Hotel energy management Essay Example | Topics and Well Written Essays - 3000 words

Hotel energy management - Essay Example We can ask the staff to be less friendly and visible or the reverse,'' he said. (Thomasson, 1) ''The changes must be small. If you were making changes every day it would be too disruptive.'' (Thomasson, 1)The stylish new facility has self-service tills that allow diners to scan their lunch while they and their trays are being weighed by a set of scales built into the floor. From a control room, researchers can direct cameras built into the ceiling of the restaurant to zoom in on individual diners and their plates. These are just a few examples of the way state of the art facilities can lighten up the customer world and add to the competitive edge. One must keep in mind that Australia attracts people from different parts of the globe. To understand the particularities of taste and comfort it becomes imperative that a detailed research support system is created to keep the hostel industry up to date. It becomes necessary for state of the art facilities to strike a balance between the t raditional and the modern, this fine balance is the key to competitive advantage in the market. (Fletcher, 188) Today's hot technology topics, including e-commerce, wi-fi, electronic payment systems, Web site design, data security, and identity theft have to be included in any discussion on technology and the way it influences the hospitality industry. The new age customer even while unwinding wants to be connected to the technological appendages it carries during the ordinary work hours. Moreover the level of comfort is often measured by the smooth functioning of the technology that a particular hotel is able to provide. One important aspect is to not make the technology involved overtly perceptible. It is important to keep the intricacies of the technology covered by a gloss of easy comfort. (Deb, 323) 2. New facilities will involve require substantial investments by hotel. How would you justify making such an investment The rate of technological input is directly proportional to the revenue generation. Investment must be and should be justified because of the competitive advantage state of art customer facilities will bring and the edge that technological inputs herald. Investment has to be put in context of the overall customer behavior pattern and the society at large. A society that breathes and lives on the micro physics of technological pervasiveness cannot imagine its hospitality industry to be devoid of the technological drive that characterizes the broader society. Profits from the hospitality industries will only start to assume substantial proportions once the technology and the comparative advantage are welded together to create an

Changes in Holography

Changes in Holography 001 Looking Back, Moving Forward How was 2004 for you? For the industry as a whole, reviewing the developments that we covered last year in Holography News, we can conclude that it was a good year for most, with many positive developments that set the scene for 2005 and beyond, but with sufficient clouds on the horizon to prevent any complacency. In terms of markets, in the high security arena the growth of holograms on banknotes continues apace (see page 3) and this will continue to be key market notwithstanding the recent news that the new $100 and other denominations will not, in all likelihood, include a holographic feature. In other high security markets, passports took something of a back seat, for holograms at least not because of technology concerns but because of the current pre-occupation with biometrics. But elsewhere in document protection, AAMVAs specification of holograms on all US driving licences was a significant boost for the industry, while the tax stamp market continues provide significant high volume opportunities for suppliers. There were few major developments in brand protection although the use of holograms as the prime authentication feature on a new labelling program for pharmaceutical products in Malaysia, and the Olympics 2004 merchandising program demonstrated the continuing success of hologram s in these areas. On the downside, the FDAs controversial decision to adopt RFID-based track and trace as the solution to product safety and supply chain management for pharmaceuticals in the US could have unwelcome consequences for the industry should drug regulatory authorities elsewhere in the world follow its example. In packaging, meanwhile, as the Stock watch article in this issue (see page 6) points out, it is barely possible to go out nowadays without seeing holography embellishing shop shelves on all manner of goods from luxury high end to everyday items. Innovation and Development On the technology front, holography continued to demonstrate its inherent capacity for innovation and development. The integration of holograms with other technologies for enhanced security and functionality continued apace examples including Schreiners KeySecure technology, Securiketts Authentikett labels, combined hologram/DNA/RFID labels from ADNAS and Holomex and enhancements to teas scribos Holospot system (see page 8) to name but a few. In the banknote market, De La Rue, Louisenthal and Kurz all launched new security features during 2004 based on combinations of substrate, thread and foil technology. In terms of production, Newmec and Gidue both entered the market with foil applications systems, General Vacuum launched its new compact metalliser while Spatial Imagings new Lightspeed digital hologram printer marked the beginning of new era in large format hologram origination. Aside from the developments in the ‘conventional market for authentication and decorative devices, holography is also beginning to demonstrate its potential for use as a tool as well as a feature. Examples of this potential include Smart Holograms development of reflection holograms as medical diagnostic devices and holographic data storage systems from Optware. Publicly-listed companies were covered in detail in the December issue of Holography News. But there was news from many other qua rters as well, including the expansion plans announced by ABNH, ITW Covid, AFC and Holoshape, and AET Films move into wide embossing on the packaging front. Louisenthal, a major player in the banknote industry, revealed that it now offers full-scale hologram production, including origination, while its former strategic partner in foils, Hueck Folien, joined the ranks of banknote suppliers with its first order for stripes for the Thai currency, signalling a potentially significant new entrant to the market. Its arrival was partially offset by AOTs decision to abandon banknote foils, while the bankruptcy of another high security supplier, Mantegazza, was staved off by its acquisition by Italian security papermaker Fabriano. Outside of the traditional industry centres of Western Europe and North America, the Far East, India and Eastern Europe and the CIS countries continue to play an increasingly important role not just as markets for western companies but as major centres of developm ent in their own right. Russia, a hotbed of scientific innovation, held its first regional conference this year; the commitment amongst Indian companies to quality and industry standards is an inspiration to us all, while all eyes are currently on China, the location for the 2005 Holo-pack†¢Holo-print which will provide the first opportunity for many western hologram companies to witness the strength and scope of this massive market. 2004s Downside So much for the positive. On the downside, RFID continues to position itself, and be viewed in some quarters, as the ‘silver bullet antidote to counterfeiting and diversion, new technologies such as Nanoventions claim their superiority over diffractive features and high quality counterfeit holograms have been discovered on currency notably the euro. The latter, in particular, is leading to a perceptible sense of disenchantment with holograms in terms of their claimed security benefits, technology proliferation and lax standard s amongst suppliers. This topic has been covered exhaustively in recent issues of Holography News and was one of the main topics for discussion at the recent Holo-pack†¢Holo-print conference in Prague, a positive outcome of which was the openness of debate and willingness amongst industry participants to work collectively to address the real issues that are causing concern and counter the misperceptions behind them. All in all, not a bad year for the industry. Provided the concerns leading to disenchantment in some sectors continues to be recognised and addressed with appropriate measures, and provided hologram companies continue to invest in the new products and techniques that form the lifeblood and future of this industry, 2005 could be even better. 002 A Watershed Year for the IHMA In his Chairmans report to the Annual General Meeting of the International Hologram Manufacturers Association, Hugues Souparis identified the launch of the Secure Hologram Producer Certification Scheme as a watershed for the Association (se HN Vol 18 No 3). This Scheme, run in co-operation with Intergraf, should make a significant contribution to improving procedures in the secure hologram field, and help to raise customer awareness of the need to source secure holograms from a qualified secure producer. Souparis company, Hologram Industries, was the first to be certified, but several others have now applied. Another important development during the year had been the negotiations with the Hologram Manufacturers Association of India (HoMAI), aimed at building a strong relationship between the two associations and serving as a model for the IHMAs relationship with other regional or national hologram associations. An important part of the planned relationship was that the IHMAs Hologram Image Register and HoMAIs Hologram Registry would be linked so that all searches for a hologram match on either database would cover both databases, improving the likelihood of identifying matches which resulted from attempts to source illicit copies of a hologram already in use. He reported that Despite the news that the US Bureau of Engraving and Printing is casting its net wider for security features (see page 1), banknotes continue to be a good market for the holography industry. A number of new banknotes have been introduced during 2004, including two major currencies the new Canadian dollar series which features a stripe and the two higher denominations of the newly-designed Japanese yen, each with a patch. Kurz was the supplier for both, the latter understood to be the largest single hologram order for banknotes in the industry. Other currencies that have introduced holograms to all or most of their the Board was in discussion with the China AntiCounterfeiting Technology As sociation (CATA) with a view to CATA establishing a hologram section, and that the IHMA was also in preliminary discussions with Russian producers interested in an industry organisation there. Souparis also reminded members of IHMAs links with Interpol and other international and national police organisations, saying that he hoped to build on these contacts in the coming year. New Board Members In the elections at the AGM, Souparis was re-elected Chairman a post he can hold for another two years. Wilfried Schipper (Hologram Company Rako) was elected as the European representative on the Board, with Alkis Lembessis (Cavomit and Taurus) as his deputy; Umendra Gupta (Holostik India) was re-elected as Asian representative, with Khalid Khanani (Metatex) as deputy. Randy James (Pacific Holographics) was elected as deputy North American representative and since the AGM the Board has co-opted John Halotek (ITW Covid) as the North American representative, there being no accepted nomination at the meeting. Alex Goncharsky (Computer Holography Centre, Moscow) and Ken Traub (ABNH) remain on the board for a second and fourth year respectively. Spreading the Word In addition to the objectives above, a key task for the IHMA in 2005 and thereafter will be to promote the positive benefits of holograms, particularly as authentication devices, as a counter to disenchantment with the technology in certain quarters, notably some parts of the high security sector. A proactive PR campaign, a greater presence at industry conferences, an improved website as a communications tool both for members and users, and a drive to increase the membership and the visibility of the IHMA are all currently underway. The hologram industry is one of the few in the authentication sector to have its own association and the IHMA is committed to building on this position and the strengths that a collective voice can provide for hologram companies. Contact: www.IHMA.org. 003 General Vacuums New Compact Metalliser (Pg # 5) General Vacuum, manufacturer of vacuum metallising equipment, unveiled further details of its new compact Holosecâ„ ¢ metalliser (see HN Vol 18 No 2) at the recent Holo-pack†¢Holo-print conference in Prague. Vacuum metallisers have until now been supplied with production widths of 800-3000m, limiting their use both financially and for production purposes among small and narrow-web hologram producers and forcing these to buy in their film and foil pre-metallised from wide web suppliers. The Holosec was designed to fill this niche and enable narrow-web producers to bring metallising in-house, thereby increasing their security of production and enabling them to take advantage of the specialised treatments the system offers. The Holosec combines the vacuum chamber, unwind and rewind units, plasma pre-treatment, demetallization and evaporation source within one compact unit with a footprint of 2m x 3m. In addition to the conventional aluminium used for holographic films and foils, it can coat silicon oxide, chrome, silver and copper and zinc sulphide for high refractive index films. It also offers pattern demetallisation with in-line registration and plasma pre-treatment that enhances the sur face energy of the films to improve adhesion and hence quality. The run rate varies from 10m to a maximum of 200m per minute. General Vacuum, formerly Valmet and now part of the Bobst Group, declined to give prices for the Holosec, stating that these depend on specification. But it can assumed that they will be considerably lower than the prices for wide web systems. When questioned at Holopack.†¢ Holo-print about the risks of spreading low-cost secure hologram production technology in the market, Dr Nadir Ahmed, who gave the presentation on behalf of his former company, commented that the company would check the legitimacy of customers before supply. To date, two machines have been sold with other orders in the pipeline for early 2005. Contact: Andy Jack, General Vacuum Equipment. Tel: +44 1706 622442; [emailprotected] 004 Menzel Vision System for Web Guiding Menzel, a German company specialising in machinery for finishing and inspection machines for textiles, expanded into similar equipment for the plastic films industry in the late 1960s, and at Holopack†¢ Holo-print exhibited a machine vision system for control of web handling machines for holographic films. The system keeps web lines in register to improve the accuracy and quality of slitting, winding/re-winding, stamping and other hologram finishing processes. Based on the companys experience building textile and film web guiding systems, the hologram guiding system can be set to read the edge of the hologram film or a specific part of the pattern in the hologram the camera scans across the width of the film to record the edge position, the registration mark position or the position of a specified image element. Once programmed, it feeds the image data to a sensor and a controller, which in turn adjusts the web guides to maintain the position of the web. The Menzel vision system for holographic film costs around â‚ ¬17- 20,000, depending on the configuration required. Contact: www.menzel.net. 005 Optical Document Security The third edition of the reference book Optical Document Security is now available from publishers Artech House. Written by Rudolf van Renesse, an expert in the field and editor and co-author of the two previous editions (published in 1994 and 1998 respectively), the book provides a comprehensive and cohesive treatment of all aspects of optical document security, according to its publishers. The books contents have been substantially updated and revised from the previous edition, and expanded to include coverage of additional security features and evaluation. The introduction on the theory of colours is followed by chapters on light interference and diffraction, substrate-based security, printing inks and printing techniques, printed security patterns (including screen decoded images and digital watermarks), diffractive- and interference-based security features, security design and evaluation and an introduction to biometrics. The emphasis is on both the physics of security features and their value in resisting counterfeiting, while the chapter evaluating security design looks at the human factors of first line document inspection. The books 350 pages contain over 270 black and white illustrations, including live security documents, and an appendix with samples of important security features. In addition, a CD-ROM is included which contains all illustrations of the book in full-colour. Author Rudolf van Renesse was senior research engineer in the Optics Department of TNO Institute of Applied Physics in The Netherlands and is now an independent consultant on document security for government departments and banking and financial institutions. He has extensive experience in the areas of holography, optical inspection techniques, and the theory of colors and document security, and is the author of more than 80 publications in these areas, as well as a contributor to Holography News and its sister publications Authentication News and Currency News. Optical Document Security is available at the discounted price  £72/$118 from Artech House www.artech-house.com 006 Display Holography on the Rise Photopolymer is making progress winning projects that perhaps embossed hologram producers might have expected to supply We feel for Nick Hardy and Valerie Love of OpGraphics, the British company that has listed its DuPont photopolymer hologram production equipment for sale on eBay. Op has been producing display holograms for the gift and promotional trade since 1983, originally on Agfa silver halide films, then in the 1990s Nick Hardy started working with DuPonts holographic photopolymer, partly because Agfa ceased production of its holographic films, partly because the photopolymer reflection holograms had lower noise and were more light efficient. Unfortunately, when DuPont Authentication Systems was established as a joint venture with Label Systems Inc, the company decided to restrict the distribution of its unexposed photopolymer film to authorised security hologram producers. Op were among the hologram producers which were given notice of a cessation of supply. They tried to fight this under competition law in the UK, but despite their significant investment in DuPonts production equipment and the time to perfect their processes, this was to no avail. The result: holographic production kit being offered on eBay. The Year of Photopolymer? The timing could not be more poignant as there appears to be an upsurge of interest in photopolymer holograms could 2005 be the year of photopolymer? The year has started well for DAS with NASCARs announcement of its licensed product authentication label, a numbered photopolymer reflection hologram (see page 4). To date, the North American sports licensing authentication projects have been dominated by embossed holograms. NASCAR (the most popular motor sport organisation in North America) may not rival the big national sporting leagues in popularity, but big race meetings such as Daytona and Indianapolis attract large crowds of eager souvenir hunters. Last year, DAS released its izonâ„ ¢ advanced photopolymer holograms, offering instant holo portraits on the film, making it particularly suitable for ID documents. And across the Pacific, Dai Nippon and Nippon Paint Co announced that Teikoku Piston Ring Co had become the first major customer for authentication holograms on Secure I mageâ„ ¢ hot-stampable photopolymer. So photopolymer is making progress in the brand protection market, perhaps winning projects that embossed hologram producers might have expected to supply. Two announcements do not make a fully-fledged market, but do represent progress. Coming Full Circle And now, coming full circle, Liti Holographics has announced that it is shipping a new instant holographic film suitable for reflection holograms for the home and hobby market (see page 3). Meanwhile, silver halide display holograms remain a force in the marketplace. Slavich continues to find a market in Russia and beyond for its silver halide plates and films, and Colour Holographics, which took over the production and supply of HRT holographic plates, finds a steady if not spectacular market. The company is finding a ready market for its own large format co lour holograms, while other silver halide display hologram producers remain in steady production. The availability of compact LED lights which illuminate holograms at a very high quality, and the improved recognition by holographers that they have to deliver a complete, lit and framed installation, is boosting the readiness of display artists and interior designers to consider display holograms as a medium. As one who first got involved in holography because of the excitement of such 3D images, it is reassuring and somewhat surprising to see the continuing interest in full parallax holograms, complementing and supplementing the large volume market of embossed holograms. 007 Litis New Reflection Film Liti Holographics, which offers low cost portrait hologram kits selling for $99 (see HN Vol 18, No 9), has launched a new hologram film. According to the company, this film has all the ‘instant hologram qualities of its previous film but is now capable of making reflection as well as transmission holograms. The new film is red-sensitive, making it compatible with both the Litiholo and other hologram kits, as well as red laser diodes and even helium neon lasers. Contact: www.litiholo.com 008 Nigerias New Pharma Certificate NAFDAC, the Nigerian Food Drugs Agency, has introduced a new certificate to be issued to authorised imported and domestically produced pharmaceuticals. The new certificate is being produced by a security printer in the UK and includes a hologram among its security features. This follows participation by Dr Dora Akunyili, Director of NAFDAC in the first Global Forum on Pharmaceutical AntiCounterfeiting, where she made contact with possible suppliers among the exhibitors. 009 Pharmaceuticals: a Hologram Market Expanding or Threatened? At the time of writing, the 2nd Global Forum on Pharmaceutical AntiCounterfeiting has just finished in Paris, organised by Holography News publisher, Reconnaissance International. One of the themes to emerge during the course of the 21/2 day meeting was the importance of authentication of genuine products as part of the system to combat counterfeit medicines, heard from speakers from national drug regulatory agencies and from pharmaceutical manufacturers. Several of the speakers implied, but Dr Thomas Zimmer of Boehringer Ingelheim explicitly stated, that the ideal authentication device for pharmaceuticals is not yet available. As Dr Zimmer was speaking in his capacity as Chairman of the Anti-Counterfeit Group of the European Federation of the Pharmaceutical Industry Associations (EFPIA), his observations must be taken seriously by suppliers or aspiring suppliers of authentication products to the pharmaceutical sector. To date holograms have been the leading device used for overt authentication on pharmaceuticals, so the claim that the ideal device is not yet available can only be interpreted as a challenge to hologram suppliers. Either holograms have failed to deliver what the pharma sector requires or hologram manufacturers have not succeeded in persuading their customers to use all the levels of security that a hologram can offer; that is first, second and third levels overt, covert and machine read. To implement covert and machine read requires additional investment by customers in training, reading tools and for machine read infrastructure. Ideal Sector The pharmaceutical sector is ideal for the introduction of such an infrastructure. Another call at the Global Forum was for increased harmonisation of authentication and inspection systems. In a sector which is as regulated and as controlled as this one, where all medicines (at least, the legitimate ones) are distributed through a controlled system in a willing partnership between manufacturers, distributors, retailers and governments, training and equipping those who handle the goods to examine the authentication device should be feasible. As should the introduction of a machine-read infrastructure, assuming that there is commonality of what is to be read. The call for greater harmonisation results from the heterogeneity in the sector at present, which makes inpsection and examination a harder task for all involved. At present each hologram supplier offers its own proprietary method of encoding and reading hidden data. It is impractical for a warehouse or pharmacist to be equipped with numerous hologram reading systems, each one required to read the differently encoded information on the holograms from each of the many manufacturers whose medicines they provide. Equally, government inspectors are not able to carry around numerous handheld devices. But as the well-established precedent of credit cards and bar-codes shows, distributors and retailers will equip themselves to read standardised codes if the equipment footprint, cost and training required is minimal and the compatibility is maximal. Can the hologram industry achieve this for the pharmaceutical sector? That is to say, will the hologram industry recognise that here is a cause where collaboration on the adoption of a common approach to encoding and decoding could offer the industry the opportunity to capture that market for many years to come? Because once established, any competing technique has not just to prove itself superior, but must also overcome the inevitable reluctance of a whole sector to change the way it does things. Huge Advantage The hologram industry starts with a huge advantage because holograms have an established customer base in the Pharma sector. And holograms are perceived by the public as a mark of authentication the public may not know how to examine a hologram but its presence gives a level of comfort. Yet if the industry takes no coherent action to work together, it will squander this advantage. The Pharma sector (manufacturers, regulators, even patients groups) is making a case for the ideal authentication device, without perhaps realising that what is actually needed is an authentication system. That system could be built around holograms but it could alternatively be built around other types of device. There are many alternatives all seeking to usurp holograms from their number one spot. Recently, RFID has made the running, in lobbying and PR terms at least, but other technologies taggants, magnetics, complex bar-codes and others are all looking for their ‘killer application and see th e pharma sector as ripe for their efforts. The pharma sector is giving mixed signals about the use of holograms. On one side, Pfizer, in its current generation of product authentication, is currently using colour shift inks instead of holograms as the basis for its solution; on the positive side, Malaysias Meditag uses a three-level hologram (overt, covert and machine-read) at the heart of a system of registration and inspection. Can the hologram industry not individual suppliers, but the industry working together persuade the whole pharmaceutical sector that Malaysias is the way forward, not Pfizers? The RFID industry successfully lobbied the US Food Drugs Administration anticounterfeit task force so that it has identified RFID as the best way forward, although it has left the door open for other technologies by not mandating the use of RFID. This is the example the hologram industry needs to follow, because it has to persuade governments, distributors and manufacturers that the pharma sector can continue to use or even, needs to use holograms at the heart of an integrated system of authentication. The prize is immense, because other market sectors would follow the pharmaceuticals sector. There is no consolation prize, because surrendering this market sector to an alternative technology would give an unavoidable signal to other market sectors. 010 HoloTouch Progress HoloTouchâ„ ¢ Inc, a development company based in Darien, Connecticut working in association with Atlantex Corp, has launched the BeamOne HoloTouch evaluation unit, a working demonstration of its noncontact control technique. HoloTouch was founded by R Douglas McPheters to exploit its patented process for projecting a real holographic image of a keypad or similar finger-tip control board such that passing a real item, such as a finger, through the image, activates the control (US Patent 6377238 see H N Vol 17 No 6). Atlantex specialises in helping bring new products to market, especially in the field of electronic controls and computer accessories . The BeamOne is a four-button box to issue instructions to a PC, to which it is connected by a USB cable. The holographic image of the buttons float about 4 (10 cm) above the BeamOne box and can be programmed to instruct the computer to perform the required functions. It is fully functional, priced at US$1995, but is characterised by Atlantex and HoloTouch as an evaluation device. Nonetheless, it has been chosen by readers of Control Engineering as ‘the most innovative human-machine interface featured in Control Engineering during the past year. McPheters identifies HoloTouch as suiting applications where non-contact is important, such as in a sterile environment, or where switches or buttons cannot be made rugged enough for the environment. The hologram image can also be larger than the keypad it mimics, making it suitable where the device is small or vision may require assistance, such as for sight impaired people or while driving a vehicle, where a quick glance at a small but ton can be dangerous. The hologram is also, of course, intrinsically illuminated, so it is useful for night time or dark environments. HoloTouch and Atlantex are looking for applications partners who will adapt the HoloTouch technique into their own control devices. www.HoloTouch.com HoloTouch Selected for FastTrack HoloTouchâ„ ¢ Inc, the company that has developed a holographic interface for contactless control devices, has been selected for Connecticut Technology Councils FastTrack scheme for promising high-technology start-ups. FastTrack is an advisory and matching programme that helps start-ups with innovative ideas and rapid growth potential to gain seed-stage capital and business planning input through the mobilisation of a network of investors, advisors, professional service providers and industry contacts. Commenting on the scheme, HoloTouch founder and president R Douglas McPheters said: ‘FastTrack offers potentially valuable assistance in connecting us with mentors and advisors and can promote our partnering with companies who see value in our innovative touchless, holographic actuation and control technology. The company has already partnered with Atlantex Corp to launch the BeamOne HoloTouch unit. This enables operators of control boards such as keypads to enter commands simply by passing a finger through holographic images that represent these commands and float in front of the device (see HN Vol 19, No 3) and is suited for applications where non-contact is important for operability of hygiene, including consumer electronics, kiosks, ATMs and medical equipment. HoloTouch and Atlantex have also announced that the BeamOne is now available with relay output, extending the technologys reach to electronic equipment controlled by programmable logic controllers (PLCs). BeamOne already offers communication with PCs through USB, serial and other ports. According to McPheters, this latest development means that the technology can now be used in a numerous industrial applications as well, such as factory floor equipment. McPheters will be presenting a paper on the HoloTouch technology at Holopack†¢ Holo-print 2005. Contact: www.holotouch.com 011 Holotek Doubles Sales and Profits Holotek Technologies Ltd, of Sanzao Zhuhai in China, has doubled its sales and profits in 2004 and is aiming to achieve at least 50% growth in 2005. Its 2003 audited sales of RMB103m ( ±US$12.5m) rose to RMB210M ( ±$25.5m) in 2004, with net profit climbing from RMB58m ( ±$7m) to RMB123.5m ( ±$15.2m), but note that the 2004 figures are not yet audited. Although the company was not liable to tax in its first years of operation (as a start-up in the Zhuhai Economic Zone), these margins of almost 60% make Holotek probably the most profitable holographic producer in the world, both by margin and in its dollar figure. 98% of these sales are for packaging, mainly for transfer metallising of cigarette liners and cartons; 85% is on OPP with the reminder on PET. Holotek has been through ownership changes since we first reported on the company (see HN Vol 17 No 6). It was set up by Fong Teng Technology of Taiwan, but government regulations limit the investment that can be put into a mai nland Chinese company from Taiwan. FT has accordingly sold its interest to four private shareholders, including the CEO Mark Chiang (as a minority owner), and Holotek operates as a subsidiary of Aimrich which is registered in Samoa. The company has also divested its former 49% holding in Yong Feng Tian Technology, a Shenzhen company that produces cigarette packaging materials. All these changes mean Holotek has also postponed its plans to float on the Hong Kong stock exchange. It had originally stated its aim was to float this year with a market capitalisation of US$150m, but it is now aiming for floatation in 2008 with a Changes in Holography Changes in Holography 001 Looking Back, Moving Forward How was 2004 for you? For the industry as a whole, reviewing the developments that we covered last year in Holography News, we can conclude that it was a good year for most, with many positive developments that set the scene for 2005 and beyond, but with sufficient clouds on the horizon to prevent any complacency. In terms of markets, in the high security arena the growth of holograms on banknotes continues apace (see page 3) and this will continue to be key market notwithstanding the recent news that the new $100 and other denominations will not, in all likelihood, include a holographic feature. In other high security markets, passports took something of a back seat, for holograms at least not because of technology concerns but because of the current pre-occupation with biometrics. But elsewhere in document protection, AAMVAs specification of holograms on all US driving licences was a significant boost for the industry, while the tax stamp market continues provide significant high volume opportunities for suppliers. There were few major developments in brand protection although the use of holograms as the prime authentication feature on a new labelling program for pharmaceutical products in Malaysia, and the Olympics 2004 merchandising program demonstrated the continuing success of hologram s in these areas. On the downside, the FDAs controversial decision to adopt RFID-based track and trace as the solution to product safety and supply chain management for pharmaceuticals in the US could have unwelcome consequences for the industry should drug regulatory authorities elsewhere in the world follow its example. In packaging, meanwhile, as the Stock watch article in this issue (see page 6) points out, it is barely possible to go out nowadays without seeing holography embellishing shop shelves on all manner of goods from luxury high end to everyday items. Innovation and Development On the technology front, holography continued to demonstrate its inherent capacity for innovation and development. The integration of holograms with other technologies for enhanced security and functionality continued apace examples including Schreiners KeySecure technology, Securiketts Authentikett labels, combined hologram/DNA/RFID labels from ADNAS and Holomex and enhancements to teas scribos Holospot system (see page 8) to name but a few. In the banknote market, De La Rue, Louisenthal and Kurz all launched new security features during 2004 based on combinations of substrate, thread and foil technology. In terms of production, Newmec and Gidue both entered the market with foil applications systems, General Vacuum launched its new compact metalliser while Spatial Imagings new Lightspeed digital hologram printer marked the beginning of new era in large format hologram origination. Aside from the developments in the ‘conventional market for authentication and decorative devices, holography is also beginning to demonstrate its potential for use as a tool as well as a feature. Examples of this potential include Smart Holograms development of reflection holograms as medical diagnostic devices and holographic data storage systems from Optware. Publicly-listed companies were covered in detail in the December issue of Holography News. But there was news from many other qua rters as well, including the expansion plans announced by ABNH, ITW Covid, AFC and Holoshape, and AET Films move into wide embossing on the packaging front. Louisenthal, a major player in the banknote industry, revealed that it now offers full-scale hologram production, including origination, while its former strategic partner in foils, Hueck Folien, joined the ranks of banknote suppliers with its first order for stripes for the Thai currency, signalling a potentially significant new entrant to the market. Its arrival was partially offset by AOTs decision to abandon banknote foils, while the bankruptcy of another high security supplier, Mantegazza, was staved off by its acquisition by Italian security papermaker Fabriano. Outside of the traditional industry centres of Western Europe and North America, the Far East, India and Eastern Europe and the CIS countries continue to play an increasingly important role not just as markets for western companies but as major centres of developm ent in their own right. Russia, a hotbed of scientific innovation, held its first regional conference this year; the commitment amongst Indian companies to quality and industry standards is an inspiration to us all, while all eyes are currently on China, the location for the 2005 Holo-pack†¢Holo-print which will provide the first opportunity for many western hologram companies to witness the strength and scope of this massive market. 2004s Downside So much for the positive. On the downside, RFID continues to position itself, and be viewed in some quarters, as the ‘silver bullet antidote to counterfeiting and diversion, new technologies such as Nanoventions claim their superiority over diffractive features and high quality counterfeit holograms have been discovered on currency notably the euro. The latter, in particular, is leading to a perceptible sense of disenchantment with holograms in terms of their claimed security benefits, technology proliferation and lax standard s amongst suppliers. This topic has been covered exhaustively in recent issues of Holography News and was one of the main topics for discussion at the recent Holo-pack†¢Holo-print conference in Prague, a positive outcome of which was the openness of debate and willingness amongst industry participants to work collectively to address the real issues that are causing concern and counter the misperceptions behind them. All in all, not a bad year for the industry. Provided the concerns leading to disenchantment in some sectors continues to be recognised and addressed with appropriate measures, and provided hologram companies continue to invest in the new products and techniques that form the lifeblood and future of this industry, 2005 could be even better. 002 A Watershed Year for the IHMA In his Chairmans report to the Annual General Meeting of the International Hologram Manufacturers Association, Hugues Souparis identified the launch of the Secure Hologram Producer Certification Scheme as a watershed for the Association (se HN Vol 18 No 3). This Scheme, run in co-operation with Intergraf, should make a significant contribution to improving procedures in the secure hologram field, and help to raise customer awareness of the need to source secure holograms from a qualified secure producer. Souparis company, Hologram Industries, was the first to be certified, but several others have now applied. Another important development during the year had been the negotiations with the Hologram Manufacturers Association of India (HoMAI), aimed at building a strong relationship between the two associations and serving as a model for the IHMAs relationship with other regional or national hologram associations. An important part of the planned relationship was that the IHMAs Hologram Image Register and HoMAIs Hologram Registry would be linked so that all searches for a hologram match on either database would cover both databases, improving the likelihood of identifying matches which resulted from attempts to source illicit copies of a hologram already in use. He reported that Despite the news that the US Bureau of Engraving and Printing is casting its net wider for security features (see page 1), banknotes continue to be a good market for the holography industry. A number of new banknotes have been introduced during 2004, including two major currencies the new Canadian dollar series which features a stripe and the two higher denominations of the newly-designed Japanese yen, each with a patch. Kurz was the supplier for both, the latter understood to be the largest single hologram order for banknotes in the industry. Other currencies that have introduced holograms to all or most of their the Board was in discussion with the China AntiCounterfeiting Technology As sociation (CATA) with a view to CATA establishing a hologram section, and that the IHMA was also in preliminary discussions with Russian producers interested in an industry organisation there. Souparis also reminded members of IHMAs links with Interpol and other international and national police organisations, saying that he hoped to build on these contacts in the coming year. New Board Members In the elections at the AGM, Souparis was re-elected Chairman a post he can hold for another two years. Wilfried Schipper (Hologram Company Rako) was elected as the European representative on the Board, with Alkis Lembessis (Cavomit and Taurus) as his deputy; Umendra Gupta (Holostik India) was re-elected as Asian representative, with Khalid Khanani (Metatex) as deputy. Randy James (Pacific Holographics) was elected as deputy North American representative and since the AGM the Board has co-opted John Halotek (ITW Covid) as the North American representative, there being no accepted nomination at the meeting. Alex Goncharsky (Computer Holography Centre, Moscow) and Ken Traub (ABNH) remain on the board for a second and fourth year respectively. Spreading the Word In addition to the objectives above, a key task for the IHMA in 2005 and thereafter will be to promote the positive benefits of holograms, particularly as authentication devices, as a counter to disenchantment with the technology in certain quarters, notably some parts of the high security sector. A proactive PR campaign, a greater presence at industry conferences, an improved website as a communications tool both for members and users, and a drive to increase the membership and the visibility of the IHMA are all currently underway. The hologram industry is one of the few in the authentication sector to have its own association and the IHMA is committed to building on this position and the strengths that a collective voice can provide for hologram companies. Contact: www.IHMA.org. 003 General Vacuums New Compact Metalliser (Pg # 5) General Vacuum, manufacturer of vacuum metallising equipment, unveiled further details of its new compact Holosecâ„ ¢ metalliser (see HN Vol 18 No 2) at the recent Holo-pack†¢Holo-print conference in Prague. Vacuum metallisers have until now been supplied with production widths of 800-3000m, limiting their use both financially and for production purposes among small and narrow-web hologram producers and forcing these to buy in their film and foil pre-metallised from wide web suppliers. The Holosec was designed to fill this niche and enable narrow-web producers to bring metallising in-house, thereby increasing their security of production and enabling them to take advantage of the specialised treatments the system offers. The Holosec combines the vacuum chamber, unwind and rewind units, plasma pre-treatment, demetallization and evaporation source within one compact unit with a footprint of 2m x 3m. In addition to the conventional aluminium used for holographic films and foils, it can coat silicon oxide, chrome, silver and copper and zinc sulphide for high refractive index films. It also offers pattern demetallisation with in-line registration and plasma pre-treatment that enhances the sur face energy of the films to improve adhesion and hence quality. The run rate varies from 10m to a maximum of 200m per minute. General Vacuum, formerly Valmet and now part of the Bobst Group, declined to give prices for the Holosec, stating that these depend on specification. But it can assumed that they will be considerably lower than the prices for wide web systems. When questioned at Holopack.†¢ Holo-print about the risks of spreading low-cost secure hologram production technology in the market, Dr Nadir Ahmed, who gave the presentation on behalf of his former company, commented that the company would check the legitimacy of customers before supply. To date, two machines have been sold with other orders in the pipeline for early 2005. Contact: Andy Jack, General Vacuum Equipment. Tel: +44 1706 622442; [emailprotected] 004 Menzel Vision System for Web Guiding Menzel, a German company specialising in machinery for finishing and inspection machines for textiles, expanded into similar equipment for the plastic films industry in the late 1960s, and at Holopack†¢ Holo-print exhibited a machine vision system for control of web handling machines for holographic films. The system keeps web lines in register to improve the accuracy and quality of slitting, winding/re-winding, stamping and other hologram finishing processes. Based on the companys experience building textile and film web guiding systems, the hologram guiding system can be set to read the edge of the hologram film or a specific part of the pattern in the hologram the camera scans across the width of the film to record the edge position, the registration mark position or the position of a specified image element. Once programmed, it feeds the image data to a sensor and a controller, which in turn adjusts the web guides to maintain the position of the web. The Menzel vision system for holographic film costs around â‚ ¬17- 20,000, depending on the configuration required. Contact: www.menzel.net. 005 Optical Document Security The third edition of the reference book Optical Document Security is now available from publishers Artech House. Written by Rudolf van Renesse, an expert in the field and editor and co-author of the two previous editions (published in 1994 and 1998 respectively), the book provides a comprehensive and cohesive treatment of all aspects of optical document security, according to its publishers. The books contents have been substantially updated and revised from the previous edition, and expanded to include coverage of additional security features and evaluation. The introduction on the theory of colours is followed by chapters on light interference and diffraction, substrate-based security, printing inks and printing techniques, printed security patterns (including screen decoded images and digital watermarks), diffractive- and interference-based security features, security design and evaluation and an introduction to biometrics. The emphasis is on both the physics of security features and their value in resisting counterfeiting, while the chapter evaluating security design looks at the human factors of first line document inspection. The books 350 pages contain over 270 black and white illustrations, including live security documents, and an appendix with samples of important security features. In addition, a CD-ROM is included which contains all illustrations of the book in full-colour. Author Rudolf van Renesse was senior research engineer in the Optics Department of TNO Institute of Applied Physics in The Netherlands and is now an independent consultant on document security for government departments and banking and financial institutions. He has extensive experience in the areas of holography, optical inspection techniques, and the theory of colors and document security, and is the author of more than 80 publications in these areas, as well as a contributor to Holography News and its sister publications Authentication News and Currency News. Optical Document Security is available at the discounted price  £72/$118 from Artech House www.artech-house.com 006 Display Holography on the Rise Photopolymer is making progress winning projects that perhaps embossed hologram producers might have expected to supply We feel for Nick Hardy and Valerie Love of OpGraphics, the British company that has listed its DuPont photopolymer hologram production equipment for sale on eBay. Op has been producing display holograms for the gift and promotional trade since 1983, originally on Agfa silver halide films, then in the 1990s Nick Hardy started working with DuPonts holographic photopolymer, partly because Agfa ceased production of its holographic films, partly because the photopolymer reflection holograms had lower noise and were more light efficient. Unfortunately, when DuPont Authentication Systems was established as a joint venture with Label Systems Inc, the company decided to restrict the distribution of its unexposed photopolymer film to authorised security hologram producers. Op were among the hologram producers which were given notice of a cessation of supply. They tried to fight this under competition law in the UK, but despite their significant investment in DuPonts production equipment and the time to perfect their processes, this was to no avail. The result: holographic production kit being offered on eBay. The Year of Photopolymer? The timing could not be more poignant as there appears to be an upsurge of interest in photopolymer holograms could 2005 be the year of photopolymer? The year has started well for DAS with NASCARs announcement of its licensed product authentication label, a numbered photopolymer reflection hologram (see page 4). To date, the North American sports licensing authentication projects have been dominated by embossed holograms. NASCAR (the most popular motor sport organisation in North America) may not rival the big national sporting leagues in popularity, but big race meetings such as Daytona and Indianapolis attract large crowds of eager souvenir hunters. Last year, DAS released its izonâ„ ¢ advanced photopolymer holograms, offering instant holo portraits on the film, making it particularly suitable for ID documents. And across the Pacific, Dai Nippon and Nippon Paint Co announced that Teikoku Piston Ring Co had become the first major customer for authentication holograms on Secure I mageâ„ ¢ hot-stampable photopolymer. So photopolymer is making progress in the brand protection market, perhaps winning projects that embossed hologram producers might have expected to supply. Two announcements do not make a fully-fledged market, but do represent progress. Coming Full Circle And now, coming full circle, Liti Holographics has announced that it is shipping a new instant holographic film suitable for reflection holograms for the home and hobby market (see page 3). Meanwhile, silver halide display holograms remain a force in the marketplace. Slavich continues to find a market in Russia and beyond for its silver halide plates and films, and Colour Holographics, which took over the production and supply of HRT holographic plates, finds a steady if not spectacular market. The company is finding a ready market for its own large format co lour holograms, while other silver halide display hologram producers remain in steady production. The availability of compact LED lights which illuminate holograms at a very high quality, and the improved recognition by holographers that they have to deliver a complete, lit and framed installation, is boosting the readiness of display artists and interior designers to consider display holograms as a medium. As one who first got involved in holography because of the excitement of such 3D images, it is reassuring and somewhat surprising to see the continuing interest in full parallax holograms, complementing and supplementing the large volume market of embossed holograms. 007 Litis New Reflection Film Liti Holographics, which offers low cost portrait hologram kits selling for $99 (see HN Vol 18, No 9), has launched a new hologram film. According to the company, this film has all the ‘instant hologram qualities of its previous film but is now capable of making reflection as well as transmission holograms. The new film is red-sensitive, making it compatible with both the Litiholo and other hologram kits, as well as red laser diodes and even helium neon lasers. Contact: www.litiholo.com 008 Nigerias New Pharma Certificate NAFDAC, the Nigerian Food Drugs Agency, has introduced a new certificate to be issued to authorised imported and domestically produced pharmaceuticals. The new certificate is being produced by a security printer in the UK and includes a hologram among its security features. This follows participation by Dr Dora Akunyili, Director of NAFDAC in the first Global Forum on Pharmaceutical AntiCounterfeiting, where she made contact with possible suppliers among the exhibitors. 009 Pharmaceuticals: a Hologram Market Expanding or Threatened? At the time of writing, the 2nd Global Forum on Pharmaceutical AntiCounterfeiting has just finished in Paris, organised by Holography News publisher, Reconnaissance International. One of the themes to emerge during the course of the 21/2 day meeting was the importance of authentication of genuine products as part of the system to combat counterfeit medicines, heard from speakers from national drug regulatory agencies and from pharmaceutical manufacturers. Several of the speakers implied, but Dr Thomas Zimmer of Boehringer Ingelheim explicitly stated, that the ideal authentication device for pharmaceuticals is not yet available. As Dr Zimmer was speaking in his capacity as Chairman of the Anti-Counterfeit Group of the European Federation of the Pharmaceutical Industry Associations (EFPIA), his observations must be taken seriously by suppliers or aspiring suppliers of authentication products to the pharmaceutical sector. To date holograms have been the leading device used for overt authentication on pharmaceuticals, so the claim that the ideal device is not yet available can only be interpreted as a challenge to hologram suppliers. Either holograms have failed to deliver what the pharma sector requires or hologram manufacturers have not succeeded in persuading their customers to use all the levels of security that a hologram can offer; that is first, second and third levels overt, covert and machine read. To implement covert and machine read requires additional investment by customers in training, reading tools and for machine read infrastructure. Ideal Sector The pharmaceutical sector is ideal for the introduction of such an infrastructure. Another call at the Global Forum was for increased harmonisation of authentication and inspection systems. In a sector which is as regulated and as controlled as this one, where all medicines (at least, the legitimate ones) are distributed through a controlled system in a willing partnership between manufacturers, distributors, retailers and governments, training and equipping those who handle the goods to examine the authentication device should be feasible. As should the introduction of a machine-read infrastructure, assuming that there is commonality of what is to be read. The call for greater harmonisation results from the heterogeneity in the sector at present, which makes inpsection and examination a harder task for all involved. At present each hologram supplier offers its own proprietary method of encoding and reading hidden data. It is impractical for a warehouse or pharmacist to be equipped with numerous hologram reading systems, each one required to read the differently encoded information on the holograms from each of the many manufacturers whose medicines they provide. Equally, government inspectors are not able to carry around numerous handheld devices. But as the well-established precedent of credit cards and bar-codes shows, distributors and retailers will equip themselves to read standardised codes if the equipment footprint, cost and training required is minimal and the compatibility is maximal. Can the hologram industry achieve this for the pharmaceutical sector? That is to say, will the hologram industry recognise that here is a cause where collaboration on the adoption of a common approach to encoding and decoding could offer the industry the opportunity to capture that market for many years to come? Because once established, any competing technique has not just to prove itself superior, but must also overcome the inevitable reluctance of a whole sector to change the way it does things. Huge Advantage The hologram industry starts with a huge advantage because holograms have an established customer base in the Pharma sector. And holograms are perceived by the public as a mark of authentication the public may not know how to examine a hologram but its presence gives a level of comfort. Yet if the industry takes no coherent action to work together, it will squander this advantage. The Pharma sector (manufacturers, regulators, even patients groups) is making a case for the ideal authentication device, without perhaps realising that what is actually needed is an authentication system. That system could be built around holograms but it could alternatively be built around other types of device. There are many alternatives all seeking to usurp holograms from their number one spot. Recently, RFID has made the running, in lobbying and PR terms at least, but other technologies taggants, magnetics, complex bar-codes and others are all looking for their ‘killer application and see th e pharma sector as ripe for their efforts. The pharma sector is giving mixed signals about the use of holograms. On one side, Pfizer, in its current generation of product authentication, is currently using colour shift inks instead of holograms as the basis for its solution; on the positive side, Malaysias Meditag uses a three-level hologram (overt, covert and machine-read) at the heart of a system of registration and inspection. Can the hologram industry not individual suppliers, but the industry working together persuade the whole pharmaceutical sector that Malaysias is the way forward, not Pfizers? The RFID industry successfully lobbied the US Food Drugs Administration anticounterfeit task force so that it has identified RFID as the best way forward, although it has left the door open for other technologies by not mandating the use of RFID. This is the example the hologram industry needs to follow, because it has to persuade governments, distributors and manufacturers that the pharma sector can continue to use or even, needs to use holograms at the heart of an integrated system of authentication. The prize is immense, because other market sectors would follow the pharmaceuticals sector. There is no consolation prize, because surrendering this market sector to an alternative technology would give an unavoidable signal to other market sectors. 010 HoloTouch Progress HoloTouchâ„ ¢ Inc, a development company based in Darien, Connecticut working in association with Atlantex Corp, has launched the BeamOne HoloTouch evaluation unit, a working demonstration of its noncontact control technique. HoloTouch was founded by R Douglas McPheters to exploit its patented process for projecting a real holographic image of a keypad or similar finger-tip control board such that passing a real item, such as a finger, through the image, activates the control (US Patent 6377238 see H N Vol 17 No 6). Atlantex specialises in helping bring new products to market, especially in the field of electronic controls and computer accessories . The BeamOne is a four-button box to issue instructions to a PC, to which it is connected by a USB cable. The holographic image of the buttons float about 4 (10 cm) above the BeamOne box and can be programmed to instruct the computer to perform the required functions. It is fully functional, priced at US$1995, but is characterised by Atlantex and HoloTouch as an evaluation device. Nonetheless, it has been chosen by readers of Control Engineering as ‘the most innovative human-machine interface featured in Control Engineering during the past year. McPheters identifies HoloTouch as suiting applications where non-contact is important, such as in a sterile environment, or where switches or buttons cannot be made rugged enough for the environment. The hologram image can also be larger than the keypad it mimics, making it suitable where the device is small or vision may require assistance, such as for sight impaired people or while driving a vehicle, where a quick glance at a small but ton can be dangerous. The hologram is also, of course, intrinsically illuminated, so it is useful for night time or dark environments. HoloTouch and Atlantex are looking for applications partners who will adapt the HoloTouch technique into their own control devices. www.HoloTouch.com HoloTouch Selected for FastTrack HoloTouchâ„ ¢ Inc, the company that has developed a holographic interface for contactless control devices, has been selected for Connecticut Technology Councils FastTrack scheme for promising high-technology start-ups. FastTrack is an advisory and matching programme that helps start-ups with innovative ideas and rapid growth potential to gain seed-stage capital and business planning input through the mobilisation of a network of investors, advisors, professional service providers and industry contacts. Commenting on the scheme, HoloTouch founder and president R Douglas McPheters said: ‘FastTrack offers potentially valuable assistance in connecting us with mentors and advisors and can promote our partnering with companies who see value in our innovative touchless, holographic actuation and control technology. The company has already partnered with Atlantex Corp to launch the BeamOne HoloTouch unit. This enables operators of control boards such as keypads to enter commands simply by passing a finger through holographic images that represent these commands and float in front of the device (see HN Vol 19, No 3) and is suited for applications where non-contact is important for operability of hygiene, including consumer electronics, kiosks, ATMs and medical equipment. HoloTouch and Atlantex have also announced that the BeamOne is now available with relay output, extending the technologys reach to electronic equipment controlled by programmable logic controllers (PLCs). BeamOne already offers communication with PCs through USB, serial and other ports. According to McPheters, this latest development means that the technology can now be used in a numerous industrial applications as well, such as factory floor equipment. McPheters will be presenting a paper on the HoloTouch technology at Holopack†¢ Holo-print 2005. Contact: www.holotouch.com 011 Holotek Doubles Sales and Profits Holotek Technologies Ltd, of Sanzao Zhuhai in China, has doubled its sales and profits in 2004 and is aiming to achieve at least 50% growth in 2005. Its 2003 audited sales of RMB103m ( ±US$12.5m) rose to RMB210M ( ±$25.5m) in 2004, with net profit climbing from RMB58m ( ±$7m) to RMB123.5m ( ±$15.2m), but note that the 2004 figures are not yet audited. Although the company was not liable to tax in its first years of operation (as a start-up in the Zhuhai Economic Zone), these margins of almost 60% make Holotek probably the most profitable holographic producer in the world, both by margin and in its dollar figure. 98% of these sales are for packaging, mainly for transfer metallising of cigarette liners and cartons; 85% is on OPP with the reminder on PET. Holotek has been through ownership changes since we first reported on the company (see HN Vol 17 No 6). It was set up by Fong Teng Technology of Taiwan, but government regulations limit the investment that can be put into a mai nland Chinese company from Taiwan. FT has accordingly sold its interest to four private shareholders, including the CEO Mark Chiang (as a minority owner), and Holotek operates as a subsidiary of Aimrich which is registered in Samoa. The company has also divested its former 49% holding in Yong Feng Tian Technology, a Shenzhen company that produces cigarette packaging materials. All these changes mean Holotek has also postponed its plans to float on the Hong Kong stock exchange. It had originally stated its aim was to float this year with a market capitalisation of US$150m, but it is now aiming for floatation in 2008 with a

Scientific Murder Essay examples -- essays research papers fc

Scientific Murder: Human Experimentation in Nazi Germany The Nazi's were infamous for their cruel and unusual experiments on humans. Although they played a small part of Nazi Germany's attempt at racial hygiene, these experiments desecrated and exterminated thousands of humans (Lifton 269). "The Nazi medical experiments of the 1930's and 1940's are the most famous example of recent disregard for ethical conduct " (Polit & Hungler 127). For the sake of science, thousands lost their lives "I have no words. I thought we were human beings. We were living creatures. How could they do things like that?" (Auschwitz survivor as quoted in Lifton 269). Was it really science, or was it murder? After the Nazi's seized power in 1933, patients no longer had protection by law from German scientists. These scientists could use any method of "research or treatment". "Terrible experiments carried out in the concentration camps were symptomatic of this amoral attitude of the German scientific community" (Friedlander 131). Prior to 1933, scientists promoted radical measures in the study of racial science. "Prominent eugenicists-anthropologists, geneticists, psychiatrists-influenced both Nazi ideologues and a generation of scientists and physicians" (Friedlander 123). Literature from these scientists influenced Adolf Hitler and many scientists during the Nazi period (Friedlander 123). Science in Germany quickly adjusted to the ideas of race and eugenics. "The enthusiastic participation of the scientific and medical establishment in the sterilization program was an indication of the fact that its ideology meshed with that of the Nazi movement' (Friedlander 125). The concept of racial hygiene was the foundation of Germany's eugenic and racial policy. State hospital directors and scientists founded institutes and departments for researching heredity. In order for scientist to move up in rank, they were coerced to comply with racial hygiene as prescribed by the regime. "Loyalty to ideology determined access to research grants and job opportunities" (Friedlander 126). Euthanasia became a solution to the problem of the slow process of mass sterilization. German scientists were eager to benefit ... ...wledge in science and medicine" (Caplan 65). The German anthropological and psychiatric scientists trapped themselves with their own mythological beliefs. "Every science at its beginning builds on its own mythological foundations. As it progresses, those parts which can no longer be integrated into the whole are dropped" (Muller-Hill 101). The scientists of the Third Reich proved to be malicious and destructive and "in the last analysis, stupid" (Muller-Hill 101). German scientists proved themselves to be traitors to science as they spilled the blood of innocent victims to consecrate their myth (Muller-Hill 101). Bibliography Caplan, Arthur L. When Medicine Went Mad. Totowa: Humana Press, 1992. Friedlander, Henry. The Origins of Nazi Genicide From Euthanasia to the Final Solution. Chapel Hill: London: University of North Carolina Press, 1995. Lifton, Robert J. The Nazi Doctors. New York: Basic Books, Inc., Publishers, 1986. Polit, Denise F., and Bernadette P. Hungler. Essentials of Nursing Research. Philadelphia: New York: Lippencott-Raven, 1997. Muller-Hill, Benno. Murderous Science. Oxford: New York: Tokyo: Oxford University Press, 1988.

Internal Control Essay

(1) If the LJB Company should decide to become a publicly traded company, a few internal controls should be implemented to comply with the Sarbanes-Oxley Act (SOX). * Management will need to provide periodic quarterly reports to evaluate the effectiveness and reliability of LJB’s internal controls over financial reporting procedures. * Management should certify the accuracy and fairness of presentation of their financial statements. * Independent auditor(s) outside of LJB will need to attest to management’s assessment of said internal controls. Additionally, non-audit services between these two parties (LJB and said independent auditor) are prohibited. (2) There are a few internal control measures that LJB already has in effect and are better for it: the use of pre-numbered invoices by the accountant and your (the President’s) involvement in the approval and hiring process of new employees. I also recommend the purchase of the indelible ink machine as per the accountant’s request. As this applies to the Internal Control Principle of Physical Control, future check fraud will be more difficult to be accomplished. 3) There are several internal control weaknesses that I assess LJB currently has. Following each weakness I list below is a recommendation from myself to rectify these internal control weaknesses. * One is risk is the accountant who serves as Treasurer and Controller. Although I understand this is to streamline many processes, it possesses a risk where an opportunity is created for this employee to commit fraud. This also violates the Segregation of Duties Principle of Internal Control Principles. I recommend that these two responsibilities be segregated 2 different employees. * When the accountant in charge of payroll leaves employees’ checks in his office unsupervised and unsecured, it presents an opportunity for theft. This violates the Internal Control Principle of Physical Control, as though checks are not constantly kept in the accountant’s office safe prior to pick up. I recommend that these checks remain physically secured at all times (by the accountant, or by delaying delivery to the accountant until he reaches his office). Due to the unorthodox honor system of dealing with petty cash, any single employee can withdraw a substantial amount of petty cash in relative anonymity. This violates two Internal Control Principles: Physical Control and Establishment of Responsibility. It violates the Physical Control Principle because the petty cash is easily accessible with no form of physical protection of theft, and it violates the Establishment of Responsibility Principle because no single person is in charge of the Petty Cash Fund (rather everyone is). This can be remedied by assigning a custodian to be responsible for the fund, as well as creating a secure area to store said funds. * These previous points additionally bring up another weakness, though not actually part of the Internal Control Principles. Though it seems to be LJB’s unofficial policy to trust long-term employees, when a desirable opportunity to commit fraud/theft arises, it becomes at the discretion of the employee to commit these acts for their personal benefit. Another weakness is LJB’s lack of individual passwords which allows personnel to anonymously use the company computers and databases. This lack of individual accountability will prevent most attempts to track suspicious employee activities on company computers and databases. This instance violates the Internal Control Principle of Physical Control. I recommend assigning employees individual accounts and passwords, as well as creating a form of digital control to prevent future unauthorized activities, such as viewing pornography on company computers. Lastly, because LGB unknowingly hired a convicted felon, it can be deduced that LGB’s Human Resource Department may be lacking, due to the fact that a background check should have caught his criminal history. This may violate the Human Resource Control Principle of the Internal Control Principles. I recommend that the Human Resource Department reevaluate their policies and staffing procedures to prevent future incidents from happening. Thank you for taking the time to read this letter and please consider my recommendations before going public with the LGB Company.

Marks ; Spencer Group Anaylsis Essay

Marks and Spencer Group plc  © MarketLine Page 2 Marks and Spencer Group plc Company Overview COMPANY OVERVIEW Marks and Spencer Group (M&S or â€Å"the company†) is one of the leading retailers of clothing, foods and homeware in the UK. The company operates in more than 40 countries across Europe, the Middle East, and Asia. It is headquar tered in London, the UK and employs 78,169 people. The company recorded revenues of ? 9,740. 3 million (approximately $15,158. 8 million) in the financial year ended April 2011 (FY2011)*, an increase of 2. 1% over FY2010. The operating profit of M&S was ? 836. million (approximately $1,302. 5 million) in FY2011, a decrease of 1. 8% compared to FY2010. The net profit was ? 612 million (approximately $952. 5 million) in FY2011, an increase of 16. 3% over FY2010. *The financial year ended April 2, 2011 was a 52-week period whereas the financial year ended April 3, 2010 was a 53-week period. KEY FACTS Head Office Marks and Spencer Group plc Wa terside House 35 Nor th Wharf Road London W2 1NW GBR Phone 44 20 7935 4422 Fax Web Address http://www. marksandspencer. com Revenue / turnover 9,740. 3 (GBP Mn) Financial Year End April Employees 78,169 London Ticker MKS Marks and Spencer Group plc  © MarketLine Page 3 Marks and Spencer Group plc Business Description BUSINESS DESCRIPTION M&S is the holding company of the Marks & Spencer Group of companies. The company is one of the UK’s leading retailers, with more than 21 million people visiting its stores each week. M&S offers clothing and home products, as well as foods, sourced from about 2,000 suppliers globally. It operates through both wholly owned stores and franchise stores. As of FY2011, the company operated 703 stores in the UK. M&S operates over 361 owned and franchised stores in over 42 territories. Though the company primarily repor ts its revenues in terms of geographic segments (UK and international), its operations can be categorized under two divisions: food and general merchandise. The food division concentrates on four main areas: fresh, natural, healthy food; special celebration products; authentic ready meal ranges; and exceptional ever yday food such as â€Å"Oakham† chicken. It operates a chain of 163 Simply Food owned stores and 202 Simply Food franchise stores in high streets, motorway service stations, railway stations and air por ts in the UK. The general merchandise division of the company is categorized into two segments: clothing and home. The clothing segment offers women’s wear, men’s wear, lingerie, children’s wear, and accessories and footwear. Some of the prominent brands offered by this segment include Autograph, Limited Collection, Collezione, Blue Harbour, Girls Boutique, Per Una, Ceriso, Adored, and Truly you. The home segment offers homeware and home accessories, kitchen and tableware, lighting, and furniture products. In addition to selling products through regular stores, the segment also offers catalogue services. M;S offers its products and services online as well as through flagship stores, high street stores, retail park stores, M;S outlets, Simply Food stores, and Simply Food franchised stores. Marks and Spencer Group plc  © MarketLine Page 4 Marks and Spencer Group plc History HISTORY M;S was founded in 1884 as a stall in an open market in Leeds, the UK. Then known as Marks’ Penny Bazaar, it was the household goods, haberdasher y, toy, and sheet-music business of Michael Marks, a Jewish refugee from Poland. In 1894, he took Thomas Spencer as a business par tner. In 1903, M&S was registered as a private limited company. Although a clothing design depar tment had first been set up in 1938, it was not until after the Second World War that it became fully developed under a leading designer. In 1973, the company entered Canada, and bought Peoples Depar tment Stores and D’Allaird’s, a national women’s wear retailer, both of which it later sold. The company also had direct retailing investments in Canada. It tried to move south of the border in 1988 with the purchase of Brooks Brothers, but the US operation never took off as the company had hoped. Five franchised stores were closed down in Turkey in 1999 when the franchise par tner Turk Petrol Holding couldn’t meet its bank obligations and collapsed. Later in the year, Marks and Spencer Canada, after 25 years of business, closed its 38 stores. The company sold its US clothing chain Brooks Brothers for $225 million in 2001. In 2003, M&S announced the launch of its â€Å"&more† credit card. Alongside this, Marks & Spencer Financial Services was re-branded â€Å"Marks & Spencer Money. † In 2004, M&S completed the sale of Marks & Spencer Retail Financial Services Holdings (M&S Money) to HSBC. During the course of 2005, the company opened 31 Simply Food stores as well as closed the Lifestore project in the UK. M&S expanded the â€Å"Simply Food† format with the acquisition of 28 stores on a leasehold basis from Iceland Foods for a consideration of ? 38 million (approximately $76. 3 million) in 2006. In the same year, M&S sold Kings Super Markets, its only non-M&S branded business to a US investor group consisting of Angelo, Gordon & Co, MTN Capital Par tners and Mr. Bruce Weitz for $61. 5 million in cash. In 2007, M&S and two of its long-term suppliers decided to star t the development of M&S’ first â€Å"eco-factories†, pioneering innovative methods of sustainable manufacturing. One factor y in Sri Lanka would make lingerie and two factories in Nor th Wales would manufacture furniture upholster y. In the same year, the company launched its own branded LCD widescreen TVs. This range was in addition to the existing collection of Sony TVs currently available at M;S. Fur ther in the year, M;S launched school wear made from recycled plastic bottles. The company’s first standalone home store in Lisburn, Nor thern Ireland was launched in 2007. In the same year, M&S launched Big & Tall, an exclusive online men’s wear offering more than 450 items online ranging from tailoring to knitwear to casual shir ts and trousers. Also in 2007, M;S reduced saturated fat level as much as 82% in more than 500 company’s products. The company reduced saturated fat levels in products including sandwiches, ready meals, crisps and savor y snacks. Marks and Spencer Group plc  © MarketLine Page 5 Marks and Spencer Group plc History Towards the end of 2007, a new Made to Measure shir ts ser vice was launched by M&S, which allowed customers to design a tailor-made shir t within 21 days. The company added new products to its men’s wear por tfolio in FY2008. M;S also launched climate control underwear featuring temperature regulating technology developed by NASA, expanded Collezione brand collection by introducing new shoes, wool and cashmere mix trousers. M;S reinvigorated its Blue Harbour brand to attract 35 to 44 year old men. Also in FY2008, the company star ted to freeze its ready meals for international sale and launched a range of 70 lines in eight countries. Later, the company also launched a 25-piece capsule collection called GD25 from Per Una. In 2008, M;S removed ar tificial colors and flavorings from its entire food and soft drinks range. In the same year, the company improved the quantity of space in a number of major out of towns and city centre stores through store extensions and also added 35 stores to its Simply Food por tfolio, including 25 BP franchised stores. A new flagship store in new Westfield Centre at White City, West London was opened at the end of 2008. To fur ther progress in Asian markets, the company opened its first 38,000 square feet store in Shanghai. M;S then entered into a par tnership with Scottish and Southern Energy, as per which M;S Energy would supply electricity and gas to domestic customers and reward them with M;S store vouchers for helping the environment by reducing their energy usage. M;S announced plans to close 10 of its Simply Food stores in 2009. The company opened Food to Go outlets in Hong Kong in the same year. Also in 2009, M;S announced plans to enter new categories in the Indian market, with the launch of luggage and footwear for men. The company introduced a Ramadan and Eid fashion collection in all the 13 stores throughout the Middle East in the UAE, Bahrain, Qatar, Kuwait and Oman in 2009. Fur ther in the year, M;S launched personalized greetings cards business online. The company also announced to open its second mainland store in Guangzhou, the capital of Guangdong province in southern China. M;S also launched a beer and cider range to complement its wine selection. M;S launched a revamped version of its website in 2009, the first major update since 2007. Fur thermore, in 2009, the company began to offer its online international deliver y service to 73 more countries as par t of a drive to grow annual sales of M;S Direct. The company began its offering within the homeware sector in 2009. M;S announced plans to open a store in Marbella, Spain by the end of 2009. In the same year, M;S and India-based Reliance Retail planned to open approximately 50 stores in India in the following five years under the banner of their joint venture company Marks ; Spencer Reliance India. Later in the year, the company outlined plans to cut costs by ? 50 million (about $150 million) by optimizing its supply chain and IT systems. M;S also announced plans to open a new store at the Swords Pavilions shopping center in the Dublin Airpor t, Ireland, in 2009. The company opened its new 22,000 square feet store at Morpeth’s Sanderson Arcade in the same year. M&S decided to launch â€Å"Simply Food† in Western Europe. Fur ther in 2009, the company a nnounced plans to sell a selected range of around 400 branded grocery and household products in all of its UK stores, following a 16-month trial in its stores in the Nor th East and South East of England. In 2010, M&S launched a new Home Energy Service division that would offer customers a suite of energy efficiency products and services. Building on the success of M&S Energy, which was servicing Marks and Spencer Group plc  © MarketLine Page 6 Marks and Spencer Group plc History over 125,000 homes, the company would roll-out a number of new products including bespoke energy advice, renewable energy solutions such as solar panels and heat pumps, and energy efficient heating solutions. In the same year, M&S announced a program to be the world’s most sustainable retailer by 2015, launching 80 major new commitments under M;S’ eco and ethical plan, Plan A. The new commitments will mean that the company ensures all M&S products become ‘Plan A products’ with at least one sustainable quality. This program will also enable the company’s 2,000 suppliers to adopt Plan A best practice and encourage M;S customers and employees to live ‘greener’ lifestyles. Fur ther in 2010, M;S launched a new version of www. marksandspencer. om designed specifically for use on mobile phones and mobile devices—the first mobile site from a major UK high street retailer. Through this, the company aims to expand its multi-channel offering. During the same year, M;S launched England Football team suit exclusively in M;S stores, to take advantage of the football World cup spending. The company opened its new 1. 1 million square feet distribution centre at ProLogis Park Bradford in the UK in 2010. This warehouse in the UK will serve all the company’s stores with furniture products and store equipment. Later in 2010, M&S launched a range of Solar PV and Solar Thermal water heating solutions. Fur thering the sustainability initiatives, the company also announced that it will use polyester made from recycled PET drinks bottles instead of virgin polymer to make more than 300 million clothing care labels a year. Towards the end of 2010, M&S announced plans to move into rail distribution to reduce its carbon footprint. More than 300,000 general merchandise products per week would move from road to rail distribution. The company also opened a new shopping center in Vilnius, Lithuania at the end of year. In April 2011, M&S opened its greenest ever store at Ecclesall Road in Sheffield. This is the first store of a number of new Sustainable Learning stores planned by the company as par t of its drive to become the world’s most sustainable major retailer by 2015. The company opened 20 stores in the UK during FY2011, including 17 Simply Foods. In international, M;S opened 49 new stores and closed 15 stores. During the same period, the company entered the Egyptian market with a 28,000 square feet store in the Dandy Mega Mall in Cairo. The company, in July 2011, launched a new iPad application for its investors. This application will provide investors with latest M;S financial news. In the following month, M;S signed a traceability deal with Historic Futures. As per the deal, Historic Futures will provide the company full traceability on ever y single clothing and home product it sells. M;S is the first major retailer to commit to full traceability for non-food products. In September 2011, M;S opened a new store at Westfield, Stratford City with the latest ‘Only at Your M;S’ innovations and customer experiences. In the following month, M&S launched its new French website, http://www. marksandspencer. fr/, marking its first international transactional website. Marks and Spencer Group plc  © MarketLine Page 7 Marks and Spencer Group plc History The company, in November 2011, opened its new flagship store at 100 Avenue des Champs-elysees in Paris. M&S, in February 2012, launched its outlet format on its website at www. marksandspencer. com/outlet. M&S Outlet will permanently offer a selection of more than 1,300 quality M&S clothing products with up to 40% off the regular high street and online prices. In the same month, the company recalled four products (Crispy Prawn Wonton, Crispy Vegetable Balls, Prawn Baguette Toast, and Prawn Siu Mai Selection) from its Chinese range due to mistake in ‘use by’ date. In March 2012, the company, announced plans to launch a new website for its Irish customers, http://www. marksandspencer. ie/. In April 2012, M&S announced that it will accept secondhand clothes at UK outlets in order to recycle into other fabrics or reuse overseas by the Oxfam charity in an aim to cut waste. Marks and Spencer Group plc  © MarketLine Page 8 Marks and Spencer Group plc Key Employees KEY EMPLOYEES Name Job Title Board Marc Bolland Chief Executive Officer Executive Board 975000 GBP Alan Stewar t Chief Finance Officer Executive Board 550000 GBP Kate Bostock Executive Director, General Merchandise Executive Board 590000 GBP John Dixon Executive Director, Food Executive Board 540000 GBP Steven Sharp Executive Director, Marketing Executive Board 655000 GBP Laura Wade-Gery Executive Director, Multi-channel E-commerce Executive Board Amanda Mellor Group Secretar y and Head of Corporate Governance Executive Board Rober t Swannell Chairman of the Board Non Executive Board Vindi Banga Director Non Executive Board Miranda Cur tis Director Non Executive Board Jeremy Darroch Director Non Executive Board 85000 GBP Steven Holliday Director Non Executive Board 85000 GBP Mar tha Lane Fox Director Non Executive Board 70000 GBP Jan du Plessis Director Non Executive Board 70000 GBP Clem Constantine Director, Proper ty Senior Management Tanith Dodge Director, Human Resources Senior Management Dominic Fr y Director, Communications and Investor Relations Senior Management Jan Heere Director, International Senior Management Nayna McIntosh Director, Store Marketing and Design Senior Management Steve Rowe Director, Retail Senior Management Darrell Stein Director, Information Technology and Logistics Senior Management Marks and Spencer Group plc  © MarketLine Compensation 450000 GBP Page 9 Marks and Spencer Group plc Key Employee Biographies KEY EMPLOYEE BIOGRAPHIES Marc Bolland Board: Executive Board Job Title: Chief Executive Officer Since: 2010 Mr. Bolland has been the Chief Executive Officer at Marks and Spencer Group since 2010. Previously, he was the Chief Executive Officer at Morrisons Supermarkets from 2006 to 2010. Prior to this, Mr. Bolland worked at Heineken for 20 years in various management roles, including Executive Board member and Chief Operating Officer, and responsibility for operations and business development in the US, France, Italy, Spain, the Caribbean and Latin America. He also ser ves as a Director at Manpower. Alan Stewart Board: Executive Board Job Title: Chief Finance Officer Since: 2010 Mr. Stewar t has been the Chief Finance Officer at Marks and Spencer Group since 2010. Before joining the company, he was the Chief Financial Officer at AWAS, an aircraft leasing company. Mr. Stewar t spent 10 years at HSBC Investment Bank before joining Thomas Cook in 1996, where he held various senior roles, including Chief Executive at Thomas Cook UK. Mr. Stewar t joined WH Smith in 2005 as Group Finance Director. He also ser ved as a Non Executive Director at Games Workshop Group. Kate Bostock Board: Executive Board Job Title: Executive Director, General Merchandise Ms. Bostock is the Executive Director of General Merchandise at Marks and Spencer Group. She joined the company in 2004. Previously, Ms. Bostock was the Product Director for Childrenswear at Next from 1994. She also ser ved as the Product Director for the George brand covering all areas of clothing and footwear at Asda. John Dixon Board: Executive Board Job Title: Executive Director, Food Marks and Spencer Group plc  © MarketLine Page 10 Marks and Spencer Group plc Key Employee Biographies Since: 2009 Mr. Dixon has been the Executive Director of Food at Marks and Spencer Group since 2009. He joined the company as a Store Management Trainee. Mr. Dixon held various senior roles at the company for over 20 years, including Executive Assistant, Chief Executive, and Director of Home and M&S Direct. Steven Sharp Board: Executive Board Job Title: Executive Director, Marketing Mr. Sharp is the Executive Director of Marketing at Marks and Spencer Group. He joined the company in 2004. Previously, Mr. Shar p served as the Marketing Director at Asda, the Bur ton Group, Booker, and Arcadia Group. Currently, he is a Non Executive Director at Adnams. Laura Wade-Gery Board: Executive Board Job Title: Executive Director, Multi-channel E-commerce Since: 2011 Ms. Wade-Gery has been the Executive Director of Multi-channel E-commerce at Marks and Spencer Group since 2011. Prior to this, she worked at Tesco and held a variety of senior roles, including Chief Executive Officer of Tesco. com and Tesco Direct. Ms. Wade-Ger y also held various roles at Gemini Consulting and Kleinwor t Benson. She has also been a Non Executive Director at Trinity Mirror since 2006. Amanda Mellor Board: Executive Board Job Title: Group Secretary and Head of Corporate Governance Ms. Mellor is the Group Secretary and Head of Cor porate Governance at Marks and Spencer Group. She joined the company in 2004 as the Head of Investor Relations. Ms. Mellor spent her early career in investment management at James Capel before becoming a Director within its Corporate Finance team. She then served at Rober t Fleming, Investment Banking prior to joining The Bur ton Group as the Director of Cor porate Relations and Investor Relations. Robert Swannell Board: Non Executive Board Job Title: Chairman of the Board Marks and Spencer Group plc  © MarketLine Page 11 Marks and Spencer Group plc Key Employee Biographies Since: 2011 Mr. Swannell has been the Chairman of the Board at Marks and Spencer Group since 2011. He joined the company in 2010 as a Non Executive Director. Prior to this, Mr. Swannell was a Senior Independent Director at The British Land Company, and 3i Group. He spent over 30 years in investment banking at Schroders/Citigroup. Mr. Swannell was previously the Vice Chairman at Citi Europe and Co-Chairman at Citi’s European Investment Bank. Vindi Banga Board: Non Executive Board Job Title: Director Since: 2011 Mr. Banga has been a Director at Marks and Spencer Group since 2011. He is currently a Par tner at Clayton Dubilier ; Rice, a private equity investment firm. Prior to this, Mr. Banga spent 33 years at Unilever, where he held several senior positions, including President of the Global Foods, Home and Personal Care businesses, and was a member of the Unilever Executive Board. He also serves as a Non Executive Director at Thomson Reuters and Maruti Suzuki India. Miranda Curtis Board: Non Executive Board Job Title: Director Since: 2012 Ms. Cur tis has been a Director at Marks and Spencer Group since February 2012. She is currently the Chairman at Waterstones, and a Non Executive Director at Liber ty Global. Ms. Cur tis has also been a Non Executive Director at National Express Group since 2008. She also serves on the Boards of the Institute for Government, the Royal Shakespeare Company, and Camfed (the leading African girls’ education charity). Jeremy Darroch Board: Non Executive Board Job Title: Director Since: 2006 Mr. Darroch has been a Director at Marks and Spencer Group since 2006. He also ser ves as the Chief Executive at British Sky Broadcasting. Previously, Mr. Darroch ser ved as the Chief Financial Officer at British Sky Broadcasting. Prior to this, he was the Group Finance Director and Retail Finance Director at Dixons Retail (formerly DSG International). Marks and Spencer Group plc MarketLine Page 12 Marks and Spencer Group plc Key Employee Biographies Steven Holliday Board: Non Executive Board Job Title: Director Since: 2004 Mr. Holliday has been a Director at Marks and Spencer Group since 2004. He is the Group Chief Executive Officer at National Grid. Prior to that, Mr. Holliday served as the Director of UK and Europe and was responsible for the UK Elect ricity and Gas businesses. He is also the Chairman of the UK Business Council for Sustainable Energy. Prior to joining National Grid, Mr. Holliday was an Executive Director at British Borneo Oil and Gas. Previously, he held several senior positions at Exxon Group. Martha Lane Fox Board: Non Executive Board Job Title: Director Since: 2007 Ms. Fox has been a Director at Marks and Spencer Group since 2007. She is the UK’s Digital Champion, the Chairman of Race Online 2012, and a Non Executive Director at Channel 4 Television. Ms. Fox is founder and Chairman of Lucky Voice, and of her own grant-giving foundation, Antigone. She was co-founder of lastminute. com. Jan du Plessis Board: Non Executive Board Job Title: Director Since: 2008 Mr. du Plessis has been a Director at Marks and Spencer Group since 2008. He is the Chairman at Rio Tinto. Previously, Mr. du Plessis was the Chairman at British American Tobacco and a Non Executive Director at Lloyds Banking Group. He also ser ved as the Chairman at RHM from 2005 to 2007. Mr. du Plessis was previously the Group Finance Director at Richemont, a position he held until 2004. Clem Constantine Board: Senior Management Job Title: Director, Proper ty Mr. Constantine is the Director, Proper ty at Marks and Spencer Group. He joined the company in 2006. Mr. Constantine was appointed the Group Proper ty and Retail Planning Director at Arcadia Group in 1999. He was appointed to his first finance directorship in 1993, for the IS brand at the Marks and Spencer Group plc  © MarketLine Page 13 Marks and Spencer Group plc Key Employee Biographies Bur ton Group, and moved through several other finance directorships with variable responsibilities including systems and retail. Mr. Constantine was trained as a Char tered Accountant at Stoy Hayward, and joined Debenhams in 1989 as a Financial Analyst. Tanith Dodge Board: Senior Management Job Title: Director, Human Resources Since: 2008 Ms. Dodge has been the Director, Human Resources at Marks and Spencer Group since 2008. She was formerly the Group Human Resources Director at WH Smith since 2003. At WH Smith, Ms. Dodge was also responsible for Public Relations, Communications and Post Office Operations. Prior to this, she was the Senior Vice President Human Resources for Europe, Middle East and Africa (EMEA) at InterContinental Hotels Group. Ms. Dodge also served as the Human Resources Director at Diageo’s two business divisions. She was also the International Human Resources Manager at Prudential Corporation. Dominic Fry Board: Senior Management Job Title: Director, Communications and Investor Relations Mr. Fry is the Director, Communications and Investor Relations at Marks and Spencer Group. He joined the company in 2009. Prior to this, Mr. Fr y ser ved at Tulchan Communications. In 1996, he was appointed the Communications Director at J Sainsbury and ser ved in the same role at ScottishPower from 2000 to 2005. In 1989, Mr. Fr y became the Communications Director at AT&T in the UK before moving from there to head up communications at the Channel Tunnel in the mid ’90s. He star ted his career in 1982 working in PR consultancy at Traverse-Healy ; Regester and then Charles Barker. Jan Heere Board: Senior Management Job Title: Director, International Since: 2011 Mr. Heere has been the Director, International at Marks and Spencer Group since 2011. He joined Inditex in 2002 where he held a several international roles, most recently as General Manager for Inditex Russia. During 2000–02, Mr. Heere held various senior management roles at Zara, Groupo Inmobiliario Lupaco, and Charanga. He began his career at Manpower in Spain in 1997. Nayna McIntosh Marks and Spencer Group plc  © MarketLine Page 14 Marks and Spencer Group plc Key Employee Biographies Board: Senior Management Job Title: Director, Store Marketing and Design Ms. McIntosh is the Director, Store Marketing and Design at Marks and Spencer Group. She joined the company in 2005. Prior to this, Ms. McIntosh was par t of the Management Team that set up the per una brand in 2001. Previously, she served as the Sales and Marketing Director for the George brand at Asda stores. Before joining George, Ms. McIntosh was at Next for four years as a Divisional Executive for the South of England. Steve Rowe Board: Senior Management Job Title: Director, Retail Since: 2008 Mr. Rowe has been the Director, Retail at Marks and Spencer Group since 2008. He joined the company in 1989 and held a variety of positions in store management, having previously worked at Topshop as a Store Manager. Mr. Rowe joined Head Office in 1992 as a Merchandiser for Menswear. In 1998, he was promoted to Category Manager in the Furniture Depar tment. In 2001, Mr. Rowe led the team developing the Home Growth Strategy, working with McKinsey Consultants, and became Head of Home categories in 2003. He was promoted to the Director of Home a year later in 2004. From 2004 to 2008, Mr. Rowe was also responsible for Beauty and New Business Development. Darrell Stein Board: Senior Management Job Title: Director, Information Technology and Logistics Mr. Stein is the Director, Information Technology and Logistics at Marks and Spencer Group. He has been working in IT for 17 years star ting his career at the company in 1990. Mr. Stein re-joined M;S in 2006 as the IT Director. From 2001 to 2006, he ser ved at Vodafone, becoming IT Director for Vodafone UK in 2004. Prior to this, Mr. Stein was Vodafone’s UK Network Director and Global IT Strategy and Architecture Director. From 1996 to 2001, he ser ved at Ernst & Young, leading a number of major IT and Change Programmes in the financial services, retail and utility sectors. In 1994, Mr. Stein joined Mars as a Project Manager. Marks and Spencer Group plc  © MarketLine Page 15 Marks and Spencer Group plc Major Products and Services MAJOR PRODUCTS AND SERVICES M&S is one of the leading retailers of clothing, foods and homeware in the UK. The company’s key products and services include the following: Products: Women’s wear Men’s wear Lingerie Children’s wear Footwear Food and grocery items Homeware and home accessories Kitchen and tableware Lighting Furniture products Services: Credit cards Car, home, travel, and pet insurance Personal loans Brands: Autograph Limited Collection Collezione Blue Harbour Girls Boutique Per Una Ceriso Adored Truly you Marks and Spencer Group plc  © MarketLine Page 16 Marks and Spencer Group plc Revenue Analysis REVENUE ANALYSIS Overview The company recorded revenues of ? 9,740. 3 million (approximately $15,158. 8 million) in FY2011, an increase of 2. 1% over FY2010. For FY2011, the UK, the company’s largest geographic market, accounted for 89. 7% of the total revenues. M;S generates revenues through two business divisions: food (51. 5%% of the total revenues in FY2011), and general merchandise (48. 5%). Revenues by division* During FY2011, the food division recorded revenues of ? 4,499. 4 million (approximately $7,002. 4 million), an increase of 1. 9% over FY2010. The general merchandise division recorded revenues of ? 4,233. 6 million (approximately $6,588. 8 million) in FY2011, an increase of 2% over FY2010. *The revenue breakdown by division is only for the revenues from the UK market. Revenues by geography The UK, M;S’ largest geographical market, accounted for 89. % of the total revenues in FY2011. Revenues from the UK reached ? 8,733 million (approximately $13,591. 2 million) in FY2011, an increase of 1. 9% over FY2010. International operations accounted for 10. 3% of the total revenues in FY2011. Revenues from international operations reached ? 1,007. 3 million (approximately $1,567. 7 million) in FY2011, an increase of 4% over FY2010 . Marks and Spencer Group plc  © MarketLine Page 17 Marks and Spencer Group plc SWOT Analysis SWOT ANALYSIS M&S is one of the leading retailers of clothing, foods and homeware in the UK. The company has expanded its food product offering significantly in the recent years. New products launches, focus on expanding healthy products, promotions, and competitive prices are all helping the company attract customers in a highly competitive market. However, surge in shoplifting could negatively impact the cost structure for M&S. Strengths Weaknesses Expanding food offering Strong market position in the clothing segment Geographical expansion to increase the addressable market and reduce vulnerability to mature UK market M&S etched a highly effective CSR strategy M&S legacy stores and systems are a ompetitive disadvantage Declining general merchandise division sales due to inadequate stocking Opportunities Threats Online channel continues to boom and will enable M&S to boost revenues Focus on China and India can lead to expansion in two of the fastest growing markets Surge in shoplifting losses costs the retailers and customers Weak consumer spending in the UK Rising labor c ost in the UK Strengths Expanded food offering The company has expanded its food product offering significantly in the recent years. In 2009, M&S consistently highlighted it is cheaper than Waitrose on a basket of 1,200 items by about 2%. The company, in 2009, decided to invest in its margins in order to provide its customers better value. As a result of this, M&S saw improved perceptions of value by its customers. The company, in FY2011, launched around 1,800 new products in food and positioned itself as the UK’s leading high quality food retailer. The key product launches of the company include Taste Italia, and Made Without Wheat range of gluten-free bread and cakes, With the success of Made Without Wheat product range, the company launched gluten-free sandwiches, sausages, stuffing, and crisp bakes. As of FY2011, the company offered 125 gluten-free products. M&S also became the UK’s second largest favorite health food brand with the launch of its Simply Fuller Longer range which encourages customers to manage their weight with a menu plan. The gross margin of food division increased by 20 basis points to Marks and Spencer Group plc  © MarketLine Page 18 Marks and Spencer Group plc SWOT Analysis 30. 8% in FY2011. This was mainly driven by better management of promotions and waste. Fur ther, in the four th quar ter of FY2012 ended March 2012, M&S launched 500 new products in the food division. The sales in this quar ter increased by 3. 1%, The company’s promotions such as roast dinner for ? 5 ($7. 8), Dine In, etc offered its customers with great value solutions for special occasions. M&S’ food division has been performing well in a ver y competitive market and against tough competitors. By launching innovative products and with an expanded food offering, the company has been able to attract the customers in a highly competitive market. Strong market position in the clothing segment M&S has a strong market position in the clothing segment. With more than one in 10 clothing items bought from M&S, the company ranks amongst the three largest clothing retailers in the UK. According to a repor t released by Verdict (Datamonitor’s retail arm) in May 2012, M;S is known for its product quality. The company was ranked first with a score of 49 for its product quality above the market average of 23. According to another repor t released by Verdict in April 2012, M;S enjoys highest conversion rate of 50. 7% and is very successful in conver ting visitors to loyal main users through its varied product offer, in-store service and garment quality. This indicates that M;S is a trustwor thy brand, which all main users would return to knowing that the quality, fit, and ser vice are reliable and consistent. The retailer has recognized that its core market of predominantly mature customers has been especially hard hit by rising core costs of living, falling interest on savings and worse prospects for pensions, and in reaction has lowered its entr y prices to compete more effectively with high street/value operators and supermarkets, helping to maintain the loyalty of its main users and prevent them from shopping elsewhere. Verdict, in its repor t in March 2012, ranked, M;S seventh in the global depar tment store market with a share of 3. 2%. This market leadership enabled M;S to excel throughout the economic downturn, while other mid-market retailers are pressured from the ever expanding value players. Leading market position indicates access to a large customer base and also popularity of M;S’ offering in the clothing segment. Going forward, this market position would enable the company to drive revenues as consumer spending recovers. Geographical expansion to increase the addressable market and reduce vulnerability to mature UK market With a por tfolio of over 361 owned and franchised stores in 42 territories M&S continues to grow its international business. This mix of ownership models and countries enabled the company to perform well in FY2011, even when individual markets were weak. Fur ther, during FY2011, the company entered the Egyptian market with a 28,000 square feet store in the Dandy Mega Mall in Cairo. M&S’ international business grew by 4% in FY2011 despite tough economic situation. As an established retailer in a mature market, it is going to be hard for M;S to continually deliver significant increases in UK sales. However, in the long run, its international business offers an oppor tunity for high growth. By generating much higher volumes, it can deliver margin benefits with suppliers. With production costs rising, this will be an advantage in the UK. International expansion will enable the company to access multiple sales points for most of the product ranges. This is especially relevant for clothing and homewares segments. Also, through expansion in the international markets M;S can reduce Marks and Spencer Group plc  © MarketLine Page 19 Marks and Spencer Group plc SWOT Analysis vulnerability to mature UK market. The company can also par ticipate effectively in some of highest growing markets such as China and India. All these factors would enable the company to reduce the overall business risk and facilitate increased revenues. M;S etched a highly effective CSR strategy M;S has to its credit an effective corporate social responsibility (CSR) strategy. CSR has been gaining prominence not just among the stake holders and governments but the consumers as well. The company has the highest propor tion of consumers believing it to be a responsible retailer and this can largely be attributed to the success of its Plan A, a ? 200 million (approximately $320. 3 million) 100-point plan launched in 2007 with five areas of focus: climate change, fair par tnership, health, sustainable raw materials, and waste. In FY2011, the company included two more areas in its Plan A: involving customers, and making Plan A how we do business. In the last few years, initiatives launched under the Plan A banner include launching the company’s first eco-store, encouraging suppliers to set-up eco-factories, removing hydrogenated fats from its ready meals, increasing the propor tion of organic food, reducing the salt content of its produce, cer tifying a larger percentage of its fish as originating from sustainable populations, and beginning to sell recycling and composting bins. It is the high profile presence of Plan A in adver tising campaigns, product labeling and store signage that gives M&S one of the best consumer perceptions of a retailer for social responsibility. The campaign works not just as a direct to consumer channel, but also because of the positive coverage it creates. Perhaps more impor tantly, it has publicized all of these initiatives extensively. In 2008, M&S launched a TV adver tising campaign focusing on its ethical, environmental and health-conscious credentials, highlighting that it only uses free range eggs and that its products are now free from ar tificial colors and flavorings. Other, more innovative, ideas have included a joint venture with Oxfam to promote the recycling of old clothes. In addition, more controversially, the retailer introduced a 5p charge for carrier bags at all of its food depar tments in 2008. Though many consumers resented this charge, it has undoubtedly boosted M&S’ reputation as an ethical retailer. Overall, sculpting its CSR strategy into such a high publicity campaign, divided into such clear action points and highly visible benefits, has seen the company move to the forefront of responsible retailing. In FY2011, the company launched Indigo Green, its first range of clothing made using more sustainable fabrics. In April 2012, the company announced to accept secondhand clothes at all the UK outlets except Simply Food stores, to recycle them into other fabrics or to reuse them in order to cut waste. Plan A has seen CSR become core to M;S’ principles in the eyes of the consumer and it has reaped the benefits of this, gaining shoppers as a result and repor tedly saving more than ? 70 million (approximately $108. 9 million) in efficiencies gained in FY2011 compared with ? 50 million (approximately $77. 8 million) in FY2010. In addition, M&S improved energy efficiency in its stores by 23% and warehouses by 24% in FY2011 compared to FY2007. It also improved the fuel efficiency of its deliver y fleets by 20% and total carbon emissions have been reduced by 13%. The company now recycles 94% of all the waste it generates from its stores, offices and warehouses. The total waste is down by more than a third. M&S also met its sustainable standards by sourcing 90% of wild fish in FY2011 (62% in FY2010) and 76% of wood in FY2011 (72% in FY2010). Marks and Spencer Group plc  © MarketLine Page 20 Marks and Spencer Group plc SWOT Analysis By actively promoting a product’s greener attributes (for example fewer, more recognizable and natural ingredients), retailers such as M;S have positioned products as improving one’s personal environment while benefiting the global environment too. Many of their successes have come from emphasizing the former rather than the latter, especially as consumers often associate ethics with a sense of wellbeing. In terms of the issues that concern consumers, the sustainability of natural resources is a major fear, as are climate change and the fairness of sourcing arrangements. Consumers are also attracted to products with health benefits and there is a clear trend that consumers can be persuaded to par t with more money in return for products with a positive impact, not just to them personally, but also to wider society. Indeed, differentiating between products becomes harder and harder to achieve, Verdict expects consumers to turn to auxiliary considerations such as ethicality and sustainability to guide their choices. Consumers are no longer purely satisfied with how a product looks and functions; they want assurances over aspects such as nvironmental impact, hygiene, safety, and fairness. In light of the above mentioned trends where the customer choices are increasingly guided by the sustainability issues, M&S will benefit due to its reputation of being a responsible retailer. Weaknesses M&S legacy stores and systems are a competitive disadvantage M&S suffers some competitive disadvantages compared to Tesco, which has been able to drive earnings before interest and tax (EBIT) growth even in the mature UK market. Tesco benefits from supplier power and state-of-the-ar t IT, supply chain and systems compared with M&S legacy systems. The supermarket retailer has been able to break up the demand cur ve with metro, express and big box store formats out of town and on the high street. Moreover, Tesco stores have been carefully designed with consistent store layouts in order to facilitate store navigation. Extra back room store space has also been allocated to allow for smooth execution of its picking and distribution model. Tesco sells both own label and branded goods (food and non-food) in a bid to drive up footfall and sales conversion. M&S legacy stores are inconsistent in terms of layout. Store size tends to dictate product availability, while a lack of back room store space does not facilitate the same style supermarket pick and delivery model. The legacy systems and stores of M&S are constraining effective servicing of customer demands on a consistent basis. This is placing the company at a clear competitive disadvantage compared to a formidable opponent, Tesco. Declining general merchandise division sales due to inadequate stocking The company’s general merchandise division sales declined in recent times, M&S’ general merchandise division sales decreased by 2. % in the four th quar ter of FY2012 ended March 2012. This was mainly due to shor tage of stock in its stores, Due to this, the company was also not able to meet customer demand for 300,000 knitwear garments under the M&S Woman label. It only sold Marks and Spencer Group plc  © MarketLine Page 21 Marks and Spencer Group plc SWOT Analysis 100,000 knitwear garments during this period. Fur ther, in times of high demand, inadequate stock could hamper the sales of the division and result in loss of sales to competitors. This not only affects the revenues of the company but could also result in shift of customers to its competitors. Opportunities Online channel continues to boom and will enable M&S to boost revenues Online retail sales in the UK have grown significantly over a period of time. According to Office for National Statistics, non-seasonally adjusted average weekly value for internet retail sales in the UK was ? 414 million (approximately $644. 3 million) in Februar y 2010, this increased to ? 573. 6 million (approximately $892. 7 million) in February 2012, representing an increase of 18%. Internet sales accounted for only 8% of the total retail sales (excluding fuel) in Februar y 2010. This figure increased to 10. 7% in February 2012. The growing desire for convenience is seeing shoppers buy more online, especially in the category of food and grocery. Consumers have also become savvier, using the internet more to get the best deal they can. Voucher codes, and cashback sites have been instrumental in this. Additionally, improved deliver y and fulfillment options have been encouraging consumers to shop more online. The company operates in the internet channel through M&S Direct where the products are offered through website and newly launched ‘Shop Your Way’ facility, a new ordering service that has been rolled-out in 444 stores (including 151 in Simply Foods stores) during FY2011, allowing customers to place orders either in stores, online or over the phone, for deliver y to either a nominated address or free of charge to their nearest store. M&S Direct’s sales increased from ? 413 million (approximately $642. 8 million) in FY2010 to ? 543 million (approximately $845. million) in FY2011, an increase of 31. 5%. Fur ther, in the first half of FY2012, M&S Direct’s sales increased by 11. 7% with more than three million visitors per week. Thus, by leveraging its online presence, M&S can cater to the requirements of a growing number of customers who are looking for convenience and better deals over the internet. Focus on China and India can lead to expansion in two of the fastest growing markets China and India are two economies which are recording highest growth rates which, in turn, are expected to aid the retail market growth in these two countries. Asia’s retail sales are estimated to increase with China driving the growth. According to the preliminary estimation, the gross domestic product (GDP) of China was CNY47,156. 4 billion ($7,285. 7 billion) in 2011, a year-on-year increase of 9. 2% at comparable prices. The fast pace economic development in China coupled with the rise of the middle class income group and their increasing disposable income have fur ther pushed up the demand for several consumer goods. According to National Bureau of Statistics of China, the total retail sales reached CNY18,391. 9 billion (approximately $2,841. billion) in 2011, representing a year-on-year nominal growth rate of 17. 1%. Fur ther, according to industr y estimates, the countr y’s total retail sales are expected to increase from approximately CNY20 trillion ($3 trillion) in 2012 to approximately CNY26 trillion ($4 trillion) in 2016, representing an increase of about 30%. Strong Marks and Spencer Group plc  © MarketLine Page 22 Marks and Spencer Group plc SWOT Analysis underlying economic trends, population growth and the increasing wealth of individuals are key factors that contribute to the retail market expansion in China. The retail industry in India is large owing to a large population and is set to grow as several factors contribute. According to the industry sources, the retail sales in India are forecast to grow from around $411 billion in 2011 to $804 billion by 2015. The key factors behind the forecast growth include strong underlying economic growth, population expansion, increasing wealth of individuals and the rapid construction of organized retail infrastructure. Also, as middle and upper class consumer base expands, there will also be oppor tunities in India’s second and third-tier cities. The greater availability of personal credit and a growing vehicle population are to improve mobility which will also contribute to a trend towards retail sales growth. M;S is strengthening presence in India and China as par t of its geographic expansion and for some time to come, these countries would be the key contributors to the company’s international expansion strategies. The company in with par tnership with Reliance Retail, an established retailer in India, can tap into this lucrative market while expansion in China also continues. Indian and Chinese markets would provide a huge potential revenue base for M&S. Threats Surge in shoplifting losses costs the retailers and customers The UK retailers are exposed to increased costs of shoplifting. Shoplifting has assumed massive propor tions in recent times. According to industry estimates, retail crime costed UK stores ? 1. 4 billion ($2. 2 billion) in 2011. There are about two million thefts per year, which concludes to an average of more than one per minute. According to another industr y repor t, the thefts across the UK stores increased from ? 4. 2 million ($6. 5 million) in 2009 to ? 5. 1 million ($7. 9 million) in 2011, an increase of 20%. Long-term trends also show the figure is likely to continue rising. As a result, retailers have been increasing their surveillance spend. This is increasing the costs for retailers as well as for the end consumers. The shoplifting losses are adding to the costs for the retailers and the customers have also been bearing the brunt. The surge in shoplifting could negatively impact the cost structure for M&S as well. Weak consumer spending in the UK The UK market is suffering from weak consumer spending. The European debt crisis added more downward pressure to the growth prospects of the UK. According to Eurostat, the UK economy grew by 0. 7% in 2011 and is expected to grow by 0. 5% in 2012. In addition, the UK has witnessed high unemployment rate. According to the Office of National Statistics, the unemployment rate for the three months period November 2011 to January 2012 was 8. 4% with 2. 67 million unemployed people in the UK. Increasing unemployment rate is expected to fur ther put pressure on the economy of the UK. High inflation, led by the increase in VAT to 20% and public spending cuts reduced disposable Marks and Spencer Group plc MarketLine Page 23 Marks and Spencer Group plc SWOT Analysis income, leading to a fall in consumer spending on discretionary items. Consumers have been cautious with their spending especially due to soaring petrol prices, tax increases and uncer tainty over jobs. The UK is the key market for M&S. In FY2011, the UK accounted for 89. 7% of M&S’ total revenues. Thus, the sluggish consumer spending and high unemployment rate in the UK could affect most of the non-food retailers and lead to reduced sales volume or shrinking profit margins. Rising labor cost in the UK Labor costs are rising in the UK. In recent times, tight labor markets, increased over time, government mandated increases in minimum wages and a higher propor tion of full-time employees are resulting in an increase in labor costs, which could materially impact the company’s results of operation. The National Minimum Wage (NMW) Regulations came into force in 1999 and since then the NMW rates have been increased annually. The national minimum wage increased from ? 5. 93 per hour ($9. 23 per hour) in October 2010 to ? 6. 08 per hour ($9. 46 per hour) in October 2011. Fur ther, the national minimum wage is expected to increase to ? 6. 19 per hour (9. 63 per hour) from October 2012. In FY2011, M&S employed 78,169 people. Increasing labor costs can adversely affect the company’s operating costs as its wage bills would escalate. This, in turn, could impact its margins adversely. Marks and Spencer Group plc  © MarketLine Page 24 Marks and Spencer Group plc Top Competitors TOP COMPETITORS The following companies are the major competitors of Marks and Spencer Group plc ASDA Group Limited Debenhams plc H ; M Hennes ; Mauritz AB J Sainsbury plc NEXT plc Selfridges plc Tesco PLC Gap, Inc. , The French Connection Group Plc House of Fraser Group Plc John Lewis Par tnership plc Arcadia Group Limited Home Retail Group Plc Marks and Spencer Group plc  © MarketLine Page 25 Marks and Spencer Group plc Company View COMPANY VIEW A statement by Rober t Swannell, the Chairman of the Board at Marks and Spencer Group, is given below. The statement has been taken from the company’s Annual Repor t for FY2011. I feel ver y privileged to be Chairman of this unique company and at such an exciting time in our evolution. Since joining Marks ; Spencer in October and assuming the role of Chairman in Januar y, I have spent much of my time getting to know the business better – meeting our employees, shareholders, customers and suppliers. I first became deeply involved with M;S during the unsolicited takeover attempt in 2004, when I led the advisory team that helped put the M;S case to its shareholders. It was then I learned first hand about this unique company: about the extraordinarily strong relationship it has with its many stakeholders and about its very special ethos. This ethos is a reflection of the high standards our customers expect from M;S – trusting us not only to deliver great value, great quality products but also to do the right thing – socially, environmentally and ethically. We know that putting Plan A at the hear t of how we do business is not just the right thing to do; it is also fundamental to our long-term success. Performance In a challenging marketplace M;S has continued to grow, with underlying profits up 12. 9% on the year. We delivered this by staying true to our heritage of quality and innovation, reminding our customers what makes M;S special. This year Marc Bolland set out a clear medium-term plan for the business, after extensive discussions with colleagues and us, the Board. This is covered in detail in Marc’s review. From day one, I have been struck by the passion and commitment of our people. I am delighted that this year we are paying a bonus to all employees to thank them for their energy and enthusiasm in what has been a difficult trading environment. Dividend We are committed to delivering consistent returns for our shareholders. To this end we have adopted a progressive dividend policy, with dividends broadly covered twice by earnings. We intend to pay a final dividend of 10. 8p per share (last year 9. 5p) in respect of the 2010/11 financial year. Governance Marks and Spencer Group plc  © MarketLine Page 26 Marks and Spencer Group plc Company View This year we returned to the traditional governance structure of a separate Chairman and Chief Executive, providing clarity between Marc Bolland and me, with regard to our respective roles. Put simply, I run the Board and Marc runs the business. The Board has a wide range of responsibilities. There are three that I think are par ticularly impor tant for the success of the business: first, to debate and agree our strategy and hold the executive team accountable for its execution; second, to ensure that we have the most talented team to execute this strategy and that we plan effectively for succession; and third, to set the tone for governance, which is par ticularly impor tant at M;S where ‘doing the right thing’ is an integral par t of our ethos. My ob is to ensure the Board has the right mix of skills and talents and to ensure that it works effectively as a team towards shared goals with the right mix of enquir y and suppor t of the executive directors from the non-executive directors. During the year we commissioned a formal Board evaluation from an independent consultant, the findings of which are outlined in the Governance section. This process highligh ted the real enthusiasm of the directors in suppor ting a shared ambition: to guide M;S to the ver y best future. We know that you expect high standards from M;S; it’s our responsibility to learn how we can improve. This review was an impor tant par t of that journey. As stated in our 2009/10 Annual Repor t, we reviewed the senior remuneration structure this year. Following extensive shareholder consultation, we believe we now have a framework that is both relevant to today’s M;S and fully aligned with our strategy. The Board Over the last year the Board has been strengthened by a series of executive appointments. In May 2010 Marc Bolland joined the business as Chief Executive, assuming the day-to-day running of the business from Sir Stuar t Rose in July. In October Alan Stewar t joined as Chief Finance Officer and in February we announced the appointment of Laura Wade-Gery as Executive Director, Multi-channel E-commerce; she will join the Board in July. Whilst the Board features some new faces, these changes have taken place around a core of executive and non-executive directors that has remained stable over recent years. I would like to pay par ticular tribute to Sir Stuar t Rose. When he became Chief Executive in 2004, M;S was at a low ebb. He restored confidence in M;S, re-established its values and built a strong business. The solid platform from which Marc is now implementing his plan is a credit to Stuar t’s energy and tireless commitment to M;S over the last seven years. The smooth management transition – the meticulous handover to me and the suppor t of Marc – is also a credit to Stuar t. In that connection, I would also like to thank Sir David Michels, and the Nominations ; Governance Committee he led, for managing a change of leadership over the past year that was accomplished quietly and effectively. David has decided to step down from the Board at the end of his second term in February 2012, but I am delighted that he will continue his role as Deputy Chairman until then. Marks and Spencer Group plc  © MarketLine Page 27 Marks and Spencer Group plc Company View I must also thank Louise Patten for the significant contribution she has made over the last five years, playing an impor tant role in each of our Board Committees. As Louise reaches the end of her second three year term on the Board, she has decided not to seek re-election at the upcoming AGM. Looking ahead Our priorities for the year ahead are clear. We have a plan and it is now our collective job to make it happen. The Board will concentrate on delivering exemplary governance at the highest level to enable our executive team to drive this strategy forward. The economy still gives us reason to be cautious. Yet in difficult times, our core values of Quality, Value, Ser vice, Innovation and Trust matter more than ever to M;S customers. These values remain at the hear t of our strategy and I therefore look forward to the future with confidence. Marks and Spencer Group plc  © MarketLine Page 28 Marks and Spencer Group plc Locations and Subsidiaries LOCATIONS AND SUBSIDIARIES Head Office Marks and Spencer Group plc Waterside House 35 Nor th Wharf Road London W2 1NW GBR P:44 20 7935 4422 http://www. marksandspencer. com Other Locations and Subsidiaries Marks and Spencer International Holdings Limited Great Britain GBR Marks and Spencer (Nederland) BV NLD Marks and Spencer (Ireland) Limited IRL Marks and Spencer (Asia Pacific) Limited HKG Marks and Spencer Simply Foods Limited Great Britain GBR Marks and Spencer Marinopoulos Greece SA GRC Marks and Spencer SCM Limited