Book Reviews
The Conscious Investor

If you are investing in equities and are unaware of what is meant by return on capital employed, price earnings ratio or return on equity, The Conscious Investor (John Price; Wiley; Pages 366; $49.95) is for you. It dwells on understanding the essential valuation ratios, payback period and discounting cash-flow methods. This book provides the basic understanding of book-keeping and accountancy. For prudent investors, it is important to have reasonable understanding of these principles. The book also includes inputs from Warren Buffett. John Price begins with the importance of calculating the intrinsic value of a stock. An investor needs to compare the intrinsic value to the market prices before making any decision to buy or sell.

Financial ratios are important to get an idea of the current strength of a company and any favourable or unfavourable trends. RoE and RoCE are key ratios which give the indication of the ability of the management. In the same way, EPS (earnings per share) provides more insight into the performance of the company than NPM (net profit margin). The book highlights the fact that dividend discount models should be used with utmost care. Articles in Moneylife have also covered the importance of these essential ratios and the irrelevance of the dividend discount model. This book is ideal for budding investors. Though it may contain technicalities of US accounting practices, these can be easily adapted. But if you are not familiar with the basics of investing, the book may leave you utterly confused.


Gas output from D1, D3 fields to fall by 13%: RIL

RIL has projected natural gas output from the two fields to fall to 38 mmscmd in 2012-13 from current production level of 43-44 mmscmd

New Delhi: Reliance Industries (RIL) has projected s 13% drop in output from the nation's biggest gas fields in the KG-D6 basin to 38 million standard cubic meters per day in 2012-13, reports PTI.

In its annual work program submitted to upstream oil regulator Directorate General of Hydrocarbons (DGH), RIL stated that natural gas output from Dhirubhai-1 and 3 or D1 and D3 gas fields in the block KG-DWN-98/3 or KG-D6, will be about 38 million metric standard cubic metres per day (mmscmd) in 2012-13 from current production level of 43-44 mmscmd.

Up to 9 mmscmd will come from D-26 or MA oil field in the same block, taking the total output from the deep-sea area in Bay of Bengal to around 47 mmscmd. At present, KG-D6 block is producing around 51-52 mmscmd.

Officials with direct knowledge of the development said RIL has projected maintaining the current production levels during 2011-12 fiscal.

A Reliance spokesperson, however, did not offer any comments.

RIL presently sells 14 mmscmd of gas from KG-D6 to fertiliser plants, 24 mmscmd to power plants and the remaining 13 mmscmd to other sectors like sponge iron plants, LPG, city gas distribution (CGD), petrochemical plants and refineries.

Officials said the company has projected crude oil output from the MA field in the same block to fall to 12,050 barrels (bpd) per day from about 17,000 bpd current production.

The RIL stock was trading 3.38% lower at Rs 996.55 a piece on the Bombay Stock Exchange at around 1pm.


Black money case: SC asks Centre to consider setting up SIT

Stating that the black money issue was not confined to one case but has wider implications, the SC bench directed the government to set up a Special Investigation Team comprising officers from different investigating agencies

New Delhi: The Supreme Court today asked the Centre to consider setting up a Special Investigation Team (SIT) to probe the black money stashed by Indians abroad, reports PTI.

A bench headed by Justice B Sudershan Reddy said the issue is not related to one case but is much wider and asked the government to consider setting up an SIT comprising officers from different departments including the Enforcement Directorate (ED), the Central Bureau of Investigation (CBI) and the Income Tax (I-T) to look into it.

"We are not talking about one case but many cases are involved in it. This is much wider," the bench said.

"In principle, do you have any objection to setting up of SIT to look into the matter?" the bench asked the government.

It told the Centre to respond on the next date of hearing on 28th March about its stand and the possible composition of the SIT.

"Before we discuss this issue, both of you (the government and the petitioner) tell us about possible composition of SIT, if the need arises, for setting up the same," the court said.

The court was hearing a petition filed by eminent criminal lawyer Ram Jethmalani seeking direction to the government to take steps in bringing back black money stashed by Indian nationals in foreign banks, which is said to be to the tune of $1 trillion.


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