Short Note - 02

1. Bonus Share :
   The company may capitalized accumulated resources and profits by the issues of share called bonus share. Companies issue bonus share to its shareholders when it makes enough profit. But it has little in cash to pay cash as dividend. The articles of the company must permit the issue of such bonus shares. Like the right shares, the bonus shares are also issues to the existing shareholders in proportion to their share holding and dividend rights. But bonus share cannot be renounced.
   The requirements of issuance of bonus share are as follows-

• The article of the company must permit the issuance of bonus share.
• The authorized capital must be sufficient to cover the same.
• The share holders must resolve to capitalize profits or to apply the share premium account or utilized other reserves and issues bonus share.
• The share must be allotted by a board resolution in the proportions determined by shareholders in general meeting.
• A return on allotment must be submitted to the registrar within 60(sixty) days after allotment of share.

1.  Statutory Auditor:

Statutory auditor refers to the external certified public accountant, i.e., external auditor. He is an external service supplier; in charge of certifying the financial statement according to specific professional auditing standards .Statutory auditor review the accuracy of a company’s a governments financial record.

1. CDBL (Central depository Bangladesh limited ):
   CDBL was incorporate as a public limited company’s on august 2000 to operate and maintain the CDs of electronic book entry, Recording and maintaining securities accounts and registering transfer of securities; changing the ownership without any physical movement or endorsement of certificates and execution of transfer instruments. Bangladesh SEC has issued a certificate to CDBL on December 23, 2003 for starting depository business as a depository.
   “Central depository” mean a company formed to establish and operate a system for the central handling of securities, whereby such securities are deposited with and hold in custing by the company as a nominee for the depositors and dealing in report of such securities are elected by means of entries in securities accounts without physical delivery of scrips.
   The role of CDBL is to provide facilities for:

• Holding eligible securities in accounts.
• Dematerialization and re-materialization of eligible securities.
• Debiting and crediting securities to an account.
• The settlement of transactions.
• Pledging ,un-pledging and confiscation of eligible securities.
• Lending and borrowing of eligible securities
• Freezing and unfreezing of eligible securities
• Report to CDBL participants, Issuer and direct a/c holders.

The initials CDBL stand for “Central Depository Bangladesh Limited” which is a joint venture company set up by banks, Stock exchange, Asian Development Bank and other institutions operates the CDs in Bangladesh.

CDBL was incorporated as a public limited company on 20^th August ,2000, the objective of which was to initiate ,implement and operate the CDs in this country.

CDBL, by transferring physical certificate into electronic from will abolish the risks of damages, lost ,forged and duplicate share certificates, Since the operation method under this system is very speedy .

So, Transfer deliver, selling and buying are done instantly.

1. Dematerialization :
   To act effecting in depository system, the securities are kept in a dematerialized from .However, dematerialization is a process by which physical certificates are converted in to electronic from for credit to the investors accounts in the depository. To hold securities in CDBL, the securities must be dematerialized before the broker sells or buys shares.
   According to the depositories act’1999 ,the transfer of every eligible securities should be in the account of depository ,So, before selling or buying any share through the depository ,it must be dematerialized.
2. EGM (Extra-Ordinary General Meeting ):
   All ordinary or general meeting of the company other then AGM are called extra-Ordinary general meeting.In other words,when a meeting is called on an emergency or on special ocoarion ,it is called EGM.
   An EGM is called when :

• There is same special business to be transacted,or
• According to articles it can’t be transacted at an AGM, or
• If it can be done at an AGM ,it so urgent that it can’t be deferred till the next AGM.

An EGM may be called in the following ways :

• By directors
• By Directors on the requisition of the shareholders
• By the shareholders /Requisitions
• By the court.

1. Record Date :
   The last date on which any dividend on a stock that has been declared but not distributed belongs legally to the buyer, rather than the seller, that is ,when one sells a stock on or before the record date ,the dividend will go to the seller, In practical terms, the record date is the trading day immediately before the ex-dividend date, It is also called the date of record.
2. Independent Director :
   Independent director means a director who either does not hold any share in the company or holds less than one (1%) percent shares of the total paid –up shares of the company and she/he 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 this basis of family relationship. His/her family members also should not hold above mentioned shares in the company.
3. Registrar :
   The registrar is the authority of the office of the registrar of Joint Stock Company and firms Bangladesh. The registrar of joint stock companies and firm (RJSC) is the sole authority which facilities formation of companies etc. and keep track of all ownership related issues as prescribed by the laws in Bangladesh. RJSC deals with the following types of entities:

• Private companies
• Public Companies
• Foreign Companies
• Trade organization
• Societies
• Partnership firm

RJSC accords registration and ensures lawful administration of the entities under the provision of applicable act.

1. Asset Management :

1. The management of a clients reinvestments by a financial services company usually an investment bank.The company will invest on behalf of its clients and give then access to a wide rouge of traditional and alternative product offering that would not be to the average investor.
2. An account at a financial institution that includes checking service, credit cards, debit cards, margin loans ,the automatic sweep of cash balances in to money market fund ,as well as brokerage services.
   
   

1. Minutes :
   Official’s records of the proceedings of the meeting kept as a record be called minutes .In other words, minutes may be defined as the records of meeting. It is a summary or record what is said or decided at a formal meeting of board of directors or shareholders of the company.
   Actually, They are records of the events took place at a meeting. The object of keeping minutes is to preserve an accurate copy of officials document of the proceeding of the meeting .So that it may be produced before the court of law or any other authorized body in times of necessity.
   The rule regarding minutes are as follows:

• Obligation to keep minutes
• Signature and evidence
• Inspection of the minues
• Having copies of minutes by the member
• Defamatory and irrelevant matter to be excluded
• Prima facie eridevoc
  
  

1. Shareholders Register :
   A list of action owbers of a companys shares, updated on an ongoing basis.The shareholder register required that every current shareholder be recorded.The register includes each persons name,address and number of shares held,but can further detail the holders occupation and price paid.the shareholder register is fundamental to the examination of the ownership of the company.
2. Defunct Company :
   This category is for companies act that were once significant ,but are now defunet,which means they no longer exsit.

• Some were driven out of business by compentitions
• Some simply stopped operation
• Some went bankrupt
• Some were marged with or acquired willingly through sale to other companies, or bought hostile takeover,

Some companies may continue to operate under their old name but as a subsidiary of a parent company.

1. One man meeting :
   Any meeting held in one man company is called one man meeting,One man company is a company in which only on man is owner of a business holds the entire capital in the form of fully paid up shares with a few extra members holding one two shares each ,but truly speaking they are the nominees of the former. Thus, one man meeting held by only one person who is the owner of the business.
2. SEC’s  Directives for submission of accounts (Un-Audited & Audited ):
   The annual report required to be furnished by an issuer of a listed security shall be includes :

• A balance sheet
• Profit and loss accounts
• Cash flow statement
• Notes to the accounts.

                The financial statement should be prepared in accordance with the requirements laid down in the schedule and IAS.

                The financial statement shall be audited by a partnership firm of chartered accountants.

                The financial statement shall be audited within 120 (one hundred and twenty ) days the date on which the issuers financial year ends.

                A copy of such audited financial statement shall be submitted to the commission and the stock exchanges within 14 (Fourteen) days thereof.

1. Private placement of share/Pre-IPO placement :
   Private placement is a cheaper method of issuing shares. Under this method new securities are sold directly to large institutional investor instead of being sold to the general public, Such as foreign fund managers.
   If any issuer make private placement with investors, the amount so placed including the means and address of such investors shall be disclosed in details in the financial structure section of the prospectus.
   Private placement is more appropriate to smaller issue.
2. Dividend :
   Dividend is the share of profit payable  to the shareholder. The aspect of payment of Dividend can be judged from two standpoints statutory and accounting. On the statutory standpoint dividend is governed by regulations 96 to 103 of the first schedule of the Act of which regulation 97 is the mandatory provision.
   But regulation 96 is more important .It is provided in that regulation that dividend once declared must be paid and disabused within two months from the date of declaration .Regulation 98 is also notable which provides that no dividend shall be paid otherwise then out of profit of the company.
3. Interim Dividend :
   A dividend to be payment made before AGM and financial statement of a company’s. This declared dividend usually accompanies the company’s interim financial statement .An interim dividend may be distributed by the board of directors in the current year on condition that the article of association (AOA) empower then to do so.
4. Specy Dividend :
   When a parent company issue its subsidiary or sister concerns share as dividend to its (Parent ) Shareholders then it is called specy dividend.
   Examples:
   When square pharma issue 1:2 ratio shares of square textile to square pharmas shareholder. It will be treated as specy dividend .If any investor has 2 (Two) share of square pharma then he will get at true of cost 1(one) share of square textile .
5. Property Dividend :
   An alternative to cash or stock dividend .A property dividend can either include shares of a subsidiary company or physical assets such as inventories that the company holds .The Dividend is recorded at the market value of the asset provided from a corporate perspective ,property dividends can be distributed it the parent company does not wish to dilute its current share position or if it does not have enough cash on hand to distribute healthy payments.

aaa) Liquidating dividend :

A type of payment made by a corporation to its shareholders during its partial or full liquidation .Liquidating dividends are not paid solely out of profits of the corporation. Instead, The entire amount of shareholders equity is distributed, when a company has more liabilities than assets equity is negative and no liquidating dividend is made at all.

A dividend may be referred to as liquidating dividend when a company:

• Goes out of business & the net assets of the company are distributed to shareholders , or
• Sells of portion of business for cash & the proceeds are distributed to share holders.

bbb) Stock Dividend :A dividend payment made in the form of additional shares ,rather than a cash payment .Companies may decide to distribute stock to shareholders of record if the company’s availability of liquid cash is an short supply. These distributions are generally acknowledge in the form of fractions paid per existing share. An example would be a company issuing a stock dividend of 0.05 shares for each single share held.

ccc) Share :

Share is the unit of capital measured by the sum of money. It is intangible by very much movable property .The capital of a company is divided in to shares, which is distinguished by its appropriate members. The shares are contained in a certificate when is transferable.

Features of Shares:

• Share is the unit of capital measured by sum of money
• According to company’s act-1994, Sec 30(1) share is a movable property and shall be transferable in manner provided by the articles of the company.
• Ownership of share creates some contractual right, responsibility and liability.
• According to companies Act-1994, Section 30(2), each share in a company having a share capital ,which is distinguishes by the appropriate.
• Share is the personal estate of shareholders with his interest in the company.
  ddd)  share warrant :
  Share warrant is a document issued by a public limited company (not a private company) in respect of fully paid shares. A public limited company limited by shares authorized by its articles for issuance of share warrant its common seal.
  Following are the conditions for issue of a share warrant.

• Only a public limited company limited by share may issue Share warrant.
• A public ltd. Co. must authorized by its articles for issuance for Share warrants.
• The share are fully paid up and stamped properly.
• The total no. of shares is mention in the share warrant
• Annual report of the company includes a detail description about share warrant .

Section 50(1) on the issue of share warrant the company must enter the following particulars in the register of member.

• The data of issue of warrant
• The fact of the issue of the warrant
• The statement of share included in the warrant distinguishing each by its member.

If default is made in complying with the requirements of this section. It shall be liable to a fine not exceeding tk.200 (two hundred) for every day during which the default continues and every officer of the company pay who knowingly and willfully continues or permits the default shall be liable to a like penalty.