Maga Ltd was manufacturing water-heater. In the first year of its operations, the revenue earned by the company was just sufficient to meet its costs. To increase the revenue, the company analysed the reasons of less revenues. After analysis, the company decided:

(i) To reduce the labour cost by shifting the manufacturing unit to a backward area where labour was available at a very low rate.

(ii) To start manufacturing solar water-heaters and reduce the production of electric water-heaters slowly.

This will not only help in covering the risks, but also help in meeting other objectives too.

(a) Identify the objectives of management discussed above.

(b) State any two values which the company wanted to communicate to the society.

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Solution

(a) Maga Ltd is discussing about the achievement of 'organisation objective' in part (i) and 'social objective' in part (ii) of the question.

(b) Two values which the company wants to communicate to the society are:

(i) Promoting employment opportunities: By providing employment to the people of backward area.

(ii) Environment friendly: By producing solar heaters and reduce production of electric heaters.

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$\begin{matrix} Particulars & Note No & 31.03.2017 * & 31.03.2016 I. EQUITY AND LIABILITIES: & Rs. & Rs. 1. Shareholder's Funds: (a) Share Capital & 10, 00, 000 & 5, 00, 000 (b) Reserves and Surplus & 2, 00, 000 & 3, 00, 000 2. Non-Current Liabilities 3. Long-term Borrowings & 8, 00, 000 & 5, 00, 000 4. Current Liabilities Trade Payables & 4, 00, 000 & 2, 00, 000 TOTAL & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 24, 00, 000 - --------- - - --------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 15, 00, 000 - --------- - - --------- - II. ASSETS : 1. Non Current Assets a. Fixed Assets: (i) Tangible Assets & 14, 00, 000 & 8, 00, 000 (ii) Intangible Assets & 3, 00, 000 & 2, 00, 000 2. Current Assets (a) Inventories & 5, 00, 000 & 4, 00, 000 (b) Cash and Cash Equivalents & 2, 00, 000 & 1, 00, 000 TOTAL & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 24, 00, 000 - --------- - - --------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 15, 00, 000 - --------- - - --------- - \end{matrix}$

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