Information technology vs industrial cluster formation Essay

Data innovation versus mechanical group arrangement - Essay Example The significance of business sectors and limits characterizing the business sectors and business spaces have experienced a total change as a result of the web and encouraging mechanical change that it got its wake. While corporate business world has exploited the web, it has still I the early periods of acknowledging full help and capability of the web. IT theorists proposed colossal advantages from the web which implied migration and complete physical opportunity from the clients, contenders and physical limits of the market which prior characterized the very furthest reaches of any industry. By mid twentieth century, the business sectors were would in general be characterized at neighborhood level, at city level and at the national levels. There was little notice of the universal or worldwide markets. This was a direct result of restricted advancement accomplished in the methods for correspondences and transportations. Most markets were considered as physical definitions or definit ions as far as physical nearness of the purchasers and merchants. Each spot where purchasers and merchants could be genuinely present were characterized as neighborhood markets. Any place the purchasers and venders could assemble from a national scale were the national markets. The constrained progressions in the methods for transport and interchanges were a characteristic hindrance available definition. Conversation: As the industrialization procedure developed and the methods for transport and correspondences likewise developed with them. The start of the railroads framework and the messages and phone realized a few relaxations in the meaning of the business sectors and the business sectors definitions likewise incorporated the zones from distant here there were clients of any item or administration where transport means, for example, rail routes and correspondence means, for example, phone and broadcasts approached. In this manner the methods for transport and interchanges have f illed in as a key factor characterizing the geological limits of business sectors. The meanings of the market limits has moved connected at the hip with the headways of the transportation and correspondences. The second 50% of the twentieth century has brought a mechanical transformation particularly in the IT segment. The PC is the most interesting innovation of the twentieth century. It has changed the speed and precision levels of the data preparing. It has likewise guaranteed and conveyed straightforwardness and legitimacy. In the last fifty or sixty years the world has seen the ascent of web which has affected the interchanges in an un-point of reference way. The ascent of the web has characterized and reclassified the nuts and bolts of interchanges in each alcove and corner of the world. The business markets and every industry and portion is profoundly influenced by the development and value of web. Among the key advantages imagined by the IT specialists, the Internet was thou ght to rethink the business sectors also. In a few parts, for example, administrations banking and retailing and IT, it was imagined that the web would present branchless administrations essentially wiping out the physical nearness of the branches in each region of the nation. In any case, in spite of the wide spread utilization of the web in each office and creation processing plants and assembling zone, it is noticed that organizations despite everything want to be situated close to their rivals and outsourcers. Why? This is the essential inquiry that we have to reply in this paper. In the

Help Writing an Essay For College

Help Writing an Essay For CollegeAre you looking for help writing an essay for college? What better way to make your writing skills perfect than to learn it from a professional writer. It is not that hard to learn some skills when you have someone to teach you.Essays are often harder to write than some other parts of the paper. You will not know what makes your essay flow until you try to write one.Once you have started writing your essay, you can easily get bogged down by the subject matter. This is a very common problem. You have to be able to read and understand a topic to write about it effectively.One of the first steps in writing an essay is to make sure you have your thesis statement down. Without this you will never be able to write an effective essay. Make sure you focus on your subject before writing the rest of the essay.Get a table or list of what your topic is and make sure you know where you want to start. Make sure you stay with the topic and not stray away from it. Ha ving a brief summary and focusing on the main points will make it easier to start writing.Make sure you practice as much as possible before writing the essay. You will need to do a lot of practicing before you start writing. This is important as it will help you perfect your essay.Think about the types of sentences you want to use when you write. Do you want to use sentences that are longer or one paragraph long? How do you want your sentences to flow? This will help you create a good outline for your essay.Get ready to write your essay. Put all the pieces together and learn as much as you can about how to write an essay for college. Being good at your subject will only take practice and reading lots of materials. With a little time and effort you will be well on your way to writing an essay that is complete and professional.

Apple Computer, Inc. v. Microsoft Corporation Research Paper

Mac Computer, Inc. v. Microsoft Corporation - Research Paper Example Presently, Apple and Microsoft are world’s driving organizations in the PC business. Microsoft is going by Bill Gates while Apple’s CEO is Steve Jobs. Numerous individuals accept that the opposition between these two organizations is really the opposition between these two charming pioneers; Bill Gates and Steven Jobs. Microsoft prevailing with regards to hoarding the working framework showcase on the planet with the assistance of their eminent Windows based working framework. Then again Apple attempted to overcome the worldwide shopper gadgets showcase with the assistance of expanded items. Apple confronted many high points and low points in their history since its presentation. It confronted solid difficulties in the 1990’s; anyway it had the option to skip back with the assistance of advancement and change the executives standards actualized in the association during the last times of 1990’s and the toward the start of the twenty-first century. Then aga in, Microsoft has not confronted numerous difficulties during their most recent 35 years of history. Notwithstanding, at present, Microsoft is confronting a few difficulties from organizations like Apple, Google and so forth. This paper thinks about the exhibitions of Apple and Microsoft since their presentation. The primary thing we as a whole know is that during 1995-97, Apple lost control of the business showcase. IT directors required something Apple couldn't flexibly: a proficient back office framework with confirmation and the board instruments. Apple seemed, by all accounts, to be conflicted about this loss of the business showcase, and a progression of poor CEOs neglected to comprehend the advancement of business prerequisites and neglected to carry lucidity to Apple's vision (Martellaro, 2006) The fight for strength among Apple and Microsoft was strengthened in 1990’s. Apple presented their Macintosh OS in light of Microsoft’s Windows in the 90’s. In an y case, Apple neglected to catch the market though Microsoft succeeded in consuming the working framework showcase. Apple’s disappointment in giving the fundamental answers for the IT chiefs, opened numerous chances to Microsoft which they acknowledged with two hands. A progression of windows based items like Windows 95, 98, 2000, XP, Vista and so on entered the market which encouraged Microsoft to consume the working framework showcase. Microsoft did everything conceivable to continue their syndication in the working framework advertise. They have presented numerous application programming which are perfect just with the Windows working framework. For instance, the MS Office bundle including programming like MS word, MS exceed expectations, MS power point, MS get to and so on are perfect just with Windows working framework. Lion's share of the worldwide PC clients were severely needing this application programming and Microsoft had the option to keep up their matchless quali ty with the assistance of these product bundles. Another business procedure effectively actualized by Microsoft was their significant joint effort with Microsoft chip makers and different business partners. For instance, Microsoft set up business coordinated effort with Intel, one of the conspicuous microchip produce

The Understanding Hedging Policy And Its Effective Implementation Finance Essay - Free Essay Example

The extreme exchange rate volatility experienced in recent times had led to significant impact on the reported earnings of the Corporation. This led to a critical review of the actions that are needed to take to manage the FX exposures through hedging. So this report looks at the necessity of managing foreign currency risks, and also looks at ways by which it is accomplished that is it outlines the process of managing this risk. In addition, report provides note on the process of actively hedging defined balance sheet exposure. The hedging is needed because of mismatches in the billing currency and local functional currency both at end-customer to the contract entity level and in the intercompany transactions. It also investigates the prudence in investing resources towards the purpose of hedging and then introduces the tools for the risk management. A key assumption in the concept of foreign exchange risk is that exchange rate changes are not predictable and that this is determined by how efficient the markets for foreign exchange are, so the report also includes the FX treatment including the revaluation of monetary and non-monetary transactions as well as translation of Indian GAAP and USGAAP treatment. Table of Contents Company Profile About Oracle Financial Services Software Limited Oracle Financial Services Software Limited, majority owned by Oracle, is a world leader in providing IT solutions to the financial services industry. With its experience of delivering value based IT solutions to global financial institutions, Oracle Financial Services Software understands the specific challenges that financial institutions face: the need for building customer intimacy and competitive advantage through cost-effective solutions while, simultaneously, adhering to the stringent demands of a dynamic regulatory environment. Their mission is to enable financial institutions to excel through the effective use of information technology. We offer financial institutions the worlds most comprehensive and contemporary banking applications and a technology footprint that addresses their complex IT and business requirements. Together with Oracle, we offer a comprehensive suite of offerings encompassing retail, corporate, and investment banking, funds, cash management, trade , treasury, payments, lending, private wealth management, asset management, compliance, enterprise risk and business analytics, among others. With a process-driven approach for service-oriented architecture (SOA) deployments, we offer banks the combined benefits of interoperability, extensibility, and standardization. We also offer best-of-breed functionality for financial institutions that need to operate flexibly and competitively and respond rapidly to market dynamics in a fiercely challenging business environment. Oracle Financial Services Software has serviced over 1,000 customers in more than 135 countries through its portfolio of products and services. We have two major business segments the products business (comprising product licensing, consulting and support) and consulting services (comprising IT application and technology services). We also have a smaller business segment that offers business process outsourcing services to financial institutions. These segments are described in detail below: Products Oracle FLEXCUBE Oracle FLEXCUBE is a complete banking product suite for consumer, corporate, investment, private wealth management, mobile and internet banking, consumer lending, asset management and investor servicing, including payments. Oracle FLEXCUBE enables banks to standardize operations across multiple countries, transform their local operations as well as address niche business models like direct banking, Islamic banking and mobile banking. Financial institutions use Oracle FLEXCUBE to respond faster to market dynamics, define and track processes, while ensuring compliance. Oracle FLEXCUBE release 12 enables banks to meet the demands of the new age customer by delivering a portfolio-driven customer relationship using a combination of enhanced self-service and assisted support. The new version includes features that enable banks to deliver more personalized and convenient service to customers across all channels. The knowledge worker in the bank is enabled across channels with advisory tools with intelligence giving enterprise-wide 360-degree customer view, an in-built interaction framework to drive user behavior. They are also assisted in aligning to the branch and personal goals through role-based dashboards with alerts and reminders. Oracle FLEXCUBE release 12 offers a harmonized infrastructure and open development tools that allows more flexible deployment options and upgrade paths. Oracle FLEXCUBE release 12 gives financial institutions the power to redefine the banking experience and deliver a personal banker experience to customers. It gives bankers the intelligence needed to truly understand customers and their interaction with the institution and the flexibility to deliver a highly responsive, personalized experience and robust-transaction capabilities regardless of the customers location. Oracle FLEXCUBE Enterprise Limits and Collateral Management Oracle FLEXCUBE Enterprise Limits and Collateral Management offer a single source for managing exposure across a business portfolio. It enables centralized collateral management, limits definition, tracking and exposure measurement for effective exposure management and resource utilization. Oracle FLEXCUBE Private Banking Oracle FLEXCUBE Private Banking is a comprehensive solution for private banking. It gives wealth managers a unified view and analyses of their customers wealth across asset classes, and provides the added benefits of performance tracking and improved customer relationship management. The application is a comprehensive, customer centric solution that offers a wealth management portal, a customer interaction tool, and portfolio management capabilities all of which can be integrated with the existing core banking solutions used by a bank. Oracle FLEXCUBE Investor Servicing Oracle FLEXCUBE Investor Servicing is a process enabled transfer agency and investor servicing solution. It helps financial institutions manage the complete fund lifecycle and reduce operational costs through process automation across fund structures, intermediary hierarchies, and investors. The ISO 20022 and 15022 compliant Oracle FLEXCUBE Investor Servicing ensures enhanced STP processing through support for a wide variety of SWIFT NET 4.0 messages. With a comprehensive business rules engine for products hedge funds, mutual funds and investment linked products, funds, and fee structures, Oracle FLEXCUBE Investor Servicing allows fund management companies to configure and launch new products rapidly. Oracle Financial Services Leasing and Lending is a family of products provides functional coverage across lending, leasing, and mortgage lifecycles for consumer, commercial, syndicated, Islamic, and SME functions. The solution supports the complete business lifecycle across origin ation, servicing, and collections and enables financial institutions to provide better service and minimize delinquency rates through comprehensive and flexible processing of booking, disbursement, and payment. It centralizes origination functions, enabling them to improve customer experience and reduce transactional overheads. Oracle Financial Services Analytical Applications Oracle Financial Services Analytical Applications are a complete and fully integrated portfolio of analytical solutions covering enterprise risk, performance management, regulatory compliance and customer insight. They are built upon a shared analytical infrastructure consisting of a unified financial services data model, shared analytical computations and the industry leading Oracle Business Intelligence platform. The suite of applications contains comprehensive set of point solutions that can be integrated to give a holistic view across all analytical applications. Financial institutions need an integrated approach that combines a diverse set of compliance and risk solutions to help them address not only present regulatory needs, but also emerging and future risk and regulatory requirements. The framework is rules driven, and readily adapts to change. Unlike other hard coded solutions, Oracle Financial Services Analytical Applications provide both prebuilt rules and the capabi lity to create and modify rules. This flexibility allows financial institutions to easily create custom rules for their own analytical requirements and to cost effectively address ever changing compliance regulations. Any rule can be viewed and audited for its underlying definition to enable supervisory oversight. Services Oracle Financial Services PrimeSourcing Oracle Financial Services PrimeSourcing is the consulting arm of the Company. It offers end-to-end consulting services, providing comprehensive business and technology solutions that enable financial institutions to improve process efficiencies, optimize costs, meet risk and compliance requirements, define IT architecture, and manage the transformation process. With a singular focus on Financial Services vertical, PrimeSourcing has proven domain expertise across Capital Markets, Private Banking, Global Wealth Management, Corporate Banking and Retail Banking. The value based offerings from PrimeSourcing are designed to provide specialized application technology services for Banking Financial Services in areas such as Access Channels, Risk Governance Compliance, Payments, Business Intelligence and product related surround services cutting across domains. PrimeSourcing Consulting Services PrimeSourcing offers end-to-end consulting services in the areas of Business IT consulting and process improvement and transformation, Quality Consulting, SOA Strategy Governance, IT Architecture Planning, Product Evaluation Selection, IT Portfolio Assessment, program management, IT architecture and governance. PrimeSourcing Application Services PrimeSourcing provides comprehensive customized IT solutions for banking, securities and insurance those encompass the complete lifecycle of an IT application asset from conceptualization to creation and maintenance. This includes the expertise around specialized practice lines like payments, trade finance, and business intelligence, CRM, Oracle Technology and Applications and testing; services include ADM Services, Testing, System Integration, implementation and Migration. PrimeSourcing Technology Services PrimeSourcing offers expertise in conceptualization, design, evaluation, implementation and management of IT infrastructure for financial institutions under two service lines. First line is of Technology Management Services, covering Data Management, Mainframe Services, Application Deployment, Monitoring Management and Risk Security Assessment. The second service line is of Remote Infrastructure Management where PrimeSourcing manages remotely monitors and supports customers applications and infrastructure providing them economies of scale, arbitrage benefits while keeping the best in class processes. Oracle Business Process Outsourcing Services (BPO) BPO offering excels in providing cost effective and high quality BPO services ranging from complex back-office work to contact centre services for the banking, capital markets, insurance and asset management domains. This comprehensive ecosystem of BPO services also draws upon software applications such as Oracle FLEXCUBE and is backed by a mature process and consulting framework. BPO offering was selected in the Leadership Category for the 2010 The Global Outsourcing 100. The Outsourcing Centre short listed it to be amongst 2010 Finalists for its Outsourcing Excellence Awards. The BPO offerings are ISO 9001 certified for quality management and ISO 27001 certified for information security management. Oracle sees demand for core banking applications continuing as banks expand by buying the assets of other banks, establish presence in new countries or standardize applications across regions. Banks are looking at the centralization of banking services such as account opening and origination of credit to improve their service levels, increase productivity and gain greater control over processes that are subject to regulatory scrutiny. Global regulators have re-emphasized the importance of stress testing in the measurement of liquidity and credit risk and in evaluating how banks would fare under different scenarios. As a result of these factors we have gained increasing traction at Tier 1 banks for our products. Banks have also exhibited renewed interest in aligning finance, risk and performance applications. Oracle Financial Service Software is an acknowledged leader in the banking space and is committed to maintain its leadership position in financial services. Oracle Financial Service Software will continue to invest in expanding its banking footprint through its own internal RD. With a process driven approach based on service oriented architecture, your Company has the distinct advantage of offering banks the combined benefits of interoperabilit y, extensibility and standardization. Together with Oracle we provide a complete banking footprint, spanning all major distribution, manufacturing and corporate administration functions. Internal control systems and their adequacy Oracle Financial Services Software group has in place adequate systems for internal control and documented procedures covering all financial and operating functions. These systems are designed to provide reasonable assurance with regard to maintaining proper accounting controls, monitoring economy and efficiency of operations, protecting assets from unauthorized use or losses, and ensuring reliability of financial and operational information. The group continuously strives to align all its processes and controls with global best practices. SWOT analysis Strengths: Acknowledged leadership in core banking, application services and Analytics Solutions (governance, risk and compliance, customer insight) and process outsourcing Superior quality and cost efficient, end to end service capability from business consulting to application development and deployment, IT management to Business Process Outsourcing Unmatched solutions portfolio with depth of offering in the retail, corporate and investment banking, funds, cash management, trade, treasury, payments, lending, private wealth management, asset management and business analytics Extensive global client base Deep domain expertise with proven track record Solutions built on best in class technology and architecture High quality manpower resources Strong RD capability with strong balance sheet. Weaknesses: Exposure to various economies Local resources in new markets. Opportunities: Penetrate major markets like US, China, Brazil, Japan, North America, Russia, and Latin America Develop strong global partner model, greatly expanding pipeline and delivery capabilities Provide integrated offerings on the Oracle technology and solution portfolio especially to tier-one financial institutions Increasing momentum in the acquisition of core banking systems by large and global financial institutions Cross-sell and up sell opportunities into global customer base. Threats: Economic slow down Potential delays in decisions due to economic uncertainties Geo political factors Competition footprint in high growth geographies. Treasury Operations of OFSS The central function of treasury department is fund management and management of financial risks. But the primary objective of the foreign currency treasury operations is to hedge the exchange rate risk; the key objective of surplus funds in short term fixed deposits with approved banks. The functions are further broken down mainly into Investment and Maintenance. Each of these functions is further sub-divided into Indian rupee and Foreign Currency. The activities undertaken by the treasurer would include: Managing Cash/Bank Operations Investment in Fixed Deposits Forward Contracts A substantial portion of their revenues is generated in foreign currencies while a majority of the expenses are incurred in Indian Rupees (INR), with the remaining expenses are incurred in US Dollars (USD) and European currencies. Their philosophy for treasury operations is conservative and they invest funds predominantly in time deposits with well-known and highly rated Indian and f oreign banks. The Company has ensured adequate internal controls over asset management, including cash management operations, credit management and debt collection. The Company also maintains funds in USD, EUR, GBP and INR accounts based on comparative exchange rates, interest rates and currency requirements. Investment in Fixed Deposit Investments in Fixed deposits are based on surplus cash which is identified based on estimated cash inflow and outflow. The guiding principles require monitoring of the deposit of any one bank and for each investment decision; the following analysis is submitted to the CAO/CFO for the decision and approval. Amount proposed to be invested and tenure (generally 181 days) Comparison of the rates quoted by various banks Ratings given by Credit ratings agencies Scenario of overall exposure to the bank pre and post the transaction Investment in Fixed Deposit of Banks will be done based on interest rate analysis by the treasury team of minimum four of any banks with whom they have banking relationship. Procedure for investment in Fixed Deposit The treasury team member compiles a comparison sheet mentioning the interest rates as quoted by different banks for approval to the CAO or CFO as applicable. On the receipt of the approval for name of the bank and tenure for which Fixed Deposit is to be placed the member from the treasury team would go ahead to process the Fixed Deposit. Process for booking Fixed Deposit Issuing instructions to the bank to debit the account only by the authorized person Receipt of Acknowledgement by Bank Updating the excel tracker with the date of booking, amount in rupees, period (tenure), date of maturity, etc. Verifying the Fixed deposit receipt Accounting of the each FD transaction Documentation The Fixed deposits transactions are tracked and monitored on excel spreadsheet-namely Fixed Deposit Register (for format please refer to Appendix-II) by the member of the treasury team. The treasury team member ensures that each month end the register is updated and tallied with General ledger and Bank statement. On quarterly basis the same is tied up with Bank confirmation Information is entered to include FD no. principal amount, interest rate, date of deposit, maturity date and the period of FD. Every month end the member of the treasury team tallies the interest income/accruals per the trial balance to the Excel Control Sheet to ensure proper recording of interest income/accruals. All differences between Bank confirmation and Interest accrual as per General ledger is documented on excel sheet and informed to statutory auditors quarterly and on year end audits. The custody of the Fixed Deposits receipt would be with the treasurer. The records for the Fixed deposits are mai ntained in such a manner that the same are easily retrievable. Risks and concerns Quantitative and Qualitative Disclosures about Market Risk Their primary market risk exposures are due to the following: Foreign exchange rate fluctuations Fluctuations in interest rates. As of March 31, 2012, OFSS had Cash and Bank Balances of Rs. 39,475.9 million out of which Rs. 34,890.3 million was in interest-bearing bank deposits. Consequently, they face an exposure on account of fluctuation in interest rates. These funds were mainly invested in bank deposits of longer maturity (more than 90 days) to earn a higher rate of interest income. Their functional currency for Indian operations and consolidated financials is the Indian Rupee. They expect that the majority of their revenues will continue to be generated in foreign currencies for the foreseeable future and a significant portion of their expenses, including personnel costs and capital and operating expenditure, to continue to be incurred in Indian Rupees. In addition, they face normal business risks suc h as global competition and country risks pertaining to countries that they operate in. Techniques for Minimizing Hedging Risks Leading and Lagging: Leading implies collection from debtors expeditiously foreign currency designated before due date and to initiate lead to pay foreign currency designated creditors before their due date of payment. Lagging implies is delaying receipt from foreign currency designated receivable whose currency is are likely to appreciate and delaying foreign currency designated payable whose currencies are likely to depreciate. This makes financial sense on account of more receipt from debtors and less payment to creditors. Therefore to receive maximum receipt or make minimum payment, in appreciation-prone countries, account receivable are collected as soon as possible and payment of accounts payable is delayed as long as possible Invoicing or Billing in the desired currency: Invoicing sales as well as purchases in the home currency is an idle method of Hedging foreign exchange risks. Billing in home currency enables the firm to know the precise amount it is likely to receive from sales (EXPORT) and likewise the exact amount it is to pay for purchase (IMPORT) as a result, its foreign exchange risk is completely eliminated. Although the method provides a natural Hedge, it may not be operationally feasible to be used always and by all firms. Only firms having high demand for their products across the worlds and those having products with low price elasticity, say petroleum products or with low complication or with less substitutes available Indexation clauses: Another technique of hedging risks is to provide clause related to the export and import of goods and services between the two parties in contract. Obliviously the terms and the conditions included in the contract depend on the bargaining strengths of the involved parties. For instance the exporter may be in a better bargaining position to include a clause in a contact whereby prices are to be adjusted in such manner that the adverse moment of foreign exchange rates is to be absorbed by the imported alone. In a contrast, if the buyer/importer happens to be in strong bargaining position he may succeed in perusing the exporter to have a clause where by price are to be adjusted downwards to absorb losses due to unfavorable moment of exchange rate Sharing Risks: The indexation clauses illustrate the extreme passions / situations in which the entire incidents or loss of the unfavorable foreign exchange risk is shared by one of the parties only. In practice, the two parties may stipulate that loss incurred during the intervening period is to be shared between them in predetermined proportion. Risk sharing techniques may be appropriate when the currencies involved in the business deals are subject to abnormal rate of changes. Who bears a higher loss will depend on bargaining position of the two parties. Derivatives: The basic types of Forex and equity derivatives are forward and futures contracts, Options (calls and puts) and Swaps. Among these instruments forward contracts are more cost-effective for hedging foreign operations risk mainly used by many Corporations. Forwards: A forward is a made-to-measure agreement between two parties to buy/sell a specified amount of a currency at a specified rate on a particular date in the future. The depreciation of the receivable currency is hedged against by selling a currency forward. If the risk is that of a currency appreciation (if the firm has to buy that currency in future say for import), it can hedge by buying the currency forward. The main advantage of a forward is that it can be tailored to the specific needs of the firm and an exact hedge can be obtained. On the downside, these contracts are not marketable, they cant be sold to another party when they are no longer required and are binding. Appendix 1 summarizes other currency hedging instruments. Hedging Policy of OFSS and Its Effective Implementation Introduction Company dealing in multiple currencies face a risk (an unanticipated gain/loss) because of sudden or unpredictable changes in exchange rates, quantified in terms of exposures. Exposure depends on the value of the foreign exchange rates and is defined as a contracted, projected or contingent cash flow whose magnitude is not certain at the moment. The process of identifying risks faced by the firm and implementing the process of protection from these risks by financial or operational hedging is defined as foreign exchange risk management. Risk management techniques vary with the type of exposure and term of exposure. There are mainly two types of exposures namely, Accounting and Economic. Accounting exposure, also called translation exposure, results from the need to restate foreign subsidiaries financial statements into the parents reporting currency and is the sensitivity of net income to the variation in the exchange rate between a foreign subsidiary and its parent. Economic exposure is the extent to which a firms market value, in any particular currency, is sensitive to unexpected changes in foreign currency. Currency fluctuations affect the value of the firms operating cash flows, income statement, and competitive position, hence market share and stock price. Currency fluctuations also affect a firms balance sheet by changing the value of the firms assets and liabilities, accounts payable, accounts receivables, inventory, loans in foreign currency, investments in foreign banks; this type of economic exposure is called balance sheet exposure. Once a firm recognizes its exposure, it then has to deploy resources in managing it. Foreign Exchange Risk Management Framework Forecasts: The first step in the risk management is to develop a forecast which is typically of six months. Once the exposure is determined, firm has to analyze the market trends to determine the future trend for the foreign exchange rates. Forecasts are always drawn on valid assumptions in order to get the correct results. It also helps in estimating the probability of getting true forecast and how much it is deviating from the forecasted results. Risk Estimation: On basis of previously developed forecast the measure probability of the risk as well as value at risk (i.e. the gain or loss because of the fluctuations in the foreign exchange rates as per the forecast) should be calculated. In this process, risk that transaction may lead to failure due to the market-specific difficulties should be taken into account. As a final point in this step, System risk should be estimated which may arise due to implementation gaps and reporting gaps in the firms exposure management system. Benchmarking: After finding the exposure and risk estimates, the firm has to restrict its foreign exchange exposures by setting its limits. Generally exposures are managed on either profit centre or cost centre basis, so firm also has to decide the basis to manage its exposures. Cost centre approach is self-protective approach but the main objective of the firm is to ensure that cash flows are not badly affected after a particular point. On the other hand, profit centre approach is more effective because firm can generate net profit on the exposure over time. Hedging: At this stage of the risk management, firm designs the appropriate hedging strategy on the basis of previously set limits by the firm. For the purpose of hedging, there are many financial instruments are available for firm to choose from futures, options, forwards and swaps and also issue of foreign debt. Stop Loss: the firms decisions about risk management are all based on forecasts which are nothing but the e stimates of practically changeable or volatile trends. It is very important to have stop loss preparations to save the firm from loss in case of the forecasts turn out wrong. For the same reason, firm should have system that will monitor and will detect the crucial levels in the foreign exchange rates in order to take appropriate measures. Reporting and Review: Risk management policies are normally subjected to the analysis based on periodic reporting. After marking to the market, the reports are mainly consist of profit and loss statement on contracts, the gain due to the actual exchange rates or interest rates on each exposure and profitability in comparison with standard level and predictable changes in overall exposure due to estimated interest or exchange rate movements. The analysis of review includes whether the standard level set are effective and valid, what the market conditions are and lastly whether the hedging strategy is working or needs modifications. Figure : F oreign Exchange Risk Management Framework Project: Main Text OFSS Business Model OFSS India entity sells to end-customer through OFSS Local entity. OFSS local entity enters into a contract with end-customer. OFSS India entity invoices OFSS Local Entity at an agreed transfer pricing rate. The transfer pricing rate varies for type of business (products and services) and also can be different depending on Region or Entity. These rates are reviewed regularly and can be amended prospectively. OFSS India entity invoices OFSS local entity in the same currency as Contracted and Invoiced to end-customer. Hedging Policy of OFSS The hedging program is needed because of mismatches in the billing currency and local functional currency both at end-customer to the contract entity level and in the intercompany transactions. Following are the key objective which are sought to be achieved by effective hedging program. To minimize exchange gain or loss situation by creating corresponding Asset/Liability in the Balance Sheet. The instrument used for hedging is Plain Vanilla Forward Contract. Hedging will be a simple program and use of exotic instruments like Options, Complex Forwards, Derivatives, etc. is not permitted. The objective is to ensure that the volatility risk is minimized it is not an objective to maximize gains. Towards a successful implementation, we will: Approach this program in phases; to hedge intercompany transaction at first phase and in second phase look for protecting non-functional currency transactions with end customers. Ensure effective controls by defining responsibili ty of person placing forwards to be separate from person confirming forwards. Define back office function to provide clearly forward requirement and front office dealing with bank completing the instructions issued by back office. FX Treatment- Revaluation and Translation Revaluation Monetary / Non monetary transactions: OFSS revalues all monetary assets /liabilities at period end rate from transaction currency to Functional currency and records the same in Profit and loss account. Non-monetary transactions would include Fixed Assets, Deferred revenue, Pre-paid expenses etc. OFSS has material transactions in non-functional currency. The treatment is consistent in all GAAP. Translation Indian GAAP and USGAAP treatment Indian GAAP classifies entities as Integral/Non-Integral. Exchange difference arising on translation of Integral operations is recorded in Profit and loss account. Exchange difference arising on translation of Non-Integral operations is recorded in Balance sheet (Foreign currency translation reserve similar to Other Comprehensive Income under USGAAP). Currently all Subsidiaries are classified as Integral operations except Subsidiaries carrying out BPO business. Under USGAAP, Exchange difference arising on translation from functional currency to Reporting currency is recorded in Other Comprehensive Income under Balance Sheet. Hedging Strategy and Its Implementation Following describes stepwise analysis done to design the hedging strategy. I. Identify the exposure by Entity and Currency. II. Analysis of Billing Report and Collection trend for currencies to be hedged. III. Determine the rate to be hedged. Phase I: Exposure by Entity and Currency Entity: The billing currency for most of the subsidiaries is the local currency. For example, OFSS INC will bill in USD; OFSS BV in Euro, etc. Secondly, ~90% of their costs are intercompany to India in the same currency. This therefore provides a natural hedge that covers almost 90% of the subsidiaries business. Even when the contract is entered in non-functional currency, for example, Netherlands entity entering into a contract with a customer in USD, the exposure is to the extent of margin retained (~10 13%). Therefore, for covering the exposure, Phase I will focus only at the exposure of currency risk for OFSS India. Currency: OFSS India invoices in multiple non-functional currencies which should be protected. Analysis for invoicing currencies for the period from April 1, 2011 to February 29, 2012 is as below: Figure : Currency Exposure 5% : Currency should be hedged 5% : Currency on watch 1% : Not material; no hedging Therefore hedging program in Phase I cover USD, EUR and AUD. We have initially considered USD for forward cover as major transactions are in USD Phase II: Analysis of Billing Register and Collection Trend Analysis of Billing Register Billing register contains the all the data of the customers which includes subsidiaries and end customers with their respective currencies. The data of customers includes customer name, description, project type, project description, invoice number, invoice amount, invoice date, etc. Criteria for data extraction Only billings with subsidiaries are considered. Billings done with End customers are not considered. Invoice number ending with CN are cancelled invoices, therefore those invoices are not considered irrespective of entity. The data is cross checked to ensure that the intercompany billing does not have transaction currency as INR. Insert Pivot table to filter the data for the required columns such as transaction currency, transaction amount including WHT, etc. As per the criteria, we have extracted data from the billing register as shown below: Table : Billing Register Transaction Currency Transaction Amount Apr-12 May-12 Jun-12 CNY $ 21.23 $ 1.55 $ 2.83 USD $ 17.74 $ 19.57 $ 25.41 THB $ 10.15 $ 12.24 $ 6.74 EUR $ 3.87 $ 2.42 $ 5.20 AUD $ 3.26 $ 6.15 $ 2.52 GBP $ 0.97 $ 0.19 $ 0.63 Total $ 57.23 $ 42.12 $ 43.32 Based on the above analysis, we will hedge up to 80% of the AR in a particular month. The total monthly billing eligible for forward cover is booked in 4 equal installments with 30 days, 60 days, 90 days, and 120 days maturity term. Note: 4 equal installments are based on last years billing trend. Analysis of April 2012 billing: For the month of April 2012, the total intercompany billing for USD transactions was USD 17.74 million and considering only 80% of the total billing amount for the forward cover, which amounts to USD 14.19 million. In case of April billing, USD 3.55 million will be booked for a period of 30 days maturing in May 2012, USD 3.55 million will be booked for a period of 60 days maturating in June 2012, USD 3.55 million will be booked for a period of 90 days maturing in July 2012 and last installment of USD 3.55 million will be booked for a period of 120 days maturing in August 2012. Analysis of May 2012 billing: For the month of May 2012, the total intercompany billing for USD transactions was USD 19.57 million and considering only 80% of the total billing amount for the forward cover, which amounts to USD 15.66 million. In case of May, USD 3.91 million will be booked for a period of 30 days maturing in June 2012, USD 3.91 million will be booked for a period of 60 days maturating in July 2012, USD 3.91 million will be booked for a period of 90 days maturing in August 2012 and last installment of USD 3.91 million will be booked for a period of 120 days maturing in September 2012. Analysis of June 2012 billing: For the month of June 2012, the total intercompany billing for USD transactions was USD 21.42 million and considering only 80% of the total billing amount for the forward cover, which amounts to USD 17.13 million. In case of June, USD 4.28 million will be booked for a period of 30 days maturing in July 2012, USD 4.28 million will be booked for a period of 60 days maturating in August 2012, USD 4.28 million will be booked for a period of 90 days maturing in September 2012 and last installment of USD 4.28 million will be booked for a period of 120 days maturing in October 2012. Following table shows total forward booking required for the month of: Table : Total Forward Booking from April to July Amount in millions Month April 2012 May 2012 June 2012 July 2012 Amount Nil $ 3.55 $ 7.46 $ 11.75 OFSS has already entered into forward contracts in FY2011-2012, which are maturing in FY2012-2013. The details of the amount and the maturity month are a s below: Table : Maturity of Forward Contracts Amount in millions Month Amount April 2012 May 2012 June 2012 July 2012 Amount Nil $ 5.00 $ 7.50 $ 10.00 The Strategic model for forward booking Table : Hedging Model Amount in millions Billing month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Billing amount $ 17.74 $ 19.57 $ 21.42 $ 25.41 $ $ $ $ Amount to be hedged (80%) $ 14.19 $ 15.66 $ 17.13 $ 20.32 $ $ $ $ Hedging Duration Apr-12 $ $ 3.55 $ 3.55 $ 3.55 $ 3.55 $ $ $ May-12 $ $ $ 3.91 $ 3.91 $ 3.91 $ 3.91 $ $ Jun-12 $ $ $ $ 4.28 $ 4.28 $ 4.28 $ 4.28 $ July-12 $ $ $ $ $ 5.08 $ 5.08 $ 5.08 $ 5.08 Total forwards to be done $ $ 3.55 $ 7.46 $ 11.75 $ 16.83 $ 13.28 $ 9.36 $ 5.08 Forwards already done in last FY $ $ 5.00 $ 7.50 $ 10.00 $ 14.25 $ 6.25 $ 4.00 $ 1.50 Additional forwards to be done $ $ $ $ 1.75 $ 2.58 $ 7.03 $ 5.36 $ 3.58 From the above table, we have concluded that for the month of May 2012 and June 2012 we already have excess forward position and hence we have not booked any extra forwards for the same. For the settlement of forwards, analysis of available bank balances as well as analysis of intercompany collection is required. Analysis of Collection Report Collection Report contains the all the data of the customers relating to amount due from subsidiaries and end customers with their respective currencies. The data of customers includes customer name, description, project type, project description, invoice number, invoice amount, invoice date, deposit accounting date, collection month, collection currency, etc. Criteria for data extraction Only collections with subsidiaries are considered. Collections for end customers transactions are not considered. Insert Pivot table to filter the data for the required columns such as invoice currency, collection month, invoice month and collection amount for the currency USD. As per the criteria, we have extracted data as shown below: Table : Collection Report Amount in millions Invoice Currency USD Collection Month Invoice Month April-12 May-12 June-12 July-12 Opening $ $ 14.24 $ 5.92 $ 12.95 April-12 $ $ 1.39 $ 5.46 $ 2.17 May-12 $ $ $ 5.71 $ 3.56 June-12 $ $ $ $ 3.20 July-12 $ $ $- $- Grand Total $ $ 15.63 $ 17.09 $ 21.87 Cash Flow Analysis After the analysis of invoice register and the collection report, cash flow analysis is required to find out amount available for settling forwards. The payments and reimbursements to the subsidiaries are deducted to arrive at surplus; remaining cash can be used to settle the forwards. As we are going to sell dollars, there should be enough balances available with subsidiaries. Table : Cash Flow Amount in millions Month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Opening Balance (Subsidiaries bank accounts) $ 35.62 $ 34.89 $ 42.71 $ 35.51 $ 41.80 $ 45.15 $ 36.17 Inter Company Collection $ $ 15.63 $ 17.09 $ 21.87 $ 23.60 $ 10.37 $ 10.00 Less: Reimbursement to Subsidiaries $ (5.73) $ (2.81) $ (16.80) $ (5.58) $ (6.00) $ (6.00) $ (6.00) Cash used to settle Forwards $ (5.00) $ (5.00) $ (7.50) $ (10.00) $ (14.25) $ (13.35) $ (13.46) Closing Balance Available $ 34.89 $ 42.71 $ 35.51 $ 41.80 $ 45.15 $ 36.17 $ 26.71 Alternate Strategy to book forwards on collective basis Current Hedge position OFSS already has forwards amounting to USD 26 million maturing from August 2012 to November 2012. These were booked prior to March 31, 2012. Position of Account Receivable as on July 31, 2012 Table : Position of Account Receivable as on July 31, 2012 Amount in millions $ Billing Apr-12 May-12 Jun-12 Jul-12 Opening Balance-Receivables $ 73.72 $ 65.66 $ 56.60 $ 57.28 Billing $ 17.74 $ 19.57 $ 21.42 $ 25.41 Collections $ (25.8) $ (28.63) $ (20.73) $ (19.91) Closing Balance-Receivables $ 65.66 $ 56.60 $ 57.28 $ 62.78 Pertains to Opening (before March 31,2012) $ 12.00 Current FY $ 50.78 The AR for the month of April was $ 73.72 million and billing amount was $ 17.74. So out of the total amount (91.46=73.72+17.74) $ 25.8 million were collected in the same month- April 2012. The similar analysis for the month of May, June and July is shown in the table given below. It also shows the opening balance of $ 12 million (before March 31, 2012) Forward booking proposal of the current FY Outstanding Balance After finding the position of account receivables, the calculation of total forwards to be booked in the current financial year (to cover the outstanding balance) is done. Rather than taking the 80% of the total billing, we have deducted the collection amount from the total billing and hedge 80% of that remaining amount which is 4.14 for April 2012. The similar figures for May, June, July are shown below: Table : Hedging Model for current FY outstanding balances Amount in millions Amt in $ Apr-12 May-12 Jun-12 Jul-12 Total Billing Amount $ 17.74 $ 19.57 $ 21.42 $ 25.41 $ 84.13 Collection $ (12.57) $ (13.18) $ (7.49) $ (5.09) $ (38.32) Balance exposure $ 5.17 $ 6.39 $ 13.93 $ 20.32 $ 45.81 Amount to be hedged (80%) $ 4.14 $ 5.11 $ 11.14 $ 16.26 $ 36.65 Maturity estimate of the above proposed forward booking OFSS has already entered into forward contracts and are considered before booking the additional forwards. Month wise maturities of the forwards which are already booked and proposed for booking are given below: Table : Total Maturity Amount in millions Amt in $ Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Total Forwards booked $ 14.25 $ 12.25 $ 5.00 $ 1.50 $ $ $ $ 33.0 Proposed booking for differential exposure $ $ $ 3.65 $ $ $ $ $ 3.65 Forward cover till July end $ 14.25 $ 12.25 $ 8.65 $ 1.50 $ $ $ $ 36.65 August month billing $ $ 1.75 $ 3.50 $ 4.50 $ 4.50 $ 1.75 $ 1.75 $ 17.75 Total Forward Position $ 14.25 $ 13.85 $ 11.85 $ 5.50 $ 4.00 $ 1.60 $ 1.60 $ 52.65 Revised Strategy We will hedge 80% of the total billing. The total monthly billing eligible for forward cover will be booked in 6 installments with maturity as 10% in 30 days, 20% in 60 days, 25% in 90 days, 25% in 120 days, 10% in 150 days, and 10% in 180 days. Note: 6 installments are based on currents years trend. Table : Revised Hedging Model Amount in millions Billing month Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Billing amount $ 22.00 $ 22.00 $ 19.00 $ 20.00 $ 23.00 $ 17.74 $ 19.57 $ 22.00  Amount to be hedged (80%) $ 17.60 $ 17.60 $ 15.20 $ 16.00 $ 18.40 $ 14.19 $ 15.66 $ 17.60 Hedging Maturity month Aug-12 $ $ 1.76 $ 3.52 $ 4.40 $ 4.40 $ 1.76 $ 1.76 $ Sep-12 $ $ $ 1.76 $ 3.52 $ 4.40 $ 4.40 $ 1.76 $ 1.76 Oct-12 $ $ $ $ 1.52 $ 3.04 $ 3.80 $ 3.80 $ 1.52 Nov-12 $ $ $ $ $ 1.60 $ 3.20 $ 4.00 $ 4.00 Total forwards to be done $ $ 1.76 $ 5.28 $ 9.44 $ 13.44 $ 13.16 $ 11.32 $ 7.28 Forwards already done in last FY $ 14.25 $ 6.25 $ 4.00 $ 1.50 $ $ $ $ Additional forwards to be done $ $ $ 1.28 $ 7.94 $ 13.44 $ 13.16 $ 11.32 $ 7.28 Total estimated outflow for forward booking: Table : Estimated Outflow Amount in millions Outflow working Month Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Outflow (Last year bookings) $ 14.25 $ 6.25 $ 4.00 $ 1.50 $ $ $ Current year booking maturity $ $ 1.76 $ 5.28 $ 9.44 $ 13.44 $ 15.00 $ 16.42 Total estimated outflow $ 14.25 $ 8.01 $ 9.28 $ 10.94 $ 13.44 $ 15.00 $ 16.42 As per the above, we have forecasted total amount of forwards that will be booked every month and total amount of estimated monthly outflow (maturities) of the forwards booked. Phase III: Determine the Rate to be hedged The program envisages protecting the invoices raised in the month at the month-end rate. Previously, OFSS used to raise and account inter-company invoices daily and at varying exchange rates. Now, this procedure has been changed and OFSS will book the inter-company invoices at the month-end rate. Table : Rate Analysis June Revaluation rate 56.3820 Average Spot rate 54.1334 Average Forward booking rate (including premium) 55.0625 August Billing rate 55.7063 OFSS will protect June revaluation rate i.e. 56.382 for the opening balances. And on monthly basis, OFSS will protect month-end rate. The above analysis shows that the hedging strategy significantly helps reduce the volatility. OFSS will book forward contracts at month end rate to ensure this rate is protected. Process for booking Forward Contracts: Monthly Billing and collection analysis is done by a member outside the treasury team. Treasury team will abide by the instruction to book forwards as provided by the outside member. For getting spot rate movement, a member from the treasury team gets in touch with the bank treasury dealer to carry out a deal, or to place an order. The spot rate quoted by the concerned bank is either checked on the Official websites such as Bloomberg, Oanda, which provides close to live market rates or by calling other banks to know the prevailing inter-bank rates. Once the spot rate is fixed, the member from the treasury team follows the schedule provided to book the maturity date of the forwards. Based on the maturity month, the member from the treasury team will fix forward premium depending on the market movement during the course of the day. The member from the treasury team updates details of the deals carried out during the day in the forward contracts excel file. The bank sends a confirmation of the deal with the complete details. The Bank sends a physical copy of the forward contract confirmation to the treasury team, for obtaining signatures of the authorized signatories. The member from the treasury team verifies the contents of the confirmation with the system records. In case of any discrepancies, the same is reported to the bank treasury dealer, and a fresh forward contract confirmation note is obtained from the bank. While booking any deals with the bank, the member from the treasury team ensures that forward contracts outstanding with banks is within the limit set under the underlying document as given to bank as per Reserve Bank of India guidelines. Forex markets are too volatile and all confirmations and approvals are done over phone with bank as well as internally. This is followed by a trade confirmation from bank on end of day. Documentation and Maintenance of Forward Contracts: After obtaining trade confirmations transactions related to forward contracts are updated in the excel spreadsheet (for Format of Forward Register refer to Appendix-III) and maintained by the treasury team. The treasury team member ensures that each month end the register is updated and tallied with General ledger and Bank statement. On quarterly basis the same is tied up with Bank confirmation. Information entered includes contract no., Forward rate, spot rate, principal amount, premium or discount, purchase date, maturity date, etc. The treasury team maintains the following records/documents: Forward Contract confirmations from the banks. Hard copies of the Correspondence exchanged with the bank. If any contract has been cancelled then hard copy of the cancelled contract provided by the bank. Various options available in forward contracts: A forward contract once booked can be cancelled, rolled over, extended and even early delivery can be made. Roll over forward contracts Forward Contracts are rolled-over when the sufficient amount is not available with customer of forward contract. That is, when installment falls due, the same is paid by the customer at the exchange rate fixed in forward contract. The balance amount of the contract rolled over till the date for the next installment. The process of extension continues till the whole amount has been paid. But the extension is available subject to the cost being paid by the customer. Thus, under the mechanism of roll over contracts, the exchange rate protection is provided for the entire period of the contract and the customer has to bear the roll over charges. The cost of extension (rollover) is dependent upon the forward differentials prevailing on the date of extension. Thus, the customer effectively protects himself against the adverse spot exchange rates but he takes a risk on the forward differentials. (i.e. premium/discount). Although spot exchange rates and forward differentials are prone to f luctuations, yet the spot exchange rates being more volatile the customer gets the protection against the adverse movements of the exchange rates. A corporate can book with the Authorised Dealer a forward cover on roll-over basis as necessitated by the maturity dates of the underlying transactions, market conditions and the need to reduce the cost to the customer. Example: An importer has entered into a 3 months forward contract in the month of February. Spot Rate = 48.65 Forward premium for 3 months (May) = 0.75 Therefore rate for the contract = 48.65 + 0.75 = 49.45 Suppose, in the month of May the importer realizes that he will not be able to make the payment in May, and he can make payment only in July. Now as per the guidelines of RBI and FEDAI he can cancel the contract, but he cannot re-book the contract. So for this the importer will go for a roll-over forward for May over July. The premium for May is 0.75 (sell) and the premium for July is 119.75(buy). Therefore the additional cost i.e. (119.75 0.75) = 0.4475 will have to be paid to the bank. The bank then fixes a notional rate. Lets say it is 48.66. Therefore in May he will sell 48.66 + 0.75 = 49.41 And in July he will buy 48.66 + 119.75 = 49.85 Therefore the additional cost (49.85 49.41) = 0.4475 will have to be paid to the Bank by the importer. Cancellation of Forward Contract A corporate can freely cancel a forward contract booked if desired by it. It can again cover the exposure with the same or other Authorised Dealer. However contracts relating to non-trade transactionimports with one leg in Indian rupees once cancelled could not be rebooked till now. This regulation was imposed to stem volatility in the foreign exchange market, which was driving down the rupee. Thus the whole objective behind this was to stall speculation in the currency. But now the RBI has lifted the 4-year-old ban on companies re-booking the forward transactions for imports and non-traded transactions. It has been decided to extend the freedom of re-booking the import forward contract up to 100% of un-hedged exposures falling due within one year, subject to a cap of $ 100 Mio in a financial year per corporate. The removal of this ban would give freedom to corporate Treasurers who should be in opposition to reduce their foreign exchange risks by canceling their existing forw ard transactions and re-booking them at better rates. Thus this in not liberalization, but it is restoration of the status quo ante. Also the Details of cancelled forward contracts are no more required to be reported to the RBI. The following are the guidelines that have to be followed in case of  cancellation of a forward contract. In case of cancellation of a contract by the client (the request should be made on or before the maturity date) the Authorised Dealer shall recover/pay the, as the case may be, the difference between the contracted rate and the rate at which the cancellation is effected. The recovery/payment of exchange difference on canceling the contract may be up front or back ended in the discretion of banks. Rate at which the cancellation is to be effected: Purchase contracts shall be cancelled at the contracting Authorised Dealers spot T.T. selling rate current on the date of  cancellation. Sale contract shall be cancelled at the contracting Authorised Dealers spot T.T. selling rate current on the date of cancellation. Where the contract is cancelled before maturity, the appropriate forward T.T. rate shall be applied. Exchange difference not exceeding Rs. 100 is being ignored by the contracting Bank. In the absence of any instructions from the client, the contracts, which have matured, shall be automatically cancelled on 15th day falls on a Saturday or holiday; the contract shall be cancelled on the next succeeding working day. The Concepts I learnt during the Internship GAAP: Companies prepare their financial statements using common set of standards, accounting principles and procedures. Generally Accepted Accounting Principles are simply the common way for recording as well as reporting accounting data. GAAP are grouping of the reliable or authoritative standards which are set by policy boards. GAAP are imposed on companies so that investors have a minimum level of consistency in the financial statements they use when analyzing companies for investment purposes. GAAP cover such things as revenue recognition, balance sheet item classification and outstanding share measurements. Companies are expected to follow GAAP rules when reporting their financial data via financial statements. If a financial statement is not prepared using GAAP principles, be very wary! That said, keep in mind that GAAP is only a set of standards. There is plenty of room within GAAP for unscrupulous accountants to distort figures. So, even when a company uses GAAP, you still need to scrutinize  its financial statements. RTGS The acronym RTGS stands for Real Time Gross Settlement. RTGS system is the fastest funds transfer mechanism through banking channel that is transfer of money takes place from one bank to another on a real time and on gross basis. Settlement in real time means instructions are processed as soon as they are received and hence payment transactions are not subjected to any waiting period. Gross settlement means the fund transfer instructions are settled individually that is on one to one basis rather than bunching with any other transactions. 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My life as a kid was a sweet life. I lived in a beautiful house in Puerto Rico surrounded by horses, cows, chickens, birds, beautiful flowers and green grass. Out of all the beautiful surroundings, there was one particular thing I loved and it was a huge tree that was in my backyard. As a child I used to climb the tree every day. Every time I went, I climbed higher and higher, reaching new branches, obstacles, and pathways on my way up. One day I reached the top and I could see my island. All the trees, plants, mountains, animals, and birds flying made it look endless, like it had no limits. I was on top of the world, and nothing could stop me. I felt like anything was possible. Then, there’s the day which seemed like it was the end of my life and everything collapsed. This specific day changed my life forever in a way that I would have never imagined. We will write a custom essay sample on The Climb to the Top or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page It was a nice summer day; sunny, clear skies, and cool breeze. I started the day as usual with my sister and I collecting eggs for breakfast. After breakfast my family headed to the park to see my baseball game. In the evening we went to a carnival in my town. My grandma was selling the blankets she made for babies under a tent. My parents were having a good time with their siblings and friends, and I was with my cousins playing and going on the rides. Suddenly, the mood of the day changed when my parents called me over to my grandma’s tent. Still to this day I remember the exact words my dad said to me, â€Å"Son, how would you like to move to the United States?† I couldn’t believe what he said. My body got goose bumps; I felt this cold feeling go up my legs, body, and to my arms. I just froze and was speechless and all these thoughts just hit me fast at once in the blink of an eye. I then ran away from him as the tears rolled down my cheeks. I see the bathroom sign and go in and start to cry. My perfect life was being taken away from me. Two weeks later I was on my journey to the land of the free. We arrived at New York on late July, and got picked up by my aunt and uncle. They drove us to Springfield, Massachusetts where we would live for seven years and counting. Once we got there I met my mom’s family I have never met. September comes and school starts. I was afraid to go to a new school and make new friends. Most kids ignored me and some tried to talk to me, but I couldn’t understand them or talk back. A few months later winter arrives and I couldn’t believe how cold it got. Every time I went outside, my face, fingers, ears, and toes got numb even though I had two layers of socks, pants, shirts, coats, and gloves on. Snow was only fun the first week until I had to shovel the sidewalk. My first year in the United States was not fun or easy but I worked hard and got through it. Now that I’m grown, I look back on the journey that I’ve been through; living in a new place with no friends, new language, new school, strange surroundings, and different climate. Despite all those problems, difficulties, and obstacles I still remembered that special tree. I thought how I never stopped trying, past new obstacles, and reached higher. So that’s what I set my mind to and that’s how my mind is still set. That tree taught me to never give up and reach higher. Every obstacle that I have encountered in life I have beat it, and I just keep moving forward. My perfect life was never taken away from me; it has just started, and it’s getting sweeter because anything is possible. I’m on top of the world again and nothing can bring me down.