atul auto

Equity | India | Automobile

Initiating

Atul Auto Ltd.

Drive on the clear way…. July 8, 2015Coverage

BUY

CMP (`) Target (`)

562462

Potential Upside

Absolute Rating

22% BUY

Market Info (as on July 08, 2015)

BSE Sensex 27,687.72

Nifty S&P 8,363.05

Stock Detail

BSE Group B

BSE Code 531795

NSE Code ATULAUTO

Bloomberg Code ATA IN

Market Cap (`bn) 10.26

Free Float (%) 47%

52wk Hi/Lo 722 / 242.50Avg. Daily Volume (NSE) 111939Face Value / Div. per share (`) 5.00 / 2.50Shares Outstanding (mn) 21.94

Company Snapshot

Atul Auto Ltd. (Atul Auto) is Gujarat based automobile manufacturing company. The company is mainly involved in the manufacturing and selling of three wheelers commercial vehicles focused mainly domestic rural markets. Atul is famous in the states of Gujarat and Rajasthan for its cost effective and high performance commercial vehicles. Now company has diverse the customer base in the cargo and passenger segment available on the two platforms viz. 350Kg payload capacity and 500Kg payload capacity. Atul auto is one of the fastest growing companies in India in 3 wheeler industry growing with the CAGR of 19.50% in last five years.

Investment Rationale

Fast growing industry and favorable economic conditions will provide an edge

Indian Auto mobile industry is one of the fastest growing industries in the country. Strong domestic market creates greater opportunities for such players. Strong initiatives taken by central government like rural transport and infrastructure development will help to boost the volumes. 3-wheelers are an important element of goods transportation in the country. It is the ideal and most widely used mode for goods transportation in rural and semi urban markets. It provides last mile connectivity in the metro and urban markets where entry of large commercial vehicles into city limits is increasingly getting restricted.

Shareholding Pattern (in %)

Promoters FIIs DII Others

52.70 6.06 8.46 32.78

Financial Snapshot (`mn)

Y/E Mar FY13 FY14 FY15E FY16E

Net Sales 4,301 4,928 5,756 7,016

EBITDA 454 579 743 888

PAT 298 406 494 568

EPS 27.16 18.49 22.44 25.81

ROE (%) 32% 34% 32% 29%

ROCE (%) 28% 28% 28% 26%

P/E 13.2 26.4 21.8 18.9

EV/EBITDA 7.8 18.2 13.9 11.4Share Price Performance

280

260

240

220

200

180

160

140

120

100

80

Sep-

14O

ct-1

4Nov

-14D

ec-

14 Dec

-14J

an-1

5Feb

-15F

eb-

15 Mar

-15A

pr-1

5Apr

-15 M

ay-1

5Jun

-15

Jun-

15

Atul Auto Ltd BSE SENSEX

Rel. Perf. 1Mth 3 Mths 6Mths 1YrAtul Auto (%) 14.5 (17.6) (27.4) 72.2

Sensex (%) 5.24 (1.21) 4.69 7.94

Source: Company data, Institutional Research

Strong distribution and dealer network makes more robust business structure

Atul auto has strong distributing network across the country. Atul auto has 17 regional offices in the country including almost all the major states. The company also has three training centers at Gujarat, Chhattisgarh, and Andra Pradesh. Atul auto has strong dealers network ensures the consistent sales over geographical splits. The Company has 200 primary dealers across the territories including rural and urban parts of the country. The company also strengthens its network with 120 secondary dealers. This makes company business structure more strong. Now company has started its business overseas, the company has presence in the countries like Bangladesh, Kenya,

Tanzania, South Africa, Nigeria, and Jamaica. This also creates a huge business opportunity overseas.

Healthy balance sheet and return ratios makes Atul Auto a safer bet

Atul auto is having very healthy balance sheet. The company has maintained the operating margins instead of making the strong volume growth. This shows the high operational efficiency in the business. EBITDA margin has grown from 9% in FY12 to 12% in FY15 in the span of three year. Whereas operating margins has grown from 8% in FY12 to 12% in FY15. The company has strong ROE which makes company more lucrative. ROE for FY 12 stood at 22% which has grown to 34% in FY15. The ROCE of the company has also grown from 19.8%in FY12 to 28.3% in FY15. This creates a great investment opportunity for the investor.

Valuation

At the CMP of `462, Atul Auto Ltd. is trading at 25.09x, and 18.9x its FY16E, and FY17E EPS of `22.4 and `25.8 respectively. Compared to its peers; Atul auto trading at a discount P/E multiple, although its margins are better than or comparable to peers. We initiate coverage on Atul Auto Ltd with a BUY rating and attach a multiple of 25.1 xs to Atul Autos’ FY16E earnings (EPS) to arrive at the target price of `562, indicating a potential upside of 22%.

Analyst +91-22- 6614 2692 Institutional Research 1Omkar

Tanksale [email protected]


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Index & Content

Sr. No. Topic

Page No.

1

Company Background

3

2

Business Model

4

3

Key Management Personnel

5

4


6

5

Three Wheeler Industry at a glance

10

6

Financial Overview

11

7

Key Risks

14

8

SWOT Analysis

15

9

Valuation & Outlook

16

10

Financials

17

11

Disclaimer

18

Institutional Research | Initiating Coverage 2


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Company Background

Atul Auto Ltd.

(Atul) is the

Gujarat based

small sized three

wheeler

manufacturing

company. It is one

of the youngest

players in the 3

wheeler business

with humble

beginning in

1992. It has well

diversified

product portfolio

of 45 models and

variants, an

extremely strong

brand, integrated

manufacturing

plant and

presence across

key regions, Atul

Auto is today the

fastest growing 3

wheeler player in

India, growing at

19.5% for last 5

years, having

installed capacity

of 48,000 units

per annum at

Rajkot Plant. It not

only caters to

diverse customer

base in the Cargo

& Passenger

segment but also

available on both

the platforms i.e.

350 kgs payload

capacity and 500

kgs payload

capacity. Atul

auto is the

inventor of the

most popular rural

transport vehicle

‘Chakkada’.

Journey of Atul Auto

Company incorporated as a private ltd company in 1986 in Maharashtra, its registered office was

shifted to Jamnagar Gujarat in 1992 & then to Rajkot in 1997. Company

went public in March 1996

Origin Lie in the 1970’swhen Mr. J Chandra

sought to modifymotorcycles to make

transport to make needsof rural areas of

Saurashtra.

Integrated plant locatedIt has been awarded

with in Shapar in Rajkot“Most Promising SME in District of Gujarat. It hasAuto & Engineering Co” installed capacity ofby CNBC TV-18 in 2012.

It 48000 vehicles p.a.has also awarded with Today, it has market“Leaders of tomorrow presence in 16 states

Award 2013” by ET Now.with 200 primary

dealers& 120 secondary dealers

Source: Company, Institutional Research



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Business Model

Atul Auto is one of the youngest players in the 3 wheeler business. Initially, company started its operation with manufacturing of Chhakadas (Rural Transport Vehicle (RTV)), customized multi-purpose vehicles for Saurashtra region in Gujarat. However since year 2000, company has been successful in launching new products in three-wheeler segment. In 2009, company launched rear engine 3W & thus mark a real reflection point for itself. It currently offers cargo & passenger variant (diesel engine powered) on 350kg & 500kg. It has current production capacity of 48000 units per annum in Rajkot, Gujarat & expected to increase to 60000 units per annum in next 2 years. Recently, it has introduced gasoline/alternate fuel for 3Ws. Company has market presence in 16 states of India with 200 primary dealers & 120 secondary dealers along with

overseas presence in market like Bangladesh, Tanzania, Kenya, South Africa, Nigeria & Jamaica. Company has 8% market share in total domestic industry.

Consistent product development




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Key Management Personnel

Atul Auto is blessed with rich experience of sound management that takes company on a successful path.

Mr. Jayantibhai J Chandra (Executive Chairman & managing Director ):

Mr. Chandra is responsible for the product development and creating goodwill for the company. He focuses on the medium- to long-term future of the company. He is also involved in leadership development and corporate social responsibility.

Mr. Mahendra J Patel (Director and CFO):

He is responsible for the major financial decisions and managing the money efficiently for the company. Mr. Patel is also serves as a executive director of the company.

Mr. Niraj J Chandra (President, Corporate Affairs & Infrastructure):

He is the first generation entrepreneur of the company taking the company on new

growth path of the company. He is responsible for creating brand and product development of the company.

Mr. Vijay K Kedia (Director):

Mr. Kedia is serves as the executive director of the company.



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Fast growing industry and favorable economic conditions will provide an edge

Indian automobile industry is one of the fastest growing industries. Strong domestic market makes industry more robust and lucrative. Strong initiatives taken by central government like rural transport and infrastructure development will help to boost the volumes. India is one of the largest manufacturers for 3-wheelers producing volume of ~ 950,000 units p.a. and growing at 6-8% p.a. Having a domestic market of ~ 550,000 unit’s p.a. And is also a cost effective mode for personal and mass transportation. Export markets include developing and under-developed countries like Bangladesh, Sri Lanka, Indonesia, African countries and Latin

American countries.

3-wheelers are an important element of goods transportation in the country. It is the ideal and most widely used mode for goods transportation in rural and semi urban markets. It provides last mile connectivity in the metro and urban markets where entry of large commercial vehicles into city limits is increasingly getting restricted.

Market Share (3W) – Domestic – FY15 - Cargo Market Share (3W) – Domestic – FY15 - Passenger

SIL, 6% SIL, 1%AAL, 5%

AAL, PVPL,18% 27%

PVPL,53% BAL, 0%

M&M,

M&M, 8% BAL, 54% 23%

Market Share (3W) – Domestic – FY15 - Total Domestic Industry

TVS, 3% SIL, 2%AAL, 8%

PVPL,32%

BAL, 44%M&M,11%




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Strong distribution and dealer network makes more robust business

Atul auto has strong distributing network across the country. Atul auto has 17 regional offices in the country including almost all the major states. The company also has three training centers at Gujarat, Chhattisgarh, and Andra Pradesh. Atul auto has strong dealers network ensures the consistent sales over geographical splits. The Company has 200 primary dealers across the territories including rural and urban parts of the country. The company also strengthens its network with 120 secondary dealers. This makes company business structure more strong. Now company has started its business overseas, the company has presence in the countries like Bangladesh, Kenya, Tanzania, South Africa,

Nigeria, and Jamaica. This also creates a huge business opportunity overseas.

Distributing Network across India


17 Regional Offices

3 Training Centers

200 Primary Dealership

120 Secondary Dealership

Overseas Presence Bangladesh Tanzania Kenya South Africa Nigeria Jamaica



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Strong volume growth backed by low cost product help to boost sales

Atul auto has high volume growth in the past few years. The company has posted 22% CAGR in last 5 years. Gujarat and Rajasthan regions are predominantly responsible for the most of the sales. Industrialization and urbanization in the Gujarat help company to boost its volume growth. However now company has started expanding its footprints across the country which will also help company to maintain its growth momentum.

Volume growth

125,000

14,000

120,000

12,000

115,000

10,000

110,000

8,000

105,000

6,000

100,000

95,000

4,000

90,000

2,000

85,000 -

Q1

FY1

1 Q2

FY

Q4

FY

Q1

FY

Q2

FY

Q3

FY

Q4

FY

Q1

FY

Q2

FY

Q3

FY

Q4

FY

Q1

FY

Q2

FY

Q3

FY

Q4

FY

Q1

FY

Q2

FY

Q3

FY

Q4

FY1

5

Avg Realization

No of Vehicle Sold ( numbers)


The above chart shows that the company has consistent sales in terms of volumes over the period of time. The consistent volume growth makes Atul auto more lucrative. Average realization also shown the upward trend indicates the rising pricing power of the company. This also shows that the company has the strong foundation in the business. Robust product profile creates a great business opportunity for the business. We believe that Atul auto continue its volume growth in the upcoming period.


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High expansion plans will boost the volumes

Atul auto‘s management has taken strong initiatives to grow its business. The company has doubled its capacity to 48,000 units annually at its only manufacturing plant at Rajkot Rajashtan. By the end of this fiscal FY16 company has also decide to ramp up the capacity to 60,000 units annually at the current manufacturing plant. The company has also plan to build a new plant in the Gujarat with the doubling the capacity to 120,000 units per year. This higher expansion plans will not increase the debt burden as total inflow of Rs.100mn to Rs.150 mn will be used from the reserves. So the company will likely to remain debt free or there will be marginal debt on its balance sheet.

Manufacturing Capacity

60,000

50,000

40,000

30,000

20,000

10,000

0

FY11 FY12 FY13 FY14FY15

Capacity Sales




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Three Wheeler Industry In India

Three wheeler Industry a great opportunity

3Ws are widely used in India as an affordable means of short-to-medium distance public transportation and last mile connectivity for goods transportation. Three wheelers segment constitute only 3 % of total automotive industry. India is one of the largest manufacturers of three wheelers in the world with a production of 950,000 units annually in FY15. Of these, almost 530,000 units are sold in the domestic market, with exports comprising the balance 420,000 units. Three-wheelers play an important part in transporting both passengers as well as goods, providing a cost-effective alternative for last mile connectivity in both urban cities as well as rural towns of the country. With easier permits available for

CNG/LPG vehicles, three-wheelers are proving emerging as a popular alternative for both personal and mass transportation needs. 3-wheeler products available with alternative fuel like CNG & LPG and thus its operating cost is moderate. Apart from the domestic demand, India has also emerged as important export hub for 3Ws with presence in some of the countries like Bangladesh, Sri Lanka, Indonesia, African and Latin American countries. India export 99% of passenger segment 3-wheelers to other nations & only 1% of cargo segment. Atul has rising market share will help to grow the business. We believe that Atul auto will improve with the CAGR of 15-17% in the next 5 years.

Industry – At a Glance (Domestic – 57%)

5,31,927 unit

Application

Fuel-type

Tonnage

Paxx Cargo Alternative Diesel 0.5 Tonne0.35

Tonne81% 19% 34% 66% 47% 53%

Industry – At a Glance (Export – 43%)

4,07,957 unit

Application

Fuel-type

Tonnage

Paxx Cargo Alternative Diesel 0.5 Tonne0.35

Tonne99% 1% 93% 7% 6% 94%




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Financial OverviewPretax Margin

EBITDA Margins

As shown in the chart below, Atul auto has consistent growing EBITDA over the period of time. There is a marginal decline of the EBITDA in the 1QFY15 but regain the momentum in the upward direction. We also can see from the above chart that EBIDTA margin are stable over the period of time. This shows the operational efficiency is maintain or increasing even if the input cost is rising.

EBITDA Margins

200

14%

180

12%

160140

10%

120 8

%100

80

6%

60

4%

402 2

0 %

0Q

2FY

12

Q4

FY1

2

Q2

FY1

3 Q3

Q4

Q1

Q2

Q3

FY1

4

Q1

FY1

5 Q3

Q1

Q3 0

%

Q1

FY1

2

Q3

FY

Q1

FY

Q4

FY

Q2

FY

Q4

FY

Q2

FY

Q4

FY1

5

EBITDA

EBIDA margin


Operating Margins

The chart below shows EBIT and EBIT margin in last 3 years. Operating margins are maintained over the period of time. Instead we can see that it is being growing from last few quarters. This shows that operational efficiency is improving. This makes business more robust and promising over the longer run horizon.

Operating Margins

18016%

160

14%

140

12%

120

10%

100

8%80

60 6%

40 4%

20 2%

0 Q2

FY1

2

Q4

FY1

2

Q2

FY1

3

Q3

FY1

3

Q4

FY1

3

Q1

FY1

4 Q2

FY1

4

Q3

FY1

4 Q1

FY1

5

Q3

FY1

5

Q1

FY1

5 Q3

FY1

5

0%

Q1

FY1

2

Q3

FY1

2

Q1

FY1

3

Q4

FY1

4 Q2

FY1

5

Q4

FY1

5 Q2

FY1

5 Q4

FY1

5

EBIT EBIT Margin




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Net Profit Margin

As we can see from the chart below, PAT is increasing with the higher growth rate and margins are also improving. Rising NPAT margins shows the lesser debt burden on the companies shoulder. We believe that the in the upcoming period the growth momentum will likely to continue.

NPAT Margin

12012%

10010%

808%

606%

404%

202%

00%

Q1

FY1

2Q

2FY

12

Q3

FY1

2Q

4FY

12

Q1

FY1

3Q

2FY

13

Q3

FY1

3Q

4FY

13

Q1

FY1

4Q

2FY

14 Q3

FY1

4Q

4FY

14

Q1

FY1

5Q

2FY

15 Q3

FY1

5Q

4FY

15

Q1

FY1

5Q

2FY

15

Q3

FY1

5

Q4

FY1

5

NPAT ( Calculated)NPAT Margin


Return Margin

ROE performance

The Return on equity is increasing at the smoother pace. However some capital expenditure in

FY14 will impact negatively on the growth momentum but we believe that the ROE will likely to maintain the momentum.

RoE

450

40%

400

35%

350

30%

300

25%

25020%

200

150

15%

100

10%

505%

00%

FY11FY12 FY13 FY14 FY15

Net Profit ROE




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Return on the capital Employed (ROCE)

Return on capital employed (ROCE) have maintained the growth momentum. Lower debt burden help to maintain the ROCE over the period of time. The ratio has also maintain the synchronous movement with the movements in the net profit. This shows that invested capital can optimize the net profit. We believe that in the upcoming period the growth momentum likely to continue.

RoCE

450

35%

40030

350

300

25%

250

20%

200

15%

150

10%

100

505%

00%

FY11FY12

FY13 FY14 FY15

Net Profit RoCE


Net Profit to Payout Ratio

Atul auto has history of paying dividend to its share holder. As shown in the diagram below we can see that company had given consistent dividends as proportion to the net profit. We believe that payout ratio to net profit ratio will likely to remain same. This also makes stock more lucrative. Investor can also take privilege of higher payout ratio.

Net Profit to Payout Ratio

450120%

400100%

350

300 80%

25060%

200

150 40%

10020%

50

0 0%FY11 FY12 FY13 FY14 FY15

Net ProfitPayout Ratio




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Key Risks

Investment Risk :

Increase in the lending rates (interest rates) will make vehicles expensive which may cause lower demand.

Increase in the fuel price will also affect the demand adversely on the automotive segment.

Rise in the prices of the key raw materials like iron, steel, aluminum will impact the margins negatively.

Entry of the big players like Mahindra & Mahindra, Tata Motors and Bajaj Auto into three wheeler segment may cause the market share to reduce.


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SWOT Analysis

Strengths Opportunities

• •

• Diversification of business.

•

ma

• Mining the existing and the new clients

AtulAutoLtd.

Weaknesses Threats

• Single domain dependence. • Slowdown economy

• Rising Lending rates• lagging geographical

• Entry of the strong playerdiversification

Source: Institutional Research


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Valuation & Outlook

At the CMP of `462, Atul Auto Ltd. is trading at 25.09x, and 18.9x its FY16E, and FY17E EPS of `22.4 and `25.8 respectively. Compared to its peers; Atul auto trading at a discount P/E multiple, although its margins are better than or comparable to peers. We initiate coverage on Atul Auto Ltd with a BUY rating and attach a multiple of 25.1xs to Atul Autos’ FY16E earnings (EPS) to arrive at the target price of `562, indicating a potential upside of 22%.

1 year forward P/E Chart

1,60

01,

400

1,20

01,

000

800

600

400

200

0 Jul-

Jul-

12O

ct-

12

Jul-

Ap

r-1

0

O c t -

Ap

r-

Jan

-

Oct

- J a n - O c t -

Apr-

Close -Unit Curr

10.0 X

15.0 X

20.0 X

25.0 X

30.0 X

Source: Capitaline, Institutional Research

1 year forward P/ BV

Chart

900

800

700

600

500

400

300

200

100

0

Jul-

11

Jul-

12

Apr-

13Ju

l-13

Jul-

14

Ap

r-1

0 Oct

-1

1 Jan-

12

Ap

r-1

2 Oct

-12

Jan-

13 Oct

-1

3J a n - 1 O c t - 1 4

Ap

r-1

5Close -Unit Curr

4.0 X

6.0 X 8.0 X

10.0 X

12.0 X

Source: Capitaline, Institutional Research



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Income Statement

Y/E Mar (`mn)

Net revenues

Raw material cost

EBITDA

EBITDA Margin (%)

Depreciation

Other Income

Interest (Net)

Exceptional Items

PBT

PBT Margin (%)

Tax

Reported PAT

Key Ratio

Y/E Mar (`mn)Per Share RatiosFully diluted E P S

Book Value

Dividend per shareValuation Ratio

P/E

P/BV

EV/EBITDA

EV/SalesGrowth Ratios

Sales Growth

EBITDA Growth

Net Profit GrowthCommon size Ratios

EBITDA Margin

EBIT margin

PAT marginReturn ratios

RoNW

RoCETurnover ratios (days)

Debtors ( Days)

Creditors( Days)Inventory (Days)Solvency Ratios

Total Debt/Equity


Balance Sheet

Y/E Mar (`mn) FY13 FY14 FY15 FY16EFY17

EEquity capital 112 112 112 112 112

Reserves & Surplus 631 833 1099 1448 1850

Net worth 743 945 1211 1560 1962Total debt 2 3 5 5 5

Deferred Tax Liability 45 61 52 45 45

Total Liabilities & Equity 790

1,009

1,268 1,610 2,012

Net block 481 533 799 949 1099

Investments 12 12 10 10 10

Long Term Loans & Adv 0 0 0 0 0Other Non Current Assets 38.5 49.7 73.5 90 90

Total Non-Current Assets 532 595 883 1,049 1,199Debtors 72 131 323 301 368

Cash & bank 381 452 274 482 684

Loans & advances 16 29 33 25 25

Other Current Assets 1 6 3 4 4

Total Current Assets 699 851 892 1,073 1,399Creditors 235 272 268 337 411

Provisions 206 166 239 175 175

Current Liab. & Prov. 440 438 507 512 586

Total Assets 7901,00

91,26

8 1,610 2,012

Cash Flow

Y/E Mar (`mn) FY13 FY14 FY15 FY16EFY17

EPBT 372 427 593 726 856

Add: Depreciation 44 52 56 72 86

Chg. in working capital (170) 84 150 (33) 49

Taxes paid 113 130 187 232 288

CF from operations 473 266 312 598 604Capex 110 105 322 222 236

Purchase of investment 0 0 (2) 0 0

Other Adjustments (7) 11 24 17 0

CF from Investing acti. 102 116 343 239 236Share application money (77) (96) (140) (144) (166)

Debt Charges (26) 17 (7) (7) 0

Other changes (139) (232) (686) (477) (472)

CF from Financing acti.

(243) (311) (833) (629)

(638)

Chg. in cash 333 71 (178) 208 202

Opening cash 48 381 452 274 482

Closing cash 381 452 274 482 684

Du-Pont Analysis

(%) FY13 FY14 FY15 FY16EFY17

EPAT/ PBT 70% 70% 68% 68% 66%

PBT/ PBIT 99% 99% 102% 99% 99%

PBIT/ sales 10% 10% 12% 13% 12%

Sales/ Assets 295%297

% 276% 270% 269%

Assets /Equity 166%153

% 147% 136% 132%

ROE 35% 32% 34% 32% 29%


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NOTES

Recommendation Rationale

RecommendationExpected Absolute Return (%) over 12 months

BUY >15%

ACCUMULATE <10% and >15%

NEUTRAL <-10% and <10%

REDUCE >-10% and <-20%

SELL >-10

Expected absolute returns are based on share price at market close unless otherwise stated. Stock recommendations are based on absolute upside (downside) and have a 12-month horizon. Our target price represents the fair value of the stock based upon the analyst’s discretion. We note that future price fluctuations could lead to a temporary mismatch between upside/downside for stock and our recommendation.

GEPL CAPITAL Pvt Ltd

Reg Office: D-21 Dhanraj mahal, CSM Marg, Colaba, Mumbai 400001

Analyst Certification

The following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed and that they have not received and will not receive direct or indirect compensation in exchange for expressing

specific recommendations or views in this report:

Name : Omkar TanksaleSector : Automobile

Disclaimer:

This report has been prepared by GEPL Capital Private Limited ("GEPL Capital "). GEPL Capital is regulated by the Securities and Exchange Board of India. This report does not constitute a prospectus, offering circular or offering memorandum and is not an offer or invitation to buy or sell any securities, nor shall part, or all, of this presentation form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities. This report is for distribution only under such circumstances as may be permitted by applicable law. Nothing in this report constitutes a representation that any investment strategy, recommendation or any other content contained herein is suitable or appropriate to a recipient’s i ndividual circumstances or otherwise constitutes a personal recommendation. All investments involve risks and investors should exercise prudence in making their investment decisions. The report should not be regarded by the recipients as a substitute for the exercise of their own judgment. Any opinions expressed in this report are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or groups of GEPL Capital as a result of using different assumptions and criteria. GEPL Capital is under no obligation to update or keep current the information contained herein. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Options, derivative products and futures are not suitable for all investors, and trading in these instruments is considered risky. Past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the

value, price or income of any security or related instrument mentioned in this report.

Any prices stated in this report are for information purposes only and do not represent valuations for individual securities or other instruments. There is no representation that any transaction can or could have been effected at those prices and any prices do not necessarily reflect GEPL Capital’s internal books and records or theoretical model-based valuations and may be based on certain assumptions. Different assumptions, by GEPL Capital or any other source may yield substantially different results. GEPL Capital makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. Further, GEPL Capital assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent development, information or events, or otherwise. Neither GEPL Capital nor any of its affiliates, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this report. In no event shall GEPL capital be liable for any direct, special indirect or consequential damages, or any other damages of any kind, including but not limited to loss of use, loss of profits, or loss of data, whether in an action in contract, tort (including but not limited to negligence), or otherwise, arising out of or in any way connected with the use of this report or the materials contained in, or accessed through, this report.

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