The Corporate Governance and The Directors

Accountability of directors

The law imposes a duty on directors to report annually, both to the shareholders and, to some extent, to the world at large, on the performance of the company’s trading and on its financial position. Each year, directors are required to prepare (or to have prepared on their behalf) a report for the shareholders. The minimum contents of the report are prescribed by International Financial Reporting (Accounting) Standards, which have the weight of UK law. In practice this minimum content is often exceeded. The report consists principally of an income statement (or a profit and loss account), a balance sheet and a cash flow statement. These financial statements are subject to audit by an independent firm of accountants, whose main role is to express an opinion on the truth and fairness of the view shown by the financial statements. The auditors’ expression of opinion is attached to the annual report. A copy of the report (containing the financial statements) must be sent to each shareholder. A copy must also be sent to the Registrar of Companies for insertion on the company’s file in Cardiff. This file must be available to be inspected by anyone wishing to do so. Virtually all major companies place a copy of their annual report on their website. In addition, large companies also send hard copies of the report to financial analysts and journalists. They will usually comply with a request from any private individual for a hard copy. The annual report is a major, but not the only, source of information for interested parties, including existing and prospective shareholders, on the progress of the company. Companies whose shares are listed on the LSE are required by its rules to publish summarised financial statements each half-year (also usually available on the companies’ websites). In practice, most large companies, from time to time, issue information over and above that which is contained in the annual and half-yearly reports.

Corporate governance and the role of directors

In recent years, the issue of corporate governance has generated much debate. The term is used to describe the ways in which companies are directed and controlled. The issue of corporate governance is important because, with larger companies, those who own the company (that is, the shareholders) are usually divorced from the day-to-day control of the business. The shareholders employ the directors to manage the company for them. Given this position, it may seem reasonable to assume that the best interests of shareholders will guide the directors’ decisions. However, in practice this does not always occur. The directors may be more concerned with pursuing their own interests, such as increasing their pay and ‘perks’ (such as expensive motor cars, overseas visits and so on) and improving their job security and status. As a result, a conflict can occur between the interests of shareholders and the interests of directors.

Where directors pursue their own interests at the expense of the shareholders, there is clearly a problem for the shareholders. However, it may also be a problem for society as a whole. If shareholders feel that their funds are likely to be mismanaged, they will be reluctant to invest. A shortage of funds will mean fewer investments can be made and the costs of funds will increase as businesses compete for what funds are available. Thus, a lack of concern for shareholders can have a profound effect on the performance of individual companies and, with this, the health of the economy. To avoid these problems, most competitive market economies have a framework of rules to help monitor and control the behaviour of directors.

These rules are usually based around three guiding principles:

  • Disclosure. This lies at the heart of good corporate governance. An OECD report (see the reference at the end of the book for details) summed up the benefits of disclosure as follows: Adequate and timely information about corporate performance enables investors to make informed buy-and-sell decisions and thereby helps the market reflect the value of a corporation under present management. If the market determines that present management is not performing, a decrease in stock [share] price will sanction management’s failure and open the way to management change. (OECD 1998)
  • Accountability. This involves defining the roles and duties of the directors and establishing an adequate monitoring process. In the UK, company law requires that the directors of a business act in the best interests of the shareholders. This means, among other things, that they must not try to use their position and knowledge to make gains at the expense of the shareholders. The law also requires larger companies to have their annual financial statements independently audited. The purpose of an independent audit is to lend credibility to the financial statements prepared by the directors.
  • Fairness. Directors should not be able to benefit from access to ‘inside’ information that is not available to shareholders. As a result, both the law and the LSE place restrictions on the ability of directors to buy and sell the shares of the business. One example of these restrictions is that the directors cannot buy or sell shares immediately before the announcement of the annual trading results of the business or before the announcement of a significant event such as a planned merger or the loss of the chief executive.

Strengthening the framework of rules

The number of rules designed to safeguard shareholders has increased considerably over the years. This has been in response to weaknesses in corporate governance procedures, which have been exposed through well-publicised business failures and frauds, excessive pay increases to directors and evidence that some financial reports were being ‘massaged’ so as to mislead shareholders. Some believe, however, that the shareholders must shoulder some of the blame for any weaknesses. Not all shareholders in large companies are private individuals owning just a few shares each. In fact, ownership, by market value, of the shares listed on the LSE is dominated by investing institutions such as insurance businesses, banks, pension funds and so on. Of the LSE-listed shares that are owned by UK investors, about 79 per cent are owned by the ‘institutions’. Table 1.1 shows the breakdown by percentages of LSE listed share ownership among UK investors.

Maintenance of Car – Save your money & yourself

Car engine parts

This article is all about car parts and maintenance; and some tips about how to save your money and save your car as well. The main parts of a car, as we all know, are its engine, combustion chamber, the block, gaskets, tires for sale.

Some cars also feature air conditioning system for better comfort. Whatever it is learning about these parts make it very easy for you to deal with these things.

Engine

This portion explains how automobile engines work. The illustration below shows the basic parts of a “V-8′ internal combustion engine. Internal combustion means fuel burns inside an engine, in combustion chambers. Other types include the steam engine and the jet engine. Although there are many designs, the parts shown below are used in almost all automobile engines.

Car engine parts – pic from seektires.com

Combustion Chamber

Fuel burns in combustion chambers inside an engine. The walls and ceilings of these chambers are hollowed into an engine head. The floor of a combustion chamber is also the top of a piston, which moves up and down as an engine runs. One combustion chamber is directly above each cylinder, with a piston sliding in each cylinder. The explosive force created inside a combustion chamber pushes a piston down, creating the motion which moves a car. As an engine runs, pistons pump up and down, one after another, in a carefully-arranged order. This up and down movement changes to spinning motion by the action of a crankshaft, the spin motion, or angular momentum, then rotates the wheels. An automobile engine really has just one job—to create spinning motion.

Block

An engine block is the most basic part of an engine. A block is a large casting of iron or aluminum with small passageways for oil and water circulation. A block itself, however, has no moving parts. Several large holes or tubes, called cylinders, are built into each engine
block. Pistons slide up and down in these cylinders and each engine will have the same number of cylinders, pistons, and combustion chambers. Automobile engines usually have four, six, or eight cylinders commonly arranged in either a straight line or a “V” shape.

Gaskets

Gaskets prevent leaks between the connecting surfaces of many car parts. Gaskets are made of cork, copper, rubber, thick paper, or various combinations of these materials. When bolted down and squeezed between two surfaces, a gasket fills in gaps. If squeezed too tight, a gasket can be distorted and pushed out of position, causing a leak.

Simple head gasket diagram

A complex metal and fiber head gasket is used between a block and a cylinder head. Cork gaskets are often used for valve covers and the oil pan or crankcase. Thick fiber and paper gaskets are usually used with water pumps and carburetors. Circular rubber gaskets are found on most oil filters. Asbestos and fiber gaskets are used for exhaust manifolds and flange gaskets.

Air Conditioning

Air conditioning system uses the same principles of cooling as a home refrigerator. A liquid refrigerant circulates in a closed system. A compressor pump pressurizes this refrigerant, changing its boiling point, and causing it to vaporize. A radiator, or condenser, located in the front of a vehicle, cools the circulating vapor, changing it back to a liquid. This cycle of changing back and forth from liquid to vapor maximizes the amount of heat absorbed. A second radiator, an evaporator, becomes cold during this process and air blown over its cool fins is then directed into the passenger compartment through larger pipes called ducts.

Car air conditioning system

An expansion valve controls refrigerant pressure, boiling point, and volume. A sight glass is used to observe the number of vapor bubbles that remain in the liquid refrigerant as it leaves a condenser. The number of bubbles indicates the volume of refrigerant.

Car Radar Detector

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Many other devices are associated with this system, including: check valve, oil bleed line, capillary tube, suction throttle valve, equalizer line, and receiver-dehydrator. Usually automobile air conditioning systems share the same blower, air ducts, and vents with the heater.

Safety Tips

  1. Drive sensibly, courteously, and soberly
  2. Use seat belts (lap and shoulder)
  3. Drive a well-maintained car
  4. Clean windows and mirrors often
  5. Drive a car with air bags
  6. Choose a car with ABS brakes
  7. Drive in a middle lane of the freeway when possible
  8. Drive with the traffic flow
  9. Think ahead and look behind, use the rear view mirrors often
  10. Carry a safety kit in your car trunk (flashlight, flares, tire inflator, etc.)
  11. Carry a cell phone for emergencies, but please don’t talk while driving
  12. Stop at stoplights and stop signs a few feet back from the crosswalks
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  14. Join the AAA car club in your area
  15. Anticipate trouble from all directions
  16. Take road rage to a gym

Money Saving

  1. Start with a good car, then work to improve it
  2. Learn How Cars Work and then work on them
  3. Locate a competent mechanic by word of mouth, not local advertising
  4. Tune a car to use the lowest octane gasoline possible
  5. Avoid unnecessary idling, turn off an engine while waiting in long lines
  6. Keep tires inflated to maximum pressure
  7. Rotate tires and change engine oil every 3,000 miles
  8. Avoid fast starts and stops
  9. Drive slower than you think you should
  10. Don’t pass highway patrol cars or make eye contact with police officers while driving.

Follow the instructions and keep yourself safe as well as your money. This simple it is.

Sierra Nevada in Granada

A view of Sierra Nevada

Introduction

The Sierra Nevada is defined as “limited on the north by the gap south of Lassen Peak, and on the south by Tehachapi Pass.” It is about four hundred miles long and varies in breadth from forty to eighty miles. Save for a small angle of the state of Nevada that penetrates Lake Tahoe, it lies entirely in California. To the geologist the Sierra Nevada “constitutes a magnificent unit, one of the finest examples on the face of the globe of a single range, the type of its class.”

A view of Sierra Nevada

To the geographer it is of equal interest. In more than one sense it constitutes a barrier—a barrier to human migration, and a barrier to the winds and storms that press upon it. As a barrier to weather, the range has a beneficial effect. In winter, the storm clouds deposit their watery burden in successive layers of snow, which in due time give birth to streams that merge into rivers and bring life to the land below.

Glory of Sierra

Water, in all its forms, is indeed the crowning glory of the Sierra. The crystalline snows harden beneath the rocky peaks and crests into perpetual snowfields, disclosing here and there beds of blue ice, reminders of the vaster glaciers that ages ago sculptured the cirques and canyons. The cirques now enfold little lakes, sapphire and emerald in hue; sometimes half-frozen, even in summer. Here, in these granite heights, all is silent—silent and undisturbed. But from below comes the tinkling sound of running water; then a murmuring and a splashing as the newborn streams glide into pools irradiated by beams of sunlight. Now comes the great drama of the Sierra. The streams gather volume and begin a boisterous journey, plunging to the depths of canyons in leaping and twisting cascades. In Yosemite, heart of the Sierra, the forms of water attain their most exciting expression. There the great waterfalls leap from lofty cliffs in magnificent variety. In contrast, there are throughout the range hundreds of quiet lakes, lapped in rock basins, bordered by pines and alders. Whether in motion or at rest, the waters of the Sierra are a constant joy to the beholder. Above all, they are the Sierra’s greatest contribution to human welfare.

This wondrous location is best enjoyed over a couple of days stay. You can go and visit by a coach party if you do not possess a car but I find this is very restricted to what time allocation they give you to see this beautiful place. My personal recommendation would be to either take a hire car or better still if you are going in a group employ the services of a professional minibus company. The obvious added bonus is not having to worry about parking, nominating a sober driver, driving in Spain or cramming your extra luggage into a number of vehicles. Specialized company such as Malaga Airport Transfers utilize trailers to carry extra luggage, skis, bikes or anything that you may want to take that would not fit into a traditional vehicle. I find a group booking saves considerably compared to individual hire car hire.

Geology of Sierra Nevada

The Sierra Nevada is generally considered by geologists to be a portion of the earth’s crust that has been detached and uplifted on its eastern margin so as to be tilted to the west in a long moderate slope, segmented laterally by deep canyons. The eastern profile is more complicated. Along much of its length there is a precipitous escarpment, but toward the north this abruptness disappears and the rise to the main crest is more gradual, though sometimes tortuous. At the midway point the crest is so flattened that an interior range has sometimes been mistaken for the summit until more closely examined. Conversely, farther north, at Lake Tahoe, the main crest is separated from the adjacent valley by a trough that contains the lake, with a subordinate range to the east.

Sierra Nevada in winter

The fundamental basis of this great tilted block is igneous rock—granite in varied forms and textures. This granitic bedrock is exposed in large areas of serrated ridges and peaks, in domes and bosses, in perpendicular cliffs, and the clean-swept flanks of canyons. There are glaciated surfaces polished smooth as glass and there are surfaces roughened by ages of weathering. The granite is found in exfoliated slabs and in massive rectangular blocks, in broken talus, and in the boulders and gravel of streambeds. Yet even the casual observer must notice that all is not granite in the Sierra. There are red mountains and there are black ones, such as Mount Dana and Red Slate Peak, Mount Lyell and Mount Goddard, and the Kaweah Peaks. Geologists tell us that these are the remains of an ancient range of metamorphic rock that stood on top of the granite before the uplift. Most of this was eroded away long ago, but substantial portions remain to give variety to the landscape. Another geologic agency, volcanism, has enhanced the variety. Although there are no huge volcanic cones as in the Cascades, there is ample evidence of enormous eruptions in some early period. The famous Table Mountain and the curious Dardanelles in the Stanislaus region indicate that the land was once flooded with lava. Smaller and more recent volcanic remnants are found in a number of places. The most remarkable is the Devil’s Postpile, rivaling in the perfection of its geometric forms the Giant’s Causeway in Ireland and Fingal’s Cave on the Scottish island of Staffa. In the higher regions of the Sierra metals occur, but only sparsely. A few copper claims have been worked, but no appreciable amount of ore has ever been taken out. Silver has been found, but the hoped-for bonanzas never materialized. The story of gold belongs largely to the western foothills, and with the exception of Gold Lake and Mariposa (to be touched upon later) is purposely excluded from this history lest it obscure all other subjects.

The famous things

On the long western slope is the unique forest belt that distinguishes the Sierra Nevada, unique in its relatively restricted area and in the variety and quality of its trees. The conifers, which are the dominant feature, are among the finest specimens of their kind in the world, towering to heights rarely excelled, beautiful in their proportions and in the texture of their bark and foliage.

Famous above all others is the Big Tree, the Sequoia gigantean, found in its natural state only in the Sierra Nevada of California. More extensive, and quite as much to be admired, arc the two great pines, the Yellow Pine and the Sugar Pine. These are the trees that the lumbermen seek for their massive beams and their broad, clear boards. Of the Sugar Pine John Muir wrote: “This is the noblest pine yet discovered, surpassing all others not merely in size but also in its kingly beauty and majesty. The trunk is a smooth, round, delicately tapered shaft, mostly without limbs, and colored rich purplish-brown, usually enlivened with tufts of yellow lichen. At the top of this magnificent bole, long curving branches sweep gracefully outward and downward. The needles are about three inches long, finely tempered and arranged in rather loose tassels at the end of slender branchlets that close the long, out-sweeping limbs. How well they sing in the wind, and how strikingly harmonious an effect is made by the immense cylindrical cones that depend loosely from the ends of the main branches!”

Holiday Home, in your own bathroom!

bathroom2

How can you bring that Mediterranean trip back with you? By turning your bathroom into a luxury destination of its own

Picture the scene: you’ve just returned from the holiday of a lifetime. You slump through the door into the drab familiarity of the house you’ve been secretly missing all fortnight, go to the bathroom to wash your face but instead of home sweet home, there’s only a sinking feeling.

You’re not alone.“You want to be able to shut the door and be right back on holiday again,” sympathises Glasgow-based interior designer Nicola Cottrell.

And so you can– kind of. Here’s how, with a few insider tips, you can make your bathroom feel like a gorgeous Mediterranean getaway. Try A Splash Of Colour– Just Not Too Much!

“The very words ‘Mediterranean bathroom’ bring up memories of pinky brown walls, mosaics in far too many colours and endless shades of blue and yellow,” says Edinburgh-based designer Becki Linley. But what works in Sardinia isn’t always perfect for suburban Salford, for example.

One tip is to keep the colour scheme neutral and take the advice of Leeds-based expert Abigail Owens: “Use colourful accessories to give your room that real Mediterranean edge instead.”Bring The Outside In Our interior experts say that modern Mediterranean style is all about bringing the outside in.

That means using natural materials such as stone and wood. Says Linley, “You can jazz up the look with accessories in colours that conjure up blue seas, leafy plants or sand dunes.”Tiling is what makes a Mediterranean bathroom. All three experts advise going for large, natural stone and picking light colours.

They also suggest tiling the ceiling as well as the floor. If that doesn’t make you feel like you’re back in your Ibiza dream cottage, nothing will. You might also consider bringing in a bunch of lavender in an earthenware pot or a small orange orkumqu at plant (though make sure you don’t water it more than once a week).

Shower Yourself With Gifts One thing a Mediterranean bathroom shouldn’t be without is a huge shower – as big as your budget and space will allow. “It’s so you feel like you’re under a waterfall,” says Owens. She also suggests using “an infinity tub that sinks into the ground for a luxurious, decadent feel”.

Infinity tubs allow you to submerge yourself up to your neck, with the water cascading over the sides. Actually, that one may be better off left in the Greek islands….Accessorise To The Max Why not rethink your usual towels and bath mats? Try thin-cotton tasselled towels to recreate the feeling of a Turkish bath.

Cottrell suggests swapping traditional bathmats for wooden mats (though not in the shower area). Your holiday in Spain will have involved completely different accessories to, say, your trip to Nice.

So why not get a mix of goodies from places such as John Lewis and OKA, or a series of different-sized rattan storage boxes and pedal bins from Bathroom Original’s Marrakech range?

What’s great is that they don’t need to cost the earth. Owens, for example, rates TKMaxx’s Home Sense department: “It’s perfect for lovely accessories that no one will guess are from the high street!” After all, this is about blowing minds not budgets. She adds:“Bring home the things that you love and that take you back on your travels.” Time to book another holiday then…

Climate Change on Property?

spain1

Last year, Spanish property prices fell by9.6 per cent, according to Tinsa real-estate consultancy.

This decrease was even greater on new homes, which have a 50 per cent VAT reduction. Some prospective buyers have held back from buying in case prices drop further, but property experts think now could be the time to strike. The proliferation of low-cost mortgages, which can be easily repaid through excellent rental yields, means purchases are likely to increase in the first quarter of 2012.

Ben Walker, sales manager at propertyinspain.net, says, “Spanish banks are being pressured by the new government to reveal losses on real-estate loans. To offload property, they are offering 100 per cent – and even 107 percent – mortgages.

This bodes well for property buyers who, due to the uncertainty over the current climate, are looking to invest as little of their own capital as possible.”As the number of tourists to Spain increased by 10 per cent last year, there were a greater number of potential second homeowners looking at the country’s stock of unsold homes.

Paul Payne, sales and marketing director of MASA International, says, “The second half of 2011 saw a considerable increase in demand for new Spanish properties. The next generation of new-build properties represents a move a way from the traditional Mediterranean style towards modern, high-spec homes with clean lines.”

So where to look? Paul Williams of developer Polaris World says, “At the moment we are finding the best deals for UK buyers are on the golf resorts in Murcia through the banks. On some resorts, such as Hacienda Riquelme, they are offering new properties at less than half their original prices. By buying a bank property we are able to obtain 90 per cent mortgage offers for international buyers – something that is no longer available on resale properties in Spain.” Seems things are looking up for those looking to buy abroad.