FINANCIAL MANAGEMENT-2

Submitted By: Ankur Arora 2011A19

BGR Energy Systems Background

The Company was originally incorporated in 1985, as a joint venture between GEA Energietechnik GmbH, Germany and the Promoter, Mr. B. G. Raghupathy In 1993 Mr. B. G. Raghupathy and members of his family became the sole shareholders of the Company and began to expand the range of product and services range in the Power and Oil & Gas industries. On June 28, 2007 the Company name was changed from GEA Energy System (India) Limited, to BGR Energy Systems Limited. The Company operates in two segments: capital goods and construction and engineering procurement construction (EPC) Contracts. BGR Energy Systems Ltd is the fourth Chennai-based company to join the elite $1 billion league after CPCL, MRF and Ashok Leyland.

Ambuja Cement: Board Composition BGR Energy Systems Management Team

NAME B. G. Raghupathy T. Sankaralingam S. Rathinam V. R. Mahadevan A. Swaminathan DESIGNATION Chairman & Managing Director Managing Director Director Finance Director Technologies & HR Director Sales & Marketing

Compounded Annual Returns

BGR Energy Systems Compounded Growth

Share Price on 2nd Jan,2012(P12) = 175.7 Share Price on 2nd Jan,2007(P08) = 903.95

P12 = P08 * (1+R)^4 903.95 = 175.7 *(1+R)^4 R = 50.61% So, the compounded annual rate of return is 50.61%

Ambuja Cement :Regression Output

BGR Energy Systems Alpha and Beta Calcu

Y= -0.00074 + 1.77110X

Where Y= Weekly return on BGR Energy Systems X= Weekly return on BSE Therefore, Beta = 1.77110 Alpha = -0.00074

BGR Energy Systems Stock Annual Returns

Year 2008 2009 2010 2011 Dividend 2 3 7 10 Stock Price 144.85 492.4 725.95 178.7 Total Returns

146.85 495.4 237% 732.95 48% 188.7 -74%

BGR Energy Systems WACC

After tax cost of Year Tax Rate Cost of debt debt
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 23.27% 21.37% 22.36% 29.05% 35.21% 32.58% 34.10% 34.02% 32.74% 32.74% 0.110019646 0.083031765 0.079035874 0.066481353 0.071557525 0.053037859 0.081845154 0.066665013 0.045243993 0.045243993 0.084421656 0.065289188 0.061361185 0.047166546 0.046364545 0.035759476 0.053933918 0.043983855 0.030432055 0.030432055

cost of equity

Beta Risk Free Rate 0.08 Return on Market 0.07 Portfolio

1.77110 8.2% 10%

0.06 0.05 0.05 0.04 0.05 0.04 Weighted Average Cost of 0.03 Capital 0.03

7.54

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