Strategic Procurement Issues Inherent In A Hospital Project Construction Essay

Strategic Procurement Issues Inherent In A Hospital Project Construction Essay Health care of the society is the top concern of the government. The government is committed to improving the quality of care of all the people therefore the poor quality of the hospital building became a major concerned. The aim is to restore and improve quality delivery of health services to local community required betterment of the facilities. There are two options available in front of trust and as per the government report; the trust has forty eight months to improve the hospital infrastructure. The chief executive and the head of the estate at trust with the consultation of central government have been provided two options: To renovate the existing building or To build a new hospital on a derelict site, this was formerly used by heavy industry owned by city council. This project is an assessment of the procurement options design and build novation procurement method under the private finance initiative and the issues that awake using the strategy during the project. After examine the carefully and assessing the entire clients (the Trust) requirement, for the proposed hospital, the report recommends building of a new hospital on the derelict site and the use of design and build procurement system. This is because the design and build procurement option offers cost effective, time bound, good quality and sustainable project delivery. The proposed design and build procurement system has the characteristics of achieving the issue of clients requirement appropriately and under the P.F.I. (private finance initiative) will give the best value for money with a focus on the public sector procurement as mentioned in the project brief. It also leads to time savings and achieve value for money and the required quality as per ground situation. The report also assessed the risks using the supply chain management under the scheme of private finance initiative involve in the project and their solution as the success of the project is concerned. Finally an effective supply chain management with T.P.I (Third party inspection) procedure has also been recommended for efficiency in the project delivery in order to meet the quality standard required by the hospital trust. INTRODUCTION This report seeks to address all the strategic construction procurement issues inherent in a hospital project and an appropriate advice given to the chief executive of the trust. The process is to map the effective stakeholders and their influence on the project. There is a brief of the project from initiation through design with drawing of the new build building as required a lot of detailed changes to convert the derelict industry into hospital building to make a proper use of the building as well as to make an appropriate use of the surrounding of the building. The operation and maintenance after construction in long run is major concern for providing a better and superior quality of services therefore design and build novation under P.F.I. is best option available. STATEMENT OF WORK 2.1 Scope of project Client Objectives: The time seems to be major constant as the Trust has given only 48 months of time to improve the structure and facilities and for the Construction of the new hospital building. As the estimate are final to 90 m Pounds the cost is also the major constant for the client obtained the certainty in cost to obtain best value for money with in a focus on the public sector procurement. The quality is also the major concern as the new build site is not developed properly and the trust has to Develop the road works, parking, hard and soft landscaping, drainage and other external works for the use of hospital running, Provision of office accommodation, a restaurant / cafà © area and obviously some form of warehouse and delivery areas. To preserve and develop and make appropriate use of the existing flora and fauna at the site of new build to make it more eco-friendly environment for the hospital patient and working of staff. It has been assumed that the present derelict bridge is just opposite the site of the building and near the flora and fauna to make appropriate use of the derelict pedestrian bridge, it can be develop for the site scene / landscape. s The study prevails that there is an existing mineshaft, which has to be close effectively so that it should not effect the environment of hospital surrounding in the future. There is need to adopt the construction management program to maintain supply chain management for effectively completion of project on time and maintain quality of material used and be in cost effective. Scope of the project Supply chain management procedures to be adopted so that all the material should be procure well in advance for the timely completion of the project and as all the material has to be procure by contractor by T.P.I. (third party inspection) by Independent body has been suggested to maintain the quality if the material used. The client has maintained PEP plan for control and performance measurement Comparison between the New builds site and Old Refurbishment. The following point has been taken to make comparison between New Building by using derelict industry and the Refurbishment of old building as per the client (TRUST Hospital) requirement. The survey team after analysing following points comes to conclusion that the use of new building for the construction of the hospital as an appropriate decision: The Survey team has assumed that the derelict Industry was closed due to competition in market and is not old more than 10 years as the Old hospital is approximately 70 to 80 years old. So structure needs more maintenance after construction It has been analysed that the old building has to be Control demolished which is still not possible with the current running of the hospital in the existing building. As its suggested that ramp should be used in hospital instead of stairs for the movement of patient from one floor to another and even in case of emergency like fire etc, when lifts cant be operate. So the construction of ramp in new building is easy else its very difficult to provide ramp in the old building. The derelict industry site has a wide range of flora and available in its surrounding which is best for the environmental policy of the NHS. From the studies of project brief it has stated that the hospital used for the acute care and accident and emergency so there will be a helipad will be preferred to Trust at the tar macadam area for landing of helicopter in case of emergency services through the helicopter, as well the new build site is well connected to road for quicker services through road as well. The new build site is also have provision for the future extension as the development are taking place in the surrounding area over decades of time. The specialist installation such as heating, ventilation and air condition is easy in new building while during the refurbishment it is quite difficult to replace the new with old one and difficult in after maintenance. Project Stakeholders The stake holders are important part in the overall process of project success so all the beneficial stakeholders are identified related to subject and their influence are clarify properly. As Walker and Marr states that a stakeholder is a term used for individuals or groups who have a connection to or an association with an organisation. They have a stake, claim, or vested interest in the day to day operation of the Project. The only way of business to know their value will be to determine exactly who their stakeholders areà ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦..and to ask them. The urgency to adapt to stakeholder power and leverage it as a business strategy is not just a business fad; it is a winning approach and the more satisfying way to do business - WIN WIN Solution. A commitment to sustainability is broader, deeper and of substantially greater strategic value to a company than merely reporting on environmental outcomes. One goal of sustainability initiative is to realize long term business benefits by building non-financial performance measures- issues key stakeholders care about into business processes. When we have gained commitment from our stakeholders, it enhances our business performance, growth and higher stock value over time. All stakeholders may be important, but nobody said they were all equal. (Walker and Marr, 2001) Extended Stakeholderism The customers, employees, and owner, or investor would consider the immediate, or core, stakeholders because these are the one we live with every day. But as in our families we have close relation with and obligation to the rest of the family as well the extended stakeholder of the business. Business depend upon on forging powerful relationship with what we would call extended stakeholders, those individuals outsides an organization beyond customers who are important to the business, such as suppliers, alliance partners, community leaders, the media , and the government. Immediate Stakeholders Extended Stakeholders Individual investors Institutional investors Customers Employees Unions Suppliers Alliances Partners Industry associations Local communities Consumer/ user association Special interest group Media Government regulators Competitors Outside board directors The general public (Beyond local communities) Financial Analysis Lenders Education leaders The Status of Stakeholder Loyalty There is value in evaluating and classifying stakeholders according to different levels of commitment to the project. Survey research can/has determine peoples position regarding the firm and their loyalty to it. Their answers can/has used to position the stakeholders on a spectrum of: . How positive or negative they feel towards the firm and . How likely or unlikely they are to remain loyal or continue supporting the firm in the future. We would normally people in a simple matrix. There are four possible combination of high and low attitude and behavior in this matrix, so we can segment the stakeholders as being truly loyal, accessible, trapped, or high risk Behaviour Positive Negative Truly Loyal Accessible Trapped High Risk High ATTITUDE Low The successful stakeholder relationship passes through four stages, called the Four Gates of Engagement: Awareness, Knowledge, Admiration, Action. (Walker and Marr, 2001) Recognition of project through from initiation through design, construction, operation, and maintenance and their consequent impact on the project procurement issue As the new build site has proposed the following points are suggested for the construction As there was a mine shaft present in the surrounding of the site so a case study has been done to investigate the Bearing capacity of soil for the construction of the hospital building. The design is be eco-friendly basis on the following points: Their should be proper ventilation and natural Light and air arrangement for the patient health and to keep staff working spirit up for efficient working. The CLC (cellular light weight concrete) blocks are hollow and hence will help in maintaining the internal temp of the room and also help in reducing sound level as hollow blocks are good insulator of heat and sound. As CLC blocks are also help to eliminate the crack between the brick and concrete and hence it will lead to less maintenance in future better value for money. The large tar macadam area, surrounding the site should be developed as the helipad so that the emergency cases can be carry through the helicopter easily and further land will be used for the recreational activities of the staff. The derelict bridge can be developing for pedestrian to cross the road as the adjacent arterial road will become more congested during peak periods. Risks Miler and lessard (2001) states that the successful projects are not selected but shaped with risk resolution in mind. Risk is the possibility that event, their resulting impact and dynamic interactions may turn out differently that anticipated and construction is nothing special compared with other industries because we simply carry out projects to a specified timescale using teams of specialist for design and construction by marshalling appropriate resources to overcome the physical and technical power involved. So to manage risk is most important for the successful completion of project in Time to keep certainty in cost and achieve the appropriate quality. RISK MANAGEMENT PROCESS RISK ASSESSMENT IDENTIFYING HAZARDS Assess probability and consequences Priorities Risk control measure Remove Contractually Insurance Retain Self finance Reduce Eliminate/substitute Reduce chance Reduce effect Residual risk RISK MANAGEMENT Risk management Process (Gunn 2008) To monitor the risk, the risk register should be maintained at site RISK REGISTER Item Description Risk Without control Controls Residual risk Action H M L Cost Impact Time impact` Others (CIOB (2002) (Chartered Institute of building code of practice for project management, 3rd edition. Blackwell edition) PROCUREMENT RISK Procurement Method Balance of Risk Client Contractor Traditional Lump sum Client Led design and built Contractor -led design and built Management contractor Construction management Contractor Finance (PFI) Finance Design Construction Finance Design Construction Finance Design Construction Finance Design Construction Finance Design Construction Finance Design Construction Hughes and Murdoch (2000) states that the apportionment of risk in design and build contracts is unique among procurement methods. This uniqueness is brought about by the single point responsibility and by the nature of the relationship between employers requirement and contractors proposal. The following points are considered for risk management in Design and built: Money Completion of the project Default by employer or contractor Time Quality Measurement of performance and benchmarked Akintoye, Beck and Hardcastle (2003) indicated the PEP plan is a live, dynamic management document that records the project strategy, organisation, control procedure and responsibilities. It is updated regularly during the projects life cycle and used by all parties both as a means of communication and as a control and performance measurement tool. Value management and other activities lead to the completion of various reports that are contained in the PEP. Examples of items that PEP should contain are: The options appraisal incorporating the clients value system. The user needs the strategic brief. The performance statement of all aspects of the project, the project brief The project execution strategy The form of contract, partnering agreement, etc The contract specifications / drawings etc Project reporting procedure and particularly the procedure for information distribution, and communication, between the clients project team consultant and the contractor The executive summaries and action plan from value management workshop reports The risk management strategy and latest risk analysis The required completion date including for any phase Holroyd (2003) considered that this is not about lowest price, but ultimately about best overall value for money. Partnering implies selection on the basis of attitude to team working, ability to innovate and to other efficient solutions. We think that it offers a much more satisfying role for most people engaged in construction and the introduction of performance measurement and competition against clear targets for improvement, in terms of quality, timeliness and cost, as the principal means of sustaining and bringing discipline to the relationship between clients, project team and their suppliers. The evidence we have seen is that these relationship, when conducted properly, are much more demanding and rewarding than those based on competitive tendering. There are important issue here, particularly for the public sector. He also consider Latham Report that effective partnering between client and contractor with teamwork and a win-win approach helped to bring the Sizewell nuclear p ower station to completion on time and within budget. But there is still scope of improvement in productivity and cost reduction, especially if design and construction team could be kept together. Akintoye, Beck and Hardcastle (2003) consider that PFI is the principle model of PPPs in the UK NHS. Procurement Route: To choose an appropriate procurement strategy is most important to achieve value for money, cost certainty and in time and of best quality. Holroyd (2003) states that clients who know what they want, who do not change their minds, and who states clearly what they want, tend to procure projects that do represent value for money. As Masterman states that the formulation of the most appropriate strategy is one of the most important tasks that the client has to undertake the projects life. The project strategy consist of a number of sub strategic areas, which needs to be examines in detail so that appropriate decisions can be taken as to which sub strategy should be adopted. The following points should include: Milestone schedule time; Quality; Financial objectives, funding and cost planning The role of the client and the third parties; The client project objectives; Environmental issues; Safety; Legal and insurance issues; Technical and design philosophy Project/ work breakdown structure; Risk management; Project constraints; Public relation/ communication The appropriate method of procurement mostly depends upon the following: Whether the organisation is publicly or private owned or funded The level of knowledge and experience within the organisation in dealing with the construction industry and implementing building project. Whether the project is needed by the client to accommodated his/her own industrial or commercial activities or whether the project is needed to lease, or sell, to other. The activities carried out by the organisation and the resulting project typology. Categorisation of building procurement System: Separated Integrated Management Discretionary Oriented The Conventional System Design Variation British partnering of Property Build Design Federation Build System Package Develop Construction Deals Management Turnkey Construct Management Design Contracting Manage Design and Build In DB there is a single point responsibility for both the design and construction of the project. The clients benefits from the contractors expertise early in the project. Research (Gidado and arshi 2004) suggest that there may be as a many as six versions of design and build. For instance, Rawlinson (2008) reports on the recent successful use of develop and construction with a two stage tender and tendering arrangement, a novated design, open book accounting and with the risk and value benefits of a Collaborative approach all on the same project. Types of Design Build Arrangement Extreme Variety A Employer led Design Develop and construct Design and Build (Single stage tender) Z Contractor led design Design and build (two -stage tender) Negotiated design and build Design and manage Turnkey The client may wish to provide the contractor with minimal information in the form of an outline brief. This will leave the design and built contractor fully responsible for the conceptual and detail design in order to meet the employer requirements. An alternative twist on develop and construct, is to novate the architect or design team to the contractor once the contract has been awarded. This variant is known as novation design and build because the clients architect, and may be other member of the design team, are legally passed over to the contractor in order to produce the detailed aspects of the design. The novation arrangement should be agreed with the architect when he is first appointed. In this way, the client will maintain an interest in the design but the contractor will pay the continuing design fees through to contract completion and become responsible for the entire design. The Tender documents will contain details of the clients consultation and the proposed novation procedure, together with a requirement that the contractor who is eventually awarded the contract will have to accept responsibility for the total design of the project, including the initial work carried out under the clients aegis. In other words it is as if the consultants by the contractor, including the level of fees, have been predetermined by the client, although normally this is a matter for negotiation between the contractor and the design team. DESIGN AND BUILD CLIENT LED DESIGN RELATIONSHIP The Team being novated to DB Contractor . (WILEY-BLACKWELL, 3rd edition, construction planning, programming and control 2009: 32) Procurement strategy The choice of building procurement systems available to clients is now so wide that the need to carry out the selection of the most appropriate method depends upon the critically study of the clients (TRUST) requirement in a disciplined and objective manner. (Masterman 2006) The procurement of a construction is chosen upon the clients project requirement and a balance between time, quality and cost. After considering entire client requirements critically and the forecast budget. JCT Design and Build novated system contract is most appropriate for the construction of hospital for the trust as According to International Commission on building (CIB W92) the procurement process is a strategy to satisfy clients development and/ or operational needs with respect to the provision of constructed facilities fro a discrete life cycle. (Masterman 2006:26) Under the JCT 05 design and build conditions, it is perhaps worth noting the practice that the employer identified a design team and the same team will become the contractors team once the contractors is appointed under a design and build form of contract and the payment terms may be either stage payments or periodic payment. Periodic payments are normally monthly, whereas stage payments are based on agreed cumulative values linked to stages or milestone as stated in the contract particulars. The payments period from the payment request date is specified in the contract as 14 days. (Davison 2006) We can write it as the option chosen for the design and build is on the cost effective and time management as steffen and Jeffery in Stakeholder Power states that as proven by the corporate raiders, one of the fastest means of raising stock value is to boost profit by cutting costs. This ushered in the era of crash dieting by large companies also known as reengineering or downsizing. (Walker and Marr 2001) The Procurement strategy is chosen on the basis of following criteria noted in the NEDO report. NEDO has suggested eight procurement factors to be considered at the procurement stage. Of these, the three main considerations are: Cost certainty of the market price at the bid submission and final account stages. Time the overall timing of the project from inception to completion. Quality the clients required standard of design and workmanship as expressed in the specification. Five other considerations were also highlighted as being influential on the choice of the procurement route. These are: Complexity Complexity of the building design, layout and services provision. Controllable variation How sure is the client of his requirements? The cost of variation of the contract may prove difficult to agree and assess. Degree of completion Does the client wish to create competition at the design and construction stage of the project? Client Responsibility Does the client wish to be directly involved in the decision making during the project. Risk in the project Commercial risk, occupation risk, design and construction risk. Taking the following factors into account, decisions has made in relation to: Choice of appropriate Procurement strategy for managing the contract (JCT- Design and Build) The Clients requirement stated in the Task Considering the clients brief and assessing the projects feasibility Considering the Project Finance Decided how to procure and manage the design and construction Considering the realistic time period for the overall project. (Williams and Cooke 2009) As the time period is of high priority and the early starting of the project is the must as the Clients required the project to be: Completed as quickly as possible (because time is money a month delay in project not even counted the construction charges but also a lot of overhead and industrial charges also) Completed by specific date (that must be achieved to ensure the govt about the proper running of the hospital) Completed on time once it commence (with no time slippage by starting the project at once under design and build procurement method) 50 40 35% 30% 30 25 % 20 6% 10 2% 2% 0 JCT98 JCT JCT JCT JCT Other Standard Intermediate Minor with Management Form Form Works Contractors + Agreement Design Major Projects SUPPLY CHAIN MANAGEMENT HOLROYDS (2003) suggest that the supply chain role is critical to achieving sustained improvement and forward thinking. In the context of extensive sub-contracting this is perhaps more so. Partnering, correctly implemented, will provide benefits comparable to those obtained by the integrated project process. (Trevor M. Holroyd, Buildability, Thomas Telford Publishing, Thomas Telford Ltd, 1 Heron Quay, London 2003) Some major clients have assembled their own standing lists of preferred suppliers according to requirement of their projects so that their project can be managed on a more long term and integrated basis while retaining an appropriate degree of competition and control. These suppliers or supply chain partners, include architects, engineers, main contractors, specialist contractors and suppliers of a variety of goods and services. The supply chain can be defined as the entire chain of processes that exist between the point at which a need for goods or services arises to the point at which the end user receives them and payment is made to the supplier. Problem is that one part of the chain impact directly on all subsequent stages, and proactive management of the supply chain is therefore fundamental to providing an efficient and effective procurement services to the organisation. (Cooke and Williams 2009) The contractor should be given the whole responsibility for the procurement of all material under the contract and a T.P.I (Third party Inspection by Individual body Trust) must be considered to achieve the best quality of material procurement. The essential point here is that the supply chain links, all the activities between suppliers and customers in a timely manner. The material will be procured at least 8 weeks before the schedule of use to maintain progress in time. Adversarial Relationship Collaborative Relationship Fragmented Lack of Process Customer Processes Customer Focus integration Satisfaction The role of SCM (supply chain Management) addressing the key problems in construction. (Fewings 2005) Cooke and Williams 2009 describes that the fast track system as a management approach aimed at the early completion of the construction phase using a combination of innovative procurement methods, industrialisation of the construction process and the use of work package contractors in order to benefits from their expertise, especially as regards their design input. The benefits of system include: Overlapping of work package both during design and construction Less duplication of effort and waste Less uncertainty and inefficiency at work package interface The use of innovative construction methods Incorporation of cutting edge technologies More emphasis on the standardisation, pre-assembly and modularisation of the construction process As a consequence, the fast-track system has the propensity to deliver completed projects in remarkable timescales. Identification and justification of relevant forms The purpose if this work is to examine the standard forms of contract most commonly used in the construction industry today. Standard forms look in at least three directions at once. One of these is towards the wider law, be it the law of contract, and be it statute law or common law, with its constant accretion arising out of decided cases. In addition all of this forms considered are entire co

Dramatic and relevant to a modern audience Essay

Lots of the characters under go personal development: for example Reverend Hale, who at first is all to eager to ‘shout witch’ but in the end is very disbelieving. My personal belief is that the events are a testament of how people shouldn’t live in a social structure that is overly tight. A crucible is a metal container in which metals are melted to extract their pure element from the impurities. This can easily be linked to the play: first witches supposedly boil potions in cauldrons and a synonym for cauldron is crucible. Secondly, it has a metaphorical meaning: the society of Salem is being heated and stirred in an attempt to remove the impurities and leave only the pure members of the society. An artificial Noah’s Ark, as it were, however this plan backfires some. Act 1 mainly revolves around Abigail and the girls being caught dancing in the woods. The drinking of blood is supposedly a charm to kill Elizabeth Proctor. Abigail wants to be with Proctor after Elizabeth kicked her out for having an affair with Proctor: â€Å"I know that you clutched my back out side your house and sweated like a stallion when ever I come near, or did I dream that? It is she put me out, you cannot pretend it were you. I saw your face when she put me out. You loved me then and you do now! † – Abigail Proctor is fighting an internal conflict; we know that on one side he wants to be with Abigail because: â€Å"[Looking at Abigail now, the faintest suggestion of a knowing smile on his face]† – Stage direction But we also know that he feels very guilty about Elizabeth: â€Å"I mean to please you Elizabeth† – Proctor However, he does tell Abigail that he wants nothing more to do with her: â€Å"Abby, I may have thought of you softly from time to time. But I will cut off my hand before I reach for you again. Wipe it out of mind. We never touched Abby. † – Proctor All the time this encounter has been in occurrence, sexual tension is building in the audience. They are also learning about Proctors and anti-hero characteristics. We learn that his name is not entirely white. He is not perfect, and the same applies to most of the characters, they all have good and bad points. I think there are two important points here. One is that Abigail is trying to seduce Proctor with seductive language, and two: Betty is only pretending to be inert. She would have heard all of this, and that is most likely the reason behind her getting up and trying to jump out of the window. Also in Act 1 Abigail threatens marry Warren, Betty and the other girls against telling anyone anything: â€Å"Let any of you breathe a word, or the edge of a word, about the other things and I will come to you in the black of some terrible night and bring a pointy reckoning that will shudder you†¦ and you know I can do it†¦ I can make you wish you had never seen the sun go down† – Abigail It is here that we learn just how aggressive and manipulative that Abigail really is. She was trying to manipulate Proctor and now she is being extremely aggressive and even explicit towards the girls. We can tell that this is a frantic and tense moment on stage by the over average use of exclamation marks and use of short sentences. We can also see physical violence from Abigail as she violently shakes Betty around. Visually this would be interesting for the audience, creating both anger and tension. There is contrast in the loud violence of this moment to the quiet seduction from Abigail before. Act 2 contrasts from the end of Act 1, in the fact that it is a calm and peaceful scene, over the loud fear-driven hysteria of the end of Act 1. Proctor comes home from ‘seeding’ his farm late at night, and he sits down to eat, with Elizabeth. From the general feel of the scene we can gather that the common room of Proctors house is cold, empty and unwelcoming. This parallels with the relationship between John and Elizabeth. There’s is a great amount of tension between the pair, and they idly make chit-chat at the table, as they feel they need to: â€Å"Proctor: Pray now for a good summer. Elizabeth: Aye† It should be noted that it is Proctor who is trying to make conversation; Elizabeth is spoiling his attempts with one-word answers. Proctor is feeling frustrated because Elizabeth is not acknowledging that Proctor is trying his hardest to repair the relationship. He is forever claiming his desire to please Elizabeth: â€Å"I mean to please you Elizabeth. † – Proctor I believe that the audience would to be getting frustrated with Elizabeth not forgiving him. The tension in the audience would also rise, due to the complete lack of any sexual tension. Arthur Millers ‘The Crucible’ raised issues that were as relevant in the 1950’s as they were today. The idea of conformity will always exist. People who define this ideologies and beliefs by which groups of people live will always exist. As will accusations made towards one group from another group, to solve their problem, or help their cause. Arthur Millers play took on some very strong issues, that are still relevant to date, it is one that cannot be ignored because of Millers ability to touch issues and themes that have plagued mankind all through history, and will continue to do so in the future.

Diplmacy

Aide Memoire Professor: Dr. Awalou Ouedraogo Diplomacy Brazil has become an emerging superpower in terms of its economic power as well as its participation in the international community. The consolidation of its strong economy has allowed Brazil to take part in conflict resolution around the world. Brazil intends to spread its own emblem of order and progress throughout the world, and is committed to establish peace and encourage human development. Brazil is the largest country in South America, covering approximately half of the total surface area of the subcontinent which places them in a very strategic and prominent place in the region.It shares borders with every other South American country except Chile and Ecuador. This has allowed Brazil to create important alliances and enjoy good relations with most of its neighbours. Brazil is also home of the Amazon forest which is considered to be the ‘lungs’ of the planet, as well as an important place where diversity of fa una and flora coexist (Note on the Political and Economic Situation of Brazil, 4). Brazil’s population also plays an important aspect in the international arena; it ranks fifth in the world in terms of its population with over 186 million people.Slavery was abolished in 1888, which over time a further blurred racial lines; Brazil is a mixture of races and ethnicities, resulting in rich diversity. Approximately 80% of its population is Roman Catholic. Despite the mixing of ethnicities; there is a class system in Brazil. Thus, there is a great disparity in wage differentials–and therefore lifestyle and social aspirations among the different classes (Brazilian Culture, Family, and Its Ethnic-Cultural Variety, 193). On the other hand, Brazil’s current economic situation is at its best.Today most of the world is consumed in debt and dealing with high levels of unemployment; Brazil instead is trying to see how to manage its economic boom. It was the last country to en ter the great recession and the first to leave it. It is positioned to overtake France and Britain as the fifth global economy. According to the International Monetary Fund website, Brazil is the largest economy in Latin America the second largest on the continent, behind the United States, the sixth largest economy in the world by nominal GDP and the seventh largest in terms of purchasing power parity.With most of the world’s economies stagnant Brazil’s economy has grown by 7%, three times faster than America. It has the most sophisticated biofuels in the world, 80% of its electricity comes from hydro power. Brazil is also the biggest mining iron producer in the world and the world’s leading exporter of coffee, orange juice, tobacco, soy and beef. Most of these commodities are exported to China which has replaced the US as their leading trade partner (Reportagem da tv Americana). It is not the only commodities that Brazil makes; it also has developed its econom ic sectors and increases its exports in aircrafts, electronics and automobiles.Although, Brazil enjoys a modern economy that is very strong and competitive, it still has serious socio-economical problems in terms of poverty within its population. There is a huge gap between the rich and the poor. Brazil is a social state organized as a unitary republic, decentralized, with autonomous territorial entities, democratic, participatory and pluralistic society based on respect for human dignity, work and solidarity of the people who make up and the prevalence of general interest.The federal capital is Brasilia, while the most important cities are Sao Paulo and Rio de Janeiro. Brazil is made up of 26 states; the president is the head of the executive and is selected by direct universal suffrage for a term of fours years. It has the classical division of power which is the executive, legislative, and judicial that is officially established by the constitution (Note on the Political and Econ omic Situation of Brazil, 6).The Brazilian government is committed to protecting human rights; their principle human rights concern includes police violence and impunity. Also, the discrimination against indigenous and landless people, human trafficking, torture and working conditions with relative impunity for those involved (Foreign and Common Wealth website). The current president Dilma has made improvements in domestic human rights a priority of her leadership. Brazil’s foreign policy is to be as a key player on the world stage; its efforts for the integration of Latin America have been tremendous.Since the creation of Mercosur, Brazil has intended to be the driving force in South America consolidating free trade agreements in the region and coordinating negotiations for the emancipation of Latin America. Under both Presidents Lula and Dilma, Brazil has been particularly active in its engagement with other emerging powers, particularly India, South Africa, China and Russi a. The combination of Brazil, India and South Africa have established a more formal grouping, called the G3 or IBSA, and co-ordinate activity across various areas.The three countries have come together in order to exert greater pressure at the WTO negotiations, a move which has upset the United States. Through its role as a leader within Latin America, Brazil has encouraged closer co-operation between the region and the Middle East (Foreign and Common Wealth website). Brazil supports reform of the United Nations, both the Security Council and more widely. Moreover, Brazil has put itself forward as a candidate for a permanent seat in an enlarged Security Council and has the stated support of a significant number of countries.Thus, in the case of Palestine in which Brazil has made important measures that would help the country to gain its recognition as state in the United Nations. Brazil has consistently spoken in favour of a ceasefire, and against mutual hostility between Israelis a nd Palestinians. Brazil has specifically related to advancing the path of national independence for the Palestinians and security for the Israelis. We can actually even go back to the Montevideo Rights and Duties of the State, and find how ‘the political existence of the state is independent of recognition by the other states.Even before recognition the state has the right to defend its integrity and independence, to provide for its conservation and prosperity, and consequently to organize itself as it sees fit, to legislate upon its interests, administer its services, and to define the jurisdiction and competence of its courts’ (Montevideo Convention on Rights and Duties). Article 3 clearly states the position the conference on American states would adopt. Paradoxically, some countries have not obeyed this approach taken by the majority of nations that bind this agreement.The Brazilian interest is to bring peace to this conflict and achieve concrete progress in buildin g the Palestinian State. On the website of the Ministry of International Affairs, Brazil with the support of some other countries states how the Brazilian Palestinian National Interest Committee continues to promote Brazil as key for Palestinian-Israeli peace, and promote Brazil's interests in the Middle East by urging its members to maintain contact with Members of Congress, to adopt resolutions to help in restoring the peace rocess and thus resolve the humanitarian situation in order to avoid future conflicts in the region, and to support important initiatives that would lead to the creation of a Palestinian State (Ministerio Das Relacoes Exteriores website). In it, Brazil also states the Mercosur-Palestine Free Trade Agreement signed on 20 December 2011 in Montevideo. The Mercosur-Palestine Free Trade Agreement contains the following chapters: trade in goods; rules of origin; bilateral safeguards; technical regulations, standards and conformity assessment procedures;  as well a s its agreement to open markets for goods.The launch trade negotiations with the Palestinians comes less than two weeks after Argentina, Brazil and Uruguay announced the recognition of a Palestinian state based on 1967 borders (Nanduti Noticias website). Finally, the resolutions made by the Brazilian Palestinian National Interest Committee made a list of the issues that must be resolved, 1. Israeli Government must cease military raids in the West Bank and Gaza. 2. Dismantling of all settlements in the West Bank. 3. Democratically elected officials are recognized. 4. Dismantling of the wall. 5. Providing Palestinians free unrestricted travel in their municipality. . Strengthening of Palestinian security forces and intelligence. 7. UNSC backing for Brazil to start leading efforts, working together with India, South Africa and the international community, to support Palestinian Government institutions in providing security for its nationals along with securing the borders with the Stat e of Israel. 8. Allowing Palestinians to control their airspace, territorial waters, and land passages between the West Bank and Gaza. 9. Resolving the Palestinian refugee issue as part of any final status agreement (Ministerio Das Relacoes Exteriores website). References 1- Neves , Pedro. On the Political and Economic Situation of Brazil. † Directorate-General for External Policies of the Directorate B -Policy Department-. (2007): 397-081. <https://docs. google. com/viewer? a=v&q=cache:jcuqvwT_ZRsJ:www. europarl. europa. eu/meetdocs/2004_2009/documents/nt/692/692067/692067en. pdf economic, political and social situation of brazil&hl=en&gl=ca&pid=bl&srcid=ADGEESj5pBjjn Vkc0u7wIo1paZ9DdS6Kh4Ws0aaZV_ok__9hpcHWbdOzuRA2zWAHmTYDI32EQLomVU8OhHoSVJ6CEfZHBgXUAJyePf59cAFEEfvreX3PPSzp3s1tRH0cKaF7xDCYiexY&sig=AHIEtbRmo3aDE1xJY_1QBjZQLAIZwR9qUQ>. 2- Torres, Claudio V. , and Maria Auxiliadora Dessen. Brazilian culture, Family and its Ethnic- Cultural Variety. † Arizona Journal of Hispanic Cultural Studies. 12. (2008): 189-202. Web. 19 Jan. 2012. ;lt;http://www. jstor. org/stable/20641909? seq=5;amp;Search=yes;amp;searchText=political,;amp;searchText=social;amp;searchText=economical;amp;searchText=situation;amp;searchText=brasil;amp;list=hide;amp;searchUri=/action/doBasicResults? la=;amp;wc=on;amp;acc=on;amp;gw=jtx;amp;Query=brasil+political%2C+economical+and+social+situation;amp;sbq=brasil+political%2C+economical+and+social+situation;amp;prq=recognition+palestinian+state;amp;si=1;amp;jtxsi=1;amp;jcpsi=1;amp;artsi=1;amp;so=new;amp;Go. =6;amp;Go. y=20;amp;Go=Go;amp;hp=25;amp;prevSearch=;amp;item=6;amp;ttl=234;amp;returnArticleService=showFullText;amp;resultsServiceName=null;gt;. 3- 60 Minutes. 2011. Photograph. CBS, Brazil. Web. ;lt;http://www. youtube. com/watch? v=DMM7OJ_Kj9I;gt;. 4- . â€Å"Acordo de Livre Comercio Mercosul-Palestina – Montevideu, 20 de dezembro de 2011. † Ministerio Das Relacoes Exteriores. Minister io Do Brasil, 20/12/2011. Web. 19 Jan 2012. ;lt;http://www. itamaraty. gov. br/;gt;. 5- Montevideo Convention on Rights and Duties of States, 1933. PDF document

Internship Report on Krachi Stock Exchange - Free Essay Example

Sample details Pages: 33 Words: 9833 Downloads: 5 Date added: 2017/09/11 Category Advertising Essay Did you like this example? Internship Report on Islamabad Stock Exchange By M Idrees Raja, MPA-IV. Department of Administrative Sciences, Quaid-I-Azam University, Islamabad. ? ? Acknowledgement I am thankful to almighty Allah who gives me courage to complete my internship in Islamabad Stock Exchange and completions of report this report for such purpose. I would like to appreciate my supervisor Prof. Mr. Ajmal Waheed Khan for his proper guidance and transferring knowledge to me. I am also thankful to Prof. Ghulam Shabair Khan Niazi who allowed me for internship at such tremendous place. I am grateful to Mr. Yousaf H. Mukhdum Secretary Islamabad Stock Exchange for his proper guidance despite his engagement in office. I am thankful Mr. Noman , Mr. Saqib Jalil Malik, Mr. Waris Khan Naizi, Mr. Kashif Rauf, Mr. Kamran Anwar, Syed Masood Shukat and all staff for deepful consideration towards me during my internship. May God bless them with success! ? ? ? ? M Idrees Raja. ? ? ? ? ? ? Signature Page Quaid-I-Azam University Islamabad. Islamabad Stock Exchange, Blue Area, Fazal-ul- Haq Road, Islamabad. ? ? ? ? ? ? Supervisor: Signature _______________________ Name ________________________ Designation ________________________ ? ? ? ? ? ? Don’t waste time! Our writers will create an original "Internship Report on Krachi Stock Exchange" essay for you Create order Coordinator Development Division: Signature _________________________ Name __________________________ Table of contents ? ? ? Executive Summary My internship proposal was accepted in May 2003 on the request of our department of Admin Sciences Quaid-I-Azam University, Islamabad. My internship was remained with the management of Stock exchange. I joined Islamabad Stock Exchange on July 2, 2003. During my internship I worked in following departments, I worked in department of company affairs for one and half week. I work on the development of web site on all companies, which were listed in stock exchange. During that time I make analysis of financial statements with different formulas and than enter on page of soft ware which was established for the purpose of web site. I also worked on code of corporate governance and listing regulation of Islamabad stock Exchange (ISE). I went in brokerage house for three days and observe various activities for trading of shares. I also worked on the clearing house. The functions of clearing were assessed and work for different activities performed. Worked one and half week in investor relation department. Worked one and half week in the department of internal control. Worked in one and half week department of finance. The financial system analyzed by me. For particle skill work was also done by me. ? ? ? ? ? Introduction Background of Study The internship report comprises a brief study on Islamabad Stock Exchange (ISE) during two months internship. The report is distributed in many parts according to nature and requirement of organization. Purpose of Study The purpose of study to develop skills through learning various aspects of organization. The study enables to get command on bookish knowledge through practical approach and to understand the difference in both approaches. This thing increases the knowledge and brings betterment in working within organizational environment. Scope of Study The working in stock exchange is different from other institutions. The ISE own internship schedule bound me to fallow it. (Annexature) It is difficult to study all aspects of organization in a limited time. The functioning in ISE is mostly related to finance departments in ISE except investor relation and upto some extent companies affairs are related to finance. The study focuses on field of finance including finance department. Methodology of Research The methodology of research consists all methods, which were possible during the internship in ISE. The following method were adopted by me, Interviews: The interviews were made on daily basis form the concerning departments in ISE. There are number of personas covered in interviews both top and lower management. The interviews were made in the form of prepared and unprepared. Before the interview general discussion were made for creating feasible environment. Questionnaire In prepared interviews the questions were asked consist on following nature, Open ended questions. Closed questions. Positive and Negative questions. Open Ended Questions: The open questions were asked more as compared to other types of questions. The open ended questions asked in different directions. The questions were asked more in number to top management when the response was given than an open discussion were made. ? ? ? Closed Ended Questions: Closed-ended questions were less in numbers as compared to other questions asked by me. the questioner were first developed and than asked to the management. in the form of scaling. Techniques in Questions: The methods of questions in open-ended technique were change question to question. In unprepared method the questions were asked according to information that I got from the respondent. But in open-ended questions were asked usually positive provided if the response was expected according to desire. If there was chance variation in questions than the questions were asked positively and than negatively after time consecutively. Sources of written Data: The data were collected from various authentic sources includes the newspapers, international books, national level books and literature. Other Methods: It includes the general observation, discussion with investors and consults the different record of Islamabad Stock Exchange (ISE). ? Scheme of Report The internship report, which I want to present, will consist on following department and related fragments, History of Islamabad stock exchange. This chapter includes about the location, establishment and background of Islamabad Stock Exchange (ISE). What is stock exchange? The chapter contains some definitions and overview about the stock exchange in Pakistan. Structure and Index of Islamabad stock exchange. This chapter has the basic importance about the ISE. This chapter comprises on the structure and index of ISE. Such information will help to understand the functions of ISE. Responsibility and functions of departments. The chapter 4 states the responsibilities existing departments of ISE. The working of different departments can be understood with the help of this chapter. Work which was done by me. The chapter contains work, which was performed by internee. Achievements of Islamabad stock exchange. The various achievements include in it. Future prospective of Islamabad stock exchange. The chapter contains the views about the future determination by ISE management and authorities related to it. My special achievements in Islamabad stock exchange. There are number of achievement got by internee during the internship, so this has a detail about it. Analysis. The chapter comprise on both type of analysis includes SWOT and PEST. The analyses were made briefly. Conclusion. The report contains a brief conclusion about the Islamabad Stock Exchange (ISE). Suggestion and recommendations. The suggestions and recommendation are written in the report with detail how to implement. The timing where these suggestions and recommendation will suitable is also stated in the report. Important statistics. Annextures. ? ? ? ? ? History of Islamabad stock exchange. The Islamabad stock exchange (Guarantee) Limited was incorporated on October 25,1989, under the companies ordinance 1984 as a company limited by guarantee. The exchange first times start trading in July, 1992. The main function of exchange to conduct, regulate, trade securities, government bonds, shares of companies and other related investment. There are 103 members of Islamabad stock exchange, But out of them 38 active only. The building of exchange is located in Blue Area, Fazal –ul- Haq Road Islamabad. The building is called Nafees Plaza, which has four stories, the building is acquired on rent basis under a contract and rent is paid on advance basis. The new building is under process near the Saudi Tower building, Islamabad. The building will consist 15 stories, including all facilities in it. The Islamabad stock exchange which was established in 1989 work under the company ordinance 1984. Securities exchange commission ordinance (SECP) 1969, securities exchange rules 1971. The exchange also has a memorandum and article of association, which was approved by SECP. The amendment cannot be made without prior approval of Securities and Exchange Commission of Pakistan (SECP). There are three regulating bodies of Islamabad stock exchange (ISE). First is the Securities and Exchange Commission of Pakistan (SECP) which is responsible for maintain regulations for securities and other matters related to companies. The other regulating body is coporate law authority, which has been merged in SECP, is responsible for law and order, which is implemented for stock exchange. The third body, which is the supreme, is the Ministry of Finance who sent instruction from time to time three exchanges including coporate law authority and SECP. There are 260 companies listed in Islamabad Stock Exchange and the strength of employees are 33 in number. There are 8 officers including M. D. and secretary of exchange in secretariat of ISE. The employees have different background of education with different qualification from various fields. Most numbers of employees are inter, graduate and masters. The master degree holders are less in numbers. The timing of trading in Islamabad Stock Exchange Friday is 9. 30 A. M. to12. 0 P. M. and 2. 30 P. M. to 4. 00 P. M.. For normal day it is 9. 30 A. M. to 2. 30 P. M, where the management timings are 9. 30A. M to 6. 00 P. M. The exchange remained closed on Saturday and Sunday in a week. In these days there are 260 companies are listed in ISE. There are no TFC’s registered in ISE. The preferred stock is only in one company n ame which is called Net Over Leasing Limited. The development of human resources is done by on the job training, seminars and workshops. The check and balance is maintained for each employee. The top management use management by walking around method (MBWA) for check and observe every employee. The promotion is based on performance and qualification of employee. The other things are seen are the mental approach, experience and qualification of the employee. The companies vary from time to time in ISE due to delisting and in some companies the merger case were existed. ? (Source: Annual Report of ISE and Economic Survey of Pakistan. ) ? ? ? ? ? ? (Source: Annual report and Economic Survey of Pakistan. ) ? ? (Source: Annual report and Economic Survey of Pakistan. ) (Source: Annual report of ISE. ) ? ? ? What is stock Exchange? The stock exchange performs various functions simultaneously for the growth and development of economy. It also depicts the economy as an instrument and help to analyze the economic condition of the country. Without strong position of stock exchanges the economy cannot be predicted that it will be healthy in future. The Securities and Exchange ordinance 1969 state that â€Å" Stock exchanges means any person who maintains or provides a market place or facilities for bringing together buyers and sellers of securities or for otherwise performing with respect to securities the functions commonly preformed by a Stock Exchanges, as that term is generally understood, and includes such market places and facilities. In Stock exchange the members meet to buy and sale stock. The principal of demand and supply is followed for price determination The exchange is managed by the board of directors consisting of certain members who may be broker, odd lot dealers and specialists. [Irshad Muhammad, 1998: 300] There are three stock exchanges working in our country for the prosperity of country. In ISE there are 260 companies are listed, where in KSE there are 701 and LSE has 582 companies. Stock Exchanges |Companies | |Islamabad Stock Exchange(ISE) |260 | |Lahore Stock Exchange(LSE) |582 | |Karachi Stock Exchange(KSE) |701 | The past history of ISE for companies listings vary from time to time. The stock exchange is a place where the buying and selling of shares are done. The management of stock exchange first observes the listing regulation for a company with authorized regulation. When a company got approval for listing in stock exchange. Then it offers the shares for sale to general public through initial public offering (IPO). This means that the shares are first offered for sale to general public. When public accepts the offer they purchase the shares from exchange and got ownership right in company. The future value of share is depending on the performance and repute of company. If the performance is good and demand is high than the value of shares will be appreciated. Conversely if performance is bad than the value of shares will go down, it is because the insufficient demand for share will occur in the market. The investors can earn the profit on shares by two ways, first from the appreciation of shares, which is also called capital gain, secondly when they receive dividends on shares. Investment in stock Exchange The investment in stock exchange is different from other sectors of economy. When an individual commits for the investment. He first opens the account to the member of stock exchange. The are three types of members in stock exchange, individual members, at partnership and corporate members. It is not necessary that all members should be active. It will be best decision for the investor for the choice best member on the basis of his repute, where he wants to open the account, is holding the office in stock exchange. In case of office is holding in other place instead of exchange building by member, investor should confirm from the stock exchange management or Securities and Exchange Commission (SECP) about the existence of office. After opening the account, a investor become the member of the brokerage house, in which he opens his account. In these days the limit to open account in a brokerage house on the behalf of member is the Rs. 10,000 at least. When the process of account is completed, the investor can acquire the shares from exchange by giving order. The shares are usually offer in lots, which varies from company to company. Strategy to Minimize the Risk It is better strategy for investment that the investor should aware of company, which he wants to purchase the shares. In stock exchange most of the investors prefer to invest in blue chips. It is because they considered that through trading in blue chips, their investment will be secured and they can protect them from big losses. There are some strategies to invest for maximum gain, Investment should made in different sectors and in different companies. The market trend and policies of company should be analyzed before the investment. Before the investment, it will be better that the investor should check the reports of companies whether quarterly, semiannually or annually. Due to this, he can check whether the company follows the code of corporate governance or not? The other advantage that he can observe the trend of profitability of companies towards the future whether their financial position is sound or not? The other method is taking the long position. In this method the investor expect that the prices of shares will go up as compared to now. But he should conscious the situation with logic and complete information about the future trend of market. Most investors can take short position for trading of shares in the market. The short position is usually taken for one day. It will better for investor to take position after opening some time in market and observing high and low price in the specific day at which he is taking position in a specific day. By making the investment in trusts and mutual funds the risk or tension trade off for some time. Precaution for investor There are some precautions for the investor before making the investment in stock market and during the trading process. These are, To avoid from the rumors the investors should reconfirm the news from the responsible authorities After giving the order for purchase or sale of shares to broker. The investor should verify that the order is placed without any error. He should check size of lots, name of company, price which he asked for such trade, date and the price at which he want to purchase or sale the shares. It is essential investor should get surety about fairness of member for the trade purpose from Securities and Exchange Commission of Pakistan (SECP). ? ? Instruments and statistical calculations for maximum Gain. Most of the investors in Islamabad Stock Exchange (ISE) do not aware the statistical tools for maximum gain. They prefer market trend and the situation of the market of Karachi Stock Exchange (KSE). After taking interviews they were unable to tell about the use of Statistics. There are some instruments given below to get maximum gain from the market. Mean: Mean is simple to use as a statistical instrument for investment in market. The mean can be got from sum of values of shares divided by number of years. For analyze the trend of a company shares for the purpose of investment in stock, it can be got sum of total market shares value for different periods divided by number of time period in which the investor is interested. Formula: Mean = Total values of share during different years Total numbers of years. Geometric Mean (G. M. ): It is defined as â€Å"the nth root of the product resulting from multiplying a series of return relatives together. † Geometric Mean (G. M. ) is the other measure of the central tendency. It measures the compound rate of growth over different periods of time. It is often used in investments and finance to reflect the steady growth rate of invested funds over some past period; that is the uniform rate at which money actually grew over multiple periods. Formula: 1/n Geometric Mean = G. M. = [ (1+TR)(1+TR)(1+TR)] 1 Where TR is abortive of total return which can be find TR = I+(P1-P)/P I= Interest received during the period. P= Beginning price. P1= Ending price. In the case of shares TR will be TR= D+( Pe-Po) / Po D= Dividend. Po= Begging price. P1= Ending price. Standard Deviation: The standard deviation is used to measure the data change with each price or it is a tool to measure the deviation of data. The shareholder can check the variation of prices in shares through it. ? Formula: 2 2 S. D. = v ? X [(? X)] n n Correlation: It is the measure the relationship in the data between two variables. In stock exchange it is applicable when the shareholder hold the shares of two ompanies or more and he want to check the relationship of prices or return on two different types of shares. After calculating the correlation the followings situation came in existence. Perfect positive correlation. Perfect negative correlation. Zero correlation. Perfect positive correlation: Perfect positive correlation exists when the relationships in securities move in same direction. This means when the return of one share or security increases then the other shares or security will also increase. It is shown by +0. 1. Perfect negative correlation: In perfect negative correlation the returns move in reverse direction. It means when the return of one type of shares is increase the other share return does not follow it and decrease in same way. It is denoted by –0. 1. Zero correlation: In this type of correlation there is no relationship between the two variables. On the base of return one security we cannot predict the other security. It is denoted by the O. Use of correlation for the investors: Correlation defines the relationships of two variables. Through the use of correlation the investor can analyze the whet the portfolio is profitable or not. Perfect positive correlation: The positive correlation provides no risk security. It is because when return of one share is gone down the other share returns also fallow it. So both shares return goes down and the investor will suffer loss. The investor can protect himself from such losses by applying the result from correlation, which is positive. He can avoid him before the investment from future losses. Negative correlation: The negative correlation is a good sign before making investment. When the return of one share decrease the other share return protect it with increase return, combining the securities with perfect negative correlation with each other eliminate risk altogether. Zero correlation: In this condition the risk cannot be eliminated totally but the practically it can be controlled upto some extent. Because it show no relationship. Perfect Negative correlation: Perfect negative correlation with each other share can reduce the risk. In the case of perfect negative correlation the returns related to one security compensate the other security. Formula: Correlation = ? XY – (? X)(? Y) 2 2 2 2 v ? X – (? X) v ? Y – (? Y) ? ? ? ? ? ? Terms used in Stock Exchanges Share: It is certificate of ownership in a company in which the investor made the investment. The shares are issued to the owner who purchases the shares from the stock market. Shares are issued usually by the companies in lots of different sizes. The common lot in the market is 500. Bull: Bull is a trend when the prices of most of the companies shares rise up. Market usually goes to bull when demand of shares is more than the supply of shares. Bear: Bear is reciprocal of bull in which the market falls down and the prices of majority of companies go down. In bear the supply of share is more than the demand of shares. Capital Gain: It is the situation when the prices of shares are gone to up than the value at which the investor buys the shares. There are many reasons for such higher in market. These include reasons may be political, economical, the performance of the company or any other in the market. ? Badla or Carry Over Trade: It the form of trade in which the individual or any institution provides the loan on short term usually for one day. The Badla rate is high than the market rate. The variation in badla rates can negatively or positively effect in market situation. Blue chips: Blue chips are those companies in which the maximum trade is done in a day. The investors done maximum trade in these companies with the expectation of maximum profit. The volume of these companies is high than other companies in the market. The other thing is that blue chips companies are the best performer in the market. The shares of such companies is easily available. In these days PTCL, HUBCO ,PSO, FFCC Jordan are the blue chips. Dividend: It the part of profit which is given to the owner of share. A part of profit is distributed among the shareholders. Ordinary shares: The most common from of shares and these shares are issued by maximum companies. The dividends depending on profitability of the company and recommendation of directors. ? Preferred shares: In this type of share the profit is given to the shareholder at fixed rate. If the company earn more profit than the shareholder cannot contribute in profit, in the case of loss he feels comfort because the earning of share is remained secure. In Pakistan the preferred share Initial Public Offering (IPO): When a company first time launches its shares in the market to general public for sale is called initial public offering (IPO). Private Placement or Inside Trading: In the type of trading the purchase or sale is made by a person who has inside information about the company which is not generally available in the market. In Pakistan such deal is illegal. Long Position: The share is purchased with intention that in future the price of shares will go up. After observing their suitable position he sale these shares in the market and earn profit. Short Position: In this type of trading the investor purchase the share s of the company with intention that he sale after some time when the price of shares will go up. When the sale is made than after he purchase again when the price go down. The earning is made time to time from such sale. This type of trading is called short position. Portfolio: When the investor purchases the shares of different companies to reduce the risk from the market the whole collection is called portfolio. Capital Gain: This is the appreciation on the price of shares, which exist in future. When the shares are bought by the investors after a some period the price of such share rise up due to excellent performance of company or any other reason, the investor can earn profit by selling it in the market this is called capital gain. Capital gain = Market prices of shares Price at which the shares purchased Investment corporation of Pakistan (ICP): The Investment Corporation of Pakistan is a body, which invest in different companies and make portfolio of it. On the behalf of such investment it issue units, which are called ICP units. Through purchase of such units the investor relaxes due to less tension, it is because he is not involved in trading process. Right Issue: When a company want to issue more shares in the market, it is a choice for the company that it offer shares first to existing shareholders. By using this option of right issue ownership will remain to existing shareholder and do not divided to other people. If the existing shareholder do not take interest in buying new shares than after some days the right is transferred to general public. Settlement: There are two type of settlements T+1 Under T+1 system the transaction is made on spot within day. T+3 In this system the transaction is made first day and clearance is made on third day. Term Finance Certificates (TFC’s): The term finance certificates are resembles to bonds, which are issued by companies for aim to generate the funds from general public. When the investor purchase TFC’s the receive interest from the companies. ? ? ? ? ? ? Structure and Index of Stock Exchange The stock exchange has different departments. The departments perform various functions according to their responsibilities. There are five main deferent departments in ISE, which are following, Department of Companies Affairs. Department of Investor Relation. Department of Internal Control. Department of General Administration. Department of Finance. Board of directors The board of director comprises the 10 directors, 1 chairman of stock exchange. The 6 directors in ISE board are belonging to SECP and five are elected from the exchange in annual general meeting. Committees There are number of standing committees for efficient functions of management in ISE, Research and development committee. Information technology committee. Seminars, training publication. Floor mediation committee. SECP coordination, rules regulation committee. Taxation committee. Employment, administration finance committee. Membership committee. Companies affairs, listing active participation committee. Default management committee. Inter stock exchange committee. New building committee. Arbitration committee. Building maintenance committee. The committees above mentioned perform a important role in different matters existing in exchange. Each committee contains various members including one Chairman of committee. The article of association decide the following provisions regarding to the committees, Other Committees The director may from time to time and at any time constitute a committee consisting of two or more persons, whether director or members, as they think fit, to undertake any function and responsibilities entrusted to it/them by the directors. Any committee so formed shall, in the exercise of the power so delegated, conform to any restriction that may be imposed on it by the directors. Convener of Committee Meetings: A committee may elect a convener of its meetings, but, if no such convener is elected, or if at meeting the convener is not present within fifteen (15) minutes after the time appointed for holding the same or is unwilling or unwilling to act as converner, the members present may choose one of their members to be convener of the meeting. Proceeding of Committee Members: â€Å"A committee may meet and adjourn, as it thinks proper. Questions arising at any meeting shall be determined by a majority of votes of the members present. In case of an equality of votes, the convener shall have and exercise a second or casting vote. † (Memorandum and Article of association, Page98). Hierarchy Level: There are different hierarchy levels in ISE. For officer the levels start from associate manager to M. D. and chairman of the exchange. The tier of hierarchy is following, Chairman. Managing Director. Directors. Secretary. General Manager. Senior Executive Secretary. Associate Managers. Staff. (Annexture) Responsibilities: The responsibilities of different positions are assessed on the bases of qualification, authority and experience. Chairman: The chairman is elected in the meeting of directors with subjects to limit for one year. In case of other person is not ready to elect as a chairman he will eligible to reelection. The chairman can hold this position for consecutive three years under this condition. For next time he will eligible after a year for election. The chairman hold office and observe that all function are going according will on the behalf of directors. The chairman is liable to perform the following main functions, To observe the policies of management and whole functions of exchange for the better interest of members and directors. To approval of any document which is sent by managing director (M. D. ) without any objection. If on any complex matter regarding to policymaking he understand that the meeting should call than he should call the meeting. To preside all meeting of exchange. Managing Director (M. D. ): The managing director is responsible for the whole function of exchange. He liable for the functions of staff to the Chairman. The board does the appointment of M. D. for the period of three years. The person who is elected as a M. D. is restricted to hold any other business or activity of trading in stock exchange. He is an independent person in exchange and full time paid employee of exchange. He is liable for following right and duties, To sustain the routine matters regarding to exchange. He can perform all functions for the betterment of management. He can arrange the training of the staff according to requirement. He can act for disciplinary actions for smooth functioning in trading of members. He responsible to provide the information to director on demand from them. He can give the summary regarding to policies of exchange in different matters. He is responsible to maintain the accounts upto date and present in meeting on the behalf of management. Directors: The director is elected in election trough the election. The board of directors has power to give the approval for any borrowing for the purpose of future growth of exchange. The director has right to inspect the accounts of exchange at any time. The directors has following rights and liabilities, The directors in the meeting of the board can give approval of loan whether in the form of bonds, TFC’s or any other security. The can inspect the accounts of exchange at any time. They can give their opinion regarding to any matter in board meeting. Any resolution cannot be approve without the prior approval of directors. They can give approval regarding to any investment for exchange in future. Secretary: The secretary is senior officer of stock exchange. He is head of secretariat and responsible to general management. He is also obligated for work, which is assigned to him from Chairman and Managing director. The main functions of secretary are, He possess the common seal of exchange and responsible for it. He has authority to verify the expenses before sending the minute sheet to Managing director For annual general meeting he issues the notice to members. On the instruction of chairman he is responsible to call the meeting board and to inform the members. He can perform the functions regarding to director finance. He responsible to attend the meeting the board of directors. He arranges the training and rehabilitation. He is responsible completion of any formality regarding to authorities e. g. SECP, Ministry of Finance. General Manager: The general manager is responsible for all functions for all matters regarding to different departments, which are working under him. He performs the following functions, He provides the consultancy service to departments. He performs the daily matters regarding to general management. He is responsible for any function regarding to any department on behalf of associate manager of department. He remained contact with SECP and ther exchanges for information. He can make any decision regarding to fine and delisting of any company with the consultation of Secretary and Managing director. Senior Executive Secretary: Senior executive secretary performs her part of duties for Chairman and Managing director. She perform the following main functions, To note all telephone messages of Chairman and Managing director. To handle all incoming and outgoing faxes. Arrange hotel booking of chairman/ Managing director Executives of ISE. Arrange all appointments of Chairman and Managing director. To check all mail of Chairman and Managing director. Maintain all personal and official files of Chairman and Managing director. Work as a telephone operator for chairman and Managing director. Associate Manager: Associate manager head of his department. He works according to instructions of general manager and secretary. The associate manager sent summary on different matter regarding his department to above management. He is responsible for functions of his department. He sent the report to Managing director with the advisory of general manager. He is chargeable if any thing due or any regulation exist regarding to law related to his department. Staff: The staff performs various functions, which are assigned to him. The staff is not directly responsible to all functions but on behalf of associate mangers. Performance Evaluation: The performance of an employee is evaluated on the basis of every six months. The performance is evaluated with the help of performance evaluation committee. The letters are sent to employee for purpose of acknowledgement from secretary on the behalf of committee. Salary and Packages: The level of salary is very low in ISE as compared to other business. On the time of offering for first joining it start from Rs. 9000. There is no other reward for employees of ISE on excellent performance. However the exchange pays fee of employees children who are not more than two in numbers. Behavior of Employees: The behavior of employees including top management vary from person to person, at average it is good. The main problem in the way of employee is the time availability from work, despite the problems they coordinate to each other. Culture: The employees belong to different areas of the country, so ISE is the multiculter organization. Language: Most of the communication is done in Urdu but the official language, which is used in correspondence, is English Dress: All officers are bound to wear paint shirts with ties by secretary of exchange. As far as concern with lower management they have option in dress. Unity: Within organization all employees are considered like a part of family. ? ? ? ? ? ? ? Islamabad Stock Exchange Index The index used by Karachi Stock Exchange (KSE) is called 100 index, where the Lahore Stock Exchange (LSE) uses the 101 index. The index is maintained in KSE by sector wise. The index, which is used by Islamabad Stock Exchange (ISE) the different from KSE and LSE. The index of ISE is the composite index. It was developed by Vital Information Services (Pvt. ) Limited, a financial and data base company, How contract? It is constructed in following way, Suppose, Base Date = 30th November 1996. Date of Publication = 1st March, 1996 Total companies 260 Multiple or Base figure 10,000 Let the are three prices or scrips A,B,C A= 10 B=15 C=20 By calculating the G. M. G. M. = Antilog{ log(10)+log(15)+log(20)}/3 Antilog(1. 15) = 13. 48 let t which is time changed than, A=12 B=17 C=25 Than G. M. = Atilog{log(12)+ log(17)+log(25)}/3 = Antilog(1. 233) = 17. 10 Index =17. 10/13. 48(10,000) = 12,685. 45 It can be calculated also, =v log(10). log(15). log(20) =13. 48 1/3 = v log(12). log(17). log(25) =17. 10 Index = 17. 10/13. 48(10,000) = 12,685. 45 ? Department of company Affairs The department of company affairs is respon sible for all functions and matters related to companies which are listed in stock exchange or the companies who want to be listed in stock exchange. This department sent reports to G. M, sectary and M. D. for final approval on decision. The department receives instructions from SECP from time to time. They have authority to list or delist any company if the company does not meet the requirement of law. They have also authority to impose the penalties for late submission of quarterly or annually report or in case of not submission according to code of corporate governance and other related regulation. In these days the department is establishing web site in which the sales, profit before tax. Book value, listing date and other related information is given for investor facility. On launch this facility the investors can take decision about the investment in various companies. The main function of department deal with companies affairs on behalf of Islamabad stock exchange (ISE) according to instructions of Securities and Exchange Commission of Pakistan. (SECP) and Ministry of Finance. In routine matters the department perform the followings functions, Receive Reports: The department receives reports from companies and maintains it. If the reports are sufficient than the department sent it in the brokerage houses for investors. Impose Penalties: The department can impose penalties on the companies according to code of corporate governance on companies for violation of rules belongs to ISE. Loss of shares: If the shares are lost from shareholders due to any reason, after receiving the complaints from shareholders the department verify about the existence of shares in stock exchange. The department sent the requests to companies for issue of duplicate shares and arrange such. Dividends: The department of Companies affairs can take actions against the companies, which are failed to pay dividend to shareholders during five with the help above management. Code of Coporate Governance: The main document, which comes under consideration of department of companies’ affairs, is the code of coporate governance, which is implemented on three exchanges with the effect 2002. There are some important provisions of code of corporate governance are following, All listed companies shall encourage effective participation of independent director non executive directors, including those representing minority interest, on their board of directors who represent the minority shareholders. The director of listed company shall, at the time of filling their consent to act as such, give a declaration in such consent that they are aware of their duties and powers under the relevant laws and the listed companies memorandum and article of association and the regulation of listing in stock exchanges. No listed company shall have a director, a person who is serving as a director of ten other listed companies. No person shall elected as a director of a listed company if: His name is not borne on the register of National tax payer except where such person is non-resident and He has convicted by court of competent jurisdiction as a defaulter in payment of any loan to banking company, a development institution, or being member of stock exchange he declare defaulter of such exchange. A list company shall endeavor that no person is elected or nominated as a director if he or his spouse is engaged in the business of stock brokerage. The tenure of directors should be for three years. The directors of listed companies shall exercise their powers and carry their duties with the sense of objectivity judgement and independence in the best interest of the company. The chairman of listed company, if present shall preside over the meeting of board of directors. The board of director shall meet at least once in the quarter of every financial year. All listed shall make carry appropriate arrangements for courses for their directors, for making acquaint them with their duties and responsibilities. The appointment, remuneration and term and conditions for employment of the chief financial officer, the company secretary and the head of internal audit of listed companies shall be determined by the CEO with approval of the board of directors, the CFO or the company secretary of the listed companies shall not be removed except by the CEO with the approval of the board of directors. The quarterly unaudited financial statements of listed companies shall be published and circulated along with directors review on the affairs of the listed company for the company. Listing of companies No dealing in securities of a company shall be allowed on the exchange. The permission under sub regulation (1) may be granted upon an application being made by the company or in respect of the securities in the manner described. The exchange such permission will concern among other things, sufficiency of public interest in the company of the securities. The exchange shall decide the questions of granting permission with in a maximum period of three month from the date of receive listing application. In case the permission is refused, the reason thereof will be communicated to the applicant and the authority within two weak of the decision. The board will be the sole authority to grant defer or refuse such permission and may for that purpose, relax any of these regulation subject only to 2/3 majority of the directors present at such meeting of the board and so desolving. De-listing and suspension: A listed company shall be de list d or suspended for the following reasons, If its securities are quoted below 50% of face value for a continuos period of three years. Provided that if the shares of the company quoted at 50% or above of their face value then such a rate is maintained for a continuos period of thirty working days. if it has failed to declare dividend or bonus for five from the date of declaration of last dividend or bonus or In the case of manufacturing companies, for 5 years from the date of commencement of production. For five from the date of commencement of business in others cases. If it has to hold it annual general meeting for a continuos. If it has failed to hold it annual meeting of a continuos period of 3 year. If it has gone into liquidation either voluntary or under court order. If it has failed to submit the annual listing fee. No Company, which has been de-listed or suspended, shall be resorted and its shares re-quoted until it removes the causes of delisting and receives the assent of the board for the restoration. ? ? ? ? Recording Department This department although is sub department. This department is responsible for maintain the record for all matter related to stock exchange. They have different folders, for individuals, for general nature and for companies affairs. This record is maintained manually, they maintain the shelves according to nature of companies e. g. the companies related to petroleum are maintained in one part of shelves, chemical sector is also mainted in one area of shelves. For external and internal correspondence, the department maintains two types of record registers separately. The register contain the following columns, Reference No Month and date. Receiving number. Companydepartment name. The dispatch register contain following columns, Issue number. Month and date. Place where to send. Subject. ? Internal correspondence: In ISE most communication is done through letters, when a letter comes from outside they maintained a record in shelves according to nature of letter whether it is related to companies affairs or general in nature. On arrive first the letter is stamped on which date, the day name and serial number is given to letter. In recording register the letter is registered. After recording they sent the letter to concerning department for further process. If the department is not mentioned on letter in which the letter will go. The recording department observes the place of letter. The general letters are sent to department of general administration. When the process is complete from the concerning department letter is sent to sectary and M. D. for final approval. After returning the letter from concerning department the recording department maintains the copy of record in related file. For faxes and telegraph same procedure is adopted. External correspondence: External correspondence is done after the process of documentation is complete. The different departments sent reply or instructions to companies or government departments. Every department sent letters to companies or different external departments according to their responsibility. The record section maintains a copy of document with entry on register. The record on dispatch the register is maintained with date wise and name of company or correspondence name where the letter will go. After preparing the envelops according to instructions of departments where the correspondence will go, a copy of document is disclosed in company or department files which is maintained separately. For faxes and telegraph the same method is applied. Brokerage House The brokerage house in which I worked is run by a member, whose name is Syed Masood Shaukat. There are three types of brokerage houses in Islamabad Stock Exchange. These are following, Individual brokerage house. Partnership brokerage house. Coporate brokerage house. The corporate brokerage houses have a private limited status. The right of ownership for member is transferable to other person. There are 103 members in Islamabad Stock Exchange (ISE). But the members who transact the business in stock exchange are 38 in number, in which individual members run 16 houses, 2 work at partnership bases and 20 exist in coporate form. There is no such fixation some about the transfer of membership to other person, it can be transferred at any time. The exchange charge fee for transfer of membership. System of House: The brokerage house is in the basement of Islamabad stock exchange. It is owned by individual. The houses comprise three big rooms including one hall in which the trade is done. Computer system: There is two systems work in hall, the two screens work at a time. In upper screen the activities of trade in Karachi Stock Market (KSE) with the prices of shares and sign of trend is shown. The screen moves swiftly within seconds with trading activities. The lower screen shows the prices of Islamabad stock Exchange (ISE) which is maintained by the brokerage house. Central Depositary Company (CDC): The central depositary is introduced some time ago for the purpose of on line trading. The stock exchange management has given ultimatum all companies that they should become member of central depositary company (CDC) before of July 31,2003. The central Depositary Company has a public limited status and its share is floating in market. Due to introduction of CDC now the duplication in shares in not possible in market. This system with rapid service also provides accuracy. Members: There are 103 members in stock Islamabad Stock Exchange (ISE). The active members are 38, in which 16 are individual, 2 at parterres and 20 are corporate. In Islamabad Stock Exchange (ISE) the individual brokerage houses are less in number as compared to coporate brokerage houses. ? ? ? ? Trading Process: The trading process is done on line but there is fiscal share trading also occur for some companies which is not become the member of CDC system upto know. After July 31, 2003 there is hope that the fiscal trading will be abolished. When an investor want to sale the share he first from the screen observe the price of shares of company which he is holding the shares. When he saw the he is in the position to make the profit in the market by making the comparison of the price of purchase and at which he want to sale he ask the broker to sale. In selling order he tells the company name, number of shares and the price at which he want to sale. The broker writes the instruction on computer for sale and place. Terms to become the Member of Brokerage House: For open the brokerage house the permission from Securities and Exchange Commission (SECP). The fee and other criteria vary according to instruction of SECP. There are following criteria, He should be a citizen of Pakistan. The age limit is at least 21 years with effect the date on which he is applying. iii) He should be at least graduate. iv) He should pay fee according to latest information Rs. 7500, 000. He should national tax payer. He should not defaulter of any financial institution or any body such that. The membership is transferable to other person, who is able to meet the criteria, which is mentioned above. All three exchanges in the country are restricted by Securities and Exchange Commission of Pakistan (SECP) that they cannot involve in any trading activity regarding to buying and selling of shares. The following activities, which a brokerage house or individual can perform with the permission of SECP, these are, He can sale his seat to other person. He can member of other stock exchanges at a time. He can issue a mutual or units in the form like ICP. ? ? ? ? ? ? ? Commission Slabs: ISE. KSE. Future. |Prices Limit. |Delivery | |Upto Rs. 5 million to Rs. 10 million. |0. 5 million. | |Above Rs. 10 million upto Rs. 20 million. |Rs. 0. 5 million plus 10% of amount exceeding 10 million. | |(Rs. 1. 5 million) | |Above Rs. 20 million upto 50 million. |Rs. 1. 50 million plus 20% million will amount exceeding Rs. 20 | | |million. | | |(Rs. 7. 50 million) | |Above Rs. 50 million and upto Rs. 100 million. |Rs. 7. 50 million plus 25% the amount exceeding 50 million. | | |(Rs. 0 million) | |Over Rs. 100 million. |Rs. 20 million plus amount exceeding Rs. 100 million. | | |(Rs. 50 million for exposure and margin upto 200 million. ) | ? ? Principal of Net Income from clearing: When Laga i s charged on the members accounts after deducting the commission of SECP, investor protection fund (IPF) and member protection fund (MPF) reaming income is the net income from the clearing. The allocation for IPF and MPF is made at the rate of 33. 3% for both after deducting the charges of commission for SECP. Income from clearing = Laga – SECP commission- IPF at 33. 33% MPF at 33. 33%. ? ? ? ? ? ? Department of Finance The finance department deals with all expenses and revenues for the stock exchange. The department uses both methods manually and through computer for recording entries. Sidat Haydir prepares the software, which is used by department for accounting purpose. The exchange pays the specific amount for such right using, beside this the software maker also provides technical services about the software. Codes of software: In finance department there is no direct entry is made about the good name. The account title is established in software with code number chart by department. When a code is entered in system the account name is written and further process for entry is done in ledger and trial balance automatically. The formation of code is made chronigicalay. e. g. Main code: 01 Sub code: 01-001 01-002 Main code is written for title name and sub code is written for further explanation of accounts. The finance department uses the 30 main codes for assets for liabilities. The some important main codes are, Main codes Main codes for assets |Main codes for liabilities | |Fixed assets 01 |Accumulated deficit 30 | |Accumulated depreciation 02 |Member fund 31 | |Long term investment 03 |Clearing house taxes 32 | |Capital work in progress 04 |Rent received in advance 33 | |Security deposits 05 |Advance from companies 34 | |Advance against expenses 06 |Accrued expenses 35 | |Advance against expenses 07 |Pa yable audit fee 36 | |Advance against source 08 |Security deposits from companies 37 | |Advance against tax deduction 09 |Member default 39 | |Advance prepaid 10 |Sundry creditors 40 | Depreciation: The depreciation is charge at the different rate according to exchange policy. The depreciation is charged with through straight line method. The important rates of depreciation is following, ? ? Rate of Depreciation Assets |Rate of Depreciation | |Furniture |10% | |Office Equipment’s |10% | |Computers |33% | |Automation |33% | |Motor vichle |20% | ? Vouchers: When the expense is made is generated the finance department makes the voucher before the entry. There are two types of vouchers, Revenue vouchers or receipts. Expense vouchers. The voucher contain the following things, Name of person who made the expense or give revenue. Date. Particulars. Amount. Total. Expense: The expenses cannot be made without the permission of associate manager of general administration, Managing director, Chairman and secretary. Before expenses the list is made for expenses which is called minute sheet . It is sent to associate manager, Managing director. and chairman for approval. After the approval on sheet the voucher are made according to list and payment is given in form of cheques or cash. If the expense is related to routine matter and small than payment is made in form of cash. In case of high payment, cheques make it. If the others departments want to do some expenses for the purpose of business than they will sent internal office memorandum ( IOM ) to finance department. The internal office memorandum also contains the quotations from different stores. After observing the best alternative the associate manager of general administration asks accountant to prepare minute sheet for approval, the remaining process will remain same for expenses. Revenues: The revenues are received from various sources. When finance department receives the revenues, the vouchers are made with name of sources and date at which it is received by department. The vouchers are made with the help of carbon papers. The original copy is given to the person for his record and carbon copies which contains the yellow and Red color is maintained in the record. Transferring: The depositary slip is maintained for the purpose for deposit in the bank. It contains two parts. When the amount is submitted in the account the entrance is made on depositary slip. If the cash will be deposited in the bank than the entry is made with the note of cash with name of source. But in the case of cheques the cheque numbers are written on the depositary book. The one part of the book is torn and disclosed with cheques for sending in the bank. The other part remained in the book for record. Bank Statement: The bank is received from bank after every six months but know it is collected before every quarter or at any special requirement. The cash book balance is reconciled with bank statement, if any discrepancy arise than it is conformed and adjusted. Budget: The budget is made quarterly basis and than compared with year. For the purpose of budget the department ask other departments to send the estimated expenses and revenue. If there is any special requirement exist than write. The departments send their reports for every quarter. The department compare all estimated budgets before closing of year, if the situation is not meeting according to standard than the department ask other departments to make effort for recovery before closing of the year. Audit: The audit is made with strict measures, there are two types of audits which is used in ISE, Internal audit. External audit. Internal audit: The department of finance makes the internal audit for advance disclose of record before the starting external audit. When the external audit is start it make easy for the department to become faster for such purpose. External audit: The audit is done at the end of quarter in ISE by a reputable firm. There are numbers of auditors in the list of ISE. After the completion of quarterly audits, the annually audit is also done. Principal of audit: Various firms from year to year complete the audit. In annual general meeting the decision is made for selection of auditor and its remuneration. ? ? ? ? ? ? Department of Internal Control The department of under internal performs the technical sensitive functions in Islamabad Stock Exchange (ISE). The main functions of department are, Operate with risk management in ISE. To deal members of ISE. To supervise the information technology (IT) department and clearing house. To deal with Market Monitoring and Surveillance Wing (MSW). Send reports regarding to trading and related matters to Managing director and Secretary of exchange. To give suggestions to SECP for impose penalty on the member in the case of violation. The risk management is the important factor in the business of stock exchange. The department work under the supervision of Marketing Monitoring and Surveillance Wing (MSW) of SECP. The clearing house is a sub department of Internal Control department. Operate with Risk Management: The risk management is the important factor of ISE, different measure are adopted for such purpose in ISE. For efficient functions, a separate department is working in SECP which monitor the functions continuously. Deal with Members: The department deals with the members and gives them instructions regarding to different matters relating to trade. If the member violate any rule regulation than the department recommend and impose penalty for such violence with the help of SECP. Deal with Information Technology (IT) and Clearing House: The information technology department and clearing house are sub departments of internal control. The departments send report regarding to routine matters to internal control. The department also performs some administrative functions for these department. Reporting Role: The department is liable to send report to secretary and managing director. When a special case arises than the department sent special reports and consults them in affairs. Market Monitoring and Surveillance Wing (MSW): This wing was newly established, it is directly connected to ISE and monitors the risk functions. If any complexity in matter arises than the department informs and sent notices to members on the behalf of department of internal control. ? ? ? Contract for web site: The department contract for web site with companies with the help of IT department in ISE. The IT department provides the technical services for such purpose. Control the system audit: The system audit is control by department of internal control. This system newly introduced by ISE, under which the members are bound for audit from reputable charted accountant firm. After reporting from charted account firms a list is prepared for purpose of such audit regarding to members.. If the report is unclear or qualified than some time is given for re audit, despite the time giving if the members fail to re audit or for clearance such audit, the report is send to SECP. After the receiving the report from SECP, the action is taken against such member. Scope of system audit: 1. To ensue that the members is following all the rules and regulations of the exchanges. 2. to ensure that there is a proper documentation and interaction between client and member, 3. To ensure that the member is operating trading workstation properly as required by exchange. 4. To ensure that the members properly paying the dues of exchange. 5. To check that in case of agents, the members are complying with regulation that relate to the registration by exchange. 6. to make sure that the books and record maintain properly, 7. To that the client marinating margin with exchange. 8. To ensure that the member registered properly with SECP and renews its registration annually. 9. To ensure the maintenance by the member of proper record of transactions involving central Depositary company. 10. To ensure that the member prepare its annual financial statements and that these are audited by a practicing by a practicing Charted accountant where the member is a coporate one. 11. To ensure that the future contracts are according to regulation. 12. To ensure that the lots transactions are properly recorded. ? ? ? ? ? ? ? ? ? ? ? Department of Investor Relations Department of investor relations perform the following functions, To provide all information with respect to members on requirements of investors. To deal with the complaints of investors in stock exchange. To meet all legal compliance in judiciary. Maintain the newspapers. Information to members: The information is providing to investor on requirement regarding to member and brokerage house. Complaints of Investors: The complains are received from investors, after completing the procedure the documents are sent to the board of directors for purpose of final decision. If the board observe that the complain is verified than the board made bound the member for recovery. In case of not following the case is referred to court for recovery. Legal compliance: The department of Investor relation is the representative of ISE in the court. It is also responsible to provide all record regarding to member on the demand of court. The department should work for investor welfare. Maintain news: The department is responsible to maintain the record of the newspapers, if the news is related to the important factors, which can effect the performance of stock mark