April 2024

The responsibility for the orderly functioning of the security market has been delegated to Securities Exchange Board of India which is entrusted to protect the interest of investors and ensure the development of securities market. The responsibility entrusted with SEBI is to create an environment in which the various participants such as the investors, government, intermediaries and the stock exchanges are satisfied. SEBI derives its validity from Securities and Exchange Board of India Act, 1992 (the SEBI Act, hereafter). The main purpose of the Act is the protection of investors in the securities market and thereby making it a reliable place. The provisions of the SEBI Act define its role in more specific terms. These broadly relate to Regulating stock exchanges as well as other security markets Regulating trade markets Prohibiting practices that are considered to be unhealthy for development of the securities market such as insider trading and fraudulent and unfair trade practices for promoting and regulating self-regulatory organizations. SEBI performs several of its functions which are based on its powers which have been given to it under Securities Contract Regulation Act, 1956 and the Securities Contract Regulation Rules, 1956. The object of the SCR Act is to provide for the regulation of stock exchanges and of securities dealt in on them. It also indulges in regulating the securities outside the stock market. Stock market facilitates mobilisation of funds from small investors and channelizes these resources into various development needs. In order to avoid undesirable transactions in securities by regulation of the business of dealing, the Securities Contract Regulation Act, 1956 was enacted by parliament. What is Stock Exchange? A stock exchange is an important factor in the capital market. It is a secure place where trading is done in a systematic way. Here, the securities are bought and sold as per well-structured rules and regulations. Securities mentioned here includes debenture and share issued by a public company that is correctly listed at the stock exchange, debenture and bonds issued by the government bodies, municipal and public bodies. Typically bonds are traded Over-the-Counter (OTC), but a few corporate bonds are sold in a stock exchange. It can enforce rules and regulation on the brokers and firms that are enrolled with them. In other words, a stock exchange is a forum where securities like bonds and stocks are purchased and traded. This can be both an online trading platform and offline (physical location) Listing of Securities – The Process According to Section 9 (1) (m) of the SCR Act, any stock exchange is free to make rules for listing of securities as part of the bye laws which govern their working. A company applying to get their securities listed on a particular stock exchange have to apply and comply with the necessary rules specified in the bye laws and SCR rules. Securities Contract Regulation Rules, 1956 have defined the documents that a company has to provide to the stock exchange while seeking the list of its securities The Listing Agreement All securities exchanges presently have a listing agreement that has several common, standard provisions. It is a contract that securities exchanges enter into with issuers which effectively governs the relationship between the issuer and the investor. Recognition of stock exchange Section 3 of the Securities Contract (Regulation) Act lays down that for recognition, every stock exchange for the purpose of being recognised has to make an application in a prescribed manner to the Central Government. If the central government is satisfied, then it may grant recognition subject to further inquiry and condition imposed as laid down in the Act. Every grant of recognition shall be published in the Official Gazette. The opportunity has to be given to the applicant to present their matter in case their application is refused. Any amendment shall not be made without the involvement of central government. Corporatisation and Demutualisation of Stock Exchanges Historically stock exchanges were formed as mutual organisations. Ownership and trading rights were clubbed together. The disadvantage in this is that the organization would work towards the benefit of the members and not the investors. In view of these shortcomings, a step was taken by the Government of India for the demutualisation and Corporatisation of the stock exchanges. Withdrawal of recognition If, in the interest of the public, the central government feels that the recognition given to the stock exchange be withdrawn, then it has the power to do so under section 5 of the SCR Act. Powers vested in Stock Exchanges Power to call for returns and make direct enquiries– According to Section 6 of the SCR Act, every stock exchange shall preserve books of accounts for a period of minimum 5 years and it may be subject to inspection at times by SEBI. Power of stock exchanges for management and regulation purposes to make bye-laws- Section 9 of the SCR Act gives the power to the various stock exchanges to make bye-laws for the regulation and control of contracts. Establish trading floor A stock exchange may establish additional trading floor with the prior approval of SEBI in accordance with the terms and conditions stipulated by SEBI. Penalties and procedures- Under Section 23 of the SCR Act, various penalties have been listed and any person who indulges in them be subjected to a penalty decided by the adjudicating officer or imprisonment which may extend to 10 years or fine which may extend to  twenty five crore Rupees. The penalties have been explained as follows – Penalty for failure to furnish information, return, etc Any person, who is required under this act, fails to furnish any information, document, books, returns or report to a recognised stock exchange or fails to maintain books of accounts Penalty for failure by any person to enter into any agreement with clients Any person who is required under this act or any bye laws of a recognised stock exchange, fails to enter into an agreement with his clients. Penalty for failure to redress investor’s grievances If any

Depreciation is an accounting practice used to spread the cost of a tangible or physical asset over its useful life. Depreciation represents how much of the asset’s value has been used up in any given time period. Companies depreciate assets for both tax and accounting purposes and have several different methods to choose from. A depreciating asset is an asset that has a limited effective life and can reasonably be expected to decline in value over the time it is used. Depreciating assets include such items as computers, electric tools, furniture and motor vehicles. Land and items of trading stock are specifically excluded from the definition of depreciating asset. Most intangible assets are also excluded from the definition of depreciating asset. Only the following intangible assets, if they are not trading stock, are specifically included as depreciating assets: in-house software; see In-house software certain items of intellectual property (patents, registered designs, copyrights and licences of these) mining, quarrying or prospecting rights and information certain indefeasible rights to use a telecommunications cable system certain telecommunications site access rights, and spectrum licences. Improvements to land or fixtures on land (for example, windmills and fences) may be depreciating assets and are treated as separate from the land, regardless of whether they can be removed or not. What Is a Depreciated Asset? A fully depreciated asset is a property, plant or piece of equipment (PP&E) which, for accounting purposes, is worth only its salvage value. Whenever an asset is capitalized, its cost is depreciated over several years according to a depreciation schedule. Theoretically, this provides a more accurate estimate of the true expenses of maintaining the company’s operations each year. An asset can reach full depreciation when its useful life expires or if an impairment charge is incurred against the original cost, though this is less common. If a company takes a full impairment charge against the asset, the asset immediately becomes fully depreciated, leaving only its salvage value (also known as terminal value or residual value). The depreciation method can take the form of straight-line or accelerated (double-declining-balance or sum-of-year), and when accumulated depreciation matches the original cost, the asset is now fully depreciated on the company’s books. In reality, it is difficult to predict the useful life of an asset, so depreciation expenses represent only a rough estimate of the true amount of an asset used up each year. Conservative accounting practices dictate that when in doubt, it is more prudent to use a faster depreciation schedule so that expenses are recognized earlier. In that way, if the asset does not live out the expected life, the company does not incur an unexpected accounting loss. Types of Depreciation Straight-Line- The straight-line method is the most basic way to record depreciation. It reports an equal depreciation expense each year throughout the entire useful life of the asset until the asset is depreciated down to its salvage value. Declining Balance- The declining balance method is an accelerated depreciation method that begins with the asset’s book, rather than salvage, value. Because an asset’s carrying value is higher in earlier years (before it has begun to be depreciated), the same percentage causes a larger depreciation expense amount in earlier years, Double-Declining Balance (DDB)- The double-declining balance (DDB) method is an even more accelerated depreciation method. It doubles the (1/Useful Life) multiplier, making it essentially twice as fast as the declining balance method. Sum-of-the-Years’ Digits (SYD)– The sum-of-the-years’ digits (SYD) method also allows for accelerated depreciation. You start by combining all the digits of the expected life of the asset. FAQs How Do Businesses Determine Salvage Value? Salvage value can be based on past history of similar assets, a professional appraisal, or a percentage estimate of the value of the asset at the end of its useful life. What Is Depreciation Recapture? Depreciation recapture is a provision of the tax law that requires businesses or individuals that make a profit in selling an asset that they have previously depreciated to report it as income. In effect, the amount of money they claimed in depreciation is subtracted from the cost basis they use to determine their gain in the transaction. Recapture can be common in real estate transactions where a property that has been depreciated for tax purposes, such as an apartment building, has gained in value over time. How Does Depreciation Differ From Amortization? Depreciation refers only to physical assets or property. Amortization essentially depreciates intangible assets, such as intellectual property like trademarks or patents, over time. 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ce Cream is considered as the most popular form of dessert across the world. On the basis of the product, the ice cream market can be further categorised into impulse ice cream, take-home ice cream and artisanal ice cream. Indian Ice Cream industry is one of the fastest growing segments in the dairy industry. As of 2016, the ice cream industry in India generated a revenue of more than USD 1.5 billion and it also has estimated to reach a revenue of approximately USD 3.4 billion by 2021. The key players or competitors in the Indian ice cream market currently are Kwality Walls franchise, Vadilal, and Cream Bell. Kwality Wall’s a frozen dessert brand is a subsidiary of Hindustan Unilever Limited, an India based consumer goods company with its headquarters in Mumbai. It is a brand name that was created by merging two individual independent companies together, Kwality of India and Wall’s of Great Britain. Kwality Wall’s is a well-recognised Ice cream brand of India’s leading and biggest FMCG company which is a major producer and distributor in India, Bhutan, Nepal, Brunei, Sri Lanka and Malaysia. Kwality Wall’s history Kwality, the Indian company was originally founded in 1956. The company was first in their region to import machinery the masses of India and sale of ice cream on a large scale. It was in 1995 that Kwality entered into an agreement with Lever as they saw a potential growth in the frozen confections market the company is also an extension of the Wall’s ice cream brand of Great Britain. It was since then the company has been known by its current name Kwality Wall’s. By August 2013, Kwality Wall’s expanded their production and distribution to Bangladesh, Nepal, Bhutan and Brunei. Kwality Wall’s was ranked 632nd among India’s most trusted brand according to a Brand Trust Report of 2013 and later on in 2014, the brand was ranked 382nd among India’s most trusted brands. Ice Cream Industry in India In India, ice cream industry is one of the fastest growing divisions of the food processing or dairy industry. Recently, ice cream business in India has been estimated to be over INR 4,000 crores and is increasing at a rate of 15-20% every year. It is predicted that by 2019, the market value will reach around INR 6,198 crores. With the increasing disposable income and the changing lifestyle, the sector has great potential for growth. What is Kwality Wall’s USP? A strong and well-established brand name- It is considered as a brand because Kwality Wall’s frozen desserts and ice creams are produced and distributed by the largest FMCG company, Hindustan Lever Limited. The brand has got its identity because it relates to its customer’s delight and taste for the product without compromising on hygiene and nutrition. The company has kept its brand value at the highest due to its total commitment to high standards of performance and productivity and working as a team effectively and efficiently. Good product distribution and market availability- The company’s marketing strategy for distribution the products and making it readily available at every consumer market possible has paved the way for sustainability, profitability and constant growth of the company. It has also lead to creating long-term value for its shareholders and business partners. Various flavours and diversified varieties of products – In order to keep the customers delighted always, Kwality Wall’s is determined to keep introducing new flavours with new assortments to maintain a long-lasting relationship with their customer base. Kwality Walls’ ice cream also consists of the following powerful and well-known portfolio of brands. They are Wall’s, Magnum, Paddle Pop, Cornetto and Ben & Jerry’s. HUL has made a considerable amount of investments to maintain high standards to ensure customers get the highest quality of products. What are the benefits of owning a Kwality Wall’s franchise? Kwality Wall’s is a leading player in the Indian Ice Cream industry who started giving out franchises in 2003. The company is designed to delight its customers and provide them with new and exciting flavours and products. So if you are thinking about taking a franchise then you should know the benefits that come along with it. 1.      The biggest advantage of owning a Kwality Wall’s franchise is the well-established and reputed brand name it has in the consumer market. 2.      The company provides great returns-on-investment. 3.      They produce a delightful range of ice cream flavours and sundaes to delight more customers every day thereby increasing footfalls in your franchise outlet. 4.      The owner of the franchise gets branch design and development support from Kwality Wall’s head office. 5.      The franchise owners are also provided with complete marketing, promotional and advertisement support. 6.      Franchise owners are also given exclusive territorial rights which are not given by other ice cream brands. 7.      Owners can be benefitted by renewing their franchise agreements once the three-year term gets over. Requirements for opening a Kwality Wall’s franchise outlet? Area- The requirements for setting up a Kwality Wall’s outlet vary depending upon the location. There are two parlour concepts in India, either you can set up an exclusive shop or make a kiosk. They are divided into two categories Kwality Wall’s ice cream parlours – Kwality Wall’s ice cream parlour – Kiosk The area required for a Kwality Wall’s ice cream parlour – Kiosk is 8 x 6 Sq.Ft. – Kwality Wall’s ice cream parlour – Exclusive Shop The area required for a Kwality Wall’s ice cream parlour – Exclusive shop is 150 Sq.ft area with a frontage of 10 Sq.ft. Swirls ice cream parlours – Swirl’s ice cream parlours – Kiosk The area required for a Swirl’s ice cream parlour – Kiosk is 8 x 8 Sq.Ft. – Swirl’s ice cream parlours – Exclusive shop  The area required for a Swirl’s ice cream parlour – Exclusive shop is 100 Sq.ft area with a frontage of 12 Sq.ft. Skills required – A candidate