Citibank Performance Evaluation Case Study

Annual Report Consolidated and Statutory Financial Statements at December 31, 2006 101st fiscal year Fiat S. p. A. Financial Statements at December 31, 2006 234 Financial Review of Fiat S. p. A. 238 Income Statement 239 Balance Sheet 240 Statement of Cash Flows 241 Statement of Changes in Stockholders’ Equity I am enough of an artist to draw freely upon my imagination. Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world. Albert Einstein 242 Income Statement pursuant to Consob Resolution No. 5519 of July 27, 2006 243 Balance Sheet pursuant to Consob Resolution No. 15519 of July 27, 2006 244 Notes to the Financial Statements 301 Appendix – Transition of the Parent Company Fiat S. p. A. to International Financial Reporting Standards (IFRS) Financial Review of Fiat S. p. A. The financial statements illustrated and commented on in the following pages have been prepared on the basis of the company’s statutory financial st atements at December 31, 2006 to which reference should be made. In compliance with European Regulation no. 606 of July 19, 2002, starting from 2005 the Fiat Group has adopted International Financial Reporting Standards (â€Å"IFRS†) issued by the International Accounting Standards Board (â€Å"IASB†) in the preparation of its consolidated financial statements. On the basis of national laws implementing that Regulation, starting from 2006 the Parent Company Fiat S. p. A. is presenting its financial statements in accordance with IFRS, which are reported together with comparative figures for the previous year. Operating PerformanceSpecifically: Personnel and operating costs, totalling 199 million euros, comprise 58 million euros in personnel costs (60 million euros in 2005), and 141 million euros in other operating costs (121 million euros in 2005), which include the costs for services, amortisation and depreciation and other operating costs. These costs increased as a w hole by 18 million euros from 2005 as a result of non-recurring charges. In 2006, the average headcount was 140 employees, compared with an average of 133 employees in 2005.The company’s Income Statement is summarised in the following table: Investment income – Dividends – (Impairment losses) reversals – Gains (losses) on disposals Personnel and operating costs net of other revenues Income (expenses) from significant non-recurring transactions Financial income (expenses) Financial income from significant non-recurring transactions Income taxes Net income Personnel and operating costs net of other revenues total 120 million euros, compared with 109 million euros in 2005. IThe Parent Company earned net income of 2,343 million euros in 2006, 1,226 million euros higher than in 2005 when the result included net non-recurring income of 1,714 million euros. (in millions of euros) Business Solutions S. p. A. (for a total of 147 million euros), net of the revaluat ion of the investments held in Fiat Netherlands Holding N. V. (376 million euros due to the positive performance of the CNH and Iveco subsidiaries), Magneti Marelli Holding S. p. A. (144 million euros) and minor companies. 2006 2005 2,461 62 2,099 – (120) – (24) – 26 2,343 (424) 8 (431) (1) (109) 1,133 (62) 858 (279) 1,117 Investment income totals 2,461 million euros compared with investment expense of 424 million euros in 2005 and consists of dividends received during the period and reversal of impairment losses (net of write-downs) of investments. Specifically: Dividends total 362 million euros and were received from the subsidiaries IHF – Internazionale Holding Fiat S. A. (259 million euros), Fiat Finance S. p. A. (75 million euros) and other companies.In 2005 dividends received from investments totalled 8 million euros. I Impairment loss reversals (net of write-downs) of 2,099 million euros resulted from the revaluation of the investments in the subsi diaries Fiat Partecipazioni S. p. A. (1,388 million euros mainly connected to Fiat Auto), Iveco S. p. A. (946 million euros) and Fiat Netherlands Holding N. V. (96 million euros connected to CNH), all written-down in previous years, net of the impairment loss recognised on the investment in Comau S. p. A. (330 million euros).I Other revenues , totalling 79 million euros (72 million euros in 2005), principally refer to the change in contract work in progress (agreements between Fiat S. p. A. and Treno Alta Velocita – T. A. V. S. p. A. ), which is measured by applying the percentage of completion to the total contractual value of the work, to royalties for the use of the Fiat trademark, calculated as a percentage of the revenues generated by the Group companies that use it, and the services of executives at the principal companies of the Group.The increase from 2005 is mainly attributable to higher charges for the use of the trademark. No Income (expenses) from significant non- recurring transactions is reported in 2006. In 2005 a gain of 1,133 million euros (net of related costs) was recorded on the transaction regarding the termination of the Master Agreement with General Motors. In 2006, there were net financial expenses of 24 million euros, arising from the interest charges on the Company’s debt, which was partially offset by the gain resulting from derivative financial instruments.In 2005 there were net expenses of 62 million euros mainly arising from the interest expenses connected with the Mandatory Convertible Facility. No Financial income from significant non-recurring transactions is reported in 2006. In 2005 this item included income of 858 million euros resulting from the capital increase of September 20, 2005 with the simultaneous conversion of the Mandatory Convertible Facility. The income represents the difference between the subscription price of the new shares issued and the stock market price of the shares at the subscription date, net of issuance costs.I In 2005, net impairment losses recognised on investments totalled 431 million euros, mainly due to losses from the investments in Fiat Partecipazioni S. p. A. (811 million euros connected mainly to the losses of Fiat Auto), Teksid S. p. A. , Comau S. p. A. and 234 Financial Review of Fiat S. p. A. The income tax revenue of 26 million euros is the net result of the remuneration for the tax loss brought into the national tax consolidation by Fiat S. p. A. in 2006 to offset the income reported by the Group’s Italian companies, and the IRAP charge recognised for the period.Income tax expenses of 279 million euros in 2005 consisted of the reversal of deferred tax assets of 277 million euros, recognised in the financial statements at December 31, 2004 in relation to the settlement subsequently made with General Motors for the termination of the Master Agreement. Financial Review of Fiat S. p. A. 235 Balance Sheet Highlights of the Parent Company’s Ba lance Sheet are illustrated in the following table: (in millions of euros) Non-current assets – of which: Investments Working capital Total net invested capital Stockholders’ equityNet debt (liquid funds) At December 31, 2006 At December 31, 2005 14,559 14,500 167 14,726 10,374 4,352 5,168 5,118 303 5,471 7,985 (2,514) Current financial payables consist of the overdraft with the subsidiary Fiat Finance S. p. A. and short-term financing received from that company, as well as payables to factoring companies for advances on receivables. Non-current financial payables consist almost entirely of loans repayable in the 2010-2013 period granted by the subsidiary Fiat Finance S. p. A. at market rates as part of the recapitalisation of subsidiaries discussed above.At December 31, 2005 financial receivables related to short-term financing of 2,700 million euros granted to the subsidiary Fiat Finance S. p. A. and due in 2006, and to cash deposited on the current account held with that company. For a more complete analysis of cash flows, reference should be made to the Statement of Cash Flows set out on the following pages as part of the statutory financial statements of the Parent Company Fiat S. p. A. Reconciliation between the Parent Company’s equity and its result for the year with those of the GroupNon-current assets mainly include investments in the relevant subsidiaries of the Group. The net increase of 9,382 million euros in investments as compared to December 31, 2005 stems from net write-ups arising from the reversal of previously recognised impairment losses and recapitalisations of 6,361 million euros carried out during the year in the subsidiaries Fiat Partecipazioni S. p. A. (6,000 million euros), Fiat Netherlands Holding N. V. (121 million euros) and Comau S. p. A. (240 million euros), in order to re-balance the equity structure inside the Group and cover losses, as well as the re-purchase from Mediobanca S. . A. of 28. 6% of the shares of Ferrari S. p. A. (893 million euros) upon exercise of the call option provided for in the 2002 agreements, which brought the investment to an 85% stake. Working capital, which totalled 167 million euros, consists of inventories net of advances received, trade, tax and employee receivables/payables, other receivables/payables and provisions. The 136 million euro decrease over December 31, 2005 is mainly attributable to the refund of VAT receivables by the Tax Authorities.Stockholders’ equity at December 31, 2006 totalled 10,374 million euros, reflecting an increase of 2,389 million euros as compared to December 31, 2005 due to the positive result of the year (2,343 million euros) and other minor changes (including 28 million euros resulting from marking to market the fair value carrying amount of the Mediobanca shareholding). Pursuant to the Consob Communication of July 28, 2006, set out below is a reconciliation between the Parent Company’s equity at December 31, 2 006 and its result for the year then ended with those of the Group (Group interest). (in millions of euros) Stockholders’ equity atDecember 31, 2006 Financial Statements of Fiat S. p. A. Elimination of the carrying amounts of consolidated investments and the respective dividends from the financial statements of Fiat S. p. A. Elimination of the reversal of impairment losses (net of recognised impairment losses) of consolidated investments Equity and results of consolidated subsidiaries Consolidation adjustments: Elimination of intercompany profits and losses on the sale of investments Elimination of intercompany profits and losses in inventories and fixed assets and other adjustments Consolidated financial statements (Group interest) 2006 Net result 10,374 2,343 14,211) – 13,404 (346) (2,099) 1,229 – (205) 9,362 (41) (21) 1,065 For a more complete analysis of the changes in stockholders’ equity, reference should be made to the relevant table set out in the following pages as part of the statutory financial statements of the Parent Company Fiat S. p. A. Net debt totalled 4,352 million euros at December 31, 2006 compared with net liquid funds of 2,514 million euros at December 31, 2005. The use of the liquid funds balance at the beginning of the year and the subsequent accumulation of debt are the consequence of the previously mentioned recapitalisations of subsidiaries and purchase of Ferrari S. . A. shares. A breakdown of net debt is illustrated in the following table: (in millions of euros) Financial receivables, cash and cash equivalents Current financial payables Non-current financial payables Net debt (net liquid funds) 236 Financial Review of Fiat S. p. A. At December 31, 2006 At December 31, 2005 (85) 1,627 2,810 4,352 (3,076) 557 5 (2,514) Financial Review of Fiat S. p. A. 237 Income Statement (in euros) Dividends and other income from investments (Impairment losses) reversal of impairment losses of investments Gains (losses) on the disposal of investments Other operating income Personnel costsOther operating costs Income (expenses) from significant non-recurring transactions Financial income (expenses) Financial income from significant non-recurring transactions Result before taxes Income taxes Result from continuing operations Result from discontinued operations Net result Balance Sheet (*) Note 2006 2005 (1) 362,418,522 2,099,350,000 425,380 79,238,202 (57,899,516) (141,006,254) – (24,846,809) – 2,317,679,525 (25,695,447) 2,343,374,972 – 2,343,374,972 7,713,904 (430,788,686) (1,300,134) 72,853,610 (60,027,274) (121,360,013) 1,133,110,377 (61,685,499) 857,636,269 1,396,152,554 278,827,554 ,117,325,000 – 1,117,325,000 (2) (3) (4) (5) (6) (7) (8) (9) (10) (*) Pursuant to Consob resolution no. 15519 of July 27, 2006 effects of transactions with related parties on the Income Statement of Fiat S. p. A. are included in the specific income statement schedule reported in the followi ng pages and also provided in the comments of the single items and in Note 30. (*) (in euros) ASSETS Non-current assets Intangible assets Property, plant and equipment Investments Other financial assets Other non-current assets Deferred tax assets Total Non-current assets Current assets Inventories Trade receivablesCurrent financial receivables Other current receivables Cash and cash equivalents Total Current assets Assets held for sale TOTAL ASSETS STOCKHOLDERS’ EQUITY AND LIABILITIES Stockholders’ equity Capital stock Additional paid-in capital Reserve under law no. 413/1991 Legal reserve Reserve for treasury stock in portfolio Extraordinary reserve Retained earnings (losses) Treasury stock Gains (losses) recognised directly in equity Stock option reserve Net result Total Stockholders’ equity Non-current liabilities Provisions for employee benefits and other non-current provisions Non-current financial payablesOther non-current liabilities Deferred tax liabili ties Total Non-current liabilities Current liabilities Provisions for employee benefits and other current provisions Trade payables Current financial payables Other payables Total Current liabilities Liabilities held for sale TOTAL STOCKHOLDERS’ EQUITY AND LIABILITIES Note At December 31, 2006 At December 31, 2005 (11) 771,530 37,252,689 14,499,594,748 20,134,319 1,573,473 – 14,559,326,759 675,599 39,658,553 5,117,531,801 5,335,175 4,501,747 – 5,167,702,875 – 154,692,452 84,173,202 626,428,489 608,105 865,902,248 – 15,425,229,007 – 215,652,499 3,075,893,885 799,919,053 95,235 4,091,960,672 – 9,259,663,547 6,377,257,130 1,540,856,410 22,590,857 446,561,763 24,138,811 6,134,851 (553,411,863) (24,138,811) 162,764,566 27,399,708 2,343,374,972 10,373,528,394 6,377,257,130 681,856,410 22,590,857 446,561,763 27,709,936 334,633 (811,736,863) (27,709,936) 134,267,390 16,102,522 1,117,325,000 7,984,558,842 18,104,487 2,810,029,000 20,000,576 3, 438,000 2,851,572,063 29,170,653 5,262,000 16,861,109 – 51,293,762 26,790,951 184,660,883 1,627,429,902 361,246,814 2,200,128,550 – 15,425,229,007 30,990,501 385,182,033 557,382,830 250,255,579 1,223,810,943 – 9,259,663,547 (12) (13) (14) (15) 10) (27) (16) (17) (18) (19) (20) (21) (22) (23) (10) (24) (25) (26) (27) (*) Pursuant to Consob resolution no. 15519 of July 27, 2006 effects of transactions with related parties on the Balance Sheet of Fiat S. p. A. are included in the specific balance sheet schedule reported in the following pages and also provided in the comments of the single items and in Note 30. 238 Fiat S. p. A. Financial Statements at December 31, 2006 Fiat S. p. A. Financial Statements at December 31, 2006 239 Statement of Changes in Stockholders’ Equity Statement of Cash Flows (in thousands of euros) 2006 2005 (in thousands of euros)A) Cash and cash equivalents at beginning of period B) Cash flows from (used in) operating activities durin g the period: Net result for the period Amortisation and depreciation Non-cash gain from extinguishment of the Mandatory Convertible Facility Non-cash stock option costs (Impairment losses) reversals of impairment losses of investments Capital losses/gains on the disposal of investments Change in provisions for employee benefits and other provisions Change in deferred taxes Change in working capital Total C) Cash flows from (used in) investment activities: Investments: – Recapitalisations of subsidiaries – AcquisitionsOther investments (tangible and intangible assets and other financial assets) Proceeds from the sale of: – Investments – Other non-current assets (tangible, intangible and other) Total D) Cash flows from (used in) financing activities: Change in current financial receivables Change in non-current financial payables Change in current financial payables Capital increase Sale of treasury stock Dividend distribution Total E) Total change in cash and cash equivalents F) Cash and cash equivalents at end of period 495 325 2,343,375 2,882 – 11,297 (2,099,350) (329) 7,990 3,438 151,872 421,175 1,117,325 2,918 (859,000) 10,041 430,789 (93) ,100 277,000 (76,028) 905,052 Capital stock Additional paid-in capital Reserve under law no. 413/1991 Legal reserve Reserve for treasury stock in portfolio Extraordinary reserve Retained earnings (losses) Treasury stock Gains (losses) recognised directly in equity Stock option reserve Net result for the period Total Stockholders’ equity At December 31, 2004 Capital increase for conversion of the Mandatory Convertible Facility 4,918,113 – 22,591 446,562 26,413 1,632 (813,435) (26,413) 74,397 6,062 2,141,000 Valuation of stock option plans and other changes Net result for the period At December 31, 2005 10,442 1,117,325 1,117,325 ,377,257 681,856 22,591 446,562 27,710 335 (811,737) (27,710) 134,267 16,103 1,117,325 7,984,559 Valuation of stock option plans and other changes Net result for the period At December 31, 2006 1,459,144 681,856 4,655,922 Fair value adjustments recognised directly in equity 1,297 (1,297) 1,698 (1,297) 59,870 10,041 59,870 (*) (*) Treasury stock at December 31, 2005 consists of 4,331,708 ordinary shares for a total nominal value of 21,659 thousand euros. (6,361,126) (919,412) (15,529) (165,193) – (1,808) 2,357 313 (7,293,397) (a) – 261 (166,740) 2,991,721 2,804,767 1,070,047 – 5,800 – 6,872,335 113 608 (753,091) – 14,548 – 401 – 738,142) 170 495 At December 31, 2005 Capital stock Additional paid-in capital Reserve under law no. 413/1991 Legal reserve Reserve for treasury stock in portfolio Extraordinary reserve Retained earnings (losses) Treasury stock Gains (losses) recognised directly in equity Stock option reserve Net result for the period Total Stockholders’ equity 6,377,257 681,856 22,591 446,562 27,710 335 (811,737) (27,710) 134,267 16,103 1,117,325 7,984,559 Allocat ion of the net result for the prior period Fair value adjustments recognised directly in equity 859,000 (3,571) 5,800 258,325 3,571 28,497 11,297 (1,117,325) – 28,497 2,343,375 2,343,375 7,097 6,377,257 1,540,856 22,591 446,562 24,139 6,135 (553,412) (24,139) (*) 162,764 27,400 2,343,375 10,373,528 (*) Treasury stock at December 31, 2006 consists of 3,773,458 ordinary shares for a total nominal value of 18,867 thousand euros. (a) In 2005, the item â€Å"Capital increase† is shown net of the repayment of the Mandatory Convertible Facility (3 billion euros), as it did not give rise to cash flows. Statement of total recognised income and expenses for 2006 and 2005 (in thousands of euros) Gains (losses) recognised directly in the fair value reserve (investments in other companies) Gains (losses) recognised directly in equityTransfer from cash flow hedge reserve Net result for the period Total of recognised income (expense) for the period 240 Fiat S. p. A. Financial Stateme nts at December 31, 2006 2006 2005 28,497 28,497 – 2,343,375 2,371,872 58,958 58,958 912 1,117,325 1,177,195 Fiat S. p. A. Financial Statements at December 31, 2006 241 Income Statement Balance Sheet pursuant to Consob Resolution No. 15519 of July 27, 2006 pursuant to Consob Resolution No. 15519 of July 27, 2006 (in thousands of euros) Dividends and other income from investments (Impairment losses) reversal of impairment losses of investments Gains (losses) on the disposal of investmentsOther operating income Personnel costs Other operating costs Income (expenses) from significant non-recurring transactions Financial income (expenses) Financial income from significant non-recurring transactions Result before taxes Income taxes Result from continuing operations Result from discontinued operations Net result 242 Fiat S. p. A. Financial Statements at December 31, 2006 Note 2006 (1) 362,419 2,099,350 425 79,238 (57,900) (141,006) – (24,847) – 2,317,679 (25,696) 2,34 3,375 – 2,343,375 (2) (3) (4) (5) (6) (7) (8) (9) (10) of which Related parties (Note 30) 33,200 (51,901) (17,765) 2005 7,714 430,789) (1,300) 72,854 (60,027) (121,360) 1,133,110 (61,685) 857,636 1,396,153 278,828 1,117,325 – 1,117,325 of which Related parties 24,256 (54,477) 106,259 (in thousands of euros) ASSETS Non-current assets Intangible assets Property, plant and equipment Investments Other financial assets Other non-current assets Deferred tax assets Total Non-current assets Current assets Inventories Trade receivables Current financial receivables Other current receivables Cash and cash equivalents Total Current assets Assets held for sale TOTAL ASSETS STOCKHOLDERS’ EQUITY AND LIABILITIES Stockholders’ equity Capital stockAdditional paid-in capital Reserve under law no. 413/1991 Legal reserve Reserve for treasury stock in portfolio Extraordinary reserve Retained earnings (losses) Treasury stock Gains (losses) recognised directly in equity Stock o ption reserve Net result Total Stockholders’ equity Non-current liabilities Provisions for employee benefits and other non-current provisions Non-current financial payables Other non-current liabilities Deferred tax liabilities Total Non-current liabilities Current liabilities Provisions for employee benefits and other current provisions Trade payables Current financial payables Other payablesTotal Current liabilities Liabilities held for sale TOTAL STOCKHOLDERS’ EQUITY AND LIABILITIES Note (11) (12) (13) (14) (15) (10) (27) (16) (17) (18) (19) At December 31, 2006 772 37,253 14,499,595 20,134 1,573 – 14,559,327 – 154,692 84,173 626,429 608 865,902 – 15,425,229 of which Related parties (Note 30) 10,029 2,408 84,173 146,908 At December 31, 2005 of which Related parties 676 39,658 5,117,532 5,335 4,502 – 5,167,703 5,262 – 215,652 3,075,894 799,920 495 4,091,961 – 9,259,664 7,687 3,075,894 106,007 (20) 6,377,257 1,540,856 22,591 4 46,562 24,139 6,135 (553,412) (24,139) 162,765 27,400 2,343,375 10,373,529 21) (22) (23) (10) (24) (25) (26) (27) 18,104 2,810,029 20,001 3,438 2,851,572 26,791 184,661 1,627,430 361,246 2,200,128 – 15,425,229 6,377,257 681,856 22,591 446,562 27,710 335 (811,737) (27,710) 134,267 16,103 1,117,325 7,984,559 2,810,029 – 17,801 1,405,554 319,078 29,171 5,262 16,861 – 51,294 30,991 385,182 557,383 250,255 1,223,811 – 9,259,664 5,262 2,622 4,975 434 215,379 Fiat S. p. A. Financial Statements at December 31, 2006 243 Notes to the Financial Statements Principal activities Fiat S. p. A. (the â€Å"Company†) is a corporation organised under the laws of the Republic of Italy and is the Parent Company f the Fiat Group, holding investments, either directly or indirectly through subholdings, in the capital of the parent companies of business Sectors in which the Fiat Group operates. The head office of the company is in Turin, Italy. The financial statements of Fiat S. p. A. are prepared in euros which is the currency of the economic environment in which the company operates. The Balance Sheet and Income Statement are presented in euros, while the Statement of Cash Flows, the Statement of Changes in Stockholders’ Equity, the Statement of Total Recognised Income and Expenses and the amounts stated n the Notes are presented in thousands of euros, unless otherwise stated. As the Parent Company, Fiat S. p. A. has additionally prepared the consolidated financial statements of the Fiat Group at December 31, 2006. Significant accounting policies Basis of preparation The 2006 financial statements are the separate financial statements of the Parent Company, Fiat S. p. A. , and have been prepared in accordance with the International Financial Reporting Standards (â€Å"IFRS†) issued by the International Accounting Standards Board (â€Å"IASB†) and adopted by the European Union.The designation â€Å"IFRS† also includes all the revised International Accounting Standards (â€Å"IAS†) and all the interpretations of the International Financial Reporting Interpretations Committee (â€Å"IFRIC†), previously known as the Standing Interpretations Committee (â€Å"SIC†). In compliance with European Regulation no. 1606 of July 19, 2002, starting from 2005 the Fiat Group has adopted the International Financial Reporting Standards (â€Å"IFRS†) issued by the International Accounting Standards Board (â€Å"IASB†) for the preparation of its consolidated financial statements. On the basis of national legislation implementing that Regulation, he annual statutory accounts of the Parent Company Fiat S. p. A. as of December 31, 2006 have been prepared for the first time also using those accounting standards. As a consequence the Parent Company Fiat S. p. A. is presenting its financial statements for 2006 and its comparative figures for the prior year in accordance with IFRS. The accou nting principles applied are the same as those used in the preparation of the Company’s Balance Sheets at January 1, 2005 and December 31, 2005 and its 2005 Income Statement in accordance with IFRS; these statements are provided in theAppendix attached to these Notes, to which reference should be made. The Appendix provides reconciliations of the Company’s equity and Income Statement reported under its previous accounting principles (Italian accounting principles) and IFRS, together with Notes, as required by IFRS 1 – Firsttime adoption of IFRS. Certain reclassifications have been made with respect to the figures published in the Appendix to the 2006 First-half Report. The comparative figures for the previous period were consequently reclassified. These reclassifications have no effect on the net result or stockholders’ equity.The financial statements have been prepared on a historical cost basis, modified as required for measuring certain financial instr uments. Format of the financial statements Fiat S. p. A. presents an Income Statement using a classification based on the nature of its revenues and expenses given the type of business it performs. The Fiat Group presents a Consolidated Income Statement using a classification based on function, as this is believed to be more representative of the format selected for managing the business sectors and for internal reporting purposes and is coherent with international practice in the automotive sector.Fiat S. p. A. has elected to present current and non-current assets and liabilities as separate classifications on the face of the Balance Sheet. A mixed format has been selected by the Fiat Group for the Consolidated Balance Sheet, as permitted by IAS 1, presenting only current and non-current assets separately. This decision has been taken in view of the fact that both companies carrying out industrial activities and those carrying out financial activities are consolidated in the 244 Fi at S. p. A. Financial Statements at December 31, 2006 – Notes to the Financial Statements Group’s financial statements.The investment portfolios of financial services companies are included in current assets in the Consolidated Balance Sheet, as the investments will be realised in their normal operating cycle. Financial services companies, though, obtain funds only partially from the market: the remaining are obtained through the Group’s treasury companies (included in industrial companies), which lend funds both to industrial Group companies and to financial services companies as the need arises. This financial service structure within the Group means that any attempt to separate current and non-current debt in the Consolidated BalanceSheet cannot be meaningful. This has no effect on the presentation of the liabilities of Fiat S. p. A. Assets are depreciated using the policies and rates described below. Lease arrangements in which the lessor maintains substanti ally all the risks and rewards incidental to the ownership of an asset are classified as operating leases. Lease payments under an operating lease are recognised as an expense on a straightline basis over the lease term. Depreciation Depreciation is charged on a straight-line basis over the estimated useful lives of assets as follows:The statement of cash flows has been prepared using the indirect method. In connection with the requirements of the Consob Resolution No. 15519 of July 27, 2006 as to the format of the financial statements, specific supplementary Income Statement and Balance Sheet formats have been added for related party transactions, so as not to compromise the overall reading of the statements. Annual depreciation rate Buildings Plant Furniture Fixtures Vehicles 3% 10% 12% 20% 25% Land is not depreciated. Intangible assets Impairment of assets Purchased and internally-generated intangible assets are ecognised as assets in accordance with IAS 38 – Intangible As sets, where it is probable that the use of the asset will generate future economic benefits and where the cost of the asset can be determined reliably. The company reviews at least annually the recoverability of the carrying amount of intangible assets, property, plant and equipment and investments in subsidiaries and associates, in order to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the carrying amount of an asset is written down to its recoverable amount.The recoverable amount of an asset is the higher of fair value less costs to sell and its value in use. Intangible assets with finite useful lives are measured at purchase or manufacturing cost, net of amortisation charged on a straight-line basis over their estimated useful lives and net of any impairment losses. Property, plant and equipment Cost Property, plant and equipment is measured at purchase or manufacturing cost, net of accumulated depreci ation and any impairment losses, and is not revalued. Subsequent expenditures are capitalised only if they increase the future economic benefits embodied in the asset to which hey relate. All other expenditures are expensed as incurred. In particular, in assessing whether investments in subsidiaries and associated companies have been impaired, their recoverable amount has been taken as their value in use, as the investments are not listed and a market value (fair value less costs to sell) cannot be reliably measured. The value in use of an investment is determined by estimating the present value of the estimated cash flows expected to arise from the results of the investment and from the estimated value of its ultimate disposal, in line with the requirements of paragraph 33 of IAS 28.Fiat S. p. A. Financial Statements at December 31, 2006 – Notes to the Financial Statements 245 When an impairment loss on assets subsequently reverses or decreases, the carrying amount of the as set or cash-generating unit is increased up to the revised estimate of its recoverable amount, but not in excess of the carrying amount that would have been recognised had no impairment loss been recorded. The reversal of an impairment loss is recognised immediately in income. Measurement Financial instruments Investments in subsidiaries and associates are tested for mpairment annually and if necessary more often. If there is any evidence that these investments have been impaired, the impairment loss is recognised directly in the Income Statement. If the company’s share of losses of the investee exceeds the carrying amount of the investment and if the company has an obligation to respond for these losses, the company’s interest is reduced to zero and a liability is recognised for its share of the additional losses. If the impairment loss subsequently no longer exists it is reversed and the reversal is recognised in the income statement up o the limit of the cost of the investment. Presentation Financial instruments held by the company are presented in the Balance Sheet as described in the following: I Non-current assets: Investments, Other financial assets, Other non-current assets. I Current assets: Trade receivables, Current financial receivables, Other current receivables, Cash and cash equivalents. I Non-current liabilities: Non-current financial payables, Other non-current liabilities. Current liabilities: Trade payables, Current financial payables (including payables for advances on the sale of receivables), Other payables. IThe item â€Å"Cash and cash equivalents† consists of cash and deposits with banks, units with liquidity funds and other highly traded securities that are readily convertible to cash and which are subject to an insignificant risk of changes in value. The liability relating to financial guarantee contracts is included in Non-current financial payables. The term financial guarantee contracts refers to contracts und er which the company guarantees to make specific payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument.The present value of the related receivable for any outstanding commissions is classified in Non-current financial assets. Investments in subsidiaries and associates are stated at cost adjusted for any impairment losses. The excess on acquisition of the purchase cost and the share acquired by the company of the investee company’s net assets measured at fair value is, accordingly, included in the carrying value of the investment. Investments in other companies, comprising non-current financial assets that are not held for trading (available-forsale financial assets), are initially measured at fair value.Any subsequent profits and losses resulting from changes in fair value, arising from quoted prices, are recognised directly in equity until the investment is sold or is impaired; the total profits and losses recognised in equity up to that date are recognised in the Income Statement for the period. Minor investments in other companies for which a market quotation is not available are measured at cost, adjusted for any impairment losses. Other financial assets for which the company has the intent o hold to maturity are recognised on the trade date and are measured at purchase price (being representative of fair value) on initial recognition in the Balance Sheet, inclusive of transaction costs other than in respect of assets held for trading. These assets are subsequently measured at amortised cost using the effective interest method. 246 Fiat S. p. A. Financial Statements at December 31, 2006 – Notes to the Financial Statements Other non-current assets, Trade receivables, Current financial receivables and Other current receivables, excluding assets eriving from derivative financial instruments and all financial assets for which quotations on an active market are not available and whose fair value cannot be reliably determined are measured at amortised cost using the effective interest method if they have a pre-determined maturity. If financial assets do not have a predetermined maturity they are measured at cost. Receivables with a due date beyond one year that are non-interest bearing or on which interest accrues at below market rate are discounted to present value using market rates.Valuations are performed on a regular basis with the purpose of verifying if there is objective evidence that a financial asset, taken on its own or within a group of assets, may have been impaired. If objective evidence exists, the impairment loss is recognised as a cost in the Income Statement for the period. Non-current financial payables, Other non-current liabilities, Trade payables, Current financial payables and Other payables are measured on initial recognition at fair value (normally represented by the cost of the transaction), in cluding any transaction costs.Financial liabilities are subsequently measured at amortised cost using the effective interest method, except for derivative financial instruments and liabilities for financial guarantee contracts. Financial liabilities hedged by derivative instruments are measured according to the hedge accounting criteria applicable to fair value hedges; gains and losses resulting from subsequent measurement at fair value, caused by fluctuations in interest rates, are recognised in the Income Statement and are set off by the effective portion of the gain or loss resulting from the respective valuation of the hedging instrument at fair value.Liabilities for financial guarantee contracts are measured at the higher of the estimate of the contingent liability (determined in accordance with IAS 37 – Provisions, Contingent Liabilities and Contingent Assets) and the amount initially recognised less any amount released to income over time. Derivative financial instrume nts Derivative financial instruments are used solely for hedging purposes, for the purpose of reducing foreign exchange rate risk, interest rate risk and the risk of fluctuations in market prices. In accordance with the conditions of IAS 39, derivative inancial instruments qualify for hedge accounting only when, at the inception of the hedge, there is formal designation and documentation of the hedging relationship, the hedge is expected to be highly effective, the effectiveness can be reliably measured and the hedge is actually highly effective throughout the financial reporting periods for which it was designated. All derivative financial instruments are measured at fair value, in accordance with IAS 39. When financial instruments have the characteristics to qualify for hedge accounting the following accounting treatment is dopted: I Fair value hedge – If a derivative financial instrument is designated as a hedge of the exposure to changes in fair value of a recognised asse t or liability that is attributable to a particular risk that could affect the Income Statement, the gain or loss resulting from remeasuring the hedging instrument at fair value is recognised in the Income Statement. The gain or loss on the hedged item attributable to the hedged risk adjusts the carrying amount of the hedged item and is recognised in the Income Statement. Cash flow hedge – If a derivative financial instrument is esignated as a hedge of the exposure to variability in the future cash flows of a recognised asset or liability or a highly probable forecast transaction that could affect the Income Statement, the effective portion of the gain or loss on the derivative financial instrument is recognised directly in equity. The cumulative gain or loss is reversed from equity and reclassified into the Income I Fiat S. p. A. Financial Statements at December 31, 2006 – Notes to the Financial Statements 247 Statement in the period in which the hedged transaction is recognised.Gains or losses associated with a hedge (or part of a hedge) which is no longer effective are immediately recognised in the Income Statement. If a hedging instrument or a hedging relationship is terminated, but the transaction being hedged has not yet occurred, the cumulative gains and losses recognised in equity until that time are recognised in the Income Statement at the time the transaction occurs. If a hedged transaction is no longer considered probable, the unrealised gains and losses that remain in equity are immediately recognised in the Income Statement. ividing the costs incurred by the total costs forecast for the whole construction). Any losses expected to be incurred on contracts are fully recognised in the Income Statement and as a reduction in contract work in progress when they become known. If hedge accounting cannot be used, the gains and losses resulting from changes in the measurement of the derivative financial instrument at fair value are immediatel y recognised in the Income Statement. Sales of receivables Inventory Inventory consists of work in progress on specific contracts and in particular relates to long-term construction contracts signed by Fiat S. . A. with Treno Alta Velocita – T. A. V. S. p. A. under which Fiat S. p. A. as general contractor performs the coordination, organisation and management of the work. Work in progress refers to activities carried out directly and is measured by applying the percentage of completion to the contract fee, thereby recognising the margins deriving from the work performed to date. The cost to cost method is used to determine the percentage of completion of a contract (by Any advances received from customers for services performed are presented as a reduction in inventory.If the amount of advances exceeds inventory, the excess is recognised as Advances in the item Other payables. Receivables sold in factoring operations are derecognised from assets if and only if the risks and rewards relating to their ownership have been substantially transferred to the buyer. Receivables sold with recourse and without recourse that do not satisfy this condition remain in the company’s Balance Sheet even if they have been sold from a legal point of view; in this case, an obligation of the same amount is recognised as a liability for the advances received.Assets held for sale Any amounts in this item will consist of non-current assets (or assets and liabilities included in disposal groups) whose carrying amount will be recovered principally through a sale transaction rather than through continuing use. Assets held for sale (or disposal groups) are measured at the lower of their carrying amount and fair value less disposal costs. Employee benefits The expense related to the reversal of discounting pension obligations for defined benefit plans are reported separately as part of the Group’s financial expense. Post-employment plansThe company provides pension pl ans and other postemployment plans to its employees. The pension plans for which the company has an obligation under Italian law are defined contribution plans, while the other post-employment plans, for which the company generally has an obligation under national collective bargaining agreements, are defined benefit plans. The payments made by the company for defined contribution plans are recognised in the Income Statement as a cost when incurred. Defined benefit plans are based on the employees’ working lives and on the salary or wage received by the employee over a predetermined period of service.The employees’ severance indemnity (trattamento di fine rapporto or TFR) is considered to be a defined benefit plan and is accounted for in the same way as other defined benefit plans. The company’s obligation to fund defined benefit plans and the annual cost recognised in the Income Statement are determined by independent actuaries using the projected unit credit m ethod. The portion of net actuarial gains and losses at the end of the previous reporting period that exceeds the greater of 10% of the present value of the defined benefit bligation and 10% of the fair value of the plan assets at that date is deferred and recognised over the remaining working lives of the employees (the â€Å"corridor method†); the portion of actuarial gains and losses that does not exceed this threshold is deferred. In the context of IFRS first-time adoption, the company elected to recognise all cumulative actuarial gains and losses at January 1, 2004 (date of first-time adoption of IFRS by the Fiat Group), although it has adopted the corridor method for those arising subsequently. 248 Fiat S. p. A. Financial Statements at December 31, 2006 – Notes to the Financial StatementsThe liability for obligations arising under defined benefit plans and due on termination of the employment contract represents the present value of the obligation adjusted by act uarial gains and loses deferred as the result of applying the corridor approach and by past service costs for employee service in prior periods that will be recognised in future years. Other long-term benefits The accounting treatment of other long-term benefits is the same as that for post-employment benefit plans except for the fact that actuarial gains and losses and past service costs are fully ecognised in the Income Statement in the year in which they arise and the corridor method is not applied. Equity compensation plans The company provides additional benefits to certain members of top management and to certain employees through equity compensation plans. Under IFRS 2 – Share-based Payment, these plans are a component of employee remuneration whose cost is measured by the fair value of the stock options at the grant date recognised in the Income Statement on a straight-line basis from the grant date to the vesting date, with a counter entry to equity.Changes in fair v alue after the grant date do not have any effect on the initial measurement. The company has applied the transitional provisions of IFRS 2 and as a result the Standard is applicable to all stock option plans granted after November 7, 2002 but which had not yet vested by January 1, 2005, the effective date of the Standard. Detailed disclosures are also provided for plans granted before that date. Fiat S. p. A. Financial Statements at December 31, 2006 – Notes to the Financial Statements 249 Taxes Use of estimatesThe company recognises provisions when it has a legal or constructive obligation to third parties, when it is probable that the settlement of the obligation will require the outflow of resources and when a reliable estimate can be made for the amount of the obligation. The tax charge for the period is determined on the basis of prevailing laws and regulations. Income taxes are recognised in the Income Statement other than those relating to items credited or charged dir ectly to equity, in which case income taxes are also recognised directly in equity.Changes in estimates are recognised in the Income Statement for the period in which the change occurs. Deferred tax assets and liabilities are determined on the basis of all the temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its corresponding tax basis. Deferred tax assets resulting from unused tax losses and temporary differences are recognised to the extent that it is probable that future taxable profit will be available against which they can be utilised.Current and deferred income taxes and liabilities are offset when there is a legally enforceable right to offset. Deferred tax assets and liabilities are measured by using the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. The preparation of financial statements and related disclosures that conform to IFRS requires management to make est imates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and iabilities at the date of the financial statements. Actual results could differ from those estimates. Estimates are used in accounting for depreciation and amortisation, impairment losses and reversals of impairment losses on investments, the margins earned on construction contracts, employee benefits, taxes and provisions. Estimates and assumptions are reviewed periodically and the effects of any changes are recognised in the period in which the estimate is revised if the revision ffects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Provisions Treasury stock The cost of purchase of treasury stock is accounted for as a reduction of equity. The effects of any subsequent transactions with those shares are similarly recognised directly in equity. Dividends received and receivable Di vidends received and receivable from investments are recognised in the Income Statement when the right to receive the payment of this income is established and only if declared from post-acquisition net income.If dividends are declared from pre-acquisition net income, those dividends are deducted from the cost of the investment. Revenue recognition Revenue is recognised to the extent that it is probable that economic benefits will flow to the company and when the amount of revenue can be measured reliably. Revenue is presented net of any adjusting items. Revenue from services and revenue from construction contracts is recognised by reference to the stage of completion (the percentage of completion method).Revenues arising from royalties are recognised on an accrual basis in accordance with the terms of the relevant agreement. Financial income and expenses Financial income and expenses are recognised and measured in the Income Statement on an accrual basis. Fiat S. p. A. and almost a ll its Italian subsidiaries have elected to take part in the national tax consolidation programme pursuant to articles 117/129 of the Consolidated Income Tax Act (T. U. I. R. ); the election has been made for a three year period beginning in 2004.Fiat S. p. A. acts as the consolidating company in this programme and calculates a single taxable base for the group of companies taking part, thereby enabling benefits to be realised from offsetting taxable income and tax losses in a single tax return. Each company participating in the consolidation transfers its taxable income or tax loss to the consolidating company and Fiat S. p. A. recognises a receivable from that company for the amount of IRES corporate income tax paid over on its behalf. In the case of a company

Comparison of Early American Literature Essay

The two selections Of Plymouth Plantation by William Bradford and The General History of Virginia by John Smith are some of the earlier pieces of American literature. Although they were both written in the same time period the style and attitudes vary greatly. William Bradford had a very direct form of writing; commonly known as â€Å"plain puritan† style, whereas, John Smith had a somewhat confusing, more elaborate, writing style. Bradford’s piece also seemed more accurate than John Smith’s account. For example, John Smith wrote of his capture by â€Å"†¦three hundred bowmen, conducted by the king of Pamunkee†¦Ã¢â‚¬  which seems more than a little exaggerated. After all, it generally doesn’t take three hundred men to capture one. Smith exaggerated many times in order to boast about himself. There are many times when he refers to his greatness. In the following quote he boasts of his leadership skills and compassion for his fellow men while belittling his superiors: â€Å"The new President and Martin, being little beloved, of weak judgment in dangers, and less industry in peace, committed the managing of all things abroad to Captain Smith, who, by his own example, good words, and fair promises, set some to mow, others to bind thatch, some to build houses, others to thatch them, himself always bearing the greatest task for his own share, so that in short time her provided most of them lodgings, neglecting any for himself†¦Ã¢â‚¬  William Bradford, on the other hand, boasts about his colony: â€Å"†¦there was but six or seven sound persons who to their great commendations, be it spoken, spared no pains night or day, but with abundance of toil and hard of their own health, fetched them wood, made them fires, dressed them meat, made their beds, washed their loath some clothes, clothed and unclothed them.† Bradford and Smith, both leaders of their colonies, wrote of their hardships in the new world. Despite these similarities the way they acted was very different. When John Smith writes about the Native Americans he refers to them as â€Å"savages† and â€Å"barbarians.† He even calls Pocahontas, the girl who saved his life, â€Å"a young wench.† Bradford writes of the Native Americans as  human beings. He even had a peace treaty with them that lasted twenty-four years. They also had different motifs for writing, which may contribute to the many differences. Smith wrote his selection to encourage people to come to America to find excitement and adventure. Bradford simply wanted to inform the readers of what the lives of colonists was really like. As different are their writing styles, motifs, and views these two men share some common ground, one being they are some of the earliest works of American Literature. So no matter how different or alike Smith and Bradford’s writings are, History of Virginia and Of Plymouth Plantation will always be remembered as great American literature.

Marriage and Family Therapy Essay

Marriage and Family Therapy Abstract The purpose of this paper is to examine the field of marriage and family counseling beginning with the history and development of the profession and its importance in the field of counseling. This paper will also evaluate five major themes relevant to Marriage and Family Therapy which include: roles of Marriage and Family Therapists; licensure requirements and examinations; methods of supervision; client advocacy; multiculturalism and diversity. The author will discuss significant aspects to the field of Marriage and Family Therapy such as MFT identity, function, and ethics of the profession. This paper will assess biblical values in relation to Marriage and Family Therapists and to the field itself. In conclusion, the author will provide reflections on Marriage and Family Therapy and the personal commitment to provide counseling that is ethical, biblically grounded, and empirically based. Marriage and Family Therapy This paper is an examination of the history and development of the field of Marriage and Family Therapy. Education, licensure requirements, methods of supervision, client advocacy, and cultural sensitivity are the focus of the evaluation with specific attention given to counselor identity, function, and ethics. History and Development The field of Marriage and Family Therapy is an emerging profession with roots dating back to the late 1940’s. In 2009 licensure for Marriage and Family Therapists was attained for all 50 states and the District of Columbia but this dream began in 1949 when the American Association of Marriage and Family Therapists (originally called the American Association of Marriage Counselors) joined forces with the National Council on Family Relations to form a committee to create the standards that would one day regulate the practice of marriage and family counseling (Northey, 2009). Marriage and family counseling was once thought of as a subset of other helping professions but now Marriage and Family Therapy is one of the major mental health professions in the United States with over 50,000 licensed therapists (Northey, 2009). The profession has its own accrediting body, COAMFTE, for accrediting graduate and doctorate programs in Marriage and Family Therapy. To further strengthen the profession, 128 core competencies have been identified with six primary domains and five subdomains (Miller, 2010). The six domains include: admission to treatment; clinical assessment and diagnosis; treatment planning and case management; therapeutic intervention; legal issues, ethics, and standards; and research and program evaluation. The subdomains relate to types of skills and are comprised of: conceptual, perceptual, executive, evaluative, and professional (Miller, 2010). According to the American Association for Marriage and Family Therapy website, a marriage and family therapist is a highly trained professional working in the mental health field that brings a family-oriented perspective to health care (http://www. aamft. org). In order to help families and married partners accomplish this, marriage and family therapists assess what kinds of emotional and mental disorders, behavioral and health problems, and relationship issues are encountered and then a treatment plan is devised. Treatment of the problems that families and couples face often results in greater understanding as well as more effective communication between members and couples which can ultimately aid in the prevention of crises for the individual and family. A main aspect of marriage and family therapy is the focus on the here and now and what can be done to remedy these current situations.

Living Together or Getting Married Research Paper

Living Together or Getting Married - Research Paper Example People have been cohabiting for different reasons. Many young adults are adopting this phenomenon because the rate of divorce has increased considerably and this has been cited as the major factor encouraging staying together rather than marrying (Barlow et al 2001). It's quite obvious that young people in the current generation see this as a way of achieving the benefits of marriage while at the same time evading the risk of divorce. Finances are the main cause of fights in married couples as cited by many researchers. When couples live together as in cohabiting, they get a chance to learn more about the spending habits of their partners as they share expenses and meet other obligations together. In this way, they can assess if their partner is really the type of a person who can handle marriage issues plus when people cohabit and things do not work out their way, they are not legally obliged to each other and do not have to seek religious authorization to break up their relationshi p (Hamilton 2005). Young people see this as a simple way for testing out whether a relationship would work or not. Just like the way it happens in colleges when you stay with your roommates and get to know their true character, living together allows the couple to get well acquainted with each others habits and behaviors and observe the way they operate in their daily life (Barlow et al 2001). Living together gives people who love each other more opportunities to experience and share their intimacy in terms of sex and emotional relationship without necessarily being married. Cohabiting is basically a trial to marriage and it's less complicated when dissolving it after failing as the couple does not incur unnecessary loss of finances like welfare, alimony or pension making the break less messy on the other hand if it works, the two can get married (Leadership U1999). Cohabiting before Marriage is Beneficial Most of the people in intimate relationships are using this method as the best measure to find out the character of their partners. Definitely in people from the past generations were to be asked, they would disregard of this as "shacking up" (Hamilton 2005). When dating, the other partner can display very decent character traits because the courtship may be defined by short visits now and then and this cannot bring out the true self of a person as incase they become angry every person goes his/her way to cool off and may apologizes later then fall back together. This is no big deal compared to living together, people tend to uncover their true being when staying together and you can be able to understand how they handle conflicts and most likely this may not be pretty. If one cannot handle this, what can happen when married Cohabiting exposes such habits and one may be able to find a way to make it work or walk away (Barlow et al 2001). Apart from anger management, another issue is cleanliness and individual hygiene; some people can appear to be very clean and smart but their houses looks like garbage dump. There are other things that one finds out from living together though some may be considered petty for instance snoring very loudly at night or talking in their sleep even sleep walking. Some people usually don't change their habits and this will start revealing

Physical impacts on building Essay Example | Topics and Well Written Essays - 750 words

Physical impacts on building - Essay Example Fog also affects adversely buildings indirectly through birds when they are migrating during misty seasons and at the night (Hobson & Wassenaar, 2008; pp. 817). Since, they assume many of the buildings’ lights are bright space bodies when flying, only to realize too late, where they swerve into a glass building, breaking it (Noble, 2004). Hurricanes grievously affect people despite their states up to date having devices meant to predict their occurrences (Barnes, 2006). Mainly, this encompasses destruction of homes besides other structures like industries or commercial buildings (Steiner & Butler, 2007). The recent Katrina’s damages according to Cauffman (n.d) reported massive obliteration of residential houses due to flooding and high velocity waters. Besides, structures that are far from the sea but near to the coastal region usually experience strong winds caused by storm surges (Cauffman, n.d). Mainly, these winds cause failure of the roofs, wakening of decks and wind-induced damage to glass windows (Cauffman, n.d). Recent disastrous incidence occurred in New Orleans its destructions amounted to approximately $60 billion besides killing 18,000 people (Marsh & Kaufman, 2012; pp. 140). Additionally, hurricanes adversely affect infrastructures, electricity besides communication networks due to flooding and st rong winds (Fitzpatrick, 2006). Extreme drought heat prompts numerous houses start experiencing fatigue faster. Since, soil at the buildings’ edges starts drying up faster where tree roots force their way under the buildings and form cracks in the floor (Waugh & Bushell, 2002: pp. 99). Sometimes the damage may be irreparable to the extent of entailing utter dismantling of the entire unit especially when the cracks are evident in the walls (Campbell & Corley, 2012). In addition, excess heat may lead to extra stress on the roofing materials that end up stretching and creating large holes where in raining

Drug addiction Research Paper Example | Topics and Well Written Essays - 1500 words

Drug addiction - Research Paper Example Drug addiction has negative consequences to both individuals and society. One of the main consequences is the increased burden to the community and individuals (Conrad & Anggard, 1977). Moreover, drug abuse affects the health status of the individual and other forms of their social life. This paper seeks to focus on drug addiction. Drug Addiction Drug addiction is a persisting problem and affects the brains resulting into compulsive drug seeking and use even when there are negative outcomes to the individual and society (NIDA, 2011). Initially, individual take the drug for casual, recreation, leisure, or entertainment. However, continuous use of the drug affects the brain in a way that the affected individual is unable to overcome the temptation of taking more drugs. Treatment is available for this condition. Most of the treatments are behavior oriented coupled with appropriate recommendations. Most of the treatment focuses on changing the social behavior of the individual involved. This means drug addiction can be managed successful reducing further damage to the individual involved. The management of drug addiction is similar to those of other chronic diseases (Conrad & Anggard, 1977. This means such care requires more attention and absolute obedience to the individuals undergoing such form of therapy. Effects of Drugs to the Brain The problem of drug addiction starts from the brain. Drugs contain chemicals that affect the brain communication system and configure the nerve cells (NIDA, 2011). This happens in two ways. They mimic the brain natural messengers and overstimulation of brain functioning system (NIDA, 2011). Some drugs have similar components as the chemical messengers found in the body. These chemical messengers are known as the neurotransmitters. Such drugs include cannabis and heroine. These drugs configure the brain receptors and stimulate the nerve cells to send abnormal messages (NIDA, 2011). Other drug causes abnormal production of chemical messengers in the brain. An example of such drug is cocaine. They prevent the normal recycling of the brain chemicals that are supposed to stop connections between neurons (NIDA, 2011). This disfigures dopamine that is responsible for controlling movement, emotion, motivation, and feelings of pleasure (NIDA, 2011). This leads to ecstatic events in response t o psychoactive drugs. Consequently, such individuals are accustomed to repeating the beneficial behavior of abusing drugs. Those that abuse such drugs are unable to enjoy the drugs and other events in life. Consequently, this decrease in satisfaction forces leads to more use of drug in order to maintain the function of dopamine to normality (NIDA, 2011). This means high amount of drug is required to maintain normalcy. In addition, other changes occur in the brain due to continued abuse of drugs. Such change affects the glutamate. The neurotransmitter affects the system functionality and the ability to learn (NIDA, 2011). When the normal amount of the neurotransmitter is affected by drug abuse, the brain tries to bring normalcy, and this may reduce the cognitive function (NIDA, 2011). This defect has been shown to affect brain processes such as learning and memory (NIDA, 2011). These challenges make the abusers seek out and continually use drugs even when there are widespread

Paper 2 Essay Example | Topics and Well Written Essays - 1250 words - 3

Paper 2 - Essay Example At the beginning of the story the readers are mislead to believe that Mrs. Mallard â€Å"was afflicted with a heart trouble† (Chopin 2009). Within the context of the whole story â€Å"heart trouble† has a double meaning. The author here tries to hint that the heart trouble might not be the heart disease that Mrs. Mallard is thought to suffer from. Besides the literal meaning, heart troubles are also connected to the feelings and inner spirituality of people. The use of the passive voice â€Å"was afflicted† speaks about the impossibility of Mrs. Mallard to act as she wishes. And because of her faint heart Josephine – her sister and Richards – a close family friend, reveal her â€Å"gently† the heart-breaking news of her husband’s death. They way in which her sister delivers her the news is in â€Å"broken sentences†. Broken sentences contrast with the fear of her family to break her heart. The use of oxymoron – â€Å"rev ealed in half concealing† suggests that the revelation of the death of her husband, conceals Mrs. Mallard’s inner feelings. Someone else’s feelings are also concealed in this paragraph. Mrs. Mallard’s husband’s friend Richards is depicted as impatient. Unclear clues are scattered throughout the paragraph. Richards assures himself of the truth, he hastens to Mrs. Mallard’s home and uses â€Å"less careful, less tender† language to bear her the â€Å"sad message†. There is an opposition here. â€Å"Less careful† might mean that Richards is both clumsy and rough man, but it can mean that he also conceals his feelings for Mrs. Mallard, as she is already married. By being less tender he will show to Mrs. Mallard that he has a strong personality and emotions to her. The â€Å"sad message† is employed ironically here. It is both ironic and sarcastic that sad message can bring happiness to two people

The Corporate Culture of Zappos Assignment Example | Topics and Well Written Essays - 250 words - 4

The Corporate Culture of Zappos - Assignment Example Considering the importance which Zappos gives the relationship between corporate culture and personal values, it is possible for the company to ask questions that measure the core value of an individual. While measuring an innate quality is difficult, it is easy to get a hint of what an individual perceives a situation (Nelson & Quick 541). This way, through the graduated rating scale, the company’s Human resource team can use the answers given t to evaluate the core values of the person. It is essential to mention that the interview focuses more on personality than technical capabilities. For this reason, the comparison between the core values of the organization and the individual perceptions of the applicant can tell their philosophies. Lack of a formal feedback might bring up issues in the organization. Formalities and bureaucracies have paramount importance as far as communication and consistency are concerned (Nelson & Quick 521). For instance, where an employee does not receive regular feedback, especially in writing, it is likely that any disciplinary action leveled against them will be treated as constructive discharge. As such, formal feedback is essential as it provides inspiration and a basis for employees to improve on their weaknesses as they judge themselves. To avoid such issues, the human resource group at Zappos should always issue a formal feedback. Over time, there are many signs that can be seen in an employee that fits into the corporate culture of Zappos. One of the signs of a character that fits the culture is the subordination of personal interest to organizational interest. Additionally, such an employee will be motivated and satisfied with their job. On the contrary, an employee that does not match the corporate culture of Zappos will be less concerned about organizational interests and will usually be a poor performer whose job is characterized by non-punctuality, and less formality.

Culture Aspect of Childbirth and Parenting Essay

Culture Aspect of Childbirth and Parenting - Essay Example There are so many dimensions to it that studying its dynamics could provide deep insights for health care professionals. This paper will examine the case of child birth and care in Kalahari, South Africa. It is expected that the discourse can further highlight the argument that the idiosyncrasies in various culture are especially prominent in pregnancy, child birth and parenting and that an understanding of such could empower health care professionals to be effective especially in decision-making stage when working with a highly diverse population. Kalahari is a region in southern Africa that covers parts of South Africa, Botswana, Angola, Namibia, Zambia and Zimbabwe. The Bushmen have thrived in the region for at least 20,000 years. Children and parenting among them are treated much the same way in Western societies. Babies are indulged and cared for until their survival is ensured. Sigelman and Rider (2011) noted that â€Å"babies are touched 70% of daytime hours, are breast-fed w henever they want (usually 20-40 times a day), and may not be weaned until the age of 4.† (p. 124) The way mothers and families rear their young – with the attention and importance given to this enterprise - is fundamentally the same with how Western communities and families care for their children. They are loved, protected and provided for. The Bushmen, however, practices a unique birthing culture. A very important aspect of it is how the Kalahari women aspire and value the manner of giving birth to her child unaided. At least this has been true in the case of the Bushmen tribe of Ju|’hoansi. According to Selin (2009), this is quite common across this group because solitary child birth is widely seen as an opportunity to prove one’s worth as it is considered part of the rites of passage wherein women can display their ability for self-control, in addition to the ritualistic beliefs entailed in ethnic rites of passage. (p. 17) The implication of this cult ural practice is that it exposes mothers and infants to several risk factors; the most serious of these is death. This practice appears so different from the Western idea about the entire birthing process. In most western societies such as in the United States, pregnancy and child birth is an opportunity for family, relatives and friends to lend support. They are equated with the procreation processes and, hence, are extremely important for many individuals beyond the family. In addition, anthropologists consider kinship relationships in the West as fundamentally connected with acts of birth and human understanding of procreation. (Stone 2009) And so pregnancy and birthing are considered an event of extreme interest. Rites, beliefs, myths, among other cultural practices that our community have made all feature the requirement of support and closer ties. It is normal for us to see assistance, especially those by women who possess authoritative knowledge on the process, as one with gr eat survival value for birthing mothers. This is the reason why today both the health professional such as the doctor or the midwife are actual partners in the pregnancy and the birthing enterprise. Another interesting aspect about child birth in Kalahari is the environment. Desert covers much of the area and this claimed an important impact in the childbirth beliefs and behaviors of the Bushmen. Unlike in our society, for instance, the Bushmen did not have the luxury of water for birthing. Women

Magnet Schools and the Pursuit of Racial Balance Essay

Magnet Schools and the Pursuit of Racial Balance - Essay Example There are 3 goals of magnet schools - to reduce minority isolation, to eliminate minority isolation and to prevent minority enrolment. Out of 54 schools in Cincinnati sample frame 10 magnet schools and 10 non magnet schools were selected. A questionnaire was distributed to all the fifth grade parents and to all non administrative staff in each school of the selected temple. Magnet schools are a tool for racial balance. Many parents believe that the goal of integration is beneficial for both the parents as well as the students. In conclusion we may say that the students will derive benefits from encounters with students from different races. In 1802, Nassau Hall was consumed by fire, the next year Dickson College's building was burned down likewise there were many such college buildings which were either burned or affected by other natural calamities like lightening. Often when a college had a building, it had no students and when it had students it had no buildings. And it if had both than it didn't have money, professors or president. College founding in the 19th century was undertaken with the same spirit as canal-building, farming etc. Yale men were responsible for setting up Christian goals in the west. For the Methodists and the Baptists founding colleges became a part of their process of coming to terms with middle class societies.

Woman in Black theatre review Essay Example for Free

Woman in Black theatre review Essay In June 2012 I had the pleasure of watching The Woman In Black in the Fortune Theatre. A spine-chilling adaptation of the 1983 novel by Susan Hill. The story explores a tale of a ‘woman in black’ who is said to haunt the living, when a young solicitor enters a town where the villagers are reluctant to speak anything of this ghostly character he ultimately discovers why. The play was first performed in 1987 in the Saint Joseph Theatre in Scarborough as a ‘Christmas play’ only to attract profits however it attracted more attention than was expected. Critics raved about the play and it went onto become a success, eventually upgrading to its present location at the Fortune Theatre in Drury Lane. The most remarkable thing about this play is the minimalism of it; there are just two actors throughout the whole of the play and a very minimalistic set, just a trunk, and a chair which the actors themselves have to maneuver in order to create different settings. The audience are initially introduced to the main characters; Arthur Kipps, assisted by a young actor to help him communicate the terrifying events that he faced when on a job in the small town of Crythin Gifford. This play uses the technique of a play within a play to relive Arthur Kipps’ memories. The young actor plays young Arthur Kipps whereas the old Arthur Kipps plays every other character he was faced with. The older actor was tremendous in carrying out his role and would have had to been; playing so many characters and displaying their dialect, body language etc perfectly was outstanding. What really stood out for me was the exceptional use of such simple effects. In each scene the simplistic setting would not be able to portray a realistic one so a simple use of layering and only lighting what you want the audience to see, with the added accompaniment of sound effects would give the intended audience reaction the director (Robin Herford) wants. Sound is one of the fundamental elements of this play. To create a sense of location such as a train station there are recorded voice-overs. However when portraying the scary and shocking moments of the play, unexpected, ear piercing volumes of screams retrieved the audiences most petrified responses.

Nutritional Needs over a Life Span Essay Example for Free

Nutritional Needs over a Life Span Essay As we grow older, our nutritional needs begin to change. Not only do they change throughout different stages of life, but they also vary depending on whether you are male or female. The following are nutrient requirements for the lifespan of both men and women: Infants Infants of both sexesleave the mothers womb and live on their mothers breast milk for the first four to six months of their life. If breastfeeding is not possible, then the infant should be formula fed. This provides all the necessary nutrients to sustain good health during this time frame. From age six to 12 months, infants can begin eating solid foods such as rice, oatmeal, soft fruits, cooked veggies and meats. After they are a year old, they can graduate to eating larger, raw fruits, vegetables and lean meats. Teenagers Teens have to keep a well balanced diet because they are growing during these years. They also have to be able to concentrate in school and get adequate nutrition to help them play sports, as well. They need sufficient iron in their diet; teenage girls usually do not get enough of this. Protein, calcium and Vitamin D are particularly important during a teenagers growth spurt. This includes fish, chicken breast, skim milk, cheese and low fat yogurts. Boys usually need more calories than girls because they have more muscle mass and tend to grow taller. Another facet of teenage life, particularly for women is the pressure to stay thin. They are more likely to suffer from eating disorders and inadequate nutrition, than males. Read more:Â  Essay on Nutritional Requirements Adults Adult men and women have different nutritional needs based on their occupation and activity level. Those who have sedentary jobs, can get away with eating a 1500-1800 calorie a day diet, without weight gain. However, those who work in field such as construction, cleaning, fitness instruction, etc..require a greater calorie intake of at least 2000-3000 calories daily. Women of child bearing age, must eat plenty of iron rich foods like cooked fish and poultry products, as well as spinach and other leafy green vegetables. Just before and during pregnancy, women have to pay close attention to the diet, as this can affect the health of the baby. Along with obtaining nutrients from all of the major food groups, she may take folic acid supplements to aid in proper development of the childs spinal cord. They should also avoid raw foods that may contain poisonous bacteria, like fish, eggs and soft cheeses. Older Adults Older adults are not as physically active as younger adults, so their calorie needs are reduced. Calcium is very important to maintain strong bones. Women are particularly susceptible to developing osteoporosis later in life, so they should increase their calcium intake Fiber rich foods such as multigrain breads and slow cooked oatmeal aid in the digestion of older adults. A variety of B-vitamins plus protein help maintain a healthy central nervous system and protects body tissues from damage.

Porters Five Forces: Non-Conventional Energy

Porters Five Forces: Non-Conventional Energy The Suzlon story being in 1995 with just 20 people; and in a little over a decade has become an epic. A company of over 13000 people, operations across the America, Asia, Australia and Europe, fully integrated manufacturing unit on three continents, sophisticated RD capabilities and market leadership in Asia, ranked 5th in terms of global market share. The seeds of the idea that became Suzlon were sown by Mr. Tanti venture into the textile industry just as began in its booming years. Faced with soaring power costs, and with infrequent availabilities of power hitting his business hard Mr. Tanti looked to wind energy as an alter native. His first brush with wind energy was as a customer, having secured two small- capacity wind turbine generators to power his textile business. The company registered revenues of INR 12 Crore in the first year, and has since achieved consistent growth, registering revenue of USD 1,405 in FY2008- just a decade after inception. The company went public with a highly successful IPO in September 2005. The issue was oversubscribed over 46 times, and led Suzlon to rank amongst the Top- 25 Indian corporations in terms of market- capital. Today Suzlon is being ranked the 5 leading wind power equipment the manufacturer with a global market share of 7.7%. The company seized market leadership in India over 2,000 MW of wind turbine capacity in country. The company adopted innovation at the very core of its thinking and ethos. Suzlon combined this with another visionary step full backward integration of the supply chain. Suzlon by this approach has developed comprehensive manufacturing capabilities for all critical components in our wind turbines bringing into play economies of scale, quality control, and assurance of supplies in an increasingly supply restricted market. Taking this focus forward, Suzlon acquired Hansen Transmission of Belgium in 2006. The acquisition if the world second leading gearbox marker gives Suzlon manufacturing. Suzlon RD strategy brings emphasizes the need to lower the cost per- kilowatt- hour, in order to create ever more competitive technology and products. This step has success in the rapid global expansion of Suzlon business with orders from Australia, Brazil, China, Italy, Portugal, Turkey and the U.S.A We have set forth to fulfill the vision of company as global as the wind. Starting as unknown player in a nascent industry in India, Suzlon grew to become the leading player on India wind power stage, and from there has grown to rank among the Top- 5 wind turbine manufacturers in the world. Mission of Suzlon Moved to towards the state where being a socially and environmentally responsible citizen is integrated within all our day to day to day business processes. Establish a truly Indian company producing Windmills with Technology suitable for India and to manufacture and market in our own brand name. Mission Minimum 20% Net Margin Minimum 50% Asian market share Minimum 60% Indian market share Minimum 25% Global market share Minimum 40% Growth Vision of Suzlon Suzlon is today a major force in the global wind industry, from human beginnings in 1995, to ranking 5 worldwide, with 7.7% of the global market share in just over a the decade. Already among the top five, Suzlon vision is to be a technology leader, to be among top 3 wind energy companies in the world by leveraging technological leadership and commercial acumen to exceed customer expectation and most respectable brand which grows fast is the most profitable company employing the best team in the sector. Vision Statement:- To be the technology leader in the wind energy industry. To be among the top 3 wind energy companies in the world. To be the most respected brand and preferred company for all stakeholders To be the best team and best workplace. To be the fast growing and most profitable company in the sector. COMPANY PROFILE SUZLON ENERGY LIMITED- OVERVIEW Suzlon Energy Limited traces its roots back to 1995, when the company took its first step on renewable energy stage with its incorporation. Suzlon began journey to the forefront of the wild energy industry with a small but significant project to supply wind turbine generators for a 3.34 MW wind farm project in Gujarat, India. In little over a decade, Suzlon has grown to rank as the world 5 leading and India the and Asia leading manufacturer of wild turbine, with over 2000 MW of wind turbine capacity supplied in India and across the world of USD 675 million, CFS FY 2006, with current order book exceeding USD 1.7 billion. Technology- Suzlon today develops and manufactures technologically advanced, high-performance and cost- efficient wild turbine, to meet the diverse need customers all around the world. In India, Suzlon offers customer end-to-end wind energy solutions, including wind resource mapping site identification, site development and installation, and finally operation mainten ance services. This allows Suzlon to offer Indian customer economies of scale, and eliminates the need for customer involvement in the complex process of wind far m development. Wind farms- Suzlon has developed and impletion several large-scale wind farms throughout India the integrated solution approach. The principal advantage of this approach is the economy of scale: the larger the wind farm and more the number of WTGs- the lower the infrastructure cost per-wind turbine. Similarly, larger project have lower operation and maintenance costs per kWh due to the efficiency obtained in managing a larger wind far m. Among Suzlon many large project are: The Kutch Wind Farm, Gujarat: Asia largest wind farm developed and operated by Suzlon, it has more than 750MW of wind power Capacity, already installed, furthers capacity addition is in progress. This wind farm comprises of Suzlon time tested wind turbines of 600kW, 1250kW, and 1500kWCapacity. The Dhule Wind Far m, Maharashtra: The Dhule wind farm is Asia second largest wind farm with an installed capacity in excess of 675 MW. This wind farm comprises of Suzlon time tested wind turbines of 600kW, 1250kW and 1500kW capacity. New Products- Suzlon aims to drive global market share growth through expanding its product line with models customized to meet customer need as well as specific wild regimes, as seen in the new S52 600 kW and S82 1.5 MW wind turbine models. In addition to this, Suzlon aims to improve the cost efficiency of generating power from wind through technology enhancements, and optimizing locations and sitting, to the end result of maximizing power generation while driving down the cost of power generated from the wind. Technology integration- Suzlon as an developer of WT Gs has developed design, development and manufacturing capability for all major components, development and manufacture of rotor blades, turbine, and tubular towers, control equipment and Nacelles covers. The company has implemented a far reaching backward-integration strategy that has brought the manufacture of all critical components in-house. Today the company, in association with subsidiaries, manufactures rotor blades, tower, nacelle covers, generators, gearboxes and all other critical components in its value chain. The QA department at Suzlon not only takes measures about the quality control i.e. the product is good or bad, accepted or rejected, but it gives assurance to the customer for the quality electricity production backed by revenue generation. Regular audits are also conducted by QA inspectors at various sites for the scrutiny of tools, equipments and processes. Suzlon backward integration strategy is driven from the point of view of increasing in-house manufacturing and allied capabilities leading to lowered WT G costs, greater quality assurance, and a secure Supply Chain. While Suzlon looks to vertically integrate, the company is also pursuing a distributed manufacturing strategy with dedicated manufacturing facilities set up at key locations across the world to supply and service international high growth markets. Today, Suzlon has facilities in Belgium, China, India, and the United States manufacturing everything from components that go into turbine, to complete wind turbine generators, and supply markets around the world. Suzlon integrated wind turbine manufacturing facility in Tianjin, China; and rotor blade manufacturing facility in the Pipestone, United States are geared to support these high growth regions with dedicated delivery capability, enabling a flexible to the local markets, and lowered logistics costs. Suzlon today develops and manufactures technologically advanced, high- performance and cost- efficient wind turbines. These services are developed to specifically meet the diverse need of customers all around the world. Suzlon offers customers end to end wind energy solution, including wind resource mapping, site development and installation, and finally operations maintenance services in India. This allows Suzlon to offer Indian customers economies of scale, and eliminates the need for customer innovation in the complex process of wind far m Development. Suzlon order book position is a reflection of its strong market position and consistency in delivering to their customers. The order book stands at around USD 4,335 million. Suzlon domestic order book position is for a capacity of 441 MW and international orders For 3,726 MW. Suzlon primary customer s in India include companies that have manufacturing facilities with high power consumption. These companies have high profitability and seek investment opportunities with stable returns. In India, Suzlon casters to leading corporate houses like the MSPL Limited, Bajaj Auto Limited, Tata Group and Reliance, to name a few. Suzlon has driven a focused effort to make wind turbine more reliable, consistently delivering availability rates to customers, beating global standard higher than 95% on an average. Suzlon has set new standards with record breaking contracts that have been signed with top wind companies around the world. Majority of the orders have been signed with top wind energy compa nies in the state. Suzlon Wind Energy Corporation has signed agreements with Edison Mission Group (EMG) of Irvine, California and after repeat orders EMG holds more than 630 MW of Suzlon wind turbine capacity in the United States. Similarly Suzlon relationship with John Deere Wind Energy (JIDW) started with its investment in several Minnesota wind power projects, but quickly expanded to Texas and recently Missouri. Suzlon has successfully entered the Chinese Market, which is one of the world fastest growing economies, with five important contracts with a total of 233.75 MW, of which 12 MW ar e installation and 221 MW are planned installations in 2007. A contract with Australian Gas Light marked Suzlon entrance into the Australian Market. Another key high-growth wind energy market Suzlon has entered into is Brazil though a contract signed with SIIF Energies do Brazil Ltd. The project is poised to double Brazil current installed capacity of 200 MW. Suzlon has adopted an innovative ap proach to its value chain, enabling the company to deliver customized solution to a variety of needs across the world. Suzlon has developed a fully integrated value chain with control over all critical components- gearbox and generator technology, to tower, rotor blades and in the end complete wind turbine. India, the world 5th largest market of wind energy is Suzlon largest Asian market and a critical hub for manufacturing. The Suzlon group head quarters is situated at Pune, in Maharashtra. State-of-the-art research and development centers, manufacturing facilities, wind farm projects, training campuses and a network of offices are spread across India. Suzlon has been the market leader in India with more than 4400MW of installed wind energy projects in 8 states. In India wind energy sector, Suzlon has maintained its No. 1 position with the highest year-on-year market share since 10 consecutive years. In FY 2008-09, Suzlon had a market share of more than 50% in the Indian market. Suzlon has grown its cumulative installed base by 400% in the last 5 years since FY 2004-05. Key Customers Suzlon revolutionized the wind energy segment in India with its unique end-to-end solutions. This hassle-free business model has enabled over 1300 customers from a variety of industry sectors and regions within India to invest in the wind energy sector with ease and confidence. Suzlon customers in India include small, medium, large scale businesses, private and public sector companies, power utilities, independent power producers (IPPs) and even high net worth individuals (HNI). Many of these customers do not have prior exposure or expertise of the power sector. But they clearly saw a big opportunity in the power generation business in a fast-growing, energy-starved market like India. Suzlon supported them with its proven technology, expertise and the comfort of end-to-end solutions to help them harness this opportunity. Following is a list of some key customers who have relied on Suzlon experience and expertise for their wind energy projects. Porters Five forces model Bargaining Power Of Supplier Is It difficult or costly for Suzlon to switch to another supplier? Towers are very costly as it accounts for 26.3% of the total cost and its partial demand is met by in house production but in that it is going for expansion by year 2009, but upto that time it has depend upon other supplier, the cost of rotor blades account for 22.2% and for the rotor blades its complete demand is met by in house production located in India, China and U.S so for that it does not have to depend on any supplier. Gear box manufacturing costs 12.9 % and also it is manufacture by only two companies and from that one is acquired by suzlon itself but for the partial demand it has depend on only one supplier so in this case bargaining power of supplier is high. In the case of generators there are many manufactures and also many companies are specialized in it. Moreover it account for only 3.44% of the total cost and in yr 2009 it is going for expansion so in this case bargaining power of supplier is moderate to low. Thus overall we could say that the switching cost is modera te to low. Demand Supply Gap:- According to Tulsi the major challenge face by the wind power industry is not the market but the short supply of the products. Also GEs order book is full for the year 2008, 09 and also half year of 2010. Thus clearly there are certain inputs are in short supply. Gear box :- Acc. To CEO with gearbox its not as easy to increase capacity as it is with other components. You need a lot of equipment, from gear cutting machines to heat treatment facilities that may it is a very capital intensive business. So increasing capacity involve a huge investment compared with, say, blade manufacturer and that take time. Thus there is clear pressure in the Gear box manufacturing facility. But the company has acquired Hanson ltd so partial demand is met by suzlon itself and also it is going for expansion so for only partial demand it has depend on other supplier so there is a less problem of short supply of gear box for suzlon as compare to other producers. Rotor blades :- A crucial component requiring sophisticated production techniques, global supply is dominated by independent blade maker LM Glasfiber, which has about 27% of the market. All the major turbine manufacturer apart from GE energy and RE power produce most of their own blades. But suzlon is going for capacity expansion by 2009 so for that it does not have to much rely on other supplier. Hence the bargaining power of the supplier could be considered moderate to low. Generators:- Supplied to the wind industry by a number of large companies such as ABB and Siemens, and dedicated supplier like Gamesa and suzlon . No signs of a shortage of supply. And also suzlon going for capacity expansion by 2009 so most of the demand is met by itself. Thus the bargaining power of the supplier is low. Tower:- There are many manufacturers of the towers in India and also across the world as it does not need high precise engineering as in the case of gear box. And in tower also it is going for capacity expansion so for that also it do not have to rely on other suppliers. Thus we can say that the bargaining power of the supplier is Low. Controllers:- The controllers are made by many industries so it is not the key issue for the company. In this case the bargaining power seems low. Thus the overall we could see that the bargaining power is moderate to low. Whether it makes good economic sense for the industry to integrate backward? The cost of the switching is low to the products it can be proved from the above graph. So the buyers can easily move from one company to another company. The number of buyer is small volume is high In the case of big wind turbine manufactures they do not take order of less than 750kw which is considered to be a big amount by most of the suppliers. Thus the client buying the turbine are important to the wind turbine manufactures. Thus the bargaining power of the buyer is generally high in case of particular customer. Also there is strong demand from the buyer which could be seen from the strong growth rate of the company. Thus we should take advantage of both and we would obtain average of it i.e moderate. Buyer demand is weak or seller are scrambling to secure the market: The cumulative growth rate of the industry is around 25%. Thus it could be considered it is an high growth rate industry. Thus the buyers demand is high. In case of seller it is found that the challengers and its few challengers are only increasing their market share where as small or mid size companies are scrambling to secure the market. Thus in this condition the buyers bargaining power could be considered moderate. Buyer are well informed regarding the prices, costs and products The customer are well informed regarding the products of suzlon; they can directly go to the companys website and get the required information of the product. In case of prices they are not shown at the website at the same time while contacting to the company person also they give round about prices of the wind turbine. In case of total costs of wind turbine it largely dependent on the land acquisition cost, set up cost, logistics cost etc and hence it is very hard to get exact cost. In this case the buyers bargaining power could be considered moderate. Buyer cannot easily go for backward integration There is a low threat in integrating backward for the company which have not been up till now in this particular industry because of following factors High Entry barriers: only to set up a gear- box manufacturing plant it takes more than 100 million dollars. To set up a rotor blades plant of 350 sets it take an investment of 35 crores. So like this all the other parts like tower, generator, panel etc also required huge investment. So there is not easy for any buyer to go backward. Unavailability of skilled labor: The skilled labor in this industry is not adequately available as per the Vestas CEO. Thus in this case it seems that the buyers bargaining power because of skilled labours and high entry barriers is low. Thus overall the bargaining power of buyer could be considered to be between low to moderate Threat of new Entrants into the Industry Brand Preference : There is a clear brand preference in the wind energy industry it could be understood by the market share of the company. The market share of Suzlon is 48%, Enercon is 27.6% and NEG- Micon it is 11.9 %. Thus overeall there are 3 companies which shares 87.51 % of the industry, Even in the remaining 12.5 % 5.54% is of Vestas. Thus the clearly the customer have brand preference of this four companies compare to other brand . Thus for new competitors the threat to enter the industry is high. Exit barriers : Exit barriers in this Industry are very much high because it required a huge investment to start the business and the payback period is also long about 8 years. So for every player its not easy to exit from this highly capital intensive Industry. So due to that the threat from new entrance is low. Capital Requirement: The capital requirement in the wind turbine industry is very high. To set up manufacturing facilities of rotor blades set of 350 set is 65 crores. Similarly to set up a gear box unit it requires 100 million dollars. Thus the potential entry of the new company is low. Access to distribution channels: all the companies are using direct distribution channel, hence it is not possible for a new entrants to access the distribution channel of other company. In this case also the potential entrant is low. Regulatory Policies Government Regulation of Energy Markets: clean energy companies are highly dependent on government subsidies and support to bring in revenue, given that oil, coal and nuclear are cheaper, well established energy sources and hold oligopolistic control over the world- wide energy market. Given this dependence on the government, many environment and social movement are focusing on pressuring the government to pave the way for a transition to renewable. Furthermore, many government endorse local renewable as an alternative to foreign fossil fuels, in an attempt to create energy independence. Government support of renewable is taking place on local, national and global scales. In this case the entry of the potential entrants is high. Tariffs and international trade restrictions: The international trade and tariffs are supportive thus the companies are benefited from it. The government through out the world are giving high incentives to this industry. Thus in this case because of supportive nature to encourage this industry the threat from the new entrants is moderate. Thus overall the threat from new entrants is from low to moderate. Rivalry in the same industry Oligopoly market: suzlon is market leader in wind energy having 48% stake followed by enercon having 27.6% and than NEG-Micon with 11.9% stake. So if one company change its strategy than it is immediately followed by other companies. So from that we can say that rivalry among competitors is strong. Differentiation: suzlon has differentiated itself and got the benefit of vertical integration through backward integration in terms of in house production that is done by its own subsidiaries and in the form of services having end to end solution that is from selection of sites to setting a wind farm according to the requirement of the customer. So from this we can say that the rivalry among competitors is moderate to low. In this case the threat from substitute product is between medium to high.But the operating cost is higher in the substitute product compare to the wind power. Also the procurement of the raw material is an important factor for the company like Bagasse co-generation, Biomass gasifier and wate-to-energy. Where as in case of small hydro power and solar photo voltaic the cost is higher than the wind turbine. Thus the overall we could say that the wind turbine is a unique product and the substitution from the substitute product is low. Thus overall threat from substitute product is b/w Medium to high.