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A  PRESENTATION ON SOLIDAIRE INFRASTRUCTURE COMPANY BY:- DEEPAK KUMAR MANISH SINGH NORANG LAL SUMIT LATHER
[object Object],[object Object],[object Object],[object Object],CONTENTS
Infrastructure  is the basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function. The term typically refers to the technical structures that support a society, such as roads, water supply, sewers, power grids, telecommunications, and so forth.  Viewed functionally, infrastructure facilitates the production of goods   and services; for example, roads enable the transport of raw materials to a factory, and also for the distribution of finished products to markets. In some contexts, the term may also include basic social services such as schools and hospitals. In military parlance, the term refers to the buildings and permanent installations necessary for the support, redeployment, and operation of military forces. ABOUT INFRASTRUCTURE
Summarization of the case study Solidaire Infrastructure Company has 3 business organized under 3 separate divisions. The cement division its manufacturing plant in Gujarat. It sells about 2/3 of its cement in Gujarat and the remaining quantity in Rajasthan and Gujarat, M.P. and Maharashtra. The power generation division, under a long term agreement, supplies ¾ its power generated to the government of Gujarat at an agreed price, which is periodically revised with mutual consent of the two parties. All three divisions are profitable and they have plans to expand their activities in  the future.
(Rs. in million) FINANCIAL DATA OF THE COMPANY ,[object Object],[object Object],[object Object],[object Object],Cement Division Fertilizer division Power division Solidaire  Sales 700 450 350 1500 PAT 29 17 24 70 Assets 550 230 420 1200 Current assets 210 100 20 330 Equity(Market value) 1000 Debt  1800
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],SWOT ANALYSIS STRENTH:
WEAKNESS: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
OPPORTUNITIES: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
THREATS: ,[object Object],[object Object],[object Object],[object Object]
WACC There are two formulas for calculating WACC(Weighted Average Cost of Capital):- K0=WACC, Kd=cost of debt, T=tax rate, Wd= weight of debt, ke= cost of equity, We=weight of equity D=debt,  E= Equity General Formula for calculating WACC is.. Where k1,k2,… are component costs  W1,w2,… are weights of various types of capital employed by the company.
Problems: ,[object Object],[object Object],[object Object],=23.6% Now for WACC: 0.0843 Or 8.43%
[object Object],Ans:- Because power division has steady flow of earnings and no uncertainty of demand. It also has a higher debt capacity so it can borrow 4 times of equity and has low operating risk and high debt capacity. Other division’s CEO said that power division should use firm’s WACC so that to ensure highly profitable projects will be accepted and the company will be able to maximize shareholders wealth.  The power division should use the firm’s WACC instead of its own.
THANK YOU….

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Fm

  • 1. A PRESENTATION ON SOLIDAIRE INFRASTRUCTURE COMPANY BY:- DEEPAK KUMAR MANISH SINGH NORANG LAL SUMIT LATHER
  • 2.
  • 3. Infrastructure  is the basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function. The term typically refers to the technical structures that support a society, such as roads, water supply, sewers, power grids, telecommunications, and so forth. Viewed functionally, infrastructure facilitates the production of goods   and services; for example, roads enable the transport of raw materials to a factory, and also for the distribution of finished products to markets. In some contexts, the term may also include basic social services such as schools and hospitals. In military parlance, the term refers to the buildings and permanent installations necessary for the support, redeployment, and operation of military forces. ABOUT INFRASTRUCTURE
  • 4. Summarization of the case study Solidaire Infrastructure Company has 3 business organized under 3 separate divisions. The cement division its manufacturing plant in Gujarat. It sells about 2/3 of its cement in Gujarat and the remaining quantity in Rajasthan and Gujarat, M.P. and Maharashtra. The power generation division, under a long term agreement, supplies ¾ its power generated to the government of Gujarat at an agreed price, which is periodically revised with mutual consent of the two parties. All three divisions are profitable and they have plans to expand their activities in the future.
  • 5.
  • 6.
  • 7.
  • 8.
  • 9.
  • 10. WACC There are two formulas for calculating WACC(Weighted Average Cost of Capital):- K0=WACC, Kd=cost of debt, T=tax rate, Wd= weight of debt, ke= cost of equity, We=weight of equity D=debt, E= Equity General Formula for calculating WACC is.. Where k1,k2,… are component costs W1,w2,… are weights of various types of capital employed by the company.
  • 11.
  • 12.