Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

Balbharti Maharashtra State Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders Important Questions and Answers.

Maharashtra State Board 12th Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

1A. Select the correct answer from the options given below and rewrite the statements.

Question 1.
Debenture holders receive ______________ as a proof of their investment in the company.
(a) Share Certificate
(b) Debenture Certificate
(c) Share Warrant
Answer:
(b) Debenture Certificate

Question 2.
______________ have no right to attend company’s meetings.
(a) Shareholders
(b) Directors
(c) Debenture holders
Answer:
(c) Debentureholders

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

Question 3.
______________ have priority in the repayment of the capital at the time of winding up of the company.
(a) Debenture holders
(b) Shareholders
(c) Secretary
Answer:
(a) Debenture holders

Question 4.
Debentures are secured through charge on the ______________ of the company.
(a) Liability
(b) Profits
(c) Assets
Answer:
(c) Assets

Question 5.
The fund created for the redemption of debentures is known as ______________
(a) DRRF
(b) DHFL
(c) IEPF
Answer:
(a) DRRF

Question 6.
Debentures are repaid on maturity by using debenture ______________ reserve.
(a) Redemption
(b) Depreciation
(c) General
Answer:
(a) Redemption

Question 7.
Debenture holder has the right to inspect ______________
(a) Partnership Deed
(b) Memorandum of Association
(c) Trust Deed
Answer:
(c) Trust Deed

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

Question 8.
From the date of request, trust deed should be provided by the company with in ______________
(a) 14 days
(b) 7 days
(c) 21 days
Answer:
(b) 7 days

Question 9.
Communication in writing means ______________
(a) Correspondence
(b) Motion
(c) Voting
Answer:
(a) Correspondence

Question 10.
Debentures are issued after passing resolution at ______________
(a) Board Meeting
(b) General Meeting
(c) Committee Meeting
Answer:
(a) Board Meeting

1B. Match the pairs.

Question 1.

Group ‘A’ Group ‘B’
(1) Courtesy (a) Wrong Publicity
(2) Prompt Response (b) True and Real Facts
(3) Transparency (c) Politeness
(4) Conciseness (d) Up to date information
(5) Precise Information (e) Reply without delay
(6) Secretary (f) Irrelevant Information
(7) Goodwill (g) Hide Information
(h) Confidential Officer
(i) False and incorrect Information
(j) Rude and harsh wording
(k) Brief and to the point
(l) Delay in replying
(m) Good image of the company
(n) Disclose Secrets

Answer:

Group ‘A’ Group ‘B’
(1) Courtesy (c) Politeness
(2) Prompt Response (e) Reply without delay
(3) Transparency (b) True and Real Facts
(4) Conciseness (k) Brief and to the point
(5) Precise Information (d) Up to date information
(6) Secretary (h) Confidential Officer
(7) Goodwill (m) Good image of the company

1C. Write a word or a term or a phrase that can substitute each of the following statements.

Question 1.
Capital raised by the company by issuing debentures.
Answer:
Debenture Capital

Question 2.
Rate of interest on debentures.
Answer:
Fixed

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

Question 3.
Debentures are secured by a charge of the assets of the company.
Answer:
Secured Debentures

Question 4.
Debentures are redeemable after a certain period of time.
Answer:
Redeemable Debentures

Question 5.
The Debenture holder has a right to inspect and obtain copies of this deed.
Answer:
Trust Deed

Question 6.
Debenture holder who gets interested through interest coupons.
Answer:
Bearer Debenture holder

Question 7.
The Debentures are issued to the public by issuing this document.
Answer:
Prospectus

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

Question 8.
The type of Debentures which can be converted into equity shares.
Answer:
Convertible Debentures

1D. State whether the following statements are true or false.

Question 1.
Debenture holders are the creditors of the company.
Answer:
True

Question 2.
Debenture holders enjoy normal voting rights.
Answer:
False

Question 3.
Debentures can be issued to more than 500 people without appointing Debenture Trustee.
Answer:
False

Question 4.
Debenture Certificate is issued within 6 months from the date of allotment of debentures.
Answer:
True

Question 5.
Secretary is the confidential officer of the company.
Answer:
True

1E. Find the odd one.

Question 1.
Courtesy, Transparency, Enclosure
Answer:
Enclosure

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

Question 2.
Conciseness, Accuracy, Inside address
Answer:
Inside address

Question 3.
Convertible Debentures, Secured Debentures, Cumulative Preference Shares.
Answer:
Cumulative Preference Share

1F. Complete the sentences.

Question 1.
Convertible Debentures are converted into ______________ on the maturity.
Answer:
Equity shares

Question 2.
Redeemable Debentures are ______________ on the date of maturity.
Answer:
Repaid

Question 3.
Registered Debenture holders get interest through ______________
Answer:
Interest Warrant

Question 4.
Bearer Debenture holders get interest through ______________
Answer:
Interest Coupons

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

Question 5.
Secured Debentures are secured by ______________ on the assets of the company.
Answer:
Charge

Question 6.
Being the creditors, due ______________ should be given to the Debenture holders while corresponding.
Answer:
Respect

Question 7.
The secretary should follow the ______________ of the Companies Act, 2013 .
Answer:
Statutory Provisions

Question 8.
As a Confidential Officer of the company, the secretary should not disclose any important and ______________ information related to the company while corresponding.
Answer:
Secret

Question 9.
The information provided by the secretary must be factual and ______________
Answer:
True

1G. Select the correct option from the bracket.

Question 1.

Group ‘A’ Group ‘B’
(a) Interest Warrant (1) …………………..
(b) ……………………….. (2) Interest Coupons
(c) ………………………… (3) Secured Debenture

(Bearer Debentures, Registered Debentures, Charge on the assets)
Answer:

Group ‘A’ Group ‘B’
(a) Interest Warrant (1) Registered Debentures
(b) Bearer Debentures (2) Interest Coupons
(c) Charge on the assets (3) Secured Debenture

1H. Answer in one sentence.

Question 1.
Who is appointed when the issue of debentures exceeds more than 500 people?
Answer:
Debenture trustees are appointed when the issue of debentures exceeds more than 500 people.

Question 2.
Debenture Certificate should be issued within how many months from the date of allotment of Debentures?
Answer:
Debenture Certificate should be issued within 6 months from the date of allotment of Debentures.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

Question 3.
Which debentures are converted into equity shares?
Answer:
Convertible Debentures are converted into equity shares.

Question 4.
Who has to communicate the decisions of the management and other information to the Debenture holders?
Answer:
The secretary has to communicate the decisions of the management and other information to the debenture holders.

Question 5.
Which fund is created for Redemption of Debentures?
Answer:
A Debenture Redemption Reserve Fund is created for Redemption of Debentures.

1I. Correct the underlined word/s and rewrite the following sentences.

Question 1.
Debentures carry a fluctuating rate of interest as a return on investment in debentures.
Answer:
Debentures carry a fixed rate of interest as a return on investment in debentures.

Question 2.
Debenture Capital is the owned capital of a company.
Answer:
Debenture Capital is the borrowed capital of a company.

1J. Arrange in proper order.

Question 1.
Redemption of Debentures, Debenture Redemption Reserve Fund, Debenture Redemption Form.
Answer:
Debenture Redemption Reserve Fund, Debenture Redemption Form, Redemption of Debentures

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

2. Study the case/situation and express your opinion.

1. As a secretary of Velon Industries Limited.

Question (a).
Give any three circumstances where the company will have to correspond with the debenture holders.
Answer:
Secretary will correspond with the debenture holder under the following circumstances:

  • Allotment Letter to debenture holders.
  • Payment of Interest.
  • Redemption of debentures.

Question (b).
What precautions should be taken while drafting the letters?
Answer:
As a secretary, one should be polite, transparency should be maintained and the image of the company should be kept in mind while drafting the letters.

Question (c).
Board Resolution is necessary for the payment of interest?
Answer:
Yes, Board Resolution is necessary for the payment of interest.

2. Disha Industries Ltd. Allots debentures to Mr. Vijay Mittal.

Question (A).
Which letter will be sent to Mr. Vijay Mittal?
Answer:
Letter of Allotment of Debentures will be sent to Mr. Vijay Mittal.

Question (b).
Why does Vijay Mittal preserve the Allotment Letter?
Answer:
Mr. Vijay Mittal preserves the allotment letter because he will receive a Debenture Certificate in exchange for the allotment letter.

Question (c).
What details does the letter contain?
Answer:
The letter contains the details of the issue of debentures i.e number of debentures applied, numbers of debentures allotted, distinctive numbers of debentures, amount received, types of debentures, rate of interest, maturity date, etc.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

3. Rolta India Limited wants to pay interest to the debenture holders.

Question (a).
Which resolution is required for the payment of interest to debenture holders?
Answer:
Board Resolution is required for the payment of interest to the debenture holders.

Question (b).
Can the company pay interest in the next year as in the current year company has incurred a loss?
Answer:
No, the company has to pay the interest as it does not depend upon the profits of the company.

Question (c).
How can the company pay interest to the debenture holders?
Answer:
The company can pay interest to debenture holders by the way of interest warrant and electronic mode i.e. ECS and NEFT.

3. Answer in brief.

Question 1.
What is a debenture? Explain Debenture Capital.
Answer:
Debentures is an instrument in writing, acknowledging a debt under a common seal of a company.

  • Debenture represents the borrowed capital of a company.
  • The debenture is an acknowledgment of debt.
  • The debenture holder is a creditor of the company.
  • Compared to equity shares, debenture capital is considered safe and secured capital.
  • Debentures are repaid on the expiry of a fixed period at the winding up of the company before equity shares are repaid.
  • A debenture may be secured, unsecured, redeemable, convertible, non-convertible, etc
  • Secured debentures have a charge on the assets of the company.
  • Redeemable debentures are repaid on the expiry of a fixed period.
  • Convertible debentures are converted into equity shares on the expiry of a fixed period.
  • Non-convertible debentures cannot be converted into equity shares but are repaid on the expiry of the fixed period.

Question 2.
State any four precautions to be taken while drafting letters to the debenture holders.
Answer:
The following precautions are to be kept in mind by the secretary while corresponding with the debentures.
(i) Transparency:

  • Transparency with debenture holders has to be maintained.
  • It is necessary to disclose correct and accurate information of the company, favourable as well as the adverse credit rating of the company, etc. in correspondence.

(ii) Politeness (Courtesy):

  • As debenture holders are the creditors of the company, proper respect should be given to them in correspondence.
  • The use of words in the letter should be proper which depicts respect to the debenture holders.
  • Rude and harsh words should be strictly avoided.

(iii) Conciseness:

  • Letters to the debenture holders should be brief and to the point.
  • Unnecessary information should be avoided.

(iv) Accuracy/Precise information:

  • The secretary should provide precise and up-to-date information to debenture holders.
  • The information must be true and correct.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

Question 3.
When does a secretary enter into correspondence with debenture holders?
Answer:

  1. Debenture holders are creditors of the company.
  2. Therefore, they do not participate in the management of the company.
  3. They do not enjoy voting rights.
  4. Whatever decisions are taken by the management, are communicated to them by the secretary.
  5. A secretary has to enter into correspondence with the debenture holders under the following circumstances:
    • Informing the applicant about allotment of debentures.
    • Informing about payment of interest through
      • Interest warrant
      • Electronic payment of Interest
    • Letter of conversion of debentures into equity shares.
    • Letter for the redemption of debentures.

4. Justify the following statements.

Question 1.
Debenture holders are the creditors of the company.
Answer:

  • Debenture represents borrowed capital of the company.
  • It is an acknowledgment of debt issued by the company under its common seal.
  • The person buying the debenture is known as the ‘Debenture holder’.
  • Debenture holders are the creditors of the company.
  • They provide loans to the company and hence, enjoy fixed-rate interest as a return on their investment.
  • Debentures are secured and redeemable. They are repaid after a certain period of time, i.e. on the maturity date.
  • Thus, it is rightly justified that, debenture holders are the creditors of the company.

Question 2.
The company secretary should follow legal provisions while corresponding with Debenture holders.
Answer:

  • Debenture holders are the creditors of the company and hence, the secretary has to correspond with Debenture holders on different occasions.
  • The secretary should follow the statutory provisions of the Companies Act, 2013 and other relevant laws while corresponding with Debenture holders.
  • Secretary should be cautious and careful while corresponding with debenture holders on legal matters. He should be aware of legal consequences.
  • Non-compliance with legal provisions can result in legal consequences, creating problems for the company.
  • Thus, it is rightly justified that, the company secretary should follow legal provisions while corresponding with debenture holders.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

Question 3.
Interest is a debt.
Answer:

  • Debenture capital is the borrowed capital of the company.
  • Debenture holders are the creditors of the company receiving the fixed rate of interest.
  • The company pays the interest through interest warrant and electronic mode i.e. Electronic Clearing System (ECS) or National Electronic Fund Transfer (NEFT).
  • Interest is to be paid compulsorily even if the company makes a loss. It does not depend upon the profits of the company.
  • Thus, it is rightly justified that, interest is debt.

5. Attempt the following.

Question 1.
Explain the different types of letters written to the debenture holders.
Answer:
Secretary has to communicate with the management and the debenture holders for various reasons. This communication is done by drafting letters to the debenture holders. A secretary should be very cautious and careful while corresponding with debenture holders of the company. Following are the circumstances when the secretary corresponds with the debenture holders.

(i) Debenture Allotment Letter.

  • An allotment Letter is sent to the debenture holders when the company allows debentures to the applicant.
  • Allotment Letter is preserved by the debenture holder till he receives Debenture Certificate in exchange for this letter.
  • Allotment Letter contains details of the issue of debentures, i.e. name of debenture holder, debentures issued, face value, types of debentures, rate of interest, etc.

(ii) Payment of Interest Letter.

  • Interest is paid to the debenture holders through:
    • Interest Warrant
    • Electronically
  • Payment of Interest Letter contains details such as a number of debentures, distinctive numbers, the gross amount of interest payable, TDS deducted, the net amount of interest payable, etc.
  • Board Resolution is required for the payment of interest on debentures.

(iii) Conversion of Debentures Letter.

  • Debentures are converted into equity shares.
  • Conversion of Debenture Letter is issued only when the company receives Letter of Option.
  • After conversion, a share certificate is issued.
  • Approval of shareholders is necessary by passing a special resolution at Extra-Ordinary General Meeting.
  • Only after receiving the shareholders’ approval, letter of conversion of debentures is sent to debenture holders.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 7 Correspondence with Debentureholders

(iv) Redemption of Debentures Letter.

  • Debentures are redeemed after a specific period.
  • Debenture Redemption Reserve Fund (DRRF) is created for the redemption of debentures.
  • Debenture Redemption Form (DRF) is sent along with the letter.
  • This letter informs that their debentures have become due for redemption.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 6 Correspondence with Members

Balbharti Maharashtra State Board Class 12 Secretarial Practice Important Questions Chapter 6 Correspondence with Members Important Questions and Answers.

Maharashtra State Board 12th Secretarial Practice Important Questions Chapter 6 Correspondence with Members

1A. Select the correct answer from the options given below and rewrite the statements.

Question 1.
Shareholders are ____________ of the company.
(a) Owners
(b) creditors
(c) loan givers
Answer:
Owners

Question 2.
Important decisions need approval of ____________ at the meeting.
(a) auditors
(b) shareholders
(c) directors
Answer:
shareholders

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 6 Correspondence with Members

Question 3.
Secretary writes letter to members as ____________
(a) auditor
(b) Public Relations Officer
(c) Director
Answer:
Public Relations Officer

Question 4.
____________ shares are issued to existing equity shareholders.
(a) deferred
(b) preference
(c) bonus
Answer:
bonus

Question 5.
Polite and prompt correspondence by secretary creates ____________ of the company.
(a) goodwill
(b) prestige
(c) image
Answer:
goodwill

Question 6.
Secretary is a ____________ of confidential matter.
(a) caretaker
(b) custodian
(c) auditor
Answer:
custodian

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 6 Correspondence with Members

1B. Match the pairs.

Question 1.

Group ‘A’ Group ‘B’
(1) Secretary (a) Registered Document
(2) Electronic Mode (b) Fluctuating rate of dividend
(3) Share Certificate (c) Correspondence with members
(4) Reply Letter (d) Dividend Warrant
(5) Bon as Share (e) Payment of Dividend
(f) Existing Equity Shareholder
(g) Bearer Document
(h) Low rate of dividend
(i) Fluctuations in the market
(j) Correspondence with Bank

Answer:

Group ‘A’ Group ‘B’
(1) Secretary (c) Correspondence with members
(2) Electronic Mode (e) Payment of Dividend
(3) Share Certificate (a) Registered Document
(4) Reply Letter (h) Low rate of dividend
(5) Bon as Share (f) Existing Equity Shareholder

1C. Write a word or term or a phrase that can substitute each of the following statements.

Question 1.
Return of investment in shares.
Answer:
Dividend

Question 2.
Warrant attached with notice of dividend.
Answer:
Dividend warrant

Question 3.
Title to the shares issued by the company.
Answer:
Share Certificate

Question 4.
A portion of profits is distributed to the shareholders of the company.
Answer:
Dividend

Question 5.
The letter containing reasons for the low rate of dividends.
Answer:
Reply Letter

1D. State whether the following statements are True or False.

Question 1.
Secretary should always provide correct, updated, and tactful information to the members.
Answer:
True

Question 2.
Secretary should disclose confidential information to the members.
Answer:
False

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 6 Correspondence with Members

Question 3.
Share certificates must be duly stamped and signed under the common seal of the company.
Answer:
True

Question 4.
The dividend is declared and approved in General Meeting.
Answer:
False

Question 5.
A dividend warrant is a written order given by the company to its banker to pay the amount mentioned in it to the shareholder whose name is specified therein.
Answer:
True

Question 6.
The dividend is to be paid to shareholders within 30 days from the date of declaration.
Answer:
False

1E. Find the odd one.

Question 1.
Allotment letter, Allotment slip, Refund order
Answer:
Refund order

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 6 Correspondence with Members

Question 2.
Dividend Coupon, Dividend warrant, Transfer receipt
Answer:
Transfer receipt

1F. Complete the sentences.

Question 1.
Shareholders are the ____________ of the company.
Answer:
owners

Question 2.
The role of secretary while writing to members is of ____________
Answer:
Public Relations Officer

Question 3.
Share Certificate must be signed by at least ____________ directors.
Answer:
2

Question 4.
Dividend is the portion of ____________
Answer:
Profits

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 6 Correspondence with Members

Question 10.
Bonus Shares issued are credited to Shareholders ____________ Account.
Answer:
Demat

1G. Select the correct option from the bracket.

Question 1.

Group ‘A’ Group ‘B’
(1) ………………….. (a) Directors and Members
(2) …………………. (b) Registered Post
(3) Correspondence (c) …………………….
(4) …………………. (d) Payment of Dividend Electronically

(Written communication, Share Certificate, Secretary, ECS)
Answer:

Group ‘A’ Group ‘B’
(1) Secretary (a) Directors and Members
(2) Share Certificate (b) Registered Post
(3) Correspondence (c) Written communication
(4) ECS (d) Payment of Dividend Electronically

1H. Answer in one sentence.

Question 1.
What is politeness?
Answer:
Politeness means the use of courteous language. A courteous letter shows sympathy, respect, and mutual understanding.

Question 2.
What is the time period to dispatch the share certificate by the company?
Answer:
The company must dispatch a share certificate to the allottee within two months after the allotment of shares.

Question 3.
What is the time limit to pay the dividend?
Answer:
The dividend is to be paid to the shareholders within 30 days from the date of declaration.

1I. Correct the underlined word and rewrite the following sentences.

Question 1.
Secretary should follow relevant provisions of the Companies Act, 1986.
Answer:
Secretary should follow relevant provisions of the Board of Directors.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 6 Correspondence with Members

Question 2.
Share Certificate must be countersigned by the shareholder.
Answer:
Share Certificate must be countersigned by the Board of Directors.

Question 3.
The interim dividend is declared by shareholders.
Answer:
The interim dividend is declared by Equity.

Question 4.
Interim Dividend is paid through cash.
Answer:
Interim Dividend is paid through electronic mode.

Question 5.
Rights shares are the shares given to existing shareholders free of cost.
Answer:
Bonus shares are the shares given to existing shareholders free of cost.

1J. Arrange in proper order.

Question 1.
(a) Reply Letter
(b) Issue of Share Certificate
(c) Payment of Dividend
Answer:
(a) Issue of Share Certificate
(b) Payment of Dividend
(c) Reply Letter

2. Explain the following terms/concepts.

Question 1.
Correspondence with Members
Answer:
Correspondence with members means communicating the decisions and information of the management to the members through letters. The letter not only includes casual informing but also sending replies to the letters.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 6 Correspondence with Members

Question 2.
Share Certificate
Answer:
Share Certificate is a registered document. It is a title of shares issued by the company under the common seal of the company. It should be duly stamped and signed by two directors and countersigned by the secretary of the company.

3. Answer in brief.

Question 1.
Explain Secretary acts as a link between the Directors and the Members.
Answer:

  • A secretary is an employee in the organization. The secretary is responsible for all the compliances with statutory and regulatory requirements.
  • The Secretary communicates the decisions and information taken by the management to the members through correspondence.
  • The secretary also deals with government agencies and private institutions.
  • The secretary replies to the queries raised by the members. Complaint letters should be promptly attended without any delay by the secretary.
  • The secretary should provide correct and updated information to the members as and when demanded.

Question 2.
Write a note on Payment of dividend.
Answer:

  • The dividend is the portion of the company’s profits that is distributed among the shareholders of the company.
  • The dividend is paid through the Dividend Warrants or through Electronic Mode i.e. ECS, NEFT, etc. to the registered shareholders.
  • The rate of dividend is recommended by the Board of Directors.
  • It is declared and approved by shareholders in the Annual General Meeting.
  • The dividend is to be paid to the shareholders within 30 days from the date of declaration.
  • The letter related to the payment of the dividend is sent to the concerned shareholders. The letter contains detailed information regarding the payment of dividends.

4. Justify the following statements.

Question 1.
Share Certificate is a registered document.
Answer:

  • Share Certificate is the title to the shares issued by the company.
  • It is duly stamped and signed by two directors and countersigned by the directors under the common seal of the company.
  • It contains all the details regarding the issue of shares, shareholders’ names, number of shares issued, share certificate number, etc.
  • It is issued or dispatched to the allottee within two months after allotment of shares.
  • Thus, it is rightly said that a share certificate is a registered document.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 6 Correspondence with Members

Question 2.
Registered shareholders get dividends through dividend warrants or electronically.
Answer:

  • The dividend is the portion of profits of the company which is distributed to the shareholders of the company.
  • Dividend can be paid through dividend warrant or by means of electronic mode i.e. ECS or NEFT, etc only to the registered shareholders.
  • The dividend is paid through dividend coupons to share warrant holders. Share warrant is a bearer document of title to shares.
  • The letter contains a number of equity shares held, dividend warrant number, gross dividend, TDS if any, the net amount of dividend, etc.
  • Thus, it is rightly said that the registered shareholders get dividends through dividend warrants or electronically.

Question 3.
Reply letter contains or specifies the reasons for the low rate of dividend.
Answer:

  • Reply letter is the answer given to the query raised by the member.
  • The letter is sent to the concerned member who is not satisfied with the payment of dividend made by the company.
  • The letter contains reasons for the lowering down of the rate of dividend.
  • The secretary has to convince the shareholders that the dividend is lowered due to void reasons and assure that company will overcome the situation.
  • Thus, it is rightly said that a reply letter contains or specifies the reasons for the low rate of dividend.

5. Study the case/situation and express your opinion.

1. As a Secretary of Networks limited.

Question (a).
Give any 3 occasions where he will have to correspond with members.
Answer:
Secretary will correspond with members on the following occasions:

  • Issue of Share Certificate;
  • Payment of Dividend;
  • Reply to query letter

Question (b).
3 points of precautions he will take while drafting a letter.
Answer:
Correct Information, Lucid language, and the image of the company have to be borne in mind.

Question (c).
Whether he should take Director’s approval before drafting any letter.
Answer:
Yes, Director’s approval is a must for major matters.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 6 Correspondence with Members

2. Comfort Motors Ltd. has allotted shares to Mr. Jayant Modi.

Question (a).
Will Comfort Motors Ltd. send a letter to Mr. Jayant Modi when demanded?
Answer:
Yes, when Mr. Jayant Modi demands, the company will send the letter for the issue of the share certificate.

Question (b).
How will the company send the share certificate?
Answer:
The company will send the share certificate through registered post.

Question (c).
What information should the letter of issue of share certificate contain?
Answer:
The letter will contain information such as folio no., share certificate no., no. of shares, etc.

3. Mr. Ashish Rai has applied for 100 shares of ₹ 10 each payable as ₹ 2 per share on application, ₹ 4 on the allotment, and ₹ 4 on 1st and final call.

Question (a).
Is there any compulsion that he get the number of shares he has applied for?
Answer:
No, there is no such compulsion to get the shares. he has applied for. In case of oversubscription he may or may not be allotted shares.

Question (b).
What is the amount he will have to pay at the time of application?
Answer:
Mr. Ashish will have to pay ₹ 200/- (₹ 2/- x 100 shares applied for) at the time of application.

Question (c).
What is the maximum amount he will have to pay for the above shares?
Answer:
₹ 1000/- (₹ 10 * 100 shares) is the maximum amount that Mr. Ashish will have to pay as a total amount for the shares.

4. Anmol Steel Industries Ltd. wants to pay dividends to the registered shareholders.

Question (a).
Who recommends and approves the rate of dividend?
Answer:
The Directors recommends and shareholders approve the rate of dividend.

Question (b).
How will the dividend be paid to the shareholders?
Answer:
The dividend can be paid through a dividend warrant or through electronic mode i.e. ECS, NEFT.

Question (c).
Is the letter sent to the registered shareholders before the payment of the dividend?
Answer:
Yes, the companies send the letter of payment of dividend.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 6 Correspondence with Members

5. Mr. Raj She seeks information about interim dividends as heard from one of his fellow shareholders.

Question (a).
What does the Secretary refer to?
Answer:
The Secretary will refer to the date of dividend notice sent to the members

Question (b).
Does he need to give the details of the interim dividend?
Answer:
Yes, he can give the date and details sent.

Question (c).
After getting the details does Mr. Raj have any document that he can refer to as proof?
Answer:
Mr. Rajat can verify with the Passbook/ statement as regards the amount credited.

6. Yash Industries Ltd. is issuing bonus shares.

Question (a).
Can the company issues bonus shares to all the shareholders?
Answer:
No, the company can issue bonus shares to only existing shareholders of the company.

Question (b).
Is it necessary for the shareholders to pay a certain amount for bonus shares?
Answer:
No, bonus shares are fully paid up shares given by the company as a gift.

Question (c).
How are the shareholders informed regarding the issue of bonus shares?
Answer:
Bonus Shares are credited to shareholders Demat Account or share certificate is issued if shares are held in physical form.

7. Mr.Anand Khot has complained of a low rate of dividends. As a Secretary,

Question (a).
Is it necessary to reply to the complaint letter?
Answer:
Yes, it is a must for the Secretary to send a reply letter.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 6 Correspondence with Members

Question (b).
Is it necessary to give reasons for the low rate of dividends?
Answer:
Yes, reasons, as discussed in the AGM, can be written in the letter in order to convince about the low rate of dividend.

Question (c).
Which points he has to keep in mind while drafting the above letter?
Answer:
Prompt response, correct information, politeness, and image of the company are some of the major points to be considered while drafting the letter.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 5 Deposits

Balbharti Maharashtra State Board Class 12 Secretarial Practice Important Questions Chapter 5 Deposits Important Questions and Answers.

Maharashtra State Board 12th Secretarial Practice Important Questions Chapter 5 Deposits

1A. Select the correct answer from the options given below and rewrite the statements.

Question 1.
No Deposits can be repaid before ___________ months.
(a) One
(b) Six
(c) Nine
Answer:
(b) Six

Question 2.
Premature deposits can be repaid after ___________ months.
(a) Two
(b) Three
(c) Four
Answer:
(b) Three

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 5 Deposits

Question 3.
___________ company cannot collect deposits from the public.
(a) Private
(b) Public
(c) Government
Answer:
(a) Private

Question 4.
A copy of return of deposits must be sent to ___________
(a) Registrar of companies
(b) Govt of India
(c) State bank of India
Answer:
(a) Registrar of companies

Question 5.
On acceptance of deposits, companies required to keep register of deposits at ___________
(a) Office of the registrar
(b) Sebi office
(c) Registered office of the company
Answer:
(c) Registered office of the company

1B. Match the pairs.

Question 1.

Group ‘A’ Group ‘B’
(1) Return of deposits (a) Cognisable criminal offense
(2) Deposits in contravention of the law (b) 25% of paid-up capital
(3) Deposit Repayment Reserve Account (c) Delivered to the registrar of companies
(4) Registrar of Companies (d) Approved by the SEBI
(5) Eligible public company (e) Filing of circular or advertisement
(f) On or before 30th June every year
(g) Not less than 15%
(h) Net worth 100 crores
(i) Net worth 10 crores
(j) No punishment

Answer:

Group ‘A’ Group ‘B’
(1) Return of deposits (f) On or before 30th June every year
(2) Deposits in contravention of the law (a) Cognisable criminal offense
(3) Deposit Repayment Reserve Account (g) Not less than 15%
(4) Registrar of Companies (e) Filing of circular or advertisement
(5) Eligible public company (h) Net worth 100 crores

Question 2.

Group ‘A’ Group ‘B’
(1) Private company (a) Approval of secretary
(2) Period of deposit (b) Can accept deposits from the public
(3) Validity of advertisement (c) Can accept deposits from its members or relatives of directors or directors
(4) Board of directors (d) Six months to three years
(5) Public company (e) Approval of depositors
(f) Right to accept deposits
(g) Six months to forty-two months
(h) Refund of deposit before maturity
(i) Ten months after the expiry of the financial year
(j) Six months after the expiry of the financial year

Answer:

Group ‘A’ Group ‘B’
(1) Private company (c) Can accept deposits from its members or relatives of directors or directors
(2) Period of deposit (d) Six months to three years
(3) Validity of advertisement (j) Six months after the expiry of the financial year
(4) Board of directors (f) Right to accept deposits
(5) Public company (b) Can accept deposits from the public

1C. Write a word or a term or a phrase that can substitute each of the following statements.

Question 1.
An acknowledgment of deposit accepted by the company.
Answer:
Deposit Receipt

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 5 Deposits

Question 2.
Type of company that can accept deposits from members as well as the public.
Answer:
Eligible Public Company

Question 3.
A record of details of public deposits maintained by the company.
Answer:
Deposit register

Question 4.
The authority which has the power to accept deposits.
Answer:
Board of Directors

Question 5.
Return on investments as deposits in the company.
Answer:
Interest

Question 6.
Time within which company has to issue deposit receipt.
Answer:
30 Days

1D. State whether the following statements are true or false.

Question 1.
A company can accept deposits payable on demand.
Answer:
False

Question 2.
A company can accept deposits to any extent.
Answer:
False

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 5 Deposits

Question 3.
Acceptance of deposits is the same as a renewal.
Answer:
False

Question 4.
Deposits may be secured or unsecured.
Answer:
True

1E. Find the odd one.

Question 1.
Record of deposits registered office of the companies, Registrar of companies.
Answer:
Registrar of companies

Question 2.
Six months, thirty-six months, forty-two months.
Answer:
Forty-two months

Question 3.
Advertisements, Circular, Board meeting.
Answer:
Board meetings

Question 4.
English newspaper, application for, a regional newspaper.
Answer:
Application forms

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 5 Deposits

Question 5.
Return of deposits, stock exchange, registrar of companies.
Answer:
Stock Exchange

1F. Answer in one sentence.

Question 1.
Are loans and deposits the same?
Answer:
Loans mean any sum borrowed by a company. It has to be repaid instantly or when demanded by the lender whereas deposits are sums borrowed by the company but repaid only on a fixed maturity date.

2. Explain the following terms/concepts.

Question 1.
Register of Deposit
Answer:

  • Register for Deposits records all the deposits accepted or renewed by the company at its registered office.
  • The details of the deposit along with the details of the depositors should be entered in the Register of Deposits within seven days from the date of issue of the Deposit Receipt.

Question 2.
Interest on Deposit
Answer:

  • The return received on the deposit amount is called Interest on Deposit.
  • The rate of interest on deposits is decided by the Reserve Bank of India from time to time.
  • In case of premature repayment of deposits, the company can deduct 1% interest from the rate of interest stated at the time of acceptance of the deposit.

3. Answer in brief.

Question 1.
Explain the provisions related to the period/tenure of deposits.
Answer:
The provisions related to the period/tenure of deposits are as follows:

  • No deposit can be accepted or renewed which is to be repaid within a period of six months or more than thirty-six months.
  • In certain circumstances, a company may accept deposits repayable earlier than six months to meet its short-term needs.
  • Such deposits must have a tenure of a minimum of three months and the number of such deposits cannot be more than 10% of the aggregate of the paid-up share capital and free reserves of the company.
  • Under certain circumstances, at the request of the depositor, the company makes premature repayment of deposits.
  • The company may also renew its deposits with the same terms of issue and it will be considered as fresh deposits.

4. Answer the following questions.

Question 1.
Explain terms and conditions for acceptance of deposits.
Answer:
The company raises funds by accepting deposits from the public and its own members. In other words, it is a short-term loan taken by the company. The company can collect deposits on certain terms and conditions laid down by the Companies Act 2013. They are as follows:
(i) Amount of Deposit:
Different types of companies have different terms and conditions for accepting deposits.
The following table shows the percentage of acceptance of deposits.

Companies Acceptance of Deposits (%)
(i) Private Company Up to 100% of the aggregate of paid-up share capital and free reserves
(ii) Public Company Should not exceed 25% of the aggregate of paid-up capital and free resources
(iii) Eligible Public Company Should not exceed 25% of the aggregate paid-up capital and free reserves in case of the public.

Should not exceed 10% of the aggregate paid-up capital and free reserves in case of members.

(iv) Government Company Should not exceed 35% of the paid-up share capital and free reserves.

(ii) Period/Tenure of Deposit:

  • The tenure of deposit should be more than six months but less than thirty-six months.
  • Under certain circumstances only, the company can accept deposits for 3 months.
  • The company can make premature repayment of deposits after a minimum of 3 months.

(iii) No demand deposit:
The company cannot accept or renew deposits repayable on demand.

(iv) Secured or Unsecured Deposit:

  • A company can accept secured or unsecured deposit if it is mentioned in the circular or advertisement.
  • A company offering secured deposits has the right to create a charge on its tangible assets within 30 days of acceptance of deposits.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 5 Deposits

(v) Application Form:

  • A prescribed application form is to be filled by the applicant.
  • This application form is given by the company.
  • It includes a declaration made by the applicant that the deposit he is making is not borrowed from any person.

(vi) Joint names:
The company can accept deposits in joint names of depositors. But there should not be more than three names.

(vii) Nomination:

  • Every depositor has to nominate at least one person.
  • Nominee enjoys all the benefits in the event of death of the depositor.

(viii) Circular or Advertisement:

  • If a company invites deposits from its members, it issues a circular. But if it invites deposits from the public, the company has to issue an advertisement.
  • A copy of the circular or advertisement signed by all directors must be filed with the Registrar of Companies.
  • Issue of Circular or Advertisement:
  • The company has to publish the advertisement in one English newspaper and one vernacular/regional newspaper.

(ix) Appointment of Deposit Trustee:

  • Deposit Trustee is appointed by the public companies and eligible public companies.
  • One of the more deposit trustees is appointed if secured deposits are issued.
  • A contract ‘Trust Deed’ is signed between the company and deposit trustee.

(x) Create charge on assets:
The company secured deposits create a charge on its tangible assets within 30 days of acceptance.

(xi) Deposit Insurance:

  • A company needs to take Deposit Insurance at least 30 days before the issue of circular or advertisement.
  • Deposit insurance is necessary only when the deposit amount plus interest is up to ₹ 20,000.

(xii) To obtain a credit rating:

  • The company obtains credit ratings for deposits on the basis of the net worth of the company, liquidating position, ability to repay deposits on time, etc.
  • Credit rating for deposits is given by credit rating agencies.
  • The rating is done every year during the tenure of deposits.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 5 Deposits

(xiii) Open Deposit Repayment Reserve Account:

  • A Deposit Repayment Reserve Account is opened in a scheduled bank for accepting deposits.
  • The company has to deposit an amount up to 15% of the number of deposits maturing during the current year and following the financial year on or before 30th April.
  • This account is used only for repaying deposits only.

(xiv) Deposit Receipt:

  • Deposit Receipt is to be issued to the depositors within 21 days from the date of receipt of money or realization of cheque.
  • The receipt has to be signed by the officer duly authorized by the Board of Directors.
  • The Receipt contains the name and address of the depositor, amount of deposit, rate of interest payable, and date on which it is repayable.

(xv) Register of Deposit:

  • Register of Deposit is to be maintained by the company at its registered office.
  • The details of the deposit accepted and renewal of the deposits are recorded and depositors are recorded in the Register of Deposits.
  • Deposit Receipt should be issued within 7 days from the date of issue.

(xvi) Return of Deposit:

  • A Return of Deposit should be recorded with the company on or before 30th June every year.
  • The return includes details of deposit with the company as of 31st March of that year.

(xvii) Interest:

  • Reserve Bank of India decides the rate of interest on deposits.
  • The rate of interest changes from time to time.
  • In case of premature repayment of deposits, the company can deduct 1% interest from the rate of interest.
  • If the deposits matured and are claimed but remain unpaid by the company, the company will be liable to pay a penal rate of interest at the rate of 18%.

(xviii) Right to alter the Terms and Conditions:
A company cannot directly or indirectly alter the terms and conditions of the Deposit, Deposit Trust Deed, and Deposit Insurance, once the circular or advertisement is issued and deposits are accepted.

(xix) Disclosure in financial statements:
Deposit money received by the company from the Directors or the relatives of the Directors (in the case of a private company) should be disclosed in the company financial statement.

(xx) Punishment:

  • As per the Companies Act, an officer of the company will be liable for punishment if found guilty / not fulfilling the provisions of the Act.
  • The Maharashtra Protection of Interest of Depositors (in Financial establishments) Act, 1999 has the right to take action against companies and also punish if found guilty.
  • Companies in Maharashtra will be punished for contravening the provisions of this Act also.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 5 Deposits

Question 2.
Explain the procedure for accepting deposits from the public.
Answer:
Only Eligible Public Companies can accept deposits from the public.
Following is the procedure to be followed for accepting deposits from the public:
(i) Hold Board Meeting:

  • A resolution is passed in the Board Meeting for accepting the deposits from the public.
  • The details of the amount of deposit, terms and conditions of issue, etc. are decided in this meeting.

(ii) Hold a General Meeting:

  • A General Meeting is held by the company for seeking shareholders’ approval for accepting deposits.
  • A Special resolution is passed and filed with the Registrar of Companies and if needed with RBI also.

(iii) Hold Board Meeting:

  • The board meeting is held to verify and approve the draft of the advertisement.
  • The draft should be signed by the majority of the Directors of the company.

(iv) Appoint Banker:
The company has to appoint a banker so that the applicants can submit their application form along with the deposit money.

(v) Obtain Credit Rating:

  • The company has to obtain a Credit rating from a recognized Credit Rating Agency.
  • This helps in the goodwill of the company.
  • This credit rating should be mentioned in the advertisement.

(vi) Appoint Deposit Trustee:

  • The company appoints Deposit Trustees when secured deposits are issued.
  • It is a contract between the company and Trustee i.e. Deposit Trustee Deed.
  • The Deposit Trust deed contains the terms and conditions.
  • The deed has to be signed at least 7 days before issuing the advertisement.

(vii) Take Deposit Insurance:

  • The company enters into an agreement with the Insurance Company 30 days before issuing the advertisement.
  • Deposit Insurance is necessary only when the deposit amount plus interest exceeds ₹ 20,000.

(viii) File a copy of the advertisement with the Registrar of Companies:

  • A copy of the advertisement has to be filed with the Registrar of Companies.
  • The company can publish the advertisement after 30 days of filing.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 5 Deposits

(ix) Advertisement to the Public:

  • Advertisement is published for the public after 30 days of filing with the Registrar of Companies.
  • The advertisement has to be published in one English newspaper and one regional newspaper having wide circulation in the state where the company’s registered office is located.

(x) Upload the advertisement on the company’s website:
After releasing the advertisement to the public, it is also necessary to upload it on the company’s website.

(xi) Collect application form and money:
The banker collects the application forms along with the deposit money on behalf of the company.

(xii) Issue Deposit Receipt:
The company has to issue a Deposit Receipt within 21 days from the date of receipt of money or realization of cheque.

(xiii) Create charge on assets:

  • The company issuing secured deposits can create charges on its assets.
  • This charge of assets should be created within 30 days of acceptance of the deposit.

(xiv) Make entries in Register of Deposits:
Secretary has to record the details of deposits in the Register of Deposits within the 7 days after issuing the Deposit Receipt.
The entries have to be verified by an authorized officer.

(xv) File Return of Deposits with Registrar of Companies:

  • The company has to file a Return of Deposit before 30th June every year.
  • The return has details of Deposits with the company as of 31st March

Question 3.
Explain the procedure for accepting deposits from members.
Answer:
The following is the procedure to accept deposits from members:
(i) Hold Board Meeting:

  • Secretary arranges for a Board Meeting.
  • In the Board Meeting, decisions regarding the amount of deposit, terms of issue of deposit, etc. are decided.

(ii) Hold a General Meeting:

  • To seek approval from shareholders for accepting deposits, the company holds a general meeting.
  • A special resolution is passed in a general meeting and filed with the Registrar of Companies.

(iii) Hold Board Meeting:

  • After getting shareholder’s approval, a Board meeting is held to approve the draft of the circular for inviting applications for deposits from members.
  • The draft should be signed by a majority of the Directors of the company.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 5 Deposits

(iv) Appoint Banker:
A Banker is appointed for collecting the application forms and the Deposit money on behalf of the company.

(v) Obtain Credit Rating:

  • Credit rating agencies rate the company’s deposit.
  • The rating given by the Credit Rating Agency must be mentioned in the circular.

(vi) Appoint Deposit Trustee:

  • Company appoints Deposit Trustees.
  • The Trust deed is signed at least 7 days before issuing the circular.

(vii) Take Deposit Insurance:
The company takes Deposit Insurance at least 30 days before issuing the circular.

(viii) File a copy with Registrar of Companies:
A copy of the circular is filed with the Registrar of Companies and can be issued to the members-only after 30 days of filing.

(ix) Issue circular to members:

  • The company sends the circulars to members after 30 days of filing them with the Registrar.
  • It is sent by registered post, speed post, or email. The company may even publish the circular in newspapers.

(x) Upload circular on company’s website:

  • An eligible public company has to upload the circular on the company’s website.
  • Whereas, it is optional for a private company and other public companies.

(xi) Collect application form and money:
The company informs the bank to collect the application form along with the deposit money.

(xii) Issue of Deposit Receipt:

  • A deposit Receipt is issued by the company.
  • It should be issued within 21 days from the date of receipt of the money or realization of the cheque.

(xiii) Create charge on assets:
If a company accepts secured deposits, it has to create a charge on its assets within 30 days of acceptance of deposits.

(xiv) Make entries in Register of Deposits:

  • Secretary has to enter the details of deposits in the Register of Depositors within 7 days from the date of issue of Deposit Receipt.
  • It has to be signed by an authorized officer.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 5 Deposits

(xv) File Return of Deposits:

  • The company has to file a return of deposit before 30th June every year.
  • The return has details of deposits with the company as of 31st March.

Maharashtra Board 12th OCM Important Questions Chapter 2 Functions of Management

Balbharti Maharashtra State Board 12th OCM Important Questions Chapter 2 Functions of Management Important Questions and Answers.

Maharashtra State Board 12th Commerce OCM Important Questions Chapter 2 Functions of Management

Select the correct options and rewrite the sentences

Question 1.
Planning is …………… function.
(a) advanced
(b) basic
(c) end
Answer:
(b) basic

Maharashtra Board 12th OCM Important Questions Chapter 2 Functions of Management

Question 2.
Division of work is involved in ……………… function.
(a) Planning
(b) Organising
(c) Directing
Answer:
(b) Organising

Question 3.
Directing is initiated at ……………….. level.
(a) Top
(b) Middle
(c) Lower
Answer:
(a) Top

Question 4.
Staffing function is a ……………… activity.
(a) basic
(b) continuous
(c) neutral
Answer:
(b) continuous

Question 5.
A process to establish harmony among different activities to achieve desired results is called ………………..
(a) Controlling
(b) Co-ordinating
(c) Co-operation
Answer:
(b) Co-ordinating

Question 6.
Unification, integration and synchronization of the efforts of group members so as to achieve common goals is a ……………… function.
(a) Planning
(b) Organising
(c) Co-ordinating
Answer:
(c) Co-ordinating

Question 7.
Staffing is concerned with ……………….
(a) physical factor
(b) financial factor
(c) human factor
Answer:
(c) human factor

Question 8.
Controlling measures the ……………… of actual performance from the standard performance.
(a) action
(b) deviation
(c) objective
Answer:
(b) deviation

Question 9.
Directing is a responsibility of ……………… at all levels.
(a) Manager
(b) Worker
(c) People
Answer:
(a) Manager

Maharashtra Board 12th OCM Important Questions Chapter 2 Functions of Management

Question 10.
Physical, financial and human resources to develop productive relationship is a ………………. function.
(a) Organising
(b) Directing
(c) Staffing
Answer:
(a) Organising

Match the pairs

Question 1.

Group A Group B
(A) Planning (1) Individual Taste
(B) Organising (2) Goodwill
(C) Staffing (3) Bridges the gap between where we are now and where we want to go
(D) Co-ordinating (4) All the people are employed
(E) Controlling (5) Not directly related to Human Beings
(6) Identify and Grouping the work to be performed
(7) Corrective Action taking
(8) Right People at Right Jobs
(9) Taking action against employees
(10) Aims only at Organisational Goals

Answer:

Group A Group B
(A) Planning (3) Bridges the gap between where we are now and where we want to go
(B) Organising (6) Identify and Grouping the work to be performed
(C) Staffing (8) Right People at Right Jobs
(D) Co-ordinating (2) Goodwill
(E) Controlling (7) Corrective Action taking

Question 2.

Group A Group B
(A) Planning (1) Unimportant management function
(B) Organising (2) Increases productivity
(C) Staffing (3) Goal-oriented /Basic function
(D) Co-ordinating (4) Manager
(E) Controlling (5) Departmentalisation
(6) Following orders
(7) Human Resource Development
(8) Worker
(9) Chain of action
(10) Deviations in performance

Answer:

Group A Group B
(A) Planning (3) Goal-oriented /Basic function
(B) Organising (5) Departmentalisation
(C) Staffing (7) Human Resource Development
(D) Co-ordinating (9) Chain of action
(E) Controlling (10) Deviations in performance

Give one word/phrase/term for the following statements

Question 1.
One of the functions of management is considered as a base for all functions.
Answer:
Planning function

Maharashtra Board 12th OCM Important Questions Chapter 2 Functions of Management

Question 2.
The function of management, which identifies and divides the work of the organisation.
Answer:
Organising function

Question 3.
A process where standards are set, actual performance is measured and corrective action is taken.
Answer:
Controlling function

Question 4.
An end function where the performance is evaluated in accordance with plan.
Answer:
Controlling function

Question 5.
An orderly arrangement of group efforts to provide unity of action to achieve common goals.
Answer:
Co-ordinating function

Question 6.
A process of taking steps to bring actual results and desired results closer together.
Answer:
Controlling function

Question 7.
A function which provides instructions from top level management to the lower level.
Answer:
Directing function.

Complete the sentences

Question 1.
A few philosophers called ………………. as ‘Life spark of an Enterprise’.
Answer:
Directing

Question 2.
……………….. is an integral part of direction function.
Answer:
Supervision

Question 3.
……………….. is a hidden force that binds all other functions of management.
Answer:
Co-ordination.

Maharashtra Board 12th OCM Important Questions Chapter 2 Functions of Management

Explain the following terms/concepts

Question 1.
Co-ordination
Answer:
Co-ordination is the integration and synchronisation of the efforts of a group of employees so as to provide unity of action for organisational goals. It is a hidden force which binds all other functions of management. Different activities of different departments are integrated and harmonised in achieving desired goal of an organisation. Thus, co-ordination between different functions and all levels of employee is the heart of success of an organisation.

Question 2.
Controlling
Answer:
Controlling is the process of bringing about conformity of performance with actual planned action. It helps is taking timely corrective measures to bring the actual and desired results close to each other. Controlling helps in formatting future plan also. It is required in all types of organisation and at all levels of management.

Distinguish between

Question 1.
Planning and Staffing
Answer:

Planning Staffing
1. Meaning Planning refers to a process of deciding in advance what to do, where to do, how to do, when to do and who is to do it. Staffing is a process of recruitment through which competent employees are selected, properly trained, effectively developed, suitably rewarded.
2. Objective The objective of planning is to set the goals and choose the means to achieve those goals. The objective of the staffing is to obtain the most competent and efficient staff to improve the overall performance.
3. Area of function Planning involves setting objectives, identifying alternative courses of actions and selecting best plain for the organisation. Staffing involves selection, recruitment, training, development, promotion, transfer, etc. of employees
4. Factors In planning function, internal as well as external factors are considered to set the targets. In staffing function, only internal factors such as human factor, finance, workload, etc. are considered.
5. Resources Planning is related to those resources which are required for achieving the targets. Staffing is related to human resources only.
6. Levels of management Usually, overall planning for the entire organization is done by the top-level management. Usually, the function of staffing is undertaken by the middle-level management.

 

Maharashtra Board 12th OCM Important Questions Chapter 1 Principles of Management

Balbharti Maharashtra State Board 12th OCM Important Questions Chapter 1 Principles of Management Important Questions and Answers.

Maharashtra State Board 12th Commerce OCM Important Questions Chapter 1 Principles of Management

Select the correct options and rewrite the sentences

Question 1.
The technique of study of ………………. concentrates on the body movements of the worker.
(a) Motion
(b) Time
(c) Organization
Answer:
(a) Motion

Maharashtra Board 12th OCM Important Questions Chapter 1 Principles of Management

Question 2.
14 principles of management are developed by ………………
(a) F. W. Taylor
(b) Henry Fayol
(c) Peter Drucker
Answer:
(b) Henry Fayol

Question 3.
Management principles influence ……………..
(a) human behaviour
(b) organization
(c) government
Answer:
(a) human behaviour

Question 4.
Management principles are …………….. in nature.
(a) constant
(b) universal
(c) limited
Answer:
(b) universal

Question 5.
Management principles establish ……………….. relationship.
(a) social
(b) legal
(c) cause and effect
Answer:
(c) cause and effect

Question 6.
‘One-plan-one head’ is stated in ……………….
(a) Principle of Direction
(b) Principle of Unity of Command
(c) Scalar Chain
Answer:
(a) Principle of Direction

Question 7.
Principle that focuses on complete change in the attitude of the employees is known as the Principles of …………………
(a) Attitude Change
(b) Scientific Management
(c) Mental Revolution
Answer:
(c) Mental Revolution

Match the pairs

Question 1.

Group A Group B
(A) Division of work (1) Direct communication
(B) Authority (2) Adhering to rules
(C) Fair  remuneration (3) Specialisation
(D) Discipline (4) Long chain of communication
(E) Gang Plank (5) Right wages to the employees
(6) Responsibility
(7) No confidence in management policies
(8) Allotting work to any employee
(9) Exploitation of workers
(10) Misuse of power

Answer:

Group A Group B
(A) Division of work (3) Specialisation
(B) Authority (6) Responsibility
(C) Fair  remuneration (5) Right wages to the employees
(D) Discipline (2) Adhering to rules
(E) Gang Plank (1) Direct communication

Maharashtra Board 12th OCM Important Questions Chapter 1 Principles of Management

Give one word/phrase/term for the following statements

Question 1.
Father of Scientific Management.
Answer:
Fredrick Winslow Taylor

Question 2.
The principle of management which says unity is strength.
Answer:
Principle of Esprit de corps

Question 3.
The principle of management explaining about fair payment to workers.
Answer:
Principle of Remuneration

Question 4.
The statements which disclose fundamental truth of management.
Answer:
Principle of Management

Question 5.
Principle of management which states that there should be balance between the authority and responsibility.
Answer:
Principle of Authority and Responsibility

Question 6.
Principle of management which states that every employee should receive orders and instructions from one boss only.
Answer:
Principle of Unity of Command.

State whether the following statements are True or False

Question 1.
Management principles are applicable to all types of organisation.
Answer:
True

Question 2.
Employees can be motivated by following the principle of fair remuneration.
Answer:
True

Maharashtra Board 12th OCM Important Questions Chapter 1 Principles of Management

Question 3.
The goal of organisation must not be sacrificed for individual goal.
Answer:
True

Question 4.
F. W. Taylor recommended total six foremen to control the various aspects of production.
Answer:
False.

Find the odd one

Question 1.
Principle of Unity of Direction, Principle of Centralisation, Principle of Order, Time Study.
Answer:
Time Study

Question 2.
Standardisation of tools and equipment, Science – not rule of thumb, Mental Revolution, Division of Responsibility.
Answer:
Standardisation of tools and equipment

Question 3.
Scientific task setting, Scientific selection and training. Principle of Stability of Tenure, Differential Piece – Rate Wage Plan.
Answer:
Principle of stability of tenure

Justify the following statements

Question 1.
Principles of management improve the efficiency of employees.
Answer:
(1) Principles of management if used and applied by the organisation in right direction, they help to improve understanding and the overall efficiency of the employees. Principles of management advocate planned activities and : systematic organisation of men, materials, methods, machinery, etc. which in turn help to improve and increase the efficiency of employees.

(2) Principles of management guide the managers about handling the human resource, reducing the wastage, co-ordinating the activities of different departments, etc. This helps to improve the productivity in the organisation and consequently efficiency of employees. Principles of management also help to develop the objective approach.

(3) Application and use of principles of management leads to specialisation, increased productivity and efficiency. It boosts the morale of employees. These principles help to co-ordinate and control various activities of the organisation and also motivate the employees to perform more efficiently and effectively.

(4) Principle of fair remuneration indicates the management to pay adequate wages and other incentives to the employees. This goes a long way to increase the morale of employees who in turn would put their best efforts to perform their duties more efficiently. Principles of management also help to understand social responsibilities and to carry out research and development activities to improve the efficiency of employees.

Maharashtra Board 12th OCM Important Questions Chapter 1 Principles of Management

Question 2.
Principles of management are applicable to all types of organisations.
Answer:
(1) Principles of management are the statements of fundamental truth which act as guidelines for managerial decision-making and actions. They establish cause and effect relationship. They are evolved through observation, analysis and experiments.

(2) However, managers can suitably modify the principles of management keeping in mind the requirements of the organisation.

(3) Principles of management are also helpful in achieving and attaining social and cultural goals. They are also directed to maximising profit without ignoring social values.

(4) Thus, Principles of management are universal in nature. They are applicable to all types of organisations irrespective of the type, size or nature of the organisations.

Attempt the following

Question 1.
Explain the significance of management principles.
Answer:
The significance of management principles is explained as follows:
(1) Provides useful insight to manager : The study of management principles helps the manager to understand the organisation, its situations and problems. They act as guidelines to find out the ‘ solutions to the problems and handle the situation accordingly. The use and application of these principles help the manager to know the manner in which they should act in different situations, Timely guidance provided by the management principles reduces the wastage of resources and help to achieve goals in exact manner.

(2) Helpful in efficient utilisation of resources : The two resources used in the organisations Eire classified as physiCEd resources such as materials, machine, money, etc. and human resources i.e. manpower. The main function of management is to mEiintain proper balance between these resources by putting them to optimum use and control the wastage of resources. It uses different techniques Emd management principles and maintains discipline and healthy working environment. This helps to establish cordial relation between management and employees. This in turn increases the efficiency level of employees.

(3) Scientific decisions : Scientific decisions in relation to business organisation implies systematic and balanced decision. Management principles train and help the manager to tackle the situation tactfully instead of using trial and error method. Managers get an idea to analyse the situation systematically, to search alternative options and their results with the use of management principles.

(4) Understanding social responsibility: A business is a part of society. It makes use of the resources of the society and therefore, it has to perform some social responsibilities. Management principles guide the managers to understand and perform social responsibilities so that management can focus on providing quality products at reasonable prices, avoiding unfair trade practices and artificial monopolistic situations in the market, fair remuneration to employees, a healthy working environment, standard tools, and equipment, etc.

(5) Encourage Research and Development: Principles of management are evolutionary in nature and have evolved with the passage of time. They have undergone certain changes on account of changes in the business world. They are modified and developed over the years to suit the current trends. They stress scientific study, research, and development in the organization. Research and Development always work to find out new techniques in the field of production, marketing, finance, human resources, etc.

(6) Helps to coordinate and control: Principles of management serve as guidelines for better coordination and control. These principles help the managers in this challenge to coordinate the activities of different departments. Managers can easily exercise control over the performance of their employees. The proper use of these principles helps to achieve the given target easily.

Maharashtra Board 12th OCM Important Questions Chapter 1 Principles of Management

(7) Develops objective approach: By using various principles of management, the manager can develop an objective approach. The manager can find out and identify opportunities, root causes of the problems and can provide appropriate solutions on it in the right direction. This approach also helps to build confidence in the minds of the managers.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

Balbharti Maharashtra State Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures Important Questions and Answers.

Maharashtra State Board 12th Secretarial Practice Important Questions Chapter 4 Issue of Debentures

1A. Select the correct answer from the options given below and rewrite the statements.

Question 1.
A company raises debt capital through the issue of ___________
(a) equity shares
(b) preference shares
(c) debentures
Answer:
(c) debenture

Question 2.
Debenture holder is ___________ of the company.
(a) Owner
(b) debtor
(c) creditor
Answer:
(c) creditor

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

Question 3.
Debenture holders get income in the form of ___________
(a) Dividend
(b) Interest
(c) Bonus
Answer:
(b) Interest

Question 4.
Power to issue debentures rests with ___________
(a) Chairman
(b) Secretary
(c) Board of Directors
Answer:
(c) Board of Directors

Question 5.
The word ‘Debenture’ is derived from the Latin word ___________
(a) Debere
(b) Debenture
(c) Debire
Answer:
(a) Debere

Question 6.
Debenture cannot be redeemed ___________
(a) at par
(b) at premium
(c) at discount
Answer:
(c) at discount

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

Question 7.
The company has to obtain the consent of ___________ if the issue of debentures exceeds ₹ 1.
(a) SEBI
(b) Registrar
(c) National Stock Exchange
Answer:
(a) SEBI

Question 8.
Debenture certificate must be issued within ___________ months of allotment.
(a) 3
(b) 6
(c) 9
Answer:
(b) 6 months

Question 9.
The ___________ is an advertisement for the issue of debentures.
(a) memorandum of association
(b) articles of association
(c) prospectus
Answer:
(c) prospectus

Question 10.
Debenture holders is entitled to receive ___________ certificate from the company.
(a) Share
(b) Debenture
(c) Dividend
Answer:
(b) Debenture

Question 11.
Fully convertible debentures are converted into ___________ shares on maturity.
(a) equity
(b) deferred
(c) bonus
Answer:
(a) Equity

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

Question 12.
A return of allotment is filed with the Registrar within ___________ days of allotment.
(a) 30
(b) 60
(c) 90
Answer:
(a) 30

Question 13.
The ___________ can direct the company to repay the principal amount of debenture with interest.
(a) Company Law Board
(b) Registrar
(c) Shareholders
Answer:
(a) Company Law Board

Question 14.
In order to redeem old debentures the company issues ___________
(a) assets
(b) public deposits
(c) fresh debenture
Answer:
(c) fresh debenture

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

1B. Match the pairs.

Question 1.

Group ‘A’ Group ‘B’
(1) Debenture Trustees (a) No voting rights
(2) Debenture (b) ICRA
(3) Convertible debenture (c) Security about Repayment
(4) Secured debenture (d) CARE
(5) Debenture holder (e) Equity Shares
(f) Borrowed capital
(g) Protect Debenture holders

Answer:

Group ‘A’ Group ‘B’
(1) Debenture Trustees (g) Protect Debenture holders
(2) Debenture (f) Borrowed capital
(3) Convertible debenture (e) Equity Shares
(4) Secured debenture (c) Security about Repayment
(5) Debenture holder (a) No voting rights

Question 2.

Group ‘A’ Group ‘B’
(1) Charge on Asset (a) Credit Rating
(2) Redeemable debenture (b) Secured debenture
(3) Board of Directors (c) 90 days
(4) CRISIL (d) Power to issue debenture
(5) Debenture Certificate (e) Unsecured Debenture
(f) Repaid on maturity
(g) 6 months

Answer:

Group ‘A’ Group ‘B’
(1) Charge on Asset (b) Secured debenture
(2) Redeemable debenture (f) Repaid on maturity
(3) Board of Directors (d) Power to issue debenture
(4) CRISIL (a) Credit Rating
(5) Debenture Certificate (g) 6 months

Question 3.

Group ‘A’ Group ‘B’
(1) Board of Directors (a) Within 6 months after allotment
(2) Debentures (b) No voting right
(3) Debenture holder (c) Application of debentures
(4) CARE (d) Interest
(5) Debenture Certificate (e) Voting right
(f) Within 120 days after allotment
(g) Credit rating agency
(h) Dividend
(i) SEBI
(j) Creditors

Answer:

Group ‘A’ Group ‘B’
(1) Board of Directors (c) Application of debentures
(2) Debentures (d) Interest
(3) Debenture holder (b) No voting right
(4) CARE (g) Credit rating agency
(5) Debenture Certificate (a) Within 6 months after allotment

Question 4.

Group ‘A’ Group ‘B’
(1) Trust Deed (a) Owner
(2) Debenture Certificate (b) Deed for debenture holders
(3) Secured Debenture (c) Charge on company’s assets
(4) Redemption by annual installment (d) Creditors of the company
(5) Debenture holders (e) Signature of two directors
(f) Two coupons
(g) Deed for depositors
(h) No charge on the company’s assets
(i) CARE
(j) Credit rating

Answer:

Group ‘A’ Group ‘B’
(1) Trust Deed (b) Deed for debenture holders
(2) Debenture Certificate (e) Signature of two directors
(3) Secured Debenture (c) Charge on company’s assets
(4) Redemption by annual installment (f) Two coupons
(5) Debenture holders (d) Creditors of the company

1C. Write a word or a term or a phrase that can substitute each of the following statements.

Question 1.
The provision dealing with the issue of debenture.
Answer:
Section 71 of the companies Act 2013

Question 2.
Name of the capital controller in India.
Answer:
SEBI

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

Question 3.
Debenture converted in equity shares.
Answer:
Convertible Debenture

Question 4.
Redemption time of secured debenture.
Answer:
10 years

Question 5.
The authority which listing the debentures.
Answer:
Stock Exchange

Question 6.
Application received more than the issue.
Answer:
Over Subscription

Question 7.
Authority consulted by Debenture Trustee.
Answer:
NCLT

Question 8.
The agency provides a credit rating of the security.
Answer:
Credit Rating Agency

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

Question 9.
Register of Entries of the debenture.
Answer:
Register of debenture

Question 10.
Meeting conducted in an emergency.
Answer:
Extraordinary General Meeting.

1D. State whether the following statements are true or false.

Question 1.
Debenture holders are the creditors of the company.
Answer:
True

Question 2.
Board has no power to issue debenture.
Answer:
False

Question 3.
Debenture helps to raise borrowed capital.
Answer:
True

Question 4.
Debenture holders enjoy normal voting rights.
Answer:
False

Question 5.
The debenture is permanent capital.
Answer:
False

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

Question 6.
A debenture trustee is a link between the company and Debenture holders.
Answer:
True

Question 7.
Appointment of the underwriter is compulsory.
Answer:
False

Question 8.
Listing of debenture is compulsory.
Answer:
True

Question 9.
SEBI has contracted over the security market.
Answer:
True

Question 10.
The allotment procedure should be completed within 60 days.
Answer:
True

Question 11.
A debenture Trust deed is a legal Agreement.
Answer:
True

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

1E. Find the odd one.

Question 1.
SEBI, NCLT, SBI
Answer:
SBI

Question 2.
25%, 15%, 10%
Answer:
10%

Question 3.
CARE, CRISIL, SEBI
Answer:
SEBI

Question 4.
Credit Rating Agency Stock Exchange, SBI
Answer:
SBI

Question 5.
SEBI, NCLT, CRISIL
Answer:
CRISIL

Question 6.
Debenture Certificate Trust Deed, share certificate
Answer:
Share Certificate

1F. Complete the sentences.

Question 1.
Debenture holder has no ___________ rights.
Answer:
Voting

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

Question 2.
CRISIL is responsible to ___________ of securities.
Answer:
Credit Rating

Question 3.
Company enters into ___________ with underwriter.
Answer:
Underwriting Agreement

Question 4.
___________ is needed to increase borrowing power.
Answer:
Special Resolution

Question 5.
If borrowing power of board is to be increased ___________ must be held.
Answer:
Extra Ordinary General Meeting

1G. Select the correct option from the bracket.

Question 1.

Group ’A’ Group ’B’
(1) Board of Directors (a) …………………….
(2) ……………………. (b) Interest
(3) Debenture holders (c) ……………………..
(4) …………………….. (d) Credit Rating Agency
(5) Debenture certificate (e) ………………………..

(Debenture, Application of debenture, No Voting Rights, 6 months, CARE)
Answer:

Group ’A’ Group ’B’
(1) Board of Directors (a) Application of debenture
(2) Debenture (b) Interest
(3) Debenture holders (c) No Voting Rights
(4) CARE (d) Credit Rating Agency
(5) Debenture certificate (e) 6 months

1H. Answer in one sentence.

Question 1.
Who creates a charge over assets?
Answer:
Debenture Trustee can create a charge over asset.

Question 2.
When is the permission of SEBI required?
Answer:
When borrowing capital exceeds 1 crore, consent of SEBI is required.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

1I. Correct the underlined word and rewrite the following sentences.

Question 1.
Debenture holders get fluctuating interest.
Answer:
Debenture holders get Fixed interest.

Question 2.
Convertible debenture holders can be converted into preference shares.
Answer:
Convertible debenture holders can be converted into Equity Shares.

Question 3.
Shareholders have the power to issue debenture.
Answer:
The Board of directors has the power to issue debenture.

Question 4.
A debenture Trust deed is an illegal document.
Answer:
A debenture Trust deed is a legal document.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

Question 5.
Debenture certificate issued by the company within 3 months.
Answer:
Debenture certificate issued by the company within 6 months.

Question 6.
Debenture holders are the owners of the company.
Answer:
Debenture holders are the creditor of the company.

Question 7.
Debentures generate owned capital for the company.
Answer:
Debentures generate borrowed capital for the company.

1J. Arrange in proper order.

Question 1.
(a) Offer letter
(b) Debenture Trust Deed
(c) Written Consent
Answer:
(a) Offer letter
(b) Written Consent
(c) Debenture Trust Deed

Question 2.
(a) Allotments of debenture
(b) Return with ROC
(c) Debenture Certificate
Answer:
(a) Allotments of debenture
(b) Debenture Certificate
(c) Return with ROC

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

Question 3.
(a) Issue of prospectus
(b) Return with ROC
(c) Underwriting Agreement
Answer:
(a) Issue of prospectus
(b) Underwriting Agreement
(c) Return with ROC

Question 4.
(a) Board meeting
(b) Open Separate Bank Account
(c) Extra-Ordinary General Meeting
Answer:
(a) Board meeting
(b) Extra-Ordinary General Meeting
(c) Open Separate Bank Account

Question 5.
(a) Receiving Application Money
(b) Allotment of debenture
(c) Open Bank Account
Answer:
(a) Receiving Application Money
(b) Open Bank Account
(c) Allotment of debenture

Question 6.
(a) Preparation and consent to the prospectus
(b) Filing with ROC
(c) Special Resolution Passed
Answer:
(a) Special Resolution Passed
(b) Preparation and consent to the prospectus
(c) Filing with ROC

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

Question 7.
(a) Debenture Certificate
(b) Entries in Register
(c) Underwriting contract
Answer:
(a) Underwriting contract
(b) Debenture Certificate
(c) Entries in Register

2. Explain the following terms/concepts.

Question 1.
Debenture
Answer:
The company raises capital by borrowing money from the public or its members. It is a proof of loan taken by the company. A person who purchases debenture is called a debenture holder. Interest is paid to the debenture holders.

Question 2.
Debenture Redemption Reserve
Answer:
Debenture Redemption Reserve is useful for the redemption of the debenture. It is created out of the profit of the company which has maintained a 25% minimum of the value of outstanding debenture in DRR.

Question 3.
Minimum Subscription
Answer:
Minimum subscription is a term that is used to represent the amount of the issue which has to be subscribed or else the shares can’t be issued if it is not being subscribed.

Question 4.
Underwriting
Answer:
An underwriting contract is a contract between an underwriter and the issuer of securities. It is helpful to issuer companies when securities are not being subscribed by the public. Here, underwriters guarantee the sale of issued stock at the agreed price.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

Question 5.
Credit Rating
Answer:
It is an estimation of the ability of a person or organization to fulfill their financial requirement, commitments, based on previous dealings. Credit Rating Agencies are responsible for credit rating.

Question 6.
Secured debenture
Answer:
Secured debentures are bonds that are issued with collateral. Here, a charge is created against the assets of the company. If a company is in default, assets can be realized to recover the dues.

3. Study the following case/situation and express your opinion.

1. ABC Limited is going to redeem its 1000 debentures of ₹ 100 each. Please advise them on the following:

Question (a).
Which fund should be created by the company to redeem debentures?
Answer:
The company should create a Debenture Redemption Reserve to redeem debentures.

Question (b).
Can debenture trustees consult NCLT if the company is at default?
Answer:
If the company is at default regarding repayment of debentures, then Debenture trustees can consult the NCLT.

Question (c).
What will be the change in the register of debenture holders?
Answer:
If debentures are redeemed, their entries will be cancelled from requisite.

2. Zeal Co. Ltd. is going to issue 2000 debentures. Please advise them on the following:

Question (a).
Does the company have to list the debentures on the stock exchange?
Answer:
Yes, the company has to list the debentures on the stock exchange.

Question (b).
Should the company get a credit rating for issuing debentures?
Answer:
Yes, the company should get a credit rating for issuing debenture and from SEBI.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

Question (c).
Can the company show a credit rating in the prospectus?
Answer:
Yes, the credit rating should be mentioned in the prospectus/offer letter/letter of offer.

4. Answer in brief.

Question 1.
Define Debenture and State its meaning.
Answer:
Definitions of Debenture:

  • According to Section 82 of Companies Act, “Debenture to any member of the company is a movable property, transferable in the manner provided by the Articles of Association:
  • According to the Oxford dictionary “Debenture is a certificate issued by a company act now leading that it has borrowed money on which interest is being paid”.

Meaning:

  • The word ‘Debenture’ is derived from the Latin word ‘Debere’- which means to owe something to someone.
  • It is a proof of loan taken by the company on certain terms and conditions.
  • It can be issued by public or private companies to raise borrowed capital.
  • A person who purchases it is called a debenture holder and he is a creditor of a company.
  • It can be issued at par, premium, and discount.
  • The Board of Directors has the power to issue debentures.
  • Debenture holders get a fixed rate of interest on their investments.

Question 2.
State the provisions as per Companies (Share Capital and Debenture) Rules, 2014 (i.e. Rule 18).
Answer:
If a company issued secured debenture, then it has to follow Rule 18 of Companies Rules, 2014. The provisions are as follows:
(i) Tenure of secured debenture:
All secured debentures should be redeemed within 10 years from the date of its issue. Infrastructure companies, Companies permitted by the Ministry of Corporate Affairs, Central Government, or RBI can issue debentures beyond the period of 10 years but not exceeding 30 years.

(ii) Create charge on assets:
Secured debentures create charges on assets. The value of the charge should be adequate to cover the entire value of debentures issued and the interest to be paid on it.

(iii) Debenture Trustee:
Before issuing a prospectus, the company has to appoint a Debenture Trustee. The company should execute the trust deed within 60 days from allotment of a debenture or before issuing the prospectus/offer letter. The Rules and Regulations of Trust Deed decide the role of debenture trustees.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

(iv) Debenture Redemption Reserve:
The company has to create a Debenture Redemption Reserve to redeem debentures. The company should maintain at least 25% of the value of outstanding debentures in the DRR account. Money from this account is used for the redemption of the debenture. Every year on or before 31st March, the company has to invest or deposit a sum of not less than 15% in the DRR account for the maturing debentures in the next year.

Question 3.
What are/Explain the requirement of SEBI for the issue of debentures?
Answer:
Following are the requirements as per SEBI for the issue of debentures in the market:
(i) Condition of minimum subscription: Regulation 12 of SEBI Regulation Act 2008 is responsible to regulate the minimum subscription collected by the company. As per SEBI, the minimum subscription for public issues is 75% of the issue price. If the minimum subscription is not received, then it should be refunded within 12 days from the date of closure of the issue.

(ii) Over Subscription:
Oversubscription means a situation where a company has more buyers than the shares to fulfill the client’s order. The company can retain oversubscription on up to a maximum of 100% of the issue price or any lower unit as specified by the prospectus.

(iii) Underwriting:
A company may enter into an underwriting agreement with underwriters for its public issue of debentures. The appointment of underwriters must be mentioned in the prospectus/offer letter/letter of offer.

(iv) Credit Rating:
As per SEBI, the company making public issue, or right issue of convertible debenture must obtain a credit rating from one or more credit rating agencies. The rating must be mentioned in the offer letter/prospectus. In India, ICRA, CRISIS, CARE are famous or recognized credit rating agencies for the corporate sector.

Question 4.
Who are Debenture Trustees?
OR
Explain the role of Debenture Trustees.
OR
Write a note on Debenture Trustees.
Answer:

  • Debenture holders are the creditors of the company and they cannot participate in the routine affairs of the management of the company. So, in order to protect the interest of debentures, the company appointed debenture trustees.
  • Debenture trustees are the institutions that protect the interest of debenture holders.
  • Debenture Trustees create a charge on assets of the company on behalf of debenture holders. They are the custodian of assets on which charge has been created.
  • In order to appoint debenture trustees, the company has to execute the debenture trust deed within 3 months, and the offer letter should be issued within 60 days after the allotment.
  • The prospectus or offer letter must mention the names of debenture trustees.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

5. Justify the following statements.

Question 1.
The company can list its debentures on Stock Exchange.
Answer:

  • A company can issue secured as well as unsecured debentures.
  • Debentures are issued to the general public.
  • The company can issue debentures to its members through public offers or offer through private placement.
  • The company gets its debentures rate from one or more credit rating agencies which attract the general public or members of the company.
  • Thus, it is rightly said that a company can list its debentures on Stock Exchange.

Question 2.
Debenture holders do not enjoy any voting rights.
Answer:

  • The company borrows a large amount of money by issuing debentures.
  • Debentures are considered to be the long-term loan that is repaid after a long period.
  • Debenture holders are the creditors of the company.
  • The company has to pay interest to the debenture holders even if the company makes a loss in the current year.
  • Thus, it is rightly said that debenture holders do not enjoy any voting rights.

Question 3.
Debenture Redemption Reserve Account is used for the redemption of debentures.
Answer:

  • Debenture Redemption Reserve is created from the profits earned by the company.
  • The company has to maintain at least 25% of the value for the outstanding debentures in the DRR account.
  • Similarly, every year on or before 31st March, the company has to invest or deposit a sum of not less than 15% in the DRR account for the maturing debentures in the next year.
  • Thus, it is rightly said that Debenture Redemption Reserve Account is used for the redemption of debentures.

Question 4.
Members, as well as debenture holders, can inspect the debenture trust deed.
Answer:

  • The company enters into the contract with the debenture trustees which is called as ‘Debenture Trust Deed”.
  • It is a legal instrument conveying the assets of a company of the trustees.
  • The deed includes the rights of debenture holders and the duties and powers of debenture trustees.
  • It contains terms and conditions agreed between the company and debenture trustee.
  • Thus, it is rightly said that members, as well as debenture holders, can inspect the debenture trust deed.

6. Attempt the following.

Question 1.
Explain the regulations governing the issue of different types of debentures.
Answer:
A company has to comply with the provisions while issuing different types of debentures. Depending upon the type of debenture, the company has to fulfill the following provisions/regulations:
(i) Companies Act, 2013: Sec. 71 of Companies Act, 2013 contains provisions for the issue of debentures.

(ii) Company Rules 2014 (Share Capital and Debentures), Rule 18: Rule 18 of Companies (Share Capital and Debentures) Rules, 2014 contains provisions for the issue of the secured debenture.

(iii) SEBI Regulations, 2008: SEBI Regulations, 2008 covers the provisions related to the issue and listing of debentures that are not convertible, either wholly or partly into equity shares. It is applicable to only those debentures which are issued through public offer, private placement. Disclosure requirements are to be followed the same as the public issue of equity shares.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 4 Issue of Debentures

(iv) SEBI Regulations, 2009: SEBI Regulations, 2009 (Issue of Capital and Disclosure Requirement) covers provisions for issue of debentures and listing of debentures that are convertible, rather partially, fully, or optionally into listed or unlisted equity shares. It also has to follow the same disclosure norms as applicable to equity shares.

(v) SEBI Regulations, 2015: SEBI Regulations, 2015 (Listing Obligations and Disclosure Requirements) covers provisions for the listed company issuing non-convertible debentures, perpetual debt instruments, etc. It includes various listing conditions which a company has to comply with.

(vi) RBI Guidelines: RBI Guidelines are formed for the banks which raise capital by issuing non-equity instruments.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 3 Issue of Shares

Balbharti Maharashtra State Board Class 12 Secretarial Practice Important Questions Chapter 3 Issue of Shares Important Questions and Answers.

Maharashtra State Board 12th Secretarial Practice Important Questions Chapter 3 Issue of Shares

1A. Select the correct answer from the options given below and rewrite the statements.

Question 1.
____________ of company must have provision regarding issue of bonus shares.
(a) Memorandum of Association
(b) Articles of Association
(c) Prospectus
Answer:
(b) Articles of Association

Question 2.
If a share of ₹ 100 is issued at ₹ 100, it is said to be issued at ____________
(a) Par
(b) Premium
(c) Discount
Answer:
(a) Par

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 3 Issue of Shares

Question 3.
If a share ₹ 100 is issued at ₹ 90, it is said to be issued at ____________
(a) Par
(b) Discount
(c) Premium
Answer:
(b) discount

Question 4.
____________ means placing the shares privately without inviting the public for subscription.
(a) Private placement
(b) Public placement
(c) Transfer
Answer:
(a) Private placement

Question 5.
A share certificate must be signed by at least ____________ directors.
(a) two
(b) three
(c) four
Answer:
(a) two

Question 6.
Letter of regret is accompanied by ____________
(a) refund order
(b) Call Letter
(c) Dividend warrant
Answer:
(a) refund order

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 3 Issue of Shares

1B. Match the pairs.

Question 1.

Group ‘A’ Group ‘B’
(1) Share certificate (a) Capitalization of profit
(2) Bonus shares (b) Transfer of shares due to operation of law
(3) Under subscription (c) Bearer document
(4) Transfer of shares (d) More applications than expected
(5) Private placement (e) Sale or gift of shares to another person
(f) Private company collecting capital privately
(g) Right Issue
(h) Registered document
(i) Public company collecting capital privately
(j) Fewer applications than expected

Answer:

Group ‘A’ Group ‘B’
(1) Share certificate (h) Registered document
(2) Bonus shares (a) Capitalization of profit
(3) Under subscription (j) Fewer applications than expected
(4) Transfer of shares (e) Sale or gift of shares to another person
(5) Private placement (i) Public company collecting capital privately

Question 2.

Group ‘A’ Group ‘B’
(1) Right issue (a) Shares allotted to the Board of Directors
(2) IPO (b) Negotiable instrument
(3) Share Warrant (c) Secondary market
(4) Bonus issue (d) Application letter
(5) Regret Letter (e) Partial issue
(f) Shares allotted to existing shareholders
(g) Non-negotiable instrument
(h) Shares issued at free of cost
(i) Refund order
(j) Primary market

Answer:

Group ‘A’ Group ‘B’
(1) Right issue (f) Shares allotted to existing shareholders
(2) IPO (j) Primary market
(3) Share Warrant (b) Negotiable instrument
(4) Bonus issue (h) Shares issued at free of cost
(5) Regret Letter (i) Refund order

Question 3.

Group ‘A’ Group ‘B’
(1) Employees Stock Option (a) Board of Directors
(2) Oversubscription (b) Conversion of shares to stock
(3) Allotment of shares (c) Control over stock exchanges
(4) Transmission of shares (d) Shares issued at more than face value
(5) Issue at par (e) More capital
(f) Transmission of ownership shares due to the operation of law
(g) Less capital
(h) Shares issued at face value
(i) Employees participation in business
(j) Refund of money

Answer:

Group ‘A’ Group ‘B’
(1) Employees Stock Option (i) Employees participation in business
(2) Oversubscription (e) More capital
(3) Allotment of shares (a) Board of Directors
(4) Transmission of shares (f) Transmission of ownership shares due to the operation of law
(5) Issue at par (h) Shares issued at face value

1C. Write a word or a term or a phrase that can substitute each of the following statements.

Question 1.
A letter that informs the applicant that shares are allotted to him.
Answer:
Letter of Allotment

Question 2.
A letter that informs the applicant that shares are not allotted to him.
Answer:
Letter of Regret

Question 3.
Passing ownership of shares from Shareholders to another person voluntarily.
Answer:
Transfer of shares

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 3 Issue of Shares

Question 4.
A document that is an invitation to the general public to subscribe for shares of the company.
Answer:
Prospectus

Question 5.
Money paid along with the application of shares.
Answer:
Application money

Question 6.
The authority has the right to make calls on shares.
Answer:
Board of Directors

Question 7.
Giving shares to share applicant or specific person with whom the company has entered into the contract.
Answer:
Allotment of shares

1D. Find the odd one.

Question 1.
IPO, FPO, ESES.
Answer:
ESES

Question 2.
ESOS, ESPS, Bonus Shares, Sweat Equity.
Answer:
Bonus Shares

1E. Correct the underlined word/s and rewrite the following sentences.

Question 1.
Rights shares are offered to existing employees of a company.
Answer:
Rights shares are offered to existing shareholders of a company.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 3 Issue of Shares

Question 2.
Letter of Regret should be sent to applicants whom shares are allocated.
Answer:
Letter of Allotment should be sent to applicants whom shares are allocated.

Question 3.
Transfer of Shares is done by operation of law.
Answer:
Transmission of shares is done by operation of law.

2. Explain the following terms/concepts.

Question 1.
Fixed Price Method
Answer:

  • In an initial public offering (IPO), if the shares are offered at a fixed price such issue is known as the Fixed Price issue.
  • In this method, the company mentions the quantity and the price at which shares are offered.

Question 2.
SARS
Answer:

  • It is a method for companies to offer their employees a bonus compensation if the company performs well financially.
  • The company allows a specified number of ‘Stock Appreciation Righf Units that are linked to the value of the Company’s shares on the date of allotment.

3. Answer in brief.

Question 1.
What is Transfer of Shares?
Answer:

  • Transfer of shares means the transfer of ownership of the shares from one person to another against consideration.
  • Transfer of shares is effected by removing the name of the existing shareholders (transferor) from the register of members and inserting the name of the new member (transferee).
  • Transfer of shares is a voluntary process of transferring shares by a member of a company.
  • A member may transfer the shares for consideration or give them away as a gift.
  • In the case of public companies, shares are freely transferable subject to the provisions of the Articles of Association.
  • In the case of private companies, there are restrictions on the free transfer of shares.
  • A member has to apply to the company for the transfer of shares by filling the ‘Instrument of Transfer’ and submit the share certificate along with the required transfer fees.
  • A member who is transferring the shares is called a Transferor and to whom the shares are to be transferred is called Transferor.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 3 Issue of Shares

4. Answer the following questions.

Question 1.
Explain briefly the different offering shares to Existing Employees.
Answer:
A company can raise funds by offering shares to its existing employees as follows:

  • Employees Stock Option Scheme (ESOS)
  • Employee Stock Purchase Scheme (ESPS)
  • Stock Appreciation Rights Scheme (EARS)
  • Sweat Equity Shares

(i) Employees Stock Option Scheme (ESOS):
An employee stock option plan is an employee benefits scheme under which the company encourages its employees to acquire ownership in the form of shares. 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 predetermined price. Generally, these shares are issued at discount. The shares are offered at a price lesser than their market price.

Following are the provisions related to ESOS:

  • A company may offer the shares directly to the employees or through an Employee Welfare Trust.
  • The shares are offered at a price lesser than their market price.
  • There is a minimum vesting period of one year.
  • The company specifies the lock-in period. It is a minimum of one year between the grant of option and vesting.
  • Shares issued under this scheme enjoy dividends or voting rights only after buying by employees.
  • The company has to get the approval of shareholders through a special resolution to issue ESOS.
  • An employee can neither transfer his option to any other person nor pledge/mortgage the shares issued under ESOS.
  • The company has to set up a compensation committee to administer ESOS
  • The company has to fulfill the provision of SEBI (Share Based Employee Benefits) Regulations, 2014.

(ii) Employee Stock Purchase Scheme:
An employee stock purchase scheme is a company-run programme in which participating employees can purchase companies equity shares 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.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 3 Issue of Shares

Provisions:

  • A different number of shares can be offered to different categories of employees.
  • Shares issued through ESPS – should be listed on a recognized stock exchange.
  • If ESPS is not a part of a public issue then it will have a one-year lock-in period from the date of allotment.
  • The company has to fulfill the provisions of SEBI.
  • The company has to get the approval of the shareholders by passing a special resolution to offer ESPS.

(iii) Stock Appreciation Rights Scheme:

  • It is a method for companies to offer their employees a bonus compensation if the company performs well financially.
  • The company allows a specified number of ‘Stock Appreciation Right’ Units that are linked to the value of the Company’s shares on the date of allotment. On the future date, the employee is paid the appreciation value in cash or through Equity Shares.
  • There is no lock-in period for SARS. To issue SARS company has to get the approval of shareholders by a special resolution.

(iv) Sweat Equity Shares:
These are shares issued by a company to its directors or employees at a discount or for consideration other than cash. It is one of the modes of making share-based payments to employees. It is issued in recognition of their valuable contribution in the prosperity of the company.

Sweat Equity Shares rank “Pari Passu” (equal footing) with other equity shares. These shares have a lock-in period of three years. The company has to get the approval of shareholders by passing a special resolution to issue Sweat Equity Shares.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

Balbharti Maharashtra State Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance Important Questions and Answers.

Maharashtra State Board 12th Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

1A. Select the correct answer from the options given below and rewrite the statements.

Question 1.
____________ is considered as Supreme controlling factor in business.
(a) Finance
(b) Material
(c) Machinery
Answer:
(a) Finance

Question 2.
A Company with share capital must issue ____________ shares.
(a) preference
(b) equity
(c) right
Answer:
(b) Equity

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

Question 3.
A person who purchases shares of a company is known as ____________
(a) Bondholder
(b) Shareholder
(c) creditor
Answer:
(b) Shareholder

Question 4.
A ____________ is indivisible unit of share capital.
(a) Debenture
(b) Share
(c) Bond
Answer:
(b) Share

Question 5.
A shareholder is entitled to receive ____________ as return on investment.
(a) Dividend
(b) Interest
(c) Discount
Answer:
(a) Dividend

Question 6.
____________ shares bear ultimate risk associated with ownership
(a) equity
(b) preference
(c) deferred
Answer:
(a) Equity

Question 7.
The control of the company is vested in ____________ shareholders.
(a) preference
(b) equity
(c) deferred
Answer:
(b) Equity

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

Question 8.
Bonus shares are issued as free gift to ____________ shareholder.
(a) equity
(b) deferred
(c) preference
Answer:
(a) Equity

Question 9.
Debentures are issued to raise ____________ capital.
(a) owned
(b) borrowed
(c) internal
Answer:
(b) Borrowed

Question 10.
Debentures are secured through ____________
(a) agreement
(b) trust deed
(c) contract
Answer:
(b) Trust Deed

Question 11.
Overdraft facility is allowed to ____________ account holder.
(a) savings
(b) current
(c) fixed
Answer:
(b) Current

Question 12.
Small retailers rely on ____________ credit from their suppliers.
(a) cash
(b) trade
(c) bank
Answer:
(b) Trade

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

Question 13.
____________ is the Depository receipt traded in countries other than USA.
(a) GDR
(b) ADR
(c) Fixed Deposit
Answer:
(a) GDR

1B. Match the pairs.

Question 1.

Group ‘A’ Group ‘B’
(1) Debenture holder (a) Owners of the company
(2) Retained profit (b) Capitalisation of profit
(3) Public deposit (c) Savings account holder
(4) Overdraft facility (d) Creditor of the company
(5) Equity shares (e) Maximum 3 years
(f) Maximum 5 years
(g) Current account holder
(h) Ploughing back of profit
(i) Permanent capital
(j) Temporary capital

Answer:

Group ‘A’ Group ‘B’
(1) Debenture holder (d) Creditor of the company
(2) Retained profit (h) Ploughing back of profit
(3) Public deposit (e) Maximum 3 years
(4) Overdraft facility (g) Current account holder
(5) Equity shares (i) Permanent capital

1C. Write a word or a term or a phrase that can substitute each of the following statements.

Question 1.
The type of shareholders who can participate in the management of the company.
Answer:
Equity shareholders

Question 2.
Name the shareholder who attends a particular meeting when his interest is affected.
Answer:
Preference shareholder

Question 3.
Shareholders who are residual claimants against assets and income.
Answer:
Equity share

Question 4.
The type of shares which can be redeemed after a certain period of time.
Answer:
Redeemable preference shares

Question 5.
Debentures that can be redeemed after a particular date.
Answer:
Redeemable debentures

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

Question 6.
Debentures can be converted into equity shares after a specific period.
Answer:
Convertible debentures

Question 7.
A definite promise in writing from the buyer for paying a certain amount on a specific date.
Answer:
Bill of exchange

1D. State whether the following statements are true or false.

Question 1.
Preference shareholders do not enjoy normal voting rights.
Answer:
True

Question 2.
Equity shareholders are real owners and controllers of the company.
Answer:
True

Question 3.
Retained earnings is a difficult and costly method of raising capital.
Answer:
False

Question 4.
Debenture holders get a fixed rate of dividend.
Answer:
False

Question 5.
Debentures are secured with some property of the company.
Answer:
True

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

Question 6.
Public deposits are a good source of long-term financing.
Answer:
True

Question 7.
A private company can collect deposits from the general public.
Answer:
False

Question 8.
Providing loans to businesses is the primary function of banks.
Answer:
True

Question 9.
Financial institutions play an important role in financing industrial firms.
Answer:
True

1E. Find the odd one.

Question 1.
An equity share, Preference share, Bond
Answer:
Bond

Question 2.
Debenture, Bond, Preference share
Answer:
Preference share

Question 3.
Public deposits, Debentures, Retained earning
Answer:
Retained earnings

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

Question 4.
ADR, GDR, Fixed Deposit
Answer:
Fixed Deposit

Question 5.
6, 24, 36
Answer:
24

Question 6.
Bonds, Debentures, Shares
Answer:
Shares

1F. Complete the sentences.

Question 1.
The value of share which is determined by demand and supply forces in the share market is ____________
Answer:
Market value

Question 2.
The shares which have a preferential right over equity shares in respect of dividend and return of capital are ____________
Answer:
Preference shares

Question 3.
____________ preference shares which are redeemed after a certain period of time.
Answer:
Redeemable Preference Shares

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

Question 4.
____________ is the value of share which is written on the share certificate and mentioned in the Memorandum of Association.
Answer:
Face value

1G. Select the correct option from the bracket.

Question 1.

Group ‘A’ Group ‘B’
(1) Debentures (a) …………………….
(2) …………………… (b) Public deposit
(3) Bondholder (c) ……………………..
(4) ………………….. (d) Equity share capital
(5) Depository Receipt traded in the USA (e) ……………………..

(Maximum 36 months, Trust Deed, ADR, Creditor, Permanent Capital)
Answer:

Group ‘A’ Group ‘B’
(1) Debentures (a) Trust Deed
(2) Maximum 36 months (b) Public deposit
(3) Bondholder (c) Creditor
(4) Permanent capital (d) Equity share capital
(5) Depository Receipt traded in the USA (e) ADR

1H. Answer in one sentence.

Question 1.
Who can accept the deposit?
Answer:
A public company having a net worth of not less than 100 crore rupees or a turnover of not less than 500 crore rupees; has obtained the prior consent of shareholders and resolution filed with Registrar before inviting deposits can accept deposits.

Question 2.
What are the minimum and maximum periods of deposits that can be accepted by the general public?
Answer:
Minimum 6 months and maximum 36 months is the period for accepting deposits from the general public.

Question 3.
Who is given overdraft facility?
Answer:
A current account holder of a bank is given an overdraft facility.

1I. Correct the underlined word/s and rewrite the following sentences.

Question 1.
Bondholders are owners of the company.
Answer:
Bondholders are creditors of the company.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

Question 2.
Private companies can collect deposits from the public.
Answer:
Private companies cannot collect deposits from the public.

1J. Arrange in proper order.

Question 1.
Equity Shares, Preference Share, Debenture.
Answer:
Debentures, Preference shares, Equity Shares

Question 2.
Forecasting, Board Meeting, Issue of Securities
Answer:
Forecasting, Board Meeting, Issue of Securities

Question 3.
Call loans, debentures, short term loans
Answer:
Call Loans, Short term loans, Debentures

2 Explain the following terms/concepts.

Question 1.
Public Deposits
Answer:

  • Public deposits are unsecured deposits invited by public limited company’s to finance working capital needs.
  • Prior consent from shareholders must be with the passing of the special resolution and a copy of the same to be filed with the Registrar.

Question 2.
Bonds
Answer:

  • A bond is a debt security and a formal contract to repay borrowed money with interest.
  • A bondholder is a lender to the institution hence, the creditor.

Question 3.
Discounting of the bill of exchange
Answer:

  • Discounting of a bill of exchange is a facility in which the holder of the bill can convert the bill to cash by discounting (giving as security) the bill with the bank before the date of maturity.
  • The bank charges its commission (discounting charges) and pays the balance to the holder.
  • It is an advance/short-term loan given to the holder of the bill.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

3. Study the following case/situation and express your opinion.

1. There are 2 companies namely company A and company B with the same financial positions and in the same line (producing the same type of products) willing to issue debentures to more than 500 people. Company A is issuing 12% redeemable debentures to be redeemed after 5 years and Company B is issuing 12% convertible debentures which will be converted after 5 years. As an investor.

Question (a).
Which company would one like to invest in?
Answer:
As an investor one would like to invest in Company B.

Question (b).
Is it worth investing or going for convertible or redeemable? Why?
Answer:
‘It is wise and worth investing in 12% Convertible debentures as for 5 years both companies are going to give same returns but after 5 years Company B gives conversion facility due to which creditor becomes a member and can enjoy all rights of membership.

Question (c).
Is there any party to be appointed to look into the safety of debenture holders?
Answer:
As the number of persons to whom the debentures are to be issued is more than 500, there has to be a party known as Debenture Trustee to be appointed who will look into the safety of Debenture holders.

2. A public limited company wants to invite depositor from the public at large as it neither wants to dilute its shareholdings nor at present want to use its reserves.

Question (a).
Does it require prior approval from shareholders?
Answer:
Yes, prior approval from shareholders is a must.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

Question (b).
What type of resolution does the company need to pass?
Answer:
The company needs to pass a special resolution for allowing to invite and accept deposits.

Question (c).
Is it necessary to file the resolution with the Registrar?
Answer:
Yes, a copy of the special resolution passed in the general meeting has to be filed before inviting the deposits.

3. A Company has an export order which is to be completed by June 15. It feels it may fall short of funds (₹ 5,00,000) as all its investments are likely to mature after July 15.

Question (a).
Does it cancel the export order?
Answer:
No, it need not cancel the order as it can approach a bank in which it has its current account for providing the funds.

Question (b).
What financial arrangements are to be made if it has to complete the order?
Answer:
It can enter into or avail overdraft facility for the required term period so that in case it falls short of funds, it can overdraw the required amount.

Question (c).
What is the amount of interest it has to pay?
Answer:
It will have to pay interest on excess amount overdrawn and for the term, it has used this extra amount.

4. A trader has drawn a bill of exchange for ₹ 50,000 on the sales made to a trader. The bill is drawn on the 1st of March 2020 for a period of 4 months. It is already a month from the date of the drawing.

Question (a).
Is there any source of finance available to him?
Answer:
Yes, a bill of exchange can act as a security and on the basis of the security, finance can be available to the trader.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

Question (b).
Can he in present situation avail any facilities?
Answer:
Yes even though a month has been completed, discounting facility with the bank is available.

Question (c).
How will the charges be calculated?
Answer:
Discounting charges will be calculated on the bill amount for 3 months at the prevailing rate decided by the bank.

4. Answer in brief.

Question 1.
What are the different sources of finance?
Answer:
(i) A business organisation requires finance

  • for various purposes
  • at different stages
  • for different term/period

(ii) The nature and size of the business determine the actual requirement of funds.

(iii) The company collects huge funds through different sources depending on the time period the funds are needed.

The various sources of finance available to the business may be as follows.
(a) External Sources: When capital is raised from outsiders/ outside the firm.

  • Used for collecting initial capital

The important external sources are:

  • Issue of shares
  • Issue of debentures/bonds
  • Public deposits
  • A loan from financial institutions
  • Bank Credit

(b) Internal Sources:

  • The capital is made available from within the organisation.
  • This is developed after a few years of profitable working of the firm.
  • The important internal source of finance is retained profit also known as ‘ploughing back of profit.’
  • The undistributed profit of the firm is re-invested in the business.

The external sources and internal sources can be further classified depending upon the financial requirements as:
(a) Long-term source: A business requires long-term finance for meeting fixed capital needs i.e. for a long duration.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

The main sources of long term finance may be:

  • Owned capital
  • Debt capital

(b) Short-term source: The short-term funds are required for meeting short-term requirements i.e. working capital requirement. The short term funds are arranged by means of

  • Public deposits
  • Bank credit
  • Trade credit
  • Loans from Directors
  • Advance from customers
  • Native money lenders
  • Government assistance

Question 2.
Describe different types of equity shares.
Answer:
The equity shares can be of two types:
(i) Equity share (with normal) with voting rights

  • The voting right of such equity holders is in proportion to his shareholdings.

(ii) Equity shares with differential voting right

  • Such equity shareholders shall have varying rights regarding dividend voting or otherwise in accordance with Rule 4 of Companies Act (Share Capital and Debenture) Rules 2014.
  • A company can thus, issue shares with limited voting rights or no voting rights.
  • They may be entitled to an extra rate of dividend.

Question 3.
What are retained earnings? What are the determinants of retained earnings?
Answer:

  • A part of the profit is retained by the company in the form of the reserve fund.
  • It is sum total of those profits, accumulated over the years and are reinvested in the business rather than distributed as dividends.
  • The process of accumulating corporate profits and their utilization in business is called ‘self-financing or ploughing back of profit.
  • It is the simple and cheapest method of raising finance by established companies.

Determinants of retained profits.
(i) Total earning of the company:

  • The company can save and retain some part of the profit, if there is ample profit ‘Larger the earnings, larger the savings.’
  • It is subject to the attitude of top management to determine the part of retained earnings.

(ii) Taxation policy:

  • The taxation policy of the government is an important determinant of corporate savings.
  • If the taxes rates charged/levied are high, a company cannot save much in the form of reserves.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

(iii) Dividend policy:

  • The policy of the Board of Directors as regards to the distribution of profit is another determinant.
  • A conservative dividend policy helps to have a good accumulation of profit.
  • The conservative policy affects the shareholders as they get dividends at a low rate.

(iv) Government Control:

  • A Government is a regulatory body of the economic system of the country.
  • Its policies, rules, and regulations compel the companies to work in that direction.
  • A Company has to formulate its dividend policy in accordance with the rules and regulations formed by the government.

(v) Expenditure policy of the company:

  • The expenditure of the company is classified as capital expenditure and revenue expenditure.
  • More and more expenditure of the company towards various projects and needs will be responsible to lesser saving and lesser retain earning.

Question 4.
List out the Financial Institutions in India.
Answer:

  • The Government has established special financial institutions for providing industrial finance.
  • These institutions provide medium and long-term finance.
  • They provide assistance to new companies as well as ongoing companies in the form of term loans, subscribing for shares and debentures, underwriting securities, and guaranteeing loans raised by cost.

(i) Development Banks:
They provide risk capital for economic development projects on a non-commercial basis. They play a crucial role in providing credit in the form of high-risk loans, equity positions, and risk guarantee instruments.
They include:

  • Industrial Development Bank of India (IDBI)
  • Industrial Finance Corporation of India Ltd. (IFCI)
  • Industrial Credit and Investment Corporation of India Ltd. (ICICI)
  • Small Industries Development Bank of India (SIDBI)
  • Industrial Reconstruction Bank of India (IRBI)

(ii) Financial Institutions:
They are institutions engaged in business dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange.
They include:

  • Risk Capital and Technology Finance Company Ltd. (RCTC)
  • Technology Development and Information Company of India Limited (TDICI)
  • Tourism Finance Corporation of India Limited (TFCI)

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

(iii) Investment Institutions:
Institutional investors are organisations that pool together on behalf of others and invest those funds in a variety of different financial instruments and asset classes.

They may be investment funds like Mutual funds, ETFs, (Exchange Traded Funds) Insurance Funds, Pension plans as well as investment banks and hedge Funds (alternative investment designed to protect investment portfolios from market uncertainty) They include:

  • Life Insurance Corporation of India (LIC)
  • Unit Trust of India (UTI)
  • General Insurance Corporation of India (GIC)

(iv) State Level Institutions:

  • They are financial agencies at the state level for the development of medium and small-scale industries. They include:
  • State Financial Corporations (SFC)
  • State Industrial Development Corporation (SIDC)

Question 5.
Explain the need/Importance/Significance of Institutional Financing.
Answer:
Financial Institutions provide debt capital to business enterprises and their need and importance may be as follows:
(i) To develop a sound capital market:

  • Financial Institutions help in developing a sound financial capital market.
  • They help in promoting and financing business enterprises either by underwriting issues or by subscribing to shares.

(ii) To mobilize financial resources:

  • Financial, institutions mobilize the scattered savings, merge them and provide the same to industries.
  • Capital is reluctantly provided to new ventures.
  • Financial Corporations have become important for the economic development of economically backward countries that fail to mobilize financial resources for development.

(iii) Capital Formation:

  • The rate of capital formation is very low in developing countries due to low per capita income and a lack of sufficient savings.
  • The gap between saving and investment is filled by financial institutions.

(iv) Planned Economy:

  • Financial institutions play an important role in the planned economic development of the country.
  • The projects of national importance are taken up by them.
  • Scarce finance resources are utilized at the optimum level.
  • Certain basic industries like iron and steel, cement, etc. are developed by the government through these institutions.

(v) Financing Small Business:

  • Special Corporations like SIDBI have been established for financing small-scale industries.
  • The problems related to small business are of different nature which is tackled by such setup corporations.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

(vi) Foreign Exchange Need:

  • Foreign exchange requirement is also one of the needs of such institutions.
  • They provide long-term loans in foreign curries.

(vii) Government taxation policy:

  • Business enterprises depend more on debt capital as investment/amount paid against debt is tax-deductible expenditure.
  • Financial institutions provide such debts to business organisations.

(viii) Rate of Interest:

  • The corporations charge a uniform rate of interest, irrespective of the amount of loan in relation to the total cost.
  • This also has become the reason for heavy borrowing from such institutions.

5. Justify the following statements.

Question 1.
Public Companies can accept deposits from the public.
Answer:

  • Public companies having a net worth of not less than ₹ 100 crores or a turnover of fewer than ₹ 500 crores can accept deposits from the general public.
  • A meeting has to be convened to get the approval of shareholders.
  • After consent, a special resolution has to pass and the same has to be filed with the Registrar.
  • Advertisements in newspapers have to be given to let people know regarding the acceptance of deposits.
  • Deposits thus can be accepted for a minimum period of 6 months and a maximum period of 36 months or 3 years.
  • Thus, it is rightly said, that public companies can accept deposits from the public.

6. Attempt the following questions.

Question 1.
Explain any five features of equity shares?
Answer:
Features of equity shares:
(i) Permanent Capital:

  • Equity shares are irredeemable shares. It is permanent capital.
  • The amount received from equity shares is not refunded by the company during its lifetime.
  • Equity shares become redeemable/refundable only in the event of the winding-up of the company or the company decides to buy back shares.
  • Equity shareholders provide long-term and permanent capital to the company.

(ii) Fluctuating dividend:

  • Equity shares do not have a fixed rate of dividend.
  • The rate of dividend depends upon the amount of profit earned by the company.
  • If a company earns more profit, the dividend is paid at a higher rate.
  • If there is insufficient profit, the Board of Directors may postpone the payment of dividends.
  • The shareholders cannot compel them to declare and pay the dividend.
  • The dividend is thus, always uncertain and fluctuating.
  • The income of equity shares is uncertain and irregular.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

(iii) Controlling power:

  • The control of a company vests in the hands of equity shareholders.
  • They are often described as real masters of the company as they enjoy exclusive voting rights.
  • Equity shareholders may exercise their voting right by proxies, without attending the meeting in person.
  • The Act provides the right to cast vote in proportion to the number of shareholdings.
  • They participate in the management of the company.
  • They elect their representatives called the Board of Directors for management of the company.

(iv) Market value:

  • Market value fluctuates according to the demand and supply of shares.
  • The demand and supply of equity shares depend on profits earned and dividends declared.
  • When a company earns huge profits, the market value of shares increases.
  • When it incurs loss the market value of shares decreases.
  • There are frequent fluctuations in the market value of shares in comparison to other securities.
  • Equity shares are more appealing to speculators.

(v) Capital Appreciation:

  • Share capital appreciation takes place when the market value of a sharp increase in the share market.
  • The profitability and prosperity of the company enhance the reputation of the company in the share market and thus, facilitates appreciation of the market value of equity shares.

Question 2.
Explain any four types of preference shares?
Answer:
(i) Cumulative Preference Shares:

  • Cumulative preference shares are those shares on which dividend accumulates until it is fully paid.
  • That is, if the dividend is not paid in one or more years due to inadequate profit, then such unpaid dividend gets accumulated and is carried forward till next year.
  • The accumulated dividend is paid when the company performs well.
  • The arrears of dividends are paid before making payment to equity shareholders.
  • The preference shares are always cumulative unless otherwise stated in Articles of Association.

(ii) Participating Preference Shares:

  • The holders of these shares are entitled to participate in surplus profit besides preferential dividends.
  • They participate in the high-profit condition of the company.
  • Surplus profit here means excess profit that remains after making payment of dividends to equity shareholders.
  • Such surplus profit up to a certain limit is distributed to preference shareholders.

(iii) Non-Convertible Preference Shares:

  • These shares are not converted into equity shares.
  • They will remain as preference shares forever till paid back.

(iv) Irredeemable Preference Shares:

  • Shares which are not redeemable are payable only on winding up of the company and are called irredeemable preference shares.
  • As per section 55(1) of the Companies Act 2013, the company cannot issue irredeemable preference shares in India.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

Question 3.
Explain features of debentures.
Answer:
Features of Debenture:
(i) Written Promise:
A debenture is a written promise by a company that it owes a specified sum of money to the holder of the debenture.

(ii) Priority of Payment:
Debenture holders have a priority in repayment of their capital over other claimants of the company. The amounts of debentures are settled before shareholders.

(iii) Assurance of repayment:

  • Debenture constitutes a long-term debt.
  • They carry an assurance of repayment on the due date.

(iv) Terms of issue and redemption of Debenture:

  • Debenture can be issued at par, premium, and even at discount.
  • Its redemption takes place only at par and premium.

(v) Interest:

  • A fixed-rate of interest is agreed upon and is paid periodically.
  • The rate of interest that a company pays/offers, depends upon the market conditions and nature of the business.
  • Payment of interest is a liability of a company. It has to be paid whether the company makes a profit or not.

(vi) Status of Debenture holder:

  • The debenture holder is a creditor of the company.
  • Debenture being loan taken by the company interest is payable on it at fixed internal and fixed-rate till redeemed/paid.
  • They cannot participate in the management of the company.

(vii) No Voting Right:

  • According to sec. 71(2) of Companies Act 2013, no company shall issue debenture carrying voting rights.
  • Debenture holders do not have the right to vote in the general meetings of the company.

(viii) Security:

  • Debenture can be secured with some property of the company by fixed or floating charge.
  • Debenture holders can sell of charged property of the company and recover their money if the company is not in a position to make payment of interest or repayment of capital.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 2 Sources of Corporate Finance

Question 4.
Explain the features of bonds.
Answer:
(i) Nature of finance:

  • It is debt or loan finance.
  • It provides long-term finance 5 years, 10 years, 25 years, 50 years.

(ii) Status of investor:

  • The bondholders are creditors.
  • They are non-owners and hence, not entitled to participate in the general meetings.
  • The bondholder has no right to vote.

(iii) Return on bonds:

  • The bondholders get a fixed rate of interest.
  • It is payable on maturity or at a regular interval.
  • Interest is paid to the bondholder at a fixed rate.

(iv) Repayment:

  • A bond is a formal contract to repay borrowed money.
  • Bonds have a specific maturity date, on which the principal amount is repaid.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 1 Introduction to Corporate Finance

Balbharti Maharashtra State Board Class 12 Secretarial Practice Important Questions Chapter 1 Introduction to Corporate Finance Important Questions and Answers.

Maharashtra State Board 12th Secretarial Practice Important Questions Chapter 1 Introduction to Corporate Finance

1A. Select the correct answer from the options given below and rewrite the statements:

Question 1.
__________ said that money is an arm or leg – use it or lose it.
(a) Henry Hoagland
(b) Henry Ford
(c) Henry Fayol
Answer:
(a) Henry Hoagland

Question 2.
Investing decision is also called as __________
(a) corporate finance
(b) capital requirement
(c) capital budgeting
Answer:
(c) capital budgeting

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 1 Introduction to Corporate Finance

Question 3.
Manufacturing industries have to invest __________ amount of funds to acquire fixed assets.
(a) huge
(b) less
(c) minimal
Answer:
(a) huge

Question 4.
Equity Share Capital carry __________ rate of dividend.
(a) fluctuating
(b) fixed
(c) economical
Answer:
(a) fluctuating

Question 5.
Preference Share Capital carry __________ rate of dividend.
(a) fluctuating
(b) fixed
(c) economical
Answer:
(b) fixed

Question 6.
Retained earnings is __________ source of financing.
(a) external
(b) internal
(c) capital
Answer:
(b) internal

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 1 Introduction to Corporate Finance

Question 7.
__________ is acknowledgement of loans raised by company.
(a) Share Capital
(b) Corporate Finance
(c) Debentures
Answer:
(c) Debentures

1B. Match the pairs.

Question 1.

Group ‘A’ Group ‘B’
(1) Finance (a) Fixed rate of dividend
(2) Equity Share Capital (b) Acknowledgment
(3) Preference Share Capital (c) Fluctuating rate of dividend
(4) Retained Earnings (d) Term Loan
(5) Borrowed Capital (e) Financing Decision
(f) Money and Money Management
(g) Ploughing back of profits
(h) Investing Decision
(i) Day-to-day transactions
(j) Raising and Utilisation of finance

Answer:

Group ‘A’ Group ‘B’
(1) Finance (f) Money and Money Management
(2) Equity Share Capital (c) Fluctuating rate of dividend
(3) Preference Share Capital (a) Fixed rate of dividend
(4) Retained Earnings (g) Ploughing back of profits
(5) Borrowed Capital (d) Term Loan

1C. Write a word or a term or a phrase that can substitute each of the following statements.

Question 1.
The firms are concerned with buying and selling without altering the physical form of goods.
Answer:
Merchandising firms

Question 2.
Indirect cost or expenses required to run a business.
Answer:
Overheads

Question 3.
They maintain small working capital because of continuous cash flow from customers.
Answer:
Public utility firms

Question 4.
Firms dealing with these products require a huge amount of working capital.
Answer:
Luxurious product firms

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 1 Introduction to Corporate Finance

Question 5.
A contract by which one person grants possession of some of his property like land, building, machinery to another for a certain period of time.
Answer:
Lease

1D. State whether the following statements are true or false.

Question 1.
A Firm needs less working capital with a longer period of the production cycle.
Answer:
False

Question 2.
If the manufacturing cycle is long a firm requires less working capital.
Answer:
False

Question 3.
Capital structure is a security mix.
Answer:
True

Question 4.
A short manufacturing cycle requires less working capital.
Answer:
True

1E. Find the odd one.

Question 1.
Railways, Reliance, Tata power.
Answer:
Reliance

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 1 Introduction to Corporate Finance

Question 2.
Debenture, Term Loans, Retained earnings.
Answer:
Retained earnings

1F. Complete the sentences.

Question 1.
The proportion of different sources of funds raised by a firm for long term finance is called __________
Answer:
capital structure

Question 2.
The acquisition and use of capital by business corporations is dealt by __________
Answer:
corporate finances

Question 3.
To decide upon the ratio of different types of capital means to decide __________
Answer:
capital structure

Question 4.
__________ bear ultimate risk associated with ownership.
Answer:
Equity shareholders

1H. Answer in one sentence.

Question 1.
What has retained earnings?
Answer:
Retained earnings are an internal source of financing. It is nothing but ploughing back of profit.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 1 Introduction to Corporate Finance

Question 2.
What are term loans?
Answer:
Term loans are borrowed capital, that carries a fixed rate of interest and is usually provided by banks and other financial institutions.

1I. Correct the underlined word and rewrite the following sentences.

Question 1.
Working Capital refers to the investment in current liabilities.
Answer:
Working Capital refers to the investment in current assets.

2. Explain the following terms/concepts.

Question 1.
Equity Share Capital
Answer:
It is the basic source of business finance that carries no preference regarding the rate of dividend, i.e. its fluctuating, and repayment of capital during winding up. They bear the ultimate risk with ownership and have a residual claim during winding up.

Question 2.
Preference Share Capital
Answer:
Preference Shares Carry preferential right as to payment of dividend and have priority over equity shares for return of capital during liquidation (winding up). These shares carry dividends at a fixed rate.

Question 3.
Debenture
Answer:
It is borrowed capital, an acknowledgment of a loan raised by the company. The company has to pay interest on debentures at an agreed rate.

3. Study the following case/situation and express your opinion.

1. Pilatus company manufactures sophisticated airplanes whereas whitewood company produces plastic items, stationery products, packed food items, etc., and is labour intensive.

Question (a).
Determine their amount and composition of capital requirement.
Answer:
Pilatus company being a manufacturer of sophisticated products like aeroplanes it will need more fixed capital. Firms that make use of sophisticated products, technology require a huge investment in fixed assets.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 1 Introduction to Corporate Finance

Question (b).
Whitewood company being labour intensive, will it need more of working capital?
Answer:
Companies that are labour intensive which do not make use of the latest technology may require less investment in plant and machinery, fixed assets. They require more working capital to pay salaries and other related expenses.

Question (c).
Does the type of product manufactured and technology used, determine fixed capital or
working capital requirement.
Answer:
Yes, the type of product and technology used to determine fixed capital. Firms manufacturing sophisticated items like aeroplanes definitely require more fixed capital compared to those companies who produce plastic items, stationery products, etc.

2. Peach line is an online seller of apparel and Caramel is a manufacturing firm manufacturing tableware and exclusive dinnerware. What are their capital needs?

Question (a).
Being an online seller, will it need more or less working capital.
Answer:
Online sellers may require a limited amount of employees and inventory and therefore it may require a lower amount of working capital.

Question (b).
Caramel being a manufacturer of tableware will it need more fixed capital?
Answer:
Caramel being a manufacturing firm of tableware may require more working capital as it has to pay wages to several employees and also make payments to suppliers, maintenance of machines, rent, and other overheads.

Question (c).
Does the nature of business determine the working capital requirement?
Answer:
Yes. Peach line an online seller is selling routine consumption products like apparel would need relatively less working capital compared to Caramel, dealing in luxurious tableware products, it requires huge working capital as the sale of such items are not frequent.

4. Answer in brief.

Question 1.
Write a short note on Capital Requirements.
Answer:
Capital Requirement is the funds required to start or run the business.
The following points are to be taken into consideration:
(i) Draft a financial plan:
While drafting the financial plan, the present and future requirements of the business should be taken into consideration. A comparison of an estimated and past financial plans will help the business in future financial requirements.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 1 Introduction to Corporate Finance

(ii) Volume of capital required:
The capital required to run the business may be small or big according to the nature and size of the business. The capital required may be of the following type:

(iii) Fixed Capital:
The capital required to purchase the assets of the company is called Fixed Capital. It is the permanent capital of the business as it stays for a longer period of time. The sources of fixed capital are shares, debentures, bonds or long-term loans, etc.

(iv) Working Capital:
Working Capital is the circulating capital of the business. It stays for a short period of time. Cash is the most reliable source for all business firms when working capital is required. It helps to meet the unexpected expenses of the business.

Question 2.
Write a short note on Working Capital.
Answer:
There are two concepts related to working capital:

  • Gross Working Capital – The sum total of all current assets of a business concern is termed as Gross Working Capital.
  • Net Working Capital = Current Assets – Current Liabilities.
  • It is the fund that is needed to run the day-to-day operations.
  • It is used to purchase raw materials, payment of wages and expenses, and payment of dividends and interest to the investors.
  • Working Capital enhances liquidity, solvency, creditworthiness, and reputation of the enterprise.
  • Working Capital is needed for the efficient use of fixed assets.
  • Working capital provides necessary funds to meet unforeseen contingencies and thus helps the enterprise run successfully during a crisis.
  • It is also called “Circulating Capital”.

5. Justify the following statements.

Question 1.
Corporate finance deals with the raising and using of finance by a business corporation.
Answer:

  • Business organisations require finance to start or expand their business.
  • The finance manager should ensure the finance required by the firm.
  • The right sources of fund should be identified that has minimum cost.
  • The funds raised must be utilized effectively.
  • Thus, it is rightly said that corporate finance deals with the raising and using of finance by a business corporation.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 1 Introduction to Corporate Finance

Question 2.
Working Capital is also called circulating capital.
Answer:

  • Working capital is required by the business to carry out day-to-day transactions.
  • Working capital helps the firm to maintain sufficient stock of raw material stock and finished goods.
  • Working capital can be funded with short-term loans, deposits, trade credit, etc.
  • It also helps the business to meet unexpected expenses. Thus, it is rightly said that Working Capital is also called circulating capital.

6. Answer the following questions.

Question 1.
What is Fixed Capital? Discuss the factors determining fixed capital requirements.
Answer:
Fixed capital is the capital that is used for buying fixed assets. Fixed Capital or Fixed assets stay in the business for a longer period of time. These assets are not meant for resale. It stays in the business almost permanently.
e.g. Capital used for purchasing land and building, furniture, plant, and machinery, etc.

Factors determining fixed capital requirements are:
(i) Nature of business:
The nature of business certainly plays a role in determining fixed capital requirements. They need to invest a huge amount of money in fixed assets.
e.g. Rail, road, and other public utility services have large fixed investments.

(ii) Size of business:
The size of a business also affects fixed capital needs. A general rule applies that the bigger the business, the higher the need for fixed capital. The size of the firm, either in terms of its assets or sales, affects the need for fixed capital.

(iii) Scope of business:
Some business firms that manufacture the entire range of their production would require a huge investment in fixed capital. However, those companies that are labour intensive and who do not use the latest technology may require less fixed capital and vice versa.

(iv) Extent of lease or rent:
Companies who take their assets on a lease basis or on a rental basis will require less amount of funds for fixed assets. On the other side, firms which purchase assets will naturally require more fixed capital in the initial stages.

(v) 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 minimize the fixed capital requirement of the business.

(vi) Acquisition of old assets:
If old equipment and plants are available at low prices, then it would reduce the need for investment in fixed assets.

(vii) Acquisition of assets on concessional rate:
With the view to foster industrial growth at the regional level, the government may provide land and building materials at concessional rates. Plants and equipment may also be made available on an installment basis. Such facilities will reduce the requirement of fixed assets.

(viii) International Conditions:
This factor is very significant particularly in large organizations carrying business at an international level. For example, companies expecting war, may decide to invest large funds to expand fixed assets before there is a shortage of materials.

Maharashtra Board Class 12 Secretarial Practice Important Questions Chapter 1 Introduction to Corporate Finance

(ix) Trend in the economy:
Economic trends also influence fixed capital requirements. During the recession, companies do not undertake expansion projects, therefore the company may not require much of fixed capital. But in anticipation of a bright future company would require additional fixed capital for expansion and modernization.

(x) Population trend:
When the population is increasing at a high rate, certain manufacturers find this as an opportunity to expand the business. For example, the Automobile industry, electronic goods manufacturing industry, ready-made garments, etc. which asks for a huge amount of fixed capital.

(xi) Consumer preference:
Industries providing goods and services which are in good demand will require a large amount of fixed capital e.g.: Mobile phone manufactures as well as mobile network providers.

(xii) Competition:
This factor is a prime element in fixed capital requirement decisions. If one competitor shifts to automation, the other companies in the same line of activity usually follow that competitor.

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Balbharti Maharashtra State Board 12th Physics Important Questions Chapter 16 Semiconductor Devices Important Questions and Answers.

Maharashtra State Board 12th Physics Important Questions Chapter 16 Semiconductor Devices

Question 1.
What is a PN-junction diode? What is a depletion region? What is barrier potential in a PN-junction?
Answer:
PN-junction diode: A two-terminal semiconductor device consisting of a PN-junction is called a PN- junction diode.
Depletion region: The neighbourhood of the junction between a p-type layer and an n-type layer within a single semiconducting crystal is depleted of free (or mobile) charge carriers. This is called the depletion region or depletion layer.

Barrier potential: The electric potential difference across the PN-junction is called the potential barrier or barrier potential.

[Note: Under the open-circuit condition (no applied potential difference), the width of the depletion region and the height of the potential barrier have their equilibrium values. The width of the depletion region in an unbiased pn-junction diode ranges from 0.5 pm to 1 pm and depends on the dopant concentrations. The barrier potential is about 0.3 V for Ge junction diode and about 0.7 V for Si junction diode.]

Question 2.
Explain the forward bias and reverse bias conditions of a diode.
Answer:
Forward-biased state : When the positive terminal of a cell is connected to the p side of the junction and the negative terminal to the n side, the diode is said to be forward biased. When forward biased, the depletion region narrows and, consequently, the potential barrier is lowered. This causes the majority charge carriers of each region to cross into the other region. This way the diode conducts when forward biased; the total current across the junction is called the forward current and is due to both electron and hole currents. Because of the narrowing of the depletion region, a forward-biased junction diode has a very low resistance and acts as a closed switch.

Reverse-biased state : A pn-junction diode is said to be reverse biased when the positive terminal of a cell or battery is connected to the n side of the junction, and the negative terminal to the p side. When reverse biased, the depletion region widens and the potential barrier is increased, the majority charge carrier concentration in each region decreases against the equilibrium values and the reverse-biased junction diode has a high resistance. The diffusion current across the junction becomes zero. Thus, the diode does not conduct when reverse biased and is said to be in a quiescent or non-conducting state, i.e., it acts as an open switch (almost).

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 3.
What is rectification? What is a rectifier? How does a pn-junction diode act as a rectifier?
Answer:

  1. The process of converting an alternating voltage (or current) to a direct voltage (or current) is called rectification.
    A circuit or device that is used to convert an alternating voltage (or current) to a direct voltage (or current) is called a rectifier. A rectifier produces a unidirectional but pulsating voltage from an alternating voltage.
  2. When an alternating voltage is applied across a pn-junction diode, the diode is forward-biased and reverse-biased during alternate half cycles.
  3. During the half cycle when the diode is forward- – biased, it conducts. Therefore, there is a current through it from the p-region to the n-region.
  4. During the next half cycle, it is reverse-biased and does not conduct. Therefore, current passes only in one direction through the circuit. This way, a pn-junction diode acts as a rectifier.

Question 4.
Explain the need for rectification/rectifiers.
Answer:
Nowadays electrical energy is generated, transmitted and distributed in the form of alternating voltage because it is simpler and more economical than direct current transmission and distribution. Another important reason for the widespread use of alternating voltage in preference to direct voltage is the fact that alternating voltage can be conveniently changed in magnitude by means of a transformer.

However, most electrical and electronic systems need a dc voltage to work. Since the transmitted voltage is very high and alternating, we need to reduce the ac line voltage and then convert it to a relatively constant dc output voltage. The power-line voltage is sequentially stepped down at the distribution substations. At the consumer end, the ac voltage is rectified using junction diodes to dc voltage.

Question 5.
Draw a neat block diagram of a dc power supply and state the function of each part.
OR
With the help of a block diagram, explain the scheme of a power supply for obtaining dc output voltage from ac line voltage.
Answer:
A consumer electronic system called a dc power supply produces a fairly constant dc voltage from ac supply voltage. Below figure shows a functional block diagram of the circuits within a power supply.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 1
Block diagram of dc power supply with waveforms at each stage

The ac supply voltage is usually stepped-down by a transformer and its secondary voltage is converted to a pulsating dc by a diode rectifier. By the superposition theorem, this rectifier output can be looked upon as having two different components : a dc voltage (the average value) and an ac voltage (the fluctuating part). The filter circuit smooths out the pulsating dc. It blocks almost all of the ac component and almost all of the dc component is passed on to the load resistor. Figure shows the filtered output for a rectified full-wave dc. The only deviation from a perfect dc voltage is the small ac load voltage called ripple. A well-designed filter circuit minimizes the ripple. In this way, we get an almost perfect dc voltage, one that is almost constant, like the voltage out of a battery.

The regulation of a power supply is its ability to hold the output steady under conditions of changing input or changing load. As power supplies are loaded, the output voltage tends to drop to a lower value. Nowadays, an integrated circuit (IC) voltage regulator is connected between a filter and the load resistor, especially in low-voltage power supplies. This device not only reduces the ripple, it also holds the output voltage constant under varying load and ac input voltage.

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 6.
Distinguish between a half-wave rectifier and full-wave rectifier.
Answer:

Half-wave rectifier Full-wave rectifier
1. A device or a circuit which rectifies only one-half of each cycle of an alternat­ing voltage is called a half-wave rectifier. 1. A device or a circuit which rectifies both halves of each cycle of an alternat­ing voltage is called a full-wave rectifier.
2. A half-wave rectifier cir­cuit uses a single diode which conducts for only one-half of each cycle. 2. A full-wave rectifier cir­cuit uses at least two diodes which conduct alternately for consecu­tive halves of each cycle.

Question 7.
State any two advantages of a full-wave rectifier.
Answer:

  1. A full-wave rectifier rectifies both halves of each cycle of the ac input.
  2. Efficiency of a full-wave rectifier is twice that of a half-wave rectifier.
  3. The ripple in a full-wave rectifier is less than that in a half-wave rectifier.
    Ripple factors for a full-wave and half-wave rectifiers are respectively, 0.482 and 1.21.

Question 8.
Explain ripple in the output of a rectifier. What is ripple factor?
Answer:
The output of a rectifier is a pulsating dc. By the superposition theorem, this rectifier output can be looked upon as having two different components : a dc and an ac. The direct current is the average value of the pulsating current, averaged over each half cycle of the ac input. The ac component in the output is called the ripple. Ripple is undesirable in most electronic circuits and devices.

The ratio of the root-mean-square value of the ac component to the average value of the dc component in the filtered rectifier output is known as the ripple factor.
Ripple factor = \(\frac{(r m s \text { value of ac component })}{\text { (average value of dc component) }}\)
Percentage ripple = ripple factor × 100%
This factor mainly decides the effectiveness of a filter circuit in a power supply, i.e., smaller the value of this factor, lesser is the ac component in comparison to the dc component. Hence, more effective is the filter.

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 10.
Explain the action of a capacitive filter with necessary diagrams.
Answer:
Consider a simple capacitive filter added to a full-wave rectifier circuit, Fig. 16.6(a). A capacitor is a charge storage device that it can deliver later to a load.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 2
(a) Capacitive filter at the output of a full-wave rectifier (b) Waveform of filtered output
In the first quarter cycle, the capacitor charges as the rectifier output peaks. Later, as the rectifier output drops off during the second quarter cycle, the capacitor discharges and delivers the load current. The voltage across the capacitor, and the load, decreases up to a point B when the next voltage peak recharges the capacitor again. To be effective, a filter capacitor should be only slightly discharged between peaks. This will mean a small voltage change across the load and, thus, small ripple. As shown in Fig. (b), the capacitor supplies all the load current from A to B; from B to C, the rectifier supplies the current to the load and the capacitor.

The discharging time constant of a filter capacitor has to be long as compared to the time between the voltage peaks. For the same capacitor used with a half-wave rectifier, the capacitor will have twice the time to discharge, and the ripple will be greater. Thus, full-wave rectifiers are used when a low ripple factor is desired.

Question 11.
What is regulation in a dc power supply ? OR Explain unregulated power supply and regulated power supply.
Answer:
Voltage regulation is am important factor of a power supply. Regulation is its ability to hold the dc output steady under conditions of changing ac input or changing load. The output voltage under no-load condition (no current drawn from the supply) tends to drop to a lower value when load current is drawn from the supply (under load). The amount the dc voltage changes between the no-load and full-load conditions is described by a factor called voltage regulation.
Voltage regulation = \(\frac{\text { no-load voltage }-\text { full-load voltage }}{\text { full-load voltage }}\)

Question 12.
What is a regulated power supply?
Answer:
A dc power supply whose preset output voltage remains constant irrespective of variations in the line voltage or load current is called a regulated power supply.

Question 13.
What is a unregulated power supply ?
Answer:
A dc power supply whose output changes when a load is connected across it is called unregulated power supply.

Question 14.
Name any four common special-purpose diodes.
Answer:
Special-purpose diodes :

  1. Zener diode
  2. light emitting diode (LED)
  3. photodiode
  4. solar cell.

Question 15.
What is meant by breakdown of a pn-junction? Name two important mechanisms of junction breakdown.
Answer:
In a reverse-biased pn-junction, the depletion region is wider and the potential barrier is higher over equilibrium values. The majority charge carrier concentration in each region decreases from the equilibrium values and the diffusion current across the junction is zero. Only a very very small current flows due to the motion of minority charge carriers. Thus, the principal characteristic of a pn-junction diode is that it rectifies, i.e., it conducts significantly in one direction only.

When a sufficiently large reverse voltage is applied to a pn-junction, there is an abrupt strong increase in the reverse current and its rectifying properties are lost. This is known as junction breakdown. The absolute value VB of the voltage at which the phenomenon occurs is called breakdown voltage. The breakdown process is not inherently destructive and is reversible.

Two important breakdown mechanisms are the Zener breakdown (due to tunneling effect) and avalanche breakdown (due to avalanche multipli-cation).

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 16.
Explain Zener breakdown.
Answer:
In a reverse-biased pn-junction, the depletion region is wider and the potential barrier is higher over equilibrium values. The electric field in the depletion region is from the n- to the p-region. When a sufficiently large reverse voltage is applied to a pn-junction, the junction breaks down and conducts a very large current. Of the two important breakdown mechanisms, Zener breakdown takes place in heavily doped diodes.

Usually, the energy that an electron can gain from even a strong field is very small. However, the depletion region is very narrow in a heavily doped diode. Because of this, the electric field across the depletion region is intense enough to break the covalent bonds between neighbouring silicon atoms and pull electrons out of their orbits. This results in conduction electrons and holes. In the energy band diagram representation, this corresponds to the transition of an electron from the valence band to the conduction band and become available for conduction.

The current increases with increase in applied voltage, but without further increase in voltage across the diode. This process, in which an electron of energy less than the barrier height penetrates through the energy bandgap, is called tunneling (a quantum mechanical effect). The creation of electrons in the conduction band and holes in the valence band by tunneling effect in a reverse- biased pn-junction diode is called the Zener effect.

[Notes : (1) Tunneling occurs only if the electric field is very high. The typical field for silicon and gallium arsenide is > 106 V / cm. To achieve such a high field, the doping concentrations for both p- and w-regions must be quite high (>1018 cm-3). (2) Zener breakdown or Zener effect is named in honour of Clarence M. Zener (1905-93), US physicist, who explained the breakdown mechanism. (3) Avalanche breakdown occurs in diodes with a doping concentration of ≅ 1017 cm-3 or less. The carriers gain enough kinetic energy to generate electron-hole pairs by the avalanche process when the value of reverse | V | becomes large. An electron in the conduction band can gain kinetic energy before it collides with a valence electron. The high-energy electron in the conduction band can transfer some of its kinetic energy to the valence electron to make an upward transition to the conduction band. An electron-hole pair is generated. All such electrons and holes accelerate in the high field of the depletion region and, in turn, generate other electron-hole pairs in a like manner. This process is called the avalanche process.]

Question 17. What is a Zener diode?
Answer:
A Zener diode is a heavily doped pn-junction diode operated in its breakdown region. Zener breakdown occurs when the breakdown voltage is less than about 6 V while avalanche breakdown occurs in lightly doped diodes and for breakdown voltage greater than 6 V. However, the Zener effect was discovered before the avalanche effect, so all diodes used in the breakdown region came to be known as Zener diodes.

Question 18.
Explain the use of a resistor in series with a Zener diode.
Answer:
The I-V characteristics in the breakdown region of a Zener diode is almost vertical. That is, the current IZ can rapidly increase at constant VZ. To prevent damage due to excessive heating, the Zener current should not exceed the rated maximum current, IZM. Hence, a current-limiting resistor Rs is connected in series with the diode.

IZ and the power dissipated in the Zener diode will be large for IL = 0 (no-load condition) or when IL is less than the rated maximum (when Rs is small and RL is large). The current-limiting resistor Rs is so chosen that the Zener current does not exceed the rated maximum reverse current, IZM when there is no load or when the load is very high.

The rated maximum power of a Zener diode is
PZM = IZM = VZ
At no-load condition, the current through Rs is Z = IZM and the voltage drop across it is V – VZ, where V is the unregulated source voltage. The diode current will be maximum when V is maxi-mum at Vmax and I = IZM. Then, the minimum value of the series resistance should be
Rs, min = \(\frac{V_{\max }-V_{Z}}{I_{Z M}}\)

A Zener diode is operated in the breakdown region. There is a minimum Zener current, IZ(min), that places the desired operating point in the breakdown region. There is a maximum Zener current, IZM, at which the power dissipation drives the junction temperature to the maximum allowed. Beyond that current the diode can be damaged. Hence, the supply voltage must be greater than Vz and the current-limiting resistor must limit the diode current to less than the rated maximum, IZM.

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 19.
State any two applications of a Zener diode.
Answer:
Applications of a Zener diode :

  1. Voltage regulator
  2. Fixed reference voltage in biasing transistors
  3. Peak clipper in a wave shaping circuit
  4. Meter protection from voltage fluctuations.

Question 20.
Solve the following :
(1) A Zener diode has a Zener voltage of 2.4 V and a 500 mW power rating. What should be the maxi-mum current through the diode if you design conservatively with a safety factor of 2?
Solution:
Data : Vz = 2.4 V, PZM = 500 mW A conservative design includes a safety factor to keep the power dissipation well below the rated maximum power. Thus, with a safety factor of 2, the operating power of the Zener diode is
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 3

(2) A 10 V regulated power supply uses a Zener diode of 500 mW power rating with an input voltage of 15 V dc and a current limiting resistor of 500 Ω. If a load of 1 kΩ is connected across the diode, is the diode in the breakdown region?
Solution:
Data: V = 15V, VZ = 10V, Rs = 500 Ω, RL =1000 Ω
The supply current,
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 4
∴ The diode current, IZ = I – IL = 0
Thus, the Zener diode is at the threshold of break down and there will not be any regulation.

(3) A 10 V regulated power supply is designed using a Zener diode of 500 mW power rating with an input voltage of 15 V dc. A load of 1 kΩ is to be connected across the diode. Calculate (a) the rated maximum current through the diode (b) the mini mum value of the series resistance.
Solution:
Data: V = 15V, VZ = 10 V, PZM = 500 mW,
RL = 1000 Ω, Rs = 200 Ω
The rated maximum Zener current,
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 5

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

(4) In the above problem, calculate the load current. If a series resistance of 200 Ω is used, what is the Zener current ?
Solution:
Data : V = 15 V, VZ = 10 V, PZM = 500 mW, RL = 1000 Ω, Rs = 200 Ω
The current through Rs is
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 6
∴ The zener current,
IZ = Is – IL = 25 – 10 = 15 mA

(5) A Zener regulator has an input voltage that may vary from 15 V to 20 V while the load current may vary from 5 mA to 20 mA. If the Zener voltage is 12 V, calculate the maximum series resistance.
Solution:
Data : Vlow = 15 V, Vhigh = 20 V, VZ = 12 V,
IL, min = 5mA, IL, max = 20mA
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 7

Question 21.
What is a photodiode?
Answer:
A photodiode is a special purpose reverse-biased pn-junction diode that generates charge carriers in response to photons and high energy particles, and passes a photocurrent in the external circuit proportional to the intensity of the incident radiation. The term photodiode usually means a sensor that accurately detects changes in light level. Hence, it is sometimes called a photodetector or photosensor which operates as a photoelectric converter.

Question 22.
Explain the I-V characteristics of a photodiode.
Answer:
When a Si photodiode is operated in the dark (zero illumination), the current versus voltage characteristics observed are similar to the curve of a rectifier diode as shown by curve (1) in figure. This dark current in Si photodiodes range from 5 pA to 10 nA.

When light is incident on the photodiode, the curve shifts to (2) and increasing the incident illuminance (light level) shifts this characteristic curve still further to (3) in parallel. The magnitude of the reverse voltage has nearly no influence on the photocurrent and only a weak influence on the dark current. The normal reverse currents are in tens to hundreds of microampere range.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 8
The I-V characteristics of a photodiode showing dark current and photocurrent for increasing illuminance

The almost equal spacing between the curves for the same increment in luminous flux reveals that the reverse current and luminous flux are almost linearly related. The photocurrent of the Si photo-diode is extremely linear with respect to the il-luminance. Since the total reverse current is the sum of the photocurrent and the dark current, the sensitivity of a photodiode is increased by minimizing the dark current.

Question 23.
Explain saturation current of a photodiode with a neat labelled diagram.
Answer:
When a reverse-biased photodiode is illuminated, the reverse current at a constant reverse voltage is directly proportional to the illuminance. The de-pendence of the photocurrent on the illuminance is very linear over six or more orders of illuminance, e.g., in the range from a few nanowatts to tens of milliwatts with an active area of a few mm2. But after a certain value of reverse current, the current does not increase further with increasing light intensity. This constant value is called the satura-tion current of the photodiode.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 9

Question 24.
What is (i) dark current (ii) dark resistance of a photodiode?
Answer:
(i) Dark current: The current associated with a photo-diode with an applied reverse bias during operation in the dark (zero illumination) due to background radiation and thermally excited minority saturation current. It is of the order of picoamperes to nanoamperes. Larger active areas or increase in temperature and reverse bias result in higher dark current.

(ii) Dark resistance : The ratio of maximum withstandable reverse voltage to the dark current of a photo-diode is called dark resistance of that diode.
Dark resistance, Rd = \(\frac{\text { (maximum reverse voltage) }}{(\text { dark current })}\)

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 25.
State any four advantages of a photodiode.
Answer:
Advantages of a photodiode :

  1. Quick response to light.
  2. High operational speed.
  3. Excellent linear response over a wide dynamic range.
  4. Low cost.
  5. Wide spectral response.
  6. Compact, lightweight, mechanically rugged and long life.

Question 26.
State any two disadvantages of a photodiode.
Answer:
Disadvantages of a photodiode :

  1. Poor temperature stability : Reverse current is temperature dependent.
  2. Reverse current for low illumination is small and requires amplification.

Question 27.
State any two applications of photodiodes.
Answer:
Applications of photodiodes :

  1. A reverse-biased photodiode conducts only when illuminated, assuming that the dark current is essentially zero. Due to its quick response to radi-ation and high operational speed, photodiodes are used in high-speed counting or switching applications.
  2. Extensively used in an fibreoptic communication system.
  3. As photosensors/photodetectors for detection of UV radiations and accurate measurement of illumination. Avalanche photodiodes have increased responsivity and can be used as photomultipliers, especially for low illumination.
  4. In burglar alarm systems as normally closed switch until exposure to radiation is interrupted. When interrupted, the reverse current drops to the dark current level and sounds the alarm.
  5. In an optocoupler, a photodiode is combined with a light-emitting diode to couple an input signal to the output circuit. The key advantage of an optocoupler is the electrical isolation between the input and output circuits, especially in high voltage applications. With an optocoupler, the only contact between the input and the output is a beam of light.

Question 28.
Name two types of solar energy devices.
Answer:
Two major types of devices converting solar energy in usable form are

  1. photothermal devices, which convert the solar energy into heat energy
  2. photovoltaic devices, which convert solar energy into electrical energy.

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 29.
What is a solar cell ? State the principle of its working.
Answer:
A solar cell is an unbiased pn-junction that converts the energy of sunlight directly into electricity with a high conversion efficiency.

Principle : A solar cell works on the photovoltaic effect in which an emf is produced between the two layers of a pn-junction as a result of irradiation.

Question 30.
Describe the output characteristics of a solar cell with a neat labelled graph.
Answer:
Output characteristic of a solar cell : The output characteristic, I-V curve, of a solar cell exposed to sunlight is plotted by varying the load resistance (Rr) from zero to infinity and measuring the corresponding current and voltage.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 10
The short-circuit condition occurs when RL = 0 so that V = 0. The current in this case is referred to as the short-circuit current ISC. The open-circuit condition occurs when RL = ∞. The net current in this case is zero and the voltage produced is called as the open-circuit voltage VOC. Increasing the lightsensing area or light intensity per single solar cell produces a proportionate increase in ISC. VOC is independent of these parameters.

The operating point of a solar cell module is the point (Vp, Ip) on the I-V curve which delivers maximum power to the load. For this, Vp/ Ip must be equal to RL.
[Note : The photocurrent in a solar cell is always in the reverse-bias direction so that the I-V graph is in the fourth quadrant.]

Question 31.
State the material selection criteria for solar cells.
Answer:
Criteria for materials to be used in solar cells :

  1. Band gap energy must be between 1 eV and 1.8 eV. (The best band gap of a solar cell is in the region of 1.5 eV.)
  2. It must have high optical absorption.
  3. It must have high electrical conductivity.
  4. The raw material must be available in abundance and the cost of the material must be low.

Question 32.
Name the common materials for solar cells.
Answer:
Optimized band gap for solar cells is close to 1.5 eV. Some of the common materials for solar cells are

  1. silicon (Si), EG = 1.12 eV – currently the most popular material but has low absorption coefficient and high temperature dependence,
  2. gallium arsenide (GaAs), EG = 1.42 eV -by far the most widely used, especially for high end applications like satellites. Its absorption coefficient is about ten times better than silicon and doesn’t have the same temperature dependence.
  3. copper-indium diselenide (CIS), EG = 1.01 eV – has the highest optical absorption, but gallium is introduced in the lattice to raise the band gap energy closer to the solar ideal. This resulted in the popular copper-indium-gallium diselenide (Culn- GaSe2 or CIGS) material for photovoltaic cell. By variation of Ga fraction, a band gap of around 1.48 eV has been achieved.
  4. cadmium telluride (CdTe), EG = 1.44 eV-made from the II-VI group elements.

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

[Notes : (1) By far the most widely used III-V solar cell is gallium arsenide (GaAs). Other III-V semiconductors-indium phosphide (InP), gallium antimonide (GaSb), aluminium gallium arsenide (AlGaAs), indium gallium phosphide (InGaP), and indium gallium arsenide (InGaAs)-exchange group III elements to make different band gap energies. III-V semiconductors offer a great host of advantages over silicon as a material for photovoltaics. However, the biggest drawback is cost. (2) The theoretical limit on the thermodynamic efficiency of single-junction solar cells is ~ 30%. Hence, today’s most efficient technology for the generation of electricity from solar radiation is the use of multi-junction solar cells made of III-V compound semiconductors. Efficiencies up to 39% have al-ready been reported under concentrated sunlight. These solar cells have initially been developed for powering satellites in space and are now starting to explore the terrestrial energy market through the use of photovoltaic concentrator systems. A triple-junction solar cell, Ga0.35In0.65P/Ga0.83In0.17As/Ge, has been demonstrated by a conversion efficiency of 41.1% at 454 kW/m2]

Question 33.
State any four uses of solar cells.
Answer:
Uses of solar cells :

  1. A solar cell array consisting of a set of solar cells is used during daylight hours to power an electrical equipment as well as to recharge batteries which can then be used during night.
  2. Solar cell arrays provide electrical power to equipment on a satellite as well as at remote places on the Earth where electric power lines are absent.
  3. Large-scale solar power generation systems linked with commercial power grid.
  4. Independent power supply systems for radar detectors, monitoring systems, radio relay stations, roadlights and roadsigns.
  5. Indoor uses include consumer products like, calculators, clocks, digital thermometers, etc. (They use very low levels of power and work under lowbrightness long-wavelength light from incandescent lamps, etc.)

Question 34.
What is a light-emitting diode (LED) ?
Answer:
A light-emitting diode (LED) is a forward-biased pn-junction diode formed from compound semiconductor materials such as gallium arsenide (GaAs) in which light emission can take place from direct radiative recombination of excess electron-hole pairs. A photon is emitted when an electron in the conduction band recombines with a hole in the valence band.

In infrared emitting LEDs, the encapsulating plastic lens may be impregnated or coated with phosphorus. Then, phosphorescence of the phos-phorus gives off visible light.

[Note: In an ordinary pn-junction diode, energy released in electron-hole recombination process is absorbed in the crystal structure as heat.]

Question 35.
Describe with a neat diagram the construction of an LED.
Answer:
Construction : A light-emitting diode is a forward- biased pn-junction diode formed from compound semiconductor materials. As shown in Fig. 16.14(a), the top metal contact to the n-layer (say) is provided with a window for the emitted light to escape. The diode chip is encapsulated in a transparent plastic lens. The cathode and anode leads from the metal contacts to the n-and p-layers, respectively, are provided for external connections, shown in figure.
The negative electrode (cathode) is identified by a notch or flat spot on the plastic body, or the cathode lead is shorter than the anode.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 11

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 36.
Draw the I-V forward characteristics of an LED and explain it.
Answer:
Explanation : The forward characteristic of an LED is similar to an ordinary junction diode. The diode starts conducting only after the forward-bias voltage overcomes the barrier potential. Thereafter the current increases exponentially beyond the knee region.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 12
The threshold voltage is about 1.2 V for a standard red LED to about 3.6 V for a blue LED. However, these values depend on the manufacturer because of the different dopant concentrations used for the different wavelength ranges.

The intensity of the emitted light is directly propotional to the forward current. An LED is operated with a typical forward current of 20 mA- about 5 mA for a simple LED indicator to about 30 mA where a high intensity of light is needed. The LED forward current must be limited to a specified safe value using a series resistance.

The peak inverse voltage (PIV) or breakdown voltage of an LED is low, typically 5 V.

Question 37.
State any four advantages of an LED over common light sources.
Answer:
Advantages of an LED as a light source over common light sources :

  1. Energy efficiency : An LED is small in size, requires low operating voltage and power and is extremely energy efficient, consuming up to 90% less power than incandescent bulbs. LED’s are now capable of outputting 135 lumens/watt.
  2. Life and ruggedness : Being a solid state device, an LED is more rugged than bulbs with filament and has a typical life of 50000 hours or more.
  3. Fast switching : An LED is very fast, i.e., its switching (on / off) time is less than 1 ns.
  4. Brightness and colour control: The intensity of the emitted light can be varied continuously. The colour of the emitted light also can be controlled.
  5. Small size : Because of their small size, they can be used to produce self-luminous, static or running, seven-segment alphanumeric displays.
  6. Environmentally friendly : An LED being a semi-conductor device, does not contain hazardous substances like mercury (as in sodium and mercury vapour lamps).
  7. Operationally cheap : Since LEDs use only a fraction of the energy of an incandescent light bulb there is a dramatic decrease in power costs.

Question 38.
State any four disadvantages of an LED.
Answer:
Disadvantages of an LED light source :
(1) Blue light hazard : There is a photobiological con-cern that bright blue LEDs and cool-white LEDs are capable of exceeding safe limits.

(2) Light quality : Most cool-white LEDs have spectral output significantly different from the Sun or an incandescent bulb-peak output being at 460 nm rather than peak retinal sensitivity of 550 nm. This can cause the colour of objects to be perceived differently under cool-white LED illumination than sunlight or incandescent bulbs.

(3) Temperature dependence : An LED luminaire can overheat in high ambient temperatures and effective cooling methods using heat sinks are essential for high-power LEDs. (Although the thermal power involved is not very large, it is released within a very small volume and area.) This is especially important for automotive, medical and military applications where the light unit must operate over a large range of temperatures and yet have a low failure rate.

(4) High initial cost: LEDs are currently more expen-sive-price per lumen-in initial capital cost, than most conventional lighting technologies.

(5) Voltage sensitivity : LEDs must be operated with the voltage above the threshold and the current below the rated maximum. This requires current- limiting resistors or current-regulated power supplies.

(6) Blue light pollution : Cool-white LEDs emit pro-portionally more blue light than conventional out-door light sources such as high-pressure sodium lamps. Due to Rayleigh scattering, these LEDs can cause more light pollution than other light sources.

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 39.
State any four applications of LEDs.
Answer:
Applications of LEDs :

  1. An LED is commonly used as an On/Off indicator lamp on electrical equipment.
  2. LEDs are used in self-luminous seven-segment alphanumeric displays of calculators and digital clocks and meters, signages, etc.
  3. Because of their low power consumption, LEDs are now commonly used in traffic signals, handheld torches, LED TV sets, domestic and decorative illumination and various indicator lamps in light motor vehicles and two-wheelers.
  4. Under certain conditions, the essentially monochromatic light emitted by an LED is also coherent. Such diode lasers have found applications in optical fibre communications, CD players, CDROM drives, laser printers, bar code scanners, laser pointers, etc.

Question 40.
What is a junction transistor?
Answer:
A junction transistor consists of two back-to-back pn-junctions forming a sandwich structure in which a thin layer of n-type or p-type semiconductor is sandwiched between two layers of opposite type semiconductor.

The three terminals of a transistor connected to its three layers are known as the emitter (E), base (B) and collector (C). One pn-junction is between the emitter and the base while the other pn-junction is between the collector and the base.

The electric current is transported by both type of carriers, electrons and holes; for this reason the device is called a bipolar junction transistor (BJT).

There are two types of junction transistors : (i) pnp transistor (ii) npn transistor.

[Note : The point-contact transistor was invented in 1947 by US physicists John Bardeen (1908-91), Walter Brattain (1902-87) and William Shockley (1910-89). A month later Shockley invented the junction transistor.]

Question 41.
Draw the circuit symbols of (i) a pnp transistor (ii) an npn transistor.
Answer:
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 13
The arrow on the emitter shows the direction of current when the base-emitter junction is forward- biased. If the arrow points in (Points iN), it indicates the transistor is a pnp. On the other hand, if the arrow points out, the transistor is an npn (Not Pointing iN).

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 42.
How is a junction transistor formed? Draw schematic diagrams showing the structure of the two types of BJTs.
Answer:
A bipolar junction transistor has three separately doped regions and two pn-junctions. A pnp transistor is formed by starting with a p-type substrate. An zz-type region is grown by thermally diffusing do-nor impurities into this substrate. A very heavily doped p+ region is then diffused into the n-type region. The heavily doped p + -region is called the emitter, symbol E in below figure.The narrow central n-region, with lightly doped concentration, is called the base (symbol B). The width of the base is small compared with the minority carrier diffusion length. The moderately doped p-region is called the collector (symbol C). The doping concentration in each region is assumed to be uniform.

The npn transistor is the complementary structure to the pnp transistor : A narrow p region grown into an n type substrate, by thermally diffusing acceptor impurities, forms the base. The heavily doped n + region diffused into the base forms the emitter.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 14

Question 43.
Draw diagrams showing the two-diode analogues of npn and pnp transistors.
Answer:
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 15
[Important note : The diode equivalents are pretty much useless except for biasing a transistor or testing with a ‘digital multimeter (DMM). The transistor action of a BJT, as explained in Question 55 is substantially different from that of two independent back-to-back pn-junctions.]

Question 46.
Explain the working of an npn transistor with a neatly labelled circuit diagram.
OR
Explain the action of a junction transistor with a neatly labelled circuit diagram.
Answer:
For normal operation of a junction transistor, the emitter-base junction is always forward biased and the collector-base junction is always reverse biased. Below figure shows the biasing of the junctions for an npn transistor connected as an amplifier with the common-base configuration, that is, the base lead is common to the input and output circuits. The emitter-base junction is forward biased by the battery VBB while the collector-base junction is reverse biased by the battery VCC. VBB should be greater than the emitter-base barrier potential (the threshold voltage). The arrows of the various currents indicate the direction of current under normal operating conditions (also called the active mode).
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 16
Since the emitter-base junction is forward biased, majority carriers electrons in the n+ emitter are injected into the base and holes (majority carriers in the p-type base) are injected from the base into the emitter. Under the ideal-diode condition, these two current components constitute the total emitter current IE.

The emitter is a very heavily doped n-type region. Hence, the current between emitter E and base B is almost entirely electron current from E into B across the forward-biased emitter junction.

The p-type base is narrow and the hole density in the base is very low. Therefore, virtually all the injected electrons (more than 95%) diffuse right across the base to the collector junction without recombining with holes. Since the collector junction is reverse biased, the electrons on reaching the collector junction are quickly swept by the strong electric field there into the n-type collector region, where they constitute the collector current IC.

In practice, about 1% to 5% of the holes from the emitter recombine with holes in the base layer and cause a small current IB in the base lead. Therefore,
IE = IB + IC ≈ IC
Therefore, carriers injected from a nearby emitter junction can result in a large current flow in a reverse-biased collector junction. This is the transistor action, and it can be realized only when the two junctions are physically close enough to interact as described.

If a pnp transistor is used, the battery connections must be reversed to give the correct bias. The conduction process is similar but takes place instead by migration of holes from emitter to collector. A few of these holes recombine with electrons in the base.

[Notes : (1) If, the two junctions are so far apart that all the injected electrons are recombined in the base before reaching the base-collector junction, then the transistor action is lost and the p-n-p structure becomes merely two diodes connected back to back. (2) Use of double-subscripted voltage notation in transistor circuits : same subscripts (viz., Vm and Vcc) represent the voltage of a biasing battery; different subscripts (viz, VBB and VCC) are used to indicate voltage between two points. Single subscripts (as in Fig. 16.19) are used for a node voltage, that is, the voltage between the subscripted point and ground.]

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 47.
What are the different transistor configurations in a circuit? Show them schematically.
Answer:
There are three configurations in which a transistor may be connected in a circuit:
(a) Common-emitter (CE) : The emitter terminal is common to the input and output circuits.
(b) Common-base (CB) : The base terminal is common to the input and output circuits.
(c) Common-collector (CC) : The collector terminal is common to the input and output circuits.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 17
[Notes : (1) CE: Produces the highest current and power gain of all the three bipolar transistor configurations the reason why it is the most commonly used configuration for transistor based amplifiers. The emitter is grounded and the input signal applied between the base and emitter. The input impedance is small due to the forward biasing of the EB-junction. The output taken from between the collector and emitter, as well as the outputimpedance, are large due to the reverse biased CB-junction. However, its voltage gain is much lower. – (2) CB : The base terminal is grounded, the input signal is applied between the base and emitter terminals while the output signal is taken from between the base and collector terminals. Though its high frequency response is good for single stage amplifier circuits, it is not very common due to its low current gain characteristics and low input impedance. (3) CC : Very useful for impedance matching applications because of the very large ratio of input impedance to output impedance. The collector is grounded and the input signal is directly given to the base. The output is taken across the load resistor in series with the emitter. Hence, the current through the load resistor is the emitter current and the current gain of the configuration is approximately equal to the β value of the transistor.]

Question 48.
State the relation between the dc common-base current ratio (αdc) and the dc common-emitter current ratio (βdc).
Answer:
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 18

Question 49.
Draw a neat labelled circuit diagram to study the characteristics of a transistor in common- emitter configuration.
Answer:
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 19

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 50.
Explain with necessary graphs (1) input (base) (2) output (collector) characteristics of a transistor in common-emitter configuration.
Answer:
Common-emitter characteristics :
(1) Input or base characteristics : This is a set of curves of base current IB against base to emitter voltage VBE for different constant collector to emitter voltages VCE shown in figure.

Keeping collector voltage VCE constant, base voltage is gradually increased from zero. Initially, IB is zero till VBE is less than the threshold voltage for the forward-biased base-emitter junction, 0.7 V for silicon and 0.3 V for germanium. For VBE greater than the threshold voltage, IB increases steeply.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 20
For a constant collector voltage VCE, the dynamic input resistance (ri) is defined as the ratio of the differential change in the base-to-emitter voltage (∆VBE) to the corresponding change in the base current (∆ICE).
ri = (\(\frac{\Delta V_{\mathrm{BE}}}{\Delta I_{\mathrm{B}}}\))VCE = constant

(2) Output or collector characteristics : This is a set of curves of collector current IC against collector-to- emitter voltage VCE for different constant base currents IB, shown in figure.

(i) For VBE less than the threshold voltage for the junction, IB = 0 and IC = 0, i.e., there is no current through the transistor. Both the junctions are reverse biased and the transistor acts like an open switch. Then the transistor is said to be switched Fully-OFF or in the cut-off region or OFF-mode.

(ii) The base current is set to a suitable value by varying the base-to-emitter voltage VBE to a value greater than the threshold voltage. Then, the collector-to-emitter voltage VCE is varied and the variation of IC is plotted against VCE. For very small values of VCE, ideally zero, IC is maximum, equal to VCC/ RL. Both the junctions are forward biased and the transistor acts like a closed switch. The transistor is said to be switched Fully-ON, or in the saturation region or ON-mode.

(iii) But for values of VCE above about the threshold voltage, IC is constant and VCE has relatively little effect on it. In this region, called as the active region, IC is determined almost entirely by IB. In this region, the common-emitter current gain β is large.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 21
For a constant base current IB, the dynamic output resistance (r0) is defined as the ratio of the differential change in the collector-to-emitter voltage (∆VCE) to the corresponding change in the collector current (∆IC).
r0 = \(\left(\frac{\Delta V_{\mathrm{CE}}}{\Delta I_{\mathrm{C}}}\right)_{I_{\mathrm{B}}=\text { constant }}\)

Question 51.
What is an amplifier? Explain the use of a transistor as an amplifier.
OR
Draw a neat circuit diagram of a transistor CE- amplifier and explain its working.
Answer:
A device that increases the amplitude of voltage, current or power of a weak alternating signal, by drawing energy from a separate source other than the signal, is called an amplifier.

Principle : The collector current can be controlled by a small change in the base current.

Electric circuit: Consider the use of a npn transistor as an amplifier in the widely used common- emitter (CE) configuration in which the emitter is common to the input and output circuits, shown in figure. The emitter-base junction is forward biased by the battery VBB while the collector-base junction is reverse biased by the battery VCC.

The voltage Vi to be amplified, called the signal voltage, is applied between the base and the emitter.

Working : The collector characteristics shows that in the active region, the collector current Ic is determined almost entirely by the base current IB, and collector potential Vc has relatively little effect on it.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 22
An npn transistor amplifier in CE configuration

For Vi = 0, applying Kirchhoff’s loop law to the output and input loops, we get respectively,
VCC – ICRL – VCE = 0 ……………. (1)
and PBB – IBRB – VBE = 0 …………… (2)
The applied signal voltage causes small changes ∆VBE in the emitter-base p.d. thereby producing variations ∆VBE in the base current.
∆VBE = ri∆IB …………. (3)
where ri is the dynamic input resistance.
BBB + Vi = IBRB + VBE + ∆IB(RB + ri)
∴ Vi = ∆IB(RB + ri) = ri∆IB

The variations in ∆IB cause proportionately larger variations ∆IC in the collector current because ∆IC = βac ∆IB, where the ac common-emitter current gain (βac) is always greater than 50. For normal operating voltages, βac is almost the same as βdc. From EQuestion(l), since VCC is constant,
∆VCC = ∆ICRL + ∆VCE = 0
The time-varying collector current produces a time-varying output voltage P0 across the load resistance RL.
V0 = ∆VCE = – ∆ICRL = – [βac∆IBRL

Thus, V0 > Vi, so that the circuit produces a voltage gain. The amplifier’s voltage gain (Av) is defined as the ratio of the output voltage to the input voltage.
Av = \(\frac{V_{\mathrm{o}}}{V_{\mathrm{i}}}=-\frac{\beta_{\mathrm{ac}} R_{\mathrm{L}}}{r_{\mathrm{i}}}\)

The minus sign indicates that the output voltage is 180° out of phase with the input voltage.
[ Note : Amplifiers use emitter bias by moving the resistor from the base circuit to the emitter circuit. This important change keeps the operating point of the transistor fixed and immune to changes in current gain. The base supply voltage is now applied directly to the base.]

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 52.
Solve the following :
(1) The diagram shows a CE circuit using a silicon transistor. Calculate the (a) base current (b) collector current. [VBB = 2V, VCC = 10V, RB = 100 kΩ, RL = 1 kΩ, [βdc = 200]
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 23
Solution:
Data : VBB = 2 V, VCC = 10 V, RB = 100 kΩ, RL = 1 kΩ,
βdc = 200.
Since it is a silicon transistor, the emitter-base
barrier potential, VBE = 0.7 V.
The voltage across the base resistor is
VBB – VBE = 2 – 0.7 = 1.3 V
Therefore, the base current,
IB = \(\frac{V_{\mathrm{BB}}-V_{\mathrm{BE}}}{R_{\mathrm{B}}}=\frac{1.3}{10^{5}}\) = 1.3 × 10-5 = 13 μA
The collector current,
IC = βIB = 200 × 1.3 × 10-5 = 2.6 × 10-3 A = 2.6mA

(2) In the above problem, calculate the collector- emitter voltage (VCE).
Solution:
The collector-emitter voltage,
VCE = VCC – ICRL = 10 – (2.6 × 10-3)(103) = 2.6V

Question 53.
What is meant by an analog signal and an analog electronic circuit?
Answer:
An analog signal consists of a continuously varying voltage or current. An analog electronic circuit takes an analog signal as input and outputs a signal that varies continuously according to the input signal.

Question 54.
What is meant by a digital signal?
Answer:
A digital signal consists of a sequence of electrical pulses whose waveform is approximately regular, with the potential switching alternately between two values. The lower value of the potential is labelled as LOW or 0 and the higher value as HIGH or 1.

With just two bits of information, 1 or 0 (HIGH or LOW), digital circuits use binary system. A sequence of 1s and 0s is encoded to represent numerals, letters of the alphabet, punctuation marks and instructions.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 24

[ Note : The meaning of a voltage being high or low at a particular location within a circuit can signify a number of things. For example, it may represent the on or off state of a switch or saturated transistor. It may represent one bit of a number, or whether an event has occurred, or whether some action should be taken. The high and low states can be represented as true and false statements, which are used in Boolean logic. When positive-true logic is used high = true, while high = false when negative-true logic is used.]

Question 55.
What is a digital circuit?
Answer:
An electronic circuit that processes only digital signals is called a digital circuit. There are only two voltage states present at any point within a digital circuit. These voltage states are either high or low.

The branch of electronics which deals with digital circuits is called digital electronics.

[Note : Digital circuits can store and process bits of information needed to make complex logical decisions. Digital electronics incorporate logical decision-making processes into a circuit.]

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 56.
What are the three ways of representing a logic gate?
Answer:
A logic gate can be represented by its logic symbol, Boolean expression and the truth table.

Question 57.
How many rows are there in the truth table of a 3-input gate?
Answer:
Each of the 3 inputs can take 2 values (0 and 1).
Hence, the number of rows in the truth table of a 3-input gate = 2 × 2 × 2 = 23 = 8.

Question 58.
Name the common logic gates.
Answer:
The five common logic gates are the AND, OR, NOT, NAND and NOR gates.

Of these the AND, OR and NOT gates which respectively perform the logical AND, logical OR and logical NOT operations are called the basic logic gates. These three gates form the basis for other types of logical gates. The NAND and NOR are called the universal logic gates because any gate can be implemented by the combination of NAND and NOR gates.

Question 59.
Define the following logic gates :
(1) AND
(2) OR
(3) NOT.
Give the logic symbol, Boolean expression and truth table of each. (1 mark each )
Answer:
(1) The AND gate : It is a circuit with two or more inputs and one output in which the output signal is HIGH if and only if all the inputs are HIGH simultaneously.
The AND operation represents a logical multiplication.

Below figure shows the 2-input AND gate logic symbol and the Boolean expression and the truth table for the AND function.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 25

(2) The OR gate : It is a circuit with two or more inputs and one output in which the output signal is HIGH if any one or more of the inputs is HIGH.
The OR operation represents a logical addition.

Below figure shows the 2-input OR gate logic symbol, and the Boolean expression and the truth table for the OR function.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 26

(3) The NOT gate or INVERTER : It is a circuit with one input whose output is HIGH if the input is LOW and vice versa.
The NOT operation outputs an inverted version of the input. Hence, a NOT gate is also known as an INVERTER.

The small invert bubble on the output side of the inverter logic symbol, Fig. 16.30 and the over bar (__) in the Boolean expression represent the invert function.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 27

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 60.
A gate generates a HIGH output when at least one of its inputs is HIGH. Which is this gate?
Answer:
It is an OR gate.

Question 61.
How will a 2-input AND gate work when both its input terminals are shorted? Give the circuit symbol and truth table.
Answer:
When both the input terminals of a 2-input AND gate are shorted, i.e., the same signal X goes to both inputs, the output is Y = X ∙ X which will give 1 if X = 1, and 0 if X = 0; hence Y = X ∙ X = X.
Circuit symbol:
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 28
Truth table :
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 29
[Note : The OR operation gives exactly the same result. The laws Y = X ∙ X = X and Y = X + X = X are called idem potent laws.]

Question 62.
Write the Boolean expression and give the circuit symbol for a 3-input AND gate.
Answer:
Consider an AND gate with 3-inputs, A, B and C. Boolean expression : Y = A ∙ B ∙ C
Circuit symbol: Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 30

Question 63.
If only 2-input OR gates are available, draw the circuit to implement the Boolean expression Y = A + B + C.
Answer:
Implementation of Y = A + B + C using two-input OR gates :
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 31

Question 64.
Define the logic gates (1) NAND (2) NOR.
Give the logic symbol, Boolean expression and truth table of each.
How are the above gates realized from the basic gates?
Answer:
(1) The NAND gate : It is a circuit with two or more inputs and one output, whose output is HIGH if any one or more of the inputs is LOW; the output is LOW if all the inputs are HIGH.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 32
The NAND gate is a combination of an AND gate followed by a NOT gate so that the truth table of the NAND function is obtained by inverting the outputs of the AND gate.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 33

(2) The NOR gate: It is a circuit with two or more inputs and one output, in which the output is HIGH if and only if all the inputs are LOW.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 34
The NOR gate is realized by connecting the output of OR gate to the input of a NOT gate, so that the truth table of the NOR function is obtained by inverting the outputs of the OR gate.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 35

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 65.
How will a NAND gate work when all its input terminals are shorted?
Answer:
A NOT gate.

Question 66.
Define the XOR (Exclusive OR) logic gate. Give its logic symbol, Boolean expression and truth table. How is the XOR gate realized from the basic gates?
Answer:
The XOR (Exclusive OR) gate : It is a circuit with only two inputs and one output in which the output signal is HIGH if and only if the inputs are different from each other.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 36

Question 67.
Prepare the truth tables for the following logic circuits. Write the Boolean expression for the output and name (or identify) the output function in each case.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 37
OR
Draw the logic diagram and write the truth table for the Boolean equations
(1) Y = \(\overline{\mathrm{A}+\mathrm{B}}\)
(2) Y = \(\overline{\mathrm{A} \cdot \mathrm{B}}\)
(3) \(\overline{\mathrm{A}}+\overline{\mathrm{B}}=\overline{\mathrm{A} \cdot \mathrm{B}}\)
(4) \(\overline{\mathrm{A}} \cdot \overline{\mathrm{B}}=\overline{\mathrm{A}+\mathrm{B}}\)
Answer:
(1)
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 38
The same signal X is fed to both the inputs of the 2-input NOR gate.
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 39
The truth table shows that the output is HIGH if the input is LOW and vice versa. Therefore, the circuit functions as a NOT gate or INVERTER.
∴ Boolean expression for the output logic is Y = \(\overline{\mathrm{A}+\mathrm{B}}=\overline{\mathrm{X}}\)

(2)
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 40
The same signal X is fed to both the inputs of the 2-input NAND gate.
Truth table :
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 41
The truth table shows that the output is HIGH if the input is LOW and vice versa. Therefore, the circuit functions as a NOT gate or INVERTER.
∴ Boolean expression for the output logic is Y = \(\overline{\mathrm{A} \cdot \mathrm{B}}=\overline{\mathrm{X}}\)

(3)
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 42
Each input of the 2-input OR gate is fed through a NOT gate, i.e., the inputs to the OR gate are \(\overline{\mathrm{A}}\) and \(\overline{\mathrm{B}}\).
Truth table:
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 43
The truth table shows that the output is HIGH if any one of the inputs is LOW; the output is LOW if all the inputs are HIGH. Therefore, the circuit functions as a NAND gate.
∴ Boolean expression for the output logic is Y = latex]\overline{\mathrm{A}}+\overline{\mathrm{B}}=\overline{\mathrm{A} \cdot \mathrm{B}}[/latex]

(4)
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 44
Inverted inputs \(\overline{\mathrm{A}}\) and \(\overline{\mathrm{B}}\) are fed to the 2-input AND gate.
Truth table :
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 45
The truth table shows that the output is HIGH if and only if all the inputs are LOW. Therefore, the circuit functions as a NOR gate.
∴ Boolean expression for the output logic is Y = \(\overline{\mathrm{A}} \cdot \overline{\mathrm{B}}=\overline{\mathrm{A}+\mathrm{B}}\)

Question 68.
What is the equivalent logic gate for the following logic circuit?
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 46
Answer:
The given logic circuit (combination of logic gates) is
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 47
i. e., the output is HIGH if and only if both the inputs are LOW, which is obtained by a NOR gate.

Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices

Question 69.
Write the truth table for the Boolean equation Y = \(\overline{\mathrm{A}}\) – B + A – \(\overline{\mathrm{B}}\).
Answer:
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 48

Multiple Choice Questions

Question 1.
An electronic circuit which converts alternating voltage into unidirectional pulsating voltage is called
(A) a transistor
(B) a rectifier
(C) an oscillator
(D) a transformer.
Answer:
(B) a rectifier

Question 2.
A pn junction exhibits rectifying property because of
(A) the potential barrier across the pn junction
(B) the difference in the doping concentrations in the p- and n-layers
(C) the avalanche breakdown when reverse biased
(D) the Zener breakdown when reverse biased.
Answer:
(A) the potential barrier across the pn junction

Question 3.
The stepped down output of a transformer, with turns ratio 5 : 1, is fed to an ideal diode D and load resistance RL. The peak load voltage is
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 49
(A) 22 V
(B) 31 V
(C) 44 V
(D) 62 V
Answer:
(D) 62 V

Question 4.
In the given circuit, the peak value of the ac source voltage is 10 V, and the diode has a negligible forward resistance and infinite reverse resistance. During the negative half cycle of the source voltage, the peak voltage across the diode is
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 50
(A) – 10 V
(B) 0
(C) 5 V
(D) 10 V
Answer:
(A) – 10 V

Question 5.
A full-wave rectifier uses a grounded centre tap on the secondary winding of a transformer and a 60 Hz source voltage across the primary winding. The output frequency of the full-wave rectifier is
(A) 30 Hz
(B) 60 Hz
(C) 120 Hz
(D) 240 Hz.
Answer:
(C) 120 Hz

Question 6.
Avalanche breakdown in a Zener diode takes place due to
(A) thermal energy
(B) light energy
(C) magnetic field
(D) accelerated minority charge carriers.
Answer:
(D) accelerated minority charge carriers.

Question 7.
A Zener diode is used as a
(A) half wave regulator
(B) half wave rectifier
(C) simple voltage regulator
(D) voltage amplifier.
Answer:
(C) simple voltage regulator

Question 8.
The current through the Zener diode in the following circuit is
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 51
(A) 5 mA
(B) 10 mA
(C) 15 mA
(D) 30 mA.
Answer:
(A) 5 mA

Question 9.
In operation, a photodiode is
(A) unbiased
(B) always forward-biased
(C) always reverse-biased
(D) either forward-or reverse-biased.
Answer:
(C) always reverse-biased

Question 10.
The photocurrent in a photodiode is a few
(A) nanoamperes
(B) microamperes
(C) milliamperes
(D) amperes.
Answer:
(B) microamperes

Question 11.
A photodiode is used in
(A) a brake indicator
(B) an optocoupler
(C) a regulated power supply
(D) a logic gate.
Answer:
(B) an optocoupler

Question 12.
When the load resistance across a solar cell is zero, the current in the external circuit passed by the solar cell is called
(A) the open-circuit current
(B) the reverse saturation current
(C) the short-circuit current
(D) the photocurrent.
Answer:
(C) the short-circuit current

Question 13.
Which of the following is the correct circuit symbol for an LED ?
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 52
Answer:
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 54

Question 14.
The colour of light emitted by an LED depends upon
(A) its forward bias
(B) its reverse bias
(C) the band gap of the material of the semiconductor
(D) its size.
Answer:
(C) the band gap of the material of the semiconductor

Question 15.
The centre terminal of a junction transistor is called
(A) the emitter
(B) the opposite semiconductor
(C) the collector
(D) the base.
Answer:
(D) the base.

Question 16.
A transistor acts as a ‘closed switch’ when it is in
(A) the cutoff region
(B) the active region
(C) the breakdown region
(D) the saturation region.
Answer:
(D) the saturation region.

Question 17.
A junction transistor acts as
(A) a rectifier
(B) an amplifier
(C) the oscillator
(D) a voltage regulator.
Answer:
(B) an amplifier

Question 18.
When an npn junction transistor is used as an amplifier in CE-mode,
(A) the central p-type region is common to both input and output circuits
(B) the emitter terminal is common to both input and output circuits
(C) the emitter junction is reverse biased while the collector junction is forward biased
(D) the signal voltage is applied between the two n regions.
Answer:
(B) the emitter terminal is common to both input and output circuits

Question 19.
When a pnp transistor is operated in saturation region, then its
(A) the base-emitter junction is forward biased and base-collector junction is reverse biased
(B) both the base-emitter and base-collector junctions are reverse biased
(C) both the base-emitter and base-collector junctions are forward biased
(D) the base-emitter junction is reverse biased and base-collector junction is forward biased.
Answer:
(C) both the base-emitter and base-collector junctions are forward biased

Question 20.
Which logic gate corresponds to the logical equation, Y = \(\overline{\mathrm{A}+\mathrm{B}}\) ?
(A) NAND
(B) NOR
(C) AND
(D) OR
Answer:
(B) NOR

Question 21.
The output of a NAND gate is HIGH if
(A) any one or more of the inputs is LOW
(B) all the inputs are HIGH
(C) only all the inputs are simultaneously LOW
(D) only if an inverter is connected at its output.
Answer:
(A) any one or more of the inputs is LOW

Question 22.
The output of NOR gate is HIGH, when
(A) all inputs are HIGH
(B) all inputs are LOW
(C) only one of its inputs is HIGH
(D) only one of its inputs is LOW.
Answer:
(B) all inputs are LOW

Question 23.
Which logic gate corresponds to the truth table
Maharashtra Board Class 12 Physics Important Questions Chapter 16 Semiconductor Devices 53
(A) AND
(B) NOR
(C) OR
(D) NAND
Answer:
(B) NOR

Question 24.
The logic gate which produces LOW output when any one of the input is HIGH and produces HIGH output only when all of its inputs are LOW is called
(A) an AND gate
(B) an OR gate
(C) a NOR gate
(D) a NAND gate.
Answer:
(C) a NOR gate

Question 25.
The Boolean expression for an Exclusive OR gate is
(A) A + B
(B) A ⊕ B
(C) \(\overline{\mathrm{A}+\mathrm{B}}\)
(D) A ∙ B
Answer:
(B) A ⊕ B