Annual Report:
An annual report is a formal financial statement issued yearly by a company. It shows assets, liabilities, revenues, expenses, and earnings — how the company stood at the close of the business year and how it fared profit-wise. Abridged versions are sent to shareholders free of cost; a detailed report is available on request. It is the best source of information about a company's financial health.

Key Features to Read Carefully:

1. Director's Report and Chairman's Statement — relates to current and future operational performance.
2. Auditors' Report — including annexure to the auditors' report.
3. Profit and Loss Account — shows financial performance over the accounting year.
4. Balance Sheet — shows the company's financial position at a particular point of time.
5. Notes to Accounts — attached to the Balance Sheet.

Source: Chapter 9 — Introduction to Financial Markets

---

• The question has two parts: define annual report + describe its features. Split your answer accordingly to capture all marks.
• Examiners expect all 5 features listed in the textbook; missing any one may cost a mark.
• Keep the definition concise (1–2 sentences) and list features as numbered points — this format is clear and saves time in the exam.
• "Best source of financial health" is a key phrase from the textbook; including it shows precise recall.

Industry Analysis means studying the performance and prospects of the industry/sector to which a company belongs. Companies producing similar products form a part of one industry. Analysts examine the effect of government policy, future demand, and changes in business environment (e.g., rupee devaluation benefiting export-oriented companies) on the industry's outlook.

Source: Chapter 9, Industry Analysis

---

• The examiner wants the definition of Industry Analysis and its key components (government policy, future demand, business environment changes).
• Use the example from the passage (NHPC, NTPC, TPC → Power Sector) only if needed for context; here the question already states it, so focus on the meaning.
• Do not confuse Industry Analysis with Corporate or Financial Analysis — all three are distinct steps in company analysis.

(b) Corporate Analysis

Wait — re-reading the passage: analyzing EPS, P/E ratio, and estimated future price is termed Financial Analysis.

Answer: (c) Financial Analysis

The source passage explicitly states: "look at the financial performance of the company and certain key financial parameters like Earnings Per Share (EPS), P/E ratio, current size of equity etc. for arriving at the estimated future price. This is termed as Financial Analysis." Students must not confuse it with Corporate Analysis (which covers managerial capabilities, past performance vs competitors) or Industry Analysis (which covers sector-level factors).

The liability section of a company's balance sheet includes the following items:

1. Share Capital – funds raised by issuing shares.
2. Reserves and Surplus – retained earnings and accumulated reserves.
3. Secured Loans – borrowings backed by assets as collateral.
4. Unsecured Loans – borrowings without collateral.
5. Current Liabilities and Provisions – amounts due to creditors, advances received, accrued expenses, and provisions for tax, dividend, etc.

Source: Chapter 9, Balance Sheet: Account Form

The examiner expects students to list the heads from the liability side of the balance sheet as given in the Account Form. For 2 marks, naming and briefly describing 4–5 items is sufficient. Avoid writing lengthy descriptions; one-line explanations per item are enough.

"Reduced Inequalities" is SDG Goal 10. Methods used to reduce inequalities include:

1. Progressive taxation – taxing higher incomes at higher rates to redistribute wealth.
2. Social welfare schemes – providing subsidies, healthcare, and education to the poor.
3. Equal opportunity policies – ensuring fair wages and employment for all sections of society.
4. Financial inclusion – giving access to banking and credit to marginalised groups.

The source passages provided are from a Financial Markets chapter and do not contain content related to "Reduced Inequalities" (SDG 10). However, this topic comes from Economics – Chapter: Development (Class 10 NCERT). The examiner expects students to list 2–3 clear methods (each as a point) for 2 marks. One mark is typically awarded per valid method mentioned. Avoid writing lengthy explanations; brief, labelled points are sufficient.

(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Assertion is true as all fixed assets except land have a fixed life. Reason is also true — annual decrease in asset value due to usage is Depreciation — but depreciation does not explain why land is excluded from having a defined lifespan.

---

• The source passage states: "all fixed assets except land have a fixed life" (A is true) and "every year the worth of an asset falls due to usage — this reduction is called Depreciation" (R is true).
• However, R explains what depreciation is, not why land has no defined lifespan. Hence R is not the correct explanation of A → Option (B).
• A common mistake is choosing (A), but that would require R to directly justify the exemption of land, which it does not.