Scribd Logo
Upload

Welcome to Scribd!

  • Return On Assets Ratio

    Uploaded by

    Monir Hosen
    9 views1 page
    CORPORATE GOVERNANCE GUIDELINE The Bangladesh Securities and Exchange Commission has initiated 'Corporate Governance' guidelines for the listed companies on 9th February 2006. The guidelines are not compulsory for the listed companies but the reasons for non-compliance of the provision of the guidelines have to be explained to the Commission: Salient features of the guidelines are: The number of Board of Directors should not be less than 5 (five) and more than twenty. The Banks, non-bank financial institutions, insurance companies and statutory bodies shall follow the prescription of their respective primary regulators in this regard. Appointment of at least one-fifth of the total number of the company's board of directors should be 'independent non-shareholders directors' in the Board. The Chairman and the Chief Executive officer simultaneously can not be the same person and the Board should clearly define their respective roles and responsibilities. The "Directors' Report" prepared as per Companies Act may include additional statements on :- The financial statement presents fairly company's state of affairs, the results of its operation, cash flows and change is equity. While preparing the financial statement - The accounting estimates are based on reasonable and prudent judgement Appropriate accounting policies have been consistently applied IAS is followed in preparation of the financial statements Proper books of accounts have been maintained Disclosure on company's ability as a going concern and if not so then the fact along with the reasons thereof, Explanation on the significant deviation from last year in operating results, if so happened, Summarize of at least last three years key operating and financial data, Reasons for non declaration of dividend (if not declared) for the year, Significant plans and decisions along with future prospects and risks Number of Board Meetings held during the year and attendance by directors, Aggregate number of shares held by: Parent/Subsidiary/Associate companies, Directors, CEO, Company Secretary, CFO, Head of Internal Audit and their spouse and minor children, Top five salaried employs other than the above mentioned persons Shareholders holding ten percent or more voting interest in the company The Companies is required to appoint a Chief Financial Officer (CFO), a Head of Internal Audit and a Company Secretary. The CFO and Company Secretary are required to attend the Board meeting. The companies will form an Audit Committee comprising of at least three members including at least one independent non - shareholder director. The Audit Committee shall assist the Board in handling the issues, which might be overlooked and ensures a good monitoring system within the business. The Committee is required to make report on its activities to the Board. An immediate report have to made to the Board on the following findings: conflict of interest; suspected or presumed fraud or irregularity or material defect in the internal control system suspected infringement of laws The Board of Director shall rectify everything, which as per Committee Report has material impact on the financial condition and results of operation of the Company. The Committee has to report to the Commission if the Board has unreasonably ignored the rectification. The company will not engage its external/statuary auditors to provide the Bookkeeping, Broker-dealer, Actuarial, Internal audit services or any other service that the Audit committees determine. The guidelines will definitely help to protect the rights of minority shareholders as well as ensure more transparency and accountability in the Management of the companies.

    Original Title

    Return on Assets Ratio

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    CORPORATE GOVERNANCE GUIDELINE The Bangladesh Securities and Exchange Commission has initiated 'Corporate Governance' guidelines for the listed companies on 9th February 2006. The guidelines are not compulsory for the listed companies but the reasons for non-compliance of the provision of the guidelines have to be explained to the Commission: Salient features of the guidelines are: The number of Board of Directors should not be less than 5 (five) and more than twenty. The Banks, non-bank financial institutions, insurance companies and statutory bodies shall follow the prescription of their respective primary regulators in this regard. Appointment of at least one-fifth of the total number of the company's board of directors should be 'independent non-shareholders directors' in the Board. The Chairman and the Chief Executive officer simultaneously can not be the same person and the Board should clearly define their respective roles and responsibilities. The "Directors' Report" prepared as per Companies Act may include additional statements on :- The financial statement presents fairly company's state of affairs, the results of its operation, cash flows and change is equity. While preparing the financial statement - The accounting estimates are based on reasonable and prudent judgement Appropriate accounting policies have been consistently applied IAS is followed in preparation of the financial statements Proper books of accounts have been maintained Disclosure on company's ability as a going concern and if not so then the fact along with the reasons thereof, Explanation on the significant deviation from last year in operating results, if so happened, Summarize of at least last three years key operating and financial data, Reasons for non declaration of dividend (if not declared) for the year, Significant plans and decisions along with future prospects and risks Number of Board Meetings held during the year and attendance by directors, Aggregate number of shares held by: Parent/Subsidiary/Associate companies, Directors, CEO, Company Secretary, CFO, Head of Internal Audit and their spouse and minor children, Top five salaried employs other than the above mentioned persons Shareholders holding ten percent or more voting interest in the company The Companies is required to appoint a Chief Financial Officer (CFO), a Head of Internal Audit and a Company Secretary. The CFO and Company Secretary are required to attend the Board meeting. The companies will form an Audit Committee comprising of at least three members including at least one independent non - shareholder director. The Audit Committee shall assist the Board in handling the issues, which might be overlooked and ensures a good monitoring system within the business. The Committee is required to make report on its activities to the Board. An immediate report have to made to the Board on the following findings: conflict of interest; suspected or presumed fraud or irregularity or material defect in the internal control system suspected infringement of laws The Board of Director shall rectify everything, which as per Committee Report has material impact on the financial condition and results of operation of the Company. The Committee has to report to the Commission if the Board has unreasonably ignored the rectification. The company will not engage its external/statuary auditors to provide the Bookkeeping, Broker-dealer, Actuarial, Internal audit services or any other service that the Audit committees determine. The guidelines will definitely help to protect the rights of minority shareholders as well as ensure more transparency and accountability in the Management of the companies.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    9 views1 page

    Return On Assets Ratio

    Uploaded by

    Monir Hosen
    CORPORATE GOVERNANCE GUIDELINE The Bangladesh Securities and Exchange Commission has initiated 'Corporate Governance' guidelines for the listed companies on 9th February 2006. The guidelines are not compulsory for the listed companies but the reasons for non-compliance of the provision of the guidelines have to be explained to the Commission: Salient features of the guidelines are: The number of Board of Directors should not be less than 5 (five) and more than twenty. The Banks, non-bank financial institutions, insurance companies and statutory bodies shall follow the prescription of their respective primary regulators in this regard. Appointment of at least one-fifth of the total number of the company's board of directors should be 'independent non-shareholders directors' in the Board. The Chairman and the Chief Executive officer simultaneously can not be the same person and the Board should clearly define their respective roles and responsibilities. The "Directors' Report" prepared as per Companies Act may include additional statements on :- The financial statement presents fairly company's state of affairs, the results of its operation, cash flows and change is equity. While preparing the financial statement - The accounting estimates are based on reasonable and prudent judgement Appropriate accounting policies have been consistently applied IAS is followed in preparation of the financial statements Proper books of accounts have been maintained Disclosure on company's ability as a going concern and if not so then the fact along with the reasons thereof, Explanation on the significant deviation from last year in operating results, if so happened, Summarize of at least last three years key operating and financial data, Reasons for non declaration of dividend (if not declared) for the year, Significant plans and decisions along with future prospects and risks Number of Board Meetings held during the year and attendance by directors, Aggregate number of shares held by: Parent/Subsidiary/Associate companies, Directors, CEO, Company Secretary, CFO, Head of Internal Audit and their spouse and minor children, Top five salaried employs other than the above mentioned persons Shareholders holding ten percent or more voting interest in the company The Companies is required to appoint a Chief Financial Officer (CFO), a Head of Internal Audit and a Company Secretary. The CFO and Company Secretary are required to attend the Board meeting. The companies will form an Audit Committee comprising of at least three members including at least one independent non - shareholder director. The Audit Committee shall assist the Board in handling the issues, which might be overlooked and ensures a good monitoring system within the business. The Committee is required to make report on its activities to the Board. An immediate report have to made to the Board on the following findings: conflict of interest; suspected or presumed fraud or irregularity or material defect in the internal control system suspected infringement of laws The Board of Director shall rectify everything, which as per Committee Report has material impact on the financial condition and results of operation of the Company. The Committee has to report to the Commission if the Board has unreasonably ignored the rectification. The company will not engage its external/statuary auditors to provide the Bookkeeping, Broker-dealer, Actuarial, Internal audit services or any other service that the Audit committees determine. The guidelines will definitely help to protect the rights of minority shareholders as well as ensure more transparency and accountability in the Management of the companies.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Performance data of last five years

    Return on Assets ratio (ROA) of a bank gives an idea of how efficiently a bank is
    using its assets to generate profit. We can also divide the banks ROA into its
    components part. Components of a banks ROA are net interest margin, net non
    interest margin and special transaction. The sum total of this components
    results in ROA of a bank. Such a breakdown of the components of a banks
    earning can be very helpful in explaining some of the recent changes that bank
    have experienced in a particular financial position.
    ROA of HSBC with its breakdown is given below:
    Net Interest
    Net NonSpecial
    ROA
    Margin
    interest Margin
    Transaction
    2011 in %
    0.176
    0.008
    0.006
    0.178
    2012 in %
    0.149
    0.007
    0.005
    0.151
    2013 in %
    0.200
    0.009
    0.006
    0.044
    2014 in %
    0.217
    0.011
    0.008
    0.042
    2015 in %
    0.235
    0.015
    0.007
    0.037
    ROA interpretation The ROA of HSBC have seen ups and downs over the last
    five years with the lowest in 2015 and the highest in 2011 of 0.037% and
    0.178% respectively. The main reason for the rise of ROA in the year 2011 is due
    to the increase of the newt profit margin which rose to a substantial percentage
    of 0.176%. Net non-interest margin was highest in 2015 at 0.015%.

    You might also like