Professional Documents
Culture Documents
On
Provident Fund
A case study of
Puls Trading Far East Ltd.
Submitted to :
Professor Shahjahan Mina
Vice- Chancellor and Internship Supervisor
Department of Business Administration
Daffodil International University
Submitted by:
Jalalur Rahman
BBA
16th Batch
ID No- 071-11-1609
Department of Business Administration
Letter of Transmittal
Dear Sir,
It expresses my gratitude to you for providing me the opportunity to learn about the Provident
Fund. In spite of various shortcomings, I have devoted my best effort to the Puls Trading Far
East Ltd in company visiting and monitoring as an advisor. I hope you will appreciate my
endeavor and find the report up to your expectation.
It has to be mentioned further that without your expert advice and cooperation it would not have
been possible to complete this report. I shall be pleased to answer any sort of query you may
regarding this report.
Sincerely Yours,
Jalalur Rahman
ID No- 071-11-1609
BBA Program
Department of Business Administration
Faculty of Business & Economics
Daffodil International University
ACKNOWLEDGEMENT
First of all I would like to thank the Almighty of Allah for giving me the strength and the
aptitude to complete this report. The intern gratefully acknowledges the guidance and assistance
received from different people and organizations while carrying out the study. Professor
Shahjahan Mina, Advisor (Faculty of Business & Economics) provided overall guidance,
support and assistance during the internship period to the development of work plan and report
outline, data analysis, and writing of this report. He carefully reviewed the draft report and made
valuable comments and suggestions that were very helpful for restructuring and finalizing the
report. I acknowledge his contribution and thank him. The intelligence, expertise, and labor of all
the staff members of ACNABIN worked behind this study and invaluable contribution to its
success. I take this privilege to thank them all. Without their support I was not be able to prepare
this report. In this regard, I want to thank my in charges of different consultancy engagements
Md.Mominul Karim (Partner), Md.Reazul Islam (Manger) & Md.Sahadat Hossain(HR Manager
of Puls Trading Far East Ltd)for their wonderful support and contributions. All of them extended
support towards the successful writing of this report by affording me their valuable time. I owe
my profound indebtedness to all of them.
.
EXECUTIVE SUMMARY
Provident fund is a compulsory savings plan contributed to by both employee and employer to
provide the employee with a lump sum based on previous contribution records on termination of
employment. Both, the employee and the employer, contribute a fixed percentage of the PF basis
towards a Provident Fund. The minimum percentage contributed is as specified by the
authorities.
The overall approach of the report is a Descriptive one as it goes into the depth of Investment &
Accounts Process of Liaison Company like Puls Trading Far East Ltd Provident Fund. Here both
primary & secondary data were used. Interview was the basic techniques comply to collect data
from any people within the organization. Different articles published on “Investment
Methodology of Provident Fund”, Different websites regarding investment sectors, Different
Annual Report on Provident Fund. Various Text Books related to provident fund helped me to
gather data about the organization.
The report contains four chapters. The first chapter of the report describes the introductory words
of the internship report in which introduction of topic, origin the report, background of the study,
objective of the report ,scope of the report, methodology & limitations, the second chapter
contains the organizational part of “ACNABIN Chartered Accountants Firm”, organization
structure of “ACNABIN”, vision, mission & services of “ACNABIN”, performance evaluation
& description. In the chapter three, introduction of Provident Fund, various types of Provident
Funds & Provident Fund Deed added. Recognition of Provident Fund, Investment techniques of
Provident Fund, Risk Factors, Rate of Return, scope of investment of provident fund in
Bangladesh have been described in that chapter. Different problems, suggestions,
recommendations have come at the end of the report within the chapter four. ACNABIN has
passed a long way since its providing services. Already it has earned a strong positioned in
Bangladesh. To continue to hold the positions & be perfect in this sector it will have to keep
more & more attention to its fair analysis.
Investment of Puls Trading Ltd
Provident Fund
Acronyms
Commission Securities and Exchange Commission of
Bangladesh
CSE Chittagong Stock Exchange
DSE Dhaka Stock Exchange
Company 1994 bd.
Act
EPS Earnings Per Share
FC Foreign Currency Account
FI Financial Institution
ICB Investment Corporation of Bangladesh
Issue Public Issue
NBFI Non-Banking Financial Institution
NBR National Board of Revenue
Net Assets The excess of assets over liabilities of the Scheme,
computed in the manner specified hereunder
Net Assets Per unit value of the Scheme arrived at by dividing
the net assets by the number of unit outstanding of
Value(NAV) the Scheme.
TABLE OF CONTENTS
Title Page No
Letter of Transmittal i
Acknowledgement ii
Executive Summary iii
Table of Contents iv
SECTION - 1: STUDY BACKGROUND
1.1 Introduction 01
1.2 Objective of the Study 01
1.3 Scope of Study 02
1.4 Methodology of the Report 02
1.5 Limitations of the Study 03
SECTION - 2: ORGANIZATION’S PROFILE
2.1 Profile of the Firm 04
2.2 Background 04
2.3 Associations 04
2.4 Membership 05
2.5 Existing Partners and Their Area of Specialization 06
2.6 External Activities of the Partners 06
2.7 Name of Partners and Their Academic And Professional Qualifications 06
2.8 Achievements of Firm 07
2.9 Human resources 08
2.10 Logistic Support 09
2.11 Area of Services 10
2.12 Analysis of Total Practice Turnover 10
2.13 Quality Control and Independence 11
2.14 Role of the Personnel 12
2.15 Non- Professional Staff 13
To face much more complex and challenging business world in the challenging business areas,
practical knowledge is essential to expand our theoretical base. To gather this practical
knowledge, we were forwarded different organization after completing BBA Program. As I have
an intention to become a chartered accountant, I was forwarded to ACNABIN, a prominent
chartered accountancy firm in Bangladesh.
This study gave me an opportunity to observe and perform real world knowledge about the
Provident Fund, which is followed by the Liaison Company. In the internship period I could
relate the theoretical knowledge of Provident Fund to practical exposure.
As an integral part of my B.B.A Program, I have enrolled myself in completing the Internship
report. It requires me to submit a report on which I have worked. To fulfill this requirement, I
have prepared this report & have chosen “Investment Methodology of Provident Fund a case
study of Puls Trading Far East Ltd.” topic. We know theoretical knowledge makes better sense
when it associates with practical experience. As I have been involved in the Chartered
Accountant Firm, I am capable to analyze Provident Fund accounts & Investment criteria with
the consideration of Risk Factor for a Liaison company in Bangladesh. This report represents the
overall Provident Fund procedures, accounts & investment process by Puls Trading Far East Ltd
& the facts & Challenges of Investment of Provident fund in Bangladesh. I have put enough
effort on this report so that I can fulfill my objectives.
I have been assigned in ACNABIN that gave me tremendous scope to familiarize with the
provident fund procedure of the organization. Major parts of scope are point out below:
The topic selected for the study was chosen by me & approved by Professor Shahjahan Mina,
Advisor, Faculty of Business & Economics Daffodil International University. Before assigning
the topic, he discussed with me & emphasized me to do report on particular side of the
organization so that it can be focus deeply & prepared well-organized report.
Morningstar Rating :
This Morningstar-sourced information is provided to organization’s risk. Morningstar is not
responsible for any damages or losses arising from any use of The Morningstar fund rating
methodology are based on a fund's risk-adjusted return within a given Morningstar category.
Value Research Fund Ratings are a composite measure of historical risk-adjusted returns. In the
case of equity and hybrid funds this rating is based on the weighted average monthly returns for
the last 3 and 5-year periods.
The Value Research Ratings are published in Monthly Mutual Fund Performance Report and
Mutual Fund Insight. The Ratings are subject to change every month. The Rating is based on
primary data provided by respective funds; Value Research does not guarantee the accuracy.
In order to prepare the assigned project paper I have collected necessary information from two
types of source as follows:
1. I have also collected secondary information like annual of Gratuity fund report,
management consultancy of Gratuity fund report, accounting system & report of
provident fund working papers.
2. The information was obtained from various corresponding files of the firm.
The study is conducted with an objective to make a thorough study of external Consultancy of
provident fund procedure. I have availed many facilities and faced some obstacles during my
study. These obstacles may be termed as limitation of the study. These limitations are as follows:
a) Scheduled time span was not sufficient to cover all information.
b) As an independent consultancy of provident fund, the information of the case study is
not adequate for this study.
c) To some extend the exact consultancy of provident fund procedure is not followed due
to time and other constrains.
d) As the internship was the first practical experience, it was not possible for me to know
all and everything of consultancy of provident fund procedure.
Firm’s Profile
2.1 PROFILE OF THE FIRM:
2.2 BACKGROUND:
Founded in 1985, ACNABIN started with seven partners. The name “ACNABIN” comes from
the acronyms of the founder partners:
A = ABM Azizuddin
C = Anwaruddin Chowdhury
N = Abu Syed Mohammad Nayeem
A = Mohammad Akhtaruzzaman
B = ATMA Bari
I = Iftekhar Hossain
N = Mohammad Nurun Nabi.
At present the partnership comprises four founder partners and four new partners. ACNABIN
represented BDO in Bangladesh during 1990-92 and Arthur Andersen from 1992 till the later
collapse in 2002.
2.3 ASSOCIATIONS:
2.4 MEMBERSHIP:
The firm has one office in the capital city of Bangladesh with four different Divisions to manage
its day to day activities. The divisions are:
♦Provident Fund,
♦Income Tax,
♦Consultancy Services, and
♦Insolvency.
Mr. ABM Azizuddin, FCA, one of the founder partners was the President of The Institute of
Chartered Accountants of Bangladesh (1990) and presently a council member and the Chairman
of Board of Studies. Three other partners are involved in different committees of the Institutes.
MR. Iftekhar Hossain is now working as administrative partner of ACNABIN.
ICAB
Name Education and Qualification
registration no.
ABM Azizudddin B. Com. (Hons.), M.Com., FCA 46
Iftekhar Hossain B.Com., FCA 150
Mohammad Nurun Nabi B. Sc., FCA 370
6. Liaison Companies
At present ACNABIN have some 120+ Audit clients. As one of the top four firms in Bangladesh
ACNABIN have Audit clients of all type, e.g. public, private, governmental, profit/non-profit
organizations. ACNABIN have several clients with international operations.
Feasibility study
Management consultation/development
Statutory Audit
Accountancy
Taxation
Accountancy and management training
System development
Data processing with computer
Privatization consultancy (Include pre-privatization review, restructuring, valuation
in particular and privatization assistance in general)
Other accounting ancillary services including investigation, internal and
management Audit.
Micro- finance consulting.
Human Resource Development Issues
Organizational consulting services
Designing computerized systems for MIS and accounting and its implementation
Share/ business/ asset valuation.
Audit 40%
Accounts preparation (including data processing and book-keeping) 5%
Tax 15%
Insolvency 10%
Financial Advisory Services 20%
Management Advisory Services 10%
Total 100%
2.13 QUALITY CONTROL AND INDEPENDENCE:
Professional staffs are recruited based on their academic result, recruitment test, interview and
referrals.
ii. Training:
In May 1994, two of our partners actively participated in a workshop on Supreme Audit
Institution held in Singapore. In January 1997 also our firm participated in the training workshop
held in Bangkok on USAID Rules and Regulations.
In March 1998, partners along with two other senior staff members took the opportunity to
participate in the training course on “Procedures for Procurement and Disbursement” under the
World Bank’s “Financed Project” held at BRAC Centre, Rajendrapur, Bangladesh. This is a part
of a continuous process for updating the knowledge in its concerned spheres of work and also to
widen the horizon of latest know how.
ACNABIN gives out a package on firm Audit procedure, office procedures to the newly
recruited staffs. Also, through the weekly training classes’ partners / managers briefed new staffs
about the firm and its procedures. The firm also makes available the information about current
developments in professional technical standards to all professional staffs through office
circulars and notice board display.
Firm’s Audit methodology is being taught through on the job training and through the
weekly training classes presenting the real life situations, problem solutions and
discussion on the current Audit clients.
Firm’s ethics and independence are being communicated to the staffs through the weekly
classes, office memo and continuous monitoring by the senior partners.
Students, staffs are taught on the International Accounting Standards as adopted by SEC
and ICAB and locally applicable GAAP in the weekly training class, on the job training
and by the quality control review discussion.
Students, staffs at ACNABIN are informed on the changes in Provident Fund and
accounting standards through weekly class, office memo, distribution of related books
and continuous monitoring by the senior partners.
iv. Activities performed by ACNABIN to recognize that the quality is essential when
performing the engagement:
Supervisors, managers as well as partners perform field visits, review of work papers
and make a list of review points.
Review on each and every Audit by second partner is done at the office after the
preparation of draft report. The procedures documented and made available to all
staffs.
i. Partners:
The role of a partner is to get new clients and also sometimes the clients approach the partners
themselves. The partners also make sure the existing clients are provided with the best possible
service. Partners guide their employees to prepare a proposal which is to be submitted to the
client depending on what kind of service the client requires.
An Audit manager is a Chartered Accountant who assists the partners in various ways. He/ she
review reports before signing by the engagement partner.
iii. Supervisor:
A supervisor may or may not be a Chartered Accountant. He has to complete the course and
having some years experience in the field of accountancy therefore he designated as the Audit
Supervisor of the firm. Audit manager briefs the Audit supervisor on where and when an Audit
has to be performed and how the job is to be carried out.
An Audit senior has some years of experience in the accountancy field therefore he has been
designated as the Audit Senior of the firm. Audit senior is briefed by the Audit manager and
supervisor about where and when an Audit has to be performed and how the job is to be carried
out.
v. Semi-Senior Student:
A semi-senior student has to complete at least one year of article ship in the firm. Every time he
is liable to his assigned senior/s.
Junior Students are the fresher who have just joined as an articled to the firm.
The numbers of non professional staffs involved with the firm are as follows:
In easy way, we can say, Provident Fund is a compulsory savings plan contributed to by both
employee and employer to provide the employee with a lump sum based on previous
contribution records on termination of employment.
Provident Fund (PF) - Both, the employee and the employer, contribute a fixed percentage of
the PF basis towards a Provident Fund. The minimum percentage contributed is as specified by
the authorities.
According to 1925 acts "Provident Fund" means a fund in which subscriptions or deposits of
any class or classes of employees are received and held on their individual accounts, and
includes any contribution and any interest or increment accruing on such subscriptions, deposits
or contributions under the rules of the Fund.
Government Provident Fund: means a Provident Fund, other than a Railway provident Fund,
constituted by the authority of the Government] for any class or classes of persons in the service
of the Republic] or of persons employed in educational institutions or employed by bodies
existing solely for educational purposes,
Railway Provident Fund: means a Provident Fund constituted by the authority of the railway
administration for any class or classes of its employees.
Employee Definition:
"Employee" as defined in Section 2(f) of the Act means any persons who is employee for wages
in any kind of work manual or otherwise, in or in connection with the work of an establishment
and who gets wages directly or indirectly from the employer and includes any persons employed
by or through a contractor in or in connection with the work of the establishment.
Compulsory deposit: means a subscription to, or deposit in, Provident Fund which, under the
rules of the Fund, is not, until the happening of some specified contingency, repayable on
demand otherwise than for the purpose of the payment of permit in respect of policy of life
insurance or the payment of subscriptions or premier in respect of a family pension fund, and
includes any contribution and any interest or increment which has accrued under the rules of the
Fund on any such subscription, deposit, or contribution, and also any such subscription deposit,
contribution interest or increment remaining to the credit of the subscriber or depositor after the
happening any such contingency;
Contribution: means any amount credited in a Provident Found, by any authority administering
the Fund, by way of addition to, a subscription to, or deposit or balance at the credit of an
individual account in, the Fund; and "contributory Provident Fund" means a Provident Fund the
rules or which provide for the crediting of contributions;
Dependant: means any of the following relatives of a deceased subscriber to, or a depositor in,
a Provident Fund, namely, a wife, husband, parent, child, minor brother, unmarried sister and a
deceased son's widow and child, and, where no parent of the subscriber or depositor is alive ,a
paternal grand-parent;
Membership:
All the employees (including casual, part time, Daily wage contract etc.) other than an excluded
employee are required to be enrolled as members of the fund the day, the Act comes into force in
such establishment.
Basic Salary:
"Basic Salary" means all emoluments which are earned by employee while on duty or on leave
or holiday with wages in either case in accordance with the terms of the contract of employment
and witch are paid or payable in cash, but does not include
Excluded Employee:
"Exclude Employee" as defined under para 2(f) of the Employees' Provident Fund Scheme
means an employee who having been a member of the fund has withdraw the full amount of
accumulation in the fund on retirement from service after attaining the age of 55 years; Or An
employee, whose pay exceeds Taka. Five Thousand per month at the time, otherwise entitled to
become a member of the fund.
Explanation:
'Pay' includes basic wages with dearness allowance, retaining allowance, (if any) and cash value
of food concessions admissible thereon.
Employees' Provident Fund Scheme takes care of following needs of the members:
(i) Retirement (ii) Medical Care (iii) Housing
(iv) Family obligation (v) Education of Children
(vi) Financing of Insurance Polices
Provident Fund Reports
Return Forms
Investments
• Movement of Investment
• Accrued Interest
• Investment Details
• Patterns of Investments
• Status of Mutuality
• Market Value Reports
• Promotion/Transfer History etc.
Transaction Entries
As per amendment-dated 22.9.1997 in the Act, both the employees and employer contribute to
the fund at the rate of 12% of the basic wages, dearness allowance and retaining allowance, if
any, payable to employees per month. The rate of contribution is 10% in the case of following
establishments:
• Any covered establishment with less than 20 employees, for establishments cover prior to
22.9.97.
• Any sick industrial company as defined in clause (O) of Sub-Section (1) of Section 3 of
the Sick Industrial Companies (Special Provisions) Act, 1985 and which has been
declared as such by the Board for Industrial and Financial Reconstruction,
• Any establishment which has at the end of any financial year accumulated losses equal to
or exceeding its entire net worth and
• Any establishment engaged in manufacturing of (a) jute (b) Breed (d) coir and (e)
Guar gum Industries/ Factories. The contribution under the Employees' Provident Fund
Scheme by the employee and employer will be as under with effect from 22.9.1997.
Benefits Of Employee:
(A) A member of the provident fund can withdraw full amount at the credit in the fund on
retirement from service after attaining the age of 55 year. Full amount in provident fund can also
be withdrawn by the member under the following circumstance:
• A member who has not attained the age of 55 year at the time of termination of service.
• A member is retired on account of permanent and total disablement due to bodily or
mental infirmity.
• On migration from India for permanent settlement abroad or for taking employment
abroad.
• In the case of mass or individual retrenchment.
B) In the case of the following contingencies, the payment of provident fund be made after
complementing a continuous period of not less than two months immediately preceding the date
on which the application for withdrawal is made by the member:
Where a member is discharged and is given retrenchment compensation under the Industrial
Dispute Act, 1947.
5.Fund Registration :
A contracted management company should act as a coordinator for the execution of fund
registration or fund article amendment. There are two forms of provident funds as follows:
1) Single Fund: One provident fund for one employer whose fund size is relatively large.
2) Pooled Fund: One provident fund for multiple employers whose fund size ranges from
small-to medium-sized.
A pooled fund article consists of two parts, i.e., general conditions for all employers
and specific conditions for individual employers.
(A)Investment:
Contributions remitted to the fund will be managed by one or more management
companies under the supervision of the fund committee to ensure that the fund manager will
invest in accordance with the fund management contract. The SEC has also extended the concept
of “employee’s choice” to provide members with an opportunity to choose an investment policy
that best suits their own risk tolerance and return expectations. Nevertheless, whether or not this
concept can be successfully implemented depends on the members’ awareness and
understanding of capital market investment.
NAV Calculation:
The net asset value (NAV) of the fund is calculated upon the mark-to-market (MTM)
practice. Market prices of different assets in the portfolio such as stocks and bonds determine the
fair value of fund assets. The fund committee and the management company agree on the
frequency of trade dates that must take place at least once a week. The NAV – initially assessed
by the management company – is updated upon a specified trade date and verified by an NAV
verifier to ensure accuracy.
Reports:
The management company provides the fund committee with monthly and annual reports
on the investment portfolio and returns. Members receive semi-annual statements of their
contributions and benefits. Members’ queries concerning the fund management can be made
through the fund committee.
0
What is Registered Provident Fund?
Registered Provident Fund is the provident fund that is voluntarily set up by employees and
employer(s) under Pillar III program. The purpose of the fund is to encourage and provide savings
for employees' benefits and that of their respective families in the event of the employees
retirements, disabilities, deaths, resignation from the company or the fund.
• Investment Policy
As required by law, the investment policy of Registered Provident Fund must comply with the
SEC's rules and regulations.
Single fund
A single fund comprises of only one employer. The appropriate size should be at least Baht 100
million to obtain benefit in terms of investment diversification into various financial instruments
and in many financial institutions, which would consequently provide more opportunity to lower
risk and earn a higher rate of return to the fund.
1. Group Funds:
Group Fund comprises of affiliated companies or companies in the same group joining together.
The main objective of Pooled fund is to provide long-term capital appreciation for its members by
means of combining together provident fund under management into a single entity.
The main rational behind such move is to take advantage of the economy of scale that the Pooled
fund can provide in terms of greater risk diversification, higher yields and lower expenses.
Investment policies under Puls Trading Far East Ltd Provident Fund Management
Investment policies can be classified into 5 policies each with distinctive objective and risk level
as follows:
This policy aims to sustain high liquidity, maintain very low risk and focus on the security of
the fund. Therefore, it concentrates only in fixed-income instruments which are time deposits,
Negotiable Certificate of Deposit (NCD), Bills of Exchange, Promissory Notes of large banks
or large financial institutions and Government/State enterprise bonds, with the total
investment duration of not exceeding 1 year. There is no investment in corporate debentures.
The objective of this fund is to preserve the principal. The credit risk, market risk, and
volatility of its return is very low.
2. Secured Fixed-Income Policy
This policy aims to preserve capital in long-term, sustain high liquidity, maintain low risk and
focus on the security of the fund. Therefore, its investment policy concentrates only in fixed-
income instruments which are time deposits, Negotiable Certificate of Deposit (NCD), Bills
of Exchange, Promissory Notes of large banks, large financial institutions and
Government/State enterprise bonds. There is no investment in corporate debentures.
Therefore, this policy will expose to relatively low credit risk; however, the variation of
interest rate is the factor that could affect the return.
This policy seeks a high level of current income by investing purely in fixed income
instruments with zero exposure to the stock market and other equity instruments. The
investment is merely in fixed-income instruments such as bank deposits, Government/State
Enterprise bonds, Bills of Exchange, Promissory Notes and debentures issued by banks or
financial institutions or private companies. Therefore, the yield performance moves in line
with the interest rate trend. The factors that might variant the return of the fund include
stability of issuers and interest rate fluctuation. The objective of this policy is to attain
averagely moderate return in long-term at moderate risk of fluctuation of return.
4. Mixed Policy
This policy is managed with a view to increase the value of capital rather than a flow of
income. Hence, in addition to investment in time deposits at Banks, Government/State Owned
Enterprise bonds, Bills of Exchange, Promissory Notes and Debentures issued by banks,
financial institutions, or private companies, the portfolio of this fund contains an element of
equity investment such as common stocks, unit trusts as well as equity derivatives. And
investment limit in equity instrument shall be under full discretion of TISCO. The return will
be relatively high volatile in short term which is a result of such factors as variation of interest
rate and SET index, including performance of the securities issuer. In the meantime, the
chance to gain averagely high return in long term is relatively high as well.
5. Equity Policy
This policy focuses on investing in equity, in which at least 65% of the net asset value (NAV)
has to be invested in equity. The rest of them could be invested in deposits or fixed-income
instruments. It aims to attain averagely high return in long term and suits those who can
withstand high fluctuation risk of return.
Remark: * For short-term fixed-income policy, the average duration of total investment does
not exceed 1 year.
Since members have diverse characteristics in expected return and acceptable risk level, only one
investment policy may not suit all. Consequently, the Provident Fund law allows one fund to
have multiple investment policies (“Master Fund”) in order to broaden the choices for members
in the same fund to choose policy that match with their own profiles such as age, expected return,
and acceptable risk level.
From long experience of provident fund management for over 40 years, TISCO has rearranged all
5 investment policies stated above into standard options which believed to cover most of
members’ needs and to facilitate fund committee in communicating with members. However, if
the employer would like to provide more choices to members, TISCO can also fulfill those needs
by providing free style option, in which members can combine all 5 investment policies upon their
desire.
Services
Apart from funds management, we also provide full services as follows:
Advisory Service
Our experienced advisory team is always ready to help our clients design a vesting scheme, fund
regulations, etc.
Provided nevertheless that the Board shall have power in their absolute discretion
to withhold income / profit altogether or partly in any year if, in their opinion,
circumstances justify such a course.
19. Withdrawals from the Provident Fund :
(1) Withdrawals by subscribers shall not be allowed by the Trustees except on special grounds in
the following circumstances or circumstances of a similar nature:
(a) to pay expenses incurred in connection with the illness of a subscriber or a member of
his family;
(b) to pay for the passage over the sea or by air of a subscriber or any member of his family;
(c) to pay expenses in connection with marriages, funerals or ceremonies, which, by the
religion of the subscriber, it is incumbent upon him to perform and in connection with
which is obligatory that expenditure should be incurred;
(d) to meet the expenditure on building or purchasing a house or a site for a house provided
that such house or site is assigned to the Trustees of the Fund;
(e) For the purpose of sub-rule (1) “family” means any of the following persons who reside
with, and are wholly dependent on the subscriber, namely, the subscriber’s wife,
legitimate children, step-children, parents, sisters and minor brothers.
(2) No such withdrawal shall exceed:
(a) the salary or wages of the subscribers for three months or in the case of withdrawals for
the purpose specified in clause (d) of sub-rule (1), the salary or wages of the
subscribers for six months, or the total of the accumulation of exempted contributions
and exempted profit contained in the balance to the credit of the subscriber, whichever
is the less;
(b) In the case of withdrawals for the purpose specified in clause (d) of sub-rule (1), eighty
percent of the total of accumulation of the exempted subscriptions, contributions and
exempted profit standing to the credit of the subscriber.
To
The Chairman
The Board of Trustees
The Ibn Sina Trust Employee Provident Fund,
Dhaka.
Sir,
I,.............................................................. son of ................................................... an employee of THE IBN
SINA TRUST hereby apply for membership of the above Fund and I agree to be bound in all respects by
the Rules of the said Fund.
I also hereby authorize THE IBN SINA TRUST to deduct from my salary/wages such subscriptions as I
am from time to time liable to pay under and in accordance with the Rules now in force, a copy of which I
have read/has been read out to me to my full understanding and to pay the amount so deducted to the
Board of Trustees of the said Fund.
Yours faithfully,
................................... ............................................................
I hereby appoint the persons(s) named in column 5 to receive payment on behalf of nominee(s) who is/are
minor(s) or is/are suffering from a legal disability.
1 2 3 4 5 6
Name & Relationship Age of Amount Name & Address of the Sex and
address of the with the nominee(s) of share of persons to whom payment is to age of
nominee(s) subscriber accumulat be made on behalf of the persons
ion to be minor or the person suffering mentioned
paid to from other legal disability in col.5
each
......................................
Note : This column should be filled in so as to cover the whole amount that may stand to the
credit of the member in the Fund at any time.
.....................................
Total investment in listed securities shall not exceed [thirty] percent of the
provident fund. Clause 3 (i)
1. Investment in shares or other listed securities of a particular company shall not
exceed five percent of its paid up capital. Clause 3 (iii)
2. In case of investment in the shares of listed companies, it shall be made only where
such companies-
1. Have a minimum operational record of five years, and
2. Have paid not less than fifteen per cent dividend to their shareholders during the
three preceding consecutive years. Clause 3 (iv)
1. Condition 1>> Total investment in listed securities shall not exceed [thirty] percent of the
[net asset value of the] provident fund. Clause 3 (i)
2. Condition 2>> Investment in shares or other listed securities of a particular company
shall not exceed five percent of its paid up capital. Clause 3 (iii)
3. Condition 3>> In case of investment in the shares of listed companies, it shall be made
only where such companies-
1. Have a minimum operational record of five years, and
2. Have paid not less than fifteen per cent dividend to their shareholders during the
three preceding consecutive years. Clause 3 (iv)
25%
30%
Central Govt
State Govt.
PSU
Additional Avenues for Investments:
15% Flexible
Types of investments made by p/f:
30%
1. Defense Savings Certificates
2. Term Finance Certificates
3. Open-ended Mutual Fund
4. Listed Securities, subject to rules discussed earlier
Specifics:
• Interest Payment
• Investment Pattern
• Valuation of Securities & Amortisation of Premium
• Settlements during the year
• Advances / Loans
• Meetings
• Submission of Returns
• Health of Securities
Procedures of Investments:
1. All investments have been classified
2. All transactions have been accounted for properly
3. Remeasurement reflected properly
4. All returns due on investment have been recorded and reflected properly
5.
Investments: Defense Saving Certificates:
1. Verify investments physically
[Number, date of issue, face value]
1. Verify DSC Schedule
[Quantity for each Denomination]
1. Compute its fair value
1. Problem Area: Different rates, Broken period
2. Reduce closing fair value from its opening to verify/determine return for the
period
2. Proper disclosure [classification, return
Problem areas:
• When return is not received
• Tracing that return was deposited in employer current account by error
• When the company issuing tfc goes bust and is unable to make repayments
1. A member shall be entitled to take loan 60% of Employer's and Employee's Contribution
from the amount standing to his credit but he/ she will not be entitled to get any interest for that
amount during the loan period. The trustees may, in their discretion, allow the same under the
terms and conditions to be put by them on special grounds in the following circumstances or
circumstances of a similar nature:
a) To pay expenses incurred in connection with the subscriber or a member of his family,
b) To pay expenses in connection with marriages, funerals or ceremonies which, by the religion
of the subscriber, is incumbent upon him to perform and in connection with which it is
obligatory that expenditure should be incurred,
c) To meet the expenditure or purchasing a house or a site for a (louse or a ready made
repairing the house/flat such house/flat/site is assigned to the trustees of the fund,
2. In time of loan sanction/approval the trustees will consider priority in the following two
grounds:
a) Employees with longer service period will get priority on loan sanction (applicable for the
first loan)
b) Circumstances of applicant. Employee don't have long service period but having strong
reason against the loan application will also have special consideration
3. A second loan approval shall not be permitted until the sum first withdrawn of loan has
been fully repaid. Also there will be a 3 months gap between the first loan recovery months to
second loan starting.
4. Applications pending for Taking First loan will get priority than the applications pending
for second loan. For a second loan case the service length of employee will not be considered.
5. There will be a priority list of the pending loan applications according to the loan policy.
6. The amount withdrawn as loan shall be repaid in not more than thirty six equal monthly
installments subject to the condition that amount of each installment shall not be less than 20%
of the basic salary of the employee availing of the loan.
7. Installments will be paid by post-dated cheques deposited by the employee to the fund. A
maximum of 12 cheques will be taken from an employee, when finished a new set of 12 cheques
should be submitted again. Same will continue till the loan is completely paid back.
8. Employee with less than two years service period will not be entitled to the loan. Special
cases might get consideration subject to approval of the board of trustees.
9. The rate of interest on the loan amount is nil but during the loan period, member will not get
any interest rate on his loan amount of PF fund.
10. Board of trustees will have the right to make an exception of the loan policy in special
cases.
N.B. # Term "Withdrawal" used in PF Deed is similar as the term "Loan" used in this loan
policy. # This loan policy will be attached together with each loan application.