12th SP Question Paper 2022 Maharashtra Board Pdf

Maharashtra State Board Class 12th SP Question Paper 2022 with Solutions Answers Pdf Download.

Class 12 SP Question Paper 2022 Maharashtra State Board with Solutions

Time : 3 Hrs
Max. Marks: 80

Note:
(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.

Question 1.
(A) Select the correct answer from the options given below and rewrite the sentences: (5) [20]
(1) __________ is related to Money and Management. (c)
(a) Production
(b) Marketing
(c) Finance
Answer:
(c) Finance

(2) Secured Debentures must be redeemed within __________ from the date of its Issue. (b)
(a) 10 days
(b) 10 years
(c) 15 years
Answer:
(b) 10 years

(3) India has a __________ depository system. (c)
(a) sole
(b) multi
(c) single
Answer:
(c) single

(4) Dividend is to be paid to the Shareholders within __________ from the date of declaration. (a)
(a) 30 days
(b) 40 days
(c) 20 days
Answer:
(a) 30 days

(5) Accumulated dividend is paid to __________ preference shares. (b)
(a) redeemable
(b) cumulative
(c) convertible
Answer:
(b) cumulative

[B] Match the pairs: (5)

Group ‘A’	Group ‘B’
(a) Investment in debenture.	(1) Deals with acquisition and use of capital.
(b) Financial market	(2) Must inform stock exchange about dividend declaration.
(c) Price of shares mentioned in prospectus	(3) Trading of financial securities.
(d) Corporate finance	(4) Safe and secured investment.
(e) Listed company	(5) Must inform government about dividend declaration
	(6) Fixed price issue method.
	(7) Risky investment
	(8) Trading of commodities
	(9) Deals with acquisition and use of assets.
	(10) Book-Building Method.

Answer:

Group ‘A’	Group ‘B’
(a) Investment in debenture.	(4) Safe and secured investment.
(b) Financial market	(3) Trading of financial securities.
(c) Price of shares mentioned in prospectus	(6) Fixed price issue method.
(d) Corporate finance	(1) Deals with acquisition and use of capital.
(e) Listed company	(2) Must inform stock exchange about dividend declaration.

[C] State whether the following statements are True or False: (5)
(1) Dividend can be paid out of capital.
Answer:
True

(2) Deposit can be accepted for a maximum of 6 months.
Answer:
False

(3) Depository bank stores the shares on behalf of GDR holder.
Answer:
True

(4) Securities market is an unorganised market place in India.
Answer:
False

(5) Bonus shares are fully paid up shares.
Answer:
True

[D] Correct the underlined word and rewrite the following sentences: (5)
(1) Depositors are owners of the company.
Answer:
Depositors are creditors of the company.

(2) Retained earnings is an external source of finance.
Answer:
Retained earnings is an internal source of finance.

(3) To rate its debentures, a company appoints underwriters.
Answer:
To rate its debentures, a company appoints Credit Rating Agency.

(4) Companies sell fresh shares for the first time to the public in secondary market.
Answer:
Companies sell fresh shares for the first time to the public in primary market.

(5) Preference shareholders get dividend from residual profits.
Answer:
Equity shareholders get dividend from residual profits.

Question 2.
Explain the following terms/ concepts: (Any FOUR) [8]
(1) Production Cycle
(2) Overdraft
(3) Employee Stock Purchase Scheme (ESPS)
(4) Depository Participant (DP)
(5) Rate of Dividend
(6) Rights Issue
Answer:
(1) Production Cycle:
The process of converting raw material into finished goods is called production cycle. If the period of production cycle is longer, then firm needs more amount of working capital If manufacturing cycle is short, it requires less working capital.

(2) Overdraft:
A company having current account with bank is allowed overdraft fpcility. The borrower can withdrawfunds as and when needed. He is allowed to overdraw on his current account, up to the credit limit which is sanctioned by bank. Within this stipulated limit any number of drawings are permitted. Repayments can be made whenever required during the time period. The interest is determined on the basis of actual amount withdrawn.

(3) Employee Stock Purchase Scheme (ESPS):
Under this scheme the company offers Equity shares to its employees at a discounted price which they can . buy at a future date. The company deducts a certain amount from the salary of the employee towards the payment for the shares.

(4) Depository Participant (DP):
It is the agent of – Depository. DP is registered under the SEBI Act. It enjoys rights and obligations as specified under SEBI (Depository and Participants) Regulations of 1996. It is an intermediary appointed by Depository. DP acts as a link between Depository and the investor. It directly deals with customers. It sends statement of accounts periodically. It functions like a securities bank.

(5) Rate of Dividend:
It is that part of the profits of the company which is distributed amongst its shareholders. Equity shareholders are subject to higher risk. That is because of fluctuating rate of dividend but Preference shareholders are subject to less risk, because of fixed rate of dividend.

(6) Rights Issue:
When a company wants to raise further capital it can issue shares to its existing Equity shareholders in proportion to their existing shareholding. Such an issue of shares is called as ‘Rights Issue’ of shares.

Question 3.
Study the following case/situations and express your opinion. (Any TWO) [6]
(1) Sunflower limited company proposes to issue debentures to the public to raise funds. After discussions, the Board of directors have decided to issue secured, redeemable, non – convertible debentures with a tenure often years. Please advise the Board on following matters:
(a) Should the company appoint Debenture Trustee?
(b) Should the company create a charge on its assets?
(c) Can the tenure of debentures be less than ten years?
(2) ‘ABC’ Company Ltd. is an eligible public company as per the Companies Act, 2013 with reference to accepting public deposits.
(a) Can the company accept deposits in joint names?
(b) Can the company accept deposits from its members?
(c) Con the company accept secured deposits?
(3) Joy Ltd. Company is newly incorporated company. It wants to raise capital for the first time by issuing equity shares:
(a) Should it go to primary market or secondary market to issue its shares?
(b) Should it offer its shares through public offer or rights issue?
(c) What will be the issue of equity shares by Joy Ltd. Co. called as, IPO or FPO?
Answer:
(1) (a) Yes. The company should appoint a Debentures trustee. This is because, in the above case, Rose Limited Company proposes to issue debenture to the public to raise funds. Thus, the company issuing debenture must appoint one or more debentures trustees.
(b) Yes. The company should create a charge on tangible assets. The charge is created Jn the favour of the Debenture Trustee and they become the custodian of the assets on which charge has been created.
(c) A company can issue secured debentures with a date of redemption not exceeding ten (10) years from the date of issue.

(2) (a) Yes, the company can accept deposits in joint names of depositors. But that should not be more than 3 names.
(b) Yes, the company can accept fresh deposits only if the amount of such deposits together with the previous deposits does not exceed 10% of the aggregate of paid-up share capital and free reserves.
(c) Yes, the company can issue a secured deposit only if it is clear which should be clearly mentioned in the circular or advertisement inviting deposits.

(3) (a) Joy Ltd. Company wants to raise capital for the first time by issuing equity shares. Therefore, it shouLd go to primary market wherein new securities are sold by the companies for the very first time to the Investors, to raise funds.
(b) It should offer Its shares through public offer. This is because, Joy Ltd Is a newly incorporated company and want to raise capital. So, in that Case public offer is best suited.
(c) The Issue of equity shares by Joy Ltd. Co. Is called as IPO. Initial Public Offer or IPO, as the name suggests, is the fresh Issue of equity shares to the general public by an unlisted company for the very first time.

Question 4.
Distinguish between the following: (Any THREE)[12]
(1) Fixed capital and Working capital.
(2) Transfer of shares and Transmission of shares.
(3) Dematerialization and Rematerialization.
(4) Primary market and Secondary market.
Answer:
(1) Fixed Capital and Working Capital

Points	Fixed Capital	Working Capital
1. Meaning	Fixed capital refers to any kind of physical asset i.e. fixed assets.	Working capital refers to the sum of current assets.
2. Nature	It stays in the business almost permanently.	Working capital is circulating capital. It keeps changing.
3. Purpose	It is invested in fixed assets such as land, building, equipments, etc.	Working capital is invested in short term assets such as cash, account receivable, inventory, etc.
4. Sources	Fixed capital funding can come from selling shares, debentures, bonds, long term loans, etc.	Working capital can be funded with short term loans, deposits, trade credit, etc.
5. Objectives of Investors	Investors invest money in fixed capital hoping to make future profit.	Investors invest money in working capital for getting immediate returns.
6. Risk	Investment in fixed capital implies more risk.	Investment in working capital is less risky.

(2) Transfer of shares and Transmission of shares.

Points	Transfer of Shares	Transmission of Shares
1. Meaning	Transfer of shares means voluntarily or deliberately giviflg away one’s shares to another person by entering into a contract with the buyer.	It means transfer of ownership of a member’s shares to his legal representative due to operation of law. It takes place on death, insolvency or insanity of the members.
2. When done?	It’is done when the member wants to sell his shares or give his shares as gift.	It is done when the member dies or becomes insolvent or insane.
3. Nature of Action	It is a voluntary action taken by the member.	It is an involuntary action. It is due to operation of law.
4. Parties involved	In transfer of shares, there are two parties involved- the member who is called as transferor and the buyer who is called as transferee.	There is only one party e.g. the nominee of the member in case of death of the member or the legal representative.
5. Instrument of Transfer	Transfer requires Instrument of transfer. It is a contract between the transferor and transferee.	No Instrument of transfer is needed.
6. Initiated by	Transferor initiates the transfer process.	Legal representative or official receiver initiates the process of transmission.

4. (3) Dematerialization and Rematerialization

Points	DemateriaUzation	Rematerialization
1. Meaning	Process of converting physical certificates of securities into electronic form.	It is the process of conversion of electronic form of securities into physical form.
2. Conversion	Here, the paper form of securities is converted into digitally/electronically held securities.	Here, the electronic records are converted into physical/paper form securities.
3. Use of Form	It uses ‘DRF’: Viz. ‘Dematerialization Request Form’ from Investor to the DP	It uses ‘RRF’: viz Rematerialization Request Form from Investor to the DP.
4. Sequence	This is an initial process. It is a primary and principal function of the depository.	This is a reverse process. It is a secondary and supporting function of depository. Already demoted securities are remated.
5. Identification of Securities	Demoted securities have no distinctive numbers. They are fungible.	Remated securities will have certificate and distinctive numbers as issued by company.
6. Difficulty of Process	Demat is an easy process. Also it’s not a time consuming process.	Remat is not only a time consuming but also a complex process.

4. (4) Primary market and Secondary market.

Points	Primary Market	Secondary Market
1. Meaning	The issue of new shares by the company is done in the primary market.	The securities issued earlier are traded in the secondary market.
2. Mode of Investment	Direct investment in the securities. Securities are acquired directly from the company.	Indirect investment as the securities are acquired from other stakeholders.
3. Parties in action	The parties dealing in this market are company and investors.	The parties dealing in this market are only investors.
4. Intermediary	The underwriters are the intermediaries.	The security brokers are the intermediaries.
5. Value of Security	The price of security in the primary market is fixed as it is decided by the company.	The price of security is fluctuating, depending on the demand and supply conditions in the market.

Question 5.
Answer in brief: (Any TWO) [8]
(1) State the features of bond.
(2) Explain any four advantages of depository system to investors.
(3) Explain the features of interest
Answer:
(1) Bond is a debt security. It is a formal contract to repay borrowed money with interest. Bond .is a loan. The holder of bond is a lender to the institution. He is a creditor of the company. He gets fixed rate of interest.

Features:
1. Nature of Finance: It is a debt Finance. It provides long term finance. The bonds can be issued for longer period i.e., 5 years, 10 years, 25 years, 50 years.

2. Status of bondholder: The bondholders are creditors. Since they are creditors and non-owners they are not entitled to participate in general meeting. They have no voting right and hence no participation in the management.

3. Return on bonds: The bondholder gets a fixed rate of interest. It is payable at regular interval or on the maturity of bond.

4. Repayment: Bonds have specific maturity date on when the principal amount is repaid.

(2) Advantage of depository system for an investor are as follows:
1. Elimination of Risk: All risks associated with physical certificates like delays, loss, theft, mutilation, bad deliveries, etc. are totally eliminated.

2. Safety: It is the most safe and secure way of holding securities. The entire system functions under the Depository Act and is monitored by SEBI. E.g. The Investor can keep his account in a ‘Freeze / Lock’ mode to avoid / prevent unexpected debit or credit or both by giving instructions to the DP.

3. Easy Transfer of shares:
(a) Efforts in filling transfer forms and lodging the documents is eliminated.
(b) Also the stamp duty levied on transfer of physical shares is not applicable.
(c) Processing time for transfer of securities is reduced and neither the securities nor the cash is tied/held up for unnecessarily long time.

4. Updates and Intimation: The investor is provided with the status of the holdings and transactions by DP and occasionally by the Depository too.

(3) In financial terms, it is a payment made for using money of another, i.e. Borrower takes money from the lender. So interest is the cost of renting money, for the borrower and it is the income from lending money for the lender.
Features:

1. Interest is the price paid for the productive services rendered by capital.
2. It is directly related to risk. Higher the risk, higher is the interest.
3. Rate of Interest is expressed as annual percentage of Principal amount.
4. Rate of interest is determined by various factors like money supply, fiscal policy, volume of borrowings, rate of inflation etc.
5. Interest is a charge against the profit of the company. Even if company makes no profit, interest should be paid.
6. It is payable at a fixed and generally predetermined rate. Company has to pay interest if it has borrowed money from creditors like Debenture holders, Depositors, Bond holders, etc.

Question 6.
Justify the following statements: (Any TWO) [8]
(1) The Board of Directors can refuse the transfer of shares.
(2) The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India.
(3) Unpaid dividends cannot be used by the company.
(4) A company can issue a duplicate share certificate.
Answer:
(1) Board of Directors can refuse transfer of shares as they have authority to refuse registration of transfer of shares.
A notice of refusal of transfer is to be sent by the board to a member within 30 days from the date on which the instrument of transfer is received by the company.

The board may refuse to register the transfer under the following conditions.

1. When the provisions for transfer of shares as given in the Articles of Association is not fulfilled by the member.
2. When the instrument of transfer is not as per the rules prescribed under the Companies Act.
3. When the instrument is not accompanied by the share certificate.
4. When the company has a lien on the sharesxo be transferred.

(2)

1. The Securities and Exchange Board of India was set up on 12th April 1988. The main purpose of setting up SEBI was to develop and regulate stock exchanges in India.
2. The objectives of SEBI are to protect the interest of the investors and regulate the securities market in India.
3. To bring professionalism in the working of intermediaries in the capital markets, i.e., brokers, mutual funds, stock exchanges, Demat- depositories, etc. is also a feature of SEBI. The role of SEBI also includes creating a good financial climate, so that companies can raise long-term funds through the issue of securities – shares and debentures.
4. The main function of SEBI is to register and regulate the working of stockbrokers, sub¬brokers, share transfer agents, bankers to an issue, trustee of trust deeds, registrars to an issue, merchant bankers, underwriters, and such other intermediaries who may be associated with securities market.
5. Thus, it is rightly said that SEBI is the regulator of the securities market in India.

(3)

1. The dividend declared by the company but has not been paid to or claimed by a shareholder within 30 days of its declaration is termed as an unpaid dividend.
2. The total amount of dividend which remains unpaid should be transferred to ‘Unpaid Dividend Account’,
3. Any amount in the Unpaid Dividend Account of a Company that remains unpaid/undaimed for a period of 7 years will be transferred to ‘Investors Education and Protection Fund’.
4. The company cannot use unpaid dividends. The only claimant of money can claim for it by following certain procedures.
   Thus, it is rightly said that unpaid dividends cannot be used by the company.

(4) A Company can issue a duplicate share certificate in the following circumstances:

1. If original share certificate has been defaced, mutilated or torned and is surrendered to the company.
2. If it has been proved by the holder that the original share certificate is lost or destroyed.
3. In case of loss of share certificate, the company puts up a notice in the newspaper to announce the loss of the share certificate.
4. If the company does not get any response from the public within the specified time, then the company issues a duplicate share certificate.
5. Duplicate share certificate should be issued within three months from the date of application.
6. Duplicate share certificate should be issued within 3 months from the date of application with bold ‘duplicate share certificate’ marked on it.

Question 7.
Attempt the following: (Any TWO) [10]
(1) Write a letter to the member for the payment of interim dividend electronically.
(2) Write a letter to the Debentureholder regarding payment of interest through interest warrant.
(3) Draft a letter of thanks to the depositor of a company.
Answer:
(1) GURUSAI AUTO LIMITED

(2) ROLTA INDIA LIMITED

Sub.: Payment of interest on debentures,
Dear Madam,

I am directed to inform you that the Board of Dlrectors has passed a resolution in the Board meeting held on 05^th June, 2019 regarding payment of interest on your 100,10% Non-convertible debentures of ₹ 100/ – each.

The details of payment of interest payable to you are as follows:

(3) GURU INDUSTRIES LTD.

Sub.: Thanking Depositor for Fixed Deposit

Dear Sir,
We are in receipt of your application dated 5^th April 2019 for investment of ₹ 1,00,000 in the fixed deposit as per terms and conditions stated in advertisement for a period of 2 years. We are thankful to you for the initiative and the trust you have shown in depositing a substantial amount in our company.

The details of deposits accepted are given in the following schedule:

The Board of Directors of our company expresses its gratitude for depositing money in our company.

We assure you of our best services and thank you for the confidence shown in our company.
Thanking you,
Yours faithfully,
For Guru Industries Ltd.
Sign.
Mr. Nitin Modi
General Manager and
Company Secretary

Encl: Fixed Deposit Receipt No. 678.

Question 8.
Answer the following questions: (Any ONE) [8]
(1) What is Preference Shares? Explain its types.
(2) Explain the provisions of Companies Act, 2013 for issue of debentures.
Answer:
(1) Preference shares have certain preferential rights distinct from those attached to equity shares.

The shares which carry following preferential rights are termed as preference shares:
(a) A preferential right as to payment of dividend during the life time of company.
(b) A preferential right as to the return of capital in the event of winding up of company.

The holder of preference share has a prior right to receive fixed rate of dividend before any dividend is paid to equity shares. The rate of dividend is prescribed at the time of issue. The preference shareholders are co-owners of the company but not controllers. These shares are purchased by cautious investors who are interested in safety of investment and who want steady returns on investments,

Types of Preference Shares:
1. Cumulative Preference Shares:
Cumulative Preference Shares are those shares on which dividend goes on accumulating until it is fully paid. This means, ifthe dividend is not paid in one or more years due to inadequate profits, then this unpaid dividend gets accumulated. This accumulated dividend is paid when company performs well. The arrears of dividend are paid before making payment to equity shareholders. The preference shares are always cumulative unless otherwise stated in the Articles of Association. It means that if dividend is not paid any year, the unpaid amount is carried forward to the next year and so on, until all arrears have been paid.

2. Non-cumulative Preference Shares:
Dividend on these shares does not get accumulated. This means, the dividend on shares can be paid only out of profits of that year. The right to claim dividend will lapse, if company does not make profit in that particular year. If dividend is not paid in any year, it is lost forever.

3. Participating Preference Shares:
The holders of these shares are entitled to participate in surplus profit besides preferential dividend. The surplus profit which remains after the dividend has been paid to equity shareholders, up to certain limit, is distributed to preference shareholders.

4. Non-participating Preference Shares:
The preference shares are deemed to be non-participating, if there is no clear provision in the Articles of Association. These shareholders are entitled to fixed rate of divided, prescribed at the time of issue.

5. Convertible Preference Shares:
The holders of these shares have a right to convert their preference shares into equity shares* The conversion takes place within a certain fixed period.

6. Non-convertible Preference Shares:
These shares cannot be converted into equity shares.

7. Redeemable Preference Shares:
Shares which can be redeemed after certain fixed period of time are called redeemable preference shares. A company limited by shares, if authorised by Articles of Association, issues redeemable preference shares. Such shares must be fully paid. These shares are redeemed out of divisible profit only or out of fresh issue of shares made for this purpose.

8. Irredeemable Preference Shares:
Shares which are not redeemable i.e. payable only on winding up of the company are called irredeemable preference shares. As per Section 55(1) of the Companies Act 2013, a company cannot issue irredeemable preference shares.

(2) Following are some of the provisions of the Companies Act 2013 which a company has to comply while issuing debentures:
(1) No voting rights:
A company cannot issue debentures with voting rights. Debenture holders are creditors of the company and so they do not have any voting rights except in matters affecting them.

(2) Types of Debentures:
A company can issue secured or unsecured debentures and fully or partly convertible debentures or non-convertible debentures. To issue convertible debentures, a Special Resolution has to be passed in the General Meeting. All debentures are redeemable in nature.

(3) Payment of interest and redemption:
A company shall redeem the debentures and pay interest as per the terms and conditions of their issue.

(4) Debenture Certificate:
Company has to issue Debenture certificate to the debenture holders within 6 months of allotment of Debentures.

(5) Create Debenture Redemption Reserve:
Company has to create a Debenture Redemption Reserve account out of profits of the company available for payment of dividend. This money can be used only for redemption of debentures. As per Companies (Share Capital and Debentures) Amendment Rules 2019, MCA has removed Debenture Redemption Reserve requirement for Listed companies, NBFCS and Housing Finance Companies.

(6) Appoint of Debenture Trustees:
If the company issues prospectus or invites more than 500 people, (either to Public or its Member) company has to appoint one or more Debenture Trustees. Debenture trustees protect the interest of the debenture holders. Company has to appoint trustees by entering into a contract with them known as Debenture Trust Deed.

(7) Impose restrictions:
When the Debenture Trustee is of the opinion that the assets of the company are insufficient or likely to become insufficient to redeem the principal amount of debentures, it may approach the NCLT. NCLT can order a company to restrict incurring further liabilities so as to protect the interest of the debenture holders.

(8) Punishment for contravention of provisions of the Companies Act:
If the company fails to comply with any provisions of the Act, then the company and its officers shall be liable to pay fine or imprisonment or both as prescribed in the Act.

Maharashtra Board Class 12 SP Previous Year Question Papers