The Da Vinci Code Chapter 21-23

CHAPTER 21 The Mona Lisa. For an instant, standing in the exit stairwell, Sophie forgot all about trying to leave the Louvre. Her shock over the anagram was matched only by her embarrassment at not having deciphered the message herself. Sophie's expertise in complex cryptanalysis had caused her to overlook simplistic word games, and yet she knew she should have seen it. After all, she was no stranger to anagrams – especially in English. When she was young, often her grandfather would use anagram games to hone her English spelling. Once he had written the English word† planets† and told Sophie that an astonishing sixty-two other English words of varying lengths could be formed using those same letters. Sophie had spent three days with an English dictionary until she found them all. â€Å"I can't imagine,† Langdon said, staring at the printout,† how your grandfather created such an intricate anagram in the minutes before he died.† Sophie knew the explanation, and the realization made her feel even worse. I should have seen this!She now recalled that her grandfather – a wordplay aficionado and art lover – had entertained himself as a young man by creating anagrams of famous works of art. In fact, one of his anagrams had gotten him in trouble once when Sophie was a little girl. While being interviewed by an American art magazine, Sauniere had expressed his distaste for the modernist Cubist movement by noting that Picasso's masterpiece Les Demoiselles d'Avignon was a perfect anagram of vile meaningless doodles.Picasso fans were not amused. â€Å"My grandfather probably created this Mona Lisa anagram long ago,† Sophie said, glancing up at Langdon. And tonight he was forced to use it as a makeshift code.Her grandfather's voice had called out from beyond with chilling precision. Leonardo Da Vinci! The Mona Lisa!Why his final words to her referenced the famous painting, Sophie had no idea, but she could think of only one possibility. A disturbing one. Those were not his final words†¦ . Was she supposed to visit the Mona Lisa? Had her grandfather left her a message there? The idea seemed perfectly plausible. After all, the famous painting hung in the Salle des Etats – a private viewing chamber accessible only from the Grand Gallery. In fact, Sophie now realized, the doors that opened into the chamber were situated only twenty meters from where her grandfather had been found dead. He easily could have visited the Mona Lisa before he died. Sophie gazed back up the emergency stairwell and felt torn. She knew she should usher Langdon from the museum immediately, and yet instinct urged her to the contrary. As Sophie recalled her first childhood visit to the Denon Wing, she realized that if her grandfather had a secret to tell her, few places on earth made a more apt rendezvous than Da Vinci's Mona Lisa. â€Å"She's just a little bit farther,† her grandfather had whispered, clutching Sophie's tiny hand as he led her through the deserted museum after hours. Sophie was six years old. She felt small and insignificant as she gazed up at the enormous ceilings and down at the dizzying floor. The empty museum frightened her, although she was not about to let her grandfather know that. She set her jaw firmly and let go of his hand. â€Å"Up ahead is the Salle des Etats,† her grandfather said as they approached the Louvre's most famous room. Despite her grandfather's obvious excitement, Sophie wanted to go home. She had seen pictures of the Mona Lisa in books and didn't like it at all. She couldn't understand why everyone made such a fuss. â€Å"C'est ennuyeux,† Sophie grumbled. â€Å"Boring,† he corrected. â€Å"French at school. English at home.† â€Å"Le Louvre, c'est pas chez moi!† she challenged. He gave her a tired laugh. â€Å"Right you are. Then let's speak English just for fun.† Sophie pouted and kept walking. As they entered the Salle des Etats, her eyes scanned the narrow room and settled on the obvious spot of honor – the center of the right-hand wall, where a lone portrait hung behind a protective Plexiglas wall. Her grandfather paused in the doorway and motioned toward the painting. â€Å"Go ahead, Sophie. Not many people get a chance to visit her alone.† Swallowing her apprehension, Sophie moved slowly across the room. After everything she'd heard about the Mona Lisa, she felt as if she were approaching royalty. Arriving in front of the protective Plexiglas, Sophie held her breath and looked up, taking it in all at once. Sophie was not sure what she had expected to feel, but it most certainly was not this. No jolt of amazement. No instant of wonder. The famous face looked as it did in books. She stood in silence for what felt like forever, waiting for something to happen. â€Å"So what do you think?† her grandfather whispered, arriving behind her. â€Å"Beautiful, yes?† â€Å"She's too little.† Sauniere smiled. â€Å"You're little and you're beautiful.† I am not beautiful, she thought. Sophie hated her red hair and freckles, and she was bigger than all the boys in her class. She looked back at the Mona Lisa and shook her head. â€Å"She's even worse than in the books. Her face is†¦ brumeux.† â€Å"Foggy,† her grandfather tutored. â€Å"Foggy,† Sophie repeated, knowing the conversation would not continue until she repeated her new vocabulary word. â€Å"That's called the sfumato style of painting,† he told her,† and it's very hard to do. Leonardo Da Vinci was better at it than anyone.† Sophie still didn't like the painting. â€Å"She looks like she knows something†¦ like when kids at school have a secret.† Her grandfather laughed. â€Å"That's part of why she is so famous. People like to guess why she is smiling.† â€Å"Do you know why she's smiling?† â€Å"Maybe.† Her grandfather winked. â€Å"Someday I'll tell you all about it.† Sophie stamped her foot. â€Å"I told you I don't like secrets!† â€Å"Princess,† he smiled. â€Å"Life is filled with secrets. You can't learn them all at once.† â€Å"I'm going back up,† Sophie declared, her voice hollow in the stairwell. â€Å"To the Mona Lisa?† Langdon recoiled. â€Å"Now?† Sophie considered the risk. â€Å"I'm not a murder suspect. I'll take my chances. I need to understand what my grandfather was trying to tell me.† â€Å"What about the embassy?† Sophie felt guilty turning Langdon into a fugitive only to abandon him, but she saw no other option. She pointed down the stairs to a metal door. â€Å"Go through that door, and follow the illuminated exit signs. My grandfather used to bring me down here. The signs will lead you to a security turnstile. It's monodirectional and opens out.† She handed Langdon her car keys. â€Å"Mine is the red SmartCar in the employee lot. Directly outside this bulkhead. Do you know how to get to the embassy?† Langdon nodded, eyeing the keys in his hand. â€Å"Listen,† Sophie said, her voice softening. â€Å"I think my grandfather may have left me a message at the Mona Lisa – some kind of clue as to who killed him. Or why I'm in danger.† Or what happenedto my family. â€Å"I have to go see.† â€Å"But if he wanted to tell you why you were in danger, why wouldn't he simply write it on the floor where he died? Why this complicated word game?† â€Å"Whatever my grandfather was trying to tell me, I don't think he wanted anyone else to hear it. Not even the police.† Clearly, her grandfather had done everything in his power to send a confidential transmission directly to her.He had written it in code, included her secret initials, and told her to find Robert Langdon – a wise command, considering the American symbologist had deciphered his code. â€Å"As strange as it may sound,† Sophie said,† I think he wants me to get to the Mona Lisabefore anyone else does.† â€Å"I'll come.† â€Å"No! We don't know how long the Grand Gallery will stay empty. You have to go.† Langdon seemed hesitant, as if his own academic curiosity were threatening to override sound judgment and drag him back into Fache's hands. â€Å"Go. Now.† Sophie gave him a grateful smile. â€Å"I'll see you at the embassy, Mr. Langdon.† Langdon looked displeased. â€Å"I'll meet you there on one condition,† he replied, his voice stern. She paused, startled. â€Å"What's that?† â€Å"That you stop calling me Mr.Langdon.† Sophie detected the faint hint of a lopsided grin growing across Langdon's face, and she felt herself smile back. â€Å"Good luck, Robert.† When Langdon reached the landing at the bottom of the stairs, the unmistakable smell of linseed oil and plaster dust assaulted his nostrils. Ahead, an illuminated SORTIE/EXIT displayed an arrow pointing down a long corridor. Langdon stepped into the hallway. To the right gaped a murky restoration studio out of which peered an army of statues in various states of repair. To the left, Langdon saw a suite of studios that resembled Harvard art classrooms – rows of easels, paintings, palettes, framing tools – an art assembly line. As he moved down the hallway, Langdon wondered if at any moment he might awake with a start in his bed in Cambridge. The entire evening had felt like a bizarre dream. I'm about to dash out of the Louvre†¦a fugitive. Sauniere's clever anagrammatic message was still on his mind, and Langdon wondered what Sophie would find at the Mona Lisa†¦if anything. She had seemed certain her grandfather meant for her to visit the famous painting one more time. As plausible an interpretation as this seemed, Langdon felt haunted now by a troubling paradox. P. S. Find Robert Langdon. Sauniere had written Langdon's name on the floor, commanding Sophie to find him. But why? Merely so Langdon could help her break an anagram? It seemed quite unlikely. After all, Sauniere had no reason to think Langdon was especially skilled at anagrams. We've never even met.More important, Sophie had stated flat out that she should have broken the anagram on her own. It had been Sophie who spotted the Fibonacci sequence, and, no doubt, Sophie who, if given a little more time, would have deciphered the message with no help from Langdon. Sophie was supposed to break that anagram on her own.Langdon was suddenly feeling more certain about this, and yet the conclusion left an obvious gaping lapse in the logic of Sauniere's actions. Why me? Langdon wondered, heading down the hall. Why was Sauniere's dying wish that his estranged granddaughter find me? What is it that Sauniere thinks I know? With an unexpected jolt, Langdon stopped short. Eyes wide, he dug in his pocket and yanked out the computer printout. He stared at the last line of Sauniere's message. P. S. Find Robert Langdon. He fixated on two letters. P. S. In that instant, Langdon felt Sauniere's puzzling mix of symbolism fall into stark focus. Like a peal of thunder, a career's worth of symbology and history came crashing down around him. Everything Jacques Sauniere had done tonight suddenly made perfect sense. Langdon's thoughts raced as he tried to assemble the implications of what this all meant. Wheeling, he stared back in the direction from which he had come. Is there time? He knew it didn't matter. Without hesitation, Langdon broke into a sprint back toward the stairs. CHAPTER 22 Kneeling in the first pew, Silas pretended to pray as he scanned the layout of the sanctuary. Saint- Sulpice, like most churches, had been built in the shape of a giant Roman cross. Its long central section – the nave – led directly to the main altar, where it was transversely intersected by a shorter section, known as the transept. The intersection of nave and transept occurred directly beneath the main cupola and was considered the heart of the church†¦ her most sacred and mystical point. Not tonight, Silas thought. Saint-Sulpice hides her secrets elsewhere. Turning his head to the right, he gazed into the south transept, toward the open area of floor beyond the end of the pews, to the object his victims had described. There it is. Embedded in the gray granite floor, a thin polished strip of brass glistened in the stone†¦ a golden line slanting across the church's floor. The line bore graduated markings, like a ruler. It was a gnomon, Silas had been told, a pagan astronomical device like a sundial. Tourists, scientists, historians, and pagans from around the world came to Saint-Sulpice to gaze upon this famous line. The Rose Line. Slowly, Silas let his eyes trace the path of the brass strip as it made its way across the floor from his right to left, slanting in front of him at an awkward angle, entirely at odds with the symmetry of the church. Slicing across the main altar itself, the line looked to Silas like a slash wound across a beautiful face. The strip cleaved the communion rail in two and then crossed the entire width of the church, finally reaching the corner of the north transept, where it arrived at the base of a most unexpected structure. A colossal Egyptian obelisk. Here, the glistening Rose Line took a ninety-degree vertical turn and continued directly up the face of the obelisk itself, ascending thirty-three feet to the very tip of the pyramidical apex, where it finally ceased. The Rose Line, Silas thought. The brotherhood hid the keystone at the Rose Line. Earlier tonight, when Silas told the Teacher that the Priory keystone was hidden inside Saint- Sulpice, the Teacher had sounded doubtful. But when Silas added that the brothers had all given him a precise location, with relation to a brass line running through Saint-Sulpice, the Teacher had gasped with revelation. â€Å"You speak of the Rose Line!† The Teacher quickly told Silas of Saint-Sulpice's famed architectural oddity – a strip of brass that segmented the sanctuary on a perfect north-south axis. It was an ancient sundial of sorts, a vestige of the pagan temple that had once stood on this very spot. The sun's rays, shining through the oculus on the south wall, moved farther down the line every day, indicating the passage of time, from solstice to solstice. The north-south stripe had been known as the Rose Line. For centuries, the symbol of the Rose had been associated with maps and guiding souls in the proper direction. The Compass Rose – drawn on almost every map – indicated North, East, South, and West. Originally known as the Wind Rose, it denoted the directions of the thirty-two winds, blowing from the directions of eight major winds, eight half-winds, and sixteen quarter-winds. When diagrammed inside a circle, these thirty-two points of the compass perfectly resembled a traditional thirty-two petal rose bloom. To this day, the fundamental navigational tool was still known as a Compass Rose, its northernmost direction still marked by an arrowhead†¦ or, more commonly, the symbol of the fleur-de-lis. On a globe, a Rose Line – also called a meridian or longitude – was any imaginary line drawn from the North Pole to the South Pole. There were, of course, an infinite number of Rose Lines because every point on the globe could have a longitude drawn through it connecting north and south poles. The question for early navigators was which of these lines would be called the Rose Line – the zero longitude – the line from which all other longitudes on earth would be measured. Today that line was in Greenwich, England. But it had not always been. Long before the establishment of Greenwich as the prime meridian, the zero longitude of the entire world had passed directly through Paris, and through the Church of Saint-Sulpice. The brass marker in Saint-Sulpice was a memorial to the world's first prime meridian, and although Greenwich had stripped Paris of the honor in 1888, the original Rose Line was still visible today. â€Å"And so the legend is true,† the Teacher had told Silas. â€Å"The Priory keystone has been said to lie' beneath the Sign of the Rose.† Now, still on his knees in a pew, Silas glanced around the church and listened to make sure no one was there. For a moment, he thought he heard a rustling in the choir balcony. He turned and gazed up for several seconds. Nothing. I am alone. Standing now, he faced the altar and genuflected three times. Then he turned left and followed the brass line due north toward the obelisk. At that moment, at Leonardo Da Vinci International Airport in Rome, the jolt of tires hitting the runway startled Bishop Aringarosa from his slumber. I drifted off, he thought, impressed he was relaxed enough to sleep. â€Å"Benvenuto a Roma,†the intercom announced. Sitting up, Aringarosa straightened his black cassock and allowed himself a rare smile. This was one trip he had been happy to make. I have been on the defensive for too long.Tonight, however, the rules had changed. Only five months ago, Aringarosa had feared for the future of the Faith. Now, as if by the will of God, the solution had presented itself. Divine intervention. If all went as planned tonight in Paris, Aringarosa would soon be in possession of something that would make him the most powerful man in Christendom. CHAPTER 23 Sophie arrived breathless outside the large wooden doors of the Salle des Etats – the room that housed the Mona Lisa.Before entering, she gazed reluctantly farther down the hall, twenty yards or so, to the spot where her grandfather's body still lay under the spotlight. The remorse that gripped her was powerful and sudden, a deep sadness laced with guilt. The man had reached out to her so many times over the past ten years, and yet Sophie had remained immovable – leaving his letters and packages unopened in a bottom drawer and denying his efforts to see her. He lied to me! Kept appalling secrets! What was I supposed to do? And so she had blocked him out. Completely. Now her grandfather was dead, and he was talking to her from the grave. The Mona Lisa. She reached for the huge wooden doors, and pushed. The entryway yawned open. Sophie stood on the threshold a moment, scanning the large rectangular chamber beyond. It too was bathed in a soft red light. The Salle des Etats was one of this museum's rare culs-de-sac – a dead end and the only room off the middle of the Grand Gallery. This door, the chamber's sole point of entry, faced a dominating fifteen-foot Botticelli on the far wall. Beneath it, centered on the parquet floor, an immense octagonal viewing divan served as a welcome respite for thousands of visitors to rest their legs while they admired the Louvre's most valuable asset. Even before Sophie entered, though, she knew she was missing something. A black light.She gazed down the hall at her grandfather under the lights in the distance, surrounded by electronic gear. If he had written anything in here, he almost certainly would have written it with the watermark stylus. Taking a deep breath, Sophie hurried down to the well-lit crime scene. Unable to look at her grandfather, she focused solely on the PTS tools. Finding a small ultraviolet penlight, she slipped it in the pocket of her sweater and hurried back up the hallway toward the open doors of the Salle des Etats. Sophie turned the corner and stepped over the threshold. Her entrance, however, was met by an unexpected sound of muffled footsteps racing toward her from inside the chamber. There'ssomeone in here! A ghostly figure emerged suddenly from out of the reddish haze. Sophie jumped back. â€Å"There you are!† Langdon's hoarse whisper cut the air as his silhouette slid to a stop in front of her. Her relief was only momentary. â€Å"Robert, I told you to get out of here! If Fache – â€Å"Where were you?† â€Å"I had to get the black light,† she whispered, holding it up. â€Å"If my grandfather left me a message – â€Å"Sophie, listen.† Langdon caught his breath as his blue eyes held her firmly. â€Å"The letters P. S†¦ . do they mean anything else to you? Anything at all?† Afraid their voices might echo down the hall, Sophie pulled him into the Salle des Etats and closed the enormous twin doors silently, sealing them inside. â€Å"I told you, the initials mean Princess Sophie.† â€Å"I know, but did you ever see them anywhere else? Did your grandfather ever use P. S. in any other way? As a monogram, or maybe on stationery or a personal item?† The question startled her. How would Robert know that? Sophie had indeed seen the initials P. S. once before, in a kind of monogram. It was the day before her ninth birthday. She was secretly combing the house, searching for hidden birthday presents. Even then, she could not bear secrets kept from her. What did Grand-pere get for me this year? She dug through cupboards and drawers. Did he get me the doll I wanted? Where would he hide it? Finding nothing in the entire house, Sophie mustered the courage to sneak into her grandfather's bedroom. The room was off-limits to her, but her grandfather was downstairs asleep on the couch. I'll just take a fast peek! Tiptoeing across the creaky wood floor to his closet, Sophie peered on the shelves behind his clothing. Nothing. Next she looked under the bed. Still nothing. Moving to his bureau, she opened the drawers and one by one began pawing carefully through them. There must be something for me here! As she reached the bottom drawer, she still had not found any hint of a doll. Dejected, she opened the final drawer and pulled aside some black clothes she had never seen him wear. She was about to close the drawer when her eyes caught a glint of gold in the back of the drawer. It looked like a pocket watch chain, but she knew he didn't wear one. Her heart raced as she realized what it must be. A necklace! Sophie carefully pulled the chain from the drawer. To her surprise, on the end was a brilliant gold key. Heavy and shimmering. Spellbound, she held it up. It looked like no key she had ever seen. Most keys were flat with jagged teeth, but this one had a triangular column with little pockmarks all over it. Its large golden head was in the shape of a cross, but not a normal cross. This was an even-armed one, like a plus sign. Embossed in the middle of the cross was a strange symbol – two letters intertwined with some kind of flowery design. â€Å"P. S. ,† she whispered, scowling as she read the letters. Whatever could this be? â€Å"Sophie?† her grandfather spoke from the doorway. Startled, she spun, dropping the key on the floor with a loud clang. She stared down at the key, afraid to look up at her grandfather's face. â€Å"I†¦ was looking for my birthday present,† she said, hanging her head, knowing she had betrayed his trust. For what seemed like an eternity, her grandfather stood silently in the doorway. Finally, he let out a long troubled breath. â€Å"Pick up the key, Sophie.† Sophie retrieved the key. Her grandfather walked in. â€Å"Sophie, you need to respect other people's privacy.† Gently, he knelt down and took the key from her. â€Å"This key is very special. If you had lost it†¦Ã¢â‚¬  Her grandfather's quiet voice made Sophie feel even worse. â€Å"I'm sorry, Grand-pere.I really am.† She paused. â€Å"I thought it was a necklace for my birthday.† He gazed at her for several seconds. â€Å"I'll say this once more, Sophie, because it's important. You need to learn to respect other people's privacy.† â€Å"Yes, Grand-pere.† â€Å"We'll talk about this some other time. Right now, the garden needs to be weeded.† Sophie hurried outside to do her chores. The next morning, Sophie received no birthday present from her grandfather. She hadn't expected one, not after what she had done. But he didn't even wish her happy birthday all day. Sadly, she trudged up to bed that night. As she climbed in, though, she found a note card lying on her pillow. On the card was written a simple riddle. Even before she solved the riddle, she was smiling. I know what this is! Her grandfather had done this for her last Christmas morning. A treasure hunt! Eagerly, she pored over the riddle until she solved it. The solution pointed her to another part of the house, where she found another card and another riddle. She solved this one too, racing on to the next card. Running wildly, she darted back and forth across the house, from clue to clue, until at last she found a clue that directed her back to her own bedroom. Sophie dashed up the stairs, rushed into her room, and stopped in her tracks. There in the middle of the room sat a shining red bicycle with a ribbon tied to the handlebars. Sophie shrieked with delight. â€Å"I know you asked for a doll,† her grandfather said, smiling in the corner. â€Å"I thought you might like this even better.† The next day, her grandfather taught her to ride, running beside her down the walkway. When Sophie steered out over the thick lawn and lost her balance, they both went tumbling onto the grass, rolling and laughing. â€Å"Grand-pere,†Sophie said, hugging him. â€Å"I'm really sorry about the key.† â€Å"I know, sweetie. You're forgiven. I can't possibly stay mad at you. Grandfathers and granddaughters always forgive each other.† Sophie knew she shouldn't ask, but she couldn't help it. â€Å"What does it open? I never saw a key like that. It was very pretty.† Her grandfather was silent a long moment, and Sophie could see he was uncertain how to answer. Grand-pere never lies. â€Å"It opens a box,† he finally said. â€Å"Where I keep many secrets.† Sophie pouted. â€Å"I hate secrets!† â€Å"I know, but these are important secrets. And someday, you'll learn to appreciate them as much as I do.† â€Å"I saw letters on the key, and a flower.† â€Å"Yes, that's my favorite flower. It's called a fleur-de-lis. We have them in the garden. The white ones. In English we call that kind of flower a lily.† â€Å"I know those! They're my favorite too!† â€Å"Then I'll make a deal with you.† Her grandfather's eyebrows raised the way they always did when he was about to give her a challenge. â€Å"If you can keep my key a secret, and never talk about it ever again, to me or anybody, then someday I will give it to you.† Sophie couldn't believe her ears. â€Å"You will?† â€Å"I promise. When the time comes, the key will be yours. It has your name on it.† Sophie scowled. â€Å"No it doesn't. It said P. S. My name isn't P. S. !† Her grandfather lowered his voice and looked around as if to make sure no one was listening. â€Å"Okay, Sophie, if you must know, P. S. is a code. It's your secret initials.† Her eyes went wide. â€Å"I have secret initials?† â€Å"Of course. Granddaughters always have secret initials that only their grandfathers know.† â€Å"P. S. ?† He tickled her. â€Å"Princesse Sophie.† She giggled. â€Å"I'm not a princess!† He winked. â€Å"You are to me.† From that day on, they never again spoke of the key. And she became his Princess Sophie. Inside the Salle des Etats, Sophie stood in silence and endured the sharp pang of loss. â€Å"The initials,† Langdon whispered, eyeing her strangely. â€Å"Have you seen them?† Sophie sensed her grandfather's voice whispering in the corridors of the museum. Never speak ofthis key, Sophie.To me or to anyone.She knew she had failed him in forgiveness, and she wondered if she could break his trust again. P. S. Find Robert Langdon.Her grandfather wanted Langdon to help. Sophie nodded. â€Å"Yes, I saw the initials P. S. once. When I was very young.† â€Å"Where?† Sophie hesitated. â€Å"On something very important to him.† Langdon locked eyes with her. â€Å"Sophie, this is crucial. Can you tell me if the initials appeared with a symbol? A fleur-de-lis?† Sophie felt herself staggering backward in amazement. â€Å"But†¦ how could you possibly know that!† Langdon exhaled and lowered his voice. â€Å"I'm fairly certain your grandfather was a member of a secret society. A very old covert brotherhood.† Sophie felt a knot tighten in her stomach. She was certain of it too. For ten years she had tried to forget the incident that had confirmed that horrifying fact for her. She had witnessed something unthinkable. Unforgivable. â€Å"The fleur-de-lis,† Langdon said,† combined with the initials P. S. , that is the brotherhood's official device. Their coat of arms. Their logo.† â€Å"How do you know this?† Sophie was praying Langdon was not going to tell her that he himselfwas a member. â€Å"I've written about this group,† he said, his voice tremulous with excitement. â€Å"Researching the symbols of secret societies is a specialty of mine. They call themselves the Prieure de Sion – the Priory of Sion. They're based here in France and attract powerful members from all over Europe. In fact, they are one of the oldest surviving secret societies on earth.† Sophie had never heard of them. Langdon was talking in rapid bursts now. â€Å"The Priory's membership has included some of history's most cultured individuals: men like Botticelli, Sir Isaac Newton, Victor Hugo.† He paused, his voice brimming now with academic zeal. â€Å"And, Leonardo Da Vinci.† Sophie stared. â€Å"Da Vinci was in a secret society?† â€Å"Da Vinci presided over the Priory between 1510 and 1519 as the brotherhood's Grand Master, which might help explain your grandfather's passion for Leonardo's work. The two men share a historical fraternal bond. And it all fits perfectly with their fascination for goddess iconology, paganism, feminine deities, and contempt for the Church. The Priory has a well-documented history of reverence for the sacred feminine.† â€Å"You're telling me this group is a pagan goddess worship cult?† â€Å"More like the pagan goddess worship cult. But more important, they are known as the guardians of an ancient secret. One that made them immeasurably powerful.† Despite the total conviction in Langdon's eyes, Sophie's gut reaction was one of stark disbelief. Asecret pagan cult? Once headed by Leonardo Da Vinci? It all sounded utterly absurd. And yet, even as she dismissed it, she felt her mind reeling back ten years – to the night she had mistakenly surprised her grandfather and witnessed what she still could not accept. Could that explain – ? â€Å"The identities of living Priory members are kept extremely secret,† Langdon said,† but the P. S. and fleur-de-lis that you saw as a child are proof. It could only have been related to the Priory.† Sophie realized now that Langdon knew far more about her grandfather than she had previously imagined. This American obviously had volumes to share with her, but this was not the place. â€Å"I can't afford to let them catch you, Robert. There's a lot we need to discuss. You need to go!† Langdon heard only the faint murmur of her voice. He wasn't going anywhere. He was lost in another place now. A place where ancient secrets rose to the surface. A place where forgotten histories emerged from the shadows. Slowly, as if moving underwater, Langdon turned his head and gazed through the reddish haze toward the Mona Lisa. The fleur-de-lis†¦ the flower of Lisa†¦ the Mona Lisa. It was all intertwined, a silent symphony echoing the deepest secrets of the Priory of Sion and Leonardo Da Vinci. A few miles away, on the riverbank beyond Les Invalides, the bewildered driver of a twin-bed Trailor truck stood at gunpoint and watched as the captain of the Judicial Police let out a guttural roar of rage and heaved a bar of soap out into the turgid waters of the Seine.

Foreign Collaboration

TAXPERT PROFESSIONALS Article on Foreign Collaboration 24 March 2011 0 TAXPERT Professionals | [Type the company address] Article on Foreign Collaboration Foreign Collaboration An Overview To fulfill the need of freeing the Indian industry from excessive official control and for promoting foreign investments in India in necessary sectors the much required liberalization of Indian economy was brought in by Industrial Policy of 1991. From then the Indian economy is more facilitating to Foreign Direct investment in all form. Foreign investment in India is regulated by ?Foreign Exchange Management Act ? Reserve Bank of India ? Department of Policy and promotion Foreign Exchange Management Act is an act to facilitate, promote and manage the foreign exchange in India. Reserve Bank of India issues various regulations to give effect to the various provisions of the Foreign Exchange Management Act. The Department of Industrial Policy & Promotion was established in 1995 and has been reconstitu ted in the year 2000 with the merger of the Department of Industrial Development. There has been a consistent shift in the role and functions of this Department since 1991.From regulation and administration of the industrial sector, the role of the Department has been transformed into facilitating investment and technology flows and monitoring industrial development in the liberalized environment. The role and functions of the Department of Industrial Policy and Promotion [here in after referred as Department or DIPP] primarily includes interalia is following: Formulation and implementation of industrial policy and strategies for industrial development in conformity with the development needs and national objectives; acilitation of FDI; technology collaborations at enterprise level and formulating policy parameters for the same; Trademarks, Industrial Designs and Geographical Indications of Goods and administration of regulations, rules made there under; TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign Collaboration The DIPP is in charge for encouraging acquisition of technological capability in various sectors of the industry where such acquisition is required to promote the economic development.Foreign technology induction is facilitated through liberal foreign technology collaboration regime either through FDI or through Foreign Technology Collaboration (FTC) agreement. There are two types of Foreign Collaboration the Financial collaboration and the technical collaboration. 1. Financial Collaboration refers to collaboration where only equity is involved. The financial collaboration can be by way of entering into Joint Venture agreement with the Indian Company. 2. Technical collaboration refers to collaboration where there is transfer of technology by the Foreign collaborator on due compensation.Foreign Colloboration Financial Colloboration 1 Financial Collaboration Techinical Colloboration Financial collab oration refers to collaboration where there is equity participation. It is regulated by the sectoral caps only and equity is permitted in almost all the sectors till the extent as mentioned in the Foreign Direct Investment Policy. Foreign Direct Investment is permitted under the automatic route in most sectors/activities excluding only few sectors which are prohibited like real estate etc and few where prior approval from FIPB is required. TAXPERT Professionals | www. taxpertpro. om [email  protected] com 09769134554 Article on Foreign Collaboration As per press note 3 (2005 Series) issued by DIPP prior government approval for new proposals would be required only in cases where the foreign investor has an existing joint venture in the â€Å"same field† [refer Annexure I for detailed discussion]. Same field as defined in the same press note mean 4 digit NIC 1987 code. In case of Financial collaboration a new Indian company [referred as Joint venture Company or JVC here in af ter] is formed, shares of which are subscribed by a foreign party and the Indian Company.When the money is received by Indian company [JVC] for subscription of shares by Foreign Company it has to intimate the RBI within 30 days of the receiving of Consideration and within 180 days of the receipt of consideration the shares are required to be allotted to foreign company, within 30 days of the allotment of shares the FC GPR Form along with Certificate from Chartered Accountant as well as Company secretary is required to be filed by Indian Company [JVC].As far as Financial collaboration is concerned in most of the cases a Joint Venture agreement is entered separately or all the conditions of joint Venture agreement are incorporated in the Article of Association of the Company. Interalia following are the clauses in Article of Association that will need consideration so that the interest of both the Joint Venture partners is saved: 1. Shares: – There can be restriction on transfe rring the share of a company [by each Joint Venture Partner] that no shareholder [JV partner] shall transfer the shares without the approval from other JV partner.The shares shall be offered to the other shareholder first before selling to the third party. How the fair value of the shares to be transferred shall be determined. There can be Lock in period for holding the shares. 2. Meetings:-The Quorum for the General meeting shall be at least one Shareholder? s representative appointed by both parties respectively. 3. Directors: – The Minimum number of directors representing interest of each party can be placed in Article of Association.The quorum of the Board Meeting can be framed to consist at least one Director appointed by each of the parties. The clauses can be put to safeguard interest of each party as to items where consent shall be given by way of affirmative voting by each party director. 2 Foreign technology agreements and collaborations For promoting technological capability and competitiveness of Indian Industry, acquisition of foreign technology is promoted through foreign technology collaborations.Foreign technology agreements and collaborations are permitted either through the automatic route under delegated powers exercised by the Reserve Bank of India, or by the Government. The items of foreign technology collaboration, which are eligible for approval through the automatic route and by the Government, are A. Technical know-how fees, B. Payments for designs and drawings, C. Payments for engineering services and D. Royalty TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign CollaborationFor entering into technology collaboration an agreement is entered into between the foreign entity and an Indian entity. The following should be taken into account while drafting the technology agreement that the licensed product/technical information is defined elaborately, period for which such a technolog y/knowhow is transferred, what is transferred and what is not transferred and what are exclusive and non exclusive rights transferred, manner of calculation of payment and schedule of payment, cost of foreign Technicians, which party will bear the taxes if etc. Please note that no permission is necessary for hiring of foreign technicians and no application need be made to Government for this purpose irrespective of whether the hiring of foreign technician is under an approved collaboration agreement or not]. As said earlier the collaboration can be through automatic route or government route.Below is the brief discussion regarding the same:- 2. 1 Automatic Route for Foreign Technology Agreements: The Reserve Bank of India, through its regional offices, accords automatic approval to all industries for foreign technology collaboration agreements subject to: The lump sum payments not exceeding US $2 million; Where there s technology Transfer :- Royalty payment being limited to 5 per ce nt for domestic sales and 8 per cent for exports, subject to a total payment of 8 per cent in sales without any restriction on the duration of the payments; and Where there is no technology Transfer: – The Government of India also permits payment of royalties of up to 2 per cent on exports and 1 per cent for domestic sales under automatic route on use of trademarks and brand names of the foreign collaborator without technology transfer. ? ? ?Also, Clarification was brought in by department via press note dated 23-12-2005 that as FDI upto 100% is permitted under the automatic route in most sectors/activities automatic route is also allowed for foreign technology collaboration where the payments are within 5% for domestic sales and 8% for exports. 2. 2 Government Approval for Foreign Technology Agreements As per press note 1(2005 series) Prior approval of the Government would be required only in cases where the foreign investor has an existing joint venture or technology transf er/trademark agreement in the „same? ield. The onus to provide requisite justification and also proof to the satisfaction of the Government that the new proposal would or would not in any way jeopardize the interests of the existing joint venture or technology/trademark partner or other stakeholders would lie equally on the foreign investor/technology supplier and the Indian partner. TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign CollaborationIn cases where the foreign investor has a joint venture or technology transfer/trademark agreement in the „same? field prior approval of the Government will not be required in the following cases: i. Investments to be made by Venture Capital Funds registered with the Security and Exchange Board of India (SEBI); ii. where in the existing joint-venture investment by either of the parties is less than 3 per cent; iii. Where the existing venture/collaboration is defunct or sick.Remit tance of Royalty/Technical Fee General permission has been given permission to authorised dealers by Reserve bank of India vide (DIR Series) Circular No. 76 dated 24th Feb 2004 to allow remittances for royalty and payment of Lump sum fee provided the payment; provided the royalty does not exceeds 5% of the domestic sales and 8% on exports and Lump sum fees does not exceeds USD 2 Million. Prior approval from Ministry of Industry and Commerce, Government of India in case exceeds the above said payments.In terms of Rule 4 of the Foreign Exchange Management (Current Account Transactions) Rules 2000, prior approval of the Ministry of Commerce and Industry, Government of India, is required for drawing foreign exchange for remittances under technical collaboration agreements where payment of royalty exceeds 5% on local sales and 8% on exports and lump-sum payment exceeds USD 2 million [item 8 of Schedule II to the Foreign Exchange Management (Current Account Transactions) Rules, 2000]. How ever as per RBI/2009-10/465 A. P. (DIR Series) Circular No. 2 dated 13 May 2010 the Government of India has reviewed the extant policy with regard to liberalization of foreign technology agreement and it was decided to omit item number 8 of Schedule II to the Foreign Exchange Management (Current Account Transaction) Rules, 2000, and the entry relating thereto. Accordingly, AD Category-I banks may permit drawal of foreign exchange by persons for payment of royalty and lump-sum payment under technical collaboration agreements without the approval of Ministry of Commerce and Industry, Government of India [w. . f 16 Dec 2009]. Source :http://rbidocs. rbi. org. in/rdocs/content/PDFs/AFE130510RC. pdf To sum up, success of any collaboration is dependent on the synergies that are driven from it by both parties. Therefore to achieve the desired objective of collaboration it is necessary that the matters like proper due diligence, tax structuring, drafting of joint venture agreement etc are v ery well taken care of. For further details get in touch at [email  protected] com TAXPERT Professionals | www. taxpertpro. om [email  protected] com 09769134554 Article on Foreign Collaboration Annexure I Source: http://dipp. nic. in/ DISCUSSION PAPER SUBJECT: APPROVAL OF FOREIGN/ TECHNICAL COLLABORATIONS IN CASE OF EXISTING VENTURES/ TIE-UPS IN INDIA 1. The Department of Industrial Policy and Promotion has decided to release Discussion Papers on various aspects related to FDI. In the series of these Discussion Papers, this is the third paper on „Approval of foreign/ technical collaborations in case of existing ventures/tie-ups in India?.Views and suggestions are invited on the observations made in the enclosed discussion paper, as also on the entire gamut of issues related to the subject, by October 15, 2010. 2. The views expressed in this discussion paper should not be construed as the views of the Government. The Department hopes to generate informed discussion on the subject, so as to enable the Government to take an appropriate policy decision at an appropriate time. TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign CollaborationDISCUSSION PAPER APPROVAL OF FOREIGN/ TECHNICAL COLLABORATIONS IN CASE OF EXISTING VENTURES/ TIE-UPS IN INDIA 1. 0 PRESENT SCENARIO: 1. 1 Paragraph 4. 2. 2 of Circular 1 of 2010 (Consolidated FDI Policy), specifies that investment would be subject to the „Existing Venture/ tie-up condition?. As per this condition, where a foreign investor had, prior to January 12, 2005, entered into an existing joint venture/ technology transfer/ trademark agreement in the same field, any new proposal for investment/ technology transfer/trademark agreement, requires Government approval.The proposal has to be routed through either the Foreign Investment Promotion Board (FIPB) in the Department of Economic Affairs, if fresh foreign investment is involved or the Project Approval Boar d (PAB) in the DIPP, if no foreign investment is involved. The 4 digit National Industrial Classification (NIC), 1987 Code, would be the basis for determining if the field was the same . 1. 2 The onus to demonstrate that the proposed new tie-up would not jeopardize the xisting joint venture or technology transfer/ trademark partner, lies equally on the foreign investor/ technology supplier and the Indian partner. 1. 3 The policy aims at protecting the interests of joint venture partners of agreements entered into, prior to January 12, 2005. Foreign collaboration agreements, both financial and technical, entered into after January 12, 2005, have been exempted from this stipulation. This is because such joint venture agreements are expected to include a „conflict of interest? lause, so as to safeguard the interests of joint venture partners, in the event of one of the partners desiring to set up another joint venture or a wholly owned subsidiary in the same field of economic act ivity. 1. 4 Five categories of investments have, however, been exempted from the requirement of Government approval, even though the foreign investor may be having a joint venture/ technology transfer/ trademark agreement in the same field.These are a) Investments to be made by Venture Capital Funds registered with the Securities and Exchange Board of India (SEBI ), b)Investments by Multinational Financial Institutions like the Asian Development Bank (ADB), International Finance Corporation(IFC), Commonwealth Finance Corporation (CDC), Deutsche Entwicklungs Gescelschaft (DEG), c) Where, in the existing joint venture, investment by either of the parties is less than 3 per cent d)Where the existing joint venture / collaboration is defunct or sick and e) Investments in the Information Technology or mining sectors. 2. 0 2. 1EVOLUTION OF THE PRESENT REGIME: PRESS NOTE 18 (1998 SERIES) In Press Note 18 (1998 series), Government set out the following guidelines for approval of foreign / te chnical collaborations, under the automatic route, in cases where previous ventures/ tie-ups existed within India. a) Automatic route for bringing in FDI and/or technology collaboration agreements (including trade-mark agreements), would not be available to those who have or had any previous joint-venture or technology transfer/trade-mark agreement, in the „same? or „allied? field, in India. TAXPERT Professionals | www. taxpertpro. com [email  protected] om 09769134554 Article on Foreign Collaboration b) Government approval route was, necessary in such cases. Detailed circumstances under which it was found necessary to set-up a new joint venture/enter into new technology transfer (including trade-mark) were required to be furnished at the time of seeking approval. c) The onus was clearly on such investors/technology suppliers, to provide the requisite justification /proof, to the satisfaction of the Government, that the new proposal would not, in any manner, jeopardize the interests of the existing joint-venture or technology/trade-mark partner or other stakeholders.It was at the sole discretion of the FIPB/ PAB, to either approve the application with or without conditions or to reject it in toto, duly recording the reasons for doing so. 2. 2 PRESS NOTE 10 (1999 SERIES) Press Note 10 (1999 series) defined the meaning of the terms â€Å"same field† and â€Å"allied field† as under: o o â€Å"same field† – four-digit NIC 1987code â€Å"allied field† – three-digit NIC 1987codeThe Press Note further clarified that, only proposals for foreign collaboration, falling under same four-digit or three-digit classifications, in terms of their past or existing joint ventures in India, would attract the provisions of Press Note 18 (1998 series). 2. 3 PRESS NOTE 2 (2000 SERIES) With a view to further liberalize the FDI regime, the Government issued Press Note 2 (2000 series), wherein all activities were placed under the automatic route for FDI, except for a specified negative list. Sector-specific guidelines were attached to this Press Note.In respect of the mining sector, it was mentioned that the provisions of Press Note 18 (1998 series) would not be applicable for setting up 100% owned subsidiaries, subject to a declaration from the applicant that he had no existing joint-venture for the same area and/ or the particular mineral. 2. 4 PRESS NOTE 8 (2000 SERIES) Press Note 8 (2000 series), recognized the special nature and needs of the IT sector. With a view to further simplify approval procedures and facilitate greater investment inflows into the IT sector in the country, FDI proposals elating to the IT sector were exempted from the provisions of Press Note 18 (1998 series). 2. 5 PRESS NOTE 1 (2001 SERIES) This Press Note provided for exemptions from the provisions of Press Note 18 for investments made in domestic companies by International Financial Institutions, such as the Asian Development B ank (ADB), International Finance Corporation (IFC), Commonwealth Development Corporation (CDC), Deutsche Entwicklungs Gescelschaft (DEG) etc.Accordingly, such International Financial Institutions were permitted to invest in domestic companies, through the automatic route, subject to SEBI/ RBI regulations and sector-specific caps on FDI. TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign Collaboration 2. 6 PRESS NOTE 1 (2005 SERIES) 1. Following the introduction of Press Note 18 (1998 series), certain representations were made by foreign investors. They pointed out that: a) The Press Note had the effect of overriding the contractual terms agreed to with the Indian partners. ) Domestic investors were using the provisions of the Press Note as a means of extracting unreasonable prices / commercial advantage. The Press Note was, thus, becoming a stumbling block for further FDI coming into the country. c) The term â€Å"allied field† was very widely defined, as it included even those products which would not have caused jeopardy to the manufacture of existing products. d) Foreign investors were being singled out to present their defence, without the Indian partner being asked to justify the existence of jeopardy. . Press Note 1 (2005 series), issued on 12 January, 2005, addressed these issues by amending the earlier guidelines. New proposals for foreign investment/technical collaboration were allowed under the automatic route, subject to sectoral policies and the following revised guidelines: a) Prior approval of the Government would be required only in cases where the foreign investor had a joint venture or technology transfer/trademark agreement in the ‘same' field, existing as on the date of the Press Note i. . 12 January, 2005. b) The onus to provide requisite justification and proof, to the satisfaction of the Government, that the new proposal would or would not, in any way, jeopardize the interests of the existing joint-venture or technology/ trademark partner or other stakeholders, would lie equally on the foreign investor/ technology supplier and the Indian partner. ) Even in cases where the foreign investor had a joint-venture or technology transfer/ trademark agreement in the ‘same' field, prior approval of the Government would not be required in the following cases: Investments to be made by Venture Capital Funds registered with the Security and Exchange Board of India (SEBI) or ii) where in the existing joint-venture investment by either of the parties was less than 3% or iii) where the existing venture/ collaboration was defunct or sick i) d) In so far as joint ventures to be entered into after the date of the Press Note were concerned, the joint venture agreements could embody a ‘conflict of interest' clause, to safeguard the interests of joint-venture partners, in the event of one of the partners desiring to set up another joint-venture or a wholly-owned- subsidiary, in the ‘same' field of economic activity. 2. 7 PRESS NOTE 3 (2005 SERIES) TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign Collaboration Subsequently, Press Note 3 (2005 series), issued on 15 March, 2005, clarified that: a) For the purposes of Press Note 1 (2005 Series), the definition of „same? field would continue to be 4-digit NIC 1987 Code. ) Proposals in the Information Technology sector, and the mining sector, continued to remain exempt from the application of Press Note 1 (2005 Series). c) For the purpose of avoiding any ambiguity, it was further reiterated that, jointventures/technology transfer/trademark agreements, existing on the date of issue of the said Press Note (i. e. 12. 1. 2005), would be treated as existing jointventures/technology transfer/trademark agreements, for the purposes of that Press Note. 3. 0 APPLICATION OF THE PROVISIONS IN PRACTICE: 3. 1 FIPB considered 566 proposals during th e calendar year 2009, out of which 16% related to matters linked with Press Notes 1 and 3 of 2005, wherein the applicants had a joint-venture / technology transfer agreement, with an Indian partner, as on 12 January, 2005. 3. Some of the principles emerging from the cases discussed in the FIPB 1 are set out below: a) In case the existing joint-venture has become defunct, there may not be any jeopardy to the Indian partner, in case the foreign collaborator wishes to set up a new venture. b) „Jeopardy? should not be invoked as a measure to stifle legitimate business activity and prevent competition. The issue of „jeopardy? has to be examined in light of the extant business agreements/arrangements between the parties. c) „Jeopardy? may not be established in cases where technology licence agreements have expired, as per terms mutually agreed by the joint-venture partners. d) In location specific projects/ activities, the concept of „jeopardy? cannot be extended b eyond the area originally envisaged in the agreement. In such cases, „jeopardy? eeds to be viewed in a location-specific context. 3. 3 The FIPB Review, 2009 has observed that: â€Å"While critics may feel that Press Note 1 has outlived its utility, the high pitched debate on the issue of jeopardy and Indian JV partners alleging foul play by the foreign collaborator cannot make us oblivious to its continuing relevance. † 4. 0 PRACTICES IN OTHER EMERGING MARKETS (CHINA AND BRAZIL): 1 FIPB Review, 2009 TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign Collaboration Emerging economies, such as Brazil and China, do not have any such corresponding requirements, under their foreign investment regimes. 5. CONCERNS RELATED TO LIBERALISING THE ‘EXISTING VENTURE/ TIE-UP CONDITION’: 5. 1 In 1998, the main policy concern was to protect the interests of domestic jointventure partners/ technology collaborators, who may ha ve been less advantageously placed, in comparison to their foreign counterparts, insofar as their ability to influence the terms of future business engagement were concerned. It was felt that an element of Government oversight was necessary, so that future collaborations were subjected to the test of „jeopardy? and existing domestic joint-venture partners/ technology collaborators were not placed in a position wherein their survival was threatened. 5. This policy framework was relaxed in 2005, while maintaining a balance between the need to ensure healthy foreign investment inflows and the need to ensure that survival of the domestic industry was not threatened. The main elements of the „existing venture/ tie-up condition? were retained, underlining Government? s concerns about ensuring the continued sustenance and growth of the domestic joint-venture partners/ technology collaborators, in collaboration with their foreign partners. 6. 0 THE CASE FOR REVIEW OF THE EXTANT REGIME: 6. 1 The „existing venture/ tie-up condition? has now been in existence, as a formal measure under the FDI policy, for nearly twelve years. It was last reviewed in 2005.There is a need to examine whether such a conditionality continues to be relevant in the present day context. 6. 2 The „existing venture/ tie-up condition? currently applies only to those joint-ventures which have been in existence as on or prior to 12 January, 2005. With more than five years having elapsed, it can be argued that the issue of „jeopardy? is, no longer relevant, as the Indian partners could have recovered their investments substantially during this period of time. 6. 3 The Indian industry today is in a much stronger position than it was in the 1990s, when the condition was first introduced. It, therefore, needs to be seen whether there is a need to continue with the elements of such a regime even today. 6. Further, industry has to increasingly become more competitive. This is particularly relevant in an era of globalization, where a number of Free Trade Agreements (FTAs) and Comprehensive Economic Cooperation/ Partnership Agreements (CEPAs/CEPAs) are in place . In such a scenario, if an industry is discouraged from being set up in India, it could be set up in a neighbouring country, with whom a trade agreement exists or is being negotiated. Competition today, is not only between domestic players inter se but also between international and domestic players. Dumping of goods from some of countries has posed serious threats to the survival of domestic industries.Between 1992 and 2010 (May), the Directorate General for anti Dumping (DGAD) has initiated anti-dumping investigations into 253 cases involving 38 countries/territories (considering 27 EC countries as a single territory). The major product categories on which anti-dumping duty has been levied are chemicals & petrochemicals, pharmaceuticals, fibres /yarns, steel and other metal products and consumer goods. TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign Collaboration Limiting international technology agreements through measures described above may constrain the growth of strong and competitive domestic industries. 6. It is also a moot point whether Government policy should intervene in the commercial sphere and override contractual terms agreed to between the parties, given the need to promote healthy competition, and ensure sustained long-term economic growth. It can be argued that Government should not be concerned about commercial issues between two business partners. 6. 6 The measure discriminates between the foreign investors who had shown confidence in India, by investing in the country prior to 2005 and those who invested later. 6. 7 The condition may be restricting a number of investors, who may not be able to reach agreement with their Indian partners on their future investment plans, thereby restricting the inflow o f foreign capital and technology into the country. 6. 8 A related issue is the concept of „same field?.Press Note 1 of 2005 significantly limited the scope of the provisions of Press Note 18 (1998 series), as the latter applied only to the â€Å"same field† and not the much wider â€Å"allied field†. However, in the present day context, even the concept of â€Å"same field† may not be an accurate indicator for determining whether the new venture would jeopardize the interest of the existing joint-venture partner. This is because , the NIC four digit Codes, even after revision , may still not fully reflect the complexities related to the concept of the „same? industry and may often tend to cover a wide range of industrial activities under the same head. As an example, the activity of „manufacturing of seat belts? may not jeopardize the activity of „manufacturing of car steering?.However, both fall under the „same field? under the NIC Code of 1987. Further, the NIC Codes of 1987 may not accurately represent many of the business situations in the current complex and diversified industrial environment, leading to difficulties in interpretation. 7. 0 POLICY OPTIONS FOR CONSIDERATION : 7. 1 For the reasons mentioned in Paras 6. 1 to 6. 8, should the „existing venture/ tie-up conditions? last amended in Press Notes 1 and 3 of 2005 and now included as paragraph 4. 2. 2 of Circular 1 of 2010 be totally abolished? 7. 2 Alternatively, if it is felt that such a condition should continue for some more time, should calibrated relaxations be introduced ?These could include exemptions from the application of the condition in cases where: a) The existing venture/tie up is more than say 10 years old b) If the activity of the new venture is demonstrably different from the activity of the existing venture/tie up, even though it has the same NIC field. Are there any other contingencies where such exemptions should be conside red? The article is contributed by CA. Sudha G. Bhushan, She is a Chartered Accountant and a company secretary. She is advisor to many international companies on international tax matters and FEMA Advisory services. She can be reached at [email  protected] com. TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554

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Strategic HR Essay Example | Topics and Well Written Essays - 250 words

Strategic HR - Essay Example R systems are the most critical in HR architecture since they are the source of value creation and have greater inimitability depending on how they are aligned with the overall corporate strategy. According to the Resource based View (RBV) of the firm, human resources are the most strategic assets for the firm and should be recognized in order to attain competitive strengths. In implementing SHRM strategy, the firm should focus on the key strengths and capabilities. According to Porter, the firm should emphasize on cost leadership and differentiation in the competitive strategy (Becker and Mark 902). Current trends in focus on differentiation in the SHRM since business processes should create value for the organization (Becker and Mark 903).unique and firm specific HR architectures will create and sustain competitive strength for the firm. Modern SHRM literature focuses on the holistic view of human resources since all employees have unique talents and contribute differently in the value creation process. Effective human resource management strategy includes both HR core architecture that creates equal value to all business processes and HR differentiated architecture that provides specific skills and attributes for the effectively performance of certain strategic jobs in the organization. According to five national surveys conducted between 1991 and 2000 and data from 3200 firms, the standard deviation from HR systems change is 10-20 percent in value of the firm. Increase of one standard deviation leads TO 4.6 percent increase in return on assets (ROA) (Becker and Mark 907). SHRM should focus on intermediate outcomes since financial performance should not be the only dependent variable and outcome of SHRM. Focus should be on strategic business processes that involve a high level of human resources. New focus should be on contingencies and fit since HR architectures should also be differentiated. HR managers face challenges of measuring employee performance

Strategies of Noki Company Case Study Example | Topics and Well Written Essays - 2000 words

Strategies of Noki Company - Case Study Example It is evidently clear from the discussion that Noki Company is offering mobile phones, smartphones, mobile computers and networks to customers worldwide. In the light of technological changes brought about by modernization, research and development, this study will attempt to find out how Noki Company deals with the macro environment changes that affect its business. Part 1 of the study presents a PESTLE analysis, Part 2 is a SWOT analysis and Part 3 is the conclusion. Before the1980s, the telecom industry operated under a monopolistic environment, but for different political-economic reasons. US, Japan, and the UK ended this era of monopoly and allowed new players in the industry. Radical changes have been instituted since then, and liberalization has invited several telecom companies to participate in the telecom industry. The government of Finland has been supportive of technological changes. In the 1980s it has veered away with agricultural products and took the position to be on e of the leaders in the technology field. Thus, during this period Nokia has established a strong alliance with the government and has now be converted into the number one corporation in Finland. IT has turned out to be the third source of revenue for the country. The mobile phones introduced by Nokia developed to be an important tool in connecting people together around the world. Noki Company has three main core businesses, the Nokia Mobile Phones, Nokia Networks and Nokia Ventures. Noki Company is considered a very important employer; likewise, it also plays a vital role in the financial system in Finland financial market. It is a publicly traded company listed in NYSE, Helsinki and Frankfurt. The company has established branches in 120 countries worldwide employing 128,445 personnel. In 2009, Noki has an operating profit margin of 5.0 % a market share of 37% and has increased the country’s GDP.  

Finance & Law for Engineers Assignment Example | Topics and Well Written Essays - 500 words

Finance & Law for Engineers - Assignment Example In order to achieve this Telit is currently seeking to grow its market for the M2M technology. The company is seeking to identify with the technology and be a major dealer with this M2M technology in the short run. This has had the effect increasing gross margin from 37.1% to 38.2% as a result of redesigning operations involving M2M technology. Telit has a wide distribution network for the M2M technology which has over five thousand dealers distributed worldwide. The company’s mode of dealership is to contact customers directly or through the dealers. Over the year, Telit recruited more employees all over the world. The 17.3% increase in revenues can be attributed to the efficiency of this distribution network. The new employees and dealers will be responsible with maintaining good relationship with clients, hence steady revenue. All this was done as part of the strategy to increase the company’s market base whose effect will be increased revenues (Telit Communications, 2013). Recently, Telit has made some acquisitions and is in the process of making more acquisitions. In its growth strategy, Telit wants to diversify its products. The company has invested in seven research and development centers that have the responsibility of coming up with new competitive products as well as innovatively improve the existing products. This had the result of an increase in research and development expenses from four million dollars to twenty four million dollars. Telit has already acquired ILS Technology LLC which will offer complementary contribution to the company’s growth strategy. ILST will offer services and products that will be used to connect M2M devices to the existing clients’ systems. Alongside ILST, the company has also acquired CrossBridge Solutions that deals with mobile data connectivity. This acquisition will assist the company to tap and properly establish itself in the Internet of Things (IoT) business. These acquisitions cost the company eleven

Communication Studies Essay Example for Free

Communication Studies Essay This blog is for students of the Community College of St Vincent the Grenadines who are to be entered for CAPE Communication Studies examination in May 2008. The blog contains information about the course syllabus, administration and assignments as well as the course content. Wednesday, March 05, 2008 The expository presentation for CAPE Communication Studies Internal Assessmblies The presentation has two distinct parts * A FACTUAL presentation on an aspect of your portfolio theme * A presentation about your research including an evaluation of two sources of information used to prepare your factual presentation. It will have all the following 6 elements present 1. An introduction (statement of topic) In the introduction you will give a brief explanation of topic/ theme and a preview (with a thesis statement) of what you are going to cover. For example. My theme is Returning Migrants to St Vincent. Returning migrants or returnees are a group within the population of St Vincent who have spent a significant time away from the island and have then returned to permanently settle again. Returning migrants often are retired from their previous occupation which they pursued in a more developed country such as the United States, Canada or Great Britain or they have been working in another Caribbean state. According to statistics from the Customs Department given to me by Mrs B Chalres in an interview 4361 people claimed the concession for returning residents in 2005. Returning migrants experience 5 phases of adjuststment when returning which can be termed as â€Å"culture shock†. Theme ; Returning Migrants to St Vincent. a group within the population of St Vincent a significant time away from the island returned to permanently settle retired from their previous occupation (the United States, Canada or Great Britain) OR working in another Caribbean state. Customs Department (Mrs B Charles) â€Å"4361 people claimed the concession for returning residents in 2005†. Returning migrants experience 5 phases of adjustmentwhen returning which can be termed as â€Å"culture shock†. 2. A rationale In the rationale you need to explain why you picked the theme and it can form part of the introduction. In the rationale you should mention any personal interests, current academic links and future career plans which influenced your decision to choose the theme For example I chose the theme returning migrants to St Vincent and specifically to focus on culture shock because I am a wife of a returning migrant. I have a BSc honours in Sociology and the concept of culture shock is part of socio-cultural studies carried out by Kavelo Oberg 1958. In the future I will be submitting my Masters thesis on this specific issue. 3. Discussion of issues The discussion of issues is the factual presentation about the theme and its narrowed focus based on the thesis statement. It should have a distinct organisational pattern and you should aim for one of the expository structures such as cause and effect, process analysis, analysis by division, classification etc (See Writing in English) It should also be referenced and include any research findings. You will also need to give a conclusion to your factual presentation as a sort of sub conclusion don’t wait until the end Here is an example of a possible outline for my example presentation (not all of it). It uses the organisational pattern of process analysis Remember you cannot read from a script! Culture shock 5 phases Honeymoon, rejection/ regression, conformist, assimilation, reverse culture shock Honeymoon Centre for Overseas Travel â€Å"the tourist phase† Questionnaire (300 returning migrants) 78% not feel â€Å"tourist† 82% â€Å"elated† Rejection Oberg – frustration etc Questionnaire 50% wanted to return after 3 months, Reasons, poor service, backward attitude, nothing to do, boring Interview Dr Sheridan Mental health presentations tend to be in 1st 4 months of return. 4. Challenges of research You need to discuss what difficulties you faced in preparing your factual presentation. If you did not have any difficulties then just explain why. For example (in note form) Questionnaires – time consuming, identifying sample, Other sources no central data on returnees, newspaper articles useful Academic research not on St Vincent 5. Evaluation of two sources For this aspect of the presentation you need to discuss your research. The two sources need not necessarily be given as a reference in the presentation but they should be relevant. You should try to select two different types of data source e.g. a newpaper article and an interview. You may want to very briefly summarise all your sources before evaluating two for reliability and validity. Please see other parts of the blog for information on reliablity and validity. For example (in note form) Secondary sources: academic text books and journals, local and international newspapers and magazines, web sites: international public organisations e.g. Peace Corps general sites e.g. Wikipedia Primary sources interviews of experts in St Vincent questionnaire of returning migrants. Questionnaire of returning migrants Reliable: primary data source, research method suited to collecting data for social research Valid: Problem with sample size as total population of RMs unknown Problem with generalisation as differences between UK, US and other RMs more research needed. Overall reliable and reasonably valid The Experience of Return Migration: A Caribbean Perspective, Joan Phillips and Reliable Denis Conway, Ashgate Press, London 2005 Author expert Phd Social Anthrop. Specialised Caribbean writer – Canada Publisher: reputable, specialst academic main interest Social research Valid Recently published Problem no reference to St Vincent Overall general but very reliable and valid source 6. Conclusion The conclusion should be slightly different to the internal summary conclusion in your discussion of issues. At this stage you can express a personal view or put forward a possible solution. For example (in note form) Returning migrants YES culture shock 3 ways Honeymoon Rejection Conformist NO assimilation Solutions Programme – promote overseas, keep in touch, Information government FINALLLY See my other post about the reseach using the internet for idea. Make sure that you are aware of the requirements for acceptable notes during the exam and be familiar with the marks scheme it is not only content that is marked but also presentation skills.

The debate of hunting Essay Example for Free

The debate of hunting Essay Even though hunting should not be a sport, hunting helps maintain a healthy herd and promotes land, wildlife conservation. Because without hunting herds will over populate and become sick from starvation or spread disease. Hunters are a major supporter and play a big part in wildlife management. People for many years have debated about, hunting as a sport, or if it is only a means of people shooting at living targets. There can be many that say hunting is a part of American culture, how it benefits animal wildlife and also land conservation. Others say it is just a form of cruelty to animals and there are no benefits in hunting. â€Å"Encouragement of a proper hunting spirit, a proper love of sport, instead of being incompatible with the love of nature and wild things, offering the best guaranty for the preservation of wild things† (Theodore Roosevelt U. S. President). How hunting is cruel and that hunting has no place in the 21st century and is becoming evident by hunters waste and destruction of wildlife. In the past people used hunting as a means of supplying hunters and their families with food. Today animal activist say that hunting is not necessary and has no place in today’s society. â€Å"Hunting is not a sport, in a sport; both sides should know they’re in the game (Paul Rodriguez). In the last hundred years the United States has been going through a transformation out of the necessity to providing food and safety through recreational activity. There was a time when a majority of people lived in rural areas. Since then, the majority live in urban areas and this meant a change in people’s lifestyle. The change in people’s lifestyle brought the need to form organizations to protect animal rights. With this change many new animal rights organizations were formed such as People for the Ethical Treatment of Animals (PETA) and others to join in protecting wildlife from hunters. Animal activist argue that hunting: â€Å"In all cases, sport hunting inflicts undeniable cruelty- pain, trauma, wounding, and death- on living, sentient creatures. Most civilized and caring people will believe that causing suffering and death is by definition inhumane, regardless of method† (Miller, 2009). Some hunting is for the purpose of who can obtain the biggest trophy. In the 1950s’ an organization named the Humane Society of the United States organized to help in the protection of cruelty to wildlife animals. Therefore, in the 70s’ a group of students from Oxford decided to argue: â€Å"whether the moral status of nonhuman animals was necessarily inferior to that of human beings and whether animals should be entitled to their own basic rights and protection by law† (Laney, 2008 ). Then in the 80s’ many film productions, news articles, books were portraying that all hunters came from low class and uneducated people. Hunters today began to see themselves being portrayed as nothing more than a bunch of rednecks running through the woods with guns and wearing plaid, killing helpless animals. The NRA [National Rifle Association] caps and says in a 2004 New York Times article by a woman who stated â€Å"let’s go out and kill some defenseless animals† (Laney, 2008). Animal activist say that trophy hunting by Americans are responsible for killing tens of thousands of wild animals in other countries. In fact in 1997 the Smithsonian Institution’s received a donation of $20 million from a big game hunter named Kenneth Behring to solicit a permit, to allow the remains of two endangered sheep be allowed to be brought back to the United States under the (ESA) Endangered Species Act to aid in the research, and helping their survival. After they received bad publicity the Institute decided to avoid obtaining the permit. All though many are surprised to find that the facts on how hunting and outdoors sportsmen promote land and wildlife conservation. Hunting for many families has been a way to grow with the outdoors and bond with nature. In the Western societies like the United States and Britain, there is the argument of morals, this makes hunting a focal point for protracted and political debate. An organization named People for the Ethical Treatment of Animals (PETA) also believe that hunters are insensitive and arrogant for participating in hunting described as â€Å"recreational† or â€Å"sporting†. â€Å" Yet many hunters themselves impose entirely different meanings on the hunt, and some, such as the naturalist Paul Shepard, even assign it spiritual significance, construing it as an activity that expresses a deep and profound reverence toward nature andliving things† (MacHalek, 2002). For many hunters of all ages, believe that hunting is a way of relaxation and an educating experience for all to enjoy. Many hunters think that â€Å"Education is lacking when an assumption is made stating hunting is only recreational and leaves damage without good† (Reed, 2008). Hunting is a human activity that in its â€Å"significance by a deceptively simple feature: the evasiveness or resistance exhibited routinely by prey. Because of the behavioral challenges that it presents, hunting has had far-reaching consequences for key aspects of human social, psychological, and cultural life† (MacHalek, 2010). Hunters have for years voiced their opinions to the public on the benefits of hunting. Hunters believe if hunting is banned, herds will over populate and there will be more animals dying of starvation, disease and more people could become involved in an accident with wildlife because of over population. Over population can lead to destruction of crops, the spread of disease, and more people acquiring injures or death in automobile accidents. Here is a picture of what happens when deer wonder out into traffic in search of food or water because there ecosystem can no longer sustain the overcrowding. For every deer that leaves an ecosystem there are two more to take its place. When food is plentiful deer will stay in one square mile. Deer prefer to stay near to where they were born and raised, in the area they know best. When deer refuse to leave their ecosystem or move to another range that has plenty of food, this leads to starvation of animals. Hunting has its educational benefit to the hunter by learning and watching and keeping track of wildlife breeding and migration patterns. â€Å"Therefore, the hunter will not only benefit by his knowledge within his hunt but also an understanding of what animals to harvest when hunting. Sick or deformed animals often give the hunter a sense of sympathy when hunting† (Reed, 2008). By understanding that these animals will probably not take long to die, they could spread the disease to other animals. Hunters help to keep track of where these animals travel and how many are sick. Hunters report these animals to the wildlife society to preserve the rest of the other herds. By addressing this problem at early stages hunters can help produce a healthier environment and aid in breeding a healthier and stronger wildlife. This will make wildlife less prone to starvation and disease. Hunting does not only benefit the hunter but it also benefits wildlife management, hunting is a good tool in wildlife management. President, Roosevelt was responsible for forming programs focused on helping to bring wildlife game back to a healthy level. Hunters benefit the economy in the way that, â€Å"Everyone benefits from the excise taxes that hunters voluntary pay on guns, ammunition and outdoors equipment. Since 1937, hunters have contributed over 4 billion dollars through the Pittman-Robertson Act for the benefit of all wildlife species† (NRA-ILA, 2004). This money is being used to buy up millions of land owned by the public in an effort to sustain wildlife in these areas. Through many other organizations that support wildlife management they have added another $ 300 million for wildlife conservation. â€Å"Hunting contributes over $30 billion to the economy each year, supporting over 1,000,000 jobs† (National Shooting Sports Foundation). Throughout the 50 states hunters and fishermen supply an annual income for the conservation agencies in that state. â€Å"Through license fees and excise taxes on arms and gear, sportsmen contribute $200 million per year for wildlife conservation,† (U. S. Fish Wildlife Service). Through the efforts of hunters and wildlife management the numbers of wildlife has risen, below is a chart that represents the numbers of wildlife species and how game species have recovered in the twentieth century. â€Å" Through legislative programs designed to channel funds back into the conservation process, hunters have restored population of deer, elk, antelope, turkeys and ducks to record numbers† (NRA-ILA, 2004). For years hunters have teamed up with organizations such as: Hunters Sharing the Harvest and Hunters for the Hungry to supply for people in need. One of the oldest hunting organizations, which are the most important to revenue sources named, Federal Aid in Wildlife Restoration of 1937 or the Pittman-Robertson Act. This organization is responsible for distributing more than $3. 8 billon to fish and wildlife agencies because it became a law. The members of organizations such as Ducks Unlimited, Rocky Mountain Elk Foundation, National Rifle Association, and hunters, are helping to finance a variety of game management programs. By hunters and organizations like the Wildlife Federation and others they have been the leaders in the way of promoting wildlife and land conservation. These organizations are working with communities to build a better understanding of how they can improve their local economy and how to establish a trust fund. â€Å"To establish an annual income the trust will purchase wildlife to be released in the conservancy, and the conservancy will later pay the trust for any increase in population over the original number of animals† (Burnett , 200). Hunting today has become a means of relaxation and experiencing one with nature. However, a survey conducted in 2006 by the U. S. Fish and Wildlife Service that the numbers of hunters are declining because fewer children and teens are learning how to hunt. Despite the demise of hunters because the era of about 12,000 years ago, hunting still has a great deal of significance in many human cultures. â€Å" In A View To a Death in the Morning (1993), Matt Cartmill traces the symbolism and imagery of the hunt from the hunting-gathering era, through the agrarian era, and into modern, industrial times. Cartmill Page 452 (MacHalek, 2010). In 2001 a group formed named , NWCP goal was to team up with National Wildlife Conservation, the goal of this organization is to set the course in the future of wildlife conservation. In setting the course these organizations works together with the President of the United States and congress to face the issues about wildlife conservation and hunting. â€Å"Thirty five hunting and conservation groups have joined NWCP. NRA is a member of the steering committee† (NRA-ILA, 2004). Hunting will be a subject that will be up for debate for years to come by many organizations. Animal activist believe that there is no place for hunting in the 20th, century. Hunters believe that without hunting wildlife will over populate and destroy valuable crops and have a devastating effect on their ecosystem. Over population will also lead to wildlife moving into urban neighborhoods and there will be more animal related accidents causing injuries and deaths to humans. Hunters are the leaders in wildlife and land conservation. Hunting is a vital tool for the preservation of all wildlife species and land conservation. Therefore â€Å"Knowing the history of hunting in the United States is important for understanding the diverse points of view surrounding this controversial subject† (Laney, 2008) . These views will probably will never see eye to eye,† If humans are, in fact, possessed of an evolved psychology that derives from a hunting-gathering past, it can not been determined if this evolved psychology and the contours of modernity are somehow reconcilable or rather, are fundamentally incommensurable† (MacHalek, 2010). References Burnett, H. S. (2001, November 12). Ideas Changing the World. Retrieved from http://www.ncpa. org/pub/ba377 Laney, D. (2008). Introduction to Hunting: Opposing Viewpoints. Retrieved from http://find. galegroup. com. ezproxy. apollolibrary. com/gps/infomark. do? contentSet=GSRCtype=retrievetabId=T001prodId=IPSdocId=EJ3010504101source=galesrcprod=OVRCuserGroupName=uphoenixversion=1. 0 Miller, D. A. (2009). Sport Hunting Should Be Banned. Retrieved from http://find galegroup. com ezproxy. apollolibrary. com/gps/infomark. do? contentSet=GSRCtype=retrievetabID=T001prodId=IPSdocId=EJ3010062287source=galesrcprod=OVRCuserGroupName=uphoenixversion=1. 0 NRA-ILA. (n. d. ). Hunting Facts. Retrieved from http://www. nraila. org/issues/factsheet/read. aspx? id=124 Reade, C. (2008, October 13). Sport Hunting Should Not Be Banned. Retrieved from http://ezinearticles. com/? Sport- Hunting-Should-Not-Be-Bannedid=1578067 MacHalek, Richard S. Hunting. Macmillan Encyclopedia of Death and Dying. Ed. Robert Kastenbaum. Vol. 1. New York: Macmillan Reference USA, 2002. 451-453. Gale Virtual Reference Library. Web. 10 Sept. 2010. Retrieved from http://go. galegroup. com/ps/i. do? id=GALE%7CCX3407200148v=2. 1u=apolloit=rp=GVRLsw=w Gale Document Number: GALE|CX3407200148.

Pestel Analysis On Petroleum Industry Economics Essay

Pestel Analysis On Petroleum Industry Economics Essay ABSTRACT: In the history of the mankind, the need of resources was the most important factor for political, technological, economic, social evolutions. In modern times need of energy resources become more significant than other industries who were more important during the past like the production of wood, stone, horse breeding, productions of ships, weapons, constructions of buildings and even gold production. The primary energy source is represented by petroleum, commonly known as oil. Petroleum is most used in transport, energy, petrochemical, agriculture and other industries that need oil products in the production of goods. Example: Metallurgy. In this paper it will be present the need of a macro-environmental analysis at the petroleum industry and the external factors that have a powerful influence on this industry. KEYWORD: environment, factors, oil, resource, PESTEL analysis, influence JEL CLASSIFICATIO: L71, L72, N01, N10, N30 1. INTRODUCTION In pre-industrial revolution time, oil was used for making and maintaining the fire, in the blacksmith, in constructions and in the period of war as a weapon (fire traps, fire projectiles of bows or siege engines and even a component of the substance used for medieval flamethrower named Greek fire, which was used in naval warfare). With the development of electricity and transport, the need for the oil rise very much and surpasses the need for coal or natural gas, which were used for the same purpose. Petroleum (oil) industry represents one of the most important components of the energy industry who is like the circulatory system of the human body to the modern economy. Oil industry is divided in: upstream (exploration, development, extraction of oil and natural gas), downstream (transport by oil tanks or pipelines, refineries, retailers and consumers). PESTEL analysis represents of the most important method used to analysis external environment within an organization or an industry sector (Moldoveanu, 2007). Necessity of using the PESTEL analysis on the petroleum industry is represented by the important role that this industry has on the economic, political and social systems around the world. 2. IMPORTANT In this paper, I want to show the importance of the external factors of macro-environment on petroleum industry and complementary industries. I would use PESTEL analysis because it responds to the questions: Are only political, economic and social factors that influence the petroleum industry? The oil industry by could be influenced by the modification of a factor that has no direct contact with industry? 3. PESTEL Analysis on Petroleum Industry PESTEL analysis is used by organizations for identifying the factors of external environment of the market that could influence the organization and entire industry. PESTEL analysis is formed by six macro-environment group of factors: political factors, economic, social, technological factors, environmental factors and legal factors. Other authors add new group factors, named international (Moldoveanu, 2007), but I dont want to split to add this factors because all PESTEL groups of factors contain both national and international description. Macro-environmental factors are less influenced by companies than micro-environmental factors (customers, employee, suppliers, shareholders, media and competitors), but companies of oil industry can have bigger influence of macro-environment than companies from other industries. This fact is resulted because of the need for energy resources for political, economic, social, technological, environmental and legal activities. 3.1. Political factors Political factors are represented by the influence of a political entity (party, country, organizations or other type of faction) on the national level, regional level or international level. Most of the countries consider that the oil industry (upstream and downstream) is a strategic point in political, economic and social needs of a country, because this industry has a great influence on transport capacity, energy production, industrial production, chemical production, agriculture and social welfare. The energy independence is a priority objective of every country who wants to be free from a political blackmail from other countries or international organization. The most influent organization in oil production is OPEC (Organization of the Petroleum Exporting Countries) who has more than 42, 8% of world oil production, other considerable producers of oil or of another substituent, products are United States of America, Countries of European Union, Russia, China, Canada and Brazil. T he consumers who have a great influence on the oil markets are United States of America, China and western European Union countries. For mutual gain, some countries make trade agreement for exchanging of energy resources for money, technology other resources or even protection. A powerful influence over the production of oil and the price is made by instable situation from the Middle East, where every conflict could disturb oil production and transport, resulting in the rising of oil price. Another region that has a great influence upon the petroleum market is ex-soviet space, where disputes are likely resolved by energetic and political blackmail. The policy of foreign oil independence of the United States diminished energetic resource imports, because of that in Alaska were build new exploitations of oil or natural gas and development of substitutes. The austerity programs of European Union have reduced the need for fuels, because of declining of the economic activities and the so cial welfare. The economic crisis made the need for cheap fuels became a priority for the major players of the global stage. Because of this situation, many territorial disputes reappear between countries for oil and natural-gas reserves like: the Falkland Islands dispute between United Kingdom and Argentina; the Arctic plateau dispute between United States of America, Canada, Iceland, Norway and Russia; the Senkaku islands dispute between China, Taiwan and Japan; the South China Sea dispute between numerous Asian countries. National politic factors are represented by grade of authority of the state, political parties, non-governmental organizations and in some cases different factions (rebels, paramilitary entities). Grade of authority of the state represent the power that have the government upon the society, economy, technology, laws. The authority of the state is higher in authoritarian states like dictatorships, theocracies, non-constitutional monarchies, tribal society and is lower in democratic republics and constitutional monarchies were the political power is given by people of the country to the elected politicians. Political parties influence the petroleum industries by imposing state strategy for electoral or economic gains. The non-governmental organizations influence the oil market by promoting anti-pollution campaigns or liberalization of the fuel market. Paramilitary factions use influence on oil industry for blackmailing or for imposing some fees in territories that are controlled by the m, cutting the transport of oil for political gains. Oil companies can have influence on political factors in regions or countries were oil in primary source of making income and in regions or countries were the energy resource are scarce and attracting additional one is need for good function of economic activities. In modern economic, because of the globalization, the state canà ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¾Ã‚ ¢t protect the external market like in mercantile system(Strange S., 1996), resulting that companies can occupy new markets or acquire new resources alone. 3.2. Economic factors Economic factors are represented by the: influences of the supply and demand on the oil price; influences of the supply or demand of the complementary goods; influence of the supply and demand of substitute resources; the USD exchange rate (petrol-dollar policy); the price of the oil barrel on the important stock exchanges; economic situation on regional and global stages; value of the known reserves, interest rate for financing; value of stock market indexes (DOW Jones, StandardPoor). The demand for fuels is influenced by variation of transport activities (road, rail, aviation, naval) that represent almost 60 %(OPEC,2011), petrochemical industry, other industries, agriculture and energy production. Variation of need for road transport activities is influenced by the number of the auto vehicles used by population or organizations; the earns of every car owner, the frequency of using his own car, the customer culture for fuels effect on the environment, the road infrastructure, seasons, touring activities. Rail transport is represented by trains that use fuels for transport; this kind of transport is used in developing countries that have big oil production. Aviation is one of the transport sectors that grown very rapidly, representing 6% of total oil demand (OPEC,2011), two thirds been represented by OECD (Organization For Economic Co-Operation And Development). Oil demand for naval transport is represented in big proportion by cargo ships that transport goods from developing countries (goods and resources producers) to developed countries (services producers). Petrochemical industry represents approximately 10% of total oil demand and the products that are produced by this industry are: plastics, synthetic fibers, synthetic rubber, detergents, paints, adhesives, aerosols, insecticides, pharmaceuticals and others. Others industry sectors which demand oil or complementary products from oil are iron and steel industry, cement industry, auto vehicles industry, naval industry, mining, construction and many others. In agriculture demand for oil and complementary products are for a wide range of activities like farming, pasturing, animal husbandry, fishing, hunting, beekeeping and many others. Table 1. Vehicle and passenger car ownership in 2008 Name Population Millions Auto vehicles Millions Cars Millions Cars per 1000 1 North America 457.7 299.9 265.5 580.1 2 West Europe 542.2 274.2 236.0 435.3 3 Pacific OECD 200.8 111.2 85.9 427.8 OECD 1,200.6 685.3 587.4 489.2 4 Latin America 421.7 76.2 59.7 141.5 5 Middle East and Africa 824.1 35.0 22.4 27.2 6 South Asia 1,595.4 24.9 16.6 10.4 7 South-East Asia 641.5 53.1 33.7 52.5 8 China 1,337.4 49.5 36.0 26.9 9 OPEC 384.8 39.8 28.7 68.5 Developing countries 5,205.0 278.4 197.0 37.9 10 Russia 142.0 34.8 29.5 207.8 11 Other transition economies 198.8 38.2 34.7 174.6 Transition economies 340.7 73.0 64.2 188.4 World 6,746.3 1,036.7 1848.6 125.8 SOURCE: adapted from World Oil Outlook 2011, p. 80 Table 2. Aviation oil demand prediction Name People that travel with planes Millions in 2008 People that will travel with planes Millions 1 North America 1.7 2.0 2 West Europe 1.1 1.3 3 Pacific OECD 0.4 0.6 OECD 3.3 3.8 4 Latin America 0.2 0.3 5 Middle East and Africa 0.2 0.3 6 South Asia 0.1 0.3 7 South-East Asia 0.5 0.8 8 China 0.3 0.7 9 OPEC 0.3 0.4 Developing countries 1.5 2.7 10 Russia 0.3 0.4 11 Other transition economies 0.1 0.1 Transition economies 0.3 0.5 World 5.1 7.0 SOURCE: adapted from World Oil Outlook 2011, p. 95 The financial system has influenced the petroleum industry in 2008 very much, making oil price to drop from history peak price of 141 USD per barrel, in July, to 33 USD per barrel only at the end of the year. This fact is explained by the beginning of financial crisis that influenced negatively the income of the companies and of the population, making the companies and people to cut the cost, or to become insolvent, resulting to diminish of economic activities across the world who make the demand for transport to fall that making the fall of oil price. 3.3. Social factors Social factors are represented by demography, culture, ethnic structure, religion structure, inter-cultural relation, structure of family, ideological view, literacy, urbanization, income distribution, migration, use of communication technology, cultural view to the different products. All around the world, do not exist a culture that is against oil exploitation and for using the oil products, most of the population saw the oil industry like a necessity for development and welfare, but are segments within the population who see the oil industry as an important factor of pollution of the environment. Population which has culture of the protection of the natural environment is located in developed countries, because not need a high rate of developing. In the countries were populations are more friendly with environment; government imposes pollution fees and pollution reduction laws and norms to petroleum industry, and complementary industries. Many companies which make complementary products, like cars, invest in reduction of fuel consumptions or start to produce hybrid products. In the developing countries, populations from see the need for development and growing rate of welfare more important than environment protection; they accept the pollution like a cost for e conomic growth. Table 3. Population level and growth forecast Name Population Millions 2010 2035 1 North America 466 555 2 West Europe 547 576 3 Developed countries of Pacific 201 194 Developed countries 1,215 1,325 4 Latin America 431 516 5 Middle East and Africa 882 1,422 6 South Asia 1,644 2,144 7 South East Asia 657 809 8 China 1,354 1,462 Developing countries 5,372 6,939 9 Russia 141 126 10 Other economy in transition(Eastern Europe and Ex-soviet space) 199 201 Economies in transition 340 327 World 6,927 8,590 Source: adapted from Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, http://esa.un.org/unpp/ panel_population.htm and World Oil Outlook 2011, p. 38 In table above, Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat forecast that the population of developed countries will have a smaller population growth then the developing countries, which will rise from 5372 millions people to 6939 millions people (higher rise been in south Asia) and countries that are in transition will have a population in decrease, resulting in a growth of the population from 6,927 millions in 2010 to 8,590 in 2035. The populations of developed countries that consume most of the fuels and energy, in these days, are growing slow and are ageing very rapidly, resulting in diminish of the need for oil in future. However, the growth of the population, in developing countries, will impose the rise of the energy resources for growing transport, petrochemical industries and electricity production needs. So de results will be that the need from developing countries for oil will surpass the reducing of need from developed countries, so the demand for oil will grow. Urbanization is another factor that influences the need for energy, because urban population consumes more energy resources for transportation, electric energy or petrochemicals (plastics, fibers) than rural population. Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat forecast that in 2035 the urban population will grow with 50,69% and rural will decrease with 4,17%. In developing countries growing of urban population will be larger than developed countries with almost 1432 millions. Rural population in developed countries will decrease with almost 16 milions and in developing countries will remain almost the same. Table 4. Population forecast by urban/rural classification Name 2010 2035 Millions Millions Urban Rural Urban Rural 1 North America 384 83 488 67 2 West Europe 398 149 461 115 3 Developed countries of Pacific 145 56 154 40 Developed countries 928 287 1102 222 4 Latin America 362 69 462 55 5 Middle East and Africa 353 529 751 671 6 South Asia 500 1,144 944 1,200 7 South East Asia 284 373 455 354 8 China 636 717 949 513 Developing countries 2394 2978 4001 2938 9 Russia 103 38 99 27 10 Other economy in transition(Eastern Europe and Ex-soviet space) 116 83 134 67 Economies in transition 219 121 232 95 World 3541 3385 5336 3244 Source: adapted from Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, http://esa.un.org/unpp/ panel_population.htm and World Oil Outlook 2011, p. 43 Petroleum industry has a great impact on social welfare, because it fuels the transports and electricity production, activities that have a great impact on human development, production of goods and services and communication. 3.4. Technological factors Technological factors are represented by technologies, techniques and methods that influence the activities within an organization (Palmer A. Hartley B., 2009). The technological factors could influence an organization from inside the industry, by making the need to acquire the last technologies (by buying equipment), techniques and methods (by hiring a trained human resource in new techniques or train the old human resource with the new techniques and methods). Once acquired, these factors will influence the organization from inside. In oil industry, the technologies are used exploration, in exploitation, transport( roads, oil tanks, pipelines), in refineries, in storage, in promoting marketing strategies, in selling; in researching and development of the brand-new products or in upgrading the old ones, in reducing the time of production the losses from the production process. Secondary technologies and techniques could be used in environment protection, workers protection, in impr oving the efficiency of the management by using of new software and hardware, improving the maintaining and repairing activities. All these factors could be used against an oil company, if a rival company owns them like a competitive advantage. Because of that will result in a perpetual race (Nicolescu Verboncu, 2009) for acquiring the news and the most efficient technologies, techniques and methods that will have the results of takings a greater share from downstream market and a greater share from the upstream market, to acquire more oil reserves or to impose the price. Technologies that influence the oil company from outside the oil industry can influence entire oil industry (upstream and downstream). These technologies are represented by the complementary products and substitutable products. The complementary products influence the demand for oil by developing technologies that will reduce the consumption of oil products or replaced them with other a substitutable product. The complementary products are represented by auto vehicles, airplanes, ships, petrochemicals (plastics, synthetic fibers, synthetic rubber, detergents, paints, adhesives, aerosols, insecticides and pharmaceuticals), energy, agricultural product or other industrial products. The substitutable products are represented by-products of the rest of energy industries. These industries are: the coal industry, natural-gas industry (which includes the new shale gas industry), nuclear industry, biomass industry, hydro industry and other renewable-energy industry (solar, wind, geothermal). Like the many coal and gas industries, the oil industry in life phase of maturity, because development of the new technologies became very hard and oil reserves are half depleted. Table 5. Forecast of world supply of primary energy level mboe/d (equivalent of a million barrels per day) Growth % per year Fuel share % 2008 2035 2008à ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬35 2008 2035 Oil 80.6 101 0.8 35.2 28.4 Coal 66.6 101.5 1.6 29.1 28.5 Gas 52 90 2 22.7 25.3 Nuclear 14.3 22.5 1.7 6.2 6.3 Hydro 5.5 10.3 2.3 2.4 2.9 Biomass 8.5 20.3 3.3 3.7 5.7 Other renewables 1.5 10.4 7.5 0.6 2.9 Total 229 355.9 1.6 100 100 Sources: adapted from World Oil Outlook 2011, p. 50 The analysis from table above will result that the need for primary energy will grow from 2008 to 2035 with 51%( from 229 mboe/d to 355,9 mboe/d) The fossil fuels (oil, gas, and coal) will decrease from 87%(199,2 mboe/d) to 82%(292,5 mboe/d) from the total of the energy supplies, but the oil will remain the most-used resource. Nuclear will almost double the production, but more use of atomic energy will be limited because of fear of nuclear disasters like Chernobyl and Fukushima. Biomass will grow with almost 240%, but the principal problem of this resource is that will compete with the need for food production, because plants, which made biomass, are using the same soil that is used in agriculture for cultivating the wheat and corn or pastures of domestic animals. Hydro will almost double in 25 years, but the great difficulty will be to find new efficient places for building hydro centrals, because most of the rivers will also have hydro central. Rest of renewable-energy production will grow will approximately seven times, from 2008 to 2035; the main issues of renewable energy are: investments are high in comparison with fossil fuels, efficiently is lower, in most of the world region renewable energy can be produced only in some seasons, and it has a dependence to weather conditions. 3.5. Environment factors Environment factors are represented by the geographical position, landform, climate, fauna, flora, rock structure and natural resource that are in case of petroleum companies represented by oil reserves. Geographic position influence the activity of oil companies because it defines the distances between exploitation, refiners and consumers (for example, oil from Middle East can be transported half the world, exploitation to refiners), or could influence the demand for oil because of transports, international trade and migration. Landform influences the difficulty of exploitation, transportation to the refiners and consumers; demand is influenced by the consumption of the fuel in heavy terrains. Climate influences the difficulty of oil exploitation in time of the cold season in north climates, or hot seasons of desert climate, demand for oil grown in winter because of low speed traffic or energy consumption. Flora and fauna influence cost oil exploitation because of existing of the oi l reserves in natural parks, or because of existing difficult access area because of vegetation and dangerous animals. Rocks structure made difficulties of exploration and exploitation oil. World oil reserves are estimated to 1481.526 billion barrels according to OPEC Annual Statistic Bulletin 2012. The biggest oil reserves are in Saudi Arabia, Canada, Iran, Kuwait, Arab Emirates, Venezuela Russia, Libya, Nigeria, United States of America, China, Qatar, Mexico, Algeria and India. These countries have own 95% of oil reserves. One specification of the environmental factors is represented by natural disasters: hurricanes, tornados, cyclones, snow storms, sand storms, extreme temperatures, earthquakes, tsunamis, volcanic eruption that could make material loss and casualties, but could disturb economic activities. Economic activities that could be disturbed are road, rail, naval, air traffic, could decline the demand for unnecessary goods and raise the demand for the primary need goods l ike water, food, pharmaceutics, construction materials, fuels, clothes. Petroleum industry influences the natural environment because of pollution and capacity of changing from natural to artificial environment by fueling the developing of modern economy. Pollution is represented by fuel emission from uses of auto vehicles, airplanes, ships and emissions from refineries that produce fuels or other petrochemical products that have a great influence on climate changing. Other pollution events are represented by accidents that can happen in activities of exploration, exploitation, refining and transport, contaminating the water, air and soil with oil, fuels or wastes. 3.6. Legal factors Legal factors are represented by constitutions, laws, norms and regulations of the local authorities, governments, international institutions, international communities (European Union, the North American Free Trade Agreement, the African Union and the Association of South East Asian Nations). This factors influence the modalities of exploration, of exploitation, of the refiner, of transportation and of commercialization of oil and oil products. The legal factors also impose laws and regulations for pollution, social protection, work protection, work regulation, competition regulation, anti-trust regulation, consumer protection, international trade (trade agreements between nations or embargoes to some countries), subsidies, the taxes( like the excise rates for fuels and oil price or taxes and fees over profit to the energy companies). Table 6. Tax rate in comparison with price Country Oil price USD per liter Tax rate Tax United Kingdom 1.76 65.1% 1.15 Germany 1.53 66.3% 1.02 Italy 1.418 66.3% 0.94 France 1.49 63.7% 0.95 Japan 1.14 49.6% 0.57 Canada 0.90 33.3% 0.30 USA 0.75 16.0% 0.12 Source: Who get What from imported oil (2011) http://www.opec.org/opec_web/en/publications/341.htm 4. CONCLUSION In conclusion, the importance of knowing the macro-environment on an industry such as important like petroleum industry is crucial in the modern economy, because these factors represent the opportunities and threats of this economic sector. Many specialists think that the change from fossil fuels to the renewable resources would resolve many of the problems and threats that the oil industry has. So the transition from oil to renewable resources should be faster, omitting many variables upstream and downstream of this industry. If a change of the principal energy resources will be made, it will be required to take caution steps, because this could make a shortage of the energy resources that could destabilize the entire world social-economic-system. For changing main energy resource will be necessary to reconvert many equipments and machinery, training the human resource, make social campaign to encourage the people to use new fuel, invest in new research about efficiency of the new f uel, the environment impact, search for new reserves and make new regulation for the use of this resource.