Tag: Management Innovation

Bangalore University B.com Notes

HR5.5 Performance Management

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Unit 1 Introduction to Performance Management [Book]  
Performance Management VIEW VIEW
Performance Evaluation VIEW
Evolution of Performance Management VIEW
Definitions and Differentiation of Terms Related to Performance Management VIEW
What a Performance Management System Should Do VIEW
**Pre-Requisites of Performance Management VIEW
Importance of Performance Management VIEW
Linkage of Performance Management to Other HR Processes VIEW

 

Unit 2 Process of Performance Management [Book]  
Overview of Performance Management Process VIEW VIEW
Performance Management Process VIEW
Performance Management Planning Process VIEW
Mid-cycle Review Process, End-cycle Review Process VIEW
Performance Management Cycle at a Glance VIEW

 

Unit 3 Mechanics of Performance Management Planning and Documentation [Book]  
The Need for Structure and Documentation VIEW
Manager’s, Employee’s Responsibility in Performance Planning Mechanics and Documentation VIEW
Mechanics of Performance Management Planning and Creation of PM Document: VIEW
Performance Appraisal: Definitions and Dimensions of PA, Limitations VIEW
Purpose of Performance Appraisal and Arguments against Performance Appraisal, Importance of Performance Appraisal VIEW
Characteristics of Performance Appraisal VIEW
Performance Appraisal Process VIEW

 

Unit 4 Performance Appraisal Methods [Book]  
Performance Appraisal Methods VIEW
Traditional Methods, Modern Methods, 360 models VIEW
Performance Appraisal 720 models VIEW
Performance Appraisal of Bureaucrats; A New Approach VIEW

 

Unit 5 Issues in Performance Management [Book]  
Issues in Performance Management VIEW
Role of Line Managers in Performance Management VIEW
Performance Management and Reward Concepts VIEW
Linking Performance to Pay a Simple System Using Pay Band VIEW
Linking Performance to Total Reward VIEW
Challenges of Linking Performance and Reward VIEW
Facilitation of Performance Management System through Automation VIEW
Ethics in Performance Appraisal VIEW
Management Notes

Visual Merchandising, Principles, Strategies, Significance, Challenges, Trends

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Visual Merchandising is a powerful and dynamic aspect of retail that involves the strategic presentation of products and the overall store environment to engage customers and enhance the shopping experience. It goes beyond the arrangement of products on shelves to encompass a holistic approach that considers aesthetics, branding, and customer psychology.

Visual merchandising is a dynamic and influential aspect of the retail landscape, contributing to the overall success of a store by shaping the customer experience, reinforcing brand identity, and driving sales. Embracing principles such as balance, storytelling, and color psychology, retailers can create visually stunning environments that resonate with customers on both emotional and practical levels. Strategic use of window displays, in-store arrangements, digital integration, and seasonal themes enhances the store’s appeal and keeps it relevant in a competitive market.

As retail continues to evolve, the role of visual merchandising remains paramount in capturing the attention of today’s discerning consumers. By staying attuned to market trends, incorporating sustainable practices, and embracing innovative technologies, retailers can create memorable and immersive shopping experiences that foster customer loyalty and set their brand apart in a visually saturated marketplace. Visual merchandising is not just about arranging products; it’s an art form that transforms retail spaces into compelling and inviting destinations, making every visit a unique and delightful experience for customers.

Principles of Visual Merchandising:

  • Balance and Harmony:

Visual merchandising aims to create a sense of balance and harmony in the store environment. This involves the strategic placement of products and displays to ensure that the overall visual composition is appealing and not overwhelming. Achieving balance enhances the aesthetic appeal of the space and contributes to a positive customer experience.

  • Focal Points:

Creating focal points within the store draws the customer’s attention to specific areas or products. These points serve as visual anchors and are strategically designed to guide the customer’s gaze. Focal points can be achieved through eye-catching displays, innovative product arrangements, or thematic elements that stand out amidst the surrounding environment.

  • Color Psychology:

Colors evoke emotions and influence customer behavior. Visual merchandisers leverage color psychology to create specific atmospheres within the store. For example, warm colors like red and orange can stimulate energy and excitement, while cool colors like blue and green evoke a sense of calm. Consistent color schemes contribute to brand identity and help establish a cohesive visual language.

  • Storytelling through Merchandising:

Visual merchandising is a storytelling tool that communicates the brand’s narrative to customers. By arranging products in a narrative sequence or thematic display, retailers can convey a lifestyle or a specific message. This storytelling approach engages customers on an emotional level, fostering a connection between the brand and the consumer.

  • Seasonal and Trend Integration:

Adapting visual merchandising to reflect seasonal changes and current trends keeps the store dynamic and relevant. Seasonal displays and trend-driven arrangements not only capture customer interest but also convey that the store is attuned to the evolving preferences of its clientele.

Strategies for Effective Visual Merchandising:

  1. Window Displays:

Window displays are a crucial component of visual merchandising, serving as the first point of contact between the store and potential customers. A well-designed window display captures attention, communicates the brand’s identity, and entices passersby to enter the store. Seasonal themes, storytelling, and innovative product arrangements are commonly employed in window displays.

  • Planograms:

Planograms are visual representations of how products should be arranged on shelves and displays. They ensure a cohesive and organized presentation of merchandise, making it easy for customers to navigate the store. Planograms consider factors such as product categories, spacing, and promotional areas, contributing to a visually pleasing and shopper-friendly environment.

  • In-Store Displays:

Strategically placed in-store displays can highlight specific products, promotions, or thematic collections. Endcaps, freestanding displays, and interactive installations are effective in catching the customer’s eye and encouraging exploration. These displays contribute to a dynamic and engaging shopping experience.

  • Digital Integration:

Incorporating digital elements into visual merchandising adds a modern and interactive dimension to the retail environment. Digital signage, interactive screens, and augmented reality (AR) displays can provide additional product information, showcase virtual try-ons, and offer immersive brand experiences. This integration aligns with the expectations of tech-savvy consumers.

  • Lighting Techniques:

Lighting is a powerful tool in visual merchandising, influencing the ambiance and highlighting specific areas or products. Well-executed lighting enhances the visibility of merchandise, contributes to the store’s overall atmosphere, and creates a sense of drama or focus. Considerations include the intensity, color temperature, and direction of lighting.

  • Seasonal Decor and Themes:

Adapting the store’s visual elements to reflect seasons, holidays, or specific themes adds a dynamic and festive touch. Seasonal decor not only keeps the store environment fresh and exciting but also encourages repeat visits from customers anticipating new and themed displays.

Significance of Visual Merchandising:

  • Enhanced Customer Experience:

Visual merchandising plays a pivotal role in shaping the customer experience. A well-designed and aesthetically pleasing store environment contributes to a positive and memorable shopping journey. Engaging displays, thoughtful arrangements, and a visually appealing ambiance create a sense of excitement and satisfaction for customers.

  • Brand Identity and Recognition:

Consistent visual merchandising reinforces brand identity and helps customers recognize and connect with a brand. From color schemes to thematic elements, the visual language employed in merchandising communicates the essence of the brand. This recognition fosters brand loyalty and encourages repeat business.

  • Increased Sales and Impulse Purchases:

Strategic visual merchandising has a direct impact on sales. Eye-catching displays, well-organized product arrangements, and effective signage influence customer behavior and purchasing decisions. By creating an environment that encourages exploration and showcases products effectively, retailers can stimulate impulse purchases and increase overall sales.

  • Differentiation in a Competitive Market:

In a saturated retail landscape, visual merchandising serves as a key differentiator. A unique and visually appealing store sets a brand apart from competitors and attracts attention. Creativity in presentation, innovative displays, and a curated aesthetic contribute to a distinctive brand image that resonates with customers.

  • Adaptability to Market Trends:

Visual merchandising allows retailers to stay agile and adapt to changing market trends. Whether incorporating seasonal themes, aligning with cultural events, or responding to emerging consumer preferences, a flexible visual merchandising strategy ensures that the store remains relevant and resonates with the target audience.

Challenges in Visual Merchandising:

  • Consistency across Channels:

Maintaining consistency in visual merchandising across physical stores, online platforms, and other channels can be challenging. Achieving a unified brand image requires coordination and attention to detail.

  • Balancing Innovation and Brand Identity:

Striking a balance between innovative displays and adherence to brand identity can be a challenge. While creativity is essential, it should align with the overarching brand message.

Trends in Visual Merchandising:

  • Sustainability in Merchandising:

Increasing consumer awareness of sustainability has led to a trend in eco-friendly visual merchandising. Use of recyclable materials, minimalistic displays, and emphasis on sustainable practices align with contemporary values.

  • Interactive and Immersive Experiences:

Retailers are increasingly incorporating interactive and immersive experiences into visual merchandising. Augmented reality (AR), virtual reality (VR), and interactive displays create engaging environments for customers.

  • Personalization:

Customizing visual displays based on customer data and preferences enhances the personalization of the shopping experience. Tailoring displays to specific customer segments contributes to a more targeted and effective strategy.

Influencing Customers through Visual Merchandising:

  • Window Displays

Window displays serve as the first point of engagement for potential customers. Creative, thematic, and eye-catching displays can attract passersby into the store. They set the tone for the brand and hint at what’s to come inside.

  • Store Layout and Flow

A well-thought-out store layout guides customers through the space, ensuring they encounter key products and displays. The layout should facilitate a logical and enjoyable shopping experience, encouraging exploration and discovery.

  • Product Grouping

Grouping related products together, known as “product storytelling,” can inspire customers to purchase additional items that complement their initial choice. This approach can also help in highlighting new collections or promoting seasonal items.

  • Lighting

Effective lighting highlights products, creates ambiance, and directs customers’ attention to key areas within the store. Different lighting techniques can be used to accentuate certain products or create a particular mood that aligns with the brand image.

  • Color Psychology

Colors can significantly influence consumer behavior and emotional responses. Using colors effectively in visual merchandising can attract attention, evoke emotions, and impact buying decisions. For instance, red can create a sense of urgency, while blue can evoke trust.

  • Signage and Graphics

Clear, coherent, and branded signage and graphics can communicate key information, guide customers through the store, and reinforce brand identity. Effective signage enhances the shopping experience by making it easier for customers to find what they need.

  • Interactive Displays

Incorporating interactive elements, such as touch screens, QR codes, or augmented reality, can engage customers more deeply, providing them with additional product information, and creating a memorable shopping experience.

  • Sensory Experiences

Engaging multiple senses through visual merchandising can enhance the customer experience. This includes not just visual elements, but also tactile experiences (e.g., product textures), scents, and sounds that align with the brand and product offering.

  • Seasonality and Trends

Updating visual merchandising elements to reflect seasonal changes, holidays, and current trends keeps the retail environment fresh and relevant. This not only attracts repeat visits but also signals to customers that the brand is up-to-date and responsive to consumer needs.

  • Cross-Merchandising

Placing complementary products from different categories together can encourage additional purchases. For example, displaying accessories near clothing items suggests complete outfits, increasing the likelihood of multiple item purchases.

  • Focal Points

Creating focal points within the store draws attention to specific products or promotions. This can be achieved through strategic product placement, distinct lighting, or unique displays.

  • Personalization

Tailoring visual merchandising strategies to the target audience ensures that the presentation resonates with the intended demographic. Understanding customer preferences and behaviors allows for more effective and personalized visual communication.

Bangalore University BBA Notes

MK&HR2 Performance Management

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Unit 1 Introduction to Performance Management [Book]
Performance Management VIEW VIEW
Performance Evaluation VIEW
Evolution of Performance Management VIEW
Definitions and Differentiation of Terms Related to Performance Management VIEW
What a Performance Management System Should Do VIEW
**Pre-Requisites of Performance Management VIEW
Importance of Performance Management VIEW
Linkage of Performance Management to Other HR Processes VIEW

 

Unit 2 Process of Performance Management [Book]
Overview of Performance Management Process VIEW VIEW
Performance Management Process VIEW
Performance Management Planning Process VIEW
Mid-cycle Review Process, End-cycle Review Process VIEW
Performance Management Cycle at a Glance VIEW

 

Unit 3 Mechanics of Performance Management Planning and Documentation [Book]
The Need for Structure and Documentation VIEW
Manager’s, Employee’s Responsibility in Performance Planning Mechanics and Documentation VIEW
Mechanics of Performance Management Planning and Creation of PM Document: VIEW
Performance Appraisal: Definitions and Dimensions of PA, Limitations VIEW
Purpose of Performance Appraisal and Arguments against Performance Appraisal, Importance of Performance Appraisal VIEW
Characteristics of Performance Appraisal VIEW
Performance Appraisal Process VIEW

 

Unit 4 Performance Appraisal Methods [Book]
Performance Appraisal Methods VIEW
Traditional Methods, Modern Methods, 360 models VIEW
Performance Appraisal 720 models VIEW
Performance Appraisal of Bureaucrats; A New Approach VIEW

 

Unit 5 Issues in Performance Management [Book]
Issues in Performance Management VIEW
Role of Line Managers in Performance Management VIEW
Performance Management and Reward Concepts VIEW
Linking Performance to Pay a Simple System Using Pay Band VIEW
Linking Performance to Total Reward VIEW
Challenges of Linking Performance and Reward VIEW
Facilitation of Performance Management System through Automation VIEW
Ethics in Performance Appraisal VIEW
Bangalore University BBA Notes

Income Tax – 1

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Unit 1 Introduction to Income Tax [Book]  
Brief history of Indian Income Tax VIEW
Legal Framework:  
Types of taxes VIEW
Cannons of taxation VIEW
Definitions:  
Assessment, Assessment year, Income, Agricultural income, Assesses, Person, Casual income VIEW
Previous year including exception VIEW
Gross total income, Total income VIEW
Scheme of Taxation VIEW
Meaning and Classification of Capital and Revenue VIEW

 

Unit 2 Residential Status [Book]  
Residential status of an Individual’s, Determination of Residential status VIEW
Incidence of tax-problems on computation of Gross total Income VIEW

 

Unit 3 Exempted incomes [Book]  
Introduction, exempted incomes U/S 10. Only in the hands of individuals VIEW

 

Unit 4 Income from Salary [Book]  
Meaning, definitions, Basis of charge, Advance salary, Arrears of salary, encashment of earned leave VIEW
All allowances VIEW
Perquisites VIEW
Profits in lieu of salary VIEW
Provident fund VIEW
Gratuity VIEW VIEW
Commutation of pension VIEW
Deductions from salary U/S 16 VIEW
Problems on computation of Salary income VIEW

 

Unit 5 Income from House property [Book]  
Income from House property VIEW
Basis of charge VIEW
Deemed owners, Composite rent VIEW
Exempted income from house property VIEW
Annual value VIEW
Determination of Annual value, treatment of unrealized rent, loss due to vacancy, deductions from Annual value U/S 24 VIEW
Problems on computation of income from house property VIEW
Bangalore University B.com Notes

MK6.5 Retail Management

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Unit 1 Retail [Book]  
Retail Management VIEW
Retailing VIEW
Functions of Retailing VIEW
Types of Retailing VIEW
Forms of Retail Business Ownership VIEW
Retail Theories VIEW
Retail Business in India VIEW
Wheel of Retailing, Retail life cycle VIEW VIEW
Influencing Factors Present Indian Retail Scenario VIEW
International Perspective in Retail Business VIEW

 

Unit 2 Consumer Behaviour [Book]  
Consumer Behaviour VIEW
Buying Decision Process and its Implication on Retailing VIEW
Influence of Group on Buying Decisions Process VIEW
Individual Factors Affecting Consumer Behaviour VIEW
Customer Shopping Behaviour VIEW
Customer Service VIEW
Customer Satisfaction VIEW
Retail Planning Process VIEW
Factors to Consider in Preparing a Business Plan VIEW
Implementation VIEW
Risk Analysis VIEW

 

Unit 3 Store Location [Book]  
Choice of Store location VIEW
Factors Influencing Location of Store VIEW
Market Area Analysis VIEW
Trade area analysis, Rating Plan method, Site evaluation VIEW
Retail Operations: Stores Layout and Visual Merchandising VIEW
Stores Designing VIEW
Space Planning VIEW
Inventory Management VIEW
Merchandise Management VIEW
Category Management VIEW

 

Unit 4 Retail Marketing Mix [Book]  
Retail Marketing Mix VIEW
Product Decisions Related to Selection of Goods VIEW
Decisions Related to Delivery of Service VIEW
Pricing VIEW
Factors Influencing Pricing VIEW
Approaches to Pricing VIEW
Price Sensitivity VIEW
Value Pricing VIEW
Markdown Pricing VIEW
Place: Retail Store Location VIEW
SCM Principle VIEW
Retail Logistic VIEW
Computerized Replenishment System VIEW
Corporate Replenishment Policies VIEW
Promotion and their Setting Objectives VIEW
Retail Communication Effects VIEW
Promotional Mix VIEW
Human Resource Management in Retailing VIEW
Manpower Planning VIEW
Recruitment and Training VIEW VIEW
Compensation VIEW
Performance Appraisal Methods VIEW

 

Unit 5 [Book]  
Non-Store Retailing (E-Retailing) VIEW
The Impact of Information Technology in Retailing VIEW
Integrated Systems and Networking VIEW
Electronic Data Interchange (EDI) VIEW
Bar Coding VIEW
Electronic Article Surveillance VIEW
Electronic Shelf Labels VIEW
Customer Database Management System VIEW
Legal Aspect in Retailing VIEW
Social Issues in Retailing VIEW
Ethical Issues in Retailing VIEW
Bangalore University B.com Notes

Entrepreneurship and Ethics

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Unit 1 Entrepreneurship [Book]
Meaning, Definition and characteristics of Entrepreneurship VIEW
**Process of Entrepreneurship VIEW
**Barriers of Entrepreneurship VIEW
Meaning, Definition and characteristics of Entrepreneur VIEW
Functions of Entrepreneur VIEW VIEW
Factors influencing Entrepreneurship VIEW
Advantages and Disadvantages of Entrepreneurship VIEW
Qualities of an Entrepreneur VIEW
Types of Entrepreneurs VIEW
Brief history about successful entrepreneurs VIEW
Role of Artificial intelligence in Developing Enterprises VIEW

 

Unit 2 Micro, Small and Medium Enterprises [Book]
Meaning, Definition, investment limit of Micro, Small and Medium enterprise VIEW
Ownership Patterns of Micro, Small and Medium enterprise VIEW
Products and Services of MSME VIEW
Role played by MSME in the development of Indian Economy VIEW
Problems faced by MSME and the steps taken to solve the problems VIEW
Stages in setting up of MSME VIEW

 

Unit 3 Start-Ups [Book]
Meaning, Definition features types, Benefit and Limitation of startups VIEW
Players in the promotion of start ups VIEW VIEW
The role of incubation centers in grooming youngsters for startups VIEW
Objectives and Functions of incubation centers VIEW
Preparation of Business plan VIEW VIEW
Feasibility Reports: Financial, technical, marketing, product service, Legal VIEW
Causes for Success and Failure of start-ups in India VIEW
Start-ups India scheme, Features eligibility, Loan facilities matching grant VIEW
VIEW
Minimizing section imbalance through the promotion of startups in Urban and Rural India VIEW
Women entrepreneurs in startups VIEW VIEW VIEW

 

Unit 4 The Role of Banking and Financial Institutions in The Promotion of Entrepreneurs [Book]
Financial Assistance by Commercial banks to Entrepreneurs VIEW
VIEW
Financial Assistance by Co-operative banks to Entrepreneurs VIEW
Government Assistance through SFCs VIEW
SFCs VIEW
SIDBI VIEW
IFCI VIEW
Non-financial assistance from DIC, SISI, AWAKE, KVIC VIEW
Financial incentives for MSMEs and Tax Concessions VIEW VIEW
Assistance for obtaining Raw Material, Machinery, Land and Building and Technical Assistance VIEW
Industrial Estates: Role and Type VIEW

 

Unit 5 Ethics in Business [Book]
Meaning, Scope of Ethics of Business Ethics VIEW VIEW
Types of Business Ethics VIEW
Characteristics of Business Ethics VIEW
Factors influencing Business Ethics VIEW
Importance of Business Ethics VIEW
Ethics in Finance VIEW
Ethics in Production VIEW
Ethics in Marketing VIEW
Ethics in HR VIEW
Ethics in R&D VIEW
Bangalore University B.com Notes

Income Tax II

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Unit 1 Profits and Gains from Business or Profession [Book]
Meaning and Definition Business, Profession VIEW
Vocation VIEW
Expenses Expressly Allowed VIEW
Allowable Losses VIEW
Expenses Expressly Disallowed VIEW
Expenses Allowed on Payment Basis VIEW
Problems on Business relating to Sole Trader VIEW
Problems on Profession relating to Chartered Accountant, Advocate and Medical Practitioner VIEW

 

Unit 2 Capital Gains [Book]
Basis of Charge VIEW
Capital Assets, Transfer of Capital Assets VIEW
Computation of Capital Gains VIEW
Exemptions on Capital Gains U/S 54, 54B, 54D, 54EC, 54F VIEW
Problems on Capital Gains VIEW

 

Unit 3 Income from other Sources [Book]
Incomes VIEW
Heads of Income: Income from Salaries VIEW
Income from House & Property VIEW
Profits and gains of a Business or Profession VIEW
Income from Capital Gains VIEW
Taxable under the Head Other Sources VIEW
Securities, Kinds of Securities VIEW
Rules for Grossing Up VIEW
Ex-Interest Securities, Cum-Interest Securities, Bond Washing Transactions VIEW

 

Unit 4 Set Off and Carry Forward of Losses and Deductions from Gross Total Income [Book]
Provisions for Set-off and Carry forward of losses VIEW
Deductions u/s: 80 C, 80 CCC, 80 CCD, 80 D, 80 G, 80 GG, 80 GGA, and 80 U VIEW

 

Unit 5 Income Tax Authorities and Assessment of Individuals [Book]
Powers and Functions of CBDT, CIT, and AO VIEW
Assessment of Individuals VIEW
Provision for Set-off & Carry forward of losses VIEW
Computation of Total Income VIEW
Tax Liability of an Individual Assesses VIEW
Bangalore University B.com Notes

MK5.6 Advertising & Media Management

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Unit 1 Introduction & Basic Concepts [Book]
History of Advertising VIEW
Advertising purpose VIEW
**Advertising functions VIEW
**Advertising Importance, Scope VIEW VIEW
**Advertising Features, benefit VIEW
Economic, Social & Ethical aspects of advertising VIEW
Advertising & the Marketing mix. VIEW VIEW
Advertising as a communication process VIEW
Types of Advertising VIEW
Major Institutions of advertising management VIEW

 

Unit 2 Advertising and Campaign Planning [Book]
Marketing Strategy VIEW
Situation analysis VIEW
Advertising plan VIEW VIEW
Advertising Objectives VIEW
DAGMAR approach VIEW
Advertising Strategy VIEW
Advertising Campaign VIEW
Advertising planning process VIEW

 

Unit 3 Creative Strategy & Advertising Budget [Book]
Creative approaches VIEW
The art of copywriting VIEW
Advertising copy testing VIEW
Creativity in Advertising communication VIEW
Motivational Approaches & Appeals VIEW
Advertising Budget process VIEW VIEW
Methods of determining advertising Appropriation VIEW
VIEW VIEW VIEW

 

Unit 4 Advertising Media Strategy [Book]
Role of media, Types of Media, Their Advantages and Disadvantages VIEW
Media Research VIEW
Media Advertising Decisions VIEW
Media Planning VIEW VIEW
Media Selection VIEW
Media Scheduling VIEW VIEW
Media Strategies VIEW

 

Unit 5 Advertising Effectiveness & Organizing Advertising Functions [Book]
Methods of measuring advertising effectiveness VIEW VIEW
Advertising Research VIEW
Structure & Functions of an advertising agency VIEW VIEW
Selection of advertising agency VIEW
Co-ordination of advertising agency VIEW
Advertising regulations VIEW
Internet advertising VIEW VIEW
Bangalore University B.com Notes

AC 5.5 Advanced Accounting

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Unit 1 {Book}
Business of Banking companies VIEW
Some important provisions of Banking Regulation Act of 1949, Brokerage, Discounts, Statutory Reserves, Cash Reserves VIEW
Minimum capital and reserves, Restriction on commission VIEW
Books of accounts VIEW
Special features of bank accounting VIEW
Final Accounts, Balance Sheet and Profit and Loss account VIEW
VIEW
Interest on Doubtful debts VIEW VIEW
Rebate on bill Discounted VIEW
Acceptance, Endorsement and Other obligations VIEW
Problems as per new provisions

 

Unit 2 Accounts of Insurance Companies {Book}
(a) Life insurance: Accounting concepts relating to life insurance companies VIEW
Preparation of Final accounts of life insurance companies VIEW
Revenue account and Balance sheet VIEW
(b) General insurance: Meaning Accounting concepts VIEW
Preparation of Final accounts VIEW

 

Unit 3 Inflation Accounting {Book}
Need, Meaning, Definition Importance, Role, Objectives, Merits, and Demerits of Inflation Accounting VIEW
Problems on Current purchasing power method (CPP) VIEW
Current cost accounting method (CCA) VIEW

 

Unit 4 Farm Accounting  {Book}
Meaning, Need and Purpose, Characteristics of farm accounting VIEW
Nature of Transactions, Cost and revenue VIEW
Apportionment of common cost VIEW
By product costing VIEW
Farm Accounting, Recording of transactions, problems VIEW

 

Unit 5 Investment Accounting {Book}
Introduction, Nature of Investment Accounting VIEW
Investment Ledger VIEW
Different terms used; Cum dividend or Interest and ex- dividend or interest VIEW
Securities VIEW VIEW
Bonus Shares VIEW VIEW
Right Shares VIEW VIEW
Procedures of Recording shares VIEW
Bangalore University B.com Notes / Bangalore University BBA Notes

Depositories in Stock Market

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In India, a Depository Participant (DP) is described as an Agent of the depository. They are the intermediaries between the depository and the investors. The relationship between the DPs and the depository is governed by an agreement made between the two under the Depositories Act. In a strictly legal sense, a DP is an entity who is registered as such with SEBI under the sub section 1A of Section 12 of the SEBI Act. As per the provisions of this Act, a DP can offer depository-related services only after obtaining a certificate of registration from SEBI. As of 2012, there were 288 DPs of NSDL and 563 DPs of CDSL registered with SEBI.

SEBI (D&P) Regulations, 1996 prescribe a minimum net worth of Rs. 50 lakh for stockbrokers, R&T agents and non-banking finance companies (NBFC), for granting them a certificate of registration to act as DPs. If a stockbroker seeks to act as a DP in more than one depository, he should comply with the specified net worth criterion separately for each such depository. No minimum net worth criterion has been prescribed for other categories of DPs; however, depositories can fix a higher net worth criterion for their DPs.

Basics of Depository

Depository is an institution or a kind of organization which holds securities with it in De-Mat form, in which trading is done among shares, debentures, mutual funds, derivatives, F&O and commodities. The intermediaries perform their actions in variety of securities at Depository on behalf of their clients. These intermediaries are known as Depositories Participants (DPs). Fundamentally, there are two sorts of depositories in India. One is the National Securities Depository Limited (NSDL) and the other is the Central Depository Service (India) Limited (CDSL). Every Depository Participant (DP) needs to be registered under this Depository before it begins its operation or trade in the market.

Demat Account Opening

A demat account is opened on the same lines as that of a Bank Account. Prescribed Account opening forms are available with the DP, needs to be filled in. Standard Agreements are to be signed by the Client and the DP, which details the rights and obligations of both parties. Along with the form the client requires to attach Photographs of Account holder, attested copies of proof of residence and proof of identity needs to be submitted along with the account opening form.

In case of Corporate clients, additional attachments required are true copy of the resolution for Demat a/c opening along with signatories to operate the account and true copy of the Memorandum and Articles of Association is to be attached.

Services provided by Depository

  • Dematerialisation (usually known as demat) is converting physical certificates of Securities to electronic form
  • Rematerialisation, known as remat, is reverse of demat, i.e. getting physical certificates from the electronic securities
  • Transfer of securities, change of beneficial ownership
  • Settlement of trades done on exchange connected to the Depository
  • Pledging and Unpledging of Securities for loan against shares
  • Corporate action benefits directly transfer to the Demat and Bank account of customer

No. of Depository in the country

Currently there are two depositories operational in India.

  • National Securities Depository Ltd. – NSDL – Having 2 crores Demat A/c as on 30-06-2020
  • Central Depository Services Ltd. – CDSL – Having 2.3 crores Demat A/c as on 30-06-2020

Depositories Act 1996

The definition of depositories under the Depositories Act, 1996 is that a “depository” is a company registered under the Companies Act, 1956. It would be granted a certificate of registration under Section 12 subsection (1A) of Securities and Exchange Board of India Act (SEBI), 1992. Hence the Depository becomes an organization like a central bank.  The main role of Depositories is to dematerialize the securities which mean converting the securities from physical form to electronic form and enabling transactions in electronic form. The depository needs to obtain a certificate of commencement of business from SEBI. At present two Depositories are functioning in India:

  • National Securities Depository Limited (NSDL)
  • Central Depository Services (India) Limited (CDSL)

Depository Participant (DP)

The Depository Participant is the link between the owner of the securities and the depositors. He is deemed to be an agent of the depository. Accordingly, he is authorized to offer depository services to investors. As per SEBI regulations and Depository Act, a depository cannot interact directly with beneficial owners. He has to deal with its agents called Depository Participant. Neither can the investors directly approach the depository for any services. They have to interact through the DP.

Services provided by a depository

The following services are provided by a depositor through a DP:

  1. Opening a Demat Account

The first step is to open a Demat Account. Demat Account is the short form for Dematerialisation Account. It is the process of holding investments like mutual funds, shares, bonds, government securities, etc. It does away with the hassles of maintenance of physical documents.

  1. Dematerialization

This process is the conversion of physical shares to electronic shares. When a shareholder uses this facility, the Company takes back the physical shares through the depository system and equal numbers of shares are credited into the shareholder’s account.

  1. Rematerialization

This is the exact opposite of Dematerialization. Here physical securities are issued in place of securities in electronic form. 

  1. Other services

Pledging Dematerialized shares

Dematerialized shares can be pledged. After the loan is repaid a request can be made through one’s DP to close the pledge through a standard format.

Initial Public Offerings

Public offer credits can be directly received into the Demat account.

Receipt of cash/non-cash benefits

When rights or bonus or dividend is announced by any corporate event for a particular security, the depository will give the details of all the clients having electronic holdings to the registrar as on that date. The registrar will then calculate the benefits due to all the shareholders.

Stock lending and borrowing

Securities in the Demat form can be easily lent/ borrowed. Instructions are to be given to DP through a standard format (which is available with DP).

Transmission of securities

In case there is a need for transmission of securities due to death, lunacy, bankruptcy, insolvency, or by any other lawful means, it is possible through the depository system. The claimant will have to fill in a transmission request form supported by valid documents.

Freezing Account with DP

If at any time one wishes that no transaction should be effected in one’s account, one may advise one’s DP accordingly. DP will freeze the account of the investor until further instructions.

Dematerialization process

  1. Appointing DP

The investor chooses a DP of his choice and opens an account with him.  The process will be just like opening an account with a bank. The Investor gets an identification number called Client ID. This is just like the bank account number. This no is the reference point for all transactions with DP. Every investor with the help of a DP has to agree with a depository to get his holding dematerialized. This step is necessary whether an investor already has securities or securities are yet to be issued in a fresh issue.

  1. “Demat” Request

The investor makes an application to DP’s in a form called Dematerialisation Request Form is known as DRF.  This form is provided by the DP, the investor hands over his share certificates after cancelling them in writing. The certificates are then surrendered to get dematerialized for Demat. The DP will accept certificates registered only in the investor’s name.

  1. Verification and confirmation by Registrar

The depository electronically intimates the issuer or its Registrar of the dematerialization request. The issuer or the Registrar has to verify the security certificates. He also has to verify that the DRF has been made by the person recorded as a member in its Register of Members. Once the Registrar is satisfied, it dematerializes the scrip and updates its record. The Registrar then authorizes electronic credit for that security in the investor’s favour and informs the depository of the same.

  1. Crediting the Client’s Account

The investor’s account is credited by DP with the number of shares dematerialized. After this, the investor holds the securities in electronic form. The investor gets the information in the form of a statement.  However, in case, there is a rejection then such credit is not given.

Features of the Depository System in India

  1. Securities in dematerialized form

The depository model is more or less similar to holding funds in bank accounts. Transfer of ownership of securities is done through simple account transfer. This method is simpler and avoids cumbersome paperwork.

  1. Fungibility

Fungibility means an asset can be interchanged with another asset of a similar type. The dematerialized securities are not identified by share certificate numbers. Hence all securities which are in the same class can be interchanged.

  1. Registered and beneficial owner

There are two types of ownership of securities. One is a registered owner and the other is a beneficial owner. For all the dematerialized securities, NSDL is the registered owner but ownership rights, duties and liabilities are with beneficial owners.

  1. Easy transferability of shares

The transfer takes place freely through the electronic system and dispenses the procedural formalities related to paperwork.

  1. No stamp duty

For the transfer of physical shares, then the stamp duty of 0.5% is payable on the market value of the shares. However, there is no such duty on the electronic form.

  1. No risk

Physical certificates have issues like loss in transit, theft, bad deliveries, etc. There is hardly any risk involved in the electronic system as compared to physical certificates.

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