Hero Honda Demerger

Table of Contents 1. ABSTRACT3 2. INTRODUCTION4 3. MATERIALS ANS METHODS5 4. ANALYSIS5 5. Conclusion14 6. References15 1. ABSTRACT THE JOINT VENTURE A joint venture between Hero Group and Honda Motor Company was established in 1984 as the Hero Honda Motors Limited at  Dharuhera Haryana. Hero  is the brand name used by the Munjal brothers for their flagship company Hero Cycles Ltd. Honda is world’s largest selling two wheeler company based in Japan. Munjal family and  Honda  group both own 26% stake in the joint venture Hero Honda motor Corporation.However the Hero Honda group was set for a split at the end of 2010. After the split Munjal family will buy Honda Motor’s 26% stake for around $1 billion, or a little less than half the current value of the stake in the stock market. The Japanese auto major will exit the JV through a series of off market transactions by giving the Munjal family an additional 26% share. Honda, which also has an independent fully owned t wo wheeler subsidiary (Honda Motorcycle and Scooter India (HMSI) will exit Hero Honda at a discount and get over $1 billion for its stake.The discount will be between 30% and 50% to the current value of Honda's stake as per the price of the stock. The Munjal family plans to compensate Honda through high royalty payouts, which could double to nearly 6% of net sales. However, key financial institutions have objected to this move, saying that the deal could favour the Munjals but be detrimental to other shareholders. Honda will continue to provide technology to Hero Honda motorbikes until 2014 for existing as well as future models. And after 2014 both companies Honda Motorcycle and Scooter India and Hero Motor corporation will compete with each other.Hero group will have full access of the overseas market as well and Honda group can compete full fledged in Indian market In this project report we have analyzed strategic motives behind the deal, differences which led to the fall of joint venture, legal and regulatory implications of the deal (through various disclosure requirements and new licensing agreements). WHY THIS PROJECT IS WRITTEN AND WHAT IS DISCOVERED Hero group is world’s largest selling bicycle company and Honda motor cop. Is world’s largest two wheeler company. This was India’s most successful joint venture.Merger of these two companies one Indian and one foreign company has to go with lots of legal regulations and strategic business implications. Demerger of these companies has to deal with many legal regulations and this merger has been taken based on changing business strategies and markets. Key concerns that this project has dealt with are. * How much successful the joint venture was? * Reasons of success of the JV. * What are the main clauses in MOU signed by the two companies? * What lead them to demerger? * What is the mode of exit from demerger? * Will open offer be required to make by hero group? Mode of funding by hero g roup to acquire 26% share of Honda group. * Does the investment by Investors in hero group require prior Government or FIPB approval? * What are the discloser requirements under proposed share transfer? 2. INTRODUCTION PROBLEM STATEMENT Analysing legal, financial and strategic issues in demerger of two companies involving an Indian and a foreign company. The demerger involves many key issues to deal with before it will go on demerger. The legal issues has some key components like * Open offer under takeover code. * Prior government approval or FIPB approval. Disclosure requirement by Hero group under takeover code and under SEB guidelines. * Mode of acquisition of shares. * Tax implications on Honda group Japan. Mode of financing by hero group to take 26% shares of Honda group is also a point of concern the key area of emphasis on it are * Bridge Financing * Funding from private equity investors Business strategies of both companies involved also came as lead to demerger the key iss ues in it are * India is a liberalised economy now. * Honda is third largest two Wheeler Company in India. * Vendor issue to supply parts. * Export market.Latest and successful technical capabilities of Honda motors and the reliability of Hero Group with pan India presence made an effective combination. Honda motors technical expertise provided better fuel efficient motorcycles and was easily sold through Hero Group‘s deep distribution network. Absence of any major competitor in the initial years helped the Company make the best of the growing market demand for motorcycles. With the decrease in price difference in comparison with scooters, that were the more popular choice earlier, the Company was able to successfully stabilize in the Indian market.Fallout of the joint venture all begin with personal interest coming into picture more than the joint venture. On December 26th 2010 when in a joint press conference both companies made public, selling of HM Japan‘s holding of 26% in the Company to Hero Group. Company also disclosed a Memorandum of Understanding signed between the Company, HM Japan and Hero Group pursuant to which the parties would enter into a new license agreement. This proposal was rolled out keeping with the plan and taking the first step in the phased process of the HM Japan‘s exit from the Company.This decision meant curtains for the 26 year old Indo-Japanese partnership. 3. MATERIALS AND METHODS The research methodology applied in this project has been of secondary research because most of the data required for analysis is easily available on internet. Since the objective of the project is to explore the strategic motivations behind the deal, various legal implications arising from the deal and how the legal issues were handled, the annual reports of Hero Honda Motor corp. and websites of various regulators who had a bearing on the deal was of great help.We have analyzed the annual reports of Hero Honda Motor comp for years 2010-11 and 2011-12 to get the facts of the demerger and the company’s opinion about the demerger. Because the pre-demerger company Hero Honda Motors Ltd. was also a listed entity the information regarding various MOUs signed between Hero Honda Motors Ltd. and Honda Motors Co. for transfer of technology or other assets is available on BSE website. The websites of regulators like RBI and SEBI also provides for regulations regarding permissible route of acquisition, foreign parties providing finance for the deal and legal ; regulatory aspects of the deal.For further complete and updated information on the demerger deal we have read the articles regarding the deal form leading newspapers like The Economic Times, The Times of India and Business Standard. The equity research reports of ICRA have also proved instrumental in providing long term implications of the transactions between Hero Honda Motors Ltd. and Honda Motors Co. Japan. Moneycontrol. com has also been useful to get im portant information for investors as a result of the deal. The information thus obtained from these sources has been classified into commercial information and legal ; regulatory information.Where the commercial information tracks the past record of the company, strategic motivations of demerger, splitting and transfer of assets, post demerger structure of the company and post merger asset sharing or asset transfer agreements. 4. ANALYSIS We have analyzed this demerger deal right from pre formation of joint venture stage to post termination of the joint venture. This covers the structure of the company before and after demerger, strategic aspects of the deal, and Legal ; Regulatory considerations of the deal and transition challenges for both the companies as a result of demerger.DEMERGER Hero Honda Demerger| Company (India)| Hero Honda Motors Ltd. | Seller (Japan)| Honda Motor Company Ltd. | Buyer (India)| Hero group through Hero Investments Private Ltd. | Proposed Transaction| Buy out of 26% stake of Hero Honda Motors Limited by HPIL as currently held by Honda Motor company Ltd. | Brief introduction of the companies’ party to the deal Hero Honda Motors Ltd: Company is a joint venture between the Hero Group of India (through Hero Investments Private Limited and Bahadur Chand Investments Private Limited) and Honda Motor Company Limited of Japan.The Company was incorporated on January 19, 1984 and is headquartered in New Delhi. Company is the world‘s largest two-wheeler company in terms of sales volumes, a position that it has been holding for the last 9 consecutive years. Company has 3 manufacturing facilities, located at Gurgaon (Haryana), Dharuhera (Haryana) and Haridwar (Uttarakhand) with an aggregate capacity to produce 5. 4 million vehicles per annum. It has an extensive sales and service network spanning around 4,500 customer touch points and ability to increase reach in new geographies and growth markets has proven to be very beneficial for the company.Honda Motor Company Limited (â€Å"HM Japan†): Established in 1948, Honda has remained on the leading edge by creating new value and providing products of the highest quality at a reasonable price, for worldwide customer satisfaction. In addition, the Company has conducted its activities with a commitment to protecting the environment and enhancing safety in a mobile society. The Company has grown to become the world's largest motorcycle manufacturer and one of the leading automakers.With a global network of 466* subsidiaries and affiliates accounted for under the equity method, Honda develops, manufactures and markets a wide variety of products, ranging from small general-purpose engines and scooters to specialty sports cars, to earn the Company an outstanding reputation from customers worldwide. Hero Group (â€Å"Hero Group†): Hero Group is a vast conglomerate of companies owned by the Munjal family, either in the form of collaborations, joint ventures or fully-owned subsidiaries with a turnover of more than INR 100 billion annually (app. USD 2. 2 billion). These companies have a presence largely in automobiles, automobile components, finance, bicycles, real estate and steel business. It began with the establishment of Hero Cycles Limited, based in Ludhiana, Punjab. The business was started by the four Munjal brothers establishing a bicycle spare parts business in Amritsar in the year 1944. By 1975, Hero Cycles Limited became the largest bicycle manufacturer in India. Over the years, they started moving into other fields, most notably the motorcycle sector and the Hero Group now consists of more than 18 companies.The Hero Group besides being the world‘s largest manufacturers of bicycles, motorcycles and chains to this date, has in recent year also diversified into newer segments like Information Technology, IT Enabled Services and Financial Services Hero Investments Private Limited (â€Å"HIPL†): HIPL is a non-banking f inancial company registered with Reserve Bank of India (NBFC) and is part of the Munjal-family owned Hero Group. Recently in July 2010, pursuant to a family arrangement, all of Hero Cycles Limited shares in the Company were transferred to HIPL, which is held by partnership firm Brij Mohan Lall Om Prakash.Along with Bahadur Chand Investments Private Limited, HIPL is one of the promoters of the Company. Bahadur Chand Investments Private Limited (â€Å"BCIPL†): Bahadur Chand Investments Private Limited is part of the Hero Group and is also one of the promoters of the Company. It is an investment company primarily involved in the promotion and assistance of the Hero Group of companies and also actively involved in investments in the Group companies. This company too is held by the partnership firm Brij Mohan Lall Om Prakash Pre termination ScenarioThis part would primarily deal with the formative years of the Company, the key commercials of the joint venture and the reasons for s plit between Hero Group and HM Japan. Shareholding pattern pre termination: Formation of Joint Venture 1. Market dynamics before the joint venture between Hero Group & HM Japan: Subsequent to independence and until the 1980s, foreign companies were not permitted to enter the Indian market. These restrictions were relaxed to a certain extent in the mid 1980s when foreign companies were allowed to enter the market through minority joint ventures.This period saw the setting up of numerous joint ventures along with foreign companies, and the Company was one such example. This joint venture provided HM Japan an entry route to Indian market and was incorporated in 1984. 2. Hero Group’s position before the joint venture: Prior to the joint venture, Hero Cycles Limited had established itself as one of the major manufacturers of bicycles in India and manufactured close to 16,000 bicycles a day. In the process, they had nurtured an excellent network of dealers and distributors to serve India‘s expansive markets.This would go on to be one of the critical factors for the Company‘s success in India and was something that most other companies had not achieved to that by that time. 3. HM Japan looks for a partner to enter into India: HM Japan was already renowned for its technological expertise in the automobile and motorcycle manufacturing sector and was looking for a suitable partner in India. Their initial plans called for an entry into the two-wheeler market as well as the electric generator market and accordingly Kinetic Engineering Limited was their first choice for partnership in India.They entered into a joint venture in 1984 but this was terminated in 1998. Hero Group was their next choice for their motorcycle venture 4. Why did HM Japan select Hero Group for the joint venture? The Hero Group through their company Hero Cycles Limited had made a mark for themselves in the Indian market. Hero was a well-known and respected brand name and an associat ion with Hero would make the entry into Indian market a lot easier for HM Japan. Hero Cycle Limited‘s engineering capabilities, their know-how, experience in handling large volume production and their extensive distribution networks were also attractive factors in their favour.Their tight focus on financials and raw material processes also made them a suitable partner for HM Japan 5. How was the joint venture formed? Hero Group first signed the technical agreement with HM Japan in June 1984. This agreement was renewed in 1994 and again in 2004. The joint venture was in the nature of HM Japan providing technical know-how, setting up manufacturing facilities and future research and developments assistance. In consideration for this technological support, HM Japan would receive a lump sum fee of USD 500,000 and 4% royalty on spare parts.At the beginning, both partners held a 26% stake in the equity of the Company. Another 26% was sold to the public and the rest was held with fina ncial institutions. An important restriction under the agreement prevented Hero Group from collaboration with any other foreign player or allowing the Company to export its products. Hence, right from the beginning, the target for the Company was only limited to the Indian market 6. Most successful joint venture of India: Over the year, Company has grown consistently, earning the title of the world‘s largest motorcycle manufacturer after having manufactured 1. million vehicles in 2001. They have retained this distinction till date and have an annual sales volume of over 2 million motorcycles, also owning Hero Honda ‘Splendor‘ which is the world‘s biggest motorcycle brand. They have successfully penetrated markets across the nation with over 5,000 outlets. In the last financial year 2009-2010, the company had total unit sales of 4,600,130 two-wheelers, a total net operating income of INR 158. 605 billion (app. USD 3. 52 billion) and a growth of 28. 1% 7. Reaso ns for the success of this venture:Sound and proven technical capabilities of HM Japan and the reliability of Hero Group made an effective combination. HM Japan‘s technical expertise provided better fuel efficient motorcycles and was easily sold through Hero Group‘s deep distribution network. The fact that there were no major competitors in the initial years helped the Company make the best of the growing market demand for motorcycles. With the decrease in price difference in comparison with scooters, that were the more popular choice earlier, the Company was able to successfully stabilize in the Indian market.Fall of Joint Venture It all began when the Company, Hero Group and HM Japan, in a joint press release dated on December 16, 2010, conveyed the decision to terminate the celebrated joint venture. The parties made public, the fact of selling of HM Japan‘s holding of 26% in the Company to Hero Group. Further, on the same date, Company also disclosed a Memorandu m of Understanding (MOU) signed between the Company, HM Japan and Hero Group pursuant to which the parties would enter into a new license agreement.This decision meant curtains for the 26 year old Indo-Japanese partnership. 1. Key clauses in the MOU signed between both the parties: In a meeting held on December 16, 2010, the board of directors of the Company approved the new licensing arrangement with HM Japan concurrent with the Hero Group‘s proposed acquisition of 26% stake held by HM Japan in the Company. 6 The highlights of this new arrangement (as per the press release from the Company) are given below7: All existing products of the Company to continueThe fresh licensing agreement with HM Japan to provide new models to the Company Company will have the freedom to export to new markets Company will have the independence to set-up its own research and development (R&D) and new product development capabilities and acquire technology No change in ongoing operations Process fo r smooth transition was finalized between the parties Name of the Company and the brand name to be changed over time Subsequently, vide a disclosure made on January 24, 2011, Company confirmed that HM Japan and the Company had executed the final binding licensing greements on January 22, 2011 with respect to existing products and new products following the MOU of December 16, 2010, which had been approved by their respective boards of directors. 2. What are the main reasons for the split? In spite of being the largest two-wheeler manufacturer in the world and riding on one of the most successful joint ventures, it seems like both the partners have had some misgivings. Key reasons that could have played a role in this historic descend are discussed here: i) Supply of components: HM Japan asked the Company to increase the supply of components ordered from HM Japan which led to disagreement between two parties for the first time. HM Japan wanted to increase its royalty from the sales o f components in the joint venture, but has been unable to do so because the bulk of the sales of almost 60%, are contributed by relatively older bikes â€Å"Splendor† and â€Å"Passion† for which the components are relatively standard and the profit margins are less (ii) Reluctance to share key technology: More stringent emission norms are set to kick in by 2015 for two-wheeler makers in India.The new Bharat Stage IV norms (BS-IV), to be imposed across India for two-wheelers by then, would be very different from the Bharat Stage III norms (BS-III) applicable today. Manufacturers are expected to make technical changes to their vehicles accordingly. Industry sources say that HM Japan and other global two-wheeler makers are investing heavily on upgrading technology to comply with new emission norms in different parts of the world. While the Indian two-wheeler market will move to BS-IV (corresponding to Euro-IV) in 2015, the European region will be upgraded to Euro-V in th e same period.HM Japan knows that better fuel injection systems are required to meet the next level of emission standards in India. HM Japan has invested heavily in making its products more fuel-efficient and it is aware that it does not stand to gain much by sharing this crucial technology with the Company. This seems to be one of the reasons why HM Japan opted to end its 26-year-old alliance with the Hero Group (iii) Brand confusion: Analysts feel that the expansion of Honda Motorcycle and Scooter India Private Limited (HMSI) and the overlaps between the two companies (i. e.HMSI and the Company) is hurting the Company. They also feel that this is leading to brand confusion because the products of both the companies are out in the market and they seem to believe that the consumer is getting confused as to which is the real ‘Honda‘ (iv) Distrust between the two companies: Certain board members also feel that there has been preferential treatment that has been given to HM SI when it comes to product and technology. They feel high-margin products seem to have found out their way into the HMSI stable whereas the low-margin products seem to have gone the way of the Company. v) Bar on exports hurt the long term growth of the Company: The board members also feel that the bar on exports for the Company is not an equitable arrangement. So far, the joint venture did not permit the Company to set foot overseas. An industry peer such as Bajaj Auto Limited exports about 30% of its motorcycles in a year. As a consequence, under the MOU and the new licensing agreement, Company won‘t have geographic constraints. (vi) Liberalization of FDI norms: The regulatory restrictions did not permit foreign investments in the 1980s.Joint ventures were a necessity at the time, done more from legal compulsions rather than commercial aspirations. Today, there are fewer restrictions. Global companies in most sectors, seeking to enter India, can make pure commercial decision s for themselves, if they want to set up a 100% subsidiary in India or enter through a joint venture. Companies with a strong network and international operating experience may like to come into India through a 100% stake and this is what HM Japan is aiming for. Post Termination of Joint VentureOffshore Japan 9. 75% 38. 04% 8. 67% 17. 33% + 26% .21% 26% INDIA Financial Institutions Individual Promoters BCIPL Hero Honda Motors Limited Bain Capital India Private Investors Lathe Investors Private Limited Honda Motor Company Limited HPIL Others 1. Mode of Exit: As mentioned further above, the parties initially made it clear that the termination of the joint venture will happen by way of the acquisition of the full 26% holding of the Company held by HM Japan by HIPL.On March 8, 2011, HIPL made a filing to the BSE and NSE as required under Regulation 3(3) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (Takeover Code) thereby disclosing that it proposes to acquire the entire 26% shareholding of the Company, currently held by HM Japan, on or about March 22, 2011. As a consequence of such an acquisition, the Hero Group, through its subsidiary HIPL, will consolidate its holding in the Company to 43. 33%. In combination with BCIPL, Hero Group will, thus, indirectly hold 52% in the Company. . Mode of Funding the Deal: Hero Group announced on March 8, 2011 that HIPL will be acquiring the 26% shareholding of the Company from HM Japan for a deal size of INR 38. 418 billion, which breaks into INR 739. 97 (app. USD 16. 44) per share of the Company. The announced purchase price is at a sharp discount than the market price of the shares of the Company. Interestingly, on the date of announcement of the deal size, the share price of the Company on the stock exchange in India is almost double than the acquisition price per share.HIPL has sourced the funds for the said acquisition of 26% stake of the Company in the following form: (i) Bridge Financi ng: HIPL has pledged its entire shareholding of 17. 33% in the Company in order to bridge finance its buyout of HM Japan‘s 26% stake in the joint venture. HIPL has pledged: (a) 10,741,798 shares representing 5. 379% of stake in the Company towards Axis Trustee Services Limited; (b) 11,935,331 shares representing 5. 977% of stake in the Company towards IL&FS Trust Company Limited; and (c) 11,935,331 shares representing 5. 977% of stake in the Company towards IDBI Trusteeship Services Limited.The above mentioned shares have been pledged by HIPL to issue short term debt, through non-convertible debentures expiring in 3 months, to fund the purchase of the shares of the Company from HM Japan. Insurance companies, Non-banking financial companies and mutual funds have bought the short-term bonds of the Company. (ii) Funding from private equity investors: Preceding the pledge of shares of the Company by HIPL, HIPL had made an application to the Foreign Investment Promotion Board (FIPB ) in respect to foreign investment in HIPL by certain private equity investors for the purpose of acquisition of the stake of the Company held by HM Japan.As the consideration involved is in excess of INR 12 billion (app. USD 266. 66 million), and the investment requires prior FIPB approval, the same needs to be approved by the Cabinet Committee on Economic Affairs (CCEA? ), in addition to the FIPB. Subsequent to the approval from the CCEA and FIPB, HIPL would repay the short term debt raised from the debenture holders from the funds invested by the Investors in HIPL. 3. Who are the offshore private equity investors investing in HIPL? : Dr. Brij Mohan Lall Munjal, Chairman of the Company, confirmed that HIPL has signed ? efinitive agreements? with private equity firms BC India Private Investors II, an affiliate of Bain Capital LLC, and Lathe Investment Private Limited, a wholly owned subsidiary of Government of Singapore Investment Corporation (Ventures). HIPL proposes to fund the a cquisition by issuing securities to the Investors worth INR 45 billion (app. USD 1 billion). BC India Private Investors II has agreed to pick up 70% of the investment and the balance 30% will be held by Lathe Investment Private Limited. 4. What is the speculation regarding payment of royalty under the new licensing arrangement? As was expected, HM Japan will end up selling its 26% stake to the Hero Group at a substantial discount to the market price. To offset this, there is a speculation that the Company would now have to pay higher royalty amounts till 2014 as an arrangement under the new licensing agreement entered between the parties on January 22, 2011. In addition, experts say the Japanese automaker's royalty from the Company will `most likely' be subject to corporate tax in Japan. Interestingly, on December 18, 2010, Japan's Nikkei daily reported that HM Japan would divest its stake to its Indian partner for INR 54 billion (app.USD 1. 2 billion) when the current market value of its holdings is nearly INR 99 billion (app. USD 2. 1 billion), that is, at a discount of nearly 45% to the market. However, as per a report, HM Japan's royalty from the Company is expected to jump three-fold, from the present 2. 6% of total sales to 8%. This will last 3 years till 2014 when the technology pact between the two partners expires. At present, this royalty outgo is around INR 4. 2 billion (app. USD 93. 33 million), which will triple to nearly INR 14 billion (app. USD 311. 11 million) per year, for the next 3 years.In the process, HM Japan will get over INR 40 billion (app. USD 888. 88 million), as pre-tax royalty. However, the Hero Group has denied any increment in rate of payment of royalty to HM Japan and the licensing agreement signed between the two groups on January 22, 2011 seeks to keep the royalty rate at around 2. 3 -3% 5. What are the consequences of HM Japan exiting the joint venture? How does it impact on the future of the Company? : Continuation of suppor t from HM Japan in the form of a licensing agreement related to technology transfer for new products is expected to provide the Company an adequate time to put in place ong term alternatives for technology support. On the business side, notwithstanding the cessation of joint venture agreement, the Company may be considered to have the ability to protect its market share and product franchise over the short to medium term benefitting from the Company‘s management‘s knowledge of the Indian consumers, Company‘s wide distribution network, an established supply chain besides strong relationship enjoyed by the Company with its dealers and vendors.The impact on the Company over the longer term would depend on the Company‘s ability to forge alternative technology tie-ups and sustain the confidence of all stakeholders. Overall, with the exit of HM Japan, the Company would need to scale up its product development initiatives, which may impact its return indicators goin g forward. Nevertheless, the Company could benefit from expanding its presence in overseas markets through exports and/or by establishing production facilities overseas, something it could not do earlier because of the restrictions under the joint venture agreement with HM Japan.Given the high competitive intensity in overseas markets on account of presence of many players from India, China, Japan etc, Company‘s ability to increase penetration in new geographies and at the same time maintain profitability would be tested in the coming years Legal and regulatory considerations: 1. Will HIPL be required to make an open offer under the Takeover Code?Under the Takeover Code, the open offer requirements are triggered in the following three situations: (i) 15% shares or voting rights: When an acquirer acquires shares or voting rights which entitles it to exercise 15% or more of the voting rights in a listed company. (ii) Creeping acquisition limit: When an acquirer, who holds 15% or more, but less than 55% shares or voting rights in a company, acquires, additional shares or voting rights entitling him to exercise more than 5% of the voting rights of a company, in a given financial year. iii) Voting Control: When an acquirer acquires control over the target company, irrespective of whether or not there has been any acquisition of shares or voting rights. However, Regulation 3 of the Takeover Code provides certain exemptions from the open offer requirements one such exception is inter se transfer of shares amongst â€Å"qualifying promoters†; provided that the transferor promoter as well as the transferee promoter has been holding shares in the target company for a period of at least 3 years prior to the proposed acquisition.Since, shares of the Company are proposed to be purchased by HIPL from HM Japan, and both HIPL and HM Japan have been named as promoters in the shareholding pattern disclosed to the stock exchanges for the past 3 years, the inter se t ransfer of shares amongst them should not trigger the open offer requirements under the Takeover Code. 2. Does the investment by Investors in HIPL require prior Government / FIPB approval? Regulation 4. 6. of the Consolidated Foreign Direct Investment Policy, released on October 1, 2010 (FDI Policy) provides the guidelines for foreign investment into investing companies. Regulation 4. 6. 4 (iii)(a) of the FDI Policy states that – foreign investment in ‘Investing Companies‘ will require the prior Government / FIPB approval, regardless of the amount or extent of foreign investment. Since, HIPL is holding the shares of the Company and is registered as a NBFC as per the list of non deposit accepting NBFCs on the RBI website, foreign investments in HIPL will require prior FIPB approval.Further, as per Regulation 4. 9. 1(ii) of the FDI Policy, the recommendations of FIPB on proposals with total foreign equity inflow of more than INR 12 billion (app. USD 266. 66 million) would be placed for consideration of CCEA. From the press release dated February 23, 2011 issued by the Government of India, Ministry of Finance, Department of Economic Affairs, (FIPB Unit) it is clear that HIPL had applied to FIPB for approval of induction of foreign equity upto INR 45 billion (app.USD 1 billion), and the matter has now been recommended for the consideration of CCEA. 3. Will the Investors be required to make an open offer under the Takeover Code? Since, acquisition of stake in HIPL by the Investors will only give it an indirect holding of less than 15% in the Company, and it does not seem that the Investors would be acquiring control of the Company, the Investors may not be required to make an open offer under the Takeover Code. . What will be the disclosure requirements in respect of the proposed transfer of shares of the Company? Disclosures by HIPL: (i) Under Takeover Code: Since, post the acquisition, the shareholding of HIPL would entitle it to more than 14% shares / voting rights in the Company, HIPL will need to make a disclosure under Regulation 7(1) of the Takeover Code to the Company and to the stock exchanges where shares of the Company are listed.Further, since the acquisitions will be under Regulation 3(1)(e), and the acquisition will be more than 5%, HIPL will be required to notify the stock exchanges where the shares of the company are listed, for information of the public, of the details of the proposed transactions at least 4 working days in advance of the date of the proposed acquisition. ii) Under SEBI (Insider Trading) Regulations, 1992: Since, HIPL is currently holding more than 5% shares in the Company, and pursuant to the Proposed Transaction it will acquire more than 2% of the total shareholding in the Company, HIPL will need to make a disclosure under Regulation 13(3) of the Insider Trading Regulations to the CompanyDisclosures by the Investors (i) Under Takeover Code: Since, post the acquisition, PE Investors, will get an indirect holding of close to 13% in the Company, the Investors will need to make a disclosure under Regulation 7(1) of the Takeover Code to the Company and to the stock exchanges where shares of the Company are listed. Disclosures by the Company i) Under Takeover Code: Since, Company‘s shares are acquired in a manner referred to in Regulation 7(1) as mentioned above, Company needs to disclose to all the stock exchanges on which the shares of the Company are listed, the aggregate number of shares held by each of such persons referred above, within 7 days of receipt of information under Regulation 7(1). (ii) Under Insider Trading Regulations: The Company shall within 2 working days of receipt of information under Regulation 13(3) from HIPL as mentioned above, disclose the same to all the stock exchanges on which the Company is listed. . What will be the mode of acquisition of shares of the Company by HIPL? From the shareholding pattern on the BSE website as on December, 2 010, it appears that the shares of the Company held by HM Japan are in physical form. If the transfer of shares takes place in physical form, a stamp duty of 0. 25% of the value of shares shall be applicable; however, no stamp duty shall be applicable, if the shares are transferred in dematerialized form. If the shares are in dematerialized form, the transfer may take place either off the floor of the stock exchange or on the floor of the stock exchange.As mentioned above, an off the floor of the stock exchange transfer may lead to higher tax implications compared to an on the floor of the stock exchange transfer. On the floor of the stock exchange, the transfer can take place in two ways, i. e. (i) by way of a block deal and (ii) by way of a bulk deal. Block deal: A block deal is execution of large trades through a single transaction. For this purpose, stock exchanges are permitted to provide a separate trading window.Block deal will be subject inter alia to the following condition s (a) The said trading window may be kept open for a limited period of 35 minutes from the beginning of trading hours i. e. the trading window shall remain open from 9. 15 am to 9. 50 am. (b) The orders may be placed in this window at a price not exceeding +1% from the ruling market price / previous day closing price, as applicable. (c) An order may be placed for a minimum quantity of 5,00,000 shares or minimum value of INR 50 million (app. USD 1. 11 million). (d) Every trade executed in this window must result in delivery and shall not be squared off or reversed. e) The stock exchanges shall disseminate the information on block deals such as the name of the scrip, name of the client, quantity of shares bought/sold, traded price, etc to the general public on the same day, after the market hours. Since, the proposed consideration price for the transfer of the shares of the Company is INR 739. 9735 (app. USD 16. 44) and the prevailing market price on March 10, 2011 is INR 1,537, it is unlikely that the condition (b) mentioned above would have been satisfied. 6. Why is HIPL issuing debentures of minimum maturity of 3 months and not less?From reports dated February 28, 2011, it appears that HIPL is raising short term debt through non-convertible debentures expiring in 3 months, for which it has pledged the shares of the Company as collateral. The group is raising debt because funds from private equity firms will take some time and HM Japan wants an early exit. But why is the term of the debentures for 3 months and not shorter? The RBI had issued directions (NCD Directions), to regulate the issuance of non-convertible debentures of original or initial maturity up to 1 year and issued by way of a private placement (NCDs) by corporate.The NCD Directions provides that the NCDs shall not be issued for maturities of less than 90 days from the date of issue. The exercise date of option (put/call), if any, attached to such NCDs, also shall not fall within the period of ni nety days from the date of issue. Therefore, in light of the NCD Directions, HIPL is prohibited from issuing NCDs of maturity less than 3 months. 7. What will be disclosure requirements in case of pledge of shares of the Company to raise loans by way of NCDs?By HIPL: HIPL, being a part of the promoter group of the Company, shall within 7 working days from the date of creation of pledge on shares of the Company held by it, inform the details of such pledge of shares to the Company under Regulation 8A(2) of the Takeover Code. By the Pledgees: Since, the term acquirer under Regulation 7(1) of the Takeover Code has been clarified to include a pledgee, other than a bank or a financial institution, therefore, the Pledgees in whose favour the shares of the Company are pledged, and the threshold of 5%, 10%, 14% etc. re crossed, shall make disclosure to the Company and to the relevant stock exchange within 2 days of creation of pledge. By the Company: Company shall disclose the information r eceived by it under Regulation 8A(4) of the Takeover Code to all the stock exchanges on which its shares are listed. 44 Further, the Company shall also disclose to all the stock exchanges on which the shares of the Company are listed, the aggregate number of shares held by each of such persons referred above within 7 days of receipt of information under Regulation 7(1) of the Takeover Code . Will the recently notified merger control regulations affect the Proposed Transaction? On March 4, 2011, the Government of India, Ministry of Corporate Affairs notified the much debated provisions of the Competition Act, 2002 (Competition Act) relating to combinations? namely Sections 5 and 6. Although notified as of March 4, 2011, these provisions are to take effect from June 1, 2011 (Effective Date) giving all those subject to the same, a period of 3 months to tie loose ends and complete unfinished transactions before getting entangled in the web of the Act.Since, the merger control provisions will come into force from the Effective Date, and the proposed acquisition of the shares of the Company is to take effect on March 22, 2010, the acquisition may not be subject to the filing / approval requirements under Sections 5 and 6 of the Competition Act. However, if the subscription of the shares of HIPL by the Investors does not take place before June 1, 2011, due to delay in approval by the CCEA or otherwise, it is likely that the Investors would be hit by the notifications regarding merger control provisions as mentioned above.However, vide its notification on March 4, 2011 the Government of India has exempted the acquisitions of small enterprises whose turnover is less than INR 7. 5 billion (approx USD 167 million) or whose assets value is less than INR 2. 5 billion (approx USD 56 million) from the definition of combination as defined under Section 5 of the Act. Therefore, if HIPL does not breach any of the exemption thresholds as mentioned above, the Investors will be ex empted from the approval requirements under the Competition Act, even if the Proposed Transaction closes post June 1, 2011. . Would HM Japan have required any prior approval while setting up its subsidiary HMSI in India? Press Note 18 (1998 Series) issued by the Department of Industrial Policy & Promotion provides that â€Å"automatic route for FDI and/or technology collaboration 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†.?Since, both HMSI and the Company are in the same / allied fields, and HMSI was set up post 1998, it is likely that HM Japan may have obtained Government / FIPB approval prior to or at the time of setting up its subsidiary. 5. CONCLUSION Through our analysis we have seen that demergers are as complex as mergers or sometimes even more complex than mergers.The following were the key motivations and reasons behind the demerger: Lack of trust between the two companies whether it was related to supply of components or regarding the sharing of technology Honda motors can now successfully sell products branded solely with Honda marquee Hero will get to fulfil it unrealized dream of exploring lucrative export markets Liberalized FDI norms also favoured demerger because now Honda could setup wholly owned company The financing of the deal as in analysis part we saw was carefully structured to satisfy the legal and regulatory requirements which led HPIL to pledge its shares for short duration of three months, a period for getting approval for a foreign investment firm investing in an Indian investment firm. The major issues arise in the demerger are mainly regarding sharing o transfer of the assets of the pre demerger company. The following clauses were included in MOU to address those issues: All existing products of the Company to continueThe fresh licensing agreement with HM Japan to provide new models to the Company Company will h ave the freedom to export to new markets Company will have the independence to set-up its own research and development (R&D) and new product development capabilities and acquire technology No change in ongoing operations Process for smooth transition was finalized between the parties Name of the Company and the brand name to be changed over time The disclosure and compliance requirements under SEBI insider trading rule, Takeover code, RBI, BSE and FIPB are heavy because company (pre demerger) is a listed entity and is a joint venture between Indian and a foreign firm. The involvement of foreign PE investors further made the issue complex.But all the legal, strategic and regulatory requirements have been carefully taken care of and clearly complied by both the companies and a clear and dispute free framework has been adopted regarding sharing of assets like brand name and technology. 6. REFERENCES CLASS NOTES Of Managing the legal & Regulatory Environment of Indian Business ( june 12 th to august 24th of 2012 ) http://student. iimcal. ac. in/ww/cw (23. 08. 12 to 02. 09. 12) http://en. wikipedia. org/wiki/Hero_Honda_Split (01. 09. 12) http://www. heromotocorp. com/hero_admin/data_content/pdf/annual_report/Annual_Report_2010-11. pdf (01. 09. 12) http://www. icra. in/files/pdf/HHML-201012. pdf (23. 08. 12) http://world. honda. om/profile/overview/(23. 08. 12) http://world. honda. com/profile/overview/(01. 09. 12) http://www. bseindia. com/stockinfo/anndet. aspx? newsid=bfe25ca2-c4de-4f75-9217-a3c48f694d75¶m1=1 (23. 08. 12) http://www. bseindia. com/xml-data/corpfiling/AttachHis/Hero_Honda_Motors_Ltd_161210. pdf (23. 08. 12) http://www. bseindia. com/stockinfo/anndet. aspx? newsid=54d0d519-450a-47c8-9f37-2c7d8c61feec¶m1=1 (01. 09. 12) http://www. bsmotoring. com/news/emission-norms-triggered-honda-exit/2940/1(01. 09. 12) http://www. bseindia. com/xml-data/corpfiling/announcement/Hero_Honda_Motors_Ltd_080311_SAST. pdf (01. 09. 12) http://articles. timesofindi a. indiatimes. om/2011-03-09/india-business/28671937_1_private-investors-ii-lathe-investment-private-limited-hero-honda(23. 08. 12) http://articles. timesofindia. indiatimes. com/2011-03-09/india-business/28671621_1_pe-investment-hero-honda-munjals (01. 09. 12) http://www. blonnet. com/2010/12/05/stories/2010120552310100. htm (31. 09. 12) http://www. moneycontrol. com/news/business/hero-honda-execute-final-binding-license-agreement_515705. html (31. 09. 12) www. icra. in/files/pdf/HERO HONDA MOTORS LIMITED-201012. pdf (01. 09. 12) http://rbidocs. rbi. org. in/rdocs/content/pdfs/73342. pdf (31. 09. 12) http://www. business-standard. com/india/news/honda%5Cs-exit-gives-bain-gic-15-in-hero-honda/427844/(31. 09. 12)

Business Redesign for Healthlite Yogurt Company Essay

Business Structure Healthlite’s corporate headquarters is located in Danbury, Connecticut. All production takes place in processing plants that are located in New Jersey, Massachusetts, Tennessee, Illinois, Colorado, Washington, and California. Healthlite Yogurt Company has 20 sales regions, each with approximately 30 sales representatives. Healthlite has a 12 person in marketing division at corporate headquarters. Products Yogurt and related health products and new yogurt based products which would include frozen desserts and low-fat salad dressings. Major Business Processes for Sales The following are the way Healthlite conducts business in a day-to-day basis: Â · Sales persons must write up hard-copy tickets to place orders through the mail or by fax. Â · Each salesperson stores and retrieves data for assigned customer accounts using the minicomputer system in the regional office. Higher client satisfaction due to value-added customer service is one positive result. Decision-making can be improved because the information systems used are more efficient and can provide them accurate and updated data in real time. Improvement in control of resources (materials, labor and products) and organizational planning. Increased job satisfaction for employees’ particularly regional sales people whose jobs are now greatly facilitated with the aid of the new system. Major Business Process Changes The following major changes are required for the business redesigning plan. Eliminate the need for hard-copy tickets to place orders. Enter sales orders directly into enterprise-wide system instead of using around 20 workers at corporate headquarters to sort and to enter order tickets which could reached up to 500,000 order tickets per week. This also allows all systems users to have access to this data for analysis purposes. Do without the need of using snail mail and fax machines for taking orders. The new business system allows orders to be placed directly through the web site. No longer need to mail printed reports for individual salespeople and sales offices. Salespeople can access the system for needed information at anytime. Sales representatives no longer need to write and mail monthly reports to regional headquarters. Sales information can be accessed from the system. Managers can access up-to-date sales data in the new system anytime they need them. They no longer need to call subordinates and piece information together to update their reports. Announcements, promotional campaigns and pricing discounts can be quickly disseminated though the enterprise-wide system. Thus, helps in improving communication processes between sales managers and sales representatives. Customer Relationship Management tools are available to help with ordering. Customer history management, complaints, and real-time tracking service are also available for use. Reduce the time involved to process orders since faxing and mailing will no longer be required in order to place orders. As a result, this would enable shipments to be delivered on time. Thus, promoting customer satisfaction. Major New Technology Components of the Plan Upon analysis of Healthlite’s needs to implement technology to support the new business processes, an enterprise system comes highly recommended. This is so because an enterprise can best meet the demands and requirements. An enterprise system could link enterprise-wide information processes in turn improving the overall business efficiency. When the entire company is able to use a single software system, all departments can share information readily and freely. Enterprise systems enable the company to avail of a wide-ranging information system technology platform. This technology platform provides a single data warehouse or a databank that can be accessed by different departments to input and to obtain enterprise-wide information. Also, the new system enables data storage in one data warehouse, which will prevent inaccuracy in extracted information. The data should be grouped according to processing sites, but can be accessed by all users. This data storage process will allow differentiation among processing sites at the same time allowing enterprise-wide search capability. It is easy to see then the enterprise system is essential element in propelling Healthlite’s success as it moves into the future. An enterprise system into the Healthlite business will enable the managers to support business processes that will make the company more efficient. The enterprise system will allow for centralized data collection and entry. This centralized entry system will reduce or eliminate paper passing throughout the company. This system will also enable employees to view reports on-line which no longer requires printing of documents or doing paperwork manually unless necessary. This additional feature will help managers and market analysts in accurate sales planning, decision-making, and marketing strategy development by providing them with the ability to collect more accurate information to assist them. Healthlite must also improve the telecommunications infrastructure for the whole enterprise. E-mail capabilities will be needed throughout the company in order to eliminate the ineffective communication using snail mails and fax within the company. Email will enable speedy communication companywide. There is no need to do additional paper works by writing or typing requests. Also, the time and effort necessary to mail or fax the message will be greatly reduced through email. The message sent is received by the person addressed to in real time. If there are problems or requests required, the recipient on the email can quickly act on it. Intranet is another option the company could use. Intranet is a private computer network that can be accessed by authorized persons only. These will ensure that secret company information will not fall on the wrong hands. Adding Intranet and Internet service will definitely improve the company’s day-to-day operations. Recommendations To help facilitate the transition and to make better use of the technology or new system, the following recommendations are given: Â · Healthlite should install an entire enterprise system and not limit itself to the customer relationship management component, or better known as CRM, of the system. In order to be effective, Healthlite could introduce the changes phase by phase. This approach in implementing the enterprise software will enable users to adapt to the system well, starting with the order and sales process and advancing to the most difficult part slowly. Â · The systems development team must focus the development process of the new system on eliminating the existing business inefficiencies in manual reporting, hand order-tickets, and mail and fax order taking. Addition ally, the development team needs to follow the systems development lifecycle to establish its new customer relationship management (CRM) system. All users must be ably represented. This means that representatives in each company division must be involved in developing the system. They should be allowed to make suggestions at the same time provide necessary information in formulating the system. And all users need to have adequate information on the upcoming changes introduced to the system. Â · Healthlite should implement e-mail and Intranet use to improve its internal communications and productivity throughout the entire business. This could help do without the need for paperwork, snail mail and fax. The company should provide value-added customer service by including the customers during the design process of the business system. This is accomplished by soliciting feedback from customers in the form of questionnaires on a regular basis. Â · Due to the low shelf life of the produ cts they sell, Healthlite needs to ensure product freshness by improving the efficiency of its distribution of products and services to customers. With the new automated business system, orders are received and delivered immediately. The timely delivery of the products would ensure their freshness. Â · Management needs to address the accounting discrepancies incurred annually. The accounting problem should be identified and resolved in the design phase to make sure that the new business system they come up with is free of these errors and accounting discrepancies will not occur in the future. Â · Management also needs to ensure that the changes implemented in the business are done step by step especially that the company is in the midst of recent and rapid growth. Management needs to change its views regarding changes and adapt to the new business process accordingly. They should also lead the development process. Â · Managers need to wait until the new business process has materialized and the benefits of the new system are realized before implementing the headcount reduction in order to ensure a smooth cutover. Conclusions Despite its current business process problems, Healthlite has managed to attain succes s in its operations. This means that Healthlite has a lot of room for improvement in the future. And this could be easily attained through redesigning business processes. Currently, the organization uses little or almost non existing technology for their daily company activities. Due to the decentralization, many people are doing the same activities over and over again and doing paperworks manually which are time-consuming and could be transmitted electronically. The rapid growth of the company requires that Healthlite should quickly implement systems changes to improve its business processes and to get the product and services to the customer in a promptly and efficiently. Healthlite’s management also posed some problems due to their very conservative views regarding technology. They need guidance in determining a proven system in which they will be comfortable. The management’s support in the new business process is essential in implementing the changes effectively and leads the company into the future as well as to guarantee its competitive advantage. The company needs to know the importance of using the systems development lifecycle. This process is vital in creating a new business system that will be useful for the company. Also, this phase is important to establish efficient procedures when developing programs that will best fit Healthlite’s needs. An enterprise system will be necessary to advance Healthlite into the future. At the present the company may only focus on redesigning the ordering, sales, and marketing processes. But later on, Healthlite management needs to realize that the CRM system is going to need to be scalable. Healthlite’s business growth despite the difficulties it encountered could mean that the company has a lot of growth potentials in the future. Healthlite therefore needs to accommodate future changes and bigger adjustments. And the new business process they are about to install must be able to handle these changes and need for additional data. The company needs to identify and get rid of the sources of the accounting discrepancies annually between headquarters and the sales force. Management needs the accounting information to make decisions necessary for the company’s growth. The accounting report helps them to address potential problems and see possibilities for future expansion. The discrepancies in their accounting records due to the errors incurred are thus potentially making business decision on bad data. Before the implementation, management needs to address these problems to ensure that they will not arise in the future using the new system. Management needs to take time in implementing the headcount reductions. A successful implementation requires that all employees will be there during its implementation phase. The installation and use of the new system requires the support of all employees. https://support.pearson.com/getsupport/s/?sitename=CW+-+WPS&tabset-dd12d=1 http://business.vcu.edu/departments-and-centers/information-systems/department-resources/software/ https://www.bl.uk/business-and-ip-centre/industry-guides https://identitech.com.au/

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Conseptual analysis Article Example | Topics and Well Written Essays - 1250 words

Conseptual analysis - Article Example Flow charts carry a similar function like other types of diagrams. They help in visualization of a process hence helping the user to understand deeper the meaning or flow of that process (John, 1984). There are different types of flow charts and each has its own design and national conventions. There are two common types of boxes in a flowchart. The first type is a processing step identified as an activity. Its denotations are rectangular in shape. The second type is a decision that is denoted as a diamond. Flowcharts are described as cross-functional where the pages in use are divided into different swim lanes (John, 1984). The lanes must be describing the control of different organizational units. For example, a symbol appearing in a particular lane is identified to be within the control of that organizational unit. Flowcharts depict certain aspects of processes (John, 1984). They are completed by drawing diagrams. Flow charts can be document flowcharts, data flowcharts, system flowcharts, or program flowcharts. They help best explain how a given system works by the use of a visual diagram. They are also helpful in brainstorming of ideas and plans. They demonstrate a high level of strategy application (John, 1984). They are graphic representations of flow of data through an information system. They help in creation of an overview of the system to be later elaborated. They show what information to input and output from a give system. They also show how the data will be either inputted or outputted and where the data will go or get stored. They are used in analysis and design phases of information processes (John, 1984). A visual image or document uses image as it primary means of communication. In other instances, visual images use the interaction of texts and images for communication. The goals of any visual analysis are to demonstrate an understanding of how the art communicates its message and meaning. This is done by breaking the

Please conduct a SWOT analysis of PAC Resources, Inc. and complete a Research Paper

Please conduct a SWOT analysis of PAC Resources, Inc. and complete a detailed paragraph response to each area of the analysis - Research Paper Example The company has strong presence in the US market and target market type of this company is niche. At the time beginning of this business the owner of the company started the business operation in US and after that it got success in that particular market. Gradually they become a strong player and increase their sales revenue from this market. Strong presence also helps the company to establish a stable customer base in this market. The company can generate almost 83% of its total revenue from one customer. The company is involved to produce major components for this customer. It can be said that that customer has started to depend on the component o this company which is one of the biggest strength of this business (Akanda, 2013). PAC Resources, Inc. employs 835 full time workers in their business activities. This scenario indicates that the company is able to get enough human resources to run their operational activities. Weaknesses are few internal lacking which needs to be correct ed by the organization after implementing appropriate strategies. Here, the company is depending on only one primary customer for earning major percentage of sales revenue. Therefore, the company posses a high risk factor regarding the possibility of decline in sales in future with the decrease of business with the primary customer. The managers do not concentrate on day to day operation in this business and as a result the business is involved in some unethical practices. Again, the management has few ides to cut down the heavy cost factors in business. Employees are dissatisfied for the management activities in this organization. This company has several opportunities to establish their business in new markets such as Asia, Europe etc. The company is cutting cost by providing employee paid share. The management of this company has taken several initiatives like various training program to improve the skills of

Tyco Company - Process of Communicating Change to Its Staff Essay

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Packaging analysis Essay Example | Topics and Well Written Essays - 250 words

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Annotated Bibliography on the book Damned by Chuck Palahniuk

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Implant tractable ID chips in newborn babies Essay Example for Free

Implant tractable ID chips in newborn babies Essay Our companys idea to implant tractable ID chips in newborn babies offers a revolutionary approach to effectively combat the high incidences of abductions of newborns and children, a menace against which eve police forces are finding themselves helpless. Once the chip is placed within children, their every movement can be traced to exactitude using the GPRS technology, making their abduction and subsequent hiding a practically impossible task. Apart from this, these IDs would act as a database for these children, containing their relevant medical, physiological and personal details, with provisions of constant upgrades. Thus doctors needs to only access childrens ID to know their history of previous medical complications and treatments, police officers can easily trace parents of a lost child and parents can keep constant vigil on the movement of their children even from their workplace. However, there are many exacting complications in successful rollout of this idea. It can be safely assumed that this concept would come under severe moral, ethical, and religious censure through the entire world. Many, if not all, would form organizations and international groups to canvass on social and legal platforms against our proposal to tag human infants, and doubts would be raised on even our integrity, commitment and sanity. Moreover, the thrust of objection and criticism is likely to come from our own scientific intelligentsia, religious and spiritual gurus, intellectuals and similar eminent personalities. These estimated objections and criticism are hardly a surprising possibility, given worlds historical anathema against every new scientific invention or discovery, any path-breaking medicinal technology, or even against any idea that appeared contrary to its set of framed ideas and concepts. History is replete with evidences that from the time of Archimedes to modern day age of cloning, people have always approached every major scientific and technological breakthrough with skepticism, incredulity and more than often, downright hostility. We can see how strong the sentiments ran when Copernicus presented the theory that its Sun that is at center of solar system, and not moon and that world is sphere shaped, against what world had been led to believe (Hall, 1954). Later Galileo was humiliated by Roman Church on the same issue. We further see the way almost entire educated western society rose against Charles Darwin for his theory of evolution through natural selection and the stringent social and religious criticism he was subjected to (Hall, 1954). Even Einstein, one of the greatest human brains of all times, was not spared from hostile criticism and rejection when he denied the existence of gravity in his general theory of relativity (Hawkins, 1988). Technological innovations and many scientific inventions were treated with similar aggressive denial and denunciation. Whether it was construction of railway locomotives, invention of telegraphs and telephones, constructions of dams, introduction of vaccination techniques, advent of contraceptive pills, gene therapy or subject of cloning and stem cell research, a significant section of society always protested and rejected the concept on plethora of supposedly ethical and moral grounds (Thomas, 2005). It is futile to say that each of these innovations contributed to further advancement and growth of human society. The reason of this persistent fear of new technological innovations is that they defy and sometimes even break the existing concepts, perceptions and notions. Often these concepts and perceptions are embedded part of a social culture, and therefore their rejection is construed as a planned attack by scientists and technicians on the very foundation of the culture (Lyne, 2005). We cannot flippantly dismiss their fears, and overlook their arguments just because they happen to contradict our idea. Instead, we need to reach out to people, address their every valid question and dispel their remotest of the doubts related to implant of IDs in newborn babies. My own understanding of the issue says that we should move ahead with project because when people are presented with rational arguments and valid answers to their queries, their gravest arguments turns in staunchest of the support. Indeed, one of their first objections we are likely to face is ethical as well as medical propriety of inserting an unnecessary foreign object in the fragile body of a newborn. But as we maintain, this implant is done for childrens own security and safety. Further, the chip is especially designed in such a way that its implant would cause minimum distress for child and the implant can be done by any surgeon through a very superficial incision. The presence or location of the chip may very well remain unknown to child unless specifically told. Of course, implanting a foreign object in human body in itself is no more an ethical issue, especially after advent of pacemakers and artificial limbs. Rather a valid query may concern the possible radiation effect of the chip on childs developing body, and whether that this radiation would impede or in any way alter hormonal or chemical composition of the growing child. But as our repeated lab tests and years of experiments have shown, the chip does not interfere with human bio- chemical growth in any way. It stays in the body like a neutral object, deactivated unless recalled for. Even upon activation, the signals emitted by chip are no more harmful than the fields of electromagnetic radiation surrounding us every second of our life. The final debate around our proposed chip would center on moral and ethical issue of tagging children. Is it right to tag children like animals are tagged in zoo and safari and then observed? Further, when these children grow up, they might become uncomfortable with the idea of being watched or remotely tracked for their every movement, and may very likely treat this an infringement of their privacy. But in my opinion, these objections are specious, and deviating from our main issue- that of stopping crime and providing a safe and secure world for children. Parents, and later on Children, may be given the option to remove or manually deactivate the chip, when they start to feel that it is more a burden than as a benefit. However, for that time that it is there, it is the best way to ensure infants are secure, safe and sound under their parents, physicians and teachers constant observation. It is the best way to completely eliminate the threat of organized abduction industry, and certainly it is the surest way to ensure that no child goes every lost or missing. I would reiterate therefore we should confidently move ahead with this revolutionary idea and usher in the new era of human-technology integration.

Explaining Prophets And Their Duties Religion Essay

Explaining Prophets And Their Duties Religion Essay From a Biblical perspective, a prophet is a spokesperson on earth who proclaims Gods word, revealing things that would happen in the future. This utterance is called prophecy because its divinely inspired, and involves, revelation or interpretation. This essay will illustrate a study on prophecy in the Old Testament (OT), various people who met the criteria of being true prophets and identify those who were known to be false prophets. Further, an insight on different kinds of prophecy and there fulfilment will also be demonstrated. Prophets through various scriptures in the bible were referred to as men of God or servants of God to implicate the seriousness of their status. After the fall of man, God had a divine plan to restore His love relationship with humans and this was portrayed throughout the OT. Tholuck titled the prophets as the ancient preachers of the Church, he said, The prophets were the living depositaries of the idea of the theocracy or kingdom of God. In other words prophecy erected from the foundation of Gods law and it was the prophets who imposed it. According to the prophetic criteria, bible theologians state that Enoch (Gen. 5: 24) and Noah (Gen. 6: 9) qualified as prophets, because God spoke through them, but it was Abraham whom God first spoke of as a prophet when He warned King Abimelech against marrying Sarah (Gen. 20: 6-7). According to Bible theology, God chose the Israelites to be His representatives on earth to whom He could reveal Himself, by speaking through His chosen advocates known as the prophets so that all other nations could be blessed and know the true Living God. He wanted humans to know that He was their creator and He had divine plans and a purpose for them to live according to His will. He gave them His laws to which they were to live by, and He was to be their God. It was those laws that caused conflict between God and His people. Chris Wright believed that it was the Holy Spirit who inspired the prophets. He said, He is the Spirit who spoke through the prophets, inspiring their commitment to speak the truth and to stand for justice. This was affirmed by Peter in The New Testament when he contested the origin of the OT prophecies (2 Pet. 1: 20-21), and was evident when Saul got anointed as king and the Spirit of God took control of Him and he prophesied (1Sam. 10: 10). Since prophets were the mediators of God, they only spoke in the name of God, lived by faith and demonstrated the holiness of God, as Zechariah father of John the Baptist said in his prophecy that, As He said through His holy prophets of long ago (Luke 1: 70). The prophets had to be fully obedient to what God required of them hoping in Gods Spirit that strengthened and worked through them. Fulfilment was a key issue in the prophetic movement. Through Isaiah, God said, As the rain and the snow come down from heaven, and do not return to it without watering the earth and making it bud and flourish, so that it yields seed for the sower and bread for the eater, so is my word that goes out from my mouth: It will not return to me empty, but will accomplish what I desire and achieve the purpose for which I sent it. (Isa. 55: 10-11). Such prophecy took away any doubt about Gods will especially to the prophets themselves, who prophesied to a doubtful nation. One writer said, The criterion of true prophecy is what it should be-truth, the correspondence between the prophetic word and the realities of history. Any prophet who spoke oracles of other gods other than the God of Israel would be known as a false prophet. So the prophets main role was to co mmunicate Gods message in its fullness. Since it was Gods divine plan to use prophets to convey His messages, He illustrated that He purposely set them apart, He said, Before I formed you in the womb I knew you, before you were born I set you apart; I appointed you as a prophet to the nations. (Jer. 28: 5). Prophets were from diverse back grounds, for example Amos was a shepherd (Amos 1:1), Elijah was a priest and Elisha was a herdsman (19:15-21). Although men were popularly used, women like Miriam; sister to Moses (Micah 6: 4); Deborah who served as an Israelite judge (Judges 4: 4); Huldah (2 Kings 22:14) and Noadiah (Neh. 6: 14) also served as prophets. God revealed Himself and communicated to His prophets through visions and dreams or spoke audibly to them as in the case of Moses. He said, Listen to my words: When there is a prophet among you, I, the LORD, reveal myself to them in visions, I speak to them in dreams (Num. 12: 6). So this is why prophets had common characteristics that identified them as Gods messengers. Their messages exposed the nature and attributes of God to men (Deut. 5:4-10); made known to men the laws of God (Ex 20: 1-17); to call the people back in obedience to Gods laws (2Chr 24:19); exhorted the people to sincerity in worship (Jer. 7:1-11); warned the Israeli tes of Divine judgment upon sin, both personal and national and foretold future events which God had willed especially the coming of the Messiah (Isaiah 9:6). According to the O.T, there are three sections of books which are refered to as prophetic books and they are known as; (Joshua to Kings) the former prophets, major prophetic books (Isaiah, Jeremiah, Ezekiel), and finally the Minor Prophets (Hosea to Malachi). The prophetic ministry in the O.T intensified at the beginning of the Exodus when God appointed Moses and Aaron as His prophets with a mission to rescue and lead His people out of slavery from the land of Egypt after 430 years. God gave a specific oracle to Moses that His chosen people were being called to worship him. The prophetic movement appeared throughout The Exodus 1446 BCE and the period of the Israelites captivity by the Assyrians and Babylonians, to the times of Zechariah who was associated with the restoration of the temple in 521-515 BCE. There is a mention of many false prophets in the O.T. God clearly warned the Israelites never to approve of such prophets, and he would test them to see if they would remain faithfully (Deut. 13: 1-5). It was a warning that was repeatedly issued with an example of Hananiah a false prophet in Judah in the reign of King Zedekiah. (Jer. 28: 1-17). God even approved of the death of such prophets when He said, But if any prophet presumes to speak anything in my name that I have not authorised him to speak, or speaks in the name of other gods, that prophet must die (Deut. 18: 20). Prophet Elijah also challenged Jezebels prophets of Baal to show that he was serving A Living God, unlike all other gods that were worshiped in the land. He killed 450 false prophets from that confrontation (1 Kg. 18: 19-40). Prophets could also be manipulated or bribed to defy God, as in the case of King Balak of Moab who asked Balaam to curse the Israelites. Now come and put a curse on these people, because they are too powerful for me. Perhaps then I will be able to defeat them and drive them out of the country. For I know that those you bless are blessed, and those you curse are cursed (Num. 22:6). Balaams response indicated that he communicated with God (Num. 22: 9-41). God revealed that He could use anything to prophecy as was in the case of Balaams donkey (Num. 22: 28). Another aspect of prophetic experience, involved the prophet himself who performed portents to support the prophecy e.g. Isaiah walked naked for 3 years in the land (Isa. 20:2); Hosea expressed the prophecy by being obedient to what God told him. Go and marry a prostitute so that some of her children will be conceived in prostitution. This will illustrate how Israel has acted like a prostitute by turning against the Lord and worship ing other gods. (Hos. 1: 2). Though Gods prophets differed on how they prophesied, the emphasis of their messages was common. It was about sin, judgement, wrath of God, repentance, love, mercy and forgiveness of a compassionate God. For example Moses was a law giver and urged the Israelites repeatedly never to take on the pagan practices of the people of the Promised Land because God Himself would raise another prophet like him to continue a prophets great role. (Deut. 18: 14-17). The Prophet Elijah was a spiritual revivalist, and Isaiahs prophecies were upon the royal house of Judah. Prophets suffered persecution, and they were often disregarded, despised and rejected especially by rebellious kings and people who had hardened hearts and continually disobeyed Gods law, But the people would not listen and continued to follow their former practices. (2 Kg. 17: 40). Ungers Bible dictionary quotes, The genius of Old Testament prophecy was rather, a prediction of the future arising from the conditions of the present and was inseparably connected with the profoundly religious and spiritual message the prophet was called to proclaim to his own generation. Some prophecies of the OT were Forth telling prophecies that called back people unto their God in terms of repentance and change, as in the case of Jonah when God relented and withdrew plans of disaster upon Nineveh (Jonah 2). Fore telling prophecies, gave the people time to obey, seek and pray honestly to God, a significantly important feature of Biblical prophecy. Such prophecies promised restoration and events that would be fulfilled in the future declaring salvation, especially those that announced the coming of a Messiah who would come at Gods appointed time, as the final perfect sacrifice to God who would redeem mankind and fulfil the reconciliation of God and man (Hos. 14; Amos 9: 11-15). Overall, Jesus was the completion of the prophetic scriptures in the OT. Jesus testified in His time that He was the reference point of the OT prophecies. I will proclaim the LORDs decree: He said to me, You are my son; today I have become your father. (Psalm 2:7). Bible Scholars, G and R Konig said, Jesus is unique among all people in history in that he is the fulfilment of centuries of Messianic prophecies, which are found in the Old Testament that foretold his place of birth, details of his life, his mission, his nature, his death, and his resurrection. From a theological perspective, God affirms both His power and right to judge, and His steadfastness in the end to save. Jeremiah prophesied of the new covenant, whereas Ezekiel had a vision of a new temple centre stage (Ezek. 40, 48). Isaiah is also memorable for its Messianic promises (Isa 9:2-7, 11:1-9), and ideas of new creation and Exodus. If Judgement and salvation are the fabric of the OT history, it explains why so much of it was the work of the prophets, because God expressed His heart through the prophets in order to restore His relationship with man. Prophecy is one of the major ways in which God communicates His will to mankind even up to this age as written: Then he turned to his disciples and said privately, Blessed are the eyes that see what you see. For I tell you that many prophets and kings wanted to see what you see but did not see it, and to hear what you hear but did not hear it. (Luke 10: 23-24). The prophetic movement was a significant phenomenon in history of Divine revelation. Therefore, without the prophecies in the Old Testament, humans wouldnt know of Gods intentions. This can only be summarised as Gods Divine love for mankind.

The Fifth Element, Sinfield, The Perfect Storm and A River Runs Through It :: Movies Writing Essays

The Fifth Element, Sinfield, The Perfect Storm and A River Runs Through It Authors examine many different sources to become better writers. By drawing on the writings of another author one can enhance their current writing style and also learn new ways to write. The plot, conflict throughout the story and the relationships between the characters are some examples of the parts of a story that an author can look at. Plot is the essence of a story. It is basically an outline of the flow of a story from one event to another. By examining the plot of a work, one can gain insight into another person's style of storytelling and from that style one can then learn ways to enhance his own writing. The movie, The Fifth Element, contains a plot that unravels very creatively. The screenwriter of the movie chose to tell his story from a future time when humans and aliens coexist. His goal is to explain to the moviegoer the idea that four elements, portrayed as rocks, make up life and one essential element holds these four together to create life and combat evil. He begins his explanation through a flashback sequence that displays the initial conflict, an ultimate evil, which will again arise later in the movie. After the flashback, the movie follows a chronological chain of events. The audience is introduced to the main characters, a man and a woman, and then to the rest of the good guys and the villains. T hroughout the course of the movie the characters move through many emotions from fear to hate to sheer joy. In the end, the good guys gather the four elements and are able to combine them together with the essential element, love, to destroy the evil. The creator’s use of common elements such as flashbacks, conflict and the basic concepts of good and evil can be drawn upon to better ones own plot construction. The Fifth Element uses the concept of a tangible evil as the major source of conflict. Sebastian Junger's book The Perfect Storm uses the natural phenomena of a storm as its ultimate conflict. The book takes place on a commercial fishing boat, the Andrea Gail, which gets stuck at sea during a terrible storm. The crew of the boat has to fight the storm in order to save their own lives. This causes a man verses nature conflict in which the man has little chance of winning.

Life Goals in Charles Dickens Great Expectations :: Great Expectations Essays

Life Goals in Charles Dickens' Great Expectations "He came closer to my tombstone, took me by both arms, and tilted me back as far as he could hold me, so that his eyes looked powerfully into mine, and mine looked most helplessly up into his" (3). These lines describe the entrance of the character, Provis, into the life of a young man who goes by the name of Pip. Pip is the protagonist in Great Expectations, the classic novel by Charles Dickens. Written in 1861, Great Expectations tells the life story of Pip, a young man who is born into the working class of England and makes his rise in society as the years progress. During his childhood years, Pip is endowed to his sister, who "brings him up by hand" (5), meaning she uses brute force when in comes to punishment, and punishment is frequent even when not required. This is also the time in his life when Pip meets the convict, Provis, out on the marshes near the church. Provis plays a key role in Pip's rise in society, even though Pip doesn't know it. Throughout the novel, the convict is subconsciously if not consciously on Pip's mind. The reader may not notice this fact at first, but it becomes evident as the novel progresses. Around the end of the novel, Pip finally learns who is the cause for his sudden wealth, and he realizes that his reasons for being ashamed of his family are shallow, so he sets things right. Great Expectations is the goals that Pip has about his life. During his childhood, Pip becomes the playmate to Estella, the adopted daughter of the wealthy Miss Havisham. Immediately, he falls in love with her, but she feels that she is socially above him and therefore he is not worthy of her. Upon first meeting Pip, Estella, upon hearing that she is to play cards with him, immediately remarks, "With this boy! Why, he is a common labouring-boy!" (55). Estella scorns Pip from the first day she meets him. Pip wants to be better for Estella and becomes ashamed of his family, because they are common townspeople. Estella is the reason for Pip's first expectation of becoming part of the upperclass. This aim is fulfilled when Pip learns that he has "come into a handsome property" (129) and he is to "be brought up as gentleman- in a word, as a young fellow of great expectations" (129).

Malpractice and Malediction in The Marquise of O. and The Yellow Wallpa

Malpractice and Malediction in The Marquise of O. and The Yellow Wallpaper  Ã‚  Ã‚     Ã‚   In Heinrich Von Kleist's The Marquise of O. and Charlotte Perkins Gilman's The Yellow Wallpaper, the female protagonist is terribly mislabeled. The inaccuracies in treatment, administered by seemingly authoritative and knowledgeable characters -- family members and a medically certified spouse, respectively -- result in tragic deterioration of the state of mind of both the Marquise and The Yellow Wallpaper's narrator. The delineation of each character's weakness is comprised of blatant references to an applied infantile image and approaching unstable mentality. In The Marquise of O, the Marquise is thrust unwillingly into the external world; in The Yellow Wallpaper, the narrator is locked away unwillingly in an interior world. Though both are persecuted because of their gender, in The Marquise of O, the Marquise is troubled by the symbolic rebirth of her womanhood; while in The Yellow Wallpaper, the narrator is troubled by the symbolic death of her womanhood. Kleist begins his delineation of the Marquise with terms such as "widowed,", "a lady," and "the mother of several well-brought-up children" (Kleist 68). In this introduction the reader learns that the Marquise has experienced both marriage and childbirth. In respect to her deceased husband, the Marquise avoids remarriage and returns to her family's home with her parents, brother and children. The Marquise transforms her role as lover and wife to daughter and mother, therefore stifling an aspect of her womanhood. It is not until she is unknowingly sexually assaulted and made pregnant that her femininity is reborn. The narrator of Gilman's The Yellow Wallpaper, on the other hand, se... ...mother realize the identity of her daughter's rapist before the Marquise, establishing irony and advancing engagement between reader and text. It is also clear to the reader that by the conclusion of The Yellow Wallpaper, the narrator has become maniacal. Though confined to similar situations, Kleist's Marquise and Gilman's narrator are delineated in very different manners. While the Marquise displays boldness and determination in locating her assailant, the narrator of The Yellow Wallpaper allows the intriguing wallpaper to take control of her senses. Both stories exhibit the consequence of a mythical diagnosis administered to an initially sane and healthy person. WORKS CITED Gilman, Charlotte Perkins. The Yellow Wallpaper. Ed. Dale H. Bauer. New York: Bedford, 1998. Kleist, Heinrich Von. The Marquise of O-. London: Penguin Books, 1978.       Malpractice and Malediction in The Marquise of O. and The Yellow Wallpa Malpractice and Malediction in The Marquise of O. and The Yellow Wallpaper  Ã‚  Ã‚     Ã‚   In Heinrich Von Kleist's The Marquise of O. and Charlotte Perkins Gilman's The Yellow Wallpaper, the female protagonist is terribly mislabeled. The inaccuracies in treatment, administered by seemingly authoritative and knowledgeable characters -- family members and a medically certified spouse, respectively -- result in tragic deterioration of the state of mind of both the Marquise and The Yellow Wallpaper's narrator. The delineation of each character's weakness is comprised of blatant references to an applied infantile image and approaching unstable mentality. In The Marquise of O, the Marquise is thrust unwillingly into the external world; in The Yellow Wallpaper, the narrator is locked away unwillingly in an interior world. Though both are persecuted because of their gender, in The Marquise of O, the Marquise is troubled by the symbolic rebirth of her womanhood; while in The Yellow Wallpaper, the narrator is troubled by the symbolic death of her womanhood. Kleist begins his delineation of the Marquise with terms such as "widowed,", "a lady," and "the mother of several well-brought-up children" (Kleist 68). In this introduction the reader learns that the Marquise has experienced both marriage and childbirth. In respect to her deceased husband, the Marquise avoids remarriage and returns to her family's home with her parents, brother and children. The Marquise transforms her role as lover and wife to daughter and mother, therefore stifling an aspect of her womanhood. It is not until she is unknowingly sexually assaulted and made pregnant that her femininity is reborn. The narrator of Gilman's The Yellow Wallpaper, on the other hand, se... ...mother realize the identity of her daughter's rapist before the Marquise, establishing irony and advancing engagement between reader and text. It is also clear to the reader that by the conclusion of The Yellow Wallpaper, the narrator has become maniacal. Though confined to similar situations, Kleist's Marquise and Gilman's narrator are delineated in very different manners. While the Marquise displays boldness and determination in locating her assailant, the narrator of The Yellow Wallpaper allows the intriguing wallpaper to take control of her senses. Both stories exhibit the consequence of a mythical diagnosis administered to an initially sane and healthy person. WORKS CITED Gilman, Charlotte Perkins. The Yellow Wallpaper. Ed. Dale H. Bauer. New York: Bedford, 1998. Kleist, Heinrich Von. The Marquise of O-. London: Penguin Books, 1978.