Maharashtra State Board Class 12th SP Sample Paper Set 1 with Solutions Answers Pdf Download.
Maharashtra Board Class 12 SP Model Paper Set 1 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.
From the given sub questions attempt any four:
(A) Select the appropriate option from options given below and rewrite them:
(i) __________ capital is used to carry out day to day business activities. (c)
(a) Fixed
(b) Floating
(c) Working
Answer:
(c) Woking
(ii) __________ is not a component of capital structure. (c)
(a) Term Loan
(b) Equity & Preference Share Capital
(c) Loans and Advances Given
Answer:
(c) Loans and Advances Given
(iii) If share of ₹ 1,000/- is issued at ₹ 980/-, it is said to be issued at __________ . (c)
(a) premium
(b) par
(c) discount
Answer:
(c) discount
(iv) Unpaid / unclaimed dividend shall be transferred to ‘Investor Education and Protection fund on expiry of __________ years. (b)
(a) three
(b) seven
(c) six
Answer:
(b) seven
(v) A market where existing securities are resold or traded is called __________ market. (a)
(a) primary
(b) derivative
(c) secondary
Answer:
(a) Primary
(B) Give one word or phrase for the following sentences:
(i) Process of offering shares of company to the public for the first time.
Answer:
Initial Public offer (IPO)
(ii) Company enters into a contract with one or more debenture trustees.
Answer:
Debenture Trust Deed
(iii) Type of company who can accept deposits only from its members or directors.
Answer:
Private Limited Co.
(iv) Borrowed capital of a company.
Answer:
Debenture Capital
(v) Latin word for “Dividend”.
Answer:
Dividendum
(C) True or false:
(i) Capital Market does not link investors with the borrower of funds.
Answer:
False
(ii) National Stock Exchange started its trading activities in 1993 under Securities Contracts (Regulation) act, 1956.
Answer:
True
(iii) NSDL & CDSL are the only depositories that exist in India.
Answer:
True
(iv) Every Company must issue or dispatch a share certificate to allottee within 1 month after allotment of shares.
Answer:
False
(v) Authorised capitalisthe maximum capital authorised by the Memorandum of Association.
Answer:
True
(D) Match the pairs:
| Group “A” | Group “B” |
| 1. Private placement | a. Recurring deposit |
| 2. N.S.D.L | b. Dividend |
| 3. Overdraft facility | c. Evidence of deposit |
| 4. Deposit receipt | d. Interest |
| 5. Returns on share | e. Depository but of India |
| f. A public company collecting capital privately | |
| g. Depository in India | |
| h. Evidence of ownership | |
| i. A private company collecting capital privately | |
| j. Current account |
Answer:
| Group “A” | Group “B” |
| 1. Private placement | i. A private company collecting capital privately |
| 2. N.S.D.L | g. Depository in India |
| 3. Overdraft facility | j. Current account |
| 4. Deposit receipt | c. Evidence of deposit |
| 5. Returns on share | d. Interest |
Question 2.
Explain the following terms / concepts in detail: (Any 4 out of 6):
(i) Fixed Capital
(ii) Listed Company
(iii) Dematerialization
(iv) Blank Transfer
(v) Forfeiture of Shares
(vi) Index of Stock Market.
Answer:
(1) Fixed Capital:
Fixed capital is the type of capital which is used for buying fixed assets which are used for a longer period of time in the business. These assets are not meant for resale. In simple words, fixed capital refers to capital invested for acquiring fixed assets. It stays in the business for long period, almost permanently. Examples of fixed capital are – capital used for purchasing land and building, furniture, plant and machinery etc. Such capital is required usually at the time of establishment of a new company. However, existing companies may also need such capital for their expansion and development, replacement of equipments, etc.
(ii) Listed Company is a company whose shares are listed on Recognised Stock Exchanges.
(iii) Dematerialization (Demat) is a process whereby a client can get physical certificates converted into electronic mode. The client has to surrender the certificates along with the Demat Request Form (DRF). The DP forwards these to the Depository who in turn forwards it to the Issuer. After confirmation from the Issuer, the Depository will credit the securities in the Demat A/c with DP.
(iv) When a member signs the Instrument of transfer without filling in the name of the transferee and hands it over to the transferee along with the share certificate, it is called ‘Blank Transfer’
(v) Taking away of shares by a company due to the non-payment of calls.
(vi) Index is a measurement of changes in the security prices. It is the benchmark of the stock market.
Question 3.
Study the following case / situation and express your opinion. (Any 2):
(i) Ram a stock broker, traded on stock exchange. He sells a stock of Reliant Industries a listed public company on 1st March, 20xx whereas the transaction gets settled on 5th March.
(No Holiday being declared to stock market in the given dates)
(ii) Jack & Jones a newly incorporated organisation wants to raise capital for the first time by issuing equity shares.
(a) Should it go for Primary Market or Secondary Market?
(b) What will be the issue of equity shares by Jack & Jones called?
(iii) Admire Ltd., a listed public company of which board of director recommended ₹ 10/- per share as a dividend to equity shareholders:
(a) Is it mandatory for Admire Ltd. to take approval from Shareholders?
(b) Admire Ltd., paid dividend of 99%to shareholders in cash and rest 1% in kind. Is it permissible according to the law?
Answer:
(i) Ram sells shares of Reliant Industries on 1st March, 20xx however, the transaction is settled on 5th March. As per the rules, the transaction should be netted of in T + 2 days. The transaction should be settled on 3rd March, 20xx. Thus, the settlement is not according to the law.
(ii) (a) Jack and Jones as newly incorporated organisation, should go for the primary market where company organise the sources of finance for capital appreciation.
(b) The shares of Jack & Jones will be issued for the first time in stock market and will be considered as Initial Public Offer.
(iii) (a) Admire Ltd. Board of Director proposed Dividend Payable: which should be mandatorily approved by shareholders in Annual General Meeting. Only after the due approval it is considered to be approved and declared by the organisation
(b) As per the provisions of the Companies Act, dividend should be paid in cash and not in kind. In case of Admire Ltd; 1% of shareholders are receiving dividend in kind which is a contravention of law.
Question 4.
Distinguish between (Any 3):
(i) Jobber & Broker
(ii) Owned Capital & Borrowed Capital
(iii) Interim Dividend & Final Dividend
(iv) Fixed Capital Sr Working Capital
Answer:
(i) Jobber & Broker
| Points | Jobber | Broker |
| Meaning | Jobber is the one who buys and sells securities in his own name. | Broker is an agent who deals in buying and selling of securities on behalf of his client. |
| Nature of Trading | A jobber carries out trading activities only with the broker. | A broker carries out trading activities with the jobber on behalf of his investors. |
| Restrictions on Dealings | A jobber is prohibited to directly buy or sell securities in the stock exchange. Also, he cannot directly deal with the investors. | A broker acts as a link between the jobber and the investors. He trades i.e., buys and sells securities on behalf of its investors. |
| Type of Agent | Ajobber is a special mercantile agent. | A broker is a general mercantile agent. |
| Form of Consideration | A jobber gets consideration in the form of profit. | A broker gets consideration in the form of commission or brokerage. |
(ii) Owned Capital & Borrowed Capital
| Points | Owned Capital | Borrowed Capital |
| Meaning | It is that capital which is contributed by the shareholders. | It is that capital which is borrowed from the creditors. It is also known as debt capital. |
| Sources | This capital is collected by the issue of equity shares and preference shares. | It is collected by the way of issue of debentures, fixed deposits, loan from bank/ financial institutions, etc. |
| Return on Investment | The shareholders get dividend as income on their investment. Rate of dividend is fluctuating in case of equity shares but fixed in case of preference shares. | The debt capital holders get interest as income on their investment. Interest is paid at fixed rate. |
| Status | The shareholders are owners of the company. | The debt holders are creditors of the company. |
| Voting right | The equity shareholders enjoy normal voting right at the general meeting. | The creditors do not enjoy voting rights at the general meeting. |
| Repayment of Capital | The shareholders do not enjoy priority over creditors. They are eligible for repayment of capital only after making payment to creditors at the time of winding up of the company. | The creditors get priority over the shareholders in case of return of principal amount at the time of winding-up of the company. |
| Charge on assets | The shareholders do not have any charge on the assets of the company. | The secured debenture holders have a charge on assets of the company. |
(iii) Interim Dividend & Final Dividend
| Points | Interim Dividend | Final Dividend |
| Meaning | It is declared and paid between two AGMs of an accounting year. | It is declared and paid after the closing of the financial year. |
| Who Declares | It is decided and declared by the Board of Directors in the Board Meeting. | It is decided and recommended by the Board of Directors. It is declared by the shareholders in the AGM. |
| Authorization | It can be declared only if Articles of Association permits its declaration. | Its declaration does not need authorization by Articles of Association. |
| When Declared | It is declared between the two Annual General Meetings of the company. | It is declared at the Annual General Meeting of the company |
| Rate of Dividend | It is declared out of profits of the current accounting year. | It is declared from different sources like; current year’s profits, free reserves, capital profits, money provided by Govt, for dividend, etc. |
| Accounting Aspect | It is declared before preparation of the final accounts of the company. | It is declared only after the accounts of the year are prepared and finalized. |
(iv) Fixed Capital Sr 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. |
Question 5.
Answer the following questions in brief (Any 2):
(i) What is depository system? Explain advantages of Depository System to the companies.
(ii) What is Employee Stock Purchase scheme? Also, explain provisions that the company must fulfil
(iii) What is Share Certificate? What are the contents of Share Certificate?
Answer:
(i) Meaning : Under Depository System, securities are held in electronic form. The transfer and settlement of securities are done electronically. The Depository System maintains accounts of the shareholder, enables transfer, collects dividends, bonus shares, etc., on behalf of the shareholder. This system is also called as scripless trading system.
Advantages:
(a) Up-to-date Information: The up-to-date information about investors is provided by the depository.
(b) Reduction in Costs and Efforts: Costs, efforts and time involved in printing and distribution of certificates in cases of new issues, bonus, transfers, etc., is saved.
(c) Better Investor-Company Relationships: The complaints arising out of loss of certificates, signature differences, long lapses of time in executing requests, etc,, is substantially reduced. It leads to better communication with investors and increased goodwill for the company.
(d) International Investment: Under Depository System, better and quicker services can be provided and this attracts investments from abroad.
(ii) Under this scheme, permanent employees, Directors or officers of the company or its Holding Company or Subsidiary company are offered the benefit or right to purchase the Equity Shares of the company at a future date at a pre-determined price. ESOS encourages employees as they feel proud to be owners of the company for which they are working and company also benefits as it can retain good employees.
Provisions: Following are the provisions related to ESOS:
(a) A company may offer the shares directly to the employees or through an Employee Welfare Trust.
(b) The shares are offered at a price lesser than their market price.
(c) There is a minimum vesting period of one year.
(d) Usually company will specify the lock-in period i. e. period during which employee cannot sell his shares. Lock-in period is minimum 1 year between grant of option and vesting.
(e) Shares issued under this scheme does not enjoy any dividend or voting rights till the employees buy the shares.
(f) Company has to getthe approval of shareholders through special resolution to issue ESOS.
(g) Employee cannot transfer his option to any other person nor can he pledge or mortgage the shares issued under ESOS.
(h) Company has to set up a compensation committee to administer ESOS. Company has to fulfil the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014.
(iii) Share Certificate is a registered document issued by a company which is an evidence of ownership of specified number of shares of the company. Share certificate is a prima facie evidence of title to shares. Contents of a share certificate are:
(a) Name of the Company, CIN, Registered office address.
(b) Folio Number
(c) Share Certificate Number
(d) Name of the Member
(e) Nature of share, number of shares and distinctive number of the shares.
(f) Amount paid on shares
(g) Common Seal if any, and signature of two Directors and Company Secretary.
Question 6.
Justify the following statements (Any 2):
(i) Finance Manager plays a vital role in Corporate Finance.
(ii) Preference Shareholders get priority in dividend over equity shareholders.
(iii) Share certificate is a document to be send via registered post.
(iv) Dividend is paid out of the profit of company.
Answer:
(i) Corporatefinance deals primarily with the acquisition and use of capital by business corporation. Apart from Financial Organisation & banks ; Finance Manager plays a very vital role in corporate finance such as:
(a) To ensure whether the firm has adequate finance.
(b) They are using right source of funds that Fiave minimum cost.
(c) Firm utilizes raised funds effectively.
(d) They are generating maximum returns for its owners.
(ii) 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 the company.
(b) A preferential right as to the return of capital in the event of winding-up of company.
Preference shares have the first charge on the distributable amount of annual net profit. The dividend is payable to the preference shareholders before it is paid to the equity shareholders.
(iii) A Share Certificate is a registered document of title to the shares issued by the company under the common seal duly stamped and signed by at least two directors and countersigned by the Secretary of the company. Every company must issue or dispatch a Share Certificate to the allottee within two months after the allotment of Shares. As per the request of allotee, company sends a letter for issuance of Share Certificate. The same needs to be send to the registered postal address.
(iv) Dividend is the part of the profits of the company which is distributed amongst the shareholders of company. Company may declare and pay the dividends (A) out of Current Profits i.e., profits arrived after due provision of depreciation and transfer to reserves. (B) Out of profits of the company of any previous financial year after providing depreciation (C) Money provided by central government or state government to pay dividend.
Question 7.
Answer the following questions in detail (Any 2):
(i) Accent Ltd. issues bonus shares in the ratio of 1:2 to the equity shareholders. Write a letter to inform the shareholder.
(ii) Write a letter to Amruta Joshi for the Payment of Interest on Debentures by Aventure India Limited, Pune.
(iii) Write a letter to thank the depositor for Fixed Deposit
Answer:
(i) Accent Limited
(ii) Aventure India Limited
(iii) Thanking fixed deposit holder
Question 8.
Answer the following questions in detail (Any 1):
(i) What are the factors affecting capital requirement?
(ii) What are debentures ? Explain its features.
Answer:
(i) 1. An entrepreneur obtains funds for the purchase of fixed assets from capital market. Funding can come from the issue of shares, debentures, bonds or obtaining even long-term loans.
Factors affecting fixed capital requirement:
(a) Nature of Business: Manufacturing industries and public utilities have to invest huge amount of funds to acquire fixed assets. While trading, business may not need huge investments in fixed assets.
(b) Size of Business: Where a business firm is set up to carry on large-scale dperations, its fixed capital requirements are likely to be high. It is because most of their production processes are based on automatic machines and equipments.
(c) Scope of Business: There are business firms which are formed to carry on production or distribution on a large-scale. Such businesses would require more amount of fixed capital.
(d) Extent of Lease or Rent: If entrepreneur decides to acquire assets on lease or on rental basis, less amount of funds for fixed assets will be needed for the business.
(e) Arrangement of Sub-contract: If the business wants to sub-contract some processes of production to others, limited assets are required to carry out the production. It would minimise fixed capital requirement of business.
(f) Acquisition of Old Assets: If old equipments and plants are available at low prices, then it would reduce the need for investment in fixed assets.
(g) Acquisition of Assets on Concessional Rate: With the view to foster industrial growth at regional level the government may provide land and building, materials at concessional rates. Plants and equipments may also be made available on instalment basis. Such facilities will reduce the requirement of fixed assets.
(h) International Conditions: This factor is very significant particularly in large organisations carrying business on international level. For example, companies expecting war, may decide to invest large funds to expand fixed assets before there is a shortage of materials.
(i) Trend in Economy: If the future of the company is anticipated to be bright, it gives green signal to business entrepreneur to carry out all sorts of expansion of business firm. In that case, large amount of funds are invested in fixed assets so as to reap the benefits in future.
(j) Population Trend: When the population is increasing at a high rate, certain manufacturers find this as an opportunity to expand business. For example, automobile industry, electronic goods manufacturing industry, ready made garments, etc. which necessitates huge amount of fixed capital.
(k) Consumer Preference: Industries providing goods and services which are in good demand, will require large amount of fixed capital. For example, mobile phone manufacturers as well as mobile network providers.
(l) Competitive Factor: This factor is a prime element in decision-making regarding fixed capital requirements. If one of the competitor’s shifts to automation, the other companies in the same line of activity, will be compelled to follow that competitor.
(ii) Sec. 2 (30) of the Companies Act, 2013, states that, ‘the word 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.
Features:
(a) Promise: Debenture is a promise by the company that it owes a specified sum of money to the holder of debenture.
(b) Face Value: The face value of debenture normally carries high denomination. It is ₹ 100 or in multiples of ₹ 100.
(c) Time of Repayment: Debentures are issued with the due date stated in the debenture certificate. The principal amount of debenture is repaid on maturity date.
(d) Priority of Repayment: Debentureholders have a priority in repayment of debenture capital over the other claimants of the company.
(e) Assurance of Repayment: Debenture constitutes a long-term debt. They carry an assurance of repayment on due date.
(f) Interest: A fixed rate of interest is agreed upon and is paid periodically in case of debentures. Payment of interest is a fixed liability of the company. It must be paid by the company irrespective of the fact, whether the company makes profit or not.
(g) Parties to Debentures:
1. Company: This is the entity which borrows money.
2. Trustees: A company has to appoint Debenture Trustee if it is offering Debentures to more than 500 people. This is a party through whom the company deals with debentureholders. The company makes an agreement With trustees, it is known as Trust Deed. It contains the obligations of company, rights of debentureholders, powers of Trustee, etc.
3. Debentureholders: These are the parties who provide loan and receive, ‘Debenture Certificate’ as an evidence.
(h) Authority to issue Debentures: According to the Companies Act 2013, Section 179 (3), the Board of Directors has the power to issue debentures.
(i) Status of Debentureholder: Debentureholder is a creditor of the company. Since debenture is a loan taken by the company, interest is payable on it at fixed rate, at fixed interval until the debenture is redeemed.
(j) No Voting Right: According to Section 71 (2) of the Companies Act, 2013, no company shall issue any debentures carrying any voting right. Debentureholders have no right to vote at general meeting of the company.
(k) Security: Debentures are generally secured by fixed orfloating charge on assets of the company. If a company is not in a position to make payment of interest or repayment of capital, the debentureholder can sell off charged property of the company and recover their money.
(l) Issuers: Debentures can be issued by both private company and public limited company.
(m) Listing: Debentures must be listed with at least one recognised stock exchange.
(n) Transferability: Debentures can be easily transferred, through the instrument of transfer.