Cognizable And Non Cognizable Offences Law Essay

Cognizable And Non Cognizable Offences Law Essay Cognizable offences have been defined under Section 2 (c) of the Criminal Procedure Code as follows; cognizable offence means an offence for which, and cognizable case means a case in which, a police officer may, in accordance with the First Schedule or under any other law for the time being in force, arrest without warrant. A non-cognizable offence has been defined under Section 2 (l) of the Criminal Procedure Code as follows, non-cognizable offence means an offence for which, and non-cognizable case means a case in which, a police officer has no authority to arrest without warrant. Now which offence falls under the category of cognizable offences and which falls under the category of non-cognizable offences can be determined as per the classification given in the First Schedule of the Criminal Procedure Code. The First Schedule has classified all acts punishable under the Indian Penal Code, 1860 into Cognizable and non-cognizable offences. Although the Code in itself does not give any reasoning as to this classification, certain patterns can be traced if the First schedule is studied carefully. All offences which have a punishment of more than 3 years under the Indian Penal Code are considered to be cognizable offences and all offences which have a punishment of less than 3 years are non-cognizable offences. Subsequently, it can be deduced that non-cognizable offences are relatively less serious in nature than cognizable offences. Consequently, in case of cognizable offences, the police officers can arrest the accused person without any warrant or authority issued by a magistrate. They can initiate investigation on their own accord and they neednt wait for the prior permission of a magistrate. In fact, they have a legal duty to initiate investigations. This duty has been endowed upon them by Section 156(1) of the Criminal Procedure code which reads; Any officer in charge of a police station may, without the order of a Magistrate, investigate any cognizable case which a Court having jurisdiction over the local area within the limits of such station would have power to inquire into or try under the provisions of Chapter XIII. Section 156 (2) further reads, No proceeding of a police officer in any such case shall at any stage be called in question on the ground that the case was one which such officer was not empowered under this section to investigate. On the other hand, police officers necessarily need prior permission of a magistrate to initiate investigations in cases of non-cognizable offences. Non cognizable offences are considered more in the nature of private wrongs and therefore the collection of evidence and the prosecution of offender are left to the initiative and efforts of private citizens. Bailable and Non-bailable offences Section 2 (a) of the Criminal Procedure Code defines bailable and non-bailable offences as an offence which is shown as bailable in the First Schedule, or which is made bailable by any other law for the time being in force; and non-bailable offence means any other offence In here too, the code does not give any reason as to on what criteria has such classification been based upon. It just lays down a seemingly arbitrary classification of the same. However, it can be logically deduced that all serious offences are non-bailable whereas all less serious offences are bailable. Similarly, all offences which have a punishment of more than 3 years under the Indian Penal Code are considered to be non-bailable offences and all offences which have a punishment of less than 3 years are bailable offences. This too is subject to the exception of existence of a contrary law. If a person accused of a bailable offence is arrested or detained without warrant he has a right to be released on bail. In case he is accused of a non-bailable offence, then his bail is subject to the discretion by the authorities. Warrant case and Summons Case According to Section 2 (x) of the Criminal Procedure Code, a warrant-case means a case relating to an offence punishable with death, imprisonment for life or imprisonment for a term exceeding two years. According to Section 2 (w) of the Criminal Procedure Code, a summons case means a case relating to an offence, not being a warrant case. This classification helps to determine the type of trial procedure to be adopted in the case. Naturally, the trial procedure in case of a warrant case is much more elaborate than that of a summons case. This classification is also useful at the stage of issuing process to the accused person in the first instance. CHAPTER II NEED FOR RECLASSIFICATION OF OFFENCES The current classification of offences has been a major cause for the high incidence of arbitrary and unnecessary arrest in our country. The scheme of classification is outdated and redundant. There is a serious need for revaluation for the classification between cognizable and non-cognizable and bailable and non-bailable offences. The nature and quantum of punishment attached to these offences also needs to be revaluated. It is not that the idea for reclassification has never come up before, but given the present situation of our judicial system, it becomes all the more relevant that it be done now. For instance, many minor offences against property are still classified as non-bailable, whereas it is evident that classifying them as compoundable offences and relying on methods such as plea-bargaining may be more effective and agreeable to address the injury caused by the same  [1]  . Also, it has been noted that the major portion of the backlog cases in the courts consists of regulatory offences such as dishonour of cheques, traffic violations, etc. Now, these acts were made offences under special laws whereby the legislature had felt that in lieu of public policy, these acts were better off classified as criminal even though they are more akin to civil wrongs. However, the fact that they will create a maximum backlog was envisaged by neither party. Hence, there is a need for an informed study and revaluation of criminal laws. It has been suggested that the offences be classified into a) The Social Welfare Code, b) The Correctional Code, c) The Criminal code and d) the Economic and other offences code. This approach of classifying the offences as per their nature is considered to be far more useful than a blanket categorization of offences. This re-classification is proposed to be done on the basis of the gravity of the offences, appropriate procedures for investigation and dispute-resolution as well as the proportionate nature and quantum of fines and punishments. CHAPTER III RECOMMENDATIONS OF THE MALIMATH COMMITTEE Considering the need for reclassification of offences, the Malimath committee gave the following recommendations for the same. Its primary recommendation was to remove the distinction between cognizable and non-cognizable offences and make it obligatory on the Police to investigate all offences in respect of which a complaint is made. However, this is not a very practical option as it will lead to a further backlog of cases and will increase the burden on the police. Section 262 of the Criminal Procedure Code provides for the procedure for summary trials, Section 263 provides for the record in summary trials and Section 264 provides for judgement in cases tried summarily. The Malimath committee recommended increasing the number of cases falling within the category of cases trialable by following the summary procedure presented by Sections 262 to 264. It also recommended increasing the number of offences that fall under the category of Petty Offences which can be dealt with by following the procedure prescribed by Section 206 of the Code. Section 206 reads If, in the opinion of a Magistrate taking cognizance of a petty offence, the case may be summarily disposed of under section 260, the Magistrate shall, except where he is, for reasons to be recorded in writing of a contrary opinion, issue summons to the accused requiring him either to appear in person or by pleader before the Magistrate on a specified date, or if he desires to plead guilty to the charge without appearing before the Magistrate, to transmit before the specified date, by post or by messenger to the Magistrate, the said plea in writing and the amount of fine specified in the summons or if he desires to appear by pleader and to plead guilty to the charge through such pleader, to authorise, in writing, the pleader to plead guilty to the charge on his behalf and to pay the fine through such pleader: Provided that the amount of the fine specified in such summons shall not exceed one hundred rupees. (2)   For the purposes of this section, petty offence means any offence punishable only with fine not exceeding one thousand rupees, but does not include any offence so punishable under the Motor Vehicles Act, 1939, (4 of 1939) or under any other law which provides for convicting the accused person in his absence on a plea of guilty. It advocated increasing the number of offences, for which an arrest neednt be made and increasing the number of offences where arrest can be made only with the order of the court and reducing the number of cases where arrest can be made without an order or warrant form the Magistrate. The Malimath committee further recommended increasing the number of offences which are bailable and reducing the number of offences which are not bailable. A compoundable offence is one in which the trial court can compound the offence and dispose the case without trial. A non-compoundable offence is an offence in which the court cannot compound the case without trial. A compoundable offence is always a lesser degree offence punishable with a shorter jail term or fine. The Malimath Committee recommended increasing the number of offences that can be brought within the category of compoundable offences, to encourage settlements without trials. CONCLUSION

Economic Globalization and Civil War Essay

Researchers Katherine Barbieri and Rafael Reuveny attempt through their study on economic globalization and civil war to find the relation, if any, between the effects of globalization and the occurrence of civil wars in developing countries. Their hypothesis is that globalization has positive effects on developing countries, causing them to have more stability and become less likely to erupt in civil war. Using the examples of 74 civil wars spanning the years of 1970-1999, the researchers compared variables of globalization including international trade, foreign direct investment, foreign portfolio investment, and internet use against periods of civil war in corresponding countries. Their results revealed that when the globalization variables, with the exception of internet use, are more important to a country it is less likely to have a civil war. These variables produce an economic stability that makes people less inclined to interrupt the status quo. Their results showed that poor countries with large populations that were less likely to be economically equal in already dire financial straits are far more likely to see internal unrest. While globalization is unlikely to be the root cause of civil war and can help reduce the likelihood it cannot prevent it as there may be deeper forces at work such as cultural or ethnic inequalities that may be exacerbated by globalization.

Analysis of Financial Reports of Hindalco Industries Inc - Free Essay Example

Sample details Pages: 18 Words: 5474 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? The production of aluminium started in India in 1938 when the Aluminum Corporation of Indias plant was commissioned. The plant which was set up with a financial and technical collaboration with Alcan, Canada had a capacity of producing 2,500 ton per annum. Hindustan Aluminum Corporation (Hindalco) was set up in UP in the year 1959; it had a capacity of producing 20,000 ton per annum. Don’t waste time! Our writers will create an original "Analysis of Financial Reports of Hindalco Industries Inc" essay for you Create order In 1965, a public sector enterprise Malco which had a capacity of 10,000 ton per annum was commissioned; by 1987, National Aluminium Company (NALCO) was commissioned to produce aluminium. It had a capacity of producing 0.218 million ton In present scenario, aluminium Industry in India is a highly concentrated industry with the top 5 companies constituting the majority of the countrys production. With the growing demand of aluminium in India, the Indian aluminium industry is also growing at an enviable pace. In fact, the production of aluminium in India is currently outpacing the demand. India is worlds fifth largest aluminium producer with an aluminium production competence of around 2.7 million tonnes, accounting almost 5% of the total aluminium production in the world. India is also a huge reservoir of Bauxite with a Bauxite reserve of 3 billion tones. Though Indias per capita consumption of aluminium stands too low (under 1 kg) comparing to the per capita consumptions of other countries like US Europe (range from 25 to 30 kgs), Japan (15 kgs), Taiwan (10 kgs) and China (3 kgs), the demand is growing gradually. In India, the industries that require aluminium most include power (44%), consumer durables, transportation (10-12%), construction (17%) and packaging etc. The Major Players The Indian aluminium industry is dominated by four or five companies that constitute the majority of Indias aluminium production. Following are the major players in the Indian aluminium industry: Hindustan Aluminium Company (HINDALCO) National Aluminium Company (NALCO) Bharat Aluminium Company (BALCO) MALCO INDAL Indian Copper industry background and overview The Indian copper industry was opened for private sector investment in 1992. Prior to 1992, industry was dominated by HCL, a public sector undertaking (PSU). The copper industry is highly dependent on the performance of and demand for products like power and telecom cables, transformers, generators and other ancillary components. Its growth is closely linked with countrys economic growth. The Indian industry can be classified into two broad categories-manufacturers of refined copper (copper cathodes) and manufacturers of copper products. Of the three manufacturers of refined copper, HCL is the only primary producer, which mines and refines copper; Hindalco and SIL process primarily imported copper concentrate to produce end products like copper bars, rods and wires. The per capita consumption of copper in India is currently at 0.4 kg per annum, which compares poorly with Chinas per capita consumption of 3 kg per annum. However, Indias per capita consumption is unlikely to increase at the same rate as China. Chinas per capita consumption at a given income level is higher than in the other emerging markets, mainly because it has a higher share of industry in gdp. So Indian copper industry may not show the same growth rate as china. Coppers future trend will be decided by upcoming demand from housing and electrical sectors that are expected to see a boom in future. Hindalco background Established in 1958, Hindalco commissioned their aluminium facility at Renukoot in eastern Uttar Pradesh, India in 1962. Later acquisitions and mergers, with Indal, Birla Copper and the Nifty and Mt. Gordon copper mines in Australia, strengthened their position in value-added alumina, aluminium and copper products. Hindalco Industries Limited is the metals flagship company of the Aditya Birla Group and worlds largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia. Its copper smelter is the worlds largest custom smelter at a single location. The acquisition of Novelis Inc. in 2007 positioned Hindalco among the top five aluminium majors worldwide and the largest vertically integrated aluminium company in India. Today they are a metals powerhouse with high-end rolling capabilities and a global footprint in 12 countries. Their consolidated turnover of USD 13 billion (60,000 crore) places them in the Fortune 500 league. Hindalcos major p roducts include standard and speciality grade aluminas and hydrates, aluminium ingots, billets, wire rods, flat rolled products, extrusions and foil. A strong presence across the value chain and synergies between operations has given them a dominant share in the value-added products market. Hindalco acquired two Australian copper mines, Nifty and Mt. Gordon, in 2003. During FY2009, Mt. Gordon produced 17,815 tonnes of copper in concentrate. Hindalcos journey has been challenging at times, but truly exhilarating. The fact file of the company in two areas covers, Worlds largest aluminium rolling company, one of the biggest producers of primary aluminium in Asia, ISO 9001:2000 and 14001 certified, One of the lowest-cost producers of aluminium in the world and Indias leading copper producer, Indias largest copper smelting and refining plant at Dahej, Gujarat, with two copper mines in Australia, ISO 9001,14001 and OSHAS 18001 certified, Smelting and refining capacity 500,000 tpa, t he largest single location smelter in the world. Domestic consumption growth for both aluminium and copper augurs well for Hindalco, which has embarked on the growth plan through low cost Greenfield projects of the company. Auditors Report SINGHI CO is the auditor for the firm. The auditor is of the opinion that the companys accounts have been properly kept by the company in accordance with the law and the Indian GAAP. The auditor also states that the final accounts prepared comply with the accounting standards Auditor agrees that The Balance Sheet, Profit Loss Account and Cash Flow Statement dealt with by the annual report are in agreement with the books of account. Auditor agrees that the Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. No material discrepancies between book record and physical inventory have been noticed. No substantial part of fixed assets has been disposed of during the year, which has bearing on the going concern assumption. The auditor has also clarified that non-monetary effects on assets or liabilities such as offering guarantees for loans, using long-term loans for short-term purposes, etc. have not occurred during the period. The auditor has given a clean or unqualified opinion for the company. The auditors have also mentioned the dues in respect of taxes, duties and cess that have not been deposited on account of disputes with the respective authorities. Disputes pending as on 31st March 2010 amounts to 288.1 crore which is 15% of the net profit reported an almost 11% of the current assets. This might look a bit significant but in our opinion this is not a major issue. This is assuming the mentioned amount is for the worst case scenario, as is generally the case. Moreover, similar pending payments arising out of disputes exist in almost all companies in india specially in metal sector (e.g for Nalco it is 23% of current assets). Auditor states again that The Company does not have any accumulated losses and has not incurred cash losses in the current financial year and in the immediately preceding financial year. The Company has not defaulted in repayment of dues to Financial In stitutions or Banks or Debenture holders. The auditor is of the opinion that the said consolidated financial statements (with subsidiaries), read together with significant accounting policies, give a true and fair view in conformity with the accounting principles generally accepted in India The auditors unqualified opinion, therefore, increases our confidence on the financial statements published by Cipla. No adjustments need to be made to the financial statements on the basis of the auditors report and our analysis of the financial statements reported, we believe, would provide us with meaningful information of the financial health of the company. Directors Report The Directors Report begins by outlining a financial summary of the companys performance in the previous financial year, and claims that downturn witnessed in the previous year was arrested and confirmed several measures taken by the Company started yielding results. Directors recommended a dividend of Rs.1.35 per share i.e. @135% per equity amounting to Rs.258.32 crore. This instils confidence in share holders and potential investors. It is also stated that the Company has decided for early adoption of Accounting Standard (AS) 30 on financial Instruments: Recognition and Measurement, in so far as it relates to derivative accounting, from 1st April, 2009. Accordingly, net loss arising on fair valuation of outstanding derivatives as on 01st April, 2009 amounting to Rs. 230.58 crore (net of deferred tax of Rs. 118.73 crore) has been adjusted against General Reserves following transitional provisions. Accounting for all derivatives from 1st April, 2009 have been done as prescrib ed under the AS 30. As a result, net loss of Rs. (236.12) crore and gain of Rs. 167.75 crore Rs. 246.09 crore for the year ended 31st March, 2010 have been included under Sales and Raw Materials Consumed Other Expenses (in Manufacturing and Other Expenses), respectively. The report also conveys that the shareholders of the Company has approved an Employee Stock Option Scheme (ESOS 2006), formulated by the Company, under which the Company may issue 3,475,000 options to its permanent employees in the management cadre. The directors raised concern over profit erosion by lowering of Rupee around Rs.750 crore. Additionally, Rs.100 crore was lost on account of the higher coal cost at Renusagar Power. Against this backdrop, the performance of both the Businesses was satisfactory. Other income at Rs.260 crore was lower by Rs.377 crore, on account of low treasury corpus, post repayment of bridge loan in November 2008, which was taken for Novelis acquisition and for higher project spe nding. Abundant liquidity kept short-term rates low. This also affected yields on the companys investments which are mostly in liquid plans. It also reduced the cost of working capital borrowing. As a result, the interest and financing charges also reduced from Rs.337crore in FY09 to Rs.278 crore in FY10. The report also states that the company is aggressively pursuing various brownfield and greenfield growth opportunities in Aluminium. The report frankly assesses the current industry problems and prospects. The future growth will partially depend on demand in post recession European market and price competition with china and other Asian countries. Swot Analysis Strengths Large upstream and midstream producer with robust project pipeline. Expansion in strategic locations such as Jharkhand and Madhya Pradesh. This facilitates Access to high quality raw material reserves. Access to relatively cheap labour. Proximity to fast growing Asian markets. Power plants located at pit head. Aggressive and innovative approaches for low cost brownfield expansions, sweating of existing assets, continuous cost reduction and optimising working capital continue to yield results despite inflationary conditions. Opportunities Acquisition of Novelis Gives access to the world market. Acquisition of Novelis provides substantive proprietary technology led operations, which is unique in Indian context. Hindalcos Greenfield plants expected to be in global best quartile for manufacturing costs. Hedging strategy should Allow Hindalco to tap into internal resources for downstream operations when market conditions are unfavourable. Weaknesses Technology is not upgraded compared to global giants in Aluminium industry. Complexity of operation. Threats The impact of foreign currency fluctuation and interest rates. Loss of sales to substitutes. Hirakud outage: Operations of the aluminium smelter at Hirakud have been affected in 2010 continuously due to bad weather with heavy rains and lightning. Revenue Recognition Policy Revenue recognition policy at Hindalco is as follows Sales revenue is recognized on transfer of significant risk and rewards of the ownership of the goods to the buyer and stated at net of trade discount and rebates. Dividend income on investments is accounted for when the right to receive the payment is established. Export incentive, certain insurance, railway and other claims where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on acceptance basis. Hindalco does not recognize or disclose Contingent Assets. Changes over time Hindalco is following same Revenue recognition policy since 2000. Consistency As per Accounting Standard 9 (AS9) of Indian GAAP, Revenue can be recognized when it is certain that economic benefits will inflow, the amount of revenue can be measured reliably, goods have been transferred to the buyer with significant risks and rewards of ownership, and control over goods have been transferred to the buyer. Hindalco recognizes revenue only when goods have been transferred to the buyer with significant risk and rewards of ownership. Trade discounts and rebates are not taken into consideration. Uncertain incomes like Export incentive, certain insurance, railway and other claims are recognized only when the amount is received. Dividend income, which is to be received from investments, is recognized when company is eligible for the same. Considering the way Hindalco carries out its business, it is consistent on revenue recognition principles with AS9 of Indian GAAP. Conservatism As Hindalco is a product based company, sales revenue comes from sales of products. If accrual basis accounting is followed, then revenue should be recognized only when it is certain and ownership of goods is transferred with significant risks and rewards. As Hindalco is following similar principle, we can comment that it is only following industry rules and neither less nor more conservative. Market Comparison We have compared Hindalcos Revenue recognition principles with two other companies from metal sector, National Aluminium Co. and Hindusthan Zinc. Revenue recognition on domestic sales are similar for all the three firm. But for foreign sales, Hindalco recognizes revenue only when amount is received citing reasons for uncertainty, where as other two companies recognizes revenue on issue of bill of lading. Fixed Assets Valuation Policy Valuation policy for fixed assets at Hindalco is as follows (a) Tangible Assets are stated at cost less accumulated depreciation and impairment loss, if any. Cost comprises of purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use. (b) Intangible Assets are stated at cost less accumulated amortization. Cost includes any directly attributable expenditure on making the asset ready for its intended use. (c) Machinery spares which can be used only in connection with an item of Fixed Asset and whose use is not of regular nature are written off over the estimated useful life of the relevant asset. As stated above, Hindalco records intangible assets at cost less accumulated amortization except goodwill. Goodwill is recorded at cost less impairment loss. For tangible assets, cost less accumulated depreciation and impairment loss is taken as book value. Impairment loss on fixed assets is calculated based on b elow principle An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value (being higher of value-in-use and net selling price). Value-in-use is computed at net present value of cash flow expected over the balance useful life of the assets. An impairment loss is recognized as an expense in the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been an improvement in recoverable amount except in the case of goodwill for which specific external event of an exceptional nature that caused impairment loss has actually reversed the effect of that event. Change over time There was a change in valuation policy for fixed assets at Hindalco in year 2008. In that year a below clause for machinery spares valuation has been amended Machinery spares which can be used only in connection with an item of Fixed Asset and whose use is not of regular nature are written off over the estimated useful life of the relevant asset. This change would not affect the financial statements significantly. Probably it was done to make the valuation oriented to primary assets which contribute to the business majorly. Also revaluation of fixed assets has been done in year 2007. Fixed Assets of Aluminum Business had been reinstated at its original cost in 2002-03. Consistency As per Indian GAAP, historical cost convention should be followed for valuation of tangible assets, where as for intangible assets it should be checked whether the asset will attribute to any future economic profit and whether the value of intangible asset can be measured reliably. Hindalco follows cost method for measuring fair value for both tangible and intangible assets which is consistent with Indian GAAP. Market Comparison When we compare Hindalcos valuation policy of fixed assets to that of National Aluminium Co. and Hindusthan Zinc we observed no significant difference. All of them use cost method for assessing the value and record the asset value as cost less depreciation (amortization for intangible assets) and impairment loss. Depreciation and Amortization Policy Depreciation and Amortization policy at Hindalco is as follows (a) Depreciation on Fixed Assets are provided using straight line method based on estimated useful life or on the basis of depreciation rates prescribed under respective local laws. (b) Leasehold lands (including mining rights) are amortized over the period of lease on straight line basis. (c) Intangible assets, other than Goodwill, are amortized over their estimated useful lives on straight line basis. (d) Depreciation on assets acquired under finance lease is spread over the lease term. Depreciation policy has almost remained consistent since 2000 for Hindalco. Only change has come in the year 2008 when one clause was added for goodwill. Till 2007, company did not have any intangible asset in form of goodwill. Though all other intangible assets are amortized over estimated useful lives, goodwill is estimated each year and if there is any reduction, the amount is written off in form of impairment. Consistency As per AS6 of Indian GAAP, Depreciation of fixed assets is carried out using the straight-line method at rates prescribed under Schedule XIV of the Companies Act, 1956. By looking at Hindalcos depreciation policies we can infer that it is consistent with AS6 of Indian GAAP and the way it carries out its business. Conservatism Since year 2000, Hindalco has followed straight line method of depreciation for fixed assets and depreciation rates has been estimated on basis on depreciation rates prescribed under respective local laws. So, it can be inferred that depreciation policies of Hindalco are reasonable and they are neither less nor more conservative. Market Comparison Since year 2000, Hindalco has used straight line method of depreciation for tangible assets. For intangible assets except goodwill, amortization has been done based using straight line method. When we compared depreciation policy of Hindalco to that of two other companies namely National Aluminium Co. and Hindusthan Zinc we observed the below findings. Hindusthan Zinc follows depreciation policies as per AS6 of Indian GAAP with below exceptions: Additions and disposals are reckoned on the first day and the last day of the month respectively. Individual items of plant and machinery and vehicles costing upto Rs 25,000/- are wholly depreciated. in respect of additions arising on account of Insurance spares, on additions/extentions forming an integral part of existing plants and on the revised carrying amount of the assets identified as impaired on which depreciation has been provided over residual life of the respective fixed assets. National Aluminum Co. follows below depreciation policies Depreciation on fixed assets is provided on straight-line method at the rates and manner prescribed under Schedule XIV of the Companies Act, 1956 except in case of certain assets where depreciation at higher rates is provided based on their estimated remaining useful life, evaluated on the basis of technical estimate made periodically:- Earth work portion of: a) Red mud pond at Alumina Refinery b) Ash pond at Alumina Refinery c) Ash ponds at Captive Power Plant Certain assets at Port Facilities are depreciated at rates calculated on the basis of balance lease period of land belonging to the Port Authority on which these assets are installed. Assets costing Rs.5, 000/- or less individually are depreciated fully in the year in which they are put to use. Assets on land not owned by the Company are depreciated over a period of five years. Cost of leasehold land including development expenses thereon is amortized over the period of lease. However, where lease agreement is yet to be signed, such expenses are amortized over a period of 20 years commencing from the year of commercial operation. Classification of plant and machinery into continuous and non-continuous is made on the basis of technical opinion and depreciation provided accordingly. From the above depreciation policies of the three companies, it is apparent that though on larger scale all of them have adopted similar policies, still there are company specific differences which are very specific to the operations of that company. Inventory Valuation Policy (a) Inventories of stores and spare parts are valued at or below cost after providing for cost of obsolescence and other anticipated losses, wherever considered necessary. (b) Inventories of items other than those stated above are valued At cost or Net Realizable Value, whichever is lower. Cost is generally determined on weighted average cost basis and wherever required, appropriate overheads are taken into account. Net Realizable Value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale. (c) Materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost Conservatism Hindalco follows the weighted-average cost method and, hence, is more balanced in environments of increasing or decreasing prices as compared to the FIFO and LIFO methods. It also takes the lesser value of the cost and net realizable value. Therefore, Hindalco is conservative in its approach. As mentioned earlier, part changes in methods for a particular year to FIFO for some of the goods should be avoided to ensure conservatism. This could have been used to overstate the profits and inventory for the point of view of certain stakeholders like directors of the company whose bonuses might be based on the profits. Clear description for the change in approach should be mentioned, otherwise. Impact of Clause 49 The broad requirements or issues of clause 49 in the Listing Agreement are as follows: Definition of independent director Definition of independent director Institutional directors Remuneration paid to non-executive directors Requirements related to audit committees Meeting of Audit Committee Role of the audit committee The impact of the all the issues mentioned above have been incorporated by Hindalco in its annual report. The details of which are as follows: GOVERNANCE PHILOSOPHY The Company is committed to the adoption of best governance practices and its adherence in the true spirit, at all times. At a macro level, the governance philosophy rests on five basic tenets viz., Board accountability to the Company and shareholders, strategic guidance and effective monitoring by the Board, protection of minority interests and rights, equitable treatment of all shareholders as well as superior transparency and timely disclosure. Report on Corporate Governance Guidelines The Company is fully compliant with the requirements of the prevailing and applicable Corporate Governance Code. Board of Directors Your Companys Board comprises of 9 Nonexecutive Directors with considerable experience in their respective fields. Of these, 6 Directors are independent Directors. Clause 49 of the Listing Agreement as amended in April 2008 requires that if the Non-executive Chairman of the Company is the promoter then at least half of the Board of Directors of such Company should consist of independent Directors and the company is in compliance with the above requirement of Clause 49 of the Listing Agreement. The composition of the board is disclosed as on 29th May, 2009. Number of meetings held and their dates are disclosed. Audit Committee Date of constitution and the details of chairperson and members of the committee are disclosed. The number of meetings of the committee and their dates are also published. Shareholders Grievances Committee The Company has a Shareholders Grievances Committee, which is headed by an independent Non-Executive Director. The details of the meetings held are disclosed Remuneration to Directors The details of the remuneration paid to the Director during the year FY 2009-10 are disclosed. Along with this the payments to the Non-Executive Directors is also disclosed. Other Disclosures Code of Conduct including Prevention of Insider Trading, CEO/CFO Certification, Report of Corporate Governance, General Body Meetings, Means of Communication and General Shareholder Information details are also provided according to the Clause 49 of the listing agreement. Thus we can see that the Company makes significant disclosures in order to be in compliance with Clause 49 of the Listing Agreement. It provides a great platform for the company to showcase its high corporate governance initiatives before its shareholders. It certainly enhances the image of the company in the eyes of the public and especially potential shareholders. Cash Flow Statement Analysis: Below is the condensed version of consolidated cash flow statement for Hindalco for the Last 2 years from its annual report dated mar-2010.  10-Mar 9-Mar 8-Mar 7-Mar Cash Flow Summary     Cash and Cash Equivalents at Beginning of the year 2183.12 1709.21 1010.14 1075.75 Net Cash from Operating Activities 1717.28 3170.39 5399.93 3425.96 Net Cash Used in Investing Activities (4074.59) (5773.42) -17615.4 -6394.69 Net Cash Used in Financing Activities 1653.97 3298.83 12914.53 2903.12 Net Inc/(Dec) in Cash and Cash Equivalent (703.34) 695.80 699.07 -65.61 Cash and Cash Equivalents at End of the year 2186.9 2183.12 1709.21 1010.14 Observations from the Cash Flow Statements: The Cash Flow Statement has been prepared under the indirect method (operations cash flow) as set out in Accounting Standard (AS) 3 Cash flow Statement as specified in the Companies (Accounting Standard) Rule 2006. The Cash flow from operating activities has been positive in the last 2 years. The cash at the end of the year has been higher than that at the start of the period. Whether this implies the company is better off at the yearend that at the start of the year will have to be determined. If the cash is generated as a result of cash generations from operations, it will be deemed positive. The revenue from operations is 2183.12 and is not sufficient to pay the depreciation and dividend for that year (3,041.41). The cash flow of the company is not fully healthy. But considering the company is spending huge amount in investment activities its future cash flow from might improve based on the returns from the investments. It is to be noted in the last four years the company had to raise cash through financing activities to meet its investment requirements. The sources of funds is mainly through an increase in share holder funds (equity). RATIO ANALYSIS: LIQUIDITY RATIOS: Current Ratio Quick Ratio The quick ratio is an indicator of a companys short-term liquidity.  The quick ratio  measures  a companys  ability to meet  its short-term obligations with  its most liquid assets. The quick ratio  is calculated as:  It is also known as the acid-test ratio or the quick assets  ratio. LIQUIDITY RATIOS Year Latest 2009 2008 Current Ratio 1.39 1.32 1.38 Quick ratio 0.39 0.88 0.53 Trend Analysis of the Liquidity Ratios: The companys liquidity ratios indicate the company has a strong financial health and that it has the ability to service all its debt in future. The current ratio is steady at around 1.4, while the long term debt has increased over the years in consideration. This is attributable to the acquisition of Novelis in 2007-08. Yet from the cash flow statement for financial activities, we are able to infer the company generates enough revenues to payoff the debts and improve its chances of remaining solvent. EFFICIENCY RATIOS: These ratios indicate efficiency based on the turnover rates. Average Collection Period Average Collection Period is the approximate amount of time that it takes for a business to receive payments owed, in terms of receivables, from its customers and clients. Days Days Inventory Days It is also known as days inventory outstanding (DIO). The Cost of Sales includes the Cost of Services and Cost of equipment sales. Days payable Days Payable is a companys average payable period. It is calculated as: Average  accounts payable  x 365 à ·Ãƒâ€šÃ‚  cost of sales. DPO is an indicator of how long a company is taking to pay its trade creditors. Efficiency Ratios of Hindalco is calculated and plotted for the last four financial years. EFFICIENCY RATIOS Year 2010 2009 2008 Fixed Assets Turnover Ratios 0.89 1.07 1.19 Inventory Turnover Ratios 4.87 5.06 5.27 Debtors Turnover Ratios 16.62 18.03 17.18 Trend Analysis of Efficiency Ratio: From the graphs, it can be seen that the average collection period has increased from 4.22 days to 7.19 days over four years however we should note the decline in the last year from 11.54 to 7.19 days which tells us that company is consciously taking steps to improve. A low collection period signifies that cash flow for company is quite good and most of the sales are paid for within a weeks time. Also the Days inventory values have been in the range of 33 to 76, but again there is a marked improved of 28 days in the last year indicating the effective inventory management policies, the number is fairly decent compared to its peers in the industry. SOLVENCY RATIOS: Debt-equity ratio It indicates what proportion of equity and debt that the company is using to finance its assets. It is calculated as Debt-Equity Ratio = Total Debt / Shareholders Equity % The debt includes the Short Term borrowings and current portion of long term debt and the Long term debt. Long Term Debt-Equity Ratio Solvency Ratio of Hindalco is calculated for the last four financial years Trend Analysis for Solvency Ratio: The debt-equity ratio ranges from between 0.3 to 0.4. A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense, and the earnings have to increase by a value greater than that of the cost of the debt, in the interests of the company. At the same time an overtly low D/E ratio tells that the company is not properly leveraging its value in the market and sees lesser chances of growth in the industry. Even in the peak of the crisis, Hindalco has beenable to raise debt to finance its huge Novelis acquisition and since then, it has been paying off its long term debt obligations out of its revenues generated from operations. PROFITABILITY RATIOS: The primary profitability indicator is ROE. The ROE when broken by the Dupont formula Profitability Asset Turnover Leverage The Dupont model breaks down the ROE into net profit margin (how much profit the company gets out of its revenues), Asset Turnover (how effectively the company makes use of its assets), and equity multiplier (a measure of how much the company is leveraged). The Three-Step  DuPont Calculation % = (Net profit margin) * (Asset Turnover) * (Equity Multiplier) Profitability Ratio of Hindalco is calculated for the last 4 financial years Du Pont Analysis 2010 2009 2008 2007   PBIDT/Sales(%) 15.71 18.78 18.78 21.82   Sales/Net Assets 0.6 0.61 0.8 1   PBDIT/Net Assets 0.09 0.11 0.15 0.22   PAT/PBIDT(%) 59.6 60.74 73.47 59.64   Net Assets/Net Worth 1.23 1.35 1.48 1.59   ROE(%) 7.41 10.83 19.17 23.28 Trend Analysis of Profitability Ratio: The Return On common Equity (ROE) value has been consistently falling over the years from an about 23% to about 7.5% over the last 4 years. From the du pont analysis, it is evident that all the three ratio components of the ROE, namely Net profit margin, Asset Turnover and Equity Multiplier have fallen over the years. This could be partially explained by the recent economic crisis and hence the fall in metal prices. This impacted the margins. The fall in demand forced the company to operate at reduced capacity levels causing the fall in asset turn over ratio over the years. But the synergy benefits resulting from acquisition of Novelis have just started to appear and with the economic scenario also improving, the ROE might improve in the next few years over the current levels. Comparison of performance with Competitor and industry average: We have compared the performance and certain key ratios of Hindalco with its competitors namely NALCO and MALCO and also with the industry average figures. For the calculation of the industry averages, apart from the above mentioned companies, Bharat Aluminium, Apollo Metalex, Indian Aluminium, Karshni Alumini, Alliance Alloys and Utkal Alumina were also considered. Summary of Comparison data: Industry Average Hindalco Inds. Madras Aluminium Natl. Aluminium 201003 201003 200903 Key Ratios     Debt-Equity Ratio 0.4 0.28 0.01 0 Long Term Debt-Equity Ratio 0.38 0.21 0 0 Current Ratio 1.39 1.09 1.13 2.03      Turnover Ratios     Fixed Assets 0.89 1.5 0.85 0.58 Inventory 4.87 4.09 15.66 7.25 Debtors 16.62 16.28 12.22 127.23 ROCE (%) 24.48 7.66 41.64 21.55 RONW (%) 22.89 7.41 32.42 13.65 From the comparison of the key ratios, we can see that Hindalco lags its industry peers in most of the parameters. Its Debt to equity is better than the industry average. So the company can take more debt to improve its way below average ROCE, if it believes it can grow at a rate above the prevailing interest rates. But this strategy might not work in the near future as the current inflation and interest rates are very high. Its current ratio is also poor compared to its peers but their higher current ratio comes with huge inventory levels. Hindalcos inventory levels are in tune with the industry averages and hence its short term liquidity excluding inventory should be at par with the industry average. Further the asset base of Hindalco is better compared with its peers. This might help its performance when demand for the metals increases, at which time, it can seek economies of scale. Divyas part Our opinion about the disclosure level s of the co, financial status and performance and our recommendations for the equity investor.

The Epidemic Of The United States - 1668 Words

The United States is currently under attack by a commanding disease that is seeking to bring this great nation to an early demise. This disease sucks the energy out of many individuals and takes control of the body by sparking heart attacks, strokes, high blood pressure, and even cancer. With the help of major junk food companies, this outbreak continues to claim thousands of lives each year. In our country today, this epidemic trails tobacco use in the second leading cause of preventable death. Many researchers have studied this horrible plague, and the only cure is the motivation to live a healthier lifestyle. Although the profits from major junk-food companies contribute significantly to America s economy, the nation is blind to the†¦show more content†¦Though my hold out would end soon, once I found out that not only does this snack turn fingers red, but also stool. Unaware of all this information I consumed tons of this product, and gained weight, as well as produced re d stool. In retrospect, if there were warning labels on this product alerting consumers of the possibility of producing red stool and becoming obese, I would not have even picked up this product. Nevertheless, I was blinded by the deceitfulness of this junk food company, and as a result, my body suffered the consequences of consuming their products. In 2010, 43 million children were projected to be overweight because of these products. However, the nation exceeded this statistic by having 92 million children being at risk of obesity (Borghi, De Onis, and Blossner 1). Because of the country’s inability to take control of this problem, lawsuits have begun to be filed against major fast-food companies, such as McDonalds, Burger King, Taco Bell, and Hardees. These companies are being sued because citizens claim they are unaware of the detriments that grease and tons of sugar can do to one’s body. For instance, in the court case Pelman v. McDonald’s Corporation, these people were suing McDonalds because they strongly believed that their fast food was the reason why they were having health issues (Kornblet 209). Though this argument seemed to be valid, countless factors affect weight and health of