issuance, Allotment, and overall share management.
 Approving share transfer and transmission.
 Issuance of debentures and allotment of it.
 Appropriation of profit with recommendation of final and declaration of interim
dividend
 Framing and approval of company contracts, deeds and agreements
 Recording and correction of statutory books
 Filing of various returns and statements
 Appointment, promotion and dismissal of staff etc.
 Fixation of Book closure
 Strategy and Management
 Structure and Capital
 Financial reporting and controls
 Approval of Credit Facilities
 Internal Control
 Contracts
 Communication
 Board membership and other appointments
 Remuneration
 Delegation of Authority
 Corporate governance matters
 Policies
 Others

3.11.4.1. Before Board meeting the Company Secretary has to do some of tasks
in relation to it and to fulfill the requirements by the law which are
described below:
 Prepare and send notice for Board meeting in consultation with the Chairman
having a reasonable length of time
 Preparation of agenda in consultation with the Chairman
 Notes to the agenda.
 Notice: The length of notice should be reasonable though no such time is
prescribed by the Act. Extremely short notice is acceptable if all the directors can

Page 32 of 88
 attend. But if a short notice is issued to exclude a particulars director, it will
render the meeting void. The notice should mention the day, date, time, place
and number of the Board meeting.
 Agenda: It should also include the agenda. The agenda points should be clear,
lucid and unambiguous. There is nothing in the Act on agenda.
 Quorum: The quorum requisite for directors meeting is subject to the provisions
of the articles of the company. Regulation 89 of Companies Act, however,
provides that the quorum necessary for the transaction of business at the Board
meeting may be fixed by the directors, and unless so fixed, it shall be three when
the number of directors exceeds three.
 Proxy: Proxy is not allowed in the Board meeting
 Chairman: There should be a Chairman to preside over the Board meeting. The
directors may elect a Chairman for their meeting and determine the period of
office as described in the Regulation 91). There may, as well, be a permanent
Chairman from amongst the directors. When he/she is absent a Chairman may
temporarily be elected to conduct the meeting. Chairman has the right of second
or casting vote.
 Resolution: The resolution of the Board meeting are, generally passed by a simple
majority. But there are three cases where unanimous votes are expected to avoid
any future complications. But to pass a special resolution, three fourth votes are
required.
* Appointment of Managing Director Issue a prospectus
* Invest in inter company shares or debenture under the same managing
agent
* At the time of Board Meeting, the Company Secretary of GSP Finance
Company (Bangladesh) Limited has so many jobs to perform such as:
 Assist the Chairman regarding matters relating to the meeting
 Provide necessary information and papers as required by the
Board.
 Write down the proceedings of meeting
 Post approval of share transfer done by transfer committee.

3.11.4.2. After concluding the Board Meeting, the Company Secretary of GSP
Finance Company (Bangladesh) Limited does the following jobs:
 Draft the minutes and finalize it in consultation with the Chairman
and final minutes signed by Chairman.
 Dispatch of Minutes to the Directors and Chairman.
 Send the copy of the Minutes to Bangladesh Bank.
 Drafting of Directors report in case of general meeting.
 Preparatory notes for the preparation of Chairman's speech in case
of general meeting.

3.11.5. Extra-Ordinary General Meeting (EGM) & Special Resolution:

GSP Finance Company (Bangladesh) Limited has taken all the resolutions accordingly, as
per the section 87 of The Companies act-1994.

3.11.6. Committee Meeting:

The committee is the smaller body of the Board or top management which may consist
of one or more members. The Directors may delegate their powers to different
committees. The committee may be standing or permanent committee, like

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 Executive committee
 Audit committee.
 Risk Management committee
 Management Committee
 Asset-Liability Management Committee
 BASEL Implementation Committee
 Anti-Money Laundering Compliance Committee
 Integrity Committee

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3.12. Board of Directors:
The sponsor directors of the company are successful group of prominent local and non-
resident of Bangladeshi investors who have earned high credentials and excellent
reputation in their respective fields of business at home and abroad. The board of
directors of GSP Finance consists of 10 members including Managing Director,
Executive Committee consists of 5 members and Audit Committee consists of 5
members.

SL Name of the Directors Status

No.
1 Mr. Feroz U. Haider
2 Mr. Saber Hossain Chowdhury
3 Mr. Wajid Ali Kahn Panni
4 Mr. Wolf- Peter Berthold
5 Mr. Moin U. Haider
6 Ms.Silwat A. Haider
7 Mr. Mohamed Abdul Jalil
8 Dr.ATM Shamsul Huda
9 Col.M.Nurul Islam Psc.(Rtd.)
10 Abu Zafar Hedaytul Islam
Table 1 Board of Directors
Chairman
Director & Vice Chairman
Independent Director
Director
Director & Chairman Executive Committee
Director
Director
ndependent Director & Vice Chairman
Independent Director & Chairman Audit
Committee
Managing Director & CEO

3.12.1. Functions of the Board of Members:

The Board of Directors is the highest level of authority in the organization structure of
GSP Finance Company (Bangladesh) Limited. The Board is responsible for the overall
direction and is ultimately accountable to the Shareholders for the activities, strategies
and performance of the Business.

3.12.2. Directors’ Share Qualification:

There are the shares which must be held by each director as a condition for acting as
director under the Articles of Association. Unless the Articles expressly require it
otherwise, a director need not hold more than one share as his qualification share.
Regulation 71, which has been made mandatory under new Act, and section 97 of
Companies Act 1994 give the following hints:

“The Articles may provide and define the qualification shares. If so provided, every
director shall take the qualification shares The qualification shares should be acquired
within sixty days or such shorter time as fixed in Articles after appointment as directors.
In default a director cease to be a director If an unqualified person acts as a director he
will be liable to a fine of Tk. 200 for every day of default Shares need not be taken from
the company. It may be bought from the open market or even from a friend or any
individual. The qualification of a director will not be lost if he pledges his shares as
mortgage somewhere”

3.12.3. Directors Appointment:

It is the responsibilities of the Company Secretary to oversee that the provisions of
Companies Act 1994, more emphatically, so far as public limited companies are
concerned, are met while appointment of directors. The provisions for appointment of
directors for public limited companies are fully complied with by GSP Finance Company
(Bangladesh) Ltd.

Page 35 of 88
Section Provisions Compliance by
GPS Finance
90(1) Every Company shall have at least three directors Complied
91(1)(b) The directors shall be appointed by the members in Complied
general meeting
91 (l)(c) Casual vacancy may, however, be filled up by the directors Complied
92(l)(a) A consent in writing by persons to act as directors must Complied
be filed with the Registrar
92(1)(b) A contract of directors to take qualification shares must be Complied
filed with the Registrar or sign the Memorandum of
Association by taking qualification shares
101 A director away from Bangladesh for a consecutive period Complied
of at least three months may appoint his alternate if so
authorized by the Articles or by a resolution of the general
meeting
115(1) A Register of Directors shall be maintained in which shall Complied
be entered all individual particulars of directors including
their any other directorship
115(2) A return to be filed with the Registrar within 14 days of Complied
appointment of directors. Every subsequent change in
the directorship must be supported by like returns within a
period of 14 days of such changes
Table 2 Director Appointment Compliance

3.12.4. Directors’ retirement:

The Directors of public limited companies are liable to retirement and re-election at the
general meeting. At the first general meeting of a company, all the directors will retire.
No less than one third of the total number of director of public companies will retire at
every successive general meeting as described under section 91(2) of Companies Act
1994. The director to retire at every general meeting should be those most senior in
office. However, the managing director will be excluded from the count of one third to
retire (Regulation 73). The directors to retire will be eligible for re-election. As to rotation
of director’s regulations 79 through 82 of schedule I of the act will have effect. In the
AGM of GSP Finance retirement and re-election of the Board Directors is done
accordingly.

Page 36 of 88
3.13. Corporate Governance:
Corporate Governance refers to the way a business or company is governed. It is the
technique by which companies are directed and managed. It means carrying the
business as per the stakeholders’ desires. It is actually conducted by the board of
Directors and the concerned committees for the company’s stakeholder’s benefit. It is all
about balancing individual and societal goals, as well as, economic and social goals.

Corporate Governance is the interaction between various participants (shareholders,

board of directors, and company’s management) in shaping company’s performance and
the way it is proceeding towards. The relationship between the owners and the
managers in an organization must be healthy and there should be no conflict between
the two. The owners must see that individual’s actual performance is according to the
standard performance. These dimensions of corporate governance should not be
overlooked.

Corporate Governance has a broad scope. It includes both social and institutional
aspects. Corporate Governance encourages a trustworthy, moral, as well as ethical
environment.

3.13.1. Reward of Corporate Governance:

Reward of good corporate governance are:

1. It lowers the capital cost.

2. There is a positive impact on the share price.
3. It provides proper inducement to the owners as well as managers to achieve
objectives that are in interests of the shareholders and the organization.
4. Good corporate governance also minimizes wastages, corruption, risks and
mismanagement.
5. It helps in brand formation and development.
6. It ensures organization in managed in a manner that fits the best interests of all.

3.13.2. Role of Company Secretary in Good Corporate Governance

Company Secretary's Roles in Promoting Good Corporate Governance are describing
below:

• To ensure compliance with all statutory filings and regulatory disclosures.

• To arrange and manage the Annual General Meeting and establishing with
the Board's agreement, the items to be considered at the AGM including
resolutions dealing with governance matters.
• To ensure, where applicable that the standard and disclosures required by
the Listing Rules are observed and where required, reflected in the
Annual Report of Directors -the Secretary usually takes the lead role in
drafting the annual report in consultation with the Chairman and
Managing Director.
• To establish an effective working relationship with the Chairman and
Chief Executive Officer (Managing Director) with accountability to the
Board for all matters relating to Directors duties as an Officer of the
Company.

Page 37 of 88
• To ensure the smooth running of the Board and Board Committee' s
activities by helping the Chairman to set agendas, preparing papers and
presenting papers to the Board and Board Committees.
• To keep under close review all legislative, regulatory and corporate
governance developments that might affect the company' s operations.
• To ensure that the concept of stakeholders is in the Board' s mind when
important business decisions are being taken.
• To act as a confidential sounding board to the Chairman, Non-executive
Directors and Executive Directors on points that may concern them.
• To act additional enquiring voice in relation to Board decisions which
particularly affect the Company.
• To maintain relations with investors, particularly institutional investors
with regard to corporate governance issues.
• To induct new directors into the business and explaining their roles and
responsibilities.
• To ensure that the Board is fully aware of its responsibility to ensure that
it does not mislead the market by putting misleading information.

Page 38 of 88
3.13.2.1. Corporate Governance of GSP Finance Company (Bangladesh) Limited
on 2017

Compliance Status
Condition
No. Title Remarks
Complied Not
Complied
1.1 Board's Size: The number of Board
The number of the Board members of the Company
members of the Company shall √ is nine (9) including three
not be less than 5 (five) and (3) Independent Directors as
more than 20 (twenty) prescribed by the
Bangladesh Bank.

1.2 Independent Directors

1.2(i) At least one fifth (1/5) of the √
total number of directors in the
Company's Board shall be
1.2(ii)(a) Independent Directors √ .
Who either does not hold any
share in the company or holds
less than one percent (1%)
shares of the total paid up shares
1.2(ii)(b) of the company √
Who is not a sponsor of the
company and is not connected
with the company's any sponsor
or director or shareholder who
holds one percent (1%) or more
shares of the total paid-up shares
of the company on the basis of
family
Who doesrelationship.
not have any other
1.2(ii)(c) √
relationship, weather pecuniary
or otherwise, with the
company or its
1.2(ii)(d) subsidiary/associated
Who is not a member, companies
director or √
officer of any stock exchanges;
1.2(ii)(e) Who is not a shareholder, √
director or officer of any
member of stock exchange or
an intermediary of the capital
market;
1.2(ii)(f) Who is not a partner or an √
executive or was not a partner
or an executive during the
preceding 3 (three) years of the
concerned company's statutory
audit firm;
1.2(ii)(g) Who shall not be an independent √
director in more than 3 (three)
listed companies;

1.2(ii)(h) Who has 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);

Page 39 of 88
 1.2(ii)(i) Who has not been convicted for √
a criminal offence involving
moral turpitude;

1.2(iii) The Independent Director(s) √

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 √
director(s) cannot remain vacant
for 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 director shall be for
a period of 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 √
a knowledgeable 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 person should be a Business
Leader/ Corporate
Leader/Bureaucrat/University
Teacher with Economics or
Business Studies or Law
background/Professionals like
Chartered Accountants, Cost
& Management Accountants,
Chartered Secretaries. The
Independent Director must have
at least 12 (twelve) years of
corporate
management/professional
experiences.

Page 40 of 88
1.3(iii)
In special cases the above
qualifications may be relaxed
subject to prior approval of the Not applicable
Commission.

1.4 √
Chairman of the Board and Chief
Executive Officer:
The positions of the Chairman of
the Board and the Chief Executive
Officer of the companies shall be
filled by different individuals. The
Chairman of the company shall be
elected from among the directors
of the company. The Board of
Directors shall clearly define
respective roles and
responsibilities of the Chairman
and the Chief Executive Officer.
1.5 The Directors' Report to Shareholders
1.5(i) Industry outlook and possible √
future developments in the
1.5(ii) industry
Segment-wise 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
1.5(v) margin
Discussion on continuity of
Not applicable
any extra-ordinary gain or loss
1.5(vi) Statement all related party √
of
1.5(vii) transaction
Utilization of proceeds from
s
public issues, rights issues Not applicable
and/or through any others
1.5(viii) instruments
An explanation if the financial
results deteriorate after the
company goes for Initial Not applicable
Public Offering (IPO), Repeat
Public Offering (RPO), Rights
Offer, Direct Listing, etc.
1.5(ix) If significant variance occurs
between Quarterly Financial
performance and Annual
Financial Statements, the Not applicable
management shall explain
about the variance on their
Annual Report

Page 41 of 88
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.

Page 42 of 88
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 Not applicable, as the

declared dividend (cash or company declared
stock) for the year, the 23.50% stock dividend
reasons thereof shall be (i.e. 23.50 bonus shares
given for every 100 shares) for
the year ended
December 31, 2017

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 (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):

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; √

Page 43 of 88
1.5(xxi)(d) Shareholders holding ten √
percent (10%) or more
voting interest in the
company (name wise
details).

1.5(xxii) In case of the appointment/ √

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

1.5(xxi)(a) A brief resume of the √

director;

1.5(xxi)(b) Nature of his/her expertise in √

specific functional areas;

1.5(xxi)(c) Names of companies in which √

the person also holds the
directorship and the
membership of committees of
the board
2.0 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) and a Company
Secretary (CS). The Board of
Directors should clearly
define respective roles,
2.2 responsibilities
Requirement andattend
to duties the
of
the CFO, the Head of Internal √
Board Meetings:
Audit and the CS.
The CFO and the Company
Secretary of the companies
shall attend the meetings of the
Board of Directors, provided
that the CFO and/or the
Company Secretary shall not
attend such part of a meeting
of the Board of Directors which
involves consideration of an
agenda item relating to their
personal matters.

3.0 Audit Committee:

3.0(i) The Company shall have an √
Audit Committee as a sub-
committee of the Board of
Directors

Page 44 of 88
3.0(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.
3.0(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.
3.1 Constitution of the 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 √
appoint 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) Filling of casual vacancy in √

the Audit Committee
3.1(v) The Company Secretary √
shall act as the secretary
3.1(vi) The
of thequorum of the Audit
Committee; √
Committee meeting shall
not constitute without
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 Annual General Meeting
(AGM)
3.3 Role of Audit Committee √
3.3(i) Oversee the financial reporting √
process
3.3(ii) Monitor choice of accounting √
policies and principles

Page 45 of 88
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
3.3(vi) approval
Review along with the √
management, the quarterly
and half yearly financial
statements before submission
to the Board for approval
3.3(vii) Review adequacy of Internal √
Audit function
3.3(viii) Review statement of √
significant related party
transactions submitted by the
management
3.3(ix) Review management √
letters/letter of internal
control weakness issued by
statutory auditors √
Declaration of Audit
3.3(x) Committee by the company
regarding utilization of
IPO/PRO, Right Issue money

3.4 Reporting of the audit committee:

3.4.1(i) The Audit Committee shall √
report on its activities to the
Board of Directors
3.4.1(ii) The Audit Committee shall √
immediately report to the
Board of Directors on the
following findings, if any:

3.4.1(ii)(a) Report on conflicts of interests; No such event found

3.4.1(ii)(b) Suspected or presumed fraud
or irregularity or material
defect in the internal control No such event found
3.4.1(ii)(c) system;
Suspected infringement of
laws, including securities
related laws, rules and No such event found
regulations;
Any other matter which
3.4.1(ii)(d)
shall be disclosed to the No such event found
Board of Directors
immediately

3.4.2 Reporting to the authorities-

Reported to the Board of
Directors about anything No such event found
which has material impact on
the financial condition and
results of operation

Page 46 of 88
3.5 Reporting to the Shareholders
and General Investors:
Report on the activities
carried out by the Audit No such event found
Committee, including any
report made to the Board
of Directors under condition
3.4.1(ii) above during the
year, shall be signed by the
Chairman of the Audit
Committee and disclosed
in the Annual Report of the
Issuer Company.

4.0 External/Statutory Auditors: √

The issuer company should
not engage its
external/statutory auditors
to perform the following
services of the company;
namely:
4.0(i) Appraisal or valuation √
services or fairness opinions
4.0(ii) Financial information systems √
design and implementation

Page 47 of 88
4.0(iii) Book-keeping or other services √
related to the accounting records
or financial statements

4.0(iv) Broker-dealer services √

4.0(v) Actuarial services √

4.0(vi) Internal audit service √

4.0(vii) Any other services that the Audit √

Committee determines
4.0(viii) No partner on 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

5.0 Subsidiary Company:

5.0(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

5.0(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

5.0(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

5.0(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
The Audit Committee of the holding √
5.0(v) company shall also review the
financial statements, in particular
the investments made by the
subsidiary company

6.0 Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO):
The CEO and CFO shall certify to the Board that:

Page 48 of 88
6.0(i) They have received financial √
statements for the year and that
to the best of their knowledge
and belief:
6.1(i)(a) These statements do not contain √
any materially untrue statement or
omit any material fact or contain
statements that might be
misleading;

6.1(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.

6.1(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.

7.0 Reporting and Compliance of Corporate Governance:

7.0(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.

The directors of the company √

7.0(ii) shall state, in accordance with
the Annexure attached, in the
Director's Report whether the
company has complied with these
conditions.

Compliance of Section 1.5(xx)

Meeting of the Board of Directors and its Sub- Committees held during the year and
attendance by each Director: -

Board of Directors Executive Committee Audit Committee

Composition Meeting Meeting Meeting
Meeting held Attended Meeting Attende Meeting Attende
Mr. Feroz U. Haider 10 10 17
held 12
d held d
Mr. Saber Hossain 10 6 17 8 4 2
Chowdhury
Mr. Wolf-Peter Berthold 10 9
Mr. Moin U. Haider 10 8 17 14 4 3
Ms. Silwat A. Haider 10 8

Page 49 of 88
 Mr. Mohamed Abdul Jalil 10 5 17 8 4 3
Dr. ATM Shamsul 10 7 4 3
Huda Independent
Director
Col. M. Nurul Islam Psc. 10 10 17 14 4 4
(Retd.) Independent
Director
Mr. Wajid Ali Khan Panni 10 10
Independent Director

Compliance of Section 1.5 (xxi)

The pattern of Shareholding

a) Parent/Subsidiary/Associated companies and other related party:

Name Relation Shares Held

Nil Nil

b) Directors, Chief Executive Officer/Managing Director, Company Sectary, Chief

Financial Officer, Head of Internal Audit and their spouse and minor children

Share
Name s Held
Mr. Feroz U. Haider Sponsor Director & Chairman of the Board (nos.)
8,440,611
Mr. Saber Hossain Chowdhury Vice-Chairman of the Board (Nominated by Karnaphuli 9,491,386
Mr. Wolf-Peter Berthold Industries Ltd.)
Sponsor Director of the Board 3,752,167
Mr. Mohamed Abdul Jalil Director of the Board (Nominated by Tai Ping Asian 10,897,92
Mr. Moin U. Haider Investment
Director Ltd.)Board
of the 2,092,6551
Ms. Silwat A. Haider Director of the Board 2,092,658
Col. M. Nurul Islam psc. (Retd,) Independent Director 78,772
Dr. ATM Shamsul Huda Independent Director None
Mr. Wajid Ali Khan Panni Independent Director None
Mr. Abu Zafar Hedaytul Islam Managing Director & CEO None
Mr. Mizanur Rahman Deputy Managing Director & Company Secretary None
Mr. Wahidul Islam Chief Financial Officer (C.C.) None
Mr. Masud Rana Head of Internal Audit (C.C.) None

c) Executives (Top five salaried employees of the Company, other than Directors,
CEO, CFO, Company Secretary and Head of Internal Audit):

Designation Name Shares

Deputy Managing Director Mr. Zillur Rhahim Chowdhury Held
None
Sr. General Manager (Credit & Marketing) Mr. Syed Sharif Zamal None
Deputy General Manager ( Sales) Mr. Shazzad Hossain None
Head of HR & Admin (C.C.) A.K.M. Mojibul Haque None
Head of Recovery (C.C.) Mr. Raihanul Islam None

d) Shareholding ten percent (10%) or more voting interest in the company

Name of Shareholder Percentag Shares Held

Tai Ping Asian Investment Limited e %
10.42 (nos.)
10,897,921

Page 50 of 88
Page 51 of 88
3.13.2.2. Corporate Governance Compliance report:
All listed companies with any Stock Exchange in Bangladesh in order to improve
Corporate Governance in the interest of Capital Market on "Comply or Explain" basis
need to submit a Compliance report as per Securities & Exchange Commission's
Notification dated 20th February, 2006.

Certificate of compliance on corporate governance guidance to the shareholders of GSP

Finance Company (Bangladesh) Limited:

We have examined the compliance of corporate governance guidelines of the Bangladesh

Securities and Exchange Commission (“BSEC”) by GSP Finance Company (Bangladesh)
Limited (the “Company”) as stipulated in clause 7(i) of the BSEC notification no.
SEC/CMRRCD/2006-158/134/Admin/44 dated August 07, 2012 for the year ended 31
December, 2017

The compliance of corporate governance guidelines as stated in the aforesaid notification

and reporting of the status of compliance is the responsibility of the Company’s
management. Our examination for the purpose of issuing this certification was limited to
the checking of procedures and implementations thereof, adopted by the Company for
ensuring the compliance of conditions of corporate governance and correct reporting of
compliance status on the attached statement on the basis of evidence gathered and
representation received.

To the best of our information and according to the explanations given to us, we certify
that, except as reported on the attached status of compliance statement, the Company
has complied with the conditions of corporate governance stipulated in the above
mentioned BSEC notification dated August 07, 2012 for the year ended 31 December,
2017.

N.H. Khan, FCA

Dated: February 01, 2018 Kazi Zahir Khan & Co. Chartered Accountants

Page 52 of 88
3.13.2.3. Report of Audit Committee:
The Audit Committee as a sub- committee of the Board of Directors of the Company and
the Audit Committee assists the Board of Directors in ensuring that the financial
statements reflect true and fair view of the state of the affairs of the Company and in
ensuring a good monitoring system within the business.

3.13.2.3.1. Composition of Audit committee:

All the members of the Audit Committee are Non-Executive Directors. The committee
has five members with three members forming a quorum. The Chairman of the
committee is an Independent Director of the Company. During the year the Audit
Committee comprised of the following Directors of the Board:

SL Name of Members Position of the Position In the

Committee Board

1 Col. M. Nurul Islam Chairman Independent

Psc.(Retd.) Director

2 Mr. Saber Hossain Member Director

Chowdhury

3 Dr. ATM Shamsul Huda Member Independent

Director

4 Mr. Mohamed Abdul Jalil Member Director

5 Mr. Moin U. Haider Member Director

3.13.2.3.2. Meetings of the Audit Committee:

The Committee held four meetings during the year 2017. The Senior General Manager
(Finance) & Company Secretary, the Head of Internal Control & Compliance and other
non-members attended the meeting by invitation of the Chairman.

3.13.2.3.3. Activities of the Audit committee:

The Audit Committee carried out the following activities during the year 2017

- Reviewed the financial and other systems including internal control and its
reporting procedure;
- Reviewed the duties, responsibilities, functions, degree of independence,
due diligence with due care, objectivity and staffing of internal audit
department;
- Recommend to the Board regarding appointment of the external auditors
and their terms of appointment;
- Reviewed all the operational policies before being approved by the Board;
- Reviewed along with the management, the quarterly and the half yearly
financial statements before submission to the Board for approval
- Reviewed along with the management, the annual financial statements
before submission to the Board for approval
- Reviewed the effectiveness and independence for the statutory auditors;

Page 53 of 88
 - Strict adherence and compliance with the Bangladesh Accounting
Standards and recommended the best accounting practices;
- Reviewed the delinquent portfolio and provided suitable guidelines;

3.13.2.3.4. Report to the Board:

All findings and decisions of the Audit Committee were reported to the Board and the
Board closely reviewed them.

Minutes of Audit Committee to Bangladesh Bank:

The minutes of meetings of the Audit Committee were sent to Bangladesh Bank within
five working days for their information.

Page 54 of 88
 Chapter: 4
Corporate Finance,
Investment and
taxation

Page 55 of 88
4.1. Treasury Division of GSP Finance company (Bangladesh) Ltd:
The Treasury Division of company is engaged with Liquidity Planning and Liquidity
Protection. The Treasury Department is also regarded as a Profit Center, which
generates income by trading instruments in the Financial Market. The Treasury is
constituted with well setup Front Office, Mid Office and Back Office. To manage treasury
unit as profit center, along with guidance from regulatory authorities, the company
equipped itself with clear policies, fit organization structure, deployment of trained staff,
modem infrastructural facilities and technological initiatives.

4.1.1.Major Functions of Treasury Division:

i. Fund Management
ii. Management of Statutory Requirement
iii. Investment
iv. Asset Liability Management
v. Risk Management

4.1.2.Treasury Product:
Treasury of GSP Finance deals with the following Money Market and Capital Market for
managing fund, statutory requirement, liquidity and investment.

a) Money Market:
i. Overnight Call
ii. Term Placement
iii. Repurchase Agreement
iv. Reverse Report
b) Government Market:
i) Treasury Bill
ii) Treasury Bond
c) Capital Market:
i) Share
ii) Treasury Bond

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 4.2. Overview of the Finance & Accounts Department
Finance and Accounts Department of GSP Finance Company (Bangladesh) Limited is
headed by Mr. Md. Mizanur Rahman, Deputy Managing Director & Company Secretary of
the company. He reports to Managing Director as well to the Board.

The main functions of the Finance and Accounts department of the Company is to
maintain company's proper books of accounts, budgetary control, matters relating to
statutory audit and corporate taxation matters, submission of accounts related return to
different regulatory authorities etc.

The functions may be summarized as follows:

Financial analysis & planning

• Preparation of Budget & Budgetary Control
• Annual Report
• Preparation of Financial Statements
• Review of Business Positions
• Off-site/ On-site Supervision
• Capital Adequacy
• Corporate Income Tax
• Leasing, Charges, Interest Rates etc.
• Deposit Insurance Premium
• Employees' Salary
• VAT & TAX

Bangladesh Bank & All Reconciliation:

• SBS-1,2,3 Returns
• SBS-1 Supplementary
• Yearly DBI
• Thursday Position
• Monthly Statement on Unadjusted Sundry Deposits
• Bangladesh Bank Taka all reconciliation
• CRR & SLR

Employee’s Benefit Related:

• Provident Fund
• Gratuity fund
• Employees' Salary

Bills & Payment:

• Bills Payment
• Voucher Preparation
• Income Tax & VAT deduction at source

Data Posting & Reporting:

• Voucher Posting
• Supplementary
• Extract

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 4.2.1.Accounting Policies of GSP Finanance:
4.2.1.1. Basis of Accounting
These Financial Statements have been prepared under historical cost convention
following accrual basis of accounting and in compliance with the requirements of
Companies Act 1994, Bangladesh Accounting Standards (BASs), Bangladesh Financial
Reporting Standards (BFRSs) and Financial Institution Act 1993.

4.2.1.2. Basis of consolidation of operation of subsidiary

The Financial Statements of the Company and its subsidiary have been consolidated in
accordance with Bangladesh Accounting Standards 27 " Consolidated and Separate
Financial Statements". The consolidation of the financial statement has been made after
eliminating all material Inter Company balances, income and expenses arising from inter
Company transactions.

4.2.1.3. Statement of compliance

The consolidated financial statements and separate financial statements of the Company
have been prepared on a going concern basis following accrual basis of accounting
except for cash flow statement and investment in marketable securities which are stated
at market value in accordance with International Accounting Standards (IASs) and
International Financial Reporting Standards (IFRSs) as adopted in Bangladesh by the
Institute of Chartered Accountants of Bangladesh as Bangladesh Accounting Standards
(BASs) and Bangladesh Financial Reporting Standards (BFRSs), except the
circumstances where local regulations differ, and the Companies Act, 1994, the Financial
Institutions Act, 1993, Securities and Exchange Rules 1987, the Listing Regulations of
Dhaka & Chittagong Stock Exchanges and other applicable laws and regulations. The
presentation of the financial statements has been made as per the requirements of DFIM
Circular No: 11, dated December 23, 2009 issued by the Department of Financial
Institutions and Markets (DFIM) of Bangladesh Bank. The activities and accounting heads
mentioned in the prescribed form, which are not applicable for the financial institutions,
have been kept blank in the financial statements.

4.2.1.4. Separate Books of accounts

The company maintains separate office and books of accounts for its subsidiary as
required under the regulations of Bangladesh Securities and Exchange Commission.

4.2.1.5. Investment in securities

Investment in marketable ordinary shares has been shown at cost or market price,
whichever is lower, on an aggregate portfolio basis. Investment in non-marketable
shares has been valued at cost or intrinsic value whichever is lower. Full provision for
diminution in value of shares as on closing of the year on an aggregate portfolio basis is
made in the financial statements as required by Bangladesh Bank DFIM circular No. 02
dated January 31, 2012.

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 4.2.1.6. Borrowing Costs
Borrowing costs are recognized as expenses in the period in which those are incurred in
accordance with benchmark treatment of BAS 23.

4.2.1.7. Revenue Recognition

As per BAS 18, revenue is recognized when it is expected that the economic benefits
associated with the transaction will flow to Company and the amount of revenue and the
cost incurred or to be incurred in respect of the transaction can be measured reliably.

4.2.1.8. Lease Financing

Interest is recognized as and when it is accrued. Lease interest outstanding over 2
months are recognized as interest suspense and not as revenue. Fee based income and
delinquent charges from lease operations are accounted for on cash basis.

4.2.1.9. Interest on Direct Finance

Interest on term finance is recognized when interest is accrued. No interest on loan is
accounted for as revenue where any portion of capital or interest is in arrear for more
than 2 months. Fee based income and delinquent charges from loan operations are
accounted for on cash basis.

4.2.1.10. Accounting for Leases

Books of accounts for leasing operation has been prepared following the criteria of
Bangladesh Accounting Standard 17 (BAS 17) under Financing Method since assets
leased out to customers under lease agreements transfer substantially all the risks and
rewards associated with the ownership of the assets, other than legal title, to customers
and all leases are full payout leases.

In accordance with BAS 17 the aggregate lease receivables including the unguaranteed
residual value throughout the primary lease term are recorded as gross receivable while
the excess of gross receivable over acquisition cost including the interest during period
of acquiring lease assets constitutes the unearned lease income.

The unearned income is recognized as revenue over the lease period generating a
constant rate of return over lease period.

4.2.1.11. Accounting for Direct Finance

Direct finance consisting of short term & long term finance are maintained based on the
accrual method of accounting. Outstanding amount of long term loans has been shown
in the balance sheet as assets under the head of Direct finance. Interest earnings are
recognized as operational revenue.

4.2.1.12. Property and equipment

I. Recognition and measurement
Items of fixed assets are measured at cost less accumulated depreciation
and any accumulated impairment losses. The cost of an asset comprises
its purchase price and any directly attributable costs of bringing the assets
to its working condition for its intended use as per Bangladesh Accounting
Standard (BAS) 16: “Property, Plant and Equipment”.
II. Subsequent expenditure on fixed assets
Subsequent expenditure is capitalized only when it increases the future
economic benefit from the assets and that cost can be measured reliably.

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 All other expenditures are recognized as an expense as and when they are
incurred

4.2.1.13. Depreciation
Fixed Assets for Company's own use are depreciated at different ranges from 10% to
20% applying straight line method throughout the estimated span of useful life ranging
from five to ten years. Rate of depreciation is as follows

Type of Assets Rate

Land & Land Development 0%
Office Building 10%
Furniture & Fixtures 10%
Telephone System 20%
Motor Vehicles 20%
Electrical Goods & Installation 20%
Office Equipment 20%
Generator & Installation 20%
House Property 10%
Table 3 Depreciation Rate

4.2.1.14. Provisions for Doubtful loss on Leases and Direct Finance

Provisions for classified and unclassified leases and direct finance receivables have been
made as per guidelines of Bangladesh Bank through FID circular no. 08 of 2002, FID
circular no. 03, May 03 of 2006 and other directives as applicable as follows:

1 to 2 Unclassified (SME) 0.25%

1 to 2 Unclassified 1%
3 to 5 SMA 5%
6 to 11 Sub-standard 20%
12 to 17 Doubtful 50%
18 and over Bad or Loss 100%
Table 4 Classified & Unclassified lease

4.2.1.15. Payable and Accruals

Liabilities are recognized for the amounts to be paid in future for goods and services
received

4.2.1.16. Provisions
A provision is recognized in the Balance Sheet when the Company has a legal or
constructive obligation as a result of a past event, it is probable that an outflow of
economic benefits will be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation.

4.2.1.17. Statutory reserves

As per Financial Institutions Regulation 1994, every Non-Banking Financial Institution
(NBFI) is required to transfer at least 20% of its current year’s profit to the fund until
such reserve fund equals to its paid up share capital and share premium (if any). In
conformity with the above requirement, GSPB transfers 20% of net profit to statutory
reserve before declaration of dividend.

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 4.2.1.18. Revenue recognition
Interest income: "Interest on loans and advances is calculated on daily product basis,
but charged and accounted for on quarterly basis. Interest on loans and advances ceases
to be taken into income when such advances fall into SS and under classification. It is
then kept in interest suspense account. Interest is not charged on bad and loss loans as
per guideline of Bangladesh Bank. Such interest is kept in separate memorandum
account.

4.2.1.19. Employee benefits

Provident Fund: Provident fund benefits are given to the staff of the company in
accordance with the registered provident fund rules. The commissioner of Income Tax,
Large Tax Payers Unit, Dhaka has approved the Provident Fund as a recognized fund
within the meaning of section 2(52) read with the provisions of part - B of the First
Schedule of Income Tax Ordinance 1984. The fund is operated by a Board of Trustees
consisting of 4 (four) members of the company. All confirmed employees of the company
are contributing 10% of their basic salary as subscription of the fund. The company also
contributes equal amount to the fund. Contributions made by the company are charged
as expense.

Gratuity Fund: Gratuity fund benefits are given to the staff of GSP Finance in accordance
with the approved gratuity fund rules. National Board of Revenue has approved the
gratuity fund as a recognized gratuity fund with effect from December 2001. Employees
are entitled to gratuity benefit after completion of minimum 10 (Ten) years of service in
the company. Actuarial valuation is not considered essential since amount payable at the
date of balance sheet is recognized and accounted for as at that date based on actual
rate. The gratuity is calculated on the basis of last basic pay and is payable at the rate of
one month's basic pay for every completed year of service. The amount so calculated are
transferred to the fund and charged to expenses of the company.

4.2.1.20. Taxation
Income tax expense comprises current and deferred tax. Current tax and deferred tax
are recognized in profit or loss except to the extent that it relates to items recognized
directly in equity.

Current tax is the expected tax payable or receivable on the taxable income or loss for
the year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years. Deferred tax is recognized in
respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognized for the following temporary differences: the initial
recognition of goodwill, the initial recognition of assets or liabilities in a transaction that
is not a business combination and that affects neither accounting nor taxable profit or
loss, and differences relating to investments in subsidiaries to the extent that it is
probable that they will not reverse in the foreseeable future. Deferred tax is measured at
the tax rates that are expected to be applied to the temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted by the
reporting date.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible
temporary differences to the extent that it is probable that future taxable profits will be
available against which they can be utilized. Deferred tax assets are reviewed at each

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reporting date and are reduced to the extent that it is no longer probable that the
related tax benefit will be realized.

The Company has conducted an exercise to find out deferred tax asset/(liability) based
on temporary differences arising from the carrying amount of an asset or (liability) in the
balance sheet and its tax base. Accordingly deferred tax is recognized as per BAS-12.

4.2.1.21. Earnings per share

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders
of the company by the weighted average number of ordinary shares outstanding during
the period. Diluted EPS is determined by adjusting the profit or loss attributable to
ordinary shareholders and the weighted average number of ordinary shares outstanding
for the effects of all dilutive potential ordinary shares, which comprise share options
granted to employees.

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 Chapter: 05
Corporate Financial
Accounting

Page 63 of 88
05.1. Statement of Compliance:
The financial statements of the company are made up to 31 December each year and
are prepared in accordance with the Financial Institution Act,1993, other Bangladesh
Bank Circulars, International Financial Reporting Standards (IFRSs) as adopted by
the Institute of Chartered Accountants of Bangladesh (ICAB) as Bangladesh Financial
Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange
Rules 1987 and other prevailing Jaws and regulations applicable in Bangladesh.

05.2. Basis of Measurement:

The financial statements of the company have been prepared on the historical cost basis
except for the following:

 Government Treasury Bills and Bonds designated as 'Held for Trading

(HFT)' at present value using marking to market concept with gain
crediting revaluation reserve.
 Government Treasury Bills and Bonds designated as 'Held to Maturity
(HTM)' at present value using amortization concept

05.3. Basis of Consolidation:

The consolidated financial statements include the financial statements of GSP Finance
Company (Bangladesh) Limited and its subsidiary made up to the end of the financial
year. The consolidated financial statements have been prepared in accordance with
Bangladesh Accounting Standard 27: Consolidated and Separate Financial Statements.
The consolidated financial statements are prepared to a common financial year ended 31
December.

05.3.1. Use of Estimates and Judgments

The preparation of the consolidated financial statements in conformity with BFRSs
requires management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.

05.3.2. Reporting Period

The financial statements cover one calendar year form 1 January to 31 December.

05.3.3. Cash Flow Statement

Cash flow statement has been prepared in accordance with the Bangladesh Accounting
Standard-7 "Statement of Cash Flows" under direct method as recommended in the
BRPD Circular No. 14 dated 25 June 2003 issued by the Banking Regulation & Policy
Department of Bangladesh Bank.

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05.3.4. Statement of Changes in Equity
The Statement of changes in equity reflects information about the increase or decrease
in net assets or wealth.

05.3.5. Liquidity Statement

The liquidity statement of assets and liabilities as on the reporting date has been
prepared on residual maturity term which has been given in the Statement.

05.3.6. Significant Accounting Policies

The accounting policy set out below have applied consistently to all periods presented in
the consolidated financial statements and those of the company, and have been applied
consistently by the group entities.

05.4. Financial Reports of GSP Finance Company (Bangladesh)

Ltd.:
1. Consolidated Balance Sheet
2. Consolidated Profit and Loss Account
3. Consolidated Statement of Changes in Equity
4. Consolidated Cash Flow Statement

The above mentioned consolidated financial reports of the company are presented in the
following few pages.

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GSP FINANCE COMPANY (BANGLADESH) LIMITED
CONSOLIDATED BALANCE SHEET
AS AT DECEMBER 31, 2017

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Page 67 of 88
GSP FINANCE COMPANY (BANGLADESH) LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED DECEMBER 31, 2017

Page 68 of 88
GSP FINANCE COMPANY (BANGLADESH ) LIMITED
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2017

Page 69 of 88
Page 70 of 88
 GSP FINANCE COMPANY (BANGLADESH) LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2017

05.4.1. Compliance with Laws

The financial statements prepared in accordance with Bangladesh Financial Reporting
Standards (BFRS) and complied with other related Jaws, rules & regulations.

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 Chapter: 06
Human Resources
management &
Administration

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06.1. General Administration Overview:
Human Resource Management is important for banks because banking is a service
industry. Management of people and management of risk are two key challenges facing
banks. Success of banking business depends on managing of the people and managing
of the risks. Efficient risk management may not be possible without efficient and skilled
manpower. Banking has been and will always be a "People Business". Though pricing is
important, there may be other valid reasons why people select and stay with a particular
bank. Banks must try to distinguish themselves by creating their own niches or images,
especially in transparent situations with a high level of competitiveness. In coming
times, the very survival of the banks would depend on customer satisfaction. Those who
do not meet the customer expectations will find survival difficult. Banks must articulate
and emphasize the core values to attract and retain certain customer segments. Values
such as "sound", "reliable", "innovative", "international", "close", "socially responsible",
etc. need to be emphasized through concrete actions on the ground and it would be the
bank’s human resource that would deliver this. This is almost true for GSP Finance
Company (Bangladesh) Limited which is paying special attention to recruitment,
selection, training, evaluation, promotion and compensation and others.

06.2. HRM of GSP Finance Company (Bangladesh) Limited:

Human Resources Division works with the employees in the organization. Its main
philosophy is the right people at the right place at the right time and also makes them
an asset for an organization. Herarchy of GSP Finance:
Managing
Director

Deputy
Managing
Director

Deputy
Executive General
General
Director Manager
Manger

Assistant
Assistant
General Manager Senior Officer
Manager
Manager

Officer

Management
Trainee Officer

Figure 2 HR Hierarchy

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06.2.1. HRD of the Company:
GSP Finance Company (Bangladesh) Limited management is well aware of the need for
human resource training and development. This can be understood from its corporate
manual: “Function of the management of the Bank is not only to cope with the situation
prevailing but also to ensure best of services to the clientele and society at large as well
as profitable returns to the owners and shareholders. These objectives may be fulfilled
only when enlightened management coexists with skilled and motivated members of
staff. Different levels of employees require different skills. An organization with people
having technical, human and conceptual skills can serve and cope with the fast changing
environment. Some of the traits and skills may be inborn in human beings. But most of
the skills can be acquired and cultivated provided that there is willingness on the part of
the employees and there is an organized effort for planned change in management and
organizational development.”

06.2.2. Role of HR Department:

Human resource department plays a very important role in this bank. They are as
follows:

06.2.2.1. Getting the best employees:

• Human Resources Planning (HRP)
• Specifying jobs and roles
• Recruiting
a. Screening
b. Selecting new employees
• Out sourcing (having functions and services done by non-employees)

06.2.2.2. Training employees:

• Career development
• Employee orientation
• Leadership development
• Management development -Personal development

06.2.2.3. Paying employees:

• Salary
• Benefits and compensation

06.2.2.4. Ensuring compliance and regulations:

• Personnel records
• Employee laws
• Work ethics

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06.2.2.5. Ensuring safe work environment:
• Employee assistance program
• Preventing violence in the work place
• Personal wellness

06.2.2.6. Sustaining high performance employees:

• Employee performance management
• Personal productivity
• Regular training session

06.2.3. Human Resources Planning of GSP Finance Company

(Bangladesh) Limited
6.2.3.1. Planning:
Human resources planning is concerned with the flow of people into, though, and out of
an organization. HR planning involves anticipating the need for labor and the supply of
labor and then planning the programs necessary to ensure that the organization will
have the right mix of employees and skills when and where they are needed.

6.2.3.2. Human Resource Demand:

Once human resource planners have collected information from both internal and
external sources, they forecast the demand for labor. These forecasts are grounded in
information about the past and present and in assumptions about the future. Different
methods of forecasting the demand for labor require different assumptions. Some of the
more common assumptions are that past trends and relationships among variables will
hold up in the future; that the productivity ratio is constant (or follows a known pattern)
as the number of units produced increases; and that the business plans of the
organization, sales forecasts, and so on are reasonably descriptive of what will actually
happen. Demand forecasting method can be divided into two categories. They are
Judgmental and Mathematical. In practice, most organizations use some combination of
the two methods. In our country most financial institutions use the Judgmental method

6.2.3.3. Judgmental Method:

Judgmental methods make use of knowledgeable people to forecast the future.
Judgmental methods do consider quantitative data but also allow for intuition and
expertise to be factored in. These methods may be used by small organization or by
those new to HR forecasting that do not yet have the database or expertise to use some
of the more complex mathematical models.

6.2.3.4. Supply of Labor:

Once the demand for labor is predicted, it is necessary to forecast the supply of labor
that the organization will already have available to meet the demand. It is basically of
two types:

1. Internal Supply of labor

2. External Supply of Labor

6.2.3.5. Job Analysis:

The procedure for determining the duties and skill requirements of a job and the kind of
person who should be hired for it. The process of job analysis is of two types:

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 a) Job description: A list of job's duties, responsibilities, reporting relationship,
working conditions, and supervisory responsibilities - one part of the job analysis
b) Job Specification: A list of a job's "human requirement" that is, requisite
education, skills, personality, and so on - another part of the job analysis.

6.1.1. Recruitment Process of GSP Finance Company (Bangladesh) Limited

When a vacancy occurs and the recruiters receive authorization to fill it, the next step is
to carefully examination of the job and an enumeration of the skills, abilities, and
experience needed to perform the job successfully.

6.2.3.6. Recruitment Process:

In the recruitment process there are couple of steps are to be followed:

1. Written test: The recruitment test is combined of both elaborative and M.C.Q.
type. In the written test a person has to obtain a certain mark to pass the exam.
2. VIVA: The candidates after qualifying written test have to face VIVA test. VIVA
usually taken by the top management of the company. Only short listed
candidate is selected finally for the job.

Organization

Vacant for new position

Perform Job analysis and plan

recruiting effort

General applicant pool via internal

or external recruitment method

Evaluate applicants via Selection

Process

Impress Applicants

Make offer

Figure 3 Recruitment Process

6.2.3.7. Method of Recruitment:

There are three method of recruitment:

1. Internal recruitment: Most companies fill vacancies internally whenever possible,

so is for GSP Finance. A number of internal recruitment methods are use for

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 different level of jobs. Lower- level jobs such as manual and clerical jobs are
often called nonexempt jobs because their incumbents are not exempt from the
minimum wage and overtime provisions of the Fair Labor Standards Act. These
people typically are paid an hourly wage. In contrast, higher-level
administrative, managerial, and professional employees are paid on a salary
basis and are exempt from the overtime provisions of the Fair Labor Standards
Act.
2. External Recruitment: In addition to looking internally for candidates, it is
customary for organizations to open up recruiting efforts to the external
community. Through the recruiting process, the hiring manager should stay in
close touch with the recruiter. The hiring manager should examine resumes or
applications that have passed initial screening by the recruiter and should also
review some of the application that the recruiter rejected during the first steps.
Such involvement on the part of the hiring manager allows feedback as to
whether or not the recruiter's decisions are consistent with the hiring manager's
performances. External recruitment methods are often grouped into two classes:
i. Informal
ii. Formal
3. Employee's referral, also known as word-of-mouth advertising, is quick,
effective, and usually inexpensive. Because employees who refer their friends
and acquaintance as candidates have their own credibility on the line, they tend
to refer people who are well qualified and well-motivated and then to mentor
these individuals once they are hired.

6.2.3.8. Selection:
Selection the right employees are important for an organization. First own performance
always depends in part on subordinates. Employees with right skills and attributes will do
a better job for the company. Employees without these skills won't perform effectively
and as a result the firm will suffer.

6.2.3.8.1. Process of Selection:

Selection activities typically follow a standard pattern, beginning with an initial screening
interview and concluding with the final employment decision.

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 Advertising / submision of
CV's at HRD Head office

Sorting Out of Application

Invited the selected

applicants for the written test

Holding the written test

Selection of eligible
candidates for the interview

Invited the selected

candidates for the interview

Conducting Interview

Investigations of applicant
details

Preparation of desirable
candidates list

Final Approval of the

competent authority

Physical fitness of
employment

Appointment and placement

Figure 4 Selection Process

6.2.3.9. Training & development:

6.2.3.9.1. Training
Training refers to the methods used to give new or present employees the skills they
need to perform their jobs. Training might thus mean showing a machinist how to

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operate his or her new machine, a new salesperson how to sell his or her firm's product,
or a new supervisor how to interview and appraise employees. Training basically provide
to the entry-level employees.

On the job training: it means learning by doing. It means employees training completed
while he works. It is basically a practical oriented training program.

Off the job training: it means training provided to the employees out of the office in a
training institute for a particular period of time i.e. for 15 to 20 days or even 03 months.
During this time the employees does not have to go to office.

6.2.3.9.2. Development
Management development is any attempt to improve managerial performance by
imparting knowledge, changing attitudes, or increasing skills. The ultimate aim of such
development programs is, of course, to enhance the future performance of the
organization itself. For this reason, the general management development process
consists:

 Assessing the company's needs (for instance, to fill future executive openings, or
to boost competitiveness)
 Appraising the managers' performance, and then
 Developing the managers (and future managers) themselves

06.3. Performance Appraisal

Performance appraisal is defined as evaluating an employee's current or past
performance relative to his or her performance standard. The appraisal process
therefore involves:

 Setting work standard

 Assessing the employee's actual performance relative to these standard; and
 Providing feedback to the employee with the aim of motivating the person to
eliminate performance deficiencies or to continue to perform above per.

06.3.1. Role of Performance Appraisal:

There are four reasons for appraise performance.

a) Appraisals provide information upon which promotion and salary decisions can be
made.
b) Provide opportunity for supervisor and subordinate to review the
subordinate's work-related behavior.
c) Appraisal is part of the firm's career planning process, because it provides an
opportunity to review the person's career plans in light of his or her exhibited
strengths and weakness.
d) Finally, it helps the Manager or the supervisor to better manage and improve
organization's performance.

06.3.2. Steps in Appraising Performance:

The performance appraising process contains three steps:

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 i) Define the job: It means making sure that supervisor and subordinate agree on
his or her duties and job standard
ii) Appraise performance: Appraising performance means comparing subordinate's
actual performance to the standards that have been set; this usually involves
some type of rating form
iii) Provide feedback: Performance appraisal usually requires one or more feedback
sessions. Here the subordinate's performance and progress are discussed and
plans are made for any development that is required.

06.3.3. Appraisal Methods of GSP Finance:

GSP Finance Company (Bangladesh) Limited follows Key Performance Indicator (KP!)
method since the year 2013. KPis, performance reviews and appraisals help employees
know how they have been doing and what further development or training they need to
do to improve. Reviews should be available to all staff. Use the performance and
development agreement plan to outline your employee's expected performance
standards and goals as well as skills improvement.

Objectives give employees focus and appraisals make them feel that their good work is
recognized. Discussion on any weaknesses or problems and identification of solutions
together can also be possible in KPI method.

06.4. Motivation:
Motivation is the art of inducing employees to work diligently and sincerely for the
success of the enterprise. It is the intensification of desire of the workers/employees to
work more cordially, carefully and consciously.

06.4.1. Features of Motivation:

Motivation is a captivating concept. It is a fascinating but a complex phenomenon. The
main features of motivation are as follows:

 Motivation is goal oriented

 Motivation is a continuous process
 Motivation may be positive or negative
 Motivation may be monetary or non-monetary
 Motivation may be considered in totally, not in piece-meal
 Motivation is a psychological phenomenon which converts abilities into
performance

06.4.2. Motivation strategy:

Employees of GSP Finance are motivated through the following ways:

o Bonus from the overall profit

o Better score in the Annual Confidential Report (ACR)
o Participation in decision making
o Promotion to the higher position
o Incentive bonus

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06.4.3. Compensation:
Employee compensation refers to all forms of pay or rewards going to employees and
arising from their employment, and it has two main components. There are direct
financial payments in the form of wages, salaries, incentives, compensations, and bonus
and there is indirect payment in the form of financial benefits like employer paid
insurance and vacations. Pattern of compensation:

Financial Non-Financial

 Basic Salary  Housing Facilities

 Bonus  Transportation
 Incentive  Medical
 Commission  Insurance

06.5. Reward plans of GSP Finance Company (Bangladesh)

Ltd.:
It includes the personal satisfactions one gets from the job itself, money, promotions
and benefits. Their common thread is that they are external to the job and come from
outside source, mainly management. The GSP Finance Company (Bangladesh) Ltd.
reward plans is in below:

 Financial: Best performer of the branch/bank can be rewarded quarterly/ half

yearly/yearly to create a challenge among the members. Air tickets for
couples of family or fixed cash/ gifts can be paid.
 Non-financial: Certificates/medals to be given to the outstanding performers.
Photo can be published in the newspaper or special reward can be given from
the Management/ Board. Special greetings can be given from to the
employees on the occasion on their marriage ceremony/ birthday etc.
 Reward for the family members: Children securing good result/ achievement
financial reward (prize bond/ cash) or non-financial rewards (watch/
ornaments etc.) can be given to them.

06.6. Promotion Policy:

As rewarding & motivating factor, the uniform promotion criteria are maintained by the
company. Minimum 2 years are required for promotion to the officer level and 3 years
for the executive level. Two method of evaluation for promotion:

 Annual confidential report (ACR) scored by the immediate supervisor

 Interview marks

Both marks are added together to prepare list for promotion.

06.7. Employee Benefits of GSP Finance:

Benefits include mandatory protection programs, pay for time not worked, optional
protection programs, private retirement plans and a wide variety of other services.

 Short term benefits: Salaries, wages, bonuses, allowances, paid annual leave,
medical leave and non-monetary benefits are recognized as an expense in the
year in which the services are rendered by the employees of the company.

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  Defined contribution plan: As required by Bangladesh's law, the company has
to make contributions to the General Provident Fund (GPF). Such
contributions are recognized as an expense in the income statement in the
year to which they relate. Once the contributions have been paid, the
company has no future obligations.
 Termination benefits: Employee termination benefits are recognized only
either after an agreement is in place with the appropriate employee
representatives specifying the terms of redundancy or after individual
employees have been advised of the specific terms.

06.8. Disciplines:
It refers to a condition in which the employees of an organization conduct themselves in
accordance with the rules and standards of acceptable behavior.

 Employee Discipline: All the employees of GSP Finance shall obey the rules &
regulations of the organizations. The company's regulations for the employees
are summarized as follows:
 Every employee must serve the company honestly &
faithfully &
 maintain secrecy regarding company's affairs
 No employee shall get himself involved directly & indirectly in any
types of politics which include grouping or taking part in any sort of
election
 No employee or his family members shall accept gift from
subordinates or any person who has the personal interest in the
company affairs or candidate for employment in the company
 Disciplinary Action: Employees not obeying the above stated are liable to
disciplinary action. If any employees are found guilty for any type of offence,
punishment is given to those who do not maintain discipline. Types of punishment
are related to the types of offence the employee has committed. For major
degree of offence, the employee may also be removed from service.
 Grounds of Punishment: Following are the main grounds on which the authority of
the company can impose punishment to the employees & staffs:
 Displace negligence or indolence in the discharge of his duties &
remains absent with informing the authority; or
 Act of misconduct, dishonesty, offence involving moral turpitude,
corruption & owning property misappropriate, misappropriation of
money; or
 Indulging in regionalism, favoritism, antagonism, polarization,
degeneration, abstracts or frustrates team efforts, creates hostility,
intolerance, resentment, internal feuds, sectarian feelings etc.; or
 Not showing respect or obeying regulations of the bank.

06.9. Features of HR of GSP Finance Company (Bangladesh)

Limited at a glance:
Age of the employees : For entry level age must be below 30 years

Probation Period : Six Months

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Basis of Promotion : Merit cum Seniority

Annual Increment : Yearly

Casual Leave : Nil

Medical Leave : 15 days. The company may at its discretion to grant

further medical leave.

Earned Leave : Upon completion of one year, 15 days earned leave can be
enjoyed.

Maternity Leave : 06 months maternity leave can be granted for twice in service
period.

Extraordinary Leave : It is allowed to the employee at the case when the employee has
no leave balance, in case of an emergency situation and at the
discretion of the management.

Notice period : for permanent employees : 3 months

Gratuity : 1 month's basic pay for each completed year for the employees
who tenders minimum 10 years of service.

Provident Fund : 10% contribution from both side (i.e. employee and employer)
Provident Fund is approved by the National Board of Revenue
under First Schedule of the Income Tax Ordinance 1984.

Chapter: 07
Findings, Page 83 of 88

Recommendation
07.1. Findings:
During the course of internship and preparation of this report, following issues are
identified-

07.1.1. Company Secretarial Practice & Corporate Governance:

 GSP Finance Company (Bangladesh) Limited has a strong and prudent Board
of Directors having representations from various business sectors. There are
02 committees under the Board of Directors are functioning properly.
 As per the Corporate Governance guidelines, the number of board members of
the company shall be not less than 5 and not more than 20, the number of
Board member of GSP Finance is 09 as on 31.12.17 Number of independent
Director of GSP Finance (1/5) of the total Board of Directors.
 Company shall appoint a CFO, a Head of Internal control & a CS. Board of
Directors shall clearly define their respective roles, responsibilities, and duties
where the company Secretary plays dual roles of CFO& CS. As per the
compliance of Corporate Governance guidelines, the Company Secretary &
CFO attends the meeting of the Board of Directors except where there is an
agenda relating to their personal interest.
 During the year 2017, 04 Board Meeting were held and notices of the meeting
were duly conveyed.
 AGM of the company was held properly in the beginning of the year for FY
2017
 Company Secretary duly filed all the return to RJSC, BSEC, DSE, CSE and
Bangladesh Bank in time

07.1.2. Corporate Finance & Accounts:

 The efficiency of operation and financial performance of the company is quite
satisfactory.
 Financial reporting and disclosures according to rules and regulations for the
time being in force are satisfactory.
 In some areas of business/ operation like SME and Retail financing, there are
still opportunities to improve.
 GSP Finance strictly follows the rules and regulations of accounting (IAS,
IFRS, BAS and BFRS) in making its accounting policy.
 In preventing money laundering the company has taken effective measures
and training is continuously given to all the categories of officers and
executives for developing awareness and skills for identifying suspicious
activities.

07.1.3. Human Resources & Other Issues:

 Right person is being employed in right position; the company' s recruitment
process is very good.
 Employee' s performance of the company is being evaluated methodically.
 Employee benefits schemes of the company are not satisfactory compared to
industries.
 Training of employee in Bangladesh Institute of Bank Management and
overseas institutes are few in numbers.
 Employee turnover rate is very high.

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  Brand Marketing, Market Communication, loyalty building program,
augmentation of product and services are poor in the company
 The company strictly follows the rules and regulations regarding loan
classification, rescheduling and write off, etc.

07.1.4. CSR Activities:

 The company has installed solar panels which use sun light to produce
electricity due to saving energy reduce, carbon emissions and preserve the
environment.
 The employees of GSPB have donated one-day salary to the victims and
donated 5 lac taka to the Prime Minister’s Fund for rehabilitating the victims of
The Rana Plaza tragedy
 The company didn’t involve more CSR activities

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07.2. Recommendations:
Though there is some drawbacks / lacking in exercising corporate governance guidelines,
yet GSP Finance is developing their corporate practice day by day. The company may
take in consideration following the issues for better practices:

 Separate division should be taken at workplace of the company for running

the operation of activities promptly and effectively.
 Should backup Information system in share division. So that any information
relating with shares like downloading the reports, checking BO account
number, share transfer etc will be available in case any crush in data base
system with CDBL.
 Should give more importance on SME and Retail Banking (low cost deposit
mobilization).
 Strong Management Information System (MIS) should be established to
support Executives, Management and Board of Directors in making quick and
correct decisions.
 The company secretary should not play dual roles like CFO & CS; in that case
the company may appoint different CFO & CS.
 To reduce the employee turnover, company should increase employee
benefits and motivational scheme for the employee.
 The company should arrange for more training of employees in Bangladesh
Institute of Bank Management (BIBM) and different National and overseas
training institutes.
 Business and operations process should be automated as much as possible to
increase the efficiency of the business.
 Need to be diversified the Loan and investment portfolios; that helpsto reduce
the risk of the company.
 The prevailing pace of keeping good corporate governance of the company
should be continued.
 Company’s should involve more CSR activities for the society as well as the
country

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07.3. Conclusion:
The operations of GSP Finance are built upon unequivocal emphasis on effective
corporate governance and objective is to create, promote and build long-term company's
value. The company's management believes that transparency in decision- making,
monitoring mechanism and full disclosure to shareholders and regulatory authorities are
essential aspects of the company's corporate governance and that they create an intense
pressure to rationalize its services and search for new competitive advantages.

GSP Finance Company (Bangladesh) Limited is committed to operating within a strong

system of internal control and a sound compliance culture that enables business to be
transacted and risk taken without exposing itself to unacceptable potential losses or
reputational damage. The activities of the company are performed under the Framework,
which has been established in line with the related guidelines of Bangladesh Bank and
other regulatory authorities of the Country. This Framework sets out company's
approach to internal governance. It establishes such effective mechanism and process by
which the Board can direct the management, through delegating its authority, setting
the tone and expectations from the top, monitoring compliance, etc. GSP Finance has
also placed an appropriate and effective inte rnal control environment to ensure that the
company is managed and controlled in a sound and prudent manner. The foundation of
company's internal control system is to establishment of (a) a strong Board of Directors,
(b) a strong Management, (c) a strong Risk Management Framework, (d) an effective
Management Information System, (e) an Independent Audit Mechanism, etc. It also
incorporates such internal requirements of the company, which reflect material legal and
regulatory requirements relating to internal control and compliance. The MANCOM
(Management Committee) of GSP Finance Company (Bangladesh) limited reviews the
overall effectiveness of the control system of the company annually. The Board of
Directors of the company also reviews and evaluates the effectiveness of the Internal
Control System annually through its Audit Committee.

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07.4. References:
 Company Website: https://gspfinance.com/
 Annual Report 2017 of the company:
https://gspfinance.com/assets/reports/Annual_Report_2017.pdf
 ICSB Journal
 Website SEC website: http://www.sec.gov.bd/
 Website of DSE: https://www.dsebd.org/
 Website of CSE: http://www.cse.com.bd/
 Website of CDBL: https://www.cdbl.com.bd/
 Company's publications
 Hand Book of Company Secretary by Mr. A K A Muktadir
 Companies Act-1994
 The Banking Companies Act-1991
 The Bangladesh Accounting Standards (BAS)
 Income Tax ordinance 1984
 Securities laws, Rules & different directions & notification of SEC

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