Comparison Between Mainframe And Distributed Information Technology Essay

Comparison Between Mainframe And Distributed Information Technology Essay Client-server invent has actual and instant profits to software developers, apart from the volume of system. The client-server model is accepted model which operates client and server machines which are designed for exact purposes for computer networking. The Internet and Local Area Networks (LANs) both can use client-server model. Examples of the client-server systems on internet could be Web servers and Web browsers, FTP clients and servers, and DNS (Domain Name System). In FTP, users enter a computer name or sometimes an IP address in interface to locate connections to the server. There are two split devices in client-server model which are personalized for their considered reasons. For instance, a network client works most excellent in a big screen display, whereas a network server does not require any display and can be placed wherever in the world. On the other hand a device can be used as both, a client and a server for identical purpose. Similarly, a server device for one app lication can concurrently work as a client to other servers, for changed applications. People like client-server architecture because it offers error separation between modules, scalable performance in multiple servers, and central server is easy to manage and easy to program. The problem described in the assignment question says that in 1987 Hures implemented its first information system which was in mainframe computer that served Altos terminals to the users desktop. Then they ported the application on the client/server network to keep pace with changes in both the business and information system environment. Although the company started to grow non-stop, they noticed the following problems: Difficulty in scaling the servers to respond to the increased load in the distributed environment. Continual requirement for increasingly powerful desktop machines. But the main problem faced by Hures was as follows: Difficulty in configuring application into client-server modules. Modifying the configuration in response to user feedback. Analysis: Client/Server Devices: Long time ago as PCs (Personal Computers) turn out to be option to older mainframe computers, Client/server networking model developed in fame. The devices which ask for and accept information over the internet is Client PCs with network software applications established. Client functions can be found in mobile devices and desktop computers. Files and databases plus composite applications such as websites are stored in server device. High performance central processors, larger disk drive and more memory than clients are needed in server devices. Client/Server Applications: Applications and devices are differentiated by the client-server model. Client devices request a server side via posting messages in networks, and those servers reply to their clients with proceeding on those requests and sending back outcomes. According to about.com one server generally supports numerous clients, and multiple servers can be networked together in a pool to handle the increased processing load as the number of clients grows. Suggested solution for Hures problems: Here the problems faced by Hures are unique as my understandings. The described problem relates on the speediness of the system. The system should be created as which can handle upcoming demands or requirements of the business. According to this, the corporation or the designer of the system would not have concentrated on the upcoming development of the adjustment of the system or the system itself, to make sure that the system will give the future requirements and demands because of the various alteration in both external and internal situation that can vary the whole flow of information in the corporation. The bigger centre of attention should be the customer, and accordingly on the information resources and services that are needed to maintain communication with customers. So the information system should be created which can support the future demands, requirements and also support the user communication. Client Server Architecture: Nowadays client-server architecture is flexible in rapidly altering IT landscape. It relies on messaging services for interaction between components and is modular in structure as well. It is actually considered for improving usability, flexibility, interoperability, and scalability. Usability means the capability of the C/S architecture to achieve customers objective which is the part of human computer interaction. An obvious consistent process of evolution towards an objective and ease of use could be considered as some of the defined features. Term flexibility offers a better key space than that reachable with single computer models and it means C/S architecture is capable to change according to different users and various system requirements. Scalability is very important term for C/S architecture which refers to a products capacity to modify in size or amount kindly to meet up requests from users. Interoperability is ability to utility with other systems with no involving person involvement and manpower. Efficiency in all of these above features can be improved through improvements by client-server architecture. According to Chris Loosley and Frank Douglas client server architecture has following primary qualities: Systems are created by collecting independent components which gives unique and specific functions to system. Client components relate with users and servers to manage computing resources in the easiest arrangement where in more difficult arrangements, some servers can also be clients of other servers. Clients and servers can use hardware and software uniquely suited to the required functions. Front-end and back-end systems usually need computing resources that differ in type and power. C/S architecture is expanded due to the limits of file-sharing architectures that needs loads of bandwidth and sometimes it may stop or jam a network reasoning it to collapse. Only low shared usage and low volume of data can be transmitted. The file servers are replaced with database servers in C/S architecture and RDBMS (Relational DBMS) answers user queries and also improve consistency of data between different users so every user can have right to use the equal updated information. Till now only particular queries were being answered so the data of the file transferred in place of the whole file which reduces speed of the network. Client/Server with Database servers is shown below: Client Application Network Client Application Client Application Database Server Figure 1: C/S architecture with Database server C/S Architecture in Mainframe Environment: The design of complex mainframe by using modular programming and the association of modules into consistent groupings, or layers, has been a standard practice from long time. Layering is good design practice. In mainframe environment host computer (a mainframe) levers all processing, counting input, output, data storage and retrieval and that was being used in 70s. No matter what the target environment, specialization of function within distinct layers encourages designers to keep similar functions closely aligned, from both a functional and a performance viewpoint (Chris Loosley and Frank Douglas 1998, pp.30) thats why layering is good practice. C/S architecture in mainframe environment with file server is shown in the following figure: Client Application Network Client Application Client Application Figure2: Client/Server with file servers in mainframe environment. C/S Architecture in Distributed System: In distributed system number of computers (workstations, PCs) is distributed physically and connected by a communication network which handle all processing and are being used by the todays generation. The coverage is not nearly as absolute as in mainframe environment. For distributed systems, the coverage is not nearly as complete as it is in a mainframe environment. Distributed system became famous when a client posts a request and gets any service that did not appear from nowhere. Client/server model a lot referred to as a two-tier model which is related with tiny LAN-based distributed systems. But architecturally, it originated from software engineering principles developed for usual, centralized mainframe systems. Client Application Network Client Application Client Application File Server File Server Figure 3: Client/Server with file servers in distributed environment. Comparison between Distributed and Mainframe: The following figure shows comparison between distributed system and mainframe environment system and the difference of layering in between those two: Figure 4: Functional layering in mainframe and distributed systems (Chris Loosley and Frank Douglas, 1998) 2. Alternative Architecture for Hures: To solve the problem faced by Hures current client/server technology, Client-Queue-Client can be useful as alternative architecture. This uses a passive queue which allows the client instances to communicate directly with each other, which will refine their request from the services (Exforsys Inc). It helps out to maintain and avoid any inconveniences with the server so it could be helpful for Hures to use this architecture as alternative. To track the number of clients that are connected to the server, client queue is utilized. Therefore, the server can trace which resources the client has obtained, and the server can release the resources after the client connection breaks down (Chan Leong 2003). Scalability is very important feature which take part in Client/Server architecture effectively. Nowadays enterprise systems must accommodate growth. As the information systems grow, performance problems take place alongside six different dimensions; those are databases, stored objects, user population, transaction rates, data analysis, and networks. Good design anticipates the effects of business growth on performance. To shorten debate of performance, one of these dimensions is considered individually from each other. In any actual enterprise, some relationships will usually be real amongst these four effects for example, complex networks typically host large client populations, and a high transaction rate generally implies a large client population. However, such relationships are not necessary. Compared to the mainframe environment, client/server gives enhanced scalability since connections can be made as required rather than being set. More and more servers can be included to a network since application needs raises. Though, the increase in power will not be linear in terms of the number of servers. Intranet web Technology: Intranet is a web technology which is constructed by applying similar protocols and tools those are applied by the global internet but only difference is the internet is applied to the different place in the world and intranet is applied to the internal network such as in organisation. It can be described like a closed-circuit television system, which can be viewed only by those people within the organization that owns the system (Lowe 2009). Intranet site could only be viewed by those who are within that network of that particular organisation. Even though based on the same protocols as the World Wide Web, an intranet is protected from the outside world either by not being connected to the outside or through a series of hardware and software obstacles known as a firewall (Matthews Matthews 2003, p. 64). Advantages of Intranet: Intranet could be huge method of making available information to the internal users of the organisation and that can be the key benefit of the intranet. The applications which are used for newsletters, price lists, policy manuals etc. might be published by using intranet web technology. It can also help to transact application by gathering information that is related on expense and programs (Lowe 2009). Since intranet permits to make a personal position in the Internet, the position will be protected and safe, because only those persons with abilities to access can make use of the website over the Internet. Most of all, it can facilitate to distribute information to the users in more easier and effective manner. Intranet also gives increased productivity, reduced margin of error, flexibly; it has appropriate and accurate information, and lets smaller for marketing. Disadvantages of Intranet: Intranet web technology can be expensive to set up and maintain within the organisation because it could require extraordinary team for managing the process of allocating and maintaining the resources which are occupied in the website. If the access is got by someone else on the outside of the organisation it can be risky for the company so there could be some security issues might be raised. For instance, an employee might have posted sensitive information for all employees to see. Intranet is the technology which could need upgrades and might not have software compatibility and security features can be insufficient as well. Sometimes poor user support may not be effectively scale up. If some users may not have PCs at their desk, they could not be able to access the intranet. There can be possibilities of information overload which can happen when the big amount of data has been put on the intranet and that can make very difficult for employees to find the way and find data that is meaningful or that they need. With Intranets, firms have to set up and maintain separate applications such as E-mail and Web servers, instead of using one unified system as with groupware that is less back-end integration7. Intranet software and the internet: There is no uncertainty that intranet software is measured as one of the most taken advantage of networking technology in the business world. The previous sentence becomes true because it can give various advantages which cannot be achieved by the peer-to-peer and client-server architecture. It permits companies to obtain improvement of the wireless and Internet technology, and on top of that, it gives the privacy and security which can be presented by established client/server system. As a result of this, it has been seen that the attractiveness of intranet software and the Internet pose threats towards the traditional client/server systems. However, it is significant to think about that although intranet and the Intranet are being exercised and conventional worldwide, there are still fractions or characteristics of the company which are in necessitate of using the established client/server systems. Conclusion: To conclude that client/server architecture is the well known and well established network model which is used a lot nowadays. It gives more scalability, flexibility, usability, interoperability which improves the efficiency of the network and throughput as well. As we know there could be some problems with system and tools which are provided but as long as we consider that the problems could be solved with the C/S architecture that is main advantage of the C/S architecture. In the report client/server architecture is explained and we compared the C/S architecture in both mainframe environment and in distributed environment. The arrangements of the mainframe and distribute systems are explained in order to C/S architecture so from that we can figure out how the client/server model will suit the different environment. As we discussed there are some issues raised about C/S architecture used in the information systems which was developed for the Hures and it was in mainframe environment so in place of that distributed systems can be used to solve the problem and also the alternative solution for the C/S architecture can be considered to solve the problem of Hures. References: About.com: Wireless/Networking (2010) Introduction to Client Server network [Online], Date of retrieval: 29/01/2010, Available from: http://compnetworking.about.com/od/basicnetworkingfaqs/a/client-server.htm Chris Loosley and Frank Douglas (1998), High performance, client/server, (pp. 38-40), John Wiley Sons. Chan, A T S Leong, H V 2003, Cooperative Internet Computing, Springer.   Exforsys Inc. (2000-2010) Peer-to-Peer and Client-Queue-Client Architecture [Online], Date of retrieval: 03/02/2010, Available from: http://www.exforsys.com/tutorials/client-server/peer-to-peer-and-client-queue-client-architecture.html Lowe, D 2009, Networking for Dummies, For Dummies. Matthews M Matthews (2003), Microsoft Office FrontPage 2003: The Complete Reference, McGraw-Hill Professional. Ravi Kalakota Andrew B. Whinston (1997), Electronic Commerce, pp.88-90, Addison Wesley Longamn, Inc.

The Treatment Of Eating Disorders Health And Social Care Essay

Eating upsets are characterized by forms of perturbations in eating behavior frequently accompanied by feelings of hurt and/or concern about organic structure weight or form. Anorexia Nervosa ( AN ) , Bulimia Nervosa ( BN ) , Eating Disorders-Not Otherwise Specified ( ED-NOS ) are three classs by which eating upsets identified. The American Psychiatric Association ( APA ) ( 1994 ) foremost identified Binge Eating Disorder ( BED ) as a probationary feeding upset diagnosing in the DSM-IV. BED is frequently classified under the â€Å" catch all † of the ED-NOS diagnosing. The DSM-IV-TR ( APA, 2000 ) standard for AN, BN, and BED are listed in Table 1. Eating upsets have frequently been noted as one of the most hard psychiatric conditions to handle and hold been associated with increased mortality and self-destruction rates ( Crow et al. , 2009 ) . Other physical and psychosocial wellness effects include but are non limited to limb and joint hurting, concern, GI jobs, catamenial jobs, shortness of breath, thorax hurting, anxiousness, depressive symptoms, and substance maltreatment ( Johnson, Spitzer, Williams, 2001 ) . Despite legion co-morbid conditions, effectual behavioral and pharmacological interventions for eating upsets have been established. For illustration, family-based therapy ( i.e. , Maudsley Approach ) is deriving acknowledgment as an evidenced-based intervention for striplings with AN ( Wilson, Grilo, & A ; Vitousek, 2007 ) in both joint household Sessionss ( Lock, Agras, Bryson, & A ; Kraemer, 2005 ) and in â€Å" detached † format where person with AN and her household attend separate Sessionss ( Eisler et a l. , 2000 ) . Additionally, cognitive-behavior therapy ( CBT ; Hay, Bacaltchuk, & A ; Stefano, 2009 ) , dialectical-behavior therapy ( DBT ; Chen et al. , 2008 ) , and interpersonal therapy ( IPT ; Fairburn, 1997 ) have been successful in the intervention of BN. Research tends to back up CBT as the intervention of pick for both BN and BED ( Hay, Bacaltchuk, Stefano, 2004 ) . Table 1. DSM-IV-TR diagnostic standards for AN, BN, BED.Anorexia NervosaRefusal to keep organic structure weight at or above what is normal weight for age and tallness ( i.e. , & gt ; 85 % of what is expected ) . Intense fright of deriving weight or going fat, even though scraggy. Perturbation in the manner in which 1 ‘s organic structure weight or form is experienced, undue influence of organic structure weight or form on self-evaluation, or denial of the earnestness of the current low organic structure weight. In postmenarcheal female, amenorrhoea ( i.e. , absence of 3 back-to-back catamenial rhythms ) . Specify Type: Restricting Type – During current episode of AN, person does non regularly engage in binge-eating or purging behaviour. Binge-Eating/Purging Type – During current episode of AN, the individual has on a regular basis engaged in binge-eating or purging behaviour.Bulimia NervosaPerennial orgy eating episodes. Characterized by: 1 ) feeding, in a distinct period of clip ( e.g. , within a 2-hour period ) , an sum of nutrient that is larger than most would eat in a similar period of clip under similar fortunes and 2 ) a sense of deficiency of control over eating during the episode ( e.g. , a feeling that one can non halt eating or command what or how much one is eating ) . Recurrent purging/compensatory weight loss steps in order to forestall weight addition. Binge feeding and purging/compensatory behaviours present at least 2 times a hebdomad for 3 months. Self-image inexcusably influenced by organic structure weight and form. Absence of Anorexia Nervosa. Specify Type: Purging Type – During current episode of BN, the person has engaged in self-induced emesis or the abuse of laxatives, water pills, or clyster. Nonpurging Type – During the current episode of BN, the individual has used other inappropriate compensatory behaviours, such as fasting or inordinate exercising, but has non engaged in self-induced emesis or the abuse of laxatives, water pills, or clyster.Binge Eating DisorderRecuring orgy eating episodes. Characterized by: 1 ) feeding, in a distinct period of clip ( e.g. , within a 2-hour period ) , an sum of nutrient that is larger than most would eat in a similar period of clip under similar fortunes and 2 ) a sense of deficiency of control over eating during the episode ( e.g. , a feeling that one can non halt eating or command what or how much one is eating ) . The binge-eating episodes are associated with 3 or more of the followers: 1 ) eating more quickly than normal, 2 ) feeding until experiencing uncomfortably full, 3 ) eating big sums of nutrient when non physically hungry, 4 ) eating entirely because of being embarrassed by how much one is eating, 5 ) feeling disgusted with oneself, depressed, or really guilty after gorging. Marked hurt environing orgy feeding. The orgy feeding occurs, on norm, at least 2 yearss a hebdomad for 6 months. The orgy feeding is non associated with the regular usage of inappropriate compensatory behaviours ( e.g. , purge, fasting, inordinate exercising ) and does non happen entirely during the class of ANor BN. Pharmacological interventions have been used in concurrence with behavioural intervention or entirely ( Zhu & A ; Walsh, 2002 ) in the intervention of eating upsets. Research supports pharmacological intervention for persons with BN and BED ( Bacaltchuck, 2000 ) . Specifically, antidepressants have been found to hold short-run benefit in the decrease of binging and purge behaviours ( Walsh et al, 2000 ; McElroy et Al, 2003 ) . Unfortunately, pharmacological intervention tends to hold high disobedience rates and backsliding is frequently frequent ( Becker, 2003 ) . Presently, there is no empirical support for the usage of antidepressants among persons with AN ( Wilson, Grilo, Vitousek, 2007 ) . Behavioral and pharmacological interventions are most frequently used in combination with another in handling eating upsets due to legion co-morbid conditions. Unfortunately, the aforesaid behavioural interventions have a figure of restrictions when delivered outside a forte scene ( e.g. , outpatient mental wellness clinic, inpatient eating upset centre ) . For illustration, the bringing of family-based therapy for AN requires 10-20 hour- long household Sessionss over a 6-12 month period ( Lock, le Grange, Agras, & A ; Dare, 2001 ) , and manualized CBT for BN requires 15-20 Sessionss over five months ( Fairburn, 1989 ; 1993 ) . Treatments for AN and BN are non merely drawn-out and dearly-won, but eating upset forte suppliers are limited, and persons with feeding upsets are frequently immune to specialty attention ( Fairburn & A ; Carter, 1996 ) . Additionally, merely a little part of persons with feeding upsets are treated in mental health care ( Hoek & A ; van Hoeken, 2003 ) and are more likely to show with feeding disordered symptoms in a primary attention puting ( Hoek, 2006 ) . While primary attention doctors frequently recommend forte intervention on claim signifiers, there is small follow- through with referrals ( Hach et al. , 2005 ; 2003 ) . Therefore, the primary attention scene is frequently the chief intervention installation for those with a life-time eating upset diagnosing ( Hudson, Hiripi, Pope, & A ; Kessler, 2007 ) . Due to the fast-paced nature of a primary attention scene, interventions need to be brief, cost-efficient, and executable in application for bing staff. Therefore, development and designation of brief, effectual intercessions for eating upsets are necessary. A figure of surveies have tested the efficaciousness of specific brief intercessions for AN, BN, and BED outside of primary attention environment. Fichter, Cebulla, Quadflieg, & A ; Naab ( 2008 ) implemented a self-help constituent ( i.e. , self-help CBT manual ) to the pretreatment stage of forte attention for persons with AN giving significantly shorter inpatient attention. For intervention of persons with BN and BED, a stepped-care attack has gained support ( Laessle, 1991 ; Treasure, 1996 ; Carter, 1998 ) . This attack may suit good with the construction of primary attention, since persons with BN are offered brief intercessions and so reevaluated. Brief intercessions for BN are often in the signifier of abridged CBT frequently accompanied by a self-help constituent ( Treasure, 1996 ; Cooper, Coker, & A ; Fleming, 1994 ) . A figure of self-help CBT books have been published aimed at assisting persons with binging and purge ( e.g. , Cooper, 1995 ; Fairburn, 1995 ) . Brief executio n of CBT ( Leonard et al. , 1997 ) , self-help CBT ( Sysko & A ; Walsh, 2008 ) , telephone counsel ( Palmer, Birchall, McGrain, & A ; Sullivan, 2002 ) , internet bringing ( Pretorius et al, 2009 ) , and motivational sweetening ( Schmidt, 1997 ; Vitousek, 1998 ) are all illustrations of promising brief intercessions explored for the intervention of binging and purge symptoms. While primary attention has been identified as an ideal puting for handling BN and BED, few effectivity surveies using brief intercessions for eating disordered symptoms have been conducted in the primary attention scene. A figure of eating upset intervention guidelines for primary attention suppliers have been published ( e.g. , Carter & A ; Fairburn, 1995 ; Gurney & A ; Halmi, 2001 ; Pritts & A ; Susman, 2003 ; Williams, Goodie, Motsinger, 2008 ) . However, there is limited information about the effectivity or deductions of behavioural intercessions for eating upsets delivered in the primary attention puting. Therefore, the purposes of the current survey are to 1 ) place all surveies presenting a behavioural constituent for AN, BN or BED in a primary attention scene, 2 ) examine the features and intervention results of surveies identified, and 3 ) supply intervention deductions every bit good as waies for future research. Methods Literature Review The reappraisal of the literature involved multiple computing machine hunts and reappraisal of old reappraisal documents every bit good as surveies cited within these documents. Search databases included CINAHL, EMBASE, PsycARTICLES, PsychInfo, and PubMed utilizing the hunt footings â€Å" binge-eating syndrome nervosa † OR â€Å" orgy eating upset † OR â€Å" anorexia nervosa † AND â€Å" primary attention. † Figure 1 outlines the literature hunt and shows 314 abstracts of articles reviewed for inclusion every bit good as mentions cited in five eating upset intervention reappraisal documents ( i.e. , Berkman et al. , 2006 ; Hay, Bacaltchuk, Stefano, & A ; Kashyap, 2009 ; Kondo & A ; Sokol, 2006 ; Williams, Goodie, & A ; Motsinger, 2008 ; Wilson, Grilo, & A ; Vitousek, 2007 ) . If deficient information was provided in an abstract the first writer obtained the full article for reappraisal. Inclusion and Exclusion Criteria Primary care-based intercession surveies aiming AN, BN, and BED, were identified based on the undermentioned inclusion and exclusion standards. Inclusion standards included: 1 ) the survey incorporated a behavioural constituent to the intercession for persons with AN, BN, or BED ; 2 ) the intercession was conducted in a primary attention puting ( or the intercession was implemented in a scene explicitly intended to emulate primary attention, as stated in the survey ‘s â€Å" methods subdivision † ) ; 3 ) the survey was a ) published in 2009 or earlier, B ) in English, degree Celsius ) and included empirical informations ; therefore, qualitative and instance surveies were excluded. Exclusion standards included: 1 ) intercessions in scenes other than primary attention puting ( or non explicitly saying an purpose to imitate a primary attention puting ) ; 2 ) non-intervention surveies ( e.g. , surveies conducted in primary attention with ends of obtaining epidemiological inf ormations ) ; 3 ) intercession surveies concentrating on weight loss or including an obesity-oriented attack ; 4 ) non-behavioral intercessions ( i.e. , entirely medicative intercessions ) . International and domestic surveies were included in this reappraisal. Given the limited literature, surveies were non excluded on the footing of whether or non participants were randomized to intervention, type of behavioural intercession, sample size, continuance of intervention, or participant features ( e.g. , gender ) . A sum of five surveies met standards for the current reappraisal. All surveies included were on the intervention of BN and BED. No surveies were found on AN. 314* abstracts/full-text articles reviewed: CINAHL ( 45 ) Embase ( 83 ) PsychArticles ( 0 ) PsychInfo ( 86 ) PubMed ( 100 ) Mentions cited in 5 eating upset intervention reappraisal documents: Berkman et Al. ( 2006 ) Hay et Al. ( 2009 ) Kondo & A ; Sokol ( 2006 ) Williams et Al. ( 2008 ) Wilson et Al. ( 2007 ) 3 original surveies identified 2 original surveies identified 4 primary care-based intercession ( 3 randomized, 1 non-randomized ) 1 designed-for-primary attention intercession ( randomized )Entire: 5 original surveiesFigure 1. Flow chart showing designation procedure of selected primary attention articles. *Note: Overlap nowadays among articles showing in multiple databases. Consequences Features of the Studies Reviewed Of the five surveies that met inclusion standards, four of the surveies were randomized ( i.e. , Banasiak, Paxton, Hay, 2005 ; Carter and Fairburn, 1998 ; Durand and King, 2003 ; Walsh et al. , 2004 ) . Among randomised surveies, none of the surveies fulfilled all of the standards of the Consolidated Standards of Reporting Trials ( CONSORT ) , a criterion and minimal set of guidelines for describing randomized-controlled tests. All surveies included were self-described as effectiveness surveies. Therefore, feasibleness of intercession was paramount to the survey. Merely two of the five surveies recruited participants in the primary attention puting ( Durand & A ; King, 2003 ; Waller et al. , 1996 ) . The figure of participants in the five surveies ranged from 11 to 109 ( M = 70.2, SD = 36.9 ) . Primary attention suppliers ( PCPs ) were the exclusive supplier of the behavioural intercession in two of the five surveies ( i.e. , Banasiak et al. , 2005 ; Durand & A ; King, 2003 ) , and P CPs delivered behavioural intercessions in concurrence with nurses in two other of the five surveies ( i.e. , Waller et al. , 1996 ; Walsh et al. , 2004 ) . Minimally trained facilitators ( i.e. , former concert dance terpsichorean, medical secretary, and group leader ) delivered the behavioural intercession in the 1 survey ( Carter & A ; Fairburn, 1998 ) . Three of the five surveies provided at least 2-6 hours of preparation for doctors and/or nurses transporting out the intercession ( i.e. , Banasiak, Paxton, Hay, 2005 ; Waller et al. , 1994 ; Walsh et al. , 2004 ) . Two of the surveies did non supply separate preparation for those transporting out the intercession, but instead gave facilitators the same educational stuffs distributed to the participants ( i.e. , Carter & A ; Fairburn, 1998 ; Durand & A ; King, 2003 ) . One survey incorporated both behavioural and pharmacological intervention attacks ( Walsh et al. , 2004 ) . See Table 2 for extra survey features. Table 2. Features of surveies reviewed.SurveyParticipants & A ; CriteriaRecruitmentRandomized/Non-randomizedDelivery of Intervention/TrainingInterventionDurationBanasiak et al. , 2005 N=109 ( full or sub-threshold BN â€Å" modified † DSM-IV standards ) Community Ads: Newspaper: 61.4 % Primary Care: 21.1 % Community centre: 12 % ED centre referral: 5.5 % Randomized aˆ?16 PCPs aˆ?given manual & A ; attended a half-day workshop GSH utilizing Bulimia Nervosa and Binge feeding: A usher to recovery vs. delayed intervention control 17 weeks/1 30-60 minute initial contact & A ; 9 20-30 minute intervention Sessionss. Carter & A ; Fairburn, 1998 N=72 ( full BED DSM-IV standards, but non run intoing full BN standards ) Newspaper Ads Randomized aˆ?3 facilitators: Former concert dance terpsichorean Medical secretary Group leader aˆ?given manual & A ; intervention of 2-3 pilot participants. PSH vs. GSH utilizing Overcoming Binge Eating V. Wait list control 12 weeks/ 6-8 25-minute Sessionss. Durand & A ; King, 2003 N=68 ( BN symptoms ) Primary attention physician referral Randomized aˆ?32 PCPs aˆ?given manual, guidelines, & A ; phone no. for particular concerns GSH via Bulimia Nervosa: A usher to recovery vs. forte clinic intervention Duration of intervention varied GSH: ~ 5 visits with PCP Waller et al. , 1996 N=11 ( full BN DSM-IV standards ) Back-to-back series of primary Care patients Non-randomized aˆ? 4 Health professionals 1 nurse aˆ? 2 three-hour preparation workshops Abridged CBT & lt ; 8 20-minute Sessionss in hebdomadal intervals. Walsh et al. , 2004 N= 91 ( BN symptoms ) Newspaper advertizements and referrals Randomized aˆ? 7 Health professionals 8 nurses aˆ? brief 2-hour preparation & A ; intervention of a sum of 6 pilot patients aˆ? GSH + placebo vs. GSH + Fluoxetine vs. placebo-only vs. Fluoxetine-only. aˆ? GSH used Overcoming Binge Eating. 6-8 30-minute Sessionss over 4-5 months. Note: PCP – Primary Care Physician, GSH – Guided Self-Help, PSH – Pure Self-Help, ED – Eating Disorder Interventions Overall, this current reappraisal identified two chief attacks to handling BN and BED in primary attention. The first was for practicians to supply behavioural reding themselves, with an augmentation ( i.e. , self-help manual ) . The 2nd option used a collaborative attack in which a non-physician ( e.g. , nurse ) served as the primary intervention supplier with the doctor in a encouraging function with or without an augmentation ( i.e. , self-help manual, psychopharmacological medicine ) . A PCP was the exclusive supplier of the intercession in two surveies ( Banasiak et al. , 2005 ; Durand & A ; King, 2003 ) and a non-physician ( i.e. , nurse ) in two surveies ( Waller et al. , 1996 ; Walsh et al. , 2004 ) . A fifth survey used facilitators ( i.e. , concert dance terpsichorean, medical secretary, and a group leader ) to emulate primary attention suppliers ( Carter and Fairburn, 1998 ) . Guided Self-help versus Pure Self-help Among all surveies examined, four surveies implemented cognitive behavioural self-help in the intercession and incorporated the usage of a self-help manual ( i.e. , Banasiak, Paxton, Hay, 2005 ; Carter and Fairburn, 1998 ; Durand and King, 2003 ; Walsh et al. , 2004 ) . Get the better ofing Binge Eating ( Fairburn, 1995 ) , Bulimia Nervosa and Binge-Eating: A Guide to Recovery ( Cooper, 1995 ) , and Bulimia Nervosa: A Guide to Recovery ( Cooper, 1993 ) were the three manuals used. The add-on of the self-help manual came in two signifiers: 1 ) guided self-help and 2 ) pure self-help. Guided self-help pattern included a doctor or other supplier ‘guiding ‘ and directing the participants through the manual during scheduled visits and delegating specific reading in the manual to the participant. Pure self-help involved the supplier providing a manual to the participant and the instructions to read the manual over the class of the intercession. Treatment Results Three of the four surveies utilizing self-help found self-help methods to be good in relieving orgy eating episodes ( Banasiak, Paxton, & A ; Hay, 2005 ; Carter & A ; Fairburn, 1998 ; Durand & A ; King, 2003 ) . One survey comparing guided self-help and Prozac found no benefits of guided self-help used entirely or used in concurrence with the medicine ( Walsh et al. , 2004 ) . However, medicative benefits of diminishing bulimic symptoms were important. These consequences should be interpreted with cautiousness, since this survey yielded a 69 % abrasion rate. Another survey comparing the benefits of guided self-help, pure self-help, and wait-list control found those who received guided self-help and pure-self aid to hold significantly fewer binge-eating episodes at station intervention and three month followup ( Carter & A ; Fairburn, 1998 ) . While no important differences were obtained between guided self-help and pure self-help intervention groups at the terminal of intervention, t he guided self-help group attained significance over the pure self-help group across post-treatment clip points ( i.e. , 3 months and 6 months ) ( Carter & A ; Fairburn, 1998 ) . Waller et Al. ( 1996 ) was the lone survey non using a self-help constituent, but instead an abridged CBT intervention. This intervention yielded a 55 % betterment rate in bulimic symptoms. See Table 3 for result informations on each survey. Table 3. Outcome information on examined surveies.SurveyResultEffect SizeRestrictionsAbrasionBanasiak et al. , 2005 60 % decrease in nonsubjective orgy eating in GSH vs. 6 % decrease in DTC. 61 % decrease of purging behaviour in GSH vs. 10 % decrease in DTC. GSH V DTC: Gorging – Einsteinium: 1.96 Purging – Einsteinium: 1.47 aˆ? PCPs delivering intervention had involvement in eating upsets prior to analyze aˆ? Not all participants recruited from Personal computer 33 % dropped out Carter & A ; Fairburn, 1998 Decrease in frequence of orgy eating episodes important in both PSH & A ; GSH. GSH significantly lower in dietetic restraint than PSH at posttreatment & A ; 3-month followup. GSH V PSH in dietetic restraint posttreatment: *ES: -.71 3-month followup: *ES: -.66 aˆ?34 % decrease of orgy feeding in wait list control aˆ? deficiency of weight alteration aˆ? conformity poorer in PSH vs. GSH aˆ? Participants non recruited from Personal computer aˆ? survey simulated PC office 12 % dropped out Durand & A ; King, 2003 No clinical significance between self-help and forte clinic intervention result. Both self-help and forte attention yielded important betterment in bulimic symptoms indicated by BITE. Self-help at baseline V 6 month followup on BITE: *ES: .56 Forte at 6 month followup on BITE: *ES: .67 aˆ?Small sample aˆ?Outcome informations based on self-report graduated table aˆ?lack of specificity in magnitude of difference b/w intervention attention aˆ?23 % dropped out in GSH group aˆ?17 % dropped out in forte attention Waller et al. , 1996 55 % improved well, 45 % did non profit Not able to cipher ; Insufficient informations aˆ?Small sample aˆ?long preparation aˆ?inefficient intercession 18 % dropped out Walsh et al. , 2004 GSH had no important consequence on the decrease of bulimic symptoms compared to Fluoxetine. Fluoxetine had important decrease in bulimic symptoms. GSH vs. Fluoxetine: *ES: -.06 Fluoxetine V Fluoxetine w/GSH: *ES: .02 aˆ? Disobedience aˆ? 8 participants were reassigned conditions aˆ? Recruitment non in Personal computer. aˆ? No public-service corporation for GSH detected. 69 % dropped out Note: GSH – Guided Self-Help, PSH – Pure Self-Help, DTC – Delayed Treatment Control, PCPs – Primary Care Physicians, Personal computer – Primary Care, BITE – Bulimic Investigatory Test Edinburgh *Effect sizes ( ES ) calculated by article ‘s first writer utilizing the undermentioned computation: vitamin D = M1 – M2 / i?-iˆ [ ( i1A? +iˆ iiˆ iˆ?A? ) / 2 ] . vitamin D = M1 – M2 / i whereiˆ i = i?- [ iiˆ ( X – M ) A? / N ] . Discussion Persons with eating upsets have some of the highest mortality rates of all psychiatric conditions ( Crow et al, 2008 ) coupled with high physical and psychological co-morbid conditions. Because of these co-morbid conditions, persons with feeding upsets are likely to show in primary attention puting with co-morbid ailments ( CITE ) . PCPs and staff are in a alone place to supply early sensing and intervention. Due to clip restraints, primary attention suppliers frequently lack the experience and preparation to implement intercessions for persons with feeding upsets. Therefore, brief, evidenced-based intercessions with minimum required preparation are paramount to the acceptance and airing of eating upset intervention. Consequences of this reappraisal expose the limited sum of research that has been conducted on the intervention of AN, BN, and BED in a primary attention puting. The current reappraisal identified five surveies – four on BN, one on BED, and no surveies were found on the intervention of AN in a primary attention puting. Of the five surveies that met standards for inclusion, four were randomized-controlled tests ( RCTs ) , which are often recognized as the gilded criterion in efficaciousness research. Among the RCTs, none of the surveies fulfilled all of the suggested CONSORT criterions. Four of the five surveies reviewed enforced CBT self-help in the signifier of a manual with educational constituents aiming binging and purge behaviours. Three of the four surveies utilizing self-help intervention found the intervention to be good ( i.e. , Banasiak, Paxton, & A ; Hay, 2005 ; Carter & A ; Fairburn, 1998 ; Durand & A ; King, 2003 ) . Therefore, self-help intervention may be a good intervention for some patients showing in primary attention. Among surveies describing benefits, guided self-help proved to be more good than pure self-help ; nevertheless, pure self-help was still found to hold benefit ( Carter & A ; Fairburn, 1998 ) . In a scene comparing survey, guided self-help CBT intervention was deemed every bit effectual as forte clinic intervention ( Durand & A ; King, 2003 ) . Effectiveness and Feasibility While all surveies were conducted in a primary attention puting or in a scene that explicitly simulated a primary attention scene, merely two surveies recruited participants from this scene ( Durand & A ; King, 2003 ; Waller et Al. 1996 ) . The enlisting context may restrict the effectivity of the interventions examined given studies of persons showing in primary attention exhibit higher rates of somatization, mental unwellness, and chronic conditions ( Jyvasjarvi et al. , 2001 ; Toft et al. , 2005 ) . Besides, given this survey was an international reappraisal, primary attention scenes differ across wellness attention systems ; hence, non merely may community samples differ from primary attention samples, but primary attention samples may differ from state to state ( Bailer et al. , 2004 ) . Similarly, PCPs in different states may hold changing clip restraints with respects to preparation and intervention bringing. However, minimum preparation and bringing efficiency are of import features for PCPs ( CITE ) . In this reappraisal, two surveies required less than an hr of preparation for the primary attention suppliers presenting the intercession ( Durand & A ; King, 2003 ; Carter & A ; Fairburn, 1998 ) . Given PCPs clip restraints, developing necessitating more than an hr may non be executable for the typical supplier. Another restriction to generalising intervention to the primary attention scene is the continuance of intervention in the surveies examined. Duration of intercession ranged from 5-10 visits at 20-30 proceedingss per visit. The length of intervention could explicate the high rates of abrasion ( i.e. , 12-69 % ) found in the surveies reviewed. However, Waller et Al. ( 1996 ) noted the indicated intervention may non take every bit long as the prescribed interv ention, since participants dropping out prior to completion of intervention still benefitted. The long-run effects and backsliding rates of brief intercession interventions in this scene is unknown, since the none of the surveies collected follow-up informations six months post intervention. Deductions for Practice Brief intercessions may merely be effectual for a subset of patients with bulimia nervosa and orgy feeding inclinations. Most surveies reviewed excluded participants with co-morbid upsets. Therefore, findings may non be generalizable to the typical primary attention population. Identifying the subset of persons in which brief intercessions will be most effectual remains disputing. While evidenced-based, brief intercessions are considered the first line of intervention for persons showing in primary attention ( NICE, 2004 ) , it is ill-defined how patients neglecting to react to these intercessions should be treated. PCPs electing non to supply behavioural intervention to patients with BN or orgy feeding must still play a important function in measuring and handling the physical symptomatology of eating upsets. With the outgrowth of incorporate attention, psychologists and mental wellness suppliers are going more present in the primary attention puting. Therefore, persons with BN and orgy eating inclinations may be treated holistically in the primary attention scene. Directions for Future Research Future research should concentrate on honing self-help CBT intervention in the primary attention puting and including participants with co-morbid features. Expanding bringing of intervention beyond primary attention doctors to other suppliers, such as nurses, dieticians, societal workers, and staff workers, may let for more trim intervention for the single presenting with feeding disordered behaviour.

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

Sample details Pages: 28 Words: 8385 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? The extreme exchange rate volatility experienced in recent times had led to significant impact on the reported earnings of the Corporation. This led to a critical review of the actions that are needed to take to manage the FX exposures through hedging. So this report looks at the necessity of managing foreign currency risks, and also looks at ways by which it is accomplished that is it outlines the process of managing this risk. Don’t waste time! Our writers will create an original "The Understanding Hedging Policy And Its Effective Implementation Finance Essay" essay for you Create order In addition, report provides note on the process of actively hedging defined balance sheet exposure. The hedging is needed because of mismatches in the billing currency and local functional currency both at end-customer to the contract entity level and in the intercompany transactions. It also investigates the prudence in investing resources towards the purpose of hedging and then introduces the tools for the risk management. A key assumption in the concept of foreign exchange risk is that exchange rate changes are not predictable and that this is determined by how efficient the markets for foreign exchange are, so the report also includes the FX treatment including the revaluation of monetary and non-monetary transactions as well as translation of Indian GAAP and USGAAP treatment. Table of Contents Company Profile About Oracle Financial Services Software Limited Oracle Financial Services Software Limited, majority owned by Oracle, is a world leader in providing IT solutions to the financial services industry. With its experience of delivering value based IT solutions to global financial institutions, Oracle Financial Services Software understands the specific challenges that financial institutions face: the need for building customer intimacy and competitive advantage through cost-effective solutions while, simultaneously, adhering to the stringent demands of a dynamic regulatory environment. Their mission is to enable financial institutions to excel through the effective use of information technology. We offer financial institutions the worlds most comprehensive and contemporary banking applications and a technology footprint that addresses their complex IT and business requirements. Together with Oracle, we offer a comprehensive suite of offerings encompassing retail, corporate, and investment banking, funds, cash management, trade , treasury, payments, lending, private wealth management, asset management, compliance, enterprise risk and business analytics, among others. With a process-driven approach for service-oriented architecture (SOA) deployments, we offer banks the combined benefits of interoperability, extensibility, and standardization. We also offer best-of-breed functionality for financial institutions that need to operate flexibly and competitively and respond rapidly to market dynamics in a fiercely challenging business environment. Oracle Financial Services Software has serviced over 1,000 customers in more than 135 countries through its portfolio of products and services. We have two major business segments the products business (comprising product licensing, consulting and support) and consulting services (comprising IT application and technology services). We also have a smaller business segment that offers business process outsourcing services to financial institutions. These segments are described in detail below: Products Oracle FLEXCUBE Oracle FLEXCUBE is a complete banking product suite for consumer, corporate, investment, private wealth management, mobile and internet banking, consumer lending, asset management and investor servicing, including payments. Oracle FLEXCUBE enables banks to standardize operations across multiple countries, transform their local operations as well as address niche business models like direct banking, Islamic banking and mobile banking. Financial institutions use Oracle FLEXCUBE to respond faster to market dynamics, define and track processes, while ensuring compliance. Oracle FLEXCUBE release 12 enables banks to meet the demands of the new age customer by delivering a portfolio-driven customer relationship using a combination of enhanced self-service and assisted support. The new version includes features that enable banks to deliver more personalized and convenient service to customers across all channels. The knowledge worker in the bank is enabled across channels with advisory tools with intelligence giving enterprise-wide 360-degree customer view, an in-built interaction framework to drive user behavior. They are also assisted in aligning to the branch and personal goals through role-based dashboards with alerts and reminders. Oracle FLEXCUBE release 12 offers a harmonized infrastructure and open development tools that allows more flexible deployment options and upgrade paths. Oracle FLEXCUBE release 12 gives financial institutions the power to redefine the banking experience and deliver a personal banker experience to customers. It gives bankers the intelligence needed to truly understand customers and their interaction with the institution and the flexibility to deliver a highly responsive, personalized experience and robust-transaction capabilities regardless of the customers location. Oracle FLEXCUBE Enterprise Limits and Collateral Management Oracle FLEXCUBE Enterprise Limits and Collateral Management offer a single source for managing exposure across a business portfolio. It enables centralized collateral management, limits definition, tracking and exposure measurement for effective exposure management and resource utilization. Oracle FLEXCUBE Private Banking Oracle FLEXCUBE Private Banking is a comprehensive solution for private banking. It gives wealth managers a unified view and analyses of their customers wealth across asset classes, and provides the added benefits of performance tracking and improved customer relationship management. The application is a comprehensive, customer centric solution that offers a wealth management portal, a customer interaction tool, and portfolio management capabilities all of which can be integrated with the existing core banking solutions used by a bank. Oracle FLEXCUBE Investor Servicing Oracle FLEXCUBE Investor Servicing is a process enabled transfer agency and investor servicing solution. It helps financial institutions manage the complete fund lifecycle and reduce operational costs through process automation across fund structures, intermediary hierarchies, and investors. The ISO 20022 and 15022 compliant Oracle FLEXCUBE Investor Servicing ensures enhanced STP processing through support for a wide variety of SWIFT NET 4.0 messages. With a comprehensive business rules engine for products hedge funds, mutual funds and investment linked products, funds, and fee structures, Oracle FLEXCUBE Investor Servicing allows fund management companies to configure and launch new products rapidly. Oracle Financial Services Leasing and Lending is a family of products provides functional coverage across lending, leasing, and mortgage lifecycles for consumer, commercial, syndicated, Islamic, and SME functions. The solution supports the complete business lifecycle across origin ation, servicing, and collections and enables financial institutions to provide better service and minimize delinquency rates through comprehensive and flexible processing of booking, disbursement, and payment. It centralizes origination functions, enabling them to improve customer experience and reduce transactional overheads. Oracle Financial Services Analytical Applications Oracle Financial Services Analytical Applications are a complete and fully integrated portfolio of analytical solutions covering enterprise risk, performance management, regulatory compliance and customer insight. They are built upon a shared analytical infrastructure consisting of a unified financial services data model, shared analytical computations and the industry leading Oracle Business Intelligence platform. The suite of applications contains comprehensive set of point solutions that can be integrated to give a holistic view across all analytical applications. Financial institutions need an integrated approach that combines a diverse set of compliance and risk solutions to help them address not only present regulatory needs, but also emerging and future risk and regulatory requirements. The framework is rules driven, and readily adapts to change. Unlike other hard coded solutions, Oracle Financial Services Analytical Applications provide both prebuilt rules and the capabi lity to create and modify rules. This flexibility allows financial institutions to easily create custom rules for their own analytical requirements and to cost effectively address ever changing compliance regulations. Any rule can be viewed and audited for its underlying definition to enable supervisory oversight. Services Oracle Financial Services PrimeSourcing Oracle Financial Services PrimeSourcing is the consulting arm of the Company. It offers end-to-end consulting services, providing comprehensive business and technology solutions that enable financial institutions to improve process efficiencies, optimize costs, meet risk and compliance requirements, define IT architecture, and manage the transformation process. With a singular focus on Financial Services vertical, PrimeSourcing has proven domain expertise across Capital Markets, Private Banking, Global Wealth Management, Corporate Banking and Retail Banking. The value based offerings from PrimeSourcing are designed to provide specialized application technology services for Banking Financial Services in areas such as Access Channels, Risk Governance Compliance, Payments, Business Intelligence and product related surround services cutting across domains. PrimeSourcing Consulting Services PrimeSourcing offers end-to-end consulting services in the areas of Business IT consulting and process improvement and transformation, Quality Consulting, SOA Strategy Governance, IT Architecture Planning, Product Evaluation Selection, IT Portfolio Assessment, program management, IT architecture and governance. PrimeSourcing Application Services PrimeSourcing provides comprehensive customized IT solutions for banking, securities and insurance those encompass the complete lifecycle of an IT application asset from conceptualization to creation and maintenance. This includes the expertise around specialized practice lines like payments, trade finance, and business intelligence, CRM, Oracle Technology and Applications and testing; services include ADM Services, Testing, System Integration, implementation and Migration. PrimeSourcing Technology Services PrimeSourcing offers expertise in conceptualization, design, evaluation, implementation and management of IT infrastructure for financial institutions under two service lines. First line is of Technology Management Services, covering Data Management, Mainframe Services, Application Deployment, Monitoring Management and Risk Security Assessment. The second service line is of Remote Infrastructure Management where PrimeSourcing manages remotely monitors and supports customers applications and infrastructure providing them economies of scale, arbitrage benefits while keeping the best in class processes. Oracle Business Process Outsourcing Services (BPO) BPO offering excels in providing cost effective and high quality BPO services ranging from complex back-office work to contact centre services for the banking, capital markets, insurance and asset management domains. This comprehensive ecosystem of BPO services also draws upon software applications such as Oracle FLEXCUBE and is backed by a mature process and consulting framework. BPO offering was selected in the Leadership Category for the 2010 The Global Outsourcing 100. The Outsourcing Centre short listed it to be amongst 2010 Finalists for its Outsourcing Excellence Awards. The BPO offerings are ISO 9001 certified for quality management and ISO 27001 certified for information security management. Oracle sees demand for core banking applications continuing as banks expand by buying the assets of other banks, establish presence in new countries or standardize applications across regions. Banks are looking at the centralization of banking services such as account opening and origination of credit to improve their service levels, increase productivity and gain greater control over processes that are subject to regulatory scrutiny. Global regulators have re-emphasized the importance of stress testing in the measurement of liquidity and credit risk and in evaluating how banks would fare under different scenarios. As a result of these factors we have gained increasing traction at Tier 1 banks for our products. Banks have also exhibited renewed interest in aligning finance, risk and performance applications. Oracle Financial Service Software is an acknowledged leader in the banking space and is committed to maintain its leadership position in financial services. Oracle Financial Service Software will continue to invest in expanding its banking footprint through its own internal RD. With a process driven approach based on service oriented architecture, your Company has the distinct advantage of offering banks the combined benefits of interoperabilit y, extensibility and standardization. Together with Oracle we provide a complete banking footprint, spanning all major distribution, manufacturing and corporate administration functions. Internal control systems and their adequacy Oracle Financial Services Software group has in place adequate systems for internal control and documented procedures covering all financial and operating functions. These systems are designed to provide reasonable assurance with regard to maintaining proper accounting controls, monitoring economy and efficiency of operations, protecting assets from unauthorized use or losses, and ensuring reliability of financial and operational information. The group continuously strives to align all its processes and controls with global best practices. SWOT analysis Strengths: Acknowledged leadership in core banking, application services and Analytics Solutions (governance, risk and compliance, customer insight) and process outsourcing Superior quality and cost efficient, end to end service capability from business consulting to application development and deployment, IT management to Business Process Outsourcing Unmatched solutions portfolio with depth of offering in the retail, corporate and investment banking, funds, cash management, trade, treasury, payments, lending, private wealth management, asset management and business analytics Extensive global client base Deep domain expertise with proven track record Solutions built on best in class technology and architecture High quality manpower resources Strong RD capability with strong balance sheet. Weaknesses: Exposure to various economies Local resources in new markets. Opportunities: Penetrate major markets like US, China, Brazil, Japan, North America, Russia, and Latin America Develop strong global partner model, greatly expanding pipeline and delivery capabilities Provide integrated offerings on the Oracle technology and solution portfolio especially to tier-one financial institutions Increasing momentum in the acquisition of core banking systems by large and global financial institutions Cross-sell and up sell opportunities into global customer base. Threats: Economic slow down Potential delays in decisions due to economic uncertainties Geo political factors Competition footprint in high growth geographies. Treasury Operations of OFSS The central function of treasury department is fund management and management of financial risks. But the primary objective of the foreign currency treasury operations is to hedge the exchange rate risk; the key objective of surplus funds in short term fixed deposits with approved banks. The functions are further broken down mainly into Investment and Maintenance. Each of these functions is further sub-divided into Indian rupee and Foreign Currency. The activities undertaken by the treasurer would include: Managing Cash/Bank Operations Investment in Fixed Deposits Forward Contracts A substantial portion of their revenues is generated in foreign currencies while a majority of the expenses are incurred in Indian Rupees (INR), with the remaining expenses are incurred in US Dollars (USD) and European currencies. Their philosophy for treasury operations is conservative and they invest funds predominantly in time deposits with well-known and highly rated Indian and f oreign banks. The Company has ensured adequate internal controls over asset management, including cash management operations, credit management and debt collection. The Company also maintains funds in USD, EUR, GBP and INR accounts based on comparative exchange rates, interest rates and currency requirements. Investment in Fixed Deposit Investments in Fixed deposits are based on surplus cash which is identified based on estimated cash inflow and outflow. The guiding principles require monitoring of the deposit of any one bank and for each investment decision; the following analysis is submitted to the CAO/CFO for the decision and approval. Amount proposed to be invested and tenure (generally 181 days) Comparison of the rates quoted by various banks Ratings given by Credit ratings agencies Scenario of overall exposure to the bank pre and post the transaction Investment in Fixed Deposit of Banks will be done based on interest rate analysis by the treasury team of minimum four of any banks with whom they have banking relationship. Procedure for investment in Fixed Deposit The treasury team member compiles a comparison sheet mentioning the interest rates as quoted by different banks for approval to the CAO or CFO as applicable. On the receipt of the approval for name of the bank and tenure for which Fixed Deposit is to be placed the member from the treasury team would go ahead to process the Fixed Deposit. Process for booking Fixed Deposit Issuing instructions to the bank to debit the account only by the authorized person Receipt of Acknowledgement by Bank Updating the excel tracker with the date of booking, amount in rupees, period (tenure), date of maturity, etc. Verifying the Fixed deposit receipt Accounting of the each FD transaction Documentation The Fixed deposits transactions are tracked and monitored on excel spreadsheet-namely Fixed Deposit Register (for format please refer to Appendix-II) by the member of the treasury team. The treasury team member ensures that each month end the register is updated and tallied with General ledger and Bank statement. On quarterly basis the same is tied up with Bank confirmation Information is entered to include FD no. principal amount, interest rate, date of deposit, maturity date and the period of FD. Every month end the member of the treasury team tallies the interest income/accruals per the trial balance to the Excel Control Sheet to ensure proper recording of interest income/accruals. All differences between Bank confirmation and Interest accrual as per General ledger is documented on excel sheet and informed to statutory auditors quarterly and on year end audits. The custody of the Fixed Deposits receipt would be with the treasurer. The records for the Fixed deposits are mai ntained in such a manner that the same are easily retrievable. Risks and concerns Quantitative and Qualitative Disclosures about Market Risk Their primary market risk exposures are due to the following: Foreign exchange rate fluctuations Fluctuations in interest rates. As of March 31, 2012, OFSS had Cash and Bank Balances of Rs. 39,475.9 million out of which Rs. 34,890.3 million was in interest-bearing bank deposits. Consequently, they face an exposure on account of fluctuation in interest rates. These funds were mainly invested in bank deposits of longer maturity (more than 90 days) to earn a higher rate of interest income. Their functional currency for Indian operations and consolidated financials is the Indian Rupee. They expect that the majority of their revenues will continue to be generated in foreign currencies for the foreseeable future and a significant portion of their expenses, including personnel costs and capital and operating expenditure, to continue to be incurred in Indian Rupees. In addition, they face normal business risks suc h as global competition and country risks pertaining to countries that they operate in. Techniques for Minimizing Hedging Risks Leading and Lagging: Leading implies collection from debtors expeditiously foreign currency designated before due date and to initiate lead to pay foreign currency designated creditors before their due date of payment. Lagging implies is delaying receipt from foreign currency designated receivable whose currency is are likely to appreciate and delaying foreign currency designated payable whose currencies are likely to depreciate. This makes financial sense on account of more receipt from debtors and less payment to creditors. Therefore to receive maximum receipt or make minimum payment, in appreciation-prone countries, account receivable are collected as soon as possible and payment of accounts payable is delayed as long as possible Invoicing or Billing in the desired currency: Invoicing sales as well as purchases in the home currency is an idle method of Hedging foreign exchange risks. Billing in home currency enables the firm to know the precise amount it is likely to receive from sales (EXPORT) and likewise the exact amount it is to pay for purchase (IMPORT) as a result, its foreign exchange risk is completely eliminated. Although the method provides a natural Hedge, it may not be operationally feasible to be used always and by all firms. Only firms having high demand for their products across the worlds and those having products with low price elasticity, say petroleum products or with low complication or with less substitutes available Indexation clauses: Another technique of hedging risks is to provide clause related to the export and import of goods and services between the two parties in contract. Obliviously the terms and the conditions included in the contract depend on the bargaining strengths of the involved parties. For instance the exporter may be in a better bargaining position to include a clause in a contact whereby prices are to be adjusted in such manner that the adverse moment of foreign exchange rates is to be absorbed by the imported alone. In a contrast, if the buyer/importer happens to be in strong bargaining position he may succeed in perusing the exporter to have a clause where by price are to be adjusted downwards to absorb losses due to unfavorable moment of exchange rate Sharing Risks: The indexation clauses illustrate the extreme passions / situations in which the entire incidents or loss of the unfavorable foreign exchange risk is shared by one of the parties only. In practice, the two parties may stipulate that loss incurred during the intervening period is to be shared between them in predetermined proportion. Risk sharing techniques may be appropriate when the currencies involved in the business deals are subject to abnormal rate of changes. Who bears a higher loss will depend on bargaining position of the two parties. Derivatives: The basic types of Forex and equity derivatives are forward and futures contracts, Options (calls and puts) and Swaps. Among these instruments forward contracts are more cost-effective for hedging foreign operations risk mainly used by many Corporations. Forwards: A forward is a made-to-measure agreement between two parties to buy/sell a specified amount of a currency at a specified rate on a particular date in the future. The depreciation of the receivable currency is hedged against by selling a currency forward. If the risk is that of a currency appreciation (if the firm has to buy that currency in future say for import), it can hedge by buying the currency forward. The main advantage of a forward is that it can be tailored to the specific needs of the firm and an exact hedge can be obtained. On the downside, these contracts are not marketable, they cant be sold to another party when they are no longer required and are binding. Appendix 1 summarizes other currency hedging instruments. Hedging Policy of OFSS and Its Effective Implementation Introduction Company dealing in multiple currencies face a risk (an unanticipated gain/loss) because of sudden or unpredictable changes in exchange rates, quantified in terms of exposures. Exposure depends on the value of the foreign exchange rates and is defined as a contracted, projected or contingent cash flow whose magnitude is not certain at the moment. The process of identifying risks faced by the firm and implementing the process of protection from these risks by financial or operational hedging is defined as foreign exchange risk management. Risk management techniques vary with the type of exposure and term of exposure. There are mainly two types of exposures namely, Accounting and Economic. Accounting exposure, also called translation exposure, results from the need to restate foreign subsidiaries financial statements into the parents reporting currency and is the sensitivity of net income to the variation in the exchange rate between a foreign subsidiary and its parent. Economic exposure is the extent to which a firms market value, in any particular currency, is sensitive to unexpected changes in foreign currency. Currency fluctuations affect the value of the firms operating cash flows, income statement, and competitive position, hence market share and stock price. Currency fluctuations also affect a firms balance sheet by changing the value of the firms assets and liabilities, accounts payable, accounts receivables, inventory, loans in foreign currency, investments in foreign banks; this type of economic exposure is called balance sheet exposure. Once a firm recognizes its exposure, it then has to deploy resources in managing it. Foreign Exchange Risk Management Framework Forecasts: The first step in the risk management is to develop a forecast which is typically of six months. Once the exposure is determined, firm has to analyze the market trends to determine the future trend for the foreign exchange rates. Forecasts are always drawn on valid assumptions in order to get the correct results. It also helps in estimating the probability of getting true forecast and how much it is deviating from the forecasted results. Risk Estimation: On basis of previously developed forecast the measure probability of the risk as well as value at risk (i.e. the gain or loss because of the fluctuations in the foreign exchange rates as per the forecast) should be calculated. In this process, risk that transaction may lead to failure due to the market-specific difficulties should be taken into account. As a final point in this step, System risk should be estimated which may arise due to implementation gaps and reporting gaps in the firms exposure management system. Benchmarking: After finding the exposure and risk estimates, the firm has to restrict its foreign exchange exposures by setting its limits. Generally exposures are managed on either profit centre or cost centre basis, so firm also has to decide the basis to manage its exposures. Cost centre approach is self-protective approach but the main objective of the firm is to ensure that cash flows are not badly affected after a particular point. On the other hand, profit centre approach is more effective because firm can generate net profit on the exposure over time. Hedging: At this stage of the risk management, firm designs the appropriate hedging strategy on the basis of previously set limits by the firm. For the purpose of hedging, there are many financial instruments are available for firm to choose from futures, options, forwards and swaps and also issue of foreign debt. Stop Loss: the firms decisions about risk management are all based on forecasts which are nothing but the e stimates of practically changeable or volatile trends. It is very important to have stop loss preparations to save the firm from loss in case of the forecasts turn out wrong. For the same reason, firm should have system that will monitor and will detect the crucial levels in the foreign exchange rates in order to take appropriate measures. Reporting and Review: Risk management policies are normally subjected to the analysis based on periodic reporting. After marking to the market, the reports are mainly consist of profit and loss statement on contracts, the gain due to the actual exchange rates or interest rates on each exposure and profitability in comparison with standard level and predictable changes in overall exposure due to estimated interest or exchange rate movements. The analysis of review includes whether the standard level set are effective and valid, what the market conditions are and lastly whether the hedging strategy is working or needs modifications. Figure : F oreign Exchange Risk Management Framework Project: Main Text OFSS Business Model OFSS India entity sells to end-customer through OFSS Local entity. OFSS local entity enters into a contract with end-customer. OFSS India entity invoices OFSS Local Entity at an agreed transfer pricing rate. The transfer pricing rate varies for type of business (products and services) and also can be different depending on Region or Entity. These rates are reviewed regularly and can be amended prospectively. OFSS India entity invoices OFSS local entity in the same currency as Contracted and Invoiced to end-customer. Hedging Policy of OFSS The hedging program is needed because of mismatches in the billing currency and local functional currency both at end-customer to the contract entity level and in the intercompany transactions. Following are the key objective which are sought to be achieved by effective hedging program. To minimize exchange gain or loss situation by creating corresponding Asset/Liability in the Balance Sheet. The instrument used for hedging is Plain Vanilla Forward Contract. Hedging will be a simple program and use of exotic instruments like Options, Complex Forwards, Derivatives, etc. is not permitted. The objective is to ensure that the volatility risk is minimized it is not an objective to maximize gains. Towards a successful implementation, we will: Approach this program in phases; to hedge intercompany transaction at first phase and in second phase look for protecting non-functional currency transactions with end customers. Ensure effective controls by defining responsibili ty of person placing forwards to be separate from person confirming forwards. Define back office function to provide clearly forward requirement and front office dealing with bank completing the instructions issued by back office. FX Treatment- Revaluation and Translation Revaluation Monetary / Non monetary transactions: OFSS revalues all monetary assets /liabilities at period end rate from transaction currency to Functional currency and records the same in Profit and loss account. Non-monetary transactions would include Fixed Assets, Deferred revenue, Pre-paid expenses etc. OFSS has material transactions in non-functional currency. The treatment is consistent in all GAAP. Translation Indian GAAP and USGAAP treatment Indian GAAP classifies entities as Integral/Non-Integral. Exchange difference arising on translation of Integral operations is recorded in Profit and loss account. Exchange difference arising on translation of Non-Integral operations is recorded in Balance sheet (Foreign currency translation reserve similar to Other Comprehensive Income under USGAAP). Currently all Subsidiaries are classified as Integral operations except Subsidiaries carrying out BPO business. Under USGAAP, Exchange difference arising on translation from functional currency to Reporting currency is recorded in Other Comprehensive Income under Balance Sheet. Hedging Strategy and Its Implementation Following describes stepwise analysis done to design the hedging strategy. I. Identify the exposure by Entity and Currency. II. Analysis of Billing Report and Collection trend for currencies to be hedged. III. Determine the rate to be hedged. Phase I: Exposure by Entity and Currency Entity: The billing currency for most of the subsidiaries is the local currency. For example, OFSS INC will bill in USD; OFSS BV in Euro, etc. Secondly, ~90% of their costs are intercompany to India in the same currency. This therefore provides a natural hedge that covers almost 90% of the subsidiaries business. Even when the contract is entered in non-functional currency, for example, Netherlands entity entering into a contract with a customer in USD, the exposure is to the extent of margin retained (~10 13%). Therefore, for covering the exposure, Phase I will focus only at the exposure of currency risk for OFSS India. Currency: OFSS India invoices in multiple non-functional currencies which should be protected. Analysis for invoicing currencies for the period from April 1, 2011 to February 29, 2012 is as below: Figure : Currency Exposure 5% : Currency should be hedged 5% : Currency on watch 1% : Not material; no hedging Therefore hedging program in Phase I cover USD, EUR and AUD. We have initially considered USD for forward cover as major transactions are in USD Phase II: Analysis of Billing Register and Collection Trend Analysis of Billing Register Billing register contains the all the data of the customers which includes subsidiaries and end customers with their respective currencies. The data of customers includes customer name, description, project type, project description, invoice number, invoice amount, invoice date, etc. Criteria for data extraction Only billings with subsidiaries are considered. Billings done with End customers are not considered. Invoice number ending with CN are cancelled invoices, therefore those invoices are not considered irrespective of entity. The data is cross checked to ensure that the intercompany billing does not have transaction currency as INR. Insert Pivot table to filter the data for the required columns such as transaction currency, transaction amount including WHT, etc. As per the criteria, we have extracted data from the billing register as shown below: Table : Billing Register Transaction Currency Transaction Amount Apr-12 May-12 Jun-12 CNY $ 21.23 $ 1.55 $ 2.83 USD $ 17.74 $ 19.57 $ 25.41 THB $ 10.15 $ 12.24 $ 6.74 EUR $ 3.87 $ 2.42 $ 5.20 AUD $ 3.26 $ 6.15 $ 2.52 GBP $ 0.97 $ 0.19 $ 0.63 Total $ 57.23 $ 42.12 $ 43.32 Based on the above analysis, we will hedge up to 80% of the AR in a particular month. The total monthly billing eligible for forward cover is booked in 4 equal installments with 30 days, 60 days, 90 days, and 120 days maturity term. Note: 4 equal installments are based on last years billing trend. Analysis of April 2012 billing: For the month of April 2012, the total intercompany billing for USD transactions was USD 17.74 million and considering only 80% of the total billing amount for the forward cover, which amounts to USD 14.19 million. In case of April billing, USD 3.55 million will be booked for a period of 30 days maturing in May 2012, USD 3.55 million will be booked for a period of 60 days maturating in June 2012, USD 3.55 million will be booked for a period of 90 days maturing in July 2012 and last installment of USD 3.55 million will be booked for a period of 120 days maturing in August 2012. Analysis of May 2012 billing: For the month of May 2012, the total intercompany billing for USD transactions was USD 19.57 million and considering only 80% of the total billing amount for the forward cover, which amounts to USD 15.66 million. In case of May, USD 3.91 million will be booked for a period of 30 days maturing in June 2012, USD 3.91 million will be booked for a period of 60 days maturating in July 2012, USD 3.91 million will be booked for a period of 90 days maturing in August 2012 and last installment of USD 3.91 million will be booked for a period of 120 days maturing in September 2012. Analysis of June 2012 billing: For the month of June 2012, the total intercompany billing for USD transactions was USD 21.42 million and considering only 80% of the total billing amount for the forward cover, which amounts to USD 17.13 million. In case of June, USD 4.28 million will be booked for a period of 30 days maturing in July 2012, USD 4.28 million will be booked for a period of 60 days maturating in August 2012, USD 4.28 million will be booked for a period of 90 days maturing in September 2012 and last installment of USD 4.28 million will be booked for a period of 120 days maturing in October 2012. Following table shows total forward booking required for the month of: Table : Total Forward Booking from April to July Amount in millions Month April 2012 May 2012 June 2012 July 2012 Amount Nil $ 3.55 $ 7.46 $ 11.75 OFSS has already entered into forward contracts in FY2011-2012, which are maturing in FY2012-2013. The details of the amount and the maturity month are a s below: Table : Maturity of Forward Contracts Amount in millions Month Amount April 2012 May 2012 June 2012 July 2012 Amount Nil $ 5.00 $ 7.50 $ 10.00 The Strategic model for forward booking Table : Hedging Model Amount in millions Billing month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Billing amount $ 17.74 $ 19.57 $ 21.42 $ 25.41 $ $ $ $ Amount to be hedged (80%) $ 14.19 $ 15.66 $ 17.13 $ 20.32 $ $ $ $ Hedging Duration Apr-12 $ $ 3.55 $ 3.55 $ 3.55 $ 3.55 $ $ $ May-12 $ $ $ 3.91 $ 3.91 $ 3.91 $ 3.91 $ $ Jun-12 $ $ $ $ 4.28 $ 4.28 $ 4.28 $ 4.28 $ July-12 $ $ $ $ $ 5.08 $ 5.08 $ 5.08 $ 5.08 Total forwards to be done $ $ 3.55 $ 7.46 $ 11.75 $ 16.83 $ 13.28 $ 9.36 $ 5.08 Forwards already done in last FY $ $ 5.00 $ 7.50 $ 10.00 $ 14.25 $ 6.25 $ 4.00 $ 1.50 Additional forwards to be done $ $ $ $ 1.75 $ 2.58 $ 7.03 $ 5.36 $ 3.58 From the above table, we have concluded that for the month of May 2012 and June 2012 we already have excess forward position and hence we have not booked any extra forwards for the same. For the settlement of forwards, analysis of available bank balances as well as analysis of intercompany collection is required. Analysis of Collection Report Collection Report contains the all the data of the customers relating to amount due from subsidiaries and end customers with their respective currencies. The data of customers includes customer name, description, project type, project description, invoice number, invoice amount, invoice date, deposit accounting date, collection month, collection currency, etc. Criteria for data extraction Only collections with subsidiaries are considered. Collections for end customers transactions are not considered. Insert Pivot table to filter the data for the required columns such as invoice currency, collection month, invoice month and collection amount for the currency USD. As per the criteria, we have extracted data as shown below: Table : Collection Report Amount in millions Invoice Currency USD Collection Month Invoice Month April-12 May-12 June-12 July-12 Opening $ $ 14.24 $ 5.92 $ 12.95 April-12 $ $ 1.39 $ 5.46 $ 2.17 May-12 $ $ $ 5.71 $ 3.56 June-12 $ $ $ $ 3.20 July-12 $ $ $- $- Grand Total $ $ 15.63 $ 17.09 $ 21.87 Cash Flow Analysis After the analysis of invoice register and the collection report, cash flow analysis is required to find out amount available for settling forwards. The payments and reimbursements to the subsidiaries are deducted to arrive at surplus; remaining cash can be used to settle the forwards. As we are going to sell dollars, there should be enough balances available with subsidiaries. Table : Cash Flow Amount in millions Month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Opening Balance (Subsidiaries bank accounts) $ 35.62 $ 34.89 $ 42.71 $ 35.51 $ 41.80 $ 45.15 $ 36.17 Inter Company Collection $ $ 15.63 $ 17.09 $ 21.87 $ 23.60 $ 10.37 $ 10.00 Less: Reimbursement to Subsidiaries $ (5.73) $ (2.81) $ (16.80) $ (5.58) $ (6.00) $ (6.00) $ (6.00) Cash used to settle Forwards $ (5.00) $ (5.00) $ (7.50) $ (10.00) $ (14.25) $ (13.35) $ (13.46) Closing Balance Available $ 34.89 $ 42.71 $ 35.51 $ 41.80 $ 45.15 $ 36.17 $ 26.71 Alternate Strategy to book forwards on collective basis Current Hedge position OFSS already has forwards amounting to USD 26 million maturing from August 2012 to November 2012. These were booked prior to March 31, 2012. Position of Account Receivable as on July 31, 2012 Table : Position of Account Receivable as on July 31, 2012 Amount in millions $ Billing Apr-12 May-12 Jun-12 Jul-12 Opening Balance-Receivables $ 73.72 $ 65.66 $ 56.60 $ 57.28 Billing $ 17.74 $ 19.57 $ 21.42 $ 25.41 Collections $ (25.8) $ (28.63) $ (20.73) $ (19.91) Closing Balance-Receivables $ 65.66 $ 56.60 $ 57.28 $ 62.78 Pertains to Opening (before March 31,2012) $ 12.00 Current FY $ 50.78 The AR for the month of April was $ 73.72 million and billing amount was $ 17.74. So out of the total amount (91.46=73.72+17.74) $ 25.8 million were collected in the same month- April 2012. The similar analysis for the month of May, June and July is shown in the table given below. It also shows the opening balance of $ 12 million (before March 31, 2012) Forward booking proposal of the current FY Outstanding Balance After finding the position of account receivables, the calculation of total forwards to be booked in the current financial year (to cover the outstanding balance) is done. Rather than taking the 80% of the total billing, we have deducted the collection amount from the total billing and hedge 80% of that remaining amount which is 4.14 for April 2012. The similar figures for May, June, July are shown below: Table : Hedging Model for current FY outstanding balances Amount in millions Amt in $ Apr-12 May-12 Jun-12 Jul-12 Total Billing Amount $ 17.74 $ 19.57 $ 21.42 $ 25.41 $ 84.13 Collection $ (12.57) $ (13.18) $ (7.49) $ (5.09) $ (38.32) Balance exposure $ 5.17 $ 6.39 $ 13.93 $ 20.32 $ 45.81 Amount to be hedged (80%) $ 4.14 $ 5.11 $ 11.14 $ 16.26 $ 36.65 Maturity estimate of the above proposed forward booking OFSS has already entered into forward contracts and are considered before booking the additional forwards. Month wise maturities of the forwards which are already booked and proposed for booking are given below: Table : Total Maturity Amount in millions Amt in $ Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Total Forwards booked $ 14.25 $ 12.25 $ 5.00 $ 1.50 $ $ $ $ 33.0 Proposed booking for differential exposure $ $ $ 3.65 $ $ $ $ $ 3.65 Forward cover till July end $ 14.25 $ 12.25 $ 8.65 $ 1.50 $ $ $ $ 36.65 August month billing $ $ 1.75 $ 3.50 $ 4.50 $ 4.50 $ 1.75 $ 1.75 $ 17.75 Total Forward Position $ 14.25 $ 13.85 $ 11.85 $ 5.50 $ 4.00 $ 1.60 $ 1.60 $ 52.65 Revised Strategy We will hedge 80% of the total billing. The total monthly billing eligible for forward cover will be booked in 6 installments with maturity as 10% in 30 days, 20% in 60 days, 25% in 90 days, 25% in 120 days, 10% in 150 days, and 10% in 180 days. Note: 6 installments are based on currents years trend. Table : Revised Hedging Model Amount in millions Billing month Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Billing amount $ 22.00 $ 22.00 $ 19.00 $ 20.00 $ 23.00 $ 17.74 $ 19.57 $ 22.00  Amount to be hedged (80%) $ 17.60 $ 17.60 $ 15.20 $ 16.00 $ 18.40 $ 14.19 $ 15.66 $ 17.60 Hedging Maturity month Aug-12 $ $ 1.76 $ 3.52 $ 4.40 $ 4.40 $ 1.76 $ 1.76 $ Sep-12 $ $ $ 1.76 $ 3.52 $ 4.40 $ 4.40 $ 1.76 $ 1.76 Oct-12 $ $ $ $ 1.52 $ 3.04 $ 3.80 $ 3.80 $ 1.52 Nov-12 $ $ $ $ $ 1.60 $ 3.20 $ 4.00 $ 4.00 Total forwards to be done $ $ 1.76 $ 5.28 $ 9.44 $ 13.44 $ 13.16 $ 11.32 $ 7.28 Forwards already done in last FY $ 14.25 $ 6.25 $ 4.00 $ 1.50 $ $ $ $ Additional forwards to be done $ $ $ 1.28 $ 7.94 $ 13.44 $ 13.16 $ 11.32 $ 7.28 Total estimated outflow for forward booking: Table : Estimated Outflow Amount in millions Outflow working Month Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Outflow (Last year bookings) $ 14.25 $ 6.25 $ 4.00 $ 1.50 $ $ $ Current year booking maturity $ $ 1.76 $ 5.28 $ 9.44 $ 13.44 $ 15.00 $ 16.42 Total estimated outflow $ 14.25 $ 8.01 $ 9.28 $ 10.94 $ 13.44 $ 15.00 $ 16.42 As per the above, we have forecasted total amount of forwards that will be booked every month and total amount of estimated monthly outflow (maturities) of the forwards booked. Phase III: Determine the Rate to be hedged The program envisages protecting the invoices raised in the month at the month-end rate. Previously, OFSS used to raise and account inter-company invoices daily and at varying exchange rates. Now, this procedure has been changed and OFSS will book the inter-company invoices at the month-end rate. Table : Rate Analysis June Revaluation rate 56.3820 Average Spot rate 54.1334 Average Forward booking rate (including premium) 55.0625 August Billing rate 55.7063 OFSS will protect June revaluation rate i.e. 56.382 for the opening balances. And on monthly basis, OFSS will protect month-end rate. The above analysis shows that the hedging strategy significantly helps reduce the volatility. OFSS will book forward contracts at month end rate to ensure this rate is protected. Process for booking Forward Contracts: Monthly Billing and collection analysis is done by a member outside the treasury team. Treasury team will abide by the instruction to book forwards as provided by the outside member. For getting spot rate movement, a member from the treasury team gets in touch with the bank treasury dealer to carry out a deal, or to place an order. The spot rate quoted by the concerned bank is either checked on the Official websites such as Bloomberg, Oanda, which provides close to live market rates or by calling other banks to know the prevailing inter-bank rates. Once the spot rate is fixed, the member from the treasury team follows the schedule provided to book the maturity date of the forwards. Based on the maturity month, the member from the treasury team will fix forward premium depending on the market movement during the course of the day. The member from the treasury team updates details of the deals carried out during the day in the forward contracts excel file. The bank sends a confirmation of the deal with the complete details. The Bank sends a physical copy of the forward contract confirmation to the treasury team, for obtaining signatures of the authorized signatories. The member from the treasury team verifies the contents of the confirmation with the system records. In case of any discrepancies, the same is reported to the bank treasury dealer, and a fresh forward contract confirmation note is obtained from the bank. While booking any deals with the bank, the member from the treasury team ensures that forward contracts outstanding with banks is within the limit set under the underlying document as given to bank as per Reserve Bank of India guidelines. Forex markets are too volatile and all confirmations and approvals are done over phone with bank as well as internally. This is followed by a trade confirmation from bank on end of day. Documentation and Maintenance of Forward Contracts: After obtaining trade confirmations transactions related to forward contracts are updated in the excel spreadsheet (for Format of Forward Register refer to Appendix-III) and maintained by the treasury team. The treasury team member ensures that each month end the register is updated and tallied with General ledger and Bank statement. On quarterly basis the same is tied up with Bank confirmation. Information entered includes contract no., Forward rate, spot rate, principal amount, premium or discount, purchase date, maturity date, etc. The treasury team maintains the following records/documents: Forward Contract confirmations from the banks. Hard copies of the Correspondence exchanged with the bank. If any contract has been cancelled then hard copy of the cancelled contract provided by the bank. Various options available in forward contracts: A forward contract once booked can be cancelled, rolled over, extended and even early delivery can be made. Roll over forward contracts Forward Contracts are rolled-over when the sufficient amount is not available with customer of forward contract. That is, when installment falls due, the same is paid by the customer at the exchange rate fixed in forward contract. The balance amount of the contract rolled over till the date for the next installment. The process of extension continues till the whole amount has been paid. But the extension is available subject to the cost being paid by the customer. Thus, under the mechanism of roll over contracts, the exchange rate protection is provided for the entire period of the contract and the customer has to bear the roll over charges. The cost of extension (rollover) is dependent upon the forward differentials prevailing on the date of extension. Thus, the customer effectively protects himself against the adverse spot exchange rates but he takes a risk on the forward differentials. (i.e. premium/discount). Although spot exchange rates and forward differentials are prone to f luctuations, yet the spot exchange rates being more volatile the customer gets the protection against the adverse movements of the exchange rates. A corporate can book with the Authorised Dealer a forward cover on roll-over basis as necessitated by the maturity dates of the underlying transactions, market conditions and the need to reduce the cost to the customer. Example: An importer has entered into a 3 months forward contract in the month of February. Spot Rate = 48.65 Forward premium for 3 months (May) = 0.75 Therefore rate for the contract = 48.65 + 0.75 = 49.45 Suppose, in the month of May the importer realizes that he will not be able to make the payment in May, and he can make payment only in July. Now as per the guidelines of RBI and FEDAI he can cancel the contract, but he cannot re-book the contract. So for this the importer will go for a roll-over forward for May over July. The premium for May is 0.75 (sell) and the premium for July is 119.75(buy). Therefore the additional cost i.e. (119.75 0.75) = 0.4475 will have to be paid to the bank. The bank then fixes a notional rate. Lets say it is 48.66. Therefore in May he will sell 48.66 + 0.75 = 49.41 And in July he will buy 48.66 + 119.75 = 49.85 Therefore the additional cost (49.85 49.41) = 0.4475 will have to be paid to the Bank by the importer. Cancellation of Forward Contract A corporate can freely cancel a forward contract booked if desired by it. It can again cover the exposure with the same or other Authorised Dealer. However contracts relating to non-trade transactionimports with one leg in Indian rupees once cancelled could not be rebooked till now. This regulation was imposed to stem volatility in the foreign exchange market, which was driving down the rupee. Thus the whole objective behind this was to stall speculation in the currency. But now the RBI has lifted the 4-year-old ban on companies re-booking the forward transactions for imports and non-traded transactions. It has been decided to extend the freedom of re-booking the import forward contract up to 100% of un-hedged exposures falling due within one year, subject to a cap of $ 100 Mio in a financial year per corporate. The removal of this ban would give freedom to corporate Treasurers who should be in opposition to reduce their foreign exchange risks by canceling their existing forw ard transactions and re-booking them at better rates. Thus this in not liberalization, but it is restoration of the status quo ante. Also the Details of cancelled forward contracts are no more required to be reported to the RBI. The following are the guidelines that have to be followed in case of  cancellation of a forward contract. In case of cancellation of a contract by the client (the request should be made on or before the maturity date) the Authorised Dealer shall recover/pay the, as the case may be, the difference between the contracted rate and the rate at which the cancellation is effected. The recovery/payment of exchange difference on canceling the contract may be up front or back ended in the discretion of banks. Rate at which the cancellation is to be effected: Purchase contracts shall be cancelled at the contracting Authorised Dealers spot T.T. selling rate current on the date of  cancellation. Sale contract shall be cancelled at the contracting Authorised Dealers spot T.T. selling rate current on the date of cancellation. Where the contract is cancelled before maturity, the appropriate forward T.T. rate shall be applied. Exchange difference not exceeding Rs. 100 is being ignored by the contracting Bank. In the absence of any instructions from the client, the contracts, which have matured, shall be automatically cancelled on 15th day falls on a Saturday or holiday; the contract shall be cancelled on the next succeeding working day. The Concepts I learnt during the Internship GAAP: Companies prepare their financial statements using common set of standards, accounting principles and procedures. Generally Accepted Accounting Principles are simply the common way for recording as well as reporting accounting data. GAAP are grouping of the reliable or authoritative standards which are set by policy boards. GAAP are imposed on companies so that investors have a minimum level of consistency in the financial statements they use when analyzing companies for investment purposes. GAAP cover such things as revenue recognition, balance sheet item classification and outstanding share measurements. Companies are expected to follow GAAP rules when reporting their financial data via financial statements. If a financial statement is not prepared using GAAP principles, be very wary! That said, keep in mind that GAAP is only a set of standards. There is plenty of room within GAAP for unscrupulous accountants to distort figures. So, even when a company uses GAAP, you still need to scrutinize  its financial statements. RTGS The acronym RTGS stands for Real Time Gross Settlement. RTGS system is the fastest funds transfer mechanism through banking channel that is transfer of money takes place from one bank to another on a real time and on gross basis. Settlement in real time means instructions are processed as soon as they are received and hence payment transactions are not subjected to any waiting period. Gross settlement means the fund transfer instructions are settled individually that is on one to one basis rather than bunching with any other transactions. Considering that money transfer takes place in the books of the Reserve Bank of India, the payment is taken as final as well as irrevocable. The RTGS system is primarily for large value transactions. The minimum amount to be remitted through RTGS is Rs. 1lakh with no upper ceiling (maximum limit) for the transaction. Therefore, there is no fixed stipulation for RTGS transactions. Under normal circumstances the beneficiary branches are expect ed to receive the funds in real time as soon as funds are transferred by the remitting bank. The beneficiary bank has to credit the beneficiarys account within two hours of receiving the funds transfer message. The remitting bank receives a message from the Reserve Bank that money has been credited to the receiving bank. Based on this the remitting bank can advise the remitting customer that money has been delivered to the receiving bank. It is expected that the receiving bank will credit the account of the beneficiary instantly. If the money cannot be credited for any reason, the receiving bank would have to return the money to the remitting bank within 2 hours. Once the money is received back by the remitting bank, the original debit entry in the customers account is reversed. NEFT System EFT and NEFT are electronic fund transfer modes that operate on a deferred net settlement (DNS) basis which settles transactions in batches. In DNS, the settlement takes place at a particular point of time. All transactions are held up till that time. For example, NEFT settlement takes place 6 times a day during the week days (9.30 am, 10.30 am, 12.00 noon. 1.00 pm, 3.00 pm and 4.00 pm) and 3 times during Saturdays (9.30 am, 10.30 am and 12.00 noon). Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time. Contrary to this, in RTGS, transactions are processed continuously throughout the RTGS business hours. EEFC Account Exchange Earners Foreign Currency Account (EEFC) is an account maintained by the exchange earners (e.g. companies, individuals, etc. who are resident in India) in the form of current account for foreign currency with the bank dealing with foreign currency or the authorized dealer. It is a facility provided to such account holders, including exporters, to credit foreign exchange earnings to the account. No interest is payable on EEFC account. There are some conditions for EEFC account that SEZ Units cannot open Foreign Currency Accounts. But, a unit located in a SEZ can open an EEFC Account with an authorized dealer in India subject to certain conditions. Again, SEZ Developers can also open EEFC Accounts. Reserve Bank of India has advised that the EEFC accou