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Board Question Paper: July 2024 - Secretarial Practice (HSC)

Maharashtra Board HSC Secretarial Practice: Question Paper & Solution (July 2024)

Maharashtra State Board

HSC Secretarial Practice (July 2024)

Question Paper with Complete Solutions

Code J-999 (E)
Time 3 Hrs.
Max. Marks 80
Seat No.
Notes:
  • (1) All questions are compulsory.
  • (2) Figures to the right indicate full marks for the questions.
  • (3) Figures to the left indicate question numbers.
  • (4) Answer to every question must be started on a new page.
Q. 1. Objective Questions [20 Marks]
(A) Write a word or a term or a phrase which can substitute each of the following statements : (5)
  1. These shareholders are the ‘real masters’ of the company.
    Answer: Equity Shareholders
  2. Transfer of shares due to operation of law.
    Answer: Transmission of Shares
  3. The organisation which holds the securities in electronic mode.
    Answer: Depository
  4. The return on investment paid to the shareholders of the company.
    Answer: Dividend
  5. A market which provides long term funds.
    Answer: Capital Market

Secretarial Practice Board Papers

(B) State whether the following statements are True or False : (5)
  1. Equity shareholders enjoy fixed rate of dividend.
    Answer: False
  2. Debenture holders are paid interest.
    Answer: True
  3. Return of deposit must be filled every year on or before 31st March.
    Answer: False (Correct: 30th June)
  4. Electronic mode of holding securities is risky.
    Answer: False
  5. Dividend once declared cannot be revoked.
    Answer: True
(C) Select the correct option from the bracket : (5)

Question: Match the pairs using the options given below:

Group 'A' Group 'B'
(a) Working Capital(1) ____________________
(b) ____________________(2) Employees Stock Option Scheme (ESOS)
(c) First Depository in India(3) ____________________
(d) ____________________(4) Dematerialization
(e) SEBI(5) ____________________
Options: (Offering shares to permanent employees, Circulating Capital, Regulator of Capital Market, Physical to electronic mode, NSDL)
Solution (Correct Matches):
Group 'A' Group 'B' (Answer)
(a) Working Capital (1) Circulating Capital
(b) Offering shares to permanent employees (2) Employees Stock Option Scheme (ESOS)
(c) First Depository in India (3) NSDL
(d) Physical to electronic mode (4) Dematerialization
(e) SEBI (5) Regulator of Capital Market
(D) Select the correct answer from the options given below and rewrite the sentences : (5)
  1. Dividend is paid first to __________ shareholders.
    • (a) equity
    • (b) preference
    • (c) deferred
    Answer: (b) preference
  2. When the trade bills are accepted by commercial banks, these are known as __________.
    • (a) treasury bills
    • (b) commercial bills
    • (c) commercial papers
    Answer: (b) commercial bills
  3. Demated shares are __________.
    • (a) non-transferable
    • (b) fungible
    • (c) bearer
    Answer: (b) fungible
  4. A __________ is one who expects fall in price of securities.
    • (a) bull
    • (b) bear
    • (c) jobber
    Answer: (b) bear
  5. Payment of __________ dividend must be authorized by the Articles of Association.
    • (a) interim
    • (b) final
    • (c) bonus
    Answer: (a) interim
Q. 2. Explain the following terms / concepts (Any FOUR) [8 Marks]
  1. Ploughing back of profit
    Companies do not distribute the entire profit earned as dividend to shareholders. A part of the profit is retained in the business for future growth and expansion. This process of retaining earnings and reinvesting them in the business is known as ploughing back of profit or self-financing.
  2. Rights Issues
    When a company wants to raise further capital by issuing new equity shares, it must first offer these shares to its existing equity shareholders in proportion to their existing shareholding. Such an issue of shares is called a 'Rights Issue'. It is a statutory right of existing shareholders.
  3. Debenture Trust Deed
    A Debenture Trust Deed is a legal instrument (contract) entered into between the company and the Debenture Trustees. It defines the terms and conditions of the debenture issue and the rights of debenture holders. It is executed to protect the interest of debenture holders.
  4. Secured Deposit
    A secured deposit is a type of public deposit where the company creates a charge on its tangible assets in favor of the deposit holders. If the company fails to repay the deposit, the depositors can claim their dues from the secured assets.
  5. Depositor
    A depositor is a person who deposits money with a company under the public deposit scheme. He/she is a creditor of the company and receives interest on the deposited amount at a fixed rate.
  6. Broker
    A broker is a registered member of a Stock Exchange. He acts as an agent/intermediary between the investor and the Stock Exchange. He buys and sells securities on behalf of his clients and charges a commission called brokerage for his services.
Q. 3. Study the following cases / situations and express your opinion (Any TWO) [6 Marks]
  1. Anushka Ltd. Company plans to raise ₹ 10 crores by issuing debentures. The Board of Directors have some queries. Please advise them on the following :
    1. Can the company issue convertible debentures?
    2. As the company is offering debentures to its members, can such debentures have normal voting rights?
    3. Capital raised by issuing debentures will be Owned Capital or Borrowed Capital?
    Solution:

    (a) Yes, Anushka Ltd. can issue convertible debentures, provided it is authorized by a special resolution passed in the general meeting.

    (b) No, debenture holders are creditors of the company, not owners. Therefore, the company cannot issue debentures with voting rights.

    (c) The capital raised by issuing debentures will be treated as Borrowed Capital (Debt Capital).

  2. A, B and Company Ltd. is an eligible Public Company as per the Companies Act, 2013 with reference to accepting public deposits :
    1. Can the company accept deposits in joint names?
    2. Can the company accept deposits from its members?
    3. Can the company issue secured deposits?
    Solution:

    (a) Yes, the company can accept deposits in joint names (usually up to 3 names are allowed).

    (b) Yes, being an eligible public company, it can accept deposits from its members as well as from the public.

    (c) Yes, the company can issue secured deposits by creating a charge on its tangible assets.

  3. Mr. R. J. holds 100 shares of Viraj Co. Ltd. in Demat mode :
    1. He wants to transfer one share each to his wife, daughter and son. Can he do so?
    2. Does he need to submit DRF or DIS if he wants to transfer his shares?
    3. Can he nominate his wife in his demat account?
    Solution:

    (a) Yes, he can transfer one share each. In Demat mode, shares are fungible, and there is no concept of odd lots; even a single share can be transferred.

    (b) He needs to submit a DIS (Delivery Instruction Slip) to his Depository Participant (DP) to transfer shares. (DRF is used for converting physical shares to demat).

    (c) Yes, he can nominate his wife in his demat account.

Q. 4. Distinguish between the following (Any THREE) [12 Marks]
  1. Owned Capital and Borrowed Capital
    Point Owned Capital Borrowed Capital
    Meaning It is the capital provided by the owners (shareholders) of the company. It is the capital borrowed from creditors (debenture holders, banks, depositors).
    Return Shareholders get dividend as a return. It is fluctuating. Creditors get interest as a return. It is fixed.
    Status Providers are owners of the company. Providers are creditors of the company.
    Voting Rights Equity shareholders enjoy voting rights. Creditors do not have voting rights.
  2. Initial Public Offer (IPO) and Further Public Offer (FPO)
    Point IPO FPO
    Meaning It is the first time offer of shares by a company to the public. It is the subsequent offer of shares to the public by an existing listed company.
    Sequence IPO precedes FPO. It is the first step. FPO comes after IPO.
    Listing Company gets listed on stock exchange for the first time. Company is already listed.
    Risk Risk is higher as the company is new to the market. Risk is relatively lower as past performance is known.
  3. Interim Dividend and Final Dividend
    Point Interim Dividend Final Dividend
    Meaning Dividend declared between two Annual General Meetings (AGMs). Dividend declared at the Annual General Meeting (AGM) after the close of the financial year.
    Authority Board of Directors has the power to declare it. Recommended by Board but declared by Shareholders.
    Timing Declared in the middle of the financial year. Declared after the end of the financial year.
    Revocation Can be revoked with the consent of shareholders in certain cases (rare). Once declared, it becomes a debt and cannot be revoked.
  4. Primary Market and Secondary Market
    Point Primary Market Secondary Market
    Meaning Market where new securities are issued for the first time. Also called New Issue Market. Market where existing securities are bought and sold. Also called Stock Exchange.
    Mode of Investment Direct investment in the company. Indirect investment via other investors.
    Parties Involved Company and Investors. Investors and Investors.
    Price Determination Price is fixed by the company. Price is determined by demand and supply forces.
Q. 5. Answer in brief (Any TWO) [8 Marks]
  1. State the features of Bonds.

    Features of Bonds:

    • Nature of Finance: It is a debt finance. It provides long-term borrowed capital to the company.
    • Status of Holder: Bondholders are creditors of the company. They are not owners and do not have voting rights.
    • Return: Bondholders get a fixed rate of interest, which is payable at regular intervals or on maturity.
    • Repayment: Bonds have a specific maturity date when the principal amount is repaid.
  2. State any four terms and conditions regarding acceptance of deposit.

    Terms and Conditions:

    • Period of Deposit: Deposits can be accepted for a minimum of 6 months and a maximum of 36 months.
    • No Demand Deposit: Companies cannot accept deposits repayable on demand.
    • Secured/Unsecured: A company can accept secured or unsecured deposits. If secured, a charge on assets must be created within 30 days.
    • Application Form: The company must provide an application form containing a declaration by the depositor that the deposit is not made out of borrowed funds.
  3. Explain DP as the constituent of Depository system.

    Depository Participant (DP):

    • DP is an agent of the Depository (NSDL/CDSL).
    • It acts as a link between the Depository and the Investor (Beneficial Owner).
    • It interacts directly with clients/investors.
    • Financial institutions, banks, stockbrokers, etc., can act as DPs if registered with SEBI.
    • It maintains the securities account of the investor and processes instructions like transfer, transmission, etc.
Q. 6. Justify the following statements (Any TWO) [8 Marks]
  1. Equity shareholders are real owners and controllers of company.

    Justification:

    • Equity shareholders bear the ultimate risk of the business. If the company incurs losses, they may not get any dividend or even their capital back.
    • They enjoy voting rights at General Meetings, allowing them to elect the Board of Directors and influence management decisions.
    • They have a residual claim on the company's profits and assets.
    • Since they assume the greatest risk and have voting power, they are considered the real owners and controllers.
  2. A shareholder of a public company can transfer shares.

    Justification:

    • Free transferability of shares is a fundamental characteristic of a Public Limited Company.
    • The shares of a public company are movable property and can be transferred from one person to another.
    • In the case of listed companies, shares are easily traded on the stock exchange.
    • The Articles of Association of a public company cannot put an absolute restriction on the transfer of shares.
  3. Unpaid dividend cannot be used by the company.

    Justification:

    • Dividend declared but not paid or claimed within 30 days must be transferred to a special account called 'Unpaid Dividend Account' within 7 days.
    • The money in this account is held in trust for the shareholders.
    • If the money remains unpaid/unclaimed for 7 years, it must be transferred to the Investor Education and Protection Fund (IEPF).
    • Therefore, the company cannot utilize this money for its business operations.
  4. Capital market is useful for corporate sector.

    Justification:

    • The capital market provides long-term funds required for business expansion, modernization, and new projects.
    • It enables companies to raise capital through the issue of shares, debentures, and bonds.
    • It provides a platform (Stock Exchange) for the trading of securities, ensuring liquidity for investors, which makes the company's securities attractive.
    • It helps in capital formation and promotes industrial growth.
Q. 7. Attempt the following (Any TWO) [10 Marks]
  1. Write a letter to the member for the payment of dividend through Dividend Warrant.
    Drafted Letter:

    ABC Industries Ltd.

    Regd. Office: 123, M.G. Road, Mumbai - 400 001.

    Phone: 022-12345678
    Date: 25th July 2024

    Ref: D/2024/101

    To,
    Mr. Rahul Sharma,
    15, Palm Heights,
    Pune - 411 004.

    Subject: Payment of Dividend on Equity Shares.

    Dear Sir,

    I am instructed by the Board of Directors to convey that in the 25th Annual General Meeting held on 20th July 2024, a Final Dividend at the rate of ₹ 2 per equity share of ₹ 10 each has been approved for the year ending 31st March 2024.

    Your name appears in the Register of Members as on the Record Date. The details of dividend payable to you are as follows:

    Folio No. No. of Shares Distinctive Nos. Dividend per Share (₹) Total Dividend (₹)
    A-105 100 501 - 600 2.00 200.00

    We are enclosing herewith Dividend Warrant No. 4567 dated 25th July 2024 for ₹ 200/-.

    Thanking you,

    Yours faithfully,
    For ABC Industries Ltd.

    (Signature)
    Company Secretary

    Encl: Dividend Warrant No. 4567

  2. Draft a letter of allotment to debentureholder.
    Drafted Letter:

    XYZ Motors Ltd.

    Regd. Office: Plot No. 55, MIDC, Aurangabad - 431 001.

    Date: 20th July 2024

    To,
    Ms. Priya Patil,
    Nashik.

    Subject: Allotment of Debentures.

    Dear Madam,

    In response to your application No. D-505 dated 1st July 2024, I am directed by the Board of Directors to inform you that you have been allotted 100, 10% Non-Convertible Debentures of ₹ 100 each. The tenure of debentures is 5 years.

    The details of allotment are as follows:

    Folio No. No. of Debentures Allotted Distinctive Nos. Amount Received (₹)
    D-202 100 1001 - 1100 10,000

    The Debenture Certificate will be sent to you within the statutory period.

    Thanking you,

    Yours faithfully,
    For XYZ Motors Ltd.

    (Signature)
    Company Secretary

  3. Draft a letter of thanks to the depositor of a company.
    Drafted Letter:

    Sunshine Finance Ltd.

    Regd. Office: 22, Business Bay, Nagpur - 440 001.

    Date: 22nd July 2024

    To,
    Mr. S. K. Deshmukh,
    Nagpur.

    Subject: Letter of Thanks for Deposit.

    Dear Sir,

    We are in receipt of your application dated 15th July 2024 along with a Cheque No. 123456 for ₹ 50,000/- for placing a Fixed Deposit with our company for a period of 2 years.

    We are thankful to you for showing confidence in our company and depositing your valuable savings with us. We assure you of our best services.

    The Fixed Deposit Receipt (FDR) No. 8899 is enclosed herewith. The details of the deposit are:

    • Amount: ₹ 50,000/-
    • Period: 2 Years
    • Interest Rate: 9% p.a.
    • Maturity Date: 21st July 2026

    Thanking you,

    Yours faithfully,
    For Sunshine Finance Ltd.

    (Signature)
    Company Secretary

    Encl: Fixed Deposit Receipt No. 8899

Q. 8. Answer the following questions (Any ONE) [8 Marks]
  1. What is preference shares? Explain its features.

    Definition: Preference shares are those shares which carry certain preferential rights over equity shares. They have a preferential right regarding payment of dividend and repayment of capital at the time of winding up of the company.

    Features of Preference Shares:

    1. Preference for Dividend: Preference shareholders have the first right to receive dividend before it is paid to equity shareholders.
    2. Preference for Repayment of Capital: In the event of liquidation (winding up) of the company, preference shareholders are paid back their capital before equity shareholders.
    3. Fixed Return: They carry a fixed rate of dividend. The rate is decided at the time of issue.
    4. Nature of Capital: It is considered as safe capital for investors who prefer steady income and safety of principal. However, for the company, it is permanent capital (redeemable after a certain period).
    5. No Voting Rights: Generally, preference shareholders do not have normal voting rights in the company's management. They can vote only on matters directly affecting their rights (e.g., reduction of capital, winding up).
    6. Accumulation of Dividend: In case of Cumulative Preference Shares, unpaid dividend accumulates and is paid in future years.
    7. Market Value: The market value of preference shares does not fluctuate as much as equity shares because the dividend rate is fixed.
  2. Explain the procedure for issue of debentures.

    Procedure for Issue of Debentures:

    1. Pass Resolution in Board Meeting: The Board of Directors must pass a resolution to issue debentures, approving the amount, type, interest rate, and terms of issue.
    2. Hold Extra-Ordinary General Meeting (EGM): If the borrowing exceeds the limit (Paid-up Capital + Free Reserves), shareholders' approval via Special Resolution is required in an EGM.
    3. Filing with Registrar: The company must file the special resolution and other documents with the Registrar of Companies (ROC).
    4. Obtain Credit Rating: The company must get its debentures rated by one or more Credit Rating Agencies (e.g., CRISIL, CARE). The rating must be disclosed in the offer document.
    5. Enter into Underwriting Agreement: If needed, the company enters into an agreement with underwriters to ensure the issue is subscribed.
    6. Issue Prospectus / Letter of Offer: The company issues a prospectus (for public issue) or letter of offer (for private placement) inviting applications.
    7. Open Separate Bank Account: Application money received must be kept in a separate bank account.
    8. Receiving Applications: Investors submit applications along with the money.
    9. Hold Board Meeting for Allotment: After the issue closes, the Board meets to approve the allotment of debentures.
    10. Issue Debenture Certificates: Certificates must be issued to the allottees within 6 months of allotment.
    11. Create Debenture Redemption Reserve (DRR): The company must create DRR out of profits available for dividend.
Title: Maharashtra Board HSC Secretarial Practice Question Paper & Solution July 2024 Labels: HSC, Secretarial Practice, Board Question Paper, July 2024, Solved Paper, Class 12 Commerce Permanent Link: maharashtra-board-hsc-secretarial-practice-question-paper-solution-july-2024 Search Description: Complete and accurate solutions for the Maharashtra Board HSC Secretarial Practice July 2024 Exam. Includes objective answers, letters, and detailed explanations.
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