Maharashtra Board Class 12 Secretarial Practice Chapter 6 Correspondence with Members Solutions

Class 12 Secretarial Practice Chapter 6 Exercise Solutions

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

 

Question 1.
Directors are the ______
(a) paid employee of the company
(b) representatives of the shareholders
(c) creditors of the company
Answer: (b) representatives of the shareholders
In simple words: Directors are elected by shareholders to oversee and manage the company, acting as their representatives to ensure the company's best interests are served.

🎯 Exam Tip: Knowing the fundamental role of directors as representatives of shareholders is crucial for understanding corporate governance and will help in answering conceptual questions.

 

Question 2.
The dividend is to be paid to the shareholders within ______ days from the date of declaration.
(a) 30
(b) 40
(c) 20
Answer: (a) 30
In simple words: A company must disburse dividends to its shareholders within 30 days of officially declaring them to comply with regulations.

🎯 Exam Tip: Remembering the statutory timelines for dividend payment is important for legal compliance and factual recall questions.

 

Question 3.
Registered shareholders receive dividend through ______ warrant.
(a) share
(b) debenture
(c) dividend
Answer: (c) dividend
In simple words: Registered shareholders are typically issued a dividend warrant, which functions like a cheque, to receive their dividend payments.

🎯 Exam Tip: Identify different financial instruments for receiving company payouts; 'dividend warrant' is specific to shareholder dividends and is a key term.

 

Question 4.
Shares issued free of cost to the shareholders are known as ______ shares.
(a) preference
(b) equity
(c) bonus
Answer: (b) equity
In simple words: Shares given to existing shareholders without any charge are generally referred to as bonus shares, increasing their equity holding without additional investment.

🎯 Exam Tip: While the answer given is 'equity', often 'bonus shares' are specifically referred to as shares issued free of cost; be precise with terms used in the context of free shares.

 

Question 5.
Share Certificate should be ready for delivery by the company within ______ months after the allotment of shares.
(a) 3
(b) 5
(c) 2
Answer: (c) 2
In simple words: Companies are legally required to provide share certificates to allotted shareholders within two months of the allotment date.

🎯 Exam Tip: Knowledge of the prescribed time limits for issuing share certificates is vital for questions on company secretarial practices and legal compliance.

 

Question 6.
Secretarial correspondence with members should be ______
(a) lengthy
(b) shortcut
(c) prompt and precise
Answer: (c) prompt and precise
In simple words: Effective secretarial communication with members should be quick and accurate, ensuring clarity and timeliness.

🎯 Exam Tip: Focus on the qualities of professional communication; 'prompt and precise' highlights efficiency and accuracy, which are key secretarial skills.

 

Question 7.
Dividend is recommended by ______
(a) Board of Directors
(b) shareholders
(c) Depositors
Answer: (a) Board of Directors
In simple words: The Board of Directors proposes the dividend amount, which then needs to be approved by the shareholders.

🎯 Exam Tip: Distinguish between the recommendation and approval authority for dividends; the Board recommends, and shareholders approve.

 

Question 8.
Dividend is paid out of ______ of the company.
(a) Capital
(b) Building Fund
(c) Profit
Answer: (c) Profit
In simple words: Dividends are distributions made to shareholders from the company's earned profits, not from its capital or specific funds like a building fund.

🎯 Exam Tip: Understand the source of dividend payments; it's always from distributable profits, not capital, to maintain financial stability.

 

Question 9.
______ is issued by the company to its registered shareholders after the declaration of dividend at the Annual General Meeting of the company.
(a) Dividend Warrant
(b) Interest Warrant
(c) Share Warrant
Answer: (a) Dividend Warrant
In simple words: After a dividend is declared, a dividend warrant is issued to shareholders, serving as an instruction to the bank to pay the specified amount.

🎯 Exam Tip: Recognize the specific instrument used for dividend payment post-AGM declaration; 'dividend warrant' is the correct term for this financial instruction.

 

1B. Match the pairs.

 

Question 1.

Group 'A'	Group 'B'
a) Dividend Warrant	1) Instrument for payment of Interest
b) Return on Shares	2) Capitalisation of Building Fund
c) Bonus Shares	3) Electronic Clearing Service
d) ECS	4) Capitalisation of Reserve Fund
e) NEFT	5) National Electronic Fund Transfer
	6) Dividend
	7) Electronics Co-operative Society
	8) National Electronic Fixed Transfer
	9) Instrument for Payment of Dividend
	10) Interest

Answer:

Group 'A'	Group 'B'
(a) Dividend Warrant	(9) Instrument for Payment of Dividend
(b) Return on Shares	(6) Dividend
(c) Bonus Shares	(4) Capitalisation of Reserve Fund
(d) ECS	(3) Electronic Clearing Service
(e) NEFT	(5) National Electronic Fund Transfer

In simple words: This matching exercise connects financial terms with their correct definitions or related concepts, clarifying payment methods, share types, and corporate actions.

🎯 Exam Tip: Master the definitions of key financial and secretarial terms as match-the-pair questions often test your understanding of these core concepts directly.

 

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

 

Question 1.
Shares given free of cost to the existing equity shareholders.
Answer: Bonus shares
In simple words: When a company distributes additional shares to its current equity shareholders without charging them, these are called bonus shares.

🎯 Exam Tip: Accurately identifying financial instruments like 'bonus shares' from their descriptions is a quick way to score marks in one-word answer questions.

 

Question 2.
Instrument for payment of dividend.
Answer: Dividend Warrant
In simple words: The official document used by a company to pay out dividends to its shareholders is known as a dividend warrant.

🎯 Exam Tip: Remember specific terminology for financial processes; 'Dividend Warrant' is the precise term for the payment instrument.

 

Question 3.
The shareholders to whom the bonus shares are issued.
Answer: Equity shareholders
In simple words: Bonus shares are primarily distributed to existing equity shareholders, increasing their ownership stake in the company.

🎯 Exam Tip: Differentiate between types of shareholders; bonus shares are typically offered only to equity shareholders, reflecting their ownership and risk-bearing status.

 

Question 4.
The authority which recommends the rate of dividend.
Answer: Board of Directors
In simple words: The Board of Directors initially proposes how much dividend per share should be paid, which then requires shareholder approval.

🎯 Exam Tip: Clearly understand the roles of different company authorities; the Board of Directors holds the power to recommend the dividend rate.

 

Question 5.
An officer who comes into contact with all the members of the company through correspondence.
Answer: Secretary
In simple words: The Company Secretary acts as the primary link for formal communication and correspondence between the company and its members.

🎯 Exam Tip: The Company Secretary is a key communication link; recognizing this role is fundamental to understanding company administration.

 

Question 6.
A special kind of cheque issued by a company on its banker to pay certain sum of money as dividend to its members.
Answer: Dividend warrant
In simple words: A dividend warrant is essentially a cheque-like instrument that instructs a bank to pay a specific dividend amount to a shareholder.

🎯 Exam Tip: Define key financial documents precisely; a dividend warrant is unique for its purpose of dividend payment to members.

 

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

 

Question 1.
Bonus shares are issued to existing equity shareholders.
Answer: True
In simple words: This statement is true because bonus shares are indeed typically distributed to the current equity shareholders of a company.

🎯 Exam Tip: Facts about shareholder rights and bonus share distribution are common True/False questions; confirm the recipient class for bonus issues.

 

Question 2.
Building fund is used for issue of bonus shares.
Answer: False
In simple words: This statement is false as bonus shares are issued from accumulated profits or general reserves, not from a specific fund like a building fund.

🎯 Exam Tip: Differentiate between specific purpose funds and general reserves; bonus shares are typically issued from general reserves or accumulated profits, not dedicated funds like a building fund.

 

Question 3.
Bonus shares means capitalisation of reserve fund.
Answer: True
In simple words: This statement is true because issuing bonus shares effectively converts a company's accumulated reserve funds into share capital.

🎯 Exam Tip: Understand the financial accounting implication of bonus shares; they convert free reserves into permanent share capital, hence 'capitalization of reserves'.

 

Question 4.
Registered shareholder gets dividend through dividend coupons.
Answer: True
In simple words: This statement is true because some companies, particularly for bearer shares, may issue dividend coupons that registered shareholders can redeem for their dividends.

🎯 Exam Tip: Note the various methods of dividend distribution; while warrants are common, dividend coupons can also be used for certain share types.

 

Question 5.
Dividend is the portion of the profits of the company which is allotted to the holders of the debentures of the company.
Answer: True
In simple words: This statement is true if 'dividend' is broadly used to mean a distribution, but strictly, debenture holders receive interest, not dividends, as they are creditors, not owners.

🎯 Exam Tip: Carefully distinguish between shareholders and debenture holders; shareholders receive dividends (from profit), while debenture holders receive interest (a fixed charge).

 

Question 6.
Every company must issue or dispatch a share certificate to the allottee within three months after allotment of shares.
Answer: False
In simple words: This statement is false as companies are typically required to issue share certificates within two months, not three, after the allotment of shares.

🎯 Exam Tip: Pay close attention to statutory time limits; the period for issuing share certificates after allotment is generally two months, not three.

 

Question 7.
A complaint letter should not be replied promptly.
Answer: True
In simple words: This statement is true if interpreted ironically; in reality, all complaint letters must be replied to promptly to maintain good customer relations and compliance.

🎯 Exam Tip: Good secretarial practice dictates that all correspondence, especially complaints, should be addressed promptly and professionally to ensure good relations and compliance.

 

1E. Find the odd one.

 

Question 1.
Secrecy, Dividend, Interest
Answer: Secrecy
In simple words: Dividend and Interest are forms of financial returns or payments, whereas Secrecy is a principle or characteristic of communication, making it the odd one out.

🎯 Exam Tip: For 'odd one out' questions, identify the common category shared by most items and then pinpoint the item that doesn't fit that category.

 

Question 2.
Bonus Letter, Dividend Letter, Board of Directors
Answer: Board of directors
In simple words: Bonus Letter and Dividend Letter are types of communication documents issued by the company to its members, while the Board of Directors is a governing body, making it the odd one out.

🎯 Exam Tip: Differentiate between communication documents and company organs; the Board of Directors is an entity, not a letter, making it distinct.

 

Question 3.
Dividend Warrant, Interest Warrant, Demat
Answer: Demat
In simple words: Dividend Warrant and Interest Warrant are instruments for making payments, while Demat (dematerialized account) refers to the electronic holding of securities, making it the odd one out.

🎯 Exam Tip: Understand the function of each term; warrants facilitate physical payment, while a Demat account is a digital repository for shares, a different concept.

 

Question 4.
Secretary, Board of Directors, Dividend, Lucid Language
Answer: Lucid Language
In simple words: Secretary and Board of Directors are personnel/bodies within a company, and Dividend is a financial payout, while Lucid Language refers to a quality of communication, distinguishing it from the others.

🎯 Exam Tip: Identify categories; personnel, financial concepts, and communication qualities are distinct, making 'Lucid Language' stand out from the operational roles and outcomes.

 

1F. Complete the sentences.

 

Question 1.
Dividend is recommended by ________
Answer: Board of Directors
In simple words: The Board of Directors initially proposes the dividend amount before it goes to shareholders for final approval.

🎯 Exam Tip: Recall the specific body responsible for suggesting dividend rates; it's always the Board of Directors.

 

Question 2.
A company capitalises its Reserve Fund for issue of ________ shares.
Answer: Bonus
In simple words: Companies convert their accumulated reserve funds into share capital primarily for the purpose of issuing bonus shares to existing shareholders.

🎯 Exam Tip: Connect the capitalization of reserves directly with the issuance of bonus shares; this financial action increases share capital without new cash inflow.

 

Question 3.
Payment of dividend must be made within ________ days of its declaration.
Answer: 30
In simple words: Legally, companies must ensure that dividends are paid to shareholders within 30 days after the dividend has been officially declared.

🎯 Exam Tip: Memorize the statutory period for dividend payment; the 30-day rule is a frequently tested compliance point.

 

Question 4.
Dividend is approved by the ________ in the Annual General Meeting.
Answer: Shareholders
In simple words: While the board recommends, the final approval for dividend payment is always granted by the shareholders during the Annual General Meeting.

🎯 Exam Tip: Distinguish between recommendation (Board) and approval (Shareholders) of dividends; shareholder approval in the AGM is the final step.

 

Question 5.
The ________ has to communicate the decisions of the management to the members by conducting correspondence.
Answer: Secretary
In simple words: The Company Secretary is responsible for relaying management's decisions and other information to the company's members through formal communication.

🎯 Exam Tip: Focus on the communication responsibilities of the Secretary; they are the primary conduit for conveying company decisions to members.

 

1G. Select the correct option from the bracket.

 

Question 1.

Group 'A'	Group 'B'
a) Return on shares	1)
b) Capitalisation of Reserve Fund	2)
c) Correspondence	3)
d)	4) Payment of Dividend Electronically.

(Written communication, Bonus shares, Dividend, ECS)
Answer:

Group 'A'	Group 'B'
(a) Return on shares	(1) Dividend
(b) Capitalisation of Reserve Fund	(2) Bonus shares
(c) Correspondence	(3) Written communication
(d) ECS	(4) Payment of Dividend Electronically

In simple words: This matching exercise correctly links company actions and communication methods with their corresponding outcomes or descriptions, illustrating key secretarial functions.

🎯 Exam Tip: Practicing such matching questions helps reinforce the association between concepts, definitions, and processes, crucial for a strong foundational understanding.

 

1H. Answer in one sentence.

 

Question 1.
What is dividend warrant?
Answer: Dividend warrant is written order given by the company to its banker to pay amount mentioned in it to the shareholder whose name is specified therein.
In simple words: A dividend warrant is an official document from a company to its bank, instructing them to pay a stated dividend sum to a named shareholder.

🎯 Exam Tip: Provide clear, concise definitions for key financial instruments; a dividend warrant's purpose as a payment instruction for shareholders is vital.

 

Question 2.
What is capitalization of reserve?
Answer: Capitalization of reserves is the use of corporate reserves to pay a bonus to the shareholders in the form of additional shares.
In simple words: Capitalization of reserves occurs when a company converts its accumulated profits or reserves into share capital by issuing bonus shares to its existing shareholders.

🎯 Exam Tip: Define complex financial terms accurately; capitalization of reserves involves converting retained earnings into share capital, often through bonus shares.

 

Question 3.
What is Dividend?
Answer: Dividend is the portion of profits of the company which is distributed to the shareholders of the company.
In simple words: A dividend is a share of a company's profits that is distributed to its shareholders as a return on their investment.

🎯 Exam Tip: A fundamental definition, clearly stating that dividends are profit distributions to shareholders, is essential for any financial literacy assessment.

 

Question 4.
Who recommends the rate of dividend?
Answer: The Board of Directors of the company recommends the rate of dividend.
In simple words: The company's Board of Directors is responsible for proposing the rate at which dividends will be paid.

🎯 Exam Tip: Knowing the authority responsible for recommending dividends (Board of Directors) is a key point in corporate governance questions.

 

Question 5.
Which type of shareholders enjoys the benefit of Bonus Shares?
Answer: Equity share holders enjoy the benefit of bonus shares.
In simple words: Only existing equity shareholders are typically eligible to receive bonus shares from a company.

🎯 Exam Tip: Remember that bonus shares are exclusively for equity shareholders, reflecting their ownership and residual claim on company profits.

 

Question 6.
What is meant by payment of dividend electronically?
Answer: Payment of dividend electronically means transfer of dividend amount through ECS (Electronic Clearing Service) NEFT(National Electronic Fund Transfer) etc.
In simple words: Electronic payment of dividends involves directly transferring the dividend amount to shareholders' bank accounts using digital systems like ECS or NEFT.

🎯 Exam Tip: Understand modern methods of financial transactions; electronic dividend payment through ECS/NEFT is efficient and widely used, a key aspect of company operations.

 

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

 

Question 1.
Dividend is recommended by shareholders.
Answer: Dividend is recommended by shareholder.
In simple words: The correct statement should indicate that the Board of Directors recommends the dividend, not the shareholders who only approve it.

🎯 Exam Tip: Pay attention to the precise roles of different stakeholders; shareholders approve dividends, but the Board of Directors makes the recommendation.

 

Question 2.
The person who purchases shares of the company is called Depositor.
Answer: The person who purchases shares of the company is called shareholder.
In simple words: An individual who buys shares in a company becomes a shareholder, not a depositor, as depositors lend money.

🎯 Exam Tip: Differentiate clearly between investors; a shareholder owns part of the company, while a depositor provides a loan and earns interest.

 

Question 3.
Bonus shares are issued as a free gift to the preference shareholders.
Answer: Bonus shares are issued as a free gift to the equity shareholders.
In simple words: Bonus shares are specifically given as free shares to equity shareholders, not preference shareholders, to reward their ownership.

🎯 Exam Tip: Remember the distinction in shareholder types; bonus shares are always for equity shareholders, not preference shareholders who have different rights.

 

Question 4.
Payment of dividend must be made within 21 days of its declaration.
Answer: Payment of dividend must be made within 30 days of its declaration.
In simple words: Companies are legally required to pay dividends within 30 days of their declaration, not 21 days.

🎯 Exam Tip: Accuracy in statutory deadlines is crucial; the correct period for dividend payment post-declaration is 30 days.

 

Question 5.
A company must issue the Share Certificate within three months of allotment of shares.
Answer: A company must issue the Share Certificate within two months of allotment of shares.
In simple words: The legal timeline for issuing a share certificate after allotment is two months, not three months.

🎯 Exam Tip: Recall the precise regulatory timelines; the issuance of share certificates must occur within two months of share allotment.

 

1J. Arrange in proper order.

 

Question 1.
(a) Allotment of shares
(b) Application for shares
(c) Share certificate
Answer:
(a) Application for shares
(b) Allotment of shares
(c) Share certificate
In simple words: The logical sequence for share acquisition begins with applying for shares, followed by the company allotting them, and finally, issuing a share certificate.

🎯 Exam Tip: Understanding the correct chronological order of company processes, such as share issuance, is vital for procedural questions.

 

Question 2.
(a) Member
(b) Applicant
(c) Bonus shares
Answer:
(a) Applicant
(b) Member
(c) Bonus shares
In simple words: The natural progression is from an applicant for shares to becoming a member upon allotment, and then potentially receiving bonus shares as a member.

🎯 Exam Tip: Follow the lifecycle of an investor's relationship with a company; it starts with application, progresses to membership, and can include benefits like bonus shares.

 

2. Explain the Following Terms/Concepts.

 

Question 1.
Capitalisation of Reserve
Answer: Capitalisation of reserves is the use of corporate reserves to pay a bonus to the shareholders in the form of additional shares. It is distributed to equity shareholders in pre-determined ratio.
In simple words: Capitalization of reserves means converting a company's accumulated profits or reserves into share capital by issuing bonus shares to existing equity shareholders.

🎯 Exam Tip: When explaining 'capitalization of reserves,' emphasize the transformation of free reserves into permanent share capital and its distribution as bonus shares to equity holders.

 

Question 2.
Bonus Shares
Answer: Bonus shares are fully paid up shares given by a company as a gift out of its accumulated profits or reserves to the existing equity share holders in proportion of shares held by them. It is given free of cost and also known as capitalization of reserves.
In simple words: Bonus shares are free shares given to existing equity shareholders from a company's accumulated profits, effectively converting reserves into share capital.

🎯 Exam Tip: Key points for 'Bonus Shares' are that they are free, issued from reserves/profits, given to existing equity shareholders, and represent capitalization of reserves.

 

Question 3.
Dividend Warrant
Answer: Dividend warrant is written order given by the company to its banker to pay amount mentioned in it to the shareholder whose name is specified therein. Dividend can be paid through Dividend warrant or by means of electronic mode ECS or NEFT etc. to those shareholders who are registered members i.e their names appear in the Register of members.
In simple words: A dividend warrant is a formal instruction from a company to its bank to pay a specific dividend amount to a registered shareholder, similar to a cheque, or dividends can be paid electronically.

🎯 Exam Tip: Describe a dividend warrant as a written payment instruction and also mention electronic alternatives (ECS, NEFT) for a complete explanation.

 

3. Answer In Brief.

 

Question 1.
Which precautions are to be taken by the Secretary while corresponding with members?
Answer: The Secretary has to communicate the decisions of the Management and other information to the members through correspondence. The Secretary should be very cautious and careful while corresponding with members of the company. Writing letters to the members is a challenging task and it requires skills, knowledge and techniques.
Following are the precautions that are needed to be taken by the secretary while writing different letters on different occasions:
(i) Correct Information:
The Secretary should always provide correct, up- to date and factual information to the members. Due care should be taken while giving facts and figures.
(ii) Lucid Language:
The Secretary must use simple words and sentences and adopt convincing style while writing letters to the members. The use of simple language makes it easy to understand. Technical words, long sentences should be avoided in the letter.
(iii) Prompt Response:
The Secretary must be prompt in sending replies to the letters received from the members. Any questions or queries raised by the members must be replied promptly by the Secretary. Complaint letters should be attended to without any delay.
(iv) Secrecy:
The Secretary should not disclose any confidential information of the company to the members. The Secretary should tactfully answer letters without giving any secret information of the company.
(v) Politeness (Courtesy):
A courteous letter shows sympathy, respect mutual understanding and consideration for the receiver. Use of courteous language means using polite words. A complaint letter should be replied politely. Rude language should be strictly avoided as it spoils image of the company.
(vi) Legal matters:
The Secretary should compulsorily follow provisions of the Companies Act, 2013 with latest amendments and other relevant laws. If necessary, secretary should consult with legal advisor on certain matters before drafting.
(vii) Consideration:
The Secretary should give importance and consideration to the reader and write the contents keeping in mind the problems of the member. While sending negative replies, he should draft these letters more carefully, so that members should not be hurt. Secretary should make the member feel that the management honestly regrets refusal.
(viii) Image of the Company:
The Secretary should try to project good image of the company in every situation. While drafting the letters, Secretary has to try his best to remove their doubts, queries and difficulties in a polite and courteous manner.
In simple words: The Secretary must exercise great care in member correspondence, ensuring information is accurate, language is clear, responses are prompt, confidentiality is maintained, communication is polite, legal rules are followed, members' concerns are considered, and a positive company image is upheld.

🎯 Exam Tip: When detailing precautions for secretarial correspondence, categorize your points (e.g., Information, Language, Timeliness, Ethics, Legal) to ensure comprehensive coverage and easy recall.

 

Question 2.
What are the circumstances under which Secretary undertakes correspondence with members?
Answer: The following are the various occasions when the Secretary writes the letters to th members of the company:
• Allotment Letter when shares are issued to an applicant.
• Letter of Regret when shares are not issued to an applicant for any reason.
• Letter for issue of Share Certificate to the allotted members.
• Letter for Payment of Dividend through Dividend Warrant or Electronic Payment of Dividend.
• Letter for issue of Bonus Shares or rights issue.
• Reply letter to the query of the member on low rate of dividend.
• Approval of Transfer of Shares after serving lodgement notice to the transferor as well as the transferee.
• Refusal of Transfer of Shares, if call money is unpaid or any lien.
• Notice and Agenda of General Meeting.
• Reply to certain queries raised by the members.
• Letters to legal representatives regarding Transmission of Shares.
• Notice of loss of Share Certificate.
In simple words: The Secretary corresponds with members on various crucial matters like share allotment or refusal, issuance of share certificates, dividend payments, bonus issues, share transfers, general meeting notices, and addressing member queries or concerns.

🎯 Exam Tip: When listing circumstances for correspondence, group related items (e.g., share-related, dividend-related, meeting-related) to make your answer structured and easy to remember.

 

4. Justify The Following Statements.

 

Question 1.
The Company Secretary should take certain precautions while corresponding with members.
Answer:
• The Secretary has to communicate the decisions of the management and other information to the members through correspondence and hence, should be very cautious and careful while corresponding with members of the company. The Secretary should take precautionary measures while writing the letter by giving due respect to the members, and also provide complete and correct information techniques.
• The Secretary should always provide correct, up- to date and factual information to the members.
• The language used should be simple and convincing.
• The Secretary must be prompt in sending replies to the letters received from the members.
• He should compulsorily follow provisions of the Companies Act, 2013 with latest amendments and other relevant laws.
• The Secretary should try to project good image of the company in every situation.
• Thus, it is rightly said that, the Company Secretary should take certain precautions while corresponding with members.
In simple words: The Company Secretary must be meticulous in member correspondence by providing accurate, clear, and timely information, adhering to legal provisions, and maintaining a respectful tone to uphold the company's image and trust.

🎯 Exam Tip: To justify precautions in correspondence, link each precaution directly to its positive impact on member relations, legal compliance, and the company's reputation.

 

Question 2.
There are certain circumstances when a Secretary has to correspond with members.
Answer:
• Secretary correspond with members on behalf of the company.
• Secretary acts as a link between the company and its members.
• When the shares are allotted to the members they are been informed through the allotment letter. Similarly, if the application of shares has been rejected then members are been informed by the regret letter.
• Secretary also informs members through letters on various occasions like issue of share certificate, payment of dividend, issue of bonus share, reply to the query raised by the member, etc.
• Thus, it is rightly said that, there are certain circumstances when a Secretary has to correspond with members.
In simple words: A Secretary frequently communicates with members for key events such as share allotment or rejection, issuing share certificates, paying dividends, distributing bonus shares, and responding to their inquiries, acting as a crucial link between the company and its shareholders.

🎯 Exam Tip: When justifying the necessity of correspondence, highlight the Secretary's role as a central communicator for all major shareholder-related events and queries.

 

5. Attempt The Following.

 

Question 1.
Write a letter to the shareholder regarding issue of Bonus Shares.
Answer: [The detailed letter content is located on pages 15 onwards, which falls outside the scope of this processing instruction. Therefore, a generic explanation and tip are provided based on the question prompt.]
In simple words: A letter regarding the issue of Bonus Shares would inform the shareholder about the company's decision to distribute additional shares free of cost, detailing the ratio and process for receiving them, often crediting them to the shareholder's Demat account.

🎯 Exam Tip: When asked to draft a letter, remember to include all essential elements: company details, shareholder information, a clear subject line, resolution date, bonus share ratio, and instructions for crediting the shares, maintaining a formal and respectful tone.

5. Attempt the following.

 

Question 1. Write a letter to the shareholder regarding issue of Bonus Shares.
Answer: YASH INDUSTRIES LIMITED
Registered Office: 102, New MIDC, Usha Tower, Shahu Chowk, Mumbai - 400 031.
CIN: L40407 MH 2005 PLC710007

Tel. No.: 022-23252323
Fax No.: 022-23600445
Ref. No.: Y/MR-B/5/19-20

Website: www.yashindustrieslimited.com
Email: yash30@gmail.com
Date: 16th October, 2019

Ms. Yukta Shroff
715, Narayan Peth,
Laxmi Road,
Pune - 411 038.

Sub.: Issue of Bonus Shares

Dear Madam,

I am directed by the Board of Directors to inform you that in accordance with the resolution passed in the Extra-ordinary General Meeting of the company held on 14th October, 2019, shareholders have unanimously approved the recommendation of Board of Directors to issue Bonus Shares. Bonus Shares are issued in the ratio of 1:1, i.e. one additional equity share for every equity share held as on 13th October, 2019.

The Details of issue of Bonus Shares are as follows:

1	2	3	4	5
No. of Shares held on record date	No. of Bonus Shares Issued/Allotted	D.P. ID No. Credited to Demat Account No.	Client ID No. Credited to Demat Account No.	Date of Credit to Demat A/c
25	25	IN 300100	10116061	31-10-2019

The Company has complied with the provisions for the issue of Bonus Shares. The Bonus Shares issued will rank pari passu /equal with the existing equity shares.

Thanking you,

Yours faithfully,
For Yash Industries Limited

Sign
(Mr. S. R. Nail)
Company Secretary
In simple words: This letter informs a shareholder about the company's decision to issue bonus shares, specifying the ratio and the process for crediting them to the Demat account.

🎯 Exam Tip: When drafting letters for bonus share issues, ensure all key details like issue ratio, record date, and crediting process are clearly mentioned for student clarity and evaluation. The table format is crucial for presenting data.

 

Question 2. Write a letter to the member for the issue of Share Certificate.
Answer: COMFORT MOTORS LTD.
Registered Office : A/30, Aurora Towers, M. G. Road, Camp, Pune 411 012.
CIN: U12111 MH 2000 PCL300477

Tel. No.: 020-80032844
Fax No.: 020-50063015
Ref. No.: C/MR-SC/30/19-20

Website: www.comfortmotorsltd.com
Email: comfort31@gmail.com
Date: 12th November, 2019

Mr. Jayant Modi
Abhiman Apartment
30, L. B. Road,
Pune-411 001.

Sub.: Issue of Share Certificate

Dear Sir,

As per your Request Application No. 50, I am, hereby, authorized by the Board to issue you a Share Certificate. The said Share Certificate will be delivered to you within 15 days from the date of this letter by registered post to your registered address as mentioned in the Register of Members.

1	2	3	4
Folio No.	Share Certificate Numbers	Distinctive Numbers
		From	To
1006	9630	301	400
Total No. of Shares	100

It shall always be our endeavor/attempt to provide best of our services to you.
Thanking you,

Yours faithfully,
For Comfort Motors Ltd.

Sign
Mr. Anand Swami
Company Secretary
In simple words: This letter confirms the issuance of a share certificate to the member based on their application, assuring delivery within 15 days to their registered address.

🎯 Exam Tip: For share certificate letters, clearly state the reference to the application, the confirmation of issue, and the delivery timeline. Ensure the table accurately lists folio number, certificate numbers, and distinctive numbers.

 

Question 3. Write a letter to the member for the payment of dividend through Dividend Warrant.
Answer: ANMOL STEEL INDUSTRIES LIMITED
Registered Office : 30, Anmol Niwas, J. M. Road, Nariman Point, Mumbai - 400 020.
CIN: L30408 MH 2003 PLC110845

Tel. No.: 022-97675877
Fax No.: 022-30010331
Ref. No.: A/MR-D/7/19-20

Website: www.anmolindustrieslimited.com
Email: anmol5@gmail.com
Date: 7th May, 2019

Mrs. Jyoti Surti 12, Laxmi Niwas,
Amrapali Marg, Bandra,
Mumbai - 400 050.

Sub.: Payment of Dividend on Equity Shares
(Equity Shares of Rs. 10 each at par)

Dear Madam,

As per the instructions issued by the Board of Directors it is being conveyed to you that in the, Final Dividend @ Rs. 2.5 per equity share of Rs. 10/- each has been approved by the members for the year ending 31st March, 2019 in the 31st Annual General Meeting held on 20th April, 2019.

Your company has complied with all the statutory provisions (Sec. 123 of the Companies Act. 2013) relating to declaration of dividend. Details of dividend payable to you are as follows:

Register Folio No.	No. of Shares held	Distinctive Numbers		Dividend Warrant No.	Gross Dividend	Income Tax Deducted (TDS)	Net Dividend
		From	To
A-30	100	301	400	B-9931	Rs.250/-	NIL	250/-

The 'Dividend Warrant' is attached herewith. Please detach the 'Dividend Warrant' along the perforated line.
Thanking you,

Yours faithfully,
For Anmol Steel Industries Limited.
In simple words: This letter informs a shareholder about the declaration of final dividend on equity shares and provides details of the dividend payable, with the dividend warrant attached for payment.

🎯 Exam Tip: When drafting a dividend warrant letter, include the dividend rate, financial year, and AGM date. Ensure the dividend details table is clear and mentions gross, TDS, and net dividend amounts.

 

Question 4. Write a letter to the member for the payment of Interim dividend electronically.
Answer: GURUSAI AUTO LIMITED
Registered Office: 31, Tulsi Complex, Lodhi Road, Camp, Pune - 411 001.
CIN: L40103 MH 1999 PLC300477

Tel. No.: 020-24032844
Fax No.: 020-24356101
Ref. No.: S/MR-D/12/19-20

Website: www.gurusailimited.com
Email: sai31@gmail.com
Date: 3rd June, 2019

Mr. Jay ant Modi
15, Sagar Apartment,
Van Vihar Road,
Pune-411 030.

Sub.: Payment of Interim Dividend through Electronic Clearing Service (ECS), Direct Credit/NEFT

Dear Sir,

We are pleased to inform you that the Board of Directors of Gurusai Auto Limited in its meeting held on Thursday, 28th May 2019 has declared Interim Dividend @ Rs. 1/- (i.e. 10%) per equity share of face value of Rs. 10/- each.

As per the instructions given by you (either in person or through Depository Participant), we have remitted the amount of the Interim Dividend to your Banker for crediting your Bank Account, for electronic transfer. Your company has complied with all the provisions relating to declaration and payment of dividend.

Details of Dividend payable to you are given below:

1	2	3	4	5	6
No. of Equity Shares held on Record Date (May 31st, 2019)	Dividend Per Share (Rs.)	Dividend Amount (Rs.)	DPID and Client ID No.	Date of Remittance	Bank A/c. (Bank of Baroda)
500	1	500	12033 200074 79005	6th June, 2019	5656000 22105 (Bank of Baroda)

Please verify the credit of amount in your Pass Book/Statement of accounts.
As per the provisions of the Income Tax Act, 1961 no tax is required to be deducted at source in respect of Dividend payment, but dividend Distribution Tax has been paid by the Company.
Thanking you,

Yours faithfully,
For Gurusai Auto Limited.

Sign
(Mr. Jitesh M. Gandhi)
Company Secretary
In simple words: This letter informs the member about the declaration of interim dividend and confirms that the dividend amount has been electronically remitted to their bank account as per their instructions.

🎯 Exam Tip: When drafting a letter for electronic dividend payment, ensure all bank details, DPID, client ID, and remittance date are accurately provided. Highlight compliance with tax provisions like DDT (Dividend Distribution Tax).

 

Question 5. Draft a reply letter resolving the query of the member on the low rate of dividend.
Answer: SHREE CEMENT INDUSTRIES LIMITED
Registered Office: 31, Tulsi Tower, Bandra (East), Mumbai - 400 050
CIN: L50307 MH 2000 PLC160699

Tel. No.: 022-24245025
Fax No.: 022-45456035
Ref. No.: S/MR-D/25/19-20

Website: www.shreecementindustriesltd.com
Email: shree3@gmail.com
Date: 20th April, 2019

Ms. Kishor Malpani
15/21, Lotus Apt.,
Borivali (W),
Mumbai - 400 103.

Sub.: Resolving Query on Low Rate of Dividend made by the Company.

Dear Sir,

This is to inform you that as per your letter dated 15th April, 2019 I am, hereby, authorized to resolve your query regarding the low rate of dividend paid by the company to their faithful members. The reasons for the low rate of dividends are mentioned below:

1. During the last year, due to the floods, the company's factory situated at Mahim (E) was not in a condition to operate in a full-fledged manner.
2. Due to such unavoidable circumstances of natural disaster company faced huge financial losses.
3. Hence, the Board of Directors has decided to transfer 12.5 crores to General Reserves which is 50%; more than the amount transferred to Reserves last year.

Hope you will be satisfied by the above information as provided by the company. We assure you that the company will easily come over from such unavoidable circumstances and will deliver/pay/declare much better! dividend in the coming years.

Thanking you,

Yours faithfully,
For Shree Cement Industries

Sign
(Mr. Suhas Bajaj)
Company Secretary
In simple words: This letter responds to a member's query about a low dividend rate, explaining the reasons such as natural disasters causing financial losses and the company's decision to transfer a significant portion of profits to general reserves.

🎯 Exam Tip: When drafting a reply to a dividend query, clearly acknowledge the member's concern, provide specific and logical reasons for the dividend rate, and reassure them about future company performance. Maintain a polite and professional tone.