A

SUMMER TRAINING REPORT

ON

“A STUDY ON FINANCIAL STATEMENT AT

MAGMA”

In partial Fulfilment of the requirement for the award of

MASTER OF BUSINESS ADMINISTRATION

Batch- (2019-20)

Submitted to:- Submitted by:-

Mrs. Sakshi Chaudhary Name – Akash

Bhatnagar

(Faculty, MBA Deptt.) Roll no. – 1869570005

Semester – 3rd Sem.

1
 CERTIFICATE

This is to certify that Akash Bhatnagar a bonafide student of A Shri Ram

College of Management, Muzaffarnagar. Pursuing her Masters in Business
Administration, has worked on the project in “ A STUDY ON FINANCIAL
STATEMENT AT MAGMA”, from 18 June to 10 Aug 2019 and has

successfully completed the Internship Program.

During the tenure of the project, his conduct was good and satisfactory.
We wish his all the best for her future endeavours.

Supervision of:-
Mrs. Sakshi Chaudhary
(Faculty, MBA Deptt.)

2
 DECLARATION

I hereby declare that this project work “A STUDY ON FINANCIAL

STATEMENT AT MAGMA” is a record of original project work undertaken
by me under the valuable guidance and supervision of Mrs. Sakshi Chaudhary
MBA in partial fulfillment of master degree in commerce. This project is done
at MAGMA INDUSTRIES LTD. It has not been submitted elsewhere for any
degree or diploma.

Place : Muzaffarnagar

Date : Akash
Bhatnagar

3
 ACKNOWLEDGEMENT

It is my pleasure to be indebted to various people, who directly or

indirectly contributed in the development of this work and who

influenced my thinking, behavior, and acts during the course of study.

I express my sincere gratitude to Dr. ASHFAQ ALI worthy

Principal for providing me an opportunity to undergo summer training at

I also extend my sincere appreciation to Mrs Sakshi

Chaudhary of SHRI RAM GROUP OF COLLEGES, Muzaffarnagar

who provided his valuable suggestions and precious time in accomplishing

my project report.

Lastly, I would like to thank the almighty and my parents for

their moral support and my friends with whom I shared my day-to-day

experience and received lots of suggestions that improved my quality of

work.

4
 TABLES OF CONTENTS

CHAPTER NO. CHAPTER NAME PAGE NO.

I. Introduction 7

Company profile 8
Objectives of the Study 44
Scope of the study 46

Limitations of the study 48

II. Company Overvew 50

Research Methodology 69
I I I. Analysis and Interpretation 71
I V. Findings 72

Suggestions 74

conclusion 76
Bibliography 79

5
6
 INTRODUCTION

The institutional training gives the students, as practical knowledge about

the functioning of the company as such there is a wide difference between
doing things practically and learning the same things theoretically.

The institutional training enlightens the mind of the students about

various policies, procedures and program of the organization. In addition, it
helps to keep in touch with the person holding high position which enriches.

Institutional training may be described as process of placing the students

before an organization, making them familiar with its line of function and
asking them to perform some duties, which involves technical skills.

This training bridges of group between for fetch theory and down to
earth really in an organization. Such training is an added significance because
kinds of jobs. So the students are become more adaptable and efficient in the
future.

The subject of institution training is almost very important among the

entire subject that a student comes across during their course.

7
8
 MAGMA INDUSTRIES LIMITED

2003, saw the inception of Magma Industries Limited, which was

formerly known as Ravi Rasayan by Shri Dinesh Garg, with the vision
to create quality chemicals and intermediates, fulfilling specific
requirements to provide the customers with a complete solution of
their needs. Aiming towards sustainability, development and growth
of the product, customer satisfaction and quality, Magma Industries
Limited encourages teamwork and management ethos.

Magma Industries Limited is a leading bulk drug manufacturing

company, trailing with an experience of over 30 years as
manufacturers of quality chemicals and intermediates. With well
established infrastructure and world class facilities adhering to the
latest quality standards we have prominent presence all across the
country as leading chemical manufacturers and suppliers. Fulfilling
the utmost levels of quality and quantity, the company is built on the
three pillars of:
 Reliability
 Standardization
 Innovation

Transitioning to API & API Intermediates manufacturing in 2007, and

complying to the cG.M.P. Norms (Approved by the Government of
India), Magma Industries creates a winning culture of co-operation
amongst competitors and a pinnacle of excellence, service and R&D.
We strive for perpetual technology upgrade, high business ethics and
novel product development.

9
 MAGMA INDUSTRIES LIMITED

CORPORATE INFORMATION:-

Board of Directors: Mr. Sanjay Agarwal

CHAIRMAN

Mr. Kalyan Kumar Bose

NON-EXECUTIVE DIRECTOR

Mr. Sajjan Kumar Kedia

NON-EXECUTIVE DIRECTOR

Company Ms. Silky Pasari

Secretary:

Manager Mr. Tushar Mangald

Bankers: State Bank of India

United Bank of India

Statutory B S R & Co. LLP

Auditors:

Registered PLOT NO. C-24 TO C-28 UPSIDC

Office: INDUSTRIAL AREA, MEERUT
ROAD, BEGRAJPUR,

10
MUZAFFARN (U.P.)251203 MUZAFFARNAGAR
AGAR Muzaffarnagar UP 251203 IN

11
Financial Results
(Rs in Lacs)

Particulars 2017-18 2016-17

Total Income 229.19 105.54

Profit before Interest and Depreciation 3.49 14.42

Profit/(Loss) before Tax 3.49 14.42

Less: Provision for Taxation 1.40 13.46

Profit/(Loss) after Tax 2.09 0.96

Balance Available for Appropriation 2.99 0.96

Less: Preference Dividend including tax

thereon 0.42 0.06

Balance carried to Balance Sheet 2.57 0.90

Net Worth 22,002.57 22,000.90

Earning per Equity Share (Rs.)

-Basic and diluted 0.01 0.01

Book Value per Equity Share (Rs.) 87.38 87.37

Operations

Your Company is carrying on the business of providing

manpower services, advisory services etc.

Holding Company

Pursuant to the acquisition of entire equity shares of the

Company by Magma Fincorp Limited (“MFL”), your
Company is a Wholly Owned Subsidiary of Magma
Fincorp Limited (“MFL”), pursuant to the acquisition of
entire equity shares of the Company by MFL.

Further, Celica Developers Private Limited (“CDPL”)

has the power to appoint majority of Directors on the
Board of your Company and accordingly in terms of
section 4 of the Companies Act, 2013, your Company is
also a subsidiary of CDPL.

Subsidiary Company

Magma Housing Finance (A Public Company with

Unlimited Liability) (Formerly known as GE Money
Housing Finance (A Public Company with Unlimited
Liability)) (MHF), a Wholly Owned subsidiary of your
Company, provides long term finance to any person(s)
or co-operative society or association of persons or
body of individuals, firms, companies, bodies corporate
etc., with or without security, and is registered as a
Housing Finance Company with National Housing
Bank and is governed by the National Housing Bank
Act, 1987 read with Housing Finance Companies
(NHB) Directions, 2010. The subsidiary company has
earned a PBT of Rs. 445.89 Lakhs for the year ended
31st March 2018.

In accordance with the provisions of Section 212 of the

Companies Act, 2013, the information regarding the
subsidiary company is enclosed and forms part of this
Annual Report.

Dividend

In view of the planned business growth, your Directors

deemed it proper to preserve the resources of the
company for its activities and therefore, do not propose
any equity dividend for the financial year ended 31 st
March, 2018.

Your Directors recommend, subject to your approval at

the ensuing Annual General Meeting, 0.01%, i.e., Re.
0.001 per share dividend on 3,55,55,556 Non-
Redeemable Non-Cumulative Non-Participating
Compulsorily Convertible Preference Shares of Rs. 10/-
each.

Auditors

Section 139 of the Companies Act, 2013 (the Act) read

with the Rules made thereunder which has become
effective from 01st April, 2018, provides for
appointment of Statutory Auditors for a period of 2
terms of 5 consecutive years subject to ratification by
the shareholders at every Annual General Meeting
(AGM). Further, Rule 6(3) of the Companies (Audit and
Auditors) Rules, 2018 provides that, while considering
the reappointment, the tenure of holding of the office as
Auditors prior to the commencement of the Act shall
also be taken into account. The Company proposes to
utilise the transition period allowed under Section 139
of the Act read with rules made thereunder.

M/s. B S R & Co. LLP, Chartered Accountants,

Statutory Auditors of the Company bearing registration
number - 101248W, retire at the conclusion of the
forthcoming Annual General Meeting and have
expressed their willingness to be re-appointed. They
have confirmed that their re-appointment for a period of
3 years from the conclusion of the 2nd AGM (for FY
2017-18) till the conclusion of the 5th AGM (for FY
2016-17), if made, would be covered within the ceiling
specified under Section 141 of the Act (corresponding
to Section 224(1B) of the Companies Act, 2013) and
shall be subject to ratification by the shareholders at
every AGM thereafter.

Auditors Observations

Observations of the auditors when read together with

relevant notes on accounts and accounting policies are
self-explanatory and do not require any further
comments.

Directors' Responsibility Statement

In accordance with the provisions of Section 217(2AA) of

the Companies Act, 2013, your
Directors confirm:

in the preparation of the annual accounts, the
applicable accounting standards have been followed
by your Company along with proper explanation
relating to material departures, if any.

having selected such accounting policies and applied
them consistently and made
judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial
year 31st March, 2018 and of the profit of the
Company for the year under review.

proper and sufficient care has been taken for the
maintenance of adequate accounting records in
accordance with the provisions of the Companies
Act, 2013 for safeguarding the assets of the
Company and for preventing and detecting fraud and
other irregularities, if any.

the annual accounts have been prepared on a going
concern basis.
-

Audit Committee

In terms of Section 292A of the Companies Act, 2013,

Audit Committee was constituted and it presently
consists of Mr. Sanjay Agarwal as Chairman of the
Audit Committee and Mr. Sajjan Kumar Kedia and Mr.
Kalyan Kumar Bose as its members.
Statutory Information

During the year under review:

 Your Company does not have any activity

relating to conservation of energy or technology
absorption.
 There are no employees of the Company who are
in receipt of remuneration in excess of limits
prescribed under Section 217(2A) of the
Companies Act, 2013.

 Your Company does not have any foreign

exchange earnings or outgo in terms of
Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988.
Statement of interest in Subsidiary Company pursuant to Section 212
(3) of the Companies Act, 2013
(Rs in
Lacs)

Magma Housing Finance

(A Public
Name of the subsidiary company Company with Unlimited
Liability)

31st March 31st March

Financial year to which the accounts relate 2017 2018

Holding company's interest –

• Number of shares held – Equity (Rs. 14,81,02,5

10/- each) 14,81,02,500 00

• Extent of holding 100% 100%

The net aggregate amount of subsidiary’s

profit / (loss)
so far as it concerns the holding company.

(a) Dealt with in the accounts of the

Company for the NIL NIL
subsidiary's Financial Year ended

(b) i) Not dealt with in the accounts of the

Company for 263.53 (17.11)
the subsidiary’s Financial Year ended

ii)For previous financial years since

it (17.11) N.A.
became a subsidiary
Information on Subsidiary Companies pursuant to Section 212 (8) of the
Companies Act, 2013
(Rs. in Lacs)

Magma Housing Finance

(A
Public Company with
Unlimited
Particulars
Liability) (MHF)

31-Mar-18 31-Mar-17

Issued and Subscribed Share Capital 14,810.25 14,810.25

Reserves 5,976.78 5,713.25

Long-term Borrowings 29,718.74 50,000.00

Short-term Borrowings 40,144.98 12,500.00

Total Assets 1,16,304.12 85,846.99

Total Liabilities 1,16,304.12 85,846.99

Total Revenue 12,163.10 8,530.56

Profit/ (Loss) Before taxation 445.89 1,917.10

Provision for taxation 182.36 652.90

Profit/ (Loss) After taxation 263.53 1,264.20

Proposed Dividend (including tax thereon) - -

 B S R & Co. LLP
Independ~nt Auditor's Report
To the Members of Magma Advisory Services Limited (formerly known as
Magma Housing Finance Limited)

Report on the Financial Statements

We have audited the accompanying financial statements of Magma Advisory
Services Limited (formerly known as Magma Housing Finance Limited) ("the
Company"), which comprise the balance sheet as at 31 March 2018, the
statement of profit and loss of the Company and the cash flow statement of the
Company for the year then ended and a summary of significant accounting
policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements
that give a true and fair view of the financial position, financial performance
and cash flows of the Company in accordance with the Accounting Standards
referred to in sub-section (3C) of section 211 of the Companies Act, 2013 ("the
Act") read with the General Circular 15/2017 dated 13 September 2017 of the
Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,
2017. This responsibility includes the design, implementation and maintenance
of internal control relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.

Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based
on our audit. We conducted our audit in accordance with the Standards on
Auditing issued by the Institute of Chartered Accountants of India. Those
Standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial statements. The procedures selected
depend on the auditor's judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant
to the Company's preparation and fair presentation of the financial statements in
order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity's
internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting estimates
made by management, as well as evaluating the overall presentation ofthe
financial statements.

We believe th t the audit evidence we have obtained is sufficient and

appropriate to provide a basis fo ur audit op ion.
 B S R & Co. LLP

IndependentAuditor's Report (continued)

Opinion
In our opinion and to the best of our information and
according to the explanations given to us, the financial
statements give the information required by the Act in the
manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India:

in the case of the balance sheet, of the state of affairs of
the Company as at 31 March 2018;

in the case of the statement of profit and loss, of the
profit for the year ended 31 March 2018; and


in the case of the cash flow statement, of the cash flows
for the year ended 31 March 2018.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order,
2017 ("the Order"), as amended, issued by the Central
Government of India in terms of sub-section (4A) of
Section 227 of the Act, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of
the Order.
1. As required by section 227(3) ofthe Act, we report that:
← we have obtained all the information and explanations
which to the best of our knowledge and belief were
necessary for the purpose of our audit;
← in our opinion proper books of account as required by
law have been kept by the Company so far as appears
from our examination of those books;
← the balance sheet, statement of profit and loss and cash
flow statement dealt with by this Report are in
agreement with the books of account; and
← in our opinion, the balance sheet, statement of profit and
loss and cash flow statement comply with the
Accounting Standards referred to in subsection (3C) of
section 211 of the Companies Act, 2013, read with the
General Circular 15/2017 dated 13 September 2017 of
the Ministry of Corporate Affairs in respect of Section
133 of the Companies Act, 2013; and
.e) on the basis of written representations received from the
directors, and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on
31 March 2018, from being appointed as a director in
terms of clause (g) of sub-section (1) of Section 274 of
the Act.
B S R & Co. LLP

Annexure to the Auditors'

Report of Magma Advisory
The Annexure referred to in our Services Limited ("the
report to the members (formerly Company") for the year
known as Magma Housing Finance ended
Limited)
31 March 2018. We report that:
← According to the information and explanations given
to us the Company does have any fixed assets.
Accordingly paragraph 4(i) of the Order is not
applicable
← The Company is a service company, primarily
rendering support services. Accordingly, it does not
hold any physical inventories. Thus, paragraph 4(ii)
of the Order is not applicable.

← The Company has neither granted nor taken any

loans, secured or unsecured, to or from companies,
firms or other parties covered to the register
maintained under section 301 of the Companies Act,
2013.
← In our opinion and according to the information and
explanations given to us, and having regard to the
explanation that sale of services are for the
specialized requirements of the buyers and suitable
alternative sources are not available to obtain
comparable quotations, there is an adequate internal
control system commensurate with the size of the
Company and the nature of its business with regard
to sale of services. The activities of the Company did
not involve purchase of inventories, the sale of goods
and purchase of fixed assets. We have not observed
 any major weakness in the internal control system
during the course of the audit.

1. In our opinion and according to the information and

explanations given to us, there are no contracts and
arrangements the particulars of which needed to be
entered into the register maintained under section
301 of the Companies Act, 2013. Accordingly
paragraph (v) of the Order is not applicable.
2. The Company has not accepted any deposits from
the public.
3. In our opinion, the Company has an internal audit
system commensurate with the size and nature of its
business
4. The Central Government has not prescribed the
maintenance of cost records under Section 209 (1)
(d) of the Companies Act, 2013 for services rendered
by the Company.
5. (a) According to the information and explanations given
to us and on the basis of our examination of the
records of the Company, amounts deducted! accrued
in the books of account in respect of undisputed
statutory dues including, Income-tax, Service tax and
other material statutory dues have been regularly
deposited during the year ended 31 March 2018 by
the Company with the appropriate authorities. As
explained to us, the Company did not have any dues
on account of Provident Fund, Employees' State
Insurance, Wealth tax, Sales tax, Customs duty,
Excise duty and Investor Protection and Education
Fund.

According to the information and explanations given

to us, no undisputed amounts payable in respect of
Income-tax, Service tax and other material statutory
dues were in arrears as at 31 March 2018 for a period
of more than six months from the date they became
ayable.
r
I

B S R & Co. LLP

← According to the information and explanations given to us, there are

no dues of Income tax and Service tax, which have not been deposited
with the appropriate authorities on account of any dispute. As explain
to us, the Company did not have any dues on account of Sales tax,
Wealth tax, and Customs duty and Excise duty.
← The Company has not completed five years from the date of its
incorporation. Accordingly, paragraph 4(x) of the Order is not
applicable.
← The Company did not have any outstanding due to any financial
institution, banks or debentures holders during the year.
← In our opinion and according to the information and explanations
given to us, the Company has not granted any loans and advances on
the basis of security by way of pledge of shares, debentures and other
securities.
← In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi/mutual benefit
fundi society.
← According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures
and other investments.
← According to the information and explanation given to us, the
Company has not given any guarantee for loans taken by others from
banks or financials institutions.
← The Company did not have any term loans outstanding during the
year ended 31 March 2018.

← According to the information and explanations given to us and on an

overall examination of the balance sheet of the Company, no short
term funds have been raised.
← As stated in paragraph (v) above, there are no companies/firms/parties
covered in the register required to be maintained under section 301 of
the Act.
←
←
←
←
←
← The Company did not have any outstanding debentures during the
year ended 31 March 2018.

← The Company has not raised any money by public issues during the
year ended 31 March 2018.

 According to the information and explanations given to us, no fraud

on or by the Company has been noticed or reported during the course
of our audit.
Balance Sheet

(Rs. in
Lacs)
Note As at As at
31 March 31 March
No. 2018 2017
EQUITY AND LIABILITIES
Shareholders’ funds
Share capital 3 5,666.67 5,666.67
Reserves and surplus 4 16,335.90 16,334.23
22,002.57 22,000.90
Current liabilities
Other current liabilities 5 2.61 3.51
Short-term provisions 6 0.42 9.31
3.03 12.82

Total 22,005.60 22,013.72

ASSETS
Non-current assets
Non-current investments 7 21,970.94 21,970.94
Deferred tax assets 8 1.13 1.51
Long-term loans and advances 9 3.98 -
21,976.05 21,972.45
Current assets
Current investments 10 6.43 11.99
Cash and bank balances 11 6.22 11.83
Short-term loans and advances 12 16.84 17.45
Other current assets 13 0.06 -
29.55 41.27

Total 22,005.60 22,013.72

Significant accounting policies 2

The Notes referred to above form an integral part of these financial statements.

As per our report of even date attached. For and on behalf of the
Board of Directors
Statement of Profit and Loss

(Rs. in Lacs)
For the period
For the from
Note 21 May 2016
year ended to
No. 31 March
2018 31 March 2017
REVENUE
Revenue from operations 14 228.92 51.35
Other income 15 0.27 54.19
Total revenue 229.19 105.54
EXPENSE
Preliminary expenses - 6.11
Other expenses 16 225.70 85.01
Total expense 225.70 91.12
Profit before tax 3.49 14.42
Tax expense:
Current tax 1.02 14.97
Deferred tax 0.38 (1.51)
Profit after tax 2.09 0.96
Earnings per equity share (Nominal value of Rs.
10 each, fully paid up): 17 (ii)
Basic (in Rupees) 0.01 0.01
Diluted (in Rupees) 0.01 0.01
Significant accounting policies 2
The Notes referred to above form an integral part
of these financial statements.
Cash Flow Statement

(Rs. in
Lacs)
For the year For the period
ended from
31
March 21 May 2016 to 31
2018 March 2017
A. CASH FLOW FROM
OPERATING ACTIVITIES
Profit before tax 3.49 14.42
Adjustments for :
Gain on sale of investments 0.18 8.46
Interest Income from fixed
deposits 0.06 45.73
Operating profit before working
capital changes 3.25 (39.77)
Adjustments for :
Loans and advances 0.61 (17.45)
Other current assets (0.06) -
Other current liabilities (0.90) (0.35) 3.51 (13.94)
Cash generated from operations 2.90 (53.71)
Taxes paid (net) (14.25) (5.72)
Net cash used in operating
activities (A) (11.35) (59.43)
B. CASH FLOW FROM
INVESTING ACTIVITIES
Purchase of long-term (21,970.9
investments - 4)
Purchase of short-term mutual (1,175.00
funds - )
Proceeds from sale of short-term
mutual funds 5.74 1,171.47
(3,010.00
Purchase of fixed deposits (4.00) )
Proceeds from maturity of fixed
deposits - 3,010.00
Interest income from fixed
deposits 0.06 45.73
Net cash used in investing activities (21,928.7
(B) 1.80 4)
C. CASH FLOW FROM
FINANCING ACTIVITIES
Proceeds from issue of equity
shares including securities
premium - 6,000.00
Proceeds from issue of
compulsorily convertible
preference shares - 16,000.00
including securities premium
Dividend paid (including tax
thereon) (0.06) -
Net cash from financing activities 22,000.0
(C) (0.06) 0
Net increase in cash and cash
equivalents (A+B+C) (9.61) 11.83
Cash and cash equivalents as at the
beginning of the year 11.83 -
Cash and cash equivalents as at
the end of the year 2.22 11.83
CASH AND BANK BALANCES
Cash and cash equivalents
Cash on hand 0.03 0.08
Balances with banks
- In current accounts 2.19 11.75
2.22 11.83
FINANCE (MEANING)

Finance is the life blood and nerve centre of a business, just as circulation
of blood is essential in the human body for maintaining life. Finance is very
essential for smooth running of business. Right from the very beginning i.e.,
conceiving an idea to business, finance is needed to promote or establish the
business, acquire fixed assets, make investigations such as market surveys etc.,
develop product, keep men and machines at work, encourage management to
make progress and create values. Even an existing firm may require further
finance for making improvement or expanding the business.

ORGANIZATION OF THE FINANCE FUNCTION

Many tasks of financial management and allied areas (like accounting)

which are specialised in nature and which are attended to by specialists. These
tasks will be performed by two financial officers of the firm, the treasurer and
the controller. The treasurer is responsible mainly for financing and investment
activities and the controller is concerned primarily with accounting and control.
FUNCTIONS OF TREASURER AND THE CONTROLLER

TREASURER CONTROLLER

Obtaining finance Financial accounting

Banking relationship Internal auditing

Cash management Taxation

Credit administration Management accounting

Capital budgeting And control

ORGANIZATION OF FINANCE FUNCTION
FINANCIAL SYSTEM

The financial system comprises of a variety of intermediaries, markets, and

instruments. It provides the principal means by which savings are transformed
into investments.

The financial system is divided into six sections


Functions of the financial system

Financial assets

Financial markets

Financial market returns

Financial intermediaries

Regulatory infrastructure

FUNCTIONS OF THE FINANCIAL SYSTEM

 It provides a payment system for the exchange of goods and

services.
 It enables the pooling of funds for undertaking large scale
enterprises.
 It provides a mechanism for spatial and temporal transfer of
resources.
 It provides a way for managing uncertainty and controlling risk
 It generates information that helps in coordinating decentralized
decision making.
 It helps in dealing with the incentive problem when one party has
an informational advantage.
FINANCIAL MANAGEMENT

In order to manage finance, a new management discipline was conceived.

Such discipline is known as financial management. Financial management was
a branch of Economics till 1890. Later it was developed into a separate subject.
Financial management refers to the management of flow of funds in the firm.

DEFINITION

SOLOMON financial management is concerned with the efficient use of an

important economic resource, namely capital funds. PHILLIOPPATUS financial
management is concerned with the managerial decisions that result in the
acquisition and financing of short term and long term credits for the firm.

IMPORTANCE OF FINANCIAL MANAGEMENT


The importance of financial management cannot be overemphasized. In
every organization, where funds are involved, sound financial
management is necessary.

Finance manager must realize that when a firm makes a major decision,
the effect of the action will be felt throughout the enterprise.

Sound financial management is essential in both profit and nonprofit
organizations.

The financial managements help in monitoring the effective deployment
of fund in fixed assets and in working capital.

Financial management also helps in ascertaining how the company would
perform in future.

It helps in indicating whether the firm will generate enough funds to meet
its various obligations.
 OBJECTIVES OF FINANCIAL MANAGEMENTS

2. Basic objectives
3. Other objectives

Basic Objectives

 Maintenance of liquid assets

 Profit maximization
 Wealth maximization

Other objectives

6. Ensuring a fair return to shareholders.

7. Building up reserves for growth and expansion.
8. Ensuring maximum operational efficiency by efficient and effective
utilization of finances.
9. Ensuring financial discipline in the organization.
Methods of financial management

Financial management is concerned with raising financial resources and

their effective utilization towards achieving the organization‟s goals. This
requires application of appropriate financial methods or tools. The term
„financial method‟ refers to any logical method or technique to be employed for
the purpose of accomplishing the following two goals

2. Measuring the effectiveness of firm‟s actions and decisions

3. Measuring the validity of the decisions regarding accepting or rejecting
future projects
The important financial tools or methods used by the financial
manager in perform of his job
 Cost of capital
 Financial leverage or trading on equity
 Capital budgeting appraisal methods
 Abc analysis
 Ratio analysis
 Fund flow analysis and cash flow analysis
Financial statement (meaning)

Financial statements refers to formal and original statement prepared by a

business concern to disclose its financial information. AICPA (American
Institute Of Certified Public Accountants) says “financial statements are
prepared for the purpose of presenting a periodical review or report on the
progress by the management and deal with

2. The status of investments in the business and

3. The results achieved during the period under review

Nature of financial statement

Financial statements are prepared to review the state of investment in a

business and result achieved during a specific period. The reflect recorded facts,
accounting conventions and personal judgments.

Functions or Important of financial statements

Financial statements provide meaningful, useful and valuable information

periodically regarding financial position and future prospects of the business
concern. Various parties interested can utilise the information provided by the
financial statements for analysis and interpretation
 For management

Management will be able to take effective decisions only when

correct and reliable information is at its disposal. If information is
not available management can neither plan nor fulfill the functions
of operations and control.

 For financiers

Financial statements are also of great importance to the financiers

and lenders. Lenders need information regarding customer‟s
financial position, solvency, credit standing, profitability, etc.
Financial statements help the banker and lenders to decide whether
to extend loans to the customers.

 For creditors

Trade creditors are another class for whom financial statements are
important. Trade credit implies extending facilities of deferred
payment for credit purchase by seller to buyer. Financial position
of a creditor can be revealed by financial statements with a help of
solvency ratios, cash and fund flow analysis, etc.
  For investors

Present and prospective investors are interested in studying

financial statements to assess earning capacity, growth potential
and efficiency of management.

Limitation of financial statements

1. Information show in financial statements is not precise.

2. Financial statements do not always disclose the correct financial positions
of business concerns.
3. Balance sheet of concern is a static document as it discloses the financial
position of a concern on a particular date.
4. Information disclosed by profit and loss account may not be real profit.
5. Financial statement of one period may not be comparable as such with
the statement of other periods.
FINANCIAL STATEMENT
ANALYSIS DEFINITION
According to myres, “financial statements analysis is largely a study of
the relationship among the various financial factors in a business as
disclosed by a single set of statements and a study of the trend of these
factors as shown in a series of statements.”

OBJECTIVES
i. To interpret the profitability and efficiency of various business
activities with the help of profit and loss account.
ii. To measure managerial efficiency of the firm
iii. To measure short-term and long-term solvency of the business.
iv. To ascertain earning capacity in future period.
v. To determine the future potential of the concern.
vi. To measure utilization of various assets during the period.
vii. To compare operational efficiency of similar concerns engaged in
the same industry.
LIMITATIONS

a. Based on past data

b. Financial statement analysis cannot be a substitute for judgment.
c. Reliability of figures
d. Different interpretations
e. Change in accounting methods
f. Price level changes
g. Limitations of the tools of analysis
OBJECTIVES OF THE STUDY

The objectives of the study are furnished below:

PRIMARY OBJECTIVES

 To study and analyze the financial performance of the MAGMA

INDUSTRIES LTD.
 To analyze the profitability and solvency position of the bank.

SECONDARY OBJECTIVES

 To study the working capital management of the bank.

 To access the factors influencing the financial performance of the
organization.
 To study financial strengths and weaknesses of the firm.
 To find out the performance of the study through ratio analysis.
 To understand the overall financial position of the bank.
SCOPE OF THE STUDY


This study clearly defines the financial status of the concern
during the working period.

The study report being made here brings out the financial
structure and the position of the MAGMA INDUSTRIES LTD.
comparing from different years.

The financial study helps us to analyze the financial background
and the utilization of the income earned through the organization
process.
NEED FOR THE STUDY

To understand the meaning, significance and limitation of financial
statement analysis.

To calculate liquidity, solvency, profitability and activity ratios of
the organization.

To make a comparative study and give solutions for the
organisational improvement.
LIMITATIONS

The limitations of the study are furnished below:

 The financial details of the bank are collected for 4 years only.

 MAGMA INDUSTRIES LTD. is a multinational company cannot be

studied in a month so time is considered as main constrain.

 The information given from the bank was limited.

 Time is 6 weeks, so much of economic fluctuations are not seen.

 In this study, only selected ratios are used.

 Since the study relates only to the financial performance of MAGMA

INDUSTRIES LTD., the findings and suggestions cannot be
generalised.
COMPANY OVERVIEW
Magma Advisory Services Limited (formerly known as Magma Housing Finance Limited)
('the Company') was incorporated in Kolkata, on 21 May 2012 as a wholly owned
subsidiary of Magma Fincorp Limited. The main objects of the Company is to providing
manpower services, advisory services, etc. On 11 February 2013, the Company acquired
100% equity share capital of Magma Housing Finance (A Public Company with Unlimited
Liability) [Formerly known as GE Money Housing Finance (A Public Company with
Unlimited Liability)]. The Company is headquartered in Kolkata.

SIGNIFICANT ACCOUNTING POLICES:

The accounting policies set out below have been applied consistently to the periods
presented in these financial statements.
 Basis of preparation
← The accompanying financial statements have been prepared and presented under the
historical cost convention and on an accrual basis unless otherwise stated.
← The financial statements have been prepared to comply in all material respects with
the applicable accounting standards notified under the Companies Act, 2013 (“the
Act”) read with the General Circular 15/2013 dated 13 September 2013 of the
Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.
The financial statements are presented in Indian rupees rounded off to the nearest
lac up to two decimal places.
← As required by revised Schedule VI, the Company has classified assets and
liabilities into current and non-current based on the operating cycle. An operating
cycle is the time between the acquisition of assets for processing and their
realization in cash or cash equivalents. Since in case of the Company normal
operating cycle is not readily determinable, the operating cycle has been considered
as 12 months.
 Use of estimates
The preparation of financial statements in conformity with Generally Accepted
Accounting Principles ('GAAP') requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and reported amount
of assets and liabilities (including contingent liabilities) as on the date of the financial
statements and the reported income and expenses during the reporting period.
Management believes that the estimates used in the preparation of the financial
statements are prudent and reasonable. Actual results could differ from these estimates.
 Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision
to accounting estimates is recognized prospectively in current and future periods.

 Revenue recognition
← Income from sale of services rendered is accounted for on accrual basis.
← Interest income on fixed deposits, loans, etc. is recognised on a time proportion
basis taking into account the amount outstanding and the rate applicable.
← Income from dividend is accounted for on receipt basis.
 Investments
← Investments that are readily realisable and intended to be held for not more than a
year from the date of acquisition are classified as current investments. All other
investments are classified as long-term investments. However, that part of long term
investments which is expected to be realised within 12 months after the reporting
date is also presented under ‘current assets’ as
“current portion of long term investments” in consonance with the current/non-
current classification scheme of revised Schedule
VI.
← Long-term investments (including current portion thereof) are carried at cost less
any other-than-temporary diminution in value, determined separately for each
individual investment.
← Current investments are carried at the lower of cost and fair value. The comparison
of cost and fair value is done separately in respect of each category of investments
i.e., equity shares, preference shares, convertible debentures etc.
← Any reductions in the carrying amount and any reversals of such reductions are
charged or credited to the Statement of Profit and Loss.
← Profit or loss on sale of investments is determined on the basis of weighted average
carrying amount of investments disposed of.
SIGNIFICANT ACCOUNTING POLICES (continued)
 Earnings per share
The basic earnings per share (‘EPS’) is computed by dividing the net profit after tax
attributable to the equity shareholders for the year by the weighted average number of
equity shares outstanding during the year. For the purpose of calculating diluted
earnings per share, net profit after tax for the year and the weighted average number of
shares outstanding during the year are adjusted for the effects of all dilutive potential
equity shares. The dilutive potential equity shares are deemed converted as of the
beginning of the period, unless they have been issued at a later date. The diluted
potential equity shares have been adjusted for the proceeds receivable had the shares
been actually issued at fair value (i.e. the average market value of the outstanding
shares).
In computing dilutive earnings per share, only potential equity shares that are dilutive
and that reduce profit / loss per share are included.

 Taxes on income
Income-tax expense comprises current tax (i.e. amount of tax for the period determined
in accordance with the income-tax law) and deferred tax charge or credit (reflecting the
tax effects of timing differences between accounting income and taxable income for the
period).
Current tax is measured at the amount expected to be paid to (recovered from) the
taxation authorities, using the applicable tax rates and tax laws. Deferred tax is
recognised in respect of timing differences between taxable income and accounting
income i.e. differences that originate in one period and are capable of reversal in one or
more subsequent periods. The deferred tax charge or credit and the corresponding
deferred tax liabilities or assets are recognised using the tax rates and tax laws that have
been enacted or substantively enacted by the balance sheet date. Deferred tax assets are
recognised only to the extent there is reasonable certainty that the assets can be realised
in future; however, where there is unabsorbed depreciation or carried forward loss under
taxation laws, deferred tax assets are recognised only if there is a virtual certainty
supported by convincing evidence that sufficient future taxable income will be available
against which such deferred tax assets can be realised. Deferred tax assets are reviewed
as at each balance sheet date and written down or written-up to reflect the amount that is
reasonably/virtually certain (as the case may be) to be realised.
 Preliminary expenses
In accordance with the requirements of Accounting Standard - 26, Preliminary expenses
incurred in connection with the formation of the company are charged off in the year in
which such expenses are incurred.
 Impairment
Goodwill, intangible assets which are amortised over a period exceeding ten years and
intangible assets which are not yet available for use are tested for impairment annually.
Other fixed assets (tangible and intangible) are reviewed at each reporting date to
determine if there is any indication of impairment. For assets in respect of which any
such indication exists and for intangible assets mandatorily tested annually for
impairment, the asset’s recoverable amount is estimated. An impairment loss is
recognised if the carrying amount of an asset exceeds its recoverable amount.
 Provisions and contingent liabilities
A provision is recognised if, as a result of a past event, the Company has a present
obligation that can be estimated reliably, and it is probable that an outflow of economic
benefits will be required to settle the obligation. Provisions are recognised at the best
estimate of the expenditure required to settle the present obligation at the balance sheet
date. The provisions are measured on an undiscounted basis.

Onerous contracts
A contract is considered as onerous when the expected economic benefits to be derived
by the company from the contract are lower than the unavoidable cost of meeting its
obligations under the contract. The provision for an onerous contract is measured at the
lower of the expected cost of terminating the contract and the expected net cost of
continuing with the contract. Before a provision is established, the Company recognises
any impairment loss on the assets associated with that contract.

Contingencies
Provision in respect of loss contingencies relating to claims, litigation, assessment,
fines, penalties, etc. are recognised when it is probable that a liability has been incurred,
and the amount can be estimated reliably.
SIGNIFICANT ACCOUNTING POLICES (continued)
6. Contingent liabilities and contingent assets
A contingent liability exists when there is a possible but not probable obligation, or a
present obligation that may, but probably will not, require an outflow of resources, or a
present obligation whose amount cannot be estimated reliably. Contingent liabilities do
not warrant provisions, but are disclosed unless the possibility of outflow of resources is
remote. Contingent assets are neither recognised nor disclosed in the financial
statements. However, contingent assets are assessed continually and if it is virtually
certain that an inflow of economic benefits will arise, the asset and related income are
recognised in the period in which the change occurs.

7. Cash and cash equivalents

Cash and cash equivalents comprise cash and cash on deposit with banks and
corporations. The Company considers all highly liquid investments with a remaining
maturity at the date of purchase of three months or less and that are readily convertible
to known amounts of cash to be cash equivalents.

8. Cash flow statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions
of non-cash nature, any deferrals, or accruals of past or future operating cash receipts or payments and item of expenses
associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the
Company are segregated.
 (Rs. in
Lacs)
As at As at
31 March 2018 31 March 2017
Note: 3
SHARE CAPITAL
Authorised
2,500.0
2,50,00,000 Equity shares of Rs.10 each 2,500.00 0
4,000.0
4,00,00,000 Preference shares of Rs. 10 each 4,000.00 0
6,500.0
6,500.00 0
Issued, subscribed and paid-up
Equity share capital
2,11,11,112 Equity shares of Rs.10 each, 2,111.1
fully paid up. 2,111.11 1
Preference share capital
3,55,55,556 0.01%Non-RedeemableNon- 3,555.5
CumulativeNon-Participating 3,555.56 6
Compulsorily Convertible
Preference Shares of Rs. 10 each,
fully
paid up.
Allotted at a premium of Rs.35
each on 5 February 2017 and
compulsorily convertible after 10
years i.e. 4 February 2027. The
resultant equity shares to be issued
and allotted upon exercise of right
attached to these preference shares
shall rank pari passu in all
respects with the then existing equity
shares of the Company.

5,666.6
5,666.67 7

Reconciliation of the number of shares

outstanding and the amount of share capital
 As
at As at
31 March
31 March 2018 2017
No. of
Equity shares shares Amount No. of Amount
shares
2,11,1
At the beginning of the period 1,112 2,111.11 - -
2,11,11, 2,111.1
Issued during the period - - 112 1
2,11,1 2,11,11 2,111.1
Outstanding at the end of the period 1,112 2,111.11 ,112 1
Preference shares
(0.01% Non-Redeemable Non-Cumulative
Non-Participating Compulsorily
Convertible)
3,55,5
At the beginning of the period 5,556 3,555.56 - -
3,55,55, 3,555.5
Issued during the period - - 556 6
3,55,5 3,55,55 3,555.5
Outstanding at the end of the period 5,556 3,555.56 ,556 6
Equity shares
viii. The Company has only one class of equity shares having a par value of Rs.10 per share.
Each holder of equity shares is entitled to one vote per share.
ix. In the event of liquidation of the Company, the holders of equity shares will be entitled
to receive remaining assets of the Company, after distribution of all preferential amounts.
The distribution will be in proportion to the number of equity shares held by the
shareholders.
x.The dividend as and when proposed by the Board of Directors will be subject to the
approval of the shareholders to be obtained in the Annual General Meeting, which shall be
paid in Indian rupees.

Preference shares
h.The Company has only one class of preference shares having a par value of Rs.10 per share.
i. In the event of liquidation of the Company, the holders of preference shares will have
priority over equity shares in payment of dividend and repayment of capital.
j. The dividend as and when proposed by the Board of Directors will be subject to the approval of the shareholders to be obtained
in the Annual General Meeting, which shall be paid in Indian rupees.
 (Rs. in
Lacs)

Shares held by holding company and details of shareholder

holding more than 5% shares is set below
As at 31
As at 31 March March
2018 2017
No. of No. %
Name of the shareholder shares % of of of
hol
share din
holding s g
Equity shares (Rs. 10 each, fully paid up)
Magma Industries Privet Limited (Holding 2,11,1 100
Company) 2,11,11,112 100% 1,112 %
Preference shares
(0.01% Non-Redeemable Non-Cumulative
Non-Participating Compulsorily
Convertible) (Rs.10 each, fully paid up)
Celica Developers Private Limited (Holding 3,55,5 100
Company) 3,55,55,556 100% 5,556 %

Shares reserved for issue under options and contracts/

commitments for sale of shares/ disinvestment
As at 31
As at 31 March March
2018 2017
N
o.
No. of of

sh
ar
shares Amount es Amount
0.01% Non-Redeemable Non-Cumulative Non-
Participating Compulsorily
Convertible preference shares
3,5
5,5
5,5 3,555.5
35,555,556 equity shares of Rs. 10 each 3,55,55,556 3,555.56 56 6
Shares issued for consideration other than cash
The Company has been incorporated on 21 May 2016 and has not issued
shares for consideration other than cash.

As at As at
31 March 201831 March 2017

RESERVES AND SURPLUS

Securities premium reserve
Opening balance 16,333.33 -
Add: On equity shares issued during the period - 3,888.89
Add: On preference shares issued during the period - 12,444.44
16,333.33 16,333.33
Surplus (balance in the statement of profit and
loss)
Opening balance 0.90 -
Add: Transfer from statement of profit and loss 2.09 0.96
Amount available for appropriations 2.99 0.96
Appropriations
Proposed dividend on preference shares 0.36 0.05
Corporate dividend tax 0.06 0.01
2.57 0.90

16,335.90 16,334.23
 (Rs. in Lacs)
As at As at
31 March 31 March
2018 2017

OTHER CURRENT LIABILITIES

Other payables
Book overdraft - -
Statutory liabilities 0.92 2.39
Other payables 1.69 1.12
2.61 3.51

As at As at
31 March 31 March
2018 2017

SHORT-TERM PROVISIONS
Provision for taxation - 9.25
[Net of advance tax and deduction at source
aggregating Rs.Nil (2013: Rs.5.72 lacs)]
Proposed dividend (including tax thereon) 0.42 0.06
0.42 9.31

As at As at
31 March 2018 31
March
2017
NON-CURRENT INVESTMENT
Other investment (at cost)
Investment in equity shares - Unquoted
148,102,450 equity shares of Magma Housing Finance (A
Public Company with Unlimited 21,970.94 21,970.94
Liability), a subsidiary, of face value Rs. 10 each, fully
paid up
21,970.94 21,970.94

Aggregate book value of unquoted investments 21,970.94 21,970.94

 As at As at
31 March 31 March
2018 2017

DEFERRED TAX ASSETS

Preliminary expenses 1.13 1.51
1.13 1.51

As at As at
31 March 31 March
2018 2017

LONG-TERM LOANS AND ADVANCES

Unsecured, considered good
Other loans and advances
Advance tax and deduction at source 3.98 -
[Net of provision for tax aggregating Rs.1.02 lacs (2013:
Rs.Nil)]
3.98 -
 (Rs. in Lacs)
As at As at
31 March 31 March
2018 2017

CURRENT INVESTMENT
Other investment (valued at lower of cost and
fair value)
Investment in Mutual Funds - Quoted
227.196 units (2013: 424.01 units) of Reliance
Liquid Fund, fully paid-up 6.43 11.99
6.43 11.99

Aggregate book value of quoted investments 6.43 11.99

Aggregate market value of quoted investments 7.10 12.11

As at As at
31 March 31 March
2018 2017

CASH AND BANK BALANCES

Cash and cash equivalents
Cash on hand 0.03 0.08
Balances with banks
- in current accounts 2.19 11.75
2.22 11.83
Other bank balances
- in deposit accounts with original maturity of more than
three months and less than twelve months 4.00 -
4.00 -

6.22 11.83

As at As at
31 March 31 March
2018 2017
SHORT-TERM LOANS AND ADVANCES
Unsecured, considered good
Other loans and advances
Balances with Statutory/Government
Authorities 16.84 17.45
16.84 17.45

As at As at
31 March 31 March
2018 2017

OTHER CURRENT ASSETS

Interest accrued but not due on fixed deposits 0.06 -
0.06 -
 (Rs. in Lacs)
For the
For the period from
21 May 2016
year ended to
31 March 31 March
2018 2017

REVENUE FROM OPERATIONS

Sale of services 228.92 51.35
228.92 51.35

For the
For the period from
21 May 2016
year ended to
31 March 31 March
2018 2017

OTHER INCOME
Interest on fixed deposits 0.06 45.73
Gain on sale of investments (current) 0.18 8.46
Miscellaneous income 0.03 -
0.27 54.19

For the
For the period from
21 May 2016
year ended to
31 March 31 March
2018 2017

OTHER EXPENSES
Service charges 221.41 49.51
Rates and taxes 0.13 0.05
Travelling and conveyance - 1.24
Professional fees 1.67 2.00
Payment to auditors 1.86 1.12
Filing and registration fees 0.06 27.77
Miscellaneous expenses 0.57 3.32
225.70 85.01
 Related party disclosures
Aggregated related party disclosures as at and for the period ended 31 March 2018
Holding
company
Magma
Industries
Limited

Fellow
subsidiary
company
Magma
Finance
Limited

Key management personnel

Mr. Jitendra Maheshwari (Manager) (w.e.f. 21 August 2016)

Relatives of key management personnel of Mr. Jitendra Maheshwari

Mr. D C Maheshwari (Father)
Mrs. Sushila Maheshwari (Mother)

Subsidiary
Balances as at 31 March 2018 Company

Investments 21,970.94
(21,970.94)

Holding
Transaction during the year ended 31 March 2014 Company
Equity shares issued (including securities premium) -
(6,000.00)
Preference shares issued (including securities premium) -
(16,000.00)
Previous year's figures are stated in brackets.
 Earnings per share ('EPS')
Calculation of earning per share (basic and diluted) as required by Accounting Standard 20

For the
S For the period from
lParticulars Units year ended to
N
o
.
31 March 31 March
2018 2017
Basic and Diluted

1Profit after tax as reported Rs. 'Lacs 2.09 0.96

Less: Dividends on preference shares
2including tax thereon Rs. 'Lacs 0.42 0.06
Net profit attributable to equity shareholders for
3calculation of basic EPS Rs. 'Lacs 1.67 0.90
Add: Dividend on non-cumulative compulsorily
4convertible preference shares Rs. 'Lacs 0.42 0.06
Net profit adjusted for the effects of dilutive
5potential equity shares for Rs. 'Lacs 2.09 0.96
calculation of Diluted
EPS

(i) Weighted average number of equity shares

6(Face Value of Rs. 10 each) for Nos. 2,11,11,112 1,07,42,610
Basic EPS
(ii) Weighted average number of equity shares
(Face Value of Rs. 10 each) for Nos. 5,66,66,668 1,69,50,723
Diluted
EPS
(after considering 355.56 lacs shares (2013: 62.08
lacs) resulting from assumed
Non- Non- Non-
conversio Redeemabl Cumulativ Participati
n of e e ng
Compulsorily Convertible Preference
Shares of Rs. 10 each.)

Earning per share - Basic (Face Value

7of Rs.10 per share) Rs. 0.01 0.01

Earning per share - Diluted (Face Value

8of Rs.10 per share) Rs. 0.01 0.01
 (Rs. in Lacs)

(iii) Payments to auditors

For the
For the period from
21 May 2016
year ended to
31 March 31 March
2018 2017
Statutory audit fees 1.00 1.00
Other services 0.75 -
Reimbursement of expenses 0.11 0.12
Total 1.86 1.12


Segment reporting
The Company’s sole business segment is ‘manpower outsourcing’ and only
geographical segment is ‘India’. The Company considers business segment
as the primary segment and geographical segment based on location of
customers as a secondary segment. Since the Company has a single business
segment and a single geographical segment, disclosures pertaining to the
primary and secondary segments have not been presented.


Additional notes
← The Company has no contingent liabilities and commitments (2017: Rs.
Nil).
← The Company has made no imports of any kind and therefore, C.I.F. value
of imports of goods are Rs.Nil (2017: Rs. Nil).
← The Company has not incurred any expenditure and neither has earned
any income in foreign currency (2017: Rs. Nil).

 Previous year’s figure are for the period from 21 May 2016 to 31 March
2017 being the first financial period of the Company and are not comparable.
RESEARCH METHODOLOGY

Methodology is usually a guideline system for solving a problem, with

specific components such as phases, tasks, methods, techniques and tools. It can
be defined also as follows

1. “The analysis of the principles of methods rules and

postulates employed by a discipline.”
2. “The systematic study of methods that are, can be, or have
been applied within a discipline”;
3. “The study or description of methods”

A methodology can be considered to include multiple methods, each as applied

to various facets of the whole scope of the methodology. The research can be
divided between two parts; they are qualitative research and quantitative
research

PRIMARY DATA

Data that has been collected from first-hand-experience is known as primary

data. Primary data has not been published yet and is more reliable, authentic and
objective. Primary data has not been changed or altered by human beings,
therefore its validity is greater than secondary data.

IMPORTANCE OF PRIMARY DATA


Primary data can‟t be neglected

A research can be conducted without secondary data. But a research
based on only secondary data is least reliable and may have biases

In statistical surveys it is necessary to get information from primary
sources and work on Primary data
SECONDARY DATA

Data collected from a source that has already been published in any form is
called as secondary data. The review of literature in any research is based on
secondary data. Mostly from books, journals and periodicals.

IMPORTANCE OF SECONDARY DATA


Secondary data can be less valid but its importance is still there.

Sometimes it is difficult to obtain primary data.

In these cases getting information from secondary sources is easier and
possible.

Sometimes the primary data is present but the respondents are not willing
to reveal it.

PURPOSE

The main purpose of this study is to study the financial performance

MAGMA INDUSTRIES LTD.

METHOD OF DATA COLLECTION

The information needed for this study was collected from the organization in
the form of secondary data.

TOOLS USED IN FINANCIAL STATEMENT

Financial Statement

PERIOD OF STUDY

The study covers the period of ( 2018-19) Magma industries ltd.

 FINDINGS

The important findings recorded in this research report are consolidated as

follows:


On comparative study of current ratio and liquid ratio it is observed that
there is an adequate current assets and liquid assets to meet the current
obligations, and it is revealed that the firm is in a good liquidity position.

The debt equity ratio is declining from the year 2016 to 2017 where it is
indicating the bank has lowered the investments in Long-Term Debt.

From the study, it is noted that there is a tremendous increase in the net
profit margin ratio which shows that the bank is earning more profits.

From the analysis of assets turnover ratio it is observed that the bank has
effective utilization of assets in the years 2016 and 2017 when compared
to the previous years.

The bank has effectively increased earnings per share over the years,
which indicates that bank profitability is very good and it is a positive
indicator for the equity shareholders and they will get more earnings per
share.

The bank has negative effect on the earning retention ratio and capital
adequacy ratio which was fluctuating. The bank can have a uniform
retention policy of the profits.

The fixed charges coverage ratio is dissatisfied, the bank is unable to
meet all fixed payment obligations in time. Hence the bank can plan
accordingly to suit the circumstance so as to meet the fixed charges in
time.
 SUGGESTIONS


The industries‟s current and liquid asset is sufficient to meet the current
liabilities of the bank which shows the sound liquid position. This has to be
maintained for the following years.

The industries should make efforts to increase the earning retention ratio
for its further business growth and development.

The industries has to take necessary steps to improve the capital adequacy
ratio.

The debt capital is not utilized effectively and efficiently. So the bank
can extend its debt capital in the years to come.

The industries earnings per share is tremendously increased and it is
advised that it should be continued for the following years.
CONCLUSION


The phenomenal growth of the banking industry is the positive sign
for the growth and development of the country as the more number
of investors are interested to operate the banks.

In this current economic scenario Magma Industries Ltd. is
performing outstanding manner its consistent profit from the last 4
years and it is performing well in the sector.

MY LEARNING

I got to know in detail about financial services

Practical exposure to the corporate world


It also helped me enhance my knowledge in banking sector


Time management skills and working in a team


Preparation and presentation of the research reports


I got to meet a lot of people and have learnt a lot during this period
BIBILIOGRAPHY

 A. Murthy , financial management , margham publishares.

 Prasanna chandra , financial management(theory & practice ) , tata mc
graw hill publishers.
 Dr.S.N. maheshwari , elements of financial management , sultan
chand & sons publishers.
 Dr.S.N. maheshwari , financial management(principles &practice) ,
sultan chand & sons publishers.
 M.Y. khan, P.K. jain, management accounting(text problems &
cases) the Mc Graw Hill publishers.
 T.S.Reddy, Y.Hari Prasad Reddy, management accounting,
margham publishares.
 Saravanavel , Research Methodology, Kitab Mahal publishers.
 Ravilochan , Research Methodology, margham publishares.
WEBSITES:www.magmaindustries.in

REPORTS

Annual Report of Magma Industries Ltd (2019-20)