STAFFING

001

TOPICS
TO COVER
- Introduction
- Importance
- Staffing Process
- Recruitment Process
- Selection Process
- Training and
Development
002

STAFFING
Staffing revolves around finding
the right person for the right job
having the right qualification, doing
the right job at the right time.

IMPORTANCE
FILLING THE ROLES BY
COMPETENT PERSONNEL OBTAINING
There will be no
use of job
position unless
*manager
and until these
are occupied by
employees.
Aisa koi kaam nahin jo
employee ne na kiya ho
003

PLACING RIGHT PERSON

AT THE RIGHT JOB
*manager

Staffing ensures higher performance

by placing right person on the right job
by proper recruitment and selection.
GROWTH OF
ENTERPRISEAN
By appointing
efficient staff,
staffing ensures
continuous
*manager
survival and
growth of the
*employee

enterprise
004

OPTIMUM UTILISATION
OF HUMAN RESOURCES
Through manpower
planning and job
analysis we can
find out the no. and
type of employees
required for a job,

HELPS IN
COMPETING
*employee
*manager

Two organisations can easily acquire

same type of physical and financial
resources, but an efficient staff helps
an organisation win over the other.
005

STAFFING
PROCESS
Staffing is both line as well as a staff activity.
ESTIMATING
REQUIREMENTMANPOWER
*Employee to Manager

Meri power ko mat bhul tu!

This involves finding out number and type of

employees needed by the organisation in near
future. While assessing the type of manpower
required, company should also make policy
regarding no. of people to be appointed from
different classes, and gender.
006

RECRUITMENT
*Manager

"Excuse me brother, brother Idhar!

Apply karke dekho humare yahan."

The process of inducing the people to apply for the

job in the organisation, so that the organisation
gets more choice and select better candidates.
SELECTION
It refers to
choosing the most
suitable candidate
*manager

to fill the vacant

job position. The
selection ia done
through tests and
interviews, etc. "Employee 1, mein
tumhe chunta hoon!"
007

PLACEMENT AND
ORIENTATION
Occupying of post by
the candidate for
which he is selected
Every manager
after placement

is Placement.
Orientation is
introduction of new
employees to
"Tu Mumbai aa raha hai"
existing employees.
TRAINING AND
DEVELOPMENT

Tayyari Jeet Ki
Organisations provide trainings to improve the
competence of employees and to motivate them .
008

PERFORMANCE
APPRAISAL
*manager

*employee

This means evaluating the performance

of employees against some standards.
Also, superiors prepare a feedback report
on the basis of performance appraisal.
PROMOTION AND
CAREER PLANNING
*manager

This means getting placed at a higher job position

with more pay, job satisfaction and responsibility.
009

COMPENSATION
*manager

It refers to the price of the job. It includes pays,

reward and other incentives given to employees.
It includes direct as well as indirect payments.

COMPONENTS
OF STAFFING
- RECRUITMENT
- SELECTION
- TRAINING AND DEVELOPMENT
010

RECRUITMENT
*Manager

"Excuse me brother, brother Idhar!

Apply karke dekho humare yahan."

Recruitment means attracting more and more

candidates to apply for vacant job positions in
the organisations. The end result of
recruitment function is receiving large
number of application to make selection from.
SOURCES OF
RECRUITMENT
- INTERNAL SOURCES OF RECRUITMENT
- EXTERNAL SOURCES OF RECRUITMENT
011

INTERNAL SOURCES
OF RECRUITMENT
*Existing
Employee

*Manager

Kachra Bhi Khelega

The vacant job positions are filled by inducing
the existing employees of the organisation, and
no outsiders are permitted in internal sources.
ADVANTAGES OF INTERNAL
SOURCES OF RECRUITMENT
IT IS ECONOMICAL
"Sasta Nahin,
Sabse Achha!"
*Manager
012

MOTIVATES EXISTING
EMPLOYEES
*Management

"Bro Hum Tujhe

Promote kar
rahe hain"

*Employee

LESS EXPENDITURE
ON TRAINING
*Management

Training ka 150 rupiya dega!

013

LESS EMPLOYEES
CHURN RATE
*Management to Employee*

IMPROVES PERFORMANCE
OF EMPLOYEES
*Management

*Employee
014

DRAWBACKS OF INTERNAL
SOURCES OF RECRUITMENT
NO FRESH IDEAS
WILL COME
*Rigid Ideas

*Management
*Fresh Ideas

*Rigid Ideas
*Management

*Fresh Ideas
015

THERE WILL BE
LIMITED CHOICE
*When employee is not
allowed to choose*

NOT SUITABLE FOR

NEW ORGANISATION

"Kya matlab naye organisation

ke liye suitable nahin hai?"
016

FREQUENT TRANSFER
REDUCES PRODUCTIVITY

*Employees

EXTERNAL SOURCES
OF RECRUITMENT
*Management to Employee*

When the candidates from outside the

organisation are invited to fill the vacant job
position then it is known as external recruitment.
017

ADVANTAGES OF EXTERNAL
SOURCES OF RECRUITMENT
FRESH TALENT

WIDER CHOICE

DANNY VAI TO
THE MOON
018

QUALIFIED PERSONNEL

LATEST TECHNOLOGICAL
KNOWLEDGE
*Employee
019

COMPETITIVE SPIRIT

tHaRa bHaI jOgInDeR

MORALE OF EXISTING
EMPLOYEES GOES DOWN

*Morale of the employees*

020

NEW EMPLOYEES'
ADJUSTMENT IS DIFFICULT

*Employee

THIS GOES VERY EXPENSIVE

*Management
021

LENGTHY PROCESS
*Management

"Kam se kam 30 saal ka time to de

re external recruitment ke liye!"
022

SELECTION
*Employee

Selection is all about discovering most

promising and suitable candidate to fill up
the vacant job position in the organisation.
023
SELECTION PROCESS
PRELIMINARY SCREENING

*Employee

Preliminary screening is done to eliminate

unqualified and misfit candidates based on
information supplied in application form.
SELECTION TEST
Employee: Apne baare
mein kuch batau?

*Management
024

Organisation conducts a written test to

find out the practical knowledge of the
candidates, and it is called Selection Test.
EMPLOYMENT INTERVIEW

The candidates who qualify the test are

called for interviews. To conduct the final
interview a panel of experts is called.
025

CHECKING REFERENCES
AND BACKGROUND
*Management

If the candidate qualifies the interview then the

organisation prefers to check with the references
about the personal character of the candidate.
SELECTION DECISION

*Every
Manager
Ever*
026

The candidates who pass the test, interview and

references check are included in selection list and
the managers select most suitable candidate.
MEDICAL EXAMINATION
*Employee *Doctor

The candidates selected are sent for medical fitness test,

to get an insight about the employee's health status.
027

JOB OFFER
The applicants who
clear the medical
test are given job
offer through letter
of appointment. *Job Offer

Ee lo.. Monday se join kar lo!

CONTRACT OF
EMPLOYMENT
*Management

*Contract

Yeh Tune Kya Likha Hai?

Hum Impressed hai tujhse!
When candidate accepts the job offer, it refers to
signing of contract of employment, also employer
and employee exchange certain documents.
028

TRAINING AND
DEVELOPMENT
Training means equipping the employees with
the required skill to perform the job. The
candidates are sent for training so that they
can perform the job in the expected manner.
 BENEFITS OF
029

ORGANISATION
REDUCED
LEARNING TIME
Training means JALDI JALDI EMPLOYEE KO

equipping the
TRAIN KARVA DETA HUN

employees with the *Organisation

required skill to
perform the job. The
candidates are sent for
training so that they
can perform the job in
the expected manner. FIR UNKI PRODUCTIVITY
BHI TO ZYADA KARVANI HAI

BETTER PERFORMANCE
030
ATTITUDE
FORMATION

It aims at moulding the employees so that they can

develop positive attitude for the organisation.
MANAGING
MANPOWER NEED

In some cases, organisations hire untrained

people and train them with the required skill
according to their organisation's need.
031

HELPS TO ADAPT
CHANGES

BENEFITS OF
EMPLOYEES
BETTER CAREER
OPTIONS Work Experience
Better Career Option
032

EARNING MORE

*Employees

Improvement in efficient performance of

employees help the employees to earn more.
 METHODS
033

OF TRAINING

On-the-job Off-the-job
Training Training
- Apprenticeship - Vestibule School
Training

- Internship

- Induction or
Orientation Training
 ON-THE-JOB
034

TRAINING
APPRENTICESHIP
TRAINING
*Employees

*Trainer

Fata-fat yeh kaam khatam

karoge, toh dusra kaam milega!
In the Apprenticeship programme, the master
worker is appointed who guides the worker or
learner regarding the skill of job, in order to
take the full charge of the job eventually.
 ON-THE-JOB
035

TRAINING
INTERNSHIP
*Employees

Shuru Certificate ke liye kiye

the, ab maja aa raha hai.
Internship is an agreement between the
professional institutes and the corporate sector
where professional institutes send their
students to various companies so that they can
practise the theoritical knowledge acquired by
them through professional institutes.
036

ON-THE-JOB
TRAINING
INDUCTION OR
ORIENTATION TRAINING
*Management

It is a process of receiving or welcoming an

employee when he first joins the company and
giving him the basic information he needs to
settle down quickly and happily and start work.
 OFF-THE-JOB
037

TRAINING
VESTIBULE SCHOOL

*Management

Mera ek machinery nakli hai, meine yeh

employees ko train karne ke liye rakha hai.

When the expensive and delicate machineries are

involved then employees avoid using on-the-job
training. A dummy model of machinery is prepared
and employees are trained on dummy model.
DIRECTING
001

TOPICS
TO COVER
- Introduction
- Importance
- Features
- Elements
of Directing
- Supervision
- Motivation
- Leadership
- Communication
002

DIRECTING
Directing is concerned with instructing, guiding,
inspiring and motivating the employees in the
organisation so that their efforts result in
achievement of organisational goal.
Employee

Director
003

IMPORTANCE
TO INITIATE ACTION
Director

The superiors direct the actions of employees

towards the predetermined goals of the organisation.
TO INTEGRATE
EMPLOYEE'S EFFORTS

Employees working at different levels need

their efforts to be integrated and co-ordinated.
004

MEANS OF
MOTIVATION

High Sir!

Through directions and instructions the superiors try to

motivate the employees to perform to their best ability.
TO FACILITATE
CHANGE
Director

Generally, the employees hesitate in accepting

the changes but through directing function the
changes can be implemented more easily.
005

BRING STABILITY AND

IN THE ORGANISATION BALANCE

Attitude 01

Attitude 02
Perfectly Balanced

Ideal
Director

When the employees are working at different levels

they develop different attitudes and the balance
between their attitudes is made by directing function.
006

FEATURES
INITIATES ACTION

By giving directions or instructions the managers

get the work started in the organisation.
CONTINUOUS FUNCTION
A manager has to
continuously guide,
supervise, and motivate
his subordinates.
"Aap baar baar mujhe
direct kar rahe hain"
007

PERVASIVE FUNCTION

Directing is present everywhere as the

subordinates at every level of the organisation
need to be instructed and directed.
FLOWS FROM
TOP TO BOTTOM
Dir
ect
ing A manager has to
continuously guide,
supervise, and motivate
his subordinates.
008

PERFORMANCE ORIENTED
Directing converts plans
into performance, as it
aims to bring efficiency
in the performance.

HUMAN ELEMENT
Directing function
involves study and
moulding of human
behaviour. It improves
interpersonal and
intergroup relationship.
009

ELEMENTS
OF DIRECTING
SUPERVISION
MOTIVATION
COMMUNICATION
LEADERSHIP
010

SUPERVISION
Supervisor

The supervision means instructing, guiding,

monitoring and observing the employees while
they are performing jobs in the organisation.
011

MOTIVATION
Every Director to his Employee

Thukra ke mera pyaar,

mera intekaam dekhegi!

Motivation is stimulating, inspiring and inducing

the employees to perform to their best capacity.
It also consists of:
- Motive
- Motivation
- Motivators.
 FEATURES OF
012

MOTIVATION
PSYCHOLOGICAL
PHENOMENON
Motivation

It is an internal feeling which means

it cannot be forced on employees.
PRODUCES GOAL
DIRECTED BEHAVIOUR
It induces people
to behave in such
a manner that
they can achieve
their goal.
013

CAN BE POSITIVE
WELL AS NEGATIVEAS
Motivators can be
positive: promotion,
increment, bonus,
respect, recognition.
Motivators can be
negative: warning,
demotion, stopping
increments.

COMPLEX PROCESS
Motivation is a
complex and *Manager
difficult task, a
manager must
understand
human needs to
motivate people.
014

MASLOW'S
HIERARCHY
OF NEEDS
PHSYCNHEOELDOSGICAL SNAEFETY
EDS
BENLOENEDGSING
ENSETEEDESM
SE LF
ACTUNALISATION
EEDS
 BASIC
015

PHYSIOLOGICAL
NEEDS
Most basic in the hierarchy and
corresponds to primary needs.
Hunger, thirst, shelter, sleep.
 SAFETY/SECURITY
016

NEEDS

Security and protection

from physical and
emotional harm,
stability of Income etc.
 AFFILIATE/
017

BELONGING
NEEDS

Refer to affection, sense of

belongingness, acceptance
and friendship
018

ESTEEM
NEEDS

Include factors such as self-

respect, autonomy status,
recognition and attention
019

SELF
ACTUALIZATION
NEEDS

The drive to become what one is

capable of becoming. These needs
include growth, self-fulfillment and
achievement of goals.
 FINANCIAL
019

INCENTIVES
 FINANCIAL
019

INCENTIVES
Financial incentives can be provided on an
individual or group basis and satisfy the monetary
and future security needs of individuals.
(a) Pay and Allowances
(b) Bonus
(c) Productivity linked Wage Incentives
(d) Profit-Sharing
(e) Retirement Benefits
(f) Stock Options or Co-partnership
(g) Commission
(h) Perquisites
 NON-FINANCIAL
019

INCENTIVES
 NON-FINANCIAL
019

INCENTIVES
Non-financial incentives focus mainly on the
fulfillment of these needs and thus cannot be
measured in terms of money.
(a) Status

(b) Organizational Climate

(c) Career Advancement Opportunity
(d) Job Enrichment
(e) Job Security
(f) Employee Recognition Programmes
(g) Employee Participation
(h) Employee Empowerment
 020

LEADERSHIP
"Tujhe is mahine organisation "Theek hai sir mein yeh
ke liye yeh goal achieve karne goals apne skills ke through
padega". achieve kar lunga!"
Director Employee Director
Employee

Leadership is a process of influencing

the behaviour of people at work towards
the achievement of specified goal.
021

FEATURES OF
LEADERSHIP
Leadership indicates the ability of
an individual to influence others.

Leadership tries to bring

change in behaviour
022
Leadership shows interpersonal
relationship between leaders and followers.
"Yeh dil maange more!"

Leadership is to
achieve common goal
 DIFFERENT STYLES
023

OF LEADERSHIP
AUTOCRATIC OR
AUTHORITATIVE
LEADERSHIP

In this style of leadership, a leader takes all

the decisions on his own and gives orders to
his or her subordinate to implement them.
024

ADVANTAGES
AUTOCRATIC OF
LEADERSHIP
Quick decision making
Provides strong motivation
and satisfaction to the leader.
May bring positive result
when great speed is requires.

DISADVANTAGES
AUTOCRATIC OF
LEADERSHIP
Low moral among subordinates
No development of
subordinates takes place
Potential and creativity of
subordinates are not utilised.
 DEMOCRATIVE OR
025

PARTICIPATIVE
LEADERSHIP

In this style of leadership a leader takes

decisions after consulting with subordinates
and encourages them to participate in decision
making.
026

ADVANTAGES
DEMOCRATIVE OFLEADERSHIP
Improves the job satisfaction of employees.
Improves decision making ability of
subordinates.
Develops positive attitude in the team

DISADVANTAGES
DEMOCRATIVE OF
LEADERSHIP
Time consuming and may result in delay in
decision
Does not yield positive result when
subordinates not prefer communication.
Leader may pass the work to subordinates
and abdicate responsibility.
027

FREE-REIN LEADERSHIP
Manager*

In this style of leadership a leader gives freedom

to his subordinate to take decisions and
execute work assigned to them and the leader
acts as observer or guide.
028

ADVANTAGES
REIN LEADERSHIP OF FREE-
Positive effect on the job
satisfaction of employees.
Maximum scope for
development of subordinates.
Full utilisation of potential and
capacity of employees.

DISADVANTAGES
REIN LEADERSHIP OF FREE-
Subordinates do not get
guidance of the leader.
It ignores the contribution of
a leader.
Working in different
direction may result in chaos.
 029

COMMUNICATION
Kaam kaisa chal
raha hai bro?

Ekdum achha sir,

monthly goals se fast
jaarhe hain.
I like it, aaj Darbaar
me team ki party!

The communication process begins when

sender thinks of an idea or message to
be conveyed to other person.
030

Sender Message

Media Encoding

Decoding Receiver

Feedback

Communication
Process
 IMPORTANCE OF
031

COMMUNICATION
FACILITATES
COORDINATION
032

PROVIDES DATA FOR

NECESSARY DECISION MAKING
Manager*

INCREASE MANAGERIAL
EFFICIENCY
Manager*

Employee*
033

PROMOTES COOPERATION
AND INDUSTRIAL PEACE
Employee*

Manager*

ESTABLISHES EFFECTIVE
LEADERSHIP
Manager*

Employee*
034

FORMAL
COMMUNICATION

Formal Communication refers to official

communication at official peace between the
people who are officially related to each other.
035

TYPES OF
COMMUNICATION
VERTICAL
COMMUNICATION

HORIZONTAL
COMMUNICATION
036

INFORMAL
COMMUNICATION

Communication between different members of

organisation who are not officially attached to
each other is known as informal communication.
037

BARRIERS TO EFFECTIVE
COMMUNICATION
Sometimes the message sent by the
sender does not reach the receiver in the
same manner as expected by the sender.
Communication
Barrier
Message

Message

Communication
Barrier
 SEMANTIC
038

BARRIERS
Employee*
Manager*

Sometimes the same words and

sentences can be understood differently
by different people in the organisation.
PSYCHOLOGICAL
BARRIERS
Confused Employee*

The state of mind has great influence

over the information and its reflection.
 ORGANISATIONAL
039

BARRIERS
Manager*

Factors related to organisational structure,

authority relationship, rules, regulations
may act as organisational barriers.
PERSONAL
BARRIERS
Certain personal
*Employee-1

factors of sender
and receiver may
influence the free
*Employee-2

flow of information.
Bh*nd samajh nahi aa
raha hai kisi ko kuch
 IMPROVING
040

COMMUNICATION
EFFECTIVENESS
USE OF PROPER LANGUAGE, TONE
AND CONTENTS OF MESSAGE
*Manager

PROPER FEEDBACK
*Manager
041

FOLLOW UP
COMMUNICATION

OPEN MIND
001

CONTROLLING
TOPICS
TO COVER
- Introduction
- Nature
- Importance
- Controlling Process
002

CONTROLLING
Controlling function can be defined as
comparison of actual performance
with the planned performance.
 NATURE OF
003

CONTROLLING
GOAL ORIENTED

Controlling makes sure every one follows the

plan or work is accomplished as per the plan.
004

ALL PERVASIVE
Controlling
Manager

Controlling is not the task of top level managers

only but managers working at all the levels.
BACKWARD AS WELL
AS FORWARD LOOKING
forward
looking

backward
looking

Managers compare the planned performance

with actual performance and also plan accordingly.
005

CONTINUOUS FUNCTION
controlling

Dhote Jao Dhote Jao

Controlling is not a time job but it is an ongoing process.

006

IMPORTANCE
CONTROLLINGOF
ACHIEVING
ORGANISATIONAL GOALS
controlling
Controlling function ensures
that all the activities in the
manager

controlling
organisational
organisation go according to
the plan.
goals
manager

controlling
manager

organisational organisational
goals goals

EVALUATING
OF STANDARDACCURACY
Management verifies
accuracy of standard
by a careful check.
007

EFFICIENT USE
OF RESOURCES
Each activity is
performed according to
predetermined standards.
This is most and effective
use of resources.

IMPROVES EMPLOYEES
MOTIVATION Who are we? Employees

An effective control
system communicates
the goals and
standards of appraisal
for employees to What do we want? Motivation, through
subordinates well in
Controlling

advance.
008

ENSURING ORDER
AND DISCIPLINE

Effective controlling system keeps the

subordinates under check and makes sure
they perform their functions effienciently.
009

CONTROLLING
PROCESS
SETTING PERFORMANCE
STANDARDS

"Standards are This! I want this!"

Standards are target against which the actual
performance is measured. The standards must be
achievable, high or very high standards which
cannot be achieved are of no use.
010

MEASURE OF
PERFORMANCEACTUAL

After setting up standards, the performance

of the employees is measured by evaluating
the actual work done by the employees.
COMPARE PERFORMANCE
AGAINST STANDARD
After measuring the
performance the
manager compares the
actual performance
with the planned
performance and
standard.
 011

ANALYSING
DEVIATIONS
If there is mismatch
between planned
performance and actual
performance, it must be
Deviations Misleading
information
brought down to the
management's notice.
Low productivity

TAKING CORRECTIVE
MEASURES
The next step is to
know the reasons for
such deviations and
trying to remove
deviations in future.
001

FINANCIAL
MARKET
TOPICS
TO COVER
- Introduction
- Functions
- Types
- Money Markets
and its instruments
- Capital markets
and its types
- Stock Exchange
002

FINANCIAL
MARKETS
Financial market is a link between the savers
and borrowers. The market transfers the
money from those who have surplus to those
who are in need of investment.

*Savers *Borrowers

*Financial
Markets
003

FUNCTIONS
OF FINANCIAL
MARKETS
MOBILISATION
CHANNELISING OF SAVINGS
THEM INTO AND
THE
MOST PRODUCTIVE USE

"Kehndi Hundi si savings

nu channelise kara de!"
004

FACILITATE PRICE DISCOVERY

Bhaiya financial
Demand and supply
of financial assets
securities dikhana?

and securities in
financial markets
help in deciding the
"Thoda sasta
prices of various
financial securities.
wala dikha do!"

PROVIDE
TO LIQUIDITY
FINANCIAL
ASSETS
Financial market Tohfe me phool nahi laayi?

provides a platform
to convert
securities in cash. Phool? Tohfa aisa do
jo dost ke kaam aaye

u idity to
Liq ancial
Fin ets
Ass
005

REDUCE THE COST

OF TRANSACTION

Because Financial market provide

complete information, investors and
companies do not have to spend much on
getting this information about prices.
006

TYPES OF
FINANCIAL
MARKETS
MONEY MARKET
CAPITAL MARKET
PRIMARY
MARKET SECONDARY
MARKET
007

MONEY
MARKET
MARKET FOR SHORT TERM

Money market is a market for short term

funds for use for a period of upto one year.
Features:
- No geographical location
- Market for short term.
008

INSTRUMENTS
MONEY MARKETOF
CALL MONEY "Aye Raju, Call
money ek din ke
liye bhijva de
meri bank ko!"

The money borrowed or lent on demand for a

short period which is generally one day.
Mostly banks use call money to solve
temporary cash shortage problems.
009

TREASURY BILLS

T Bills are issued by Reserve Bank of India on

behalf of the Government of India. These bills
are negotiable instruments and are freely
transferable, and are issued at discount.
010

COMMERCIAL BILLS
*Business 1

Business 2*

Trade bills or accomodation bills are bills

drawn by one business firm on another.
These are common instruments used in
credit purchase and sale. These have short
term maturity period: generally 90 days.
011

COMMERCIAL PAPER

Commercial Banks*

Public/Private Companies

It is an unsecured promissory note

issued by public or private sector
companies with a fixed maturity period
which varies from 15 days to one year.
012

CERTIFICATE
OF DEPOSITS
Banks

Tum mujhe paise, Main tumhe

Cerficate of Deposit dunga

It is a time or deposit which can be sold in the

secondary market. It is a bearer certificate
or document of title. It is also a negotiable
instrument and can be transferred easily.
013

CAPITAL
MARKET
MARKET FOR LONG TERM

Capital Market is a market for medium and long

term funds. It includes all the organisations,
institutions and instruments that provide long
term and medium term funds.
014

TYPES OF
CAPITAL MARKET
- PRIMARY MARKET
- SECONDARY MARKET
PRIMARY MARKET
015

In this market, securities are sold for

the first time, i.e, new securities are
issued from the company.

Securities*

Company*

New Securities are issued

from the company.
016

METHOD
OF OF FLOATATION
SECURITIES IN
PRIMARY MARKET
PUBLIC ISSUE
PROSPECTUS THROUGH

Company*

Company issues a prospectus to inform and

attract general public. Company provides
details about the purpose for which funds are
being raised, past financial performance of the
company, background and future prospects of
company.
017

OFFER FOR SALE

Company*

Securities*

New securities are offered to general

public but not directly by the company
but by an intermediary who buys whole
lot of securities from the company, the
intermediaries are the firms of brokers.
 018

PRIVATE PLACEMENT
General Public
Company* (Selected)
Intermediary*

Securities*

The securities are sold by the company

to an intermediary at a fixed price and in
second step intermediaries sell these
securities not to general public but to
selected clients at higher price.
019

RIGHT ISSUE

SHARES

Companies*

The issue of new shares to existing

shareholders. Each shareholder has the
right to subscribe to the new shares in the
proportion of shares he already holds.
020

ELECTRIC INITIAL
PUBLIC OFER

Company Company
before e-IPO after e-IPO

It is the new method of issuing securities

through online system of stock exchange.
In this company has to appoint registered
brokers for the purpose of accepting
applications and placing orders.
021

SECONDARY
MARKET
The secondary market is the market for the
sale and purchase of previously issued or
second hand securities. The securities are
sold by existing investors to other investors.
022

STOCK EXCHANGE

An organisation or body of individuals,

whether incorporated or not established
for the purpose of assisting, regulating
and controlling of business in buying,
selling and dealing in securities.
023

FUNCTIONS
STOCK OF
EXCHANGE
ECONOMIC BAROMETER

Every major change in country and economy is

reflected in the prices of shares. It indicates
the boom or recession cycle of the economy.
PRICING OF SECURITIES

*demand and
supply factors*
*share prices*

The stock market helps to value the securities on the

basis of demand and supply factors. The securities of
profitable and growth oriented companies are valued
higher as there is more demand for such securities.
024
CONTRIBUTE TO ECONOMIC GROWTH

*investor*
*stock
exchange*

The process of buying and selling of stocks helps to

invest in most productive investment proposal and
this leads to capital formation and economic growth.
BETTER ALLOCATION OF CAPITAL

*share
price*

The shares of profit making companies are

quoted at higher prices and are actively
traded so such companies can easily raise
fresh capital from stock market.
025

SAFETY OF TRANSACTIONS
SEBI

Hum sabse surakshit jagah par khade hai

SCAM

SEBI

The stock market only trades listed

securities, which is confirmed after
verifying the soundness of the company.
026

PROVIDING SCOPE FOR SPECULATION

I have seen everything that has ever happened.

ever will happen. ever could happen. and yet...

To ensure liquidity and demand of supply

of securities the stock exchange permits
healthy speculation of securities.
LIQUIDITY

*investor*

bhai paisa ho to kya kuch nahi ho sakta!

The presence of stock exchange market gives

assurance to investors that their investment can
be converted into cash whenever they want.
027
PROMOTES THE HABITS OF
SAVINGS AND INVESTMENT

*stock *investor*
exchange*

The attractive opportunities to invest encourages

people to save more and invest in securities.
028

TRADING PROCEDURE
ON A STOCK EXCHANGE
Previously the buying and selling of securities
was done in trading floor of stock exchange,
today it is executed through computer and it
involves the following steps:

1. SELECTION OF BROKER

Broker! Mhe tumhe chunta hu

2.ACCOUNT
OPENINGWITH
DEMAT
029

DEPOSITORY
*investor*
*demat
account*

Arey Demat account kholo bhai!!

Demat account refers to an account which an

Indian citizen must open with the depository
participantsto trade in listed securities in
electronics form
Depository is an institution or an organisation
wich holds securities.
At present, There are two depositories: NSDL and
CDSL
3. PLACING THE ORDER
030

investor

Bhaiya thode shares nikal do!

investor

Thoda sasta dikhana!

4.ANDMATCH THE SHARE

BEST PRICE
investor

Best I can do is buy the best shares.

5. EXECUTING ORDER
031

broker

woh physical form me shares order

karne ka option dikh raha hai?

investor

han kardiya!!! kardiya!!!

broker

Electronic form me order karna tha!

6.CONTRACT
ISSUE OFNOTE
032

*broker writing a detailed contract note*

After Trade, the broker issues a contract note.

This note contains the details of a number of
shares bought or sold, the price, the date, time of
deal and brokerage charges.
This is an important legal document as it helps to
settle disputes claims between investors and
brokers.
7.ANDDELIVERY OF SHARE
033

MAKING PAYMENT
broker

Yeh lijiye Shares! Payment karva dijiye.

The investors has to deliver the shares sold o pay

cash for the shares bought.
This should be done immediately after receiving
the contract note or before the day when the
broker shall make payment or delivery of shares
to the exchange.
This is called Pay in Day
8. STATEMENT CYCLE
034

2 din baad aana han!

mast settlement ho jayega.

Settlement cycle is generally of T + 2 days. On T +

2 day, the Stock Exchange will deliver the share
or make payment to the other broker.
This is called Pay out Day.
035

DEMATERIALISATION
AND DEPOSITORIES
Dematerialisation is a process where
securities held by investor in physical form
are cancelled and the investor is given an
electronic entry or number so that he can
hold it as an electronic balance in account.
Share in
Shareholder physical form

Jaa raha hun lekin wapas zaroor aaunga!

036

BENEFITS OF
DEMATERIALISATION
Holding shares in demat form is very
convenient.
Physical shares can be converted into
electronic form or vice versa, i.e., .
Demat securities can be even be
pledged to get loans.
No danger of loss, theft or forgery of
share certificates.
Reduces Paper work
It is broker's responsibility tp credit the
corrct number of shares in the
investor's account.
Securities of different companies can
be held in a single demat account.
WORKING OF
037

DEMAT SYSTEM
*Demat
Account*

Pehle tu de!

1. The investor must select a Depository Participant before

opening a demat account.
2. Filling out an account opening form with PAN card and photo.
3. Physical share certificates to be given to DP with a
dematerialisation request form.
4. If applying for IPO shares, simply provide demat account and DP
details, and allotment will be credited to demat account.
5. If shares are sold through a broker, instruct the DP to debit the
account.
6. Instructs his DP to deliver the shares to the exchange.
7. The broker then compensates the person for the shares sold.
8. All transactions must be completed within 2 days, i.e. share
delivery. Since April 2003, buyers' payment settlement period is
T+2.
038

CONSTITUENTS OF
DEPOSITORY SYSTEM
1. The Depository
2. The Depository participants.
THE DEPOSITORY
Depository is the apex organisation or
unit in the depository system. It is just
like a bank where investor can deposit
and winthdraw the money or securities.
THE DEPOSITORY
PARTICIPANTS
Depository participant is an agent of the
depository. An investor has to interact only
with a DP and not with the depository for all
his dealings in shares in electronic form.
039

SEBI
Securities and Exchange Board of India
was set up with the main purpose of
keeping a check on malpractices and
protect the interest of investors.

SEBI

Investor
040

FUNCTIONS
OF SEBI
The SEBI performs functions to meet its
objectives. To meet three objectives
SEBI has three important functions.
1. Protective functions
2. Developmental functions
3. Regulatory functions.

SEBI

Chalo bhai, dekho ab mein kya karta hoon!

 041

PROTECTIVE
FUNCTIONS

Bacha le re SEBI!
1. Check Price Rigging : SEBI prohibits manipulating
the prices of securities with the main objective of
inflating or depressing the market price of securities
2. Prohibits Insider Trading: SEBI prohibits insider
training and any leak of sensitive information of a
company
3.SEBI prohibits fraudulent and unfair trade practice:
SEBI prohibits companies from making false or
misleading statements that could lead to the sale or
purchase of securities.
042

4.SEBI educates investors to help them

evaluate and select the most profitable
securities.
5. SEBI promotes fair practises and a code of
conduct in the securities market by:
(a) SEBI has issued guidelines to protect
debenture holders' interests.
(b) Insider trading is punishable by a stiff fine
and imprisonment by SEBI.
(c) SEBI has stopped preferential allotment of
shares that is not linked to market prices.
 043

DEVELOPMENTAL
FUNCTIONS
SEBI to Investors

Bachna bhi hai, aage badhna bhi hai!

The SEBI performs these functions to promote and develop
stock exchange activities and increase business. SEBI performs
the following developmental functions:
(i) SEBI promotes securities market intermediary training.
(ii) SEBI promotes stock exchange activities by adopting flexible
and adaptable approach:
Internet trading is permitted through registered stock brokers.
(iii) To reduce issue costs, SEBI made underwriting optional.
(iv) Even primary market IPOs are allowed via stock exchange.
044

REGULATORY
FUNCTIONS

SEBI to Fraud

Oye! Wapas rakh use

SEBI regulates the stock exchange

business. The following functions are
performed to regulate the stock exchange:
To regulate intermediaries like merchant
bankers, brokers, underwriters, etc, SEBI
has framed rules and regulations.
001

FINANCIAL
MANAGEMENT
TOPICS
TO COVER
- Introduction
- Role
- Objectives
- Financial Decisions
- Financial Planning
- Capital Structure
- Fixed Capital
- Working Capital
002

FINANCIAL
MANAGEMENT
*Business
to Investor*

Financial Management is concerned with

efficient acquisition and allocation of funds.
003

*Entrepreneur: Sir, we need funds to

buy fixed assets and raw materials.
*Investor
004

ROLE OF
FINANCIAL
MANAGEMENT
All the financial activities of a
company are directly or indirectly
affected by the financial management.
SIZE AND COMPOSITION
OF FIXED ASSETS

Depends directly on investment decision, i.e,

how much capital a company is planning to
invest.
005

AMOUNT AND COMPOSITION

OF CURRENT ASSETS
Manager*

The amount of current assets and its division

in cash, bills receivable, inventories also
depend upon financial decisions.
THE AMOUNT OF LONG TERM
AND SHORT TERM FUNDS
006

BREAK UP OF LONG TERM

FINANCING INTO DEBT, EQUITY
Organisation*

Investor*

Ek Tera, Ek Mera.
Do Tera, Do Mera!

Firms can raise long term debts by issue of

equity shares as well as by issue of
debentures and other borrowed fund,
ALL ITEMS IN PROFIT
AND LOSS ACCOUNT
007

OBJECTIVES
OF FINANCIAL
MANAGEMENT
The main and foremost objectives of
financial management is to maximize
the wealth of equity shareholder.
PROFIT MAXIMISATION
Investor*

*When a business
finance is well
managed*

"Uss se mera kya fayeda!"

008

MAINTENANCE
OF LIQUIDITY

PROPER UTILISATION
OF FUNDS
009

MEETINGS OF FINANCIAL
COMMITMENTS WITH CREDITORS

Creditor*

Business*
010

FINANCIAL
DECISIONS
INVESTING
DECISIONS

This decision relates to careful

selection of assets in which funds
will be invested by the firms.
011

INVESTING
DECISIONS
IMPORTANCE OF
INVESTING DECISION
- Long Term Growth
- Large amount of funds involved
- Risk involved
- Irreversible decision
FACTORS AFFECTING
INVESTMENT DECISIONS
- Cash flow of the project
- Return on Investment
- Investment Criteria
012

FINANCING
DECISION

21 DIN MEIN PAISA DOUBLE

FInance manager has to decide the source of
finance. A company can raise finance from
various sources such as by issue of shares,
deventures, or by taking loans and advances.
013

FINANCING
DECISION
FACTORS AFFECTING
FINANCING DECISION
- Cost
- Risk
_ Cash Flow Position
- Control Considerations
_ Floatation Cost
- Fixed Operating Cost
- State of Capital Market
014

DIVIDEND
DECISION

Tum shareholder k pas jao

Tu retained earning ban jake

This decision is concerned with distribution of

surplus funds. The profit of the firm is distributed
among various parties such as creditors, employees,
debenture holders, sharholders, etc.
015

DIVIDEND
DECISION
FACTORS AFFECTING
FINANCING DECISION
- Earning
- Stability of Earnings
- Cash flow position
- Growth Opportunities
- Stability of Dividend
- Preference of shareholders
- Taxation Policy
- Access to capital market consideration
- Legal Restrictions
- Contractual Constraints
- Stock Market reactions
016

FINANCIAL
PLANNING

*
Business

"22 pe padhai. 25 pe
naukri. 26 pe chhokri"

Financial Planning means deciding in

advance how much to spend, on what to
spend according to funds at your disposal.
017

OBJECTIVES
OF FINANCIAL
PLANNING
TO ENSURE AVAILABILITY OF FUNDS
WHENEVER THESE ARE REQUIRED

It ensures that sufficient funds should be

available in the company for different purposes.
018

TO SEE THAT FIRM DOES NOT

RESOURCES UNNECESSARILY RAISE

RAISED
UNNECESSARY
FUNDS

Excess funding is as bad as

inadequate or shortage of funds.
Financial planning includes both short
term as well as the long term planning.
019

IMPORTANCE
OF FINANCIAL
PLANNING
MAKES THE FIRM BETTER
PREPARED TO FACE THE FUTURE

It helps in forecasting what may happen in

future under different business situations.
020

HELP IN AVOIDING BUSINESS

SHOCKS AND SURPRISES
When Financial
Planning is not done

By preparing blue print to face

different types of situations.
COORDINATE
FUNCTIONS VARIOUS

It helps in coordinating various

functions the production, sales by
providing clear policies and procedures.
021

PROPER UTILISATION
OF FINANCE

"Paison ka poorn
upyog koi inse seekhe!

Detailed plans of action prepared under

financial planning reduce waste,
duplication of efforts and gaps in planning.
LINK PRESENT
WITH FUTURE

It tries to link present with future

by anticipating sale, growth, etc.
022

LINK BETWEEN INVESTMENT

AND FINANCING DECISIONS
financing decisions

investment

It provides link between investment and

financing decisions on a continuous basis.

CAPITAL
STRUCTURE
Capital Structure means the
proportion of debt and equity used for
financing the operations of business.
023

Capital Structure = Debt/Equity

Financial Leverage = Debt/Equity

FACTORS DETERMINING
THE CAPITAL STRUCTURE
CASH FLOW
POSITION

The expected cash flow must watch with

the obligation of making payments because
if the company fails to make fixed
payments it may face insolvency.
024

INTEREST COVERAGE RATIO

It refers to the number of time companies
earning before interest and taxes cover
the interest payment obligation.
ICR = EBIT/Interest
DEBT SERVICE
COVERAGE RATIO
UCR covers the obligation to pay back
interest on debt but DSCR takes care of
return of interest as well as principal
repayment.
DSCR = (Profit after tax + Depreciation +
Interest + Non cash exp written off) /
(Preference Dividend + Interest +
Repayment Obligation)
025

RETURN ON INVESTMENT
If ROI is more than rate of interest then
company must prefer debt in its capital
structure whereas if ROI is less than rate of
interest, then company should avoid debt.

COST OF DEBT
If firm can arrange borrowed fund at
low rate of interest then it will prefer
more of debt as compared to equity.
TAX RATE
High tax rates make debt cheaper as interest
paid on debt security holders is subtracted
from income before calculating tax.
026

COST OF EQUITY
As far as debt is increasing earning per
share, then we can include it in capital
structure but when EPS starts decreasing
with inclusion of debt then we must depend
upon equity share capital only.
FLOATATION COSTS
Issue of shares, debentures requires more
formalities as well as more floatation cost.
Whereas there is less cost involved in
raising capital by loans and advances.
RISK CONSIDERATION
Financial risk refers to a position when a
company is unable to meet its fixed
financial charges such as interest,
preference dividend, payment to creditors.
027

FLEXIBILITY
Excess of debt may restrict the firm's capacity
to borrow further. To maintain flexibility it must
maintain some borrowing power to take care of
unforeseen circumstances.
CONTROL
If existing shareholders want complete control
then they should prefer debt, loans of small
amount. If they don't mind sharing the control
then they may go for equity shares also.
REGULATORY FRAMEWORK
Companies have to follow the regulations
of monetary policies. If SEBI guidelines are
easy then companies may prefer issue of
securities for additional capital whereas
with monetary policies are more flexible
then they may go for more of loans.
028

STOCK MARKET CONDITION

Boom and recession affect the capital
structure especially when company is
planning to raise additional capital. Depending
upon the market condition the investors may
be more careful in their dealings.
CAPITAL STRUCTURE
OTHER COMPANIES OF
Some companies frame their capital structure
according to industrial norms. But proper care
must be taken as blindly following Industrial
norms may lead to financial risk. If firm cannot
afford high risk it should not raise more debt
only because other firms are raising.
029

FIXED AND
WORKING CAPITAL
FIXED CAPITAL

Fixed capital involves allocation of firm's

capital to long term assets or projects. The
capital budgeting decision affects the growth
and profitability of the company.
030

FACTORS AFFECTING
REQUIREMENT OF FIXED CAPITAL
NATURE OF BUSINESS

aap karte kya ho thoda spasht

basha mhe bataiya?

SCALE OF OPERATIONS

Isko scale kaise karoge?

031

TECHNIQUE OF PRODUCTION

TECHNOLOGY UPGRADATION

Technique hi galat hai tumhari!

032

GROWTH ASPECTS

Bhai paisa ho to kya kuch nahi ho sakta!

DIVERSIFICATION

Bhai yeh kis line mein aa gaye aap!

033

AVAILABILITY OF FINANCE
AND LEASING FACILITY

LEVEL OF COLLABORATION

Maruti
Suzuki
WORKING
034

CAPITAL

bhai 100-200 zyada lele par

operations sahi karva de

Working capital refers to excess of

current assets over current liabilities.
- Gross working capital is investments in
all the current assets.
- Net working capital is excess of
current assets over current liabilities.
035

FACTORS AFFECTING
REQUIREMENT OF FIXED CAPITAL
NATURE OF BUSINESS

SCALE OF OPERATION
036

BUSINESS CYCLE
FLUCTUATION

Business during Business During

boom period depression period

CREDIT ALLOWED
037

CREDIT AVAIL

*supplier

OPERATING EFFICIENCY
038

AVAILABILITY
RAW MATERIALSOF

LEVEL OF
COMPETITION
039

INFLATION

GROWTH ASPECTS
001

CONSUMER
PROTECTION
TOPICS
TO COVER
- Concepts
- Consumer
Protection Rights
- Consumer
Responsibility
- Redressal
Agencies
002

CONCEPTS
Defective Goods
The Consumer
Protection Act

Unfair Trade Practices

Other Forms Consumer

Consumer protection refers to

protecting the interests of consumers.
003

CONSUMER
RIGHTS
Consumer Consumer
Protection Act

RIGHT
SAFETYTO
Consumer
Consumer

Goods & Services Right to Safety

Hazardous to Life

Consumers have the right to be protected

against the marketing of goods and services
which are hazardous to life and property.
 RIGHT TO
004

INFORMATION

Frustrated Random
Seller Person

Sab Jaan'na hai is halwe ko!

Consumer has the right to get information

about the quality, quantity, purity, standard
and price of goods and services.
RIGHT
BE TO
HEARD
The consumer
has the right to
represent
himself or to be
heard or right to
advocate his
interest.
 RIGHT TO
005

MAKE CHOICE The right to choose

means an assurance or
availability, ability and
Bhaiya ye dikhao
access to a variety of
Woh wala bhi dikhao
products and services
at competitive price.
Woh Kone Wala Bhi

Yeh Wala Utaro Last Woh Dikhao

RIGHT TO
REDRESSALSEEK
The consumer has
the right to get
Vendor

compensation
against unfair
trade or any other
exploitation.
Customer

"Kuch to sharam karo janab,

unfair trade practice ka
compensation chahiye mujhe!"
 RIGHT TO
006

CONSUMER
EDUCATION
The right of
the consumer
Consumer
Education
Is Important is to acquire
the knowledge
and skills to be
informed to
customers.
Acquiring
knowledge
& skills is
important.
 CONSUMER
007

RESPONSIBILITY
CONSUMER*

"ABHI HUMARI
RESPONSIBILITY
ZINDA HAI!"
 CONSUMER
008

RESPONSIBILITY
MUST EXERCISE
THEIR RIGHTS
The consumer
rights will be
useful only
when consumer
*Consumer
Rights*

exercises these
"Kya tum mujhe kaam aane
rights.

CAUTIOUS
par use kar sakte ho?"

CONSUMER
The consumer
should not blindly
believe on the words
Cautious Consumer

of seller. He must
insist on getting full
information. Consumer who is
not cautious
 FILING A COMPLAINT
009

FOR THE REDRESSAL

GENUINE GRIEVANCES OF
Consumer
Protection Act

Consumer

Ab to sach bol de, ABCD Ke

The attitude of not filing a complaint

encourages the corrupt businessman to supply
low standard or defective goods and services.
CONSUMER MUST BE
QUALITY-CONSCIOUS
Quality Non-Quality
Conscious Conscious
Consumer Consumer
010

The problems of consumer exploitation can

be solved only when consumer himself
stops compromising the quality of product.
DO NOT BE CARRIED
BY ADVERTISEMENTS AWAY
Consumer
Very often,
advertisement shows
exaggerated qualities
of a product, consumer
should do some
Advertisement
research on his part.

INSIST ON CASH MEMO

To file a complaint,
the consumer needs
"La Bhai Cash
Memo Dede Jaldi?"

the evidence of
purchase, and thus
must ask for cash
memo everytime.
*The Legit Consumer*
 REMEDIES
011

AVAILABLE
Consumer's
Exploitation
by Vendor

Remedies
Available

REMOVAL
OF DEFECTS
Seller Frustrated
Consumer

laat maar ke bahar nikaal defected goods ko!

 REPLACE-
012

-MENT OF
Vendor Replaced
Goods

GOODS
Defected
Goods

Vendor Replaced
Goods

Defected
Goods

REFUNDS
OF THE
PRICES
PAID Seller :)

Arey tau itna possesive

hona bhi theek nahin hai!
013

COMPENSATION
OF THE LOSS
Seller

Compensation

Seller is bound to pay

compensation if required.

DISCONTINUE OF
TRADE PRACTICESUNFAIR
Consumer

Consumer
Protection Act
 REDRESSAL
014

AGENCIES
State
Commission National
Commission
District
Commission
 DISTRICT
015

COMMISSION

District Commission

Complaints worth Rs. 1 Crore

are filed in this agency.
Consists of a president and
two members. one of whom
should be a woman
Aggrieved party can appeal in
the state commission within
45 days, if not satisfied.
 STATE
016

COMMISSION
State
Commision

Complaints more than Rs. 1 crore

and less than Rs. 10 crore are filed
in this agency.
Consists a president and atleast
two members.
Aggrieved party can appeal in the
National commission within 45
days, if not satisfied, after
depositing 50% of the fine money.
 NATIONAL
017

COMMISSION
National
Commission

Complaints exceeding Rs. 10

Crore are filed in this agency.
Consists of a president and four
members.
Aggrieved party can appeal in the
Supreme Court within 45 days, if
not satisfied. After depositing
50% of the fine money.