HSC 12th Secretarial Practice (SP) Board Paper Solution June 2026 | Maharashtra Board
HSC SP 12th Standard June 2026 Board Paper Solution
Q. 1. Objective Questions
(A) Select the correct answer from the options given below and rewrite the sentences:
- Company has to pay taxes to government.[cite: 1]
- A depository receipt traded in U.S.A. is called American Depository Receipt.[cite: 1]
- Transmission of shares takes place due to operation of law.[cite: 1]
- Money from Debenture Redemption Reserve account is used for redemption of debentures.[cite: 1]
- Deposits are short term loans of the company.[cite: 2]
(B) Write a word or a term or a phrase which can substitute each of the following statements:
- The agent of the depository. - Depository Participant (DP)[cite: 2]
- The return paid to the creditors by the company. - Interest[cite: 2]
- Instrument for payment of dividend. - Dividend Warrant[cite: 2]
- A specific place where trading of securities is arranged in an organized method. - Stock Exchange[cite: 2]
- A market which provides short term funds. - Money Market[cite: 2]
(C) Match the pairs:
- (a) Working capital: (4) Sum of current assets[cite: 2]
- (b) Board of Directors: (5) Power to issue debentures[cite: 2]
- (c) Tenure of deposits: (1) Maximum 36 months[cite: 2]
- (d) Financial Market: (2) Trading of financial securities[cite: 2]
- (e) Bad delivery: (3) Problem faced in physical mode[cite: 2]
(D) Find the odd one:
- Land and Building, Plant and Machinery, Cash - Cash[cite: 3]
- Face value, Redemption value, Market value - Market value[cite: 3]
- SEBI, Debentureholder, Shareholder - SEBI[cite: 3]
- Dividend account, Dividend mandate, Unpaid/Unclaimed dividend account - Dividend mandate[cite: 3]
- New issue market, Secondary market, Call money market - Call money market[cite: 3]
Q. 2. Explain the following terms / concepts (Any FOUR):
(i) Investment Decision
Meaning: Investment decision refers to the careful selection of assets in which a company will invest its funds. It ensures that the funds are utilized effectively to earn maximum possible returns for the investors.
Scope: It primarily involves two major areas: investing in fixed or long-term assets (known as Capital Budgeting) and investing in current or short-term assets (known as Working Capital Management).
(ii) Trade Credit
Meaning: Trade credit is a short-term financing facility where a manufacturer or wholesaler sells goods to a retailer or another business on credit. It allows the buyer to purchase goods now and pay for them at a later scheduled date.
Significance: It is one of the most common and easy sources of working capital. It does not involve the actual borrowing of cash but rather delays the cash payment, which helps businesses manage their short-term cash flows efficiently.
(iii) Initial Public Offer (IPO)
Meaning: Initial Public Offer (IPO) is the process of offering shares of an unlisted company to the general public for the very first time.
Purpose: By issuing an IPO, a privately held company transforms into a public company to raise fresh capital from the public. This method is used by companies for expansion, growth, or to pay off debts.
(iv) Debenture Certificate
Meaning: A debenture certificate is a formal document issued by a company under its common seal, acting as an official acknowledgment of debt owed to the debenture holder.
Content and Time Limit: It contains details such as the name of the holder, number of debentures allotted, interest rate, and the maturity date. A company must issue debenture certificates within six months from the date of allotment of debentures.
(v) Rematerialization
Meaning: Rematerialization (Remat) is the reverse process of dematerialization. It is the process by which a client can get their electronic (demat) holdings of securities converted back into physical certificates.
Procedure: To initiate this process, the investor has to fill out and submit a Remat Request Form (RRF) to their Depository Participant (DP). Once processed, the electronic balance is reduced, and physical certificates are dispatched to the investor.
(vi) Stock Exchange
Meaning: A stock exchange is an organized and regulated market where financial securities such as shares, debentures, bonds, and mutual funds are bought and sold.
Function: It provides a safe and transparent platform for investors to trade existing securities. In India, stock exchanges like the BSE and NSE function under the strict rules and guidelines formulated by the Securities and Exchange Board of India (SEBI).
Q. 3. Study the following cases / situations and express your opinion (Any TWO):
(i) ALPHA Company Ltd. has made a demand on its shareholders to pay the balance unpaid amount of ₹20/- per share...
- Are the shareholders liable to pay ₹20/- for the shares held by them?
Yes, the shareholders are legally liable to pay the unpaid balance amount of ₹20/- per share when the company makes a valid call. - Name the letter sent by the company to its shareholders asking them to pay ₹20/-.
The company sends a Call Letter (or Letter of Call on Shares) to the shareholders. - What happens if a shareholder fails to pay the money within the specified time?
If a shareholder fails to pay the call money within the specified time along with any interest due, the company’s Board of Directors has the right to forfeit (cancel) their shares.
(ii) Mr. Rajesh holds 100 shares of STAR Company Ltd. in demat mode:
- He wants to transfer one share each to his wife, daughter and son. Can he do so?
Yes, he can do so. Shares of a public limited company are freely transferable, and he can transfer his holdings in any desired quantity to his family members. - Does he need to submit DRF or DIS if he wants to transfer his shares?
He needs to submit a DIS (Delivery Instruction Slip) to his Depository Participant (DP) to execute the transfer of shares. DRF (Dematerialization Request Form) is used for converting physical shares into electronic form, not for transferring them. - Can he nominate his wife in his demat account?
Yes, he can easily nominate his wife in his demat account. The depository system provides a nomination facility for individual investors.
(iii) DONALD Company Ltd. declares a dividend of ₹10/- per share for F.Y. 2024-25.
- Is company under default, if dividend was not paid within 30 days of its declaration?
Yes, the company is in default. As per the provisions of the Companies Act, 2013, a declared dividend must be paid to the registered shareholders within 30 days from the date of its declaration. - Is company right in transferring the unpaid dividend to its Debenture Reserve Account?
No, the company is incorrect. The total amount of dividend which remains unpaid or unclaimed within 30 days must be transferred to a special bank account called the Unpaid Dividend Account, not the Debenture Reserve Account. - Does the company have to transfer the amount of unpaid dividend to IEPF after 30 days?
No. After the expiry of the 30-day payment period, the unpaid amount is first transferred to the Unpaid Dividend Account within the next 7 days. The amount is transferred to the IEPF (Investor Education and Protection Fund) only if it remains unpaid or unclaimed for seven consecutive years in the Unpaid Dividend Account.
Q. 4. Distinguish between the following (Any THREE):
(i) Owned Capital and Borrowed Capital
| Points of Difference | Owned Capital | Borrowed Capital |
|---|---|---|
| 1. Meaning | It is that capital which is contributed by the shareholders or owners of the company. | It is that capital which is borrowed by the company from creditors, banks, or the public. |
| 2. Sources | It is collected by issuing equity shares, preference shares, and retaining earnings. | It is collected by issuing debentures, accepting public deposits, and taking bank loans. |
| 3. Status of Provider | The providers of owned capital (shareholders) are the owners of the company. | The providers of borrowed capital (e.g., debenture holders) are the creditors of the company. |
| 4. Return on Investment | The return paid on owned capital is called 'Dividend', which fluctuates with profits. | The return paid on borrowed capital is called 'Interest', which is paid at a fixed rate. |
| 5. Voting Rights | Equity shareholders (providers of owned capital) enjoy normal voting rights in company meetings. | Creditors do not have voting rights in the general meetings of the company. |
| 6. Security | It is generally unsecured capital. Assets are not charged against it. | It is generally secured capital. Fixed assets are usually kept as a security. |
(ii) Rights Shares and Bonus Shares
| Points of Difference | Rights Shares | Bonus Shares |
|---|---|---|
| 1. Meaning | Shares offered by a company to its existing equity shareholders in proportion to their existing holdings. | Shares issued free of cost by a company to its existing equity shareholders out of accumulated profits. |
| 2. Payment | Shareholders have to pay for the rights shares at a price usually lower than the market value. | Shareholders do not have to pay anything as these are issued free of cost. |
| 3. Purpose | The main purpose is to raise fresh working capital or funds for expansion. | The main purpose is the capitalization of accumulated profits or free reserves. |
| 4. Right to Renounce | Shareholders can renounce (transfer) their rights to purchase shares in favor of another person. | Shareholders cannot renounce bonus shares in favor of another person. |
| 5. Minimum Subscription | The company must collect the minimum subscription amount as stated in the prospectus. | There is no question of minimum subscription as no money is collected. |
(iii) Interim Dividend and Final Dividend
| Points of Difference | Interim Dividend | Final Dividend |
|---|---|---|
| 1. Meaning | Dividend declared and paid between two Annual General Meetings (AGMs) of the company. | Dividend declared and paid after the close of the financial year at the Annual General Meeting (AGM). |
| 2. Who Declares | It is declared directly by the Board of Directors in a Board Meeting. | It is declared by the shareholders in the AGM upon the recommendation of the Board of Directors. |
| 3. Time of Declaration | It is declared before the finalization of the annual accounts of the company. | It is declared only after the final accounts are prepared, audited, and approved. |
| 4. Source | It is generally paid out of the profits of the current financial year up to the date of declaration. | It is paid out of the current year's profits, free reserves, or capital profits. |
| 5. Rate of Dividend | The rate of interim dividend is generally lower than the final dividend. | The rate of final dividend is generally higher than the interim dividend. |
(iv) Jobber and Broker
| Points of Difference | Jobber | Broker |
|---|---|---|
| 1. Meaning | A jobber is a dealer in securities who acts as a market maker and trades on his own behalf. | A broker is a member of the stock exchange who acts as an agent and trades on behalf of clients. |
| 2. Nature of Dealing | A jobber is prohibited from dealing directly with the general public or investors. | A broker deals directly with the general public (investors) and executes their orders. |
| 3. Source of Income | The income of a jobber is the profit earned from the price difference between buying and selling securities. | The income of a broker is the commission or brokerage charged to the clients for services rendered. |
| 4. Role | A jobber acts as a principal who buys and sells securities in his own name. | A broker acts as an intermediary or link between the investor and the jobber. |
| 5. Risk Involved | A jobber assumes high financial risk as he buys securities and holds them in his own inventory. | A broker bears almost no financial risk as he only executes trades on behalf of clients. |
Q. 5. Answer in brief (Any TWO) :
(i) State any four provisions of Companies Act, 2013 for issue of debentures.
The Companies Act, 2013 contains several provisions regulating the issue of debentures. Any four provisions are as follows:
- No Voting Rights: A company cannot issue any debentures carrying voting rights. Debenture holders are creditors, not owners, and therefore cannot vote in the general meetings of the company.
- Types of Debentures: A company can issue secured or unsecured debentures, as well as fully or partly convertible debentures. However, the issue of convertible debentures requires a special resolution passed in a general meeting.
- Payment of Interest and Redemption: A company is legally bound to pay interest and redeem the debentures according to the terms and conditions of their issue. It is a compulsory financial obligation.
- Creation of Debenture Redemption Reserve (DRR): The company must create a Debenture Redemption Reserve out of its profits available for dividend payment. The money in this account can only be used for the redemption of debentures.
(ii) Explain the features of Interest.
Interest is the return paid by a company to its creditors for using their funds. Its main features are:
- Fixed Rate: Interest is paid at a predetermined and fixed rate agreed upon at the time of borrowing, regardless of the company's profit levels.
- Compulsory Payment: It is a compulsory obligation for the company. Interest must be paid to creditors (like debenture holders or banks) on time, even if the company suffers a loss.
- Charge against Profit: Interest is considered an expense and is a charge against the profits of the company. It is deducted from the company's income before calculating the tax liability.
- Prioritized Status: In the event of the winding up of a company, the payment of interest and the repayment of borrowed capital are given priority over the payment of dividends to shareholders.
(iii) State any four functions of financial market.
A financial market plays a crucial role in the economic development of a country. Any four of its functions are:
- Mobilization of Savings: The financial market facilitates the transfer of savings from individuals and households (investors) to the corporate sector (borrowers) for productive investments.
- Price Discovery: Financial markets help in establishing the price of financial assets. The price is determined by the forces of demand and supply of securities in the market.
- Providing Liquidity: It provides liquidity to financial instruments by offering a ready market. Investors can easily and quickly convert their securities into cash whenever required by selling them in the market.
- Reduces Cost of Transactions: Financial markets provide valuable information regarding securities and trading, which saves the time, effort, and money of both buyers and sellers, thereby reducing transaction costs.
Q. 6. Justify the following statements (Any TWO):
(i) There are various factors affecting the requirement of fixed capital.
Justification:
- Nature of Business: Manufacturing and public utility companies require a huge amount of fixed capital to acquire plant, machinery, and infrastructure, whereas trading companies need relatively less fixed capital.
- Size of Business: A firm operating on a large scale requires massive fixed capital for expansive operational facilities compared to a small-scale business.
- Scope of Business: If a business undertakes both production and distribution of its goods, its fixed capital requirement will naturally be higher.
- Lease or Rent arrangements: If an entrepreneur decides to acquire assets on a lease or rental basis, the need for outright purchase diminishes, thereby reducing the fixed capital requirement.
- Thus, the requirement of fixed capital is not uniform for all organizations and is influenced by these various dynamic factors.
(ii) Debenture trustees are appointed by a company issuing debentures.
Justification:
- Legal Requirement: As per the Companies Act, 2013, a company issuing a prospectus or inviting more than 500 persons to subscribe to its debentures must appoint one or more Debenture Trustees.
- Protection of Interest: Debenture trustees are appointed to protect the interests and rights of the debenture holders. They ensure the company does not take actions detrimental to the investors.
- Trust Deed: The company enters into a contract with them called a 'Debenture Trust Deed', which creates a legal charge on the company's assets in favor of the trustees.
- Grievance Redressal: In case the company defaults in paying interest or repaying the principal, the trustees have the legal right to sell the charged assets to recover the money. Therefore, their appointment is essential for safeguarding investors.
(iii) All companies cannot accept deposits from public.
Justification:
- Private Companies: According to the Companies Act, 2013, a private company is strictly prohibited from inviting or accepting deposits from the general public. It can only accept deposits from its members, directors, or their relatives.
- Eligible Public Companies: Only 'Eligible Public Companies' are permitted to accept deposits from the public. To be eligible, a public company must have a net worth of not less than ₹100 crores or a turnover of not less than ₹500 crores.
- Compliance and Rating: Even eligible companies must obtain the prior consent of their shareholders via a special resolution and secure a credit rating from a recognized agency.
- RBI Regulations: Banking companies, Non-Banking Financial Companies (NBFCs), and housing finance companies are governed by separate RBI regulations for accepting deposits. Thus, general public deposit acceptance is restricted and highly regulated.
(iv) Electronic holding of securities is safer than physical holding.
Justification:
- Elimination of Physical Risks: Electronic holding (dematerialization) completely eliminates the risks associated with physical certificates, such as loss in transit, theft, mutilation, or damage by fire and water.
- No Bad Deliveries: In the physical system, trading can be halted due to 'bad deliveries' caused by torn certificates or signature mismatches. Electronic holdings guarantee clean and precise transfers.
- Instant Transfer: Transferring securities electronically is instantaneous and seamless, saving the time that was previously wasted in sending physical documents to company registrars.
- Automatic Corporate Benefits: In demat holding, corporate benefits like dividends, bonus shares, and rights issues are automatically and directly credited to the investor's bank or demat account. Hence, it is significantly safer and far more efficient.
Q. 7. Attempt the following (Any TWO) :
(i) Write a letter to the member for the issue of Share certificate.
TATA MOTORS LTD.
Registered Office: Bombay House, 24, Homi Mody Street, Fort, Mumbai - 400 001.
CIN: L28920MH1945PLC004520
Phone: 022 - 2204 4356
Website: www.tatamotors.com
Email: investors@tatamotors.com
Ref. No.: TM/SC/102/2025-26
Date: 25th July, 2026
To,
Mr. Rohan Sharma,
15, Vasant Vihar,
Pune - 411 004.
Subject: Issue of Share Certificate.
Dear Sir,
This is to inform you that, as per your application No. 4567 and the subsequent Board Resolution passed in the Board Meeting held on 15th July 2026, you have been allotted 100 (One Hundred) Equity Shares of ₹10/- each fully paid up.
Your Share Certificate is enclosed herewith. The details of your shareholding are as follows:
| Folio No. | Share Certificate No. | Distinctive Numbers (From - To) | Total No. of Shares |
|---|---|---|---|
| R/304 | 9087 | 45001 - 45100 | 100 |
Please keep this Share Certificate safely, as it is the primary evidence of your title to the shares.
Thanking you,
Yours faithfully,
For Tata Motors Ltd.
(Sign)
Company Secretary
Encl: Share Certificate No. 9087
(ii) Draft a letter of allotment to debentureholder.
RELIANCE INDUSTRIES LTD.
Registered Office: Maker Chambers IV, Nariman Point, Mumbai - 400 021.
CIN: L25111MH1973PLC019278
Phone: 022 - 2278 5000
Website: www.ril.com
Email: investor.relations@ril.com
Ref. No.: RIL/DA/441/2025-26
Date: 10th August, 2026
To,
Mrs. Sunita Verma,
42, Park Street,
Kolkata - 700 016.
Subject: Allotment of Debentures.
Dear Madam,
In response to your application No. D-8890 dated 20th July 2026, I am directed by the Board of Directors to inform you that, at the Board Meeting held on 5th August 2026, you have been allotted 50 (Fifty) 9% Non-Convertible Debentures of ₹100/- each, for a tenure of 5 years.
The details of the allotment are given below:
| Folio No. | No. of Debentures Applied | No. of Debentures Allotted | Distinctive Numbers (From - To) | Amount Received (₹) |
|---|---|---|---|---|
| D/112 | 50 | 50 | 10201 - 10250 | 5,000/- |
The Debenture Certificate will be dispatched to your registered address within the stipulated time limit of six months from the date of allotment.
Thanking you,
Yours faithfully,
For Reliance Industries Ltd.
(Sign)
Company Secretary
(iii) Draft a letter to depositor informing him about payment of interest through Interest Warrant.
INFOSYS LIMITED
Registered Office: Electronics City, Hosur Road, Bengaluru - 560 100.
CIN: L85110KA1981PLC013115
Phone: 080 - 2852 0261
Website: www.infosys.com
Email: investorservices@infosys.com
Ref. No.: INF/FD/INT/99/2025-26
Date: 5th September, 2026
To,
Mr. Amit Patel,
10, Navrangpura,
Ahmedabad - 380 009.
Subject: Payment of Interest on Fixed Deposit.
Dear Sir,
I am instructed by the Board of Directors to convey to you that the interest on your Fixed Deposit with our company is due for payment. The interest has been calculated @ 8.5% p.a. for the year ending 31st August 2026.
The details of the interest payable to you are as follows:
| FDR No. | Deposit Amount (₹) | Gross Interest (₹) | TDS (₹) @ 10% | Net Interest Amount (₹) | Interest Warrant No. |
|---|---|---|---|---|---|
| FD-404 | 1,00,000/- | 8,500/- | 850/- | 7,650/- | IW-998877 |
Please find enclosed herewith the Interest Warrant No. IW-998877 dated 1st September 2026, drawn on State Bank of India, for ₹7,650/-.
Thanking you,
Yours faithfully,
For Infosys Limited
(Sign)
Company Secretary
Encl: Interest Warrant No. IW-998877
Q. 8. Answer the following question (Any ONE) :
(i) What is Debenture? Explain the different types of debentures.
Meaning: The word 'debenture' is derived from the Latin word 'debere' which means 'to owe'. A debenture is a document issued by a company under its common seal, acknowledging a debt to the holders. It is a long-term source of borrowed capital.
Definition: According to Section 2(30) of the Companies Act, 2013, "Debenture includes debenture stock, bonds, and any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not."
Types of Debentures:
- On the basis of Security:
- Secured Debentures: These debentures are secured by a charge on the assets of the company. If the company fails to pay the interest or principal, the debenture holders can recover their money by selling the mortgaged assets.
- Unsecured Debentures: These debentures are not backed by any security or charge on the company's assets. (Note: Under the Companies Act, 2013, companies are generally prohibited from issuing unsecured debentures).
- On the basis of Transferability:
- Registered Debentures: The details of these debenture holders (name, address, etc.) are recorded in the 'Register of Debentureholders'. They can only be transferred through a formal transfer deed.
- Bearer Debentures: The names of the holders are not recorded in the company's register. They are easily transferable by mere delivery, similar to currency notes. Interest is paid to the person who produces the attached coupons.
- On the basis of Repayment:
- Redeemable Debentures: These are issued for a specific period and are payable at the end of that period (maturity date) as mentioned on the debenture certificate.
- Irredeemable Debentures: These are not repayable during the lifetime of the company. They are repaid only at the time of the liquidation (winding up) of the company.
- On the basis of Convertibility:
- Convertible Debentures: These debentures give the holder the option to convert them into equity shares after a specific period. This issue requires a special resolution in the general meeting.
- Non-Convertible Debentures (NCDs): These debentures cannot be converted into equity shares upon maturity. They are redeemed in cash.
(ii) Explain the statutory provisions for allotment of shares.
Meaning: Allotment of shares means distributing shares among the applicants based on their applications submitted in response to the prospectus. A public company must follow the statutory provisions of the Companies Act, 2013, and SEBI guidelines.
Statutory Provisions for Allotment of Shares:
- Registration of Prospectus: Before issuing the prospectus to the general public, a copy of it must be filed with and registered by the Registrar of Companies (ROC).
- Application Money: The Companies Act states that the application money must be at least 5% of the nominal (face) value of the share. However, SEBI specifies that for public issues, the application money should not be less than 25% of the issue price.
- Minimum Subscription: It is the minimum amount that must be collected by the company from the public to proceed with the allotment. SEBI guidelines state that the minimum subscription must be 90% of the entire issue size. If 90% is not received within the stipulated time, the entire application money must be refunded within 15 days.
- Closing of Subscription List: According to SEBI, the subscription list must be kept open for a minimum of 3 working days and a maximum of 10 working days. Applicants can apply for shares only during this period.
- Basis of Allotment: The allotment must be strictly made based on the predetermined rules and categories. Once the allotment is finalized by the Allotment Committee, it requires the approval of the Board of Directors.
- Over Subscription: In case a company receives applications for more shares than it has offered, it is called over-subscription. SEBI does not allow the company to keep any excess money; it must be refunded, or in certain cases, adjusted towards allotment/call money if permitted.
- Permission to Deal on Stock Exchange: Every company making a public offer must apply to one or more recognized stock exchanges to list its shares. The prospectus must state the name of the stock exchange where the application has been made.
- Appointment of Intermediaries: To process the share allotment smoothly, the company must appoint various intermediaries like Merchant Bankers, Lead Managers, Syndicate Members, Bankers to the Issue, and a Registrar to the Issue.
