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Rana Sugars Pvt. Ltd. - a Study on Capital Structure and Cost of Capital of Companies

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INSTITUTE OF MANAGEMENT, NIRMA UNIVERSITY

FINANCIAL MANAGEMENT – II (MBA-FT – YEAR-I, TERM-III)

GROUP ASSIGNMENT

A Study on Capital Structure and Cost of Capital of Companies

SUBMITTED TO:

PROF. AMOLA BHATT

SUBMITTED BY:

SECTION: __C__                 GROUP NO.: __15_

Roll No.

Name

Signature

161358

Shubham Ghotankar

161337

Parag Jyoti Borah

161339

Rachit Kulshreshtha

161334

Nehal Parwal

                

                                 DATE OF SUBMISSION: 15th Feb, 2017


                                            INDEX

Acknowledgement                                                                    

Industry Information                                                                

Companies Information                                                            

Capital Breakup                                                                      

Financial Statements                                                              

Promoters Stake                                                                      

Cost of Equity                                                                          

Notes to Accounts                                                                    

Comparative Analysis (Intra firm)                                          

Inter-firm Analysis                                                                  

Interpretations and Suggestions                                              

References    

     


                                   ACKNOWLEDGEMENT

We wish to say thanks to Professor Amola Bhatt for giving us such a wonderful opportunity to work on this assignment. We got to know the various financial issues facing the Sugar industry. We went through various internet sites and accessed Ace Equity database. Our learning and knowledge about the industry have been strengthened. We also did inter firm and intra firm analysis, which revealed to us various facts which have been hidden from us. We got to know how to practically apply the theories which have been taught to us in Financial Management 2 subject.

                         


Indian Sugar Industry

Sugar, the second-largest agro-based industry in India, is a sector of immense importance to the Indian economy. ISI impacts livelihoods of about 50 million farmers and their families and provides direct employment to over 5 lakh skilled and semi-skilled persons in sugar mills and related industries. It covers 5 million hectares of land. For past two sugar seasons (SS; refers to the period October 1 to September 30) ended SS2015-16, the ISI has been witnessing a challenging phase marked by extreme volatility in sugar prices and lopsided margins for the sugar mill owners.

The sugar prices started declining from August 2014 on account of surplus sugar stock both in domestic and global markets. Sugar production exceeded the sugar consumption levels for past five consecutive SS from SS2010-11 to SS2014-15. Wholesale price of sugar slumped from Rs.33.76/kg in August 2014 to a low of Rs.26.40/kg in August 2015 and remained below Rs.30/kg for almost half of production period in the SS2015-16. The situation at present, however, seems totally reversed where the major cause of concern for the government is surging sugar price. The sugar price started picking up from September 2015 and since then it has been on a continuous uptrend. In August 2016, sugar price prevailed at Rs.37.86/kg in wholesale market and crossed the price level of Rs.40/kg in the retail market.

The production and consumption pattern of sugar in India is shown below. (Source: Indian Sugar Mills Association)     

[pic 1]

 

                                           

                                                   COMPANY-1

                                  161358

                        Rana Sugars Pvt. Ltd.

Introduction:

Rana Group of Companies made a humble begnning in mid 80’s when Rana Gurjeet Singh, group’s Managing Director , set-up Agro Boards Limited a Kraft Paper unit in Punjab Sucess of this maiden venture was duly recognised by apex state owned industial promotion corporations and this led venturs of Rana Group with different state owned corporations. 

Rana Sugars Ltd. was founded in 1992 by collaboration with Punjab AgroCorporation. In year 2002 RSL has setup a Demonstration Co-generation Project to produce extra power from the Bagasse (by-product of sugar) and export it to Punjab State Electricity Board. 

Capital Structure:

RANA SUGARS

 

16-Mar

15-Mar

14-Mar

13-Mar

12-Mar

Total Shareholders’ Funds

199.28

182.55

237.52

261.46

256.06

 

 

 

 

 

 

Long Term Borrowings

250.5

239.05

240.27

238.45

229.29

Other Long Term Liabilities

0

0.00

0.00

0

0

Short Term Borrowings

514.66

502.67

510.72

406.72

376.22

Other Short Term Liabilities

0.92

0.86

1.51

0.64

0.37

TOTAL DEBT

766.08

742.58

752.50

645.81

605.88

 

 

 

 

 

 

TOTAL CAPITAL STRUCTURE

965.36

925.13

990.02

907.27

861.94


Balance Sheet (Rana Sugars Ltd.):

Balance Sheet of Rana Sugars

------------------- in Rs. Cr. -------------------

 

Mar 16

15-Mar

14-Mar

13-Mar

12-Mar

[pic 2]

 

 

 

 

 

 

 

12 mths

12 mths

12 mths

12 mths

12 mths

[pic 3]

 

 

 

 

 

 

EQUITIES AND LIABILITIES

 

 

 

 

SHAREHOLDER'S FUNDS

 

 

 

 

Equity Share Capital

153.54

153.54

153.54

153.54

153.54

Preference Share Capital

41.09

41.09

41.09

41.09

41.09

Total Share Capital

194.63

194.63

194.63

194.63

194.63

Reserves and Surplus

4.64

-12.09

42.89

66.83

61.42

Total Reserves and Surplus

4.64

-12.09

42.89

66.83

61.42

Total Shareholders Funds

199.28

182.55

237.52

261.46

256.06

NON-CURRENT LIABILITIES

 

 

 

 

Long Term Borrowings

250.5

239.05

240.27

238.45

229.29

Long Term Provisions

5.42

5.33

4.91

2.59

1.53

Total Non-Current Liabilities

255.92

244.39

245.18

241.05

230.83

CURRENT LIABILITIES

 

 

 

 

Short Term Borrowings

514.66

502.67

510.72

406.72

376.22

Trade Payables

262.4

207.18

185.87

190.36

156.57

Other Current Liabilities

206.72

171.99

155.37

148.86

167.04

Short Term Provisions

0.92

0.86

1.51

0.64

0.37

Total Current Liabilities

984.7

882.71

853.48

746.58

700.19

Total Capital And Liabilities

1,439.90

1,309.64

1,336.18

1,249.09

1,187.08

ASSETS

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

Tangible Assets

446.89

439.49

452.83

454.08

479.28

Capital Work-In-Progress

28.71

34.39

32.46

39.56

24.51

Fixed Assets

475.6

473.88

485.29

493.63

503.79

Deferred Tax Assets [Net]

32.22

32.19

5.59

0

0

Long Term Loans And Advances

2.96

5.05

8.63

12.4

11.41

Total Non-Current Assets

510.78

511.11

499.51

506.03

515.19

CURRENT ASSETS

 

 

 

 

Current Investments

0

0.09

0.09

0.09

0.09

Inventories

645.27

586.78

638.65

546.07

517.07

Trade Receivables

74.02

57.46

59.45

57.53

45.39

Cash And Cash Equivalents

28.48

13.99

32.75

20.03

22.12

Short Term Loans And Advances

181.16

136.64

105.67

119.15

85.84

OtherCurrentAssets

0.19

3.57

0.06

0.2

1.37

Total Current Assets

929.12

798.53

836.67

743.06

671.88

Total Assets

1,439.90

1,309.64

1,336.18

1,249.09

1,187.08

OTHER ADDITIONAL INFORMATION

 

 

 

 

CONTINGENT LIABILITIES, COMMITMENTS

 

 

 

 

Contingent Liabilities

176.62

180.5

6.38

8.75

15.55

CIF VALUE OF IMPORTS

 

 

 

 

Raw Materials

2.4

1.74

0

0

7.48

Capital Goods

6.37

5.31

3.06

1.73

0

EXPENDITURE IN FOREIGN EXCHANGE

 

 

 

 

Expenditure In Foreign Currency

0.4

0.54

0.92

0.53

7.68

REMITTANCES IN FOREIGN CURRENCIES FOR DIVIDENDS

 

 

 

 

Dividend Remittance In Foreign Currency

-

-

-

-

-

EARNINGS IN FOREIGN EXCHANGE

 

 

 

 

FOB Value Of Goods

0.7

0.1

-

-

13.49

Other Earnings

0.25

0.12

-

-

-

BONUS DETAILS

 

 

 

 

Bonus Equity Share Capital

-

-

-

-

-

NON-CURRENT INVESTMENTS

 

 

 

 

Non-Current Investments Quoted Market Value

-

-

-

-

-

Non-Current Investments Unquoted Book Value

-

-

-

-

CURRENT INVESTMENTS

 

 

 

 

Current Investments Quoted Market Value

-

-

-

-

-

Current Investments Unquoted Book Value

-

-

-

-

-

[pic 4]

Source : Dion Global Solutions Limited

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