Samacheer Kalvi 12th Commerce Notes Chapter 8 Securities Exchange Board of India (SEBI)

Samacheer Kalvi 12th Commerce Notes Chapter 8 Securities Exchange Board of India (SEBI)

→ SEBI was first established in the year 1988 as a non-statutory body for regulating the securities market. It was made as an autonomous body by the Government of India on 12 May 1992 with SEBI Act 1992 being passed by the Indian Parliament. SEBI has its headquarters at the business district of BandraKurla Complex in Mumbai.

→ The various objectives of SEBI Regulation of stock exchanges are protection to the investors, checking the Insider Trading and control over Brokers.

→ SEBI is the nodal agency which safeguards the interests of an investor in the Indian Financial market. SEBI performs three key functions, Quasi¬legislative, Quasi-judicial and Quasi executive.

→ SEBI has wide powers regarding the stock exchanges and intermediaries dealing in Securities, power to impose monetary penalties, power to regulate Insider Trading. SEBI is also empowered by the Finance Ministry’ to nominate the members in the Governing body of every stock exchange.

→ Dematerialization is the process by which physical shares certificates of an investor are taken back by the company/registrar and destroyed.

→ Dematerialization is done at the request of the investor. Investor will first have to open an account with a DP (Depository Participant) and then request for dematerialization of certificates through the (D.P).

→ A demat account holds all the shares that are purchased in electronic or dematerialized form. Basically a demat account is to shares what a bank account is to money.

A demat account holds the certificates of financial instruments like shares, bonds, Government securities, mutual funds and exchange traded funds (ETFS).

→ Koushikaa’s father has gifted her the shares of a large cement company with which he had been working. The securities were in physical form. She already has a bank account and does not possess any other forms of securities. She wishes to sell the shares and approached a registered broker for the purpose. Mention one mandatory detail which she will have to provide with the broker.

  1. By opening a Demat Account through this account the shares can be sold.
  2. She has mentioned total number of shares of the cement company.
  3. She can mention Name of the company, types of shares and market value of shares of the company.

→ Mr. Kulandaivel was the Chairman of Thangam Bank. The bank was earning good profits. Shareholders were happy as the bank was paying regular dividends. The market price of their share was also steadily rising. The bank was about to announce taking over the ‘Trinity Bank’.

Mr. Kulandaivel knew that the share price of Thangam Bank would rise on this announcement. Being a part of the bank, he was not allowed to buy shares of the bank. He called one of the his rich friends Mr. Chandrasekaran and asked him to invest ₹ 5 crores in shares of his bank promising him the capital gains.

As expected, the share prices went up by 40% and the market price of Chandrasekaran’s shares was now ₹ 7 crores. He earned a profit of ₹ 2 crores. He gave ₹ 1 crore to Mr. Kulandaivel and kept ₹ 1 crore with himself. On regular inspection and by conducting enquires of the brokers involved, the Securities and Exchange Board of India (SEBI) was able to detect this irregularity. The SEBI imposed a heavy penality on Mr.Kulandaivel. By quoting the lines from the above paragraph, identify and state any two functions that were performed by SEBI in the above case.

Regulating, controlling, inspection and inquiries of share market by SEBI.

  1. The price (market) of their shares were controlled by SEBI.
  2. On regular inspection by conducting enquires SEBI was able to detect this irregularity and imposed a heavy penality on Mr. Kulandaivel.

Collect the information on various measures taken by SEBI to protect the interests of investors since its inception.

Investor awareness program:
Investor education and protection fund. Investor Assistance and Education. He knows how to invest and he has full knowledge and complete information about the market.

Send a group of students to a trading terminal in your city to gain first hand information on securities trading and prepare a report.

  1. Identifying information and related assets plus potential threats, Vulnerabilities and impacts.
  2. Evaluating the risks.
  3. Deciding how to address or treat the risk to avoid mitigate share or accept them.
  4. Selecting appropriate security control and implementing them.
  5. Monitoring activities making adjustment as necessary to address any issues, changes improvement opportunities.
  6. To offer guidance, policies industrial, standard, software legal liability and security awareness.

Collect information about SEBI action for Investor Protection taken during last two years.

The securities Exchange Board of India has sent notices to mutual fund companies that defaulted on fixed maturity plan payments. SEBI has taken action for not fulfilling the investor, protection norms by delaying the payment due on fixed maturity plan and for giving loan against shares.

SEBI has taken action on mutual fund on several issues that occurred in the recent past. Mutual fund which defaulted on fixed maturity plan scheme (HDFC and Kotak for delay in FMP).

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 7 Stock Exchange

Samacheer Kalvi 12th Commerce Notes Chapter 7 Stock Exchange

→ Stock exchange is one of the important constituents of capital market. It is an organized market for purchase and sale of industrial and financial security. It is a convenient place where trading in securities is in a systematic manner.

→ Stock exchanges are indispensable for the smooth and orderly functioning corporate sector in a free market economy.

→ According to Husband and Dockerary “Stock exchanges are privately. organized markets which are used facilitate trading in securities ”.

→ The various function of stock exchange are ready and continuous market correct evaluation of securities protection to investors, aid to capital formation, and facilities for speculations.

→ Stock exchange is a market where securities of corporate bodies, Government and semi-Govemment bodies are bought and sold.

→ Buying and selling transactions in securities at the stock exchange are governed by the rules and regulations of stock exchange as well as SEBI guidelines.

→ Stock exchange is a particular market place where authorized brokers together daily on the floor of market called trading circles and conducting trading activities.

→ The benefits of stock exchange are classified with benefits to the community, company and investors.

→ The limitations of stock exchange are as follows. Lack of uniformity and control to stock exchanges, failure to control unhealthy speculation, allowing more than one charge in the place and no proper regulation of listing of securities on the stock exchange.

→ There are 24 stock exchanges in the country with 21 of them being regional in nature. Three others have been set up in the reforms era (NSE)(OTCEI) and (ISE) have mandate to national wide trading network.

→ Speculators in a stock market are of different types. They are named after animals as their behavior could be compared best with the behavior of animals [Bull, Bear, Stag, Lame Duck].

→ The structure of stock market in India has undergone a vast change due to the liberalization process limited by the Government. A brief description of these structures in the Indian stock market system is presented below.

National Stock Market System (NSMS)

  1. National Stock Exchange of India Limited (NSE)
  2. Stock Holding Corporation of India Limited (SHCIL)
  3. National Clearing and Depository System (NCDS)
  4. Securities Trading Corporations of India (STCI)
  5. National Securities Depositary Limited (NSDL)

Ramesh and Asaladeepesh are good friends. Ramesh is very god-fearing kind, while Asaladeepesh was an enterprising person, having practical in approach. Read the following conversation.

Ramesh: Hi, Deepesh! What are you doing?
Asaladeepesh: Hi, I am reading the newspaper – a financial market page that gives us information about the shares price.
Ramesh: Shares, that is an area of big gambles.
Asaladeepesh: No, not really! You must understand how it works.
Ramesh: Frankly speaking, I think this Capital market is all a gambling game and I don’t see any use of them.
Asaladeepesh: No, you are seriously mistaken; you do not know the importance of capital market. I will tell how it is needed for an individual and an economy.

You are required to play the role of Asaladeepesh and continue the conversation.

Ramesh: Tell me about the significance of capital.
Asaladeepesh: Business firms need large funds to undertake a project.
Ramesh: What do you mean by capital?
Asaladeepesh: The most productive use leading to growth and development of the economy.
Ramesh: I couldn’t understand the concept capital.
Asaladeepesh: Capital in the form of shares bonds and stocks.
Ramesh: How to purchase these forms of capital?
Asaladeepesh: In capital market where buyers and sellers engage in trade of financial securities like bonds, shares, and stocks.

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 6 Money Market

Samacheer Kalvi 12th Commerce Notes Chapter 6 Money Market

→ Money is a market for purely short term funds. It deals with financial assets and securities whose maturity period does not exceed one year.

→ Money market is the segment of financial markets where in financial instruments having maturities of less than one year are traded.
Eg: Treasury Bills, Commercial Bills, Certificate of Deposits, Government securities etc.,

Money market serves the following objectives:
→ Providing an equilibrium mechanism for ironing out short term surplus and deficits.

→ Providing a focal point for central bank intervention for influencing liquidity in the company.

→ Providing access in uses to users of short term money to meet their requirements at a reasonable price.

→ The main characteristics of money market short term funds or financial assets called near money. Assets which can be converted into cash with minimum transaction cost. Transaction take place through phone oral communication. It comprises of several submarkets each specializing in a particular type of financing Eg: call money market, bill market.

→ Commercial bank play a dominant role in this market. There are money participants in money market. It deals with money’instruments like treasury bills, commercial bills, commercial papers etc.

→ A market for the purchase and sale of treasury bills is known as a “Treasury bills market” treasury bills may be classified into three. They are:

  1. 91 days,
  2. 182 days,
  3. 364 days. Treasury Bills.

Certificate of deposit:
→ Certificate of deposit are short term deposit instruments issued by banks and financial institutions to raise large sums of money. Certificate of deposits are issued in the form of usance promissory notes.

→ A bill of exchange issued by a commercial organization to raise money for short term needs. These bills are of 30 days, 60 days and 90 days maturity.

→ A market where by the Government or gilt – edged securities can be bought and sold is called “Government Securities Market”.

→ Government securities are issued for the purposes of refunding the maturing securities, for advance refunding securities which have not yet matured and for cash financing that is raising fresh cash resources.

How to Invest Money in Money Market Funds?

Gathering information about Money Market Funds
Learn about money market
Understand the goal of money market funds
Learn the disadvantages of money market funds
Investing in Money Market Funds
Understand the different types of Money Market Funds
Understand the purpose of Money Market Funds Compare past yields
Buying and Tracking of Money Market Funds.

Information:
Money market is a market for purely short term funds. It deals with the financial assets and securities whose maturity period does not exceed one year.

Money value:
Treasury bill minimum for one lakh. Certificate deposits or commercial paper is for minimum of? 25 lakhs.

Participants:
Brokers bankers RBI and Government.
High liquidity in money market.

Number of instruments:

  1. Inter bank call money
  2. Short term deposits up to 3 months
  3. 91 days Treasury bill
  4. 182 days Treasury bill
  5. Commercial papers.

Regulator – Central bank is the regulator of money market.
→ High level of liquidity that they offer it is easy to make money market trade across currencies maturities, debt structure as well as credit risk which makes it ideal for institution seeking to borrow or invest the short term money market.

→ A money market fund is a kind of mutual fund that invest only in high liquid instruments such as cash, cash equivalent securities and high credit rating debt based securities with short term less than 13 months (maturity).

→ These funds offer high liquidity with a very low level of risk. The goal of money market to provide a reasonable access to users of short term funds to meet their requirement quickly, adequately and at reasonable cost.

→ A money market fund generates income taxable or tax free depending on its port folio but little capital appreciation.

If you earn money, which investment plan would you like?

  1. Mutual Funds,
  2. Shares,
  3. Debentures,
  4. Treasury Bill,
  5. Commercial Bill,
  6. Certificate of Deposit. Why? Give reasons

A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities.

A mutual fund is a type of financial vehicle made up of a pool of money collected form many investors to invest in securities such as stocks, bonds and money market instruments.

Reasons:

Earn higher returns, creating wealth over time, offer returns on your money over time, grow your money, and reach financial goals.

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 5 Capital Market

Samacheer Kalvi 12th Commerce Notes Chapter 5 Capital Market

→ The term Capital Market refers to the facilities and institutional arrangements through which long term funds both debt and equity are raised and invested.

→ Capital Market can be defined as a “Market for borrowing and lending of long term capital funds required by business enterprises.” Capital market offers an ideal source of external finance.

→ The Capital Market is divided into two that is Primary Market and Secondary Market. Primary Market deals with those securities which are issued to the public for the first time. Primary Market facilitates capital formation.

→ Secondary Market may be defined as the market for old securities which are previously issued in the Primary Market are traded here. It covers both stock exchange and over-the-counter market.

→ The significance of Capital Market in economic development – savings and capital formation, permanent capital, Industrial growth, proper channelization of Funds and Provision of variety of services.

→ The period between 1947 and 1973 marked the development of infrastructure for Capital Market. The period between 1980 and 1992, Debenture emerged as a powerful instrument of resources mobilization in the Primary Market. There was a momentous growth in the Secondary Market.

→ SEBI emerged as an effective regulatory body for the Primary and Secondary Markets.

→ A High Powered study Group on Establishment of New Stock Exchange, A Committee on Trading in Public Sector Bonds and Units of Mutual Funds.

→ A number of institutions of finance have been established to cater to the credit, requirements of various segments of Industry and needs. (Mutual Funds, Factoring institutions, OTCEI, NSEI, NCDS, NSDL and SHCIL).

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 4 Introduction to Financial Markets

Samacheer Kalvi 12th Commerce Notes Chapter 4 Introduction to Financial Markets

→ Financial Market facilitates business firms as well as governments to raise the needed funds by issuing and selling different instruments.

→ With the help of Financial Market, all kinds of business, Government and the financial institutions can get financial assistance in terms of both short term finance and long term finance.

→ The Indian financial system can be broadly classified into organized sector and unorganized sector. Organized Sector consist of Regulators Financial Institutions, Financial Markets and Financial Services. The Unorganized Sector consists of Money Lenders, Indigenous Bankers etc.

→ A Market where in financial instruments (claims, assets and securities) are traded is known as a “Financial Market”. Financial Market transactions may be place either at a specific place or location. Eg: Stock Exchange.

→ Financial Market leads to the overall economic development.

→ Financial Markets can be classified in different ways.

→ Financial Claim, Maturity, Time of Issue of Financial Claim, Time of Delivery and Organizational Structure of Financial Market.

→ Financial Market plays a key role in arrahging investment of funds. It contribute the development of the entrepreneurial class.

→ To accelerated growth of Industrial and economic development of a Country and raising the standard of living. (Society’s Well-being)

→ A financial market renders the following functions

  1. Intermediary functions and
  2. Financial functions

→ A financial asset is one which is used for production or consumption or for further creation of assets. Financial assets can be classified differently under different circumstances.

  1. Marketable Assets,
  2. Non-Marketable Assets.

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 3 Management By Objectives (MBO) and Management By Exception (MBE)

Samacheer Kalvi 12th Commerce Notes Chapter 3 Management By Objectives (MBO) and Management By Exception (MBE)

→ Management by objectives is a management system in which each member of the organization effectively participates and involves himself. This system gives full scope to the individual strength and responsibility.

→ Prof. Reddin defines MBO as “the establishment of effective standards for managerial positions and the periodic conversion of those into measurable time bound objectives linked vertically and horizontally and with future planning”.

→ An attempt is made by the management to integrate the goals of an organization and individuals. This will lead to effective management, MBO tries to combine the long run goals with shortrun goals. It increases the organizational capability of achieving goals at all levels. It encourages a climate of trust, goodwill and a will to perform.

→ The process of MBO is defining organizational objectives, goals of each section, fixing key result areas, targets, matching resources. Periodical review meeting and appraisal of activities.

→ Management by exception is an important principle of managerial control suggested by the classical writers on management. It is style of business management that focuses on identifying and handling cases that deviate from the norm.

→ Management by exception provides the following benefits. It saves the , time of managers because they deal only with exceptional matters. Routine problems are left to sub-ordinates. It facilitates delegation of authority. It provides better yardstick for judging results. It is helpful in objective performance appraisal.

Discussion on the various functions of management, how it helps to MBE

  1. A process of continuing and related activities.
  2. Involving and concentration on organisational goals.
  3. Achieves organizational goals by working with people and resources management by exception is a way of separating tasks between staff and management.
  4. To reduce managerial load.
  5. Exception management also has an IT application.
  6. The management that gives employees the responsibility to take decisions and fulfill their work or projects by themselves.

State your own view about MBO and MBE need to the management

  1. Manager should create a action plan aimed at organisational goals.
  2. How to distribute the resources and to organise their employees according to the plan.
  3. Time to spend with their employees on interpersonal managing task communicating motivating and encouraging employees to achieve higher level of productivity.
  4. MBO is a practice of management that empower employees take part in goal setting process.
  5. MBE is method of control. It is helpful in objective performance appraisal.

Make your own project about MBO and MBE with some examples
Online Marketing:
MBO:
It is a tool for know the behaviour of non-sales related activities. Those in digital or online marketing are tasked with something to increasing site traffic conversion. A broader organisational goal in this regard “Increase brand authority” and become an industry influence.

MBE:
MBE with project management. It is well organised meeting. To conduct regular meeting to keep up with the progress of project.

Sales Management:
To solving the problems, improving marketing the product and product development.

The company gets 30% of marginal profit for every year, but not increasing the salary of the employees for last three years. The employees conduct the indefinite strike against the company. Assume you are the manager of the company. How to solve the problem with using MBO or MBE?

To solve the problem using MBO to motivates the employees and to make them to understand their responsibilities and their role to achieve their goal with organisational goal. The strike may be stopped through this system (MBO) to give full strength of the organisation.

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 2 Functions of Management

Samacheer Kalvi 12th Commerce Notes Chapter 2 Functions of Management

→ Managerial functions are time specific institution specific and country specific. To explain the management functions of 20th century and after.

→ Management functions are called as managerial process. This process is 24 hours non-stop process for attaining the objectives again and again for reaching the highest level.

→ Functions of management can be classified into two categories, they are
(a) Main functions
(b) Subsidiary functions.

→ Planning, organizing, staffing, directing, motivating, controlling and co-ordination are the main functions of management.

→Innovation representations, decision making and communication are the subsidiary functions of management.

→Scholars in the field of management have their own classification of functions of management. Some scholars add few functions and delete some other functions.

Check for the criterias that add cost in the absence of planning

Resource availability includes information about what resources we can use on our project when they are available to us and the conditions of their availability. The goal of activity resource estimating is to assign resources to each activity in the activity list.

Every company faces unique set of risk and it needs to plan for to identifying a through risk assessment, contingency planning is one response to risk. In some cases it may be safer or more cost effective to tackle it or to avoid risk by investing in new equipment.

Design a communication network that speeds up the work

Communication design can also refer to a system based approach in which totally of media and messages within a culture or organisation are designed a single integrated process rather than a series of discrete efforts.

Communication help the regulation of job and co-ordinates the activities (printed, crafted electronic media, all of these communicate with people).

Identify the need for financial and non-financial motivators relating to Gen Z

The generation “Z” study or Technology initimates an arrival study created to better understand the emerging technology network and communication needs to todays sawiest generation. The generation will be work from different locations, travel more for their jobs and want to stay, connected 24/7 they plan to work so many countries so employers recognize and emerging social media and networking technologies (smart phones).

What kind of control measures can be planned for minimal waste for future organisations

  1. Refusing, reducing, reusing, recycling and composting waste.
  2. By reducing or eliminating the generation of harmful and persistent wastes, waste minimisation,
  3. Effort should be taken to promote more sustainable society.
  4. To carry out proper waste management, proper waste disposal, in an effective safe and sustainable manner.

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 1 Principles of Management

Samacheer Kalvi 12th Commerce Notes Chapter 1 Principles of Management

→ Management is part and parcel of our day to day life. Management is goal oriented and it is an art of getting things done with and through others. The practise of management helps to achieve the organisational mission and determines the future of the business enterprises. It is a global and universal concept.

→ In management, we have planning action – control cycle. Management of human resources inorder to secure co operation and teamwork from the people in their performance.

→ “To manage is to forecast, to plan to organise to command, to coordinate and to control” – Henry Fayol. It attempts to describe management in terms of what a manager does and not what management is.

→ Druckes stresses three jobs of management:

  1. Managing a business
  2. Managing manager and
  3. Managing workers and work

→ A discussion about the nature of management whether it is an art of doing things or it is a pure science of getting things done.

→ Management is all about plans and actions but the administration is concerned with framing policies and setting objectives. The manager looks after the management of the organisation where as administrator is responsible for the administration of the organisation. Management focuses on managing people and their work.

→ A process is something that what a person does in the context of his individual duties and responsibilities assigned by his or her immediate higher authority. There are twin purposes of the management process.

  1. Profitability
  2. Maximum human welfare and satisfaction.

→ Principles of scientific management propounded by Taylor are:

  1. Science, not rule of thumb
  2. Harmony, not discard
  3. Co-operation, not individualism
  4. Mental revolution
  5. Development of each and every person to his or her greatest efficiency and prosperity.

→ The father of modem management is Mr Henry fayol and according to him, there are 14 major principles of management which every manager has to practise for the success of the organisation.

→ The span of management refers to the number of subordinates who can be managed efficiently by a superior, similarly the manager having the group of subordinates who report him directly is called as the span of management.

→ The span of management is related to the horizontal levels of the organisation structure. There is a wide and a narrow span of management.

Imagine yourself to be a manager and chart down the functions to be performed,

If I am to be a manager following will be functions that I need to be perform. Planning organizing staffing directing and controlling. First I will be plan already then to organise and create structure for daily tasks and allotment of work in each and every department of my company.

After plan I must be organize my team to motivating and guiding and encouraging the employees to do the best way. Then I will assist to give guidance how to solve the problem in my company. There is need to check the result against the goal. If it is necessary to take correct actions to make sure that immediately to take steps against the employee. I am always to be control over all the aspects of my company.

Formulate a new policy relating to timing of employees
A new policy to timing of employees:

(i) Flexible working hours makes employees more productive.
(ii) Time Policy – The company must insist that every employee should be regular and punctual in attendance. The basic advantage of fixed timing is that there is a very appropriate coordination among the employees. Flexible working hours makes employees more productive.

Write an e-mail to all the employees informing them about the office timing. This is done to ensure the availability of employee in the office. Departments may wish to consider allowing some employees to perform job responsibilities from home (or) from other alternative work sites. Spending time with their families and getting enough sleep lets the employees feel refreshed they are very happy to come to work.

The changes in management and administration of a school growing into a college

Hire and supervise teachers to create school rules, policies and plan academic calendars. School offering college administration may be different in the policy making, researchers, consultant to help evaluate and to develop way to enrich and enhance the educational system at all levels.

Application of management process in accomplishing work life balance

Work life balance is a concept that describe the idea of splitting onetime and energy between work and other important aspects of their life. To make time for family, friends relatives and community participations. Personnel growth, self care and other personal activity keep our energy flowing ear mind and bodies healthy. Track your time and determine yourpriorities work smarter and not harder. Measurable goals and set specific goals.

Samacheer Kalvi 12th Commerce Notes