Samacheer Kalvi 12th Economics Notes

Tamilnadu Samacheer Kalvi 12th Economics Notes

Samacheer Kalvi 11th Commerce Notes Chapter 31 Discharge and Breach of a Contract

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 31 Discharge and Breach of a Contract Notes

→ Discharge of contract implies termination of the contractual relationship between the parties.

→ Different modes of discharge of contract have been provided under different sections of the Act.

→ Agreement between the parties comes to an end by mutually agreeing for it.

→ Express consent may be given at the time of formation of the contract or subsequent to its formation.

→ A contract may be discharged if its performance becomes impossible.

→ According to the Limitation Act, 1963 a contract must be performed within a specified time.

→ If the contracts depend on the personal skill or ability, then such contract may be discharged on the death of the promisor.

→ In case of breach of contract by one party, then the other parties may rescind the contract and thereby the party is absolved from his all obligations under the contract.

→ When it is probable that compensation in money cannot be received for the non- performance of the act agreed to be done.

→ The contract made by a company ultra-vires of its Memorandum of Association

→ Injunction is an order passed by a competent court restraining a person from doing some act.

→ Injunction can be defined as a mode of securing the specific performance of the negative terms of a contract.

→ The meaning of the phrase quantum merit is‘as much’as earned’.

→ The main purpose of awarding the damages is to make good the loss suffered by him. It is known as doctrine of restitution.

Samacheer Kalvi 11th Commerce Notes

Samacheer Kalvi 11th Commerce Notes Chapter 17 Social Responsibility of Business and Business Ethics

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 17 Social Responsibility of Business and Business Ethics Notes

→ A business entity carries out economic activities on a regular basis to earn profit.

→ “Social Responsibility refers to the obligation to pursue those policies to make those decisions or to follow those lines of action which are desirable in terms of objectives and values of our society.” -Howard R.

→ “Social Responsibility requires managers to consider whether their action is likely to promote the public good, to advance the basic beliefs of our society, to contribute to its stability, strength and harmony”. – Peter F. Drucker

→ Business is a creation of society and uses the resources of society.

→ A business can improve its image in public by assuming social obligations.

→ A business enterprise which accepts and discharges social obligations enjoys greater freedom.

→ Mahatma Gandhi suggested that “those who own money or property should hold and use it in trust for society.”

→ Business organisations and their managers have proved their competence and leadership in solving economic problems.

→ Professional managers are required to display a keen social sensitivity and serve the society as a whole.

→ Adoption of social responsibility as an objective will help to improve the public opinion of business.

→ Business organisations possess only economic power and not social power.

→ Tampering it with social responsibility would make the decision-making process quite complex and controversial.

→ A business enterprise is basically an economic entity and, therefore, its primary social responsibility is economic i.e., produce goods and services that society wants and sell them at a profit.

→ Investors are those who provide finance by way of investment in debentures, bonds, deposits etc. Banks, financial institutions, and investing public are all included in this category.

→ Suppliers are businessmen who supply raw materials and other items required by manufacturers and traders.

Samacheer Kalvi 11th Commerce Notes

Samacheer Kalvi 11th Commerce Notes Chapter 16 Emerging Service Business in India

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 16 Emerging Service Business in India Notes

→ The individual who acquires the right to operate the business or use the trademark of the seller is known as the franchisee.

→ Franchise relationship is based on an agreement which lays down terms and conditions of this relationship.

→ When a franchisor awards rights covering all business aspects as a complete business package to the franchisee it is called as business format franchising.

→ The cost of advertising for the franchisor will be reduced since this cost will be shared by the franchisee.

→ Franchising enables a franchisor to expand the existing business to wider geographical regions within the country and abroad.

→ Factoring is derived from a Latin term “facere” which means To make or do’.

→ Factoring is an arrangement wherein the trade debts of a company are sold to a financial institution at a discount.

→ When the claims of an exporter are assigned to a financial institution and the finance is advanced on the basis of export invoice it is called as international factoring.

→ Forfaiting is defined as “the non-recourse purchase by a bank or any other financial institution of receivables arising from an export of goods and services”.

→ Factoring helps smooth running of business by getting short term credits from financial institutions against accounts receivables.

→ Logistics Management is defined as ‘Design and operation of the physical, managerial, and informational systems needed to allow goods to overcome time and space.

→ Organisations taking proactive managerial attention in coordinating the actors in logistics leads to reduced logistics costs and improved customer service.

→ The Logistics „ Management can be classified on the basis of applications from various dimensions in the process of examining and evaluating alternatives.

→ In transportation infrastructure the following framework can be used to identify the problem areas like Right of way, Vehicle, Motive power, Terminals, Operations/systems.

→ Logistics Management deals with the efficient management of a static gap between demand and supply whereas Supply Chain Management tries to identify the dynamic nature of the value creation itself such as responsiveness, qualify and design.

→ Recently a new type of business in service sector has become popular in the world. It is called the Business Process Outsourcing (BPO).

→ Companies can benefit in the long run provided they are keen on their core activities rather than non core activities.

→ Outsourcing enables the firms to pursue excellence in two ways namely excelling themselves in the activities they do and excel outsiders by extending their capabilities through contracting out.

→ BPO means getting contractual services of external companies or group of companies to complete special work or process of a company.

→ KPO means obtaining high end knowledge work from outside the organization in order to run the business successfully and in cost effective manner.

→ E – Commerce or Electronic Commerce is the buying and selling of goods and services through electronic networks like internet.

→ E – commerce promotes innovative practices of carrying on business.

→ Electronic and software products could be downloaded immediately after purchase through e – commerce mode.

→ Business to customers (B2C) is fastest growing segment in e – commerce spare. Under this model, business concern sells directly to consumers.

Samacheer Kalvi 11th Commerce Notes

Samacheer Kalvi 11th Commerce Notes Chapter 32 Direct Taxes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 32 Direct Taxes Notes

→ Tax is a compulsory contribution to state revenue by the Government.

→ Tax is the basic source of revenue to the Government.

→ If a tax levied on the income or wealth of a person and is paid by that person (or his office) directly to the Government, it is called direct tax.

→ If tax is levied on the goods or services of a person (seller). It is collected from the buyers and is paid by seller to the Government. It is called indirect tax.

→ Indian taxation system is one of the largest systems in the world.

→ The tax administration has clear demarcation between Central Government and State Governments and then between State Governments and Local Bodies.

→ Income tax is a direct tax under which tax is calculated on the income, gains or profits earned ‘by a person such as individuals and other artificial entities (a partnership. firm, company, etc.)

→ The Income tax Act has defined the term income and it includes salary income, house property income, business/profession income, capital gains and other sources income.

→ The year of earning income is called ‘Previous Year’ and the year in which assessment of income is done is called ‘Assessment Year’.

→ Income tax is administered by the Central Government (Ministry of Finance) with the help of ‘Income tax department’ with branches throughout the country.

→ Assessee means a person by whom any tax or any other sum of money is payable under this Act.

→ The year in which income is earned is called previous year.

→ Section 14 of Income Tax Act 1961 provides for the computation of total income of an assessee which is divided under five heads of income.

→ Income from all the above five heads of income shall be computed separately according to the provisions given in the Act. Income computed under these heads shall be aggregated after adjusting past and present losses and the total so arrived at is known as ‘Gross Total Income’.

→ Out of Gross Total Income, Income tax Act 1961 allows certain deductions under section 80. After allowing these deductions the figure which we arrive at is called ‘Total Income’.

Samacheer Kalvi 11th Commerce Notes

Samacheer Kalvi 11th Commerce Notes Chapter 15 Insurance

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 15 Insurance Notes

→ Insurance is a means of providing against loss caused by natural or man-made factors.

→ “Insurance is a plan by themselves which large number of people associate and transfer to the shoulders of all, risk that attacks to individuals” – According to John Merge

→ Indemnity means security or compensation against loss or damages.

→ “The principle of indemnity is not applicable to life insurance because one cannot estimate the loss due to the death of a person”

→ The word ‘Causa proxima’ means ‘nearest cause’.

→ The same subject matter may be insured with more than one insurer then it is known as ‘Double Insurance’.

→ Subrogation means‘stepping the shoes on others’.

→ Life insurance provides protection to the family at premature death of an individual.

→ Life Insurance should more properly be called as “Life Assurance” because the risk insured here is certain and natural. Only the time of occurrence is uncertain.

→ The policy is taken up jointly, on the lives of two or more persons is known as Joint Life Policy.

→ Fire insurance is a contract whereby the insurer, in consideration of the premium paid, undertakes to make good any loss or damage caused by a fire during a specified period upto the amount specified in the policy.

→ Marine insurance is a contract of insurance under which the insurer undertakes to indemnify the insured in the manner and to the extent thereby agreed against marine losses.

→ When a ship is insured against any type of danger, it is known as hull insurance.

Samacheer Kalvi 11th Commerce Notes

Samacheer Kalvi 11th Commerce Notes Chapter 14 Transportation

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 14 Transportation Notes

→ The term ‘transport’ includes all the clerical, mental and manual occupation involved in the operation of road, rail, canal, sea and air transport.

→ According to K.K. Saxena, ’’the transport system acts with reference to the area it serves in the same way as a candle does in a dark room”.

→ Transport of people and goods by land vehicles is known as land transport. It is also called as ‘Surface Transport’.

→ Pathways Transport is the oldest form of transport found in hilly areas, forest areas and in remote places.

→ Road Transport is one of the most promising and potent means suitable for short and medium distances

→ The invention of steam engine by James Watt, revolutionized the mode of transport all over the world.

→ The Indian Nationwide network, the 4th longest in the world, is owned and operated by State-Owned Indian Railways and includes an operating route length of more than 65,000 Kms.

→ Metro Rail is a convenient, fast, efficient, reliable, comfortable mode of urban transport.

→ A monorail is like a train, but instead of having two sets of wheels that balances on a railway track, the monorail is balanced on top of one rail.

→ A Ropeway is another means of transport in naval lifting device.

→ Hyper loop is a proposed system of transport that would see pods or containers travel at high level speed through a tube that has been pumped into a near vacuum.

→ Water transport is the process of moving people, goods, etc., by barge, boat, ship or sailboat over a sea, ocean, lake, canal, river, etc.

→ Inland Waterways comprise of rivers, canals and lakes. It is also known as internal water transport.

→ Ocean transport has been playing a significant role in development of economic, social and cultural relations among countries of the world.

→ Coastal shipping constitutes an important means of transport in all countries having a long coastline.

→ Commercial air transport is now one of the most prominent modes of overseas transport.

→ Railway Receipt is an acknowledgement of receipt of goods by the railway for transporting.

→ The document through which this contract is made is known as ‘Charter Party’ may also be known as‘Voyage Charter’or‘Time Charter’.

→ Bill of Lading is a document containing the terms and conditions of the contract of carriage.

→ A common carrier is a person, who is engaged in the business of carrying goods for hire indiscriminately for all persons.

Samacheer Kalvi 11th Commerce Notes

Samacheer Kalvi 11th Commerce Notes Chapter 13 Warehousing

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 13 Warehousing Notes

→ The term “Ware” means products or goods.

→ “Warehousing” generally means storage place or godowns which is located near a factory to keep the raw materials and finished products.

→ According to J. Stephenson, “a warehouse in an establishment for the storage or accumulation of goods.

→ “A warehouse is a commercial building for storage of goods. Stored goods can include any raw materials, packing materials, spare parts, component or finished goods associated with agriculture, manufacturing and production”.

→ Private warehouses are built and owned by private business enterprises in order to store the products produced by them.

→ Bonded warehouses are those warehouses, which are licensed by the government to accept storage of imported goods which are not cleared due to non-payment of customs duty by the importer.

→ Underground storage structures are used by farmers in villages to store food grains.

→ Goods are transported in refrigerated containers and stored in refrigerated warehouses.

→ To develop and regulate the warehousing industry in India Warehousing Development and Regulatory Authority was established under the Warehousing (Development and Regulation) Act, 2007.

→ Transit Mixing refers to a function in which warehouse receives products from different plants and mix and repack them as per client’s requirement.

→ Warehouses reduce distribution cost of the traders by storing the goods in bulk and allow the trader to take the goods in small lots to his shop.

→ Warehouse Warrants is a document issued in favour of the owner or depositor of goods by the warehouse keeper.

→ Dock is a place in the harbor where the goods are loaded into the ship.

→ Dock receipt is an acknowledgement of receipt of goods issued by dock authorities to the owner of the goods.

→ Delivery Order is a document through which the depositor directs the warehouse keeper to deliver the specified goods either to the party mentioned in the document or to the bearer.

→ India is an agrarian country but the importance of warehousing was not felt till 1950.

→ The available storage capacity of Central Warehousing Corporation is 11.17 million tonnes and with the operation through 464 warehousing centers across the country.

→ Every state government is given power to establish its own Warehousing Corporation after getting approval from the CWC.

→ The available storage capacity of TNWC is 6.83 Lakh MT with 7 Regional offices and 256 Godowns across the state.

→ From 2019, new technology could be revolutionary and improving efficiency in warehouse by Warehousing Management System (WMS).

Samacheer Kalvi 11th Commerce Notes

Samacheer Kalvi 11th Commerce Notes Chapter 33 Indirect Taxation

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 33 Indirect Taxation Notes

→ Indirect Tax is levied on the goods and services. It is collected from the buyers by the sellers and paid by the sellers to the Government. Since it is indirectly imposed on the buyers it is called indirect tax.

→ Goods and Services Tax (GST) is the tax imposed on the supply (consumption) of goods and services.

→ Traders having annual turnover, within a state, below 20 lakhs are exempted from GST.

→ GST Act was passed on April 12, 2017. GST came into effect from 1st July, 2017. It is the single biggest tax reform since Independence.

→ Several Countries like Russia, Canada, Australia, Singapore, China, etc. have already introduced GST.

→ The kinds of GST are: Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Union Territory Goods and Services Tax (UGST), Inter-State Goods and Services Tax (IGST).

→ CGST means Central goods and service tax to replace the existing tax like service tax, excise, etc. and It is levied by central government.

→ SGST means State goods and service tax, replace the existing tax like sales tax, luxury tax, entry tax, etc. and it is levied by the state government.

→ IGST refers to the Integrated Goods and Services Tax and it is a combined form of CGST and IGST and it is levied by central government.

→ The Central Government shall have l/3rd voting power and all State Governments shall have 2/3rd voting powers.

→ GSTN facility will reduce multiple record keeping, lesser investment in man power and resources and improve efficiency.

→ All interactions will be through common GSTN portal and will ensure corruption free administration.

→ Several Economists says that GST in India would impact negatively on the real estate market. It would add up to 8 percent to the, cost of new homes and reduce demand by about 12 percent.

→ Adoption and migration to the new GST system would involve teething troubles and learning for the entire ecosystem.

Samacheer Kalvi 11th Commerce Notes

Samacheer Kalvi 11th Commerce Notes Chapter 11 Types of Banks

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 11 Types of Banks Notes

→ According to Banking Regulation Act 1949, “Banking means the accepting for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheque, draft, pay order or otherwise”.

→ There are different types of banks performing different sets of functions.

→ Banks which accept deposits from the public and grant loans to traders, individuals, agriculture, industries, transport, etc. in order to earn profit.

→ Huge finance required for investment, expansion and modernisation of big industries and others are granted by a separate type of banks called development Banks. They are also called industrial banks.

→ All cooperative banks in India are owned by its customers or members who are farmers, small traders and others.

→ National Cooperative Development Corporation (NCDC) established in 1963 is providing loans and grants to State Governments for financing cooperative societies.

→ In 1920, first Land Mortgage Bank (LMB) was established in India.

→ First Cooperative Societies Act was passed in 1961 by Tamil Nadu Government.

→ Primary Agricultural Credit Societies (92,789 – refer chart) in India do not carry the name banks and they are not recognised by the RBI as banks.

→ Banks which have registered office in a foreign country and branches in India are called foreign banks.

→ The RRBs were formed under the Regional Rural Bank Act 1976, jointly by the Central Government, State Government, and a sponsor bank.

→ EXIM Bank provides finance for import of technology, export product development, pre-shipment and post-shipment and overseas investment.

→ Local Area Bank (LAB) scheme was introduced by the RBI in August 1996.

→ Small Finance Banks (SFBs) are private sector banks set up in unbanked and underbanked regions of the country to achieve financial inclusion.

→ In September 2015, RBI granted provisional licenses to 8 Non-Banking Finance Companies (NBFCs) already engaged in microfinance to be converted into SFBs and 2 others.

→ Payment banks are formed to widen the spread of payment and financial services to small businesses, low-income households, and migrant labourers.

→ A Multilateral Development Bank is formed by the Governments of a group of countries.

→ All banks which satisfied the norms and included in the Second Schedule to the RBI Act, 1934 are called scheduled banks.

→ Any bank in which not less than 51 percent of shares are owned by the Government are called Government banks or public sector commercial banks.

→ In 1969, Government of India nationalised 14 private banks.

Samacheer Kalvi 11th Commerce Notes