To study the Trade Document of a Retail Company
Submitted to: Mr. Manish
Submitted By: Payal Bansal (03) Anshika Rajwanshi (30) Ashish Verma
Indian Retail Scenario
The retail scenario is one of the fastest growing industries in India over the last couple of years. India retail sector comprises of organized retail and unorganized retail sector. Traditionally the retail market in India was largely unorganized; however with changing consumer preferences, organized retail is gradually becoming popular.
Unorganized retailing consists of small and medium grocery store, medicine stores, subzi mandi, kirana stores, paan shops etc. More than 90% of retailing in India fall into the unorganized sector, the organized sector is largely concentrated in big cities. Organized retail in India is expected to grow 25-30 per cent yearly and is expected to increase from ` 35, 000 crore in 2004-05 to ` 109, 000 crore ($24 billion) by 2010.
Quick facts on Indian retail sector
Indian Retail sector is the fifth largest global retail destination. The top five companies in retail hold a combined market share of less than 2%. The Indian retail market has been ranked by AT Kearney's eighth annual Global Retail Development Index (GRDI), in 2009 as the most attractive emerging market for investment in the retail sector.
Currently the share of retail trade in India's GDP is around 12 per cent, and is estimated to reach 22 per cent by 2010.
According to Government of India estimate the retail sector is likely to grow to a value of ` 2,00,000 crore (US$45 billion) and could yield 10 to 15 million retail jobs in the coming five years; currently this industry employs 8% of the working population.
India continues to be among the most attractive countries for global retailers. According to the Department of Industrial Policy and Promotion, approximately US$ 47.43 million was the amount of Foreign Direct Investment (FDI) inflow as on September 2009, in singlebrand retail trading.
Key Players In Indian Retail Sector
AV Birla Group has a strong presence in apparel retail and owns renowned brands like Allen Solly. it operates lifestyle retail chain. Segments include Food & grocery. Lifestyle International is their international brand business.000 crores ($20 billion) by 2009-10. books. music & gifts.58 mn in 2006. the lifestyle retail chain registered a turnover of ` 3. entertainment etc. consumer electronic chain etc. A study reveals that among the more than 20 locations. Westside. health & beauty care services. music and gifts. and ` 100 crores on Citymax 3 star hotel chain.
Landmark Group invested ` 300 crores to expand Max chain. Louis Phillipe. apparel. entertainment.75 billion which is expected to cross US$100 million mark by 2010.
Pantaloon Retail has 450 stores across the country and revenue of over ` 20 billion and is expected to touch 30 million by 2010.
K Raheja Corp Group has a turnover of ` 6. e-tailing.More than 80% of the retail sector in the country is concentrated in the large cities. for organized retail in India. home solutions. Trouser Town. The company has investment plans to the tune of ` 8000 – 9000 crores till 2010. consumer electronics.
Reliance has more than 300 Reliance Fresh stores. shoes. Van Heusen and Peter England. they have multiple formats and their sale is expected to be ` 90. book and music retail chain. Segments include books. Mumbai was found to be the most preferred location followed closely by Bengaluru in the second position.
Trent is a subsidiary of the Tata group.
2009.88 million this fiscal to add up to existing 2. PRIL intends to set up 155 Big Bazaar stores by 2014. However. the company has recorded a net profit of US$ 1.
Shoppers Stop has plans to invest ` 250 crore to open 15 new supermarkets in the coming three years. during the last quarter a bit of confidence was restored as the economy showed signs of growth.
Lifestyle International.4 million sq ft retail space.
Timex India will open another 52 stores by March 2011 at an investment of US$ 1.
.Retail and recession
The global economic slump has had its impact on the India retail sector. In 20 years they expect the India operations to be larger than the Australia operations.
Pantaloon Retail India (PRIL) plans to invest US$ 77. plans to have more than 50 stores across India by 2012–13. raising its total network to 275 stores.3 million taking its total store count to 120. Vishal Retail secured corporate debt restructuring (CDR) plan from its lenders while other players like the Reliance Retail run by Mukesh Ambani and Pantaloon led Kishore Biyani by went slow on expansion plans and even scaled down operations.2 million.
Australia's Retail Food Group is planning to enter the Indian market in 2010. In the first six months of the current fiscal ending September 30. One of the earliest players in the Indian retail scenario Subhiksha's operations came to a near standstill and required liquidity injection. It has plans to clock US$ 87 million revenue in five years. a division of Landmark Group.
By 2012 the rural retail market is projected to have a total of more than 50 per cent market share.9 per cent by 2015. The total number of shopping malls is expected to expand at a compound annual growth rate of over 18. According to market research report by RNCOS the Indian organized retail market is estimated to reach US$ 50 billion by 2011.The Road Ahead
Industry experts predict that the next phase of growth in the retail sector will emerge from the rural markets.
5 Lac for a public Company and Rs. must register and get identification number under the new requirements. The following steps are required for name approval: You have to file an application in Form No.Incorporating your company
The first step in getting your company registered is the approval of name for the Company. The application is to be signed by one of the promoters and must contain the following details: Minimum 2 alternative names for the proposed Company. The form along with the supporting documents (PAN Card & Residence proof duly attested by CA. 1A with the Registrar of Companies (ROC) of the State in which the Registered Office of the Company is proposed to be situated. the ROC scrutinizes the same and sends the approval/objections in about 10 days to the applicant.
. (The name can be coined names from the objects of the Company or the names of the directors. etc. but should definitely be indicative of the main object of the Company. Justification for the name needs to be specified along with the application). Notary or Gazette Officer) is to be sent to the offices designated by respective ROCs. Director Identification Number (DIN) Directors for an Indian company. both Indian and foreigners. Names and address of the members (minimum 7 for a public Company and 2 for a private Company). 1 lac for a private Company).
Main objects of the Company
On submitting the application. The application needs to be filed online. Generally. Authorized Capital of the Company (Minimum Rs. it takes about seven days to get the approval. It is called Director Identification Number (DIN).
29 . father’s name. 18 . occupation.The fee for obtaining DIN can be deposited online or deposited in banks authorized for this purpose. DSC is required for all Directors or authorized representatives of any Company as well as the professionals who will sign ROC forms or documents. residential address.
Form No. The Memorandum also states the authorized share capital of the Company and the names of its first directors. The stamp duty depends on the authorized share capital. 1 . the Articles contain the rules and procedures for the routine conduct of the Company. (Not required in case of private Company).This is to be filed by one of the directors of the Company informing the ROC of the registered office of the Company.
Form No. ancillary/subsidiary and other objects of the Company.
. Memorandum and Articles also need to be stamped.This is the consent obtained from all the proposed directors of the Company to act as directors of the Company. are also required to get Digital Signature Certificate (DSC).These are required to be executed by the promoters in their own hand in the presence of a witness in quadruplicate stating their full name. both Indian and foreigners.This is a declaration to be executed on a non-judicial Rs 20 stamp paper by one of the directors of the Company or other specified persons such as attorneys or advocates stating that all the requirements of the incorporation have been complied with. Documents Required to be Filed with ROC The following documents are required to be submitted to the ROC : Memorandum and Articles .
Memorandum and Articles of Association (Memorandum and Articles respectively) While the Memorandum states the main.
Form No. Digital Signature Certificate (DSC) Directors for an Indian company. number of shares subscribed etc.
gov. These documents need to be filed online first and then a physical copy should be submitted to the ROC.Form No. Applicable filing fees. the Company must obtain its PAN. the certificate of incorporation is sent by post to the registered office of the newly registered company.
Web resource : mca. For this purpose. Power of Attorney in case of a subscriber who has appointed another person to sign the Memorandum on his behalf. if any in the Memorandum and Articles filed. filling of Income Tax returns and various other financial transactions.in
Income Tax related compliance
Permanent Account Number (PAN) After incorporation. On complying with the same. Certificate of Incorporation After the above documents are filed. Power of Attorney signed by all the subscribers to Memorandum authorizing one of the subscribers or any other person to act on their behalf for the purpose of incorporation and accepting the certificate of incorporation. Name approval letter in original. an application needs to be filed with the Income Tax Department in Form 49A with the necessary documents. PAN is mandatory for opening of Bank Account. the ROC calls the attorney on a specified date for scrutiny and making corrections.
. 32 .This states the appointment of the proposed directors on the board of directors from the date of incorporation of the Company and is signed by one of the proposed directors.
There are more than 100 services on which service tax is currently applicable. The rate of service tax presently is 10%. each state has its own rules for the Act. The objective of this Act is to lay down statutory obligation and rights of employers as well as the employees. a Tax Identification Number (TIN) is granted. Registration of shop/establishment is mandatory within 30 days of commencement of work. Web resource : exciseandservicetax.
Employees Provident Fund Organization Provident fund registration is compulsory if the size of your workforce is 20 or more. TAN is required for depositing of TDS/TCS. the Company must also obtain a TAN. Service Tax Service tax is applicable on an entity which is engaged in providing prescribed services. Professional tax It is a tax on profession (including employment). an application needs to be filed with the Income Tax Department in Form 49B with necessary documents. thus. This is to be applied for to the local Sales Tax Department in the prescribed forms along with specified fees and necessary documents.in
Other Tax compliance
Value Added Tax VAT registration is required for a trading business. On completion of the formalities. Professional tax is applicable in some states in India and the rate of tax also varies from State to State. The
The Shops & Establishment Act The Shops and Establishment Act is a State legislation and.nic. Web resource: incometaxindia.Tax Deduction Account Number (TAN) After incorporation.gov. For this purpose.
Employees State Insurance Corporation (ESIC) Employees’ State Insurance Scheme of India is an integrated social security scheme tailored to provide social protection to workers in the organized sector and their dependents in contingencies such as sickness.
Indian stamp act 1899 Original purpose was to raise revenue to Govt.
Importer Exporter Code (IEC) IEC Code is mandatory for doing import or export. Non-seasonal and non-power using factories and establishments employing twenty (20) or more persons. maternity or death and disablement due to an employment related injury or occupational disease. The ESI Act.
. The employer is required to provide necessary information to the concerned regional ESI department in the prescribed form for allotment of Establishment Code Number. today stamped document is considered much more authentic and reliable than an un-stamped document Instruments chargeable to duty under the Stamp Act which are not duly stamped are inadmissible in a court of law and have no evidentiary value. However.employer is required to provide necessary information to the concerned regional Provident Fund Organization (EPFO) in the prescribed form for allotment of Establishment Code Number. (1948) applies to the following categories of factories and establishments in the implemented areas:Non-seasonal factories using power and employing ten (10) or more persons.
Shops and Establishment Act retail stores are governed by various Shops and Establishments Acts as applicable in the states These acts regulate the conditions of work and employment in shops and generally prescribe obligations in respect of inter alia registration. a penalty of up to 10 times the original stamp value has to be paid to rectify them The Easement Act 1882 governed by the Easements Act. opening and closing hours. the “dominant owner”. Such a right may also arise out of necessity or by virtue of a local custom. i. or on his behalf by the person in possession of the property. an easement may be acquired by the owner of immovable property. holidays. daily and weekly working hours.e. health and safety measures wages for overtime work
. 1882 the right of easement is derived from the ownership of property It means a right which the owner or occupier of land possesses for the beneficial enjoyment of that land and which permits him to do or to prevent something from being done in respect of certain other land not his own. leave.
Contract Labour (Regulation and Abolition) Act. rest rooms. is mandatory through an application to the registering authority Employer/each contractor in relation to each employer have to obtain a license from Govt. TRIPS provides for initial registration and each renewal for a term of ten years The Trade and Merchandise Act 1999 is compatible with TRIPS and harmonizes it with international systems and practices Laws relating to Employment A retail organization is governed by the provisions of the Employees’ Provident Funds Act. 1952. washing facilities etc. licensing officers to execute any work through contract labour The license may impose conditions as to work./contractor in which 20 or more workmen are employed or were employed in the past 12 months as contract labour Registration of an estt. fixation of wages and other essential amenities in respect of contract labour The Act provides for the welfare of the workers by imposing obligations on the employer to provide for canteens. this act mandates periodic contributions to the Employees’ Provident Fund Scheme and the Employees’ Pension Scheme as applicable The firm also has to make contributions under the Employees’ State Insurance Act. Non-adherence to this this act is punishable with imprisonment or with fine
. or any combination of signs that can distinguish the goods and services of one organization from the other organization.The Trade & Merchandise Marks Act. 1999 TRIPS defines Trademarks as any sign. 1970 This legislation applies to every estt.
1948 Provides for benefits to employees in case of sickness. employment injury. must register within the specified time and in the specified manner All employees in the estt. maternity. to which this act applies shall be insured The contribution payable = employer’s + employee’s @ decided by the Central Government and payable to the ESIC Contribution has to be made for all employees. 1952 applicable to any estt. Every estt. whether directly or indirectly employed by the firm
Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act. 1979 regulates the employment of inter-state migrant workmen and provides for their conditions of service
.Employees Provident Funds Act. etc. employing 20 or more persons provides for compulsory Provident Fund for the benefit of employees in factories and other estts. Employer’s contribution to be deposited to the EPF is a specified %age of the employee’s salary employee’s contribution = employer’s contribution
Employees State Insurance Act.
among the workmen applicable to every estt. 1948 applicable to any person who employs 1 or more person in any scheduled employment The employment can be direct or indirect AIM of this act is to prevent exploitation of labour and to provide sustenance and maintenance of the worker and his family
Payment of Bonus Act. 1965 Objective : distribution of profits earned by the estt. in the prescribed manner and time The contractor has to obtain the license from the licensing officer appointed by the Central/State Govt./contractor employing 5 or more inter-state migrant workmen currently or have employed in the past 12 months The estt. in which 20 or more persons are employed on any day during an accounting year An employer is bound to pay every employee a minimum bonus of 8. has to apply for the registration of the estt. applicable to every estt.33% of the salary or wage earned by the employee. The license is valid only for a specified period and requires to be renewed at its expiry The Act levies some duties on the principal employer and the contractor principal employer provides for the displacement allowance and journey allowance contractor provides for adequate wages.
. medical facilities and other benefits
Minimum Wages Act.
either directly or indirectly AIM : to ensure that the wages are paid by the employers within the prescribed time limit w/o any unauthorized deductions Workmen’s Compensation Act. arising out of and in the course of his employment A contractor for construction of building is also made liable for the personal injuries of his workmen amount of compensation depends on the nature and extent of the injury
. death.Payment of Gratuity Act. 1936 “every employee has a right to receive remuneration for the services provided by him applies to persons employed in any estt. death or occupational diseases Provides for assistance to the family members of the workmen An employer has to pay compensation for the personal injury caused to a workman by accident. 1972 applicable to any estt. in which 10 or more employees are employed or were employed on any day in the preceding 12 months An employee should be in uninterrupted service (as per conditions laid down in the Act) in order to be paid gratuity Gratuity shall be payable after the completion of 5 years of continuous service upon the termination of his employment on superannuation or retirement or resignation in case of death of an employee it is payable to the nominee of the employee
Payment of Wages Act. etc. 1923 Provides for protection from hardship faced by workmen due to accidents.