Duty of Care and Contractual Agreements in Architecture

Duty of Care and Contractual Agreements in Architecture Section 1 Clearly explain what particular requirements must be in place for a Contract to exist between two parties? For a contract to exist between two parties there must be evidence of three key principles. An intention between all involved parties to form a legally binding relationship. A consideration (usually monetary) for the agreement. The offer and acceptance of the stated agreement. The intention of a legally binding relationship from each party must be formal; a moral obligation alone is insufficient. As such, articles such The Memorandum of Agreement outline the requirements of parties when intending to enter a contract. For a contract to exist the promise must be enforceable with a consideration. It is the party who provides this bargain who enforces the contract. Once a consideration is provided, all parties are drawn into privity of contract. The consideration is decided by the parties involved and the level of adequacy is irrelevant, it must be offered and accepted for the agreement to mature into a contract. As such, an offer without an acceptance is merely a pre-contractual agreement, not binding in law. In any case, for a contract to exist all terms of the offer must be accepted and a consideration provided. However, there is no requirement for a written document for most types of contract. An oral contract is legally binding providing there has been acceptance of an offer. From a legal stand-point, difficulty can be avoided if documentary evidence is provided of an agreement. The four corners rule allows a contract to be recorded and subsequently is easier to enforce in law. Explain what is meant by the term Duty of Care and what are the implications upon the architect? A duty of care is a legal obligation in tort law imposed on the Architect requiring they exercise a standard of reasonable care and diligence whilst carrying out professional work that could foreseeably harm others. Any failure in an Architects duty of care can result in an action in negligence where they become liable in tort law. Furthermore, a duty of care is also applicable in agency outside of any contractual arrangement. It is not required that a duty of care be defined by law, however, it often develops through the jurisprudence of common law. In this respect, a duty of care can be interpreted as a formalisation of the social contract and implicit responsibilities of the individual towards others in society. It is an ARB requirement that Architects adhere to the established standards of the profession and exercise due skill, care and diligence,whilst carrying out professional work within agreed time-frames and without unnecessary delay. For a duty of care to be breached, the following must be true: Harm must be reasonably foreseeable of the defendants conduct. A relationship of proximity between the defendant and the claimant. It must be fair, just and reasonableto impose liability. Explain the term Joint and Several Liability and how does it impact upon particular forms of architectural Practice? Under Joint and Several Liability, a client may pursue an obligation against any single party as if they were jointly liable. The responsibility then passes to the defendants who must establish their respective percentages of liability and monetary payment. Therefore, if a claimant pursues a single defendant and receives all the damages, that defendant must then pursue the other libelous parties to obtain contributions proportionate to their share of liability. Joint and Several liability is most relevant in tort claims and most often invoked in cases of negligence. Architects seek to establish a clear and properly defined agreement with specific reference to the understanding and expectations of the client. These agreements provide an assured basis on which the commission can be undertaken. Furthermore, the chosen form of appointment will determine the limit of the Architects liability and accountability. Architects also seek to limit their risk and liability through their chosen form of architectural practice. For Example, Limited Liability Partnerships and Companies cannot be jointly or several liable with its members liability determined by their stakehold in the partnership or shareholding in the company. Explain what is meant by the term Lean Construction. Lean construction is a method of designing production systems to minimize the time, effort and material waste of a project to generate the maximum amount of value. The process itself is derived from the lean production system within the manufacturing industry. It is fundamental that the production system is designed through a collaboration of project participants (Client, Architect, Engineer, Contractor, Building Owner) at the earliest stages of the project. It is based on the premise that desired ends affect the means to achieve these ends, and that available means will affect realized ends. The principles of Lean Construction are as follows: Allow value to flow by systematically removing obstacles to value creation and dispensable processes that create no value. Optimisation of the system through collaboration and systematic learning. Priority on delivering the Client/End-user/Building Owners expected value. Creating Pull Production. The pursuit of perfection/continual improvement, involving everyone in the system. Lean construction supplements traditional construction management by considering material and information flow, focusing on the enhancement of the production systems value generation. Therefore, a project using the Lean Construction method should: Deliver maximum functionality. Benefit end-users with the lowest optimum cost of ownership. Eliminate the inefficiency and waste in the use of labour and materials. Involve specialist suppliers in design from the beginning to achieve integration and buildability. Establish performance and improvement achievements by measurement. Use a single point of contact for effective co-ordination and clear responsibility. Explain and define what is meant by a Letter of Intent. What are the circumstances under which it may be issued, what may be its objectives and what are the principal matters that it should contain? A Letter of Intent is a document that outlines an agreement between two or more parties before the agreement is finalised. They resemble written contracts but are not legally binding for the parties involved. However, letters of intent can contain provisions that are legal binding such as a covenant to negotiate in good faith, non-disclosure agreements and stand-still provisions that promise exclusive negotiation rights. It can also be interpreted as binding if it resembles a formal contract too closely. Therefore, the letter of intent is enforceable by the courts both in terms of the remuneration and the act. However, the letter of intent is not a contract; instead it is a unilateral agreement in which one party confirms an intention to enter a contract with another party. Most importantly, it must contain an instruction to act and confirmation of a consideration as payment. Letters of intent are usually issued to: Clarify the nature of complex transactions for the convenience of the parties involved. Provide safeguards in case of collapsed negotiations. Officially declare interest or intent. Allow work to continue quickly based on trust. Architects mainly use letters of intent for the purpose of negotiation. For example, following the first stage of tender, a letter of intent maybe issued to inform a contractor of their approval based on their proposal. The contractor can then contribute to the design before the second stage of tendering by providing detailed pricings and an overall building cost. Once the second stage of tendering is complete, a formal contract can be established between the parties. What are the principal factors that determine the choice of a particular contract form? To determine the most appropriate contract form, the Architect and client must first consider the priorities of the project in terms of time, cost and quality. These three factors are linked through a trade-off paradigm: Time results in increased cost and decreased quality. Cost results in increased time and decreased quality. Quality results in increased cost and increased time. They are all related and inter-dependant. If time is the priority, then the procurement method must allow sufficient time to consider all of the design issues properly at the pre-contract stage. The client is afforded predictability and additional time can be saved by allowing the contractor to resource their own materials, effective management, real-time planning and overlapping detailed design phases with actual construction. If cost is the priority, then a financial limit must be established that a contract sum cannot exceed. Certainty of cost is dependant upon comprehensive design, drawings and specification that accurately assesses cost at the tender stage. If quality is the priority, the issue and degree of quality in the finished building must be clearly defined and established from the outset through a specification. Also, the measure of quality must also be defined. The choice of contract type is also directly related to the chosen type of procurement. Each type of procurement type uses standard contract forms that are known and accepted by the industry. Most architects choose to use these standard forms as they are comprehensive, address common construction situations and take account of current legal decisions. Factors such as the complexity, size and overall value of the project may also inform the procurement route or contract type. In all situations the Architect as the lead consultant has the duty to advise the client of the long-term implications of their decisions. Section 2 The Design and Build process of procurement has been endorsed by the Public Sector as the preferred procurement option, on the basis that it is claimed that it offers certainty of contract sum and brings certain cost benefits. Consider and discuss the merits or otherwise of this approach in comparison with the Traditional method of procurement with particular reference to the role of the architect. (70 marks). Design and Build is a procurement method for project delivery whereby an individual contractor is contractually responsible for both the design and construction of a project. In recent years, the public-sector has moved towards Design and Build as the chosen procurement path as opposed to the traditional, three-party arrangement where design and construction are separately contracted. The public-sectors interest in Design and Build can be attributed to several potential benefits that are not always obtainable through alternative procurement methods. The following points outline the advantages. The Design and Build procurement route provides a single source of responsibility as the contractor is singularly responsible for any defect in both the construction and design of the project. This is of particular benefit to the building owner or client, who does not have to define whether such defects are brought about by a deficiency in design or construction. Instead, the contractor is jointly and severly liable for the complete works. In a traditional contract, it is the client who must first determine the nature and cause of a problem, before deciding whether it is the designer or contractor who is at fault. Design and Build is also a popular route for the public-sector client as the contractor is obliged to bear any additional cost that results from inadequate or defective plans provided by the design team. In a traditional contract, the client warrants the sufficiency of the plans and as such is liable for any increased cost because of inadequate design. In the Design and Build contract, it is the contractor who is responsible for the projects design as well as the construction. They are hired to meet the clients specific performance specifications rather than merely construct the building as in the traditional contract procurement. Hence, if the plans are inadequately drafted or designed, the contractor is unable to seek compensation from the client. It is widely recognised that Design and Build contracts enable a project to be completed within a shorter time-period than the traditional three-party arrangement. The interface between the designer and contractor, often adversarial in the traditional method, can become more open and hence foster a more co-operative arrangement and exchange of ideas that can make the project a faster process. Time savings are also made by fast-tracking construction of known elements before the specifications and drawings of unknown elements are complete. The phased-nature of the design essentially allows work to commence on site whilst the later phases of the project are still being designed. The same time-savings are unable to be made within a traditional contract as the contractor does not usually even submit a tender, let alone start work on-site, before the design and drawings of the Architect are finalised. The responsibility for meeting local controls such as planning, bylaws and legislation is placed with the contractor, which usually results in increased efficiency. The phased nature of the Design and Build method also allows the contractor to have increased control of the project and can result in lower costs for the client. The specific control of detailed design enables the contractor to use familiar construction methods and materials which increase the efficiency of the build process. By staggering the construction process, the contractor is able to order materials for upcoming phases, ahead of time and at a lower cost. The savings made on labour, materials and time are all passed on to the benefit of the client. It is considered that the Design and Build method reduces the requirement for independent professional representation. Public sector clients often prefer to limit the number of points of contact to restrict the amount of time, effort and in-house staff it requires to undertake a project. Often it will use Design and Build in conjunction with privatisation, whereby it contracts an independent party to undertake responsibilities previously held by the Government, such as land acquisition, project finance, design, construction, operation and ownership. This method, in its most complete form is represented by the turnkey and package deal options, whereby the client is uninvolved for the majority of the project and presented with the completed building. However, it is desirable to have an independent third party (usually an Architect) for the purpose of quality control. Without a third party, the contractor, who is hired to complete the project promptly and economically, also has the task of assessing the quality and quantity of its own work. Hence, the contractor has a potential conflict of interest and is likely to reduce quality in order to satisfy the clients other requirements. With the presence of a third-party, the client/owners interests are represented during the design and construction. Clients choose Design and Build contracts as usually a fixed price and contract sum can be negotiated. The client specifies the maximum price it is willing to pay for the project before it solicits a proposal from the Design and Build contractor for its specifications, configuration and materials. However, difficulty can arise when there is an increase in the cost of work and construction. The contractor can sometimes abuse the situation by recouping costs in other areas of the project and without a third party, the client finds it far more difficult to detect and control such situations than in a traditional contact form. Therefore, most Design and Build contracts are lump-sum and fixed price, but payments are completed on a cost-plus basis to facilitate potential increases in cost. Also, payments tend to be dependant on the achievement of project milestones. This allows the contractors progress to be measured and assessed by the client, allowing easier negotiation in terms of compe nsation where costs have significantly increased under a fixed-price contract. However, the Design and Build route is not without potential problems. Many architects, clients, building owners and contractors have varying opinions about the successes of this procurement type. The following points are amongst the potential disadvantages to using Design and Build in the public-sector. If a public-sector client chooses the Design and Build procurement path it is difficult to actively compare preliminary proposals from multiple contractors. The contractor is only responsible for satisfying the clients performance specification; therefore the designs may be wide-ranging in aesthetic and prioritise different issues depending on the contractors individual stand-point. As in the turnkey approach, the client or eventual building owner has little input into the design and final appearance of the building and as such, may be unsatisfied with the result. Also, as the contract is entered into by negotiation rather than competitive tendering, the client may not always achieve the lowest cost for the building. Therefore, unlike the traditional route, if a client wants to attract multiple preliminary proposals, they must provide an individual consideration for each contractor that submits a design package. This is a cost often overlooked in debating the value of Traditional vs. Design and Build procurement, as these fees are separated from the contract sum in the case of Design and Build. Another problem with tendering a Design and Build contract is the potential for the building to become a competition in under-design. Contractors will seek to meet the clients outline requirements whilst sacrificing quality, life-span, ease of maintenance, and value in a bid to offer the minimum price. In placing responsibility for both the design and construction in the contractors hands, the client forfeits control. Therefore the client has little input in assessing sub-standard work, claiming for variations, debating extensions of time or even using a termination clause due to excessive delay. To combat against this, it is again advisable to use a third-party design professional who can check the value and realism of the tendered bid. However, the monetary and time savings inherent to Design and Build contracts then become nominal as the time-period and expertise needed by the third-party to check the work of the contractor is both expensive and time-consuming. Such a third party can be appointed independently by the client, or be appointed through consultant switch or novation if they are the original designer/design team. Also, contractors seek to recoup the outlay of unsuccessful tenders with their successful tenders; therefore, the client will always pay a small premium for the work of their chosen contractor. Another disadvantage to the Design and Build arrangement is the difficulty of obtaining long-term contractual protection in terms of the suitability of the work. Many contractors use contracts where such insurance is prohibitively expensive and resultantly, commercially unviable for the client. Therefore, it is the clients responsibility to be aware of the extent of coverage of the contractors liability insurance. In the event of a defect in the design or construction of the project, the client may be unable to recuperate anything if the contractors insurance coverage or assets are insufficient to pay compensation, regardless of whether liability can be determined. Public sector clients often choose the Design and Build procurement route as the available financial resources of a contractor are normally greater than that of the professional individual or architectural practice, in the event of a post-completion failure. A potential problem with liability can arise when the Design and Build contractor hires an Architect as a sub-consultant. Most contractors professional indemnity insurance does not cover damages caused by defective design or specifications prepared by the Architect. Conversely, the Architects professional indemnity insurance does not cover damages caused by defective labour, materials or operations during the contractors construction process. Therefore, the contractor offers a warranty for an agreed (but usually limited) time-period based on the notion of negligence. However, the commercial and financial pressures of the Design and Build contract compel the contractor to essentially under-design the building as far as possible making failures within the building an increased likelihood. As a result, there is often a need for litigation to define whether the economy of the project surpasses the expected level of professional responsibility at the time of design and construction. Therefore in order to protect their building, the client should seek to obtain a warranty that guarantees the completed building is suitable for its intended purpose, regardless of defects incurred by the contractor. In the public sector, Design and Build contracts are usually awarded on subjective criteria such as value, experience and qualification. The public sector in particular has developed contractor evaluation and selection policies that try to mitigate against the risk of such subjective judgments. In many cases this is achieved by awarding contracts based on a point-scoring system with the highest scorer being appointed. However, this discretional points system implemented by public managers offers little objectivity in determining the adequate point allocation for individual elements of the proposed scheme. For instance, there is hardly any way to decide whether one contractors foundation system warrants 20 points or a different contractors warrants 22, it is completely subjective. Also the criteria used for marking generally do not relate to the specific building type, therefore analysing a contractors qualifications and experience presents a measure of competence but does not guarant ee a successful project outcome. There is also difficulty in reasonably comparing alternative design proposals in an effort to determine which represents the best value. For example, some contractors may offer higher quality plumbing whilst others offer better electrical systems. Therefore it is impossible to draw reasonable conclusions from dissimilar bids in terms of which proposal offers best value. Often, value can only be determined after the building has been completed. In conclusion, public owners look for procurement systems that meet the needs of the public whilst mitigating against legal problems and reducing administrative burden. The public-sector has favoured the Design and Build approach as the client can guarantee a total fixed project cost early in the process and the building can be constructed in a shorter time-period with more efficiency than other procurement systems. The contract type also allows an exploration of new solutions through an open dialogue between architect and contractor, in which the public benefit from the innovation and lower costs. As a result, the public-sectors involvement with Design and Build has increased over recent years. Fundamentally, the public requires its construction projects to be durable, environmental, functional and most importantly, fit for purpose. At the same time, it expects the government funded projects to represent good value and be economic in nature. Therefore, the public itself has little involvement or interest in which procurement system is utilised, however, they expect each project to fulfill its stated requirements within its allocated budget. It is the view of the public-sector, that Design and Build is the system best equipped to meet the publics expectations and provide the most transparent value for projects that are ultimately funded by the tax-payer. Bibliography Lupton S. Architects Job Book. (RIBA Enterprises 7th ed.) Chappell D Wills A. The Architect in Practice. (Blackwell Publishing 10th ed.) ARB. Architects Code: Standards of Conduct and Practice. (November 2002) http://en.wikipedia.org/wiki/Design_and_Build http://www.lao.ca.gov/2005/design_build/design_build_020305.htm

The Withered Arm by Thomas Hardy and Farthing House by Susan Hill :: Thomas Hardy Farthing House Hill essays

The Withered Arm by Thomas Hardy and Farthing House by Susan Hill I am going to be comparing two short stories; The withered arm by Thomas Hardy, which was written before 1900 and Farthing house by Susan Hill which was written more recently. The themes in each of the two stories are quite similar. They are both based around women, their needs and their wants and illegitimate children. Both stories have obvious similarities especially with the types of women in the story. 'The withered arm' was a story written before 1900. At the time when The Withered Arm was written, there was a very high child mortality rate. Babies died at an early age due to poor health care and repeated pregnancies. Many women died during childbirth. There were some forms of birth control but they were condemned by the church. Society believed that a woman's main purpose in life was marriage and motherhood. For many, this was not possible. There was a high mortality rate amongst male babies, early death amongst adult males and emigration among marriageable young men. There were hierarchies in society. Quite often, rich males would commit adultery with poor, working females. Once the woman got pregnant, she would be left on her own as marriage was not possible. Single mothers would then become outcasts in society. Generally, people knew what was happening. They were against sex outside marriage but they did nothing to stop it. Now in the 21st century, the roles of women have changed. They are no longer expected to just get married and have children. There is more equality in today's society. Although women still get married, they are also allowed a career and life of their own. They have more freedom and independence. There is better health care and birth control but sex outside marriage still continues. Today, there are many single mothers. Although they are no longer the outcasts they once were, they still have not been entirely accepted by everyone and are sometimes treated as inferiors and thought of as sluts. In the Withered Arm, Rhoda Brook, a poor, once beautiful, milkmaid was used by the rich farmer Lodge. After she became pregnant, she was tossed aside like some used toy. Lodge wanted nothing to do with her. He was rich, she was poor; there was no way they could marry. Rhoda had a child without a husband. Everyone in their village knew about the affair but did nothing to help. They knew that Rhoda had been used and then discarded of but still continued to treat her as an outcast in society. She was the thing to gossip about when there was nothing

?Dead Poets society? :: essays research papers

â€Å"Dead Poets society† In the film â€Å"Dead Poets Society†, dir. Peter Weir, we can see vivid pictures from the life at Welton, a very old and traditional boys school. The action is taking place in 1950s. It is predominantly viewed by the eyes of Todd Anderson (Ethan Hawk), newcomer, who is very shy and timid and is under the pressure because of his elder brother, who was successful and popular student of Welton. He and his classmates Knox, Max, Neil Perry and the others, came here to get a classical education and they were expected so. But everything had changed when a new literature teacher, Mr. John Keating (Robin Williams), came. He graduated here and came to teach here. But he taught another way, his methods absolutely differed from those of other teachers and from the spirit of the school in a whole. He was trying to teach them out of the textbooks. He loved poetry very much and wanted his students to love it too and he believed that it would help them in their future life. And Todd, Neil an d the whole class loved him very much. They discover that while studying there, Mr. Keating organized the â€Å"Dead poets society† and decide to continue this â€Å"society†. In the secret from the whole school they get together in a cave at nights, smoked, read poetry and spoke About everything: poetry, girls, philosophy, about the life in a whole. But the principal doesn’t share the student’s admiration of their teacher. Especially after the fact that Neil Perry killed himself because he wanted to be an actor but his father didn’t allow him. He wanted his son to be a doctor. And the administration saw (or wanted to see) here the influence of Mr. Keating and his lessons. All the members of the â€Å"society† were punished and Mr. Keating – dismissed. But in the final scene, when he come to take his belongings, some his students stand up at the desks to show their protest and solidarity with their favorite teacher. In this film Peter Weir in a masterly way showed the conflict between hypocrisy spirit of Welton and fresh jet of Keating’s philosophy. In a broad meaning it can be considered as a conflict between romantism and realism, between the way we would like to live and the way we live, the real life and how should we do with this problem.

Evaluate How Practitioners Use Text, Symbols and Compositional Strategies to Construct Meaning in Artworks.

Evaluate how practitioners use text, symbols and compositional strategies to construct meaning in artworks. Artists such as Mexican Frida Kahlo and British Francis Bacon are two 20th Century practitioners who employ text, symbols and compositional strategies to construct meaning about themselves and the wider world in their paintings. Kahlo’s artworks such as he â€Å"Self-Portrait as a Tehuana (Diego in my thoughts)† and â€Å"Henry Ford Hospital 1932† provide an insight of her life and her obsessions with child-bearing and her husband, Diego Rivera.Likewise, Francis Bacon’s â€Å"Three Studies for the Figures at the Base of a Crucifixion† and his â€Å"Self-portrait 1971† conveys the suppression of his sexuality and inhumanity of one man to another. Self-Portrait as a Tehuana (Diego on my thoughts) 1943 Oil On Masonite 29 7/8 † x 24 † Gelman Collection, Mexico City Self-Portrait as a Tehuana (Diego on my thoughts) 1943 Oil On Ma sonite 29 7/8 † x 24 † Gelman Collection, Mexico City Frida Kahlo’s artworks usually construct meaning through compositional strategies including autobiographical references and personal symbolism.Kahlo’s ethnicity also has a significant impact towards her art making practices such as the repetitive themes of life and death. Her excessive fascination towards childbearing and her husband, Diego Rivera was evidently portrayed in her artworks such as her â€Å"Self-Portrait as a Tehuana† and â€Å"Henry Ford Hospital†. Kahlo’s Mexican culture is highly apparent through the traditional Tehuana costume found in her self-portraiture artwork whilst a sense of estrangement and detachment from this culture is manifested in her artwork â€Å"Henry Ford Hospital† through her representation of Detroit where she had experienced her second miscarriage.Kahlo’s life was perceptibly dominated by her obsessive love and constant thought of D iego that is has impacted her artworks thematically. This notion is evident in her self-portrait painting where Diego’s miniature portrait appears on her forehead that literally and metaphorically signifies Diego’s presence in her mind, which was also conveyed in the subtitle of her work â€Å"Diego on my mind†. Diego’s repetitive influence on Kahlo’s work is again presented in another artwork however conveyed in another context.Kahlo’s â€Å"Miscarriage in Detroit (Henry Ford Hospital)†, painted in 1932 elucidated her emotional and physical agonies from her miscarriages within her marriage to Diego. This artwork supports the notion of Frida Kahlo’s infatuation towards child-bearing whereby the six floating images that connects to her lower abdomen by an umbilical cord-looking red lines precisely references to her second miscarriage. Henry Ford Hospital, 1932 Oil on metal 32. 5 x 40. 2 cm Collection Museo Dolores Olmedo Patino, Mexico City. Henry Ford Hospital, 1932 Oil on metal 32. 5 x 40. 2 cm Collection Museo Dolores Olmedo Patino, Mexico City.Kahlo also uses symbolism and texts to convey the depth of her artworks in relationship with her personal emotions and life experiences. The artwork â€Å"Miscarriage in Detroit† evokes the excruciating experience that she had with childbearing whereby the six floating images suggests a sense of detachment and loss of control of her body. It also educes her constant link with Diego through the floating foetus that was named Dieguito meaning â€Å"little Diego†. A snail was used to represent the slow torment and horror of losing a baby while the machine is to symbolise her medical impersonality.Frida’s study of medicine prior to her bus accident enabled her awareness towards the impact of her bus accident to her body and bones. This incident significantly affected Kahlo’s artworks and was evidently revealed in her â€Å"Miscarriage in Detroit† painting where the images of a pelvis and a side-view of a female anatomy represents this event along with an orchid that her husband Diego gave her. The concepts of connection and detachment are both portrayed in this artwork whereby the floating images are â€Å"connected† to her through the umbilical cord-like string connecting to her uterus.This string-like line links the objects to herself advocating its personal connection to Kahlo. The floating images also metaphorically suggest her detachment to the place where she had her second miscarriage. Kahlo also used personal symbolism to convey meaning in her artworks, which was clearly portrayed in her â€Å"Diego on my mind† painting in 1943. Diego’s obvious domination in Kahlo’s life is evident in her artworks where her obsessive love and constant thought of Diego has become a thematic notion in most of her paintings.Diego’s miniature portrait on her forehead indicates her obsessi ve love and constant thought of him. Due to this desperate infatuation of Diego, she painted herself in the costume that he greatly admired to attract and entice him closer to her. The roots of the leaves surrounding her head metaphorically symbolises a pattern of a spider’s web in which she hoped to trap her prey, Diego. The impassive image of Rivera’s face on Kahlo’s forehead however indicates her psychological obsession towards Diego but also of her â€Å"philandering† husband’s tarnished indifference to her feelings.Surrealist artists such as Frida Kahlo evoke the meaning of their artworks through the use of symbols, texts and various compositional strategies. Musee National d’Art Moderne, Centre Georges Pompidou, Paris Francis Bacon, a British painter elucidates his personal emotions through abstraction and surrealism which are evident in his artworks such as his â€Å"Self-portrait 1971† and one of his triptych series â€Å"Thr ee Studies for the Figures at the base of Crucifixion† in 1943-1944. Bacon portrays both the suppression of his sexuality and similarly to Kahlo’s feeling of detachment and hostility.His â€Å"Self-portrait 1971† conveys a provocative and disturbing representation of Bacon, one which embodies the painter’s strong feelings of despair and vulnerability that was possibly caused by the suicidal death of his lover Dyer during the same year. This distorted image of himself intensified with his use of broad-brush strokes, as well as the dark colours which are made harsher and more prominent but the added whites and blues. His emotionless state and detachment from the audience was symbolised through his blackened eyes thus also conveying his constant motif of death and â€Å"silent screams†.The name of his artwork is somewhat ironical towards his painting as the text states that it is a self-portrait however, it was distorted and perhaps metaphorically refe rring to his emphasis to the suppression of his sexuality. Bacon’s artwork â€Å"Three Studies for the Figures at the Base of a Crucifixion† in 1943-1944 summarises themes explored in his previous paintings, including his examination of Picasso's biomorphs and his interpretations of the Crucifixion and the Greek Furies.Bacon did not realise his original intention to paint a large crucifixion scene and place the figures at the foot of the cross. The structure of the artworks when put together does not convey any commonality thus further emphasising his personal emotions towards the feelings of displacement. The brightness and contrasting colours used in this artwork signifies the chaotic environment that he was in. The third image illustrates an open and gaping mouth as if it was screaming out of pain.This idea references back to his childhood and the suppression of his sexuality. The screaming object in the painting is a representation of Bacon’s emotions during the times when homosexuality was a crucial topic to the society. The artists Francis Bacon and Frida Kahlo both convey the meaning of their artworks with references to their personal life experiences through the use of symbols, texts and compositional strategies.

Kotler Ch. 1 Jetblue Company Case 14th Edition

1. The need being met by JetBlue is mainly transportation. In today’s world consumers need to be able to travel long-distances quickly and JetBlue’s practices ensure customer comfort/satisfaction along the journey. The wants of JetBlue’s customers are to safely and quickly travel on an airplane. They also want to be comfortable and treated well. JetBlue accomplishes this by providing leather seats and entertainment with great customer service. The demands of this airline’s customers are pretty low. They are already flying on a â€Å"discount airline,† yet they have great amenities such as more legroom.There are not really any wants that money needs to back in this scenario. JetBlue has done a good job at ensuring everything from email is available at no extra charge. 2. Consumers exchange money and time for a flight with JetBlue. They also give up the ability to fly with another airline. In exchange, however they get the â€Å"happy jetting† experience. This includes amenities such as plush seats and snacks combined with excellent customer service. From the terminal, to the plane, JetBlue employees are courteous and nice.This overall experience is highly valued by JetBlue and is supported by all the smaller facets of their market offering. 5. JetBlue should certainly be able to continue building customer relationships successfully. While Southwest is a competitor, JetBlue does have the competitive edge in cost. Also, their fun culture combined with loyal customers who spread the word certainly helps continue this success. It’s not easy to offer such great amenities while also having low fares, but JetBlue also places a lot of value on their intangible wonderful customer service.

Industrial Electronics Bonus

Industrial Electronics, Inc. Is an electronic equipment company that has annual sales exceeding $ 8 Billion. The company is set up by product line and operates as 16 divisions, reporting to four business managers. Unfortunately, due to the recession and the competitiveness of the emerging and developing industry, the bonus pool for the employees has decreased causing Issues with employee morale, and can overall affect the profitability of the organization If the company analyzed the ROI of turnover and training.Therefore, the company reviewed the current bonus structure and proposed a new bonus structure for the Division Managers, as they currently felt their contributions to their departments was not being rewarded. The current bonus system focus on the overall goals of the company. Although it is essential to set and communicate company goals, having this one structure as the only measurement for bonus can be detrimental. If one or a few departments contribute to the company not ac hieving their goals, this means that all employees and departments are not being recognized for their contributions.The current goal is a 10% bonus pool of the company's profitability after taxes in excess of 12& of the company's book net worth allocated for the bonus pool. The proposed bonus structure Is set up to drive the performance more directly related to the division, but not does not focus on any overall company goals. In order to stay in business the overall goals and financial metrics need to be a part of the bonus system. The targets for this new structure are set and negotiated during the budgeting process.If the division managers are going to be held to achieve and/or et these standards their input should be taken into consideration during the budgeting process if they are not directing Involved or responsible for the budgets. This will allow the organization to have the buy In and accountability from the Division Managers and their employees throughout the year in achi eving these targets. This will also allow for employees to be more responsible for controllable cost and waste.The proposed bonus system percentage awards of the Division Managers Base Salary would be: Dillon A : 63. 5% 150% (this is the maximum amount payable) DiViSion B. Division C: 63. 7% Division D: 68 Division E. 26. 2% An optimal bonus plan for Industrial Electronics, would be one that comprises both and success overall in order to pay out bonus and provide employment, but they can drive this overall company success also through operational excellence, key metrics and standards at the divisional level.Therefore, the bonus plan should include company objective and division objective. The divisional objectives should be directly related that divisions related business relevance to the organization, with set key performance indicators which can include sales, output, controllable costs as labor, reduce costs, waste, turnover, etc. The bonus plan also should not be structured as a n all aqua r nothing.For example, maybe it the division does not achieve it sales goals but maintain the controllable expense in accordance with the achieved sales, they receive a partial bonus. If the division does not hit its target but the company does the employees still received a portion of the bonus, as they are part of the organizational teams overall success. Their individual performance behaviors or lack thereof, should be addressed during their buy seines reviews and/or salary review and increases.

Loans & Advances of Dhaka Bank

Home  » Business  » Economics  » Report on Procudure for Distributing Loans and Advance at Dhaka Bank Report on Procudure for Distributing Loans and Advance at Dhaka Bank on March 20, 2013 in Economics [pic][pic]1. a. Introduction Internship program is a pre-requisite for acquiring M. B. A. degree. Before completion of the degree, a student must, undergo the Internship program. As the classroom discussion alone cannot make a student perfect in handling the real business situation, therefore, it is an opportunity for the students to know about the real life situation through this program.The program consists of three phases: 1. The orientation of the Intern with the organization, its function and performance. 2. The project work pertaining to a particular problem or problems matching with the Intern’s area of specialization and organizational requirement. 3. The report writing to summarize the Intern’s analysis, findings and achievements in the proceeding of the fo llowings. 1. b. Objectives of the Report: The report has two objectives: 1. General Objective 2. Specific Objective 1) General objectives of the report: The general objective of the report is to complete the internship.As per requirement of MBA program of Chittagong University, a student need to work in a business organization for two months to acquire practical knowledge about real business operations of a company. 2) Specific objective of the report: The specific objective of this report is to find and analyze the Credit facilities (its outstanding, recovery, classified loans etc), approval and monitoring process of Dhaka Bank Limited, Local office. It will also include gathering an idea about the securities behind the loan facilities and issuing different bank guarantees.The detail objectives of my study are as follows- †¢   To access the credit structure of banks in practice. †¢   To measure the effectiveness of the selected banks in utilization of their available deposit and resources. †¢   To identify the relationship with their customers. †¢   To identify the loan recovery performances of the selected banks. †¢   To find out the deposit utilization problems. †¢   To find out the implementation of credit risk management policy of the selected banks. †¢   To find out the implementation of the credit risk grading manual of Bangladesh bank by the selected banks. To find out the unsound credit according to the credit risk management policy. 1. c. Methodology Methodology of the study: This report is mainly prepared by the secondary sources of information & some few primary sources of information like – O Direct observation. O Information discussion with professionals. O Questioning the concerned persons. The secondary sources of my information – O Annual reports of DBL. O Credit rating report of DBL by credit rating information & services limited. O Desk report of the related department. O Credit manual information. O Different reference books of the library.O Some of my course elements as related to this report. 1. d . Scope of the study: This report will cover an organizational overview of Dhaka bank. It will give a wide view of the different stages of credit appraisal system of Dhaka bank, starting from the loan application to Loan disbursement and the comparison between standard and existing credit appraisal system of a Bank. The study is organized as follows: †¢   Credit profile of the selected banks. †¢   Loan recovery. †¢   The nature of default. †¢   Credit management and guidelines. †¢   Analysis of the findings and recommendation. 1. e.Limitations There are some limitations I had to face while preparing this report. It is very difficult to collect some of the important data and information. There is some information very secret and the Bank didn’t want to provide this information. But this information may help to build a go od report. Another limitation is availability of the data. The bank doesn’t have sufficient documents of the interest amount they collect from different loans. For this there is no specific profit calculation of the credit department. So, These kinds of limitations I faced while preparing the report. . a. Dhaka Bank Limited DHAKA BANK LIMITED was incorporated as a public limited Company on 6th April 1995 under the company act. 1994 and started it’s commercial operation on June 05, 1995 as a private sector bank. The bank started its journey with an authorized capital of Tk. 1,000. 00 million and paid up capital of Tk. 100. 00 million. The strength of a bank depends on its management team. The Employer in Dhaka Bank is proud to have a team of highly motivated, well-educated and experienced executives who have been contributing substantially in the continued progress of the bank.The marketing activities at the Dhaka Bank are very implicit and vast comparing to that of oth er bank in the country today. The Philosophy of the bank is â€Å"EXCELENCE IN BANKING†. Dhaka Bank is always willing to offer new product features to the client. Besides the applications of these products or services are prepared in a very modern way so that the service can be provided in least time required. The Credit facilities approved by Dhaka Bank are increasing day by day because of its well-organized and trained management and also well-equipped facilities.In recent time banking sector becomes very competitive and without giving good and attractive facilities and service no bank can survive in this time. Dhaka Bank is also trying to provide good service to keep going with this competition. 2. b. Mission Statement: To be the premier financial institution in the country providing high quality products & services backed by latest technology and a team of highly motivated personnel to deliver Excellence in Banking. 2. c. Vision Statement: At Dhaka Bank, we draw our inspi ration from the distant stars.Our term is committed to assure a standard that6 makes every banking transaction a pleasurable experience. Our endeavor is to offer you razor sharp sparkle through accuracy, reliability, timely delivery, cutting edge technology, and tailored solution for business needs, global reach in trade and commerce and high yield on your investments. Our people, products and processes are aligned to meet the demand of our discerning customers. Our goal is to achieve a distinction like the luminaries in the sky. Our prime objective is to deliver a quality that demonstrates a true reflection of our vision- Excellence in Banking. . d. Slogan: Excellence in Banking. 2. e. Company Philosophy The motto or the philosophy of the Bank is â€Å"Excellence in Banking†. Whether in Personal, Corporate, Treasury or Trade transactions of Dhaka Bank Limited is committed to provide the best. Meeting the demand of the bank’s discerning customers is not the sole object ive. The Bank endeavor to deliver a quality that makes every transaction a pleasurable experience. Dhaka Bank feels that, if they can meet maximum clientele requirements in less time with efficiency, then they will be able to accomplish a successful business in the world of banking.Their main objective is – they want to provide every single customer service available in today’s banking procedure for their clientele. Thus they can guarantee the excellence in banking to their valuable customers. 2. f. Company Activities and Performances Paid up Capital The paid up capital of Dhaka Bank Limited amounted to Tk. 1,547 million as on December 31, 2008 which was Tk. 100 million when the Bank started its operation. The total equity (capital and reserves) of the Bank as on December 31, 2008 stood at Tk. 3125 million. Deposits A strong deposit base is critical for success of a bank.During the years the Bank has mobilized a substantial amount in deposits in transactional and savin gs account. The deposit base of the bank continued to register a steady growth and stood at Tk. 48,731 million excluding call as of 31 December 2008 compared to Tk. 41,554 million of the previous year registered a 17% growth. Investment Dhaka Bank has diversified its investment portfolio through Lease Financing, Hire Purchase, and Capital Market Operations besides the investment in treasury bills and Prize Bonds. The emphasis on high quality investment has ensured the bank to maximize its profit.Dhaka Bank Limited is a member of the Dhaka Stock Exchange and Chittagong Stock Exchange. A specialized unit of the Bank, the Investment Division manages the Bank’s portfolio and actively participates in the screen-based on-line trading of both the Stock Exchanges. Profit Dhaka Bank Limited registered an operating profit of Tk. 2,010 million in 2008 compared to Tk. 1,183 million in 2007 making a growth of 70%. After all provisions including general provisions on unclassified loans, pr ofit before tax stood at Tk. 1,531 million. Provision for tax for the year 2008 amounted to Tk. 27 million. The net profit of the bank as on 31 December 2008 stood at Tk. 704 million compared to previous year’s Tk. 580 million making growth of 21%. Earning per share (EPS) was Tk. 46. 06 in 2007 compared to Tk. 45. 17 in 2007. Loans and Advances The Bank implemented the system of credit risk assessment and lending procedures by stricter separation of responsibilities between risk assessment, lending decisions and monitoring functions to improve the quality and soundness of loan portfolio. The Bank recorded a 17 % growth in advances with a local loans and advances portfolio of Tk. 9,972 million at the end of December 2008 compared to Tk. 34049 million at the end of December 2007. As of 31 December 2008, 96. 85 % of the total Bank’s loan portfolio was regular while only 3. 15 % of the total portfolio was non-performing as compared to 1. 64 % of 2007. Bank made required pr ovision as on 31 December against performing loans as per rate and classification norm provided by Bangladesh Bank (se note-2c). The volume of non-performing loans stood at Tk. 1,258 million in 2008 from Tk. 554 million in 2007. Of the total loan provision of Tk. 04 million, Tk. 465 million was general provision, which was 51 % of total provision. The rest Tk. 439 million was against the classified accounts. 1. Non-performing loan 2. Regular Loan A wide range of business industries and sectors constitutes the Bank’s advance portfolio. Major sectors where the Bank extended credit include steel and engineering, ship breaking, edible oil, sugar, housing and construction, pharmaceuticals, chemicals, electronic and automobiles, energy and power, service industries, trade finance, personal or consumer credit, leasing etc.The Bank continued to support Small and Medium Enterprises (SME) and expended credit facilities to them through its SME Cell. Sector wise allocation of advances re veals a well-diversified portfolio of the Bank with balance exposure in different sectors. High concentration sectors are textile and garment industries with outstanding of Tk. 7,524 million, housing and construction with Tk. 4,093 million, food and allied industries with Tk. 2,949 million and engineering and metal including ship braking with Tk. 1,903 million as at 31 December 2008. Customer ServiceCustomer is in the core of everything a service-oriented company does. Accuracy, reliability, and timely delivery are the key elements of the Dhaka Bank’s service. Well-qualified and experienced officials always prepared to provide efficient, personalized and quality service man Dhaka Bank Limited. The banks prime objective is to provide high quality product and services to the customers. The bank also performs according to the needs of its corporate clients and provides a comprehensive range of financial services to national and multinational companies. International Trade & Fore ign ExchangeInternational trade constituted the major business activity conducted by the bank. Dhaka Bank offer a full range of trade finance services, namely, Issue, Advising and Confirmation of documentary Credits; arranging forward Exchange cover; Pre-shipment and post- shipment finance; Negotiation and purchase of Export bill; Discounting of bills of Exchange, Collection of bills etc. In the year 2008, Dhaka Bank Limited was active in extending services to their valued clients related with import business. As of 31st December 2008 the import volume was Tk. 49,496 million compared to the volume of 2006 for Tk. 6,277 million marking as increase of 7% from the last year. Dhaka Bank Limited experienced sound growth of export business in 2007 from 2006. The volume of export business rose to Tk. 31,081 million from Tk. 23,269 million in 2007 showing an increase of 34%. Branches Dhaka Bank has opened already 41 branches in different Cities, Places and areas in Dhaka and also in Chittag ong, Sylhet, Narayangonj, Norshingdi and Savar. This shows the banks commitment to provide services to their valued customers through an extensive branch network at all commercially important places across the country.They also have planned to open more branches in the sort coming year. These branches are well decorated and well secured with the new technologies. Human Resources and Training The driving force behind Dhaka Bank has always its employees. The bank recognizes that professional development of its people is vital to establishing workers as a provider of quality service. In this regard, the bank have expanded its training facilities and set up a full-fledged training institute at SaraTower, Motijheel, Dhaka. Environmental Management ProgramThe Bank’s Environmental Management Program stipulates adherence with environmental, health and safety regulations and guidelines, refraining from business that impairs the ability of future generations to meet their own needs, as sessing an mitigating risks concerning environment, health and safety issues that the bank undertake. Community Service The Bank extends assistance to socio-cultural and community development programs. During the years under review, the Bank had provided support to a number of community welfare programs. At present Dhaka Bank assist the National Hokey Federation. Technologies, Products and ServicesDhaka Bank’s products and services are regularly upgraded and realigned to fulfil customer expectation. Their delivery standards are constantly monitored and improved to assure the highest satisfaction. The bank specially emphasizes on the service base on technologies. Because the life became very fast and people want take service within sort time. The consumer-banking sector of the Bank deals with number of tasks related to various services. The products that are recently being offered by the bank are as follows –   Accounts: Dhaka Bank provides the Savings Account; Curren t Account; Short Term Deposit; Fixed Deposit Receipt etc. or the customers. ATM (Automated Teller Machine): Dhaka Bank ATM Cards enable their valued customers to carry out a variety of banking transactions 24 hours a day. Credit Cards: Dhaka Bank Credit Card has earned wide acceptability and reputation within a very short time. The Bank has developed the process such that it can deliver the Credit Card within only 7 days against security; for unsecured cards it takes only 10 days. Phone banking: Dhaka Bank phone banking service allows customers to conduct a variety of transactions by simply making a phone from anywhere.Customers can inquire about the balance in their account, check transaction details or request for account statement by fax or e-mail. Locker: By this facility customers can put their valuable things such as jewelry items, valuable papers etc. for the safety reason. Consumer Credit: Dhaka Bank also provides consumer credit facilities with very attractive terms and con ditions. Industrial Loan: Loans issued for purchasing equipment, inventories, plants, payrolls etc. Any Branch Banking: By this customers can transact from any branch insight the country.Utility Bill Payment: Customers can pay different utility bill such as phone bill, credit card bill etc. 3. a. Bank: Banks are among the most important financial institutions in the economy. They are the principle source of credit (loanable fund) for millions of households (individuals and families) and for most local units of government. Moreover, for small businesses ranging from grocery stores to automobile dealers, banks are often the major source of credit to stock the shelves with merchandise or to fill a dealer’s showroom with new goods.When the business and consumers need financial information and financial planning, it is the bankers to whom they turn most frequently for advice and council. 3. b. Types of Bank Loans: The banks make a wide variety of loans to a wide variety of custome rs for many different purposes-from purchasing automobiles and buying new furniture, taking dream vacations and pursuing college education to constructing homes and office buildings. Bank loans may be divided into the following broad categories of loans, delineated by their purpose:   1.Real Estate Loans, which are secured by real property-land, buildings, and other structures- and include short-term loans for construction and land development and longer-term loans to finance the purchase of farmland, residential, and commercial structures etc. 2. Financial institution Loans, including credit to banks, insurance companies, finance companies, and other financial institutions. 3. Agricultural Loans, extended to farm and ranch operations to assist in planting and harvesting crops and to support the feeding and care of livestock. 4.Commercial and Industrial Loans, granted to business to cover such expenses as purchasing inventories, plant, and equipment, paying taxes, and meeting payr olls and other operating expenses. 5. Loans to Individuals, including credit to finance the purchase of automobiles, homes, appliances and other retail goods to repair and modernize homes, cover the cost of medical care and other personal expenses, either extended directly to individuals or indirectly through retail dealers. 6. Lease Financing Receivables, where the bank buys equipment or vehicles and leases them to its customers.Among the categories, the largest volume is in the real estate loans. The next largest category is commercial and industrial loans. 7. Asset-based Loans, loans secured by a business firm’s assets, particularly accounts receivable and inventory. Installment Loans, credits that is repayable in two or more consecutive payments, usually on a monthly or quarterly basis. 9. Letter of credits, a legal notice in which a bank or other institution guarantees the credit of one of its customers who is borrowing from another institution. 0. Retail Credit, smaller -denomination loans extended to individuals and families as well as to small business. 11. Term loans, credit extended for longer than one year and designed to fund longer-term business investments, such as the purchase of equipment or the construction of new physical facility. Term Loans are designed to fund long-and medium-term business investments, such as the purchase of equipment or the construction of physical facilities, covering a period longer than one year.Usually the borrowing firm applies for a lump-sum loan based on the budgeted cost of its proposed project and then pledges to repay the loan in a series of installment. 12. Working Capital loan, provide businesses with short-run credit, lasting from a few days to about one year. Working Capital Loans are most often used to fund the purchase of inventories in order to put goods on shelves or to purchase raw materials; thus, they come closest to the traditional self-liquidating loan described above.Frequently the Working C apital Loan is designed to cover seasonal peaks in the business customer’s production levels and credit needs. 3. c. Credit Analysis: The division of the bank responsible for analyzing and making recommendations on the fate of most loan applications is the credit department. This department must satisfactorily answer three major questions regarding each loan applicat 1. Is the Borrower Creditworthy and how know that? The question must be dealt with before any other is whether or not the customer can service the loan- that is, pay out the credit when due, with a comfortable margin for error.This usually involves a detailed study of six aspects of the loan application: – Character   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   🙠 well defined purpose for loan request and a serious intention to repay), Capacity   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   🙠 proper authority to request for the loan and legal standing to sign a loan agreement), Cash   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   🙠 ability to generate enough cash, in the form of cash flow), Collateral   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   🙠 enough quality assets to provide adequate support for the loan), Conditions   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   🙠 aware borrower’s line of work and also economic conditions), and Control   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   : All must be satisfactory for the loan to be a good ne from the lender’s point of view. 2. Can the loan agreement be properly structured and documented so that the bank and depositors are adequately protected and the customer has a high probability of being able to service the loan without excessive strain? The loan officer is responsible to both the customer and the Bank’s depositors and stockholders must seek to satisfy the demands off all. This requires, first, the drafting of a loan agreement that meets the borrower’s need for funds with a comfortable repayment schedule.The borrower must be able to comfortably handle any required loan payments, because the bank’s success depends fundamentally on the success of its customers. If a major borrower gets into trouble because it is unable to service a loan, the bank may find itself in serious trouble as well. So, the bank’s loan officer must be a financial counselor to customers as well as a conduit for their loan applicants. 3. Can the bank perfect its claim against the assets or earnings of the customer so that, in the event of default, bank funds can be recovered rapidly at low cost and with low risk?While large corporations and other borrowers with impeccable credit ratings often borrow unsecured, with no specific collateral pledged behind their loans except their reputation and ability to generate earnings, most borrowers at one time or another will be asked to pledge some their assets or to personally guarantee th e repayment of their loans. Getting a pledge of certain borrower assets as collateral behind a loan really serves two purposes for a lender.If the borrower cannot pay, the pledge of collateral gives the lender the right to seize and sell those assets designated as loan collateral, using the proceeds of the sale to cover what the borrower did not pay back. Secondly, collateralization of a loan gives the lender a psychological advantage over the borrower. Because specific assets may be at the stake a borrower feels more obligated to work hard to repay his or her loan and avoid losing valuable assets. The most popular assets pledged as collateral for bank loans are- Accounts Receivable, Factoring, Inventory, Real Property, Personal Property, Personal Guarantee etc. . d. Loan Review: Banks today use a variety of different loan review procedures; nearly all banks follow a few general principles. These include: 1)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Carrying out reviews of all typ es of loans on a periodic basis- for example, every 30, 60, or 90 days the largest loans outstanding may be routinely examined, along with a random sample of smaller loans. 2)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Structuring the loan review process carefully to make sure the most important features of each loan are checked. )  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Reviewing most frequently the largest loans, because default in these credit agreements could seriously affect the bank’s own financial conditions. 4)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Conducting more frequent reviews of troubled loans, with the frequency of review increasing as the problems surrounding any particular loan increase. 5)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Accelerating the loan review schedule if the economy slows down or if the industries in which the bank has made a substantial portion of its loans develop significant problems. 3. e. Handling Problem Loans:Inevitably, d espite the safeguards most banks build in their lending programs, some loans on a bank’s books will become problem loans. Usually this means the borrower has missed one or more promised payments or the collateral pledged behind a loan has declined significantly in value. The process of recovering the bank’s funds from a problem loan situation- suggests the following key steps: 1)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Always keeps the goal of loan workouts firmly in mind: to maximize the bank’s chances for the full recovery of its funds. )  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The rapid detection and reporting of any problems with a loan are essential: delay often worsens a problem loan situation. 3)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Keep the loan workout responsibility separate from the lending function to avoid possible conflicts of interest for the loan offers. 4)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Estimate what resources are ava ilable to collect the troubled loan. 5)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Loan workout personnel should conduct a tax and litigation search to see if the borrower has other unpaid obligations and many other processes. CREDIT MANAGEMENT: POLICY & PROCEDURESIntroduction: In general, a banking system aggregates a high number of low value deposits to fund enterprises with a smaller number of high value loans. This intermediation through a well functioning bank helps to achieve some economic benefits for the depositors, the borrowers and above all — the economy in the following ways: The depositors: †¢ Higher return †¢ Lower risk †¢ Greater liquidity The borrowers: †¢ Availability of fund for all credit worthy borrowers †¢ Thus allows to enterprises grow and expand The economy Economic growth is maximized as the banks channels the country’s scare financial resources into those financial opportunities with maximum return †¢ Thus profit able enterprises receive funding, grow and expand. †¢ Loss making enterprises are refused funding and allowed to go out of the business – thus saving the economy from drainage of resources. The bank must allocate loans effectively for achieving these broad objectives of the economy and the pre-requisites are: †¢ Banks are able to identify reliably those enterprises that can repay their loans. Banks allows loans to those enterprises likely to yield high return and deny loan to those likely to yield low or negative returns. While identifying profitable enterprises, the bank – in fact – identifies risks of the borrower and business in order to allow loan in the context of its risk – return profile. Credit risk management (CRM) is a dynamic process, which enables banks to proactively manage loan portfolios. Four major areas of CRM are: †¢ Policy – lending guidelines †¢ Procedure – evaluating viability and associate risks of b usiness enterprises. Organizational structure – segregation of risk taking and risk approving authority †¢ Responsibility – decision making and accountability A clear understanding of the four areas are crucial for maximizing bank’s earning by carefully evaluating credit risks and attempting to minimize those risks. 4. a. Policy objectives: 1) Maximize Bank’s earning from loan portfolio 2) Improve quality of loan portfolio to maximize earnings by: a) To keep non-performing assets below 10% b) Arresting new loans to become classified. ) Utmost emphasis on loan sanctioning is to be given in order to improve quality of the loan portfolio. Credit facilities are to be considered solely on viability of business / enterprises / project / undertaking having adequate cash flows to adjust the loans, and management capacity of the borrower to run the business profitably. 4) Evaluate credit risks before sanctioning, which may hamper generation of the projected c ash flows of the borrower and might delay or hinder repayment of bank’s loan. ) Monitoring continuously performances of the financed projects / business / enterprises will be bank’s main trust for ensuring repayment of the loan, and receiving early warning (EL) for taking timely corrective measures. 6) Price the loans on the basis of loan pricing module of the bank focusing on risk rating of the borrower. 7) Strict adherence to Bangladesh Bank’s policy guidelines 4. b. Lending guidelines As the very purpose bank’s credit strategy is to determine the risk appetite of the bank, so bank’s focus should be to maintain a credit portfolio to keeping in mind of our risk absorbing capacity.Thus its strategy will be invigoration loan processing steps including identifying, measuring, containing risks as well as maintaining a balance portfolio through minimizing loan concentration, encouraging loan diversification, expanding product range, streamlining securi ty, insurance etc. as buffer against unexpected cash flow. Types of credit facilities Bank will go for: †¢ Term financing for new project and BRME of existing projects (Large, Medium, SE) †¢ Working capital for industries, trading, services and others (Large, Medium, SE) †¢ Import and export Finance Lease Finance †¢ Consumer Finance †¢ Fee Business †¢ Islamic mode of finance Single borrower/ Group limits / Large Loans / Syndication The limit for single client / group under one obligor concept will be as under: 1. The total credit facilities by a bank to any single person or enterprise or organization of a group shall not any point of time exceed 35% of the bank’s total capital subject to the condition that the maximum outstanding against fund based financing facilities (fund facilities) shall not exceed 15% of the total capital. 2. Non-funded credit facilities, e. g. etter of credit, guarantee etc. can be extended to a single large borrower. But under no circumstances, the total amount of the funded and non-funded credit facilities shall exceed 35% of bank’s total capital 3. However, in case of export sector, single borrower limit shall be 50% of the bank’s total capital. But funded facilities in the form of export credit shall not 15% of the total capital   Large loan 1. Loan sanctioned to any individual or enterprise or any organization of a group amounting to 10% or more of bank’s total capital shall be considered as large loan. 2.The bank shall be able to sanction large loans as per the following limits set against their respective classified loans: |Rate of net classified loans |The highest rate fixed for large loans against bank’s total | | |loans & advances | |Up to 5% |56% | |More than 5% but up to 10% |52% | |More than 10% but up to 15% |48% | |More than 15% but up to 20% |44% | |More than 20% |40% | 3. In order to determine the above maximum ceiling for large loans, all on-fund ed credit facilities e. g. letter of credit, guarantee etc. shall also be considered to arrive 50% credit equivalent. However the entire amount of non-funded credit facilities shall be included while determining the total credit facilities provided to an individual or an enterprise or an organization or a group. 4. A Public Limited Company, which has 50% or more public share holdings, shall not be considered as an enterprise / organization of any group. 5. In case of credit facilities provided against government guarantees, the aforementioned restrictions shall not apply 6. In the case of loans backed by cash and excusable securities (e. g.FDR), the actual lending facilities shall be determined by deducting the amount of such securities from the outstanding balance of the loans. 7. Banks shall collect the information to the borrowers from Credit Information Bureau (CIB) of Bangladesh Bank before sanctioning, renewing or rescheduling loans to ensure that credit facilities are not pro vided to defaulters. 8. Banks shall perform Lending Risk Analysis (LRA) before sanctioning or renewing large loans. If the rating of an LRA turns to be â€Å"marginal†, a bank shall not sanction large loan, but it can consider renewal of an existing large loan taking into account other favorable conditions and factors. However, if the result of an LRA is unsatisfactory, neither sanction nor renewal of large loans shall be considered. 9.While sanctioning or renewing large loan, a bank shall assess borrower’s overall debt repayment capacity taking into consideration the borrower’s liabilities with other banks and financial institutions. 10. A bank shall examine its borrower’s Cash flow Statement, Audited Balance Sheet, income Statement and other financial statement to make sure that the borrower has the ability to repay the loan. Term Financing and Syndication Like large volume of loan, long term financing is one of the riskiest areas of the bank because of long duration of repayment. Long duration casts uncertainties on repayment as variable with which financial and other projections are made very widely in a dynamic global economic scenario.Thus utmost care is to be exercised while considering long term financing †¢ Long term relationship with the borrower is prerequisite for considering term financing †¢ Due diligence is to be exercised for accessing viability of the projects in terms of Management ability, Market gap, Technical suitability, Financial viability. †¢ Information on projects should be adequate and reliable †¢ Minimum information for project viability analysis is to be given. Syndication Syndication means joint financing by more than one bank to the same clients against a common security basically, to spread the risk. It also provides a scope for an independent evaluation of risk and focused monitoring by the agent / lead bank.In syndication financing banks also enter into an agreement that one of t he lenders may act as Lead Bank, who has to co-ordinate the activities at various stages of handling the proposal i. e. appraisal, sanction, documentation sharing of the security, disbursement, inspection, follow – up, recovery etc. it may also call meetings of syndication members, whenever necessary to finalize any decision Discouraged business types In the context of present economic situation vis-a-vis government policy as well as market scenario, the following industries and lending activities are considered as discouraged †¢ Military Equipment / Weapon Finance †¢ Highly leveraged Transactions †¢ Finance of speculative business Logging, Mineral Extraction/ Mining or other activity that is ethically or environmentally sensitive †¢ Lending to companies listed on CIB black list or known defaulters †¢ Counter parties in countries subject to UN sanctions †¢ Share lending †¢ Taking an equity stake in borrowers †¢ Lending to holding compan ies †¢ Bridge loans relying on equity / debt issuance as a source of repayment Loan facility parameters Size: Funded: maximum 15% of Bank’s total capital : Funded + Non Funded: 1)  Ã‚  Ã‚  Ã‚  Ã‚   Shall not exceed 35% of bank’s total capital 2)  Ã‚  Ã‚  Ã‚  Ã‚   Maximum 50% of Bank’s total capital for export sector. (Funded facility shall also not exceed 15% of bank’s total capital). Tenor: Short term: Maximum 12 months Medium Term: Maximum 5 years   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Long Term: Maximum 15 yearsMargin: To be determined by Banker Customer relationship and nature of business. Security: Return of Banks funding to any business is ensured primarily on the cash flow of the business. A smooth flow of cash in the business requires efficient management competence in conducting the business in a given market. However as the market never remains stable owing to various uncontrollable factors, the continuity of well- managed business cash flow is difficult to visualize in the long run. As such to ensure realization of Banks finance in case of any eventuality, other adequate security coverage deemed necessary with a view to protects interest of the bank. General Covenants Bank shall not extend any credit facility to any defaulter as defined in the bank company act 1991(clean CIB report required. ) †¢ The borrower shall have valid Trade license, †¢ In case of partnership firm there must be a partnership deed duly notarized / registered. †¢ Limited Company must be registered with the Registrar of Joint Stock Company. †¢   Directors and other loans will be subordinated to Dhaka Banks loan. Directors loan (if any) will be interest free and no dividend will be declared/paid before full adjustment of Term Loan of Dhaka Bank. †¢ The borrower shall submit annual audited/un-audited/projected financial statements regularly where applicable. †¢ The borrower shall maintain cur rent ratio of not less than 1. 5 times.. The borrower shall obtain and maintain in full force and effect all Government of Bangladesh (GOB) authorizations, licenses and permits required to implement and operate Borrowers business. †¢ The borrower shall maintain all insurance as detailed in Loan Documents. †¢ The borrower shall maintain satisfactory swing/turnover of the limit in case of continuous loans/advance. †¢ The borrower shall pay all fees , duties , taxes etc, that are due to the Government of Bangladesh (except where waivers or deferrals have been granted by Government of Bangladesh) when due. †¢ The borrower shall not create any charge, mortgage or any encumbrances of any other security interest over any of its assets without the prior written consent of the Bank. The borrower shall not avail any credit facility from other source without the prior written consent of the bank. †¢ The borrower shall not make any amendment/alteration in the Companyâ⠂¬â„¢s Memorandum & Articles of Association without obtaining prior approval of Dhaka Bank Ltd in writing. †¢ The borrower shall not furnish any corporate guarantee to other firm/company without Banks permission. Events of Default Bank will have the right to call back the Loan/Advance in the event of default under the following circumstances: †¢ Failure to repay †¢ Breach of Covenants of the loan agreement. †¢ Bankruptcy or liquidation or insolvency event affecting the Borrower. †¢ Occurrence of a material adverse change in the financial position of the Borrower. Any change in GOB directives, which in the opinion of the Lenders would prejudice the Borrowers ability to meet the financial obligations in respect of this facility, †¢ Any security interest over any asset of the Borrower becomes enforceable or any execution or distress is levied against or any person is entitled to or does take possession of the whole or any part of the assets or undertakings . Facility Wise Charge Documents %3 |L/C |LTR |BG |TL |CC Hypo/CC Pledge (Key Stock to | | | | | |Bank) | |1. Promissory Note|1. Promissory Note |1. Promissory Note |1. Promissory Note |1. Promissory Note | |2. Letter of |2. Letter of Undertaking |2. Letter of Undertaking |2. Letter of Undertaking |2.Letter of Undertaking | |Undertaking | | | | | |3. A/C Balance |3. A/C Balance confirmation |3. A/C Balance confirmation |3. A/C Balance confirmation |3. A/C Balance confirmation Slip | |confirmation Slip |Slip |Slip |Slip | | |4. Letter of |4. Letter of Continuity |4. Letter of Continuity |4. Letter of Continuity |4. Letter of Continuity | |Continuity | | | | |