ISC

Analysis of Pupil
Performance

COMMERCE

Research Development and Consultancy Division

Council for the Indian School Certificate Examinations
New Delhi
Year 2020

Published by:
Research Development and Consultancy Division (RDCD)
Council for the Indian School Certificate Examinations
Pragati House, 3rd Floor
47-48, Nehru Place
New Delhi-110019

Tel: (011) 26413820/26411706

E-mail: [email protected]

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All rights reserved. The copyright to this publication and any part thereof solely vests in the Council for
the Indian School Certificate Examinations. This publication and no part thereof may be reproduced,
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Council for the Indian School Certificate Examinations.
 FOREWORD

This document of the Analysis of Pupils’ Performance at the ISC Year 12 and ICSE Year 10
Examination is one of its kind. It has grown and evolved over the years to provide feedback to
schools in terms of the strengths and weaknesses of the candidates in handling the examinations.

We commend the work of Mrs. Shilpi Gupta (Deputy Head) and the Research Development and
Consultancy Division (RDCD) of the Council who have painstakingly prepared this analysis. We
are grateful to the examiners who have contributed through their comments on the performance of
the candidates under examination as well as for their suggestions to teachers and students for the
effective transaction of the syllabus.

We hope the schools will find this document useful. We invite comments from schools on its
utility and quality.

Gerry Arathoon
November 2020 Chief Executive & Secretary

i
 PREFACE
PREFACE

The CISCE has been involved in the preparation of the ICSE and ISC Analysis of Pupil Performance
documents since the year 1994. Over these years, these documents have facilitated the teaching-
learning process by providing subject/ paper wise feedback to teachers regarding performance of
students at the ICSE and ISC Examinations. With the aim of ensuring wider accessibility to all
stakeholders, from the year 2014, the ICSE and the ISC documents have been made available on the
CISCE website www.cisce.org.

The documents for the ICSE and ISC Examination Year 2020 include a detailed qualitative analysis
of the performance of students in different subjects. The purpose of this analysis is to provide insights
into how candidates have performed in individual questions set in the question paper. This section
is based on inputs provided by examiners from examination centers across the country. It comprises
of question wise feedback on the performance of candidates in the form of Comments of Examiners
on the common errors made by candidates along with Suggestions for Teachers to rectify/ reduce
these errors. The Marking Scheme for each question has also been provided to help teachers
understand the criteria used for marking. Topics in the question paper that were generally found to
be difficult or confusing by candidates, have also been listed down, along with general suggestions
for candidates on how to prepare for the examination/ perform better in the examination.

The Analysis of Pupil Performance document for ICSE for the Examination Year 2020 covers the
following subjects/papers: English (English Language, Literature in English), History and Civics,
Mathematics, Physics, Chemistry, Commercial Studies and Environmental Science.
Subjects covered in the ISC Analysis of Pupil Performance document for the Year 2020 include
English (English Language and Literature in English), Hindi, Physics, Chemistry, Mathematics,
Computer Science, History, Political Science, Economics, Commerce, Accounts, and Environmental
Science.

I would like to acknowledge the contribution of all the ICSE and the ISC examiners who have been
an integral part of this exercise, whose valuable inputs have helped put this document together.

I would also like to thank the RDCD team of Dr. M.K. Gandhi, Dr. Manika Sharma, Mrs. Roshni
George and Ms. Mansi Guleria, who have done a commendable job in preparing this document.

We hope that this document will enable teachers to guide their students more effectively and
comprehensively so that students prepare for the ICSE/ ISC Examinations, with a better
understanding of what is required from them.

Shilpi Gupta
November 2020 Deputy Head - RDCD

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CONTENTS

Page No.

FOREWORD i

PREFACE ii

QUALITATIVE ANALYSIS: COMMERCE 1

 PART I (20 Marks)
Answer all questions.

Question 1 [10x2]
Answer briefly each of the questions (i) to (x):
(i) What is meant by Micro-Environment?
(ii) State any two features of a Credit Card.
(iii) What is Net Working Capital?
(iv) Give two advantages of Trade Credit, as a source of short-term finance.
(v) Define Management as an activity.
(vi) Moon Ltd. imported new machinery from Germany. However, the productivity of
the business did not improve with the use of this machinery. On investigation, it was
found that the workers were not able to operate the high-tech machinery effectively,
causing poor performance and wastages.
What can be done by Moon Ltd. to overcome the above problem?
(vii) What is meant by Span of Control?
(viii) Name two types of Markets on the basis of subject of exchange.
(ix) State any two points of difference between Marketing and Selling.
(x) What is meant by Physical Distribution?

Comments of Examiners Suggestions for Teachers

(i) Many candidates missed key words like-"direct  Ensure that students understand the
influence" and "affects the meaning of the term Business
working/performance". Micro-environment was Environment.
at times confused with macro environment and  Reiterate key words while
business environment. Some candidates wrote explaining micro and macro
that micro-environment consists of internal and environment.
external factors without completing the answer  Ensure that students write precise
by writing how they affect an individual answers with relevant keywords.
organization.  Stress upon the habit of writing out
(ii) Many candidates wrote the physical the answers.
characteristics of a credit card like having a  Advise students to read questions
plastic body and a chip. A few candidates wrote thoroughly, understand clearly and
merits instead of features. Some confused a then write carefully.
credit card with a debit card. Instead of writing  Clarify the difference between the
that a credit card has a cash withdrawal limit terms “merit” and “feature”.
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 along with credit limit, most candidates wrote  Explain the forms of e-banking by
that a credit card is used to withdraw cash. The giving live and situational examples.
fact that some charges are charged from the  Ensure that the concept of debit
credit card holder was written as fees. card, credit card, ATM card is
(iii) A few candidates defined net working capital as- crystal clear to students.
Total assets minus Total liabilities instead of  Stress upon key words / terms for
Current Assets minus Current Liabilities. The conceptual clarity. Update the
key word 'current' was missing from the answers. students with the latest trends in
A few misspelt the word "excess" as "access", banking.
Some candidates defined gross working capital  Use a flow chart to explain
i.e., working capital = current assets. Some classification of capital.
candidates wrote the abbreviation CA-CL  Clarify terms such as: working
without giving the meaning of the symbols. capital, gross working, net working
capital, fixed assets, current assets,
(iv) In place of advantages of trade credit, some total assets, current and long-term
candidates wrote the meaning of trade credit. liabilities.
Many wrote, "it is a short-term source of finance"  Explain trade credit, cash credit
and "it can be returned at convenience", as instalment credit, bank draft, bank
advantages. A few wrote, “it helps in smooth overdraft in detail with adequate
running of business and profit can be earned”. examples. Stress on the differences
Some candidates wrote about cash credit. again and again so that the students
Several candidates wrote it as discount allowed are thorough.
by the seller to the buyer, some wrote about trade  Discuss case studies with
credit being short term loan given by financiers. application-based questions to
(v) Many candidates explained management as a reinforce the concepts taught and to
process, or they wrote functions of management ensure that students make correct
Several candidates wrote incomplete answers. usage of the terms.
They did not mention “the efforts of other  Stress upon proper time
people”. Even while trying to write the alternate management so that adequate time is
definition, several candidates mentioned the left for last minute revision of the
objectives of achieving certain common goals. answers written.
(vi) Many candidates wrote that the company should  Clarify the concept of span of
remove the workers and recruit new well-trained control. Make students aware of the
workers. Some candidates could not identify the basic keywords which are essential
cause of poor performance. Several candidates to bring out the complete meaning of
wrote about rights of consumers. Many wrote the term. Also, stress upon the
that a complaint must be made to the District rationale for using these terms.
Forum.  Explain classification of markets by
using flow charts along with
(vii) Many candidates attempted this question relevant live examples, such as
correctly. However, some candidates confused different classification of markets
span of control with the principle of unity of based on geographical area, volume
command. The keyword 'number of subordinates of business, subject of exchange,
under one manager' was missing in many position of buyers and sellers,
answers. Also, many candidates wrote
subordinate instead of subordinates and

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 managers instead of manager and this changed nature of transactions and nature of
the meaning of the answer. goods.
(viii) Several candidates were confused with the  Point out the difference between the
classification of markets. Majority of the terms marketing and selling, giving
candidates were unable to understand the basis of ample relevant examples.
classification asked for. Following were the  Inculcate the habit among students
common errors made by candidates: goods of writing differences in a tabular
market, stock market, exchange market were form along with the basis of
written as examples of classification of market difference, as this helps in avoiding
based on subject of exchange. Some even wrote repetition.
spot market, and future market. Some candidates  Emphasise the importance of time
defined market instead of types of markets. management while answering
questions.
(ix) In many answers, the basis of distinction was not  Clarify the difference between the
stated correctly or did not correlate with the channel of distribution and physical
explanation. A few candidates wrote the distribution.
definition of marketing and selling but with no
clarity. Some candidates wrote the points of
selling under marketing and the points of
marketing under selling. Several candidates were
confused between marketing and sales
promotion.
(x) For the meaning of Physical Distribution some
candidates wrote the definition of marketing
while others wrote “selling of goods by
producers to consumers”.

MARKING SCHEME
Question 1
(i) Micro-Environment:
Micro-Environment refers to those internal (any internal factor, e.g. mission) and external
(any external factor like customer, etc.) factors/ forces which exercise a direct influence on
the working and performance of an individual business organisation.

(ii) Features of a Credit Card:

1. The Credit Card does not require the user to deposit advance money with the issuer of
the Card. However, the user may be asked to open an account.
2. The card contains personal details / name / address / validity / date of the card holder.
3. Name and address of the bank.
4. Credit card allows credit facility to the cardholder.
5. The cardholder has to make payment after using the card.
6. The cardholder pays some charges for the credit card.

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 7. Some incentives / gifts may be available to the cardholder.
8. Has a cash withdrawal limit along with credit limit.
9. Add on card facility, free of cost for family members.
10. Annual fee, depending upon the variant of Credit Card may be levied
11. Additional charges on delayed payment
12. Service tax.
13. A person with a good reputation/credit standing/goodwill is issued a credit card.
(Any two)

(iii) Net Working Capital:

Net Working Capital means the excess of current assets (any two current assets) over current
liabilities (any two current liabilities).
OR
Net Working Capital = Current Assets / Accounts receivable – Current Liabilities /Accounts
payable.

(iv) Advantages of Trade Credit:

1. It reduces the capital/ working capital requirement.
2. Convenient method of raising short term finance.
3. Simple/No formalities are involved
4. Credit is readily available to reputed business firms.
5. No interest is payable.
6. No security is required.
7. Flexible source of finance as no charge is created against the assets of the company.
8. More economical/cheaper than bank loan.
(Any two) (self-explanatory)

(v) Management as an activity:

As an activity, management means the art of getting things done through the efforts of other
people.
OR
As an activity, management guides, directs, regulates, and integrates human efforts towards
the achievement of certain common goals.
Management aims to achieve organizational goal.

(vi) Give training to the employees.

(vii) Span of control is the area of activity and number of functions, people or things for which
an individual or organisation is responsible.
OR

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 Span of control refers to the number of subordinates under the manager's direct control. As
an example, a manager with five direct reports has a span of control of five.
OR
Number of employees that report to a manager.

(viii) Types of markets on the basis of subject of exchange:

• Commodity Market
• Capital market
• Money market
(Any two)

(ix) Points of difference between marketing and selling:

Sr.No. Basis Marketing Selling
1. Scope Wide scope Narrow scope
2. Focus Needs of buyer Needs of seller
3. Object / nature / Profit through customer Profits through sales
meaning satisfaction volume

4. Orientation Customer oriented Product oriented

5. Beginning Begins before production Begins after production
6. End Continuous after sales Ends with sales
7. Perspective Long term perspective Short term perspective
8. Slogan Let the seller beware Let the buyer beware
9. Approach Systematic Fragmented
(Any two)

(x) Physical Distribution:

Physical distribution means a series of interrelated activities involved in the movement of
materials and finished goods so that they are available at the right time and at the right place.
OR
It is a set of activities / storage / warehousing / inventory control / order processing (any
two elements of physical distribution) concerned with efficient movement of finished goods
from the producer’s end to the consumer’s end.
(Any other relevant point may also be accepted)

5
 PART II (60 Marks)
Answer any five questions

Question 2
(a) Explain any three advantages of Debentures from the Debenture holder’s point of [3]
view.
(b) With reference to the various dimensions of Business Environment, state what is [4]
meant by Political Environment. Mention any three components of Political
Environment.
(c) Enumerate any five points of importance of staffing as a function of management. [5]

Comments of Examiners Suggestions for Teachers

(a) Most candidates wrote the merits of debentures  Teach students shares and
from the viewpoint of a Company, like having no debentures in detail, clearly
voting rights. Some candidates got confused discussing the meaning, features,
between debentures and shares. A few candidates merits and demerits from debenture
instead of writing regular interest or return, holder’s point of view.
wrote that a debenture holder gets regular  Ask students to read and understand
dividend, which was incorrect. the question before attempting to
(b) Many candidates wrote an incorrect definition of answer.
Political Environment. Some candidates either  Explain the terms “interest” and
wrote management of public affairs or impact on “dividend”.
business. Many candidates wrote the components  Teach the elements of Macro
which were vague and irrelevant. A number of environment by giving examples of
candidates stated the names of specific defence/ the prevailing situations and
foreign policy instead of writing in general as relating them to the key words.
components of political environment. A few Stress upon the keywords which
candidates wrote about the political situation or bring out the complete meaning of
politicians or political structure, instead. the answer. For better retention of
(c) Many candidates gave correct headings but could topics couple classroom teaching
not substantiate the headings. Points like holistic with live examples.
approach, liberalisation and globalisation,  Clarify the terms Political, Legal
multiplier effect were not explained by many and Economic Environment.
candidates. Repetition of explanation as well as  Train students to understand the
the headings was also observed. Majority of the difference between the terms
candidates wrote about the features instead of “features” and “importance”.
importance of staffing. A few candidates wrote  Train students to write answers
about the process of staffing. giving headings with proper
explanation for each heading.
 Discuss each function of
management under the following
heads-meaning, steps, features,
merits and demerits.
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 MARKING SCHEME
Question 2
(a) Advantages of Debentures, from the point of view of Debenture holders:
• Appeal to cautious investors – Large amount of finance can be raised by issue of
debentures from cautious and orthodox investors who prefer safety of investment and a
fixed return.
• Regular Return – Debenture holders are paid interest at a fixed rate and at periodic
intervals irrespective of profits.
• Safety of investment – Debentures are usually secured by a charge on the company’s
assets. So, their repayment is assured.
• Preference in repayment – In the event of winding up of the company, they are given
preference in repayment.
• Debentures have a definite maturity period.
• A debenture is usually more liquid investment, and an investor can sell or mortgage his
instrument to obtain loans from financial institutions.
• The interest of debenture-holders is protected by various provisions of the debenture
trust deed and the guidelines issued by the Securities and Exchange Board of India in
this regard.
(b) Political Environment:
Meaning:
Political Environment is the environment that consists of the forces concerning management
of public affairs and their impact on business.
Components:
• Constitutional framework.
• The political system – nature and ideology, political parties and power centres.
• The political structure – centre - state relations.
• Stability of the government
• Political processes – Party system, elections, and their funding.
• Foreign and Defence policy of a country
• Relation of the country with other countries.
• Type of government, i.e. single party or multi-party government
• Peace in the country.
• Attitude of government towards business organization.
[Any three components]

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 (c) Importance of Staffing as a function of Management:
• Filling organizational positions – Staffing ensures that various organizational positions
are filled by right persons.
• Optimum use of human resources - by matching talent with the job.
• Employee satisfaction – by making the employee do the work which matches his
qualification and thus help him to develop and acquire better incentives and scope for
promotion.
• Key to other functions – Staffing injects life into the organization by providing the right
person for every job. The effectiveness of directing and controlling functions also
depends upon staffing.
• Long-term effect – Investment in human resource has long term effects on the
organization, thus decision in this direction should be taken with utmost care.
• Efficiency/ specialisation – Since staffing helps to place the right person at the right job,
efficiency of the organization increases.
• Huge investment
• Holistic approach
• Liberalisation and Globalisation
• Multiplier effect
(Any five points)

Question 3
(a) Distinguish between a Formal Organisation and an Informal Organisation. [3]
(b) Explain any four objectives of Communication. [4]
(c) Define Advertising. Explain any four features of Advertising. [5]

Comments of Examiners Suggestions for Teachers

(a) Many candidates did not bring out the differences  Explain the terms formal and
between formal and informal organization. informal organization by drawing
Social interactions or social relationships among examples from the surrounding
employees in informal organisations were environment and relating them to the
missed out by many. Several candidates neither concept being taught.
wrote the basis for a differentiation nor  Stress upon the use of correct
mentioned the basis within the sentences, they antonyms wherever required. For
simply gave one word as distinction. A few example - its structure is rigid - its
candidates repeated the points in the answers. structure is flexible (instead of "is
(b) In place of objectives of communication most of not rigid").
the candidates wrote characteristics / features /  Train students to write the
importance or elements of communication. differences in a tabular form and

8
 A few wrote, how it helps in overcoming barriers mention the basis to ensure that the
and how it helps in informing about products, differences co relate and there is no
thus increasing profits of the company. Some overlapping or duplication of points.
candidates explained the process of  Ask students to give complete
communication. In some scripts, the header was explanation if the basis of difference
not accompanied by a correct explanation. The is not given.
point 'to train and educate people' was written as  Help students to understand the
to 'train and educate managers' by several difference between features,
candidates. objectives, barriers and process of
(c) In the definition of advertising some candidates communication.
missed key words like paid/non-  Help students to understand the
personal/identified sponsor/promotion of goods difference between features and
and services Many candidates did not mention advantages of advertising.
four features of advertising. Several candidates  Discuss the concept of advertising
mistook features for advantages. Some in detail, focusing on important
candidates got confused between publicity and keywords like 'paid form', 'identified
advertising. sponsor', 'non personal
presentation', ‘ideas’ and ‘services’.
Keep emphasising on the different
elements of promotion.

MARKING SCHEME
Question 3
(a) Differences between a Formal and an Informal organisation are:
Sr. Basis Formal Organisation Informal Organisation
No.
1. Meaning Structure of Authority Network of social relationship
relationship
2. Formation Deliberately planned and Emerges spontaneously as a
created by management result of social interactions
among employees
3. Purpose / focus To achieve planned goals of To satisfy social and cultural
the organisation needs of members and fulfil
common interest
4. Structure Well defined structure No clear-cut structure
5. Nature Rigid/ stable/predictable Flexible/unstable,
unpredictable
6. Leadership Managers act as leaders by Members voluntarily choose
virtue of their superior their leaders
position

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 7. Flow of Official lines of Members communicate in any
communication communication called scalar direction as per convenience
chain
8. Origin Originates as a result of Originates as a result of social
company rules and policies interaction
9. Interdependence Exists independently Within the framework
10. Rules & Written Oral
Regulations
11. Organisation Can be depicted Cannot be depicted
chart
(Any three)

(b) Objectives of Communication:

• To educate and train people: The management issue orders and instructions to
employees so that they may perform their jobs efficiently. Consumers are provided
information about new products and their uses.
• To motivate employees: Good communication can mould employee’s behaviour and
create cordial industrial relations.
• To promote managerial efficiency: Managers provide guidance to employees through
communication thereby improving their efficiency.
• To implement decisions quickly: Subordinates understand managerial decisions and
take steps to implement them through communication.
• To facilitate leadership: The effectiveness of leaders depends on their communication
skills.
• To carry out change: Free flow of ideas and information reduces workers’ resistance to
new technology and other changes.
• To create teamwork: Communication is designed to create mutual understanding and
cooperation among people working for living together.
• To secure feedback: Suggestions and complaints from workers and consumers enable
managers to improve work methods and procedures.
(Any four points)

(c) Advertising:
Meaning: Any paid form of non-personal presentation and promotion of ideas, goods and
services by an identified sponsor. (any other relevant point)
Features:
• Advertising is a paid form of communication. The advertiser has to pay to the advertising
media used for the space or time used to communicate the message to customers.
• It is a non-personal form of presenting information regarding a product, service or idea.
• It is done by an identified sponsor.

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 • It is a form of mass communication.
• Advertising can be done through a wide variety of media.
• It is generally positive
• It is widely used and popular tool of product promotion.
• It is a one-way communication/ No feedback.
• It is less credible.
(any four points)

Question 4
(a) Explain any three sources of External Recruitment. [3]
(b) Give four differences between Taylor’s and Fayol’s Principles of Management. [4]
(c) What is meant by RTGS? Give any three features of RTGS. [5]

Comments of Examiners Suggestions for Teachers

(a) Majority of the candidates answered this  Explain sources of External
question correctly. However, while many Recruitment by giving live
candidates gave correct headings for the sources, situational examples.
they could not substantiate the headings with  Involve students in the learning
proper explanation, for example, for Gate hiring, process to help them retain what is
the explanation was - a notice is put for hiring taught.
people; for Placement Agencies - they hire  In long answers, headings with
people on behalf of the Company. Some relevant and adequate explanation
candidates repeated the sources, for example: must be given.
Internet and websites. Many candidates wrote  Conduct group discussions, role
advertising as a source but explained it as an plays and live examples to help
element of promotion mix. Newspapers, students retain the subject matter
magazines, advertisements were written as effectively.
separate points by several candidates. A few  Ensure that the students understand
candidates wrote about internal source of the differences between the asked
recruitment instead of sources of external principles of management.
recruitment.  Discuss the meaning and unique
features of RTGS and NEFT
(b) Most candidates answered this part correctly.
thoroughly.
However, some wrote the principles of
 Clarify and reinforce essential key
management instead of differentiating between
words which are mandatory to the
the two principles asked. The basis of distinction
concept.
was not mentioned by many candidates. Some
 Advise students to read the questions
candidates mentioned the basis, but the
carefully and write answers
differences did not co relate to the basis or to
according to the requirements, of the
each other. Repetition of points was also
question.
observed in some scripts.

11
(c) Majority of the candidates did not write key terms
such as transfer of funds in Real time / gross
basis / one to one basis, bank/branch to another.
Some candidates limited their explanation to
only the expansion of the abbreviation RTGS.
Several candidates wrote the merits instead of
features. A few candidates wrote the features of
NEFT instead of features of RTGS.

MARKING SCHEME
Question 4
(a) Sources of External Recruitment:
• Advertisement
• Employment exchange
• Educational institutions/ Campus recruitment
• Placement /Personnel consultants
• Casual callers /Waiting list
• Direct recruitment / Gate hiring
• Recommendation of present employees
• Labour contractors and jobbers
• Internet /Telecasting/e-recruitment
(Any three points with brief explanation)

(b) Differences between Taylor’s and Fayol’s Principles of Management:

Sr.No. Basis F.W. Taylor Henry Fayol
1. Meaning / Focus F.W. Taylor, is a father of Henry Fayol is a father of
scientific management who modern management who
introduced four principles of laid down 14 principles of
management, for increasing management, for improving
overall productivity. overall administration /
efficiency.
2. Concept Scientific management General theory of
administration.
3. Emphasis / Low level management Top level management
Perspective
4. Applicability Applies to specialised Universally applicable
organisations only
5. Basis of formation Observation and Personal experience
experimentation.

12
 6. Orientation Production and engineering Managerial functions
7. System of wage Differential payment Sharing of profit with
payment system. managers
8. Approach Engineer’s approach Manager’s approach
9. Personality Scientist / Father of Practitioner / Father of
scientific management modern management

(Any four points)

(c) RTGS:
Meaning: It is a fund transfer system under which transfer of funds takes place from one
bank to another on a ‘Real Time’ and ‘Gross basis’. Real Time means, there is no waiting
period and gross basis means, transactions are done on one to one basis rather than in
batches.
Features:
• Real Time Gross Settlement (RTGS) facility is provided only by CBS enabled bank
branches.
• RTGS transactions are processed individually and continuously rather than in batches.
• The minimum amount in a RTGS transaction is rupees two lakhs.
• There is no upper ceiling for RTGS transaction / maximum 10 lakh per day
• The receiving or beneficiary bank must credit the customer’s account within 30 minutes
of receiving the funds transfer message.
• Timing of RTGS is 7 a.m. to 6 p.m.
• It is irreversible/irrevocable /can’t be changed.
• It can be used for foreign remittances.
• No charges from the receiver.
• Sender has to pay some charges.
(meaning, any three features)

Question 5
(a) Explain any three factors that you will consider while determining the Working [3]
Capital requirement for a business enterprise.
(b) Explain four advantages of raising funds from Commercial Banks. [4]
(c) Explain the first five steps involved in the process of Planning, as a function of [5]
Management.

13
Comments of Examiners Suggestions for Teachers
(a) Many candidates got confused between the  Clarify the terms Fixed capital
factors affecting fixed capital and working and Working capital and factors
capital requirements. A few candidates wrote affecting them very clearly,
correct side headings but could not explain the giving relevant examples.
same. A few candidates wrote types of working  Insist upon students to write
capital instead. complete explanation of points.
 Explain the importance of time
(b) Majority of the candidates were not able to write
management to students. Instruct
correctly, the advantages of raising funds from
them to revise the answers
Commercial Banks. Some gave types of credits
written by them to avoid mistakes.
or functions of banks whereas others gave
 Discuss various types of loans
advantages of borrowing funds (from financial
and their advantages in detail.
institutions) without relating them to the bank
 Train students to write the steps
(c) Many candidates wrote the side headings involved in the process of
correctly but did not give any explanation. Some planning in correct order or
candidates gave a vague explanation to each of sequence.
the steps. A few candidates wrote steps of  Organize an activity in the class
controlling and a few others wrote the steps of in which the students themselves
organising. Some candidates wrote the steps plan, organize and control
involved in the process of Planning, in incorrect thereby going through the steps
sequence. of various functions of
management.

MARKING SCHEME
Question 5
(a) Factors to be kept in mind while considering Working Capital of a Business enterprise:
• Nature of Business - Manufacturing firms require considerable working capital as they
have to build up stock of raw-materials and finished goods on the other hand, public
utility undertakings require less working capital as they do not have to maintain
inventory.
• Size of Business – Firms carrying on large-scale operations require more working capital
than small scale firms.
• Manufacturing cycle – It means the time involved in the production of goods. Longer is
a time gap between the purchase of raw-materials and production of finished goods,
higher is a need for working capital.
• Rapidity of Turnover – When turnover is rapid, the amount of working capital required
is small. This is because working capital is locked up in business for a short period.
• Terms of purchase and sale – A business firm requires comparatively small amount of
working capital if it buys goods and services on credit and sells them in cash. On the
other hand, if it purchases in cash and sells on credit, larger amount of working capital
will be required.

14
 • Credit policy – when a liberal credit policy is followed, more working capital is required.
On the contrary, smaller working capital is needed in case of a tight credit policy.
• Goodwill of Business – An enterprise enjoying good reputation in the market can easily
and quickly obtain short-term loans from commercial banks. It requires a less amount of
working capital.
• Growth and expansion plans – growing and expanding firm requires more working
capital than a stagnant firm.
• Seasonal variation – working capital requirement of business which are subject to
seasonal variations are comparatively high during a particular season.
• Cyclical fluctuation – cyclical changes create emergency demand for working capital.
During boom period there is need for larger working capital to support higher sales.
• Operating efficiency
(Any three points with explanation of each point)

(b) Advantages of raising funds from Commercial Banks:

• Funds are available for a long period, often between three to ten years/ specified period.
• Repayment of loan/ interest amount can be made out of future earnings of the company.
• Interest payable on bank loan is a tax-deductible expense.
• Loan can be repaid in easy instalments
• Bank maintains utmost secrecy of the affairs of their clients.
• Bank provides fund in many ways. The borrower has a choice.
• Bank do not interfere in the management of the client’s business.
• Loan from a reputed bank increases the credit worthiness of the borrower.
• Trading on equity.
(Any four points)

(c) First Five Steps involved in the process of Planning:

1. Setting objectives
2. Developing the planning premises
3. Identifying alternative course of action
4. Evaluating alternatives and choosing the best alternative
5. Formulating derivative plans
(All steps in correct order with explanation of each step)

Question 6
(a) Explain any three methods of Consumer Protection. [3]
(b) What are Retained Earnings? Explain any three demerits of Retained Earnings. [4]
(c) Define Marketing. Briefly explain any three features of Marketing. [5]

15
Comments of Examiners Suggestions for Teachers
(a) Majority of the candidates were able to explain  Discuss clearly, the difference
the three methods of consumer protection between the Rights and
correctly. Some candidates confused methods of Responsibilities of Consumers,
Consumer Protection with the Rights / need for Consumer Protection and
responsibilities of Consumers or the Consumer methods of Consumer Protection.
Protection Act.  Instruct students to read and
(b) Most candidates did not explain Retained understand the question carefully
Earnings correctly. In many scripts, either of the before attempting to answer it.
two key words, retaining and reinvesting was  Emphasizing on key words while
missing. Though many candidates wrote the teaching the concept.
demerits of Retained Earnings correctly, a few  Explain the Retained Earnings and
their merits and demerits thoroughly.
wrote merits instead of demerits.
 Clarify market, marketing, its
(c) Many candidates defined market instead of functions, features, importance and
marketing. Some other candidates defined objectives in detail. Repeatedly
marketing without conveying the correct discuss types of markets and their
meaning. A large number of candidates wrote classification.
objectives and importance in place of features of
marketing. Also, in several scripts, the headings
were correct, but the explanation written was
vague, and incorrect.

MARKING SCHEME
Question 6
(a) Methods of Consumer Protection:
• Self -regulation by Business
• Consumer Awareness
• Consumer Associations
• Government control
• Publicity
• Awards
• Lok Adalats
• Public Interest Litigation
• Consumer Redressal Forums
• Environment Friendly Products
• Consumer Welfare fund
(Any three points)

16
(b) Retained Earnings:
Meaning: It is a process of retaining a part of the net profits year after year and reinvesting
the same in the business.
Demerits:
• The Management of the company may not always use retained earnings in the best
interest of shareholders and may invest in unprofitable fields.
• Heavy reinvestment leads to lower rate of dividend to shareholders.
• It may lead to unbalanced industrial growth because profits which might have been
invested outside in other industries are reinvested in same industry.
• It may be used to manipulate share prices on the stock exchange.
• Excess retained earnings leads to over capitalization.
• Excess retained earnings may result in monopoly and concentration of economic power
in few hands.
(Any three points)

(c) Marketing:
Meaning: All activities that direct the flow of goods and services from the producers to
consumers or ultimate users.
Features:
• Customer oriented – all business activities should be oriented towards the satisfaction of
customers’ needs.
• Marketing Research – in order to understand and satisfy the need of customers, relevant
information needs to be collected.
• Continuous and dynamic – it is a continuous process. A marketer has to consistently
monitor the environment and make changes accordingly.
• Precedes Production – it precedes production in the sense that identifying customers
needs and wants is the primary task of a marketing manager.
• Integrated Approach – there should be coordination among various departments of the
enterprise to achieve the desired goals.
• Pervasive – it is needed in both business and non-business organizations. In non-business
organisation, it may be in the form of spreading useful social information about hygiene,
family planning, etc.
(Or any other relevant points)
(Meaning of Marketing, any three features- headings and explanation of each)

17
Question 7
(a) Explain any three objectives of Publicity, as an element of Promotion Mix. [3]
(b) What are the various Channels of Distribution available to a Manufacturer in the [4]
process of distribution?
(c) Give five differences between Preference Shares and Equity Shares. [5]

Comments of Examiners Suggestions for Teachers

(a) Majority of the candidates wrote features of  Explain elements of Promotion
Publicity in place of objectives of Publicity. Mix, especially Publicity clearly
Some candidates could write only two objectives to the students.
of Publicity. Several candidates got confused  Differentiate Publicity from
between the objectives of Publicity and Advertising, giving relevant
Advertising / Sales promotion / Personal selling. examples.
 Discuss the differences between
(b) Most of the candidates answered the various
objectives and features of
Channels of Distribution available to a
Publicity, in the context of
Manufacturer in the process of distribution,
business.
correctly. The common errors noticed were:
 Regular revision of topics by
− only mentioned the flowchart or examples asking questions or by
of channels of distribution and ignored the conducting written tests will help
explanation. students to retain concepts.
− wrote elements of physical distribution.  Do a project with students on
marketing a product using all the
− did not write the correct channel of promotional strategies.
distribution from the manufacturer to the  Discuss in detail the different
consumer. channels of distribution. i.e., zero
(c) A large number of candidates did not write basis level, one level, two level and
of distinction to differentiate Preference Shares three level with proper
and Equity Shares and wrote one-word answer. explanation and a flowchart.
However, many others wrote the basis of  Point out the differences between
distinction but did not write the specific word Preference shares and Equity
which differentiates the two terms. Some wrote shares clearly.
vague and incomplete differences.  Explain shares and debentures
with the help of a flow chart.
 Conduct group discussions, role
plays to help students to retain
the subject matter effectively.

18
 MARKING SCHEME
Question 7
(a) Objectives of Publicity, as an element of Promotion Mix:
• To inform the public about a product or service
• To draw public attention to noteworthy event
• To save cost / economical / cheaper
• To highlight an organizations contribution to society.
• To warn people about undesirable activities or goods/ public
(Any three points – self-explanatory)
(b) Channel of Distribution available to a Manufacturer in the process of Distribution:
• Manufacturer – consumer (zero level)
• Manufacturer – Retailer – consumer (one level)
• Manufacturer – wholesaler – retailer – consumer (two level)
• Manufacturer – Agent - wholesaler – retailer – consumer (three level)
(Each point to be explained briefly)
(c) Differences between Preference Shares and Equity Shares:
Sr.No. Basis Preference Shares Equity Shares
1. Nominal value High Low
2. Risk Comparatively low Very high
3. Dividend Fixed Varies with company’s
profits
4. Voting rights Limited voting rights Full voting rights
5. Refund of capital Prior to refund of equity Repayment after all
capital other obligations are
refunded
6. Appeal Appeal to cautious and Appeal to bold and
conservative investors adventurous investors
7. Redemption Redeemable during the Not redeemable during
life of the company the lifetime of the
company
8. Convertibility Can be convertible into Not convertible into
equity shares preference shares
9. Arrear of dividend May accumulate Never accumulate
10. Issue of Right and Bonus Not entitled to receive Entitled to receive
shares Rights shares and Bonus Rights shares and Bonus
shares. shares.
11. Order of refund Before equity shares After preference shares
((Any five)

19
Question 8
(a) Explain any three features of Industrial Products. [3]
(b) Define Management. Briefly explain any three objectives of Management. [4]
(c) Explain any five qualities that a good leader should possess. [5]

Comments of Examiners Suggestions for Teachers

(a) Instead of features of Industrial Products, many  Ensure that students understand
candidates wrote about classification or meaning “Product", "types of products" and
of Industrial Products. Some candidates "features of different types of
explained the types of Industrial Products, e.g.: products" clearly.
raw materials, operating supplies, etc. Side  Train students to write side headings
headings were not written by several candidates. with explanation in long answers.
Most answers were vague, inadequate, and  Emphasise upon conceptual clarity
inaccurate. and stress upon use of correct
terminology.
(b) Most of the candidates attempted this part
 Organise interactive sessions and
correctly. Some confused the objectives of
give written practice of answers
Management with the features or importance of
frequently.
Management or objectives and importance of
 Explain the meaning, classification,
Marketing.
and features of industrial products
(c) A large number of candidates attempted this with appropriate examples.
question well. However, some candidates wrote  Ensure that students understand the
only the header without any explanation. A few concept of Management and its
candidates did not explain the qualities but the objectives and importance clearly.
output of the qualities. Some candidates confused  Explain the qualities of leadership in
leadership qualities with the qualities of a detail and give examples of leaders
salesmen. from real life.

MARKING SCHEME
Question 8
(a) Features of Industrial Products:
• Few Buyers – the number of buyers of industrial products is limited.
• Indirect/Derived demand – the demand for industrial products is derived from the
demand for consumer goods.
• Geographical concentration – Industrial markets are geographically concentrated. For
example, sugar mills are located in few regions.
• Shorter distribution channels – Due to a few and concentrated buyers, industrial products
are sold through direct channel or one level channel.
• Technical considerations – Industrial products are complex and involve technical issues.

20
 • Leasing out – Due to heavy price, some buyers may lease out capital equipment, instead
of outright purchase.
• Reciprocal buying.
(Any three features with explanation)

(b) Management:
Meaning: Management is what Management does. It is the task of planning, executing and
controlling.
Management is the art of knowing exactly what you want people to do and seeing that they
do it in the best and cheapest way.
Management is the force that integrates human and non-human resources into effective
operating unit.
(Or any other relevant answer)
Objectives:
• Growth and development/ Prosperity – Management must ensure that the business
organisations earn sufficient profits for growth and development.
• Quality products at fair prices – the aim of good management has always been to produce
better quality products at the minimum cost.
• Improving performance – Management should aim at improving the performance of
each and every factor of production by making them to perform well.
• Development of people – Management should work for its people as to ensure success.
Well-motivated people perform in a better way in achieving the goals.
• Discipline and Morale – Management maintains discipline and boost the morale of the
employees by giving them authority and responsibility.
• Optimum utilization of resources – The objective of management is to use various
resources of the enterprise in a most economical way.
• Innovation – management undertakes research and development to take lead over its
competitors and meet uncertainties of the future.
• Right decision – Management must ensure that the right decisions are taken at the right
time for the success of the business.
• Profitability
• Improving image/goodwill
(Any three objectives with brief explanation)

(c) Qualities of a good leader:

• Sound physique
• Intelligence
• Initiative
• Decisiveness
• Emotional stability
• Self-confidence
• Will power

21
 • Communication skills
• Vision and foresight
• Sense of responsibility
• Social skills
• Character/integrity/honesty/creativity
(Any five points with brief explanation)

Question 9
Write short notes on the following:
(a) Instalment Credit as a source of short-term funds for business. [4]
(b) Line and Staff Organisation. [4]
(c) Marketing Research. [4]

Comments of Examiners Suggestions for Teachers

(a) Majority of the candidates wrote the meaning of  Clarify to students how short-term
Instalment Credit as a source of short-term funds for funds are different from medium
business, correctly. However, a few candidates wrote term funds and long-term funds.
only the disadvantages of Instalment Credit. Common  Help students understand the
errors observed were: difference between "Line
− In Instalment Credit, purchase of current assets or Organisation" and "Line and Staff
goods was mentioned instead of fixed assets or Organisation" clearly giving
non-current assets. appropriate examples. Use
− Either the merits and demerits were not stated or quizzes / power point
stated incorrectly. presentations to bring out the
concept of different types of
− Vague and generalized explanation was given. organization at structures.
(b) In Line and Staff Organization, majority of the  Give enough practice of writing
candidates did not provide a satisfactory answer. short notes with meaning,
Some candidates stated the merits and demerits features, importance, advantages,
correctly, but the explanations given by many and disadvantages.
candidates were vague and generalized. Several
candidates defined Line Organisation and Staff
Organisation separately. Many candidates did not
write the advantages and disadvantages.
(c) The term Marketing Research could not be answered
correctly by many candidates. Some candidates made
errors by writing that it is the consumer who does
market research in order to find a suitable product.
Most of the candidates wrote the meaning of Market
or Marketing, instead of Marketing Research.

22
 MARKING SCHEME
Question 9
(a) Instalment Credit as a source of short-term funds for business:
Meaning: It refers to the facility of buying machinery, equipment, and other durable goods
on credit.
Advantages:
• The balance payment can be made in instalments after paying a part of the cost at the
time of delivery.
• It enables the business firm to use the asset and make payment out of the earnings.
Disadvantages:
• High rate of interest has to be paid in each instalment
• Unnecessary expenditure in purchasing asset which may not be needed.
• It may become difficult to pay instalments in future due to low earnings.
• High rate of interest has to be paid in each instalment
• Unnecessary expenditure in purchasing asset which may not be needed.
• It may become difficult to pay instalments in future due to low earnings.
(Give meaning, one advantage and one disadvantage)
(b) Line and Staff Organisation:
Meaning: It is a combination of the line structure and the functional structure. It is an
attempt to combine the advantages of specialisation and unity of command.
Advantages:
• Balanced decisions
• Discipline
• Flexibility
• Undivided responsibility
• Executive development
• Planned specialisation
Disadvantages:
• Conflicts
• Lack of coordination
• Expensive
• Ineffective staff
• Lack of creativity
(Give meaning, one advantage and one disadvantage)

23
 (c) Marketing Research:
Meaning: It refers to scientific and systematic investigation of all aspects of marketing. It
helps in collecting information about the preference and taste of customers and their
purchasing power.
Techniques / Sources: necessary information can be collected from trade journals, consumer
organisations, government publications, wholesalers, retailers, etc.
Advantages:
• Estimating the potential demand for a product
• Testing of new products
• Finding new users of existing products
• Judging the competitive strength and brand image
• Measuring the effectiveness of distribution channels
Disadvantages:
• Time consuming
• Expensive/costly
• Uncertainty

GENERAL COMMENTS

• Question 1(vii): Span of Control.

Topics found • Question 1 (x) : Physical Distribution.
difficult/ • Question 2 (b) : Political Environment.
confusing by • Question 2 (c) : Importance of Staffing.
candidates • Question 3 (b) : Objectives of Communication.
• Question 3 (c) : Meaning and features of Advertising
• Question 5 (b) : Advantages of raising funds from Commercial Banks.
• Question 6 (b) : Demerits of Retained Earnings
• Question 7 (a) : Objectives of Publicity.
• Question 8 (a) : Features of Industrial Products.
• Question 9 (b) : Line and Staff Organisation.
• Question 9 (c) : Marketing Research.

24
 • Concentrate in the class for better understanding of concepts.
• Keep abreast with the updates relating to the subject/topics.
• Note down the key points or underline the key words in the textbook.
Suggestions
for Students • Understand meaning, features, merits, demerits, importance, and
objectives of each term / concept.
• Practice questions based on case studies.
• Solve previous years’ ISC question papers for better understanding of the
topics.
• Avoid selective study.
• Instead of learning by rote, understand terms / concepts and express in
your own words with appropriate key words.
• Manage your time well while answering Part I and Part II. Estimate the
time required for attempting both short and long answer questions and
for revising the answers.
• Practice by writing key words and headers of different topics.
• Revise the chapters again and again before examination.
• Read the question, understand, and then answer.
• Answer all subjective questions with side headings and explanations.
Ensure that heading and explanation in an answer correlate with one
another.

25
 ISC

Analysis of Pupil
Performance

COMMERCE

Research Development and Consultancy Division

Council for the Indian School Certificate Examinations
New Delhi
Year 2019
__________________________________________________________________________________

Published by:
Research Development and Consultancy Division (RDCD)
Council for the Indian School Certificate Examinations
Pragati House, 3rd Floor
47-48, Nehru Place
New Delhi-110019

Tel: (011) 26413820/26411706

E-mail: [email protected]

© Copyright, Council for the Indian School Certificate Examinations

All rights reserved. The copyright to this publication and any part thereof solely vests in the Council for
the Indian School Certificate Examinations. This publication and no part thereof may be reproduced,
transmitted, distributed or stored in any manner whatsoever, without the prior written approval of the
Council for the Indian School Certificate Examinations.
 FOREWORD

This document of the Analysis of Pupils’ Performance at the ISC Year 12 and ICSE Year 10
Examination is one of its kind. It has grown and evolved over the years to provide feedback to
schools in terms of the strengths and weaknesses of the candidates in handling the examinations.

We commend the work of Mrs. Shilpi Gupta (Deputy Head) of the Research Development and
Consultancy Division (RDCD) of the Council and her team, who have painstakingly prepared this
analysis. We are grateful to the examiners who have contributed through their comments on the
performance of the candidates under examination as well as for their suggestions to teachers and
students for the effective transaction of the syllabus.

We hope the schools will find this document useful. We invite comments from schools on its
utility and quality.

Gerry Arathoon
October 2019 Chief Executive & Secretary

i
 PREFACE

The Council has been involved in the preparation of the ICSE and ISC Analysis of Pupil Performance
documents since the year 1994. Over these years, these documents have facilitated the teaching-learning
process by providing subject/ paper wise feedback to teachers regarding performance of students at the
ICSE and ISC Examinations. With the aim of ensuring wider accessibility to all stakeholders, from the year
2014, the ICSE and the ISC documents have been made available on the Council’s website www.cisce.org.

The documents include a detailed qualitative analysis of the performance of students in different subjects
which comprises of examiners’ comments on common errors made by candidates, topics found difficult or
confusing, marking scheme for each question and suggestions for teachers/ candidates.

In addition to a detailed qualitative analysis, the Analysis of Pupil Performance documents for the Examination
Year 2019 also have a component of a detailed quantitative analysis. For each subject dealt with in the
document, both at the ICSE and the ISC levels, a detailed statistical analysis has been done, which has been
presented in a simple user-friendly manner.

It is hoped that this document will not only enable teachers to understand how their students have performed
with respect to other students who appeared for the ICSE/ISC Year 2019 Examinations, but also provide
information on how they have performed within the Region or State, their performance as compared to other
Regions or States, etc. It will also help develop a better understanding of the assessment/ evaluation process.
This will help teachers in guiding their students more effectively and comprehensively so that students prepare
for the ICSE/ ISC Examinations, with a better understanding of what is required from them.

The Analysis of Pupil Performance document for ICSE for the Examination Year 2019 covers the following
subjects: English (English Language, Literature in English), Hindi, History, Civics and Geography (History
and Civics, Geography), Mathematics, Science (Physics, Chemistry, Biology), Commercial Studies,
Economics, Computer Applications, Economic Applications, Commercial Applications.
Subjects covered in the ISC Analysis of Pupil Performance document for the Year 2019 include English
(English Language and Literature in English), Hindi, Elective English, Physics (Theory), Chemistry (Theory),
Biology (Theory), Mathematics, Computer Science, History, Political Science, Geography, Sociology,
Psychology, Economics, Commerce, Accounts and Business Studies.

I would like to acknowledge the contribution of all the ICSE and the ISC examiners who have been an integral
part of this exercise, whose valuable inputs have helped put this document together.

I would also like to thank the RDCD team of Dr. M.K. Gandhi, Dr. Manika Sharma, Mrs. Roshni George and
Mrs. Mansi Guleria who have done a commendable job in preparing this document.

Shilpi Gupta
October 2019 Deputy Head - RDCD

ii
CONTENTS

Page No.

FOREWORD i

PREFACE ii

INTRODUCTION 1

QUANTITATIVE ANALYSIS 3

QUALITATIVE ANALYSIS 10
 INTRODUCTION

This document aims to provide a comprehensive picture of the performance of candidates in the
subject. It comprises of two sections, which provide Quantitative and Qualitative analysis results in
terms of performance of candidates in the subject for the ISC Year 2019 Examination. The details of
the Quantitative and the Qualitative analysis are given below.

Quantitative Analysis
This section provides a detailed statistical analysis of the following:

 Overall Performance of candidates in the subject (Statistics at a Glance)

 State wise Performance of Candidates
 Gender wise comparison of Overall Performance
 Region wise comparison of Performance
 Comparison of Region wise performance on the basis of Gender
 Comparison of performance in different Mark Ranges and comparison on the basis of Gender for
the top and bottom ranges
 Comparison of performance in different Grade categories and comparison on the basis of Gender
for the top and bottom grades

The data has been presented in the form of means, frequencies and bar graphs.

Understanding the tables

Each of the comparison tables shows N (Number of candidates), Mean Marks obtained, Standard
Errors and t-values with the level of significance. For t-test, mean values compared with their
standard errors indicate whether an observed difference is likely to be a true difference or whether it
has occurred by chance. The t-test has been applied using a confidence level of 95%, which means
that if a difference is marked as ‘statistically significant’ (with * mark, refer to t-value column of the
table), the probability of the difference occurring by chance is less than 5%. In other words, we are
95% confident that the difference between the two values is true.

t-test has been used to observe significant differences in the performance of boys and girls, gender
wise differences within regions (North, East, South and West), gender wise differences within marks
ranges (Top and bottom ranges) and gender wise differences within grades awarded (Grade 1 and
Grade 9) at the ISC Year 2019 Examination.

The analysed data has been depicted in a simple and user-friendly manner.

1
Given below is an example showing the comparison tables used in this section and the manner in
which they should be interpreted.

The table shows comparison

between the performances of boys
and girls in a particular subject.
Comparison on the basis of Gender
The t-value of 11.91 is significant at
Gender N Mean SE t-value 0.05 level (mentioned below the
Girls 2,538 66.1 0.29 table) with a mean of girls as 66.1
11.91*
Boys 1,051 60.1 0.42 and that of boys as 60.1. It means
*Significant at 0.05 level
that there is significant difference
between the performance of boys
and girls in the subject. The
probability of this difference
occurring by chance is less than 5%.
The mean value of girls is higher
than that of boys. It can be
interpreted that girls are performing
significantly better than boys.

The results have also been depicted

pictographically. In this case, the girls
performed significantly better than the
boys. This is depicted by the girl with a
medal.

Qualitative Analysis
The purpose of the qualitative analysis is to provide insights into how candidates have performed in
individual questions set in the question paper. This section is based on inputs provided by examiners
from examination centres across the country. It comprises of question wise feedback on the
performance of candidates in the form of Comments of Examiners on the common errors made by
candidates along with Suggestions for Teachers to rectify/ reduce these errors. The Marking Scheme
for each question has also been provided to help teachers understand the criteria used for marking.
Topics in the question paper that were generally found to be difficult or confusing by candidates,
have also been listed down, along with general suggestions for candidates on how to prepare for the
examination/ perform better in the examination.

2
STATISTICS AT A GLANCE

Total Number of
Candidates: 33,205

Mean Marks: Highest Marks: 100

67.3 Lowest Marks: 01

3
 PERFORMANCE (STATE-WISE & FOREIGN)
West Bengal 66.7
Uttarakhand 64.6
Uttar Pradesh 64.1
Tripura 44.6
Telangana 75.1
Tamil Nadu 77.6
Sikkim 62.9
Rajasthan 78.4
Punjab 69.2
Puducherry 79.3
Odisha 62.2
New Delhi 76.9
Meghalaya 73.8
Maharashtra 81.1
Madhya Pradesh 71.3
Kerala 77.2
Karnataka 81.2
Jharkhand 66.3
Himachal Pradesh 59.8
Haryana 79.2
Gujarat 69.2
Goa 88.2
Chhattisgarh 62.3
Chandigarh 73.4
Bihar 76.3
Assam 89.0
Andhra Pradesh 71.7
Foreign 79.8

The States of Assam, Goa and Karnataka secured highest mean

marks. Mean marks secured by candidates studying in schools
abroad were 79.8.

4
 GENDER-WISE COMPARISON

GIRLS BOYS

Mean Marks: 70.9 Mean Marks: 64.1

Number of Number of
Candidates: 15,612 Candidates: 17,593

Comparison on the basis of Gender

Gender N Mean SE t-value
Girls 15,612 70.9 0.15
31.21*
Boys 17,593 64.1 0.15
*Significant at 0.05 level

5
 REGION-WISE COMPARISON

East North
Mean Marks: 66.7 Mean Marks: 65.1

Number of Number of
Candidates: 14,051 Candidates: 14,881

Highest Marks: 100 Highest Marks: 100

Lowest Marks: 01 Lowest Marks: 06

REGION
Mean Marks: 77.9 Mean Marks: 76.0

Number of Number of
Candidates: 2,133 Candidates: 2,013

Mean Marks: 79.8 Highest Marks: 100

Highest Marks: 100
Lowest Marks: 17 Lowest Marks: 17
Number of
Candidates: 127
South West
Highest Marks: 100
Lowest Marks: 20

Foreign

6
 Mean Marks obtained by Boys and Girls-Region wise
85.1
81.0 79.8
74.4 72.9 72.8
68.8 70.1
61.4 64.1

North East South West Foreign

Comparison on the basis of Gender within Region

Region Gender N Mean SE t-value
Girls 7,417 68.8 0.22
North (N) 7,464 61.4 0.23
23.58*
Boys
Girls 6,111 70.1 0.25
East (E) Boys 7,940 64.1 0.23
17.57*
Girls 1,116 81.0 0.43
South (S) Boys 1,017 74.4 0.57
9.14*
Girls 896 79.8 0.59
West (W) 1,117 72.9 0.58
8.40*
Boys
Girls 72 85.1 1.68
Foreign (F) Boys 55 72.8 2.38
4.25*
*Significant at 0.05 level

7
 MARK RANGES :
COMPARISON GENDER-WISE

Comparison on the basis of gender in top and bottom mark ranges

Marks Range Gender N Mean SE t-value
Girls 5,807 90.2 0.07
Top Range (81-100) Boys 4,458 89.8 0.08
3.60*
Girls 51 16.6 0.74
Bottom Range (0-20) Boys 147 17.3 0.32
-0.94
*Significant at 0.05 level

Boys Girls All Candidates

Marks Range (81-100) 89.8

81 - 100 90.2
90.1

70.4
61 - 80 71.1
70.7
Marks Range (81-100)
51.3
41 - 60 51.7
51.4

33.1

Marks Range (0-20) 21 - 40 33.6

33.3

17.3
0 - 20 16.6
17.2

8
 GRADES AWARDED :
COMPARISON GENDER-WISE

Comparison on the basis of gender in Grade 1 and Grade 9

Grades Gender N Mean SE t-value

Girls 3,147 94.7 0.06
Grade 1 Boys 2,264 94.6 0.06
1.42
Girls 445 25.0 0.21
Grade 9 Boys 1,060 25.1 0.13
-0.19

Boys Girls All Candidates

94.6
1 94.7
In Grade 1 and Grade 9 no 94.6
significant difference was 84.4
2 84.5
observed between the average 84.5
74.5
performance of girls and boys. 3 74.5
74.5
64.5
4 64.7
64.6
57.1
5 57.1
57.1
51.9
6 52.0
51.9
47.2
7 47.4
47.3
38.6
8 38.9
38.7
25.1
9 25.0
25.1

9
 PART I (20 Marks)
Answer all questions.

[10 × 2]
Question 1
Answer briefly each of the questions (i) to (x).
(i) What is meant by the term Business Environment?
(ii) State any four short-term sources of finance for a Joint Stock Company.
(iii) Mention any two advantages of e-Banking to the customers.
(iv) Differentiate between Fixed Capital and Working Capital.
(v) “Management is universal”. Comment.
(vi) State any two points of difference between recruitment and selection.
(vii) Explain feedback as a part of the process of communication.
(viii) Mention any two facilitating functions of marketing.
(ix) Name two types of markets on the basis of nature of transactions.
(x) Mr. Kappa has recently purchased a refrigerator from TUTU Enterprises, paying
₹ 30,000. After using it for a day or two, he found mechanical defects in the
refrigerator. Immediately, he informed the dealer about the defect but there was no
response from the dealer. Mr. Kappa decided to lodge a complaint against TUTU
Enterprises.
(a) Which court should Mr. Kappa approach to file a complaint?
(b) State any one relief the concerned court may order in favour of Mr. Kappa.

10
Comments of Examiners
(i) Some candidates restricted the meaning of Suggestions for teachers
business environment to forces, not having written - Tell students to write both micro and
that these forces have an impact on a business macro factors influencing the
organization. working of the organization.
(ii) Many candidates, instead of explaining the short- - Ensure that the students clearly
term sources of finance, explained the long-term understand the funds required by a
sources of funds like shares and debentures. Some corporate form of organization as
candidates mentioned funds like owned funds, well as a non-corporate form of
loans from relatives and friends as a source of organization.
short-term funds, not realizing that these are raised - Ensure that the students, under the
by a non-corporate form of an organization and corporate form, are able to discern
not by a Joint Stock Company. amongst the sources of long-term,
medium-term as well as short-term
(iii) A number of candidates, instead of giving the
funds.
merits of E-banking, wrote its meaning. Some
- Explain advantages of E-banking by
candidates wrote the advantages of E-Banking
relating to real life situations.
from a bank’s point of view, when the question
- Explain the meaning of the term
clearly asked for merits from the customers’ point
feedback as a part of the process of
of view. A few candidates wrote about the
communication, laying stress on the
technological knowledge required by the bank as
keywords.
well as the customer.
- Advise the students not to write one-
(iv) Some candidates wrote: word answers which give an
- one-word answers without the basis. incomplete meaning.
- differences in a paragraph format. - Tell students to give sufficient
- irrelevant differences like, risk and scope. explanation so as to differentiate
- differences which did not correlate with each properly between two terms.
other. - Inculcate the habit among the
- meaning of fixed capital based on the capital students of writing the differences in
methods taught in partnership accounts. a tabular form along with the basis of
(v) Many candidates wrote the literal meaning of differentiation. This will help in
management instead of explaining as to why avoiding repetition of points.
management is considered universal. Several - Explain the meaning of the term
candidates did not mention the fact that feedback as a part of the process of
management is required in all types of communication, laying stress on the
organizations and at all levels. keywords.

11
(vi) Some candidates wrote:
- recruitment takes place after selection.
- the employee is recruited while under the
- Explain the functions of marketing
term ‘selection’, they wrote that the employee
by means of a flow chart with the
is selected, which gave the impression that
basis of classification and the
the person seeking employment has already
functions under each classification.
been employed by the organization.
- Repeatedly discuss types of market
- incorrect parallel distinctions. and their classification.
A few candidates were confused with the terms - While teaching, stress upon the key
selection and recruitment. terms for students to get conceptual
(vii) Majority of the candidates did not write key clarity.
terms like the reaction/response of the receiver - Give adequate written practice to
of the message. A number of candidates, instead students.
of writing the meaning of feedback, wrote the - Emphasize on in-depth study of the
meaning of effectiveness. Several candidates did subject.
not understand the question and gave a flowchart - Ensure that the students understand
by the way of explanation. Some candidates the importance of time management
mistook the term feedback as feedback of a so that they have some time left, after
product by the customer, to the seller of the completing the paper, to revise what
product, and so wrote about feedback with they have written.
reference to producer and consumer. - Advise students to read the questions
(viii) Majority of the candidates were confused carefully and write answers
between facilitating functions, functions of according to their requirements.
physical supply and functions of exchange and - Give case studies with application-
thereby wrote functions of exchange, like buying based questions involving one
and selling, or functions of physical supply, like answer. This will reinforce the
transportation and warehousing, instead of the concepts taught and ensure that
facilitating functions. students make correct usage of the
terms.
(ix) Majority of the candidates were unable to
understand the basis of classification. Some
candidates wrote their answer based on the
volume of business or on geographical basis. Different terms such as, spot payment and future
payment, online and offline were substituted for spot market and future market, in a few answer
scripts.
(x) Many candidates, instead of writing district forum or consumer court, wrote district commission.
Several candidates wrote state forum/national commission in place of consumer court.

12
 MARKING SCHEME
Question 1
(i) Business Environment:
Business environment refers to the sum total of all individuals, institutions and other forces /
external/internal/conditions/ events that lie outside a business enterprise but may influence its
functioning and performance.
Or
Business environment is the sum total of all individuals, institutions and other forces that lie
outside the control of a business organization and may affect its working.
(Any other correct meaning)

(ii) Short-term sources of finance for a Joint Stock Company are:

• Public deposits
• Commercial banks/Bank credit
• Loans and advances
• Cash credit
• Discounting bills of exchange
• Bank overdraft
• Trade credit
• Customer advances
• Factoring
• Inter-Corporate deposits
• Installment credit/Hire Purchase/Deferred Payment System (Any four)
(iii) Advantages of E-Banking to the customers are:
• Customers get 24 hours and 365 days-a-year service.
• Customers can make the permitted transactions from residence or office and even while
travelling. They need not go to the bank/convenient.
• Recording of each and every transaction inculcates a sense of financial discipline.
• Customers feel a sense of security. They do not face the risk of carrying cash.
• Unlimited access to the bank increases customer satisfaction.
• Quick/fast transactions (Any two, self-explanatory points)
(iv) Differences between Fixed Capital and Working Capital are:

Basis Fixed Capital Working Capital

Purpose It is used to generate income It is used to meet day to day expenses
Utilisation or usage It is invested in fixed assets It is required for investment in
like plant and machinery, current assets like stock of goods,
land and building, etc. debtors, bills receivable, etc.

13
 Time period or time It is invested for long time It is invested for a short time period.
span period.
Change in form It does not change its form. It keeps on circulating or changing
its form. / The capital changes from
one current asset to another like cash
to raw material to work in progress
to cash again.
Source It is generally raised through It is generally raised through public
shares, debentures, long term deposits, trade credit and banks, etc.
loans, etc. (long term (short term sources)
sources)
Another term It is called block capital It is called circulating or revolving
because it is blocked up in capital because it keeps on
fixed assets for the life time circulating in business by changing
of the enterprise. its form from one current asset to
another.

(Any two)
(v) Management is universal because:
It is required in all types of organisations, big or small, business or non-business. /Management
is required at all the levels of the organization. The basic functions of management are
performed at every level of authority – top, middle or lower.

(vi) Differences between recruitment and selection are:

Basis Recruitment Selection

Objective / aim / To create a large pool of To eliminate all unsuitable

purpose candidates from which candidates. OR choose right person
choice can be made. for every job.
Stage / order / It is done prior to selection. It is undertaken only after
sequence OR It is the second stage of recruitment. OR It is the third stage
Staffing process. of Hiring process and comes after
recruitment.
Complexity There is very low level of There is a complex process as it
complexity. It is a simple involves various selection tests.
process.
Nature of process It is a positive process It is a negative process because it
because it involves attracting rejects unsuitable candidates.
large number of candidates.

14
 Number No maximum limit or Only limited number or according to
restriction upon the number vacancy; fixed number of candidates
of candidates. are selected.

Time Not time consuming Time consuming

(vii) Feedback in the process of communication: It means the reaction / reply / response by the
receiver.
OR
It represents the return flow of communication.

(viii) Facilitating functions of marketing are:

• Advertising
• Salesmanship / personal selling
• Sales promotion
• Financing
• Risk taking/ Insurance
• Market research
• Product planning and development
• Standardization
• Grading
• Packaging
• Branding
• Labeling
• Pricing
• Packing (Any two)
(ix) Types of markets on the basis of nature of transactions:
• Spot market
• Future market
(x) (a) Consumer Court / District Forum/District Forum Court/ Consumer Court

(b) Relief / Remedies available to Mr. Kappa:

• Removal of defect in working of the machine
• Replacement of defective working machine with a new one.
• Refund of price paid for the product.
• Payment of compensation by the seller.
• Withdrawal of hazardous goods from the market.
• Discontinuance of unfair and restrictive trade practices
(Any one)

15
 PART II (60 Marks)
Answer any five questions.
Question 2
(a) Explain three important characteristics of Management. [3]
(b) Briefly explain any four external factors of Micro environment of business. [4]
(c) What is meant by barriers to communication? Explain three suitable measures to [5]
overcome the barriers to effective communication.

Comments of Examiners
(a) Most of the candidates wrote either the importance
or objectives of management, instead of Suggestions for teachers
characteristics of management. Several others wrote - Ensure that the students understand
the characteristics of marketing or the objectives of the difference between the features,
marketing. Some candidates got confused between importance, objectives and
characteristics of management and characteristics of characteristics of management.
principles of management. - Regularly conduct oral and written
(b) Many candidates, instead of writing the external tests, unit wise, which will help the
factors of microenvironment, wrote the internal students in retaining the concepts
factors. Several candidates who wrote the external and contents of the answers.
factors, did not give a proper explanation of the - Emphasize on in-depth study of the
header. Some candidates wrote about the benefits of subject as selective study results in
environmental scanning. A few candidates wrote the the students making up their own
factors of business environment. The explanations answers, based on their limited
lacked substantial points /words in a few answer understanding of the terms.
scripts. - Advise students not to explain the
meaning of a term by just giving an
(c) Majority of the candidates were unable to explain the
example, rather, to use the example
core concept of barriers to communication as the
as an aid to bring out clarity in its
essential keywords were missing in their
meaning.
explanation. Many candidates, instead of writing the
- Reinforce the learning of the
meaning of barriers of communication, explained the
students by frequently questioning
different types of barriers, like semantic, etc. The
them in different ways on the
suitable measures to overcome barriers to
concepts taught.
communication were however, correctly explained
by most candidates.

16
 MARKING SCHEME
Question 2
(a) Important characteristics of Management are:
• Management is goal-oriented
• Management is universal/pervading/pervasive
• Management is a group activity
• Management is a social process
• Management is a dynamic function
• Management is a system of authority
• Management is both an Art and a Science
• Management is a distinct entity
• Management is intangible
• Management is an integrating force
• Management is multi-disciplinary/ multi-dimensional
• Management is creative
• Management is a continuous process (Any three with explanation)
(b) External factors of Micro environment of business are:
• Customers
• Competitors
• Suppliers
• Marketing Intermediaries (Middlemen)
• Financiers
• Public/Media/NGO (Any four with explanation)
(c) Meaning of Barriers to Communication: Certain hurdles/ blockades/ obstructions/ bottlenecks,
hinder effective communication. These are called barriers to communication.
Measures to overcome barriers to effective communication are:
• Well drafted message or clarity in ideas
• Appropriate language
• Two-way communication
• Appropriate channel and media of communication
• Feedback
• Gestures and tones/facial expressions
• Open door policy
• Good listening
• No contradiction between words and actions/consistency
• Credibility in communication
• Free from personal prejudice
• Multiple channels – appropriate combination of formal and informal (grapevine)
communication.
• Usefulness of message for the receiver
• Use of grapevine (informal communication).
• Simple language (Any three with explanation)

17
Question 3
(a) Give three differences between Shares and Debentures. [3]
(b) What is meant by supervision? Explain three functions of a Supervisor. [4]
(c) Explain the importance of Delegation of Authority. [5]

Comments of Examiners
(a) Majority of the candidates missed out on the key
word equity in highlighting the differences Suggestions for teachers
between shares and debentures, as they wrote that - Make it clear to the students that
shares have voting rights instead of equity shares
both type of shares - equity and
have voting rights/ Debentures cannot be
preference, must be taken into
converted into shares instead of debentures cannot
be converted into equity shares. consideration while writing an
answer involving shares.
(b) Many candidates were unable to explain the - Explain shares and debentures with
meaning of the term supervision as they simply
the help of a flow chart.
expanded the term. The functions of supervisor
- Explain and reinforce certain
were correctly answered by majority of the
candidates. However, some candidates confused essential key words which are
functions of a supervisor with qualities of a good mandatory to the concept.
leader. - Advise students to include the
mandatory terminology in their
(c) Majority of the candidates wrote the meaning and
answers.
elements of delegation of authority. A few
candidates wrote the importance of - Conduct group discussions, role
decentralization instead of delegation of authority. plays which are very effective
In some cases, the answer was given in a paragraph methods to help the students retain
form with points not being clearly demarcated. the subject matter effectively.
- Train students to write the answers
in points which are clearly
demarcated.
- Give adequate written practice to
students.

18
 MARKING SCHEME
Question 3
(a) Differences between Shares and Debentures are:

Basis Shares Debentures

Status Shareholders are the owners of Debenture holders are the creditors
the company/owned funds of the company/borrowed funds
Returns Equity Shareholders are paid Debenture holders are paid fixed
fluctuating dividend out of the interest irrespective of the
profits/ Appropriation of profits profits/Charge against profits
Order of Shareholders are paid after the Debentures holders are paid before
repayment debenture holders. the shareholders.
Voting rights Equity shareholders get full Debenture holders get no voting
voting rights. rights.
Terms of Shares are usually irredeemable/ Debentures are usually redeemable
repayment/ Shares are redeemable at the after a fixed period of time.
Redemption time of winding up.
Risk to holders Shares are not secured and carry Debentures are generally secured
high risk. and carry low risk.
Restrictions on There are certain restrictions on There are no restrictions on the issue
issue the issue of shares. of debentures.
Convertibility Shares cannot be converted into Debentures may be converted into
debentures. equity shares.
Taxation Dividend paid on shares is not Interest paid on Debentures is
deductible from the profits of the deductible from the profits of the
organization. organization.
Claim to rights Dividends cannot be claimed as Interest can be claimed as a right
a right
Meaning Capital divided into small units Acknowledgement of Debts
called shares

19
(b) Meaning of Supervision:
Supervision means overseeing/guiding/observing/instructing employees at work to ensure that
they are working in a desired manner. It also includes giving instructions to achieve goals
/objectives/ tasks of the organisation. (Any other correct meaning)

Functions of a Supervisor:
• Scheduling the work
• Issuing orders and Instructions
• Guiding subordinates
• Motivating workers
• Maintaining Discipline
• Handling Grievances
• Monitoring Performance
• Ensuring safety
• Feedback
• Serving as a Linking Pin (Any three with explanation)

(c) Importance of Delegation of Authority are:

• Relief to top executives
• Scalar chain
• Specialization
• Quick decisions
• Motivation of subordinates
• Executive development/fixing responsibility
• Growth and diversification
(Any five with explanation)

Question 4
(a) Explain any three disadvantages of issuing equity shares, from the Company’s point [3]
of view.
(b) What is meant by NEFT? Give any two features of NEFT. [4]
(c) Explain five factors that should be taken into consideration while determining the [5]
price of a product or service.

20
Comments of Examiners
(a) Many candidates, instead of writing the demerits
of issuing equity shares, wrote the merits. Several Suggestions for teachers
candidates wrote the disadvantages from the - Clearly explain the merits and
shareholders point of view. The word dividend demerits of issuing equity shares,
was substituted with the interest in some answer
both from the point of view of the
scripts.
investor as well as the company.
(b) Majority of the candidates did not write key terms - Explain the unique features of NEFT
such as electronic transfer of funds, from one bank and RTGS so that it becomes easy for
to another bank, transfer of funds in batches. the students to differentiate between
Some candidates limited their explanation to only the two terms.
the expansion of the abbreviation NEFT. Some
- Teach factors determining the price of
candidates, in the expansion, wrote Net instead of
a product or service with practical
National. A few candidates wrote the features of
examples.
RTGS instead of features of NEFT.
- Train students to write proper
(c) Majority of the candidates wrote inadequate and headings along with the explanation.
inappropriate explanation with no correlation - Advise students not to simply expand
between the header and the explanation. Several
the header by the way of explanation.
candidates expanded the header by way of
- Advise the students to read the
explanation. Some candidates correlated the
questions carefully and write answers
concept with Economics.
according to their requirements.

MARKING SCHEME
Question 4
(a) Disadvantages of issuing equity shares from the Company’s point of view are:
• Manipulation of control
• Danger of over-capitalisation
• Costly/non economical / expensive
• Inflexible/ capital cannot be restructured once decided
• Issue depends on market conditions (favourable or unfavourable)
• No trading on equity
(Any three with explanation)
(b) Meaning of NEFT:
It is a nationwide payment system under which an individual, firm and company can
electronically transfer funds from any bank branch to any individual, firm or company having
account with any other branch in the country. It operates in half hourly batches.
(Any four)

21
 Features of NEFT are:
• There is no minimum or maximum amount that can be transferred through NEFT when one
has bank account. However, the bank may restrict the amount one can transfer in a day.
• It operates in hourly batches/ batches are settled every half hour
• Individuals, firms, corporates maintaining accounts with a bank branch can transfer funds
using NEFT.
• Even such individuals, who do not have a bank account can use NEFT facility up to
Rs. 49,999
• In order to receive funds through NEFT, one must have account with the NEFT enabled
branch.
• It cannot be used to receive foreign remittances.
• The sender of funds has to pay charges for NEFT.
• The receiver of funds has to pay no charges
• NEFT is done via electronic messages
• NEFT takes advantage of the core banking solution in India.
(Any two)
(c) Factors that should be taken into consideration while determining the price of a product or service
are:
• Cost of the production
• Competition in the market
• Quality of goods / services (value for money)
• Promotional strategy
• Buying motives of consumers
• Government control
• Pricing objectives of the firm/objectives of the firm
• Customer demand
• Risks – seasonal goods, fashion articles, liberal credit basis sales, bad debts, etc.
(Any five with explanation)

Question 5
(a) Explain any three objectives of Marketing. [3]
(b) What are Public Deposits? Briefly explain any two merits of Public Deposits. [4]
(c) What is financial planning? Explain three points of importance of financial planning [5]
for a business organisation.

22
Comments of Examiners
(a) Many candidates, instead of writing the objectives Suggestions for teachers
of marketing, wrote its importance. The - Emphasize that public deposits are
explanations of the objectives of marketing written deposits made with Non-Banking
by several candidates lacked conceptual clarity. companies.
(b) Majority of the candidates confused public deposits - Highlight the differences between the
with bank deposits and wrote the advantages based importance of business finance and
on the same. Several candidates did not write financial planning.
essential key words like public and non-banking - Ensure that the students understand
companies. Some candidates wrote the advantages the difference between the features,
of public deposits from the investors point of view. importance, objectives and
characteristics of any topic.
(c) Some candidates gave the importance of planning
- Adequate written practice and regular
instead of importance of financial planning. Some
feedbacks will help the students
candidates wrote the advantages of having adequate
retain the subject matter and avoid
finance. A few candidates wrote the role of business
making mistakes between similar
finance.
sounding terms.
- Reinforce the learning of the students
by frequently questioning them in
different ways on the concepts taught.

MARKING SCHEME
Question 5
(a) The objectives of marketing are:
• Consumer satisfaction/ satisfaction of human wants
• Profitability
• Coordination and integration
• Service to society/ generate employment
• Creation of demand/ awareness of product
• Survival, growth and expansion of business
• Creation of goodwill (Any three with explanation)
(b) Meaning of Public Deposits: These are deposits received by non-banking companies from
shareholders, employees and the general public and are unsecured in nature. They are popular
source of short-term finance primarily meeting the requirement of working capital.
(Any correct meaning)
Merits of Public Deposits are:
• Conveniences / simple procedure
• Economical
• No charge on assets
• Flexibility
23
 • No trading on equity
• Wide contacts
• No interference / no dilution of shareholders control (Any two with explanation)
(c) Meaning of Financial Planning: It is the process of estimating the financial requirements of an
organisation, choosing the sources of funds and deciding how the funds are to be utilised.
(Any other correct meaning)
Importance of financial planning for a business organisation:
• Sound financial management
• Effective use of funds
• Serves as a guide in developing balanced capital structure
• Effective control of funds
• Coordination in various functional areas
• Meeting contingencies / shocks.
(Any three - self-explanatory)

Question 6
(a) Explain any three points of importance of Planning. [3]
(b) Discuss any four features of Objectives, as a type of a Plan. [4]
(c) Explain the various steps involved in the process of Controlling, as a function of [5]
Management.

Comments of Examiners
(a) Many candidates wrote the features of planning Suggestions for teachers
instead of the importance of planning. In several - Clearly distinguish between the
cases, the headers were not accompanied by proper features and importance of planning.
explanation. - Explain the features of different types
(b) Majority of the candidates wrote vague answers or of plans.
generalized answers without any proper substance - Organize an activity in a class in
as they were unable to understand this question. which students themselves plan,
Several candidates repeated the same explanation organize and control. This will help
under all the headings. Many candidates wrote the students retain the subject matter
planning as a type of plan. Some candidates wrote related to management and also help
only the meaning of objectives. them to retain the steps of various
functions of management.
(c) While a number of candidates were able to answer - Tell students that in long answers the
this question well, a few candidates either wrote heading and explanation must be
incorrect sequence of steps or wrote just a couple relevant and adequate.
of steps. - Highlight the difference between
features and essentials of every
concept.

24
 MARKING SCHEME
Question 6
(a) Importance of Planning:
• Focuses attention on objectives
• Makes activities meaningful
• Brings order in place of chaos
• Reduces risks of uncertainty
• Improves economy of operation
• Provides basis for control
• Promotes innovation and creativity
• Facilitates decision making
• Helps in coordination
• Bridges the gaps between present and future.
(Any three with explanation)
(b) Features of Objectives, a type of a Plan:
• Objectives are the most basic types of plans and all other plans are based upon objectives.
• Objectives can be arranged in order of importance/sequence.
• Some objectives are long term while some are short term objectives/time bound.
• Objectives of every department should contribute to meet the basic objectives of the
organization as a whole/objectives are interrelated/ supportive coordination.
• Objectives exists to achieve several rather than a single goal.
• There may be multiple objectives in an organization
• Objectives can be defined as broad or generalized objectives like growth objectives or specific
like 20 percent growth on yearly basis/quantitative.
• Objectives have a hierarchy beginning from top level {overall objectives) middle
level(divisional/departmental) lower level (sectional objectives) and individual objectives.
• Objectives are ends towards which organization runs.
(Any four -self explanatory)
(c) Steps involved in the process of Controlling, a function of Management, are:
• Setting of performance standards
• Measuring actual performance
• Comparing actual performance with standards
• Analyzing deviations
• Taking corrective actions.
(All five steps in correct order/sequence with explanation)

25
Question 7
(a) Distinguish between advertising and sales promotion. [3]
(b) Explain any four rights available to a consumer under the Consumer Protection Act, [4]
1986.
(c) What is meant by promotion mix? Briefly explain the elements of promotion mix. [5]

Comments of Examiners
(a) Many candidates mistook sales promotion to be Suggestions for teachers
salesmanship and wrote the difference between
advertising and salesmanship. Some candidates - Make students do a project on
confused the concept of sales promotion with marketing which uses all the
promotion of an employee. In several cases, promotional strategies. This will help
differences on the same parameters were found to students in retaining the subject
be lacking, with the explanation of advertising matter.
being correct but the explanation of sales promotion - Explain different promotional
not being corresponding to the one on advertising. strategies used by the companies by
(b) Responsibilities of consumers were stated instead giving day today examples.
of rights of the consumers by many candidates. - Real life examples and application-
Some candidates misunderstood and wrote about based questions will help the students
illiteracy while writing about right to education. to distinguish between similar
Candidates seemed to have got confused between sounding terms.
the right to be informed and consumer education. In - Encourage group discussions in the
many cases, the headers were not accompanied by class.
proper explanation. - Conduct regular oral and written tests
(c) Majority of the candidates did not write that unit wise, which will help the students
promotion mix persuades the customers to buy the in retaining the concepts and contents
product. Some candidates wrote the meaning of of the answers.
promotion of an employee. Some others wrote on - Instruct the students to utilize the
elements of marketing mix. reading time effectively.

26
 MARKING SCHEME
Question 7
(a) Differences between Advertising and Sales Promotion are:
Basis Advertising Sales Promotion
Meaning Any paid form of non-personal Refers to all those activities that
presentation by an identified stimulate purchasing and dealer
sponsor effectiveness.
Objective To create favourable image of To increase current sales
the firm
Time horizon Long-term technique Short-term technique
Availability/Nature Regular and repetitive Temporary and non-repetitive
Focus Attracts customers Pushes the product towards the
buyer
Control Less controllable More controllable
Expenditure Substantial Limited
Scope Includes print media Radio, TV, Includes free samples, coupons,
cinema/ wide coverage premiums, offers etc./limited
coverage
Outside Needs an outside agency May not require outside agency
(Any three)
(b) Rights available to a consumer under the Consumer Protection Act, 1986, are:
• Right to safety
• Right to information
• Right to choice
• Right to be heard
• Right to seek redressal
• Right to education
• Right to healthy environment (Any four with explanation)
(c) Meaning of Promotion Mix:
When a product is developed, its price is decided and its distribution channel is selected, the
prospective customers must be informed of its availability and they need to be persuaded to buy
it. All the activities involved in informing and persuading the customers are collectively known
as Promotion in Marketing.
Elements of promotion mix are:
1. Advertising
2. Sales Promotion
3. Personal Selling
4. Publicity

27
Question 8
(a) Explain three features of goods, as an element of Product Mix. [3]

(b) Discuss any four types of preference shares. [4]

(c) State and explain the principles of management as laid down by F.W. Taylor. [5]

Comments of Examiners
(a) Several candidates, instead of writing the features
of product mix, wrote the features of marketing mix. Suggestions for teachers
Some candidates made up their own features. A
- Explain the meaning and features of
number of candidates wrote about the features of
product and services by giving
services instead of features of a product mix. A few
examples of products commonly
candidates gave elements of product mix.
used in daily life.
(b) A number of candidates discussed types of - Explain clearly, the different types
debentures instead of types of preference shares. of preference shares.
Some candidates wrote the correct headers /types of - Clearly distinguish between Fayol’s
preference shares but the explanations given under principles and Taylor’s principles.
the headings were incorrect specially in case of - Explain how one word can change
participating and non-participating preference the context of the answer, for
example, Harmony and discord
shares.
changes the meaning of the principle
(c) Many candidates wrote Henry Fayol’s principles, completely and is contradictory to
instead of principles of F.W. Taylor. Several Harmony not discord.
candidates wrote only division of work instead of - Instruct the students to answer to the
division of work and responsibility. A few point and not in paragraphs.
candidates wrote the correct principles but with
incorrect explanation.

28
 MARKING SCHEME
Question 8
(a) Features of Goods, an element of Product Mix, are:
• Goods are tangible.
• They have shape, size, weight, colour, etc.
• Goods are separable from the producer and seller.
• Goods can be stored for sale or use in future.
• Factory made goods are homogenous / identical / similar in quality.
• Goods are of several types, viz:
- Consumer products
- Shopping products
- Specialty products
- Industrial products
• Goods have monetary value.
• Every product has a life cycle with various stages.
(Any three - self explanatory)
(b) Types of preference shares are:
• Cumulative preference shares
• Non-cumulative preference shares
• Participating preference shares
• Non-participating preference shares
• Convertible preference shares
• Non-convertible preference shares
• Redeemable preference shares
• Non-redeemable preference shares.
(Any four with explanation)
(c) Principles of management as laid down by F.W. Taylor are:
• Science, not rule of thumb
• Harmony, not discord
• Maximum, not restricted output
• Division of work and responsibility
• Scientific selection, training and development of workers
• Standardisation
• Mental Revolution

(Any five with explanation)

29
Question 9
Write short notes on the following:
(a) E.S.O.P. [4]
(b) Features of Management as an art. [4]
(c) Channels of distribution. [4]

Comments of Examiners
(a) Majority of the candidates did not write key words Suggestions for teachers
such as, employee, specified number of its shares,
stipulated price under market price, specified - Train the students to include the
eligibility conditions. Several candidates did not meaning, objective, features, merits
write the demerits of E.S.O.P. Some candidates as well as demerits in short notes in
only expanded the abbreviation. order to have a complete answer.
Emphasize to the students to write
(b) Majority of the candidates gave only three features relevant explanations co-relating to
of management as an art. A number of candidates the header.
wrote a paragraph on management without - Tell the students that while writing a
dividing it into appropriate points. short note on channels of distribution,
not only its meaning but also both
(c) Many candidates were unable to explain Channel direct and indirect channels must be
of distribution. Several candidates, instead of explained.
writing on direct and indirect channels, wrote the - Make a flow chart showing the proper
types of channels of distribution. Some candidates classification of different channels of
gave an explanation about physical distribution distribution.
instead of writing about the channels of - Test the students by asking them
distribution. questions in different ways on the
same topic.

MARKING SCHEME
Question 9
(a) Employee Stock Option Plans: It is a scheme under which an employee of the company is
given a right to purchase a specified of number of its shares at a stipulated price, usually below
market price. The employees have to fulfil the specified eligibility conditions.
Merits:
• This scheme can link compensation package closely to performance.
• It enables a company to retain eligible employees and encourages them to work better.
• It inculcates a sense of ownership and responsibility among employee and boosts their
morale.
• It helps the employees to become rich when the market price of the company’s share rises.
(Any one)
30
 Demerits:
• This scheme can be used only by profit making companies.
• Falling share prices may result in loss to employees.
• Lack of transparency earns accusations of favoritism.
• Unsound Stock Market condition causes inconvenience to employees in encashing their
investment.
• Lock in period is generally more than one year.
(Any one)
(b) Features of Management as an Art, are:
• Practical knowledge: As an art, management involves putting the available theoretical
knowledge into practice so as to attain the predetermined goals.
• Personal skill: Just as in art, management involves an individual’s skill to tackle problems
using his own thinking and understanding of the situation.
• Creativity: Like art, management is result- oriented and uses its creativity to convert inputs
into profitable outputs.
• Perfection through practice: As in art, management involves regular practice. An efficient
manager can convert a challenge into an opportunity through continuous decision –
making and leadership.
(Heading with explanation)
(c) Channels of Distribution:
Meaning:
A channel of distribution is a route /path/ way along which products flow from the point of
production to the point of ultimate consumption or use.
The major types of channels are:
1. Direct channel (Zero level): In this type of channel, the manufacturer directly makes
goods available to consumers without involving any intermediary, e.g. Bata India Ltd.,
Eureka Forbes.
2. Indirect channels (One level/two level): In indirect channels one or more intermediary is
employed to move goods from the point of production to the point of consumption.
E.g. Big Bazar, Maruti Udyog.
Elements of Indirect Channel:
• Manufacturer-retailer-consumer (one level channel)
• Manufacturer-wholesaler-retailer-consumer (two level channel)
• Manufacturer-agent-wholesaler-retailer-consumer (three level channel)
(direct channel with one example, indirect channel with one example/element)

31
 Topics • Question 1(vii): Feedback as a part of the process of
communication.
found • Question 1(viii): Facilitating functions of marketing.
difficult by • Question 3 (c): Importance of delegation.
candidates • Question 4 (c): Factors to be taken into consideration while
determining the price of the product.
• Question 5 (b): Public deposits.
• Question 5 (c): Financial planning.
• Question 6 (b): Features of objectives as a type of plan.
• Question 9 (a): ESOP
• Question 9 (b): Management as an art.

Concepts in
• Short term sources of finance.
which • Management is universal.
candidates • Important characteristics of management.
got • NEFT and RTGS.
confused • Objectives of marketing.
• Financial planning and Planning.
• Promotion mix and marketing mix
• Sales promotion and salesmanship.

• Avoid selective study.

• Practice writing long answers.
Suggestions
• Identify the features, advantages and disadvantages of terms.
for • Give equal importance to both, the meaning as well as explanation of
candidates every term.
• Read the financial section of newspapers to establish links between
theory and the practical world scenario.
• Make flow charts, comparative charts and mind maps which will help
in better retention of the subject matter.
• Divide the time proportionately between Part I and Part II while
writing the exam.
• Write answers to the point and underline important terms Avoid
repetition of points.
• Read, analyse, understand the requirement of the question before
writing its answer.

32
 ISC

Analysis of Pupil
Performance

COMMERCE

Research Development and Consultancy Division

Council for the Indian School Certificate Examinations
New Delhi
Year 2020

Published by:
Research Development and Consultancy Division (RDCD)
Council for the Indian School Certificate Examinations
Pragati House, 3rd Floor
47-48, Nehru Place
New Delhi-110019

Tel: (011) 26413820/26411706

E-mail: [email protected]

© Copyright, Council for the Indian School Certificate Examinations

All rights reserved. The copyright to this publication and any part thereof solely vests in the Council for
the Indian School Certificate Examinations. This publication and no part thereof may be reproduced,
transmitted, distributed or stored in any manner whatsoever, without the prior written approval of the
Council for the Indian School Certificate Examinations.
 FOREWORD

This document of the Analysis of Pupils’ Performance at the ISC Year 12 and ICSE Year 10
Examination is one of its kind. It has grown and evolved over the years to provide feedback to
schools in terms of the strengths and weaknesses of the candidates in handling the examinations.

We commend the work of Mrs. Shilpi Gupta (Deputy Head) and the Research Development and
Consultancy Division (RDCD) of the Council who have painstakingly prepared this analysis. We
are grateful to the examiners who have contributed through their comments on the performance of
the candidates under examination as well as for their suggestions to teachers and students for the
effective transaction of the syllabus.

We hope the schools will find this document useful. We invite comments from schools on its
utility and quality.

Gerry Arathoon
November 2020 Chief Executive & Secretary

i
 PREFACE
PREFACE

The CISCE has been involved in the preparation of the ICSE and ISC Analysis of Pupil Performance
documents since the year 1994. Over these years, these documents have facilitated the teaching-
learning process by providing subject/ paper wise feedback to teachers regarding performance of
students at the ICSE and ISC Examinations. With the aim of ensuring wider accessibility to all
stakeholders, from the year 2014, the ICSE and the ISC documents have been made available on the
CISCE website www.cisce.org.

The documents for the ICSE and ISC Examination Year 2020 include a detailed qualitative analysis
of the performance of students in different subjects. The purpose of this analysis is to provide insights
into how candidates have performed in individual questions set in the question paper. This section
is based on inputs provided by examiners from examination centers across the country. It comprises
of question wise feedback on the performance of candidates in the form of Comments of Examiners
on the common errors made by candidates along with Suggestions for Teachers to rectify/ reduce
these errors. The Marking Scheme for each question has also been provided to help teachers
understand the criteria used for marking. Topics in the question paper that were generally found to
be difficult or confusing by candidates, have also been listed down, along with general suggestions
for candidates on how to prepare for the examination/ perform better in the examination.

The Analysis of Pupil Performance document for ICSE for the Examination Year 2020 covers the
following subjects/papers: English (English Language, Literature in English), History and Civics,
Mathematics, Physics, Chemistry, Commercial Studies and Environmental Science.
Subjects covered in the ISC Analysis of Pupil Performance document for the Year 2020 include
English (English Language and Literature in English), Hindi, Physics, Chemistry, Mathematics,
Computer Science, History, Political Science, Economics, Commerce, Accounts, and Environmental
Science.

I would like to acknowledge the contribution of all the ICSE and the ISC examiners who have been
an integral part of this exercise, whose valuable inputs have helped put this document together.

I would also like to thank the RDCD team of Dr. M.K. Gandhi, Dr. Manika Sharma, Mrs. Roshni
George and Ms. Mansi Guleria, who have done a commendable job in preparing this document.

We hope that this document will enable teachers to guide their students more effectively and
comprehensively so that students prepare for the ICSE/ ISC Examinations, with a better
understanding of what is required from them.

Shilpi Gupta
November 2020 Deputy Head - RDCD

ii
CONTENTS

Page No.

FOREWORD i

PREFACE ii

QUALITATIVE ANALYSIS: COMMERCE 1

 PART I (20 Marks)
Answer all questions.

Question 1 [10x2]
Answer briefly each of the questions (i) to (x):
(i) What is meant by Micro-Environment?
(ii) State any two features of a Credit Card.
(iii) What is Net Working Capital?
(iv) Give two advantages of Trade Credit, as a source of short-term finance.
(v) Define Management as an activity.
(vi) Moon Ltd. imported new machinery from Germany. However, the productivity of
the business did not improve with the use of this machinery. On investigation, it was
found that the workers were not able to operate the high-tech machinery effectively,
causing poor performance and wastages.
What can be done by Moon Ltd. to overcome the above problem?
(vii) What is meant by Span of Control?
(viii) Name two types of Markets on the basis of subject of exchange.
(ix) State any two points of difference between Marketing and Selling.
(x) What is meant by Physical Distribution?

Comments of Examiners Suggestions for Teachers

(i) Many candidates missed key words like-"direct  Ensure that students understand the
influence" and "affects the meaning of the term Business
working/performance". Micro-environment was Environment.
at times confused with macro environment and  Reiterate key words while
business environment. Some candidates wrote explaining micro and macro
that micro-environment consists of internal and environment.
external factors without completing the answer  Ensure that students write precise
by writing how they affect an individual answers with relevant keywords.
organization.  Stress upon the habit of writing out
(ii) Many candidates wrote the physical the answers.
characteristics of a credit card like having a  Advise students to read questions
plastic body and a chip. A few candidates wrote thoroughly, understand clearly and
merits instead of features. Some confused a then write carefully.
credit card with a debit card. Instead of writing  Clarify the difference between the
that a credit card has a cash withdrawal limit terms “merit” and “feature”.
1
 along with credit limit, most candidates wrote  Explain the forms of e-banking by
that a credit card is used to withdraw cash. The giving live and situational examples.
fact that some charges are charged from the  Ensure that the concept of debit
credit card holder was written as fees. card, credit card, ATM card is
(iii) A few candidates defined net working capital as- crystal clear to students.
Total assets minus Total liabilities instead of  Stress upon key words / terms for
Current Assets minus Current Liabilities. The conceptual clarity. Update the
key word 'current' was missing from the answers. students with the latest trends in
A few misspelt the word "excess" as "access", banking.
Some candidates defined gross working capital  Use a flow chart to explain
i.e., working capital = current assets. Some classification of capital.
candidates wrote the abbreviation CA-CL  Clarify terms such as: working
without giving the meaning of the symbols. capital, gross working, net working
capital, fixed assets, current assets,
(iv) In place of advantages of trade credit, some total assets, current and long-term
candidates wrote the meaning of trade credit. liabilities.
Many wrote, "it is a short-term source of finance"  Explain trade credit, cash credit
and "it can be returned at convenience", as instalment credit, bank draft, bank
advantages. A few wrote, “it helps in smooth overdraft in detail with adequate
running of business and profit can be earned”. examples. Stress on the differences
Some candidates wrote about cash credit. again and again so that the students
Several candidates wrote it as discount allowed are thorough.
by the seller to the buyer, some wrote about trade  Discuss case studies with
credit being short term loan given by financiers. application-based questions to
(v) Many candidates explained management as a reinforce the concepts taught and to
process, or they wrote functions of management ensure that students make correct
Several candidates wrote incomplete answers. usage of the terms.
They did not mention “the efforts of other  Stress upon proper time
people”. Even while trying to write the alternate management so that adequate time is
definition, several candidates mentioned the left for last minute revision of the
objectives of achieving certain common goals. answers written.
(vi) Many candidates wrote that the company should  Clarify the concept of span of
remove the workers and recruit new well-trained control. Make students aware of the
workers. Some candidates could not identify the basic keywords which are essential
cause of poor performance. Several candidates to bring out the complete meaning of
wrote about rights of consumers. Many wrote the term. Also, stress upon the
that a complaint must be made to the District rationale for using these terms.
Forum.  Explain classification of markets by
using flow charts along with
(vii) Many candidates attempted this question relevant live examples, such as
correctly. However, some candidates confused different classification of markets
span of control with the principle of unity of based on geographical area, volume
command. The keyword 'number of subordinates of business, subject of exchange,
under one manager' was missing in many position of buyers and sellers,
answers. Also, many candidates wrote
subordinate instead of subordinates and

2
 managers instead of manager and this changed nature of transactions and nature of
the meaning of the answer. goods.
(viii) Several candidates were confused with the  Point out the difference between the
classification of markets. Majority of the terms marketing and selling, giving
candidates were unable to understand the basis of ample relevant examples.
classification asked for. Following were the  Inculcate the habit among students
common errors made by candidates: goods of writing differences in a tabular
market, stock market, exchange market were form along with the basis of
written as examples of classification of market difference, as this helps in avoiding
based on subject of exchange. Some even wrote repetition.
spot market, and future market. Some candidates  Emphasise the importance of time
defined market instead of types of markets. management while answering
questions.
(ix) In many answers, the basis of distinction was not  Clarify the difference between the
stated correctly or did not correlate with the channel of distribution and physical
explanation. A few candidates wrote the distribution.
definition of marketing and selling but with no
clarity. Some candidates wrote the points of
selling under marketing and the points of
marketing under selling. Several candidates were
confused between marketing and sales
promotion.
(x) For the meaning of Physical Distribution some
candidates wrote the definition of marketing
while others wrote “selling of goods by
producers to consumers”.

MARKING SCHEME
Question 1
(i) Micro-Environment:
Micro-Environment refers to those internal (any internal factor, e.g. mission) and external
(any external factor like customer, etc.) factors/ forces which exercise a direct influence on
the working and performance of an individual business organisation.

(ii) Features of a Credit Card:

1. The Credit Card does not require the user to deposit advance money with the issuer of
the Card. However, the user may be asked to open an account.
2. The card contains personal details / name / address / validity / date of the card holder.
3. Name and address of the bank.
4. Credit card allows credit facility to the cardholder.
5. The cardholder has to make payment after using the card.
6. The cardholder pays some charges for the credit card.

3
 7. Some incentives / gifts may be available to the cardholder.
8. Has a cash withdrawal limit along with credit limit.
9. Add on card facility, free of cost for family members.
10. Annual fee, depending upon the variant of Credit Card may be levied
11. Additional charges on delayed payment
12. Service tax.
13. A person with a good reputation/credit standing/goodwill is issued a credit card.
(Any two)

(iii) Net Working Capital:

Net Working Capital means the excess of current assets (any two current assets) over current
liabilities (any two current liabilities).
OR
Net Working Capital = Current Assets / Accounts receivable – Current Liabilities /Accounts
payable.

(iv) Advantages of Trade Credit:

1. It reduces the capital/ working capital requirement.
2. Convenient method of raising short term finance.
3. Simple/No formalities are involved
4. Credit is readily available to reputed business firms.
5. No interest is payable.
6. No security is required.
7. Flexible source of finance as no charge is created against the assets of the company.
8. More economical/cheaper than bank loan.
(Any two) (self-explanatory)

(v) Management as an activity:

As an activity, management means the art of getting things done through the efforts of other
people.
OR
As an activity, management guides, directs, regulates, and integrates human efforts towards
the achievement of certain common goals.
Management aims to achieve organizational goal.

(vi) Give training to the employees.

(vii) Span of control is the area of activity and number of functions, people or things for which
an individual or organisation is responsible.
OR

4
 Span of control refers to the number of subordinates under the manager's direct control. As
an example, a manager with five direct reports has a span of control of five.
OR
Number of employees that report to a manager.

(viii) Types of markets on the basis of subject of exchange:

• Commodity Market
• Capital market
• Money market
(Any two)

(ix) Points of difference between marketing and selling:

Sr.No. Basis Marketing Selling
1. Scope Wide scope Narrow scope
2. Focus Needs of buyer Needs of seller
3. Object / nature / Profit through customer Profits through sales
meaning satisfaction volume

4. Orientation Customer oriented Product oriented

5. Beginning Begins before production Begins after production
6. End Continuous after sales Ends with sales
7. Perspective Long term perspective Short term perspective
8. Slogan Let the seller beware Let the buyer beware
9. Approach Systematic Fragmented
(Any two)

(x) Physical Distribution:

Physical distribution means a series of interrelated activities involved in the movement of
materials and finished goods so that they are available at the right time and at the right place.
OR
It is a set of activities / storage / warehousing / inventory control / order processing (any
two elements of physical distribution) concerned with efficient movement of finished goods
from the producer’s end to the consumer’s end.
(Any other relevant point may also be accepted)

5
 PART II (60 Marks)
Answer any five questions

Question 2
(a) Explain any three advantages of Debentures from the Debenture holder’s point of [3]
view.
(b) With reference to the various dimensions of Business Environment, state what is [4]
meant by Political Environment. Mention any three components of Political
Environment.
(c) Enumerate any five points of importance of staffing as a function of management. [5]

Comments of Examiners Suggestions for Teachers

(a) Most candidates wrote the merits of debentures  Teach students shares and
from the viewpoint of a Company, like having no debentures in detail, clearly
voting rights. Some candidates got confused discussing the meaning, features,
between debentures and shares. A few candidates merits and demerits from debenture
instead of writing regular interest or return, holder’s point of view.
wrote that a debenture holder gets regular  Ask students to read and understand
dividend, which was incorrect. the question before attempting to
(b) Many candidates wrote an incorrect definition of answer.
Political Environment. Some candidates either  Explain the terms “interest” and
wrote management of public affairs or impact on “dividend”.
business. Many candidates wrote the components  Teach the elements of Macro
which were vague and irrelevant. A number of environment by giving examples of
candidates stated the names of specific defence/ the prevailing situations and
foreign policy instead of writing in general as relating them to the key words.
components of political environment. A few Stress upon the keywords which
candidates wrote about the political situation or bring out the complete meaning of
politicians or political structure, instead. the answer. For better retention of
(c) Many candidates gave correct headings but could topics couple classroom teaching
not substantiate the headings. Points like holistic with live examples.
approach, liberalisation and globalisation,  Clarify the terms Political, Legal
multiplier effect were not explained by many and Economic Environment.
candidates. Repetition of explanation as well as  Train students to understand the
the headings was also observed. Majority of the difference between the terms
candidates wrote about the features instead of “features” and “importance”.
importance of staffing. A few candidates wrote  Train students to write answers
about the process of staffing. giving headings with proper
explanation for each heading.
 Discuss each function of
management under the following
heads-meaning, steps, features,
merits and demerits.
6
 MARKING SCHEME
Question 2
(a) Advantages of Debentures, from the point of view of Debenture holders:
• Appeal to cautious investors – Large amount of finance can be raised by issue of
debentures from cautious and orthodox investors who prefer safety of investment and a
fixed return.
• Regular Return – Debenture holders are paid interest at a fixed rate and at periodic
intervals irrespective of profits.
• Safety of investment – Debentures are usually secured by a charge on the company’s
assets. So, their repayment is assured.
• Preference in repayment – In the event of winding up of the company, they are given
preference in repayment.
• Debentures have a definite maturity period.
• A debenture is usually more liquid investment, and an investor can sell or mortgage his
instrument to obtain loans from financial institutions.
• The interest of debenture-holders is protected by various provisions of the debenture
trust deed and the guidelines issued by the Securities and Exchange Board of India in
this regard.
(b) Political Environment:
Meaning:
Political Environment is the environment that consists of the forces concerning management
of public affairs and their impact on business.
Components:
• Constitutional framework.
• The political system – nature and ideology, political parties and power centres.
• The political structure – centre - state relations.
• Stability of the government
• Political processes – Party system, elections, and their funding.
• Foreign and Defence policy of a country
• Relation of the country with other countries.
• Type of government, i.e. single party or multi-party government
• Peace in the country.
• Attitude of government towards business organization.
[Any three components]

7
 (c) Importance of Staffing as a function of Management:
• Filling organizational positions – Staffing ensures that various organizational positions
are filled by right persons.
• Optimum use of human resources - by matching talent with the job.
• Employee satisfaction – by making the employee do the work which matches his
qualification and thus help him to develop and acquire better incentives and scope for
promotion.
• Key to other functions – Staffing injects life into the organization by providing the right
person for every job. The effectiveness of directing and controlling functions also
depends upon staffing.
• Long-term effect – Investment in human resource has long term effects on the
organization, thus decision in this direction should be taken with utmost care.
• Efficiency/ specialisation – Since staffing helps to place the right person at the right job,
efficiency of the organization increases.
• Huge investment
• Holistic approach
• Liberalisation and Globalisation
• Multiplier effect
(Any five points)

Question 3
(a) Distinguish between a Formal Organisation and an Informal Organisation. [3]
(b) Explain any four objectives of Communication. [4]
(c) Define Advertising. Explain any four features of Advertising. [5]

Comments of Examiners Suggestions for Teachers

(a) Many candidates did not bring out the differences  Explain the terms formal and
between formal and informal organization. informal organization by drawing
Social interactions or social relationships among examples from the surrounding
employees in informal organisations were environment and relating them to the
missed out by many. Several candidates neither concept being taught.
wrote the basis for a differentiation nor  Stress upon the use of correct
mentioned the basis within the sentences, they antonyms wherever required. For
simply gave one word as distinction. A few example - its structure is rigid - its
candidates repeated the points in the answers. structure is flexible (instead of "is
(b) In place of objectives of communication most of not rigid").
the candidates wrote characteristics / features /  Train students to write the
importance or elements of communication. differences in a tabular form and

8
 A few wrote, how it helps in overcoming barriers mention the basis to ensure that the
and how it helps in informing about products, differences co relate and there is no
thus increasing profits of the company. Some overlapping or duplication of points.
candidates explained the process of  Ask students to give complete
communication. In some scripts, the header was explanation if the basis of difference
not accompanied by a correct explanation. The is not given.
point 'to train and educate people' was written as  Help students to understand the
to 'train and educate managers' by several difference between features,
candidates. objectives, barriers and process of
(c) In the definition of advertising some candidates communication.
missed key words like paid/non-  Help students to understand the
personal/identified sponsor/promotion of goods difference between features and
and services Many candidates did not mention advantages of advertising.
four features of advertising. Several candidates  Discuss the concept of advertising
mistook features for advantages. Some in detail, focusing on important
candidates got confused between publicity and keywords like 'paid form', 'identified
advertising. sponsor', 'non personal
presentation', ‘ideas’ and ‘services’.
Keep emphasising on the different
elements of promotion.

MARKING SCHEME
Question 3
(a) Differences between a Formal and an Informal organisation are:
Sr. Basis Formal Organisation Informal Organisation
No.
1. Meaning Structure of Authority Network of social relationship
relationship
2. Formation Deliberately planned and Emerges spontaneously as a
created by management result of social interactions
among employees
3. Purpose / focus To achieve planned goals of To satisfy social and cultural
the organisation needs of members and fulfil
common interest
4. Structure Well defined structure No clear-cut structure
5. Nature Rigid/ stable/predictable Flexible/unstable,
unpredictable
6. Leadership Managers act as leaders by Members voluntarily choose
virtue of their superior their leaders
position

9
 7. Flow of Official lines of Members communicate in any
communication communication called scalar direction as per convenience
chain
8. Origin Originates as a result of Originates as a result of social
company rules and policies interaction
9. Interdependence Exists independently Within the framework
10. Rules & Written Oral
Regulations
11. Organisation Can be depicted Cannot be depicted
chart
(Any three)

(b) Objectives of Communication:

• To educate and train people: The management issue orders and instructions to
employees so that they may perform their jobs efficiently. Consumers are provided
information about new products and their uses.
• To motivate employees: Good communication can mould employee’s behaviour and
create cordial industrial relations.
• To promote managerial efficiency: Managers provide guidance to employees through
communication thereby improving their efficiency.
• To implement decisions quickly: Subordinates understand managerial decisions and
take steps to implement them through communication.
• To facilitate leadership: The effectiveness of leaders depends on their communication
skills.
• To carry out change: Free flow of ideas and information reduces workers’ resistance to
new technology and other changes.
• To create teamwork: Communication is designed to create mutual understanding and
cooperation among people working for living together.
• To secure feedback: Suggestions and complaints from workers and consumers enable
managers to improve work methods and procedures.
(Any four points)

(c) Advertising:
Meaning: Any paid form of non-personal presentation and promotion of ideas, goods and
services by an identified sponsor. (any other relevant point)
Features:
• Advertising is a paid form of communication. The advertiser has to pay to the advertising
media used for the space or time used to communicate the message to customers.
• It is a non-personal form of presenting information regarding a product, service or idea.
• It is done by an identified sponsor.

10
 • It is a form of mass communication.
• Advertising can be done through a wide variety of media.
• It is generally positive
• It is widely used and popular tool of product promotion.
• It is a one-way communication/ No feedback.
• It is less credible.
(any four points)

Question 4
(a) Explain any three sources of External Recruitment. [3]
(b) Give four differences between Taylor’s and Fayol’s Principles of Management. [4]
(c) What is meant by RTGS? Give any three features of RTGS. [5]

Comments of Examiners Suggestions for Teachers

(a) Majority of the candidates answered this  Explain sources of External
question correctly. However, while many Recruitment by giving live
candidates gave correct headings for the sources, situational examples.
they could not substantiate the headings with  Involve students in the learning
proper explanation, for example, for Gate hiring, process to help them retain what is
the explanation was - a notice is put for hiring taught.
people; for Placement Agencies - they hire  In long answers, headings with
people on behalf of the Company. Some relevant and adequate explanation
candidates repeated the sources, for example: must be given.
Internet and websites. Many candidates wrote  Conduct group discussions, role
advertising as a source but explained it as an plays and live examples to help
element of promotion mix. Newspapers, students retain the subject matter
magazines, advertisements were written as effectively.
separate points by several candidates. A few  Ensure that the students understand
candidates wrote about internal source of the differences between the asked
recruitment instead of sources of external principles of management.
recruitment.  Discuss the meaning and unique
features of RTGS and NEFT
(b) Most candidates answered this part correctly.
thoroughly.
However, some wrote the principles of
 Clarify and reinforce essential key
management instead of differentiating between
words which are mandatory to the
the two principles asked. The basis of distinction
concept.
was not mentioned by many candidates. Some
 Advise students to read the questions
candidates mentioned the basis, but the
carefully and write answers
differences did not co relate to the basis or to
according to the requirements, of the
each other. Repetition of points was also
question.
observed in some scripts.

11
(c) Majority of the candidates did not write key terms
such as transfer of funds in Real time / gross
basis / one to one basis, bank/branch to another.
Some candidates limited their explanation to
only the expansion of the abbreviation RTGS.
Several candidates wrote the merits instead of
features. A few candidates wrote the features of
NEFT instead of features of RTGS.

MARKING SCHEME
Question 4
(a) Sources of External Recruitment:
• Advertisement
• Employment exchange
• Educational institutions/ Campus recruitment
• Placement /Personnel consultants
• Casual callers /Waiting list
• Direct recruitment / Gate hiring
• Recommendation of present employees
• Labour contractors and jobbers
• Internet /Telecasting/e-recruitment
(Any three points with brief explanation)

(b) Differences between Taylor’s and Fayol’s Principles of Management:

Sr.No. Basis F.W. Taylor Henry Fayol
1. Meaning / Focus F.W. Taylor, is a father of Henry Fayol is a father of
scientific management who modern management who
introduced four principles of laid down 14 principles of
management, for increasing management, for improving
overall productivity. overall administration /
efficiency.
2. Concept Scientific management General theory of
administration.
3. Emphasis / Low level management Top level management
Perspective
4. Applicability Applies to specialised Universally applicable
organisations only
5. Basis of formation Observation and Personal experience
experimentation.

12
 6. Orientation Production and engineering Managerial functions
7. System of wage Differential payment Sharing of profit with
payment system. managers
8. Approach Engineer’s approach Manager’s approach
9. Personality Scientist / Father of Practitioner / Father of
scientific management modern management

(Any four points)

(c) RTGS:
Meaning: It is a fund transfer system under which transfer of funds takes place from one
bank to another on a ‘Real Time’ and ‘Gross basis’. Real Time means, there is no waiting
period and gross basis means, transactions are done on one to one basis rather than in
batches.
Features:
• Real Time Gross Settlement (RTGS) facility is provided only by CBS enabled bank
branches.
• RTGS transactions are processed individually and continuously rather than in batches.
• The minimum amount in a RTGS transaction is rupees two lakhs.
• There is no upper ceiling for RTGS transaction / maximum 10 lakh per day
• The receiving or beneficiary bank must credit the customer’s account within 30 minutes
of receiving the funds transfer message.
• Timing of RTGS is 7 a.m. to 6 p.m.
• It is irreversible/irrevocable /can’t be changed.
• It can be used for foreign remittances.
• No charges from the receiver.
• Sender has to pay some charges.
(meaning, any three features)

Question 5
(a) Explain any three factors that you will consider while determining the Working [3]
Capital requirement for a business enterprise.
(b) Explain four advantages of raising funds from Commercial Banks. [4]
(c) Explain the first five steps involved in the process of Planning, as a function of [5]
Management.

13
Comments of Examiners Suggestions for Teachers
(a) Many candidates got confused between the  Clarify the terms Fixed capital
factors affecting fixed capital and working and Working capital and factors
capital requirements. A few candidates wrote affecting them very clearly,
correct side headings but could not explain the giving relevant examples.
same. A few candidates wrote types of working  Insist upon students to write
capital instead. complete explanation of points.
 Explain the importance of time
(b) Majority of the candidates were not able to write
management to students. Instruct
correctly, the advantages of raising funds from
them to revise the answers
Commercial Banks. Some gave types of credits
written by them to avoid mistakes.
or functions of banks whereas others gave
 Discuss various types of loans
advantages of borrowing funds (from financial
and their advantages in detail.
institutions) without relating them to the bank
 Train students to write the steps
(c) Many candidates wrote the side headings involved in the process of
correctly but did not give any explanation. Some planning in correct order or
candidates gave a vague explanation to each of sequence.
the steps. A few candidates wrote steps of  Organize an activity in the class
controlling and a few others wrote the steps of in which the students themselves
organising. Some candidates wrote the steps plan, organize and control
involved in the process of Planning, in incorrect thereby going through the steps
sequence. of various functions of
management.

MARKING SCHEME
Question 5
(a) Factors to be kept in mind while considering Working Capital of a Business enterprise:
• Nature of Business - Manufacturing firms require considerable working capital as they
have to build up stock of raw-materials and finished goods on the other hand, public
utility undertakings require less working capital as they do not have to maintain
inventory.
• Size of Business – Firms carrying on large-scale operations require more working capital
than small scale firms.
• Manufacturing cycle – It means the time involved in the production of goods. Longer is
a time gap between the purchase of raw-materials and production of finished goods,
higher is a need for working capital.
• Rapidity of Turnover – When turnover is rapid, the amount of working capital required
is small. This is because working capital is locked up in business for a short period.
• Terms of purchase and sale – A business firm requires comparatively small amount of
working capital if it buys goods and services on credit and sells them in cash. On the
other hand, if it purchases in cash and sells on credit, larger amount of working capital
will be required.

14
 • Credit policy – when a liberal credit policy is followed, more working capital is required.
On the contrary, smaller working capital is needed in case of a tight credit policy.
• Goodwill of Business – An enterprise enjoying good reputation in the market can easily
and quickly obtain short-term loans from commercial banks. It requires a less amount of
working capital.
• Growth and expansion plans – growing and expanding firm requires more working
capital than a stagnant firm.
• Seasonal variation – working capital requirement of business which are subject to
seasonal variations are comparatively high during a particular season.
• Cyclical fluctuation – cyclical changes create emergency demand for working capital.
During boom period there is need for larger working capital to support higher sales.
• Operating efficiency
(Any three points with explanation of each point)

(b) Advantages of raising funds from Commercial Banks:

• Funds are available for a long period, often between three to ten years/ specified period.
• Repayment of loan/ interest amount can be made out of future earnings of the company.
• Interest payable on bank loan is a tax-deductible expense.
• Loan can be repaid in easy instalments
• Bank maintains utmost secrecy of the affairs of their clients.
• Bank provides fund in many ways. The borrower has a choice.
• Bank do not interfere in the management of the client’s business.
• Loan from a reputed bank increases the credit worthiness of the borrower.
• Trading on equity.
(Any four points)

(c) First Five Steps involved in the process of Planning:

1. Setting objectives
2. Developing the planning premises
3. Identifying alternative course of action
4. Evaluating alternatives and choosing the best alternative
5. Formulating derivative plans
(All steps in correct order with explanation of each step)

Question 6
(a) Explain any three methods of Consumer Protection. [3]
(b) What are Retained Earnings? Explain any three demerits of Retained Earnings. [4]
(c) Define Marketing. Briefly explain any three features of Marketing. [5]

15
Comments of Examiners Suggestions for Teachers
(a) Majority of the candidates were able to explain  Discuss clearly, the difference
the three methods of consumer protection between the Rights and
correctly. Some candidates confused methods of Responsibilities of Consumers,
Consumer Protection with the Rights / need for Consumer Protection and
responsibilities of Consumers or the Consumer methods of Consumer Protection.
Protection Act.  Instruct students to read and
(b) Most candidates did not explain Retained understand the question carefully
Earnings correctly. In many scripts, either of the before attempting to answer it.
two key words, retaining and reinvesting was  Emphasizing on key words while
missing. Though many candidates wrote the teaching the concept.
demerits of Retained Earnings correctly, a few  Explain the Retained Earnings and
their merits and demerits thoroughly.
wrote merits instead of demerits.
 Clarify market, marketing, its
(c) Many candidates defined market instead of functions, features, importance and
marketing. Some other candidates defined objectives in detail. Repeatedly
marketing without conveying the correct discuss types of markets and their
meaning. A large number of candidates wrote classification.
objectives and importance in place of features of
marketing. Also, in several scripts, the headings
were correct, but the explanation written was
vague, and incorrect.

MARKING SCHEME
Question 6
(a) Methods of Consumer Protection:
• Self -regulation by Business
• Consumer Awareness
• Consumer Associations
• Government control
• Publicity
• Awards
• Lok Adalats
• Public Interest Litigation
• Consumer Redressal Forums
• Environment Friendly Products
• Consumer Welfare fund
(Any three points)

16
(b) Retained Earnings:
Meaning: It is a process of retaining a part of the net profits year after year and reinvesting
the same in the business.
Demerits:
• The Management of the company may not always use retained earnings in the best
interest of shareholders and may invest in unprofitable fields.
• Heavy reinvestment leads to lower rate of dividend to shareholders.
• It may lead to unbalanced industrial growth because profits which might have been
invested outside in other industries are reinvested in same industry.
• It may be used to manipulate share prices on the stock exchange.
• Excess retained earnings leads to over capitalization.
• Excess retained earnings may result in monopoly and concentration of economic power
in few hands.
(Any three points)

(c) Marketing:
Meaning: All activities that direct the flow of goods and services from the producers to
consumers or ultimate users.
Features:
• Customer oriented – all business activities should be oriented towards the satisfaction of
customers’ needs.
• Marketing Research – in order to understand and satisfy the need of customers, relevant
information needs to be collected.
• Continuous and dynamic – it is a continuous process. A marketer has to consistently
monitor the environment and make changes accordingly.
• Precedes Production – it precedes production in the sense that identifying customers
needs and wants is the primary task of a marketing manager.
• Integrated Approach – there should be coordination among various departments of the
enterprise to achieve the desired goals.
• Pervasive – it is needed in both business and non-business organizations. In non-business
organisation, it may be in the form of spreading useful social information about hygiene,
family planning, etc.
(Or any other relevant points)
(Meaning of Marketing, any three features- headings and explanation of each)

17
Question 7
(a) Explain any three objectives of Publicity, as an element of Promotion Mix. [3]
(b) What are the various Channels of Distribution available to a Manufacturer in the [4]
process of distribution?
(c) Give five differences between Preference Shares and Equity Shares. [5]

Comments of Examiners Suggestions for Teachers

(a) Majority of the candidates wrote features of  Explain elements of Promotion
Publicity in place of objectives of Publicity. Mix, especially Publicity clearly
Some candidates could write only two objectives to the students.
of Publicity. Several candidates got confused  Differentiate Publicity from
between the objectives of Publicity and Advertising, giving relevant
Advertising / Sales promotion / Personal selling. examples.
 Discuss the differences between
(b) Most of the candidates answered the various
objectives and features of
Channels of Distribution available to a
Publicity, in the context of
Manufacturer in the process of distribution,
business.
correctly. The common errors noticed were:
 Regular revision of topics by
− only mentioned the flowchart or examples asking questions or by
of channels of distribution and ignored the conducting written tests will help
explanation. students to retain concepts.
− wrote elements of physical distribution.  Do a project with students on
marketing a product using all the
− did not write the correct channel of promotional strategies.
distribution from the manufacturer to the  Discuss in detail the different
consumer. channels of distribution. i.e., zero
(c) A large number of candidates did not write basis level, one level, two level and
of distinction to differentiate Preference Shares three level with proper
and Equity Shares and wrote one-word answer. explanation and a flowchart.
However, many others wrote the basis of  Point out the differences between
distinction but did not write the specific word Preference shares and Equity
which differentiates the two terms. Some wrote shares clearly.
vague and incomplete differences.  Explain shares and debentures
with the help of a flow chart.
 Conduct group discussions, role
plays to help students to retain
the subject matter effectively.

18
 MARKING SCHEME
Question 7
(a) Objectives of Publicity, as an element of Promotion Mix:
• To inform the public about a product or service
• To draw public attention to noteworthy event
• To save cost / economical / cheaper
• To highlight an organizations contribution to society.
• To warn people about undesirable activities or goods/ public
(Any three points – self-explanatory)
(b) Channel of Distribution available to a Manufacturer in the process of Distribution:
• Manufacturer – consumer (zero level)
• Manufacturer – Retailer – consumer (one level)
• Manufacturer – wholesaler – retailer – consumer (two level)
• Manufacturer – Agent - wholesaler – retailer – consumer (three level)
(Each point to be explained briefly)
(c) Differences between Preference Shares and Equity Shares:
Sr.No. Basis Preference Shares Equity Shares
1. Nominal value High Low
2. Risk Comparatively low Very high
3. Dividend Fixed Varies with company’s
profits
4. Voting rights Limited voting rights Full voting rights
5. Refund of capital Prior to refund of equity Repayment after all
capital other obligations are
refunded
6. Appeal Appeal to cautious and Appeal to bold and
conservative investors adventurous investors
7. Redemption Redeemable during the Not redeemable during
life of the company the lifetime of the
company
8. Convertibility Can be convertible into Not convertible into
equity shares preference shares
9. Arrear of dividend May accumulate Never accumulate
10. Issue of Right and Bonus Not entitled to receive Entitled to receive
shares Rights shares and Bonus Rights shares and Bonus
shares. shares.
11. Order of refund Before equity shares After preference shares
((Any five)

19
Question 8
(a) Explain any three features of Industrial Products. [3]
(b) Define Management. Briefly explain any three objectives of Management. [4]
(c) Explain any five qualities that a good leader should possess. [5]

Comments of Examiners Suggestions for Teachers

(a) Instead of features of Industrial Products, many  Ensure that students understand
candidates wrote about classification or meaning “Product", "types of products" and
of Industrial Products. Some candidates "features of different types of
explained the types of Industrial Products, e.g.: products" clearly.
raw materials, operating supplies, etc. Side  Train students to write side headings
headings were not written by several candidates. with explanation in long answers.
Most answers were vague, inadequate, and  Emphasise upon conceptual clarity
inaccurate. and stress upon use of correct
terminology.
(b) Most of the candidates attempted this part
 Organise interactive sessions and
correctly. Some confused the objectives of
give written practice of answers
Management with the features or importance of
frequently.
Management or objectives and importance of
 Explain the meaning, classification,
Marketing.
and features of industrial products
(c) A large number of candidates attempted this with appropriate examples.
question well. However, some candidates wrote  Ensure that students understand the
only the header without any explanation. A few concept of Management and its
candidates did not explain the qualities but the objectives and importance clearly.
output of the qualities. Some candidates confused  Explain the qualities of leadership in
leadership qualities with the qualities of a detail and give examples of leaders
salesmen. from real life.

MARKING SCHEME
Question 8
(a) Features of Industrial Products:
• Few Buyers – the number of buyers of industrial products is limited.
• Indirect/Derived demand – the demand for industrial products is derived from the
demand for consumer goods.
• Geographical concentration – Industrial markets are geographically concentrated. For
example, sugar mills are located in few regions.
• Shorter distribution channels – Due to a few and concentrated buyers, industrial products
are sold through direct channel or one level channel.
• Technical considerations – Industrial products are complex and involve technical issues.

20
 • Leasing out – Due to heavy price, some buyers may lease out capital equipment, instead
of outright purchase.
• Reciprocal buying.
(Any three features with explanation)

(b) Management:
Meaning: Management is what Management does. It is the task of planning, executing and
controlling.
Management is the art of knowing exactly what you want people to do and seeing that they
do it in the best and cheapest way.
Management is the force that integrates human and non-human resources into effective
operating unit.
(Or any other relevant answer)
Objectives:
• Growth and development/ Prosperity – Management must ensure that the business
organisations earn sufficient profits for growth and development.
• Quality products at fair prices – the aim of good management has always been to produce
better quality products at the minimum cost.
• Improving performance – Management should aim at improving the performance of
each and every factor of production by making them to perform well.
• Development of people – Management should work for its people as to ensure success.
Well-motivated people perform in a better way in achieving the goals.
• Discipline and Morale – Management maintains discipline and boost the morale of the
employees by giving them authority and responsibility.
• Optimum utilization of resources – The objective of management is to use various
resources of the enterprise in a most economical way.
• Innovation – management undertakes research and development to take lead over its
competitors and meet uncertainties of the future.
• Right decision – Management must ensure that the right decisions are taken at the right
time for the success of the business.
• Profitability
• Improving image/goodwill
(Any three objectives with brief explanation)

(c) Qualities of a good leader:

• Sound physique
• Intelligence
• Initiative
• Decisiveness
• Emotional stability
• Self-confidence
• Will power

21
 • Communication skills
• Vision and foresight
• Sense of responsibility
• Social skills
• Character/integrity/honesty/creativity
(Any five points with brief explanation)

Question 9
Write short notes on the following:
(a) Instalment Credit as a source of short-term funds for business. [4]
(b) Line and Staff Organisation. [4]
(c) Marketing Research. [4]

Comments of Examiners Suggestions for Teachers

(a) Majority of the candidates wrote the meaning of  Clarify to students how short-term
Instalment Credit as a source of short-term funds for funds are different from medium
business, correctly. However, a few candidates wrote term funds and long-term funds.
only the disadvantages of Instalment Credit. Common  Help students understand the
errors observed were: difference between "Line
− In Instalment Credit, purchase of current assets or Organisation" and "Line and Staff
goods was mentioned instead of fixed assets or Organisation" clearly giving
non-current assets. appropriate examples. Use
− Either the merits and demerits were not stated or quizzes / power point
stated incorrectly. presentations to bring out the
concept of different types of
− Vague and generalized explanation was given. organization at structures.
(b) In Line and Staff Organization, majority of the  Give enough practice of writing
candidates did not provide a satisfactory answer. short notes with meaning,
Some candidates stated the merits and demerits features, importance, advantages,
correctly, but the explanations given by many and disadvantages.
candidates were vague and generalized. Several
candidates defined Line Organisation and Staff
Organisation separately. Many candidates did not
write the advantages and disadvantages.
(c) The term Marketing Research could not be answered
correctly by many candidates. Some candidates made
errors by writing that it is the consumer who does
market research in order to find a suitable product.
Most of the candidates wrote the meaning of Market
or Marketing, instead of Marketing Research.

22
 MARKING SCHEME
Question 9
(a) Instalment Credit as a source of short-term funds for business:
Meaning: It refers to the facility of buying machinery, equipment, and other durable goods
on credit.
Advantages:
• The balance payment can be made in instalments after paying a part of the cost at the
time of delivery.
• It enables the business firm to use the asset and make payment out of the earnings.
Disadvantages:
• High rate of interest has to be paid in each instalment
• Unnecessary expenditure in purchasing asset which may not be needed.
• It may become difficult to pay instalments in future due to low earnings.
• High rate of interest has to be paid in each instalment
• Unnecessary expenditure in purchasing asset which may not be needed.
• It may become difficult to pay instalments in future due to low earnings.
(Give meaning, one advantage and one disadvantage)
(b) Line and Staff Organisation:
Meaning: It is a combination of the line structure and the functional structure. It is an
attempt to combine the advantages of specialisation and unity of command.
Advantages:
• Balanced decisions
• Discipline
• Flexibility
• Undivided responsibility
• Executive development
• Planned specialisation
Disadvantages:
• Conflicts
• Lack of coordination
• Expensive
• Ineffective staff
• Lack of creativity
(Give meaning, one advantage and one disadvantage)

23
 (c) Marketing Research:
Meaning: It refers to scientific and systematic investigation of all aspects of marketing. It
helps in collecting information about the preference and taste of customers and their
purchasing power.
Techniques / Sources: necessary information can be collected from trade journals, consumer
organisations, government publications, wholesalers, retailers, etc.
Advantages:
• Estimating the potential demand for a product
• Testing of new products
• Finding new users of existing products
• Judging the competitive strength and brand image
• Measuring the effectiveness of distribution channels
Disadvantages:
• Time consuming
• Expensive/costly
• Uncertainty

GENERAL COMMENTS

• Question 1(vii): Span of Control.

Topics found • Question 1 (x) : Physical Distribution.
difficult/ • Question 2 (b) : Political Environment.
confusing by • Question 2 (c) : Importance of Staffing.
candidates • Question 3 (b) : Objectives of Communication.
• Question 3 (c) : Meaning and features of Advertising
• Question 5 (b) : Advantages of raising funds from Commercial Banks.
• Question 6 (b) : Demerits of Retained Earnings
• Question 7 (a) : Objectives of Publicity.
• Question 8 (a) : Features of Industrial Products.
• Question 9 (b) : Line and Staff Organisation.
• Question 9 (c) : Marketing Research.

24
 • Concentrate in the class for better understanding of concepts.
• Keep abreast with the updates relating to the subject/topics.
• Note down the key points or underline the key words in the textbook.
Suggestions
for Students • Understand meaning, features, merits, demerits, importance, and
objectives of each term / concept.
• Practice questions based on case studies.
• Solve previous years’ ISC question papers for better understanding of the
topics.
• Avoid selective study.
• Instead of learning by rote, understand terms / concepts and express in
your own words with appropriate key words.
• Manage your time well while answering Part I and Part II. Estimate the
time required for attempting both short and long answer questions and
for revising the answers.
• Practice by writing key words and headers of different topics.
• Revise the chapters again and again before examination.
• Read the question, understand, and then answer.
• Answer all subjective questions with side headings and explanations.
Ensure that heading and explanation in an answer correlate with one
another.

25
Analysis of Pupil
Performance
`

COMMERCE

Research Development and Consultancy Division

Council for the Indian School Certificate Examinations
New Delhi
Year 2018
__________________________________________________________________________________

Published by:
Research Development and Consultancy Division (RDCD)
Council for the Indian School Certificate Examinations
Pragati House, 3rd Floor
47-48, Nehru Place
New Delhi-110019

Tel: (011) 26413820/26411706

E-mail: [email protected]

© Copyright, Council for the Indian School Certificate Examinations

All rights reserved. The copyright to this publication and any part thereof solely vests in the Council for
the Indian School Certificate Examinations. This publication and no part thereof may be reproduced,
transmitted, distributed or stored in any manner whatsoever, without the prior written approval of the
Council for the Indian School Certificate Examinations.
 FOREWORD

This document of the Analysis of Pupils’ Performance at the ISC Year 12 and ICSE Year 10
Examination is one of its kind. It has grown and evolved over the years to provide feedback to
schools in terms of the strengths and weaknesses of the candidates in handling the examinations.

We commend the work of Mrs. Shilpi Gupta (Deputy Head) of the Research Development and
Consultancy Division (RDCD) of the Council and her team, who have painstakingly prepared this
analysis. We are grateful to the examiners who have contributed through their comments on the
performance of the candidates under examination as well as for their suggestions to teachers and
students for the effective transaction of the syllabus.

We hope the schools will find this document useful. We invite comments from schools on its
utility and quality.

Gerry Arathoon
October 2018 Chief Executive & Secretary

i
 PREFACE

The Council has been involved in the preparation of the ICSE and ISC Analysis of Pupil Performance
documents since the year 1994. Over these years, these documents have facilitated the teaching-learning
process by providing subject/ paper wise feedback to teachers regarding performance of students at the ICSE
and ISC Examinations. With the aim of ensuring wider accessibility to all stakeholders, from the year 2014,
the ICSE and the ISC documents have been made available on the Council’s website www.cisce.org.

The documents include a detailed qualitative analysis of the performance of students in different subjects
which comprises of examiners’ comments on common errors made by candidates, topics found difficult or
confusing, marking scheme for each answer and suggestions for teachers/ candidates.

In addition to a detailed qualitative analysis, the Analysis of Pupil Performance documents for the Examination
Year 2018 have a component of a detailed quantitative analysis. For each subject dealt with in the document,
both at the ICSE and the ISC levels, a detailed statistical analysis has been done, which has been presented in
a simple user-friendly manner.

It is hoped that this document will not only enable teachers to understand how their students have performed
with respect to other students who appeared for the ICSE/ISC Year 2018 Examinations, but also provide
information on how they have performed within the Region or State, their performance as compared to other
Regions or States, etc. It will also help develop a better understanding of the assessment/ evaluation process.
This will help teachers in guiding their students more effectively and comprehensively so that students prepare
for the ICSE/ ISC Examinations, with a better understanding of what is required from them.

The Analysis of Pupil Performance document for ICSE for the Examination Year 2018 covers the following
subjects: English (English Language, Literature in English), Hindi, History, Civics and Geography (History
and Civics, Geography), Mathematics, Science (Physics, Chemistry, Biology), Commercial Studies,
Economics, Computer Applications, Economic Applications, Commercial Applications.
Subjects covered in the ISC Analysis of Pupil Performance document for the Year 2018 include English
(English Language and Literature in English), Hindi, Elective English, Physics (Theory), Chemistry (Theory),
Biology (Theory), Mathematics, Computer Science, History, Political Science, Geography, Sociology,
Psychology, Economics, Commerce, Accounts and Business Studies.

I would like to acknowledge the contribution of all the ICSE and the ISC examiners who have been an integral
part of this exercise, whose valuable inputs have helped put this document together.

I would also like to thank the RDCD team of, Dr. M.K. Gandhi, Dr. Manika Sharma, Mrs. Roshni George and
Mrs. Mansi Guleria who have done a commendable job in preparing this document.

Shilpi Gupta
October 2018 Deputy Head - RDCD

ii
CONTENTS

Page No.

FOREWORD i

PREFACE ii

INTRODUCTION 1

QUANTITATIVE ANALYSIS 3

QUALITATIVE ANALYSIS 10
 INTRODUCTION

This document aims to provide a comprehensive picture of the performance of candidates in the
subject. It comprises of two sections, which provide Quantitative and Qualitative analysis results in
terms of performance of candidates in the subject for the ISC Year 2018 Examination. The details of
the Quantitative and the Qualitative analysis are given below.

Quantitative Analysis
This section provides a detailed statistical analysis of the following:

 Overall Performance of candidates in the subject (Statistics at a Glance)

 State wise Performance of Candidates
 Gender wise comparison of Overall Performance
 Region wise comparison of Performance
 Comparison of Region wise performance on the basis of Gender
 Comparison of performance in different Mark Ranges and comparison on the basis of Gender for
the top and bottom ranges
 Comparison of performance in different Grade categories and comparison on the basis of Gender
for the top and bottom grades

The data has been presented in the form of means, frequencies and bar graphs.

Understanding the tables

Each of the comparison tables shows N (Number of candidates), Mean Marks obtained, Standard
Errors and t-values with the level of significance. For t-test, mean values compared with their
standard errors indicate whether an observed difference is likely to be a true difference or whether it
has occurred by chance. The t-test has been applied using a confidence level of 95%, which means
that if a difference is marked as ‘statistically significant’ (with * mark, refer to t-value column of the
table), the probability of the difference occurring by chance is less than 5%. In other words, we are
95% confident that the difference between the two values is true.

t-test has been used to observe significant differences in the performance of boys and girls, gender
wise differences within regions (North, East, South and West), gender wise differences within marks
ranges (Top and bottom ranges) and gender wise differences within grades awarded (Grade 1 and
Grade 9) at the ISC Year 2018 Examination.

The analysed data has been depicted in a simple and user-friendly manner.

1
Given below is an example showing the comparison tables used in this section and the manner in
which they should be interpreted.

The table shows comparison

between the performances of boys
and girls in a particular subject.
Comparison on the basis of Gender
The t-value of 11.91 is significant at
Gender N Mean SE t-value 0.05 level (mentioned below the
Girls 2,538 66.1 0.29 table) with a mean of girls as 66.1
11.91*
Boys 1,051 60.1 0.42 and that of boys as 60.1. It means
*Significant at 0.05 level
that there is significant difference
between the performance of boys
and girls in the subject. The
probability of this difference
occurring by chance is less than 5%.
The mean value of girls is higher
than that of boys. It can be
interpreted that girls are performing
significantly better than boys.

The results have also been depicted

pictographically. In this case, the girls
performed significantly better than the
boys. This is depicted by the girl with a
medal.

Qualitative Analysis
The purpose of the qualitative analysis is to provide insights into how candidates have performed in
individual questions set in the question paper. This section is based on inputs provided by examiners
from examination centres across the country. It comprises of question wise feedback on the
performance of candidates in the form of Comments of Examiners on the common errors made by
candidates along with Suggestions for Teachers to rectify/ reduce these errors. The Marking Scheme
for each question has also been provided to help teachers understand the criteria used for marking.
Topics in the question paper that were generally found to be difficult or confusing by candidates,
have also been listed down, along with general suggestions for candidates on how to prepare for the
examination/ perform better in the examination.

2
STATISTICS AT A GLANCE

Total Number of
Candidates: 30,654

Mean Marks: Highest Marks: 100

63.3 Lowest Marks: 01

3
 PERFORMANCE (STATE-WISE & FOREIGN)
West Bengal 62.5
Uttarakhand 61.4
Uttar Pradesh 60.9
Tripura 43.1
Telangana 72.8
Tamil Nadu 73.8
Sikkim 51.9
Rajasthan 64.4
Punjab 63.7
Puducherry 83.3
Odisha 57.9
New Delhi 75.3
Meghalaya 75.0
Maharashtra 76.6
Madhya Pradesh 67.2
Kerala 72.7
Karnataka 76.1
Jharkhand 61.2
Himachal Pradesh 61.2
Haryana 70.9
Gujarat 65.2
Goa 77.5
Chhattisgarh 53.7
Chandigarh 73.1
Bihar 71.4
Assam 86.5
Andhra Pradesh 61.9
Foreign 72.4

The States/ UTs of Assam, Puducherry and Goa secured highest

mean marks. Mean marks secured by candidates studying in
schools abroad were 72.4.
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 GENDER-WISE COMPARISON

GIRLS BOYS

Mean Marks: 66.4 Mean Marks: 60.4

Number of Number of
Candidates: 14,972 Candidates: 15,682

Comparison on the basis of Gender

Gender N Mean SE t-value
Girls 14,972 66.4 0.16
26.88*
Boys 15,682 60.4 0.16
*Significant at 0.05 level

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 REGION-WISE COMPARISON

East North
Mean Marks: 62.4 Mean Marks: 61.5

Number of Number of
Candidates: 12,848 Candidates: 13,865

Highest Marks: 100 Highest Marks: 100

Lowest Marks: 01 Lowest Marks: 10

REGION
Mean Marks: 73.6 Mean Marks: 71.6

Number of Number of
Candidates: 1,989 Candidates: 1,838

Highest Marks: 100 Mean Marks: 72.4 Highest Marks: 100

Lowest Marks: 18 Lowest Marks: 16
Number of
Candidates: 114
South West
Highest Marks: 100
Lowest Marks: 28

Foreign
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 Mean Marks obtained by Boys and Girls-Region wise

76.2 74.5 76.1

70.7 68.9 69.2
64.7 65.4
58.1 59.9

North East South West Foreign

Comparison on the basis of Gender within Region

Region Gender N Mean SE t-value
Girls 7,158 64.7 0.22
North (N) Boys 6,707 58.1 0.23
20.22*
Girls 5,841 65.4 0.25
East (E) Boys 7,007 59.9 0.24
15.89*
Girls 1,043 76.2 0.52
South (S) Boys 946 70.7 0.59
6.90*
Girls 877 74.5 0.64
West (W) Boys 961 68.9 0.63
6.31*
Girls 53 76.1 2.45
Foreign (F) Boys 61 69.2 2.48
1.97*
*Significant at 0.05 level

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 MARK RANGES :
COMPARISON GENDER-WISE

Comparison on the basis of gender in top and bottom mark ranges

Marks Range Gender N Mean SE t-value
Girls 4,211 89.8 0.09
Top Range (81-100) Boys 3,132 89.6 0.10
1.63
Girls 24 18.4 0.47
Bottom Range (0-20) Boys 57 17.1 0.58
1.79

Boys Girls All Candidates

89.6
81 - 100 89.8
89.7

69.9
61 - 80 70.5
70.3

50.3
41 - 60 51.1
50.7

34.8
21 - 40 35.3
35.0

17.1
0 - 20 18.4
17.5

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 GRADES AWARDED :
COMPARISON GENDER-WISE

Comparison on the basis of gender in Grade 1 and Grade 9

Grades Gender N Mean SE t-value

Girls 2,148 94.5 0.07
Grade 1 Boys 1,528 94.6 0.08
-0.67
Girls 385 25.8 0.15
Grade 9 Boys 801 25.6 0.12
1.29

Boys Girls All Candidates

94.6
1 94.5
In Grade 1 and Grade 9 no 94.5

significant difference was 2

84.3
84.4
84.4
observed between the average
74.3
performance of girls and boys. 3 74.5
74.4
64.4
4 64.6
64.5
56.9
5 57.0
57.0
51.9
6 52.1
52.0
46.9
7 47.1
47.0
39.1
8 39.3
39.2
25.6
9 25.8
25.7

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 PART I (20 Marks)
Answer all questions.

[10 × 2]
Question 1
Answer briefly each of the questions (i) to (x).
(i) Name the two dimensions of business environment.
(ii) What is meant by factoring?
(iii) What is a debit card?
(iv) Why is management considered to be a discipline?
(v) Explain any two sources of external recruitment used in today’s world.
(vi) Name the four elements of directing, as a function of management.
(vii) Distinguish between advertisement and publicity.
(viii) Mention two types of markets, on the basis of the position of buyers and sellers.
(ix) The producer of ‘Lime Fresh’ tea introduces ‘Buy one Get one’ scheme on all the
products of ‘Lime Fresh’. Identify the promotional strategy used by the producer.
State any one objective that could be met by this strategy.
(x) Expand the following terms:
(a) RTGS
(b) NEFT

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Comments of Examiners
(i) Some candidates substituted the word Environment
with Economic. A number of candidates wrote Suggestions for teachers
Internal and External environment / Dynamic and − Draw flow charts with proper
Relative environment / benefits of Micro and classification and guide students to
Macro environment instead of just naming the two use the correct terminology.
− Give adequate practice to the
dimensions of business environment – Micro and
students to answer question as per its
Macro. requirements.
(ii) Many candidates misinterpreted ‘factoring’ as − Explain similar sounding terms with
‘factory’ and hence wrote about factors of adequate examples indicating to the
production needed to process the raw material into students how these could be
finished goods. The terms Fixed Assets and Current misinterpreted.
− Test the students frequently which
Assets were substituted for Accounts Receivable by
will help them in retaining the subject
some candidates. matter.
(iii) Most of the candidates got confused between the − Through written work, give adequate
meaning of debit card, credit card, smart card and practice to the students to answer
an ATM card. Those who did write on the debit questions on differences.
card missed out on important keywords/phrases − Conduct a quiz in the class for
popular business acronyms.
such as it being issued by the bank and that a person
− Explain to the students that when a
needs to have a bank account in order to avail its question begins with ‘What’, the
facility. Some candidates gave the uses of a debit meaning is required.
card instead of its meaning. − Undertake case studies for
(iv) Majority of the candidates explained the Principle developing application skills.
of Discipline as advocated by Henry Fayol instead − Differentiate clearly between the
of explaining it as a systematized body of meaning of discipline as advocated
by Fayol and management as a
knowledge, a separate subject of study having its discipline.
own principles and practices of administration. − Explain the internal and external
(v) Some candidates explained the internal sources of sources of recruitment giving
recruitment like promotion and transfers. A few examples from real life situations.
candidates mentioned the external sources while in − Clearly bring out the difference
some cases the explanation was ambiguous. In a between leadership and supervision.
− Reiterate the elements of different
few answers the sources mentioned were repetitive
functions of management.
and overlapping, for example- internet and websites − Explain the meaning of and
or print media like newspapers and magazines. differences between the elements of
(vi) Most of the candidates mentioned the different promotion mix through real life
functions of management instead of elements of examples.
directing. Some candidates explained Fayol’s
principle of unity of direction. A few candidates
wrote the steps to directing or the objectives of
directing. In a few answers the words ‘guide’ and ‘guidance’ were substituted in place of
‘leadership’.

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 (vii) While differentiating between advertisement and
publicity, a few candidates substituted the term − Clearly explain the different types of
sponsor with owners / firm / organization for markets by giving examples of
advertising and the point on advertising being a paid products from daily life, which can be
form was substituted with it being a commercial sold, based on the area of sale,
volume of business, subject of
transaction. Some candidates were confused exchange, etc.
between the meaning of publicity and salesmanship. − Do a project with the students on
Differences on the same parameters were found to marketing a product, using all the
be lacking in several cases, with the explanation of promotional strategies.
advertising being correct but the explanation of − Explain, with examples, the
publicity not being corresponding to the one on difference between increasing sales
and spot sales.
advertising.
(viii) Majority of the candidates were unable to
understand the basis of classification asked for. They
wrote their answer basing the market on volume of business / nature of the transaction / geographical
area. Answers of many candidates showed that they were confused about the position of wholesalers
and retailers in the primary, secondary and terminal markets.
(ix) Many candidates could not identify the promotional strategy. A few candidates, who were able to
identify the strategy were unable to explain its objective. Some candidates wrote the correct objective
despite being unable to identify the strategy. In a few answers terms in the objective like off season,
on the spot were missing.
(x) A few candidates explained the abbreviations instead of giving their full forms. Many candidates
substituted the word National with the word Net / Nation while expanding NEFT. In case of RTGS
the word service was substituted for the word settlement.

MARKING SCHEME
Question 1
(i) The two main dimensions of business environment are Micro and Macro.

(ii) Factoring:
Factoring is a way of raising short term finance through sale or mortgage of book
debts/Accounts receivable/Debtors. Finance companies purchase Accounts Receivable and
make up to 60% advances against accounts pledged with them. The business is relieved of the
cost and effort of collecting debts and bad debts losses. The debtors of the firm make payments
to it, which in turn forwards them to finance companies.
(iii) Debit Card:
A debit card is a card issued by the bank to the customer. The customer can get the debit card
only by depositing money in the bank. The card holder can make immediate payment for the
goods purchased or services availed provided, the seller has a terminal facility. On presenting
the debit card the terminal automatically transfers money from the buyers account to the
seller’s account.
The Debit card can be used to withdraw money from the ATM.

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 The card can be used to spend money upto the deposit made by the cardholder. No
overdraft/credit facility is given to a debit card holder. (Any two points)
(iv) Management is considered to be a discipline as it is a specialized branch of knowledge which
involves the study of principles and practices of administration. It refers to the systematized
body of knowledge and a separate field of study. It involves financial management, marketing
management, etc.
(v) External sources of Recruitment:
1. Advertisements
2. Campus recruitment
3. Casual callers
4. Employment exchange
5. Direct recruitment or gate hiring
6. Placement agencies
7. Internet recruiting
8. Job fairs
9. Recommendations of employees.
10. Personal contacts.
11. Contract basis (Any two points with brief explanation)
(vi) Elements of Directing
• Supervising/supervision
• Leadership
• Motivation/motivating
• Communication/communicating
(vii) Basis Advertisement Publicity
1. Sponsor The identity of the sponsor is The identity of the sponsor is not
clearly known known
2. Source The message originates from the The message originates from the
advertiser media
3. Payment The advertiser has to pay to the The individual involved does not
media owners – paid form have to pay directly – non paid
form – media sponsors
4. Control The sponsor has control over the Media has control over the
content and timings content and timings
5. Type of Positive Can be positive or negative
message
conveyed
6. Focus On the target audience On awareness
(Any two points of difference)
(viii) Types of Markets on the basis of position of buyers and sellers:
1. Primary market
2. Secondary market
3. Terminal market (Any two)

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 (ix) Promotional strategy used is Sales Promotion.
The objectives:
• To inspire on the spot buying
• To increase immediate sales
• To clear old stocks
• To supplement advertising and personal selling
• To generate demand over off season (Any one)
(x) (a) RTGS – Real Time Gross Settlement
(b) NEFT – National Electronic Funds Transfer

PART II (60 Marks)

Answer any five questions.
Question 2
(a) Explain any three barriers to Communication. [3]
(b) Explain any four features of Business Environment. [4]
(c) Discuss the need for the principles of management. [5]

Comments of Examiners
(a) Several candidates wrote correct headings but the Suggestions for teachers
explanation under the headings was either
- Clearly bring out the distinction
inadequate or did not relate to the header. A few
between features and importance of
candidates merged two different barriers to business environment.
communication, for example, semantic and - Emphasise that, wherever possible,
language, and explained them as one barrier. In a explanation of the long answers
few answers there was no clarity in status and must be substantiated with suitable
organizational barriers. Some candidates explained examples.
- Train students to explain a point as
the elements of communication instead of barriers to per its heading.
Communication. - Guide students to read and understand
(b) A large number of candidates, instead of explaining the questions before attempting
the features of business environment, wrote on either them.
its importance or its benefits, while many candidates - Ensure that the students are familiar
with all the topics and sub- topics in
wrote on SWOT analysis. Even amongst those who
the syllabus.
wrote the features, a few did not give the complete - Regularly take oral and written tests
explanation. to help students in retaining the
(c) Many candidates, instead of discussing the need for contents of the answers.
principles of management, wrote on either its - Create mind maps and also train
students to make their own mind
importance or its features while a few candidates
maps for better retention.
discussed the principles of management as given by
Henry Fayol or FW Taylor. Some candidates
explained the needs for principles of management in
terms of their need for employees, workers and subordinates.
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 MARKING SCHEME
Question 2
(a) Barriers to Communication:
1. Physical Barrier
2. Personal or Psychological Barrier
3. Semantic Barrier
4. Language Barrier
5. Status Barrier
6. Organizational Barrier
7. Inattention
8. Premature evaluation
9. Choice of Wrong medium
10. Communication overload
11. Wrong Translation
12. Poor Retention (Any three with brief explanation)
(b) Features of Business Environment:
1. Totality of External Forces
2. General and Specific Forces
3. Interrelatedness/interdependent
4. Complexity
5. Dynamic
6. Uncertainty
7. Relativity
8. Multidimensional
9. Diversity
10. Non-controllable (Any four features with brief explanation)
(c) Need for principles of Management:
• To increase efficiency
• To crystallize the true nature of management
• To train managers
• To improve research
• To attain social goals
• To clarify thinking
• To spread knowledge
• To evaluate managerial behaviour (Any five features with brief explanation)

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Question 3
(a) Discuss three advantages of ploughing back of profit, from the company’s point of [3]
view.
(b) Explain why management is considered to be a science. [4]
(c) What is labelling? Explain four advantages of labelling. [5]

Comments of Examiners
(a) The explanation given by majority of the candidates
was inadequate and incomplete, lacking conviction. Suggestions for teachers
Most of the candidates were unable to establish the − Teach students the advantages of
fact that ploughing back of profits is a simple and ploughing back of profits, both, from
convenient method of self-financing. Several the company’s point of view and the
candidates gave the merits of retained earnings from investor’s point of view.
the investors point of view. − Clarify the distinction between
(b) A number of the candidates mixed up the points of management as an art, science or
management as a science with management as an art profession through flow charts and
and profession as well as with the principles of mind mapping.
management given by Henry Fayol and F.W Taylor. − Explain the meaning of labelling
Many candidates did not give the explanation in through real life examples.
points but wrote them in a paragraph form without − Do a comparative analysis of the
meaning of different terms like
highlighting the specifics. Some candidates simply
labelling, branding and packaging.
expanded the headings. Several candidates were
− Ask the students to incorporate the
unable to give an appropriate explanation of how the important key words and phrases in
principles of management are universally valid, the answers as well as to bring out
thereby making management a science. the unique features of the topic
(c) Many candidates did not give the meaning of wherever necessary.
labelling or gave an incomplete meaning. Several − Stress upon the fact that headings
candidates mixed up the meaning of labelling with and explanation must focus on the
that of branding and packaging. In a few answers, questions asked.
either the advantages were repeated, or the points − Conduct regular oral and written
given were not specific. tests.

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 MARKING SCHEME
Question 3
(a) Advantages of ploughing back of profits:
• Cost effective
• Simple/convenient/flexible
• No legal formalities
• No charge on assets
• No restriction on freedom of management
• Adds to the financial strength/ credit worthiness
• To face unforeseen contingencies
• To redeem debts
• To replace obsolete assets
• To take advantage of business opportunities
• To stabilize rate of dividend
• Expansion and modernization (Any three with brief explanation)

(b) Management is considered to be a science because it fulfils the essential requirements to qualify
as a science.
• Systematic/organised body of knowledge
• Observation/ experimentation/ observation and experimentation
• Cause and effect relationship
• Universal validity of principles (All four with brief explanation)
(c) Labelling:
Labelling means designing a label to be put on the package.
Advantages:
• Social service (statutory warning/legal restrictions/obligatory statements about product)
to customers.
• Avoids price variations by publishing the price on the label.
• Helps advertising activity of the organization.
• Helps customers to assess the superiority of a product.
• Guarantee for standard of the product.
• Information convey- usage, date, time, product details (false claims can be prevented)
(Any four with brief explanation)

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Question 4
(a) Give three points of difference between a product and a service. [3]
(b) What are the different types of short term financial assistance provided by the [4]
commercial banks to business houses?
(c) Explain any five types of debentures through which a company can collect borrowed [5]
capital from the public.

Comments of Examiners
(a) Many candidates gave the differences in paragraph Suggestions for teachers
form without writing the basis of distinction. Several − Inculcate the habit amongst the
candidates wrote irrelevant and vague differences. students, of writing the differences
Some candidates explained various types of between two terms in a tabular form
products. along with the basis of difference as
(b) Majority of the candidates wrote about trade credit, this helps in avoiding repetition.
instalment credit or factoring instead of cash credit. − Teach the topic of financing in depth
Several candidates explained bank draft instead of so that each feature of short term
bank overdraft. Some candidates gave only two finance is clear to students.
forms of raising short term finance instead of the − Conduct a quiz in the class on the
features of short term finance raised
four forms.
from the banks and the features of
(c) Majority of the candidates were unable to explain other forms of finance such as trade
different types of debentures. Some candidates credit, instalment credit, etc.
mentioned the correct type but were unable to − Clearly bring out the meaning,
explain them, especially the registered and bearer features and differences between
debentures. In case of convertible debentures, a few different types of preference shares
candidates did not mention the word equity which and debentures.
was essential. Some candidates wrote cumulative − Insist on the use of the correct
and non-cumulative debentures as types of terminology in the answers.
debentures, which are not types of debentures but − Tell the students that explanation of
types of preference shares. a heading does not mean its
expansion but involves detailing.

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 MARKING SCHEME
Question 4
(a) Difference between a product and service:
Basis Product Service
1 Tangibility It can be seen, felt and touched It cannot be seen, felt and
(Tangible) touched (Intangible)
2 Standardisation Standardised Cannot be standardised.
3 Inseparability Fully separable, remote Not separable from service
between buyer and transactions are possible. provider, remote
seller transactions are not
possible.
4 Quality Can be measured and controlled. Difficult to control and
measure.
5 Inventory Can be stored. Cannot be stored.
6 Sensitivity to time Low sensitivity. High sensitivity.
7 Risk Product can be replaced. Service once delivered
cannot be replaced.
8 Customisation Increases cost and restricts sales. Increases Customer delight.
9 Perishability Usually durable. Usually perishable.
10 Ownership Transferable. Not transferable.
(Any three)

(b) Short term financial assistance provided by commercial bank are:

1. Loans and Advances: A loan is a direct advance made in lump sum which is credited to
a separate loan account in the name of the borrower. The borrower withdraws the full
amount and repays it at one go or in instalments. He has to pay an interest on the whole
amount. Loans may be secured or unsecured.
2. Cash Credits: It is a revolving credit arrangement under which a borrower is allowed to
borrow upto a certain limit. Unlike a loan, it is a running account from which the
amounts can be withdrawn as and when needed. Interest is charged only on the amount
withdrawn and not the entire amount.
3. Bank Overdrafts: Loan arrangement under which a bank extends credit up to a
maximum amount (called overdraft limit) against which a current account customer can
write cheques or make withdrawals. Bank charges interest on overdrawn amount.
4. Discounting of bills: The purchase of bills of exchange, promissory notes and hundies
by banks before maturity. The bank pays less than the nominal value of the bill,
deducting a certain percentage for interest. At maturity, the bank collects the full
nominal value from the drawee. (All four)
(c) Type of debentures:
1. Secured debentures/mortgaged.
2. Unsecured Debentures/naked.
3. Redeemable Debentures.
4. Irredeemable Debentures.
5. Registered Debentures.
6. Bearer Debentures.
7. Convertible Debentures.
8. Non-convertible debentures. (Any five with brief explanation)
19
Question 5
(a) Explain the need for consumer protection. [3]
(b) ‘Planning is not a guarantee of success.’ In this context, explain the limitations of [4]
Planning.
(c) Explain the following Principles of management, as advocated by Henry Fayol: [5]
(i) Stability of tenure
(ii) Discipline
(iii) Unity of command
(iv) Unity of Direction
(v) Order

Comments of Examiners
(a) Instead of explaining the need for consumer Suggestions for teachers
protection, many candidates wrote on the rights and − Explain the need for consumer
methods of consumer protection while a few protection from the point of view of
candidates explained the legislative rights of the the business by giving different
consumers. types of situations.
(b) A large number of candidates, instead of explaining − Test the students frequently by
giving them a variety of questions so
the limitations of planning wrote either its features that they are able to understand the
or importance. In a few answers, the limitations were requirements of each one of them.
repeated/ the points given were not specific. − Stress upon key terms for conceptual
(c) Many candidates were unable to explain the concept clarity.
underlying the principles. For principle of order, − Give sufficient written practice
instead of writing on material and social order, which will help the students to
formulate better answers.
several candidates wrote that it involves instructions − Explain all the fourteen principles of
given by the employer or the boss to his employees. management, laying stress on their
Several candidates interchanged the explanation of core concept and cause and effect of
unity of command and unity of direction. The each one of them.
explanation of principle of stability of tenure was − Stress that all the principles of
also given vaguely by a large number of candidates. management are equally important.

20
 MARKING SCHEME
Question 5
(a) Need for consumer protection:
1. Consumer is the purpose of business
2. Business is a means of human welfare
3. Multiple objectives
4. Growth with social justice
5. Stakeholder approach
6. Responsibility with power
7. Theory of trusteeship
8. Business ethics
9. Self-interest (Any three with brief explanation)

(b) Limitations of Planning are:

1. Costly process/uneconomical/expensive
2. Time-consuming/delayed action
3. Rigidity
4. Lack of accuracy
5. False sense of security
6. Psychological barrier
7. External limitations
8. Human elements (Any four with brief explanation)

(c) Principles of Management by Henry Fayol:

1. Stability of tenure: It takes time to learn and get used to a job. Therefore, a reasonable
security of service should be given to all employees. It helps to develop loyalty on the
part of the employees. Unnecessary labour turnover increases the cost of training and
lowers the goodwill of the firm.
2. Discipline: Good supervision at all levels, clear and fair agreements and judicially
applied sanctions [penalties] must be maintained in all organization. Application of this
principle is essential for smooth functioning. Mostly implemented as essential for smooth
functioning but reward and punishment pattern may vary in different organizations.
3. Unity of command: An employee should receive orders from one and only one superior
at a time. Non-application of the principle undermine authority, weaken discipline,
divide loyalty and create confusion or delay in action and completion.
4. Unity of direction: There should be one head and one plan for a group of activities having
the same objectives. Non-applicability makes co-ordination and unity of action
impossible.
5. Order: There must be a material and social order in every organization- a place for
everything and everything at its right place as well as a place for everyone and everyone
in his appointed place. Material and social order leads to smooth and successful
functioning of an organization. (All five with brief explanation)
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 Question 6
(a) Explain any three types of training that can be given to an employee. [3]
(b) What is Branding? Give any three advantages of branding to the marketers. [4]
(c) Explain the various steps involved in the process of organising. [5]

Comments of Examiners
(a) Majority of the candidates explained on the job Suggestions for teachers
training and off the job training as separate points. A − Make a flow chart showing the proper
large number of candidates wrote the sub divisions classification and sub classification
of the job training which is considered as one point. of different types of training.
In a few answers, the header was missing, while − Reinforce the names of the different
types of training with their features
some candidates wrote about their own type of through suitable examples.
training. − Explain the meaning, features and
(b) Majority of the candidates were unable to benefits of branding, labelling and
packing through a live demonstration
differentiate between branding, labelling and
by showing a product used in daily
packaging. Some candidates were able to explain the life.
meaning of branding, but the advantages of branding − For better clarity, do a project with
given by them were either not specific to branding or the students in which they develop a
were merits of branding from the point of view of the product, create its package, label the
consumers. product and brand it themselves.
− Explain the benefits of branding, both
(c) Many candidates did not attempt this question and from the point of view of the
those who did, wrote the steps of planning or steps manufacturer as well as from the
of controlling instead of the steps in organizing. point of view of the consumer.
Several candidates, who did write the steps in − Through examples, make students
aware of the fact that a question could
organizing, either gave the wrong sequence of steps
be framed in various ways, yet its
or wrote just a couple of steps. In a few answers, in essence remaining the same.
the last step of organizing, the word coordination − Stress upon the correct sequence of
was substituted with the word cooperation. the steps of the various functions of
management.
− Explain clearly the difference
between the steps of planning,
controlling and organizing.
− Organise an activity in the class in
which the students themselves plan,
organize and control, thereby going
through the steps of the various
functions of management to help
them retain the sequence of the steps.
− Emphasise the important points
which must be included in long
answers.
− Insist that the points do not overlap.

22
 MARKING SCHEME
Question 6
(a) Types of training that can be given to an employee.
1. Orientation training
2. Job training (in job, off job, vestibule or any other type of job training)
3. Safety training
4. Promotional training
5. Refresher training
6. Remedial training (Any three with brief explanation)
(b) Branding is the process of assigning a distinctive name, symbol, term, logo etc. by which the
customers can easily differentiate it from the competitors’ product.
Merits of branding to marketers are:
1. Differentiating the product from competitor’s product.
2. Facilitates advertising.
3. Differentiated pricing.
4. Reduces selling costs
5. Ease in introducing new products.
6. Widens market
7. Creates brand usage/goodwill/reputation

(Any three)
(c) Steps involved in the process of Organising:
1. Division of work
2. Grouping jobs or activities
3. Assigning duties
4. Delegation of Authority
5. Coordinating activities (All five steps in sequence with brief explanation)

Question 7
(a) Explain any three disadvantages of borrowing funds from specialised financial [3]
institutions.
(b) Briefly explain any four types of working capital required by a business concern. [4]
(c) Explain Maslow’s theory. [5]

23
Comments of Examiners
(a) Many candidates wrote the disadvantages of borrowing Suggestions for teachers
funds from commercial banks or creditors instead of the
disadvantages of borrowing funds from specialized − Suggest mind mapping and making
flash cards to help students to
financial institutions. Several candidates gave demerits retain the advantages and
of various long-term sources like debentures. Some disadvantages of each source of
candidates made up their own disadvantages. A common finance.
error made by a majority of the candidates was − Do a comparative study of different
mentioning high rate of interest as a disadvantage. rates of interest charged by banks
(b) Many candidates used the terms assets, fixed assets while and financial institutions through a
power point presentation followed
explaining the various types of working capital. Several by a group discussion.
candidates were unable to give a clear and a concise − Clarify the different types of
explanation of permanent and variable working capital working capital with the help of a
and hence they made up their own explanation. flow chart.
(c) Majority of the candidates did not follow the correct − Teach the different types of assets
hierarchy of needs. Several candidates wrote correct by giving examples from daily life
situations.
headings but the explanation under the headings was − Stress upon the fact that the
either inadequate or did not relate to the header. A large hierarchy of needs has to follow a
number of candidates wrote the word psychological in correct sequence.
place of physiological. − Explain the difference between the
words psychological and
physiological.

MARKING SCHEME
Question 7
(a) Disadvantages of borrowing funds from specialised financial institutions:
1. Formalities (Documentation)
2. Investigations/time consuming
3. Security and other conditions
4. Restriction on autonomy of management (Any three)
(b) Types of working capital: On the basis of operating cycle
• Permanent working capital
• Initial permanent working capital
• Regular permanent working capital
• Variable/temporary working capital
• Seasonal variable working capital
• Special variable working capital
On the basis of Balance Sheet
• Gross working capital
• Net working capital (Any four with brief explanation)

24
 (c) Maslow’s Theory:
• Physiological needs
• Safety and Security needs
• Social / affiliation needs
• Ego / esteem needs
• Self-actualization needs (Any five with correct sequence and with brief explanation)

Question 8
(a) Discuss the features of good packaging. [3]
(b) Explain the advantages of equity shares, as a source of finance. [4]
(c) Discuss any five functions of marketing. [5]

Comments of Examiners
(a) Majority of the candidates gave repetitive features of Suggestions for teachers
good packaging and the explanation to many of the
points was unsatisfactory. Several candidates got − Emphasise on conceptual clarity.
confused between the features of packaging, branding − Stress on correct terminology.
and labelling. A number of candidates wrote features − Ask students to read and understand
the question and then answer as per
of packing instead of packaging. Some candidates
the requirements.
wrote the advantages of packaging instead of the − Clearly explain the functions of
features. marketing, their meaning, the merits
(b) Candidates largely wrote mixed answers. Some and demerits of each type of
candidates wrote the advantages from the company’s marketing function by giving relevant
point of view, a few wrote from the investors point of examples.
view while a few others gave the advantages from the − Organise group discussions on
point of view of the shareholders. various marketing functions to
(c) Many candidates wrote the importance of marketing enhance better understanding of the
instead of its functions. A few candidates mixed up the topic.
objectives, functions and importance while a few − Instruct students not to write points
others wrote the features of modern marketing. In that are repetitive/ overlapping.
some answers the headings were simply expanded. − Give sufficient written practice to
students which will help them to
formulate better answers.

25
 MARKING SCHEME
Question 8
(a) Features of good packaging:
• Should be convenient to handle and use
• Should have aesthetic satisfaction – design, colour, neatness
• Should provide safety to product
• Should establish its own identity
• Should build customer’s confidence
• Should have distinct personality
• Should have resale value (Any three)
(b) Advantages of equity shares as a source of finance from company point of view:
• No burden on earnings
• Permanent capital
• No charge on assets
• Source of strength
• Small nominal value
• Unlimited source.
• Open chances of borrowing-A company majorly financed by equity shares has a
controlled financial leverage ratio. Lower levered companies have a greater chance of
borrowing in times of need.
• Additional capital through issue of right shares
(Any four with brief explanation)
(c) Functions of Marketing:
• Buying
• Assembling
• Selling
• Distribution.
• Transportation
• Storage
• Marketing Research
• Product Planning and Development
• Standardisation
• Grading
• Packing
• Packaging.
• Branding
• Labelling
• Pricing
• Advertising
• Salesmanship
• Publicity
• Sales Promotion
• Financing
• Risk taking
(Any five with brief explanation)
26
Question 9
Write short notes on the following:
(a) Meaning and Elements of Product Mix. [4]
(b) Core banking solutions. [4]
(c) Coordination, as the essence of management. [4]

Comments of Examiners
(a) Many candidates gave the meaning of product instead Suggestions for teachers
of product mix. A few candidates wrote on marketing − Explain the difference between
mix. Some candidates who gave the meaning of product and product mix by giving
product mix, did not write its elements, while in a few examples of products commonly used
answers only the elements of product mix were in daily life.
mentioned. − Show a presentation linked to a CBS
(b) Several candidates wrote that in a CBS enabled bank enabled bank’s website to show all
the customer becomes the customer of the branch the facilities available under it to the
customers.
rather than the customer of the bank. Many candidates
− Ensure that the students are well
mentioned the concept behind CBS but did not give versed with all the updated
sufficient points to elaborate upon it. Some candidates information of all the facilities under
explained net banking / RTGS / NEFT instead of CBS. a CBS enabled bank.
(c) Many candidates wrote the meaning of coordination − Discuss the concept behind
instead of its essence. Several candidates did not write commercial terms and their features
the role of coordination in every function of and facilities.
− Discuss the importance and the role
management or were unable to connect the of coordination in detail.
coordination function with other functions of − Stress upon the fact that a short note
management such as planning, directing staffing and should include meaning, objectives,
controlling. Some candidates gave an ambiguous and features, advantages and
obscure explanation. disadvantages.
− Do systematic revision through mind
maps.

27
 MARKING SCHEME
Question 9
Meaning of Product Mix:
(a)
Product mix involves planning, developing and producing the right type of products and
services to be marketed by the firm.
Elements of Product Mix:
• Branding / Trade mark
• Labelling
• Packing
• Packaging (Elements of Product Mix with brief explanation)
(b) Core banking Solutions (CBS):
Under this system, a customer becomes a customer of the bank rather than becoming a customer
of the branch. By opening a bank account in one branch (which has CBS facility), the customer
can operate the same account in all the CBS branches of the same bank anywhere across the
country. The bank gives a unique ID to a CBS customer which gives him the privilege of opening
an account with any of the CBS branches without any formalities. CBS is also known as
'Centralised Banking Solution'.
Facilities:-
1. Instant transfer of funds between the accounts in CBS branches across the country.
2. Cash withdrawal facility from any of the CBS branches.
3. Updating of pass book at all CBS branches
• Transactions management
• Designing new banking products
• Loan disbursal and management
• Establishing the criteria for minimum balances, interest rates, number of withdrawals
allowed
(c) Coordination is the essence of management because it is inherent in all managerial functions.
• In planning, coordination is required between the master plan of the enterprise and the
plans of different departments.
• During organizing, there should be coordination between the authority and
responsibility of every individual.
• While staffing, coordination is achieved by placing the right man at the right job.
• While directing, supervision, motivation and leadership are used to ensure proper
working of the organization.
• During controlling, coordination is achieved by ensuring that the actual results are
according to plans. (Any four)

28
 Topics
found • Question 1 (ii): What is meant by factoring?
difficult by • Question 1(iv): Why is management considered to be a discipline?
candidates • Question 1 (viii): Mention two types of markets, on the basis of
position of buyers and sellers.
• Question 2 (c): Discuss the need for principles of management.
• Question 3 (a): Discuss three advantages of ploughing back of profit,
from the company’s point of view.
• Question 4 (c): Explain any five types of debentures through which a
company can collect borrowed capital from the public.
• Question 4 (b): What are the different types of short term financial
assistance provided by the commercial banks to business houses?
• Question 5(c): Explain the following Principle of management, as
advocated by Henry Fayol:
(i) Stability of tenure
(v) Order
• Question 9: Write short notes on the following:
(a) Meaning and Elements of product mix
(c) Coordination, as the essence of management.

Concepts in
which • Branding, labelling and packaging
candidates • Objectives of sales promotion
got • Need for consumer protection
confused • Short term assistance given by commercial banks
• Dimensions of business environment
• Steps in the process of organizing
• Advertising and publicity

29
Suggestions
for
• Understand clearly the meaning of various terms.
candidates • Give equal importance to both, the meaning as well as explanation of
every term.
• Identify the features, advantages and disadvantages of the terms.
• Make a note of all the headings.
• Read the financial section of newspapers to establish links between
theory and the practical world scenario.
• Make flow charts, comparative charts and mind maps which will help
in better retention of the subject matter.
• Solve questions based on case studies for better understanding of the
topic.
• Practice writing long answers.
• Revise all topics systematically.
• Avoid selective study
• Solve past years’ papers and go through the past years’ Analysis of
Pupils’ Performance.
• Divide the time proportionately between Part I and Part II while
writing the examination.
• Read, analyse, understand the requirement of the question before
writing its answer.
• Write answers to the point.
• Avoid repetition of points in the answers.
• Underline important terms.

30
Analysis of Pupil
Performance

COMMERCE

Research Development and Consultancy Division

Council for the Indian School Certificate Examinations

New Delhi
Year 2017
__________________________________________________________________________________

Published by:
Research Development and Consultancy Division (RDCD)
Council for the Indian School Certificate Examinations
Plot No. 35-36, Sector VI
Pushp Vihar, Saket
New Delhi-110017

Tel: (011) 29564831/33/37

E-mail: [email protected]

© Copyright, Council for the Indian School Certificate Examinations

All rights reserved. The copyright to this publication and any part thereof solely vests in the
Council for the Indian School Certificate Examinations. This publication and no part thereof
may be reproduced, transmitted, distributed or stored in any manner whatsoever, without the
prior written approval of the Council for the Indian School Certificate Examinations.
 FOREWORD

This document of the Analysis of Pupils’ Performance at the ISC Year 12 and ICSE Year 10
Examination is one of its kind. It has grown and evolved over the years to provide feedback to
schools in terms of the strengths and weaknesses of the candidates in handling the examinations.

We commend the work of Mrs. Shilpi Gupta (Deputy Head) and the Research Development and
Consultancy Division (RDCD) of the Council who have painstakingly prepared this analysis. We
are grateful to the examiners who have contributed through their comments on the performance of
the candidates under examination as well as for their suggestions to teachers and students for the
effective transaction of the syllabus.

We hope the schools will find this document useful. We invite comments from schools on its
utility and quality.

Gerry Arathoon
November 2017 Chief Executive & Secretary

i
 PREFACE

The Council has been involved in the preparation of the ICSE and ISC Analysis of Pupil Performance
documents since the year 1994. Over these years, these documents have facilitated the teaching-learning
process by providing subject/ paper wise feedback to teachers regarding performance of students at the ICSE
and ISC Examinations. With the aim of ensuring wider accessibility to all stakeholders, from the year 2014,
the ICSE and the ISC documents have been made available on the Council’s website www.cisce.org.

The document includes a detailed qualitative analysis of the performance of students in different subjects
which comprises of examiners’ comments on common errors made by candidates, topics found difficult or
confusing, marking scheme for each answer and suggestions for teachers/ candidates.

In addition to a detailed qualitative analysis, the Analysis of Pupil Performance documents for the Examination
Year 2017 have a new component of a detailed quantitative analysis. For each subject dealt with in the
document, both at the ICSE and the ISC levels, a detailed statistical analysis has been done, which has been
presented in a simple user-friendly manner.

It is hoped that this document will not only enable teachers to understand how their students have performed
with respect to other students who appeared for the ICSE/ISC Year 2017 Examinations, how they have
performed within the Region or State, their performance as compared to other Regions or States, etc., it will
also help develop a better understanding of the assessment/ evaluation process. This will help them in guiding
their students more effectively and comprehensively so that students prepare for the ICSE/ ISC Examinations,
with a better understanding of what is required from them.

The Analysis of Pupil Performance document for ICSE for the Examination Year 2017 covers the following
subjects: English (English Language, Literature in English), Hindi, History, Civics and Geography (History
& Civics, Geography), Mathematics, Science (Physics, Chemistry, Biology), Commercial Studies,
Economics, Computer Applications, Economics Applications, Commercial Applications.
Subjects covered in the ISC Analysis of Pupil Performance document for the Year 2017 include English
(English Language and Literature in English), Hindi, Elective English, Physics (Theory and Practical),
Chemistry (Theory and Practical), Biology (Theory and Practical), Mathematics, Computer Science, History,
Political Science, Geography, Sociology, Psychology, Economics, Commerce, Accounts and Business
Studies.

I would like to acknowledge the contribution of all the ICSE and the ISC examiners who have been an integral
part of this exercise, whose valuable inputs have helped put this document together.

I would also like to thank the RDCD team of Dr. Manika Sharma, Dr. M.K. Gandhi, Ms. Mansi Guleria and
Mrs. Roshni George, who have done a commendable job in preparing this document. The statistical data
pertaining to the ICSE and the ISC Year 2017 Examinations has been provided by the IT section of the Council
for which I would like to thank Col. R. Sreejeth (Deputy Secretary - IT), Mr. M.R. Felix, Education
Officer (IT) – ICSE and Mr. Samir Kumar, Education Officer (IT) - ISC.

Shilpi Gupta
November 2017 Deputy Head - RDCD
CONTENTS

Page No.

FOREWORD i

PREFACE ii

INTRODUCTION 1

QUANTITATIVE ANALYSIS 3

QUALITATIVE ANALYSIS 10
This document aims to provide a comprehensive picture of the performance of candidates in the
subject. It comprises of two sections, which provide Quantitative and Qualitative analysis results in
terms of performance of candidates in the subject for the ISC Year 2017 Examination. The details of
the Quantitative and the Qualitative analysis are given below.

Quantitative Analysis
This section provides a detailed statistical analysis of the following:

 Overall Performance of candidates in the subject (Statistics at a Glance)

 State wise Performance of Candidates
 Gender wise comparison of Overall Performance
 Region wise comparison of Performance
 Comparison of Region wise performance on the basis of Gender
 Comparison of performance in different Mark Ranges and comparison on the basis of Gender for
the top and bottom ranges
 Comparison of performance in different Grade categories and comparison on the basis of Gender
for the top and bottom grades

The data has been presented in the form of means, frequencies and bar graphs.

Understanding the tables

Each of the comparison tables shows N (Number of candidates), Mean Marks obtained, Standard
Errors and t-values with the level of significance. For t-test, mean values compared with their
standard errors indicate whether an observed difference is likely to be a true difference or whether it
has occurred by chance. The t-test has been applied using a confidence level of 95%, which means
that if a difference is marked as ‘statistically significant’ (with * mark, refer to t-value column of the
table), the probability of the difference occurring by chance is less than 5%. In other words, we are
95% confident that the difference between the two values is true.

t-test has been used to observe significant differences in the performance of boys and girls, gender
wise differences within regions (North, East, South and West), gender wise differences within marks
ranges (Top and bottom ranges) and gender wise differences within grades awarded (Grade 1 and
Grade 9) at the ISC Year 2017 Examination.

The analysed data has been depicted in a simple and user-friendly manner.

1
Given below is an example showing the comparison tables used in this section and the manner in
which they should be interpreted.

Comparison on the basis of Gender The table shows comparison

between the performances of boys
Gender N Mean SE t-value and girls in a particular subject.
Girls 2,538 66.1 0.29
11.91* The t-value of 11.91 is significant at
Boys 1,051 60.1 0.42
*Significant at 0.05 level 0.05 level (mentioned below the
table) with a mean of girls as 66.1
and that of boys as 60.1. It means
that there is significant difference
between the performance of boys
and girls in the subject. The
probability of this difference
occurring by chance is less than 5%.
The mean value of girls is higher
than that of boys. It can be
The results have also been depicted interpreted that girls are performing
pictographically. In this case, the girls significantly better than boys.
performed significantly better than the
boys. This is depicted by the girl with a
medal.

Qualitative Analysis
The purpose of the qualitative analysis is to provide insights into how candidates have performed in
individual questions set in the question paper. This section is based on inputs provided by examiners
from examination centres across the country. It comprises of question wise feedback on the
performance of candidates in the form of Comments of Examiners on the common errors made by
candidates along with Suggestions for Teachers to rectify/ reduce these errors. The Marking Scheme
for each question has also been provided to help teachers understand the criteria used for marking.
Topics in the question paper that were generally found to be difficult or confusing by candidates,
have also been listed down, along with general suggestions for candidates on how to prepare for the
examination/ perform better in the examination.

2
STATISTICS AT A GLANCE

Total Number of
Candidates: 28,920

Mean Marks: Highest Marks: 100

63.0 Lowest Marks: 04

3
 PERFORMANCE (STATE-WISE & FOREIGN)
West Bengal 61.9
Uttarakhand 63.2
Uttar Pradesh 60.3
Tripura 40.7
Tamil Nadu 72.0
Telangana 71.0
Sikkim 60.4
Rajasthan 64.6
Punjab 66.6
Odisha 60.7
Madhya Pradesh 62.7
Meghalaya 58.0
Maharashtra 71.8
Kerala 68.8
Karnataka 76.2
Jharkhand 62.0
Himachal Pradesh 64.6
Haryana 70.6
Gujarat 67.7
Goa 75.8
Delhi 74.6
Chandigarh 59.0
Chattisgarh 60.7
Bihar 68.6
Assam 76.1
Andhra Pradesh 61.9
Foreign 64.0

The States of Karnataka, Assam and Goa secured highest mean

marks. Mean marks secured by candidates studying in schools
abroad were 64.0.

4
 GENDER-WISE COMPARISON

GIRLS BOYS

Mean Marks: 65.9 Mean Marks: 60.3

Number of Number of
Candidates: 14,143 Candidates: 14,777

Comparison on the basis of Gender

Gender N Mean SE t-value
Girls 14,143 65.9 0.15
26.40*
Boys 14,777 60.3 0.15
*Significant at 0.05 level

5
 REGION-WISE COMPARISON

East North
Mean Marks: 62.0 Mean Marks: 61.9

Number of Number of
Candidates: 12,439 Candidates: 12,993

Highest Marks: 100 Highest Marks: 100

Lowest Marks: 04 Lowest Marks: 08

REGION
Mean Marks: 71.9 Mean Marks: 69.6

Number of Number of
Candidates: 1,656 Candidates: 1,717

Highest Marks: 100 Mean Marks: 72.6 Highest Marks: 100

Lowest Marks: 21 Lowest Marks: 17
Number of
Candidates: 115
South West
Highest Marks: 97
Lowest Marks: 41

Foreign

6
 Mean Marks obtained by Boys and Girls-Region wise

77.5
74.5 72.5
68.7 67.2 67.0
64.8 64.8
58.7 59.8

North East South West Foreign

Comparison on the basis of Gender within Region

Region Gender N Mean SE t-value
Girls 6,782 64.8 0.21
North (N) Boys 6,211 58.7 0.22
19.99*
Girls 5,602 64.8 0.24
East (E) Boys 6,837 59.8 0.22
15.17*
Girls 900 74.5 0.53
South (S) Boys 756 68.7 0.61
7.18*
Girls 798 72.5 0.61
West (W) Boys 919 67.2 0.58
6.30*
Girls 61 77.5 1.99
Foreign (F) Boys 54 67.0 2.35
3.41*
*Significant at 0.05 level

7
 MARK RANGES :
COMPARISON GENDER-WISE

Comparison on the basis of gender in top and bottom mark ranges

Marks Range Gender N Mean SE t-value
Girls 3,615 88.5 0.08
Top Range (81-100) Boys 2,462 88.1 0.09
3.07*
Girls 45 17.9 0.48
Bottom Range (0-20) Boys 108 18.3 0.24
-0.80
*Significant at 0.05 level

Boys Girls All Candidates

Marks Range (81-100) 88.1

81 - 100 88.5
88.4

70.0
61 - 80 70.5

Marks Range 81-100 70.3

49.1
41 - 60 50.0
49.5

32.0
Marks Range (0 -20) 21 - 40 32.1
32.0
No significant difference was observed
between the average performance of 18.3
0 - 20 17.9
girls and boys.
18.2

8
 GRADES AWARDED :
COMPARISON GENDER-WISE

Comparison on the basis of gender in Grade 1 and Grade 9

Grades Gender N Mean SE t-value

Girls 1,689 92.6 2.25
Grade 1 Boys 1,052 92.6 2.85
0.01
Girls 458 27.3 1.30
Grade 9 Boys 837 26.9 0.95
0.25

Boys Girls All Candidates

92.6
1 92.6
In Grade 1 and Grade 9 no 92.6

significant difference was 2

84.3
84.4
observed between the average 84.3
74.3
performance of girls and boys. 3 74.5
74.4
64.3
4 64.4
64.4
56.9
5 56.9
56.9
52.1
6 52.2
52.2
47.0
7 47.0
47.0
42.4
8 42.4
42.4
26.9
9 27.3
27.0

9
 PART I (20 Marks)
Answer all questions.

[10 × 2]
Question 1
Answer briefly each of the questions (i) to (x).
(i) What is meant by Macro Environment?
(ii) What is the importance of finance to a business concern?
(iii) Give two merits of Inter Corporate Deposits.
(iv) Define Management as a process.
(v) Explain the principle of Authority and Responsibility, as laid down by Henry Fayol.
(vi) What is a Demand Draft?
(vii) State any two features of advertising.
(viii) Give two points of difference between training and development.
(ix) Mention two physical functions of marketing.
(x) Agrim purchased a Diesel Car for ₹ 7 Lakhs from an automobile Company and
found its engine to be defective. Despite many complaints, the defect was not
rectified. Suggest the appropriate authority where Agrim under his right as a
consumer, could file a complaint.

10
 Comments of Examiners
(i) Some candidates were confused between macro and
micro environment. A number of candidates mentioned Suggestions for teachers
the components of macro environment without referring − Stress upon the kind of forces and its
to the impact of such components on the business. Some impact/influence on Macro and Micro
candidates did not mention essential keywords like environment.
external/ remote/ uncontrollable/ general forces. − Tell students that objectives,
(ii) Most of the candidates repeated the same points and importance and features are different.
same headings were presented in a different manner. − Clearly explain legal formalities
Some candidates wrote about sources of finance, while involved in intercorporate deposits as
other candidates mentioned the features or importance. well as the rate of interest.
(iii) The meaning of ICD was given without its advantages − Bring out the conceptual clarity in
by many candidates. Some candidates were confused various definitions of management.
regarding the rate of interest. Several candidates wrote − Stress upon the relationship between
that there are no legal formalities involved and some authority and responsibility.
candidates confused ICD’s as a source of finance from − Clearly explain the principle of
commercial bank. authority and responsibility with
(iv) In many answers, either the human factor or the suitable examples.
organizational goals were missing. A large number of − Explain similar sounding words like
candidates wrote about PODSCORB. Some candidates Bank draft and bank overdraft.
confused this answer with the integrated concept. − Define features of every element of
(v) Many candidates explained authority and responsibility promotion.
separately and were not able to relate it with Henry − Ask students to write basis of
Fayol’s principle. difference with proper explanation
(vi) Some candidates wrote about Bank overdraft or a bill of relating to the points of difference.
exchange instead of demand draft. Several candidates − Explain the basis of classification
did not mention the purpose of demand draft or the relating to the marketing functions
unique features of a demand draft. Many candidates did − Practice application based questions
not mention that it is drawn by the bank or a branch of so that analytical skill of students may
the bank. be developed.
(vii) Many candidates explained advantages or the − Undertake a few case studies for
importance of advertising instead of features while developing application skills.
other candidates tried to show the relationship between
advertising and publicity.
(viii) The differences did not correlate to each other and in the
absence of basis of difference one word answers given by the candidates did not convey any
meaning.
(ix) Most of the candidates did not give the basis of classification clearly. Several candidates wrote
either the functions of exchange, that is buying, selling or facilitating functions like grading,
standardization, etc.
(x) Several candidates substituted District forum/consumer court/consumer forum with state
forum/national commission/district commission or district court.

11
 MARKING SCHEME
Question 1
(i) Macro environment consists of those external forces which have homogeneous / identical
effect on the working of business organisations across business sectors. OR
Macro environment refers to the general environment or remote environment within which a
business firm and forces in its Macro environment operate.
OR
Macro environment refers to the major external and uncontrollable factors that influence an
organization’s decision making and affects its performance and strategies. These factors
include the Economic, demographic, legal, political, social and technological changes and
natural forces.
(ii) Importance of finance to a business concern:
• Establishing an enterprise
• Purchase of fixed and current assets
• Expansion/growth/modernisation/renovation of business.
• Meeting its liabilities in time/ (creditors, accounts payable, etc.)
• To carry on the business smoothly and without any interruptions.
• To face recessions, trade cycles and other crisis.
• To take advantage of business opportunities
• To meet preliminary expenses
• To maintain working capital at a desirable level.
• To replace obsolete assets/machinery, etc./any fixed assets
• Helps in meeting requirements of contingent liabilities.
• For timely payment of dividend
(any two)

(iii) Merits of I.C.D:

• Very convenient/ minimum formalities/ less legal formalities are involved.
• Rate of interest is generally lower (than that charged by banks).
• Deposits are made through personal contacts and brokers.
• Unsecured/not mortgaged/no change on assets/ no fixed or floating charge
• Identity of the borrower is not disclosed./There exists secret in the market of inter corporate
deposits
• The rate of interest varies, depending on the amount involved and the time period.
• These deposits help corporate’s in solving their short-term requirements of funds/
working capital
(any two)

(iv) Management as a process:

• Management is what Management does. It is the task of planning, executing and
controlling to achieve the common goals. OR

12
 • Management is defined as a process by which a cooperative group directs action
towards common goals. OR
• Management is the process of releasing and directing human energy towards attaining
a definite goal.
(v) Principle of authority and responsibility, as laid down by Henry Fayol:
Authority is the right to get work done from others. Responsibility is the obligation to perform
the assigned task.
Authority is the right to make decisions and get these implemented by the subordinates.
Responsibility is the duty of a person to complete an assigned work.
Anyone who exercises authority must accept responsibility for his work. Similarly, one who
is held responsible should be given the necessary authority. Authority and responsibility go
hand in hand. There should be parity between authority and responsibility.
(vi) Demand Draft:
A bank draft or demand draft is a type of cheque drawn by a bank either on its own branch
or another bank in favour of a third party. It is payable to the person named in it or to his order.
It is always payable on demand and therefore also known as demand draft. OR
Demand Draft, also known as Bank Draft, is a payment instrument which is drawn by a bank’s
branch instructing another branch to pay the specified amount to the entity named in the
demand draft.
A Demand draft is a negotiable instrument similar to a bill of exchange. A bank issues a
demand draft to a client(drawer) directing another bank(drawee) or one of its own branches to
pay a certain sum of money to the specified party(payee)

(vii) Features of advertising, in relation to marketing:

Paid form, Non Personal, Identified sponsor, Mass Communication. Wide variety of media,
forms of media.
(any two)
(viii) Points of differences between training and development:

Basis of difference Training Development

1 Duration It is important for a It’s a continuing process

fixed period /short / long term / career
term. bound.

2 Level of persons Important at lower The level of

involved level for employees development is higher
and junior managers. and concerns senior
managers.

3 Scope of learning It is a part of It is a wider term and

development and includes education,
limited in scope. OR learning and training OR

13
 On Developing skills On developing hidden
already possessed by qualities and talent of
workers. personnel.

4 Aim/purpose To make workers To prepare employees

proficient in their for handling more
work. challenging jobs.

5 Meaning An activity to Growth of employees at

increase every level of
understanding, skill management by planned
and attitude to and organised process.
perform better.

6 Depth of knowledge Deep / teaching Not deep; only facilitates

mainly technical growth / teaching human
skills. skills.

7. Initiative in learning From the employer From the employee

On the job Off the job techniques
techniques

(any two)
(ix) Physical functions of marketing:
• Transportation
• Warehousing / storage
(x) District Forum / Consumer Court/ Consumer forum

14
 PART II (60 Marks)
Answer any five questions.

Question 2
(a) Explain three disadvantages of Preference shares from the investors’ point of view. [3]

(b) Effectiveness of leadership depends on the qualities of the Leader. Explain any four [4]
qualities that a good leader should possess.
(c) Explain the importance of Business Environment in shaping the future of a business. [5]

Comments of Examiners
(a) Many candidates wrote the demerits of preference
shares from the company’s point of view. The word Suggestions for teachers
‘dividend’ was substituted with the word ‘interest’.
− Updated knowledge regarding the
Some of the candidates gave inadequate
company’s amendment Act 2013 is a
explanations which shows lack of in-depth
must.
knowledge of the topic. A number of candidates − Ask students to read and understand
wrote that preference shareholders do not have the questions before attempting.
voting rights which is not correct. − Give day to day live examples for
(b) A large number of candidates stated overlapping better retention of the topic. The
attributes synonymous to the character of a leader students must be prepared for every
topic.
rather than the various qualities of a leader.
(c) Several candidates wrote correct headings but the
explanation under the headings was either incorrect
or did not relate to the header. In some cases, the headings were expanded as a way of explanation.

MARKING SCHEME
Question 2
(a) Demerits of Preference shares, from the investors’ point of view:
• Fear of being shown the door: When the company has surplus funds, it can redeem and pay
back.
• No capital appreciation: do not get the benefit of appreciation in their investment – do not
share in the prosperity of the company during the boom period.
• No guarantee of dividends and the return rate is generally modest. Price fluctuations are
greater and less saleable on stock exchanges.
• Lower liquidity – unlike equity shares, preference shares are not traded frequently in stock
exchange. Thus, they have lower liquidity.

15
 • Fixed Return with Attached Risk: Return on preference shares is fixed but preference
shareholders bear risk which is considered more than the return involved.
• No security: Return of capital is not sure due to no security on assets is provided
(Any three with explanations)
(b) Qualities of a leader:
 Sound physique,
 Good communication skills
 Intelligent,
 Emotional stability,
 Vision and foresight, Understanding of the field
 Character- Initiative, Integrity, self-confidence and will power, sense of responsibility,
 Social skills, decisiveness, objectivity, motivation skills
(any four)
(c) Importance of Business Environment in shaping the future of a Business:
( Finance, Marketing, Business Environment)
• First movers advantage
• Early warning signals
• Customer focus
• Strategy formulation
• Coping with change
• Public image
• Continuous learning
• Better performance (any five)

Question 3
(a) Give three differences between advertising and personal selling. [3]
(b) Explain any four features of a budget. [4]
(c) You are the finance manager of a newly established company. The Directors have asked [5]
you to determine the amount of fixed capital requirement for the company. Explain any
five factors that you will consider while determining the fixed capital requirement for the
company.

16
Comments of Examiners
(a) Many candidates gave differences in paragraph
form and in some cases, the sequence of
differences did not match. In many cases where Suggestions for teachers
the basis of difference was not given, only one - Inculcate the habit of writing the
word answers were given which did not convey
basis of differences as it helps in
any meaning for e.g. ‘Wide’ and ‘Narrow’ – this
avoiding the repetition.
does not convey any meaning.
- Train the mind-set of the students to
(b) Very few candidates answered this question derive features from the definition of
correctly. A large number of candidates wrote the terms like budget.
about benefits or advantages of a budget instead of
- Case studies help in better retention.
the features. In many cases, the features
- Use flow chart for teaching the
overlapped and were repetitive in nature. various factors affecting capital.
(c) Several candidates wrote about factors affecting
the working capital or factors affecting capital
structure instead of factors affecting fixed capital. In some cases, the explanation did not correlate
with the heading.

MARKING SCHEME
Question 3
(a) Differences between advertising and personal selling:
Basis of Difference Advertisement Personal Selling

1. Communication Non personal Personal

2. Media used Diverse media – oral as well as Limited Media – Verbal
written
3. Message Same message for all Tailored message
4. Coverage Mass communication Individual or Group
5. Flexibility Low High
6. Cost Low High
7. Feedback Delayed Immediate
8. Objective Introducing new products Achieving sales by
satisfying customers

9. Payment Paid but independent media Paid media controlled

by sellers
10 Suitability In initial stages At a later stage.
(any three)

(b) Features:
• It is expressed in quantitative or monetary terms/Expressed in financial terms
• It is prepared for a fixed period of time. (It is prepared before the period in which it
commences.)

17
 • Practical to implement.
• It spells out the objects and the policies to be pursued in order to achieve the objective of
the organization./ It is blueprint
• Flexible enough to allow changes in the changing environment.
• Analysis of cost and revenue.
• Prepared on the basis of established standards of performance.
• Instrument of both planning and control.
• It is related to a definite future period/ forward looking/ it is prepared before the period in
which it commences
• Shows the planned income to be generated.
• It is a part of forecast (financial) (any four)
(c) Fixed Capital requirement of a Company:
• Nature of business
• Size of business/ scale of operation
• Nature of Products
• Method of Production/Types of manufacturing process
• Diversity of Product Lines/scope of activities
• Mode of acquiring fixed assets
• Intangible Assets (any five)

Question 4
(a) Give three points in support of the statement, “Organising is an important function of [3]
management.”
(b) What is social environment? Enumerate any three components of social environment. [4]

(c) Briefly discuss any five features of principles of management. [5]

18
Comments of Examiners
(a) In many answers, the points related to the Suggestions for teachers
importance of organizing were mixed up with the
importance of planning/management/ marketing. − Give relevant explanations for
teaching importance of organizing.
(b) Many candidates did not mention the effect of
social environment on business. Some candidates − For better retention of topics
missed out on the forces within which the business classroom teaching should be coupled
operates. A number of candidates were not clear with live examples.
about the meaning of the term. − Stress upon the key terms for
conceptual clarity.
(c) Most of the candidates wrote about ‘principles of
management’ or ‘features of management’ rather − Clear demarcation of points will help
than the ‘features of principles of management’. in avoiding repetition of points.
Several candidates gave brief or vague − Improve performance through
explanations. frequent feedback and tests.

MARKING SCHEME
Question 4
(a) Importance of organisation:
Specialization, optimum use of human resources, coordination and cooperation security and
support.
• Growth and diversification
• Adaptation to change
• Training and development of personnel
• Aid to management
• Effective administration
• Clarity in working relationship
• Optimum utilization of resources.
(The answer must have implications of both management as a process and as an activity.)
(b) Social environment: The social environment consists of all the social and cultural forces within
which business firms operate.
Components of social environment:
• Social attitudes, customs, traditions rituals, culture, lifestyle, etc.
• Size and distribution of population, age compositions, male female ratio, rural urban
mobility, income distribution, etc.
• Family structure and values.
• Social concerns regarding pollution, corruption, status of women and minorities.
• Education levels, awareness of rights and work ethics.
(c) Features of management principles:
 Universality
 Dynamic or Flexible
 Influencing Human Behaviour
19
  Contingent
 Cause and effect relationship
 Equal importance
 General guidelines
 Formed by practice and experimentation
(any five)

Question 5
(a) What are the objectives of personal selling? [3]
(b) Explain the following: [4]
(i) SMS alerts
(ii) ATM
(c) Explain any five points of importance of controlling, as a function of management. [5]

Comments of Examiners
(a) Many candidates wrote the features instead of the
objectives of personal selling. Several candidates
Suggestions for teachers
mixed up the objectives of advertising/ sales
promotion and publicity with the objectives of − Accentuate on the fact that the
personal selling. A number of candidates deviated question to be answered must be
from the topic by writing general points like, what understood and then attempted by the
the salesman should deliver. students.
(b) Most of the candidates answered this part − Clearly explain different marketing
satisfactorily. Some candidates gave an explanation techniques and different elements of
about SMS relating to friends and relatives instead promotion.
of the bank. A number of candidates wrote − Explain the full form of the
‘Automated teller machine’ as ‘Automatic teller abbreviation.
machine’. − Discuss the course content and
(c) Majority of the candidates gave detailed different type of question in the class.
explanation of importance of management or steps − Advise students to visit an ATM to
of controlling. understand the concept of ATM more
clearly.
− Take up importance/objective/steps
of every function of management.

20
 MARKING SCHEME
Question 5
(a) Objectives of personal selling:
• To convert the interest and desire created by advertising into demand.
• To increase sales/turnover/revenue
• To introduce new products through demonstration and explanation
• To redress grievances and objections of customers
• To persuade dealers to carry the brand
• To persuade consumers to switch over from rival brands
• To collect feedback from consumers
• To do the complete job of selling (any three)
(b) (i) SMS Alert:
Under this service, a customer gives his / her mobile phone number to his bank which is
recorded in the computer system in the customer’s account. Whenever, there is a
transaction (debit or credit) there is automatically an SMS on the customer’s mobile
phone. The SMS states the nature and amount of transaction, date of transactions and the
balance in the account on that date. Thus, the customer receives all the information of his
account without visiting the bank.
It is a form of mobile banking.
(ii) ATM:
A cash machine also known as Automated Teller Machine is an electronic
telecommunication device that enables the customer of a financial institution / bank to
perform financial transactions, particularly, cash withdrawal without the need for human
cashier, clerk or bank teller.
Using ATM, customers can access their bank deposits or credit accounts in order to make a
variety of transactions. For operating the ATM, the customer has to insert his card in the
machine or swipe it with the designated space of the machine. After this, the machine asks
the customer for ATM Pin. By filling the details of the transaction, the ATM works. The
customer can operate from anywhere in the country and need not visit his / her bank.
(c) Points of importance of controlling:
• Achievement of organizational goals – It is through controlling that managers ensure the
execution of plans and the accomplishment of goals. Control keeps constant watch over
performance so that mistakes are detected and corrected promptly.
• Optimum utilization of resources – Controlling is essential for securing the best possible
us of human, physical and financial resources. A good system of control helps to prevent
misuse and wastage of resources.
• Decentralization of authority – With the help of feedback information, managers can ensure
that decisions taken at lower levels are consistent with the policies and interests of the
organization. An effective system of control facilitates delegation of authority.

21
 • Means of coordination – Controlling facilitates coordination between different departments
by laying down standards of performance. All activities and efforts are directed towards
the accomplishment of common objectives.
• Better employee morale – Employees know well in advance what they are expected to do
and the standard against which their performance will be judged. Therefore, they are not
likely to be careless or negligent.
• Simplified supervision – Timely reports help supervisors in identifying gaps between
performance and standards. As a result, supervisors can take appropriate actions to rectify
deficiencies.
• Better planning – Controlling reveals deficiencies in plans. It reveals whether the standards
are accurate and objective.
• Coping with change and complexity – Control system helps managers to anticipate,
monitor and respond to changing conditions. The environment in which business
organizations operate keeps on changing. (any five)

Question 6
(a) Distinguish between marketing and selling. [3]
(b) Explain any four objectives of communication. [4]
(c) Explain the first five steps involved in selecting suitable work force in an organisation. [5]
Comments of Examiners
(a) Many candidates gave the modern and the
traditional concept of marketing by way of Suggestions for teachers
explanation. In the absence of basis of difference,
the points of difference did not correlate with each - Discourage selective studies.
other and many points were repeated or written - Encourage students to derive features
and importance of each term.
under the wrong heading.
- Conduct regular tests and discuss case
(b) In most of the cases, instead of objectives of studies along with live examples.
communication either the features of - Stress upon the correct sequence of the
communication were explained or the points steps.
between objectives of communication, steps of - Explain clearly the difference between
communication and importance of communication the steps of recruitment, steps of
staffing or steps of selection.
were mixed up. Several candidates gave
inappropriate explanations which did not correlate
with the headings. In many cases there was no
relation between the heading and the explanation.
(c) Majority of the candidates wrote steps of staffing or steps of recruitment instead of steps of
selection. Several candidates gave a wrong sequence of steps. A number of candidates wrote about
sources of recruitment.

22
 MARKING SCHEME
Question 6
(a) Marketing and selling:
Basis of Distinction Marketing Selling
1 Scope Wide Narrow
2 Focus Needs of buyer Needs for seller
3 Object Profit through customer Profit through sales
satisfaction volume.
4 Orientation Customer oriented Product oriented

5 Beginning Begins before production Begins after production

6 End Continuous after sale to Ends with sale.
judge customer’s reaction
7 Perspective Long term Short term
8 Approach Systematic Fragmented.
9 Slogan Let the Buyer Beware Let the Seller Beware
(any three)
(b) Objectives of communication:
• To educate and train people
• To motivate employees
• To implement decisions quickly
• To facilitate leadership
• To carry out change
• To create team-work
• To secure feed back
• To promote managerial efficiency
• Sharing of ideas
• Giving orders and instructions
• Submission of work performance
• Sharing of information. (any four)
(c) First five Steps involved in selecting suitable work force in an organisation:
• Screening of applications: This is the preliminary screening of the suitability of the
applicants.
• Selection test: if the organization has a policy to conduct selection test, all the eligible
candidates are called for the test. There are various types of selection tests which are used
in the selection process: intelligence test, personality test, aptitude test, interest test and
trade test.
• Selection interview: Selection interview, also known as employment interview, is a
formal, in depth conversation conducted to evaluate the acceptability of the candidates.
23
 • Checking references: Many organizations insist that candidates provide them complete
contact details of references from whom information provided by a candidate could be
verified and additional information about the candidate could be sought. Checking
references is done at this stage.
• Physical examination: Organizations which follow the practice of physical examination,
also known as medical examination, conduct the test at this stage. Sometimes, physical
examination is conducted after the selected candidates join the organization. (in sequence)
OR
1. Preliminary Screening
2. Application Blank
3. Employment on Selection Tests
4. Employment Interview
5. Medical Examination

Question 7
(a) Explain Buying and Assembling, as function of marketing. [3]
(b) What is meant by R.T.G.S? Give any two features of R.T.G.S. [4]
(c) Management is the dynamic, life giving element in every business. In the context of [5]
this statement, explain the importance of management in modern times.

Comments of Examiners
(a) A number of candidates had no clarity regarding the
meaning of ‘assembling’. The terms buying and Suggestions for teachers
assembling were integrated with each other instead of − Teach buying and assembling in the
each term being explained separately. context of marketing.
(b) In most of the answers, certain essential key terms − Stress upon the fact that a short note
/unique features like, transfer of funds from one bank, should include meaning, objective
continuously, real time, gross settlement, not in batches features, advantages and
were missing. Some candidates expanded the disadvantages.
abbreviation without giving any explanation while − Explain clearly the unique feature
several others were confused between the terms which differentiate RTGS from
maximum or minimum amount of funds to be NEFT.
transferred. − Give practice in writing answers.
Clarity in thought regarding
(c)Most of the candidates wrote objectives of management
features/importance/advantages in
instead of the importance of management. In some cases,
order to formulate an appropriate
the header was expanded or only one sentence given as
answer is a must.
an explanation. Repetition of points was also observed.

24
 MARKING SCHEME
Question 7
(a) Buying and Assembling:
Buying is the first step in the process of marketing. Buying means the procurement of raw
materials, components and finished products. Buying involves several activities such as
determination of needs, selecting the source of supply, ascertaining the suitability of goods,
negotiating the terms of purchase and arranging for the transfer of ownership. Goods may be
purchased through various modes.
1. Purchased through inspection
2. Purchase by description
3. Purchase by sample
4. Purchase by grade
Assembling involves collection of goods already purchased from different sources at one
common place. Assembling offers the following advantages:
• It reduces the cost of transportation
• It permits large scale selling
• It facilitates financing
• It facilitates standardization and grading.
• It widens the market.

(b) R.T.G.S:
Real Time Gross Settlements systems are specialist funds transfer systems where the transfer
of money or securities takes place from one branch to another on a real time and on a gross.
Features:
• Transactions are processed continuously throughout the RTGS business hours.
• It is mostly for large transactions.
• The minimum amount that can be remitted through it is ₹ 2 lakhs.
• R.T.G.S. does not have an upper ceiling for transaction.
• R.T.G.S. law and transaction are free but charges are applicable on outward transactions.
• It is available at only CBS enabled bank/branches (any two features)
(c) Importance of management in modern times:
• Achievement of group goals
• Optimum utilisation of resources
• Minimisation of cost
• Survival and growth of business
• Generation of employment
• Higher standard of living
• National development [brief description of any four points]

25
Question 8
(a) Give three points of difference between Taylor’s and Fayol’s Principles of [3]
Management.
(b) Explain four advantages of raising funds from commercial banks. [4]
(c) Discuss any five points of importance of marketing. [5]

Comments of Examiners
(a) Most of the candidates attempted this part correctly.
A number of candidates wrote the principles of Suggestions for teachers
Fayol and Taylor instead of differentiating between − Explain in detail the modern and
the two. scientific concepts.
(b) A large number of candidates did not give a proper − Emphasise that in absence of the basis
explanation of this part. Some of the candidates of difference, one word answers are
gave types of credit or functions of the bank while not acceptable as they do not convey
others gave advantages of borrowing funds without any meaning.
relating it to the bank. − Stress upon the fact that borrowing
(c) Instead of importance of marketing the objectives funds from commercial banks and
from financial institutions is different.
of marketing, features of marketing or advantages
of marketing were given by many candidates. Most − Explain meaning with relation to the
of the candidates were not able to give a proper bank.
explanation as to how marketing is the foundation − Ensure that students underline the
of the business and how it helps in decision making. keywords /terms essential to bring out
conceptual clarity in the topic.

MARKING SCHEME
Question 8
(a) Points of difference between Taylor and Fayol:
Basis of F. W Taylor Henry Fayol
difference
Perspective Shop floor or operative Top Level of management
level
Worked on Scientific Management General theory of
administration – father of
Modern management
Focus Increasing productivity of Improving overall efficiency of
workers administration
Techniques Scientific observation and General principles of
used measurement management
Personality Scientist Practitioner
(any three differences)

26
(b) Advantages of raising funds from commercial banks:
• Economical: short term loans from commercial banks are generally cheaper as compared
to other short-term financing. This results in reduced interest burden on the borrowers.
• Timely availability of funds: often, procedural formalities in case of loans from commercial
banks are much less than those of financial institutions. Therefore, borrowers get the fund
on time.
• Provision for concessional financing: Commercial banks advance loans to certain sections
of the society and priority sectors on concessional rate of interest as per the directives of
the Reserve Bank of India.
• Easy repayment Mechanism: There is easy repayment mechanism of commercial bank
loans depending on the mode of giving advances. Thus, in the case of bank overdraft, the
amount deposited by the borrower is adjusted automatically to reduce the amount of
overdraft, in case of bill discounting, money is collected from acceptor of the instrument;
in case of loans, there are easy modes of instalments.
• No interference in management: Commercial banks do not interfere in the management of
borrowing organizations.
• High flexibility: There is high flexibility in funds from commercial loans as these are
available in different modes and a business organization may choose a mode which suits it
the most.
(any four)
(c) Points of importance of marketing:
 Foundation of business
 Source of revenue
 Satisfaction of customer needs
 Higher standard of living
 Gainful employment
 Development of nation
 Basis for decision making (any five)

27
 Question 9
Write short notes on:
(a) Publicity. [4]
(b) Secured Debentures. [4]
(c) Programme, as a type of plan. [4]

Comments of Examiners
(a) Most of the candidates wrote a short note without
including objectives, features and disadvantages. Suggestions for teachers
Feature of advertising like ‘paid form’ was given by
− Explain to students that a short note
some candidates instead of ‘non-paid form’. Several
should include advantages,
candidates confused advertising with publicity.
disadvantages meaning and
(b) In most of the answers, candidates explained
objectives.
meaning and types of debentures without giving the
− Use group discussions and case studies
objectives, advantages, features or disadvantages.
for better retention of the topic.
(c) A large number of candidates covered meaning of
programme leaving out other additional information. − Teach various types of plans in detail.

MARKING SCHEME
Question 9
(a)
Publicity is any form of non-paid, commercially significant news or editorial comment about
ideas, products or institutions.
Features:
• It is not directly paid for by the organization
• It covers favourable news about the organization
• It is done by the newspapers, magazines, radio, television, internet and other forms of
mass media.
• Publicity is outside the direct control of the organization.
• Publicity can be negative also.
Objectives:
• To inform people about someone/ inform people about something.
• To highlight an organization’s contribution to society
• To draw public attention
• To warn people about undesirable activities or goods.

28
(b) Secured Debentures:
Secured debentures have a charge on the assets of the company, the charge may be
specific/fixed or floating. In ease of liquidation of the company, the case of their disposal, the
debenture holders will have to be paid from the proceeds of the assets disposed.
Objective:
To raise long term loans
Advantage:
Security/No risk
Disadvantage:
Reduces credit standing/goodwill
Fixed burden
(c) Programme:
A programme is a comprehensive plan designed to implement the policies and accomplish the
objectives. It is a concrete or well defined scheme designed to accomplish a specific objective.
It also indicates who should do what and how. Programmes may be of two types – major and
minor. A sound programme should be stable enough to meet internal demand and to instil
confidence. At the same time it should be flexible enough to take care of external changes.

29
 Topics
found • Question 1(i): What is meant by Macro Environment?
• Question 1 (iii): Merits of ICD deposits.
difficult by
• Question 1 (iv) : Define management as a process.
candidates • Question 1 (v) : Explain the principle of Authority and responsibility as
laid down by Henry Fayol.
• Question 2(a): Disadvantages of preference shares from the investor’s
point of view.
• Question 3 (b): Explain any four features of a budget.
• Question 6 (b): Explain any four objectives of communication.
• Question 6 (c): Steps involved in selecting suitable work force in an
organization.
• Question 7 (a): Explain buying and assembling as function of marketing.
• Question 7 (b): What is meant by RTGS? Give any two features of
RTGS.
• Question 8 (a): Give three points of differences between Taylor’s and
Fayol’s principles of management.
• Question 8 (b): Advantages of raising loans from commercial bank.
• Question 9 (b): Short notes on secured debentures.
• Question 9 (c): Short note on programme.

Concepts in
which
candidates • Principle of authority and responsibility
got • Bank draft and bank overdraft
confused • Physical functions of marketing and Exchange functions of
marketing
• Features of principles of management and principles of management
• Steps involved in selecting suitable work force in an organization
with steps of staffing or steps in recruitment
• RTGS was confused with NEFT
• Programme was confused with policies

30
Suggestions • Develop better understanding of each term.
for • Study provisions of the Amended Company’s act 2013.
candidates • Avoid selective study and rote learning
• Understand the essential key terms required to bring out clarity in the
answer.
• Concentration in the classroom is extremely essential.
• Analyse each question carefully before answering it
• Divide your time logically among different questions.
• Ensure quality not quantity in your answers
• Make short notes incorporating the essential key terms necessary to
bring out clarity in the explanation
• Practice writing out long answers.
• For each topic prepare meaning, objective, features, merits and demerits.
• Solve indirect and case study based questions.

31
 Analysis of
Pupil Performance

Part 3 – Humanities and Commerce

 FOREWORD

This document of the analysis of pupils’ performance at the ISC Year 12 and ICSE Year 10
Examination is one of its kind. It has grown and evolved over the years to provide feedback to
schools in terms of the strengths and weaknesses of the candidates in handling the
examinations.

We commend the work of Mrs. Shilpi Gupta (Deputy Head) and the RDCD division of the
Council, who have painstakingly prepared this analysis. We are grateful to the examiners who
have contributed through their comments on the performance of the candidates under
examination as well as for their suggestions to teachers and students for the effective
transaction of the syllabus.

We hope the schools will find this document useful. We invite comments from schools on its
utility and quality.

Gerry Arathoon
November, 2016 Chief Executive & Secretary

i
 PREFACE

The Council has been involved in the preparation of the ICSE and ISC Analysis of Pupil
Performance documents since the year 1994. Over these years, these documents have
facilitated the teaching-learning process by providing subject/ paper wise feedback to
teachers regarding performance of students at the ICSE and ISC examinations. With the aim
of ensuring wider accessibility to all stakeholders, from the year 2014, the ICSE and the
ISC documents have also been made available on the Council’s website.
The documents which comprise of one Volume for ICSE and three Volumes for
ISC (Languages, Commerce and Humanities) aim to provide a detailed quantitative and
qualitative analysis of the performance of candidates for various subjects, including the
overall performance of the candidates, examiners’ comments on common errors made by
candidates, topics found difficult or confusing, marking scheme for each question and
suggestions for teachers/ candidates.
It is hoped that while on one hand, feedback provided in this document will enable teachers
to understand the assessment/ evaluation process better and help them in guiding their
students more effectively and comprehensively, it will also help students in preparing for the
ICSE/ ISC Examinations, with a better understanding of what is required from them in the
examination.
The Analysis of Pupil Performance document for ICSE for the Examination Year 2016 covers
14 subjects/papers. The ISC Analysis of Pupil Performance document for the year 2016 covers
21 subjects/papers. On popular demand, the subject Business Studies has been added to the
list of subjects for which the analysis is done at the ISC level.
The RDCD team of Mr. Richard Ellis, Dr Manika Sharma and Ms. Mansi Guleria have done a
commendable job in preparing this document, along with Mr. Vinay Kumar. I would also like
to thank Mr. Sameer Kumar of the IT Department for providing the statistical data.

Shilpi Gupta
November, 2016 Deputy Head - RDCD

iii
 COMMERCE
STATISTICS AT A GLANCE
Total Number of students who took the examination 27,933
Highest Marks Obtained 100
Lowest Marks Obtained 1
Mean Marks Obtained 61.4

Percentage of Candidates according to marks obtained

Mark Range
Details
0-20 21-40 41-60 61-80 81-100
Number of Candidates 395 1592 13607 7209 5130
Percentage of Candidates 1.41 5.70 48.71 25.81 18.37
Cumulative Number 395 1987 15594 22803 27933
Cumulative Percentage 1.41 7.11 55.83 81.63 100.00

48.71
50.00
Percentage of Candidates

45.00
40.00
35.00
25.81
30.00
25.00 18.37
20.00
15.00
5.70
10.00 1.41
5.00
0.00
0-20 21-40 41-60 61-80 81-100

126
 COMMERCE
PART I (20 Marks)
Answer all questions.

Question 1 [10 × 2]
Answer briefly each of the questions (i) to (x).
(i) State two components of legal environment of a business concern.
(ii) Why is working capital also known as circulating capital?
(iii) What is meant by participating preference shares?
(iv) Distinguish between advertising and personal selling.
(v) Why is feedback an important element in the communication process?
(vi) Explain the principle of Esprit de corps as advocated by Henry Fayol.
(vii) What is meant by a product?
(viii) Explain the meaning of coordination, as a function of management.
(ix) What are bonus shares?
(x) Explain the concept of management by exception.
Comments of Examiners
(i) Most candidates confused legal environment with
political environment. Some candidates wrote one Suggestions for teachers
word answers which did not convey the meaning. − Stress upon key words which are
(ii) A number of candidates explained working capital, essential for bringing out the
net working capital or gross working capital instead complete meaning of the answer.
of circulating capital. Some candidates explained only − Bring out the differences between the
with the help of a diagram. terms ‘working capital’, ‘net working
(iii) Many candidates did not mention that a participating capital’, ‘gross working capital’ and
preference shareholder has a right to participate in the ‘circulating capital’.
surplus assets of the company, at the time of winding − Convey updated information
up. especially with reference to the
(iv) Some candidates wrote differences between sales Amended Companies Act 2013.
promotion and advertising or differences between − Provide proper and frequent feedback
marketing and advertising. through oral and written tests on
similar sounding topics like personal
selling and sales promotion.

127
(v) In a few cases, either the meaning or the
effectiveness was given. Some of the candidates − Stress upon the fact that comparable
referred to feedback from the consumers’ point of points of difference must be given
view with reference to marketing. and repetition of points as well as
(vi) Most candidates explained other principles of Fayol overlapping of points of difference
such as, unity of direction or unity of command. In
must be avoided.
several cases, candidates were unable to explain
Esprit de corps clearly. − Reinforce that questions must be
(vii) Many candidates restricted the meaning of read, understood and then answered.
‘product’ by referring to only the tangible aspect of − Give a lot of written practice so that
the product - this made the answer incomplete since the management principles as
a product can be in the form of service which is advocated by F.W. Taylor and Henri
intangible. The fact that the product must be offered
Fayol are understood.
for sale was also missing in some of the answers.
(viii) In some cases, the essence of coordination was − Explain tangibility and the
explained instead of the meaning of coordination. intangibility aspect of the product so
Also, some integral terms like, ‘individual efforts’ that the complete meaning is bought
were not included in the answer rendering it out in the answer.
incomplete. − Distinguish between ‘coordination’
(ix) The important key words essential for bringing out and the ‘essence of coordination’.
the meaning of bonus shares, like ‘fully paid’, ‘free
− Tell students to write complete
of cost’, ‘existing shareholder’ were missing in
most of the answers. answers - inadequate and vague
(x) Some of the candidates gave functions of explanations must be avoided.
management instead of explaining the term − Instruct students to use correct
‘management by exception’. terminology while explaining Bonus
shares, Right shares, etc.

MARKING SCHEME
Question 1
(i) Components of legal environment of a business concern:
• Rights / duties/rights and duties of citizens as specified in the constitution (optional)
• Laws concerning promotion/ operation/ expansion of business
• Flexibility and adaptability of laws.
• Judicial system of the country
(One-line explanation, Any two)
(ii) Working capital is invested, recovered and reinvested repeatedly during the operating cycle
of the business and hence is called the circulating capital. In ordinary course of business, it
circulates from cash to inventories to receivables to cash for further investment into business
OR
Current Assets which during the course of business are converted from one form like cash to
another form like inventories than to Receivables and ultimately back into cash.

128
(iii) Participating preference shares are those shares which entitle their holders a share in the
residual/surplus profits of the company in addition to a fixed rate of dividend and share in
surplus assets at the time of winding up of the company.
(iv) Distinguish between advertising and personal selling:
Basis of Advertising Personal selling
distinction
Meaning It involves non-personal It involves personal persuasive
persuasive communication/ not communication/ face to face
face to face
Objective To stimulate and create demand To satisfy the wants of customers
for goods and services which results in immediate sales.
Scope/coverage Wide Restricted to specific customers.
Nature It creates demand for goods It induces customers to purchase
the goods.
Feed back No immediate feed back Immediate feed back
Type of sale Mass selling Individual selling
Media Used Diverse media involving use of Limited media involving use of
oral and written words and oral words and gestures
gestures
Message / Same message/ rigid Message is specific and tailored to
flexibility each customer./ flexible
Suitability More suitable in the initial life of More useful at later stages.
a product
Cost Economical/low High/Expensive
(Any two)
(v) Feedback is the response or reaction of the receiver. Without feedback the sender will not be
able to judge the effectiveness of his message and the communication process will remain
incomplete.
(vi) There must be team spirit and cooperation among the members of an organisation. ‘Unity of
strength ‘and strength of an enterprise lies in the cooperation and harmony in individual
efforts. Group efforts are more than the aggregate of individual contributions on account of
Esprit de corps. It is a feeling of pride and mutual loyalty shared by the members of a group/
team spirit.
(vii) Product means anything which is offered to the public for sale. It may be a physical object,
service or an idea/tangible or intangible. It represents certain benefits and provides some
service. A product is a means of satisfying the needs and wants of consumers. For example, a
car or a house.

129
 (viii) Coordination means harmonising/synchronising/ unifying/ integration of individual efforts
towards achievement of the common goal.

(ix) Bonus shares are fully paid shares given to the existing shareholders free of charge in
proportion to their existing shareholdings. Issue of bonus shares is also known as
capitalisation of undistributed profits.

(x) Management by exception states that managers at every level should confine their attention
to only critical and exceptional deviations from planned results, relevant at their level. In
other words, managers are busy people and have to consume their time, effort and attention
for relatively more important matters avoiding trivial ones. Thus, management by exception
involves selective control or control at strategic points.

PART II (60 Marks)

Answer any five questions.

Question 2
(a) Explain any three external elements of micro business environment. [3]
(b) Briefly explain any two sources of short term finance. [4]
(c) Explain the meaning of debentures. State any four disadvantages of debentures. [5]

Comments of Examiners
(a) Most of the candidates attempted this part correctly.
Several candidates explained components of social, Suggestions for teachers
legal & technological environments instead of − Explanations should contain relevant
external elements of micro environment. In a few matter pertaining to the headings.
cases, words such as ‘consumed’ were used instead − Ask students to add value to a point
of 'consumer’ which changed the context of the by elaborating on the essential points
answer. Some candidates did not give proper in the explanation.
explanation for the points. − Explain sources of finance with
(b) Many candidates ignored the interest aspect in reference to source of capital, interest
various sources of finance. Several candidates were rates, security and repayment
not able to distinguish between bank overdraft and process.
cash credit. A number of candidates explained long − Long term sources and short term
term sources like shares and debentures and loans sources must be clearly demarcated
from financial institutions. Important points were
and distinguished in class with
missing in many cases.
(c) Most candidates did not include essential terms like appropriate examples.
‘acknowledgement of debt’, ‘common seal’ in the − Emphasize the necessity of using key
answers. The word ‘dividend’ was substituted for terms, which bring out clarity of
the word ‘interest’ by some of the candidates which concepts.
resulted in an incorrect answer since dividend is an
appropriation of profit and interest is a charge against the profit.
130
MARKING SCHEME
Question 2
(a) External elements affecting the micro business environment:
• Customers
• Competitors
• Suppliers
• Market intermediaries
• Financiers
• Public (Any three with brief explanation)
(b) Short term sources of finance are:
• Commercial banks
• Trade credit
• Instalment credit/ hire purchase
• Factoring
• Customer advance
• Inter-corporate deposits
• Public deposits
• Loans and advances
• Cash Credit
• Bank Overdraft
• Discounting of bills (Meaning of any two)
Commercial Banks: are a major source of short term finance for business. Bank provides
finance in the following ways:
• Loan and advances
• Cash credit
• Bank overdrafts
• Discounting of bills.
Trade Credit: is the credit extended by seller to buyers at all levels of the production and
distribution process down to the retailer. It arises out of transfer of goods and is unsecured.
Instalment Credit/ Hire Purchase: Instalment credit refers to the facility of buying machinery,
equipment and other durable goods on credit. The buyer has to pay a part of the price of the
asset at the time of delivery and the balance is payable in a number of instalments. The
supplier charges interest on the balance due and the interest is included in the amount of
instalment.
Factoring: Factoring implies raising finance through the sale or mortgage of book debts.
Finance companies or factories provide finance to business concerns through outright
purchase of account receivable or against the security of accounts receivables. The finance
companies generally make advance up-to 60% of the accounts receivable pledged with them.

131
 Customer advances: The customers advance represents a part of the price of the goods
ordered / booked by the customers to be supplied at a later date. This arrangement is used in
case of products which are in short supply.
Inter-corporate Deposits: When a company borrows funds for a short period from another
company which has surplus funds, it is called inter-corporate deposits. The ICDs are generally
unsecured and are arranged by a financier.
(c) A debenture is a certificate issued by a company under its common seal as acknowledgment
of debt as well as an undertaking to repay the specified sum with interest on or before the
prescribed date.
Disadvantages of debentures:
• Permanent burden of interest
• Reduction in credit standing/ goodwill
• Charge on assets
• No voting rights
• High unit price
• Unattractive
• Reduction in dividend
• Heavy stamp duty
• No participation in management
• No participation in (residual) profits (Any four )

Question 3
(a) Write any four features of equity shares. [4]
(b) Explain any four factors that affect the capital structure of a company. [8]

Comments of Examiners
(a) Some candidates wrote advantages instead of features
of equity shares. Substituting the word ‘risky’ in place Suggestions for teachers
of ‘Risk capital’, without giving appropriate − Highlight the fact that each point
explanation, rendered the answer meaningless. Several must be stated with clarity.
candidates used the word ‘interest’ in place of − Headings and explanation must co-
‘dividend’ which conveyed an incorrect meaning. relate to each other.
(b) Many candidates gave factors affecting the fixed − Familiarize students with the terms
capital instead of the factors affecting the capital ‘shares’ and ‘debentures’ and the
structure requirements. A number of candidates did not usage of appropriate terms like
give adequate explanation. dividend and interest.
− Draw attention to the fact that points
should neither repeat nor overlap.
− Give practice in writing answers.
− Distinguish between factors
affecting working capital, fixed
capital and the capital structure.

132
 MARKING SCHEME
Question 3
(a) Features of equity shares:
• Equity shares are called risk capital./ Do not create any charge on the assets.
• Equity shares are issued prior to preference shares and debentures.
• Equity shares carry no preferential rights in the payment of dividend and repayment of
capital at the time of winding up of the business.
• Holders of Equity shares enjoy voting rights.
• Equity shares are entitled to the residual profits of the company.
• The face value of shares is generally very low/ nominal.
• The liability of Equity shareholders is limited to the face value of shares subscribed by
them/ limited liability.
• Equity shareholders have the pre-emptive right to subscribe to new shares issued by
the company/ right shares.
• Participation in the management.
• Equity shares have variable rate of dividend.
(Any four with brief/one-line explanation)

(b) Factors that affect the capital plan of a company:

(i) Trading on equity
(ii) Exercise of control
(iii) Need for flexibility
(iv) Nature of business
(v) Cost of financing
(vi) Period and/ or purpose of financing
(vii) Capital market conditions
(viii) Statutory requirements
(ix) Needs of investors
(x) Cash flow position (Any four with brief explanation)

Question 4
(a) Briefly explain any three demerits of public deposits. [3]
(b) Differentiate between line organisation and line and staff organisation. [4]
(c) Write five features of an informal business organisation. [5]

133
Comments of Examiner
(a) A number of candidates gave extremely concise
Suggestions for teachers
explanations for this part. However, some
− Public deposits are an important
candidates gave features or advantages of public
source of finance and must be taught
deposits and confused pubic deposits with
thoroughly. The features, merits and
debentures or retained earnings. Others confused
demerits must be highlighted.
public deposits with bank deposits.
− Students must be asked to give
(b) Common errors made by candidates while
complete explanations if the basis of
answering this question were as follows:
difference is not given.
• Overlapping of points of difference were
− Preferably, differences should be
given.
given in a tabular form.
• The differences did not correlate.
• One word answers were given by way of − Mind maps or flow charts can be
explanation used to teach these topics.
• Four distinct differences were not given. − Systematic revision of each topic
(c) A number of candidates repeated the points while with regular oral and written
writing the answer. Several candidates wrote feedback will help the students.
features of ‘formal organisation’ instead of
‘informal organisation’. Many candidates gave a
vague and general explanation.

MARKING SCHEME
Question 4
(a) Demerits of public deposits:
• Uncertainty: Public deposits are an uncertain and an unreliable source of finance. The
depositors may not respond when the conditions in the market are not favourable. Deposits
may be withdrawn under unfavourable conditions .deposits are called fair weather friends.
It is not advisable to depend upon them for long term financing
• Risk to investors. Depositors face high risk as they do not get any security for their
investment. Management may not use the deposits as it likes.
• Restrict growth of capital markets:-use of public deposits restricts the growth of healthy
capital market. It distorts the interest rate pattern and results in the dearth of sound
industrial securities. A spurt in public deposits may pose a threat in its credit planning and
plan priorities of the Government.
• Not available to new firms:-Public deposits are not available to new companies and those
with uncertain earnings.
• Speculation:- Management of a company may indulge in overtrading and speculation
with the help of these deposits.
• No voting rights/ No participation in the management.
(Any three points)

134
 (b) Difference between line and line and staff organisation.
Basis Line organisation Line and Staff organisation
Relationship One type of relationship – one Two types of relationship – two
dimension. dimensions.
Specialization Absent Present
Cost Economical Costly
Possibility of Absent High
conflict
Co-ordination Easy Complex
Top executive High responsibility Low responsibility
Nature Simple Complex
Suitability Small organization Large organization
Burden on top High low
executive
(Any four)
(c) Features of an informal business organisation.
(i) It is unplanned and arises spontaneously due to coming together of persons with
common interests and attitudes.
(ii) It reflects human or social relationships among people.
(iii) It is based on common taste, language, religion, culture etc.
(iv) The membership of informal organization is voluntary.
(v) It has no written rules and regulations. Group’s norms serve as the standards of
behaviour.
(vi) It is not portrayed on the organization chart of the company because there is no
definite structure.
(vii) It emerges to meet the social and psychological needs of people.
(viii) It may cut across departments/levels of management, /does not follow the scalar
chain. For example, an accounts clerk, a salesman and a factory supervisor may be
member of an informal group.
(Any five with brief/one-line explanation)

Question 5
(a) Why is management considered as a science? [3]
(b) Differentiate between centralisation of authority and decentralisation of [4]
authority.
(c) State and explain the principles of management as laid down by [5]
F.W.Taylor.

135
Comments of Examiners
(a) Some candidates wrote a general explanation in a
paragraph instead of stating each point clearly. Suggestions for teachers
Several candidates gave the difference between Fayol − Stress upon the fact that the
and Taylor. In many cases the headings were principles of management cannot be
expanded as a way of explanation. changed, though explanation can be
(b) Common errors made by candidates while answering subjective.
this question were as follows: − Stress upon the fact that students
should bring lucidity, precision and
• Basis of differentiation was not stated correctly.
explicitness in their answers.
• Basis of differentiation did not correlate to the
explanation given. − A lot of written practice must be
• Points of difference were repeated/ overlapping. given so as to help students write
• Points of difference were interchanged and quality answers.
written under incorrect headings. − For any kind of distinction, stress
• A few candidates explained Fayol’s principle of upon giving specific points.
centralization. − Some activities can be conducted in
(c) Most candidates wrote correct headings but the the class to bring about a better
explanations given by them were incorrect and understanding of the concepts.
inadequate. Instead of F.W. Taylor, some candidates
gave principles as advocated by Henri Fayol. A number of candidates mixed Principles of Henri Fayol
and F.W. Taylor.

MARKING SCHEME
Question 5
(a) Management is considered as a science because:
Management is a systematized body of knowledge which can be acquired through
observation and experimentation. It consists of universally accepted principles which
establish relationship between causes and effects.
The essential features of science are as under:
(i) Systematized body of knowledge
(ii) Principles based on observation and Experiments
(iii) Cause and effect Relationships
(iv) Universal validity of principles (Any three)
(b) Difference between centralisation and decentralisation of authority:
Basis of difference Centralisation of authority Decentralisation of authority

Meaning Centralisation of authority at Dispersal/ delegation of authority

top level of management at all levels of management
Role of subordinates/ Minimum Maximum
delegation.

136
 Main purpose To ensure control and To speed up decisions, motivate
coordination and develop employees

Burden on top Heavy Low

executives
Suitability Suitable for small Suitable for large organization
organization
(Any four)
(c) Principles of management as laid down by F.W. Taylor:
• Science, not rule of thumb
• Harmony not discord
• Maximum not restricted output
• Division of work and responsibility
• Scientific selection, training and development of workers.
(with brief explanation)
Explanation:
1. Each and every job and the method of doing should be based on scientific study and
analysis rather than on trial and error.
2. Harmony and discord: There should be healthy cooperation between employer and
employees. Management should adopt an enlightened attitude and share the gains of
productivity with workers. Workers on their part should work with discipline and loyalty.
3. Conflict between management and workers on division of surplus can be resolved by
increasing the size of surplus by increasing the productivity.
4. Taylor suggested separation of planning from operational work. Management should
concentrate on planning the job of workers and workers should concentrate on
performance of work.
5. Workers should be selected and trained keeping in view the job requirement. Each and
every worker should be encouraged to develop his full potential.

Question 6
(a) Explain any three objectives of management. [3]
(b) Explain the terms: [4]
(i) Labelling
(ii) Packaging
(c) Discuss the first five steps involved in the process of staffing. [5]

137
Comments of Examiners
(a) Most of the candidates attempted this part correctly. Suggestions for teachers
Common errors made by candidates were: − Use various teaching techniques so
• The features or the importance of management that learning similar sounding topics
were given. become easier.
− Reinforce that headings should be
• Objectives of marketing were stated instead.
supported by a proper explanation.
• Wrong objectives were stated. − Meaning, features, importance must
be taken up separately and explained
• ‘Development of nation’ was written instead of
well in order to avoid confusion.
‘development of people’.
− Explain with appropriate examples
• Explanation was vague and lacked accuracy. the difference between packing,
(b) Most candidates managed to explain ‘labelling’ package and packaging.
properly. A few candidates confused ‘packaging’ with − Train students to write keywords
‘packing’. Objective of packaging was missing in which are essential to bring out
most of the answers. clarity.
(c) Many candidates wrote steps of recruitment or − Encourage students to follow the
selection process instead of the process of staffing. correct sequence of steps. Steps
Several candidates did not write the correct sequence should be explained in a
of steps. chronological order
− The difference between recruitment,
selection and staffing must be
explained clearly.

MARKING SCHEME
Question 6
(a) Objectives of Management:
• Profitability
• Prosperity and growth/productivity
• Change and innovation
• Development of people
• Discipline and morale
• Effective decision making
• Building up goodwill
• Quality goods at reasonable price
• Proper utilization of resources.
(Any three with brief explanation)

138
 (b) (i) Labelling:
The term’ labelling’ means designing a label to be put on a package. A label is a small
slip placed on the product to denote its nature, contents, ownership, destination etc. A
label describes the product, its usage and specifies it contents, ownership, destination
etc. It is the medium through which the manufacturer gives the necessary information
to the user or consumer. Any legal restriction is evidenced through labelling. The
packaged commodities order makes it obligatory on the part of the manufacturers to
provide information such as name of the product, name and address of the
manufacturer, date of manufacture contents and ingredients, maximum retail price,
directions for use etc. In case of tobacco products, a statutory warning is required.
(ii) Packaging:
Packaging refers to designing and producing appropriate packing material for a product.
Various kinds of goods are placed into appropriate containers for protection, convenient
handling, makes product attractive and serves as a means of self-advertising.
(Purpose and benefit)

(c) Steps in the process of staffing:

(i) Human resource planning: It involves forecasting and determining the number and
kind of manpower required by the organization in future. The manpower needs of the
organization are estimated keeping in view the present activities and future plans such
as production schedules, demand forecasts, market trends etc. Its purpose is to obtain the
right number of qualified people at the right time. It is an integral part of overall
corporate planning. Manpower requirements are estimated with the help of work load
analysis and work force analysis. Work load analysis help in assessing the number and
types of human resources required for performing various jobs. Work force analysis
would reveal the number and type of human resources already working in the
organization.
(ii) Recruitment: Is the process of searching the prospective employees and stimulating
them to apply for jobs in an organization.
(iii) Selection: it is the process of choosing from among the pool of candidates created at the
recruitment stage. It helps to ensure that the organization gets the best among the
available
(iv) Placement: it refers to the employee occupying the post for which he has been selected.
(v) Orientation: It is the process of introducing the selected employee sand familiarising
him with the policies and rules of the organization.
(Each step adequately explained. The steps should be given in the correct order)

Question 7
(a) Distinguish between method and procedure. [3]
(b) What is marketing? State two features of the modern concept of marketing. [4]
(c) Explain the need for consumer protection. [5]

139
Comments of Examiners
(a) Many candidates lacked conceptual clarity and could Suggestions for teachers
not answer this question correctly. Several candidates − Teach type of plans in detail along
could not identify three distinct points of difference. with differentiation between each
Points of difference written by some candidates did type of plan.
not correlate. − Group discussion and examples must
(b)Some candidates wrote the ‘meaning of market’ be taken up in class.
instead of the ‘meaning of marketing’. A few − Inculcate in the students the habit of
candidates wrote the traditional definition. A number reading, understanding and then
of candidates presented the definition in their own answering the questions.
words and missed out the keywords essential to bring − Systematic revision will help avoid
out the complete meaning. confusion.
(c) Most candidates answered this question correctly.
Some candidates explained the ‘rights of consumers’ instead of the ‘need for consumer protection’.
In some cases, the headings were not accompanied by correct explanation.

MARKING SCHEME
Question 7
(a) Method Procedure
1 Prescribes the specific manner of Chronological sequence of steps
performing the task
2 Limited in scope General
3 More detailed Less detailed, cuts across departments
4 Constitutes part of the procedure Includes method
5 Standardized ways of accomplishing Are designed to execute policies and
repetitive and routine jobs achieve objectives.
6 Not associated directly with control Facilitates control by exception
(Any three)
(b) Marketing:
Marketing is a total system of interacting business activities designed to plan, price and
promote and distribute want satisfying goods and services to present and potential customers.
Features:
• Customer orientation
• Integrated approach
• Marketing research
• Marketing planning and control
(Any two with brief explanation)
(c) Need for consumer protection:

140
 • Consumers are the purpose of business
• Business as a means of human welfare
• Multiple objectives
• Growth with social justice
• Stakeholders approach
• Theory of trusteeship/Responsibility with power.
• Business ethics/code of conduct.
• Self-interest
• Consumers may be unaware/ignorant consumers.
• Protection from unfair trade practices.
(Any five with brief introduction)

Question 8
(a) State three objectives of sales promotion. [3]
(b) Explain the meaning of e-banking. State any three features of e-banking. [4]
(c) Explain five factors that affect the pricing decision of a product. [5]

Comments of Examiners.
(a) Some candidates wrote the objectives of Advertising
Suggestions for teachers
in place of the objectives of sales promotion. In some
− Explain elements of sales promotion
cases, ‘objectives of sales promotion’ were confused
with the ‘features of sales promotion’. Some, clearly in terms of features,
candidates got confused between ‘sales promotion’ objectives and meaning.
and ‘personal selling’. Several candidates gave a − Highlight the difference between
general paragraph on sales promotion. advertising, sales promotion, and
(b) Many candidates were not able to define e-banking personal selling.
properly as essential keywords were missing in their − Explain to students that electronic
answers. Some candidates gave advantages of fund transfer is a service provided
e-banking instead of its features. A few candidates under E-banking, it is not E-banking.
explained NEFT or RTGS instead of e-banking. − Stress upon the fact that expansion of
(c) A few candidates gave vague answers by making up
the header is not an explanation. The
their own points. In some cases, inappropriate and
answer should contain a proper
inadequate explanations were given under correct
headings. explanation covering the meaning,
features and objectives along with
advantages and disadvantages.

MARKING SCHEME
Question 8
(a) Objectives of sales promotion:
• Inspire on the spot buying
• Increase immediate sales
• Clear old stocks
141
 • Supplement advertising and personal selling
• Generate demand during off-season
(Any three with brief explanation)
(b) Meaning of e-banking:
E-banking means banking transactions carried with the help of computer systems/ Electronic
device. It is banking over the internet. It is a part of virtual banking.
Features of e-banking:
• Customer gets 24 hours and 365 days a year services, using personal computer/ laptop/
any other electronic device.
• It is a part of virtual banking.
• Customers can make the permitted transactions from residence or office and even while
travelling. They need not go to the bank.
• It gives sense of security to the customers. They do not face the risk of carrying cash.
• Main forms of e-banking are: Electronic funds transfer system/NEFT/RTGS, ATM,
Debit Card, Credit Card, core banking solution and SMS alert.
(Any three)
(c) Factors that affect the pricing decision of a product:
• Cost
• Demand
• Competition
• Objective
• Quality and service
• Buying motives
• Promotional strategy
• Risk
• Government control
(Any five with explanation)

Question 9
Write short notes on:
(a) SWOT analysis. [4]
(b) Marketing research. [4]
(c) Bank overdraft. [4]

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Comments of Examiners
(a) A number of candidates, expanded the word SWOT Suggestions for teachers
but did not explain SWOT analysis as a whole. In − Explain when an abbreviation is to be
some cases, only examples were given. expanded and when it is to be
(b) A few candidates got confused and wrote that it is the analysed. The difference must be
consumer who does the market research. bought out.
(c) Many candidates confused between bank overdraft − Give students different types of
with bank draft/demand draft. Several candidates questions so that the students get
explained debt card and credit card instead of bank used to answering them.
overdraft. In most cases, the necessity of having a − Highlight the fact that a proper
current account in order to avail the facility of bank detailed explanation should be given.
overdraft was not mentioned. − Explain as to why marketing research
is undertaken. The concept of
marketing research must be crystal
clear.
− While answering a question on short
notes, the meaning, objective,
features merits and demerits must be
written.
− Clarify the differences between
similar sounding words.
− Visiting a bank would help a student
to effectively retain the subject
matter.

MARKING SCHEME
Question 9
(a) SWOT analysis:
SWOT analysis means analysis of Strengths (S), Weakness (W), Opportunities (O), and
Threats (T).
1. A strength is an inherent capacity which help a company to gain a strategic advantage
over its competitors/ for example huge financial resources or latest technology.
2. A weakness is an inherent limitation or constraint of a company which creates a strategic
disadvantage/ for it example unknown brands, poor financial position or obsolete
technology.
3. A threat is an unfavourable condition in the company’s external environment an
environment/ e.g. political corruption, increasing competition, risks in foreign market.
4. An opportunity is a favourable condition in the company’s external environment which
enables it to strengthen its position. / Economic liberalization and globalization offers an
opportunity to companies which want to enter banking insurance and telecommunications
sector market.

(b) Marketing research:

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 Meaning: Marketing research refers to scientific and systematic gathering, recording and
(analysing of data – optional) about marketing problems to facilitate decision making.
I. Technique of conducting marketing research:
• Trade journal with explanation
• Consumer associations
• Government publications
• Services of trained investigators
II. Advantages/importance:
• It provides a sound basis for formulating marketing strategies and policies.
• The potential demand for a product or service can be estimated.
• The actual needs, tastes and preferences of consumers can be ascertained.
• New products can be tested before launching them for sale in the market.
• New uses of existing products can be found and new market can be developed for sale.
• The attitude of customers towards the products can be judged.
• The competitive strength and brand image of a product can be judged.
• The effectiveness of distribution channels, advertising methods, etc. can be measured.

(c) Bank overdraft:

1.(It is a kind of temporary financial accommodation extended by the bank to its regular
customers.) Under this arrangement a 2(customer having a current account) with a 3(bank is
allowed to overdraw his account at a specific amount/ upto specified a/m A business
enterprise can enter into this arrangement to take care of a temporary working capital.
4(Interest is charged on the amount actually overdrawn) and not on the amount sanctioned by
the bank. 5(The borrower does not to seek the approval of the bank every time it is
overdrawing.) 6(a/m sanctioned depends upon creditworthiness.
(Any four)

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GENERAL COMMENTS:
(a) Topics found difficult by candidates in the Question Paper:
Question 1 (ii) Circulating capital.
(iii) Participating preference shares.
(v) Why is feedback an important element in the communication process?
(vii) What is meant by a product?
(ix) What are bonus shares?
Question 3 (b) Explain four factors affecting the capital structure of a company.
Question 6 (c) Discuss the first five steps involved in the process of staffing.
Question 7 (a) Distinguish between method and procedure.
Question 7 (b) Features of modern concept of marketing.

(b) Concepts in which candidates got confused:

− Components of legal environment with political environment.
− Co-ordination with essence of co-ordination
− Management by exception.
− Principles of F.W. Taylor with principles of Henri Fayol.
− Objectives of management with importance of management.
− Steps of staffing with steps in selection and recruitment.
− Objectives of sales promotion.
− Bank overdraft with Bank draft.

(c) Suggestions for candidates:

− Regular studies are essential in order to score marks.
− Selective studies must be avoided.
− Explanations must co-relate with the heading and should be complete.
− Utilize the reading time effectively. Chalk out the questions to be attempted.
− Understanding the requirements of the question before attempting the answer. Solve the past years’
papers.
− Be regular in class. The keywords that bring out the complete meaning must be underlined and
included in the answer.

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 FOREWORD

This document of the analysis of pupils’ performance at the ISC Year 12 and ICSE Year 10 Examination is one
of its kind. It has grown and evolved over the years to provide feedback to schools in terms of the strengths and
weaknesses of the candidates in handling the examinations.

We commend the work of Mrs. Poonam Sodhi and the ISC Division of the Council who have painstakingly
prepared this analysis. We are grateful to the examiners who have contributed through their comments on the
performance of the candidates under examination as well as for their suggestions to teachers and students for the
effective transaction of the syllabus.

We hope the schools will find this document useful. We invite comments from schools on its utility and quality.

Gerry Arathoon
November 2015 Chief Executive & Secretary

i
 INTRODUCTION

The Council has consistently been bringing out the “Pupil Performance Analysis” document since 1994.
This document is reviewed every year and changes incorporated based on suggestions received from various
quarters which include experts in the field of education as well as heads of schools and teachers, in order to make
the study more useful and meaningful.

This document comprises of qualitative analysis of performance of pupils at the ISC examinations. Performance
Analysis has been carried out for the most popular subjects that are largely ascribed to, by the schools.
The purpose of this study is to enable teachers to see at a glance, overall performance of all candidates who
have taken the examination and examiners comments on each question. This would enable the teachers to
understand the assessment of the ISC examinations better and would help them to guide their students more
effectively.

The qualitative analysis details the assessment criteria followed for evaluation of answer scripts. Once the
process of evaluation of scripts is over, examiners are requested to give detailed comments on the performance
of candidates for each question. This includes the examiners’ response on what constitutes a good answer;
common errors made by candidates while answering the questions; their popularity with students and overall
performance of students.

Mrs. Shilpi Gupta along with Mrs. Desiree Tennent, Ms. Mansi Guleria, Mrs. Geeta Bakhshi and
Mrs. Theresa Cherian and have done commendable work in ensuring that this document is prepared well in time,
in order to guide students who will be appearing for the ISC Examination.

Poonam Sodhi
November 2015 Deputy Secretary
 COMMERCE
STATISTICS AT A GLANCE
Total Number of students who took the examination 28,331
Highest Marks Obtained 100
Lowest Marks Obtained 2
Mean Marks Obtained 66.09

Percentage of Candidates according to marks obtained

Mark Range
Details
0-20 21-40 41-60 61-80 81-100
Number of Candidates 127 1725 9804 9872 6803
Percentage of Candidates 0.45 6.09 34.61 34.85 24.01
Cumulative Number 127 1852 11656 21528 28331
Cumulative Percentage 0.45 6.54 41.14 75.99 100.00

Range of Marks Obtained

34.61 34.85
35.00
Percentage of Candidates

30.00
24.01
25.00

20.00

15.00

10.00 6.09

5.00
0.45

0.00
0-20 21-40 41-60 61-80 81-100

Marks Obtained

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B. ANALYSIS OF PERFORMANCE

PART I (20 Marks)

Answer all questions.

Question 1 [10  2]
Answer briefly each of the questions (i) to (x).
(i) Enumerate the components of macro environment of a business concern.
(ii) What is meant by capital gearing ratio?
(iii) Explain the meaning of gross working capital.
(iv) Distinguish between NEFT and RTGS.
(v) Distinguish between Unity of Direction and Unity of Command.
(vi) Explain the term span of control.
(vii) What are the steps involved in the process of recruitment?
(viii) What is meant by the term place in marketing mix?
(ix) Explain branding.
(x) What is mobile banking? State any two banking services available on mobile
phone.
Comments of Examiners
(i) Only two components of macro environment
Suggestions for teachers
were given and explained in detail by many
 Stress upon use of correct terminology.
candidates. Some candidates wrote components
 Explain the difference between ‘capital
of micro environment instead. Candidates also
fund’ and’ equity fund’
used words such as, technique/ technical/
 Working capital, gross working
economical /legally instead of technological/
capital, and net working capital should
economic/ legal environment, which resulted in
be explained clearly. Also explain the
a change in the context of the word.
difference between assets, fixed assets
(ii) Many answers lacked conceptual clarity. In
and current assets.
some cases, equity to debt ratio was substituted
 Tell students that when differences are
with words such as capital fund. The correct
asked, expanding the abbreviations
formula was not written by some candidates.
does not become a point of difference.
(iii) The concept of working capital was explained in
Teach students the latest banking
general by a number of candidates. Some
trends. They must also be trained to
candidates got confused between gross working
give the correct difference under the
capital and net working capital and gave an
correct heading.
explanation of net working capital. Several
candidates wrote that gross working capital is

128
 the book value of assets instead of writing that
gross working capital is book value of current  Give oral and written practice to
assets, while other candidates wrote that gross students in writing short answers so as
working capital is the amount invested in fixed to help them understand the
assets/assets instead of current assets. methodology of answering a question.
(iv) Many candidates wrote the expanded forms of the  Stress upon the important keywords
abbreviations NEFT and RTGS as a point of without which the answer is
difference. In several cases, the differences were meaningless and incomplete. The
not only given under the wrong headings but were principles of management and their
also inaccurate and incorrect. Candidates did not relevance must be taught giving
seem to be aware of the latest banking trends. suitable examples.
(v) Though majority of the candidates gave a correct  Recruitment and selection process
explanation for ‘unity of command’, some could must be explained clearly.
not explain ‘unity of direction’ correctly.  Clarify the terms - market, marketing
Important key words such as, ‘one head and one mix and elements of marketing mix.
plan’, were missing in many answers.  Discuss in class the latest banking
(vi) The keyword ‘number’ of subordinates under one trends and facilities available through
supervisor was missing in many answers; also mobiles with suitable examples.
instead of writing ‘subordinates’ some of the  Ask students to read and understand
candidates wrote ‘subordinate’ and instead of the question before attempting it.
writing ‘manager’ the candidates wrote
‘managers', which changed the meaning of the answer.
(vii) Instead of writing the steps involved in recruitment, some candidates wrote the steps involved in
selection/ planning/controlling.
(viii) The meaning of ‘market’ was given by several candidates instead of the element place in marketing
mix. Many candidates defined ‘place mix’ as manufacturing producing place or as a function of
exchange. In some cases, either ‘channel of distribution’ was written or ‘distribution of products’
was given, whereas, both formed an important part of the answer.
(ix) The most common error made in this answer was that though most of the candidates gave the
meaning of the word ‘brand’, they did not write its purpose i.e. product differentiation or
inculcating brand loyalty.
(x) This question was misunderstood and many candidates wrote about e-banking or net banking. Also,
instead of writing the meaning of the word ‘mobile’, candidates used words like, ‘land line’ which
is contrary to the word ‘mobile.
MARKING SCHEME
Question 1
(i) The components of macro environment of a business concern:
 Economic environment
 Social environment
 Technological environment
 Political environment
 Legal environment (any four points)

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(ii) Capital gearing ratio:
The ratio between equity and debt (borrowed funds) is called capital gearing ratio / financial
leverage. Two types of gearing are: High gearing / Trading on thin equity and Low gearing /
Trading on thick equity.
High geared when borrowed capital > equity
(iii) Gross working capital means the total amount of funds invested in current assets / working
assets / cash, stock of goods, debtors and short term investments.
OR
Gross Woking Capital = Book value of current assets
(iv) NEFT and RTGS:
NEFT RTGS
1. Processing NEFT transactions are settled RTGS transactions are
in batches/NEFT is based on processed individually and
net settlement at specific times. continuously/RTGS is based on
gross settlement
2. Minimum No minimum value Minimum value is Rs.2 lakhs
transaction value
3. Number of Six times on week days and No limit on the number of
transfers during three times on Saturday transfers during the day
the day
4. Maximum value If one does not have a bank There is no upper ceiling for
account, the maximum amount RTGS.
that can be transferred is
`49,999. In the case of an
account holder, there is no
minimum or maximum limit.

5. Area Is used for national - NEFT For international/ national - Can

can be used only for remitting be used to receive foreign
Indian rupee among the remittances
participating banks within the
country
(any two)

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 (v) Unity of Direction and Unity of Command:
Unity of direction Unity of command
1. Meaning One head and one plan for a group of One employee must be
activities having the same accountable to only one
objectives. supervisor/ head/ boss.
2. Relativeness Relates to the organization as a Relates to the functioning of
whole. people
(Any one)
(vi) Span of control means:
Span of control means the number of subordinates/ employees/ workers who report directly
to one Manager/ supervisor/ authority.
(vii) The steps involved in the process of recruitment are:
 Identification of sources of manpower
 Comparing the dependability of various sources
 Choosing the best source of manpower
 Calling applications for vacancies
OR
 Identifying the sources of supply of adequate number and right type of personnel.
 Publicizing information about job vacancies in the organization.
 Assessing alternative sources and choosing the best source.
 Contacting the chosen source or recruitment to secure applications.
(viii) Place in marketing mix:
Place is an element of marketing mix which refers to distribution of products and channels of
distribution to make the product available to customers for purchase and consumption.
(ix) Branding:
Branding may be defined as the process of giving a distinctive brand name / symbol / mark/
logo/ sign to a product with the purpose of differentiating it from competitive products or
inculcating brand loyalty.
(x) Mobile banking means banking transactions through mobile phone. Banking services
available on Mobile phone are:
1. SMS Alert
2. Making payments
3. Making enquiries
4. Money transfer (any two services)

131
 PART II (60 Marks)
Answer any five questions.
Question 2
(a) Explain any three features of business environment. [3]
(b) Discuss in brief any four factors that affect the working capital requirement of a [4]
company.
(c) Explain any five rights of consumers as provided under the Consumer Protection [5]
Act, 1986.
Comments of Examiners
(a) In several cases, the features of business
Suggestions for teachers
environment were confused with
 Explain to students the effect of
importance/benefits of business environment.
changing business environment.
Some candidate wrote features of marketing, while
Features and dimensions should be
some wrote the dimensions of micro environment
clearly distinguished.
or elements such as, customer, competitor,
 Ask students to utilize the reading time
suppliers, etc.
given, to understand the question
(b) The most common error committed by candidates
before attempting it.
in this question was that they wrote the factors
 Differences between the fixed capital
affecting the fixed capital requirement or the
and working capital must be
factors affecting financial planning or the factors
highlighted. Flow charts and mind
affecting capital structure instead of the factors that
maps can be used to help students
affect the working capital requirement of a
remember.
company, as asked.
(c) Some candidates wrote about responsibilities of
consumers, methods of consumer protection and the redressal machinery under the Consumer
Protection Act 1986, instead of the rights of consumers. Several candidates misunderstood and
wrote about illiteracy while writing about Right to Education. In a few cases, for the ‘Right to be
heard’, candidates wrote about hearing instead of the how grievances of consumers can be heard.
MARKING SCHEME
Question 2
(a) Features of business environment:
 Totality of External Forces
 General and Specific Forces
 Interrelatedness
 Complexity
 Dynamic
 Uncertainty
 Relativity
(Any three with explanation)

132
(b) Factors that affect the working capital requirement of a company:
 Operational efficiency
 Nature of business
 Size of the enterprise
 Manufacturing cycle/ length of the operating cycle
 Terms of purchase and sales
 Turnover of working capital
 Business cycle
 Dividend policy
 Management attitude towards risk
 Rate of growth of business
 Seasonal variations
 Goodwill/ creditworthiness/ reputation
(any four with explanation)
(c) Rights of consumers as provided under the Consumer Protection Act, 1986.
 Right to safety
 Right to information
 Right to choice
 Right to be heard
 Right to seek redressal
 Right to education
 Right to healthy environment
(Any five with explanation)

133
Question 3
(a) What is meant by trade credit? Mention two advantages of trade credit as a short term [3]
source of finance.
(b) Explain any four types of debentures through which a Public Limited Company can collect [4]
its borrowed capital from the public.
(c) What is retained earning? Explain any two of its merits and two of its demerits. [5]
Comments of Examiners
(a) Instead of writing about trade credit, some
candidates wrote about cash credit or they wrote that Suggestions for teachers
it is the discount allowed by the seller to the buyer;  Trade credit, cash credit and customer
some others wrote about trade credit being short advances are three different forms of
term loans given by financers. The advantages of short term finance. Trade credit must
trade credit as a short term source of finance were be explained from the business point
not properly explained by many candidates. of view.
(b) Correct headings were given by many candidates but  Instruct students to write complete
the explanation was either an expansion of the sentences and not one word answers.
heading or was not correct, especially in the case of  Tell students that explanation does not
registered and bearer debentures, Also, in case of mean expanding the heading. The
convertible debentures, several candidates forgot to meaning of each type of debenture
write that convertible debentures are converted into must be made clear.
equity shares.  The importance of keywords must be
(c) In the explanation of retained earnings, not only is stressed upon. The type of answers
the word ‘retaining’ important, but also the word required must be explained and
‘reinvesting’, which many candidates did not shortcomings of answers given by
include in the answer. The explanation given by candidates must be discussed in class.
some candidates was general, vague and inadequate.

MARKING SCHEME
Question 3
(a) Trade credit:
Trade credit is the credit extended by one business firm to another as incidental to sale or
purchase of goods and services. In other words, Trade Credit is the credit extended by sellers
to buyers at all levels of production and distribution process down to the retailer.
Advantages of trade credit:
 Trade Credit is a very simple or convenient method of raising short term finance.
 No formalities are involved and the credit is readily available to reputed business firms.
 No interest is payable.
 No charge is created on company’s assets.
 More economical. (Meaning and any two advantages)

134
(b) Types of Debentures:
 Registered debentures
 Bearer debentures
 Redeemable debentures
 Irredeemable debentures
 Naked / unsecured debentures
 Mortgage debentures
 Convertible debentures
 Non-convertible debentures
(any four with brief explanation)
(c) Retained earnings:
Retained earnings refer to the process of retaining and reinvesting part of net profit in the
business to expand the business and to meet the financial requirements.
Merits:
 Convenient
 Economical
 Increases the credit worthiness of the company
 No dilution of managerial power
 No charge on company’s assets
 No burden on the company’s profits.
 Can be used to redeem debts
 No dilution of voting rights
 Helps to increase capital formation which is necessary for rapid development of nations
 Can undertake plans for expansion irrespective of capital market conditions
Demerits:
 May lead to over capitalization
 Manipulate share prices
 Lop sided development of the industry
 May create monopoly.
 Lead to dissatisfaction among the present shareholders
 Unstable source since profits may not remain the same in future years

135
Question 4
(a) Distinguish between equity shares and preference shares. [4]
(b) Explain any four facilitating functions of marketing. [8]

Comments of Examiners
(a) The basis of differentiation was not given by many Suggestions for teachers
candidates. As a result, they could not give clear,  Ask students to revise their answers
complete and accurate differences. Some candidates and ensure that they have written
wrote the difference correctly but under wrong the differences under correct
headings. Several candidates wrote the word headings. If the differences are
‘interest’ as a return on shares and ‘dividend’ as a written in a paragraph format, the
return on debentures. In some cases, only one word points of differences must be
was given as a difference, for example, under ‘degree clearly demarcated. The differences
of risk’, a few candidates wrote ‘high’ or ‘low’ which given must correlate to each other.
did not give the complete meaning.  Stress upon the use of correct
(b) The most common error made in this part was that terminology.
instead of giving the facilitating functions of  The reading time must be utilized
marketing, many candidates gave functions of effectively. Classification and the
exchange i.e. buying and selling or functions of basis of classification must be
physical supply that is, transportation and explained. Reference work is a
warehousing. In some cases, instead of facilitating must.
functions, candidates wrote about marketing mix.

MARKING SCHEME
Question 4
(a)
Basis Equity Shares Preference Shares
1. Nominal value Generally low Generally high
2.Degree of risk Very high risk because Comparatively low because
dividend is not fixed. of fixed rate of dividend
3.Right to dividend After dividend paid to Prior to dividend on equity
preference shares shares
4.Refund of capital Repayment after all other Prior to refund of equity
obligations are refunded capital.
5.Voting rights Voting rights exists Limited voting rights
6. Appeal To the bold adventurous To the cautious and
investors conservative investors.
7.Redemption Not redeemed during the life Redeemable preference
shares are redeemed

136
 8.Convertibility Shares of business cannot be Can be converted into equity
converted to preference shares shares
9.Arrears of dividend Not paid Arrears of Cumulative
preference shares are paid
dividend out of next year’s
profit.
10.Further issue of shares Shareholders are entitled to Shareholders are not entitled
issue of right shares and to issue of right shares and
Bonus shares bonus shares.
11. Rate of dividend Varies with profit Fixed
(any four)
(b) Facilitating functions of Marketing:
 Marketing research
 Product planning and development
 Standardization and grading
 Packing and packaging
 Branding and labelling
 Pricing
 Advertising and salesmanship
 Financing
 Risk taking
(any four points with proper explanation)

137
Question 5
(a) Mention three remedies available to consumers under the Consumer Protection [3]
Act, 1986.
(b) Explain any four merits of borrowing funds from financial institutions. [4]
(c) Explain any five ways of overcoming barriers to communication. [5]
Comments of Examiners
(a) In this part, a number of candidates wrote about the
Suggestions for teachers
redressal machinery instead of the remedies available
 Consumer rights, responsibilities,
to consumers under the Consumer Protection Act,
remedies and redressal machinery are
1986. Some other candidates wrote about rights or
different concepts and must be clearly
responsibilities of consumers.
explained. Practice should be given to
(b) Though a few candidates could give a correct answer
students in various types of questions,
to this question, the merits were not clear and some
so that students can attempt them
candidates made up their own points. Some
without misunderstanding the
candidates wrote about merits of various long term
question.
sources of finance like shares and debentures. Some
 The difference between banks and
candidates wrote about advantages of borrowing
financial institutions must be
funds from a bank, instead of financial institutions, as
explained and more oral and written
required.
practice must be given to the students.
(c) Many candidates did not seem to have conceptual
 Different types of barriers to
knowledge about the ways of overcoming barriers to
communication and ways to
communication. Answers were vague, inadequate and
overcome them can be explained
incomplete. Some candidates wrote about barriers to
using suitable examples and case
communication instead of the ways to overcome
studies.
barriers to communication. At times, points were
overlapping or repetitive.

MARKING SCHEME
Question 5
(a) Remedies available to consumers under the Consumer Protection Act, 1986:
 To remove the defects in goods or deficiency in service.
 To replace the defective product with a new one, free from any defect.
 To refund the price paid for the product or the charges for the services.
 To pay a reasonable amount of compensation for any loss or injury suffered by the
consumer due to the negligence of the opposite party.
 To pay punitive damages in appropriate circumstances.
 To discontinue the unfair / restrictive trade practices and not to repeat in future.
 To cease manufacture of hazardous goods and to desist from offering hazardous services.
(any three)

138
(b) Merits of borrowing funds from financial institutions:
 Both, risk/equity capital as well as loan capital is available.
 Financial institutions provide under-writing facilities.
 Benefits of trading on equity is available.
 New companies which may find it difficult to raise finance from the public can get finance
from these institutions.
 Financial institutions provide finance for modernization and expansion of a business
concern.
 Loans and guarantee in foreign currency and deferred payment facilities are available
for the import of required machinery and equipment.
 The rate of interest is economical/low and repayment procedure is convenient.
 Along with finance, a company can obtain expert advice and guidance for the successful
planning and administration of projects.
(any four)
(c) Ways of overcoming barriers to communication:
 Well drafted message with proper language
 Two way communication
 Sound organizational structure
 Consistency
 Empathetic listening
 Motivation
 Feedback
 Open door policy
 Gestures and tone (any five to be explained)

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Question 6
(a) Explain any three internal factors of micro environment of a business [3]
organization.
(b) Explain the objectives of marketing. [4]
(c) Planning is beneficial to all. In the light of this statement, discuss the [5]
importance of planning.
Comments of Examiners
(a) Though majority of the candidates answered this
question correctly, a few misunderstood and wrote Suggestions for teachers
about the importance/ features/ external factors  Students must be trained in
influencing the business organization. It was also answering similar type of questions.
noticed that in several cases, the candidates wrote Ask students to give a proper
correct headings but the explanation given under explanation for every heading.
these headings was incorrect.  Use of flow charts and mind maps can
(b) Instead of giving the objectives of marketing, help in clarifying concepts.
importance or advantages of marketing were given by  The shortcomings of an answer
many candidates. Also, in several cases, while the should be discussed with students in
headings were correct, the explanations given under class. Students must be told that if
these headings were vague, inaccurate and extremely they are using the paragraph format,
generalized or incorrect. the points should be well defined and
(c) Instead of writing the importance of planning, some clearly stated. The points must not
candidates gave features/ steps/ functions of planning. overlap.
Many candidates answered in a paragraph format
with the points not clearly demarcated and well defined.

MARKING SCHEME
Question 6
(a) Internal factors of micro environment are:
 Corporate culture: The values, beliefs and attitudes of the founders and top management
of the company.
 Mission and objectives: The business philosophy and purpose of Company guides its
priorities, business strategy, product market scope and development process.
 Top management structure: the composition of the board of directors, the degree of
professionalization of management and the organizational structure of a company have
important bearing on its business decisions.
 Power structure
 Company image and brand equity
 Human and other resources
(any three)

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(b) Objectives of Marketing:
 Inducing customers to buy products
 Consumers’ satisfaction
 Increasing sales volume
 Profitability
 Coordination and integration
 Improving standard of living of people
 Optimum utilization of business resources
 Service to society – welfare of the society, protection of environment
 Generating employment
(any four with brief explanation)
(c) Importance of planning:
 Focuses attention on objectives
 Makes activities meaningful
 Brings order in place of chaos
 Reduces risk of uncertainty
 Improves economy of operations
 Provides basis for control
 Promotes innovation and creativity
 Facilitates decision-making
 Helps in co-ordination
 Bridges gap between present and future
(Any five with explanation)

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Question 7
(a) Differentiate between functional organization and divisional organization. [3]
(b) What is meant by service? Mention three features of service. [4]
(c) Coordination is the essence of management. Explain. [5]
Comments of Examiners
(a) This question was not attempted by a number of
candidates and many of those who attempted it gave Suggestions for teachers
 Familiarize students with the
vague and inadequate explanations. Many candidates
did not write the basis of differentiation which functional and divisional forms of
organization through examples and
resulted in the differences not being clearly defined.
case studies so that they can bring out
Points were repeated by many candidates.
the differences between the two forms
(b) The keyword ‘intangible’ was missing in many of the
clearly.
answers. Some candidates misinterpreted the word
 Give practice to students in writing out
‘service’ as, being in employment and stated the
answers.
features of employment instead. However, some
 Stress upon the important keywords in
candidates managed to write the features of service
the topic.
correctly.
 Coordination is inherent in every
(c) While many candidates were able to explain the function of management which is why
meaning of coordination, some failed to explain as to it is considered as the essence of
why coordination is considered to be the essence of management. This must be made clear
management. Several candidates failed to relate while teaching the topic in the
every function of management to coordination and classroom
the fact that coordination is inherent in every
function of management.

MARKING SCHEME
Question 7
(a) Basis Functional organization Divisional organization
1. Formation Each major function of the Each major product line
organization is a separate is a separate division
department
2. Type of Functional specialization Product specialization
specialization
3. Organizational units Functional departments and Product divisions and
sections sub-divisions
4. Coordination Difficult Simple
5. Cost Economical Expensive
6. Responsibility for Cannot be fixed on one Can be fixed on each
profits department division
7. Development of Not possible Possible
general managers

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 8. Autonomy of Less More
operations
9. Control Simple Difficult
10. When useful For all types of firms For firms having
diversified product line.
(Any three)
(b) Meaning of Service:
Services are intangible products which cannot be seen and touched and the ownership of
services cannot be transferred.
Features:
 Services are intangible
 Services are perishable
 Services are inseparable
 Services are variable (brief explanation required)
(c) Coordination as the essence of Management:
Coordination is not a separate function but the very essence of management. The very purpose
of management is to achieve harmony between individual efforts and accomplishment of
group goals.
Or
It is because the very purpose of management is achievement of harmony between individual
efforts towards the accomplishment of group goals. It is because the achievement of
harmony between individual efforts towards the accomplishment of group goals is the very
purpose of management. Coordination is inherent in all the functions of management.
Coordination is the result which can be achieved through the proper performance of
managerial functions:
 In ‘planning’, coordination is required between the master plan of the enterprise and the
plans of different departments or divisions. There should also be coordination between
the objectives and the available resources.
 During ‘organizing’, there should be coordination between the authority and
responsibility of every individual. Same work should not be assigned twice. Organization
would be ineffective if there is lack of coordination between different departments and
divisions.
 While ‘staffing’, coordination is achieved by balancing the skills and abilities of the
employees with the jobs assigned to them.
 While ‘directing’, supervision, motivation and leadership are used to ensure harmonious
working of the organization.
 During ‘controlling’, coordination is achieved by ensuring that actual results conform to
plans as closely as possible.

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Question 8
(a) What is a market? Explain the meaning of capital market and money market. [3]
(b) Differentiate between traditional concept of marketing and modern concept of [4]
marketing.
(c) What is meant by indirect channels of distribution? Explain the types of indirect [5]
channels of distribution.

Comments of Examiners
(a) A general definition of market was given by many
Suggestions for teachers
candidates. In some cases, capital market and
 Meaning of ‘market’ must be clarified.
money market were not explained clearly.
Capital and money market must be
Majority of the candidates seemed to lack
explained clearly and with examples.
conceptual clarity. The sources from where funds
 Students must be trained to write
are available were not explained by some
corresponding differences. Giving
candidates. A few candidates tried to link capital
one-word answers as differences must be
market and money market with fixed assets.
avoided. Students must also be cautioned
(b) Only one or two differences were explained by
against repetition of points.
many candidates. Some candidates gave
 Stress upon the importance of
differences in one word. In several cases,
understanding the question before
differences were given under wrong headings and
attempting it. The word intermediary/
certain points were also repeated.
middleman is very important and must be
(c) Majority of the candidates answered this question
included in the answer for ‘indirect
correctly but some candidates ignored the concept
channels of distribution’ so as to
of middleman and did not mention intermediaries
differentiate it from a direct channel of
which is an important part in indirect channel of
distribution.
distribution. Several candidates only gave one

level of channel of distribution. A few candidates
wrote about zero level which is not an indirect channel of distribution but a direct channel of
distribution.

MARKING SCHEME
Question 8
(a) Market: It is the sum total of the environment in which resources, activities and attitude of
buyers and sellers affect the demand for products and services / a place where the buyer and
seller meet either personally or virtually to affect the sale and purchase of products and
services.
Capital Market: This is a specialized market for providing long term finance of business
enterprise. It comprises specialized financial institutions, stock exchanges, investment trusts,
insurance companies, etc.
Money market: This is a specialised market for providing short term finance to business
enterprises. It consists of various types of banks.

144
(b) Traditional concept of Marketing Modern concept of Marketing
1. Scope It involves obtaining of orders Modern concept of marketing
from customers and delivering involves the design of the
them the products. products acceptable to
customers and transfer of
ownership from the sellers to
buyers.
2. Orientation It is selling oriented It is customer oriented
3. Beginning It begins (selling) after the goods Marketing begins before
are purchased production in order to identify
the wants of customers

4. End It ends with the sale of goods Marketing continues after sales
in order to provide after sales
services and to judge customers
response.
5. Focus Attention on sellers need of Attention on customers needs
increasing sales volume and satisfaction
6. Goal Short term goal of profit Long term goals such as growth
maximisation and stability
7. Means of Maximising profit by increasing Marketing aim is earning profit
achieving goal sales volume. through maximum customers
satisfaction

(any four)
(c) Indirect channels of distribution:
When one or more intermediary is involved in the distribution network, it is referred to as
indirect channel.
Types of indirect channels of distribution:
 Manufacturer – Retailer – Consumer (One level channel)
 Manufacturer – Wholesale – Retailer – Consumer (Two level channel)
 Manufacturer – Agent – Wholesaler – Retailer – Consumer (Three level channel)
(types with brief explanation)

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Question 9
Write short notes on:
(a) Motivation as an element of directing. [4]
(b) Formal organization. [4]
(c) Internal sources of recruitment. [4]

Comments of Examiners
(a) Key words such as, ‘desire, inducing people to work
Suggestions for teachers
hard and achieve goals’, which were an important part
 Give practice to students in writing
of the answer, were missing in many cases. The
short notes which should include the
explanation given by several candidate did not
meaning, objective, advantages as
synchronize with the heading given. Some candidates
well as disadvantages.
wrote Maslow’s Theory of Hierarchy of Needs.
 Give regular assignments and provide
(b) The answers given by the many candidates showed
feedback to students on the
lack of in-depth study of the topic.
shortcomings of the answers written
(c) While the meaning was clearly bought out by most
by them.
candidates, some candidates did not write the
advantages and disadvantages of internal sources of
recruitment, while a few ignored types of internal recruitment, that is, promotion and transfer.

MARKING SCHEME
Question 9
(a) Motivation as an element of directing:
One of the functions of management is to create the desire among the employees to perform
their jobs to the best of their abilities. Inducing people to work hard for achieving common
goals constitutes the motivation function of management. Motivation, may, therefore, be
defined as the process of stimulating or inducing people to take the desired course of action.
Features:
 It is the act of inspiring employees to work hard to achieve the desired goals of the
organization.
 It involves arousing needs and desires in people so as to initiate and direct their behaviour
in a purposeful manner.
 The aim of motivation is to influence the behaviour of subordinates for better performance
and achieving the desired results.
 Motivation is an ongoing process. Human needs are unlimited whereas the means to
satisfy them are limited. As soon as one need is satisfied, another need arises. This
process is continued from birth to death.
 Motivation produces goal directive behaviour. A motivated person works towards the
achievement of the desired goals. Human needs influence behaviour in different ways.

146
  Motivation may be positive or negative. Positive motivation means inspiring people to
work better and appreciating a work that is well done; in certain cases by offering rewards
or promotions. Negative motivation means forcing people to work by threatening or
punishing them.
 Motivation is a result of interplay among three groups of factors.
 Influences operating within an individual
 Influences operating within an organization
 Forces operating in the external environment
Process of Motivation:
 Awareness of need
 Stimulus for action
 Fulfillment of need
 Discovery of new need
(b) Formal organization:
An organization’s structure which is designed and established by management to achieve
organizational goals is termed as formal organization. It is an official system of clearly
defined activities and relationships which are intended to divide and integrate the activities of
the organization.
Advantages:
 Fixation of responsibility is easy as relationship among the members is clearly defined.
 Clarity of roles helps in avoiding duplication of work.
 Unity of command is maintained through an established chain of commands.
 Effective accomplishment of goals by providing rules and procedures and by placing more
emphasis on work.
 Stability in the organization, because behaviour of employees can be fairly predicted since
there are specific rules to guide them.
Disadvantages:
 Delay in decision making: established chain of command and communication may lead to
procedural delays.
 Lack of creative effort: rigid laid down policies may not provide adequate recognition to
creative talent.
(c) Internal sources of recruitment:
Internal sources may refer to employing persons from within the organisation. The important
internal sources of recruitment are as follows:
1. Promotion: it means shifting an employee to a higher post carrying higher salary, status
and responsibility.

147
 2. Transfer: It refers to shifting an employee to a similar job with no change in salary, status
and responsibility.
Advantages:
1. Familiarity – the organization and employees are already familiar to each other
2. Economy – minimum cost is involved.
3. Motivational value – source of motivation and encouragement for employees
4. Better utilization of existing talent
Disadvantages:
1. Limited choice
2. Lack of competition
3. Conflicts among employees
4. Inbreeding – new talent and new blood available outside, does not enter the enterprise.
5. Incomplete source.

GENERAL COMMENTS:
(a) Topics found difficult by candidates in the Question Paper:
 Capital gearing ratio
 Unity of direction
 Motivation
 Span of control
 Functional and divisional organization
 Coordination as essence of management.
 Capital and money market
(b) Concepts in which candidates got confused:
 Facilitating functions with functions of exchange and functions of physical supply.
 Trade credit with cash credit
 Importance of planning with features and steps of planning
 Barriers of communication with ways to overcome barriers to communication.
 Direct with indirect channels of distribution.
(c) Suggestions for candidates:
 Make brief notes on the various Units with key words.
 To be regular and punctual and pay attention in the class.
 Revise all topics and do not resort to selective studies.

148
 Make collective notes from different text books.
 Complete the syllabus on time and leave enough time for revision.
 Improve general knowledge by reading financial pages of the newspapers and know the terms
commonly used.
 On the day of the examination, devote the reading time to collecting your thoughts and
selecting the questions to answer.
 Read the questions twice before you start answering them.
 Give answers that are in line with the requirements of the question.
 Avoid repetition of points in the answer.
 Write differences in a tabular form, making sure that the differences correlate with each other.
 Headings and explanation must co-relate with one another.
 Read your answers once you have finished the paper and correct the errors.

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 INTRODUCTION

The Council has consistently been bringing out the “Pupil Performance Analysis” document since 1994.
This document is reviewed every year and changes incorporated based on suggestions received from various
quarters which include experts in the field of education as well as heads of schools and teachers, in order to
make the study more useful and meaningful.

This document comprises of qualitative analysis of performance of pupils at the ISC examinations. Performance
Analysis has been carried out for the most popular subjects that are largely ascribed to, by the schools.
The purpose of this study is to enable teachers to see at a glance, overall performance of all candidates who have
taken the examination and examiners comments on each question. This would enable the teachers to understand
the assessment of the ISC examinations better and would help them to guide their students more effectively.

The qualitative analysis details the assessment criteria followed for evaluation of answer scripts. Once the
process of evaluation of scripts is over, examiners are requested to give detailed comments on the performance
of candidates for each question. This includes the examiners’ response on what constitutes a good answer;
common errors made by candidates while answering the questions; their popularity with students and overall
performance of students.

Mrs. Shilpi Gupta along with Mrs. Desiree Tennent have done commendable work in ensuring that this
document is prepared well in time, in order to guide students who will be appearing for the ISC Examination.

Poonam Sodhi
October 2014 Deputy Secretary

iii
 FOREWORD

This document of the analysis of pupils’ performance at the ISC Year 12 and ICSE Year 10 Examination is one
of its kind. It has grown and evolved over the years to provide feedback to schools in terms of the strengths and
weaknesses of the candidates in handling the examinations.

We commend the work of Mrs. Poonam Sodhi and the ISC Division of the Council who have painstakingly
prepared this analysis. We are grateful to the examiners who have contributed through their comments on the
performance of the candidates under examination as well as for their suggestions to teachers and students for the
effective transaction of the syllabus.

We hope the schools will find this document useful. We invite comments from schools on its utility and quality.

Gerry Arathoon
October 2014 Chief Executive & Secretary

i
 COMMERCE

A. STATISTICS AT A GLANCE

Total number of students taking the examination 27,574

Highest marks obtained 100
Lowest marks obtained 1
Mean marks obtained 63.18

Percentage of candidates according to marks obtained

Mark Range
0-20 21-40 41-60 61-80 81-100
Number of candidates 378 1885 11340 7897 6074
Percentage of candidates 1.37 6.84 41.13 28.64 22.03
Cumulative Number 378 2263 13603 21500 27574
Cumulative Percentage 1.37 8.21 49.33 77.97 100

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B. ANALYSIS OF PERFORMANCE
PART I (20 Marks)
Answer all questions.

Question 1 [10  2]
Answer briefly each of the questions (i) to (x).
(i) What is the meaning of business environment?
(ii) Enumerate the main forms in which financial assistance from a commercial bank
may be available.
(iii) Write any two features of principles of management.
(iv) What is factoring?
(v) Distinguish between gross working capital and net working capital.
(vi) State any two points of distinction between recruitment and selection.
(vii) Differentiate between bearer debentures and registered debentures.
(viii) In the context of right shares, bring out the meaning of pre-emptive right.
(ix) What is marketing research?
(x) Mention any two specific differences between product and service.
Comments of Examiners
(i) The complete definition of ‘Business environment’
was not stated by many candidates. The candidates Suggestions for teachers
either wrote about the factors affecting business  Stress upon writing complete
environment or the influence of these factors on answers with the necessary
business environment. A complete definition keywords.
consisted of both, the factors and their influence on  Tell students that each question
the business environment. must be read carefully,
understood and then answered.
 Give regular writing practice to
students and also provide
feedback on the written work.

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(ii) Instead of giving the four forms of short term finance,
some candidates gave only two forms. Several  Features of management,
candidates got confused between the terms ‘Trade Features of principles of
credit’ and ‘Cash credit’. Some candidates gave long management, Principles of
term sources of raising finance like, shares and management are all different
debentures. A few candidates wrote ‘Bank draft’, topics and must be explained
instead of ‘Bank overdraft’, while other candidates clearly.
wrote ‘loans’ and ‘advances’ as separate points.  Stress upon proper time
(iii) Common errors made by candidates in this question management while answering
were: instead of features of principles of questions, so that adequate time
management, candidates wrote the principles of is left for last minute revision of
management .i.e. either Henri Fayol’s principles or the answers written.
F.W. Taylor’s principles. Some candidates wrote  The terms ‘Gross working
about the importance of management. capital’ and ‘Net working capital’
(iv) A number of candidates did not seem to have a clear must be clearly differentiated and
concept of ‘factoring’ - the concept of arrangement by explained to candidates.
banks and ‘Book debts were ignored by many  Clear distinction should be made
candidates. Some candidates stated that factoring was between ‘fixed assets’, ‘current
finance available through purchase of ‘Bad debts’ assets’ and ‘total assets’.
instead of ‘Book debts’. Many candidates gave an  Ask students to give differences
inadequate explanation. Some candidates wrote that in a tabular form. The basis of
selling of Mortgage is factoring. differentiation is also important.
(v) Several candidates made errors while writing about Also, the points of differences
gross working capital. Some candidates stated that should relate to one another.
Gross working capital is the amount of capital  Tell students that repetition of
invested in fixed assets or they wrote that Gross points must be avoided and also
working capital is current assets minus depreciation. that merely expanding the
In a few cases, the differences were given in tabular headings does not constitute an
form, but the points of difference did not correspond. answer.
(vi) A few candidates did not know the meaning of
recruitment and selection. In some cases, the points of
differences were mismatched and did not relate to each other. However, majority of the
candidates answered this question correctly.
(vii) Following were the common errors made by candidates while writing this answer: differences
given did not correlate with one another; answers were inadequate and incomplete; many
candidates got confused between the points of transferability, legal formalities and record; a
number of candidates did not know in which Book the name of the registered debenture holders
is recorded.
(viii) Many candidates did not write the term ‘existing shareholders’. They wrote that these shares are
issued to directors or promoters or employees, instead of writing that the right shares are issued
to the existing shareholders. Some candidate confused ‘right shares’ with sweat equity shares
and bonus shares.
(ix) An inadequate/ generalized/ vague explanation was given by most candidates. Some did not
write that it is undertaken in order to solve the problems faced by the consumer; some got
confused between ‘marketing research’ and ‘marketing information’.
(x) While most of the candidates answered this question correctly, some made the mistake of not
correctly correlating the differences.
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MARKING SCHEME
Question 1.
(i) The term business environment refers to the sum total of all individuals, institutions and the
/factors/surroundings/environment that lie outside the business enterprise but that may affect/
its functioning and performance.
OR
Business Environment refers to the environment that affects the functioning and existence of
a business enterprise
(ii) The main terms in which financial assistance from a bank may be available are:
(i) Cash credit
(ii) Loan/advances/loans & advances
(iii) Bank overdraft/Bank O/D
(iv) Discounting of Bill
(iii) Two features of principles of management:
(i) Universality
(ii) Dynamism or Relativity/ relative principle
(iii) Influencing Directing human behaviour
(iv) Flexibility
(v) Cause and effect relationship
(vi) Equal importance (Any two)
(iv) Factoring:
The finance companies or factors provide finance to business organisations through the
purchase of accounts receivables. The debtors of the firm make payments to the finance
company. The business organisation is relieved of the cost and effort of collecting debts and
bad debts. Or
It refers to an arrangement whereby the Book debts [trade debtors]/ sale or mortgage of book
debt, are assigned to a Bank and payment is received against the debtors balance in advance
from the bank. This facility is provided by the bank on the payment of specified charges

124
(v)
Gross working capital Net working capital
(i) Meaning: Gross working capital Net working is excess of current assets over
means the total amount of funds current liabilities
invested in current assets/give e.g. of
amount asset.
OR
(ii) Formula: Gross working capital = Net working capital = current assets –
current assets current liabilities
(Either of the points)

(vi) Meaning:
Recruitment is searching and stimulating the prospective employees to apply for jobs whereas
selection is choosing the right person with necessary qualification.
Approach:
Recruitment is a positive approach whereas selection is a negative approach.
Objective:
The objective of recruitment is to create a large pool of candidates while selection’s objective
is to eliminate all unsuitable candidates.
Process:
Recruitment is a simple process many can cross this stage easily whereas selection is a
complex process, difficult to cross this stage.
Number of Candidates:
Recruitment does not restrict the number of candidates whereas in selection only limited
candidates are selected.
Order:
Recruitment is done prior to selection – whereas selection is made only after recruitment.
(Any two)

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(vii)
Bearer Debenture Registered debenture
(i) Transferability Bearer debentures can be Registered debentures can be
transferred by mere delivery transferred by transfer deed.
(ii) Legal No legal formalities are required Intimation to the company for
Formalities for their transfer and no their transfer is necessary.
intimation to the company is
necessary
(iii) Record No record of such debentures Registered debentures are
kept in the register of debenture recorded in the register of
holders debentures holders..
(iv) Interest Interest is paid on the production Interest is paid by the company
Payment of coupons attached to such to registered debenture holders
debentures. without presenting coupons.
(v) Document No new certificate is issued A new debenture certificate is
issued to the buyer and the
sellers name is cancelled
(Any two)

(viii) The right of the existing shareholders/ members to subscribe for the new shares issued by a
joint stock company as per section 81 of the companies Act, is called pre-emptive right.
(ix) Marketing research is the systematic gathering, recording and analysing of data about the
marketing problems to facilitate decision making.
(x) The differences between product and service are:
Product Service
(i) Tangibility Product can be seen, touched and service cannot be touched and
felt. seen
(ii) Inseparability A product is fully separable from It cannot be separated from the
the seller. seller.
(iii) Durability/ A product is durable, can be There is simultaneous production
Storage stored. and consumption of services.

(iv) Replacement Possible Not possible

(v) Ownership Transferability can be done Non Transferable
(vi) Examples
(Any two)

126
 PART II (60 Marks)
Answer any five questions.
Question 2

(a) Explain why management is considered to be an art. [4]

(b) State and explain any four principles of F.W. Taylor. [8]

Comments of Examiners
(a) Many candidates gave correct headings but could not
substantiate the headings with correct explanation. Suggestions for teachers
Some candidates just expanded the headings as a part  Inform students that in any long
of the explanation. A number of candidates wrote a answer, subheadings are essential
paragraph on management without subdividing it into and a proper explanation
appropriate points. Many candidates could not explain explaining the subheadings must
the point ‘Creativity’. be given. Explanation written by
(b) Common errors made by candidates while answering the candidate must be relevant
this part of the question are as follows: and adequate.
(i) Candidates got confused between Henry Fayol’s  Features of Management as an
and F.W. Taylors principles of management. Art as well as Management as a
(ii) The headings were given but the explanation Science must be explained
given under the heading were not correct. Some clearly.
explanations given were vague and generalized  Unnecessary elongation of the
(iii) While explaining certain principles like, answer by including irrelevant
‘Division of work and responsibility’, some subject matter must be avoided.
candidates only explained ‘Division of work’.

MARKING SCHEME
Question 2.
(a) Art means practical application of knowledge and skills to achieve the desired results. As the
management fulfils the essential features of art, it is considered an art. The essential features of
art are:
i) Practical knowledge
ii) Personal skills
iii) Creativity /constructive skills
iv) Perfection through practice
v) Result oriented approach
(Heading with explanation)

127
(b) The Principles of F.W. Taylor are:
(i) Science not Rule of Thumb / scientific study and planning of work
Each and every job and method of doing it should be scientifically analysed and decided
instead of doing it under trial and error method. The task to be performed should be
scientifically planned. The materials, equipment and working condition should be
standardized. The amount of work to be done should be decided through objective study.
(ii) Harmony not Discord
Harmony in group action/mental revolution. There should be healthy co-operation between
employer and employees. Taylor advocated a complete mental revolution on the part of both
management and workers. Management should adopt an enlightened attitude and share the
gains of productivity with workers. Workers on their part should work with discipline and
loyalty.
(iii) Maximum not Restricted Output / Maximum prosperity for both employees and
management
Conflict of interest between management and workers arises mainly on division of surplus.
Taylor suggested that the best way to resolve the conflict is to increase the size of surplus so
that each side can have a larger share. Management and workers have common interest to
increase the productivity.
(iv) Division of work and Responsibility
Taylor suggested separation of planning from operational work. Management should
concentrate on planning the job of workers and workers should concentrate on performance
of work.
(v) Scientific selection, training and Development
Workers should be selected and trained keeping in view the job requirements. Each and
every worker should be encouraged to develop his full potential.
(vi) Standardization of tools and equipment
Standardization is made in respect of tools, equipment, working hours, working conditions
etc., for improving the efficiency of workers.
(Any four)

Question 3

(a) Distinguish between fixed capital and working capital of a business concern. [3]
(b) What are equity shares? Explain any three advantages of issuing equity shares [4]
from the point of view of a company.
(c) Briefly explain any five factors to be considered while preparing a suitable [5]
capital plan.

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Comments of Examiners
(a) A number of candidates did not know the proper
meaning of ‘fixed capital’ and ‘working capital’. Suggestions for teachers
Repetition of points was noticeable in many answers.  Ask students to read, understand
Several candidates only wrote examples by way of and then answer the question.
explanation. Method of raising finance for both proper  Students must be taught the
working and fixed capital was not known to candidates. advantages of issuing equity
Many of candidates were unable to give any concrete shares from the company’s point
differences. of view as well as from the
(b) A number of candidates did not understand the shareholders’ point of view.
question. Some candidates wrote the advantages of  Regular feedback from teachers
equity shares from the shareholders’ point of view. in the form of worksheets and
In some cases, Repayment of capital at the time of oral tests can help reinforce the
winding up, and Payment of dividend was not subject matter as well as enhance
mentioned by candidates. retention of the subject matter.
(c) Common errors made by candidates while answering  Give writing practice to students
this question were as follows: so that they can formulate a
 Candidates confused the factors affecting capital qualitative answer.
plan with the factors affecting fixed capital  Factors affecting the capital plan
requirement and working capital requirement; and factors affecting the fixed
 Headings were given but the explanation was not capital and working capital are
correct; not the same. Teachers must
 Very vague and generalized explanations were make their teaching more specific
given by candidates. and highlight the points which
can result in mistakes.

MARKING SCHEME
Question 3.
(a) Difference between Fixed capital and Working capital.
Fixed capital Working capital
(i) Meaning It is the capital/block capital or It is the capital invested in current
money invested in fixed assets like assets like Stock of materials and
land and buildings, machinery and finished goods.
etc.,
(ii) Tenure It is invested for a long time It is invested for a short period
(iii) Forms It does not change its form/block Its form keeps on
capital. changing/revolving or rotating
capital
(iv) Sources It is generally raised through shares, It is generally raised through public
Debentures and long term loans, etc. deposits, bank loans and trade
credit, etc.

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(b) Equity shares: The shares which carry no preference rights or priority in the payment of
dividend and in the repayment of capital are called equity shares.
Advantages of issuing Equity shares from Company’s point of view:
(i) No burden on earnings.
(ii) Permanent capital.
(iii) No charge on assets.
(iv) Source of strength./ making a company financially sound
(v) Small nominal value.
(vi) Unlimited source/ capacity to raise further capital.
(Any three with explanation)
(c) Factors to be considered while preparing a suitable capital plan are:
(i) Nature of business.
(ii) Size of business.
(iii) Cash inflows
(iv) Cost of raising capital.
(v) Period of finance.
(vi) Flexibility of capital structure.
(vii) Trading on equity.
(viii) Control of the company.
(ix) Needs of investors.
(x) Capital market conditions.
(xi) Legal requirements.
(Any five with heading and proper explanation)

Question 4
(a) What are sweat equity shares? [3]
(b) List any four features of NEFT. [4]
(c) Briefly explain any five external factors of micro-environment of business. [5]

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Comments of Examiners
(a) Majority of the candidates got confused between
sweat equity shares, right shares and bonus shares. Suggestions for teachers
Many candidates did not write the purpose of issuing  Emphasize upon conceptual
sweat equity shares. Some candidates wrote that clarity and stress upon usage of
sweat equity shares are issued to the shareholders correct terminology.
instead of writing that these shares are issued to  Teachers must make sure that
employees and directors. reference work is done by the
(b) Most of the candidates answered this question candidates and they are not
correctly. Some candidates did get confused between dependent on one book.
features of NEFT and features of RTGS.  Compare the features of NEFT
(c) Most of the candidates answered this question with the features of RTGS so that
correctly. Some candidates only wrote the heading the difference between the two is
without giving a proper explanation. A few clearly bought out.
candidates gave factors of business environment.

MARKING SCHEME
Question 4.
(a) Sweat Equity Shares:
These shares are issued by the company under section 79A of the Companies Act 1956, to
employees/workers or directors.
1. At a discount (to the market price).
2. For consideration other than cash.
3. For providing knowhow or making available property rights
(Any one)
The purpose of these shares is to retain the talent as they have a lock-in-period of 3 years.
(meaning and purpose)
(b) The Features of NEFT are:
1. Can be processed at NEFT enabled Bank/Branch.
2. In order to receive fund there must be an a/c in NEFT enabled Bank/Branch.
3. Cash transfer is possible by individual firm or company.
4. No minimum or maximum amount in case of Bank account.
5. Transaction takes places in batch/netting.
6. If the customer does not have a bank account, maximum amount to be transferred is
` 49,999/.
7. Sender of funds has to pay certain charges.
8. Cannot be used for foreign remittance/transfer nationally (or within nation)
(any four features)

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(c) External factors of micro environment of business are:
 Customers
 Competitors
 Suppliers
 Marketing Intermediaries
 Financiers
 Public – NGOs /Local community/media/environmentalist.
(Any five with brief explanation)

Question 5
(a) Distinguish between centralisation and decentralisation. [3]
(b) Write four methods by which the objectives of consumer protection can be [4]
achieved.
(c) Describe any five qualities of a good leader. [5]
Comments of Examiners
(a) Many candidates could not bring out the differences Suggestions for teachers
between centralization and decentralization. In some  Explain to students that while
cases, the points were given under wrong headings. writing differences, the points of
(b) Majority of the candidates answered this question difference must correlate with
correctly. However, some candidates got confused and each other.
wrote on the Rights of consumers instead of the  Give specific instructions to
methods by which objectives of consumer protection students to read and understand
can be achieved. Some candidates repeated points just the question carefully before
to elongate the answer. attempting to answer it.
(c) This was correctly answered by most of the candidates  Give writing practice to students.
Some candidates gave the headings but did not give a
proper explanation for the same.
Some candidates mixed leadership qualities with qualities of salesman and in some places only
used adjectives as an answer.

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MARKING SCHEME
Question 5.
(a)
Centralisation Decentralisation
(i) Centralisation of authority refers to Decentralisation means systematic
systematic and consistent retention of dispersal of authority in all departments
authority for decision making at top and all levels of management to taking
level management. decisions.
(ii) Top management retains absolute The top management retains only authority
authority for making all decisions the for overall coordination and control of the
functioning of the organisation. organisation. Other works authority are
delegated.
(iii) Centralisation of authority at the top Decentralisation of authority takes place at
level of management. the middle and lower level of management.

(b) Methods of achieving objectives of consumer protection:

1. Self-regulation of the business
2. Consumer awareness/self-help by consumer.
3. Consumer associations
4. Government control (legislative measures)
(heading with explanation of all four points)
(c) Qualities of a good leader:
 Sound physique
 Intelligence
 Initiative
 Integrity
 Decisiveness
 Emotional stability
 Self-confidence and will power
 Communication skills
 Vision and foresight
 Sense of responsibility
 Social skills
(Any five points - heading with explanation)

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Question 6
(a) Explain any three barriers to communication. [3]
(b) Explain the features of planning as a function of management. [4]
(c) Explain the various steps involved in the process of organising. [5]

Comments of Examiners
(a) This part was answered well by most of the candidates.
Suggestions for teachers
Some candidates did not give the explanation in
 More writing practice should be
synchronization with the heading.
given to candidates and
(b) Majority of the candidates understood the question and
shortcomings in answers
answered it well. Some candidates gave the importance
discussed.
of planning/ steps to planning instead of the features.
 Systematic revision can help
Several candidates wrote the features of planning but
candidates retain the subject
could not substantiate the headings with proper
matter and avoid confusion
explanation. Points were repeated in many answers.
between features, importance and
(c) Several candidates could not elaborate upon the steps
steps in planning.
of organizing in a proper sequence, which resulted in
 Instruct students to write the
loss of marks. A few candidates gave the steps of
steps in a proper sequence.
planning instead of steps of organizing.

MARKING SCHEME
Question 6.
(a) Barriers to communication:
1. Physical barrier
2. Personal or psychological barrier
3. Semantic barrier
4. Status barrier
5. Organisational barrier
6. Inattention
7. Premature evaluation
8. Language barrier
9. Different comprehensions of reality
(Heading with explanation – any three)

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(b) Features of planning as a function of management:
1. Goal oriented
2. Future oriented/forward looking
3. Intellectual process
4. Pervasive function/common to all
5. Continuous function
6. It aims at efficiency
7. Primary function
8. Selective in nature/involves choices.
((Heading with explanation – any four)
(c) Steps involved in the process of organising:
1. Division of work
2. Grouping activities
3. Assigning duties
4. Delegation of authority
5. Co-ordinating activities
OR
1. Identifying work to be performed
Division of work
2. Grouping of similar activities
3. Assignment of duties
4. Delegation of adequate authority
Defining responsibility relationship
5. Providing proper physical facilities
Proper coordination and communication
(Five points to be explained in the given order)

Question 7
Write short notes on:
(a) Maslow’s theory of needs. [4]
(b) Line and staff organisation. [4]
(c) Modern concept of marketing. [4]

135
Comments of Examiners
(a) Several candidates were unable to follow the ‘hierarchy Suggestions for teachers
of needs’.  Tell students that a proper
(b) Majority of the candidates failed to give a satisfactory sequence must be followed while
answer. The explanation given by candidates were writing Maslow’s hierarchy of
vague and generalized. needs.
(c) Several candidates wrote the definition of ‘market’  Each type of organization, that is,
instead of ‘modern concept of marketing’. A few line, line and staff, functional
candidates wrote the definition without writing the organization must be taught and
features and they repeated the points several times. The their features, merits and demerits
core of modern concept of marketing, that is, consumer discussed in detail in class.
satisfaction was missing in most of the answers.  Ensure that students know the role
of ‘line’ and ‘staff’ in the
organization.
 The difference between the
modern concept of marketing and
the traditional concept of
marketing must be clearly bought
out.

MARKING SCHEME
Question 7.
(a) Maslow’s hierarchy of needs:
According to Maslow, human needs can be classified into five categories and can be arranged
in order of their importance or priority. This arrangement of human needs according to their
priority is called “hierarchy of needs”:
 Physiological needs
 Safety or security needs
 Social or affiliation needs
 Ego or esteem needs
 Self-actualisation needs.
(points to be explained in the given order)
(b) Line and Staff Organisation:
Meaning: Line and staff organisation is a combination of line structure and the functional
structure. The line managers serve to maintain unity of command while the staff provides
expert advice and counsel for efficient management. In this system is bifurcated into
conceptual and executive functions.
Features:
 Planned Specialisation: /separation of planning and execution. Line Managers are relieved
of day to day jobs. They can concentrate on executive functions and they get expert advice
or counsel from staff.

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  Balanced decisions: Staff specialists provide adequate information and expert advice at
the right time so that executives can take better decisions.
 Discipline: Unity of command is maintained, staff provides only advice they cannot issue
instructions to subordinates in line department. There is a direct chain of command which
facilitates decision.
 Line managers have undivided authority which cannot be delegated.
 In Line and staff organization, there is scope for growth and expansion. But, in this, there
is generally a conflict between line executives and staff specialists. Lack of well-defined
authority results in confusion and lack of coordination. Lastly, line and staff structure is
more expensive because two separate sets of personnel are required. In practice, line and
staff structure has become most popular in larger organizations. Often an enterprise begins
with line structure and adds up staff specialists as the business expands.
(Meaning and any three)
(c) Modern concept of Marketing:
 Meaning: According to the modern concept of marketing, marketing is the process of
planning and executing the conception pricing, promotion and distribution of goods and
services and ideas to create exchanges with large groups that satisfy consumers and
organisational objectives.
 Features: Modern concept of marketing is a wider concept/ which focuses attention on the
consumers and satisfaction of their needs.
 Marketing begins much before production /and continues after sales (to provide after sale
services)
 Modern marketing is a two way traffic wherein the marketer provides satisfaction and
consumer provides feedback or response to the efforts of the marketers.
 Modern marketing is customer oriented/ It involves marketing research in order to
understand and satisfy needs of the consumers/ Modern marketing is a dynamic process
which aimed at satisfying customer’s needs.
(Meaning and any three)

Question 8

(a) Explain any three elements of Promotion Mix. [3]

(b) Explain the meaning of: [4]
(i) SMS alert
(ii) Fayol’s principle of centralization
(c) Explain any five sources of external recruitment. [5]

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Comments of Examiners
(a) Instead of writing about the ‘elements of promotion
mix’, some candidates wrote about the ‘elements of Suggestions for teachers
marketing mix’. Others wrote the elements correctly,  Interactive sessions which
but the keywords necessary to be incorporated in the include group discussions are a
answer, such as, ‘paid form’ and ‘identified sponsor’ must and should be encouraged
were missing. Several candidates gave a generalized by teachers.
explanation and at times, elements had overlapping  Instruct students to read the
explanation. For example, ‘creation of demand’ and question carefully and then
‘persuading customer’ were mentioned in every answer the same.
element of promotion mix, by a few candidates.
(b) (i) This part was answered correctly by majority of the candidates.
(ii) The principle of centralization, as given by Henry Fayol, was not written correctly by a
number of candidates. Many candidates explained in general about centralization and got
confused between ‘centralization’ and the ‘principle of centralization’ as advocated by Henry
Fayol.
(c) Majority of the candidates answered this question correctly. However, some candidates repeated
the sources, which resulted in loss of marks. Several candidates wrote ‘Internet’ and ‘website’ as
two separate points; similarly Newspaper, Magazines and Advertisements were written separately
by some candidates.

MARKING SCHEME
Question 8.
(a) Elements of Promotion Mix:
 Personal selling - face to face/direct or oral presentation between buyer and seller to
persuade and sell.
 Advertising - paid/non personal/identified sponsor/stimulate, create and educate customer.
 Publicity-non paid/personal or non-personal/no sponsor/ positive or negative features.
 Sales Promotion – all activities other than advertisement, publicity and personal selling
and includes exhibition fairs, coupons, samples, etc. Activities that are non-recurring or
non-routine in nature.
(Any three with brief explanation)
(b) (i) SMS Alert: Under this service, customer gives his/her mobile number. The bank
records the mobile number in its computer system in the customer’s account.
Whenever, a transaction takes place in the customer’s account, the customer receives
information about withdrawal and deposits by an SMS on his/her mobile phone. The
SMS states the nature and amount of transaction, date of the transaction and the balance
in the account on that date.
(ii) According to Fayol, everything that increases the importance of subordinate’s role is
decentralisation and everything that reduces it is centralisation. Centralisation and
decentralisation is a matter of proportion and the right proportion between them should
be decided keeping in view the circumstances of the particular case. There should be a
proper balance between centralisation and decentralisation.
138
(c) Sources of external recruitment are:
1. Advertisements
2. Employment Exchanges
3. Educational Institutions/university or campus recruitment.
4. Placement agencies/ private employment agencies
5. Casual callers/waiting list
6. Direct recruitment
7. Recommendation from present employees
8. Labour contractors or jobbers
9. Intermediaries –agent or any other intermediary not covered as separate point.
10. Gate giving
11. Internet/webs (Any five with brief explanation)

Question 9
(a) Write the meaning of the following types of plans: [3]
(i) Policy
(ii) Procedure
(iii) Method
(b) Explain any four functions of a supervisor. [4]
(c) What is packaging? Explain three functions of packaging. [5]
Comments of Examiners
(a) The explanations given by candidates were inadequate
and vague; at times, the same explanation was repeated Suggestions for teachers
in all the headings. Candidates did not seem to have  Different types of plans must be
explained well with illustrations
conceptual knowledge related to all types of plans. and case studies.
Many candidates ignored keywords while explaining  Ensure that students know the
about policy, procedure and method. importance and significance of
(b) Some candidates confused ‘functions of a supervisor’ key words in an answer.
with ‘qualities of a good leader’. In several cases, the  Encourage group discussion in
headings were written correctly but explanations were class on functions of a leader and
not satisfactory. supervisor: Who is a supervisor?
What functions does he perform?
(c) A number of candidates got confused between What is his job in the
‘packing’ and ‘packaging’. The complete meaning was organization? Answers to these
not written in many cases. At times, the same points questions must be known to
were repeated by candidates. students.
 The exact meaning of packaging
should be clarified by making
students aware of the keywords
and their significance.

139
MARKING SCHEME
Question 9.
(a) Policy: A policy is a general statement that guides decision making. Policies define the
boundaries within which decisions can be made and they direct decisions towards the
accomplishment of objectives.
Procedure: A procedure describes the exact manner in which a certain activity is to be
performed. It is a chronological sequence of steps to be taken. It helps to ensure consistency
and uniformity of action by avoiding chaos and random activity.
Methods: Methods are formalised and standardised ways of accomplishing repetitive and
routine jobs. They are designed to keep operations running on planned and desired lines to
prevent confusion and to ensure economy and efficiency.
(b) Functions of a Supervisor:
 Scheduling the work.
 Issuing orders and instructions
 Guiding subordinates
 Motivating workers
 Maintaining discipline
 Handling grievances
 Monitoring performance/coordinate
 Ensuring safety
 Reporting/feedback
 Serving as a linking pin
(Any four points with brief explanation)
(c) Packaging:
Packaging refers to covering, wrapping, crafting, filling, compressing of goods to protect them
from spoilage, pilferage, breakage, leakage, etc.
OR
Packaging involves designing and producing appropriate packages for products.
Benefits:
1. Protection
2. Identification
3. Prestige
4. Economy
5. Reuse or resale
6. Promotion
7. Convenience
8. Innovation (Meaning and functions)

140
GENERAL COMMENTS:
(a) Topics found difficult by candidates in the Question Paper:
Question 1: (iv) Factoring.
(v) Gross working capital & net working capital
(viii) Right Shares
(ix) Marketing research
Question 2: Management as an Art.
Question 3: Factors affecting capital plan.
Question 4: Sweat equity shares.
Question 5: Centralization & decentralization
Question 7: Line and staff organization
Question 8: Fayol’s principle of centralization

(b) Suggestions for candidates:

 Study regularly.
 Write differences in a tabular form, making sure that the differences correlate with each other.
 Write steps sequentially, in the correct order.
 Headings and explanation must correlate with one another.
 Learn time management.
 Read and understand the question before attempting to answer.
 Avoid writing overlapping of points.

141