Class 12 SP Letter for Payment of Interest on Debentures: Format & Solved Warrant Specimen
Master the official format and scoring guidelines for the Class 12 Secretarial Practice (SP) letter on the Payment of Interest on Debentures (via Interest Warrant) tailored for the Maharashtra State Board (HSC) Commerce examination. Under Chapter 7 (Correspondence with Debenture Holders), drafting a formal letter dispatching an interest warrant to a debenture holder is a recurring high-frequency question in Question 7 (Letter Writing), carrying a direct weightage of 5 marks. Below, you will find the official board exam scenario, step-wise marking breakdown, legal implications under the Companies Act, 2013, and a textbook-accurate solved model answer.
Statutory Rule (Section 71, Companies Act 2013): Interest on debentures is a charge against profits and constitutes a contractual debt obligation. It must be paid periodically at the predetermined coupon rate regardless of whether the company earns profits or suffers operational losses. Unlike dividends, interest payments are never contingent upon shareholder approval at the AGM.
HSC Board Examination Question Scenario
In the HSC examination, this question is typically framed as follows:
"Draft a letter to a debenture holder informing him / her regarding the payment of interest on debentures through an Interest Warrant, citing the resolution passed at the Board Meeting."
Official HSC Step-Wise Marking Breakdown (5 Marks)
Examiners evaluate secretarial correspondence based on structural layout and accurate statutory schedules:
| Component | Required Exam Content | Marks |
|---|---|---|
| Letterhead & Layout | Company Name, Registered Address, 21-digit CIN, Phone, Email, Website, Ref. No., and Date. | 1 Mark |
| Inside Address & Subject | Debenture Holder Name, Address, concise Subject Line, and formal Salutation. | 1 Mark |
| Body of the Letter | Reference to Board meeting resolution, coupon rate, half-yearly period, interest calculation table, and banking details. | 2 Marks |
| Sign-off & Enclosure | Complimentary close ("Yours faithfully"), Secretary signature block, and mandatory Enclosure ("Encl: Interest Warrant"). | 1 Mark |
| Total Marks | Question 7 (Attempt Any 2 Letters out of 3 = 10 Marks Total) | 5 Marks |
Solved Model Answer: Payment of Interest on Debentures (Warrant Mode)
APEX STEEL INFRA LIMITED
Registered Office: 21, Nariman Point, Mumbai - 400021.
CIN: L27100MH2008PLC998877
Phone: 022 - 6655 4433
Email: debentures@apexsteel.com
Website: www.apexsteel.com
Ref. No.: ASIL/INT/W-05/2026-27
Date: 5th January 2027
To,
Mr. Anil M. Deshmukh,
Plot No. 18, Sadashiv Peth,
Pune - 411030.
Subject: Payment of Interest on 10% Secured Non-Convertible Debentures.
Dear Sir,
I am directed by the Board of Directors to inform you that at the Board Meeting held on 2nd January 2027, the Board approved the payment of interest on the company's 10% Secured Non-Convertible Debentures for the half-year ending 31st December 2026.
We are pleased to enclose herewith Interest Warrant No. IW-885421 drawn on Bank of India, Nariman Point Branch, Mumbai, for the net interest amount due to you. The details of the interest calculation are summarized in the schedule below:
| Folio No. | No. of Debentures Held | Gross Interest Amount (₹) | TDS Deducted (₹) | Net Interest Payable (₹) | Interest Warrant No. |
|---|---|---|---|---|---|
| D-1025 | 100 | 500.00 | Nil | 500.00 | IW-885421 |
(Calculation: 100 Debentures of ₹ 100/- each = ₹ 10,000/- @ 10% p.a. for 6 months = ₹ 500/-)
Please detach the enclosed Interest Warrant and present it for encashment at any branch of Bank of India or deposit it into your bank account. Kindly acknowledge receipt of the warrant.
Thanking you.
Yours faithfully,
For Apex Steel Infra Limited
(Signature)
Mr. Rajesh Mehta
Company Secretary
Encl: Interest Warrant No. IW-885421
Examiner's Secret: 3 Critical Points for Scoring Full Marks
- Mandatory Enclosure Line: Since this is a physical payment mode, failing to write
Encl: Interest Warrant No. ...at the bottom-left will cause an automatic mark loss.- Accurate Half-Yearly Arithmetic: Show realistic calculations. If the debentures are ₹ 100 each with 10% interest for 6 months, 100 debentures ($₹ 10,000$) yield exactly $₹ 500$ half-yearly interest.
- TDS Disclosure: Always show a distinct column for Tax Deducted at Source (TDS). If the gross interest amount is below the statutory limit for deduction, write "Nil" in the TDS column.
Frequently Asked Questions (HSC Board Exam FAQs)
1. Is debenture interest paid out of company profits only?
No. Debenture interest is a legal charge against profits. It must be paid periodically as a contractual liability even if the company suffers operating losses.
2. What is an Interest Warrant?
An Interest Warrant is a physical payment order or cheque issued by the company to a commercial bank, directing the bank to pay the specified interest amount to the named debenture holder.
3. What happens if a debenture holder does not encash the Interest Warrant?
If an interest warrant expires (usually valid for 3 months), the holder must surrender the stale warrant to the company for revalidation or re-issuance.