SUMMARY OUTPUT

Regression Statistics
Multiple R 0.291012
R Square 0.084688
Adjusted R 0.069174
Standard E 25.21473
Observatio 61

ANOVA
df SS MS F Significance F
Regression 1 3470.669 3470.669 5.458892 0.022885
Residual 59 37511.18 635.7827
Total 60 40981.85

Coefficients
Standard Error t Stat P-value Lower 95%Upper 95%Lower 95.0%
Upper 95.0%
Intercept 0.459973 3.269182 0.1407 0.888586 -6.081644 7.00159 -6.081644 7.00159
X Variable 0.871585 0.373042 2.336427 0.022885 0.12513 1.61804 0.12513 1.61804
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.334262
R Square 0.111731
Adjusted R 0.096676
Standard E 24.83945
Observatio 61

ANOVA
df SS MS F Significance F
Regression 1 4578.959 4578.959 7.42135 0.008467
Residual 59 36402.89 616.9981
Total 60 40981.85

CoefficientStandard Et Stat P-value Lower 95%Upper 95%Lower 95. Upper 95.0%

Intercept 0.433827 3.212184 0.135057 0.893027 -5.993738 6.861393 -5.993738 6.861393
X Variable 0.908371 0.333443 2.724215 0.008467 0.241153 1.57559 0.241153 1.57559
1.Monthly prices and logarithmic returns
Month Bhushan CP Sensex CP BSE 500CP Bhushan Ret Sensex Ret Bse 500 Ret
Sep-05 180.15 8634.48 3521.83
Oct-05 138.7 7892.32 3198.69 -26.15 -8.99 -9.62
Nov-05 147.8 8788.81 3568.37 6.35 10.76 10.94
Dec-05 143.75 9397.93 3795.96 -2.78 6.70 6.18
Jan-06 147.2 9919.89 4004.96 2.37 5.41 5.36
Feb-06 155.45 10370.24 4130.07 5.45 4.44 3.08
Mar-06 184.3 11279.96 4516.73 17.02 8.41 8.95
Apr-06 215.6 12042.56 4829.73 15.69 6.54 6.70
May-06 201.9 10398.61 4157.93 -6.57 -14.68 -14.98
Jun-06 203.35 10609.25 4029.97 0.72 2.01 -3.13
Jul-06 229 10743.88 4029.43 11.88 1.26 -0.01
Aug-06 230.95 11699.05 4423.88 0.85 8.52 9.34
Sep-06 275.85 12454.42 4739.67 17.77 6.26 6.90
Oct-06 332.25 12961.9 4957.37 18.60 3.99 4.49
Nov-06 341.1 13696.31 5227.73 2.63 5.51 5.31
Dec-06 374.25 13786.91 5270.76 9.27 0.66 0.82
Jan-07 428.3 14090.92 5408.71 13.49 2.18 2.58
Feb-07 398.85 12938.09 4938.08 -7.12 -8.54 -9.10
Mar-07 513.65 13072.1 4955.39 25.30 1.03 0.35
Apr-07 535.95 13872.37 5311.03 4.25 5.94 6.93
May-07 660.4 14544.46 5646.9 20.88 4.73 6.13
Jun-07 695 14650.51 5781.37 5.11 0.73 2.35
Jul-07 702.8 15550.99 6063.2 1.12 5.96 4.76
Aug-07 759.7 15318.6 5950.11 7.79 -1.51 -1.88
Sep-07 930.6 17291.1 6773.54 20.29 12.11 12.96
Oct-07 1067.9 19837.99 7785.22 13.76 13.74 13.92
Nov-07 1350.15 19363.19 7865.98 23.45 -2.42 1.03
Dec-07 1556.95 20286.99 8592.43 14.25 4.66 8.83
Jan-08 1116.1 17648.71 7160.03 -33.29 -13.93 -18.24
Feb-08 1028.2 17578.72 7108.12 -8.20 -0.40 -0.73
Mar-08 662.8 15644.44 6157.27 -43.91 -11.66 -14.36
Apr-08 801.9 17287.31 6885.03 19.05 9.99 11.17
May-08 909.15 16415.57 6474.97 12.55 -5.17 -6.14
Jun-08 807.85 13461.6 5215.37 -11.81 -19.84 -21.63
Jul-08 925.9 14355.75 5525.77 13.64 6.43 5.78
Aug-08 844.4 14564.53 5631.51 -9.21 1.44 1.90
Sep-08 663.6 12860.43 4897.59 -24.09 -12.44 -13.96
Oct-08 646.85 9788.06 3570.07 -2.56 -27.30 -31.62
Nov-08 395.4 9092.72 3295.6 -49.22 -7.37 -8.00
Dec-08 315 9647.31 3596.85 -22.73 5.92 8.75
Jan-09 288.2 9424.24 3426.76 -8.89 -2.34 -4.84
Feb-09 300.7 8891.61 3232.11 4.25 -5.82 -5.85
Mar-09 398.3 9708.5 3523.53 28.11 8.79 8.63
Apr-09 415.5 11403.25 4140.42 4.23 16.09 16.13
May-09 637.85 14625.25 5520.25 42.86 24.89 28.76
Jun-09 657.05 14493.84 5492.03 2.97 -0.90 -0.51
Jul-09 781.2 15670.31 5940.38 17.31 7.80 7.85
Aug-09 1075.9 15666.64 6044.61 32.01 -0.02 1.74
Sep-09 1403.9 17126.84 6552.75 26.61 8.91 8.07
Oct-09 1155.4 15896.28 6142.43 -19.48 -7.46 -6.47
Nov-09 1336.6 16926.22 6584.98 14.57 6.28 6.96
Dec-09 1453.65 17464.81 6842.25 8.39 3.13 3.83
Jan-10 1436.2 16357.96 6509.9 -1.21 -6.55 -4.98
Feb-10 1598.75 16429.55 6518.38 10.72 0.44 0.13
Mar-10 1679.65 17527.77 6919.55 4.94 6.47 5.97
Apr-10 1786.5 17558.71 7042.68 6.17 0.18 1.76
May-10 1400.55 16944.63 6782.37 -24.34 -3.56 -3.77
Jun-10 1417.05 17700.9 7092.2 1.17 4.37 4.47
Jul-10 1555.1 17868.29 7205.22 9.30 0.94 1.58
Aug-10 1817.35 17971.12 7289.74 15.58 0.57 1.17
Sep-10 416.3 20069.12 7984.45 -147.37 11.04 9.10
Oct-10 496.65 20032.34 8036.88 17.65 -0.18 0.65
Average 1.66 1.38 1.35
SD 26.135 8.726 9.617
Var 683.031 76.145 92.489
RSQ 0.085 0.112
Intercept(alpha) 0.46 0.43
Slope(Beta) 0.87 0.91
Covariance 65.279 82.637
 Beta(cov/Mvar) 0.86 0.89

2. Regression Output
SUMMARY OUTPUT
SENSEX ret-Vs-BHUSSTEEL ret
Regression Statistics
Multiple R 0.29
R Square 0.08
Adjusted R Squar 0.07
Standard Error 25.21
Observations 61.00

ANOVA
df SS MS F Significance F
Regression 1 3470.67 3470.67 5.46 0.02
Residual 59 37511.18 635.78
Total 60 40981.85

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 0.46 3.27 0.14 0.89 -6.08 7.00 -6.08 7.00
X Variable 1 0.87 0.37 2.34 0.02 0.13 1.62 0.13 1.62

SUMMARY OUTPUT
BSE 500 ret-Vs-BHUSSTEEL ret
Regression Statistics
Multiple R 0.33
R Square 0.11
Adjusted R Squar 0.10
Standard Error 24.84
Observations 61.00

ANOVA
df SS MS F Significance F
Regression 1 4578.96 4578.96 7.42 0.01
Residual 59 36402.89 617.00
Total 60 40981.85

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 0.43 3.21 0.14 0.89 -5.99 6.86 -5.99 6.86
X Variable 1 0.91 0.33 2.72 0.01 0.24 1.58 0.24 1.58

3.computation of expected rate of return

Method:1 Historical Method

Avg monthly ret 1.66
Annualized Rate of Return 19.95

Method:2 CAPM BSE Sensex BSE 500

Risk Free Rate p. Rf 0.67 0.67
Market Ret p.m. Rm 1.38 1.35
Beta β 0.87 0.91
Premium for Systeβ*(Rm-Rf) 0.62 0.62
Monthly Rate of RRf+β*(Rm-Rf) 1.29 1.29
Annualized Rate of Return 15.46 15.48

method:3 market model BSE Sensex BSE 500

Alpha α 0.46 0.43
Beta β 0.87 0.91
Market Ret p.m. Rm 1.38 1.35
Monthly Rate of Rα+β*Rm 1.66 1.66
Annualized Rate of Return 19.95 19.95

method:4 primium for total ris Stock BSE Sensex BSE 500
risk free rate of r Rf 0.67 0.67 0.67
market ret p.m Rm 1.38 1.35
standerd deviatio σ 26.13 8.73 9.62
monthly rate of reRf+σi/σm*(Rm-Rf) 2.80 1.29
Annualized Rate of Return R 33.54 15.47
Method 5: Premium for Business And Financial Risk
year total asset PBT int PBIT ROI debt funds shareholdersD/E
Mar-01 1102.68 49.76 67.34 117.1 10.62 613.75 488.92 1.26
Mar-02 1051.67 50.13 71.29 121.42 11.55 594.53 457.12 1.30
Mar-03 1280.77 63.59 66.49 130.08 10.16 777.82 502.95 1.55
Mar-04 1519.3 103.94 66.22 170.16 11.20 930.6 588.68 1.58
Mar-05 2048.06 165.65 79.39 245.04 11.96 1,317.47 730.59 1.80
Mar-06 2929.45 159.66 75.38 235.04 8.02 2,036.18 893.27 2.28
Mar-07 4456.49 372.35 85.82 458.17 10.28 3,241.98 1,214.50 2.67
Mar-08 7343.47 538.95 107.8 646.75 8.81 5,718.13 1,625.32 3.52
Mar-09 10494.75 560.78 117.27 678.05 6.46 8,066.25 2,428.50 3.32
Mar-10 15395.76 1151.36 210.01 1361.37 8.84 11,404.11 3,991.67 2.86
Mean 9.79 2.21
Range 3.52

Rrisk free return 8

Business Risk Premium[3(range of ROI/avg ROI)] 1.07928776
Financial Risk Premium[2(avgD/E)] 4.42640888
Expected return 13.5056966

4.Decomposition of total risk based on beta Stock BSE Sensex BSE 500
2
Total Risk σ 683.03
Beta β 0.87 0.91
2
Beta Sq. β 0.7597 0.8251
2
Variance of Market Ret σ 76.15 92.49
2 2
Systematic Risk β *σ 57.84 76.32
Unsystematic Risk σi2-(β2)(σm2) 625.19 606.71
Total Risk 683.03 683.03

Total Risk σi 26.135

Beta β 0.87 0.91
Standard Deviation of Market σm 8.73 9.62
Systematic Risk β (σm) 7.61 8.74
Unsystematic Risk σi-(β)(σm) 18.53 17.40
Total Risk 26.13 26.13

Decomposition of Total Risk Based on RSQ Stock BSE Sensex BSE 500
RSQ 0.08 0.11
Total Risk σi 2 683.03
Systematic Risk (RSQ*Var) 57.84 76.32
Unsystematic Risk (1-RSQ)(Var) 625.19 606.71

Total Risk σi 26.13

Systematic Risk Sqrt. Of RSQ * σi 7.61 8.74
Unsystematic Risk Total Risk-Sys.Risk 18.53 17.40
Computation of TSR and HPR

FY Price on first trading day of apr Price on last trading day of march DPS DY Cap G/L TSR P+DPS ln ret

2000-01 23.5 18.6 1 4.26 -20.85 -16.60 19.60 -18.15

2001-02 20 15.5 0.5 2.50 -22.50 -20.00 16.00 -22.31
2002-03 15.85 24.25 0.5 3.15 53.00 56.15 24.75 44.57
2003-04 25.05 60.7 1 3.99 142.32 146.31 61.70 90.14
2004-05 66.75 206.8 2.5 3.75 209.81 213.56 209.30 114.28
2005-06 217.1 184.3 2.5 1.15 -15.11 -13.96 186.80 -15.03
2006-07 188.15 513.65 2.5 1.33 173.00 174.33 516.15 100.92
2007-08 504.55 662.8 2.5 0.50 31.36 31.86 665.30 27.66
2008-09 669.2 398.3 2.5 0.37 -40.48 -40.11 400.80 -51.26
2009-2010 372.55 1679.64 2.5 0.67 350.85 351.52 1682.14 150.75
2.17 86.14 88.31 378.25 42.16

Beg value end value Implied HPR

1 Yr Holding(1 Apr 2000-31 Mar 2001) 23.5 18.6 -0.21 -20.85%
2 Yr Holding(1 Apr 2001-31 Mar 2002) 18.6 15.5 -0.19 -18.79%
3 Yr Holding(1 Apr 2002-31 Mar 2003) 15.5 24.25 0.01 1.05%
4 Yr Holding(1 Apr 2003-31 Mar 2004) 24.25 60.7 0.27 26.77%
5 Yr Holding(1 Apr 2004-31 Mar 2005) 60.7 206.8 0.54 54.49%
6 Yr Holding(1 Apr 2005-31 Mar 2006) 206.8 184.3 0.41 40.95%
7 Yr Holding(1 Apr 2006-31 Mar 2007) 184.3 513.65 0.55 55.37%
8 Yr Holding(1 Apr 2007-31 Mar 2008) 513.65 662.8 0.52 51.81%
9 Yr Holding(1 Apr 2008-31 Mar 2009) 662.8 398.3 0.37 36.95%
10 Yr Holding(1 Apr 2009-31 Mar 2010) 398.3 1679.64 0.53 53.26%
BALANCE SHEET
Bhushan Steel Ltd.
Rs. In crores
Mar '01 Mar '02 Mar '03 Mar '04 Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Sources Of Funds
Total Share Capital 33.04 33.04 40.47 40.47 40.47 41.27 42.47 42.47 42.47 79.15
Equity Share Capital 33.04 33.04 40.47 40.47 40.47 41.27 42.47 42.47 42.47 42.47
Share Application Money 0 0 0 0 0 3.6 0 0 400.44 0
Preference Share Capital 0 0 0 0 0 0 0 0 0 36.68
Reserves 455.88 424.08 462.48 548.21 690.12 848.4 1,172.03 1,582.85 1,985.59 3,912.52
Revaluation Reserves 0 0 0 0 0 0 0 0 0 0
Networth 488.92 457.12 502.95 588.68 730.59 893.27 1,214.50 1,625.32 2,428.50 3,991.67
Secured Loans 584.08 534.82 644.47 788.11 1,089.79 1,650.91 2,412.84 3,333.11 5,136.32 8,326.96
Unsecured Loans 29.67 59.71 133.35 142.49 227.68 385.27 829.14 2,385.02 2,929.93 3,077.15
Total Debt 613.75 594.53 777.82 930.6 1,317.47 2,036.18 3,241.98 5,718.13 8,066.25 11,404.11
Total Liabilities 1,102.67 1,051.65 1,280.77 1,519.28 2,048.06 2,929.45 4,456.48 7,343.45 10,494.75 15,395.78

Application Of Funds
Gross Block 871.86 880.17 890 1,338.46 1,657.81 1,795.91 2,693.73 2,927.09 3,281.86 3,685.89
Less: Accum. Depreciation 197.73 257.74 361.44 464.32 610.81 775.83 970.27 1,168.07 1,395.89 1,606.57
Net Block 674.13 622.43 528.56 874.14 1,047.00 1,020.08 1,723.46 1,759.02 1,885.97 2,079.32
Capital Work in Progress 68.33 109.31 411.72 190.64 385.7 1,295.22 1,892.11 4,567.97 7,400.13 11,109.33
Investments 19.1 19 19 19 18.99 19.17 20.85 58.46 107.73 370.04
Inventories 170.45 158.96 257.38 394.11 581.67 474.78 756.34 1,129.63 1,230.36 1,962.67
Sundry Debtors 250.25 290.72 250.19 350.66 339.44 404.48 538.9 617.38 619.82 733.92
Cash and Bank Balance 14.41 13.8 9.23 10.77 10.69 11.5 16.14 21.38 124.29 100.42
Total Current Assets 435.11 463.48 516.8 755.54 931.8 890.76 1,311.38 1,768.39 1,974.47 2,797.01
Loans and Advances 35.42 43.57 57.08 90.84 130.94 241.73 368.5 645.51 771.85 957.39
Fixed Deposits 0.35 0.6 0.24 0.54 6.7 70.02 84 6.25 0.08 19.77
Total CA, Loans & Advances 470.88 507.65 574.12 846.92 1,069.44 1,202.51 1,763.88 2,420.15 2,746.40 3,774.17
Deffered Credit 0 0 0 0 0 0 0 0 0 0
Current Liabilities 129.82 206.52 251.58 406.17 464.96 593.49 926.02 1,442.82 1,617.77 1,900.65
Provisions 7.84 6.08 4.98 5.23 8.11 14.04 17.79 19.31 27.71 36.45
Total CL & Provisions 137.66 212.6 256.56 411.4 473.07 607.53 943.81 1,462.13 1,645.48 1,937.10
Net Current Assets 333.22 295.05 317.56 435.52 596.37 594.98 820.07 958.02 1,100.92 1,837.07
Miscellaneous Expenses 7.9 5.88 3.93 0 0 0 0 0 0 0
Total Assets 1,102.68 1,051.67 1,280.77 1,519.30 2,048.06 2,929.45 4,456.49 7,343.47 10,494.75 15,395.76
Contingent Liabilities 397.34 570.55 367.14 548.26 930.37 1,931.44 1,551.57 2,545.91 2,424.34 4,047.07
Book Value (Rs) 147.98 138.35 124.27 145.45 180.5 215.56 285.96 382.68 477.51 931.21
PROFIT & LOSS A/c
Bhushan Steel Ltd. Rs. In Crs
Mar '01 Mar '02 Mar '03 Mar '04 Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
INCOME
Sales Turnover 1,058.38 1,139.19 1,262.56 1,745.31 2,867.90 3,070.38 4,202.05 4,672.73 5,409.55 6,003.07
Excise Duty 133.95 143.42 131.23 180.63 192.91 276.39 372.45 492.5 423.83 381.3
Net Sales 924.43 995.77 1,131.33 1,564.68 2,674.99 2,793.99 3,829.60 4,180.23 4,985.72 5,621.77
Other Income -3.18 -0.46 3.41 14.6 4.45 4.59 39 22.8 -180.91 117.77
Stock Adjustments 4.02 -4.06 -9.36 64.43 164.55 -75.57 95.17 188.07 -98.17 295.46
Total Income 925.27 991.25 1,125.38 1,643.71 2,843.99 2,723.01 3,963.77 4,391.10 4,706.64 6,035.00
EXPENDITURE
Raw Materials 666.69 721.47 823.7 1,227.92 2,247.41 2,112.06 3,004.82 3,223.83 3,377.06 4,052.78
Power & Fuel Cost 42.63 52.47 58.04 74.53 108.31 126.6 147.7 196.22 203.83 214.98
Employee Cost 9.44 11.85 13.19 16.86 23.61 36.43 51.01 73.87 100.86 140.94
Other Manufacturing Expenses 1.47 1.61 3.03 4.95 4.74 3.85 6.62 12.88 13.2 13.05
Selling and Admin Expenses 25.58 17.46 23.82 42.78 53.11 68.17 111.1 104.06 179.06 204.25
Miscellaneous Expenses 6.44 8.34 8.42 9.59 12.9 16.13 28.89 26.34 60.3 174.15
Preoperative Exp Capitalised -4.05 -5.44 -6.67 -9.88 -15.85 -41.03 -53.46 -104.26 -140.13 -335.66
Total Expenses 748.2 807.76 923.53 1,366.75 2,434.23 2,322.21 3,296.68 3,532.94 3,794.18 4,464.49

Operating Profit 180.25 183.95 198.44 262.36 405.31 396.21 628.09 835.36 1,093.37 1,452.74
PBDIT 177.07 183.49 201.85 276.96 409.76 400.8 667.09 858.16 912.46 1,570.51
Interest 67.34 71.29 66.49 66.22 79.39 75.38 85.82 107.8 117.27 210.01
PBDT 109.73 112.2 135.36 210.74 330.37 325.42 581.27 750.36 795.19 1,360.50
Depreciation 57.95 60.05 69.73 102.87 164.72 165.76 208.92 211.41 234.41 209.14
Other Written Off 2.02 2.02 2.04 3.93 0 0 0 0 0 0
Profit Before Tax 49.76 50.13 63.59 103.94 165.65 159.66 372.35 538.95 560.78 1,151.36
Extra-ordinary items 0 0 0 0 0 -0.11 0 0 0 0
PBT (Post Extra-ord Items) 49.76 50.13 63.59 103.94 165.65 159.55 372.35 538.95 560.78 1,151.36
Tax 4.25 9.97 8.54 13.66 12.3 5.21 59.11 115.2 139.48 305.57
Reported Net Profit 45.51 40.15 55.05 90.3 153.35 154.45 313.26 423.73 421.3 845.8
Total Value Addition 81.51 86.29 99.83 138.82 186.82 210.14 291.85 309.12 417.12 411.72
Preference Dividend 0 0 0 0 0 0 0 0 0 0.23
Equity Dividend 3.3 1.65 2.02 4.05 10.12 10.32 10.62 10.62 10.62 10.62
Corporate Dividend Tax 0.34 0 0.26 0.52 1.32 1.45 1.8 1.8 1.8 1.8
Per share data (annualised)
Shares in issue (lakhs) 330.4 330.4 404.72 404.72 404.72 412.72 424.72 424.72 424.72 424.72
Earning Per Share (Rs) 13.77 12.15 13.6 22.31 37.89 37.42 73.76 99.77 99.2 199.09
Equity Dividend (%) 10 5 5 10 25 25 25 25 25 25
Book Value (Rs) 147.98 138.35 124.27 145.45 180.52 215.56 285.96 382.68 477.51 931.21
Market Price on first trading day of April 23.5 20 15.85 20.05 66.76 217.1 188.15 504.55 669.2 372.55
Market Price on last trading day of March 18.6 15.5 24.25 16.7 206.8 184.3 513.65 662.8 398.3 1679.64