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(i) Block Level Planning: In block-level planning, each district is divided into blocks consisting of about 100 villages with a population of about 60,000. This planning was aimed at mobilization of the local resources and participation of the local people in decision making and implementation of the development scheme. It is initiated under the leadership of a block development officer and a team of various specialists and village level workers. 

(ii) Panchayat Level Planning: A Panchayat is an elected body in which villagers, as voters, elect their representatives. The Panchayat Raj system has a three-tier structure, i.e., firstly, the village level is popularly known as Gram Panchayat or Gram Sabha, secondly, the block level is Panchayat Samiti and thirdly the district level is called Zila Parishad.

(i) Regional development means economic, social and political development of a region of the country or a large area in a state which is less developed. 

(ii) Multi-level planning is planning for a diverse number of regions which group to form a system and subsystems. There are several layers of planning providing the structure for higher level planning and a hierarchy for lower planning also. 

(iii) A planning region is a self-made living organism having a lifetime which helps in promoting life in that region and creates a unifying force that helps the region to be a unified regional space and fosters regional planning.

C-24, Kamla Nagar 

Near Vikas Market 

Agra 

15th March 2013 

The Editor 

Amar Ujala 

Bye Pass Road 

Agra 

Subject—Complaint Against Lack of Playground in Neighbourhood. 

Sir, 

Through the columns of your newspaper I would like to divert the attention of the authorities concerned, towards the problem of lack of proper playground area in our neighbourhood. The children consequently are forced to play on the busy streets, which proves to be hazardous for their lives. 

Children today have become obese and malnutritioned due to lack of outdoor activities and physical fitness. Most of their time is spent indoors, watching television, eating junk food and henceforth becoming couch potatoes. When they are scolded and asked to go out and play, they complain of having no playground in the vicinity. This indeed is their genuine complain, for it is too risky to play on busy roads. It is essential that every colony should have some open area or a playground parks, where children can go and refresh, relax and revitalize for their allround development. They interact better with each other while playing developing healthy sportsmanship. They can walk, run, play group games, badminton, tennis to gain stamina and vitality. 

Even the parents are motivated to come out with their kids, and get some fresh air which is conducive of good health. They can interact with their neighbours and become good friends. One gets exposure to life by moving out and melting people, not by staying confined in one’s house. They can share their grievances, problems and can luckily get some solutions. They can overcome their sedentary life style by walking, running, doing yoga and relaxing. 

Moreover playing on streets, can lead to serious accidents which often one confronts. Vehicles run at a fast pace, resulting in serious casualties. So it is my earnest request that please publish this letter in your columns so that the concerned authorities will look into the problem and provide a play area immediately in our colony. 

Thanking you in anticipation 

Yours truly 

Siddhartha Bansal

C-28, 

Kamla Nagar 

Near Sri Ram Mandir 

Agra 

15th March 2013 

Dear Grandpa,

I received your letter just yesterday and was elated to know that you have recovered from your ailment and are back home from the hospital. 

Grandpa, I really admire your concern about my future, since in your letter you have inquired about the stream and subjects I wish to study in XI and XII. 

You know quite well that I have always wanted to become a famous C.A. like you. You have always inspired me to come up in life. I want to take commerce stream to fulfill my aim of becoming a C.A. 

The subjects that I wish to study are Maths, Commerce, Accounts, Economics and Business Study. These will help me know the basics of accounting and will enhance my interest and aptitude towards the Commerce stream. I am good at Maths, so I will surely do good in Accounts also. 

Moreover you are always there to guide and assist me in my future endeavours. I am sure with a lot of diligence and motivation from you, I will do very well and will realise my ambition soon. Thanking you for always being there for me. 

Your loving grand-daughter 

Deepshikha.

(a) 

1. building—Fixed capital 

2. tailors — Circulating Capital 

3. sewing machines — Fixed capital 

4. tailoring accessories — Circulating capital 

(b) 

1. Income tax; which is imposed on the income of the earners. 

2. Profit tax; which is levied on the profit of the entrepreneurs. 

(c) CRR [Cash Reserve Ratio]: According to RBI act, each commercial bank has to keep a certain ratio of cash reserves (deposits) with the central bank or RBI. The RBI is empowered to vary this CRR between 3% to 15%. By increasing the CRR, the excess reserve of commercial bank is reduced, which restricts the credit granting capacity of the commercial banks. Similarly, the reduction in CRR, increases the capacity of commercial banks to expand credits.

(d) Hypothetical market demand schedule :

(e) Money acts as a store of value. It means people can store their wealth in the form of money. Money is the most liquid form of wealth and it can foe stored without loss in value. Money enables people to save a part of their current income and store it for future use.

A cheque can be dishonoured by a banker in the following conditions: 

• When there is no sufficient balance in the account on which the cheque has been issued. 

• If there is any alteration on the cheque and that alteration has not been authorized by the account holder. 

• When the signatures put on the cheque do not match with the signatures stored in the records of the bank.

A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The mutual fund will have a fund manager that trades the pooled money on a regular basis. Currently, the worldwide value of all mutual funds totals more than $30 trillion.

(a) Unsatisfactory management 

(b) Difference of opinions 

(c) Heavy expenses of formation.

An alternate director is a temporary’ director who can represent an elected director at a meeting of the board of directors, provided (1) the articles of association of the company allow for such arrangement and the other elected directors of the firm do not object.

Retained earnings are the undistributed profits of the company. These earnings help the company to avoid external borrowings.

Advantages of Borrowing Funds from Finacial Institutions Immediate Infusion of Cash The main benefit of borrowing money from a financial institution is the ability to obtain a large amount of money quickly. This money can be used for necessary purchases and investments, including investments in your own education.

Financial institutions can lend more money than most friends and family members can.

terest Rates: Financial institutions attach interest rates to the principal amount borrowed. An interest rate can either be positive or negative. Borrowers with good credit can attain a loan with a lower interest rate. This, in turn, makes the loan less expensive in the long run. Borrowers with poor credit scores can likely only attain a loan at higher interest rates. This can make borrowing money an expensive decision and possibly unattractive as a financial option. Interest rates also fluctuate. As such, borrowers should watch interest rates to borrow when rates are low. A strong credit score and favourable market interest rates produce a favourable borrowing environment.

Collateral: Collateral is a legal interest, otherwise known as a lien, that a financial institution places on an asset in case you default on your loan. A common form of this interest is the home mortgage. Collateral removes the risks a financial institution takes on when lending out large sums of money (a house mortgage or car loan, for example). Upon default, the financial institution takes control of the asset and sells it for a profit to cover any losses. This secures the institution against losses and creates the freedom to lend out larger amounts. Loans backed by collateral, also known as secured loans, offer lower interest rates but present the clear danger of losing your property.

Traditional Banks and Credit Unions: Traditional banks and credit unions offer different benefits to borrowers. Traditional banks offer services to all potential customers. Even though anyone can potentially use the financial services of traditional banks, these financial institutions often offer loans aihigh-interest rates.

Credit unions, on the other hand, are open to specific groups of people, usually people who live in a specific geographical location or those who belong to certain professions. These financial institutions often offer their members lower interest rates, but. unlike a bank, not everyone can become a customer.

The steps necessary for the incorporation of a joint-stock co. are threefold. Initially, a necessary document has to be prepared and filed, this is followed by payment of necessary fees and lastly by obtaining the certificate of incorporation.

A brand basically serves as an identify for a company . This is much more than logos and names. The identity has to be created based on a different and unique idea and put through a compelling story . You have to make sure that it connects well with the all the potential customers and this should also form strong bonds with the customers.

Remedies Granted under the Act. The District Forum / State Commission / National Commission may pass one or more of the following orders to grant relief to the aggrieved consumer.

• to remove the defects pointed out by the appropriate laboratory from goods in question.

• to replace the goods with new goods of similar description which shall be free from any defect; 

• to return to the complainant the price or. as the case may be. the charges paid by the complainant; 

• to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to negligence of the opposite party.

Mobile banking means banking through mobile phone. Mobile banking allow s you to bank anytime anywhere through your mobile phone. You can access your banking information and make transactions on your Savings Account. Loan Accounts and Credit Cards at absolutely no cost. With the new m Shop facility on i Mobile. you will now be able to recharge your mobile phone and book movie tickets.

The significance of management in the modem business world has increased tremendously due to the following challenges.

• Growing size and complexity of the business. 

• The increasing specialization of work. 

• Cutthroat competition in the market. 

• Growing unionization of labour. 

• Sophisticated and capital intensive technology. 

• The increasing complexity of business decisions. 

• Need for research and development. 

• Need for optimum utilization of scarce resources

Management is equally important at the national level. It is an agent of change and economic growth. The prosperity, power and prestige of a nation depend upon the competence and dedication of its managers and administrators.

All the external forces : Business Environment includes all the forces, institutions and factors which directly or indirectly affect the business organizations.

Specific and general forces : Business environment includes specific forces such as investors, customers, competitors and suppliers. Non-human or general forces are Social, Legal, Technological. Political, etc. which affect the business indirectly.

Inter-relation : All the forces and factors of business environment are inter-related to each other. 

For example with inclination of youth towards western culture, the demand for fast food is increasing.

Uncertainty: It is very difficult to predict the changes of business environment. As environment is changing very fast for example in IT. fashion industry frequent and fast changes are taking place.

Business environment can be defined as the sum total of external factors that influence the functioning of a business enterprise. 

The main features of Business Environment arc given below: 

Specific and general forces: Business environment is made up of both specific and general forces. General forces such as economic, social, political, legal conditions indirectly influence the business operations. Whereas specific forces refers to customers, competitors, investors etc. which have a direct effect on the day-to-day working of the business.

Dynamic nature: Business environment is dynamic in nature i.e., it keeps on changing. Entry of new competitors in the market, development of new technology , shifts in the preferences of consumers are examples of environmental changes.

Complexity: Business environment is complex because it consists of several interrelated elements which keeps on changing. Many forces constitutes the business environment. 

For example, it is difficult to know the impact of economic, social, political, technological and other forces on changes in demand for a product or service.

Uncertainty : Business environment is very uncertain as one cannot predict future events particularly changes in technology and fashion which occur fast and frequently. Its dynamic nature makes it more challenging to handle uncertainty.

According to Philip Kotler, “Marketing is a social process by which individual groups obtain what the} need and want through creating offerings and freely exchanging products and sen ices of value with others”.

The various functions of marketing are given below : 

Marketing Planning and Product Development: It involves making plans for increasing production and sales, .promotion of product etc. and also laying down a course of action for achieving these objectives. It relates to the decision of quality standards to be used for shape or design of the product, packing etc. in order to make product attractive. Product planning and development involves introduction and development of new products, improvement of the existing product and dropping out unprofitable items from the product line.

Standardization and Grading: Standardization is the general term which includes the establishment of standards for products, the inspection of products in order to determine the standard to which they conform and where necessary the sorting of products into lots conforming to established standards. Grading refers to a process of classifying products into different groups on the basis of their features like size, shape, quality etc. This assures the quality, price and packaging of product to the customers.

Storage or Warehousing: Storage refers to the holding and preservation of goods from . the time of production until the time of consumption. There is a need for storage of adequate stock of goods to meet the demand in case of contingencies and to avoid unnecessary delays in delivery. Warehousing is essential for commodities like wheat, sugar, rice etc. which are produced during the particular seasons but demanded throughout the year.

Transportation : It means physical movement of goods from the place of production to the place of consumption. It serves as a link between the producers and consumers who are located at different places. A business firm analyses its transportation needs on the basis of factors like nature of the product, cost, location of the target market etc. It also removes the barrier of distance and help to stabilize prices by matching supply with demand.

Pricing: The amount of money which a customer is required to pay for purchasing the product is known as product price. It is important function in marketing because it determines the sales volumes and the amount of profits. Thus, while determining the price for a product, various factors like type of customers, their income, product demand etc. should be considered.

Gathering and Analyzing Information : Gathering and analyzing market information is necessary to identify the needs of the customers and take various decisions for the successful marketing of products and sendees. This is also important for making an analysis of the available opportunities and threats as well as strengths and weaknesses of the marketers and helps in deciding what opportunities can best be pursued by it. 

For example, rapid growth is predicted in several areas in India including internet, cell phones, cooked foods, ready made garments, etc. These areas offer opportunities to the producers and marketers.

Packaging and Labelling : Packaging is traditionally done to protect the goods from damage in transit and to facilitate easy transfer of goods to customers. But now it is also used by the manufacturer to establish his brand image as distinct from those of his rivals. Patanjali Honey’. ‘Boro Plus’. ‘Amul Butter’, ‘Tata Salt’ and All Out’ are some examples in this regard.

(i) Financing: This is the service of providing credit and money necessary for the producer on the seller to make goods available to the consumers. Financial is the lifeblood of modern business. It is the lubricant that facilitates the marketing of products. The prosperity working and future of a business unit mainly depends on the availability of adequate finance. Finance should also be available in sufficient amounts to face trade cycles, recession etc.

(ii) Price Determination: This is the process of fixing the price of a product on service. 

Generally, the price of a product is determined by the following factors:

• The demand for the product 

• Nature of the product 

• Cost of the product 

• Extent of competition 

• Government regulation if any etc. 

• Condition of product

The price of a product should be determined in such a way that it brings in the largest volume of sales with a sufficient margin of profit.

(iii) Grading: This refers to the classification of goods into well-defined classes on the basis of certain standards. The main objective of grading to introduce uniformity. It facilitates the fixation of prices of various grades in advance. It is costly to sell graded goods as consumers.

(iv) Sales Promotion: This is an effort to stimulate consumers to purchase more and more of a particular commodity. It is a marketing effort the function of which is to inform customers about the merits of a product on sen ice. It is used to create; capture and maintain demand. It influences the attitudes of behaviour and the purchase decision of consumers.

“Planning is not a guarantee of success.” It suffers from various limitations : 

Planning may not work in dynamic environment: The environment in which a business exists is very dynamic. Changes in technology, changes in government policies, legislative enactments, industrial unrest in the country etc. are important external limitation of planning. Thus, it becomes very difficult to forecast the future when the economic policies of the gov ernment keeps on changing continuously.

Time-Consuming : Considerable time is required for collection, analysis and interpretation of information for planning. Sometimes, a lot of time is taken in formulating the plans, as a result of which very less time is left to implement these plans. Planning is not practicable during emergencies and crisis w hen on the spot decisions are necessary.

Rigidity : In an organisation, a well defined plan is drawn to achieve some specified goals within a specified period of time. Employees become more concerned with observing the programmes and procedures rather than achieving the goals. They have to strictly adhere to the formulated plans irrespectiv e of changes in the environment. Therefore, rigidity in plans may create difficulty in an organisation.

Costly Process : Planning is an expensiv e process. The cost is in terms of money, time and effort. Moreover, sometimes the cost incurred in formulating plans turn out to be higher than the benefits actually received from these plans. Management must exercise intelligent judgement to balance the expenses of preparing plans against the benefits derived from them.

Direct Channels : When the producer or the manufacturer directly sells the goods to the customers without involving any middlemen, it is known as direct channel. It is the simplest and the shortest mode of distribution. Selling through Indian Post. Internet or door to door selling etc. are the examples of this channel. 

Methods of Direct Channel are :

• Door to door selling 

• Internet selling 

• Mail order selling 

• Company owned retail outlets 

• Telemarketing

Indirect Channels: When a manufacturer or a producer employs one or more middlemen to distribute goods, it is known as indirect channel.

Following are the main forms of indirect channels : 

Manufacturer-Retailer-Consumer : This channel involves the use of one middleman i.e. retailer who in turn sells them to the ultimate customers. It is usually adopted for specialty goods. 

For example Tata sells its cars through company approved retailers.

Manufacturer-Wholesaler-Retailer-Customer : Under this channel, wholesaler and retailer act as a link between the manufacturer and the customer. This is the most commonly used channel for distributing goods like soap, rice, wheat, clothes etc.

Manufacturer-Agent-Wholesaler-Retailer-Consumer : This level comprises of three levels; middlemen (agent), wholesaler and the retailer. The manufacturers supply the goods to their agents w ho in turn supply them to wholesalers and retailers. This level is usually used when a manufacturer deals in limited products and even then wants to cover a wide market.

Balance in share forfeiture account is capital gain and can be used to reissue to some other shareholder.

NEFT: NEFT- National Electronic Funds Transfer service can be used for sending funds inter-bank and intra-bank. The limit of remitting funds is from Rs 1 to limitless.

RTGS : RTGS – Real Time Gross Settlement service can also be utilized for sending funds inter-bank and intra-bank, but the minimum amount is Rs 2 lakh and no upper limit.

NEFT: Timings : 09:00 hours to 19:00 hours (Monday to Friday) 09:00 hours to 13:00 hours (Saturday)

RTGS: Timings : 09:00 hours to 16:30 hours (Monday to Friday) 09:00 hours to 13:30 hours (Saturday)

Capital gearing ratio is the ratio between the capital plus reserves i.e.. equity and fixed cost bearing securities. Fixed cost bearing securities include debentures, longterm mortgage loans etc.

(a) The capital market is a market for financial assets which have a long or indefinite maturity. Capital market involves various instruments which can be used for financial transactions. Capital market provides long term debt and equity finance for the government and the corporate sector. 

Capital market can be classified into primary and secondary markets. The primary market is a market for new shares, where as in the secondary market the existing securities are traded. Capital market institutions provide rupee loans, foreign exchange loans, consultancy services and underwriting. 

Functions of the capital market : 

(i) Mobilization of Savings : Capital market is an important source for mobilizing idle savings from the economy. It mobilizes funds from people for further investments in the productive channels of an economy. In that sense it activate the ideal monetary resources and puts them in proper investments. 

(ii) Capital Formation : Capital market helps in capital formation. Capital formation is net addition to the existing stock of capital in the economy. Through mobilization of ideal resources it generates savings; the mobilized savings are made available to various segments such as agriculture, industry, etc. This helps in increasing capital formation.

(b) The main objectives of industrial relations are : 

• To safeguard the interest of labour and management by securing the highest level of mutual understanding and goodwill among all those sections in the industry which participate in the process of production. 

• To avoid industrial conflict or strife and develop harmonious relations, which are an essential factor in the productivity of workers and the industrial progress of a country. 

• To raise productivity to a higher level in an era of full employment by lessening the tendency to high turnover and frequency absenteeism. 

• To establish and promote the growth of an industrial democracy based on labour partnership in the sharing of profits and of managerial decisions, so that ban individuals personality may grow its full stature for the benefit of the industry and of the country as well. 

• To eliminate or minimize the number of strikes and lockouts by providing reasonable wages, improved living and working conditions, said fringe benefits. 

• To improve the economic conditions of workers in the existing state of industrial managements and political government.

Redeemable Debentures: Redeemable debentures carry a specific date of redemption on the certificate. The company is legally bound to repay the principal amount to the debenture holders on that date.

Irredeemable (Perpetual) Debentures: On the other hand, irredeemable debentures, also known as perpetual debentures, do not carry any date of redemption. This means that there is no specific time of redemption of these debentures. They are redeemed either on the liquidation of the company or w hen the company chooses to pay them off to reduce their liability’ by issues a due notice to the debenture holders beforehand.

Convertible Debentures : Convertible debenture holders have an option of converting their holdings into equity’ shares. The rate of conversion and the period after which the conversion w ill take effect are declared in the terms and conditions of the agreement of debentures at the time of issue.

Non-Convertible Debentures: Non-convertible debentures are simple debentures with no such option of getting converted into equity. Their state will always remain of a debt and will not become equity’ at any point of time. 

(a) Advertising agency is an independent service-rendering organization. It delivers various services and performs many functions for its clients, who are advertisers. It is mainly involved in activities like planning, preparing and placing of ads in media. It also performs non-advertising functions for them. It offers them advisory and creative services. It does so to make a profit. 

Functions : 

(i) Media selection : Advertising agency helps an advertiser to select a proper media (ad platform) to promote his advertisement effectively. Media selection is a highly specialized function of an ad agency. It must select the most suitable media for its client’s ad. It must choose media, which has a potential to give best results for the lowest cost. It must select more than one media for the ad. For example, an advertisement can be put on television, the internet, newspapers, magazines, etc. After selecting the media, the ad agency must maintain goods contacts with the media. 

(ii) Sales promotion : Advertising agency performs sales promotion. It helps an advertiser to introduce sales promotion measures for the dealers and consumers. This helps to increase the sales of the product.

Consumers’ rights under section-6 of the consumer protection act are as follows : 

(1) Right to Safety : A consumer has the right to safety against such goods and services as are hazardous to his health, life and property. For example, spurious and sub-standard drugs; appliances made of low quality raw material, such as, electric press, pressure cooker, etc. and low quality food products like bread, milk, jam, butter, etc. The consumers have the right to safety against the loss caused by such products. 

(2) Right to be Informed/Right to Representation : A consumer has also the right that he should be provided with all the information on the basis of which he decides to buy goods or services. Such information relate to quality, purity, potency, standard, date of manufacture, method of use, etc. of the commodity. Thus, a producer is required to provide all such information in a proper manner, so the consumer is not cheated. 

(3) Right to Choose : A consumer has the absolute right to buy any goods or services of his choice from among the different goods or services available in the market. In other words, no seller can influence his choice in an unfair manner. If any seller does so, it will be deemed as interference in his right to choice. 

(4) Right to be Heard : Aconsumer has the right that his complaint be heard. Under this right, the consumer can file a complaint against all those things which are prejudicial to his interest. First, their rights mentioned above (Right to Safety; Right to be informed and Right to choose) have relevance only if the consumer has the right to file his complaint against them. These days, several large organizations have set up Consumer Service Cells with a view to providing the consumer the right to be heard. The function of the cell is to hear the complaints of the consumers and to take adequate measures to redress them. Many daily newspapers have also special columns to entertain the complaints of the consumers. 

(5) Right to Seek Red’ressal : This right provides compensation to the consumers against unfair trade practice of the seller. For instance, if the quantity and quality of the product do not conform to those promised by the seller, the buyer has the right to claim compensation. Several redressals are available to the consumer by way of compensation, such as free repair of the product, taking back of the product with refund of money, changing of the product by the seller.

(a) Interest on Debentures A/c Dr. 

To Debentures holders A/c 

To Income Tax Payable A/c 

(Being the Interest due to debenture holders and tax payable to Income tax Dept.)

(b) Debenture holders A/c Dr. 

To Bank A/c 

(Being the amount of interest paid to debenture holders)

Gross working capital is sum of current assets of a company and does not account for current liabilities. Gross working capital includes assets such as cash, checking and savings account balances, accounts receivable, short-term investments, inventory and marketable securities.

The two dimensions of Business Environment are : 

• Micro Environment 

• Macro Environment

A people can get a debit card by depositing money in the bank. The card holder can make immediate payment for the goods purchased or sendees availed with the help of debit card availed provided the seller has the terminal facility. Debit card can also be used to withdraw money from the ATM.

Consumer protection is necessary due to following reasons : 

Consumer is the purpose of business : Customer is the foundation of business and keeps it in existence. It is a consumer who not only relates to repeat sale but also provide positive feedback to other customers and thus results in an increased consumer base for business.

Business uses society’s resources : Business exercises considerable power and influence over society . It is the duty of the business to use the resources in such a way that the interests of society in general and consumers in particular are not damaged. Consumer’s protection aims at satisfying them and thus protect the long term interests of the business itself.

Ethics : Leading business houses all over the world have been founded on ethical values and they have followed high standards of ethics. To take care of consumer’s interests and to avoid any form of their exploitation is the moral duty of every business. Therefore, consumer protection is the ethical obligation of business.

Factoring implies raising finance through the sale or mortgage of book debts. The finance companies provide finance to business concerns through outright purchase of accounts receivables. The debtors of the firm make payments to it which in turn forwards them to the finance company.

A business organization cannot exist a vacuum. It needs living persons, natural resources and places and things to exist. The sum of all these factors and forces is called the business environment.

Difference between a product and a service :

Five types of debentures are : 

Mortgage and Unsecured Debentures : Mortgage debentures are those debentures which are secured by either a fixed charge or a floating charge on the assets of the company. In case, the company makes a default in payment, the debentureholders can recover their dues from the mortgage property. Whereas unsecured debentures are those debentures which are not secured by a charge.

Redeemable and Irredeemable Debentures: Redeemable debentures are repayable on a predetermined date or at any time prior to their maturity at the option of the company. Irredeemable debentures are those debentures that are not repayable during the lifetime of the company and hence will be repaid only when the company is wound up.

Bearer Debentures : Bearer debentures can be transferred by mere delivery as no record of such debentures is kept in the Register of Debentureholders. Payment of interest is made on production of coupons attached to the debenture. No legal formalities are required for their transfer and no formal notice or intimation to the company is necessary.

Registered Debentures : These arc the debentures, in respect of which the names, addresses and particulars of holdings of the debentureholders are entered in a register kept by the company. Such debentures can be transferred only by transfer deed or intimation to the company and not mere delivery.

Convertible and Non-Convertible Debentures: In case of convertible debentures, the debentureholders arc given the option to convert their debentures into equity shares after a specified period. Debentureholder have an option of exchanging the whole or a part of amount of their debentures for shares. In case of non-convertible debentures, these are those debentures which do not earn the right to be converted into equity shares.

There are different types of short term financial assistance provided by the commercial banks to business houses :

Cash Credits: It is revolving credit agreement under which a borrower is allowed to borrow upto a certain limit. Cash credit is of two types : Clean Cash Credit and Secured Cash Credit. In both types of cash credit, the borrower has to pay interest only on the amount actually utilized.

Discounting of Bills: Commercial banks provide short term finance to business concerns by discounting their bills of exchange, promissory notes and hundies. Banks pay the price lower than the face value and charge some commission.

Loan and Advances: A loan is a direct advance made in lump sum which is credited to a separate loan account in the name of the borrow er. These are usually secured by pledge of specific assets which are in the actual or constructive possession of the bank.

Bank Overdrafts: Under this arrangement, a customer having a current account with the bank is allowed to overdraw his account upto a specified amount. Interest is charged on the amount actually overdrawn and not on the amount sanctioned by the bank.

Principles of management are required for the following reasons : 

Providing managers with useful sights into reality : With the help of principles of management, the organisation will increase the managerial efficiency by adding to their knowledge and ability to understand the various situations. These principles enables managers to solve problems in a methodical way without wasting time and effort in trial and error. It also help to improve the art of management by suggesting how things should be done to get good results.

To train managers : Principles of management provide a conceptual framework for scientific and systematic training and development of managers. It is central point of management theory . Formal methods of training managers in institutes and univ ersities are possible only when there are fundamental principles and concepts.

To evaluate managerial behaviour: Principles are help to prescribe what one should do to manage things in a given situation. These principles attempt to evaluate the behaviour of managers.

To fulfill the social goals : Management principles enable managers to make optimum use of human and material resources. The principles of management and management theory have been devised in such a way that they help in fulfilling these responsibilities. Managers coordinate efforts of the people so that individual objectives get translated into social attainments.

To improve research : Growing popularity and utility of management principles have attracted experts towards their study and analysis. It also help the managers in taking decisions based on the objective assessment of the situation, free of any bias and prejudice. It will helped in expanding the horizon of knowledge in management.

Bank provides financial assistance in the following forms : 

• Loans and Advances to Priority and Non-Priority Sectors 

• Cash Credits to businessmen 

• Bank Overdrafts to businessmen and individuals 

• Discounting of Bills

Factoring is a transaction in which a business sells its accounts receivable, or invoices, to a third party commercial finance company, also known as a “factor.” This is done so that the business can receive cash more quickly than it would be waiting 30 to 60 days for a customer payment. Factoring is sometimes called “accounts receivable financing.”

Four external factors of micro environment of a business are : 

• Suppliers : Without a supplier, it is not possible to carry on the business. 

• Customers : Customers are another basic requirement to run a business. If no one is buying the products of your business, you will have to close its doors.

• Marketing Intermediaries: Middlemen have a direct impact on your business operation. They could be your distributors, wholesalers and other related people. 

• Financiers : Typically, business owners take out a loan to get started and the growth of the business depends upon their ability to obtain additional loans.

The integration concept of management involves coordination of human and non-living resources into effective operating unit for the achievement of organizational objects.

The principles of management have the following characteristics or features : 

Universal Application : The principles of management are universal in nature. They are applicable to all kinds of organisations and situations. 

For example, the principle of unity of direction is widely applied to all types of activities and to all organisations. Similarly, the principle of division of work has found application in all kinds of organisations in order to achieve the benefits of specialization. However, the extent of division of work may vary from situation to situation.

General Guidelines : Management principles have been evolved by management thinkers out of their experience and analysis. That’s why, they have been expressed in the form of general statements. Management principles cannot be stated as exact as the principles of physical sciences. The obvious reason is that management principles deal with human beings. Thus, no manager can ever be sure about the behavior of human beings who have different backgrounds, perceptions and needs.

Developed by Practice and Experimentation : Many of the management principles have been developed by practitioners including Henry Fayol, F. W. Taylor and L. Urwick. 

For example, Henry Fayol suggested principles of general management as a result of practice and F.W. Taylor developed principles of scientific management by virtue of his practice and experimentation. In particular. Taylor conducted experiments on time study, motion study and fatigue study to increase the efficiency of workers and reduce their fatigue and Henry Fayol suggested the principles to create conducive environment for people at work.

Flexibility : The principles of management are flexible in nature. Refinements in principles can take place as per need of the situation faced. Thus, they must be accepted as flexible and dynamic guidelines and not as rigid or static rules. They can be accepted as ‘diagnostic guides’. The application of management principles depends upon specific situation being faced by the manager. They can be modified by the manager to meet the needs of the situation. 

For example, the principle of division of labor may not be applicable in small firms to the same extent as in large firms.

Influence Human Behavior: The principles of management are meant for influencing human behavior and getting higher performance from them. They guide them how to respond under different situations. 

For example, principles like division of work, unity of command, discipline, unity of direction, etc., help the managers to regulate the behavior of operative employees. However, because of complex nature of human behavior, management principles might have limited application.

Maslow Theory: Abraham H. Maslow, an American psychologist has developed a classification of human needs which is known as ‘Hierarchy of Needs’. Needs are those desires, wants or urges of individuals which influence their behavior. 

Types of Needs:

Physiological Needs : These are the basic needs which a person is required to satisfy first of all in order to survive in life. These include the need for air. water, food, sleep, sex etc. As these needs are concerned with the sheer survival, they are at the base in the hierarchy of needs. An organisation can satisfy the physiological needs of its employees by offering good salary and comfortable working conditions.

Safety and Security Needs : These needs arise after the satisfaction of physiological needs. These includes physical safety against danger and economic security against old age, sickness etc. An employer can satisfy safety needs of his employees by offering job security, pension, gratuity, housing etc.

Social and Affiliation Needs : These are related to the natural desire to socialise or interact with others. The person needs love, affection, a sense of belonging, association, friendship with others. Once the people get their physiological and safety needs satisfied, the affiliation needs become more active.

Ego Needs : Ego needs include factors like self respect, autonomy status, recognition and attention from others. Organisation can satisfy these needs by offering challenging jobs, recognizing good performance, providing good job titles etc.

Self Actualization Needs : Self actualization needs refers to need to grow and self fulfillment. These needs arise after the satisfaction of all previous needs i.e., physiological, safety, social, ego needs. 

For example, A manager may provide opportunities for continuous learning, encourage creativity, grant independence and allow risk taking to help employees satisfy their self actualization needs.