MCO 7120 Assignment

MCO 7120 – FINANCIAL REPORTINGAND STANDARDS
M.COM YEAR ONE ASSIGNMENT

Requirements:
 Form a team of two members in a team
 Select a company and down an annual report of the year 2020-2021
 Read the following article and analyse the annual report
Article:
Listed companies come out with their reports highlighting annual performance to its shareholders.
These reports are primary source of information for an investor to understand the company, sector,
management views and analyse the financials.
You can get annual reports from company website under investor relation section, BSE/NSE website
and will receive in post / email if you are shareholder of a company.
10 important things to analyse while reading an annual report are as follows:
1) Vision and mission statements of the company

In this section, you will get to read vision and mission statement, values and goals of the company.
These statements are general in nature. Take a look at vision and mission statements of Infosys:
Vision: "We will be a globally respected corporation."

Mission: "Strategic Partnerships for Building Tomorrow’s Enterprise."
2) Corporate information
In this section, you will get details of directors, bankers, auditors and registered and corporate office.
Key things to look is designation of each board members, incase auditors are reputed they provide
additional comfort to the company you are investing.
3) Products overview and financial highlights in last 5 to 10 years

Get details of products being manufactured by a company, segment wise performance in last two
years, key raw materials consumed, etc. Some companies publish financial highlights of 5 to 10 years
in annual reports. You will get to analyse trend of revenue, earnings before interest, tax, depreciation
and amortization (EBITDA), profit after tax (PAT/Net income / loss) from income (profit and loss)
statement and also get a glimpse on shareholders equity, assets, debtors, liability and total debt from
balance sheet over the years. Important ratios are also presented in charts over 5 to 7 years time line.
4) Director’s report
This section provides brief summary on financials, explanation of the financial results, key
developments in the company. Key things to look in here are operational parameters of the company
such as capacity additions, capex plan / executed during the year, order book as on financial year end,
average length of stay, occupancy rates, average revenue per occupied bed, average revenue per user,
etc. Terms used to discuss operation of the company varies depending on sectors so get some
knowledge about industry terms or use glossary to get better insights. Read the past 3 to 5 years
director report to see whether management has achieved the set revenue target over the years, whether
strategies adopted over the years were favorable for company and did management able to perform
during roller coaster ride of an economy. Also, look at the tone of the director report while reading
annual report. Ideally, it sounds positive in good years and negative in bad years of the company
performance.
5) Management discussion and analysis (MDA)

This section provides information on trends in the industry, SWOT analysis of the company, insights
on key line items of financial statements and risk factors/concerns affecting the company
performance. You will get relevant information to understand the industry while reading this section.
1
It’s appreciated to read at least 3-5 years of MDA to understand trends of the company in different
economy scenario.
6) Report on Corporate governance

This section gives insight on corporate governance followed by a company, composition of board of
directors, brief background information on directors and independent directors of the company,
attendance of directors in board meetings and annual general meetings, remuneration of directors, re-
appointment of directors after completing the term, composition of sub-committees, etc. Key things to
look here is composition of board of directors, sub committees and attendance records of directors
during meetings, relate remuneration paid to directors with profits earned by the company. Analyse
whether profile of independent directors match with the requirement of company as per sector of a
company.
7) Information on shares of the company

This section provides information on historical performance of share price, share holding pattern of
the company, pledging of shares by promoters during the year, split of shares, bonus shares
distributed, etc.
8) Auditors report
This section gives information on comments by auditors on the financials of the company. You look
out who are the auditors for the company and any qualifications by the auditors on internal processes.
The information on change in accounting policy if any will be highlighted in this section.
9) Financial statements
This section provides detailed information on profit and loss accounts (income statement), balance
sheet as on year end, cash flow statement and schedules of the financials for two years. Analyzing
numbers from this section help us to check financial health of the company. We will explain in other
article key things to look in financial statements for fundamental analysis of a company.
10) Notes to accounts

In this section you will get information on accounting policy followed by a company, depreciation
method, forex losses / gains, segmental reporting, inventories, liabilities, leases, etc. It will be helpful
if you read notes to account section of last 3 to 5 years. This will help to get information on any
change in accounting year or accounting policy which can inflate revenues or profits of the company,
trend in segmental revenues / profitability, contingent liabilities over the years, related party
transactions, etc.
You may find reading an annual report is tedious exercise for the first time. However, it’s an advice to
analyse at least 2 to 3 years past annual reports of a company to understand in and out about
operations of the company, financials and management’s view/stand in various economic trends. A
corporate and analyst presentation available on company website are useful sources of information
with reading an annual report then take a decision of buy, sell or hold of stocks with your
understanding.
Source: investmentyogi.com
Prepare a report with the following guidelines

Report contents:
Introduction
About the company
Analysis
1. Chairman message
2. Performance highlights for the last few years
3. Director's report
4. Management discussion and analysis
5. Forward looking statements, industry and segment analysis
2
6. Standalone Financial statements and notes
7. Financials about parent company
8. Consolidated Financial statements and notes
9. Related party transactions
Conclusion
Bibliography
Submission of the report

Save your report with both the register number
Open https://secure.urkund.com/account/auth/login
Create account for document upload (STUDENTS)
Use Analysis Address : [email protected] to upload your document
Submission deadline
12 / 1/2021 – Tuesday before 10am

MCO 7120 Assignment

Uploaded by

Copyright:

Available Formats

MCO 7120 Assignment

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

MCO 7120 Assignment

Uploaded by

Copyright:

Available Formats

MCO 7120 – FINANCIAL REPORTINGAND STANDARDS

M.COM YEAR ONE ASSIGNMENT

1) Vision and mission statements of the company

Vision: "We will be a globally respected corporation."

3) Products overview and financial highlights in last 5 to 10 years

5) Management discussion and analysis (MDA)

6) Report on Corporate governance

7) Information on shares of the company

10) Notes to accounts

Prepare a report with the following guidelines

Submission of the report

You might also like