PERIYAR UNIVERSITY SALEM 636 011.

PERIYAR INSTITUTE OF DISTANCE DUCATION [PRIDE]

B.COM DEGREE IN CO-OPERATION

[Candidates admitted from 2008-2009 onwards]

Prepared by: S. Gurunathan. MCS., M.Phil Lecturer in Commerce Sengunthar Arts & Science College Tiruchengode 637 205 Namakkal Dt.

UNIT - I Introduction The word Communication is derived from the Latin word communication which means to share. It is the act of sharing or imparting a share of anything. II. Meaning The word communication has. been derived from the Latin word communis which can be translated as common. Communication can be defined as the process through which two or more. persons come to exchange ideas and understandings among themselves., Communication is defined as Exchange of facts, ideas, opinions or emotions or two or more persons. Another definition of communication is Interchange of ideas from one person to another Various Situations That Communication Arises 1. Information The purpose of all communication is to bring about a change for the. better. e intention of the communication is to influence some action in order to promote common welfare of a group or an organisation. For e.g., A Indian farmer requires some information regarding the weather, prices, seeds, irrigation etc., Thus communication plays a vital role in giving information. 2. Advice The word advice is a kind of information. Parents advice their children, elders advice the young, teachers advice their pupils, politicians advice a large group. Advice means opinion given or counsel Hence advice denotes some communication which is aimed at bringing about a change. 3. Order

One of the objectives of communication is to convey orders and get them operated and receive a feed back. n order operates through communication. An order establishes the authority of the communicator. Normally if there is no conflict the order will be accepted automatically. 4. Suggestion To suggest means to call up on an idea.. It also something for acceptance or rejection Communication is used to convey suggestions or ideas. This happens in any social group like a family, office, factory, state, nation etc. Effective communication promotes the acceptance and trial of good suggestions. 5. Persuasion To persuade means to convince another or induce a person to do (or) go into action. The teacher persuades his pupils to listen to him and study. The politician persuades the voters to vote for him and his party. The managing director persuades, his subordinates to do the work according to his way of thinking. Hence persuasion is one of the importance objective of communication. Persuasion takes place through some kind of communication. 6. Warning To warn means to give notice to put on guard or to mentally register danger. We frequently notice such warning as Beware of Dogs, No Smoking, Danger? etc. Warnings are given by a higher official to his subordinates in official and factories. Hence warnings being a method of communication is essential to get the work done. 7. Motivation Motivation mans impelling powers to induce a person to act. For example, desire fear etc. Motivation is one of the important functions of management. We often say that the manager motivates the worker in a factory ad gets the work done. For this the manager has to constantly communicate with the men he manages.. Hence motivation can be successful only through proper communication.

COMMUNICATION PROCESS Communication process may involve the various elements as shown in figure: Sender Idea Encoding Channel Receiver Decoding Feed back

The above figure shows the following elements in this process. Sender The person who intends to make contact with the objective of passing information, ideas1 to other persons is known as sender. Ideas This is the subject - matter of communication. This might be opini attitude, feelings, views suggestions, orders etc. Encoding Since the subject matter of communication is abstract and intangil its transmission requires the use of certain symbols such as wor actions, pictures, etc. Conversion of the subject matte symbols is the process of encoding. Channel These symbols are transmitted through certain channels, e.g. rad telephone, air etc., depending upon the situation of the two sender parties. v sender and receiver. Receiver Receiver is the person to whom message is meant for. Decoding Receiver convert the symbols received from the sender to give I the meaning of the message.

Feedback Feedback is necessary to ensure that the receiver has received message and understands it in the same sense as sender. Further, it also acts as an energising factor, thereby changing of action in the communication. III. PRINCIPLES OF COMMUNICATION The communication to be effective must be based on certain important principles. H. Koontz says that the following principles are useful guides for establisher a good communication. 1. Clarity: A communication is said to have clarity when it is expressed and transmitted to the receiver in an understandable manner. Unless the message is well understood by the subordinates, efficiency in action shall not become reality. 2. Integrity: Managerial communications are only means but not ends. The purpose of communication is to develop understanding and to bring cc-ordination to attain the cherished goals of the firm. 3. Uses of Informal Organisation: Managers must make use of the informal organisation to supplement the communication channels of formal organisation. BENEFITS OF COMMUNICATION The importance of the concept of communicator cannot be over emphasised. Barnard has called it as the foundation of all ground activities. As stated by H. Koontz, group activity is impossible without informal transfer, because without it, co-ordination and I change cannot be effected. Communication, thus s a concept, has assumed more importance in the managerial process. Its importance can also be judged from the following benefits it provides. 1. Good communication ensures a smooth and unrestricted running of the enterprise. 2. It helps the managers to arrive at vital conclusion.

3. It Is sine quo non for the quick and systematic implementation of the managerial functions. 4. It helps a lot in planning properly and co-ordinating the various managerial functions. 5. It avoids illusions, builds up the morale of the employees and eliminates conflicts and chaos. 6. It helps in attaining maximum productivity with minimum costs. Thus, as stated by Shobhana Kandalwala, communication has become a part of education, propaganda leadership and guidance function of the management. Need and Importance of Communication in Business and Management In olden days, the scale of business operations generally used to be very small. The sole proprietor or the partners of a partnership firms carried on their business in a small area, knew their customers personally and dealt with them face to face. Hence, they did not feel the necessity of commercial correspondence. But conditions are different these days. The great developments in trade and commerce which have taken place over these years have led to a corresponding increase in communication by letters. The ever quickening pace of business life, and the expansion of trade have compelled business concerns to make use of business letters on a very large scale in order to maintain close and uninterrupted business relations with their customers. Thus a business letter is a must in modern business. It serves as a lubricating oil to the wheels of Business. It is the life blood of commerce. Without proper communication. 2. Importance Commercial correspondence has been playing a significant part in commercial progress. Correspondence is one of the main channels through which a business house makes and maintains contact with the outside world. Business correspondence is so important to a business house that experts compare it to the process of human respiration. They opine that the business correspondence is a

vital factor to run smoothly. The scope and importance of commercial correspondence is fast increasing every day because of the following reasons: 1. A considerable portion of commercial or business writing is found to be in the form of letters. Effective communication is the crux (basic of necessity) of human civilisation. Language is the most suitable and effective medium of communication to establish essential links among individuals in different walks of life. Effective communication can be established only through effective letter. 2. Commercial correspondence is expected to open up and maintain good business relations in order to introduce, promote and conclude business transactions. Thus, it is regarded as a very valuable instruction. 3. Effective commercial correspondence has enabled businessmen from one. corner of the globe to capture and expand markets all over the world. Business correspondence is therefore rightly called as The life blood of modem commercial world. 4. Business agreements concluded orally or through telephone will not be upheld in the courts of Law, unless they are made in writing. Unnecessary misunderstanding and troubles can be eliminated it all agreements are confirmed by letters. 5. A business letter is always cheaper. It can handle accurately even the most intricate (complicated) transactions. 6. On many crucial occasions, a letter can achieve certain appreciable resuIts which a personal interview may not. For a businessman, time is money, ohe cannot afford to waste his precious time. The loss of time involved in long personal and business talks can be done away by writing short letters. Even if the letters are long, they can be kept aside during busy hours and read during leisure hours. 7. The tongue and the pen are the interpreters of mind, of these two, the pen is more faithful than the tongue. This is because the tongue being seated in a most slippery place, may fail in her expressions. But the pen having the greater advantage is not so subject to error.

8. The unpleasant task of refusing a request at an interview can be conveniently accomplished through a letter. TYPES OF COMMUNICATION

Upward Downward Vertical Horizontal Grapevine Consensus Downward communication Here communication flows from a superior to a subordinate. Orders, individual instructions, policy statements, job sheets, circular etc., fall under downward communication. Downward communication is eminently suited to-an organisation in which the line of authority runs distinctly downwards, with each rank clearly below another, to which it is directly related. Main objectives of downward communication 1. To gain specific directives about the job being entrusted to a subordinate. The decisions taken at the managerial level are transmitted to the subordinate staff in the form of directives so that action may be initiated. 2. To explain policies and organisational procedures. A clear understanding of the policies gives the lower staff a wider perspective so that they can grasp and play their role more meaningfully. 3. To appraise the subordinates of their. performance. If the performance of a subordinate is objectively assessed and the assessment is communicated to him in a considerate tone, it will definitely promote his efficiency. 4. To give information about the rationale of the job, i.e., to explain to a subordinate the significance of the job assigned to him and why he has been entrusted with it.

Limitations of downward, communication Under-communication and over-communication Downward communication is often married either by under communication or over-communication, i.e., a superior. may either talk too little or too much about a job. Delay The lines of communication in downward communication being very long, transmitting information to the lowest worker is a time-consuming process. By the time information reaches him, it may have lost much of its significance, or it may have caused damaging delay. Loss of Information Unless the communication is fully written, it is not likely to be transmitted downwards fully. A part of it almost is certain to be lost. In fact, it has been experimentally verified that only 20 percent of the communication sent downward through five levels of management finally gets to the workers level. Distortion In long lines of communication, information is not only lost but even distorted. Built in resistance. Built in resistance The subordinates do not get any opportunity of participating in the decisionmaking process. They are expected to receive the policy decisions and directives without questioning their appropriateness, utility or validly which they resent.

Upward communication

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The communication channel which pushes the flow of information upwards is known as the upward channel of communication. Managers have only recently come to recognize the importance of upward communication. Importance upward communication Providing feedback Upward communication provides the Management with necessary feedback. Outlet for the pent-up emotion Upward communication gives the employees an opportunity to vent their problems and grievances. Constructive suggestions Often employees offer constructive suggestions to promote the welfare of the organization. Some of these suggestions, when implemented definitely prove beneficial. Easier introduction of new schemes Since the employees fee[ themselves to be a party to the decision- making process, it helps the organisation to introduce new schemes without unduly antogonizing the employees. Greater harmony and cohesion Upward communication acts as a kind of lubricant. It makes the atmosphere in the company congenial and creates greater harmony and cohesion between the management and the employees. Methods of upward communication Open door policy The employees are given a feeling that the managers doors are always open to them. Whenever they like, they can walk into his room without any hesitation whatsoever, and talk to him about their problems Complaints and suggestion boxes

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At some convenient places in the office or the factory, complaints and suggestion boxes are installed. Social gatherings Social gatherings are frequently arranged in different departments. These gatherings offer a very informal atmosphere in which the employees shed their inhibitions and talk about their problems. Direct correspondence Sometimes the manager may directly write to an employee and ask him to communicate with him. Reports Employees may be required to submit reports about the progress of their work at regular intervals. Counseling In some organization, workers are encouraged to seek the counsel of their superiors on their personal problems. V Limitations of upward communication 1. Employees are usually reluctant to initiate upward communication. The managers might keep their doors open. But they can force the employees to walk in to their rooms. 2. Employees often feel that if they communicate their problems I their superiors, it may adversely reflect on their own efficiency. 3. Upward communication is more prone to distortion than downward

communication. In downward communication, distortion is often unconscious. But upward communication is deliberately distorted. Some managers lose their temper if they are confronted with unpleasant facts. So information is suitably edited before it is passed on to them. While transmitting communication upwards, the

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transmitter always conscious of how it Will be received and he cannot resist the temptation of sugar-coating the information. 4. Sometimes, in the process of upward communication, worker become too bold, ignore their immediate superiors and suggestions or complaints. This proves harmful in two ways. The officers have been by - passed feel hurt, white the highups get suspicious of the workers information. The relations between the worker and their immediate superiors get strained and work suffers. 5. Any negligence shown towards upward communication makes the workers cynical. They carry the impression that the opportunity to communicate upwards is only an eye-wash. This acts as a barrier to upward communication in future. Horizontal communication Communication between departments of people on the same level in the managerial hierarchy of an organization may be termed a Horizontal or lateral communication. Horizontal communication is extremely important for promoting understanding and co-ordination among various departments. The purchase department might keep on purchasing material which is neither immediately needed nor can be adequately stored. The stores may report shortage of material when production is fully geared up. Scarcity of raw material may cause production to slow down but the sales department may continue booking orders. Free flow of horizontal communication among various departments can easily avert the incidence of such situations. Grapevine In every organisation an. informal channel of communication called the grapevine is in operation. It is quite natural for a group of people working together to be interested in one another and talk about appointments, promotions, retrenchments, or even domestic affairs. Some people derive great pleasure from gathering such secret information and

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transmitting it to others. They are the leaders who control the grapevine. Soon this top secret reaches everybody. Keith Davis rightly points out that the grapevine is more a product of the situation than it is of the person. Certain situations like insecurity of service, uncertainty over promotions, special increments to a particular employee, certain innovations in the organization that are likely to affect the job prospects of the employees, are sure to activate the leaders of the grapevine so that very soon all kinds of rumours spread in the organisation. The grapevine in basically a channel of horizontal communication, for it is only, between people working at the same level of hierarchy who can informally communicate with one another with perfect ease. Importance of the grapevine A safety valve Apprehensions experienced by workers on matters like promotions and retrenchments become an obsession with them. Talking about them may not alleviate their fears, but it certainly provides them emotional relief. Orqai1sational solidarity and cohesion The existence of the grapevine proves that the workers are in the rested in their associates. The very fact that they talk among themselves helps to promote organizational solidarity and cohesion. Supplement to other channel All information cannot be transmitted to the employees through the official channels. If there is some useful information unsuitable for being transmitted through official channels, it can be transmitted through grapevine. Quick transmission: The speed with which information is transmitted through the grapevine is just remarkable. Feedback: The grapevine provides feedback to the management.

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Demerits of the grapevine Distortion : One of the major drawbacks of the grapevine is that it may spread baseless or distorted news which may sometimes prove harmful even to the employees. Incomplete Information : The grapevine information is usually incomplete. Damaging swiftness The swiftness with which the grapevine transmits information may even be damaging. A rumour may have spread and caused serious damage before the management becomes aware of it and can take any rectifying steps. How to use grapevine effectively 1. The managers should try to spot the leaders. They should try to find out the people who. are more. active an the grapevine and keep them well informed so that harmful rumours do not reach the employees. 2. The grapevine should be used to feel the pulse of the employees. 3. If there is any false rumour, the management should immediately use the official channels to contradict and to dispel the fears of the employees. 4. If the workers are associated with decision-making, the rumour- mongers will be automatically frustrated. If the workers are already aware that the plant is to be modernized but that the modernization process is not going to involve any retrenchments, the arrival of the new machinery and engineers will not cause any undue apprehensions among them. Thus the harmful effects of the grapevine will be successfully counteracted. Consensus In the commercial field, it is felt desirable that when the board meeting is held, decision should be arrived at through consensus. Unanimous decision help to project a good image of the organisation among the employees as well as share holders. Consensus does not imply unanimity, for perfect unanimity is just impossible. It simply means that the majority of people subscribe to a particular view, which all the

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members are willing to accept in the larger interest of the organisation. The dissent is there, but the dissent is not pressed and it is minimum. Barriers in Communication There might be a number of such barriers impeding the flow of communication in the organisation. These may be classified as (i) Semantic (ii) Emotional or psychological barriers (iii) Organisational and (iv) Personal factors. 1. Semantic barriers Semantic barriers are obstructions caused in the process of receiving or understanding of the message during the process of encoding and decoding ideas and words. These barriers arise from the linguistic capacity of the parties involved. The following are some semantic barriers. Badly expressed message Lack of clarity and precision in message makes it badly expressed. Poorly chosen and empty words and phrases, careless omission, lack of coherence, bad organisation of ideas, awkward sentence structure, inadequate vocabulary, platitudes, numbing repetition, jargon, failure to clarify implications are some common faults in this case. Faulty translations Every manager receives various types of communication from superiors, peers, subordinates and he must translate information destined for subordinates, peers and superiors into language suitable to each. Hence the message has to be put into words appropriate to the frame work in which the receiver operates. Unclarified assumptions There are certain uncommunicated assumptions which underlie practically all messages. Though a message appears to be specific its underlying assumptions may not be clear to the receiver.

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Specialists language It is often found that technical personnel and special group develop a special, peculiar, and technical language of their o increases their isolation from others and builds a communication barrier. 2. Emotional or psychological barriers The following are some emotional barriers: Premature evaluation V Rogers and Roethliberger in 1952 first pointed out this barrier. Premature evaluation is the tendency of prematurely. evaluating communications, .rather than to keep an uncompromised position during the interchange. This barrier can be remedied by empathy a evaluative listening. Inattention The preoccupied mind of a receiver and the resultant non-listening is one of the major chronic psychological barriers, It is a c phenomenon that people simply fail. to react to bulletins, notices, minutes and reports. Loss by. transmission and poor retention When communication passes through various levels organisation, successive transmission of the same .message decreasingly accurate. It is said that in case of oral communication about 30% of the information is lost in each transmission. Distrust of communication It arises out of ill-considered judgments or illogical decision frequent countermanding of the original communication by the communicator. Repeated experience of this kind gradually con the receiver to delay action or act unenthusiastically and hence making the communication unsuccessful, though apparently it is complete.

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Failure to communicate It is quite an accepted fact that managers often tail to transmit needed messages. This might be because of laziness on the part communicator, or assuming that everybody knows, or procrastination hogging information or deliberately to embarrass others. 3. Organisational barriers Organisational policy The general organisational policy regarding communication an overall guideline to everyone in the organisation regarding how normally expected to behave in this matter, Organisational rules and regulations Organisational rules and regulations affect the flow of communication by prescribing the subject matter to be communicated and also the manner through which those are to be communicated. The rules may restrict the flow of certain messages and may leave many important ones. On the other hand, communication through proper channel in a specified way prescribed by these rules delays it and works against the willingness of persons to convey the message. This barrier is strongly operative in Indian Public Sector enterprises where observance of rules and regulations are more rigid. Status relationships The placing of people in superior subordinate capacity in the formal organisation structure also blocks the flow of communication and more particularly in upward direction. Greater the difference between hierarchical positions in terms of their status greater would be the possibility of communication breakdown. Complexity in organisation structure In an organisation where there are a number of managerial levels, communication gets delayed. Chances of communication getting distorted are more in case of upward communication, because people generally do not like to pass up the adverse criticism either of themselves or of their superiors.

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Organisational facilities Organisational facilities provided for smooth, adequate, clear and timely flow of communication may take a number of forms. Some of these have been mentioned earlier in the communication media such as meetings, conferences, complaint box, suggestions box, open door system, social and cultural gatherings etc -If these are not properly emphasized generally people fail to make effective communication. 4. Personal barriers A plethora of factors internal to the two parties sender and receiver- to this process also exert important influences on its operation, as communication is basically an interpersonal process. a) Barriers In superiors Attitude of superiors The attitude of superiors towards communication in general or in at t, particular direction affect the flow of message in different directions. For example, if this attitude is unfavourable, there is greater possibility that messages would not flow adequately from and or to superiors. Fear of challenge to authority A person in the organisation always tries to get a higher position and prestige to satisfy his needs. As such managers in general try to withhold the information coming down the line or going up as frequent passing or information may disclose their weakness. Insistence on proper channel One of the basic features of superiors exercising of the authority is that they wish to remain in communication links and they do not like an. type of by - passing in communication.

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Lack of confidence in subordinates Superiors generally perceive that their subordinates are less competent and capable, they are not able to advise superiors or they may not have some information coming downwards. Ignoring communication Sometimes superiors consciously and deliberately ignore the communication from their subordinates to maintain their importance. Lack of time Superiors feel, whether correct or otherwise, that they are overburdened with the work and they have little time to. talk to their subordinates. Lack of awareness Sometimes superiors may lack awareness about the significance and usefulness of. communication in different directions in general or of a particular subject-matter. In such a case, communication flow is blocked. b) Barriers in subordinates Vertical communication in either direction can take place only when subordinates also actively participate in this process. There are various factors in the subordinates that adversely affect such active participation on their part. Some factors which have been traced in the case of superiors are also applicable here, such as attitude, time availability, awareness about the significance, etc. Lack of proper Incentive Lack of motivations to communicate also prevents subordinates to communicate upwards. The ward and punishment system of the organization is more responsible for this. If a novel suggestion by a subordinate does not evoke any attention from the organizations, he would not convey it.

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How to Make Communication Effective There are various guidelines for making effective communication. American Management Association has suggested ten commandments of good communication. Clarity in idea The communicator should be quite clear about what he wants to communicate. Communication is a process starting with ideation which includes generation of ideas which are meant for communication. This is the subject-matter of communication and may include opinions, attitudes, feelings, views, suggestions, orders etc. Purpose of communication Every communication has some purpose, the basic purpose, of any communication being to get behavioral response from the receiver of the communication. However the ultimate objective may be extended further, for example, getting an order accepted by the subordinate. The communication should be directed towards this objective by the efforts of communicator. Empathy in communication The way for effective communication is to be sensitive towards receivers needs, feelings, and perceptions. This is what psychologists call empathy in communication, implying putting lase in others shoes. Two-way communication Communication is a two-way traffic and this fact must be realised in communication. Two-way communication brings two minds together which is the basic core Of any communication. It involves a continuous dialogue between sender and receiver of the massage. Appropriate language The subject-matter of communication is transmitted by decoding it into some symbols. Such symbols may be in the form of words, either spoken or written, and gestures, if words are used, the languages used for communication should be such, which

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is understandable by the receiver. Technical terminology and multi-syllable words may be impressive looking, but they can also be troublesome to the listener. One way of making the communication simple is to use repetitive language with which receiver is quite familiar. Supporting words with action Often it is said that action speaks louder than words. While communicating, the V sender may use the actions to emphasise a point. This will ensure seriousness in communication. Credibility In communication. One criterion for effective management communication is that demonstrated through his competence that he Is worthy for trust must also maintain his trust and creditability. Thus any communication which is based on this trust and creditability will be followed subordinates. Good listening A communicator must be a good listener too. By this process, he is not only giving chance to others to speck but he gathers usual information for further communication. By concentrating on the speakers explicit and implicit meanings, the manager can obtain a much better understanding of what is being said. Nicholas has identified managers suffer from some common habits of bad listening. Davis suggested ten points which may be observed in listening. These Stop talking, put the talker at ease, show the talker that you w to listen to, remove distractions, empathies with the talker, patient, hold your temper, go easy on arguments and criticism, questions, stop talking. He has emphasized stop talking because without stopping talking, one cannot listen to. Key concepts for review Process of communication - Encoding - Grapevine

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- Semantic Barriers - Psychological Barriers - Organizational Barriers - Personal Barriers - Art of listening LISTENING Listening an important aid to communication. Whenever a person communicates anything orally, it will reach the communicate only when he listens to it. Listening is different from learning. It involves much more than hearing. Hearing is simply perceiving sound. When you perceive a sound, you are merely aware of it. You dont necessarily comprehend it. On the other hand, when you listen, you interpret and assign meaning to the sounds. Keys to Better Listening Following are considered as the keys to better listening. 1. Undivided Attention: While listening to a lecture, one should give the speaker, his/her undivided attention. In other words, he has to pay more attention to what the speaker says than to how he says it. Listeners have to focus on the content of the talk and do not overly concerned about how the talk is delivered. Speaker may have dressed inappropriately, spoken very fast, appeared nervous. Do not bother. Always give importance to what is said than how it is said. Similarly, dont miss a topic simply because it is presented in an uninteresting manner. Some information that may be boring in fact may prove to be wry much useful. 2. Be Open-minded: While listening to a speech dont look at whom you are listening to or what the topic is etc. Keep your emotions under control; listen objectively. You should be willing to accept new information, ideas, points etc., if they are really useful.

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Dont look at the situation as a win/lose situation. Think it of as a win/win situation. Because, the speaker wins by convincing audience of the merits of his position, and the audience win by gaining new information and ideas, which will help them in performing their duties effectively. 3. Actively Involve Yourself Mentally: While listening to a lecture, actively involve yourself in it. Dont get distracted. Repeat the important ideas, which the speaker put before you to yourself. This will be of very much useful to understand the lecture better. If you feel that noting down the points will be helpful, note down the main points in a brief manner. Dont become so busy writing down the facts that you miss the message. 4. Listen with a Positive Attitude: Mostly, listeners fail to listen because they are not mentally prepared to listen. This is not correct. Li4eners should listen with a positive attitude. 5. No Interruption: Interrupting a speaker creates a barrier to effective communication. It may be due to impatience, time pressure, etc. Such interruptions have many negative consequences. They are considered as rude. They tend to drag out the exchange of information instead of speeding up. 6. Bodily Exhibitions: A listener must show himself that he is interested in listening. Non-verbal signs can be used to exhibit affirmative head nods and appropriate facial expressions, eye contact etc., convey certain things to the speaker. 7. Ask Questions: An effective listener always asks questions, clarifies doubts, seeks explanations, and ensures dear understanding. This makes the speaker realise that he is really listening. 8. Do not Overtake: Some people instead of listening to the speaker till he completes his version, speak their own ideas or points. Listening is the price one has to pay to get the people talk. An effective listener will never overtake the speaker. One cannot talk and listen at the same time.

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9. Put the Speaker at Ease: By your attitude, help the speaker become relaxed and aware of a willing listener. Be not only seen to listen, but felt to listen. And use eye contact. 10. Listen Patiently: The speaker is entitled to be heard, even if you feel his approach is wrong. 11. Avoid Premature Arguments: Dont interrupt to question or argue about facts: 12. Remove Distractions: Dont play with papers, pencils or anything else. 13. Indicate Acceptance: An occasional yes or I see or even a nod of the head indicates attention. It can also acknowledge what is being said. 14. Observe Nan-verbal Cues: Search out the main points. Observe the nonverbal areas such as tone, pitch, physical gesture etc., which too convey meaning to the message. A listener may note them down as these will help in revealing if the speaker appears to be sincere in his views. 15. Avoid Fake Attention: Many listeners mistake silence for listening. They develop the habit of faking attention. They steadily fix their eyes on the speaker and try to pretend as good listeners. They usually miss out many important points made by the speaker. 16. No Personal Bias: It is always desirable to drop personal biase and attitudes about a speaker arid his views. Listeners often prematurely dismiss lectures as uninteresting. They assume so and let their mind wander some where else. . VI. Channels of communication Todays dynamic business require many mechanical devices for fast of quick communication for manages to make effective decisions. A manager must communicate both internally and externally.

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I. Internal Communication 1. Oral communication a. Face - to - face communication Oral communication is the most popular means of transmitting - messages, whether in business or social set up. It is used more often than any other type of communication. * b. Mechanical devices i) Staff on location The superior appoints a staff for the delegation of authority. He communicates with the concerned worker regarding his work at the time of working hours. ii) Telephone In todays fast moving competitive business world, telephone is one of the most commonly used means of oral communication. It is to make appointments, to establish valuable business contacts and numerous other things. Advantages 1. lt saves time 2. Effective if voice is modulated 3. It helps for immediate feed back. 4. The communicator can make sure that his communication has been well underetood and the communicator can have his doubts clarified. Disadvantages 1. They cannot use facial expressions. 2. Since telephone service, especially in India is still far from satisfactory, a lot of time is wasted. 3. A telephone message does not provide a permanent record for legal purposes. . 4. Nuisance of wrong numbers

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5. Dependent entirely on voice modulation 6. Greater chances of missing or misinterpreting something. iii) Intercom or. Inter-communications The internal telephone extensions may be brought together on a private board and control for inter-communication. Any person or department having an extension line can get in toveh with an outside line or with another extension line of the same office without going through the central telephone exchange. If such a private switch boarrd is operated and controlled by an operator employed by the office, it is known as PBX (private branch exchange) If there is no operator an automatic switch board is installed for the same purpose, it is known as PABX (private automatic branch exchange). iv) Dictating machine Another mechanical device used in oral communication is dictating machine or dictaphone. It is just like a tape recorder and it records the message given by the superior. It is a substitute for the short hander. If the superior is free he will dictate it on the machine when the typist is free he will types that matter. 2.. Written Communication A. Through actual delivery i) Messenger service Written communication is as essential as oral communication. In this written communication, messengers were used to transfer the matters both internally and externally. In this type of communication, the superior will write the matter or type it and he gives to the messenger, the messenger will hand over that particular file to the concerned party as soon as possible without any delay.

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ii) Mechanical devices a. Pneumatic tubes Pneumatic tubes are located thipughout the office, The basic principle of a prieumatctube is. a hollow tube in which acun-entofairis forced from one end to the other end. It transport documents from one department to another. The initial cost is high, but the maintenance cost is low. b. Conveyor, systems Conveyor systems is used. in all offices. Documents are attached to the overhead wire which moves along supported chains and carry the documents from one place to another. Horizontal conveyor systems transport files in the same floor, while .a vertical conveyor system transports documents from top to bottom. c. Lifts Lifts may be manually operated .or electrically operated. When documents have to be passed continuously from the top floor to ground floor crossing 5 or 6 floors, this system is used. B. Without delivery I) Tele Printers Tele printer works with the help of the type writing machine to send the message from one place to another distant place. In this method, we can type the message in one place and it will be automatically typed at the other centre. This tele printer is based on the law of electro - magnitude, and so it sends the message very quickly. ii)Telex A telex machine consists of an automatic electric type writer and a dial box is installed there and it has a telex directory like a telephone directory. In India many cities have telex services, each station has a separate code number. For eg, For Mumbai, the no is o11, for Madras it is 041 etc., The telex provides automatic communication through the

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printed word between subscribers and establish their own connection to the required party by dialing a station code followed by the telex number of the called party. When the subscriber has to call a foreign party, he has to first to book a call to the International Telex service which gives connection with the foreign party. The charges for a telex call begin as soon as the number is connected. iii) Tele - writer The another device used in written communication is tale writer. It is just like the tele printer. This is also based on the law of electro magnitude. This is also called as tale type- writer. But nowadays it is not in use because of its lack of clarity. iv) Closed - circuit television In very big organizations and factories this closed circuit televisions are used. Because it is very difficult to supervise each and every ones work, closed circuit televisions are fitted in important junctions and are carefully watched by the top authority. This helps to reduce the cost of production by decreasing the number of supervisors in the company. II. External Communication 1. Oral Communication a. Telephone The telephone is the most important tool of communication employed. in the business world today. A telephone is a great tactility, its quickness is its greatest advantage. It saves time and money and ultimately it is a cheap mode of communication. The disadvantage of telephone communication is that one is not sure of getting the number when it is wanted and lf one gets the number the person called may not be available or may avoid talking. b. Fascimile (Fax) This modern machine fascimile or Fax is used to transmit visual materials such as diagram, illustrations, photographs or artworks. This is connected with a telephone. One

29

can transmit the information through the fax to a distant place where an identical copy of the document is reproduced by the receiving fax machine. The message is electronically scanned and signals are transmitted to the receiving end. We can send important documents like certificates, degress testimonials, agreements and contracts from one place to another place at the speed of a telephone call. c. E-Mail This is popularly known as Electronic Mail. This is also similar to fax but are connected by two computers. The message is typed on the computer screen at one end and is conveyed to the other computer through electronic impulses. If the computers have fax, telephone or telex facilities attached to them, E-mail can be used .to transmit telephonic messages or to send important documents. Advantages 1. It can be easily stored for future reference. 2. It is quick and time saving. 3. lt both persons are simultaneously sitting at both ends, clarification can be easily sought. 4. E-mail messages can be made highly confidential by using codes. d. Tele conferencing It is now possible to link one telephone number with many telephone numbers simultaneously, leading to a mini-conference out meeting each other face-to-face. It saves costly executive time money. We can even attach television (video facilities) to enable people to see each other while taching. 2. Written Communication a) Postal & Telegraphic Services In many business organizations most of the business transact are held only by the postal services. It is an effective communication least cost of production. Letters, parcels

30

are sent through the Offices: QMS (Quick mail service) Post bags. post boxes, insurance V.PP. are the facilities given by the post offices to the commercial sectors. Likewise telegram were used for quick transmission. b) Tele-fax It is the latest system of machine used in highly, professional offices. In this system drawings, photographs, documents, are sent through by means of electronic system. The documents are fed at one end by pressing a button, a similar image is formed at the other end. VIII. Elements of communication The basic elements of communication are: 1. Sender i.e., Communicator: Sender is a person who sends a message. He may be a writer, speaker or actor. 2. Receiver i.e., Communicatee: Receiver is a person who receives a message. The receiver may be a reader, listener or observer. 3. Message: Message is the subject matter of communication. It is in the form of a verbal or non-verbal language. Verbal language means spoken or written words or numbers. Non-verbal language can take the form of facial or body gestures or expressions. 4. Channels of Communication: Channel is the media by which the message is flowed from the communicator to the communicatee. It acts as a connecting link between them. 5. Feedback: The last stage in the communication process is feedback, the receiver makes it known to the sender that he understood the message. The communication process is said to be completed when the communicator receives the feedback. Feedback is the response, reaction or reply made by the communicatee.

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Notes ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Notes ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Unit II
COMMON ERRORS IN LETTER WRITING Commercial English which was in vogue during the Victorian period has lost much of its charm these days. They have become meaningless jargons, lacking sincerity. The use of simple, natural English is preferred in commercial correspondence. Some examples: 1. Commerical English Yours of the 18th instant to hand and the same shall receive prompt attention. Simple Usage: We tank your for your letter of the 18 th January 1985. it shall receive our prompt attention. Instead of Say

2. We beg of acknowledge receipt of your We have received your letter. favour 3. We enclose herewith or Enclosed please We enclose find 4. I am to point out that the prices quoted are The prices quoted are subject to a trade discount of subject to attrade discount of 25% 5. With a view to a discussion of the matter 6. 25% (The words I am to point out are redundant. To discuss the matter.

it will be appreciated that owing to Owing to frequent price changes we fare unable to

fluctuation in prices it is impossible for us to quote. quote 7. Adverting to your favour Referring to your letter (or) Thank your for your letter 8. We beg to thank you We thank your

34

9. The favour of your early reply will oblige

I shall be glad to hear from you soon.

10. Assuring your of our best attention at all Meaning less endings. Hence better to avoid them. times. / Thanking you in anticipation. We beg Altogether. to remain / Awaiting the favour of you early 11. As per 12. At your earlier convenience 13. Only too pleased to 14. please be good enough to advise us f 15. Contents noted 16. 2nd inst., Proximo, ultimo 17. Our Mr. Antony 18. Commence According to As soon as possible Very gald to Please tell us Unnecessary expression; hence can be omitted. Better to mention the name of the month. Mr. Antony, our Sales Officer. Begin

19. In the course of his speech, he talked on During his speech, he talked about security the question of security 20. Rules have been made for the avoidance Rules have been made for avoiding and settling and settlement of disputes disputes. goal cannot be achieved without the

21. Achievement of this goal is not possible This without the co-operation of the staff

cooperation of the staff.\

22. We shall advise you as soon as goods are Inform ready 23. We don anticipate any difficulty in expect

meeting your requirements Correct the following: Questions 1. 9 persons .. Corrected Answers (Nine persons)

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2. Twelve days.. (Rule: Figures must be used for numbers 10

(12 days)

and above; they must be spelt out if below ten.) 3. Thirty five members attended.. (Rule: A hyphen must be used to join the compound numbers from 21 to 99) 4. 0.45 = . (Rule: figure ) 5. Twenty-fifth December 1989.. (Rule: Date must be written in figures) 6. 90 clock (Rule: if 0clock is used to indicate time, the numeral must be spelt out 7. please acknowledge the receipt of this letter. (Please acknowledge receipt of this letter) 8. The Sales Manager and not his assistants, were responsible for this omission. (The Sales Manager and not his assistants, was responsible for this omission.) 9. One of the directors have resigned. (One of the directors has resigned.) (nine 0clock) (25 December 1989) Two zeroes must be put before the (00.45) (Thirty-five)

decimal point in case there is no integer in a

10. The committee is unable to agree on the (The committee has unable to agree proposal. 11. report on the proposal.)

The Committee have submitted their (The committee has submitted its report. Here the committee is

36

refered to a single unit.) 12. None have turned up for the meeting (None has tuned up for the

meeting.) 13. Everybody are entitled to vote at the (Everybody is entitled to vote at the meeting.)

meeting.

14. Neither the chairman nor the members has (Neither the chairman nor the tuned up. 15. Two-birds of this pole are rotten. (Rule: The complete subject determines the members have turned up.) (Two-thirds of this pole is rotten.)

number of the verb.) 16. Some of the files has been stolen. (Some of the files have been stolen.) 17. One thousand rupees are a lot of money (One thousand rupees is a lot of for the poor. 18. money for the poor.

The number of files missing are very (The number of files missing is very small.) (I)

small. 19. Mr. K is more successful than me.

20. We have received your order of 1st June (it) 1980. and the same is receiving attention.

Kinds of Business Letters Name the different kinds of, business letters. With the widening of the area of business operations as well as with the stupendous increase in the volume of business done by each. Business unit business letters take different forms and are of diverse varieties The various kinds of business letters are briefly enumerated below:

37

1. Letters of - Enquiry and Replies: These are meant for knowing the availability of goods price lists, V terms of trade, request for lowest quotations etc, and replies from business units. V 2. Offers and Quotations: V These are letters in the nature V of a circular announcing offer of goods cautioning the danger V of poor supply in future and emphasizing the benefits of present buying. Letters containing quotations sent in response to a request theref9r state the rates at which goods will be offered for sale.

3. Orders and their Execution: Letters placing orders with firms V for the supply Of V specified quantities of goods, letters intimating execution of orders or requesting condonation of delays come under this category. 4. Status Enquiries: Letters written to business hoses to ascertain the advisability of granting credit to specified parties when fresh applicants for credit approach them are called letters of status enquires. The persons addressed are the firms furnished as references by such creditapplicants. Replies furnishing opinion on the Credit standing of parties referred to also come under this type. 5. Complaints, claims and. adjustments Letters of-complaints are many. They may be with regard to poor quality of goods supplied, short supply, delay in the. execution of orders etc. Replies assuaging the wounded feelings, called adjustment letters require to be drafted. with tact, ad courtesy .

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6. Circular Letters: These letters convey messages meant for a number Of parties may be customers, business friends, dealers etc. Example: Removal of business to new premises, obtaining an agency, clearance sales, retirement of a partner etc. 7. Letters Relating to Agency: Applications requesting grant of agency, letters granting agency, letters seeking reasons for foor sales performance etc. come under this type. 8. Collection Letters (Dunning Letters): These are letters demanding settlement of dues, granting time extention for payment threatening legal action against continued default etc. 9. Application for a situation: These relate to applications put in for appointment to posts advertised or heard about. Appointment letters and letters verifying reference will also come under this category. 10. Letters of Recommendation. They may be testimonials given or letters in traducing business friends to other business houses for help. 11. Letters Relating to Export and Import: These comprise letters seeking price quotation Placing orders with foreign suppliers advice of shipment, letters of advice of sale etc. 12. Bank Correspondence . Correspond, with the bankers by any business house is very frequent. Standing instructions to bankers, letters regarding dishonored cheques, those requesting loan facilities, correspondence by bankers to business houses (e.g asking 1. for production of more securities) letters from banks to their Head offices and vice versa, letters from one bank to another alt these come under this type.

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13. Insurance Correspondence: Requests for cover against fire or marine risk, notice of damage by fire together with claim, replies of insurance companies accepting liability or rejecting claims come under insurance correspondence 14. Secretarial Correspondence: The correspondence of the company secretary with the directors, shareholders, office staff, Registrar of joint stock companies, correspondence with various government bodies with banks, stock exchanges, etc. come under secretarial correspondence.

15. Correspondence with Government Departments: No business unit can function these days without having something to do with various government departments. Obtaining licenses, submission of various statical data, seeking clarifications on various government orders-all come under this category. These are the important kinds of business letters. Note: If a question on kinds of business letters is asked under section A or B, itls enough to enumerate the various kinds of business letters given as paragraph headings in this answer, In other words, n explanation is needed. Structure of a Business Letter A Business letter consists of eight parts 1. Heading 2. Date 3. Reference number 4. Inside address

40

5. Salutation 6. Body of the letter - consisting of: a) introductory paragraph b) the message c) closing paragraph 7. Complimentary close or subscription 8. Writers signature and designation Spacing the parts of the letter The spacings which must be observed in a letter are indicated in the layout shown below:

The Layout of a Business Letter ___________________________________ _______________ _______________ _______________ _______________ Ref.No Inside address _______________ _______________ Saluation _______________ _________________________________________________________________ _________________________________________________________________ _____________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________ ___________________________ ___________________________ Heading Complement ary close and signature Heading Date

Message

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The name of the organization is printed at the top of the letter and the address at the right hand side. It may also give particulars such as description of the business, telephone number telegraphic addresses of its branches and the address of its head office. The following letter-head is a typical one. The printed letter head, thus constitutes the senders address enabling the addressee to reply.

VENGATESWARA LIMITED (Dealers in Textiles) Phone: 654 Tele: Gram: Balaji Ref.No Date The date is typed next to the address, at the right side of the letter There are three ways of denoting the date: (i) English Style - Englishmen generally write the date as, 30th October 1998 (ii) American Style - October 30, 1998 (iii) Oxford University Press Style - 30 October,1 998. In the English style the date is written in the order of day, month and year. In the American style it is in the order of month, day and year. The Oxford style is similar to the English except that the day is not followed by the suffixes-st, nd, rd and th. In all the three types, a comma is placed before the year and a full stop after the year. 3. Reference Number Reference numbers are often quoted at the left hand side of the letter but not on the same line of the date. The reference may take a variety of forms. Let may serve to identify either the department other section of a department from where the letter was written. e.g.- Our, ref: Dep. B\o. or it may refert o the file in which the correspondence is to be found: 561, Ashok nagar, Madras ..

42

e.g.- Our ref: R 468.78 It is also common that the reference consists of the initials of the person dictating the letter and of the typist: eg. - Our ref: RG\YR . The reference enables the original writer to identify the particular member of the staff who had dealt with the letter. Failure to quote a given reference causes much inconvenience and surely it is discourteous. 4. Inside Address This is the address of the person to whom letter is directed it is typed from the left hand hand margin with three line spacing below the reference line. This inside address is useful to the writer. Normally, copies of such letters are filed for future reference. Without the inside address, we can not identify the addresses at that time. It may be either in the indented form or in the block from as shown below.

Indented form Messers. Chellam & Co. 444. Main Road Kovilkpatti

Block form Messers. Chellam & Co. 444. Main Road Kovilkpatti

In the indented form each line is indented five or more line spaces to the right of the first letter of the preceding line. In the block form each line starts at the margin, and punctuation is omitted wherever it is not necessary. The former4 form is commonly used in England and the latter in the U.S.A. But there should be consistency in the use of any one particular form. Students are advised to follow block form consistently in all letters. The address should be correctly punctuated. Commas should be placed after the firms name after the door number and after the name of the street. A full-stop should be upt after the name of the city.

43

Inside address need not be written on a post card, since outside address appears just on the other side. Modes of addressing Mr, Miss, Mrs and Messrs, are the ordinary titles used for addressing correspondence. There are also other titles of rank such as Doctor, Professor, Sir, Colonel, Captain, Reverned. Mr. is the appropriate mode of addressing in general, it becomes a must when forename or initial is not known. (e.g.) Mr. R. Kaviarasu / Mr. Kaviarasu Miss - The name of an unmarried woman should be preceded by Miss or Selvi. (e.g.) Miss K. Sutha / Selvi N. Geetha Mrs- The anme of a married woman should be preceded by Mrs. (Mistress) or Tmt. (Thirumathi) (e.g.) Mrs. Gandhi / Mrs. Indira Gandhi In foreign countries, the practice is to write the husbands name ( or initials) and his surname after Mrs (e.g.) Mrs. Robert Kennedy or Mrs. R. Kenney If the husband name or initial is not known, surname alone may us used after Mrs. This is quite common. (e.g.) Mrs. Kennedy / Mrs. Naidu In western countries, normally the Chirstain name of the woman is not written except in legal documents. But in India, the common practice is to insert personal name between Mrs and the husbands surname for easy identification. (e.g.) Mrs. Indira Gandhi - Personal name and husbands surname

44

Mrs. Gandhi Husbands surname alone.

Anyway, a married women should not be addressed by her personal name below. Wrong: Mrs. Sarojini / Mrs. Chandra Messrs: it is the abbreviation of Messiers, it is the plural of Mr. Therefore, it is appropriate to use it in the plural where Mr (or Esq) woule be used in the singular. But there are some difficulties in using this rule.

In addressing a firm Partners constitute a firm, custom has prescribed the rule that firms are addressed as Messrs, when the firms name includes a personal element, it should not be addressed as Messrs. When its name is already preceded by a courtesy title or by the word the. Dr. Nanjappa & Sons. e.g. The Himalaya Trading Company in addressing incorporated bodies The use or non use of Messrs in addressing an incorporated body like a limited company is much a matter of opinion. Although limited company is an artificial person in the eyes of law, it cannot logically be addressed except through an agent. Besides, there is a probable gain of efficiency if we address correspondence direct to the person concerned like the managing director, the sales manager, the personnel manager and so on. When we do not know which of the companys officers will deal with our letter, we may address it to, The Secretary or The Manager. Recommended practice a) For firms Messrs. is used to address a firm that has a persona! name.

45

e.g. Mssrs, R.K. Sen & Co, (Personal name) b) For incorporated bodies It is better to address correspondence to the particular officer concerned. e.g. The Manager, c) Some donts The title Messrs should not be used in the following cases: 1. When an individual is addressed: Mr. K.A. Raja, Managing Partner, The chief Accountant Morarji Mills Ltd. 2. When a title is already included in the address: Rajah Sir M.A. Muthiah Chettiar & Co., Sri Meenakshi Govt.College for Women. 3. When the title is impersonal Rainbow Trading Stores 4. When the title beings with The The New deal Radio Co., 5. The Salutation The salutation is the complimentary greeting when the writer begins his letter. This appears just three line spacing below the inside address, close to the left hand margin. The form of salutation depends upon the writers relationship with his correspondent. The salutation SW is commonly used in all government correspondence, and in a vary formal business letter. For ordinary business purposes. Dear Sir or Dear Madam* (for both single and married :woman) is used for addressing a single person. Dear Sirs, (or Mesdames*) for addressing two or more (especially when a letter is addressed to a firm.) Salutations., are

46

not used for office memoranda. Like formal invitations, they are written in thethi rd person. Dear Mr. Ravi and other similar forms may he used where the correspondents are personally known to each other or where the writer wishes to foster a personal touch to the letter as a matter of business policy. Gentlemen is a formal mode of addressing like Sirs. Now its use is specially adopted for letters and reports addressed to bodies such as boards, committees and councils. This salutation is not widely used in ordinary business correspondence. It should be noticed that the salutation is always followed by a comma.

6. Message The message refers to the information to be conveyed to the addressee. Hence, this is a most important part of the letter. This should be written in clear and concise English with correct paragraphing and punctuation. Commas and question marks should be used sparingly to have exactness of meaning and to avoid ambiguity. Typing - of the message begins two clear line spacings below the Salutation. Paragraphs are similarly spaced The body of the business letter usually consists of the following three parts: i) Opening Paragraph ii) Main communication and iii) Concluding paragraph The various subjects dealt with should be treated in the order of their importance and a separate paragraph should be devoted to each subject. . . a) Opening paragraph sees as an introduction to the suhject matter dealt within the letter. It should begin with such good natured and friendly, expressions as:

47

We are happy to - I We are glad that I We thank you for your b) The body of the letter depends upon the circumstances. If the letter is short, and deals with only one matter, one paragraph is sufficient. When there are several matters to be mentioned, however, each should be dealt with in a separate paragraph. This will facilitate easy reading. C) The concluding paragraph consists of a few sentences to conclude the letter smoothly. This paragraph should be as effective and convincing as possible because this part of the letter is likely to stay in the memory of the reader. A few examples: Assuring our best attention at all times I should appreciate the opportunity of calling on you to demonstrate our new noiseless typewriter. We accept the full blame for the unfortunate errors, and offer our sincere apologies. . . 7. Complementary Close or Subscription This consists of words expressing the regard of the writer towards his correspondent, it is simply a polite way of concluding a letter. It should always be consistent with the salutation: It should agree with the salutation not only in number and wording. bu also in style. It is typed two line spacing below the last line of the body

Salutation 1. Sir, Gentlemen, Dear Sir, Dear sirs, Dear Madam, Dear Mesadames, 2. Dear Mr. Ravi Dear Mrs.

Complimentary close

Yours faithfully,

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Dear Miss. Dear Yours sincerely

The most commonly used subscription is Yours faithfully Yours sincerely is used in business letters only. whether addressed correspondent, an expression 8. Writers Signature arid Designation It is the last part of the letter and is placed after the complimentary close. It is the signature of the writer or the name of the him or .company \ which is represented. Those who cannot sign legibly hive their names typed below their signatures. Signatures on commercial letter vary according to the authority of the person signing the letter. Per Pro Signatures In a large organization. It is impossible for the head of the organization :o de with the entire correspondence. Hence, certain employees are authorized to sign for the firm. They are said to sign per procurationment [per pro or p.p) The authority may result from custom or from the execution of a >roper Power of Attorney. The existence of the proper authorization should always was be indicated y the signature, thus: per pro Muktha & Co.. P.C. Sekar . An employee with no social authority tG bind the firm would sign Kavitha & Co.. . or For Kavitha Co., per K. Dhasan . K. Dhasari writer is well acquainted with the person .In some case, depending upon the intimacy between the writer and his

The modem tendency is to omit the per instead the designation of the signatory (e.g. Personnel Manager, Sales Manager or Secretary) is usually added. Then the recipient

49

wilt be in a better position to estimate the exact scope of powers and duties of his correspondent. Firm A partner signing for his firm may write the name of the firm without the addition of his name or initials: SANKARGANESH&CO

Womans Signature A woman, especially when Writing to a stranger. should indicate whether she is married or single so as to ensure that she is properly addressed in any reply. \She may do this in the (following way s when she writes her name below her signature: married: (Signatue) (Mrs. UMA Arasu Single (Signature) (Ms. R. Sugannia) Enclosures: When documents or papers are enclosed with the letter, it should be indicated on the left hand bottom corner of the letter by writing the word Enclosures, or Ends. (e.g.) End : one cheque.

Postscript (P.S.) If the writer wants to write something after the completion of the letter, he writes a postscript. The postscript begins with its abbreviation P.S. As the P.s. is a part of the letter,

50

it acquires the signature of the writer or his initials. Postscript should be avoided as far as possible and should be used only in unavoidable cases. The initials of the person dictating the letter and of the person typing it are often placed at the bottom of left hand corner of the letter. They are typed in capitals and separated by an oblique line. (e.g.) V.R.1K. C. The first initials indicate the party who has written it arid the second initials indicate the party who has typed it.

Use the correct Proposition Arrive at the 15th June Sold to a competitive price Supply your at the date fixed Your order from the 20th June No demand in this design. The terms to which we are prepared to well. Replenish our stock with low prices. Essential of Good Business Business letter-writing Communication is the life-blood of any business. A good lot of business is done by means of correspondence. Daily, thousands of letters, as silent and reliable salesmen, move out and move in to accomplish their ends. Letters (a) establish contact between two parties separated by long-distance (b provide w6tten evidences of what pass on between persons resulting in contractual relationship and (c) serve as a cheap mode of communication. Arrive on the 15th June Sold at a competitive price Supply your on the date fixed Supply you of the 20th June No demand for this design. The terms on which we are prepared to sell. Replenish our stock at a low prices.

51

Being different from personal letters, business letters are to be i written with special attention and in a particular style. The following may be considered for this purpose: 1 Choose the right word t convey the proper meaning of that you want to express. 2. Choose the simple word to make your letter easily understandable. The tendency to use, more complicated and round about methods. of expression of words or idiomatic sense should be avoided. eg. We shall be in a position to effect delivery - This may be written as: We shall be able to deliver.., or We can deliver 3. Use adjectives and-adverbs sparingly - e., they must be used only then they are essential and contribute something to the meaning of the statements. 4. Avoid unnecessary prepositional phrases and simplify your language. Prof. Gartside brings out this common failing in business letters (viz using cumbersomesubstitutes for a single word or a few ,simple ords). He gives the following as examples. Instead of In the event of . So as to With a view to With the object of Having regard to On the question of With the reference to With regard to Object to On the object to About/conceming to If Say

52

Avoid exaggerations : As in the commercial advertisement a common mistake in business letter writing is to exaggerate things ir order to produce a striking effect. This is al right in advertisement but not desirable in letters. 6. Avoid foreign phrases and idioms which are used common by in English. They have no place in Business English. Information technology and the future Modern business depends on two vital areas, management and communication. Ineffective management and communication will lead to fall in morale, low productivity, poor turnover and ultimately to financial disaster. Effective communication takes place only if a message or information gets transmitted from one individual (or group) to another and obtains the correct and anticipated response from the receiver. Nowadays, communication is dependent on high technology generally called Information Technology (IT). Information Technology has growth immensely having great potential for speed and efficiency. The revolution in IT has been accelerated by the invention of the silicon chip followed by the modem digital systems. Together, they have transformed compunction by replacing the traditional forms of communication including the analogue telephone. Instantaneous communication of a large volume of signals around the world has become a reality. Soon we will be seeing cashless banks and paperless offices. All that we have studied in the foregoing chapters Enquiries and offers, quotations and orders, complaints and civisms may appear unnecessary in a situation where a business manager sits before his lap-top equipped with a web-camera, negotiating a deal. It is true that traditional business correspondence should give way to the telephone, telex, the fax, email, the internet and voice mailing systems wherever speed is the watch word. However, business communication through letters will continue to have its influence in business c :ls1he high-tech machines can just tell you how you can communicate efficiently and quickly. But they can hardly tell you what you have to communicate because they are neither programmed that way nor they can be programmed to replace human brain. In fact, the development of language as a tool of communication

53

itself is a technological advancement. But it is with the invention of the telephone and telegraph that the revolution began. What does technology mean to business? The offices will have less man-power and more machine-power. The tables containing files, in-box trays will be replaced by digital desks with sophisticated electronic devices. Lengthy paper-based time-consuming communication will be eliminated. Internet, e-mail and teleconferences will become the order of the day. Errors in letters and documents can be corrected by taking advantage of special editing programmes like the spell-check The dual advantage for business lies in the increase in speed complemented by reduction in costs. Storage becomes easy demanding less space. Benefits of technological advancement to business communication 1. Speed of transmission of messages will increase. 2. Accuracy of the transmitted message will be at a higher level than in the traditional modes. 3. Man-power resource will be saved thus saving resources of energy and time. 4. Cost, particularly recurring costs like wage and wage increases will undergo phenomenal reduction. Obstacles that hinder technological advancement 1. Reluctance of managers to adapt to the new advancement. 2. Opposition on grounds of retrenchment from employees and their organizations. 3. Reluctance to make heavy investment in an area that keeps hanging at a rapid pace making the earlier investment obsolete. 4. Poor planning and improper rate of implementation of high tech modes. Need for Automation In spite of the obstacles mentioned above, automation is taking place at a hectic pace. Banks are urged by the Reserve Bank of India, Joint stock companies by the SEBI

54

and even retail traders by the Tax department to use computers for all operations like storing, retrieving and communicating information. In this context it becomes necessary for a student of business communication to get acquainted with some of the technological advancements briefly explained below: Fax: A facsimile machine (or fax) can transmit a document, as it is, over long distances to another fax machine connected through telephone line. The document gets scanned and converted into a signal and gets transmitted. A fax machine, today can transmit a page in less than half a minute. Newer machine to being developed to make transmission even faster. Images, pictures in colour can now be transmitted by faxes. It is still the best method for transmitting documents, charts, graphs, designs and contracts. Visas issued by some country can be transmitted to the anxious traveler waiting at another corner of the world. Faxes produce hard copies that can be filed for future references. e-mail: E-mail combines characteristics of speaking and writing. One can directly and immediately communicate with the receiver. One can send a message to another even if he does not know his whereabouts by just sending it across with the E-mail ID. Through E-mail one can reach individuals as well as groups. E-mail communication is more informal. Formalities observed in a traditional business communication are dropped. The informality can reduce an E-mail message into a rambling message unless one is careful to put the most important message upfront. Otherwise these is the risk of overlooking it or missing it. The following are the exercises involved in sending E-mail. 1. You should be having an E-mail account and a password for your identity. Then you can log onto a computer. 2 You should know the email ID of your receiver. It is not a postal address. 3. You have to compose the message. 4. The message should be sent to the relevant ID through the computer. 5. To receive your e-mail correspondence, you have to log on and search for the mail at your ID with your password. You can always delete, store, print or forward a message through the computer. The commands used in sending and receiving messages

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form the front-end and the process of storing messages before reading, the transport of the mail from one mail-box to another are called the back-end. E-mail ID is not confidential but the password is confidential.. Internet: A wide range of computer-networks connecting organizations and individuals to services is called Internet. One can have access to internet access the weather at any part of the world through the net. Tele Conferencing Aninter organizational meeting need not involve travel hereafter. Members can get across to each other for a conference or a meeting through telecommunication services. The advantage of having the person and seeing him at the screen while speaking and responding to him through the same facility has immense job potential for the business of tomorrow. High-level meetings can take place among executives using the facility. The cost of video-conferencing is quite high now. Voice Mail Voicemail is used in many offices today. The message is recorded in a computer and can be retrieved by the receiver later if he is not available then. The receiver can access the message through telephone also with additional facilities. We are not treating technology as a subject nor is it necessary at this stage. We have only had a glimpse of the new devices that offices are trying to acquire. The speaking tube, the telegram and the telex are all getting out moded. The pager as a device of communication is disappearing as fast as it appeared. But the telephone as a tool of communication will continue to hold its sway as person to person oral communication has great potential in business. Mobile Phones and satellites together are revolutionizing communication. More sophisticated versions of the mobile phone are on the anvil. Managing technology in Communication through commercial providers. You can book flight tickets or even railway tickets, hire services or

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Communication using hi-tech instruments has its own problems. The user has to be cautious in managing communication and technology. The users have to be wary of the computer hackers and cyber-crimes. The user friendly high tech mechanisms cannot distinguish between a genuine user and a hacker. In such a situation, confidentiality of the communication and the files in the database are at risk of getting affected. One firm can unethically eavesdrop into the policies, programmes and strategies of a competitor. Viruses can be artificially created to damage programmes. In the United States of America there are strict laws that prohibit the sale of cigarettes to minors. A recent report says that minors below sixteen place orders for cigarettes through the internet. The seller sometimes asks for their age. False information enables them to get the cigarettes dropped at their door-steps. Sellers have even sent compliments like ash-trays and lighters to minors. The law enforcing authorities lament that they are unable to enforce the law because of net-shopping practices. Another incident that happened in USA causes greater concern. In February 2000 a computer hacker operating from Montreal, Canada intercepted Yahoo.com a popular website and stopped thousands of subscribers from getting access to the information they sought or the mails they wanted to send. They had to sit before the blank screen of their PCs. Several websites went out of the circuit. Wall Street trading in stocks got crippled. The home page of several department stores were removed affecting millions of dollars of trade. The US Government formed a high level committee from different national security agencies to find the culprit. The administration was afraid of national securitys vulnerability in the face of this threat. But finding a culprit sitting behind a key board in the area of cyber -crime can be compared to the searching of a needle in a hay stack. The police of two countries jointly investigated and were able tc find the culprit in ten days. They found him to be just a boy of fifteen. He was arrested and fifty eight charges were framed against him, all relating to cyber-crime. They were able to arrest him because as an immature boy he bragged to some people about what he was doing. The boy said that he merely wanted to test the security of these webs It is considered safe by knocking then off line. He also, claimed that he wanted to launch a high security internet company for websites. This incident not only exposes the

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vulnerability of high technology but also underscores the need for international cooperation in developing them as safe and sure means of communication. Meaning of Business Correspondence The term correspondence means communication by exchange of letters, telegrams, written messages etc. that passes between persons. written communication between individuals or groups on matters of common interest. Hence , oral or face-to-face is not correspond E In other words, the term correspondence exclusively stands for written communication. The expression Business Correspondence or Commercial Correspondence refers to the written communication between two businessman connected with their business. Importance of Business correspondence In spite of the technological progress, which enables man to convey the spoken word to any distance, the practical need for written word still continues. Every businessman has to write letters at every stage of performance.. For the purchase of goods, he has to make inquiries with the suppliers. Again, he has to write letters to offer his goods for sale. Similarly, when complaints are received, he should attend them promptly. Moreover, he has to retain the relationship with the old customers and establish relationship with new ones. Every businessman has to write several letters for varied purposes and without which he can not carry on the business. Thus, business letter is the lifeblood of Theodore business. The various advantages that will accrue by effective business letters J can summarized as follows: 1. Means of connecting with the Outside World: The correspondence is the principal and sometimes the only means by which business relations with the outside world are established. It creates a good impression, and a well-drafted letter will pave way to establish new business connections and invite new customers.

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2. Record for future Reference; It constitutes a written evidence of the communications passed between the two parties and serves as an authenticated record for the future reference. Need For Business Letters In the field of trade and commerce, business letters play a significant role. Every business, whether small or. big in size, require business correspondence with many people like suppliers, customers, prospects, Government departments and the like. A businessman, as day to day activities, has to communicate with different people for different purposes. For instance, soll enquiries, placing order for goods, executing orders, granting credit, asking for credit, sending statement of accounts to his debtors, requesting for settling accounts, canvassing goods. Further, he has to contact with certain Government authorities say income tax authorities, sales tax authorities, municipalities, corporations etc. to fulfil various statutory obligations, It is very difficult to maintain contact with all these persons and institutions personally. The best method to meet all these persons and institutions is letter correspondence. Letters are the onycomnu.pic4tioz1.cbannels, which enable the firm to maintain contacts constantly of the people in the business world because it acts as a messenger. Of course, there are other means of communication, such as telex telephone, telegraph, Email, Ecommerce etc. But they can make only. a temporary impression in the minds of the receiver. Further they are quite expensive.

Functions of a Business Letter As L Gartside pursuit there are four main reasons for writing business letters, They are as follows: . 1.. To provide a convenient and inexpensive means of communication, without personal contact. 2. To seek or give information.

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3. To furnish evidence of transactions entered into, and 4. To provide a record for future -reference. These reasons can also be termed as functions of a business letter. Besides, there are other incidental functions like the building of goodwill etc. However, the principal functions performed by a business letter can be classified into four categories. They are: 1. Reference function. 2. Legal function. 3. Sales function. 4. Goodwill function. 1. Reference Function: (Letters are valid records for ready reference in the routine of administration) They are highly useful in all business transactions. ince business ls a continuous process, and administrative policies have to be shaped not only according to the current trends but also on the basis of relevant past experience, reference to previous correspondence becomes necessary) Oral transactions are of no use in those circumstances, because it is difficult and even impossible for a businessman to remember persons. Where memory fails records come to rescue. 2. Legal Function: Letters containing offers and undertakings should be legally binding. The legal position of the parties with regard to any transaction cars be clearly distinguished by pursuing the concerned correspondence. In case of any dispute, the business letters concerned with that transaction could be produced as evidence. 3. Sales Function: Promotion of sales is considered as the primary function of business correspondence. There are special types of sales letters often drafted to create a demand for new goods or expand the sales of an existing product. Letters can play the role of salesmen in creating, maintaining and expanding the market for goods and services. In fact, every business letter is a sales letter.(,,The ultimate object of every business letter is either to attract orders from the customers or to retain a customer or to expand a market) . 4. Goodwill Function: Goodwill is essentially a concept of friendliness -with the community of customer. This friendly contact is established not necessarily by personal

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visits but by the polite tone of the message put forth in the business letters. The contacts are personalized through frequent dispatch of letters on appropriate occasions\Godwill adds a moral and human touch to business routine. A badly written letter creates ill will among the customers and down grades the reputation of the firm. Goodwill can be built up by observing the following technique. Qualities of a Business Letter Letter writing, no doubt, Anyone who can write a cogent I house. An effective business letter should not leave. for further improvement, amendment or modification. The correspondent must able to collect and classify facts and to present them in a form that interest the reader, captures his attention, his approval and gets him to take the desired a all these objectives, the business letter should havdi1ta1T qualities. They are: 1. Correctness. 2. Completeness. 3. Conciseness. 4. Clearness. 5. Courtesy. 6. Cheerfulness. 1. Correctness A good business letter should always be written correctly and should always in the correct form. The information given in a business letter should be absolutely correct. Facts, figures, statements, quotations etc must be accurately mentioned. Every detail given in a letter should, therefore, be carefully checked. Since the letters constitute a record for future reference, any mistake committed shall land the business firm into trouble. 2. Completeness The information furnished in a business letter should also be complete in all respects. Inadequate information shall create a misunderstanding in the mind of the reader. Therefore, the correspondent mist have complete knowledge of the transaction. lf has full

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grasp of the subject and if he knows exactly what is to be communicated, he can easily write a letter or draft a reply covering all the necessary information. Incomplete information shall result in unnecessary exchange of letters leading to delay and frustration, and may even create an adverse effect on the reader. 3. Conciseness Though the letter to be effective must complete in all respects, it should be as precise as possible. It is always undesirable to use more shall waste the time of the Writer and also that of the reader. Besides, the reader shall also be placed in an embarrassing situation. Lack of conciseness is caused mainly by: 1. Tautology. 2. Pleonasm. 3. Verbosity. 1. Tautology: Tautology means repetition of words I.e., the addition of words that add nothing to the sense. 2. Pleonasm: Pleonasm means the use of more words than are necessary to convey the matter proposed. As in the case of tautology, it consists of adding words needlessly what is already implied. For example: A sole monopoly a false lie etc. However, pleonasm is not always a fault. It may sometimes be used to stress a particular point : 3. Verbosity: Verbosity refers to the use of many words to express what could be expressed in a fewer words. The writer can avoid tautology and pleonasm by omitting superfluous words, but verbosity requires a different treatment. 4. Clearness Simple arid clear expression is an important virtue of effective writing. The reader should not have any difficulty in understanding the matter conveyed by the writer. Clear writing is possible only when the writer has a clear idea of what he wants to say.

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If he has only a vague idea, the expression will also be vague.. It is therefore, essential for the writer to think dearly before he beings writing.As observed by Lord Chesterfield The first things necessary in writing letter of business is extreme clearness and perspicuity. (lucid). Every paragraph should be so clear and unambiguous that dullest fellow in the world may not be able to mistake it nor obliged to real it twice in order to understand it Reasons for Lack of Clearness The main reasons for lack of clearness can be listed as follows: 1. Incorrect position of words, phrase and clauses. 2. Ambiguous use of pronouns. 3. Use of words, having two meanings. 4. Faulty punctuations. 5. Confused thinking. 5. Courtesy Courtesy means consideration for the feelings of others. Courtesy costs nothing. But much is gained by it. It is like the oil, which removes friction, makes the life smooth and wins friends. It so ftens the sting of an unpleasant piece of. information, creates goodwill and produces a favorable response. The business letter, to be effective must be courteous. A discourteous letter is often very costly. It shall result in loosing of friends and business. Courtesy may be shown or a variety of ways - in the general tone of the letter, in spelling correctly the name of the person addressed, addressing him by his proper title, making prompt answers, complying with the request when no obligation is involved and so on. There are many occasions in which businessmen have to deal with many unpleasant matters like asking for the early settlement of an overdue account, making a complaint,

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replying to a discourteous letter etc. Even in those circumstances, courtesy should not be giver up. 6. Cheerfulness The letter will inspire the reader only when its contents are presented with positive and pleasing elements. Cheerfulness symbolizes optimism, goodwill, hope and confidence. The writer should draft his letter in such a way as to create cheer among the readers, hold out promises and hope instead of choosing words to cause gloom or disappointment. Positive words always have the effect of creating hope and confidence. Negative words, on the other hand, deflate the purpose of writing and acts as a drag on the goodwill of the firm. Even inconvenient and unpleasant situations can be sugar coated with cheerful expressions. The You Attitude The concept of keeping the readers interest, need and tastes in view is known as you attitude in the business world. The first requisite of a successful letter is that it would take the readers point of view. The you attitude in a letter is not merely a matter of phraseology, but is one of attitude. In other words, merely using the pronoun you will not refer to you attitude. The writer while drafting the letter should always keep in mind the interests of the reader and design his letter to appeal to him. It can be done by pointing out the qualities related to the readers vintage. Concrete things like profit, pleasure, utility, appearance or enjoyment. Therefore, the writer while drafting his letter should forget himself and should think about the person to whom it is addressed. All of us are generally tempted to write about what we ourselves are doing or hoping to do.. No one, in fact, is interested in our problems, our products or our wishes. Therefore, as observed by Robert L Shurter, In letter writing, it is a good principle to forget yourself. Think about the person to whom you are writing. He probably will not be interested in your affairs unless you show him what he should be by appealing to his interests.

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A glance through the advertising pages of any magazine will show that how effectively the copy writers use this technique. Their appeal is always to the readers interest and the same technique can be followed in business letters also. This, however, does not mean that the writer should completely suppress his own interest and unduly praise the readers interest. The writer should not artificially praise the reader or make exaggerated claims. Therefore, great caution is needed in using you attitude. Nothing in the letter should be further from the truth. Sincerity, truthfulness and integrity should rank high on the list and unless the writer uses the you attitude sincerely and in good faith, the very purpose of it will be defeated. Therefore, authorities feel that the essence of good human relations in letter is the avoidance of superficial cordiality and exaggerated claims. If properly used, the you attitude shall tell the reader in a honest, tactful and truthful manner the benefits he obtains froM an action or attitude implicit in the letter. Physical aspects or appearance of a business letter It is no exaggeration to say that the reputation of a business firm is often judged by the general appearance of its letters. It should be capable of attracting the attention of the reader. The purpose of the letter is to bring business and so the physical appearance of the letter should enable the reader to form an opinion about the firm and its reputation. If the physical appearance of the letter fails to create good impression in the mind of the reader, it may even fail to evoke the is Ponse: Therefore, the businessman should regard the physical appearance of his letter as a matter of great importance The business man should note the following paints in his mind while writing a letter. 1. Paper Regarding the paper for the letterheads and envelopes, three points need to be considered. They are: 1. Quality of the paper, 2. Colour of the paper, and 3. Size of the paper.

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1. Quality of the Paper: The paper must be of good quality. A letter written on a cheap paper shall certainly destroy, the prestige and reputation of the firm using it. On the other hand, letters written on a paper of superior quality shall definitely create a pleasant feeling to the reader and thereby add prestige to the firm. Preferably bond papers are used. 2. Colour of the Paper: White is considered as the best colour for business letters and so it is commonly used. However, if colored papers are used, they should be of light shade. 3. Size of the Paper: The size of the letter paper maybe according to the suitability of each business. Different firms use different sizes. In Great Britain, the following sizes are commonly used. 1. 8 x 10 (Standard size) 2. 5xS The former is generally known as quarto and the latter is used for sending short communications. In the United States, the standard size is 8 x 11. Besides , 5 x 8 and 7 x 8 are also used. Foolscap paper is generally used in Government departments. 2. Typing Typewriters are, commonly used by most of the business firms. Even small businessmen prefer typed letters rather than hand written. This is because, a typed letter has a majestic look. Besides, it saves time and copies can also be taken for future reference. The typewriter should be in a good condition and the ribbons should also be of superior quality. Above all, the typist should be efficient and capable of typing neatly. The following points should be noted while typing a business letter. 3. Margins Margins should be left on all sides of the letter paper and the subject matter should be typed in the centre of the letterhead; The margins are just like the frame to a picture. Hence, decent margin gives attractiveness and good look to the Letter.

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Generally, one and a half-inch margin is used. In some cases, especially when the matter is very long, one-inch margin is sufficient. However, there is no hard and fast rule regarding the width of the margin. It generally depends on the size of the Letter paper. On any account, it should not be less than one inch. Margins should also be Left on the top as well as at the bottom of the letter paper. 4. Folding The letters should have only a minimum number of folds so that the envelope does not look bulky. if the letter is folded in an unsystematically wa9, it shall not evoke a favorable reaction in the minds of the readers. 5. Envelope The envelopes used should correspond to the size of the paper. The colour and quality of the envelope should also be in agreement with the letterhead. The number of folding of the letterhead depends on the size of the envelope. Letters of 8 x 10 are generally enclosed in envelopes

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UNIT III TRADE ENQUIRIES AND REPLIES I. Trade enquiries For all trading concerns, purchasing is very important. A trader, especially under the present competitive conditions should carefully watch the market trends of the goods in which he is dealing. Then only he can obtain proper goods at proper times and on the most advantageous terms. He should discover new sources of supply, so that he can get goods without any interruption, in case the regular supplier is not in a position to supply. Moreover, for even dealers who have permanent sources of supply and who can not switch over to other suppliers due to the credit facilities offered, it is advisable for them to have a birds eye view of the market trends. Newspapers, market reports and price lists, of course, provide valuable information. But they are not sufficient and hence many enquiries have to be sent out. Thus, enquiry letters are of paramount important to all business concerns. Occasions in Which Letters of Enquiry Are Sent Traders usually send letters of enquiry in the following circumstances. 1. When the goods required by them is of a kind, which they do not regularly buy, and therefore they do not know the current prices.

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2.

When they want to ensure that the present suppliers are supplying at competitive rates.

3. 4.

When they want to discover better sources of supply. When they want to tap new lines of business.

Classification of Enquiry Letters Enquiry letters may originate on the writers own initiative or as a response to appeals and offers made by the sellers. They can be classified as follows.

Enquiry Latter

Enquiries asking for a favour

Enquiries containing sales Possibilities

Solicited Enquiries

Unsolicited Enquiries

1. Inquiries Asking for a favour Such letters contain requests for the favour of information with no immediate possibilities for placing an order. For instance, a promoter of a company may write to suppliers to enquire about certain goods not with a view to buy them but to collect data for preparing his plan. Likewise, a student may require the business details for reference in his research work.

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Such letters should be courteous, compact and at the same time should be confident and definite. They should refer to the following points. 1. The purpose in view 2. Raising relevant questions, answers to which, will help n realising the purpose. 3. Indication as to have the material collected will be utilized. 4. Mentioning the advantages to the reader if the request is complied with. 2. Inquiries Containing Sales Possibilities They are written by prospective buyers requesting for such particulars as may be necessary to make up their mind to buy specific goods. The inquiries are motivated to place orders on the basis of the information provided by the sellers. The inquiries containing sales possibilities are of two types: 1. Solicited letter of enquiry. 2. Unsolicited letter of enquiry. 1. Solicited Letter of Enquiry: The solicited inquiries are written in response to advertisements and general offers made by the sellers. Drafting of a solicited letter of enquiry poses no serious difficulty to the writer. It should be very brief and usually not longer than one or two sentences and should state definitely what is wanted. It is also appropriate to mention the medium in which the advertisement is made. 2. Unsolicited Letter of Enquiry: The unsolicited inquiries are those written by prospective buyers on their own initiative to different firms to get more particulars about the quality, price and other terms of sale. This type of letter is more complex and much more detailed. To give the reader sufficient information to enable him to answer intelligently and easily, the unsolicited enquiry letter should contain the following. 1. A clear statement of the information desired or of the problem involved. This should include:

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1) What is wanted? 2) Who want it? 3) Why it is wanted? 2. A tabulation of questions or a reference to an enclosed questionnaire. This is preferable when the enquiry is lengthy. The questions,.-in which case, should be of objective type requiring yes or no answer. 3. An expression of appreciation Some Dos and Donts To make an unsolicited letter more effective, Robert L. Shurter suggests the following points while writing the letter of inquiry. 1. Ask as few questions as possible. 2. Phrase them so that they are clear, direct and easy to answer. 3. Where confidential information is requested promise to keep it confidential. 4. Try to send the inquiry at the seasons when the pressure of business is least heavy. 5. If possible, stress the way in which the recipient will benefit by answering the questions. Some Practical Hints on Writing Letters of Enquiry Making an enquiry or sending an enquiry is not a matter of fact affair. It calls for careful specifications, dear particulars etc. Further, the letter of Inquiry will naturally vary with the product concerned. But it is possible to lay down more or less definite rules for their construction. The following practical hints are highly useful to all students. 1. Exact Type of Goods: The inquirer should dearly state what he Intends to buy. He should specify the size, style, quality, variety, shape, and brand or trade mark of the goods he requires. Detailed description minimises the chance of receiving unsuitable goods and avoids the need for further correspondence.

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2. Probable Quantities that may be needed: The inquirer should give a rough estimate about the quantity likely to be required. Discounts, concessions in packing and forwarding expenses, timing of delivery etc. are all linked up with the quantity of goods expected to be bought. However, dont misrepresent or inflate your requirements first to obtain better terms. 3. Purpose and Time of Requirement: If you require the goods for a specific purpose or for sale during a particular-season, do not fail to say so. This is because, in that case the seller will be in a better position to offer those goods, which are most likely to serve the purpose. 4. Literature and Catalogue: The letter of inquiry may include a request, for descriptive literature, catalogue or price list which should indicate the exact rates at which the goods are offered for sale. In case of complicated machines, inquirer may request for trial demonstration at places convenient to both. 5. Other Matters: The inquirer will also ask the seller to state the definite policy of his firm regarding granting of credit, offer of discounts, mode and time of delivery and terms of payment. General Points That Should Be Remembered While Writing a Letter of Enquiry 1. Description of Goods: If the buyer is definite about his requirements, he should describe in detail. By writing detailed description, the chance cf getting undesirable goods can be avoided. If enquiry is made on the basis of catalogue, number assigned to each goods may be given in lieu c the details. However, a clear description must be found in a letter of enquiry, in order to avoid unnecessary further correspondence. 2. Price, Time and Place of Delivery: The buyer should know the prices. If it is not found in the catalogue, he asks for it in his letter of enquiry, as well as the time taken for delivery of goods, the place of delivery etc. The period of delivery time is an important element. The goods may be supplied at F.O.R. or Ex-go down or C.l.F. value. To eliminate doubts as to the quality of goods, sample may be asked for.

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3. Terms of Payment: If a new purchaser aims at buying goods from a firm with which he has had no previous transaction, he should ask whether goods will be supplied on cash or credit. If it is on credit, the buyer should give references to enable the seller to enquire the status of the buyer. It is also advisable to state the probable quantity that may be purchased by him. 4. Other Charges: Generally insurance, commission, discount, rebate etc. are found in terms of trade. It is seen that where a large quantify of goods is purchased, certain facilities are given by a seller to the buyer viz., discount, commission. Any suggestions, if needed, can be forwarded and of course the seller will comply with it. Details regarding packing and forwarding of goods can be had from the seller. The shortest route to the destination from the sellers place may also be mentioned.

Opening and Closing Sentences How to begin a letter of enquiry and how to end it will depend upon the nature of the enquiry and circumstances in which it is made. Therefore, it is difficult to lay down hard and fast rules n this regard. Further, the students should be encouraged to develop their own style. However, for their guidance a few opening and dosing sentences are given below. 1. Opening Sentences 1. We should be glad to receive details of your prices. 2. We should be obliged if you would inform us of the terms on which you are prepared to supply. 3. We should be grateful for... 4. We should appreciate details of... 5. As we are now interested in purchasing... 6. We should welcome information...

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2. Closing Sentences 1. We look forward to placing further orders with you and trust that you will make every effort to satisfy our particular requirements. 2. We hope to give you further business and feel sure that you will make every effort to satisfy us. 3. We await the favour of an early reply. 4. We request your prompt attention to our enquiry. 2. Replies to enquiry Writing replies to enquiries also calls for greater care and skill on the part of the writer. He should fully take note of each item in the enquiry. The letter should be as precise and clear as the enquiry itself. Robert L. Shurter suggests two cardinal principles for drafting replies to trade enquiries. They are : 1. Answer all inquiries promptly. 2. Take special care in addressing, posting and enclosing the material. Importance of Replies to Enquiries A few years ago, businessmen generally regarded the letters of enquiry they received as a nuisance or as best as a matter requiring routine treatment. The replies, in those days, lacked imagination and foresight. But today majority of the businessmen has realized that these letters represent a real opportunity to turn the requests for information into orders and goodwill. Therefore, most of the reputed businessmen are attending to it promptly and in many cases the inquiries are answered within twenty-four hours. Sometimes, the trader may not be in a position to send a reply either because the article required is out of stock or has stopped in dealing with the articles required. Under such situation, his immediate reply will greatly please the inquirer and make him think favorably of the firm for his courtesy and promptness. Model Instructions for Dealing with Enquiries

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One progressive company of U.S.A. issued a few instructions to its correspondents, which are worth mentioning here. They are: 1. Answer all enquiries the same day they are received. Strike while the iron is hot! Give inquiries the right of way over all other correspondence. 2. Size up the needs of the prospect and answer his enquiry in terms of the advantage of our product to him. 3. Dont make him wait for information while you refer him to Local Representatives or Branch Offices. Answer him first and let your local agents follow it up. 4. Allow a reasonable amount of time for an order or a reply to come in and then follow it up with another letter. The percentage of returns from similar follow up makes it profitable. So keep on writing at regular intervals. Kinds of Replies Replies to enquiries are of three kinds: 1. A letter answering the enquiry and referring to the catalogue of samples sent. 2. A letter containing a quotation within itself. 3. A letter enclosing a quotation on a separate sheet or a separate form. Some Hints on Drafting Replies to Enquiries 1. Commence your reply by referring to the number if any, and the date of the letter of enquiry and thank the writer for his letter. Then proceed to answer clearly and concisely. 2. Dont forget to mention 1) Mode and terms of payment. 2) Place and time of delivery. 3) Method of transport. 4) Charges on account of sales tax, octroi, freight and insurance. 5) Packing and forwarding charges.

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3. if you send a price list or catalogue in a separate cover, mention that fact in your reply. 4. If you are not in a position to supply the article asked for but have a substitute, which is similar in quality and price, you may offer substitute with tact and confidence. 5. Close the reply by assuring the enquiries that you have been glad to be of service to him and are willing to supply him with any further information that he may need. Specimen Letters of Enquiry and Reply 1. Solicited Letter of Enquiry NAVEEN & SONS (Dealers In Hardware and Paints) 108, Flower Bazaar Road, Coimbatore - 641 001. 4th May 2000. The Sales Manager, Godrej Locks Ltd., 50, Mahatma Gandhi Road, Fort, Mumbai - 400 001. Dear Sir, We have read with interest your advertisement in The Hindu dated 31st April2000 regarding the introduction of new type of locks with Anchor Brand. We shall appreciate further information about Nay - Tal locks since, we earnestly desire to evoke good response for them in the local market. Kindly, therefore, send us a copy of your latest catalogue and let us know your terms for the bulk buyers. You can expect from us bulk orders provided your terms are competitive.

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Yours faithfully, For Naveen and Sons, S. Ranjith Manager.

Note: This is a solicited letter of enquiry because the writer sends the inquiry after seeing the advertisement in the newspaper.

2. Reply to Letter No.1. GODREJ LOCKS LIMITED

50, Mahatma Gandhi Road, Fort, Mumbai 400 001.

10th May 2000. M/s. Naveen & Sons, 108, Flower Bazaar Road, Coimbatore 641 001.

Dear sir, We thank you for your letter dated 4th May 2000 and have pleasure in sending you under separate cover a copy of our latest catalogue and price list.

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We need hardly add that behind every Godrej lock is our reputation of over seventy years as makers of quality locks specially designed for use in our country. Out list prices are subject to a trade discount of 15% and an additional commission of 2% in case your annual purchases from us exceed Rs. 1, 00, 000/-. We are also allowing an extra discount of 5% if your annual purchase of the New Anchor Brand lock exceeds Rs. 5, 00, 000/-. We trust that you will be able to take advantage of these terms. Yours faithfully, For Godrej Locks Limited, R. Gowtham Sales Manager. 3. Unsolicited Letter of Inquiry AJANTHA BOOK CENTRE (Book Sellers and Publishers) 127, Cherry Road, Salem 636001. 4th May 2000. M/s. Modern Book House, No. 187, Thanappa Madli St., Chennai 600 001.

Dear Sirs, Please inform if you can supply us following books and their prices : 1. 2. Business Organisation by S. Kathiresan and Dr. V. Ratha. Nuclear physics by Prof. Murugesan.

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3.

Export Management by S. Kathiresan & Dr. V. Radha. We look forward to an early reply so that we may proceed to piace the order. Yours faithfully, Students Book Centre, R. Aroind Partner.

Note : The letter is written on the own initiative of the trader and not in response to a specific offer or advertisement.

4. Reply to Letter No.3. MODERN BOOK HOUSE (Educational Publishers and Book Sellers) 187, Thanappa Mudali St., Chennai 600 001. 6th May 2000. M/s. Ajantha Book Centre, 127, Cherry Road, Salem 636 001. Dear Sirs, We thank you for your letter dated 4th May 2000. We have the pleasure to inform you that we can supply you the following books at prices noted against each. 1. 2. Business Organisation Nuclear Physics Rs. 80.00 Rs. 150.00

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3.

Export Management

Rs. 70.00

We are sending under separate cover a copy of our latest trade catalogue, which can furnish details of all our publications. Documents through Bank only. We allow a trade discount of 20% to all booksellers and allow cash discount of 5% if the bill is retired from the bank within 7 days from the date of the intimation. We hope that you will be able to take advantage of these terms. Yours faithfully, For Modern Book House, N. Sama , Manager. 5. Letter Asking for Better Terms JAYAGOPAL ELECTIUCALS (Dealers In Electrical goods and Govt approved Contractors) 12, East Main Gate, Thanjavur- 613001. 3rd May 2000. The Sales Manager, Bombay Electricals Ltd., 21, Mahatma Gandhi Road, Mumbai - 400 001.

Dear Sir, We are in receipt of your letter dated 26th April2000, along with your recent catalogue.

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A few other firms from Mumbai have offered 10% trade discount and 2% cash discount for 30 days. We feel it would be competitive if you allow us as either an additional trade discount of 5% or 3% for 0 days cash discount apart from the trade discount you have already offered. We are also prepared to place an order for Rs. 1,00,000/- if the terms are agreeable to you. We also assure to place further orders for Larger amounts on these terms. We look forward a prompt reply from you. Yours faithfully, For Jayagopal Electricats, J. Jayaraman. Manager. 6. Reply to Letter No.5. BOMBAY ELECT1UCALS LTD. (Manufacturer and Suppliers of Electrical Goods) 21, Mahatma Gandhi Road, Fort, Mumbai -400001. 7th May 2000. MIs. Jayagopal Electricals, 12, East Main Gate, Thanjavur- 613 001.

Dear Sir, We thank you for your letter dated 3rd May 2000 and also appreciate your interest our products.

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May we point out to you that our quotations contained minimum prices taking into account the variety and quality of benefit. The extra cost of packing and forwarding leave us only a thin margin of profit. However, we shall be pleased to allow you the requested additional of 5% discount if you can raise your order to Rs.2,00,000/-. We await your confirmation along with your order. Yours faithfully, For Bombay Electricats Ltd., S. M. Battiboi Sales Manager.

Additional Precautions while Refusing an Enquiry Answers to inquiries can be grouped into two general categories. 1. Those granting or accepting the request. and 2.Those refuses the requests. Drafting a letter of the first type is very easy due to the very nature of the situation; The letters, which merely grant the request, are invariably written in a routine fashion. But the refusal of a request is one of the most difficult types of letters. Great tact and courtesy must be used while drafting the letter of this type. Of course, many of the requests or inquiries that are made by businessmen are inconsiderable or unreasonable, but the answers to their requests should never be harsh, even when the request is refused. A harsh refusal may antagonize a potential customer or develops a source of ill will towards the firm. As observed by Robert L. Shurter, regardless of how thoughtless the request may seem, the intelligent technique is to refuse it tactfully. By doing this good correspondents have lea it that they can say No and still retain the readers goodwill. The writer while refusing a request should follow the following pattern while drafting the letter.

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1. A statement of appreciation of the inquirer for his interest. 2. A refusal of his request without hedging and without apology. 3. If it is convenient, an explanation of why the request must be refused. Wherever possible avoid vague terms life company policy or similar generalizations. 4. If possible make a constructive suggestion or offer in the closing paragraph to be of service in the future. Specimen Letter Refusing an Enquiry Situation: Janatha Rubber Company is a manufacturer of cycle and Rickshaw Tyres. Lion Rubber Industries is another manufacturer in the same line of business. Janatha Rubber Company could not compete with Lions Rubber Industries due to the effective performance of its Sales Representatives. Therefore, Mr. Janaki Raman, the Manager of Janatha Rubber Company wrote a letter to the Lions Rubber Industries Ltd. asking for information concerning the basis on which the company pays to its Sales Representatives. A letter ref using to disclose the information shall be as follows. LIONS RUEBER INDUSTRIES LTD. 23, Industrial Estate, Guindy, Chennai -600032. 20th May 2000. Mr. Janaki Raman, Manager, Janatha Rubber Company, 114, Purasawalkam High Road, Chennai - 600 007.

Dear Mr. Janaki Raman,

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Thank you for your interest in your letter of 12th May 2000 concerning the way in which we pay our Sales Representatives. We are really flattered that so successful businessman like you should ask our advice. We regret that we cannot divulge this information. Since each of our Sales Representatives works under an individual contract, we would be violating the confidence of our employees if the terms of these contracts were given out. Because our employees themselves have requested this secrecy you will understand why we can not comply with your request. We hope that you may be familiar with the book Setting up a Sales Organization by E.J. Smith. We have found it valuable in its practical suggestions for dealing with specific problems. It might prove very useful to you at the present time. If we may be of assistance to you in some other way, please feel free to write us. We want to offer our best wishes for success in your venture along with the hope that our pleasant relationship with you may continue. Yours sincerely, For Lions Rubber Industries Ltd., Sales Manager. Note: This letter is drafted according to the model guidelines laid down by Robert L. Shurter. 1. First paragraph contains a statement of appreciation. 2. Second paragraph contains a polite refusal to disclose information and also an explanation for refusal in clear terms (In fact, it is a lie. But the tone is convincing). 3. Third consists of a constructive suggestion, and 4. The final paragraph contains an assurance to serve or assist in future (A customary assurance). II. Quotations

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Quotation on the other hand is a specific offer for sale in response to an enquiry from a particular person or business house. A quotation includes price for the specific goods desired, terms of payment, conditions of delivery and other details. Terms used in a quotation The to towing are terms most frequently used in quotations 1. Loco It refers to the price of goods at the sellers factory or warehouse. The buyer has to bear all the charges of carrying the goods to his place... It may or may not include the cost of packing. If packing is extra, it is better to specify it in the quotation e.g. Loco Madras factory, packing extra.

2. Ex-Warehouse This indicates the price of goods at the warehouse of the seller. 3. At Station At Station Price includes the cost of goods and the charges of transporting them to the station named. Al! subsequent charges such as handling and loading them into rail wagons and the freight must be paid by the purchaser When the seller gives such a quotation he should mention the name of the station where the goods will be ready for loading. 4. Carriage paid (Carr.Pd.) This indicates that the seller is responsible for delivering the goods at his own cost to the purchasers address or to the nearest station. In the latter case. it is conventional to name the station as in the case of carriage paid to Madurai Junction. 5. Carriage Forward (Carr. Fwd) This means that the cost of transport is to be borne by the purchaser 6. Free on Roll (f.o.r.)

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When prices are quoted on these terms the seller undertakes the responsibility of taking the goods to the station named and loading them into wagons. All charges such as carriage and lorry freight payable upto the station and charges of handling and loading into the wagons are to. be borne by the seller. The purchaser should bear the railway freight, carnage inwards, unloading charges etc.,. 7. Cash on Delivery (c.o.d) . This means that payment must be made when the goods are delivered to the purchaser. 8. Cash with order This indicates that payment must accompany the orders. If it is not so, the orders will not be executed. 9. Prompt. Cash This means that payment should be made within two or three days from the arrival of goods. This time-lag is allowed so that the purchaser is enabled to, examine and check up the goods with the invoice. 10. 5 percent 7 days This means that a discount of 5% will be allowed on prices quoted, if payment is made with 6 days from the date of invoice. 11. Cost - Insurance - and Freight (c.o.i.f) This quotation covers the price ex-warehouse and includes carriage up top the dock, dock dues freight and insurance as for the port to which the goods are to be consigned. Thereafter, the buyer has to meet the other expenses. Sample letter for offer and Quotation Offer of tea: Southern India Tea Company 14, Gandhiji Road, Salem 28th August 1998

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To M/s Robertson and Sons Limited No:5, Bank Road, Bangalore.

Dear Sir, We have enclosed a price list of our tea and trust that the high quality of our products will induce you to place a trial order with us. Our terms are attractive and adopted to the needs of all types customers. Credit is allowed for three months, if required against proper security. Cash payments within 14 days, however are subject to discount of 2%. You will Observe that the prices quoted are exceptionally low, and they are likely to rise very soon we would advice you in your own interest to place your order as early as possible. Thanking You. Yours faithfully Dr. Lakshmi Sample letter for Quotation A letter submitting quotation for the supp- of drawing boards. Diwakar and Company 14, Nehru Street, Mysore. 28th August 1998 To

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M/s. Johnson and Company. 5, Beach Road Mumbai.

Dear Sir, I have your letter of 20th August 1998, informing me that you thinking of placing your order for two dozen drawing boards with u: I should be able to supply two dozen drawing boards as per following details. 1. Drawing board A - Rs. 275 each 2. Drawing board B - As. 250 each 3. Drawing board C - Rs. 235 each If you place your order, it may be accepted against demand within two months of acceptance. Delivery will be made within weeks of your order. I have quoted you the lowest possible price and I hope you will be enough to send your esteemed order. Since we require sometime keep the boards prepared according to your specification, it will be highly appreciated if you can kindly send your reply immediately. Yours faithfully C.S. Hemavidhya. III. Status enquiry Although goods may be sold for cash or on credit, the credit sales play a vital part in the growth of any business. As business of credit invariably carry an element of risk of non-payment, business man always makes enquiries regarding the financial standing, reputation, credit worthiness and above all the character of the new customers before entertaining credit deals with them. Such information relating to the status of credit customers can be obtained from the following sources.

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1. Business firms of the prospective credit customers. 2. Credit information agencies. 3. Banks. 1. Trade reference Usually an order for goods or application for an appointment or an agency from an unknown person will contain trade references (i.e) the names of firms or individuals to whom enquiries about his standing may be addressed. . . The business friends of a prospective customer who is in need of credit facility or an agent who wants agency may supply the required information free of charge.

2. Credit enquiry agencies Information agencies supply reliable information regarding the status of any person or firm, professionally, according to a fixed scale of charges. Such Information can also be had from chamber of commerce and trade associations. 3. Bank references Bankers will answer status enquires only from another banker. The business house making the enquiry must address it to its own banker and ask him to obtain the required information from the banker whose reference to the prospective customer or agent has given. Hints on giving replies to status enquiries 1. Make it as brief as possible, hut let it be clear and adequate, 2. Say something, only on the basis of your personal knowledge and experience and not on hear say. 3. Do not specify the amount up to which it would be sate to grant credit unless the enquirer is very particular about it,

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4. Express the unfavorable opinion with extreme care and tact. The best way is to state that you are unable to express any opinion about the person about whose status is enquired. 5. Always make it clear that a. You are in no way responsible for the information you give. b. The matter should be treated private and strictly confidential. Sample letter A letter concerning the financial status and business standing of a new customer. Raja Traders, 14, Nehru Street, Mumbai. 1 4th October 98 To M/s. Shankar & Bros, 4, Good Street, Chennai.

Dear Sirs, We have an order from 1he firms mentioned below. M/s. Rani Traders, 5, Gandhiji Street, Chennai. They have given us your name as reference.

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We shall be grateful if you will give information relating to their financial status and business standing. Please let us know, in particular, whether you consider it would be reasonable to grant them credit upto s. 5,000. Whatever information you can provide us will be of immense help to Land we assure you that such information will be treated strictly confidential. Please make use of the enclosed stamped, self-addressed envelope. Thanking you, Yours faithfully, P. Mahesh.

A favourable reply from the reference Shankar & Bros. 14, Good Street, Chennai. 16th October 98 To Raja Traders, 14, Nehru Street, Mumbai.

Dear Sir, Sub : Favourable reply to your status enquiry.

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In reply to your enquiry, we are glad to inform you that proprietors of the firm in question enjoy the fullest respect and unquestionable confidence in the local market. They possess considerable amount of capital. They are very promising, and as far as we known them, they have not sustained and losses. Moreover, from our dealings, with them for the last fifteen years, we have always found them prompt in all their dealings including settlement of their accounts. . Personally, we feel no hesitation in allowing them credit for an amount for the sum you have mentioned. However, please note that this opinion is given without obligation on our part, although we fully believe you will find our information borne-out by facts. Thanking you, Yours faithfully, P. Arumugam (You have been asked about the financial standing of a business friend who was once bankrupt but has since then paid his creditors in full write a letter to the enquirer about the applicant for credit.) Ram Traders 16, Guru Street, Chennai. 15th October 98 To M/s. Muruga Traders 15, Murugan Street,. Palani.

Dear Sir,

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This is in receipt to your enquiry dated 12th October. The owner of the firm in question enjoys a good respect in the market at present. Now the possess a good bank balance. But the honesty of the person cannot be thought of in favour. The person in question was bankrupted once but sustained his losses now. But we are not in a position to provide you exact information about the present financial position of the person. Since the amount quoted by you is a slightly heavy, we cannot give you the fullest assurance about the credit-worthiness. The informations provided by us are all factual and not but of any hear -say. Thanking you, Yours faithfully, J. Krishnan. Bank references State Bank of Jaipur 14, Bank Street, Jaipur. 15th October98 To The Agent State Bank of lndore, Indore

Dear Sir,

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M/s. Hanuman Transport Company, Indore have approached us for an O/D (overdraft) limit of Rs.. 50,000 and your name has been furnished as Bankers. We would request you to advice us about the financial standing of the party. Thanking you, Yours faithfully, (For Agent) Reply for the bank enquiry State Bank of Indore 14 Bank Street, Indore. 21st October98

To. The Agent, 14, Babu Street, S.B. of Jaipur.

Dear Sir, Sub: Reply to the status enquiry With reference to your letter dated 15th October 97 we would mention that M/s. Hanuman Transport Corporation, Indore had a current account with our branch for fine years, but the same was closed about six month ago. We therefore, regret our inability to advice you in the matter. Thanking you, Yours faithfully,

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(For Agent) IV. Orders Making enquires is the first stage for the buyer to get the necessary information to enable him to place an order for the goods required. On the part of the seller, replies to enquiries (ie) the quotations are the stage from where he expects orders from buyers. The quotation is called an offer made by the seller and the orders by the buyer are called the acceptance of the offer. This acceptance which is in the form of an order is the thread which establishes a legal relation between the seller and the buyer. The order must be brief but clear, complete and accurate so that it may be correctly understood and promptly executed. Many multinational companies use printed order forms to place orders. These are standardized order forms printed with columns for necessary information. The advantage of this standardized form is that it contains all the instructions necessary to be given to the seller and no important point gets omitted, while ordering. These type of forms are very common for repeat orders particularly in the case of large firms, as well as for regular routine orders. Hints for drafting an order 1. Thank the seller for his quotation especially when special terms were offered. 2. Give the specification of the goods. a. Exact trade name, size, colour, design and quality etc.. b. Price and discount c. Quantity desired for each item in number or in weight. d. Alternative goods if acceptable. 2. Give shipment or forwarding direction (IC) by air, ship, lorry, rail. 3. Give special instructions for packing, making insurance etc. 4. State the manner of payment.

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5. Close with what you wish to emphasize (ie) quality, prompt execution, discount, time factor etc. Obligations of order A Careless order may lead to annoying experience. Whenever a trader plans to procure goods, he makes trade enquiries or asks for quotations or tenders. On obtaining the-necessary information and particulars, he selects a specific source of supply and places an order with that supplier on the agreed terms and conditions. The orders bind both the parties legally. So, clarity, exactness and unambiquity are necessary ingredients of such letters. An order is a definite offer of the buyer to buy certain goads at the agreed price and therefore when it is accepted by the seller, it becomes a legal contract binding both the parties and creating certain legal obligations. The legal obligations are : a) Buyers obligations When the binding agreement comes into force, the buyer is required bylaw 1. to accept the goods supplied, when they correspond to the agreed specifications, 2. to pay for the goods, unless there is an agreement to the contrary, 3. to check the goods, at the earliest opportunity and report the defaults to the seller. (Failure on the part of the buyer to give notice about the faults will be presumed as acceptance of the goods) b) Sellers Obligations 1. To deliver the goods exactly of the kind ordered at the agreed time. 2. To guarantee the goods to be free from faults of which buyer could not be aware at the time of purchase. If faulty goods are supplied, the buyer may claim either reduction in the price or replacement of the goods or cancellation of the order itself. Contents of an Order Letter

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Usually an order letter should contain the following matters: a) Quantity Be precise and clear in stating the quantity (e.g. please supply 20 steel cots of 18 cms x 90 cms) When necessary, state your urgent requirements separately in the order itself: b) Quality Full particulars with regard to the kind, colour, degree of fine-ness, makes, trade name etc, must be stated. If their quality of the goods cannot be described, a sample may be sent with the order. If the goods are selected from the traders catalogue the quality should be indicated mentioning the number and trade name assigned to them in the Catalogue. c) Mode and terms of payment The terms of payment need not be stated if the goods are ordered with a regular supplier. But when the orders are placed with a new firm, the terms of payment must be confirmed in the order - letter itself. Along with that, the specific mode of payment as such as through money order, cheque, draft, accepting a Bill of exchange, etc., should be stated.

d) Price Even when the price has been settled through the previous correspondence, do not hesitate to give a detailed accurate statement of the price agreed upon. If the money is enclosed with the order, the amount and the form in which it is sent should be clearly stated e.g.. Please supply. the: Boom chappels of 8 or 9 size at Rs. 75 or Rs. 90 per dozen. This statement is ambiguous: because here either the quantity or the size is not stated clearly. e) Packing. Generally the cost of packing is included in the price quoted by the seller. If the buyer desires any special kind to packing, it should be clearly stated in the order. For this

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the supplier may levy an extra charge, e.g., when the supplier is in the habit of sending goods-in plywood boxes. The buyer may write please send the goods in hard wooden boxes. The seller in this case may charge a bit more for wooden packing. f) Mode of transport The buyer should give clear instructions as to the mode of transport (roadways, railways, waterways, airways). Otherwise, the supplier will use the discretion in selecting the mode of transport. Along with this the buyer should state whether he wants the goods as carriage paid or carriage forwarded. g) Time and place of delivery The seller is expected to deliver the goods within the, required time and at the place of delivery; otherwise, the order may be cancelled. The specific period (eg., Before August 16th) must be stated clearly. As far as possible the usage of the phrases within reasonable time, at the earliest, as early as possible, at your convenient date etc., may be avoided. If the goods are to be delivered at a place other than the one mentioned in the address of the order letter, the specific address of the place of the delivery must be mentioned clearly. h) Insurance In inland trade; if .the buyer desires to get the goods insured, necessary instructions should be give in the order itself. In the case of foreign trade, goods are invariably insured. Precautions In writing order - letters Great care is necessary in writing order letters. To be effective in writing order letters, the following hints are suggested. 1. Place a clear and firm order. It is the only thing in which the supplier is interested. 2. Eyen if it amounts to repeating do not hesitate to give a detailed, accurate, and complete description of the items you wish to buy. The size, colour, quality, make, reference to catalogue, Identification number etc., may be specified.

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3. Make sure that there is no deviation from the description given in the original letter inviting quotations. 4. If only a few things are ordered, you can specify the details in the body of the letter itself. But when you order for large number of items, you better tabulate them or attach a separate list of such items. 5. When the orders are placed through Telephone, Telegram or with the salesmen, confirmation of such orders is necessary through a formal order letter. 6. It is better to use printed order forms in case of order for different and multiple products or when your firm is big, and making frequent orders of those items. 7. If the order is repeat order the number and the date of the previous orders may be mentioned to have a clear understanding of the terms and conditions. If the terms differ from the previous order do not forget to state that precisely. 8. As the sales tax laws make it compulsory to enter the sales tax number on the. receipt, indication of such number will reduce the burden to a greater extent.

Order forms Many of the large business houses use printed order forms for all their purchases. They are perforated, numbered and kept in a serial in the order book. The purchase officer of the firm fill up the particulars or specifications in the space provided for them. Usually such order forms are printed in duplicate or triplicate; the original will be sent to the supplier arid one copy will be retained in the file and the third copy will be sent to the stores or the receiving department for checking the goods received on their arrival. Order forms have certain merits. They save time and labour of the purchase officer and his typist. They, remind the purchase officer of all the points, about which the information is needed. Usually they are uniform in size making it convenient to keep in files and serve as ready reference.

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Kinds of Order Letters Order letters may be classified into the following heads for convenient grouping. Trial (Or First) Order Trial orders are placed usually when the quotations or samples received have been found satisfactory. Sometimes they are sent when the travelling salesman have procured the orders. They may also be sent when a new market Is to be tapped or a new product is to be introduced or when a bargain has been just concluded. When the trial orders are placed on the basis of samples, the buyer may reserve the right of rejection, if they dont tally with samples supplied. When an order letter is written just after the conclusion of negotiations the supplier would express the hope that this order would lead to mutually profitable business. Routine Order A routine order is placed at more or less regular interval with the regular suppliers. All the details considered are lived long before. A routine order is often placed on an order form and an accompanying letter goes with, it. Routine orders for standard .goods are short and formal but they must include essential details. When the order is for two, or more items, they should be tabulated as this lessons the chance of such items being over looked. Orders based on the sellers quotations As the supplier has already supplied the quotations, there may not be any problem in filling up an order form regarding instructions, specifications etc. To avoid misunderstanding, price quoted along with the discounts permissible and special instructions should be repeated. when the order is placed. Orders based on inspection of samples Sometimes, the quality of the goods is highly indescribable. In such cases, orders are placed after examining the goods or samples. These letters should always convey thanks for the samples and the results of the inspections carried out in the laboratory. Repeat Orders

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A repeat order is placed when (a) the trial order has proved good and the article is still needed as the demand is continuous. This may happen with seasonal goods or fashion goods; (b) The market has been successfully taped, as it seems possible to sell more. These letters would make reference to the success of the trial order, and the reason why a repeat order is required. As the time is important n such orders, the buyer usually reserves the right of rejection when the goods are delivered late. Such letters will express a hope that the way is perhaps open for a regular business. Covering Letter With Order Form When a covering letter is sent with an order form, essential details will be contained in the form and additional explanations in the coveting letter. Usually these letters are sent when the order is for an item involving technical details. Or when the order is to the specific requirements of the buyers. Orders With Conditions Attached When the orders are very urgent or to the individual specifications or involving heavy outlay and huge commitments based on the promise given to third parties, the buyer will seek to protect himself by making his order subject to certain penalties, should the terms of the contract not fulfilled. Specimen Letters 1. First order letter SHINE WEL FURNITURE Netaji Road, Madurai- 625 001. 12th July, 1998. To The Perfect Furnitures, 134, Gandhiji Road,

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Madurai. Dear Sirs, Thank you for your quotation of 2nd July, We are pleased to place the trial order for the following items: 50 Numbers of EXECUTIVE chairs of Rs. 250/- each 25 Numbers of ALL PURPOSIVE Tables of Rs. 500/- each The above quoted prices should include packing and forwarding charges, freight shall be charged to our account. Sales tax will be charged @ 4% as our declaration form C is attached herewith. Please arrange to send the consignment by rail to Madurai Junction before 25th July and forward the documents through Indian Overseas Bank, Bullion Branch, Madurai. We hope that this order will be executed to our satisfaction and that it will help to develop trade relations in our mutual benefit. Yours faithfully, For Shinewel Furniture, P. MURUGAN Manager. 2. Routine order letter STUDY WELL BOOK SELLERS (Dealers in Text Books) 49, Now Line Beach Road, Bombay, 30th June 1998. M/s Palaniappa Book Sellers,

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48, Anna Salai, Madras.

Dear Sirs, Confirming the order we placed with you by telephone this morning, we wish you to supply the following books on the usual terms and at a special discount of 25% off the published prices. Copies Title Author Published Price (Rs.) 10 15 Model Business letter Gartside Commercial Correspondence 10 Business report writing U.R. Keli and 15 10

Urmila Raj Sharma and krishnamohan 15

These books are required very urgently and we understand that you are arranging for immediate delivery from stock. Yours faithfully, V. PARI Manager. 1. Draft a letter ordering electrical motors and switch gears for the first time without giving references from Suganya traders to Crompton India Pvt. Ltd., Bombay. Suganya Traders 15, Bank Road, Delhi

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30th August 1998 To Crompton India Pvt Ltd., 238, Andheri Road, Bombay.

Dear Sirs, I have pleasure in placing the following urgent order with you for the first time. 1. Electrical motors 150 HP 2. Electrical motors 250 HP 3. Switch gears 4. Fancy switch boards 5. Switch boards with rolling buttons Nos. 60 Nos. 40 Nos. 20 Nos. 20 Nos. 30

Packing : in new wooden boxes securely sealed. Delivery : in any case not later than 30 the September 1998. Payment: Twenty percent advance on confirmation of the order by you and balance against delivery by cheque or D/D through State Bank of India. A prompt delivery by you will be our highest pleasure. Quality and prompt delivery will help us to continue our trade relationships. Thanking you, Yours faithfully (P.G. Sekar) 2. Write are order letter from Shakthi Agencies to M/s. VIP Luggage company placing order for the various models for VIP suitcases, briefcases, Also state the mode of

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transport, insurance requirements, packing requirement, mode of payment, discounts, quality specifications, quantity required, size, colour and design. Shakthi Agencies 15, Nehru Street Delhi. 10th September98 To M/s. VIP luggage company 18, Andheri Road, Mumbai.

Dear Sir, We are extremely happy to place the following order with you. In accordance with your quotation letter dated 5th September 98. S. No 1. Descriptions VIP Alfa Suitcase 10 x 20 cms 2. VIP suitcase 40 x 60 cms. 3. VIP Briefcases (assorted colours) 8375 15 75 1, 125 25 150 3, 750 Qty. (pieces) 35 Unit Price Rs. 100 Amount Rs. 3,500

Since, the above articles are required by us immediately to supplement our stocks, we request you to sent these items by lorry service (L/S) to Delhi.

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Since, the items required are. subject to damage, we request you to insure them before sending. The packing should necessarily be done in wooden boxes duly sealed. The lorry receipt and the bills at 15% discount will be sent through Canara Bank, Delhi. Yours faithfully, (C.S. yoga) Execution of orders Hints for drafting an acknowledgement 1. Receipt of every order must be promptly acknowledged. 2. Thank the party for his order. 3. Specify the goods you have dispatched or time by which you will despatch them. 4. Refer to the need of prompt payment, but do not stress this point. 5. Mention the mode of delivery whether by passenger or goods train, lorry, ship or air. 6. Reference. must be made to the quality and popularity of goods and also the expression of hope that the goods will satisfy the customers, requirement. 7. Mention a personal tone and show your eagerness to serve the customer in all possible ways. 8. Impress your customer that his order has been given prompt attention. 9. End the letter by soliciting further orders. Execution of the orders - Sample letter. National Paints Ltd. 15,BahaclurNagar Ahmedabad 18th september98

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To Hiremath Brothers 16 North Street Madurai. Dear Sir, Sub: Despatch of paints for your order dated 11th September 98. We are happy to count you among our good friends in our business and as in our every day life. We received your first order on 12th September and a beginning has been made. We will endeavour to retain and strengthen our mutual business friendship through our quality products and friendly service, for which our firm has earned great reputation. As specified by you the following orders have been despatched (refer to the previous order letter dated 11th September) V As your are in great need of the above items we made a special care to despatch it as quickly as possible. The goods have been sent by passenger train carriage forward to Madurai. As mentioned by YOU the railway receipt(R/R) and the invoices at 7% discount have been sent through State Bank of Madurai. We solicit your future orders to build our friendship. Thanking you, Yours faithfully, (P. Mahesh) Defective orders How to answer replies to parties who are sending defective orders? Sometimes sellers receives orders with incomplete information, such orders if executed may not fully meet the customers requirement. Hence it is always a good policy to write back to the customer asking for exact specifications regarding colour, design, price, size etc., before executing the order.

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To enable the customer to furnish exact specification, sellers should send separately the catalogue and price list. It must be remembered that telling the customers that, since his order is defective it cannot be executed, will loose our sales opportunity. Tact suggestion and the tone of being helpful are the most important qualities of these type of letters. Delay in execution In some cases, the seller may find it difficult to execute the order promptly or within the periods specified by the buyer. Delay in shipping the goods may be caused by many factors like goods being out of stock, production being held up on account of scarcity of raw materials, machinery breakdown, strike, lockout, heavy orders on hand, shifting the premises, asking for credit or more special terms etc. In all these above cases it is desirable to write to the buyers informing them of the circumstances, in which the delay in the execution of their order has become inevitable. They should be informed about their probable time within which the goods can be despatched. He should apologies to him to co-operate by allowing an extension of time for the execution of the order. Hints for drafting letter intimating delay in the execution of orders 1. Thank the party for his orders. 2. Explain in clear tone the reasons for delay. 3. Make the customers understand that the circumstances are beyond your control. State if possible the date, when you cant V execute the order. 4. Assure the party that his order will receive prompt attention on the date being mentioned. 5. End your letter with reference to the inconvenience.

Sample letter

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Mayur Quick Food Co.,

15, Bank Road, Bangalore. 20th September98 To The National Food Products, 14, Nehru Street, Mysore.

Dear Sir, Sub: Delay in execution of order. We thank you for your order dated 1 3thV August 98. We regret to inform you that there will be a delay for a fortnight for the supply of bulk packings of Appalam. Sambar Powders, Pickles. The rest of the goods are ready and they will be delivered to you next week. We trust that this will not give inconvenience to you. The delay is due to non availability of the raw materials Our suppliers have assured us that these would be made available within a short period. We hope you will appreciate our difficulty and bear with us for the delay. Thanking you, Yours faithfully, (S: Lakshmi) Refusal of an order He is less disappointed who is promptly refused. There maybe certain occasions when the supplier is not in a position to execute an order on the agreed terms. Letters written by the suppliers in such cases are called refusal

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letters. These letters are negative in their character because they usually carry unpleasence with care and tact. As such, all the refusal letters should have the motive of winning back the customers to our trading list. Otherwise, unpleasant refusal letters is to politely express our inability to execute the order of the customer. Reasons for Refusal Refusing of orders leads to loss of business to the seller and further trouble to the buyer. In order not to lose the customer the letter should carry convincing reasons for the refusal. These refusal letters should be made into goodwill letter so that we may not lose the customers who are the life blooed of the business. Reasons for refusal may be classified into sales value messages and other reasons; they are: Messages having sales value 1. The demand is greater than supply or production. 2. Government restrictions or pre-occupation of capacity due to vital defense needs e.g., khaki for military purposes or steel or cement controls during war time. 3. Scarcity of raw materials. 4. When the order is received after the offer has expired. Other reasons 1. Breakdown of machinery.. 2. Stoppage of work due to accidents like fire, storm, cyclone, flood etc. 3. Labour strikes. 4. Other internal disturbances which cause suspension of work or production. 5. Unacceptable term of buyer. 6. Buyers credit- standing is suspected or sudden bankruptcy of the buyer. 7. Lack, of correct information. 8. When the orders are not received through proper channel.

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9. Technical difficulties e.g., Transfer of executives. Precautions to be taken while writing refusal - letters Whereas he the reasons for refuring the orders refusal letters must be written with an eye on the goodwill and future business of the firm. 1. First refusal letters should contain expression. of thanks and a note of acknowledgement of the order received. 2. Express your regret for not accepting the order. The regret should build up goodwill e.g. When a non-credit worthy customer asks for credit, rather than denying it we shall ask him to order on cash basis. 3: Politely express the reason for the refusal in convincing manner. 4. Explain your position clearly and the steps that are being taken to control date of despatch. 5. If the time schedule doesnt suit you. express the approximate date of despatch. 6. Express the hope that the customer will be sympathetic and bear the inconvenience. 7. Propose an alternative product or proposal as a substitute. 8. If the buyers terms are different, make a counter-offer in the refusal letter itself. 9. When the terms are altered, supplier may send the goods on altered terms; but such an execution of an order equals to goods being sent on sale on approval basis... 10. When the refusal is especially due to any bad condition, do not express the same bluntly; instead, state the alternative proposals firmly e.g. when a customer asks for a long credit-term, the refusal letter may quote the companys policy regarding credit periods. 11. Never give the impression to the customer that the order is too small to accept; because every customer is important and every order is valuable. 12. When the order cannot be executed, it will be helpful, if you suggest the others suppliers address. Because the buyer will appreciated and remember such services.

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13. If the buyer asks for any unfavourable obligations etc, such request can be outwardly rejected. For example, if the purchasing officer of the buying company asks for a commission, such things may be rejected openly. 14. By all possible means, express your interest in the interests of the customer. Kinds of refusal - letter 1. Seller rejecting the order due to modification of the terms such as price reduction, delivery terms and extending credit. 2. 3. 4. 5. 6. Sellers refusal and suggestion to some other source of supply. Suppliers counter offer. Seller sending a substitute on an approval basis. Refusing a request asking for undue favour or better terms. Sellers refusal due to unforeseen circumstances, government directions or official regulations. Sample letter Jupiter Watch Company

15, V.V. Road, Mumbai. 22nd September 98 To The Olympic Watch Company 24, Bank Road, Bangalore.

Dear Sir, Sub : Refusal of your order.

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We thank you very much for your order for 200 click-well wall clocks. We greatly appreciate your interest in clocks and we regret to inform you that we are unable to accept your order as we have already in hand several large orders, which will keep our factory busy for a long time. It will not be possible for us to book your order, even if you were good enough to extend the date of delivery by several weeks. To cope with the increasing demand for Jupiter Clocks we have ordered a new platform Japan and it is likely to be installed next month. We are very sorry for our inability to serve you at present, but look forward to the time when we shall be able to attend to your order. Thanking you . . Yours faithfully,

Sample Cancellation letter A letter cancelling order for undue delay Laxmi Cloth Stores. 56, Bank Road, Bangalore. 22nd September 98 To M/s. Shyam & Sons, 14, Nehru Street, Mysore.

Dear Sir, Sub : Order cancellation.

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We place an order with you on 1st August for 10 dozens of Royal to be delivered on or before 10th September. But till now we have not received either the goods or any letter from you. As the time of delivery expired long above we are compelled to cancel the order and if the goods arrive they will be refused. Thanking you Yours faithfully,

V. Claims, complaints and adjustments Errors very frequently occur even in. the best managed business houses, because To Err is human. The moment any discrepancy or mistake is discovered by any trader, he must immediately bring it to the notice of a supplier by writing a letter of complaint or claim. Instead of unnecessarily entering in to a dispute the supplier should honourably try his best to settle the matter peacefully, if the defects are proved. Occasions, giving charges for a claim or complaints are many. Moreover, following are the important causes that give chances for claims and complaints. 1. Inordinate delay in the execution of order. 2. Variance in the quality and quantity of the goods supplied as against those ordered. 3. Supply of wrong goods or goods of inferior quality. 4. Delivery of damaged goods due to defective packing. 5. Variance in the terms and conditions relating to the payment and delivery. Replies to Complaint Letter Much tact and restraint must be practised, such letters should start with an apology or at least with an expression of regret, when an apology is considered to be in appropriate. The writer should explain the circumstances which led to the trouble and should never try to justify his failure. He should state what he process to set things right to most cases. He

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may offer to take the goods or allow a special discount. He should also assure that every effort will be made to prevent its recurrence. A complaint letter should contain the following points. 1. Am explanation of what is wrong 2. The explanation should give exact dates, model number sizes,. colours, or any other material data. 3. A statement of the inconvenience caused. 4. A statement of the loss suffered.. 5. An attempt to motivate action by appealing to dealers sense of fair play, his honesty or his Goodwill.. 6. A statement . of what adjustment is considered fair. The art of drafting letters of claims and complaints A trader must be extra ordinarily careful while drafting a letter of claim or complaint in a satisfactory manner because such letters are generally drafted in a moods of dissatisfaction or anger. Successful drafting of claim and complaint letters call for great tact, courteousness, sympathy and patience, in order to avoid unnecessary bitterness, long and tedious disputes and legal proceedings over petty issues. Hints for drafting claims and complaints The letter should be 1. Fair and temperate but not apologetic. 2. Based only on facts without assumptions. 3. Friendly and courteous letters prove more effective than a letter breathing fury and threats in gaining the co-operation of the reader. 4. Complete, supplying all the details is considered very necessary to adjust what is wrong. 5. Definite and reasonable in its request for readers.

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6. Brief in the statements relating to the inconvenience suffered by the customer because of the error. Sample Complaint letter Maruti Book House 4, Station Road, Mangalore. 27th September98. To Raja Book House, No.5, Bank Street, Mysore.

Dear Sir, Thank you, very much for the despatch of six books on Effective Business English sent to us by you in accordance with our order dated on 20th September. On going through these books, we found out that one of the copies sent by you was is incomplete as pages 45 - 64 (20 pages) are missing, while another copy is badly damaged. We presume that this must be due to a mistake by one of your packers. Will you please, let us know whether we can return these two copies to you may replace them by the two good and complete copies Thanking you, Yours faithfully, S. Hemavidhya. II. Write a compliant letter from Subash stores to perfect pressure cooker company that six out of the 50 cookers received from them we re in a damaged condition and ask them to replace the damaged goods immediately. Subash Stores

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5, Bank Road, Coimbatore. 27th September 98 To Perfect Pressure Cooker Co. 6, Eldams Road. Chennai,

Dear Sir, We thank you for the despatch of fifty Cookers, sent by you in accordance with out order dated 20th September. We regret to inform your that out of the fifty cookers sent by you, three were found to have a broken handle and three with broken whistles. We presume it to be due to your carelessness. Kindly, let u known whether the six damaged cookers may be replaced by six good ones by you. Thanking you, Yours faithfully, Replies to letters of complaints and claims It is wrong to think that compliant are a nuisance. The business man should welcome any reasonable expression of dissatisfaction with his goods or his service. Replies to complaints are called adjustment letters. They require the most delicate and skillful handling, as they have not only to satisfy the customer hut also safeguard the business interest and reputation of the writer. Hence while drafting such letters, the business man should, 1. Be very careful and tactful. 2. Fully investigate the matter complained and appreciate the feelings before giving any reply either admitting or refuting the complaint.

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3. Plan the letter in such a way as to retain his goodwill. Hints for writing the adjustment letters. 1. Deal with the complaint and reply as promptly as possible. 2. Do not show any discourtesy even though their complaint is unjustifiable. 3. Think that The buyer is always night. 4. Give due importance to the customers feeling in order to retain his goodwill. 5. Never treat any complaints indifferently. 6. Begin your reply to complainant by thanking him for his letter and apologizing for the trouble caused to him. 7. Do not suggest that the customer was careless. 8. Do not think of paying back your customer.

Sample Adjustment letter I Raja Book House No.5, Bank Street, Mysore. 29th September 98 To Maruthi Book House, 4, Station Road, Mangalore. Dear Sir, Sub : Reply to the complaint letter.

We thank you for your letter dated on 27th September1998. We are very sorry to know that you have received one damaged and another incomplete copy of Effective Business English.

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We shall be highly grateful to you if you will kindly return those two copies, so that we can, with great pleasure, replace them immediately. We are very sorry for the inconvenience that must have been caused to you. However, we assure you that such mistakes will not be repeated in future. We shall of course, bear the postage both ways. Thanking you, Yours faithfully, Raja Govindasamy Adjustment Letter 2 Perfect Pressure Looker Co. 6, Eldams Road, Madras. 29th September 1998,

To, Subash Stores, 5, Bank Road, Coimbatore

Dear Sir, Sub : Reply to the complaint regarding pressure cookers. We thank you for your letter dated 27th-September 98. We are very sorry to note that you have received six damaged cookers (Three with broken handle and the other three with broken whistle) We shall be highly obliged if you would be kind enough to return back those six damaged pieces. It will be helpful for us to replace them immediately.

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We are very sorry for the inconvenience caused and assure you that such mistakes will not be repeated. We shall of course bear the lorry receipt (L/R) both ways. Thanking you, Yours faithfully. P. Yogananda

Strong Sample Claim Letter Draft a letter of complaint to M/s Roja Grinders, Trichy that 22 out of 150 dry grinding machines supplied by them were making heavy noise and get struck up after 5 minutes of running which disturbs your production In the letter mention that you have made atleast 15 S.T.D. calls and received no response from them. Strongly word the letter and ask them to replace the faultly machines immediately. Roja Traders 15, Gandhi Road, Coimbatore, 30th September 98. To, M/s. Roja Grinders, 25, Nehru Road, Trichy. Dear Sir, Thank you very much for your prompt delivery of 150 dry grinding machines in receipt of our order dated 20th September 98. We regret to inform you that out of the 150 machines, 22 are making a heavy noise while running. They are a great source of disturbance in our locality. Moreover they get struck up after5 minutes of running which disturbs our production to a great extent.

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Before writing this letter have made more than 15 S.T.D. calls to your place and received no response. This carelessness showed by yours highly rag regrettable. We feel sorry to inform you that further negligence showed by you will force us to take legal actions against you. Therefore, make it a point to replace the machines as early as possible. That will help us to maintain cordial relationships. Thanking you Yours faithfully, Settlement of accounts or remittance letters. (Payment of bill) After receiving the goods ordered, the buyer should not only acknowledge their receipt, but also arrange, to make payment of the amount due to the seller. The made of payment depends upon the arrangement between the buyer and the seller. Most of the accounts are settled by cheque, bank draft etc. The greatest volume of business is generally done on credit. Remittances against periodical statements of accounts received by the debtor from the creditor are generally arranged when there are regular dealings between them. The letters of remittance should be written with special care and accuracy as they involve matters relating to payment of money.

Sample Payment letter Letter acknowledging receipt of goods and informing remittance by cheque RAJA STORES 5, Nehru Street, My sore, 30th September 98

To Camel Hair dye,

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6, Sank Road, Bangalore, Dear Sir, The camel hair dyes invoiced (bill) by you have arrived and are satisfactory. We enclose a cheque tar Rs.2000 (Two thousand rupees only) in full settlement of the amount of your bill. Please acknowledge this receipt and credit us with the amount. Thanking you, Yours faithfully, Roja Application Letter Application for a Job or application for a situation Letters of applications for a situation or employment are undoubtedly very important from stand point of unemployed persons seeking some jobs. An application for a situation is a type of sales letter by which the applicant tries to sell his services and it may affect his whole life as he will evaluated first by his application. The experienced mind and eye of the business man wilt assess the character of the applicant from his letter. Hence one should devote both time and thought over its drafting. form The following Application diagram shows the process of selection. Process of selection Test

Interview

Physical exam

R E J E C T I O N

References 124 Training

The structure of the application is similar to that of any other business letter with which we are already familiar. The only special difficulty that may arise in the case of any application for a situation is that the applicant may not have proper letter head. But this is not problem. It is enough if the name and the address of the applicant should be placed on the left hand top corner and the date should be placed on the right hand corner.

Hints for drafting application 1. Do not apply for a situation for which you feel that you are neither qualified or quite fit. 2. 3. Write the application with great care, courtesy and precision. See that it is clear, legible and neat, free from blots, erasers. Rewrite it if you find that your first draft is not satisfactory. 4. Ensure that there are no spelling and grammatical mistakes. If you are not sure of yourself, get it revised by a better man in this line. 5. Introductory paragraph a. If the application is replied to an advertisement (i) State when and where that advertisement appeared. For eg, the name and date of the newspaper. (ii) Give the box number and address in its inside address, if the name of advertiser is not known.

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b.

If it is sent unsoliated, explain your interest in the kind of work for which you apply and commence the introductory paragraph by writing Being given to understand that a vacancy exists for the post of

c. 6.

State the nature of the position for which the application is made.

Body of the letter

State in the next paragraph, frankly, modestly and briefly your (i) educational qualification, the name of the college or university from which you have passed (ii) Experience in that particular line, the period of service, name of the employee, the reasons for your leaving etc. (iii) (iv) General ability. Age, hobbies and any special qualification that may useful to the employer. (v) (vi) Fitness for the position for which you are applying. Divide the body of the letter into paragraphs, each dealing with a separate idea. 6. State the terms and conditions under which you are willing to serve, if you get appointed. 7. Give the names of persons or firms to whom reference may be made in respect of you character and suitability for the post. 8. Concluding paragraph; End the letter with an assurance that you would endavour to give satisfaction to the employer, if you are selected. It would be better to conclude with a request for an interview. But never promise anything more than what you can reasonably hope to keep. End this para in such a way as to leave a favourable and pleasing impression on the mind of the reader.

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Sample letter of application for the post of a sales executive From P. Mahesh, 16, Big Kammala St., Trichy 8. 29th December 98 To The advertiser, Box No : 140, C/o Indian Express Madurai. Sir, With reference to your advertisement dated on 25th December 1998 in issue of the Indian Express, Trichy edition for the post of sales executives, I wish to offer myself as a candidate for the post. I have passed the MKU, B.B.A. Examination in first calss (72%) and I am happy to inform you that have secured university 3rd rank. I have scored good marks in marketing management and sales management in my B.B.A. examination from DDE, MKU. I have completed my post graduate diploma in Marketing management from the J.M.M. I am also well-built with better communication skills. I have been working as an assistant sales executive in the firm Arumugam & Co., Madurai since last six months and I am now seeking better opportunities which my present employer, with their limited range of business cannot supply. I am at present 22 years of age and of active nature. I am prepared to serve on any reasonable salary that you may be pleased to offer. I sincerely hope that you will give me a trial before deciding about the salary, which if your opinion would be appropriate for the work I shall do.

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Copies of testimonials from the heads of the institutions mentioned above are enclosed. One of them is in my own handwriting (to acquaint you with my hand) and this application is a sample of my typing. You may also refer to my present employers who have readily consented to write to you about my attitude, ability and character. Please give me an appointment at a time most convenient to you when I may call at your office from an interview. I assure you that I shall try my best to give you complete satisfaction, if I am selected for the post. Yours respectfully, P. Mahesh.

Write an application for the post of office manager in a house. From Mr. R. Anuradha, No:62, Sonaiyar St, J Mangalam, Madurai dt.

To The Advertiser, Box No: 140, C/o The Hindu, Madurai.

Sir,

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With reference to your advertisement in the Hindu for the post of a sales manager, I wish to offer myself as a candidate for the post. I am a B.B.A. graduate, having passed the B.B.A examination of the MKU with distinction. My degree is crowned with an extra credit of securing the university I rank. Moreover, my qualifications are credited with a diploma from I.M.M. I am also doing M.B.A under the correspondence course offered by the MKU. I would be completing it in the next academic year. I am pleased to inform you that I also have better communication skills and cocoordinating capacity. I was nick-named as work driller in the previous institutions where I worked. I am always successful as a loader of the team and adapted/to quick-decision making. I have been working assistant manager in M/s Anu Priya for the past 5 years. Since am seeking better opportunities, which m present employers have failed .to offer; I headed my college volley ball team for the state level National level championships in football & volleyball. I also hold a post graduate diploma in complete applications from the NIIT. I am also a good orator and have a good fluency in three languages (Hindi, English & Tamil). I have also learnt French. I am at present 29 years old and I am to work for a my reasonable salary offered by you. I would also not mind travelling abroad on business and also have a passport. I have enclosed here with all my certificates from the heads of institutions mentioned above. My previous employers have, also consented to provide you necessary information regarding by ability attitude & character. You may give me an appointment at-a-time most convenient to you. I assure you that I will do my best if given an opportunity. Yours Respectfully, R. Anuradha.

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UNIT IV CIRCULAR LETTERS A circular a communication meant to notify or convey all customers business friends of a business house regarding certain fundamental changes or important information Circular letters are sent to a large number of persons at the same time. In business these are numerous occasions in which circular letters re sent. A circular letter is one that carries a communication to a number of addresses. The basic difference between a circular and a general letter is that whereas the former is addressed to many persons and the latter is addressed to only one person. Circular letters are to be read by a large number of people whereas general letters a personal and private in nature. Therefore, circular letter must be specially well written in clear and understandable language. Various situations of circular letters 1. The establishment of a new business 2. A change in the constitution of the business like.

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a. Transfer or taking over of a business. b. Admission, death or retirement of a partner. c. Conversion of a partnership into a limited company. 3. Removal of business to a new premises (or) opening a new branch. 4. Granting or withdrawing power of attorney. 5. Obtaining an agency. 6. Appointment, discharge or retirement of an important employee. 7. Instructions to agents, travelling salesmen. branch managers etc. 8. Report to share-holders regarding general progress of some special work. 9. Issue of bonus shares or debentures. 10. Change of address or title. 11. Clearance sales. 12. Offering new shares to existing share-holders. Circulars have certain special characteristics. They are usually printed or cyclostyled. As regards the salutation general form is Dear sir or dear madam. The signature must appear in circulars. Advantages of printed or cyclo-styled circular letters 1. Hundreds of them can be easily prepared and posted in one day. 2. They are comparably less expensive. 3. They penetrate where the salesman fails to find access because their initial success of arousing interest lasts longer, but the salesmans success of gaining the ear of the buyer may be easily over-whelmed by interruption. 4. The receiver can place aside for further reading at a more convenient time. 5. They neither feel rebuffs nor bring about the dismal feeling of wasted effort. Objectives of circular letters 1. To obtain publicity bra merchandise.

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2. To impress the readers with the facts about the firm and the products. 3. To make the readers mor interested in their contents. 4. To attain the confidence of the readers. 5. To stimulate sales. Precaution to be taken in preparing circular letters As the information through circular letter reaches many people at a time, special care and caution should be taken in drafting such a letter. 1. Circular - letter should be short, crisp and direct to the point; otherwise, these letters may not be looked into. 2. The opening paragraph should catch the readers interest either by a neat heading or telling an anecdote story etc. 3. To give the letter an attractive look; a. When large number of letters are sent, letters can be printed - in the imitation typewriter types, with the signature in original or in facsimile or printed in a different colour etc. b. Use good quality paper and seal your letter in its envelope. The mere fact that the letter is sealed creates curiosity and interest. Never use cheap looking stencil duplicated letters on semi absorbing paper for it. c. Use attractive printed letterhead which will have a favourable psychological effect and add only a little to the cost. 4. Create the impression of personal interest by preferring you to such general expressions as our reader, our customer our clients etc. 5. Circular-letters may be adopted for business promotion also by appreciation of the customers confidence in the past and the hope that it will continue in the future.

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6. Eventhough circular letters are prepared for many, an attempt is to be made to convey a personal message that seems to be directed towards the reader himself. 7. These letters should convey correct and comprehensive information and worded in such a way as to inspire confidence among the receivers of such letters. 8. The circular-letter should not be arrogant in tone which will be detrimental to the interests of the sender. 9. Circular-letters may be made so as to appeal to the egoism of the recipient e.g.) you and a few others are chosen among the elite to try our magazine at concessional rate. 10. In these letters never make any big promise which you cant keep; because, an unfilled promise will cause more damage than an undelivered one. 11. These letters should also carry convincing message to persuade the customers and create the necessary action. Different Circulars during different occasions Given below are the important points to be included in the various types of circular letters depending upon their nature. A. Commencing a new business 1. Name and address of the firm and its telegraphic code telephone number etc. 2. The exact date of opening the new business and the time of business hours. 3. Capital employed and the financial standing. 4. The qualifications, special business experience, knowledge of the proprietor so as to infuse confidence among the customers 5. Quality of the goods and fairness of prices. 6. Other special attractions and concessions available. 7. Specimen signature of the manager or the person incharge of the business to guard against forgery.

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8. An invitation to extend the patronage and support. B. Introducing a new product 1. The brand-name and the uses of the new product. 2. How it is superior to other products of the same kind. 3. Special features like packing, saving in expenses, easy handling etc. 4. Any special discount and incentives offered to wholesalers and distributors. 5. End the letters with a hope of the trial order and suggest that the result would be satisfactory. C. Reduction sale or clearance sale 1. The period and time during which it is kept open. 2. 2. The kind and type of goods offered under the scheme. 3. A comparsion between the usual and reduced prices, 4. Soliciting the early visit of the customers to select among the varieties. 5. Assuring the customers of the genuiness of the sale and appealing to use of the offer. D. Shifting to new promises, opening of a new department or branch and Expansion of premises All these factors have great sales-value, therefore such circular letters must, a. stress the development of the business. b. Mention the additional facilities like the easy reach for the customers, more variety department. c. Extend cordial invitation to the customers to visit the new premises/branch or department.. In case of expansion and shifting to new premises, inform your customer about the delays in supplying goods, request them to bear with . inconvenience. Also convince them that the changes are for the betterment. When opening a new department or branch

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assurance may 1e given that it will maintain the firms policy of selling sound products 11 t competitive prices. Where new branches are being opened, the address, the opening date and the name of the manager incharge should also be stated. Along with this, information may be given about forwarding of the communications. If the new branch or department offers any special or additional facilities that may also be stated separately, E. Change in price Usually any increase in the price will b resisted by the customers To overcome this difficulty these i4tters should carry convincing argument for the increase in price 1. Express the reason for the change in the price in a convincing manner. 2. Say clearly what the. new price is. 3. Express your assurance again that the Same quality and standard will be maintained. 4. Hope that the same patronage will be extended. despite the changes in the price. F. Obtaining an Agency If the product is offered to a new locality, steps should be taken to popularise it. As such the circular letter should contains 1. The excellance of the product you sell. 2. Effort should be made to suggest delicately that the manufacturer must hold the agent in high esteem to leave the marketing of the product to him. 3. Details as to the price quality and delivery schedule of the product. can be given. 4. The area and the period of agency may e given. 5. The operating managers specimen signature may be given. 6. If any special or concessional terms are offered at the initial period of agency that can also be stated clearly.

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7. If the product is widely advertised a reference may be made about it. 8. Finally a cordial invitation can be extended to make use of your service.. 9. Generous quantity of samples and specimens may also be sent to the customers. Granting and withdrawing of powers of attorney or procuration 1. At the first instance the reasons for granting or withdrawing the authority may be given 2. If the authority is delegated, the full name of he person along with his specimen signature must be given. 3. If the power. of attorney is for a specific period, this period should also be stated more clearly. 4. If the authority is withdrawn a note of caution stating that any representation by that person will not bind the firm subsequently, may be given clearly. Appointment of an employee . 1. Express the need for the appointment , 2. Introduce the newly appointed hi qualifications, abilities, previous experience etc. 3. Attention should also be drawn towards his model signature. 4. The extent of power granted, to him and the department looked after by him may be cited. . 5. Express your hope that under the guidance of the new officer the business would prosper well. Discharge of an employee 1. Express the reasons for discharge. 2. The date and the time of discharge may be mentioned. 3. A note of thanks for his earlier service to the business.

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4. Mode of refilling his agency. 5. A word of caution stating that for all subsequent dealings he is not binding the firm or business. Admission of a new partner . V 1. The occasion which necessitates the admission. 2. The name, address and other details about the new partner. 3. The date of admission and the capital brought in by him.

4. An appreciation of his special capabilities, rich experience abilities, which may help\in improving the business further 5. A speciman signature of the new partner for the attention of the customers and bankers. 6. State about y change in the name of the business, if .1ny effected by the admission of a partner. 7. Thank the customer for the past patronage and request him to continue the same in future. Death of a partner 1. Express your deep regret over the sudden demise of the partner it possible, the cause of the death may be given. 2. Acknowledge the services rendered to the business by the deceased partner. 3. Share the grief with the family numbers. 4. Write about the alternate arrangements made for the loss of service and capital. 5. State any change in the name of the business. 6. Thank the customer for the past patronage and request him to continue the same. Retirement of a partner

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1. Regret the loss of service of the partner without shaking the confidence of the customers. 2. Appreciate and acknowledge the service rendered by him so far 3. Explain the reason for retirement e.g. illhealth, old age etc. 4. If the retiring partner withdraws capital explain the alternate arrangements made. 5. Specify any change in the nature and in the name of the firm 6. Thank the customer for his support so far and express your-hope that the same with continue. Conversion of a Partnership Firm into a Company 1. Explain the reason for conversion 2. State clearly the new name and address. If there is any change in the address of the company specify them clearly. 3. Give an assurance that such a change is only for betterment and the same personnel would be maintained. 4. Thank the customer for the past patronage and express your hope that it will continue. Specimen Letters 1. Letter intimating the inauguration of a new business HEAR.WELLRADIOHOUSE 38, Townhall Road, Madurai, 1st August, 1998. To The Manager, The Electricals and Electronics Company,

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Ram Nagar Bazar, Dindigul -

Dear Sir/Madam, We have pleasure to inform you of the opening on Friday 7th of August 1 998, of a high class radio shop at the above given address under the firm name of: SACS AUDIO HOUSE We have appointed Mr. Victor as the manager incharge. His fifteen years experience in the business with the Standard Electronics will help a great deal in running the business on the most efficient lines with prompt after-sales service to the utmost satisfaction of all. Our adequate capital will enable us to have bulk purchase at attractive discounts and sell them at moderate prices, which will probably be the lowest anywhere in Tamil Nadu. The stores will be kept open from 8 A.M. to 8 P.M. and a special discount of 10% will be allowed on all the purchase made by the first day customers. It is of course, impossible to prove our worth and fairness of the prices unless you give a trial order to us. We hope you will be satisfied with the results. The fascimile signature of Mr. Victor is given below for your kind attention. -This will be used in all the agreements entered into by our firm. Specimen signature of Mr. Victor Yours faithfully. S. Kurnar Victor Proprietor. 2. Circular - letter about opening of a new branch BUY ALL PO VISIONS 41 Big Bazar St.,

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Madras. 18th June, 1998. To Mr Raja Thilakar, 38, K.K. .Nagar, Madras.

Dear Sir, Due to the recent increase in the volume of our trade in the Northern Region we have decided to open a Branch at42 Big Street, K.K. Nagar with Mr. Sukumar as the manager. Although we had been all to provide you efficient-service in the past, the establishment of a branch in your region will result in your orders and enquiries being dealt with more promptly. The new branch will be opened on 1St Jul 1998 nd from that date as the orders and enquiries from your region should be sent to Mr. Sukumarr, the Branch Manager. We thank you for your patronage in the past and assure you again of our prompt attention Yours faithfully, P. Chandra Sekaran. General Manager.

Sample Circular letter announcing the retirement of a Partner Ram Shyam & Sam Co. 15. Nethaji Road, Murnbi. 17th December 98

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We regard to inform you that Mr. Sam our valued partner and one of the founders of this firm is retiring due to old age and continued ill-health He has however gladly consented to continue his association with u by acting in advisory capacity. Consequent on Mr Sarns retirement, we find it necessary to change the name of our firm as RAM SHYAM & Co., We however sincerely feel that we shall be able to continue to serve you to you atmost satisfaction, as we did not receive any compliant for the last two years during which Mr. Sams work in the firm had been completely taken over by our young and able partner Mr. Shyam subject to Mr. Sams ill-health. We assure you that the ,business will be carried on at the same premises and on exactly the same principles as in the past. We are glad to state that the firm has been able to replace the capital with drawn by Mr. Sam with contributions from the remaining partners and continues to enjoy the original financial standing. We thank you most sincerely for the confidence you have hitherto kept in us and hope that it will in no way be diminished by the altered arrangement. Please give us opportunities to prove that the same standards of service are being maintained. Yours faithfully, Shyam Circular conveying conversion of a partnership into a company Hints 1. Mention that the expansion of the firms business, the consequent necessity to carry out schemes of general development, the consequent need for more capital have rendered the conversion desirable. 2. Re-assure them that their needs will receive the same attention as in the, past and that every effort will be made to maintain its personal touch. 1. Draft a circular letter for M/s. Balaji Rarnji, announcing the conversion of their partnership into a ltd., company (Public) under the style of Balaji, Ramji& Co., Ltd.,

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2. Draft a circular to be sent out by Raja & Co., stating that the manager of the firm Mr. Ram has been taken as a partner. The shop will in future be known as Raja, Ram Co., State that a large and varied stock is on view and invite enquiries and orders. V MIs. Balaji & Ramji 25, Goods Street, Coimbatore 18th December 98 To x xx x xx x x

Dear Sirs, We take great pleasure in informing you, that we have taken a decision to convert our firm into a Limited Company. This decision has been taken on account of the increasing demand for our goods and the necessity of additional capital. Our growing business demands a large amount be in line with the growing demand, additional funds have become inevitable. The new name and style of the company which will be born on 14th April 98 will be BALAJI RAMJI & Co., Ltd., We also grant you assurance that the change in the style of our business, as far as you are concerned will be only for name sake. Intact, it will be more beneficial to you as the increase in the scale will enable us to favour you with concessions. We certainly believe that the intimacy shared by us will only grow and not diminish It is our foremost duty to thank you at this venture, or the interest you have shown in our company and enabled us to expand and grow to this extent. We eagerly anticipate your view and opinions which would serve as guidelines for our functioning.

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Thanking you, Yours faithfully, Balaji Raja & Co. 56, Nethaji Road, Coimbatore. 18th December 98 To xxxx xxxx Dear Sirs, We inform you with extreme pleasure, the inclusion of a new partner Mr. Ram to our firm. Mr,Ram, the manager is associated with our firm for the past 18 years. He is one of our charter members. Our firm will now continue its services in the name. RAJA RAM & Co. Mr. Ram is highly qualified and is also fully conversant with the technical knowhow. Besides these he has supplied us with a capital of Rs,. 1 latch as his contribution. We are sure that his past experience in the field both at home and abroad will help us a lot. Moreover, we inform you with joy, that due to his, addition to the capital we have had a varied stock of a variety of goods. We eagerly anticipate your enquiries and orders. We express hope that the addition of our partner will help us to serve you best. Thanking you, Yours faithfully, Ganesan Circular announcing the new agency obtained

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Hints 1. Refer to the excellence of the product and the fairness of its price in relation. to its quality, arrangements for delivery.. 2. Suggest that the manufacturers of such goods must hold the agent in high esteem to leave the problem of marketing of the product to him. 3. End with an expression of service and by soliciting a trial orders. Sample letter Ram Agencies 15, Nehru Street, Chennai 20th December 98 To xxxx x x. x x Dear Sir, We are happy to inform you that we have been entrusted with the marketing of wash-well soap throughout South India. You will agree with us that this soap needs very little introduction to the trade. as it is a product of the well-known firm of Janata Oil& Soap works Ltd., whose preparations are world famous. Under arrangements with them we have agreed to keep a fairly large stock of their products. We are now in a position to deliver all varieties of Janata goods. As we are, appointed their sole distributors for South India all orders from dealers in the are will be booked by them through us. You will be notified from the price list enclosed that all prices are subject to a discount of 15%.

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It has always been our earnest endeavour to serve you to the best of our ability with goods of proved quality, and we feel we may safely claim to offer you once again a high grade commodity on the most convenient terms. Thanking you, Yours faithfully, Ram Hints for drafting circular letter for expansion of a business premises or shifting to a new premises. 1. Inform your customers in advance the delays in the execution of orders that are likely to be caused and request them to adjust or - to accommodate as far as they can 2. Convince them, that the change is for their benefit.. 3. Strees then the special attractions which is much easier to reach of the customers. 4. Display very clearly the address of the new premises. Sample letter A circular issued in connection with shifting to a larger premises. Ram & Bros., 14, Nehru Street, Chennai. 22nd December 98 To xxxx xxxx Dear Sir, You will be pleased to know that the steady growth of our business has necessitated an early move to a new and larger premises. Our old factory (including the showrooms and administrative offices) has rapidly become insufficient to cope efficiently with he

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increased demands of both old and new customers actually complained of the in adequacy of our floor space and the poor showroom facilities and poor ventilation in the old building, we could not move to a more specious premises owing to the nonavailability of suitable premises. Fortunately we have now succeeded in acquiring a newly built large building at 45, Gandhiji Street, Chennai This building is best suited for our purpose and enables us to ensure. satisfactory service to our customers. The site is in the heart of the large industrial estate within easy reach of the railway, the road and the sea. Transport bottle necks are thus reduced to a minimum and quick deliveries can now be guaranteed. Another heartening fact is that the new factory, in this new premises offers great scope for mechanisation which is sure to increase both the quantity and quality of our output. Such a transitional period, as you know, gives rise to considerable difficulty. Although, we are trying our best to hasten the shifting operations. We have confidence that you will certainly allow us a certain amount of latitude in the special circumstances explained. As the factory will be ready for production within the next to days, we can assure you of prompt delivery of all goods ordered from 2nd January 1998. Please send all your communications to our new address. We take this opportunity of expressing our sincere thanks for your confidence, custom and patronage in the past, without which we could not have moved on We trust that the improvements that are going to be effected will lead to even more business. Thanking you, Yours faithfully, P. Yogananda

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Introduction A great volume of worlds trade both external and internal is conducted on the system of agency. Particularly, business abroad would be difficult if the agency system had not been devised. Even big manufacturers, though want to dispose of their products in fairly large quantities in far distant markets, do not prefer to open a branch there. This is because, they are often luxurious and have a tendency to eat deeply into the revenues. Therefore, in most of the countries the agency system is adopted. It should also be noted that it is not only manufacturers who avail themselves of these facilities. For instance, insurance companies have recognised the value of the agency system even years ago. An agent is one who is appointed to act for another. The person who appoints the agent is known as the principal. The agreement between them is known as the agency agreement. Kinds of agents There are various types of mercantile agents. Most important of them are: 1. Commission Agents. 2. Del credre Agents. 3. Factors.

4. Brokers. 5. Auctioneers. 6. Clearing arid Forwarding agents. 7. Underwriters. 8. Warehouse Keepers. 1. Commission Agent: A commission agent is a person employed by a principal either to buy or sell goods on his behalf. He receives a commission at a specified rate. The principal meets all the expenses connected with the purchase or sale of the goods.

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2. Del credre Agent: His function is similar to that of a commission agent, but in addition, he undertakes an additional liability of guaranteeing payment to the principal when he sells the goods on credit. The principal, therefore, need not worry about bad debts. For this additional service, he is entitled to an additional commission known as Del credre Commission. 3. Factor: He is a general mercantile agent who had possession of the goods and sells them in his own name without disclosing the name of the principal to the third party. He receives payment from the buyer and issue receipts in his own name. In case of default, he can sue or be sued. 4. Broker: He is a special mercantile agent. His duty is to bring the intending buyer and the intending seller together. Thus, he acts only as an intermediary between the two. He is not given the actual physical possession of goods. He is not personally liable and hence cannot be sued by third parties. 5. Auctioneer: He is a person employed by a principal to sell his goods or property publicly i.e., by asking the public to bid for it. For his services, he gets a commission. 6. Clearing and Forwarding Agent: A clearing, agent is one who clears the goods for the importer. The clearing agent assists the importer for a commission. A forwarding agent, on the other hand, forwards goods to foreign countries for the exporter. These agents are also employed in internal trade. 7. Underwriter: An under writer is generally appointed for underwriting an issue of shares and debentures. The underwriter undertakes that he would subscribe to the shares or debentures to the extent under written by him, if the public do not subscribe for them. His commission is called underwriting commission. 8. Warehouse Keeper: A warehouse keeper helps trade and commerce by storing goods in his go down or warehouse. His function is to take care of the goods kept in his warehouse. He issues receipt known as warehouse keepers receipt for the goods stored. He may even undertake to sell the goods on behalf of his clients. Stages of Agency Correspondence

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In the selection of an agent care must be taken. Similarly, an agent shall only want to represent a reputed and reliable principal. The person seeking the agency can apply to the principal or the principal himself can offer agency other persons. We shall now consider the correspondence between a principal &! and the agent. 1. Letter offering the Agency The principal himself may offer agency to some other persons. This situation shall occur only when the product of the manufacturer is not popular in that area or the agent is a reputed businessman. Generally, the terms of such agency shall be liberal and the rate of commission is also more. The writer should note the following points. 1. A reference to the potential market. 2. The merits of the article. 3. Special advantages offered such as regular advertisements, maintenance of showroom etc. 4. Terms, conditions and period. 5. An expression of hope that the connection would prove mutually beneficial. 2. Letter Applying for an Agency Usually, the agent will apply for agency to the principal. Particularly in case of popular goods, obtaining an agency is a difficult task. The intending person who wants to obtain the agency should apply to the manufacturer. In such letters, he should specify his ability, .reputation, familiarity In the area etc. The following points are to be noted while drafting an application for agency. 1. The Opening Paragraph: In the opening paragraph, the applicant should mention the source from which he got the information. The application, therefore, may be based on either 1. An advertisement offering agency, or 2. Information received from others, or 3. On the own initiative of the applicant.

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1. Application with reference to an Advertisement 1. Make a reference to the said advertisement of the producer. 2. Offer your services and express your willingness to work as an agent. 2. Application based on the information from others 1) Specify the source from where you have received information about the desire of the manufacturer to appoint an agent in your area. 2) Offer your services and express your willingness to work as an agent. 3. Application on the own Initiative 1) Firstly introduce yourself as agent. 2) Explain the potential market for the product of the manufacturer in your area. 3) Specify your desire to take up the promotion of the sale of his products as an agent. 2. The Main Communication: In the main paragraph, the following points should be highlighted. 1. How long you have been in the line of business and the reputation you have built up. 2. The business contacts established by you. 3. Your ability, experience and knowledge about the business trends, market conditions etc. 4. Your arrangement for storage, distribution, advertisement, display, showrooms and window displaying etc. 5. The terms of agency applicable to you and means of settlement. 6. One or two references that you know better and furnish valuable information about you. 3. The Concluding Paragraph: Conclude your letter with a hope of getting a favourable reply from the producer. 3. Letter of the Manufacturer in Reply to the Application.

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A reply from the manufacturer may be either the grant of the agency or refusal of the agency. In all the cases, the following points should be noted. 1. Acknowledge with thanks, the correspondents letter. 2. Appreciate his interest in your product and also his business standing. 3. Inform whether you are prepared to grant the agency applied. If not, inform politely that you have already appointed or have no idea of appointing an agent at present. Also express an assurance that his case will be considered if any agent is to be appointed in future. 4. If the agency is granted, mention the terms of agency either in the form of accepting the terms offered by the applicant or by giving your own terms. 4. Other Letters from the Principal Besides, a few letters are also to be sent between the principal and the agent. The letters written by the principal to the agent are the following. 1. Letter asking for the reasons of low sales if the agent fails to reach the target sales. 2. A circular letter to his customers and other interested parties expressing the termination of the agency with a request not to deal with him in future. 5. Other Letters from the Agent The letters written by the agent are the following: 1. Letters suggesting improvements in the product if a complaint is received from the customer. 2. Letters explaining the reasons for the poor sales if an explanation is sought for, 3. A circular letter to all the customers and interested parties about your appointment as an agent for the manufacturer. Terms of Agency

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The manufacturer and the proposed agent have, to decide upon several points regarding the terms on which the agency is to operate The main points to be settled regarding the terms of agency are the following: 1. Allowance or Commission: The rate of commission or allowance is fixed with reference to the capacity of the agent to boost up the sales. In deciding the reasonable rate, the facilities provided by the agent in the shape of his contacts, showrooms, travels etc. should be taken into account. Some reputed manufacturers follow a rigid policy regarding the rate of commission. In some cases, the rate of commission is negotiable. 2. Duration of the Agency: The period for which the agent should act as an agent for the manufacturer should be settled If the product is new to the market, the duration should be reasonably long, and if the product is already popular in the market, a shorter period may be specified. For example, one year. It may be renewed if the agents performance is satisfactory. 3. Area under the Agent The area allotted to the agent should be neither too small nor too large If it is too small, the agent will not be able to earn adequate commission and so he will show less interest in his work. If it is unduly large, he will not be able. to cover the whole area properly. 4. Terms of Payment: Terms of payment refers to the mode of payment by the agent to the principal and the period within which The amount is to be settled. If any amount is to be deposite with the principal as security deposit, the amount of such deposit should also be stated. Travelling salesmen. Travelling salesmen or commercial travellers, as they are called, are persons whose business is to go from place to place and to do business on behalf of their principals They are generally paid a salary plus a fixed. rate of commission for the orders booked by them. Functions of the Travelling Salesmen The traveling salesmen generally perform the following functions:

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1. To take orders from old as well as new customers and pass on them to the principals for execution. 2. To visit customers who have stopped placing orders and try to receive them. 3. To collect overdue accounts, if authorized to do so. 4. To collect information regarding the financial status of old as well as new customers if necessary. 5. To attend to the complaints of the customers and settle claims if any. 6. To baring to the knowledge of their principals any new development, favourable or unfavourable, to the business of the firm. 7. To submit a report periodically about their performance. In performing these functions, the traveling agent has to write several letters to the principal. Specimen Letters in Agency 1. Letter Offering Agency PHILICO ELECTRICALS LTD. Manufacturer of High Class Electric Bulbs & Fittings 12. Industrial Estate, Hosur- 635 109 Dharmapuri District. 14th May 2000. M/s. Saliesh & Co., 46, Harrington Road, Trichy- 620 002. Dear sir,

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We have every reason to believe that our electrical bulbs and fittings would sell readily in your distinct, provided an energetic agent could be found to overcome the difficulties of introducing them to the local buyers who naturally prefer the familiar makes. The difficulties are lessened by the care which we have been taking to make these bulbs and fittings more than usually suitable for tropical conditions and to place them within the reach of most people at cheaper prices. For the present, however, only the cheaper varieties would be consigned unless you express a desire for the finer ones. we appreciate the difficulties you are likely to meet, and are accordingly willing to allow you as sales agent a commission of 20 per cent on the net sales. It is our firm belief that this connection would prove mutually beneficial, and we hope that you will be prepared to act for us. Yours faithfully, For Philico Electricals Ltd., v.m.s Renganathan sales manager. 2. Reply to the above-Accepting Offer SAILESH AND COMPANY Dealers in Electrical Goods and Government Contractors 46, Harring Road, Trichy- 620 002. 16th May 2000. Philico Electricals Ltd., 12, Industrial estate, Hosur- 635 109 Dharmapuri District.

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Dear sir, We thank you for your letter of 14th may 2000 offering us the agency for your electrical goods in Trichy District and appreciate the confidence you have placed on us. We share your view as to the possibilities of the market and believe that though sales for the first few months may be low, the final result will justify the establishment of the agency. The cheaper varieties are, in our opi9nion, excellent means of testing the market, though it is likely that the more expensive models could be handled later. We accept your offer on the terms stated and await your further instructions. Yours faithfully, For Sailesh and Company, N. sathish Managing Partner. 3. Application for an Agency BABU CYCLE TRADERS Dealers In Cycles and Cycle Spare Parts 23, North Car Street, Tirunelveli -627001. 20th May 2000. M/s. Bajaj Cycle Industries, 168, Miller Ganj, Judhiana- 141 001. Dear Sir,. We think that you have overlooked the possibilities of Tirunelveli District as an outlet for your excellent cycles. There is in fact every indication that a small advertising campaign would be productive of most satis1ring results.

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It is at this point that you would need an efficient distribution system to back your advertising. We believe that our knowledge of local conditions, your reputation and our connections would be of the highest service to you. Our show rooms situated in the heart of the business. quarters, offer admirable facilities for display and our many branches in the district enable us to reach most of the larger towns in our district. You can veri1 these statements by referring to: 1 M/s. Rain Cycle Mart, Town Hall Road, Madurai -625001 2. India Cycle Company, 204, Broadway, Chennai - 600 001. As there will be considerable difficulties at first, we think you will agree that a commission of 2O%isreasonable. We are prepared to pay by monthly drafts on Ludhiana but would, of course, also ready, consider any other alternative method you might suggest. We are already representing several reputed manufacturers, for many years. We trust that we shall have the pleasure of giving you similar service. Yours faithfully, For Balm Cycle Traders, Managing Partner. 4. Letter offering Agency to the Applicant BAJAJ CYCLE INDUSTRIES Manufacturers and Exporters of QualIty Cycles 161s, Miller Ganj, Ludhiana- 141 001. 26th May 2000. M/s. Babu Cycle Traders, 23, North Car Street, Tirunelvelli -627001.

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Dear Sir, We thank you for your letter of 20th May 2000 and are favourably impressed by the suggestions you have made. It is, however possible that the local conditions may make large sales difficult and with this, possibility is ruined we cannot do more than to forward a small consignment of 100 cycles to test the state of the market We also know that you have to face considerable difficulty in the absence of advertising, but we think you will agree that our campaign is quite out of the question at this stage. However, if you can succeed in pushing up the sales, we can also offer an additional commission of 5 per We accept your conditions with regard to commission and settlement and hope that you will be as successful with our products as with those of your other manufacturers. Yoursfaithfiilly, For Bajaj Cycle Industries, Sales Manager. 5. Letter to the Agent asking Explanation for Low Sales BAJAJ CYCLE INDIJSTRIES 168, Miller Ganj, Ludhiana 141001. 26th May 2000. Sri SaravanaEmporim, 14,North Street, Villupuram -605602. Dear Mr. Aravind, I note with regret that your sales do not show any improvement as yet. Our products sell quite readily elsewhere and we regularly receive a considerable amount of business even from your neighbouring districts like Trichy and South Arcot.

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It is possible that there is some special reason for your low business, but we think that we are entitled to ask for some explanation of the situation. Thai will enable us to assist you in tackling your local problems with success. We trust that with our co-operative efforts your sales returns will improve. Yours faithfully, For Bajaj Cycle Industries, Sales Manager.

Banking Correspondence Bank plays a vital role in the business line. It has become part and parcel of our life. Banks cater to the needs of agriculturist, Industrialist, traders and other sections of the society. ft is an indispensable institution in a modern society and constitutes the back-bone of money market, Origin of Banking The word Bank is said to have derived from the french word Banco or Bongue which means a Bench. In fact the early Jews transacted their business by sitting on benches. When their business fail the benches were broken and the word Bankrupt came into practice. Another view is that the word Bank might have been originated from the German word Back which means a joint stock fund. For a businessman it is an absolute necessity for he has to handle large amount of money from day-to-day and then safely depositing money and withdrawing it at will. Sometimes a business man finds his money tied up when he needs it most for another cash deal. At such a time he can approach his bankers for a loan. Even a common man may want to keep his valuable belongings in safe custody and he may approach a bank, Thus we find that a bank performs various functions for its customers.

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Functions of a Bank(er) The following are some of the important functions of a bank. 1. Receiving deposits of money It accepts deposits from the customers who can take back their money at will. Types of accounts A. Savings accounts: Customers deposit their money in savings bank accounts to save a part of their current incomes to meet their future needs and also earn an income from their savings in the form of interest. 1 he minimum amount should be maintained as a reserve. B. Current account: A current account on the other hand is a running account, which may be operated up on any number of times during a working day. The bank does not pay any interest. C. Recurring deposit account: In recurring account, the depositor deposits a fixed amount at regular intervals and the total amount can be claimed after the due. The interest rate is higher than that of savings account, since there is no interrupted withdrawals during the operation. D. Fixed deposit account: In a FD account the deposit made for a fixed period and a higher rate of interest is paid to the depositer. 2. Granting loans: A bank lends money to the needy people at a certain interest rate. Banks give loans to agriculturist, industrialist arid business men who invest it in their ventures to their own profit and to the own economic advancement of the country. 3. Discounting bills of exchange: One of the important function performed by the Bank to its customers is discounting the bill of exchange by endorsement. 4. Acting as an agent fo1r its customers: Banks act as an agent to its customers in various commercial transactions like payment of insurance premiums, payment of tax etc. 5. Supplying status enquiry information to another bank which is needed by the customers.

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6. Taking charge of valuables for safe custody. 7. Issuing letters of credit and travellers cheque. Relationship between a Banker and a customer 1. Depository relationship 2. Banker as a bailee 3. Banker as a trustee 4. Banker as an agent-follows the instruction of a principal in buying and selling shares, collects cheques, dividends, pays insurance premium, subseriptions etc.

5. Debtor - creditor relationships. A Bank must communicate a. with its customers b. With other banks c. with its head office d. with government departments. The essential characteristic of Bank correspondence Following are the essential elements of a successful bank correspondence 1. It should be as brief as possible. 2. it should be dear, complete precise and absolutely free from ambiguity. 3. It should be accurate in contents in figures, dates, names of the parties should be properly maintained. . 4. It should be so carefully. worded as to maintain secrecy about the accounts of its customers. 5. It should be tactful and courteous particularly while drawing the attention of his customers to their over-drawn accounts. Classification of Banking Letters

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A banker who hopes for a successful career in banking should be well versed in the art of writing banking letters. Acquiring this knowledge is as important acquiring knowledge of the fundamentals of banking, them an who can talk on paper to a customer in a friendly and impressive way will be an asset to his bank. Bank correspondence can be classified as under: 1) Letters between a bank and its customers 2) Letters between the head office and its branches 3) Letters from one bank to another.

Part - 1 Correspondence between a Bank and its customers In view of the varied transactions that take place between a banker and his customers, it is obvious that banking correspondence are bulk and large. However, a major portion of this is done by just filling in printed forms since most of the transactions are stereotyped in character. Thus, most of the letters between the banker and his customer have become standardised and formal. In his correspondence with others, a banker must be very courteous and diplomatic. A banker is expected to guard in the secrecy about the financial affairs, transactions and the nature of accounts of the customers. Therefore, banks normally do not disclose to an outside party information regarding their customers account. They will, however, exchange opinions and during that process, they always exercise great care and caution. To their customers banks must give correct and prompt information and guidance. Following are a few specimen letters to be exchanged between a banker and his customer. Letter to a new customer to use the safe deposit service CANARA BANK Paridian Hotel Buildings. Alakarkoil Road,

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Madurai, 28th November, 1998. Dear Sir/ Madam, . An insurance policy may get you money to rebuild your house or to buy new furniture and clothes after a catastrophe, but fire and theft remove so many things which cannot be replaced. . Have you ever visited Our Safe Deposit fault? Have you seen the great 33 ton door with the burglar alarm system that resorts to sound Waves, the unique time saving vault arrangement and the countless other modem innovation that have been brought about? A safe deposit vault at the bank provides complete protection against loss of valuable jewelleries, securities and documents. Ourvault contains boxes of various sizes to suit your needs. You can. take on rent one of them for your exclusive use. If you have not yet seen the vault, kindly take this letter as a cordial. invitation to see for yourself this equipment which is modem; safe and convenient. It will give me great pleasure to show you around the. vault and explain its many interesting features and advantages. Yours faithfully, P Chancdru. Part - II. Correspondence between the Head office and its Branches Bank correspondence with Head Office is similar inform to any other correspondence, but there are a few points which must be noted here. The Head Office of any Bank has a number of specialised departments and to facilitate the receiving of letters by proper officials, it is usual to mark all letters on the left hand top corner With the name of the appropriate department such as Staff Department, Loan Department, Accounts Department etc. Sometimes, letters meant for a particular official of a particular department will be marked as follows:

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The Chief Accountant, Head Office, The Staff Manager, Head Office. Letters from the branches to the Head Office usually consist of (i) Proposals for advances to customers of the branch (2) Letters concerning staff-their promotions, transfers etc, (3) Reports on the general administration of the branch local trade conditions, ways and means of developing the business and general topics of interest to the Head Office. Letter from the Head Office to a branch asking for statements DIAMOND BANK LIMITED Tele Grams : Diamond Phone: 254096 280, Tamrind Lane, Fort, Bombay 10th March 1998. The Branch Manager, Majestic Circle Branch, Bangalre. Sir, Board Meeting- 25th November, 1998.. Please send us on or before 25th November 1998 statements of General and Petty Cash and Deposit accounts made up as at the close of 30th September, 1998. Please also send us a certificate, addressed to the chairman, of the balance at that date. Yours faithfully,

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R. SIDDHARTHA Secretary. Letter from a Branch Manager to the Head Office recommending loan to a customer against the security of shares. LAKSHMI VILAS BANK LTD. (Rajapalayam Branch) Railway Station Road, Rajapalayam, 15th November, 1998. The Managing Director, Lakshmi Vilas Bank ltd., 93, Jawahar Bazaar, Karur.

Sir, Narayana Raja who owns and operates two rice mills, has applied for a loan of Rs.50,000/- against the following securities. 1000 shares of Lakshmi Mills - currently quoted at Rs.55 per share 5,000 equity shares of Tata Co.; currently quoted at Rs.25 per share 2,000 equity shares of Alembic Industries Ltd., currently quoted at Rs.25 per share. All the shares are fully. paid up and they stand in the applicants own name. The applicant will execute the usual documents and deposit the shares with the signed blank transfer deeds as collateral security. He agrees to maintain a margin of 50 percent on the market value. Thus, there will be an ample margin to safeguard our interests against abnormal fluctuations in the stock exchange. He is a man of considerable means possessing valuable

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properties in the town. He has recently purchased a large quantity of paddy for his mills during the last harvest season and therefore is running short of ready cash for his mills. He hopes to repay the loan within the next six months. The advance will carry interest at the rate of 16 percent per annum. I recommend that the proposal may favourably be considered and request that it is sanctioned, the decisi9n may be communicated at the earliest. Yours faithfully, H. KALAVANAM Branch Manager.

Part-III Letters from one Bank to another A bank writes letters to other fellow banks under various, Circumstances. Some of them are (a) enquiring about the credit-worthiness of a person, firm or a limited company. . (b) enquiring about cheques sent for collection 3 (c)for verifying the specimen signature (d) introducing a customer to a distant blank. Note: When goods are to be sold on credit terms, the supplier takes steps to ascertain the financial standing and credit-worthiness of the buyer, To obtain this information, he may have to enquire from the customers baker. However, because of the highly confidential relationship between the banker and his customer, the banker will not respond to such private enquires directly. But he will be willing to give such information to his fellow bankers. Therefore, the supplier must make his enquiry his banker.

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1. Application for opening a bank account. a. By an individual b. By a partnership tirm c. By a joint-stock company 2. Credit or debt advice by a bank to its customers. 3. Statement of account sent by a bank. 4. Intimation of non-collection, refusal or dishonour of cheques. A letter requesting a banker to open an account MARUTI & Co. 14, Gandhiji St, Chenai. 5th Janyuary 98 To The Manager, Indian Bank, Chennai. Dear sir, I am desirous of opening a current account with you. I have sent your printed application form duly filled in with specimens of my signature and the letter of introduction form one of your customers Mr. N. Guru, Proprietor, Vasanth & Coy., through my personal assistant Ms. Maya, who will pay in sum of rupees Rs. 1000 as initial deposit. Kindly send with her a cheque book containing 25 leaves a passbook and pay in slip book for purpose of remittances. Thanking you, Yours faithfully,

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Madhan. Write a letter from a bank regarding dishonoured cheque due to insufficiency of funds CANARA BANK No.4, Goods Street, Madurai. 5th January 98. To M/s Gupta Agencies, 56, Koli Street, Madurai. Dear sir, We regret to inform you that we were forced to dishonour your cheque dated 02.01.98 due to insufficiency of funds. Your cheque was worth Rs 50,000 but the balance in the SB account is only Rs. 40,000 Kindly avoid such mistakes in the future as they create a doubt about your truest worthiness. Else you can avail an O/D facility to avoid such hinderences. Thanking you, Yours Faithfully, P. Murugan. Hint for drafting request to pay insurance Premium. 1. Request the banker to make payment on bank. 2. Instruct him to debit your account for these payments. 3. Assume him that you will keep sufficient balance on due dates enabling him to make such payments 4. Give details of policy, amount and period

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Sample letter which requests to pay insurance premium RAJA & Co. 14, Nehruji Street, Madurai. 16th January 98. To The Manager, State Bank of India, Madurai.

Dear Sir, : I was an account holder in your bank. Due to my industrial tour I was unable to pay the insurance premium, so I request you to pay the insurance premium to life Insurance Corporation of Indian on or before 15th January 1998. My insurance premium number is 256 The amount to be paid is Rs.500. You can debit the amount from my account. I assure your that I will keep sufficient balance on due date enabling you to make such payments. My current account number is 110. I again assure that I will maintain regular flow of money in my account. My policy value is Rs.50,000. Once again I remember you to pay the insurance premium of Rs.500 on or before 15th January 198. Thanking you, Yours faithfully, S. Kumar. Write a letter requesting the banker to pay income tax. JAYANTHI&Co. 15, Colony Road,

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Coimbatore. 16th January 98. To The Manager, StateBankOf India, Coimbatore.

Dear Sir, I hold a current account in your bank for the past two years. I have been at present invited by an U.S. company to attend an important. conference. I will have to be these by 7th January98 and so I am unable to pay my income tax. I request to pay my income tax on or before 25th January 1998 as per the enclosure of necessary details. My yearly income comes around 15 crores. The e4nclosed details will give you all the information about the tax to be paid. You can debit it from my account. My current account number is 99. I give you the fullest assurance that I will keep sufficient balance and regular flow of money in my account. Kindly, debit my IT before 25th January 19.8 without fail. Thanking you, Yours faithfully.

Request for an over draft Hints: 1. Tell the banker about the progress of. your company. 2. Tell him why you need the over-draft (OlD) and why you cannot get credit supplies. 3. Mention the amount needed and the period.

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4. Assure him that you will honour the term on which the over-draft facility is granted and will bring the account in credit by the end of. the agreed period. . 5. Inform him that your previous transactions with the bank and your books of accounts would be sufficient for the bankers to sanction the over draft on personal security. 6. Request the banker to give an early reply. 1. You are expecting an increased turn over in the coming season but you are not in a position to finance yourself for additional stocks, and not able to obtain credit from your supplies: Request your banker to allow you an over-draft for Rs.10,000, for a period of 3 months, on. your personal security. ULTRA MODERN STORES 15, Gandhiji Road, Mumbai, 7th January 98. To The Manager, Indian Bank, Mumbai.

Dear Sir, We are pleased to report you, the steady progress of our business 8lnce its establishment in January1991. The 200% increase in our turn over in the past six years is a proof of our success in business.. We have been able to achieve this, mainly because of the wide range of consumer goods readily available in our stores in large numbers During the further pongal season, we anticipate a further rise in our turn over arid as such we wish to add, other lines of goods also. On account of tight Deflation of money

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market. our usual suppliers have expressed their inability to grant us a credit or a period of more than one month. Dear Sir, Under these circumstances, we are obliged to approach you with a request for a small over-draft of Rs. 10,000 would be sufficient to finance our increasing seasonal stocks. We require this amount for a period of 3 months by the end of which we shall be able to place the account in credit At present we can give you only our personal guarantee as security for the overdraft. However we wish to draw your attention to the operation of our current account in your bank has been fairly maintained regularly. Trading and profit and Loss Account balances as on the date of application are enclosed for your verification. An early reply will help us to send the orders to our suppliers and having our stocks in time. Thanking you, Yours faithfully, Write a reply from the bank. Indian Bank The Manager, Mumbai. 8th January 98. To. The Ultra Modem Stores, 15, Gandhiji Stores, Mumbai.

Dear Sir

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We regret to inform you that we are unable to grant you-the over-draft facility that you had asked for. Though your increase in the sales had been satisfactory; your late remittance of your previous debit account, arises a doubt regarding your trustworthiness. Further more the deflation in the money market has tightened our hands. The amount you have asked for is slightly heavy to be allowed for personal guarantee. We are again sorry for the inconvenience. Thanking you,

Request for credit Hints: 1. Address to the agent of the bank. 2. State the reference as open credit. 3. State the reasons for credit and the potential demand for the product. 4. State your financial difficulty and requirement. 5. Give details of your security along with its values 6. Assure prompt payment. Sample letter MALHOTRA BROTHERS 5, Bank Street, Mumbai. 8thJanuary 98. To . The Agent, State Bank of India,

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Mumbai.

Dear sir Ref: Open credit. The recent business tour of European markets by our senior partner - Mr. J.K. Malhotra has brought in large number of orders for our products. The state trading corporation (STC) has at the same time requested us to supply a considerable quantity of our products to some of the East African countries. This has increased our I production activity beyond our expectation. Since all these orders are to be supplied on credit ranging from four months to eight months, we are obliged to approach you for a term loan for a period of one year for Rs.70,000 This amount would cover 80% of our financial requir9ment, account increased production activity. The remaining 20% being met by us from our internal sources. Please let us know whether your bank can help us in this matter. We offer the following securities. . 1. Factory building 2. Land 3. Machineries. Rs.50,000 Rs.40,000 Rs.30,000

We assure you that our payment is regular and prompt, An early reply is highly appreciated. Thanking you, Yours faithfully. Reply Letter A customer of your bank has applied for a loan of Rs.10,000 against an old building and some shares. As the manager of the Bank, write a tactful reply regretting your inability to grant the loan applied for. CA NA RA BANK

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15, Bank Street, Mumbai. 8th January 98. To M/s JAVANTHI & Co, 56,WorliRoad, Mumbai. Dear Sir, With-reference to your application for a loan of Rs.10,000 against an old building and some shares, we regret that we are not able to sanction the same for the following reasons. 1. The shares given as security are not approved shares and these is heavy fluctuation in share prices. 2. The security, an old building for which no valuation certificate and income certificate has been submitted. 3. You have not specified the purpose for the loan supplied and your terms of repayment have not been satisfactorily furnished. As such we dare lodging the proposal adjourned. Thanking you and assuring you of our best attention at all times. Yours faithfully, Hints for drafting reply from, the banks Replies from the banks regarding credit may take place in three forms. 1. Approval 2. Denying & ask for more, securities 3. Rejecting Hints for drafting denying and ask for more securities,

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1. Acknowledge the receipt of application 2. Politely decline the otter stating the reasons like insufficiency of the securities.. 3. Request the customer to supplement more securities 4. Await for reply. Hints for drafting rejection letter 1. Acknowledge the application letter. -. 2. State the reasons for your in ability to sanction the credit. because of a negative reply from the head office. 3. Tell him that you are persuading the head office and shall reply. Sample letter Denying and ask for more securities State Bank of India 56, Bank Road, Mumbai. 10th January 98. To, The Maihotra Bros, Mumbai. Dear Sir, Ref : Open credit.

We have the pleasure to acknowledge your application for an open credit of Rs. 70,000. Your application had been forwarded to our head office for their favourable consideration, since we are not authorized to sanction advances beyond Rs.20,000. The nature and values of your securities have been noted and our local, values have already been instructed to go into the matter and submit their report within a week.

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We wish to point out here that in considering your application for loan our head office has rejected your loan application with reference to the report of the local values. However, we hope to convince our head office for granting the loan, if you provide better securities. We are eagerly awaiting for your positive reply enclosing additional securities. Thanking you Yours faithfully,

Over Draft Over draft is an arrangement between a banker and his customer I by which the customer is allowed to with draw over and above his credit I balance in the current account upto an agreed limit. This is only a J temporary accommodation usually granted against securities. The borrower i5 permitted to draw and repay any number pf times, provided the total amount over drawn does not exceed the agreed limit. The interest is charged only for the amount drawn and not for the whole amount sanctioned. A cash credit differs from an over-draft. A cash credit is used for long term by business men in doing regular business. Whereas over-draft is made occasionally and for short duration. Temporary Over - draft Banks sometimes, grant unsecured over-draft for small amounts to customers having current account with them. Such customers may be government employees with fixed income or traders. Temporary overdrafts are permitted only where reliable source of funds are available to a borrower for repayment. Procedures The banker may take some collateral security or may grant such advance on the personal security of the borrower.

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Generally, an over-draft facility is give by a bank on the basis of a written application and a promissory note signed by the customer. In such cases an express contact comes into existence. ln some cases, in the absence of an express contract to grant overdrat, such an agreement can be inferred from the course of business. For example, If an account holder, even without any express rant of an overdraft facility, over draws on his account and his cheque is duly honoured by the bank the transaCt0fl considered as an overdraft. Banks should therefore obtain a letter and a promissory note incorporating the terms and conditions of the facility including the rate of interest chargeable in respect of the over-draft facility. I Hints: IV. Insurance correspondence Business is full of risks. The risks of accident, theft, burglary etc cannot be completely prevented despite utmost care. Hence the next best protection is insurance. Production and marketing problems can be effectively shouldered only if some insurance coverage is there, giving an opportunity to producer and marketer to have full concentration in their affairs. Definitions Insurance is a contract between two parties, in which the insurer agrees to pay indemnity to the insured in case of loss. The insured pays a consideration called the premium to the insurer for the protection. Principles The basic principles on which an insurance contract depends are 1. 2. 3. Utmost good faith Indemnity Insurable interest

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1. Utmost good faith When a contract is entered, the person who wishes to be insured has to give all the relevant informations which may prove to be a good or bad risk. 2. Indemnity The principle of indemnity is the controlling principle, which prevents insurance from becoming a profit making organisation. The insurer agrees to pay indemnity to the extent of actual loss. 3. Insurable Interest When a policy is taken out, the insured, must have an insurable interest in the goods which he is insuring.. This is an essential clause, as otherwise people may take out an insurance policy on others possessions from which they do not derive any benefit and in case of destruction claim indemnity.

Classifications Insurance contracts can be broadly classified as life assurance and general insurance. 1. Life assurance or Insurance It is a contract whereby the insurer (insurance company) in consideration of a premium paid either in a lump sum or in periodical installments, undertakes to pay an annuity or a certain sum of money, either on the death of the insured (policy holder) or on the expiry of a certain number of years. 2. General insurance a) Fire insurance It is an agreement whereby the insurer, in return for a consideration, undertakes to indemnify the other party against financial loss which the insured may sustain by- reason

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of certain defined subject matter being damaged or destroyed by fire or other defined perils upto an agreed limit. b. Marine insurance It is an arrangement by which the insurance company or underwriter agrees to indemnify, the owner of a ship or cargo against risk which are incidental to marine adventure in consideration of a premium paid by the insured. c. Miscellaneous insurance i) ii) iii) iv) v) vi) Personal accident insurance Fidelity insurance Burglary insurance Motor-vehicle insurance Workmans compensation insurance The all-in-one policy.

Life insurance (or) Life assurance correspondence relating to life insurance 1. An enquiry regarding terms and conditions. 2. Submission of proposal for insurance to the insurance company. 3. Acceptance or refusal of the proposal. 4. Failure to pay premiums. a. Remainder from the insurance company. b. Notice of the lapse of the policy. 5. The proposal for surrendering the policy, conversion into -a paid up policy. 6. Applying for a loan against a policy. 7. Revival of the a lapsed policy. 8. Assignment of a policy. Advantages or objectives of insurance

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1. It acts as a tax shield. 2. It gives a higher security against unhappening. 3. It renders earnings to the policy holders by giving more and more bonus. 4. It grants loans from policy. For eg., Housing loan, Medical care loan and shortterm loans. 5. It encourages thrift (savings) Procedure for taking up a life policy The person intending to insure his life should study and consider the related advantages which the various insurance plans offer and select the best type. The agent of the LIC gives a proposal form and this must be filled and submitted to the LIC. The LIC will arrange for the medical examination by a doctor approved by them. After studying all the papers, the corporation will decide whether or not to accept the proposal. Lf it is accepted he will be asked to pay the premium. After the payment of first premium, the LIC will proceed to issue the policy. The assurance however begins with the acceptance of the first premium. The LIC of India publishes several rates of premium in its prospectus. Premiums are payable annually, half-yearly, quarterly or monthly according to the terms of the contract. If the payment of premium is delayed a nominal interest should be paid. Types of Life insurance policy The LIC of India issues several kinds of policies to suit the needs of people, tastes and pockets of different classes of people. Following re some of the important policies issued by the corporation. 1. The whole life policy Under this policy, premiums are payable throughout the life time of the life assured and as such this is the cheapest form of policy. The policy money is payable only on the

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death of the assured. It is therefore, particularly suited for those persons who wish to provide financial assistance to their family or nominees. 2. The limited payment policy Under this policy, premiums are payable for a selected period of year or until death of the life assured, if it occurs within this period. 3. Endowment policy Under this policy, the insured amount is payable to the insured on his - at1aining a specific age or on a pre-determined date in the event of his dying earlier, to his family or nominees. This is the most popular form of life assurance, since it not only makes provisions for the family of the life assured in the event of his early death but also assures a lump-sum at any desired age. Premiums are usually payable for a term of years equal to the endowment term or until death if its occurs within this period. 4. The double endowment policy The policy is similar to an endowment policy with an advantage of payment to the life assured himself, on his surviving the term of years selected, of double the amount of the original sum assured. 5. The pure endowment policy Under this policy, the sum assured is payable on the life assured surviving the endowment term. In the event of his death within that term, all premiums paid, without any reduction will be paid to the person entitled. However, in the event of death in the first and second year of, policy, the benefit will be limited to 80% and 90% of the premiums paid respectively. No medical examination in case of such policy. 6. Joint life policy In order to effect some economy in the amount of premium, two or more persons may simultaneously be insured under one policy, insured amount shall become payable upon the death of any one of the person. Such policies are usually taken by partnership firms.

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7. Circular endowment policy These policies are taken to provide funds for the education or marriage of the children. In case of these policies the insured pays premium for a fixed period and the corporation on its part agrees to pay a fixed amount for the objects arranged for, when the children attain a certain age. The payment of insured amount will not be affected on account of non-payment of premiums by the pre-matured death of the insured. 8. With or without profit policy A with profit policy is one the holder of which is entitled to take the benefit of bonuses declared out of the profits of the company every two years. Bonuses will be added to the value of such policies and shall be paid on their maturity. In case of without profit policy this benefit is not available.

9. Annuities This type of policy provides for the payment of insured amount by monthly or annual installments for a certain period. The fixed periodical payments may continue either until death or for a specified number of years. Insured in this case is asked to deposit a lump sum of money in the beginning of the policy. Insured may at his option get the annuities into a lump sum amount. These policies are mostly taken with the object of making provisions for ones old age etc., 10. Money back policy This type of policy provides money back at regular intervals, before the policy expires. For eg., on a twelve year policy, one gets 20% of the sum assured after four years, anothter20% on the expiry of another next four years and the balances at the end of twelfth year. 11. Ascending premium policies. 12. The convertable whole life assurance policies. 13. Cash and cover policy.

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14. Progressive protection policy. 15. The multi purpose policy. Sample letter Write a letter to the LIC regarding the nomination From R. Anuradha, 56, Raja Street, Madurai. 2nd February98.

To The senior divisional manager, LIC of India Madurai. Dar Sir, Ref : Policy No : 520 Whole life policy. I hereby give you notice that I have now nominated Mr. Ram as the person to whom the money secured by the above policy shall be paid in the event of my death. The other details are enclosed in the policy itself. Kindly do the needful. Thanking you, Yours faithfully,

Sample letter Letter asking about surrender value of the policy. From

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R. Anuradha, 56, Sonaiyar St., Madurai. 2nd February 98 To The Senior D.M., LIC of India, Madurai. Dear Sir, Ref : Policy No : 6 Whole life policy.

I intend to surrender my above life policy for a cash value of, as my financial circumstance do not permit me to continue the payment of premiums. I shall therefore, be glad if you let me know the present surrender value of my policy. Thanking you, Yours faithfully,

Reply letter stating that policy has no surrender value LIC of India 56, New Marg, New Delhi. 2nd February 98 To M/s. Anuradha, New Delhi.

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Dear Madam, Ref : Policy No : 67 Whole life policy. This is receipt of your letter dated 25th January. We regret to inform you that your policy does not have any surrender values, since the maturity period runs own to five years and it is only six months since you have taken the policy. Moreover due to your irregularity in the payment of premiums, you have paid the premiums only for four months. Our service charges tallies with your payment of premiums. Therefore, there is no balance left out. Thanking you, Yours faithfully,

Sample letter Reply from the branch manager discouraging the surrender and offer for a loan. LIC of India 56, New Marg, New Delhi. 2nd February 98 To Mr. Raja, 56, Raja St., Madurai. Dear Sir, Ref : Policy No : 6 Whole life policy.

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We are in receipt of your letter, we are sorry to know that you find it difficult to continue your above policy and that you are thinking of surrendering your policy for cash value. The present surrender value of your policy is Rs. 2, 000 only. While admitting that you are the best judge of your financial position, we regret to inform you that the surrender of a policy is never interest to a policy holder gets less than what he has paid. Moreover, he deprives his dependants of the provision he made for them. When you have paid your premium for five years the policy will not easily lapse. We presume that your difficulties are merely temporary in nature and if you can some how tied over the present difficult period, your policy will mature, the sum thus accruing being atleast 8 times higher than what you will be getting now by surrender. In view of these facts, we suggest you to keep your policy in force with a loan from the LIC as you entitled to a loan of 80% of the surrender value. You should decide to accept our suggestions, please complete the enclosed loan application form and send it along with your policy to us. Thanking you, Yours faithfully, Sample letter Letter requesting for loan against a policy From R. Anuradha 56, Raja St., Madurai. 3rd February 98 To Senior D.M., LIC of India,

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Madurai. Dear Sir, Ref : Policy No : 6 Whole life policy. Thank you very much for your letter intimating the present surrender value of my above policy and for the valuable advice to continue my policy with a loan if necessary. I have enclosed the duly completed loan application form and my above policy. Please see that the loan is sanctioned as early as possible. I await an early favourable reply from you. Thanking you, Yours faithfully,

Sample letter Reply letter intimating the sanction of the loan LIC of India 56, New Marg, New Delhi. 3rd February 98 To M/s. R. Anuradha 56, Raja St., Madurai. Dear Madam, Ref : Policy No : 6 Whole life policy.

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With reference to your letter requesting us for a loan, we are glad to inform you that a loan of Rs. 1, 600 has been sanctioned on the security of the above policy, on our usual terms of interest at 6% per annum payable every half year. Please write to us for further adjustments. Thanking you, Yours faithfully, Requesting the LIC for claiming the insurance money by the nominee. From R. Anuradha 56, Sonalyar St., Madurai. 3rd February98 To The Senior D.M., LIC of India, Madurai. Dear Sir, Ref : Claming the nomination. Policy No : 7- Whole life policy. I wish to bring to your kind perusal the demise of the above policy holder Mr. Sundaresan. As he has nominated me as his nominee. I request you to grant me the maturity value of his policy. Kindly reply at the earliest. Thanking you, Yours faithfully, Marine Insurance

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It is a contract whereby in consideration of the payment of a sum of money called premium, the insurer undertakes to indemnify the insured, in the manner and to the extent specified in the contract against marine losses. The word marine indicates not only the ocean marine but also inland marine. Importance of the marine insurance Marine insurance is very significant in international trade both the shipper of the goods and the ship owner run the risk of incurring losses on account of the perils of the sea to which they are constantly exposed. They would not venture upon their business unless they are protected from such losses and it is the aim of the marine insurance to give them this protection. Marine insurance also helps traders to obtain financial assistance from banks. For eg., if a shipper applies to a banker for credit facilities and offers shipping documents as security the banker will not ordinarily grant the request unless the documents offered are in respect of shipments which are insured. This is the another reason why shippers insure their shipments. Insurable interest In marine insurance, the insured must have insurable interest in the property insured. A person is said to have an insurable interest in something, when he is so situated with regard to that thing, that he would benefit from its existence, and be loss by its destruction or damage. The following are the examples of persons having insurable interest. a. The ship owner and the owner of cargo (goods) to the extent of the value of their interest. b. The mortgagee or hankers to the extent of the sum by the mortgager. c. The insurer to the extent of his liability to the insured. Kinds of marine losses Marine losses are of two kinds

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(1) Total Loss a. Actual total loss An actual total loss occurs when the subject matter insured fully destroyed or is so damaged that it ceases to the thing insured. For eg:, when a vessel (ship) after leaving a port disappears completely or when the goods of the ship were badly damaged that it has become valueless. b. Constructive total loss It occurs when the subject matter is reasonably abundant because its total loss appears unavoidable or when it is so badly damaged, but the cost of repairs would exceed the value of goods. In every case of constructive total loss, the insured must give the insurer a notice of abandonment. If this not done the loss will be considered as partial.

2. Partial loss Partial loss means that only a portion of the goods are damaged. a. General average In order to avoid a danger threatening ship or its cargo, extraordinary, sacrifice or expenditure is voluntarily and reasonably made, to prevent the ship from sinking, the owner of the ship, the owner of the cargo and the persons entitled to transport, all these, people should make a contribution to make goods the loss incurred for the benefit of all. The contribution made by each is in proportion to the value of his interest in the ship, freight or cargo and is called as general average. b. Particular average When however the goods are damaged which affects a particular interest in accidental damage to the goods of a particular party by sea water or fire or to ship by collapses, the loss should be beared by the party concerned and it is called particular average. Some important clauses in marine insurance-policy

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1. FAA (Free of all average) FAA exempts the insurer from liability of both particular average and general average. 2. FPA (Free of particular. average) It exempts the insurer from liability for only particular average. 3. WPA (With particular average) WPA means that particular average is covered by the policy, and the underwriter is liable for it,

4. FGA (Foreign general average) . It refers to a clause in marine insurance policy whereby the insurer in paying a general average loss agreed to be bound by the calculation of the loss according to foreign law. 5. AR (All risks) Under this AR all the above set clauses are included. Kinds of marine policy 1. Voyage policy This policy insures the goods for a particular voyage. For eg., from Mumbai to London. 2. Time policy This policy insures the goods for a specific period. For eg., from 1 st January 1997 to 31st December 97. 3. Mixed policy

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This policy covers the risk for a specified voyage and for a stated period of time. 4. Value policy This policy states the value of the goods which is agreed by the insured and the insurer, the value. It refers to the actual value of the insured goods. 5. Unvalued policy In this policy the value of the goods is not stated at the time of issue of policy. But it is to be appraised after the loss has occurred. Subjected of course to the limit of the sum assured. 6. Floating (or) declaration policy When a merchant makes frequent shipments of one and the same type of cargo and does not wish to take out a separate policy for every consignment, he takes out a floating or declaration policy for a round sum representing approximately, he total value of his consignments during a particular period. The premium is generally collected in advance for the full amount as each shipment is made its nature and other particulars are declared and the amount of declaration is reduced from the policy. When the total amount of declaration becomes equal to the face value of income, the insured may take up a new policy and send it to the insurer for the declaration. 7. Open policy This is a kind of policy undertaking to insure a certain clause of goods to be shipped to specified destination during period of time usually twelve months. The amount of plicy being the maximum acceptable to the company on each shipment and being not exhausted by declaration. A separate certificate is issued in respect of each shipments and premium is collected against each certificate. Sample letter Write a letter to New India Assurance Co., for Rs. 30,000 for the value of goods sent from Mumbai to Japan by S.S. Adam. The policy Includes W.P.A.

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Raja & Co., 56, Raja St., Mumbai. 6th February 98 To The Manager, New India Assurance Co., (Marine Insurance Division) Mumbai. Dear sir, Ref: Covering the goods under marine insurance. Please cover us the goods given below. 5 cases of Books value Rs. 30,000 Paintings value Rs. 20,000 to Japan per SS Adam leaving Mumbai on 8 th February 98. The cargo is to be insured from Mumbai warehouse to Japan warehouse. The rate to be agreed by you is 3% W.P.A (with particular avg) addition 5% for the late risk. We have enclosed a cheque of Rs. 2,000 towards premium calculated at the above rate. Kindly issue the policy before 8th February 98. Thanking you, Yours faithfully, 2. Write a letter asking for the issue of a floating marine policy Raja & Co., Ref: Covering the goods under floating policy.

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56, Raja St., Mumbai. 6th February 98 To The Manager, New India Assurance Co., (Marine Insurance Division) Mumbai.

Dear Sir, Please issue in our name a floating policy for R. 50,000 covering all risks (AR) including package on our consignments of vegetable oil in tins to be railed from Mumbai to port and laving by Bharat to Andarnan, the policy should cover the risk from 1St Feb to 31st Dec 98. Thanking you, Yours faithfully, 3. Sample Reply letter Reply letter enclosing the floating marine policy. New India Assurance Co., 56, Raja St., Mumbai. 6th February 98.

To M/s. Raja & Co., 56, Raja St.,

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Mumbai Dear Sir, Ref: Issuing floating marine policy. We thank you for your letter of 6th Feb asking to issue a floating marine policy for Rs. 50,000 on your consignments of vegetable oil. As you desired we enclose the policy no: M 235 together With our debit note for Ps. I ,250, being the amount of premium at 2.5% and including the stamp duty for Ps. 50. Please declare each shipment to us, as and when made giving particulars of the number of tins, destination value and the date of railway receipt (R/P) and other particulars. Thanking you, Yours faithfully, Sample letter Your consignment of handicrafts to NewYork has been damaged during a voyage. Submit a claim for compensation from the insurar1ce company stating all the necessary facts. Mysore Handicrafts Palace Road, Mysore.. 7th Feb98. To The Manager, Oriental Insurance, (Marine Insurance Division) Mysore.

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Dear Sir, Ref: Claiming for compensation. We have just received a report from our consignment at New York saying that our shipment of handicrafts sent per SS Bay of Bengal, has reached them in a damaged condition. This shipment was covered by the valued policy no: M 125 issued by you on 10th Jan 98. The details of the damage S.No 1. Description Seven cases containing embroided Products found in sunked condition 2. Five boxes of sandal wood products Found broken and damaged 3. To this must be added 10% of the invoice Price for estimated losses surveyor fees Total Rs. 2,000 Rs. 100 Rs. 1,400 Amount Rs. 600

____________ Rs.4,1000 _____________

According to the standing instructions the damage was surveyed by your authorised representative at NewYork port, Mr. Robert, whose report we have enclosed, along with the original invoice in support of the claim made. The policy and the case report of the surveyor was also enclosed. We now request you to arrange for payment and send us a cheque for the claim at an easily date. Thanking you,

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Yours faithfully, Fire Insurance It is a contract whereby the insurer in consideration of the premium paid, undertakes to compensate the insured for any loss, that may result due to the occurance of fire. Essential characteristics 1. It is a contract of indemnity The insured can recover, in case of loss, only the actual amount of loss not exceeding the value of the policy. 2. It is a contract of utmost good faith It is the duty of both the insured as well as the insurer to disclose to each other every material fact known to them, which will affect the contract of insurance. 3. The insured must have insurable interest in the property insured The interest must exist both at the time of taking the policy as well as at the time of loss. 4. It is the contract from year to year only A fire insurance policy cannot be issued for a period exceeding one year. The contract can however be renewed during the days of grace allowed under the policy. 5. The insurer is liable to compensate for loss, only when fire is the proximate cause of loss. 6.The principles of subrogation and contribution are applicable to fire insurance contract. Difference between fire and life insurance 1. Fire insurance provides cover to losses of properties, while life insurance relates to human life.

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2. Fire insurance Is a contract of. indemnity while life insurance is a contingent contract. 3. Fire Insurance contracts are entered into a maximum of one year at a time, but life insurance contracts are mostly made for longer terms. 4. In case of life insurance contracts, insured is required to have insurable interest in the subject matter insured, only at the time of the compensation of the contract, but in fire insurance insured is required to have insurable interest in the subject matter insured, both at the time when the policy is taken as well as at the time when the loss takes place. 5. Unlike a life insurance policy, a fire insurance policy does not have any surrender value.

What is fire? It simply means production. of light and heat by combustion occurance only at the ignition point and therefore there is no fire without ignition. The loss by heating alone, cannot be taken as loss by fire, unless the subject matter has been burnt by the fire. Various occasions of the fire insurance correspondence The correspondence in respect of\fire insurance., usually consist of the letters pertaining to 1. A request for the insurance of a proposal submitted to the under writers. 2. A reply from the underwriters in acceptance or refusal of the proposal. 3. Negotiation of the terms, the rates of premium etc. 4. Notice of damage by fire. 5. The settlement of the claim. Types of fire policy

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a. Specific policy In this case, policy is taken for a specified amount which is always less than the real value of property. However, the specified amount will not help us in any way in determining the amount of actual loss or claim except that it will lay down the maximum limit up to which compensation can be claimed. Insurance company is held liable for the actual loss upto the amount specified in the policy. These policies are not subject to average. b. Valued policy Here the liability of the insurer is fixed at the contract of insurance. Insurers in the case of valued policy agreed to pay the specified amounts I irrespective of the actual loss suffered. This converts fire insurance contract from a contract of indemnity to a contingent contract. However, these policies are rarely issued in practice, since its legality has changed. c. Average policy A policy containing an average clause is called an average policy. Most of the policies nowadays are issued subject to average, which contain this average clause. d. Replacement policy In this policy the insurer reserves with himself the right to replace the property instead of paying compensation to the insurer for the property destroyed. e. Consequential loss policy This policy is also known as loss of profit policy. In the case of a fire, not only, property of the firm is destroyed, but its earning capacity is also seriously affected till the properties are re-built, thus fire also results in loss of profit that would have been earned. The loss is further increased on account of non-recovery of standing charges of the business. A consequential loss policy is taken to cover these losses i.e., (i) (ii) Loss on account of non-recovery of standing charges. The loss of profits that would have been earned. Sample letter

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Write a letter from progressive printers, asking details from New India Assurance Co., regarding the fire insurance and request for a blank proposal. Progressive Printers 56, Rajaji Road, Coimbatore. 18th February 98 To The Manager, New India Assurance Co., Coimbatore.

Dear Sir, Sub: Request for blank proposal for fire insurance. We wish to get insured against loss or damage by fire, our stock of books, paper and other printing materials, which is in our go down No 73, Gandhili Street, Coimbatore. Kindly, let us know your premium rates and also send a blank proposal form at an early date. Thanking you, Yours faithfully, Reply letter from the New India Assurance Company New India Assurance Co., 56, Rajaji Road, Coimbatore. 19th February 98.

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To The Manager, Progressive Printers, 56, Raja Road, Coimbatore.

Dear Sir, We acknowledge your letter with many thanks. We are glad to in for you that our representative Mr. R. K. Joshi shall call on you on 20th February at 10.00 am. He shall be pleased to give all the information required by you, in request of cover note needed by you. Mr. Joshi wilt supply the necessary forms. We sincerely hope to have the privilege of extending our insurance cover to you. Thanking you, Yours faithfully, Sample letter - Notice of damage Write a letter from the king fireworks claiming for the insurance amount Rs.2 lakhs due to an unexpected fire accident.

King Fire Works 56, Raja Road, Sivakasi. 19th February 98.

To The Branch Manager, New India Assurance Co.,

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Madurai.

Dear Sir, Ref: Claim for insurance amount Rs. 2 lakhs. We are sorry to inform you that our stocks and buildings are damaged due to a terrible fire accident. Although we took several precautionary steps to prevent the fire accident, it is beyond to us. We have safeguarded and have given proper security in the go down, an unfortunate electricity leakage destroyed our whole stocks and buildings. This horrible accident was held on 15th February 98 at morning 5.00 A.M. We have struggled to put off the fire more than three hours. The accident held at un time, so we are helpless and nobody came forward to put off the fire. We have informed for the fire station and neighbours also co-operated with us to put off the fire. So the expenses to put off the fire is Rs. 2,000. We expect your supervisor to value the damage as early as possible, because we are in great need. You also please send us a claim form to get our insurance amount. We expect you to take quick and necessary steps to issue our insurance amount Rs. 2 lakhs. We have taken a fire policy for the buildings and stocks for a amount of Rs. 3 lakhs, its number is Fl 220. We claim you only 65% of the insurance, including the put off expenses. Thanking you, Yours faithfully, Sample letter The oriental fire insurance cc. is unable to accept a claim of Jayalakshmi Cotton Mills, Salem for Rs. 20,000 under a fire policy. As the divisional manager of the company, write a suitable letter to the policy holder informing them of your inability to accept the claim.

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Oriental Fire Insurance Co., (Fire Insurance Dept) 56, Rajaji Road, Salem. 19th February 98.

To The Manager, Jayalakshmi Cotton Mills, Salem. Dear Sir, This is in receipt of your letter dated 17th February 98. We regret to inform you our inability to sanction the claim of Rs. 20,000 under the fire policy. We are unable to sanction the amount because of an unfavourable report from our supervisors. They have estimated the loss to be upto Rs. 10,000. Further the report also says that the loss could have been easily prevented if only you could have taken immediated measures to rectify it. Thanking you and assuring you of our best service at all times. Yours faithfully, Sample letter for change of address Ravalgon Cotton Mills 14, Gandhiji St., Mumbai. 20th February 98.

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To The Branch Manager, New India Assurance Co., Mumbai. Dear Sir, Ret: Change of address. We wish to inform you that we are an insure in your company. We have taken a fire policy for a period of one year, Its number is Fl 240. We have insured, the godown for Rs. 1 lakh The recorded address is Ravalgon Cotton Mills, 14, Gandhiji St., Mumbai. But now we have changed our godown due to insufficiency of place, rather the new address is nearer to. the Railway Station, which Will reduce our transportation cost. The new address is, Ravalgon Cotton Mills, NO: 10, Nehru Street Mumbai. We suppose to inform this matter because to avoid unnecessary problems arising at a later stage. Thanking you, Yours faithfully, Sample letter Letter regarding the extension of time period. Raja Dress Place 14, Murmagoa Street, Goa. 20th February 98.

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To The Branch Manager, Oriental Insurance Co., Goa. Dear Sir, Ref: Extension of time period. We shall be thankful to you, if you kindly extend the time period of insurance coverage, for a period of one year. We are in need to extend the maturity date for one more year. We have taken a replacement fire policy, its number is RP 220, for the value of 2 lakhs. So kindly extend the time period and accept the premium amount which has been enclosed. Yours faithfully, Submit a claim for total loss by fire to yo9ur silk goods insured under a valued fire policy and stored in your godown. Rashmi Silk Palace 56, Rajaji Road, Coimbatore. 20th February 98. To The Manager, (Fire Insurance Dept.) 59, Raja Street, Coimbatore. Dear sir, Ref: Claim for the insurance amount of 3 lakhs.

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We wish to bring to your kind perusal, the terrific fire accident which took place at our godown on 15th February 98. Despit heavy measures to prevent such accidents on our part, we were not able to prevent it. As you would be well aware of the recent bomb blasts and riots taking place in and around coimbatore for the past one week. Our godown could not escape the dangers of the riot. As a bomb had been implanted on a pettishop adjacent to our godown, both the shop and the godown were reduced to ashes in the blast. We could do nothing but to helplessly watch our godown an investment of Rs. 3 lakhs being reduced to mere ashes. Every brick and mortar of it was shattered to pieces. We expect your supervisors to value the damage as early as possible because all our stocks of latest design sarees have been destroyed. Kindly please send us the claim form to get our insurance amount and take quick steps to grnt us the insurance amount of Rs. 3 lakhs. We have taken a valued fire policy for the buildings and stocks for Rs. 4 lakhs. Its number is VP 333. Kindly reply at the earliest. Introduction Transactions in foreign trade pass through the same stages as in the internal trade viz., Enquiry, Quotations, Order, Execution of orders etc. But on account of differences in currency, language, laws and rules, Governments etc., the correspondence in foreign trade is procedure oriented. Besides in our country, both import and export are subject to the control of the Central Government. A few articles cannot b exported and likewise a few items cannot be imported. The policy of the Government also varies from time to time depending on the circumstances and business environment. Therefore, a clear knowledge about the formalities to be. complied with is essential in both the cases. The procedure and formalities involved are somewhat different in both cases, and so they are studied separately. Let us now first take up the import trade for discussion. Procedure for Import

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Import can be made only by strictly adhering to certain procedures. In our country: the following steps are necessary for importing the goods from any foreign country. 1. Obtaining of Licence and Quota No importer is free to import goods from abroad without the permission of the Central Government. Further, permission is limited to a few commodities, which are not locally available. Therefore, the importer should first make sure that the article he wants is not locally available and whether import of such article is allowed. If the article he wants to import is permitted to be imported, he should apply to the Controller of Import. The Controller of Import is an authority appointed by the Central Government issue licences. The application has sometimes to be submitted through a sponsoring authority e.g. Directorate of General Technical Development. The licence may be a general licence or an individual licence. General licence is one, which is issued for imports from any country, whereas individual licence or specific licence applies to specific countries. The import licence has two identical copies one for exchange control purposes and the other forcustoms purposes. A certificate specifying the quantity and the value of goods, which the importer can import, should also be obtained along with the import licence. The certificate is called Quota Certificate. 2. Obtaining Foreign Exchange After getting the Licence and Quota, the importer has to make arrangements for obtaining the necessary amount of foreign currency. In our country, under exchange Control Act, the importer has to prepare an application in the prescribed form. A Foreign Exchange Bank on the presentation of the import licence should endorse that form. When the Reserve Bank of India approves, the importer can get the necessary amount of foreign currency from the Exchange Bank concerned. 3. The Indent The word Indent means an order for goods. The importer who has a licence is at liberty to place the order directly with the foreign country or through intermediaries like

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Indent Houses. In our country, majority of the traders has little knowledge about the foreign markets. To them, indent houses are -highly useful, as they are in a better position to buy for their customers, the right types of goods at competitive prices. The licence holder should approach the indent houses and request them to procure the goods for him from abroad. If the prices etc. are agreeable to the importer, the indent house enters all the details of the order in a form called Indent Form and get it signed by the importer. The Indent Form is a kind of letter from the indentor to the Indent House requesting him to indent the goods mentioned therein on the terms and conditions stated in the Indent Form.

4. Confirmation of Indent The Indent House then sends a copy of the Indent Form to the prospective seller or supplier in the foreign country. If the foreign supplier accepts the order, he confirms it and demands the opening of an irrevocable Letter of Credit in his favour through a bank having a branch in the exporting country. 5. Opening the Letter of Credit When the exporter demands a letter of credit to be opened in his favour, the importer should approach his bank to instruct its branch in the exporting country to open a letter of credit in favour the exporter Under this arrangement, the exporting party after executing the order and obtaining the relevant shipping and other documents and preparing his invoice can draw bill of exchange and submit the same to the bank in the country and receive the payment of his bill. It should be noted that almost all the exporters unless they know the financial ability of the importer - or have had long business dealings with them, require an Irrevocable letter of credit be opened in their favour so that they may receive payment without delay. Thus the purpose of a letter of credit is to ensure payment for the goods sent because the importer is unknown to the exporter. Moreover, if the importer makes default it would become difficult to take legal action against him. To avoid all sorts of such complications, it is better to ask the importer to open an irrevocable letter of credit. Kinds of Letter of Credit: A letter of credit may take any of the following types.

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1. Documentary Letter of Credit: It consists of a condition that documents of title to goods must be sent along with the Bill of Exchange. Documents of title to goods means and includes Bill of Lading etc. 2. Clean Letter of Credit: It contains no conditions for the - acceptance. and payment of the bills of exchange. A clean letter of credit is always desirable. 3. Revocable Letter of Credit: It can be withdrawn at the discretion of the issuing banker without the prior consent of the foreign dealer concerned. 4. Irrevocable Letter of Credit: It cannot be withdrawn by the issuing banker without the consent of the foreign dealer i.e., exporter. A foreign dealer generally demands an irrevocable letter or credit. 6. Sending the Advice Note After the letter of credit is opened, the exporter shall arrange for procuring the goods, pack them properly, mark the cases with the special mark of the importer and send the cases to the ship which would reach the country of destination. On receipt of the goods on board, the Master shall issue a document known as Bill of Lading. Immediately after despatching the goods, the exporter should send an Advice Note to the importer. The advice note will indicate the date on which the goods have been shipped and the date on which the ship is expected to reach the Port of destination. 7. Sending of Documentary Bills The exporter after obtaining the Bill of Lading and other documents like Certificate of Origin, Consular Invoice etc. prepares his Invoice and also a Bill of Exchange for the amount of the Invoice. The exporter then submits the Bill of Exchange along wjth other shipping documents now termed as Documentary Bills of Exchange to the banker where the letter of credit is opened in his favour. Kinds of Documentary Bills: Documentary Bills are of two types viz., (i) D.P. Bills, and (ii) D.A. Bills. 1. Documents against Payment (D.P. Bills): In case of D.P. Bills, the Banker of the importer shall deliver the documents only where he pays the full amount of the bill.

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2. Documents against Acceptance (D.A. Bills): In case of D.A. Bills, the Banker of the importer shall deliver the documents only when the exporter accepts the bill of exchange drawn on him. In this case, he need not pay the amount to get the shipping documents immediately but can pay the amount after a few days usually after thirty or sixty days.

8 Clearing of the Bills When the documentary bills are submitted to the banker in the foreign country, he then sends all the documents along with the bill of exchange to its branch in the importing country. The banker in the importing country on receipt of the documents instructs the importer to make payment of the bill if it is a D.P. Bill or asks the importer to accept the Bill if it is a D.A. Bill. After acceptance or payment, the importer can take delivery of the documents. 9. Securing the Goods from the Customs After the importer gets the shipping documents that entitle him to take delivery of the goods shipped to him, he has to fulfill certain formalities before he can take delivery of the goods. When the ship carrying the goods arrives at the port, it is usually notified in the newspapers. When the ship arrives, the goods are unloaded from the ship and keep, in the custody of the Customs house. The importer has to undergo certain customs and other formalities before the goods are delivered to him. They are the following: 1. He has to first obtain endorsement for delivery on the Bill of Lading or Delivery Order from the shipping company or its agents. The shipping company shall make the endorsement of issue delivery order only when the freight etc. has been duly paid. 2. Then he has to fill in three copies of the Bill of Entry Forms, obtainable from the customs office. The bill of entry contains the fact that the goods of a

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specified quantity, value and descriptions are entering the boundaries of a country from another county 3. He has also to fill in another form called Application to Import in duplicate and present .them at the Landing and Shipping Dues Office, where on payment of the dock charges, he will be returned one copy of the Application to Import. 4. He should then present the copy of the Application to Import along, with the three copies of the Bill of Entry at the Customs Office. It examines them carefully and if it finds them in order then allows the importer to take away the goods. If they are dutiable, the customs office calculates the duty payable and tl3e importer must pay the amount before the goods can be released. Clearing Agents The customs formalities referred above are rather complicated and many importers find it troublesome to go through them. They, therefore, engage the services of a class of mercantile agents, who do the work of clearing the goods from the customs for the importers. They pay a small charge for their service. Correspondence From the correspondence point of view, importing can be divided into two parts: 1. Direct importing, and 2. Importing through Indent houses. 1. Direct importing Here, the intending buyer makes a direct enquiry with the foreign manufacturer, asks for quotations, places orders and obtains the goods. An illustrative series of such correspondence is as follows: 1. Direct Enquiry with the Manufacturers CHE1%NAI PLASTIC PRODUCTS LTD. Regd. Office: Dhan Building, Bose Road,

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Chennai -600002. 10th March 2000. Messrs. Samsang & Co., 156, New Bazaar, Tokyo, Japan.

Dear Sirs, We have been manufacturing plastic products of a very wide variety for the last twenty years. The use of plastic products in our country has been rapidly increasing in the recent past. So we plan to multiply our production capacity by installing four additional machines. Your name was suggested to us by the Trade Commissioner of your country during his recent visit to Chennai. We have already obtained Import Licence as actual users. Will you please send us an illustrative catalogue of your latest machines for use in the production? We expect a very reasonable quotation from you. An early reply will be greatly appreciated. Yours faithfully, For Chennal Plastic Products Ltd.., Director - Purchases. 2. Reply to Letter No. I SAMSANG & Co. Administrative Office, 156, New Bazaar,

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Tokyo, Japan. 25th March 2000. The Director (Purchases), Chennai Plastic Products Ltd., Dhan Building, Bose Road, Chennai -600002- India.

Dear Sir, Many thanks for your enquiry regarding the Samsang Machines. We have pleasure in enclosing an illustrated catalogue of our products. The machines of your requirement are illustrated on pages 10 to 25, which are of latest addition to our products. Our Research Department consisting of the most competent technical staff has invented these machines of superior design, simple handling and maximum capacity of turn-out These machines are highly suitable for the manufacturing activity you are engaged in. In particular, we recommend you our Multi - Product Machine with designing part adjustable for different designs. For each machine we supply you five different design patterns which you can fix according to your requirements. Besides that, the in-built patterns provide you Blocks, Cubes, Plates, Wires, Balls and other usual items for manufacturing different products separately. We give you two-year guarantee on all these machines. The enclosed Proforma invoice shows the Trade Discount, Packing description and other details. The rate mentioned is firm for 30 days only: While placing your order you are requested to deposit with us 25% of the Invoice value. You will get a 5% Cash Discount on an initial deposit of 50% or above of the Invoice value. The balance of the Invoice will have to be paid to the banker of your firm through whom you will be receiving the DIP Bill and other documents.

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We shall be pleased to book your order for delivery within 15 days from the receipt of the order. Yours faithfully, For Samsang & Co., Sales Executive. Ends: 1. Proforma Invoice. 2. Catalogue. 3. The importer places the Order Chennai. 12th April 2000. Messrs. Samsang & Co. Dears Sirs, We acknowledge with thanks your letter of 25th March and the illustrated catalogue received on 6th April. Your products have been examined by our technical and production departments and found quite suitable for our line of activities. We have pleasure in ordering:

The rates are c.i.f. Calcutta and are at the current rate of exchange, subject to changes as on the date of the shipment of machines. According to your special offer, we are enclosing a draft for Rs. 50,000 (payable in Yeas) on Grindlays Bank Ltd., Tokyo, and have claimed the special Discount of 5%. Marks and Number: Each of the packages should be marked as under: Calcutta Packing: Your details about packing as mentioned in your catalogue, are acceptable to us and we do not wish to have any other special packing.

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Payment: You may please draw on us a D/P Bill for the balance and send it though the Chennai Branch of our bankers, Grindlays Bank Ltd. Delivery: We shall be thankful for your shipment of machines and the designpatterns within 10 days from the receipt of this order. Your are also requested to ship the goods only by a vessel of the shipping Corporation of India. Yours faithfully, For Chennai Plastic Products Ltd., Director-Purchases.

4. Shipping Advice from the Exporter Tokyo, Japan. 22nd April 2000. The director (Purchases), Dear Sir, We have pleasure to inform you that 5 packages, 4 containing a machine each and one containing 20 design-patterns, have been shipped by us per Jalakrid which left for Calcutta on 21 21st April. Each package is marked and numbered as per your instructions. You will receive the original Invoice and other documents along with the D/P Bill sent through Grindlays bank Ltd. You are requested to honour the Bills promptly when it is presented to you. The second copy of each document is enclosed now. Soon after taking delivery, please check up the machines and send us your report about the condition in which you have received them.

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Soon after taking delivery, please check up the machines and send us your report about the condition in which you have received them. Your technical staff, we trust, will be able to install the machines as per guidelines mentioned on the top of the machine. Should you need any help in the matter, you may kindly contact the General Manager, Mumbai Packaging industries (P) Ltd., Thana (Dt), Maharastra. We have already requested him to depute three of our technical staff members who are engaged in their factory for the on-the Machinery-Training to their workers. Out staff members will be glad to assist you in the matter of installation and also the fixing of different design-patterns 5. A Letter requesting the Clearing Agents to Arrange the Clearance of Goods Chennai. 1st May 2000. Messers. Das & Co. 20, shakespear Sarni, Clive Row, Calcutta- 700 001. Dear Sirs, Please arrange to clear, on our behalf, the goods mentioned below from Calcutta Docks on their unloading. The details are as under: Name of the Ship: Jalakrid. Goods: Machines and Design-Patterns. Packages: 5 packages, each bearing the mark. We are enclosing the D/L Original Invoice, Insurance Policy and the Import Licence. Please return these documents after the goods have been cleared from the docks.

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The packages may be sent through Patel Roadways (P) Ltd. The Motor Receipt and your Bill may be sent through Grindlays bank Ltd., Chennai. Your are requested to arrange for insurance in transit also. Yours faithfully Encls: Four, as detailed above. 10. The Banker informs the buyer BANF OF INDIA Head Office: Mumbai, India 1l6,M.G.Road, Calcutta - 700 001. 2nd May 2000. The Secretary, Jainsons Cotton Mills Ltd., Nehru Nagar, Calcutta -700001. Dear Sir, We hold a D/P Bills in your name received from Messrs. Sheikh & Co., Cario. This is in respect of4O bales of Egyptian cotton that you have bought from them. The Bill is for Rs and the flanks Commission thereon is Rs Kindly arrange to pay the above amount and take delivery of the documents within 15 days. You can avail yourself of our special service of foreign trade customers in the matter of clearing of goods. Please let us know, by return of post, whether you wish us to arrange for the clearing of the bales from Mumbai harbour and storing them in a duty- paid warehouse? If you so wish, please remit or allow us to debit your account with Rs. 6,850 for the duty and clearing charges.

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Yours faithfully, For Bank of India, Manager. Letter of Credit As already noted, at exporter invariably requires the importer to send him (the exporter)! letter of Credit issued it his favour by a banker. This guarantees the exporter of payment of his bill before the importer takes delivery of goods. The following are the different stages involved in the issue a1d confirmation of the Letter of Credit. 1. Importer requests his banker to open an Irrevocable Letter of Credit 2. Importer informs the exporter about the opening of Letter of Credit. 3. The banker informs the exporter of the Letter of credit having been opened in his favour. 11. The Importer requests the Banker to open an Irrevocable Letter of Credit in favour of the Exporter JIINS0NS COTTON MILLS LTSL Nehru Nagar, Calcutta-700 001. 27th March 2000.

The Manager, Bank of India, 116, M. G. Road, Calcutta -700001. Dear Sir,

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We request you to kindly open by cable an irrevocable Documentary Credit in favour of Messrs. Sheikh & Co., Cairo for the amount of Rs (Rupees only) available to them by draft at 30 days by your agent in Cairo. This Credit is in respect of a shipment of Egyptian cotton Bales as mentioned in the enclosed sheet. The draft by the beneficiaries should accompany the following documents. 1. Bills of Lading (2) 2. Commercial Invoices (3), to evidence shipment of Cotton Bales as Specified in the enclosed sheet. 3. Insurance Policy(l) 4. Consular Invoice (1) 5. Certificate of Origin (1). The Credit is to be established in local currency with your Cairo Correspondents to be availed of by the beneficiarys Bills in such currency on the correspondents. The Credit is to be confirmed to: Messrs. Sheikh & Co. Head Office: Ahuluva Bldg., Cairo, and shall cease to be valid after 31st July, 2000. Pail shipment Not Allowed. Invoice to be made c.i.f. Calcutta and to include the bank commission also. Special instructions: Documents to be forwarded to us by Air Mail. Yours faithfully, For Jainsons Cotton Mills Ltd., 12. The importer informs the Exporter of the arrangements being made to open an irrevocable Letter of Credit in his (exporters) favour

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JAINSONS COTTON MILLS LTD. Nehru Nagar,. Calcutta -700 001, 27th March 2000. Messrs. Sheikh & Co. Head Office: Ahuluva Building, Cario, Dear Sirs, Many thanks for your letter accepting our order dated We are pleased to inform you that we have instructed the to open an irrevocable credit for Rs in your favour, available in your local currency and valid up to 31st July This credit will be confirmed by the Cairo Branch of the Bank of India. They will accept your draft on them for 30 days. Please attach the following documents to your draft and surrender them against acceptance: 1. Bills of Lading (2) 2. Commercial Invoices (3) 3. Insurance Policy for Rs 4. Consular Invoice (1) 5. Certificate of Origin (I). The Invoice should be made to include c.i.f. Calcutta and the bank commission. Please advise us by air mail immediately on the despatch of goods. Yours faithfully, For Jainsons Cotton Mills Ltd.,

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13. The Foreign Correspondent of the Importers Banker (who himself is generally a banker) informs the Exporter that the Credit is available and the Exporter can draw on him This is the procedure to Confirm the credit. Such information is also generally in the form of a printed proforma, which is completed with necessary details and sent to the exporter. However, if a letter is to replace such a printed proforma, it will be in the following style: BANK OF INDIA Head Office: Mumbai (India) 24/12, Central Avenue, Cairo. 4th June 2000. Messrs. Sheikh & Co., AhuluvaBuilding, Cairo. Dear Sirs, The Calcutta Branch of the Bank of India has instructed us to open an Irrevocable Credit for Dinars in your favour, valid till 31st July, 2000. We are pleased to inform you that you are authorised to draw on us at 30 d/s. against this credit. Please send your draft to us for acceptance immediately after the despatch of goods to Jainsons Cotton Mills Ltd., Calcutta, as specified in the enclosed list. You are requested to enclose the following documents with your draft for its acceptance: 1. Bills of Lading (2) 2. Commercial Invoices (3) 3. Insurance Policy (1)

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4. Consular Invoice (I) 5. Certificate of Origin (I). Please note that your draft is to include all charges to Mumbai and our Commission @5% yours faithfully, Manager. Importing Through Indent Houses Her intenting buyer buys goods through indent houses. An illustrative series of such correspondence is as follows: Letter from the importer to the indent House AGARWAL & GUPTA (P) LTD., Booksellers & Publishers, 22, Borivill, West Mumbai 400 092. Ref: GR/NR/Imp. The Marketing Officer, M/S. Tribeni Tissues limited New Kamani Chambers, 32, Nicol Road, Mumbai- 400 001. Dear sir, Sub: Indent for Gateway natural Tracing Paper for total value: 1,294.18 C.I.F equivalent to Rs. 23,847/We request you to kindly forward a copy of our order to your principal M/s. Wiggins Teape Overseas Sales Ltd, Belgrave house, Basing Views Basingstock (U.K.) for the

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supply of Gateway natural Tracing Paper Extra smooth finish in size 40 X 20 yards. Quantity: Approx. 92 rolls. 1. 50%-60/65 gms, and 2. 50%-85/90 gms. against our Import Licences Nos P/L 2711016/XX/53/B/37-38 of 2-10-98 & P/L2718283/C/XX/55/B/39-40 of 30-12-99. We shall open an Irrevocable Letter of Credit with our banker, Bank of India, Kalbadevi Branch, Bombay- 400 002, for Rs 23, 847/- in favour of your principal through the London office of Bank of India. Thanking you and awaiting you reply, we remain. Yours faithfully For Agarwal & Gupta (p) Ltd., Sales manager. Encl: Indent. 2. Letter from the indent House Enclosing the indent TRIBENI TISSUES LIMITED A Member of the Teape Group New Kamanl Chambers, 32, Nicol Road, Mumbai 400 001. Phone: 275477 Email: [email protected] Ref: VV/OM/GWT. M/s. Agarwal & Gupta P Ltd., 22, Borivil West, West Mumbai-400 092 Dear sirs,

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We thank you for your order worth Rs. 23, 847/- and pleased to enclose our forma indent B-4697 for your signature. Kindly return one copy of the indent duly signed for our records. Please arrange to open a letter of credit for his order as per particulars furnished in the attached sheet as early as possible. On receipt of your credit details, we shall arrange to forward your order to our associates to process the same at the mill for an early shipment. Yours faithfully, For Tribeni Tissues Limited, Marketing officer. Encl: As stated above.

3. Letter of the Indent House intimating acceptance of the Indent TRIBENI TISSUES LIMITED New Kamanl Chambers, 32, Nicol Road, Mumbai- 400 007 Phone: 275477 Email: [email protected]. VV/OM/gnt 2000. M/s. Agarwal & Gupta (P) Ltd., 22, Borivili west, West Mumbai- 400 092. Dear Sirs, Indent No. B-4697 6th February

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L/C No. K.40/47 In connection with the above we are enclosing herewith our Associates acceptance letter Ref: VSR/s.c. dated 29th January 2000 in original for your information Our Associates have received your letter of credit and released the order to the mill and they anticipate having the paper ready for shipment by the end of March 2000. We trust you will find this in order. We now request you to amend your letter of credit to read as All Bank charges are for openers account. Please arrange to make the above amendment as early as possible. We now look forward to receiving your amendment advice for the above. Yours faithfully, For Tribeni Tissues Limited, Marketing Officer.

4. Letter from the Exporters Confirming the Order received and Acknowledging LIC arrangement WIGGINS TEAPE OVERSEAS SALES LTD. LINCOLNS IN HEWS LONDON (Successors to the business of Charles Morgan & C. Ltd.) Samuel Jones & Co. Ltd., Wiggins Teape (Stationery) Ltd. P.O. Box 88, Belgrave House Basing View, Basingstoke AamshireRG2l 2EE Telephone: Basingstoke (0256) 20262 Telegrams & Cables: Wigteape Basinstoke

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Telex 858628/9 When replying please quote our Ref: VSR/SC M/s. Agarwal & Gupta (P) Ltd., 27th February 2000. 22, Borivili West, Mumbai -400092. India.

Dear Sirs, INDENT NUMBER B-4697- OUR 0V1658771F11N We acknowledge with thanks receipt of your Letter of Credit No.K40/ 47 for a sum of 1,294.19 through the Bank of India. We have accordingly instructed our Mill to proceed with this order, and they anticipate having it ready for despatch by the end of March 2000. Please note that all bank charges covering the above Letter of Credit are for the account of openers. Enclosed is or official order confirmation, which we trust is to your satisfaction. Yours faithfully, For Wiggins Teape Overseas Sales Ltd., Zone F. Encl: Official Order Confirmation. 5. Letter intimating Shipment and Negotiation of Documents TRIBENI TISSUES LIMITED Phone: 275477 Email: [email protected] \

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15th March 2000. Ref: UVIOMJGNT. M/s. Agarwal & Gupta (P) Ltd., 22, Borivili West, West Mumbai -400 092.

Dear Sirs, Indent No.: B.4697 LIC. No.: K40147 We have pleasure in enclosing herewith shipping documents covering the above indent expected to arrive by 14-2000 for your information. 1. Copy of Non-negotiable Bill of Lading No.18. 2. Copy of Invoice No. WF/UK/l328 dated 26-2-2000 3. Copy of Insurance Certificate. 4. Copy of the Packing List Please note that the original and duplicate invoices and duplicate Insurance certificates and two copies of Bills of Lading have been forwarded to Bank of India, Mdmbai-2 along with a sight draft for 1,294.18 drawn against your above mentioned Letter of Credit. We trust that you will receive the consignment shortly.

Yours faithfully, For Tribeni Tissues Limited, Marketing Officer. 6. Letter of the Importer requesting the Banker to retire the Bill of Exchange AGA1IWAI & GUPTA (P) LTD.

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22, Borivlli, West Mumbai - 400 092. 1st April 2000. The Manager, Bank of India, Foreign Exchange Dept, Kalbadevi Branch, Mumbai -400002. Dear Sirs, Ref: L/C No. K1401147 for 1,293.49. Favouring: M/s. Wiggins Teape Overseas Sales Ltd., London. We request you to retire the sight Bill of Exchange for 1,294.18 + 6.01 = 1,300.19 of the above beneficiary and release the documents under intimation to us. Enclosed here with Foreign Remittance Application Form A duly filled in and signed The exchange copies of relevant Import Licences are already lying with you. Thanking you, we are. Yours faithfully, For Agarwal & Gupta (F) Ltd., . Marketing Manager. 7 Letter to the Clearing Agents to Clear the Goods.. AGA1IWAL & GUPTA (P) LTD 22, Borivili, West Mumbai - 400 092. 3rd April2000. M/s. Batliboi & Co Clearing Forwarding& Shipping Agents,

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Sree Mahavir chambers, 1-5, Banji Road, Mumbai .400001.

Dear Sir, We learn from the agents of the India Steam Ship Company that their vessel S.S.Sultana carrying our shipment of tracing paper is expected to arrive on 15th instant. Please collect the relevant shipping documents from us and arrange to clear the goods soon after its arrival. Yours faithfully, For Agarwal & Gupta (F) Ltd., Marketing Manager. Export and import Introduction Exports are very important to every country for its speedy development. In our country, the Central Government is taking all positive measures to expand our export and has set up various bodies and institutions for its promotion. Besides, several incentives are also offered to Indian Exporters to increase the exports. Recently, the Government has decided to exempt export incomes of all business firms from taxation. 100% Export oriented units are excluded from. MRTP Act. Therefore, the formalities to be complied with are comparatively lesser in case of an exporter. However, there are certain commodities, which cannot be exported. Similar to import trade, export maybe direct or indirect i.e., through Indent Houses. Procedure for Export According to the Export and Import Rules in effect in India, an export transaction has to pass through the following stages.

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1. Enquiry for Goods: The first stage in an export transaction is the receipt of an enquiry. Though the prospective buyers can buy goods from the exporter directly, they usually buy through the Indent Houses or Export Commission Houses. Therefore, the enquiry may be made either directly or through his agent. The exporter should attend to the enquiry in detail. The exporter has to send a quotation usually a C.I.F. quotation. A standard contract form may be sent to the importer to give him an idea of the terms relating to payment, packing, settlement of disputes etc. 2. Receiving an Order or Indent: The next stage is the receipt of an order from the foreign importer by the Indian exporter. The order should contain the specifications and particulars of the grade to be sent, their packing, the marks and numbers to be put on the cases, the time for shipment, instructions regarding insurance and the method by which the exporter is to recover the amount of the invoice. 3. Obtaining the licence and Quota: if the goods to be exported require any licence, it should be properly obtained from the date of its issue. However, this may be extended up to a further period of three months. Along with the export licence a quota permit is also issued. This is especially in the case of goods, which are in short supply in our country. 4. Demanding the Letter of Credit: The exporter will usually ask the foreign importer to open a letter of credit in case of new importers, C.W.O. (Cash With Order) or deposit of full price may be insisted upon. Besides, the exporter should fix the exchange rate with his banker. This will avoid the possible reduction of profit, which may arise due to fluctuations in the exchange rates. 5. Obtaining the Shipping Order: When all these formalities are over, the exporter should arrange for the collection of the goods ordered, their packing and marking according to the instructions contained in the order. Special care is needed for packing because goods are liable to damage by seawater and other perils of the sea during transit. Besides shipping companies charge freight not merely on the basis of weight but also on the basis of volume and space occupied. This being so, the maximum quantity should be packed in the minimum space besides consistent with safety. Then he should select the

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ship through which the goods can be transported to the destination port. He should obtain a shipping order, which contains instructions to the Captain of the ship to receive on board the vessel the specified quantity of goods from the exporter concerned. 6. Compliance with Exchange Regulations: Under the Foreign Exchange Regulations Act, the exporter has to make a declaration that he will surrender the foreign exchange earned to the extent of the full value of the goods to the Reserve Bank of India within the prescribed period. This is not required in case of exporters dealing with the traders in Nepal and Bhutan. 7. Obtaining of Consular Invoice: In order to avoid the trouble in assessing the import duty on advalorern basis, the exporter may get a consular invoice from the Consul of the importing country residing in his own country. The exporter fill in a special invoice form available from the Consul, affirms the accuracy of his statement regarding full particulars of the goods shipped and gets it sealed and signed by the Consul. The customs authorities readily accept such invoice as the true statement of the goods and assess the import duty on this basis. 8. Customs Formalities: After obtaining the shipping order but before loading the goods into the ship, the Indian exporter should undergo certain customs formalities. They are as follows 1. First he has to fill in the Application to Export Form in duplicate and the shipping Bill in triplicate. 2. These forms should be first presented to the Shipping and Landing Dues Off ice where ship dues, if any, are to be paid. 3. One copy of the application to export is retained by the Landing and Shipping Dues Office and the remaining documents are returned to the shipper. 4. The returned copy of the Application to Export is then passed on to the customs office. If any export duty is payable on the goods, it is collected by the Customs Office.

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5.

The customs office keeps one copy of the Shipping Bill and returns the other copies to the exporter or his agent. A Customs Export Pass is also issued to the exporter.

9. Loading the Goods: The exporter should then arrange to send the goods to the docks or direct into the ship. When the goods are being taken through the dock gates, the exporter hands over one copy of the Shipping Bill to the customs peon at the dock gate. This copy is afterwards collected and used by the customs authorities for inspecting the shipment. 1O. Obtaining Mates Receipt: When the goods are taken into the steamer, shipping order and the shipping bill are surrendered to the Captain of the ship or his assistant known as the Mate. If the mate is satisfied with the number of packages and their packing conditions, he issues a receipt.. it is known as Clean Mates Receipt. If the packing i defective they will make a mention of it on the face of the receipt and such a receipt is known as Foul Mates Receipt. 11. Bill of Lading: The exporter should then deliver the Mates Receipt to the shipping company and the shipping company in exchange of it issues a Bill of Lading to him. A Bill Of Lading is an official receipt for the goods shipped and contains an undertaking to carry the goods to their destination. It also contains the terms and conditions on which the goods are being carried. The Bill of Lading is document of title to goods shipped and is transferable by endorsement and delivery. It is generally made out in triplicate. 12. Insurance: Goods that enter into export trade are exposed to the perils of the sea. Hence, it is necessary to insure them against such risks. it is done by getting a marine insurance policy from an Insurance Company. The policy will be usually sent along with the Bill of Lading and other documents to the importer. 13. Certificate of Origin: Sometimes goods exported from certain countries treated favourably in the matter of levying import duties in the importing country. Such concessional treatment is the result of trade agreements between the two countries concerned. If the goods are subject to the benefit bf such favourable treatment, it is

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necessary for the exporter to obtain a certificate called Certificate of Origin for the goods shipped. It is also sent to the importer along with other documents to enable him to daim a reduction in import duties. 14. Preparation of Invoice: After having shipped the goods, the exporter prepares the invoice relating to the goods. The invoice should contain the description of the goods, their price and other charges to be recovered from the importer. The charges recoverable from the importer depend upon the terms of sale. For example, if the goods are sold on CI.F. basis, insurance and freight are not recoverable from the importer. If not, they are separately shown on the invoice and can be recovered. 15. Securing Payment: Finally, the exporter should take steps to secure payment. If a letter of credit is opened in favour of him by the importer, he can. draw a bill of exchange and submit all other documents along with bill of exchange to the banker and can get payment. If no such letter is opened, the usual way of drawing a Bill of Exchange and its collection shall be followed. SPECIMEN LEITUS IN EXPORT TRADE 1. Letter of Enquiry from a prospective Foreign Buyer. SMITH & SONS (1) LTP. 901, Queen Victoria Street, London E.C. 4. 20th March 2000. The Sales Manager, Radha Silk Emporium, 105 1, Mount Road, Chennai -600002. INDIA. Dear Sir,

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One of our best clients has entrusted us with the Purchase of 10,000 window curtains made of spun silk and we are interested to know if you can provide us with a variety particularly suitable for the London Market. We prefer only light colours. As rigid price limits have been fixed, an effort should be in made to provide a really competitive quotation. Your quotation will not be expected to include special packing as the goods will be repacked in London:

The size of this trial order will probably help you in assessing the value of this connection and it is hardly necessary to remind you of the benefit likely to follow from the supply of a satisfactory product. Yours faithfully, For Smith & Sons (P) Ltd., cYtbA4u74Ofl Manager (Import). 2. Letter from the Exporter replying Enquiry RAIHIA SILK EMPORIUM 1051, Mount Road, Chennai -600002. India. 15th April 2000. The Export Manager, M/s. Smith St Sons (P) Ltd., 901, Queen Victoria Street, London E.C.4. Dear Sir, Thank you for your enquiry of 20th March 2000. We are ready to supply our Rainbow Window Curtains made of spun silk, at a special price of 20 per piece. These

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curtains have the special qualities you require and it has proved its popularity in the East. We have sent today under a separate registered parcel, samples of our window curtains. It is only the size of the order that enabled us to quote this special price and we trust you will not regard it as a standing quotation for both large and small orders. We look forward to receiving instructions without delay. Yours faithfully, For Radha Silk Emporium, Sales Manager. 3. Letter from the Buyer Enclosing the Indent SMITH & SONS (P) LTIL 910, Queen Victoria Street, London E.C. 4. 10th May 2000. The Sales Manager, Mrs. Radha Silk Emporium, 1051, Mount Road, Chennai -600002. India.

Dear Sir, We have received you letter of 15th April 2000 and the samples of Rainbow Curtains. As the goods are up to our expectations, we have pleasure to enclose our indent No.3181 covering this transaction. Please inform the approximate time when you can ship the goods so that we may advice the buyers accxding1y. V

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We have every reason to believe that this shipment will be successful and we hope to give you further business in the neat future. Yours faithfully, For Smith & Sons (P) Ltd., Manager (Import). 4. Letter from the Exporter Advising shipment RAUHA SILK EMPORIUM 1051, Mount Road, Chennai -600002. India. 30th May 2000. The Import Manager, Mrs. Smith & Sons (P) Ltd., 901, Queen Victoria Street, London E.C.4. 199

Dear Sir, Ref: Indent No. 3lgj for Window Curtains This is to inform you that we shipped 4 bales containing Rainbow curtains measuring approximately 5 sq. metres per S.S Queen Victoria on 29th May 2000. A copy of our Invoice and other documents are enclosed for your information The document are being forwarded to you as usual, through our bankers, The Chartered Bank, Chennai - 1.

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We are confident of having provided you with exactly what your customer require. We await further business in the near future. Yours faithfully, For Radha Silk Emporium Sales Manager. Secretarial correspondences Company Secretarys Correspondence A public limited company has the members of public subscribe and buy its shares. This is done on the basis of the prospectus issued by the company. The company itself is formed by informing the public about its formation. The prospectus should not contain untrue or misleading information. Penal actions can be taken if such misleading statements are made. A company thus incorporated becomes an artificial person created by law with a perpetual succession and a common seal which is the signature of the company. Such an incorporated company must have a company secretary who is a key executive figure involved in general administration and day-to-day administration. Company secretaries reach that position by their qualification, or being an associate member of the Institute of company secretaries and experience. The job is a highly responsible one with a high level of commitment, motivation, integrity and Confidentiality as requirements. A company secretary has to correspond with the public, shareholders directors, registrar of companies and also the SEBI (Securities Exchange Board of India. And company Law Board. He has to prepare notices for meetings, design agenda for them, edit and issue the prospectus and correspond with the staff of the company. He has to conform to statutes and contracts. The secretary should be impartial in his communications. He should be business-like in his dealings Without mincing words. He should be unoffending and polite. The following are Some of the specimens of routine correspondence handled by a company secretary. THE CREPENDEL LIMITED (Registered Office)

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17 Barracks Road Perambur Chennai 600 012 Notice Notice for the monthly meeting of the board of Directors Date and Time : 19 March 1998 at 4.00 p.m. The Board Room of CREPENDEL Block 1. 1. Minutes of the meeting held on 17 January 1998. 2. Points arising. 3. Declaration of Dividends. 4. Executive salaries and revision. 5. Any other matter with the permission of the Chair. 6. Schedule for the next meeting. Mantra Chowdhry 23 Link Road West Anna nagar Chennai 600 040. 2. Letter of allotment of shares: THE CREPENDELE LIMITED (Registered office) 17 Barracks Road Perambur Chennai 600 012 Dear Madam:

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The Company is pleased to allot you 100 shares at Rs. 125/- each. The premium on the share has been fixed within the norms of the SEBI. Since you had applied for 300 shares and paid 10% on application, the balance after adjustment will be refunded to you. Please keep this letter of allotment until the share certificates are sent to you. 2. Letter regretting the allotment of shares: THE BLUEBELL TOYS LTD. 23 Pennya Industrial Estate White Fields Bangalore 560 086 Regd office: 14 Kempe Gowda Circle Bangalore 560 003. Ms. Savithri Gopalan 17 East Kamaraj Street Thiruvanmiyur Chennai 600 041 Dear Madam: The board of directors regret that the shares you have applied for have not been allotted to you as the issue has been over subscribed. The amount you have remitted for the shares is refunded by the enclosed cheque drawn on Deepti Bank, Bangalore for Rs. 25,000/We thank you for your interest in our company and request you to mail the duly signed receipt. Yours faithfully Secretary 4. letter indicating the issue of Bonus Shares:

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THE DUNREICH LIMITED (Ultimate in auto-spares) Regd Office: 23, Sairam Street First Line Beach Road Chennai 600 001. Dear sir: The Board of Directors of the Dunreich Limited has resolved to allot bonus shares to existing shareholders at the ratio 1:1 This entitles you to one additional shares for every share held by you. The breakup of allotment and certificates will be sent to you soon. Company Secretary

SINDHOOR CONFECTIONERJESD COFFEE Regd Office: 17 Bouleward Road Red fields Coimbatore 641 090 March 13 1996 Mr. A. Bhimaraja Naicker 23. 70 feet Road R.K. Puram Coimbatore 640 018.

Dear Sir: Your concern and anxiety about the non-enhancement of the usual dividend in spite of huge profits is appreciated. This has a valid reason. The Board of Directors decided last year that the company required to buy two new estates at Coorg, Mercana and this has

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necessitated a greater allotment to capital building. You would appreciate that in the long run this move would prove to be wiser. This explanation is offered at the direction of the board which anticipated such clarification being sought by our shareholders. Yours faithfully G. Srinivasan Company Secretary 6. Reply to shareholder on the allotment of Bonus shares: THE FITNESS FOODS LTD. Regd Office: 17 Trunk Road Chittoor 517 002 Andhra Pradesh M.S. Vidyalatha 17 Vallivedu Street T.Nagar Chennai 600 017.

Dear Madam: Thank you for your letter. I appreciate your eagerness and enthusiasm. However, 1 am unable to answer your specific question on dividend projections and allotment of bonus shares owing to the confidentiality of the matter. All the information you have sought will be available to shareholders at the AGM on 15 December 2003. Yours faithfully Narayana Gowda Secretary

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7. A letter from the company secretary to the director who could not attend a Board meeting. Ms. Nandhinj Saha Director 27, 3 rd Cross, 4 th Main Indira Nagar Bangalore 560 040. Dear Madam: I am enclosing a brief extract of the minutes of the board meeting on 3 March 1998. You will begetting the detailed minutes soon. Most of the decisions taken relate to the modernisation of the plant and office. There was consensus on all matters and the resolutions adopted were unanimous. Pending matters have been deferred to the board meeting to be held on 15th April 1998.

Chennai 600 007. Dear Mr. Paulson: We welcome your idea of transferring the shares between your two daughters. Though hares are freely transferable, they cannot be passed on without some formality being observed. The contractual relationship between you, a member of Leonex Corporation and he company makes it obligatory that an instrument of Transfer is presented to the authority mentioned in the enclosed format on a blank paper. Then the instrument of transfer shall be presented to the company along with the share certificate. The instrument will be executed by the by the transferror (in this case David Paulson) in favour of his daughters (Ms. Margaret and Ms. Miranda), the transferees. Iris mandatory that we complete this exercise within two months. Please forward the instrument of transfer duly signed to enable us to do the needful. Yours sincerely S. Govindaraman Secretary

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9. Letter to a Director on holding of AGM Ms. LeenaVakil Director 73, Greams Road Adyar Chennai 600 020. Dear Madam: Your suggestion to hold the AGM of our company on April 7 1997 at Ooty is well taken. But rules governing the conduct of such meetings are unambiguous. The AGM shall be held either at the Registered office of the company or at some other place within the same city/town or village ii which the registered office is situated. The Board has no discretion or power to charge the venue of the meeting. Yours faithfully A. Ananthanarayan Secretary Advertisement Preparation I. Classified advertisements Classified advertisements are found in all the dailies. Under classified advertisements, only a small space is provided for each advertisement. They are called so because advertisements are grouped under different heads. Some of such heads are personal messages such as anniversaries, air conditioners/refrigerators, astrology, business proposals, pagers, fax/modems, packers and movers, pest control services, restaurants/fast foods, television, tuition/coaching, vehicles, auto finance, situation vacant, situations wanted, matrimonial, rental, real estate, property for sale/purchase etc. Advertisements, which are related to a particular category namely, anniversaries, will be given one by one before they give another category of advertisements. So the similar natured advertisements

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are categorised, grouped and are shown together This enables the readers to have a look over the topics by simply identifying its locality in the newspaper. Classified advertisements are normally given in small letters and each advertisement occupies only a small space. They are given one after another without giving much space between them. So now-a-days, most of the newspapers started giving the matter within boxes. Normally advertisement is made in an attractive manner to catch the eye of the readers. But this is not the case here because the advertisers have to give full details within the limited space. Otherwise, readers may not have full idea of the advertisement. However, now-a-days, some newspapers follow the practice of shading the advertisements with different colours. This will at least help the readers to differentiate one with another, if not attractive. However, such advertisements cost higher. Classified advertisements are not sales promotion advertisements. They are in the nature of informing some news to others. For example, in case of situation vacant advertisements, advertisers simply inform that there is some vacancy in their office, in case of tuition coaching advertisements, institutions inform the public that they provide coaching for such and such courses and those who are interested can make use of their services. Mostly newspapers allot a separate page for classified advertisements. In Hindu, during weekdays we can find such advertisements under the heading Classifiedsmart on R.No. 8 arid on Sunday a special magazine for dassifiedsmart is published. In some newspapers, which are circulated over a small area, only a portion of page like half of a page, quarter of a page is, provided daily for classified advertisements. Essentials of a Good Classified Advertisement A good classified advertisement should fulfill the following essentials. 1. Brief and Concise: A classified advertisement should be brief and concise. Cost of advertisement is determined as per the number of words used including punctuation marks. So it should be brief and concise so that the cost will be minimum. Normally, classified advertisements are repeatedly given till their requirement is fulfilled. Very often,, people rendering services advertise through classifieds to keep in touch with the public.

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That is, to say we are here and providing such services etc. In case of educational institutions, advertisements are given very frequently say once in two days, once in a week etc. during June and July. This is common in case of newly started institutions. So advertisers should write their message in a brief and concise manner. 2. Complete: Another essential that is to be fulfilled by the classified advertisers is completeness. Advertisement should be complete in all respects. It should give all the necessary details. The very purpose of advertisements is to inform the public some message so that those who are in need of such an information will utilise the same. This is possible, only when it is complete. So the advertiser should give due weight age to this aspect and confirm himself that it covers all the essential aspects 3. Clarity: It should be clear and unambiguous. It should show its idea directly and clearly. Each sentence must be as simple as possible Each and every aspect should be clearly given. For example, in case situation vacant advertisements, one has to be very careful in including the aspects like the nature of the job, educational qualifications required, experience expected, salary promised, the last date (if any fixed) for applying etc.

Specimen Classified advertisements Many groups are advertised in Classified advertisements column However, the groups, which are related to business are given special attention here. 1. Situations vacant Some of the specimen advertisements for advertising situations vacant are given below. A. Advertisement for the Post of Secunty Officers Type 387, 388, 389, 390, 391 II. Direct mail advertising Direct Mail advertising is advertising made through mail directly to the former customer or persons having consuming potential. It is commonly adopted by publishers of

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books, Jewellery shops, textile showrooms etc. Book publishers adopt this technique to send their catalogue to all the educational institutions and book sellers. to make them known the arrivals, their rates etc. This is normally made at the time of opening of the academic year. Jewellery shops and textile showrooms etc. follow this technique while they offer discount during off- season. They used to keep the addresses of customers while they buy goods in their shops. This will enable them to contact through mail when they require. Direct mail advertising is a direct appeal to their potential customers. This is made with a hope that such customers will visit the shop and purchase some goods. Customers also will be very much impressed by seeing such a direct appeal and also feel very intimate to the shopkeeper. Such an impression will create a cordial and close relationship between the customers and the shopkeeper. If advertisement is made in a newspaper, magazine, television etc., it can be read! watched only by those who have access to them, in other words, such advertisements can reach only the readers of newspapers/ magazines or viewers of TV, cinema etc. Even in such case also, cent percent attention to the contents of advertisement is not possible. This is because mostly people. a old advertisements, feel very bore to hear! watch advertisement etc. This defect is however eliminated in direct mail advertising because it approaches people directly. So they can read leisurely at home and also keep it in their bags! brief cases. However, mailing list is to be carefully prepared to include mainly those who frequently buy such things and are interested to avail discounts etc. This will help avoiding wastage considerably. Factors to be Considered while Adopting Direct Mail Advertising It is necessary to consider the following factors while adopting the technique of direct mail advertising. 1. Approaching Proper Persons: As it is direct mail advertising, mail list should be prepared carefully. It should be sent only to those who are interested in the products of the advertisers. For e.g. in case of books, catalogues are sent only to professors, educational institutions, librarians of colleges! schools etc. Similarly, in case of saris, mails

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are sent to their regular buyers of saris from the shop. If proper person is approached, automatically sales will be improved. 2. Enclosures: Normally, in case of direct mail advertising, along with catalogue price list cum order form is also sent. This will enable the persons to place order for goods that they want without any delay. 3. Attractive Gift Offers: It should offer certain discount, free gifts etc. so that people who received the mail will be influenced to place orders. 4. Guarantee Periods: As goods are offered through mail, people may have some doubt about the quality etc. of the goods. So guarantee period should be allowed. During such period, if purchaser face any difficulty in the usage of the products, he should be allowed to. return the goods and get back their money. This type of facility will encourage the people to buy goods without any hesitation. 5. Testimonials from Prominent People: People may be impressed by including the testimonials from prominent people about the product. The satisfactory reports of such people will create confidence in the minds of general public about the product.

Limitations of Direct Mail Advertising. The main drawbacks of Direct Mall advertising are as follows: 1. People may not have faith in the goods offered through direct mail advertising. However, they can be removed, when goods offered are well known. In case of goods which are new, a company has to struggle a lot in convincing the customers about the quality etc. of the products. 2. People may not be interested in opening and reading the mail. If this is the case, advertiser has to design the advertisement copy very interestingly. Further, it should be as brief as possible so that people will find time to read the message.

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Notes -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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UNIT V AGENDA, MINUTES OF MEETING

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ultimate authority lies should also meet from time to time to consider the past conduct of the directors and the future plans. The Companies Act also provides that only the members acting in a General Meeting can decide certain matters. Therefore, it is needless to say that company meetings constitute an V important part of the company administration. Moreover, it is also essential for a proper understanding of the company administration to know how the company meeting are summoned and conducted. KINDS OF COMPANY MEETINGS The meetings of a companies can be broadly classified into four kinds. 1. Meetings of the shareholders. 2. Meetings of the Board of Directors and their Committees. 3. Meetings of the debenture holders. 4. Meetings of the creditors. The meetings of the shareholders can be further classified into four kinds namely, I. Statutory Meeting, 2. Annual General Meeting, 3. Extra Ordinary General Meeting, and 4. Class Meeting. 1. Meetings of the Shareholders: It is already stated that the meetings of the shareholders can be classified into four kinds, Now we shall discuss them in detail. 1. Statutory Meeting: This is the first meeting of the shareholders conducted after the commencement of the business of a public company. Sec. 165 of the Companies Act provides that every public company should hold a meeting of the shareholders within 6 months but not less than one month from the date of commencement of business of the company. Usually, the statutory meeting is the first general meeting of the company. It is conducted only once in the life time of the company. A private company or a public company having no share capital need not conduct a statutory meeting. V 2. Annual General Meeting: The Annual General Meeting is one V of the most important meetings of a company. It is usually held once in a year. This meeting is to be conducted by every company whether public or private, limited by shares or guarantee, having or not having a share capital.

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As the name suggests, the meeting is held annually to transact the ordinary business of the company. 3. Extra Ordinary General Meeting: Statutory meeting and annual general meetings are called ordinary meetings of a company. All other general meetings other than these two are called Extra-ordinary General Meetings (Article 47 of Table A, Schedule 1). As the very name suggests, these meetings are convened to deal with all the extra-ordinary matters which fall outside the usual bushiness of the Annual General Meeting. These meetings are generally called for transacting some urgent or special business which cannot be postponed till the next Annual General Meeting Every business transacted at these meetings are called special business. 4. Class Meeting: Class meetings are those meetings, which are held by the shareholders of a particular class of shares e.g. preference shareholders or debenture holders. Class meetings are generally conducted when it is proposed to alter, vary or affect the rights of a particular class of shareholders. Thus, for effecting such changes it is necessary that a separate meeting of the holders of those shares is to be held and the matter is to be approved at the meeting by a special resolution. For example, for canceling the arrears of dividends on cumulative preference shares, it is necessary to call for a meeting of such shareholders and pass a resolution as required by Sec. 106 of the Act. In case of such a class meeting, the holders of other class of shares have no right to attend and vote. 2. Meetings of the Board of Directors Meetings of the directors are called Board meetings These are the most important, as well as, the most frequently held meetings of the company. it is only at these meeting that all important matters relating to the company and its policies are discussed and decided upon. Since the administration of the company lies in the hands of the Board of directors, they should meet frequently for the proper conduct of the business of the company. The Companies Act, therefore, gives wide discretion to the directors to frame the rules and regulations regarding the holding and conduct of Board meetings. The directors of most

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companies frame rules concerning how, where and when they shall meet and how their meetings would be regulated. These rules are commonly known as Standing Orders. Duties of the Secretary in the Board Meetings and Other Meetings It is the Board Meeting in which much of the real work of managing the business of the company is transacted. - Therefore, it is more appropriate to divide the duties of the secretary under three heads. 1. Duties of the secretary before the meeting. 2. Duties of the secretary during the meeting. 3. Duties of the secretary after the meeting. 1. Secretarys Duties Before the Meeting: 1. To issue notice of the meeting to the directors. 2. To prepare the agenda for the meeting. 3. To arrange for the attendance at the meeting of other officials of the company such as Auditors etc. whom the Directors may also desire to consult. 4. To have in readiness all the documents requiring the attention of the Board and Cheques, transfers, Share certificates etc. requiring the signature should also be kept ready. 5. To have in readiness the companys seal and indexed copies of the Memorandum and the articles for reference. 2 Secretarys Duties During the Meeting: 1. To get the signatures of the Directors in the Directors attendance book. 2. To ensure that all the required documents, papers etc. are on the table for ready reference. 3. To read the minutes of the previous meeting. 4. To produce the Bankers pass book with a statement on the financial position of the company.

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5. To take down notes of the business transacted. This will form the basis of the minutes to be drawn up later on. 3. Secretarys Duties After the Meeting: 1. To write up the minutes as early as possible after the completion of the meeting. 2. To issue necessary instructions to the company officials about the decisions of the Board for their executions. Notice of the Meeting A meeting cannot be held unless a proper notice of it is served to all the members of the company. In other words, the notice should be given to all those who are concerned with the business of the meeting and are entitled to attend it. The Companies Act contains elaborate provisions regarding the notice of the meetings particularly for general meetings. The legal provisions can be summed up as follows: 1. Length of the Notice: The length of the notice required for convening a general meeting is not less than 21 days. According to Sec. 171 of the Act, the general meeting can be called only by giving to every member not less than 21 days notice. The expression not less than 21 days means 21 dear days i.e. the date of serving the notice and the date of holding of the meeting are to be excluded. For example, to count 21 clear days for a meeting to be held on 30th March, the notice should be served on 8th March. Intervening holidays however, are counted as the period of notice. 2. Shorter Notice under Special Cases: However, a shorter notice is permissible in the following cases. 1. If the meeting is of any other type and the Company has a share capital, with the consent of the holders of 95% of such part of the paid-up capital having voting right. 286 2. If the company has no share capital, then any number of members having not less than 95% of the total voting power exercisable at that meeting.

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3. To Whom the Notice Should be Sent: Sec. 172(2) states that the notice of the meeting of the company should be sent to every member, entitled to attend and vote and having a registered address in India or who have supplied an address to the company for this purpose. 1. By ordinary post to the registered address within India by prepaying the postage, or 2. By registered post or under certificate of posting if a member so desirous and a sum sufficient to cover the expenses is received from him in advance. 4. Contents of the Notice: Every notice should specify the place, the day arid the hour of the meeting and the business to be transacted at the meeting. In case of an Annual General Meeting, it should be held only in the registered office during business-hours on a day which is hot a public holiday. Other general meetings can be held at any other place. The notice should also specify the business to be transacted in the meeting. The business may be general business or special business. If the notice does not specify the nature of the business, it is bad in law. Moreover, the meeting cannot deal with a matter which is not specified in the notice. 5. Explanatory Statement: It is not only enough to state the nature of the business. It is also necessary that all material facts relating to the special business should be circulated to the members along with the notice of the general meeting. The explanatory statement should contain the following particulars. 1. A statement of material facts. The facts having a direct bearing on the company should be disclosed fairly and in a manner not to mislead the shareholders. 2. The nature of concern or interest of any director or manager in the approval of the special business. 3. The shareholding of the interested director or the manager if it is not less than 20% of the paid-up capital. 4. If the special business relates to the approval of a document, the time and place where the document can be inspected shall be specified..

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SOME HINTS ON THE CONTENTS OF NOTICE The drafting of the notice of general meetings requires some more clarifications on the contents so that the students will understand how to draft a notice for the general meetings. Some hints on the contents of notice are given below. 1. Description of the Meeting: It should be spcci&a1Iy mentioned on the top of the notice that it is for the Annual General Meeting or Statutory Meeting and so on. 2. Date of the Notice: The notice should bear a date. The date of the notice is the date of posting the notice to individual shareholders. According to Section 171 of the Act, only giving not less than 21 days notice can convene a general meeting of a company. Therefore, the time gap between the date of the notice and the date of the meeting should be not less than 21 clear days. 3. Date, Time and Place of the Meeting: The notice should specifically mention the date, time and place of meeting. In case of Annual General Meeting, it should be held only at the Registered office, during business hours and on a day which is not a Public Holiday. The other general meetings can be held at any other place and on any other date. However, for the convenience of the shareholders, general meetings including Annual General Meetings are now invariably conducted at public places like Community Halls, Hotels etc. 4. Nature of the Business: The business transacted at a meeting is of two types namely, 1. ordinary business, and 2. special business. Both ordinary business and special business can be transacted in the AGM. But in case of other meetings, only special business can be transacted. Special business should be separately shown in the notice. 5. Separate Resolutions for Appointment of each Director: The Act also provides that separate resolutions are to be passed for appointment of each director. For example, if two directors are to be appointed two resolutions, if they are three then three resolutions should be passed separately. - -

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6. Appointment of Directors Retiring by Rotation: According to section 173(1), appointment of directors retiring by rotation is an ordinary business. 4t is also presumed that the appointment of directors, in any manner other than by rotation is a special business. 7. Text of the Resolutions: In case of ordinary business, the text of the resolution need not be given, whereas in case of special business the whole text of the resolution should be given. 8. Right Person should issue the Notice: Only the Board of Directors has the right authority to issue orders to convene the meeting. Neither the managing director nor the manager nor the secretary has the right to issue notice of the general meeting. : 9. Proxy Rules: The proxy rules should be indicated prominently on the notice by way of a note. The proxy rules shall not apply for the Board Meetings. 10. Explanatory Statement: Section 173(2) of the Act requires - that an Explanatory Statement should be enclosed in case of every special business. The statement should disclose all material facts and the nature of interest of the directors. Mere explanation is not sufficient. 11. Documents available for inspection: If the special business relates to the approval of a document, it should be mentioned that .the document is available for inspection. The time and place where the document can be inspected shall also be specified in the notice itself. AGENDA FOR THE MEETING The term Agenda means the things to be done or business to be transacted at a meeting. In order to transact the business of a meeting systematically and without omission of any important item, it is necessary to put down the items of business to be done on a paper called the Agenda Paper or Agenda. The Agenda should be circulated amongst the members along with the notice of the meeting. No business should be transacted at a meeting unless it is specified in the Agenda Paper.

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The preparation of the agenda is the work of the company secretary. He should do this job in consultation with the Chairman of the company. In preparing the agenda, the secretary should take care to include therein all the business to be transacted. The matters should be presented clearly and in a summary form so that the members. can grasp the matters in advance and to form some opinion. The agenda should be so drafted as to help the quick disposal of the business. The usual practice is to put the routine items first and the complex matters latter. So that routine matter can be disposed of first and the latter part of the meeting can be utilized for discussion of more important items. It is also considered advisable that matters of similar or allied character should be placed in continuous order. There are generally two ways in which the agenda for a meeting can be prepared. 1. By referring to the business very briefly by writing just one line about each item. For example, 1) to read the minutes. 2) to pass the transfers. 3) to produce financial statement. 2. By giving more details about each item and even sometimes including suggested drafts of the resolutions for consideration of the meeting. For example, 1) to read and sign minutes of the meeting held on 25th March 2000. 2) to pass transfer of 208 to 215. The second method is found more suitable as it helps the secretary to write the minutes easily. Definition of Minutes The term minutes can be defined as the written record of the business done at a meeting. E.g. resolutions and decisions of the meeting. But speeches and arguments are not recorded in the minutes. Only resolutions and decision are recorded in the minutes.

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The minutes differ from reports. Reports contain records of what was said while minutes are records of what was done. Sec. 193 of the Act provides that every company must keep its minutes containing a fair and correct summary of all the proceedings of the General and Board meetings in the books kept for this purpose. The objective of minutes is to keep a correct and authenticated record of the decisions of the meeting. Therefore full, true and correct information should be recorded in the minutes so that even an ordinary man can get a correct idea of the precise nature of the business transacted at the meeting. Writing of Minutes Minutes being an authenticated record of the meetings, great care and caution is needed in entering the information correctly in the minutes books. It is the duty of the company secretary to write the minutes of the meetings. The minutes though intend to serve as a permanent record available for future reference, they should not be too lengthy. The secretary while writing the minutes should avoid all superfluous words. The language should be simple and brief. In this connection, E. Martin in his book How to Take Minutes observed as follows: They are analogous to a telegram than to a letter to a j3recis than to a narrative. He further suggests that the secretary should commence writing of the minutes as soon after the meeting as possible. If it is done so, he will be able to record the minutes without any omission because the proceeding, will be still fresh in his mind and he will be remembering clearly the details of the discussions on the various matters considered at the meeting. Some Hints on the Writing of Minutes A few hints on the writing up of the minutes are given below: 1. Heading of the Minutes: The minutes of each meeting should have a heading containing the nature of the meeting, date, time and place of the meeting. The usual way of writing the heading will be like this. Minutes of the Sixth Annual General Meeting held on Wednesday, the 11th November 1999 at 3 PM. at the Registered Office of the Company, 182, Anna Salai, Chennai - 600 002.

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2. Names of the Members Present: The minutes should contain the names of all those who are present in their capacity as members and also those who are present in some other capacity. It is usual to attach to the minutes a list of all the members and others present at the meeting. 3. Sub-headings of the Business: To facilitate reference to d particular item in the minutes, it is advisable to write in the margin or at some other suitable place, a brief appropriate sub-heading or a marginal note. Each heading should be numbered and underlined. It is also advisable to write the heading slightly bolder than ordinary handwriting in which the minutes are written. 4. Dates and Figures: Dates and figures must be mentioned and not skipped over. For instance, if a reference is made in the minutes to letters and reports, their dates should always be mentioned. 5. No Reference to Personal Feelings: It is advisable not to make any reference to the feelings of the individual directors or members. 6. Brief and Short: It is not necessary to record word by word the discussions which led to the adoption of a certain resolution or the taking of a particular decision. It is sufficient if the resolution passed or decision taken is proceeded by a short 1ecription. It is usual to mention the name of the proposer and seconder to the resolution. 7. Special Resolution etc.: If a resolution is required to be passed by a given majority as in the case of special resolutions, the minutes should state that the resolution was carried by the requisite majority and also the number of members who voted for and those against the resolution. 8. Tense and Voice: The minutes should always be written in simple past tense impersonal passive voice. E.g.: It was decided to 9. Rough Draft: Minutes once written cannot be materially altered. Hence, great care should be taken in preparing the minutes. Therefore, it seems to be advisable for the secretary to write a rough draft of the minutes before writing the minutes in fair in the minutes book. This will avoid the necessity of altering the minutes subsequently.

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PRECIS WRITING A. ESSENTIALS 1 Summary of all important points: A good precis should be a summary of all the important facts. It should not contain any unimportant detail The essentials must be sifted and retained. Conclusions and definite opinions must not be omitted. 1) Length: It should normally be one-third of the original passage. Form: Precis of speeches and articles in direct speech must appear in indirect speech. They must be in the third person and in the past tense. The language and the style: The language and style of the precis should be simple and clear. Figurative language in the original should. be reduced to plain, straight forward English in the precis. It must be note that the .original expression need not be changed merely for the sake of changing them. If a phrase in the original expresses an idea in the best possible way, it can be retained. Order of Points: The precis should normally maintain the order of the various points as found in the original unless it has been badly arranged in the original itself. Connection of ideas: The transition from one idea to the next should be natural and logical. 255. What points must be borne in mind in precis - writing? The main points that should guide precis-writing are enumerated below: 1. The passage must be read sufficiently thoroughly to understand the subject-matter. 2. The passage should be read /through again and again.

The important points to be included in the precis should be underlined.

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3.

Now these points, must be briefly noted in our own words The language of the original must be avoided as far as possible, unless certain phrases used in the original convey the meaning in the best possible way.

4.

From the brief notes made, a Continuous summary of the passage must be prepared.

5.

Our personal comments or our own views must not be incorporated in the passage.

6. 7.

The passage must be in third person, in indirect speech and in past tense: The high flown language used in the original must be reduced to simple, straight forward English.

8.

The words in the summary must be counted. If it is too long, details must be eliminated; if it is too short, important ideas omitted must be added back so that the length of the passage is one-thjrd of the original.

9. 10.

Now a fair copy of the precis must be written. It should be made sure that it is intelligible to the reader who has never seen the original.

11.

A note stating the number of words used in the precis must be appended at the foot of the precis.

356. Make a precis of the following passage: Many entrepreneurs especially in the small-scale sector , and particularly those with a technical background are conscious of the need to maintain a minimal level of quality in their products However, while this is true in the beginning, a number of these entrepreneurs give in to the tempation of laxity in their quality standards merely to be able to Survive. What really happens is that in maintaining the quality hat these entrepreneurs had originJly st for themselves hey find they are priced out of the market. A number

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Unscrupulous persons take to producing similar produce using substandard materials and dumps them in the market priced appreciably lower than those produced by quality The customers get greatly influenced by lower priced products without quite realizing their qualitative difference. The result is that the lower priced substandard products rare sold out much quicker than the higher priced quality ones. The retailers also tend to b swayed by the sale of lower priced products and are reluctant either to stock or Lpush the sale of higher priced products even though of much superior quality. Small-scale entrepreneurs find themselves in a quandary; and they feel that if they have to compete with the price i tag of the substandard producers, they have little choice but to use cheaper and substandard materials themselves, as otherwise they are unable to cut down their manufacturing costs sabstantially. However, you as a. small-scale entrepreneur would be advised to desist from such a temptation. You must appreciate that your gains on substandard products would be ry temporary. The poor quality would soon enough be own in the market and among users and your credibility be affected. You may find it impossible to regain lost ity and may never be able to re-establish yourself. It does not mean that you should go on producing quality goods and not be able to sell at the price which gives a reasonable profit margin. It also does not mean that ou start selling at a price lower than your costs and being burdened by heavy losses. You will have to devise ways and means to keep producing quality goods and selling them at a price covering our costs and allowing you a reasonable profit margin against all the odds of cheaper, substandard products. What are these ways and means? First the foremost you have to let the customer know that your products are of a particular standard. You have also to let him know that the cheaper products are below the minimum standards. You have to go to a step further and get the prospective customer to understand the harm the substandard products can cause him. Perhaps the most effective way of educating your prospective customers will be to highlight the quality features of your own product, the better quality of material that you

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use and its effect on the usage and life of the product, the heat treatment that you give and its advantages; the specia1 quality checks that you conduct. In other words, the way to beat the substandard products is through an imaginative and educative advertisement and publicity policy. The exact approach will differ from product to product and the target clientele. However the objective must be that your target clientele gets your message in a manner that is convincing. Advertisement and publicity are specialized areas and you would do well to consult specialists in them. However it is you who will have to spell out to them the strengths o your products. You shall have to apprise them with why quality is so important in your specific product. You shall have to put them wise on what damage could take place if certain standards are not maintained. Similarly, you should carry out a detailed critical study of your production processes with a view to seeing if costs can be reduced, You must take a critical look at your other needs and see if these can be cut down. You must see if wastage in materials can he brought down. Another useful approaches which. Will go a long way in helping you maintain the quality of your product and a good share of the market is to shift your target consumers to quality-conscious groups. There are consumers who are extremely particular about quality. In fact, they usually get de devoted to brand names in their quest for quality products. In shifting your customer target to this group you may have to further improve your quality. You may need to incorporate features which give added value to the consumers ego. You may have to spend some money on improving the looks and finish of your products. Your packaging will need to be designed keeping in view this sophisticated clientele. Your advertisement and publicity will have to be of a much higher standard. However expenditure in these directions would yield you good dividends. Solution: Competing with Sub Standard Products

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Many technical entrepreneurs in the small scale sector are aware of the need for maintaining quality in their products. But a number of them tend slowly to lower their quality in the need for survival. Many unscrupulous persons begin producing similar products using sub-standard materials, and price them very low. Quality producers cannot compete with them. The low-priced, sub-standard products sell fast because consumers do not realize the quality difference. Retailers also prefer to tock them. Unable to cut manufacturing costs, tpese quality conscious entrepreneurs tend to use cheaper materials. But they should avoid this temptation because users will soon realize the poor quality aid lose faith in their credibility. Days to sell quality goods at a price ensuring reasonable profit must be found. They should convince the prospective customers the harm that cheaper products can cause them, of the superior materials used in their own products and the quality checks applied thereon through effective advertisement and publicity. policy. They must consult specialists in advertisement. They should clearly tell them the 3pecial features o their products, and damage resulting from sub-standard and ones. The message must reach the target consumers in a most convincing manner. Production process must he critically restudied to reduce costs, and overheads and to prevent wastage. Another approach consists in shifting the target consumers to quality-conscious groups. For this, the looks and finish of the products must be improved and packaging well designed. The quality of the product and a good share of the market can be maintained thereby. B. Precis of Speeches 257. Make a precis of the following speech: Chairmans Speech at the Annual General Meeting on 30th May, 1886 Ladies and Gentlemen,

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I extend to you all a cordial welcome o the 84th Annual General Meeting of your company. The notice calling this meeting, the audited Accounts and Directors Report for the year ended 31st December 1985 have been with you and with your permission I shall take them as read. Your company continued to make very satisfactory progress in 1985. Notwithstanding the highly competitive environment in the Paint Industry, a great market penetration was achieved. This enabled your company to increase its market share: The sales turn over increased by 28% from Rs.34.13 crores in 1984 to Rs.43.83 crores in 1985. Profit be fore tax increased by 63% from Rs.1 05 crores in 1984 to Rs 1.71 crores in 1985. Based on the good performance of your company in 1985, the Directors have recommended, for your approval a higher dividend of Rs.1.50 per share, as against Rs.1 per share last year. Besides the amount to be transferred to reserves is Rs.47 lakhs, as against Rs. 8.4 lakhs last year. Several bold decisions were taken by the Government in 1985-86 to stimulate industrial growth. Industrial licensing was liberalized, the concept of broad-banding introduced, assets limitation for MRTP companies raised from Rs.20 crores to Rs. 100 crores, and R & D effort and updating of technology encouraged. Direct taxation was reduced to generate surpluses for growth and the concept of MODVAT was introduced o minimize the cascadin3 effect to excise levies. It is now incumbent on industry to respond to these measures by increasing production, lowering costs, improving service levels and the quality of goods, The management and workers have a joint responsibility for achieving these objectives. I am sure your company will not be lacking in its efforts to contribute to these national goals, as indeed it has proved in 1985. Your company has rationalized a wide range of its pro ducts to meet specific customer requirements. Greater emphasis s being placed on Research and Development for which the company is making fresh investments. New Products for marine and protective coatings have been introduced. The company has further consolidated its position in the

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areas of marine protective coatings, packaging coatings and industrial plaints. Along with this significant headway has been made in the area of building paints. The flagship brands of your company. i.e Superlac Emulsion and Superlac Enamel are now supported by a wide variety of other products which help the company to make further inroads in the decorative paint market. Some recent developments, however have caused us a certain amount of concern. One is the amendment to the Bonus Act the financial implications of which remain to be watched since they are not linked with possible increases in productivity, and will place additional burdens on the company. The other is the increase in the cost of petroleum based products used in the paint industry and the higher excise duties levied on paints and varnishes, all of which will adversely affect our cost structure. The introduction of MODVAT in the paint industry has not provided the relief we expected from it. It will be our endeavor to bring these to the attention of the authorities in the hope of se curing appropriate reliefs. Under the able leadership of Mr. Vinod Krishna, Managing Director of your company substantial progress has been made in 1985. The results for 1985, in terms of turnover, volume of goods sold and quantum of profit, are the highest achieved by the company. We now have a team poised to take the company to greater heights; organizational effectiveness is being enchanted to meet the challenges of the future. More emphasis is being put on plant modernization and quality improvement, recruitment, and training and development. It is the quality and dedication of people that makes an organization. There is an increasing awareness that the companys progress can only be through innovative approaches and dedicated team work. In the ultimate analysis, the real test lies in the market place. I have no doubt that with the determination shown by your management team, together with carefully formulated marketing strategies your company will continue to make good progress. During the year the Board of your company has undergone some changes. The Board has been strengthened by the addition of Mr. B,S., who was appointed Additional

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Director from 16th October 1985. The Company will greatly benefit from his wide experience and wise counsel. Mr. C.P. wholetime Director of the company retired from the services of the company on 31st March 1986. He had a long association with the company. The Directors and I wish to place on record our sincere appreciation of the services rendered by him. I take this opportunity to express our gratitude for the active support received from our associates in the U.K. Messrs, International Paints Ltd. Your company continues to receive invaluable help and guidance them in the area of product development. M express my warm thanks to my colleagues on the Board for their support and guidance. Before concluding, I am me the shareholders will join me in conveying their appreciation and thanks to employees their at various levels in the company who are geared to the successful results in 1985, and who are geared to meet the challenges of the future. Solution: Chairmans Speech at the 184th Annual General Meeting of the India Paints Ltd. held on 30th May 1986, The chairman, after formally welcoming the shareholders appreciatively spoke of the greater sales turnover a Rs.43.83 crores and the profit before tax at Rs.1.71 crores in 1985 despite heavy competition in the point industry. The higher dividend of Rs 1.50 per share had bee recommended. He also welcomed the various liberalization policies o the Government announced in 1985 and urged the industries to respond by increasing production, lowering costs and mi proving quality of goods. He was sure that this company would contribute to these national objectives. The chairman added that the company had rationalize a wide range of its products to meet customers needs. New products for marine and protective coatings had been

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introduced. The speaker that that along with its packaging coating and industrial paints, it had made significant progress in the area of building paints. However, the amended Bonus Act, the increased cost of petroleum-based products and the higher excise duties caused concern to them. The speaker also praised the services of Mr. V. K., its Managing Director for the best results shown. He pointed out that plant modernization, quality improvement and innovative approaches would receive top emphasis and hoped that the company would achieve a greater share of the market. He also referred to changes in the Board and appreciated the services of the retiring whole-time director Mr. C.1. The speaker ended his speech the a vote of thanks t their associates in the U.K. to his collegues the and to the employees. (Total No. of words in the original passage: 873) (Number of words in the precis: 251) C. Precis of correspondence. 258. What points must be looked into while preparing a precis of a correspOdence i) The addresses salutation, complimentary close etc. found in the letters must be totally omitted. ii) Only the important point that emerges from each letter must be noted. iii) The precis can be prepared taking the series of letters passing between the two parties as a whole. iv) Suitable heading must be given for the series of letters for which precise is attempted. 259. Give a precis of the following series of letters from 1 to 4 Southern Paper Company

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52, Anderson Street Madras 600 001. 2nd June, 1986. Messrs Singaram Stores, 17, South Car Street, Pennadam. Dear Sirs, We thank you for your letter dated 27th May and confirm that we can supply newsprint (Double Crown) at Rs.3 per ream. Your orders will be executed within a week. We look forward to receiving your order. Yours faithfully, For Southern Paper Company T.A. Saied Partner Letter No. 2 Singaram Stores 17. South Car Street Pennadam. 6th June. 1986, Messrs Southern Paper Company, 52, Anderson Street, Madras I Dear Sir,

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We thank your for your letter of 2nd June quoting sate for foreign newsprint at Rs.96 per ream. As we have to supply a very large quantity of paper to one of our valued publisher customers, will kindly see your way to reduce the rate still further? If the rate suits us we assure you of repeat orders. Yours faithfully, R. Singaram Proprietor. Southern Paper Company,

52 Anderson Street, Madras 1 10th June, 1986 Dear Sirs, We have already quoted the lowest rate and any further will only erode the very low profit that we make the sales. However, we are prepared to offer at Rs.89 ream provided each order is for more than 100 reams paper. We hope OU find this quite competitive, Yours faithfully, T.A. Saied Partner. 17, South Car Street, Dear Sirs, We thank you for your letter of 10th June finally quoting yout rate at Rs. 89 per ream.

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We have enclosed our order Form No. 115 for the supply 150 reams of foreign newsprint. Please treat this as urgent and effect delivery before 25th June. Yours faithfully, R. Singaram,, Sole. Proprietor.

Correspondence between M/S ingaram Stores, Pennadam and M/s Southern Paper Company, Madras. On 2nd June 1986. Messers Southern Paper Company wrote to Messrs Singaram Stores quoting foreign newsprint Double Crown at Rs.90 per read and offering to supply within a week. Singaram Stores, on 6th June asked for a still lower rate assuring repeat bulk orders. On 10th June, Southern Paper Company agreed to reduce it to Rs.89 pro vided each order is for more than 100 reams of paper. MIS Singaram placed orders an 14th June for the supply of 150 reams of paper requesting delivery before 25th June.

Memos and Note making, Expanding note The literal meaning of the word-Memorandum is a note to assist the memory. Memo is the short form of memorandum. A memorandum is mainly used for internal communication between executives arid sub ordinates and also between the officers of the same level. Memos are often, used at the horizontal and downward levels of communication amongst the executives of the same level, communication from top to bottom and very rarely upward memorandum is sent. An employer may ask any explanation from his subordinate regarding various matters, in the form of a report which is usually confidential. The form of a Memo The Memo differs from letters that are sent out by the firm. Since a memo moves from one department another or from one employee to another, it is essential to write the

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name of the person sending the memo and the name of the receiver and his designation or department. It must also have reference numbers. The word from and to are used in memos. There is no salutation. The writers signature is put without super scribing, and there is no complimentary close. The memo is probably dated, is written in a direct style and as brief as possible. Contents of a memo report 1. Headline 2. Inside address of sender and receiver. 3. Body of the report 4. Signature of the sender 5. Enclosures if any Memos are usually of the following kinds. 1. Inter office o.r inter departmental memos. 2. Memo informing of the action taken. 3. Memo seeking explanation. 4. Memo informing of transfer. 5. Memo seeking the superiors approval for the action taken. 6. Memo seeking suggestions from the officials of the same status. 7. Circular Memos. The different occasions that a Memo takes place 1. Charge sheet 2. Warning note 3. Job instruction 4. J Extension of probationary period.

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5. Memo informing a cut in salary. 6. Asking for explanation -for going on leave without permission. 7. Intimating transfer. 8. Memo seeking some explanation. 9. Asking for superiors approval for transfer. 10. Asking suggestions from equal officials. 11. A memo as a circular. Sample Memo A memo to inform, the extension of probationary period. Janata Bank Ltd., 26, Bells Road, Bangalore. 3rd March 98 Ref No: 227 From Zonal Manager, Janata Bank. To Mr. Raja, Probationary Officer, Janata Bank. Whereas Mr. Raja probationary officer, Janata Bank. joined the bank from 1996 and he is confirmed in the service of the bank with the effect from 28th February 1998 and his work progress etc were not found satisfactory, it is therefore considered necessary to

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extend his probationary period by two months, so as to provide him an opportunity to the arrive drawbacks. 146 Now therefore the probationary period by Raja is hereby extended by two months . (ie) upto 30th April 1998. c.c. To Branch Manager, Bangalore. II. Memo informing a cut in salary State Bank of India Maduari 3rd March 98 Ref No: 999 From, The Manager SBI To Mr. Rajaram, Clerk, SBI, Sub: Information regarding cut in salary. You remained away from your duty on 25th February 98 from 10.30 A.M. to 5.30, P.M., without any prior permission and please note that your salary and ennoblements for the above period will not be given to you. c.c. To Staff Section. IlI. A memo intimating the transfer of the employee 56, Raja Road,

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Bangalore. 3rd March 98 Ref No: SS 220 From Marketing Manager Ashok Leyland Ltd., To Mr. Raja, Sales Representative, Ashok Leyland Ltd., Sir Ashok Leyland Ltd., (Marketing division) Sub: Proceeding of the marketing manager dated on 1St March 1998. The following transfer is ordered, Mr. Raja, sales rep, Ashok Leyland Ltd., Madurai. Branch office, is transferred to the Trichy branch. He shall join the duty within four days, from the day he is relieved from the Madurai office. Since the transfer is made at his request no TA will be given. c.c. To Branch Manager, Trichy. A memo asking suggestions from equal office. Raja & Co., Chennai. 5th February 98. Ref No: S 230 From Mr. Suresh

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Sales Manager. To Mr. Ram, Finance Officer Ref: Funds for exports. A newly established wing of the sales department has successfully explored a good number of foreign markets for our products. The profit margin in the export sale also appears to be better. Time has now come to decide how to arrange the supply to export markets (ie l whether by reducing the home market supplies or by increasing e production. No doubt, the second alternative yield higher profit to the company. However the increase in production requires installing additional production capacity, additional hands in the sales department and other extra actives due to increased production. All these involves the problem of finance a matter of your department. You are therefore requested to send in your suggestion in the directions of sources to raise funds and their cost and returns, along with the fund flow statement to enable the board of directors to take a final decision in this matter. A copy of the statement from the production manager and a statement from our department are enclosed for your information, You are requested to send your suggestions to us, by this week and, so that we can prepare a consolidated report and submit it to the board which has its meeting during the end of this month. c.c.. To all directors. To Mr. Raja Office Peon From the past five months, we have received a number of complaints regarding your imprope4r work in the office time. You have just got6 the permanent job but your have

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misused your freedom and not attend the office in the afternoon time and doing some personal work. So we want a suitable and a proper explanation regarding this matter. c.c. To personnel Manager. II. Draft a memo to a clerk who has huge arrears of works pending with him. Reliance Co., Ltd., Mumbai 7th March 98. Ref No: R 21 From Administrative Manager, To Mr. Raj, Office Clerk, If is three months since we are receiving complaints regarding the slow completion of the files at your disposal. This stagnates the work, completely in one section of our office. Your delay regarding the accounts files causes huge problems. Try to clear out the files as early as possible. Otherwise the company would surely

take severe action and may even not hesitate to depromote you. c.c. To Section Manager. Warning note Warning note is also a type of memorandum, which is considered as a preliminary, or prior notice before issuing charge sheet. It is an intimation given to the sub-ordinates warning them that they are dearailing from the companys rules and regulations and giving then a chances to rectify their wrong doings.

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It is an awareness note created to abide the rules and regulations of the company policy and administration. As the memorandum, it is also an internal communication mostly flow downward from top to bottom (ie) from superiors to sub-ordinataes. As it is preliminary stage of charge sheet, if the wrong doings of the sub-ordinate continues even after the warning note, they are charged by their activities and necessary action is taken thereafter. Charge sheet Charge sheet are also one kind of memo given by the superiors to the sub-ordinates seeking some explanation. communication. Charge sheets are the sheets consist of several charges framed against the subordinates for their wrong doings. These charge sheets should certainly have a feed back as their reply from the subordinates giving adequate explanations to their superiors. These charge sheets are mainly used for internal

Charge sheet process 1. Charge Sheet: It was the first step in the actual process of issuing charge sheet, in which various charges are pointed out one by one and sent to the concerned subordinate. 2. Explanation: The feed back process, whereby the sub-ordinate numbly pertain his position and the actual to the superior in a detailed manner. If it is a satisfied and genuine explanation, the process comes to an end or else if the explanation given by the subordinate was unsatisfactory and unreliable, the next step enquiry will proceed on. 3. Enquiry: The next step in the process, if the explanation was unsatisfactory. Here an individual or a committee is appointed to enquire into the matter and pertain the facts.

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4.

Punishment: The concluding part of the process in which actual remedial work is done. Punishments may be classified as

a) Suspension: suspension order is given to those sub-ordinates if their offenses was proved. Moreover, it is subject to minor or meager matters. b) Disliegal: If it is a servere offense, strong or heavy punishment like dismissal,

imprisonment were given. Occasions or Chances of using charge sheets 1. Not observing punctuality 2. Vacating the office premises earlier than the closing time. 3. Wandering here are there which results in low production, accidents etc., 4. Having huge arrears of work pending 4ith continuously. 5. Doing some independent bass which ultimately affects the ordinary work. 6. Mishandling some valuable spare parts, documents etc., 7. Using unparliamentarily words, assaulting etc., 8. Gheraowing the official. Sample letter Mr. Albert has stolen a few spare parts from the stores dept. He was caught red handed by the security forces. Draft a charge sheet against Mr. Albert asking for an explanation and inform him that an enquiry is likely to be conducted against him after 10 days. Fenner India Ltd., Madurai. 12th March 98, Ref No: p 100

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From The personnel Manager, Madurai. To Mr. Albert Instrument Mechanic Maintenance Dept., Fanner India Ltd., On the 7th March you were found guilty of having stolen spare parts trom our stores dept. In spite, the warning given by the security officer, you have entered into an act which is liable for punishments When the security persons found you red handed in the act of stealing, you had assaulted upon the security guards and you had also abused them with unparliamentarily words. On further enquiry you had confessed that you were also indulged n the earlier theft also. Hence the following charges are made against you. 1. Stealing of spare parts worth Rs. 5,000 2. Assaulting the security personnel 3. Using unparliamentarily words 4. Also found involving in the earlier theft. Before we decide to hand over the case to police authorities for taking further criminal proceedings against you we would like to hear from you exactly, what do you want to say for the above charges.. Your explanation should reach us before the end of this month. Also you are requested to appear before the officers of General Manager on 22nd of this month for an enquiry with the disciplinary committee c.c. The Production Manager II. Reply letter

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Fenner India Ltd., Madurai. 13th March 98.. From Mr. Albert Instrument Mechanic Maintenance. Dept., Fenner India Ltd., I was quite surprised on receiving the charge sheet for no fault of mine. Actually what had happenned was that I had caught the security officer red handed in stealing those parts. In his own fear of being caught, the security officer had presented the matter before you in a completely topsy - turvy manner. He had also threatened me to keep quite or else it would be harmful to my whole family. Since I have old parents and three little children to look after, I thought of keeping quite and now my calmness had only harmed me all the more. Kindly maintain secrecy about my letter to you, or else it may harm my own family. Kindly enquire into the matter fully and give me justice. c.c. To PM (Production Manager) Draft of Business drafts A report is a statement or account of a certain event or happening or occurrence, prepared after careful investigation. Objects or Purposes of a Business Report The object of a bass report is to group altogether, as briefly as possible, all important data showing the true position of affairs, pertaining to a particular matter or issue and making appropriate recommendations or suggestions dictated by the circumstances.

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The purpose of every report is to give information to some person or body of persons not is possession\of the full facts of the subject with which it deals. Characteristics and features of a good bss report. 1. Grammatical accuracy: Every report should have grammatical accuracy. All the ordinary rules of grammar and construction of sentences applied to the drafting of reports. 2. Simple and unambiguous language: The language should be simple and unambiguous. The report should be free from ornamental language, figures of speech, phrases, etc., 3. Good arrangement and clearness: The subject matter of the report should be symmetrically arranged. 4. Accuracy: It is very necessary to ensure that the facts presented in the report are accurate, reliable and complete. 5. Objectives of recommendations: The concluding remarks including the various recommendations and suggestions should be unbiased. It should be based on the objective data rather than on mere imaginary calculations or illusions or mere impression. 6. Brevity: Repeatations and exaggerative. remarks should be avoided in the report. The report must deal with the subject matter as briefly as possible. Broad Classifications of Reports Reports can be broadly classified as (i) Reports by individuals (ii) Reports by committee. (i) Reports by individuals: The report by an individual is generally on a subject matter (le) suitable for investigation by a single person If the subject is connected with an organization and management of a company, the person deputed to write a report is often a secretary. This report is generally in the form of a business letter and is written in the first person singular and informal in tone. (ii) Reports by committees: Before taking any decision on some important matter or a problem, the management of an organization many time appoints a committee with a

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person as a secretary and another as a-chairman and one or two persons as members. The main purpose of management is to obtain a considerable opinion after the matter has been thoroughly investigated and discussed by the committee: The committee investigates the problem, gather evidences and then prepares its report. Such a report being the result of matured study and thorough investigation carries weight age with the appointing authority. A committees report should have the following. 1. It should have a title or heading. 2. It should make a reference to the appointing authority, stating that terms of reference and date of appointment of committee. 3. It should be in the third person. 4. The opening paragraph should clearly state the objects of the Committees investigation. 5. The subsequent paragraph should contain the investigation carried out and evidence taken. 6. The findings of the committee should be clearly stated. 7. Signatures of the chairman, members secretary along with the date should be presented. How to write a report or format of a report I. Introductory material a. Title page b. Letter of transmittal c. Table of contents d. Summary or synopsis II. Body material e. Introduction f. Textual content

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g. Conclusions h. Recommendation III. Supplementary material i. Appendix j. Bibliography a. Title page: The title sheet also called cover page is set apart for writing the title or tie heading of the report, the persons or authority whom it is addressed, the date of submission, the name of the author etc. b. Letter of transmittal (preface): It is a covering letter presenting the report and is addressed to the person or authority to whom it is submitted. It serves as a preface to the report. c. Ta bleat contents: The table of chapters with the title and page marks of each chapter is given on a sheet after the letter of transmittal. d. Summary or synopsis: If the report is very lengthy, the. author of the report may give a separate summary or synopsis of the report after the table of contents. e. Introduction: It is the first part of the body of the report wherein the terms of reference, the subject of study, its importance and scope, definition of technical terms used in the report are stated. f. Textual content: Also called the text proper gives light on the central point of the report. It consists of the development or findings. g. Conclusions: The inference., drawn by the author is stated under this heading in a systematic way. h. Recommendations: Not all reports will have this particular part. If the particular subject matter of the report calls for any suggestion or recommendations at the end of the text proper. i. Appendix: The data used along with charts and diagrams are generally included as a appendix to the body of the report.

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j. Bibliography and References: If the report is based on exclusive research, the author is expected to add a list of references and bibliography so that the readers wilt get an idea of the books and reports referred to, white drafting the report. Index: An index of the contents is given after the bibliography, if the author finds it necessary. Signature: The report must be signed by the persons submitting it. In the case of important reports all the members of the committee or commission are expected to sign it. Otherwise the signature of the chairman is enough. If there is no unanimity among the members the opinion of the majority is submitted in the report. However: the dissenting. members are also allowed either to submit a separate minority report or to sign the majority report with notes of dissent. Types of reports 1. Formal and informal reports. 2. Routine and special reports. 3. Statutory reports. 1 (i) Formal reports The physical make up tone and wording of these reports must suit the formal occasions with which they all are concerned. They generally deal with complex problems and the conclusions drawn from the data given in them have wide range in significance. The formal reports/are of the following types.. a. Informative reports: This report give information about the subject, on which they are written For eq., A report. on the production problems and sates problems ih a company.. b. Analytical report: This report present an analysis of the investigation carried out and the conclusions drawn. They may also make suitable recommendations. For eq. market service,. Accounting reports etc., S

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c. Research report: These reports are about products resulting from laboratory research and experiment. They also describe the methods employed to test the products. 1(ii). Informal reports, Any report may be presented in an informal style. A report given by a secretary t the Managing Director may be called as strictly formal report. But at the same time a report by an employee of an organisation to another equal rank will be extremely informal. Informal reports are often meant for exchange of ideas or i information. Eg., Memorandum. A memo-does not contains salutation (or) a complementary close. Functions of memorandum 1. A memorandum communicates information horizontally (ie)from department to another. 2. They also convey messages vertically downwards 3. They serve as a record of the discussions held and decisions 4. Memorandums are brief, crisp and relevant. one

2 a. Routine reports These reports are written as a matter of usual routine or practice. They are generally written in accordance with asset pattern. Sometimes printed forms, with blanks which could be filled in or used for preparing such reports. For eg., Annual report of the branch manager of a company to its Head office. 2 b. Special reports These reports deal with special situations of every kind. These reports may be short or long. For eg., A project report on starting a hotel at a sea side resort is a report of this kind. Special reports can be classified as a) Report of a specialist

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b) Feasibility report. c) Survey reports d) Press reports a. Report of a specialist: This Is a report prepared and submitted by a specialist at the request of an organization or an authority. In this report, the specialist first refers to the appointing authority, the date of appointment and the nature of the problem involved. Then he gives details of his studies and findings and finally his recommendations. For eg, Report of a firm of consulting engineers on a building needing repairs. b. Feasibility or possibility report: When an organisation proposes to extend its operation to a new place, it needs a feasibility report;. For eg., A bank thinking of opening a new branch at a new place, gets a special report from the top executive. Similarly, when an organisation proposes to introduce a new product and wishes to know its prospects, it tries to get a feasibility report from an expert or an experienced person. c. Survey report: Insurance companys appoint qualified and licensed surveyors when. a property insured against fire or marine risks gets damaged by fire or perils of the sea, and the insured intimates the damage or loss to the insurance company, the surveyor of the company visits the place of damage, inspects the property, studies the terms of the policies, assess the damages and suggests the compension payable in his report. This report is called a survey report. d. Press report: The press plays an important role in the life of the civilized man. The press reports must be accurate and true and should not be influenced by personal feelings. The press report may be in the form of an extensive account of an important event Forge., floods might have caused damages to life and property, the reporter may visit the place interview the people and write a detailed report. 3. Statutory Reports These are the reports which are. required to be prepared and submitted under the law. a. Statutory reports

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b. The directors report to the share holders. c. Auditors reports d. The annual report of the managing committee of a cooperative housing society. a. Statutory report: According to Companies Act, 1956, the board of directors of every limited company must prepare and forward to its members a report called a statutory report, at least 21 days before, the day on which the statutory meeting is to be held. This report must contain. 1. Total no of shares allotted, whether fully paid up or partly paid up. 2. Cash received by shares. 3. An abstract of receipts and payments. 4. The name, address, occupation of the directors of the company. 5. Particulars of any contract. b. Directors report to the members: The Companies Act, 1956 requires the board of directors of every company to prepare its report and place it before the company in the annual general meeting along with the balance sheet and profit and loss account, The directors report contains the following information. 1. The state of the companys affairs. 2. Dividend declarations. 3 Amount proposed to be carried on to reserved capital. 4. Any major change in the financial commitment. The report should also deal with, any changes which have occurred during the financial year (ie) in the nature of companys business or in the companys subsidiaries or classes Of business in which the company has interest.

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c. Auditors report: The auditors are required under the Companys Act 1966 to make a report on the account of the company examined by him and on the balance sheet and profit and loss account of the company Sample feasibility report To The Chairman, Raja Engineering Works Ltd., Bombay. 24th March 98. Sir, You had asked me to report to you on the possibility of locating our new chemical project at a suitable place in the state of Gujarat. After considering -various possible locations, I have come to the conclusion that the most suitable place for our purpose is Broach. I give below full information about GIDC industrial estate in this town. Broach district in south Gujarat, .with\i rich alluvial soil, a green forest and abundant mineral wealth, promises to be an existing growth centre. Its huge potential will be tremendously increased with the commissioning of the famous Narmada Project. Broach ,the head quarters of Broach district, is one of the oldest town situated on the bank of the river Narmada. It is served by the Western Railway, double line road gauge which connects directly to Bombay, Ahemedabad and Delhi. Broach is just 74 kms from Baroda and 66 kms from Surat on national highway. The GIDC has developed an estate of 40 acres with complete infrastructural facilities. The state has been so selected that it can be extended easily to 500 acres. In fact the expansion of the estate by another 100 acres is already under consideration. The open pints range in size from 800 sq.m. to 10,0000 sq.m. A number of prominent, medium and large size chemical, textile and engineering units have decided to locate their projecs this estate. The following are some of the details.

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Terms and conditions. The current premium price for obtaining a plot at Broach is fixed at Rs.12 / sq.m. Plots: Initially 25% of the. total amount should be paid balance 75% amount to be paid in 6 yrs with 15% interest. Sheds: Initially 20% of the total amount. Other amenities (facilities). 1. Abundant water: GIDC has a two phase, programme for water supply. in first phase 2 lakh gallons of water will be supplied per day. The second phase will give more. 2. Adequate power: At present, Broach town and the industries around it receive power from the 10 megawatts (mw) Broach substation. However, additional power is planned for. 3. Shopping and commercial sector: Commercial zones for the establishment of shops, office, bank, post office etc have also been planned. Telephone are available for every unit in the estate. 4. Banking: The Broach industrial estate is served by about 15 banks which would take care of all financial requirements. 5. Medical care: Well qualified medical personnel both private and public provide medical aid. There is also a maternity home, public dispensary and a family planning centre. 6. 8roach the town: Broach is the lovely town offering everything one may Plenty require of In a prosperous facilities, a industrial civil and commercial cinemas, state establishment. govt depts, housing hospital,

a number of schools and colleges. 7. Broach - the incentive area: Broach also offers a-great investment opportunity. If offers special incentives which provide you with up to 85% of your capital requirements for setting up an industry.

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a. Cash subsidy: Industries receive a special cash subsidy of 15% on capital investment upto Rs.1 crore from the central govt., b. Income tax remission: Another significant benefit in Broach is that the Govt of. India has planned to offer remission of income tax on 20% of our project for a period of 10 yrs. c. Liberal assistance: All the major national financial institutions along with the four Gujarat corporations offer maximum assistance in the form of lcng, term loans for investment in fixed capital upto Rs.30 lakhs from the Gujarat State financial corporation. (GSFC) d. Foreign exchange loans: All these incentives plus its proximity which is poised to go on stream shortly, make Broach an excellent location for an ancillary estate. Yours truly, Secretary. Report on declining sales To The Directors, Beauty Cosmetics Ltd., Bangalore 25th March 98. Sir, Sub: Report on the declining sales of our cosmetics. We have carefully examined the various causes of steep decline in the sales of our cosmetics as desired by you in the resolution passed at the boatels meeting held on 20th March 98. A brief report of our investigation and recommendation is being sent herewith. We hope that a quick action will be taken on these recommendations so that any further decline is arrested.

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Resolutions i. That a sub committee be appointed to study the causes of the decline in sales of the cosmetics produced by the company and to make recommendations for the promotion of sales. ii. That the sub committee may consist Mr. Shri Ram, Chairman & Mr. Choudhary, Secretary. Work done . 1: The. sub committee scrutinized the sales report for different quarters of 1997 and compared them with the sales reports for the previous year. 2. The sub-committee made a careful study of the cosmetic market in order to ascertain whether there had been a general decline in. the entire market or the decline has been peculiar to our company alone. 3. The sub-committee interviewed the whole sale dealers stocking the cosmetics of our company as well as the retailers and a large number of customers. 4. The subcommittee actually circulated nearly 1,000 questionnaires to the users. 5. The committee has analyzed several products of our company by some chemists in order to as certain. their quality. Findings 1. The subcommittee found that there have been a steep decline in the companys sales during the year 1996 Nov and this trend continues till today. This decline was peculiar to the products of Beauty Cosmetics Ltd., and there had been no general slump in the market. . 2. The questionnaire reveals that the consumers have not satisfied with the quality of our products, some of them have clearly stated that there has been a deterioration of quality. Our shampoo leaves the hair dry and rough. The ladies using face creams report that after a little while starts looking caky or masky. The antiseptic talcum powder does not

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act as an effective deodorant.. The chemists report also point to the unsatisfactory quality of our cosmetics. 3. Our publicity also to be improved we are still following the old modes of publicity like sending long wordy insertions in the dailies. Our publicity department has not cared about the more effective media like radio and televisions, Our insertions also are not attractive. They are not designed to appeal to the consumer psychology. During the last two years, some rival enterprises have entered the market in a big way. They offer most attractive terms to their dealers. They have also offered door -to-door delivery and producing quality goods with high .publicity.

Recommendations 1 . The first thing to be done is obviously, to take care of our products. It appears that we shall have to appoint better qualified chemists and to follow strict quality control. 2. We should give a new look to our products and to built a massive advertising campaign to boost the sales,. 3. We should revise the terms of sales on the basis of market information relating to credit and discount sales. 4. We should also undertake door-to-door publicity and sales and offer attractive gifts and bonus coupons. 5. We should make a review, of sales promotion schemes every 3 months during the next year A copy of the questionnaire circulated among the consumers and the chemists. report on the quality of our products are enclosed for your reference. yours faithfully, Market Report

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Market report is a form 0f technical writing about the position prevailing in a market during a gien period. The position of the market means the tendency of price, the attitude of the dealers operating there, the underlying economic processes and their possible effects on the future turn of trends. In a dynamic economic structure of todays markets, commodities and securities are subject to frequent fluctuations induced by back forces of demand and supply, the impact of Governments monetary, fiscal and general economic policy by the expectations and forecasts of the dealers and operators composing of the market. Knowledge of the various factors influencing the market conditions is essential for entrepreneurs and dealers to plan their policies and design their strategies. Another important feature of modem organized market is the speculative activity conducted by a professional class of operators who trade on anticipated changes in prices. Their activities ar noted with interest by industrialists, investors, dealers, brokers and general buyers and sellers. Hence, information about the economic forces at work in a market over a period is conveyed through a Market Report. Market report, like any other report, is a systematized treatment in writing of the observed facts at play in a market with reference to a product, security or money over a specified period. Market reports reveal the movements of prices as on a particular day or during a week. Daily market reports bring out the sensitive currents and gross currents while weekly market reports represent synopsis view of the business transacted during the week with reference to the salient force. resulting in balancing the demand and supply. Monthly and annual reports give a factual account of changes in prices over a period of one month or year. Uses of Market Report The important uses of market reports are the following: 1. They provide accurate information about the transactions in a particular market during a specified period. This information is helpful to producers, consumers, businessmen and Government policy makers.

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2. Since they reflect the tendencies in the nature of demand and supply, crucial data is provided for speculative operators in the line. They furnish hints or clues to the speculators to base their forecasts of the price movements. 3. They facilitate comparative study of different markets in different areas for a product at different periods. They help the traders to bid accurately at the right time and at the right place. 4. Glaring variations in price level in different markets are ironed out because dealers knowing the movement of prices through market reports can engage in countervailing contracts. 5. Market reports published in newspapers and periodicals make readers familiar with the transactions in the market and give them scope for wise investment 6. They serve as a guide to the Government also in framing their fiscal, monetary, and other regulatory policies to reconcile the interest of the industry, trade and consumer. Contents of a Market Report A market report contains information or particulars about the following. 1. Period under reference-Daily, Weekly etc. 2. Name and area of the market to be reviewed. 3. Date on which the reports being compiled. 4. Types of commodities dealt with. 5. Estimate of demand and supply of the products or securities. 6. Details of business transacted i.e., volume of purchase or sales, their value etc. 7. Prices ruling in the market. 8. Extent of fluctuations in prices during the period under review with reference to the factors or events which have caused such fluctuations. 9. Indications regarding the turn of future trends in prices. Writing a Market Report

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The students should note the following hints while drafting a market report. 1. Mention the market, under report i.e., Stock Exchange, Wheat Market, Bullion Exchange etc. 2. Specify the location of the market, Example: Bombay Stock Exchange, Calcutta Jute Exchange. 3. 4. Report Writing 5. 6. Specify the operating and closing quotation of prices. Explain briefly the underlying political, economic and international causes of changes in prices. The cause and effect processes should be sufficiently analyzed. 7. Give an intellectual appraisal of the trends with projections of future changes. 8. The report should be drafted in indirect speech ad the wordings should be usually in past tense. 9. Technical terms and phrases should be used whenever necessary to explain the exact stage of things in the market. 10. 11. 12. The report should not be too lengthy or too short. Exact details should be quoted. Concluding remarks about the attitude of the dealer or operators, the Government, the working of the firms in the line and conjecture about future changes should be indicated. Form of Market Report Market reports are generally published daily in all popular English dailies like The Hindu, The Financial Express, The Economic Times, Times of India. A careful analysis of Refer to the period of review. Highlight the main features of the transactions during the period.

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various reports reveals that the reports follow an identical pattern for drafting the reports. The usual form of a market report is as follows: 1. Heading: A heading is usually given in all the reports. The heading should be short and indicative of the main trend in the market. Examples: Equity steady in Data! Street, Steep fall in coconut oil, Oil easier in Madras. 2. Introduction: The date, place and name of the market are usually mentioned in the introductions. Examples: 10th October Mumbai Cotton Exchange, 27th February Alleppey Market. 3. Opener: The writer should mention his general finding about the characteristics of market trend. . Examples: The Mumbai Stock Exchange presented slightly better understand on Monday. Some buying was in evidence in several scrips at lower levels.. The turn over was moderate. Prices of coconut oil and copra suffered a steep fall in Alleppey market last week. 4. Body of the Report: The body of the report should contain transactions made during the week or day as. the case my be. The following are the examples. Gujarat Fertilizer witnessed wide price fluctuations. The scrip went to Rs.570 from Rs.565 and met with a flurry of selling orders to drop to Rs.552. The closing rate was Rs.558. Century fluctuated both ways between Rs.897.05 and Rs.907.50 before closing at Rs.900. Bombay Dyeing varied to Rs.72 from the days opening of Rs.66.50. Coconut oil opened Rs.15 lower at Rs.3,225 a quintal and slumped to close at Rs.3,050. About 8,200 quintals were reported transacted for spot delivery. On Monday this oil went down further by Rs.100 to Rs.2,950.

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5. Closer: The concluding remarks about the present trend and predictions about the future are generally specified. Example The market is still firm and shall move forward. SPECIMEN MARKET REPORT 1. Weekly Report about the Madras Edible Oil Market A sharp drop in groundnut oil and coconut oil featured trading on the oilseeds and oils exchange last week. Gingelly oil too yielded modest ground. Groundnut oil lost Rs.40 at Rs. 1,440 a quintal and 171 quintals were traded last week. Gingelly oil ordinary and agmark varieties went up by Rs.20 each initially before closing Rs.30 to close at Rs. 1,600 and Rs.1,750 a quintals. Thus there was a net loss of Rs.10 each in this oil. Coconut oil declined sharply to Rs. 512 at mid week from the opening rate of Rs.612/- but recovered partially to end the week at Rs.586 for a tin of 16.5 Kg. Arrivals of groundnut kernels from the upcountry centers of Tamil Nadu averaged 110 tons daily and price of new crop was put at Rs.470-490 for a bag of 80 Kg and that of old crop al Rs.520-530. The oil content of the fresh crop is expected to be 28-30 Kg for a bag of 80 Kg of kernels. The summer crop arrivals will gather volume from the middle of March. Butter and gee were quoted at Rs.100 and Rs.200 per Kg. 2. Daily Report about the Madras Stock Exchange MIXED TREND IN MADRAS A mixed trend was in evidence on the Madras Stock Exchange. Plantations and cements that remained firm despite some profit-taking at higher levels. The turnover remained large. The sharp rise in Tube Investment to Rs.24.25 from Rs.22 on keen institutional buying was a feature. ABC further hardened by Rs.3.47; Madras Cements met with profit taking and dropped to Rs.25.75; Mettur Chemicals lost 50 paise at Rs.23.50; Oriental Hotels were in

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demand 75 paise at Rs.23.25; Gwalior Rayon declined to Rs.4, from Rs.5 1.75; Lower upcountry advises, Kothari Industrial rose further to Rs.27.20 from Rs.26.75. SI Viscose gained a rupee to RsJ49 while Lakshmi Mills lost a rupee to Rs8 I. Madura Coats shaded to Rs.28.75 from Rs29 Tea Estates and CWS India were in keen demand at Rs.37SO and Rs.37.75 Amurtanjan went up to Rs50 from Rs.48, FACT were a shade lower at Rs.5, Loyal Textiles lost is.2 at Rs.165 Renowned Auto noted industrial l buying at Rs,27 against Rs.26.5O. Consolidated Coffee rose to Rs.35 from Rs.34, Neelamali remained firm at Rs. 11.75 though Peria Karamalai eased slightly to Rs.8 40.

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