14MBA22

USN
||Jai Sri Gurudev||
BGS Institute of Technology
Department of Management Studies
II SEM MBA I Internals- Financial Management
Max. Marks: 50

Time: 2hr

PART-A (Answer any two) 2x3=6

1. What is time value of money?
2. What is lease financing?
3. What do you mean by forex market?
PART-B (Answer any two) 2x7=14
1. What are the key activities of finance manager?
2. Mr.X borrows car loan of Rs.500000 from bank at 10% interest rate with 5 equal annual
installments. Calculate annual installment and also prepare loan amortization schedule.
3. Explain the objectives of financial management.
PART-C (Answer any two) 2x10=20
1. Explain the different sources of long term funds.
2. Mr.X deposits Rs.50000 in a bank at 12% interest rate. How much shall it grow at the end of 4 years,
if interest rate is compounded annually, quarterly, semi-annually & monthly.
3. Explain the structure of financial market in India.
4. Write a note on a) Commodity market b) Angel Investing
PART-D (Case Study) 10 marks
What went wrong with Satyam?
Satyam Computer Services Ltd. is a consulting and information technology services company based in
Hyderabad, India .It was found in 1987 by B.Ramalinga Raju. The company offers information
technology(IT) services spanning various sectors, and is listed on the New York Stock Exchange and
Euronext It is considered as an icon among the IT companies and at one point had over a billion dollar
revenue. The company employs 40,000 IT professionals across development centres in India, the United
States, the United Kingdom, the UAE, Canada, Hungary, Singapore, Malaysia, China, Japan, Egypt and
Australia.
Satyam Computers had on December 16, 2008, announced that it will acquire two group firms - Maytas
properties and Maytas Infra the BOD of Satyam had approved the founders proposal to buy 51 per cent
stake in Maytas Infrastructure and 100 % in Maytas properties. The company is run by the sons of
RamalingaRaju. The company has huge land banks and the prices have dropped down in the real estate
significantly. The deal was not profitable for investors dumped Satyams stock and threatened action against
the management.
Ramalinga Raju tried to fill the gap b/w actual profits of the company and the profits that were shown in
records, balance sheets etc. and also tried to cope up the situation till last minute. But now the situations
were beyond his hands and therefore he confessed the frauds (on Jan 7, 2009) made by him by showing
inflated profits in the balance sheet. Simple manipulation of revenues and earnings, shown superior
performance raising fictitious bills for services that were never rendered, increase the Cash &bank balance
correspondingly & Operating profits were artificially boosted from the actual.
Who is guilty in this sordid state of events?
Is Raju the father of this fraud? Are they others in this case are culpable?