Brave New World Conformity Essay Research Paper Example

Brave New World Conformity Essay Research Paper Example Brave New World Conformity Essay Paper Brave New World Conformity Essay Paper Essay Topic: Brave New World In Aldous Huxley’s novel Brave New World. Huxley creates a futuristic universe governed by conformance and entry to society. Citizens of this World State are conditioned to follow a set life style determined at birth in order to make a stable civilisation. However. there is still some signifier of individualism in each individual. specifically in the characters Bernard. Lenina. and Linda. Within each of these characters. their difference in personality does non suit the norms of society. and they hence try to stamp down their ain traits with alone methods such as haoma. In times of unhappiness and desperation. Bernard. Lenina. and Linda each give up a portion of their ain individualism and political orientation. lodging to the conventions of the World State society which accordingly adds to their battle of seeking to suit in with the remainder of the universe. Looking at Bernard. his physical visual aspect sets him apart from being a normal Alpha: â€Å"Bernard’s build was barely better than that of the mean Gamma† ( 64 ) . Along with his physical visual aspect. Bernard besides has the capableness to believe otherwise than most citizens of the World State. apparent on his day of the month with Lenina when he remarks about the sea: â€Å"It makes me experience as though. . as though I were more of me. . . Not merely a cell in the societal body† ( 90 ) . However. despite his different physical and personality traits. he doesn’t exert his differences that would dispute the World State. For illustration. he strives to desire to be like Helmholtz. â€Å"wishing. . . that he could hold every bit many misss as Helmholtz did. † alternatively of encompassing himself for who he is ; Bernard continually falls into conformance and attempts to follow an order than is non compatible with whom he is. Alternatively of researching and oppugning the universe around him. he takes haoma as his signifier of suppression to seek to work out his jobs of suiting into society. When Bernard gets humiliated in forepart of the Arch-Community Songster. he chooses to take haoma which merely delays his job further and makes his status worst: â€Å"The poisoning of success had evaporated ; he was gravely his old ego. . . the old ego seemed unprecedentedly heavier than the environing atmosphere† ( 178 ) . By puting aside his personal traits. he becomes another conformist to the conventions of World State. Similarly. Lenina possesses mental features that do non suit into the World State. Lenina tends to be in a relationship with merely one cat. instead than traveling out with many cats as conditioned by the World State. Once John comes to see the World State. Lenina instantly falls in love with him and can non halt believing about him. exposing human emotions that citizens should non hold in the World State. Her human emotions are evident during the eventide when she waits for John to come out for the Arch-Community Songster: â€Å" . . . she sat in a corner. cut off from those who surrounded her by an emotion which they did non portion. . . † ( 173 ) . From her personality. Lenina is fit for a love that involves emotion and connexion. but Lenina decides to stay by her society and chooses to hold a love surrounding by blind sex and no feelings. Through this determination. she conforms to the norm. actively lending to the conditions of her society antonym of her true ego. She goes farther to take haoma after John does non demo up for Bernard’s presentation. which. similar to Bernard’s haoma hole. merely prolongs her job: â€Å"But in the intervals I still like him. I shall ever wish him† ( 188 ) . Through her use of haoma. she follows the methods of the World State. throwing off her individualism and doing herself more hurt and struggle with her love personal businesss. Finally. Linda has alone features due to her life spent in the Savage Reservation and giving birth to her boy John. Linda. despite being conditioned to be horrified at the thought of holding a babe. still loves her boy John. This is evident when John negotiations about his childhood experiences with Bernard. depicting the clip Linda was crushing up John: â€Å"He opened his eyes once more and saw that she was looking at him. He tried to smile at her. Suddenly she put her weaponries round him and kisses him once more and again† ( 127 ) . Since Linda has an emotional fond regard to John. she has a personality different from the other citizens of the World State Society. However. despite the motherly connexion that she could hold continued with John. she chooses to sell her life to the drug haoma. When Lenina lays deceasing in the infirmary with John following to her. she unconsciously chooses her life of sex and haoma she used to hold over John: â€Å"She knew him for John. her boy. but fancied him an interloper into that paradisal Malpais where she had been passing her soma-holiday with Pope† ( 205 ) . In the really terminal. Linda suppresses her emotional love for John with haoma and goes back to the rules and pleasantries of the World State Society. Bernard. Lenina. and Linda all have alone features that set them apart from the regular citizens of the World State Society. However. all three of them have unwittingly fallen into the conformances of the state’s maladaptive regulations. sooner taking to emanate the state’s values that do non suit their ain features. The World State’s guidelines and ordinances pull all the citizens of the World State. including Bernard. Lenina. and Linda. into one life style of life through a Domino consequence of conformance: the more people that conform. the more harder it is to defy the impulse to conform with them. Aldous Huxley’s Brave New World shows the annihilating effects of conformance – a force that strips off your single potency and individuality.

McDonalds in Kazakhstan Essay Example | Topics and Well Written Essays - 1250 words

McDonalds in Kazakhstan - Essay Example McDonald's generates revenues through company operated restaurants and franchisee restaurants. Of a total of over 31,000 restaurants, over 8000 are operated by the company and over 18,000 are operated by franchisees. The remaining restaurants are operated by affiliates. The company's revenue comprises sales from company operated restaurants and fees as well as rent from franchisees and affiliates. Under the franchise arrangement, the franchisees invest in the equipment, signage, seating and dcor, while the company owns or leases the land and building. Franchisees pay the company service fees and rent for premises. Service fees are set as a percentage of sales, while rent and other terms of occupancy are stipulated in the franchise agreement, which is drawn for a period of 20 years. The company and its franchisees as well as affiliates purchase food, packaging, equipment and other goods from approved suppliers. The company maintains quality standards through assurance labs around the world. A quality assurance board, including the company's technical, safety and supply chain specialists, provides guidance on all aspects of food quality and safety. The McDonald's business model is slightly different from that of most other fast food chains. In addition to ordinary franchise fees, supplies and percentage of sales, McDonald's also collects rent. As a condition of the franchise agreement, McDonald's owns most properties. Since rent is a fee that is not linked to sales, this practice allows McDonald's more control over its franchisees (Rumbelow, 1 February 2001). As the world's largest fast food company, McDonald's was the target of criticism on many grounds over the review period. It has been accused of the exploitation of entry-level workers and ecological damage caused by agricultural production and industrial processing of its products with high levels of packaging waste. Critics claim it sells unhealthy or non-nutritious food with exploitative advertising targeted at children and contributes to the suffering and exploitation of livestock. McDonald's has also been criticised for its litigious and heavy-handed approach to preserving its image and copyrights. Consequently, McDonald's recorded its first ever global loss in the last quarter of 2002 and in Europe sales plunged 3.8% in January 2003. To combat this, McDonald's underwent a fundamental revolution in its approach to menus, marketing and consumers in 2003. In the UK, McDonald's is improving its standards and continued to work with government and health officials to investigate impro vements (Euromonitor, 29 November 2005). On the other hand, Kazakhstan is a relatively new nation as it gained independence from Soviet Union in 1991. McDonald's has is one of the countries it has to conquer. Kazakstan's 1,052,100 square miles (2,724,900 square kilometres) make it by far the largest state in Central Asia and the ninth largest in the world. Between its most distant points Kazakstan measures about 1,820 miles (2,930 kilometres) east to west and 960 miles north to south. While Kazakstan was not considered by authorities in the former Soviet

Managing Information 2 Assignment Example | Topics and Well Written Essays - 1500 words

Managing Information 2 - Assignment Example If considering the enterprise government, focus on executing management actions is required to support the strategic goals of the organization (JOHNSTON et al. 2009). It has been calculated approximately half of the breaches to the security of the information systems are made by the internal staff or employee of the organization (Spears et al. 2010). Security incident management facilitates the development of security incident handling and planning including preparation for detection and reply to information security issues. The standard of the incident management primarily relates to ensure the existence of processes rather than the contents of these procedures. The security incident of different computing systems will have dissimilar effects and escort to different consequences, bureau, departments the organization need to tailor the security incident handling plan according to specific operational requirements. Organizations invest enormous money to buy and install computing e quipments for securing their networks. Information systems security is a challenge for executives and the information technology professionals (Dhillon et al. 2006).Organizations focus on performance and efficiency of the security equipments. This is not enough, as human intervention and a proper plan need to be defined. The information technology professionals are not only responsible for securing the information systems, all the employees of the organization are responsible (Rotvold 2008). One needs to know what an incident is, before making a plan for dealing with the computer incidents. A simple definition is available in network dictionary which says â€Å"An incident as an adverse network event in an information system or network or the threat of the occurrence of such an event.† For organizations to be competitive with network incidents, they must lay a foundation within the organization for incident handling. The incident handling procedure refers to an action pla n associated with security breaches, thefts, distributed denial of service, fire, floods etc. Incident handling consists of six-step process: research, classification, restraint, purge, revival, and lessons learned. The information security should be handled internally and externally by the employees of the organization. They will be supported by the security teams with high-powered information security officers. The employees who do not have insufficient skills in dealing with information security, they can perform well in reducing risk factors (Bulgurcu et al. 2010). In each major business unit, an employee with a skill set of solid risk management and project management can be a good choice to be an information security officer. Likewise, the primary objective is to enforce policies and train the end users for following the procedures made for each policy. Moreover, acceptable use for networks and data on information systems must be communication, as end users can download susp icious codes or emails from the Internet etc. furthermore, if the company decides to outsource its security operations to another company, this will save cost but at the same time increase risks to critical information if no care has been taken for choosing a reliable business partner. Non disclosure agreement must be signed by the service organization and skill evaluation of the staff should also be considered. Furthermore, service level agreements

Community Development Essay Example for Free

Community Development Essay Achieving gender equality and empowering women are necessary to achieve social, economic and political development. Today, girls and women continue to benefit from health and education services with women surpassing men in enrolment and academic achievements in many situations. Women in Malaysia are also more actively involved today in politics and numerous other national initiatives. Malaysia’s commitment and dedication to the advancement of women is evident in many of its programs and policies in the last two decades. In 1985, the Government of Malaysia formulated the National Policy on Women as a guide for women’s participation in the development process. The Policy helps enhance women’s quality of life by overcoming challenges through poverty eradication and education. The stature of women became a primary objective of the 6th Malaysia Plan (1991 – 1995), where a special fund for the development of women became a significant and integral step towards empowering women in Malaysia. Subsequent Malaysia Plans continue to focus on the needs of women with recommendations to advance their position in society. By agreeing to the commitments set forth in the Beijing Platform for Action at the UN Fourth World Conference on Women (1995), the Government promised to 1) enhance the national machinery for womens advancement; 2) increase womens participation in decision-making; 3) safeguard womens rights to health, education and social well being and 4) remove legal obstacles and gender discriminatory practices. In 1995, the Government also ratified the UN Convention on the Elimination of All Forms of Discrimination Against Women(CEDAW). In 2001, the Government created the Ministry of Women and Family Development with a mandate to address issues on women and uplift the stature of women in the country. Malaysia’s Constitution was amended in August 2001 to prohibit discrimination in any law on the basis of gender. The Government continues to play a crucial and supportive role in achieving greater gender equality in the country, by providing a healthy environment for the advancement of women at both national and international arenas. The Ministry of Women, Family and Community Development which is responsible for addressing women’s issues in Malaysia has had its budget increase from RM 1.8 million (US$ 0.5 million) in 2001 to RM 30.5 million (US$ 8.6 million) in 2005, demonstrating the country’s serious commitment to the cause. Future challenges to be considered include: addressing the continued poverty among female-headed households; combating violence against women; raising the effectiveness of gender mainstreaming strategies; reducing women’s risk of contracting HIV; removing attitudinal challenges that impact capacity-building; and raising the level of women’s participation in the labour force, in business and in politics and government. KPWKM is headed by a Minister, currently held by Datuk Seri Shahrizat Abdul Jalil (UMNO). She is assisted by a Deputy Minister, currently held by Senator Heng Seai Kie (MCA). The following departments and agencies are under the purview of the KPWKM: * Department for Womens Development  In 1975, the Government set up the National Advisory Council on the Integration of Women in Development (NACIWID) as the machinery to ensure the involvement of women in development. In 1983, the Secretariat for Womens Affairs (HAWA) in the Prime Ministers Department was established to take over the tasks of the NACIWID Secretariat. From 1997, HAWA functioned as a department under the former Ministry of National Unity and Social Development. In 2001, the Department was placed under the then newly established KPWKM and restructured as the Department for Womens Development (DWD). By 2002, the DWD had set up branch offices in every state in Malaysia.[7] * Social Welfare Department  Initially set up in 1946 as the Community Welfare Department of Malaya, the Social Welfare Department (SWD) has evolved in fulfilling its role in national development. From initially being involved in mitigating the social problems brought about by the immediate post-war period, the role and functions of this department have expanded to cover prevention and rehabilitation services in social issues as well as community development.[8] * National Population and Family Development Board  The National Population and Family Development Board (NPFDB) was established in 1966 to improve the reproductive health status of women and men and encourage family planning. It has since evolved to include policy and advisory roles by assisting planners and programme managers to integrate population and family development into sectoral development programme planning as well as facilitate policy makers to consider population and family development factors in the formulation of national development policies and strategies.[9] * Social Institute of Malaysia  The Social Institute of Malaysia was set up to promote professional and semi-professional training in the field of training and research as well as social education to all social workers from various levels and groups from within and outside the country including non-governmental organizations. It currently operates from a 50-acre (200,000 m2) campus in Sungai Besi that was completed in 2001.

General Ulysses S. Grant :: essays research papers

Not long after fighting had begun in the Civil War, Ulysses S. Grant went back into battle and enlisted in the army. Grant was a great military leader. He combined tactics that were taught to him at West Point with his own knowledge and with what he picked up on from the Mexican War, where he was under the command of Zachary Taylor and Winfield Scott. Grant proved his leadership and strategy when he captured Fort Donelson in Tennessee. This was the first major victory for the Union. This was where Grant said a famous line when the confederate general Simon B. Buckner requested an armistice. General Grant’s answer to this was â€Å"Yours of this date proposing Armistice, and appointment of Commissioners, to settle terms of Capitulation is just received. No terms except an unconditional and immediate surrender can be accepted. I propose to move immediately upon your works.† This is where he gets his nickname Unconditional Surrender Grant. And as a result of this victory, Grant is promoted to Major General. Another important victory for Grant was his victory at Vicksburg. This battle was the deciding factor for the Union taking control of the Mississippi River, which would cut the Confederacy in half. Grant had succeeded in starving out the Confederates in order to capture the city. Grant demanded unconditional surrender from the Confederate commander, Simon Bolivar Buckner. This along with the victory at Gettysburg marks the turning point of the war. Not to long after this, Grant is promoted to Lieutenant General, giving him complete power over all armies. This is when Grant launches his new campaign of Total war, where he is not only at war with the Confederate soldiers, but also with civilians who are helping out the Confederates. He sends General Sherman on his famous march to the sea, where Sherman and his troops burn everything in their path. While this was going on, Grant was attacking Lee’s army, just battle after battle, because Lee had no reserves to replace men who have died, but the Union had many civilians in their reserve.

How Procter and Gamble Moved to Electronic Documents

The Business Problem P&G faced problems managing the vast amounts of paper required for a company that develops drugs and over-the-counter (OTC) medications. Regulatory issues, research and development (R&D), and potential litigation generate even more paper documents and files. As a result, P&G wanted to gain control of its company documents, reduce administrative oversight of its paper documents, reduce costs, accelerate R&D initiatives, and improve tracking and signature compliance. P&G decided to adopt an electronic document management system.When P&G moved to electronic documents, it had to ensure that it could authenticate digital signatures and build signing and storage processes into its daily workflow. Further, P&G’s legal department wanted to ensure that it had a legally enforceable signature on file. The IT Solution P&G turned to IT integrator Cardinal Solutions (www. cardinalsolutions. com) to implement Adobe LiveCycle Reader Extensions and Adobe LiveCycle PDF Gene rator (www. adobe. com), which would function with P&G’s eLab Notebook program.These software packages would manage, review, approve, and sign the huge volume of R&D information, including files created with Microsoft Word, Excel, and PowerPoint. P&G adopted the pharmaceutical industry’s Signatures and Authentication for Everyone (SAFE) BioPharma Association standard. This standard was established to help companies go paperless and still interact with regulatory authorities on a global scale. P&G’s initiative focused on implementing methods to manage digital signatures and creating a method to confirm the identity of the signer.The company’s IT and legal departments agreed that the standard met the company’s business needs and risk requirements. Instead of recording information from experiments in paper notebooks – along with numbering each page, signing it and having a witness sign it – researchers can now use word processing program s, spreadsheets, presentation software, and similar tools to generate project notes and other necessary documentation. After a researcher has collected all the data, LiveCycle PDG Generator creates a PDF document and prompts the person creating the file to add a digital signature.The system requires the use of a USB token for authentication. At that point, LiveCycle Reader Extensions embeds usage rights within the document. The Result Today, once a digital signature is added to a file, an auditor can immediately view the document and all activity related to the document. The auditor right-clicks on the signature and views the entire audit trail. The signature can also be appended as a last page of the file so that it can be shared externally when necessary, such as in a court of law.The system saves P&G time and money. Researchers no longer have to spend several hours per week archiving paper files from their experiments. In addition, P&G is able to quickly retrieve large volumes of data that may be needed for government regulators or business partners. P&G projects that it will achieve tens of millions of dollars in productivity gains by using the system. The typical employee will save approximately 30 minutes of signing and archiving time per week..

About penm - Free Essay Example

Sample details Pages: 17 Words: 5204 Downloads: 4 Date added: 2017/06/26 Category Statistics Essay Did you like this example? Final Review Memorandum Newco JSC (Newco) Background PENM is seeking approval to invest up to DKK 115 m (USD 22 m), and minimum DKK 78 m (USD 15 m), in Newco, a fast growing, consumer orientated holding company with investments in Techcombank and Masan Food, with new, related, business areas to be added over time. With a 20% holding in Techcombank, Newcos assets are dominated by its bank investment, measured at current OTC prices, 2/3s of the market value of Newco relates to Techcombank. The investment represents PENMs only opportunity to invest, indirectly, in one of Vietnams most attractive unlisted bank, Techcombank.. Don’t waste time! Our writers will create an original "About penm" essay for you Create order 1. Update since CRM Since writing the CRM, PENM has performed the following due diligence activities: Interviewed senior management of Techcombank, including the CEO, COO, Deputy Executive and Head of Treasury Interviewed some of Techcombanks advisors, including McKinsey Co, a consulting company assisting the bank with product and branch development strategies Interviewed PwC auditors, auditors of the two largest publically traded joint stock banks (ACB and Sacombank) as well as the largest of the state-owned banks (Vietcombank). Interviewed the CEO of Masan Food Performed additional financial analysis on Techcombank, Masan Food and the new business areas Signed a detailed term sheet and started contract negotiations This FRM incorporates the most significant findings from this due diligence and provides an update on the deal structures as well as PENMs valuation. As noted in the CRM, as a successful result of our close cooperation with Masan Food and Eurowindows, PENM has been presented with a unique opportunity to invest in Newco before other local funds have access to the deal. In order to take advantage of this access, the transaction needs to be closed by 15 September, subject to normal Board approvals. 2. Deal structure The establishment of Newco will follow the below steps: Establishment of Newco though a share swap of Techcombank and Masan Food shares PENMs investment Investment by foreign funds, reportedly Carlisle and TPG Newco will be established by owners of Techcombank and Masan Food shares, principally Masan Investment, Dr Quang (Masan Food Chairman) and Mr Ho Hung Anh (Techcombank Chairman), swapping their holdings for shares in Newco. Upon completion of the swaps Newco will have a direct holding of 20% in Techcombank (with an option for a further 10% direct investment, when the law allows, and indirect control of 40% of the banks share capital) and a minimum 55% holding in Masan Food. PENM will initially invest up to USD 22 m in new share capital for a 5.61% stake in the company. Furthermore, in order to: (1) protect PENMs investment in Masan Food from the risk of not being part of the company that is setting its strategy; and (2) enhance PENMs exit opportunities in the Masan Food, should Newco be listed in the future, PENM has obtained an opportunity to swap its shares in Masan Food for shares in Newco in 2 tranches. In order to have the opportunity to put our Masan Food shares, it has been necessary to give Newco a corresponding call option. The valuation of PENMs Masan Food shares under this arrangement will be a minimum USD 375 m, which compares favourably to PENMs entry price of USD 250 m (up 50%) and Mekong Capitals entry price from March 2009 of USD 320 (up 17%). The terms of the swap arrangement: Duration Masan Food Valuation (USD m) Newco Valuation (USD m) First put 12 months from closing 375 375 + 1,000 net debt First call 12 24 months after closing 375 Market price on stock exchange Second call 15 months from closing 400 within 12 months 415 from 12 15 months Market price on stock exchange Second put 15 21 months from closing 450 Market price on stock exchange The swap gives rise to the following ownership interest scenarios for PENM in Newco, before any dilution for additional capital raising activities: Investment / Share swap PENMs ownership interest in Newco Initial cash investment Up to USD 22 m 5.61% # 1st Option PENM swaps 3,150,000 shares in Masan Food 10.07% 2nd Option PENM swaps the remainder of its shares in Masan Food 14.23% * #: At an initial pre-money valuation of USD370 m (55% x $400 m + 20% x $1,000 m $50 m net debt) *: Assumes valuation of Newco is the same as entry Swap arrangement: Masan Food Valuation (USD m) Newco Valuation (USD m) First put 12 months from closing 350 before listing of Newco 300 after listing of Newco 350 + 1000 net debt First call 12-18 months from closing 350 Market price on stock exchange Second call 15 or 18 months from closing upto First put excersied before or after listing 400 within 12 months 415 from 12 15 months or 12 18 months Market price on stock exchange Second put 15-18 or 18-24 months from closing upto Second call period 450 Market price on stock exchange Following ownership interest scenarios for PENM in Newco: Investment/Shareswap PENMs ownership interest in Newco Initial cash investment Up to USD 22 m 5.57% # First put PENM swaps 4,410,000 shares in Masan Food 11.49% First call PENM swaps 4,410,000 shares in Masan Food 11.11% * Second call PENM swaps remaining shares in Masan Food 13.62% * or 13.70% * Second put PENM swaps remaining shares in Masan Food 13.88% * #: At an initial pre-money valuation of USD3 71.6 m (54.7%x $400m + 20%x$1,000 m $47.2 m net debt) *: Assumes valuation of Newco is the same as entry Following the completion of its transaction with PENM, Newco will look to raise an additional USD 30 40 m from foreign based financial investors Newco is currently in discussions with Carlisle and TPG. Negotiations with these parties are ongoing and we understand that the entry valuation of Newco will be approximately 15% higher than PENMs entry valuation, reflecting a 25% premium to the value attributed to Masan Food. Should the additional USD 40 m be raised at the above mentioned valuation, PENMs ownership interest, should all shares in Masan Food be swapped, will be diluted to 13.17%. 3. Financial performance The financial performance of Newco is based on the underlying financial performance of the businesses in which it has invested, including: Techcombank Masan Food New business areas 3.1 Financial performance Techcombank Balance sheet Techcombank USD m 2008 Actual June 2009 2009 Estimate 2010 Forecast 2011 Forecast Cash on hand 87.0 56.6 101.4 123.5 161.2 Balance with the state bank 127.6 104.6 157.8 191.1 248.5 Balances with financial institutions 869.3 912.3 1,199.7 1,299.9 1,712.2 Investments 638.1 635.1 857.6 1,043.8 1,362.7 Net loans and advances to customers 1,445.5 1,829.2 1,940.8 2,523.0 3,279.9 Fixed assets 32.0 35.3 43.1 52.4 68.4 Other assets 82.1 185.0 110.4 134.4 175.4 Total Assets 3,281.6 3,757.9 4,410.8 5,368.1 7,008.3 Balances with other financial institutions 498.3 476.7 529.3 644.2 841.0 Deposits from customers 2,367.3 2,811.3 3,349.5 4,058.5 5,277.4 Other liabilities 103.4 93.2 137.4 163.8 249.4 Total Liabilities 2,969.1 3,381.2 4,016.2 4,866.5 6,367.8 Share capital 261.4 261.4 261.4 261.4 261.4 Retained earnings 35.4 57.1 96.2 187.2 305.3 Reserves 15.8 58.1 37.0 53.0 73.9 Total Liabilities Equity 3,281.6 3,757.9 4,410.8 5,368.1 7,008.3 YTD June 2009, Techcombanks net loans increased by 29%, compared to 2008, which outstripped market growth of 17% across the sector. Loan growth is expected to be lower in the second half of 2009 as a result of the expiration of the 4% government interest rate subsidy program, expected increases in base rates to curb increasing inflationary concerns and government efforts to limit national annual credit growth to 30%. As a result we expect full year loan growth to be 35% in 2009. In 2010 and 2011 we forecast annual growth in loans of 30%, which will be supported by network expansion, with the number of branch / transaction offices to increase by 45% from 2008 to 2010. In June 2009 non-performing loans (NPLs), decreased from 2.56% in 2008 to 2.54%, reflecting improved economic conditions. We forecast NPLs to remain at around 2.5% of the gross loan portfolio, while increasing the provision coverage of those loans to 70%, up from current levels of around 50%. Techcombanks solid balance sheet, at 2008 loans represented 66.5% of deposits, which was among the lowest of all top tier Vietnamese banks, has allowed it to capitalise on other banks demand for funding, driven by loan growth by being a significant net lender in the interbank market. Historically, this has been a very profitable asset pool for the company. We expect that the company will continue to be an active player in the interbank market and forecast that 70% of its deposit base will be used for customer loans. Investments are mainly bonds and other debt instruments issued by Vietnamese financial institutions, the government and corporations, a large number of which were acquired at heavily discounted prices in 2008. Through network expansion and offering innovative products, Techcombank has been able to develop customer deposits, which are mainly from individuals, into its dominant finding source, accounting for 85% of total funds mobilisation at June 2005, up from 80% in 2008. We expect this to continue going forward, to be supplemented with funding from interbank borrowing and by issuing bonds. Techcombanks capital adequacy ratio (CAR) stood at 14% at the end of 2008, falling to 10.7% at June 2009, we forecast it to remain at around 11 13% in the forecast period, significantly above the 8% recommended by Basel and required by the SBV. Profit and loss Techcombank USD m 2008 Actual June 2009 2009 Estimate 2010 Forecast 2011 Forecast Interest income 345.5 n.a. 354.9 442.5 563.3 Interest expenses (247.7) n.a. (228.4) (290.9) (366.8) Net interest income 97.8 61.2 126.5 151.6 196.5 Net fee and commission income 26.8 25.7 36.0 46.8 60.9 Trading, treasury and other income 58.1 16.3 44.1 53.7 70.1 Total operating income 182.8 103.2 206.6 252.1 327.4 Operating costs (48.2) (29.1) (62.0) (75.6) (98.2) Depreciation (2.3) (1.7) (3.2) (3.8) (5.0) Net operating income before provisions 132.2 72.4 141.5 172.6 224.2 Provisions (42.4) (15.1) (32.0) (30.0) (39.0) PBT 89.8 57.3 109.5 142.6 185.2 Tax (24.0) n.a (27.4) (35.7) (46.3) PAT 65.7 n.a 82.1 107.0 138.9 PAT % 36.0% n.a 39.7% 42.4% 42.4% Note: USD 1 = VND 18,000 (different from the change rate in the info memo) n.a. Not available At June 2009 the banks net interest margin was 3.6%, down from 4.1% in 2008. Over the forecast period we estimate that this will fall to 2.55% as the market becomes more competitive, leading a CAGR increase in net interest income of 19% from 2008 to 2011 to USD 563 m. Techcombank will continue its concerted efforts to increase per customer revenue by pursuing fees and commission income from letters of credit, guarantees, FX and commodity futures as well as developing new products. In 2008 Techcombank booked USD 63 m in realised gains from the sale of bonds purchased in the high inflation environment that existed in mid-2008, a further USD 30 m has been booked in the year to June 2009. While the size of these gains are not expected to be recurring, at December Techcombank had USD 590m of bonds on its balance sheet included in investments, a large portion of which were purchased at heavily discounted rates. In accordance with VAS (Vietnamese Accounting Standards) no gains relating to these bonds have been booked to the income statement. The banks strong balance sheet mean that it should be able to take advantage of such opportunities, should they appear in the future, however, in the forecast period, we expect income from these investments to be at half the current level and together with treasury, investment and trading income, represent 20% of total operating income. We expect the write-off of bad debts to be lower in 2009, compared to 2008 as a result of an improvement in economic conditions. As noted above, we forecast the provision balance will cover 70% of the total NPL balance, which is significantly higher than the historical rate of around 50%. Historically, Techcombank has had a low operating cost ratio, accounting for 26.4% of total operating income in 2008, the lowest of all its peers. Our forecasts, conservatively, include an increase in these costs to 30% of income as competition for staff intensifies in the increasingly competitive environment. As a result of this low cost base we expect PAT to double from 2008 to 2011 to USD 139 m. 3.2 Financial performance Masan Food Profit and loss Masan Food USD m 2008Actual YTD June 2009 2009FRM 2009 Estimate 2010Forecast 2011 Forecast Sales 108.6 83.3 210.1 210.8 296.2 362.5 COGS (71.9) (56.0) (139.5) (141.2) (200.3) (245.4) Gross profit 36.7 27.3 70.6 69.6 95.8 117.0 Gross Margin 33.8% 32.8% 33.6% 33.0% 32.4% 32.3% Sales expenses (8.5) (9.4) (27.3) (23.8) (34.1) (42.4) Admin expenses (5.1) (3.1) (6.3) (7.9) (10.4) (12.7) EBITDA 23.1 14.8 37.0 37.9 51.4 61.9 EBITDA % 21.3% 17.8% 17.6% 18.0% 17.4% 17.1% Depreciation (2.9) n.a.* (3.0) (2.0) (5.9) (7.0) EBIT 20.2 15.0 34.0 35.9 45.5 54.9 Interest 4.4 (0.9) (3.0) (2.0) (2.6) 1.1 Other income 2.1 2.1 0 0 Tax (3.1) (1.4) (6.2) (6.8) (8.6) (11.2) PAT 21.5 14.7 24.8 29.2 34.3 44.8 PAT % 19.8% 17.7% 11.8% 13.8% 11.6% 12.4% Note: YTD June 2009 only includes domestic income, no income from export sales are recorded *: Depreciation not disclosed at June 2009 YTD June revenue, USD 83.3 m is 120% higher than the corresponding period in 2008, largely due to growth in fish sauce (up 218%), due to the introduction of a mass market label/brand in Q4 2008, and instant noodles, up USD 15 m, following the successful nation-wide launch of Tien Vua, a mass market offering in March 2009. YTD PAT, USD 14.7 m, is 165% higher than 2008, due to improved gross margins (YTD 2009: 34% vs YTD 2008: 31%), as a result of lower raw material prices, which is slightly offset by higher sales costs for fish sauce and instant noodles. Other income of USD 2.1 m is income earned on the interest rate differential arising from the governments interest rate subsidy program. Based on the particularly strong June results, we have increased our initial outlook (from November 2008) for 2009, increasing our PAT estimate from USD 24.8 to USD 29.3 m, representing a 36% increase on 2008. Our change in outlook reflects lower than expected increase in sales costs as a result of deeper penetration of Tam Thai Tu, Masan Foods mass market fish sauce, in rural and provincial areas. Privately, management expect that 2009 PAT will be USD 35 38 m. Consistent with what we have previously reported, in 2010 and 2011 sales as expected to increase by 40% and 22%, respectively, driven by growth in the following segments: fish sauce -Masan Food is focused on increasing market share in this large segment by increasing distribution in provincial and rural areas and offering an even more inexpensive line for those customers. By 2011 Masan Food hopes to have around 50% market share. instant noodles similar to fish sauce, Masan Food will continue to broaden its distribution to rural and provincial areas and offer line extensions of its mass-market noodle line. In doing so Masan Foods estimated market share will increase to around 15% in 2010, from around 8% in 2009 and account for 30% of total revenue. Currently the revenue forecast does not include any sales from new categories, including granules, frozen food or beverage (refer to Masan Food due diligence for further details). Nor does it include possible changes in distribution as a result of new activities in Newco. The increased contribution of instant noodles, the gross margin for which (30%) is less than that earned on other sauces (40%), will have a negative impact on profitability going forward as will higher depreciation as a result of investments in additional capacity in 2009 and 2010. Conversely, savings in financing costs in 2011 help improve the PAT%. Balance Sheet Masan Food USD m 2008 Actual 2009 Estimate 2010 Forecast 2011 Forecast Assets Cash Cash Equivalents 5.5 2.1 3.0 42.5 Accounts Notes Receivable 6.4 23.1 32.5 39.7 Inventories 10.4 17.4 24.7 30.3 Other receivables 44.6 32.8 21.5 11.6 Net Property, Plant Equipment 14.7 45.6 54.2 61.0 Other long term assets 15.1 10.6 10.6 10.6 Total Assets 96.6 131.5 146.3 195.6 Liabilities Short Term Borrowings 16.8 35.7 5.4 Accounts Payable 9.0 19.3 27.4 33.6 Other Current Liabilities 11.9 12.1 13.0 16.6 Long Term Debt 1.9 0.5 0.5 0.5 Other Long Term Liabilities 0.1 0.1 0.1 0.1 Shareholders Equity 56.9 63.8 99.9 144.7 Minority Interest Total liab. shareholders equity 96.6 131.5 146.3 195.6 The increase in net debt from USD 26.1 m in 2008 to USD 34.1 m in 2009, is a result of capex is in the region of USD 30 m. The majority, USD 24 m, of the spending is to be allocated to additional noodle capacity, both in HCMC and in Hanoi, with the remainder being spent on Vietnams fished fully automated fish sauce line, USD 5.5 m, in Q4, and moving of the chilli sauce line from the old factory to the new facility in Binh Duong. The capex forecast for 2010 and 2011 does not include expenditure for new facilities in new business areas, including beverage. The most significant other receivable is USD 17.4 m is a convertible bond owed by Masan Investment. The majority of this exchangeable bond was distributed to shareholders as a dividend from 2008 profits. According to our investment agreement, PENM transferred our rights to most of these bonds to Masan Investment (parent company) for the shares purchased in the initial transaction, the remainder will be part of any swap arrangement. Masan Food maintains relatively lean working capital levels, offering 40 days credit to its customers (distributors) and maintaining relatively low levels of finished goods such that total raw material and finished goods represents a little over a month of production. 3.3 Financial performance -New business areas Below is PENMs very early estimate for the earnings potential of the new business areas. These business areas are closely related to Techcombank and Masan Food activities and it is envisaged that there will be close cooperation within the group to ensure that these business areas realise their full potential. We have not included earnings from these businesses in our forecasts or our valuation. 3.3.1 New business areas logistics Logistics financial highlights USD m 2010 Estimate 2011 Estimate 2012 Estimate Revenue 8.3 17.8 21.3 EBITDA % 5% 5% 5% PAT (0.4) (0.6) 0.4 CAPEX 8.0 7.0 Newco will partner with Dubai-based Gulf Agency Company (GAC) (www.gacworld.com), a leading provider of provider of shipping, logistics, marine and related services, to establish a full scale logistics operation in Vietnam. Initially, the new joint venture, which Newco expects to own a 70% stake in, will distribute Masan Food products. The above estimate assumes that the new venture will carry 40%, 70% and 80% of Masan Foods outbound volume in 2010, 2011 and 2012, respectively. We have not included any new, third party business. 3.3.2 New business areas -branded rice Branded rice financial highlights USD m 2010 2011 2012 Revenue 2.0 7.0 15.0 Gross profit 0.6 2.1 4.5 Gross margin 30% 30% 30% PAT (0.5) 0.25 1.45 CAPEX 8.0 Newco will invest between USD 3 5 m in a joint venture with Olam International (https://www.olamonline.com/), a Singapore-based global leader of supply chain management for agricultural products, for a new factory to produce branded rice. Olam, based partner will assist with processing technology and the development of export markets while Newco will provide an arms-length distribution agreement with Masan Food. 3.3.3 New business areas -commodity exchange Newco will team up with Financial Technologies Group (www.ftindia.com), one of the worlds largest providers of IT platforms for equity and commodity exchanges, with operations in India, the Middle East, SE Asia and Africa, to establish a local commodity exchange in Vietnam. The exchange will initially focus on the trading some of Vietnams largest agricultural exports: rice; coffee; and cashews and will use Techcombanks back office as well as leverage from its corporate customer base, a quarter of which are agriculture traders and processors. Currently, there is no financial forecast for this business area. 4. Newco Opening balance sheet and consolidated PL Newco estimated opening company balance sheet USD m 2009 Investments 420 Total assets 420 Debt 50 Share capital 370 The opening balance sheet reflects the 2 investments in Masan Food and Techcombank as well as the USD 50 m in debt, which has used in acquiring some of the shares. Newco consolidated profit and loss USD m 2009 Estimate 2010 Estimate 2011 Estimate Revenue Masan Food 210.8 296.2 362.5 Branded Rice 2.0 7.0 Logistics 17.8 21.3 Commodity exchange n.a. n.a. Total revenue 210.8 315.9 390.8 PAT before minorities 29.2 33.4 44.5 Elimination of minorities (13.1) (15.2) (20.1) Techcombank 16.4 21.4 27.8 PAT after minorities 32.5 39.6 52.2 n.a. not available The above is our estimate of Newcos consolidated income statement for the forecast period. It includes the full earnings of Masan Food as well as the new business areas, with minority holdings being eliminated after PAT. Techcombank, an associate of Newco, is equity accounted. 5. Valuation The negotiated valuation for PENMs cash investment in Newco has been based on: an equity value of Techcombank of USD 1,000 m an equity value of Masan Food of USD 400 m net debt of USD 50 m Giving rise to the following pre-money valuation: USD m Pre-money negotiated valuation PENM cash flow valuation PENM multiple valuation (PER) Techcombank (20%) 200 200 240 245 410 Masan Food (55%) 220 220 248 250 320 Net debt (50) (50) (50) Pre-money equity value 370 370 438 445 680 No value has been assigned to the new business areas. 5.1 Valuation of Techcombank An equity value of USD 1,000 m for Techcombank, equates to a PE (2009) of 12.2 x (2008 14.1 x) and a P/B (2009) of 2.5 x (2008 3.1 x). In the context of other listed banking companies in Vietnam, the Techcombank valuation is lower than its peers: Techcombank Peer Group Analysis PER P/B 2008 2009 2008 2009 Local Vietcombank 27.0 x 20.9 x 5.0 x 4.6x Vietinbank 24.6 x 24.8 x 3.6 x 3.3 x ACB 16.9 x 14.9 x 3.8 x 4.0 x Sacombank 19.7 x 16.2 x 2.4 x 2.6 x Regional (Indonesia) Bank Mandiri 16.0 x 14.7 x 2.8 x 2.5 x Bank Negara 24.3 x 12.3 x 1.9 x 1.7 x Bank Rekyat 12.9 x 16.0 x 4.1 x 3.4 x Bank Danamon 9.8 x 21.9 x 3.5 x 2.5 x Our cash flow analysis, which is based on the above financials and assumes average loan growth of 22% from 2008 2014, a net interest margin of 2.5% and a terminal value of 8 x 2014 PAT, discounted at 20% p.a., supports an equity value of between USD 1,000 1,250 m. 5.2 Valuation of Masan Food The valuation of USD 400 m for Masan Food equates to an EV/sales of 1.9 x 2009 (2008 3.0 x), EV/EBITDA of 10.2 x (2008- 14.1 x) and a PE of 14.5 x 2009 (2008 19.1 x). Compared to local and regional peers, the above valuations appear reasonable, particularly given the current growth rate of the company. Masan Food Peer Group Analysis PER EV/EBITDA 2008 2009 2008 2009 Local Vinamilk 29.4 x 15.5 x 11.5 x 9.6 x Regional China Foods 28.6 x 20.1 x 11.5x 14.1 x Nestle (Malaysia) Berhad 22.9 x 21.2 x 13.3 x 12.7 x Fraser Neave Holdings Berhad 20.3 x 16.2 x 8.9 x 8.3 x An equity value for Masan Food of USD 400 m is significantly higher than PENMs original entry value of USD 250 m (60%) and than the reported USD 320 m (25%) that Mekong Capital paid in March 2009. Our cash flow analysis, which is based on the above financials, forecast until 2018, with a perpetual growth rate of 5% p.a. and an annual discount rate of 20%, supports an equity value of between USD 400 450 m. 6. Limited due diligence results 6.1 Limited due diligence results Techcombank Our due diligence findings were based on interviews, with the assistance of David Hexter, Advisory Board Chairman, with senior Techcombank management (CEO, COO, Head of Treasury and Deputy Executive), as well as McKinsey Consulting, who are currently advising the bank, the CEO of Masan Investment and PwC, the auditor of the largest state-owned and listed joint stock banks in Vietnam. Those interviews confirmed that Techcombank is a well managed bank, strongly positioned to take advantage of the growth potential in the under-developed Vietnamese banking sector. The key findings from those meetings include: The cooperation with HSBC has been successful to date through the staff seconded to Techcombank (currently approx. 20) and representations in all Boards and committees, HSBC is very active in both the day-to-day management as well as at strategic levels in the bank. It appears that the cooperation has been particularly effective in improving/strengthening internal systems and staff development. Having just received its full banking licence, there could be concern that there is a conflict between HSBCs own activities and that of Techcombank, however, HSBC remain focused on providing services to locally based multi-nationals (MNCs) and foreign companies and individuals and not in Techcombanks of affluent local individuals and local Small Medium Enterprises (SMEs). Management is strong by local standards, although challenges remain By local standards, Techcombanks management and staff are strong, however, there is still a gap when compared to regional competitors. Recognising the gap, the bank has recently recruited a number of experienced foreigners (in addition to the secondments from HSBC) to the senior management team, including the roles of COO, Head of Treasury, Head of Sales and Head of Marketing. Despite this, remaining challenges include improving branch productivity, staff training and staff retention as still present. The Vietnamese banking sector is tightly regulated by the State Bank of Vietnam (SBV) As previously noted, the SBVs control is wide reaching, regulating everything from maximum loan rates banks can charge to loan growth and foreign ownership rules. Its control has the ability to significantly influence the development of the market, as evidenced during the high inflationary period during 2008, however, the development of a stable financial sector appears to be one of the governments focus areas. One of the key risks for the sector is the devaluation of the VND- as evidenced by Moodys recent downgrading of a number of Vietnams banks (including Techcombank and ACB, the leading listed joint stock bank) credit ratings, the devaluation of the VND is one of the greatest near-term risks in the banking sector. Techcombank, well aware of the risk, does not trade FX and limits inter day FX positions as part of its arbitrage services to 5 10% of its capital. Techcombanks level of collateralisation is high -Consistent with other local banks, Techcombanks loan portfolio is highly collateralised. At June 2009 99% of the banks loan portfolio was secured by collateral. By Vietnamese standards, it applies a conservative appraisal policy, and at June 2009 the appraised value represented 2.2 x the total loan portfolio, with the majority of the collateral being held in real estate and land use rights. This high level of collateralisation is also reflected in the banks credit processes, which appear to be more asset based than cash flow based. Techcombank has a low level of NPLs with adequate provisioning-Techcombanks proportion of NPLs to total loans is currently at 2.5%, showing a downward trend, this compares local competitors, Eximbank (4.7%) and Vietcombank (3.5%) who have a similar loan portfolio structure, with a high proportion of loans to corporations, who generally are slower in making interest payments. To cover potential losses in excess of the collateral held against those loans, at June 2009, Techcombank recorded provisions (specific and general) equivalent to 53.7% of its total NPLs, up from 48.7% at December 2008. Based on historical trends, these provisioning levels appear to be adequate to cover any write-off exposure. We do not believe that Techcombanks NPL level would be significantly higher if recorded under IFRS the classification of loans under Vietnamese regulations (VAS) is based on outstanding repayment of interest. This differs from IFRS, which uses an impairment based approach, taking into account such factors as the financial state of a company and the industry it is in. This difference allows Vietnamese companies to distort the allocation of loans into various categories by rescheduling repayment dates. However, the banks management has repeatedly attested that it does not undertake rescheduling and insisted that loans are classified automatically in its banking system. A recent survey by Fitch, a credit ratings agency, found significant differences in the level of NPLs under IFRS and VAS for the state-owned banks due to legacy loans to state-owned corporations. Although it did not have access to the joint stock banks accounts, Fitch concluded that such differences did not plague the joint stock banks, who were focused on SMEs and retail customers. Our discussions with PwC, auditor for 2 of the largest listed joint stock banks and largest state-owned bank, corroborated these findings and lead us to believe that the banks NPL level would not be significantly higher if IFRS was applied. It has not been possible to interview the Head of Risk Management or Techcombanks auditors, KPMG. We have, however, discussed risk management with Newcos Techcombank responsible (author of the Techcombank info memo) and PwC, the leading bank auditor in Vietnam. 6.2 Limited due diligence results Masan Food Our due diligence was limited to a discussion with Masan Food CEO, Mr Than, who was upbeat about the future of the company and reaffirmed his commitment to developing Vietnams leading a consumer-focused food and beverage company by entering new markets and defending its dominant position in existing markets. The main conclusions from those discussions were: The companys near term food strategy has been finalised In 2010 Masan Food will focus on marketing a new Vietnamese granule to be used in combination with fish sauce. While granules are currently available in the market, Masan Foods new marketing push is aimed at changing consumer behaviour. Furthermore, the company intends to enter the frozen food market in 2010, starting with an acquisition of a frozen seafood company a category for which no strong brand exists and where Masan Food can continue its food safety message adopted previously. The companys beverage strategy is in advanced stages of development, but not yet in place Masan Food has a vision of being a large food and beverage company and is currently exploring opportunities within beer, ready-to-drink (RTD) tea, water and fruit juices. Of these the most advanced is beer, where the company is considering a partnership with Deer Chang of Thailand in a joint venture that would require an investment of USD 40 50 m. Senior management strongly believe that, due to lack of focus consumer from the major local players, SABECO and HABECO, there are significant opportunities in building a new Vietnamese mid-market brand, focusing on the take-home market (which accounts for over 65% of consumption). Entry into this new category will be a significant challenge for the company and will require a new team to be hired into the company. Managements biggest near term challenge is remaining focused key to the companys success and profitability, has been its ability to derive value from very few stock keeping units (SKUs). As new markets are added Masan Food needs to ensure that its marketing competencies are not spread too thinly. The market is increasingly competitive Asian food suppliers are considered a greater threat than the international players, Unilever and PG, as a result of their ability to localise recipes and consumer insight. Masan Foods scale, particularly in fish sauce, and local marketing expertise, should help it in defending its position in the market. Operational issues still exist consistent with what we noted in our original due diligence, Masan Food continues to have a few operational issues including a poor production set-up (even the new factories are too cramped), an over-complicated internal supply chain and lack of support (operations and finance) from a strong IT system. A new ERP system should be in place by the start of 2010, however, the remaining operational issues still need to be addressed. 7. Key terms Transaction Up to USD 22 m in new capital (VND 394,727,571,000), representing an expected ownership interest of 5.5761%. Use of proceeds Repayment of debt, investment in new business areas and further capital increases in Techcombank. Conditions to subscription Receipt of all relevant evidencefor the ownership structure and approval of the transactions, including Business Registration Certificates, Share Certificates and excerpts of Shareholders Register Books,GSM resolutions, Board resolutions,and due diligence conclusions, accounts etc. satisfactory to PENM and PENM Board approval. Key covenants, reps and warranties Standard covenants, representations and warranties found in this type of transactions in Vietnam. Shareholder rights PENMs minority rights will be limited to normal rights included in the company charter, we will, however, received 1 Board position for a 2 year period after PENM exercises its first put option and as long as PENM holds 8% of the outstanding equity in Newco, excluding any dilution from the issuance of new shares. Restrictions Lock-up of 1 year after closing. Right of first refusal (one-sided) relating to PENMs shares in Newco gained from the swap arrangement, during the swap period. Indemnity Maximum liability, thresholds and Gross-up of Payable Amounts (gross up to ensure that theindemnified party receives and retains a net sum equal to the financial loss actually suffered). Exit Through listing or trade sale. 8.Key risks Key risks Comments Mitigation Limited influence in Newco Medium: The presence of a dominant majority owner and the possibility of future capital raising may mean that, despite Board representation, PENM has limited influence in the decision making process of Newco Use close contacts already forged with owners and align interests with other funds. An eventual listing would make Newco an easy exit Listing of Newco Low / medium: If Newco is listed, it is uncertain how the market will react to a group that combines banking and food assets. Diversified conglomerates are not unusual in the Asian context so no significant discount is expected Bank collapse similar to Europe / US Low: Despite being unaffected by the recent turbulence, there is a risk that the Vietnamese banking sector experiences similar issues as has been seen in Europe and the US Complex derivative instruments are not widely used in Vietnam, banking sector is strictly regulated by the SBV and has little financing on the international interbank market Masan Food not maintaining earnings momentum Low: The valuation of Masan Food requires the company to maintain its momentum in earnings growth The same risk exists on our current investment in Masan Food. The company also has a strong pipeline 9. Proposal PENM is seeking approval to make up to DKK 114,975,0005 m (USD 22 m), and minimum DKK 78 m (USD 15 m), investment in Newco for a 5.5961% stake.