If the north pole of the magnet is moved towards the coil, the upper face(U.F) of the magnet acquires the north polarity on closing the key between 2 and 3. [This is because the current induced in the coil flows in an anti clockwise and this produces a magnetic field with the upper face acquiring a north polarity]. Therefore, work has to be done against the force of repulsion in bringing the magnet closer to the coil. If the magnet is moved away, south polarity develops on the same face. Therefore, work has to be done against the force of attraction in taking the magnet away from the coil. It is this mechanical work done in moving magnet with respect to the coil that changes into electrical energy producing induced current. Thus, energy is being transformed.
