Maharashtra HSC Secretarial Practice flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Capital structure
- The long-term mix of a company's sources of funds, namely equity share capital, preference share capital, retained earnings and long-term debt such as debentures and term loans.
- Trading on equity
- Using fixed-cost funds such as debt or preference capital to magnify the return available to equity shareholders when the company's earnings exceed the fixed cost of those funds.
- Capital gearing
- The ratio of fixed-interest or fixed-dividend bearing funds to equity shareholders' funds; high gearing indicates greater fixed obligations and higher financial risk.
- Over-capitalisation
- A situation where the capital employed by a company exceeds what its earning capacity can justify, so earnings per share fall below a reasonable return.
- Equity share capital
- Owned capital contributed by equity shareholders, who bear residual risk, receive dividends only when declared and enjoy voting rights without a fixed rate of return.
- Preference shares
- Shares carrying a fixed rate of dividend and priority over equity in dividend payment and repayment of capital, usually with restricted voting rights.
- Debenture
- A written acknowledgement of a debt owed by the company, carrying a fixed rate of interest payable whether or not the company earns a profit, usually secured by a charge on assets.
- Retained earnings
- Profits ploughed back into the business instead of being distributed as dividends; an internal source belonging to equity shareholders with no flotation cost.
- Public deposits
- Unsecured borrowings accepted from members of the public for a fixed period, usually up to thirty-six months, subject to limits and rules under the Companies Act.
- Rights issue
- An offer of new shares first to existing equity shareholders in proportion to their holding, usually at a discount, before the shares are offered to outsiders.
- Bonus issue
- Free shares issued to existing shareholders by capitalising reserves or accumulated profits; no consideration is received and paid-up capital increases.
- Private placement
- An offer of securities to a select group of persons, not exceeding two hundred in a financial year excluding qualified institutional buyers and employees under a scheme.
- Book building
- A price discovery process in which investors bid within a stated price band and the final issue price and allotment are determined after the bids close.
- Minimum subscription
- The minimum amount that must be subscribed before the company can proceed to allot shares; if not received, application money must be refunded.
- Depository
- An entity that holds securities in electronic form and effects transfers by book entry; in India the recognised depositories are NSDL and CDSL, regulated by SEBI.
- Depository Participant
- A registered intermediary, typically a bank or broker, that acts as the investor's link to the depository and maintains the investor's demat account.
- Dematerialisation
- The conversion of physical share or debenture certificates into electronic holdings credited to a demat account, eliminating the need to hold paper certificates.
- ISIN
- The International Securities Identification Number, a unique code that identifies each security and is necessary for holding and trading securities electronically.
- Notice of general meeting
- A formal written communication stating the date, time, place and business of a general meeting, given at least twenty-one clear days before the meeting.
- Record date
- The date fixed by the company for determining which members are entitled to a dividend, rights issue or other benefit, based on the register of members.
- Book closure
- The period during which the register of members and share transfer books remain closed, so that entitlements such as dividend are fixed for members on the register.
- Dividend
- The portion of profits distributed to shareholders as declared by the board and, where required, approved by members at the annual general meeting.
- Interim dividend
- A dividend declared by the board of directors between two annual general meetings, usually based on the company's performance during the year.
- Unpaid Dividend Account
- A separate bank account to which a company transfers unpaid or unclaimed dividend within seven days of the expiry of thirty days from the date of declaration.
- IEPF
- The Investor Education and Protection Fund, to which unpaid dividends and underlying shares unclaimed for seven years are transferred for investor protection.
- Primary market
- The segment of the capital market where new securities are issued and sold by companies to raise fresh capital, through public issues, rights issues or private placements.
- Stock exchange
- A recognised market place where existing securities are bought and sold, providing liquidity, price discovery, safety of transactions and a market for corporate securities.
- SEBI
- The Securities and Exchange Board of India, the statutory regulator of the securities market, responsible for protecting investors and regulating intermediaries and exchanges.
- Quorum
- The minimum number of members or directors who must be present for a meeting to transact business validly, prescribed by the Companies Act and the articles.
- Special resolution
- A resolution passed at a general meeting by at least three times the votes cast in favour as against those cast against, required for specified important matters.
- Company Secretary
- A key managerial personnel responsible for ensuring compliance with company law, supporting the board, maintaining records and communicating with shareholders.
- CSR obligation
- The duty of specified companies to spend at least two per cent of average net profits of the preceding three years on activities listed in the CSR rules.