/ Ŷ Ɛ Ɵ ƚ Ƶ Ɵ Ž Ŷ Ă ů  ƌ Ž Ŭ ŝ Ŷ Ő

585$/38/6(
ϮϳƚŚΘϮϴƚŚDZ,ϮϬϮϯ

$ JU R
W L OL]HUV &K
U HP
)H )(5
7,/
,=(
56
5H
*

WD
)0&

56
LO6

,=(
7,/
)(5
H
FWRU
WR

6
$X

H H GV

$J
, UL&
0) UHGLWV

3267&21)(5(1&(127(
  
 
Rural Pulse 2023 Update   

Foreword 
We  recently  concluded  a  successful  two  day  virtual  conference  “Orion  Outreach‐  “The 
Rising  Stars  –RURAL  PULSE”  focussed  primarily  on  the  rural  India  to  check  demand 
outlook and trends in several consumption sectors. We invited Industry experts, dealers 
and distributors from sectors representing FMCG, Retail, Fertilizers, Agro‐Chemicals, MFI 
and Agri‐Credit to get a holistic view and understand ground reality in different rural parts 
of the country. The conference witnessed a good participation of investors, and we are 
convinced  that  these  interactions  helped  the  investors  to  draw  fair  assessment  on 
consumption scenario and future trends. 
Rural regions of India have been on a path of slow but steady economic recovery. Over past 
several  quarters,  we  have  witnessed  that  the  rural  India  has  been  experiencing  a 
tumultuous downturn in demand due to some reasons such as Covid‐19, spiralling food and 
fuel inflation, lack of technology in agriculture and uneven monsoons. This in turn altered 
the  consumption  momentum  in  many  rural  regions,  especially  in  Central.  The  industry 
participants  opined  these  macro‐economic  headwinds  are  expected  to  wane  off  given 
tapering food inflation and commodity costs. Therefore, we believe starting Q1FY24 with 
strong  visibility  on  monsoon  (also  improved  irrigation  systems)  and  the  revival  in  the 
economy should show up in demand recovery. Though high inflationary pressure pushed 
companies to increase product prices, the rural consumer saw strong impact on lowering 
share of wallet allocated to staples and discretionary products. On the other hand, demand 
across consumption categories was primarily driven by ‘essential items” and “necessity”, 
also echoed by Tractor and 2‐Wheeler dealers.   
Overall, the key takeaways from the conference are as follows: 
 In retail, consumer demand continued under strain, especially in clothing and footwear 
segment due to high food inflation, and the GST rate hikes. The distributors were of the 
view that the competition from new entrants in the value‐retail appears to be negligible 
as extended credit acts as a barrier, especially in the footwear industry.  In addition to 
this, demand for the building materials witnessed a softer growth in the current quarter.  
 In the auto 2‐Wheeler and Tractor segment the dealers witnessed a divergence between 
robust  two  wheeler  sales  and  stable  volumes  in  tractors.  Demand  in  the  tractors  was 
driven  by  lower  HP  tractors  as  revised  emission  norms  pushed  prices  making  them 
expensive and beyond their budgets. However, keeping in view of price hikes the auto 
financing companies held the interest rates, despite RBI hiking repo‐rates.  
 While the consumption trend in the FMCG sectors were mixed bag. Distributors opined 
though  beauty  and  personal  care  categories  saw  marginal  uptick  in  demand,  yet 
detergents and foods categories such as biscuits fared well as consumers continue to 
prefer purchasing smaller pack amid companies hiking prices in response to broader 
inflationary  pressures.  However,  most  of  the  distributors  confirmed  that  near  term 
outlook appears to be positive, as they expect visibility on monsoon should lift rural 
consumer sentiments and reflect in pick‐up in demand.  
 Within agriculture, fertilizer segment prices have ebbed and hence experts indicated 
increase in the fertilizer consumption thereby leading to volume growth in the near 
term. In addition to this, adoption of new age technology (nanotechnology) will offer 
an opportunity to the Indian farmers to improve crop yields in the medium term. 
 Notably, in rural financing segment it was highlighted that larger banks have witnessed 
losses  leading  to  increase  in  market  share  of  their  smaller  peers  (NFBC’s,  SFB’s  and 
RRB’s). Further, as per the interaction with the MFI player on collection efficiency and 
loan growth there were no visible signs o`f slowdown or cracks in spite of headwinds 
(inflationary pressures) faced by rural economy. 
Nischal Maheshwari   
CEO, Centrum Broking Ltd. 
 

Centrum Institutional Research  2
 
Rural Pulse 2023 Update 

Table of contents  
Particulars  Page No

Auto ‐ Hero Motocorp Dealer  4

Auto – Tractor Dealer  5

FMCG – Nestle and P&G Distributor  6

FMCG ‐ Britannia Distributor  7

FMCG ‐ Industry Expert ‐ Diary  8

FMCG Distribution Expert  9

Building Materials Distributor  10

Retail ‐ Footwear Industry Expert  11

Retail ‐ 1‐India Family Mart   13

Retail ‐ Campus Footwear Distributor   14

Fertiliser Dealer  15

MFI Industry ‐ Arman Financial  16

Agri–Credit Expert ‐ Ex‐DMD, NABARD  17

Centrum Institutional Research  3
 Rural Pulse 2023 Update

Institutional Research
India I Auto
29 March 2023

Rural Pulse: Hero Motocorp (Auto) NIFTY 50: 17,081

BSE Sensex: 57,960
Supply chain improved, rural sentiments picking up
In our channel-check series - Rural pulse Day 1, we hosted Hero Motocorp dealer to
understand demand environment in T3/T4 towns and impact of new launches ahead Nifty 50 vs CNXAUTO
135
for the company. Further, we tried to comprehend on-ground consumer sentiments CNXAUTO

from the dealer given there is slowdown in rural market. The dealer opined that (1) 120
Demand remains strong in last 60 days, (2) Supply chain issues are behind and he is 105
carrying enough inventory, rather it is under control, (3) Demand for 100cc bikes
90 NIFTY 50
remain resilient, (4) Splendor is fastest selling product, (5) New launches in 125cc
segment could lift demand, and (5) Rural consumer choose EMI option largely driving 75
Mar-22 May-22 Jul-22 Sep-22 Nov-2 2 Jan-23 Mar-23
80% sales. The dealer confirmed that in his area Hero is the undisputed market leader
Source: Bloomberg
selling 45-50% higher volumes as compared to combined numbers achieved by peers.
Key takeaways: -
ƒ Steady increase in demand witnessed in last 2months while majority demand is
driven by 100cc segment
ƒ The dealer achieved 20-25% increase oved Q3, yet sales volumes crossed pre-
pandemic levels
ƒ Dealer said, post festive season (Q3) the demand has improved significantly as
farmers growing cotton and soya bean in his area saw rise in prices
ƒ He believes sales would further increase by 10-15% as there are scheduled new
launches in 100cc segment - Hero Passion in next 2 months and also in 125cc
ƒ The Company has taken avg. price hike of Rs1500-2000/bike in last 3 months and
dealer expect it to increase from April onwards
ƒ Portfolio breakup - 80% sales come from 100cc, 15% from scooters & 125cc and 5%
come from 150cc
ƒ The dealer opined that 125cc would contribute higher as new models are going to
be launched soon
ƒ Scooter sales has been improving in last 3 months as company has started more
promotional offers & discounts against Honda and other players
ƒ XTEC segment contribute 25% of sales (priced higher by Rs3-4k) compared to base
model witnessing higher growth as it has some additional features like (1) Bluetooth
connectivity including SMS & call alerts, (2) twin trip meters, (3) real-time mileage
indicator, (4) USB charging port and (5) a side-stand engine cut-off feature
ƒ The dealer mentioned that supply of various models is now streamlined, while
Splendor is the highest selling products in his area
ƒ On EV segment, Hero Vida hasn’t launched in rural market however he expects
strong demand once it is made available in rural markets
ƒ Competition intensity has increased significantly in his market; however, their sales
are still lower than 40% as compared to Hero
ƒ Major competitors – Honda (Shine & Activa), Bajaj (Pulsar) and TVS
ƒ In past lower demand has pushed scale of advertisement and promotion activities
and it may continue for some more time
ƒ Dealers opined that though consumer feedback is very positive for 100cc bike, while
above 100cc people prefer Honda & Bajaj products
ƒ Majority rural customers (75-80%) choose EMI option offered by NBFCs such as Shirish Pardeshi
Shriram Finance, Hero Fincorp etc. Research Analyst, Consumer
ƒ Inventory has come down recently on the back of festive season while avg.
Consumer

+91-22-4215 9634
shirish.pardeshi@centrum.co.in
inventory stands at 1-1.5months
ƒ On an average dealer opined that Hero sales ~100+ bikes a month against Bajaj 10-
12 bikes, Honda 40-45 bikes and TVS 5-6 bikes
ƒ Dealer opined there is lot of scope for improvement in scooter segment as Hero is
Soham Samanta
market leader in the bike segment Research Associate, Consumer
+91-22-4215 9771
soham.samanta@centrum.co.in

Please see Disclaimer for analyst certifications and all other important disclosures. 4
 Rural Pulse 2023 Update

Institutional Research
India I Auto
29 March 2023

Rural Pulse: Tractor dealer (Auto) NIFTY 50: 17,081

Flat volumes for tractors in Jan-Mar; rising prices big worry BSE Sensex: 57,960

In our channel-check series - Rural pulse Day 2, we hosted Tractor dealer primarily Nifty 50 vs CNXAUTO
dealing with Escorts, Sonalika & Massey Ferguson to understand demand environment
135 CNXAUTO
in rural-UP and T3/T4 towns and impact of new launches ahead for the company. The
agri. rural belt handled by the dealer driven by Wheat is expected to do better, 120

however last season Mustard crop saw lower output due to unseasonal rains. Given 105
this we also tried to comprehend on-ground consumer sentiments from the dealer 90 NIFTY 50
given lot of noise around slowdown in rural market. The dealer opined that (1)
75
Demand remained flat in last 60 days, (2) Swaraj & Mahindra are the market leader, Mar-22 May-22 Jul-22 Sep-22 Nov-2 2 Jan-23 Mar-23
(3) Sonalika and most companies are not producing >50HP tractors and the farmers Source: Bloomberg
are settling for lower HP tractors, (4) 80% of farmers choose EMI option - largely driven
by monthly/ quarterly option, and (5) Tractor companies also focus on providing
farming implements as new growth driver.
Key takeaways: -
ƒ Total demand in his region ~1000+ tractor and he holds 10-15% market share with
larger demand concentrated around 35-40HP
ƒ Majority of the farmers in his region grow Mustard, Wheat and Paddy and with
better than expected wheat crop it should reflect in higher demand in next 3-4
months, though 65% of total sales occurs in Jan –July period
ƒ Despite companies are not supplying 50HP tractors due to changes in emission
norms and steep price increases he has achieved his monthly targets
ƒ Last 5 years’ trend indicate, customers buying higher HP tractor, yet with higher
price increases they settle for lower HP products
ƒ The dealer said, this year mustard crop output would be similar as last year, but
despite unseasonal rains, expects better Wheat output should drive demand
ƒ Dealer opined that, most companies have controlled production as they increased
prices by Rs100k for >50 HP tractors due to changes in emission norms
ƒ Swaraj & Mahindra are the market leader in his area with combining market share
of 30% while he claims Sonalika and Massey Ferguson hold 15-18% share each
ƒ Dealer inventory stands ~1 month which is generally 10% of sales
ƒ Farmtrac is the market leader in >50HP in western UP with higher demand for 50,
60 & 6055 models, yet in 45-50HP segment Sonalika 745 and DI 35 sales higher
ƒ With new management in Escorts, there is lot of aggression on sales front as
company started giving more advances to dealer and discount to win their trust
ƒ According to him, election year (especially panchayat election) indicates slowdown
in tractor sales due to political instability
ƒ Now farmers choose Rotavator (implements) of branded companies over local
players which makes up 5-10% of total sales
ƒ No rental demand has been observed in western UP, as of now
ƒ In UP there is good market for resale where Swaraj & Mahindra hold higher resale
value (assume 15% depreciation each year)
ƒ Though 80-85% farmers choose EMI option, major NBFC players such as TVS, L&T
Kotak, Hinduja hold larger share of funding/disbursement in his area
ƒ Most farmers opt for quarterly EMI options and even companies encourage farmers Shirish Pardeshi
to opt for monthly/Quarterly EMI option Research Analyst, Consumer
ƒ Despite rise in interest rates by 1-2% reflecting higher % of LTV, according to dealer
Consumer

+91-22-4215 9634
shirish.pardeshi@centrum.co.in
there is no impact on demand as financing companies did not changed rates
encashing on market opportunity
ƒ Sonalika has more aggressive sales policies (dealer friendly) compared to Escorts &
Massey Ferguson as they maintain flat billing system for every dealer where Massey
gives more credit to dealers Soham Samanta
Research Associate, Consumer
+91-22-4215 9771
soham.samanta@centrum.co.in

Please see Disclaimer for analyst certifications and all other important disclosures. 5
 Rural Pulse 2023 Update

Institutional Research
India I Consumer
29 March 2023

Rural Pulse: Nestle distributor NIFTY 50: 17,081

Strong demand in rural led by detergents, Maggie and Kit-Kat BSE Sensex: 57,960

In our distributor-dealer channel-check series - Rural Pulse Day 1, we hosted Nifty 50 vs NSE FMCG Index
distributor of P&G and Nestle to gauge on-ground demand environment in rural (UP)
140
and road ahead for the companies. Despite weak rural commentary and intermittent 130
NSE FMCG

rains impacting ripe harvesting (Rabi) season the distributor sounded very optimistic 120
given strong growth witnessed in Tide (detergent bar+powder) and Maggie and Kit- 110
Kat. The distributor opined that (1) Demand remains resilient in both companies 100
NIFTY 50
handled by him: P&G and Nestle, (2) In P & G, fabric care & male grooming business 90
80
saw +40%/15% growth YoY, while Feminine care (Whisper) grew in value terms ~7-8% Mar-22 Jun-22 Sep-22 Dec-22 Mar-23
with flat volumes, (3) Nestle business growing at 18-20% led by Maggie/ KitKat with Source: Bloomberg
focus on distribution, yet baby food shown strong demand despite steep price
changes. The distributor raise concern with Maggie chotu pack now priced at Rs7 and
Rs14 the sales saw some dip in offtake as competition offering better value-price
equation. Over all in UP state rural demand saw steady up-tick.
Key takeaways: -
P&G:
ƒ P&G products saw strong double digit growth across portfolio YoY, though products
like Vicks has seasonality trend
ƒ In Fabric Care, both Tide & Ariel have been growing ~30-40% driven by bar and Tide
fresh & clean powder segment despite company has taken price hikes ~12-17% in
last 6-8 months’
ƒ The distributor indicated P & G would execute some price cuts in next quarter as
competition intensity from HUL has been higher, though P&G charges premium
compared to HUL’s portfolio (Surf, Rin, Wheel)
ƒ In Haircare Portfolio Head & Shoulders grew 6-7% on YoY while wholesale channel
would be the major challenge at this time as they sell small packs
ƒ Health Care segment saw moderate growth of 2-3% in Vicks as it sells mostly in
winter & monsoon, while during Covid, sales jumped 3x compared to normal levels
ƒ In Feminine Care segment, Whisper has seen major challenges from new age brands
and online channels however efforts on distribution led to value growth of 7-8%
with flat volumes, also regional players offer heavy trade discounts in rural market
ƒ Male Grooming business saw strong double digit growth as Gillette rules the
category without any major competitors, though company’s clear focus in rural and
small towns is to drive Wilkinson, Presto, and Guard brands distribution
ƒ Oral Care business has grown by 10-12% in urban however it has been facing
challenges in rural market due to unavailability of toothbrush with Rs10 price point
ƒ The distributor, said they have increased its distribution coverage by 30% YoY, yet
wholesale channel contribute 45% sales followed by Modern Trade at 20% and
balance 35% comes from General trade
Nestle:
ƒ Nestle grew 18-20% led by increase in distribution coverage supported by Maggie
and Kit-Kat portfolio growing at 20%/ 25%
ƒ Distributor said, despite Kit-Kat clocking 25% growth YoY there is inadequate supply
of products priced at Rs5 & Rs10, hence believes with improved supply, Nestle could
grow ~30-35% Shirish Pardeshi
Research Analyst, Consumer
ƒ Maggie noodles & Kit-Kat contribute ~50% of revenues followed by nutrition
Consumer

+91-22-4215 9634
portfolio, yet in his markets products such as Ensure, Everyday check lower demand shirish.pardeshi@centrum.co.in

ƒ With revised prices for Maggie chotu pack at Rs7 and Rs14 the sales momentum
was lost as the competition still offer products at Rs5 and Rs10 in rural markets
ƒ However in baby food, Nestogen, Cerelac, and Nan-1/2 still rule rural consumers as
there is very little competition Soham Samanta
Research Associate, Consumer
+91-22-4215 9771
soham.samanta@centrum.co.in

Please see Disclaimer for analyst certifications and all other important disclosures. 6
 Rural Pulse 2023 Update

Institutional Research
India I Consumer
29 March 2023

Rural Pulse: Britannia distributor NIFTY 50: 17,081

Marginal pick up in volume growth in Jan-Mar’23 BSE Sensex: 57,960

In our distributor-dealer channel-check series - Rural Pulse Day 2, we hosted Britannia

Nifty 50 vs NSE FMCG Index
super-stockist covering 80+ rural distributors to check on-ground demand in rural
140
(Maharashtra) and road ahead for growth in the business. The distributor opined that NSE FMCG
130
over Q3 there has been marginal growth in sales across portfolio and expect growth 120
momentum to pick up with visibility on monsoon. Further, he indicated Parle’s remain 110
undisputed leader in the glucose category, while it is facing serious under cutting (low 100
NIFTY 50
price) issues from the neighboring markets as compared to Britannia. Good Day, 90
Bourbon, Marie & Jim-Jam hold 60-70% sales contribution and continue to witness 80
Mar-22 Jun-22 Sep-22 Dec-22 Mar-23
strong demand, while few NPDs such as Win-Kin diary, Croissant, Time-Pass saw Source: Bloomberg
limited off-take as these products priced higher against the local competition. Over all
dealer said demand in rural markets saw marginal up-tick in volumes.
Key takeaways: -
ƒ Britannia products saw marginal volume growth (3-4%) across portfolio in last 2-3
months’ and super-stockist expects demand would further increase post good
visibility in monsoon and going forward
ƒ Company has not increased prices and they offer higher grammage on key SKUs
ƒ Good Day is fastest yet highest selling SKU followed by Marie, Tiger with combined
sale of 60%, yet Bourbon and Jim-Jam add 10-15% of sales
ƒ Dealer confirmed Good Day pack priced at Rs10 remains highest selling product in
rural markets across 80 rural distributors points
ƒ Despite several rounds of price hikes implemented by Britannia, there is no major
slowdown in demand witnessed by him however prices for Good Day and Tiger
remain fluctuating due to increased competition
ƒ On Bourbon portfolio, dealer has indicated higher growth as there is no major
competition, while Little Hearts saw mid to high single digit growth
ƒ On competition front, Parle –G rules the market in glucose category compared to
Tiger, yet Parle’s face major under cutting problem/disruptions in rural markets
ƒ Dealer confirmed though Win-Kin saw moderate demand there is stiff competition
from Amul and local products as they are priced lower, yet it had very little demand
for products such as Croissants in his area
ƒ The distributor pointed out Jim-Jam sales picking up fast, however inadequate
supply cut the growth
ƒ Though rusks, cookies and cakes product hold lot of promise they contribute ~1%
each, as rural consumer still prefer to eat biscuits over these products
ƒ The distributor said, there is lot of push from the company to place Time-Pass
(snacking) in rural, limited promotional activities and media push impact demand
ƒ Dealer indicated that company offers super-stockist margin of ~3.5% while the rural
distributors operate with ~4% trade margin
ƒ Even though Britannia operates on advance payments, the distributor needs to offer
minimum 4-6 days’ credit to rural distributors to drive sales Shirish Pardeshi
ƒ Britannia supplies to the distributor ~4-5 times a week, while he then supplies to Research Analyst, Consumer
Consumer

+91-22-4215 9634
rural preferred distributors once a week shirish.pardeshi@centrum.co.in

ƒ Recent changes in C & F agent at Ranjangaon has impacted delivery schedules said
the distributor
ƒ For biscuits category Q4 deliver lower sales as compared to Q3, as majority schools
and colleges remained shut down due to exam season Soham Samanta
Research Associate, Consumer
ƒ Overall Q4 saw marginal pick up in volume over Q3 +91-22-4215 9771
soham.samanta@centrum.co.in

Please see Disclaimer for analyst certifications and all other important disclosures. 7
 ZƵƌĂůWƵůƐĞϮϬϮϯhƉĚĂƚĞ

/ŶƐƚŝƚƵƚŝŽŶĂůZĞƐĞĂƌĐŚ

/ŶĚŝĂ/ŽŶƐƵŵĞƌ

ϮϵDĂƌĐŚϮϬϮϯ

ZƵƌĂůWƵůƐĞ͗ŝĂƌLJdžƉĞƌƚ E/&dzϱϬ͗ϭϳ͕Ϭϴϭ


DŝůŬƉƌŝĐĞƐƚŽĐŽŵĞŽĨĨƐŚĂƌƉůLJďĞĨŽƌĞŶĞdžƚĨůƵƐŚƐĞĂƐŽŶ ^^ĞŶƐĞdž͗ϱϳ͕ϵϲϬ





tĞŚŽƐƚĞĚDƌ͘Z͘^^ŽĚŚŝ͕WƌĞƐŝĚĞŶƚ͕/ŶĚŝĂŶŝĂƌLJƐƐŽĐŝĂƚŝŽŶĂŶĚĨŽƌŵĞƌDŽĨ'ƵũĂƌĂƚ


EŝĨƚLJϱϬǀƐE^&D'/ŶĚĞdž 
DŝůŬDĂƌŬĞƚŝŶŐ&ĞĚĞƌĂƚŝŽŶ;ŵƵůͿƚŽĚŝƐĐƵƐƐ͕;ϭͿKƵƚůŽŽŬĂŶĚŝŵƉĂĐƚŽĨŚŝŐŚĞƌĨĞĞĚ
ϭϰϬ
ĐŽƐƚ ŽŶ ŵŝůŬ ƉƌŝĐĞƐ͕ ;ϮͿ ŽŶĐĞƌŶƐ ŽŶ ůƵŵƉLJ ƐŬŝŶ ĚŝƐĞĂƐĞ͕ ĂŶĚ ;ϯͿ ĞŵĂŶĚʹƐƵƉƉůLJ ϭϯϬ
E^ &D'

ƐĐĞŶĂƌŝŽŝŶƚŚĞ/ŶĚŝĂŶĚŝĂƌLJƐĞĐƚŽƌ͘Dƌ͘^ŽĚŚŝŽƉŝŶĞĚ͕ƚŚĂƚĐƵƌƌĞŶƚĂŝƌLJŝŶĚƵƐƚƌLJƐƚĂŶĚƐ ϭϮϬ
ĂƚZƐϭϬůĂŬŚĐƌŽƌĞǁŚŝůĞŽƌŐĂŶŝƐĞĚƐĞŐŵĞŶƚĐŽŶƚƌŝďƵƚĞƐϭͬϯŽĨƚŚĞŝŶĚƵƐƚƌLJǁŚŝĐŚŝƐ ϭϭϬ
ĞdžƉĞĐƚĞĚƚŽŐƌŽǁĚŽƵďůĞͲĚŝŐŝƚŝŶŶĞdžƚϯͲϱLJĞĂƌƐ͘&ƵƌƚŚĞƌ͕ŚĞďĞůŝĞǀĞƐƚŚĂƚŵŝůŬŝŶĨůĂƚŝŽŶ ϭϬϬ
E/&dzϱϬ
ƚƌĂŝůǁŝƚŚϲͲϵŵŽŶƚŚƐ͛ůĂŐĞĨĨĞĐƚƚŽĨŽŽĚŝŶĨůĂƚŝŽŶ͘,ĞƉŽŝŶƚĞĚƚŚƌĞĞŝƐƐƵĞƐĂƌŽƵŶĚƌŝƐŝŶŐ ϵϬ
ϴϬ
ŵŝůŬ ƉƌŝĐĞƐ͕;ϭͿ ŽǀŝĚ ĚŝƐƌƵƉƚŝŽŶƐ ĨŽƌ ƚǁŽ LJĞĂƌƐ ǁŝƚŶĞƐƐĞĚ ůŽǁĞƌ ƉĂĐĞ ŽĨ ĐĂůǀŝŶŐ͕ ;ϮͿ DĂƌͲϮϮ :ƵŶͲϮϮ ^ĞƉͲϮϮ ĞĐͲϮϮ DĂƌͲϮϯ
ŽƉĞŶŝŶŐ ŽĨ ,KZ ĐŚĂŶŶĞů ƐĂǁ ŚŝŐŚĞƌ ĚĞŵĂŶĚ ĨŽƌ ůŝƋƵŝĚ ĂƐ ǁĞůů ĂƐ ǀĂůƵĞ ĂĚĚ ^ŽƵƌĐĞ͗ůŽŽŵďĞƌŐ
ƉƌŽĚƵĐƚƐ͕ ĂŶĚ ;ϯͿ ŚŝŐŚĞƌ ƚŚĂŶ ĂŶƚŝĐŝƉĂƚĞĚ ŝŶĨůĂƚŝŽŶ ŝŶ ĨĞĞĚ ĂŶĚ ǀĞƚĞƌŝŶĂƌLJ ĐŽƐƚƐ͘ 
dŚĞƌĞĨŽƌĞŚĞĞdžƉĞĐƚƐŽŶĐĞƚŚĞƐĞŝƐƐƵĞƐŐĞƚƌĞƐŽůǀĞĚ͕ĐŽƵƉůĞĚǁŝƚŚŐŽŽĚŵŽŶƐŽŽŶƚŽ
ĐƵƚ ĨĞĞĚ ŝŶĨůĂƚŝŽŶ ƌĞĨůĞĐƚŝŶŐ ĚƌŽƉ ŝŶ ŵŝůŬ ƉƌŝĐĞƐ ďĞĨŽƌĞ ŶĞdžƚ ĨůƵƐŚ ƐĞĂƐŽŶ͘ Dƌ^ŽĚŚŝ͕
ŝŶĚŝĐĂƚĞĚĞǀĞŶƐƚĂƚĞĚĂŝƌŝĞƐŚĂǀĞƐŽĐŝĂůĐŽŵŵŝƚŵĞŶƚƚŽƚĂŵĞƚŚĞŵŝůŬŝŶĨůĂƚŝŽŶ͘
<ĞLJƚĂŬĞĂǁĂLJƐ͗Ͳ
ƒ ĂŝƌLJŝŶĚƵƐƚƌLJŝƐƚŚĞŵŽƐƚƉŽƚĞŶƚŝĂůŝŶĚƵƐƚƌLJŝŶ/ŶĚŝĂǁŚĞƌĞƐĐĂůĞĂŶĚƐƵƉƉůLJͲĐŚĂŝŶ
ĞĨĨŝĐŝĞŶĐŝĞƐďĞƚƚĞƌ͕LJĞƚŵĂƌŐŝŶƐĂƌĞǀĞƌLJĐŽŵƉĞƚŝƚŝǀĞ
ƒ Dƌ^ŽĚŚŝ ďĞůŝĞǀĞƐ͕ ƚŽƚĂů ŵĂƌŬĞƚ ƐŝnjĞ ŽĨ ĚĂŝƌLJ ŝŶĚƵƐƚƌLJ ƐƚĂŶĚƐ Ăƚ ZƐϭ͘Ϭ ƚƌŶ͕ ǁŚŝůĞ
ŽƌŐĂŶŝƐĞĚƐĞĐƚŽƌĐŽŶƚƌŝďƵƚĞƐϭͬϯŽĨƚŚĞŝŶĚƵƐƚƌLJǁŚŝĐŚŝƐĞdžƉĞĐƚĞĚƚŽŐƌŽǁĚŽƵďůĞ
ĚŝŐŝƚŝŶŶĞdžƚϯͲϱLJĞĂƌƐ
ƒ Dƌ^ŽĚŚŝ ŝŶĚŝĐĂƚĞĚ ƚŚƌĞĞ ŬĞLJ ŝƐƐƵĞƐ ĂƌŽƵŶĚ ƐƵƉƉůLJ͕ ;ϭͿ ŽǀŝĚ ĚŝƐƌƵƉƚŝŽŶƐ ĨŽƌ ƚǁŽ
LJĞĂƌƐǁŝƚŶĞƐƐĞĚůŽǁĞƌƉĂĐĞŽĨĐĂůǀŝŶŐ͕;ϮͿWŽƐƚŽǀŝĚŽƉĞŶŝŶŐŽĨ,KZĐŚĂŶŶĞů
ĚƌŝǀŝŶŐ ĚĞŵĂŶĚ ŵŽƌĞ ƚŚĂŶ ƉƌŽĚƵĐƚŝŽŶ͕ ;ϯͿ ƌŝƐŝŶŐ ĨĞĞĚ ĂŶĚ ǀĞƚĞƌŝŶĂƌLJ ĐŽƐƚƐ͕ ;ϰͿ
ůƵŵƉLJƐŬŝŶĚŝƐĞĂƐĞůŽǁĞƌŝŶŐŵŝůŬŽƵƚƉƵƚƉĞƌĂŶŝŵĂů
ƒ ƵƌŝŶŐŽǀŝĚƉĂŶĚĞŵŝĐ,KZĐŚĂŶŶĞůĚƌŽƉƉĞĚΕϱϬйǁŚŝĐŚŚĂƐƌĞĐŽǀĞƌĞĚŶŽǁ
ƒ ,ĞŽƉŝŶĞĚƚŚĂƚŵŝůŬŝŶĨůĂƚŝŽŶƚƌĂŝůǁŝƚŚŚĂƐϲͲϵŵŽŶƚŚƐ͛ůĂŐƚŽĨŽŽĚŝŶĨůĂƚŝŽŶĂŶĚĂƐ
ĨŽŽĚ ŝŶĨůĂƚŝŽŶ ŚĂƐ ƐƚĂƌƚĞĚ ƐůŽǁŝŶŐ ĚŽǁŶ͕ ŚĞ ĞdžƉĞĐƚƐ ĞǀĞŶ ŵŝůŬ ƉƌŝĐĞƐ ƚŽ ĐŽŽů ŽĨĨ
ďĞĨŽƌĞŶĞdžƚĨůƵƐŚƐĞĂƐŽŶ
ƒ >ĂƐƚ ĨůƵƐŚ ƐĞĂƐŽŶ ŝŶ /ŶĚŝĂ ƐĂǁ ůĞƐƐĞƌ ƋƵĂŶƚŝƚLJ ŽĨ ŵŝůŬ ĐŽŶǀĞƌƐŝŽŶ ƚŽ ^DW͕ ĂŶĚ
ƐƵŵŵĞƌ ďĞŝŶŐ ůĞĂŶ ƐĞĂƐŽŶ ŵŝůŬ ƉƌŝĐĞƐ ƌŝƐĞŶ ƐŚĂƌƉůLJ͕ ŚŽǁĞǀĞƌ ŚĞ ƐĂŝĚ͕ ƐŝŵŝůĂƌ
ƐŝƚƵĂƚŝŽŶŵĂLJŶŽƚŽĐĐƵƌŝŶƚŚĞŶĞdžƚĨůƵƐŚƐĞĂƐŽŶ
ƒ /ŶƚĞƌŶĂƚŝŽŶĂůŵŝůŬƉƌŝĐĞŚĂƐĚƌŽƉƉĞĚϯϰйĐŽŵƉĂƌĞĚƚŽůĂƐƚDĂƌĐŚŚŽǁĞǀĞƌŝƚŝƐƐƚŝůů
ŚŝŐŚĞƌďLJϱйsƐDĂƌ͛Ϯϭ
ƒ ^ŝŵŝůĂƌƚƌĞŶĚŚĂƐďĞĞŶǀŝƐŝďůĞŝŶŚĞĞƐĞ;ͲϯϬйͿĂŶĚ^ŬŝŵŵĞĚŵŝůŬƉŽƌƚĨŽůŝŽ;ͲϯϱйͿ
ƒ KŶĚĞŵĂŶĚĨƌŽŶƚ͕ŶŽŶͲĐŚŝŶĂĚĞŵĂŶĚŚĂƐďĞĞŶŝŶĐƌĞĂƐŝŶŐǁŚŝůĞƉƌŽĚƵĐƚŝŽŶŚĂƐŶ͛ƚ
ŝŶĐƌĞĂƐĞĚĚƵĞƚŽŚŝŐŚĞƌƌĂǁŵĂƚĞƌŝĂůĐŽƐƚ
ƒ Dƌ^ŽĚŚŝ͕ƐĂŝĚ͕ĞǀĞŶƚŚŽƵŐŚŝŶƚĞƌŶĂƚŝŽŶĂůŵŝůŬƉƌŝĐĞƐĂƌĞůŽǁĞƌ͕ŝƚĂƚƚƌĂĐƚƐůĞǀLJŽĨ
ĚƵƚŝĞƐĂŶĚŚĞŶĐĞŝƚŵĂLJŶŽƚďĞǀŝĂďůĞŽƉƚŝŽŶĂƚƚŚŝƐƚŝŵĞ
ƒ Dƌ^ŽĚŚŝ͕ ŽƉŝŶĞĚ͕ ƚŚĂƚ ĐƵƌƌĞŶƚ ŵŝůŬ ƉƌŝĐĞ ŝƐ Ăƚ ƉĞĂŬ ĂŶĚ ĞdžƉĞĐƚƐ ŶŽ ŵĂũŽƌ ƵƉƐŝĚĞ
ĨƌŽŵŚĞƌĞĂŶĚĞdžƉĞĐƚƚŚĞƚƌĞŶĚǁŽƵůĚƌĞǀĞƌƐĞďĞĨŽƌĞŶĞdžƚĨůƵƐŚƐĞĂƐŽŶ
ƒ ƐƉĞƌDƌ^ŽĚŚŝ͕ŵŝůŬŽƵƚƉƵƚĐŽŶƚƌŝďƵƚĞƐϭϯͲϭϰйŽĨƌƵƌĂůŚŽƵƐĞŚŽůĚŝŶĐŽŵĞǁŚŝůĞ
ĂŐƌŝĐƵůƚƵƌĞ Θ ĂŶŝŵĂů ŚƵƐďĂŶĚƌLJ ďŽƚŚ ĐŽŶƚƌŝďƵƚĞƐ ΕϱϬй ǁŚŝĐŚ ĂƌĞ ƵŶĚĞƌ ƐƚƌĞƐƐ͕ ^ŚŝƌŝƐŚWĂƌĚĞƐŚŝ
ŚĞŶĐĞƌƵƌĂůŚŽƵƐĞŚŽůĚŐĞŶĞƌĂƚĞůŽǁĞƌŝŶĐŽŵĞ ZĞƐĞĂƌĐŚŶĂůLJƐƚ͕ŽŶƐƵŵĞƌ
ŽŶƐƵŵĞƌ

нϵϭͲϮϮͲϰϮϭϱϵϲϯϰ
ƒ /ŶĚŝĂ͕ĐƵƌƌĞŶƚůLJŚŽůĚĂŶŝŵĂůƉŽƉƵůĂƚŝŽŶŽĨϮϬϬŵŶĐŽǁƐĂŶĚϭϬϬŵŶďƵĨĨĂůŽ͕ǁŚŝůĞ ƐŚŝƌŝƐŚ͘ƉĂƌĚĞƐŚŝΛĐĞŶƚƌƵŵ͘ĐŽ͘ŝŶ
ůƵŵƉLJƐŬŝŶĚŝƐĞĂƐĞŚĂƐŝŵƉĂĐƚĞĚΕϮͲϯйŽĨĂŶŝŵĂůƉŽƉƵůĂƚŝŽŶŽĨϱйŽĨŵŝůŬŽƵƚƉƵƚ
ƒ tŝƚŚ ƌŝƐŝŶŐ ŵŝůŬ ƉƌŽĚƵĐƚŝŽŶ ĂǁĂƌĞŶĞƐƐ ĨŽƌ Žǁ 'ŚĞĞ ŚĂƐ ƌŝƐĞŶ LJĞƚ Žǁ 'ŚĞĞ ŝƐ
ĐŚĞĂƉĞƌƚŚĂŶƚŚĂƚŽĨƵĨĨĂůŽ'ŚĞĞ
ƒ 'Žǀƚ͘ ŽĨĨĞƌƐ ƐĞǀĞƌĂů ƐĐŚĞŵĞƐ ƚŽ ŝŵƉƌŽǀĞ ĂŶŝŵĂů ƉƌŽĚƵĐƚŝŽŶ ĂŶĚ ďƵŝůĚŝŶŐ ^ŽŚĂŵ^ĂŵĂŶƚĂ
ZĞƐĞĂƌĐŚƐƐŽĐŝĂƚĞ͕ŽŶƐƵŵĞƌ
ŝŶĨƌĂƐƚƌƵĐƚƵƌĞǁŚŝĐŚŚĂƐƐŚŽǁŶƐƚĞĂĚLJŝŶĐƌĞĂƐĞŝŶƚŚĞƌĞĐĞŶƚďƵĚŐĞƚǁŚĞƌĞƚŽƚĂů нϵϭͲϮϮͲϰϮϭϱϵϳϳϭ
ŽƵƚůĂLJŚĂƐŝŶĐƌĞĂƐĞĨƌŽŵZƐϮϱͲϮϬďŶƚŽZƐϰϬďŶ ƐŽŚĂŵ͘ƐĂŵĂŶƚĂΛĐĞŶƚƌƵŵ͘ĐŽ͘ŝŶ

WůĞĂƐĞƐĞĞŝƐĐůĂŝŵĞƌĨŽƌĂŶĂůLJƐƚĐĞƌƚŝĨŝĐĂƚŝŽŶƐĂŶĚĂůůŽƚŚĞƌŝŵƉŽƌƚĂŶƚĚŝƐĐůŽƐƵƌĞƐ͘ϴ
 Rural Pulse 2023 Update

Institutional Research
India I Consumer
29 March 2023

Rural Pulse: FMCG distribution Expert NIFTY 50: 17,081

No major uptick on rural demand; inventory days jumped BSE Sensex: 57,960

We hosted Mr. Dhairyasheel Patil, National President of All India Consumer Products
Distributors Federation to discuss, (1) Demand conditions for various FMCG categories
in rural, and (2) Major factors impacting rural demand in various markets. Mr. Patil
opined, that currently FMCG sector services 12.5mn retail touch points in the country
and the growth in outlets trail population growth, rather there is some consolidation
happened due to rising share of MT and E-com channels during last two years. Further
he alluded ~5.0mn stores are still serviced through indirect channel such as wholesale
which provides ample room for coverage expansion. He strongly believes though
Reliance Retail appears to be a big disruptor, for many staples categories there is no
visible impact at this time as they have made many attempts in the past. On demand
side, given sticky food inflation, in medium term rural demand is still challenged.
However he expects consumption to pick up post visibility on monsoon. Given this
distributor inventory jumped to 40-45 days due weak secondary sales trailing primary.
Key takeaways: -
ƒ Rural is the barometer of FMCG sector which has been sinking for last 9-12 months
on the back of higher inflation along with lower income
ƒ In last 12 months, we have observed that sales for small packs (sachet) have risen
sharply which cuts volume growth of all consumer companies
ƒ Yet top players companies took intense price hikes (~30-35%) to counter the higher
inflation which also had direct implications on sales of big packs
ƒ Mr. Patil believes, the supply-chain in retail segment is fully flooded with stocks
however secondary sales are not picking up as per expectation, largely visible in
categories such as BPC, hair oils, oral care and personal care
ƒ On B2B supply chain, though Big Bazar shut its operations, majority players like
Udaan, Metro cash & carry, JioMart has started penetrating GT segment, however
off late their sales dropping down which is a positive sign for small retailers and also
distributors
ƒ The speaker believes no major demand changes would visible in next 2-3 months
however with better than expected realisations for Rabi crop and visibility on
monsoon should lift sentiments for rural consumers
ƒ Given lower rural offtake the distributor inventory has gone up 45-50 days from 15-
20 days earlier, however few companies offer extended credits against RTGS
ƒ Generally, in the past Q4 being dull quarter, most FMCG companies used to execute
price increases (once in a year), conversely given unabated inflation the companies
would have taken 3-4 price changes in past one year
ƒ He said, in Q4 there were no major price increases across FMCG categories as
commodity prices started softening
ƒ Food category has grown much faster ~20-25% despite multiple price hikes while
other segment like Hair, Skin care, Personal care have experienced drop
ƒ Mr. Patil strongly defended no major impact would be visible in short to mid-term
even though Reliance Retail aggressively building its own distribution back end
ƒ Mr. Patil alluded in India distributor service ~12.5mn retail outlets which has grown
less than population growth, rather there is some consolidation in past two years
ƒ Given FMCG companies cater ~5-6mn outlets directly and through wholesale Shirish Pardeshi
channel there is ample room for growth in distribution across many categories Research Analyst, Consumer
Consumer

+91-22-4215 9634
ƒ Earlier, B2B players were offered 15-20% lower prices compared to GT retailers, the shirish.pardeshi@centrum.co.in
federation successfully impressed on the companies to differentiate packs, which
has now been working smoothly
ƒ With lower than expected demand and higher primary push from the companies
the system hygiene has been deteriorated driving under cutting in many categories Soham Samanta
across the country which remains a cause of concern Research Associate, Consumer
+91-22-4215 9771
soham.samanta@centrum.co.in

Please see Disclaimer for analyst certifications and all other important disclosures. 9
 Rural Pulse 2023 Update

Institutional Research
India I Building Materials
29 March, 2023

Rural Pulse: Building Materials NIFTY 50: 17,081

BSE Sensex: 57,960
Demand not as per expectations in 4th quarter
We hosted a distributor for building materials products operating in Madhya Pradesh Nifty 50 vs NSE Midcap
region. The distributor has been in this space since 1985. He caters to rural markers 120
and currently is a distributor for product categories including plastic pipes, tiles, NSE Midcap
110
sanitaryware, faucetware and wood panel. Following are the takeaways from the call.
100
Plastic Pipes & Fittings NIFTY 50
ƒ The demand trend in 4QFY23 is below expectation. Liquidity with retailers in rural
90

regions is also impacted on account of lower agricultural income. 80

Mar-22 Jun-22 Sep-22 Dec-22 Mar-23
ƒ However, the plumbing pipes business will still witness a growth of 20-25% in in Source: Bloomberg
FY23 vs FY22 in value terms (low base effect: 1QFY22 was impacted due to COVID).
ƒ The PVC prices are stabilising after the recent decline. There was a steep decline in
demand when the prices rose earlier however, similar trend is witnessed with
declining prices as well as purchases are kept on hold in anticipation of further price
decrease.
ƒ The price differential between organized and unorganized products have
decreased though both are registering growth.
ƒ In the pipes market, Astral has the highest market share followed by Ashirwad and
Supreme in the distributor’s region. Astral have created a new strong market and
consumer base in the last 5 years which will be difficult to beat. Finolex is also
getting good traction in rural markets and its product quality is getting close to that
of Supreme. Pricing wise, Supreme is priced cheaper than Astral and Ashirwad.
ƒ Astral and Ashirwad are adopting an aggressive approach in the form of higher
marketing spends and providing higher incentives to distributors and retailers. This
is allowing them to gain market share and increase brand recall value in the mind
of consumers. Supreme, on the other hand has been moderate in its marketing
spend. Wavin has also entered the market aggressively with presence in all the
categories.
ƒ Supreme is the largest in terms of SKUs it has with no close competition to it on
this parameter. Astral, on the other hand, has wide range of SKUs in CPVC.
ƒ CPVC pipe segment for Astral and Ashirwad is much stronger than that of Supreme
and other players. These two entered the market with CPVC while others started
their journey with PVC.
ƒ The various players in the market along with new entrants (low entry barrier) are
each able to get some share. With minimal scope for innovation, obtaining share
from here will be a function of undercutting and exploring new markets.
ƒ Supreme has significantly higher presence in HDPE pipes (for drinking water supply)
than other pipe companies.
Sanitaryware and Faucetware
ƒ The industry has grown at an average of 16% in 4QFY23. Parryware has achieved
this level of growth among the brands.
ƒ The pricing trend is similar across all the brands. All the companies have revised
their prices in 4QFY23 by 3-5% as part of their standard operating procedure that Akhil Parekh
Building Materials

Research Analyst, Midcap

takes place every 6 months. +91-22--42159265
ƒ Parryware, Cera and Hindware being the top brands are majorly preferred for akhil.parekh@centrum.co.in

projects. Cera is bigger in the project business while Parryware is bigger in retail
though pricing remains similar for all.

Kevin Shah
Research Associate, Midcap
+91-22-4215 9000
kevin.shah@centrum.co.in

Please see Disclaimer for analyst certifications and all other important disclosures. 10
 Rural Pulse 2023 Update

Institutional Research
India I Footwear
29 March, 2023

Rural Pulse: Footwear expert NIFTY 50: 17,081

Demand slowdown persists BSE Sensex: 57,960

As part our Centrum Rural Pulse Conference, we hosted Mr. Subhash Jagga, General
Secretary of Footwear Park Association (Bahadurgarh, Haryana). Bahadurgarh houses
2,000 large, medium and small scale footwear units with an annual turnover of
Rs200bn.
Demand trend continues to be sluggish
ƒ The demand for footwear continues to be impacted in the rural regions since covid
and is further aggravated by GST rate hike and worldwide slowdown.
ƒ The purchasing power has reduced significantly in rural regions as people are
postponing discretionary purchases and focusing more on saving. Second, raw
material inflation in FY22 led to price hikes of 25%. Third, GST rate hike from 5% to
12% for products priced below Rs1000 (effective 1 st Jan 22) contributed to the
demand slowdown.
ƒ The expert is confident of witnessing a demand revival in FY24 backed by improving
farm income and higher marriage led footwear spends. He also highlighted good
opportunity to export in coming year.
Reversal of price hikes to counter demand slowdown
ƒ Footwear companies rolled back the price hikes to the extent of 10% (earlier hiked
by 25%) to counter the slowdown in demand and downtrading by consumers. This
was possible with the help of cooling down of raw materials.
ƒ PU, EVA and PVC, natural rubbers are some of the common raw materials used in
non-leather footwear. 100% of the EVA requirement is imported from European
countries, Singapore and China and 98% requirement of PU is imported.
Substantial reduction in Chinese imports over the years
ƒ The imports from China have reduced sharply to 2-3% from ~63% 4-5 years ago led
by healthy growth of good quality Indian products at competitive prices. Chinese
footwear (majorly PU based) was being sold in the range of Rs150-200, most of
these share is now taken by VKC footwear, a south based footwear company.
ƒ The footwear park in India at Bahadurgarh produced a total of 80-100mn pairs of
footwear in FY23 vs 60mn pre covid. Availability of infrastructure and raw material
factories in the region aided to register this growth. Availability of land at cheaper
rates in the region also helped small players to increase their contribution and take
market share from Chinese imports as per the experts.
Increasing preference for sports footwear
ƒ The production and consumption of sports footwear is rising steadily in India.
ƒ The preference of all consumer age groups is tilting towards them.
ƒ 150 factories in Bahadurgarh produce sports footwear including small brands like
Welcome, Lancer, Today, Diamond, Jauuar.
ƒ Despite high quality, lower brand equity does not allow India sport shoes to get
better realization compared to international brands.
GST rate hike and macro factors not aiding the footwear industry
ƒ GST rate increase from 5% to 12% for products below Rs1,000 along with rise in
raw material prices led to higher prices for those products. This impacted the
demand for those products and consumer started down trading. Akhil Parekh
ƒ 90% of the footwear produced in India falls in the below Rs1,000 range which are Research Analyst, Midcap
Footwear

+91-22--42159265
consumed majorly in rural regions. akhil.parekh@centrum.co.in
ƒ Footwear manufacturers are against the initiative of BIS certification and find it
negative for the industry. At present, there is no infrastructure to do the testing.
ƒ Unlike China, Indian manufacturers face issues in obtaining land at cheaper rates.
ƒ Providing prolonged credit period in the footwear industry acts as an entry barrier. Kevin Shah
ƒ The footwear industry lacks in training, knowledge and infrastructure. Availability Research Associate, Midcap
+91-22-4215 9000
of infrastructure, cheaper land and lower taxes are key levers for growth. kevin.shah@centrum.co.in

Please see Disclaimer for analyst certifications and all other important disclosures. 11
Building Materials 29 March, 2023

ƒ 15 days of credit period is provided to the builder in the project business for Cera wherein
the distributor acts as an invoicing agent between company and builder and makes instant
payment to the company.
ƒ Distributor earns a fixed margin of 3-5% while retailer earns a margin of 15-18% in
sanitaryware (as prone to higher damages) and 10-12% in faucetware (less damages).
ƒ Sanitaryware and faucetware are less capital intensive in manufacturing vs pipes while they
instead require higher spends on showrooms unlike pipes.
ƒ The consumers of Sanitaryware & Faucetware are the most brand conscious (especially in
project business) as they don’t want to take the risk of facing damages. From a category’s
pricing power perspective, Sanitaryware and Faucetware stands at top among other
building material categories.
ƒ Tiles distributors usually have sanitaryware distributorship. Not more than 20-25% of Pipes
distributors have distribution of Sanitaryware and Faucetware.
ƒ Astral has not yet entered aggressively with its sanitaryware products in the region where
the distributor operates.
Tiles
ƒ The pricing difference is minimal in the tiles segment across all the brands. The same plant
is manufacturing the tiles for many of the brands. Except for designs most of the things
remain same and hence pricing difference is less among different brands.
ƒ Brand loyalty too is not very high barring top 2-3 brands.
ƒ The price war with unorganized players continue to remain high in tiles segment.
ƒ In tiles, usually local players first introduces the new products which is then adopted by all
the branded players.
Wood panel
ƒ The wood panel consumers are brand conscious and want good quality (Greenply and
Action Tesa among the preferred) product to avoid imbibition and termites.
ƒ Cheaper MDF is being imported at an increasing pace with a price differential of 15-20%.

Centrum Institutional Research 12

 Rural Pulse 2023 Update

Institutional Research
India I Retail
29 March, 2023

Rural Pulse: 1-India Family Mart NIFTY 50: 17,081

Deferment of demand in rural India BSE Sensex: 57,960

We hosted the co-founder & CEO of 1-India Family Mart (incorporated in 2013), a value
retailer. The company currently operates 84 stores largely in East India with strong
presence in UP (40), Bihar (20) and Jharkhand (12). It caters to consumers (5.8mn
customers) with household income of Rs15,000-25,000 per month. Following are the
key takeaways from the call.
Rural demand yet to recover from covid
ƒ The value segment based out of tier 2 and 3 towns are facing issues since covid unlike
the urban value segment. Apparel segment is the first to be impacted. Spends are
happening only for urgent needs including wedding and events.
ƒ 20-30% of the rural working population is yet to join back work post covid. Their
savings are impacted by covid and facing pressure of debt. Inflation is one of the
least concerning factor in rural regions at the moment.
ƒ Footfalls are improving though well below pre covid levels causing a hindrance to
reach pre covid sales. Sales/sqft stands at Rs500 vs Rs650 pre covid. Conversion rate
though has improved from 43% pre covid to over 50% as consumers now visiting
stores based on needs. Bill size has also increased by 15-20%.
ƒ UP, Bihar and Jharkhand are one of the poorest states with very high impact of covid.
The retailer had to close 20-22 of its stores in the last 2 years. Self-employed class is
struggling the most. Even the high value customers are not buying as breadwinner
has lost his life or has lost job during the pandemic.
ƒ The occasion of Diwali is expected to witness first signs of recovery led by better
yield and higher crop income. Purchase of advanced mobile phones and two wheeler
vehicles will be a key indicator for demand revival.
Minimal impact of price movement on the demand
ƒ The retail chain has an ASP of Rs350 for apparel (74% contribution) and over Rs200
for other products (26% contribution from luggage, toys and accessories). It took a
price hike of 8% in FY23 and a total of Rs20 over 18 months.
ƒ 80-85% of the merchandise is sold at full price earning margin of 33-34%. For the
balance merchandise, discounting starts from 20% to as high as 80%.
ƒ The retail outlets offered higher discounts on summer merchandise in August and
September to dispose the pile of stock lying since covid. Led by short winter season
in FY23, outlets are now selling winter clothes at discount to clear its inventory. The
current quarter is one of a rare quarter to offer discounts, cashbacks and rewards all
together.
Competitors in rural witnessing similar trend
ƒ Competition from new entrants has been negligible as no new retailer have entered
this space in last 3 years.
ƒ The branded players operating in these regions such as V-mart and V-bazaar also
continue to struggle and are struggling to reach pre covid sales in most of their
stores.
ƒ Zudio, on the other hand is well placed as it caters to upper end of value retail
segment with fewer stores in tier 2 and zero presence in 3 towns. It is doing many
right things which is helping it grow. Decluttering the business and its focus on few Akhil Parekh
fast moving merchandise is their key strategy getting them 80% of sales. Research Analyst, Midcap
ƒ The trend of penetration from unorganized to organized is expected to commence +91-22--42159265
Retail

akhil.parekh@centrum.co.in
once the rural economy and consumption is back in shape. If situation worsens,
further fallouts can be expected in unorganized space.
ƒ Over 1bn people are yet to enter the value consumption market. Over 0.8bn people
still rely on free grains distributed by government making it a highly underpenetrated
Kevin Shah
market with great scope for future growth. This will help every retailer to co-exist Research Associate, Midcap
and take a share of the market opportunity. +91-22-4215 9000
kevin.shah@centrum.co.in

Please see Disclaimer for analyst certifications and all other important disclosures. 13
 Rural Pulse 2023 Update

Institutional Research
India I Footwear
29 March, 2023

Rural Pulse: Campus Activewear NIFTY 50: 17,081

Early signs of demand slowdown BSE Sensex: 57,960

We hosted a distributor for Campus Activewear operating in Kanpur region. The S & P BSE Midcap Vs S&P BSE Consumer Discretionary
distributor has been associated with the company since the last 6-7 years. He caters to 124
all the product segment (Rs899-3,600). Following are the key takeaways from the call. S&P BSE Midcap
114
Demand slowdown and increasing concentration in the market
104
ƒ There is some slowdown in the demand and shortage of cash in the market. The
94
bigger trend though is of concentration as bigger players and bigger dealers are S&P BSE CONSUMER DISCRETIONARY

taking major chunk of the market. 84

Mar-22 May-22 Jul-22 Sep-22 Nov-2 2 Jan-23 Mar-23
ƒ Over 50% of the sales continue to be contributed by the mid-range segment of Source: Bloomberg
Rs1,000-2,000. Retailers are facing difficulty in selling low end products (below
Rs1,000). As a result, contribution from lower range products is decreasing YoY
while contribution of premium (above Rs2,000) products is increasing.
ƒ The distributor touched his FY22 sales level in Jan’23 and has currently grown 25%
YTD. 4QFY23 is going as per expectation for him.
Rollback of price hikes
ƒ Campus took a price hike to the extent of Rs100-200 however, they have now
rolled back this hike completely for more than 50% of its articles to counter the
demand slowdown. Most of the peers to have rolled back the price hikes.
Healthy competition in the market
ƒ Sparx and Abros are the key competitors for Campus in the branded space. They
are priced lower than Campus. Abros is priced 30-40% lower compared to Campus.
Sparx is also getting positive feedback lately for its new SKUs.
ƒ The products introduced by Bata in the sneakers space (Power brand) are mainly
confined to their own showroom (COCO stores). Newly launched sneakers are not
sold through MBO channel.
ƒ Bata is witnessing a healthy growth in the formal and school shoes category in MBO
channel. Bata has adopted an aggressive approach by increasing the speed of
introducing new SKUs (new SKUs in last 1 year higher than those introduced in last
5-7 years), bringing new styles, aggressive pricing for school shoes, change in brand
ambassador and higher marketing spends, rise in fulfilment and integration with
dealer’s warehouse.
ƒ The open footwear category is highly competitive and is dominated by Sparx.
Campus entered this space two year ago however, couldn’t gain much traction.
Rising e-commerce operations a threat for other channels
ƒ E-commerce platforms like AJIO are undercutting on prices and selling at lower
prices. The sharp rise in e-commerce channel contribution for Campus can be seen
as a threat especially for distributors. The management has indicated aggressive
focus on its D2C channel (Ecom + EBOs).
ƒ The overlap of merchandise between online and offline has significantly reduced
now which used to be high earlier. AJIO is the main buyer for Campus in the online
space while Udaan is not very significant.
Other key pointers
Akhil Parekh
ƒ Ease in selling the products of Campus brand and realising payments is a key Research Analyst, Midcap
+91-22--42159265
incentive for distributors to stick with the brand. Hence, turnover compensates for
Footwear

akhil.parekh@centrum.co.in
the low margins. They also get additional benefits for being an exclusive dealer for
Campus.
ƒ Campus provides a credit period of 10-15 days to the distributors.
Kevin Shah
Research Associate, Midcap
+91-22-4215 9000
kevin.shah@centrum.co.in

Please see Disclaimer for analyst certifications and all other important disclosures. 14
 Rural Pulse 2023 Update

Institutional Research
India I Chemicals
29 March 2023

Rural Pulse: Fertiliser dealer NIFTY 50: 17,081

BSE Sensex: 57,960
Prices softening, focus on new age technologies
We hosted fertilizer and agrochemical dealer for Rural Pulse Conference. Discussions largely
revolved around 1) Surge in fertilizer prices during COVID period followed by softening, Nifty 50 vs NSE Midcap
while some downfall being prolonged due to Russia-Ukraine war 2) Marquee technological 120
upgradation– Adoption of Nanotechnology, Drone services, Bio products and 3) Current NSE Midcap
110
Rabi situation impact due to non-seasonal rains and Kharif outlook.
100
Indian Fertiliser industry past 5-year perspective: NIFTY 50
ƒ Indian demand supply scenario was balanced between 2017 to 2019. However, this 90

situation changed drastically during Covid period which created lack of supply due to 80
Mar-22 Jun-22 Sep-22 Dec-22 Mar-23
supply chain unavailability.
ƒ Prices of key fertilisers like DAP, phosphoric acid, Urea etc. surged ~2-3x between FY2020
Source: Bloomberg

to FY2022 creating unrest.

ƒ Prior to Covid, the Central Government fertilizer subsidy which was around Rs700bn p.a.
surged to Rs4,500bn for the period FY20-22 (~3.5x rise).
ƒ Currently the Russia Ukraine war has also impacted the supply of potash globally leading
to surge in fertilizer prices.
ƒ At elevated prices of fertilisers, consumption by farmers remained muted and therefore
impacted yields.
ƒ Except MOP all key fertilizers have witnessed price softening and this trend is likely to
continue further. At normalized fertilizer prices, farmer’s fertiliser consumption is
expected to increase thereby leading to volume growth.
Adoption of new technology - Drone, Nanotechnology, Bio Products:
ƒ Indian Government’s clear focus towards enhancing farmer’s income and technological
upgradation in the agriculture sector has offered Indian farmers an opportunity to adopt
new age technologies to maximize their yield.
Shift to Nanotechnology:
ƒ IFFCO has launched its patented technology of Nano-Urea and Nano-DAP technology with
a goal to replace conventional Urea and DAP.
ƒ Urea, a heavily subsidized product, having cost of production ~Rs1,500 per bag (45kg) is
being made available to farmers at ~Rs270 per bag.
ƒ Nano urea (500 ml bottle) costing ~Rs235 per bottle is a sufficient replacement for a 45kg
conventional urea bag (45kg)
ƒ Conventional urea being applied on the soil has lower efficacy as compared to nano-urea
which is directly sprayed on plants and absorbed through the leaves.
ƒ Higher usage of conventional urea has also affected soil conditions deeply which poses
risk of ground water contamination.
ƒ Despite huge benefits to farmers and government the adoption of nanotechnology is
relatively slow due to lower awareness, education and conventional farmer mindset of
losing crop due to adoption of new technology.
ƒ Although the adoption is slow, exponential growth is expected in next couple of years
backed by higher farmer education and increased government initiatives to promote
nano-technology.
Focus on micro-nutrients:
ƒ Higher utilization of synthetic pesticides and fertilizer have eroded critical micronutrients
from the soil over the course of time. A huge potential market for micronutrients exists
currently and is expected to grow exponentially. Rohit Nagraj
Research Analyst, Chemicals
Drone technology:
Chemicals

+91-022-4215 9645
ƒ Various government initiatives have been undertaken to educate farmers regarding rohit.nagraj@centrum.co.in
scalability benefits which new age drones offer. New age drones have capabilities to spray
on an average 50-60 acres of land in a day.
Season Outlook:
ƒ Non seasonal rains have impacted the current rabi season whereby yields in some areas Jay Bharat Trivedi
are expected to be impacted as high as 60%. Wheat being a major rabi crop shall be the Research Associate, Chemicals
+91-022-4215 9201
most impacted and the prices of the same are expected to remain high. Although rabi jay.trivedi@centrum.co.in
seems to have been impacted by Kharif is expected to be good.
Please see Disclaimer for analyst certifications and all other important disclosures. 15
 ZƵƌĂůWƵůƐĞϮϬϮϯhƉĚĂƚĞ

/ŶƐƚŝƚƵƚŝŽŶĂůZĞƐĞĂƌĐŚ

/ŶĚŝĂ/&^/

ϮϵDĂƌĐŚϮϬϮϯ

ZƵƌĂůWƵůƐĞ͗ƌŵĂŶ&ŝŶĂŶĐŝĂů;D&/Ϳ E/&dzϱϬ͗ϭϳ͕Ϭϴϭ


hŶĚĞƌƐƚĂŶĚŝŶŐƚŚĞĚŝĐŚŽƚŽŵLJŝŶƌƵƌĂůĞĐŽŶŽŵLJ ^^ĞŶƐĞdž͗ϱϳ͕ϵϲϬ


tĞ ŚŽƐƚĞĚ Dƌ͘ ĂůŽŬ WĂƚĞů ʹ :ŽŝŶƚ DĂŶĂŐŝŶŐ ŝƌĞĐƚŽƌ ĂŶĚ WƌŽŵŽƚĞƌ͕ ĨƌŽŵ ƌŵĂŶ


EŝĨƚLJϱϬǀƐĂŶŬEŝĨƚLJ


&ŝŶĂŶĐŝĂů ^ĞƌǀŝĐĞƐ >ŝŵŝƚĞĚ ŝŶ ŽƵƌ ǀŝƌƚƵĂů ĐŽŶĨĞƌĞŶĐĞ ŽŶ ZƵƌĂů WƵůƐĞ͘ dŚĞ ǁŚŽůĞ 
ϮϭϬ
ĚŝƐĐƵƐƐŝŽŶ ǁĂƐ ƉƌŝŵĂƌŝůLJ ĂƌŽƵŶĚ ƚŚƌĞĞ ŬĞLJ ƉŽŝŶƚƐ ϭͿ dŽ ƵŶĚĞƌƐƚĂŶĚ ƚŚĞ ĚŝĐŚŽƚŽŵLJ 




E/&dzϱϬ
ϭϳϱ


ǁŚĞƌĞŵŽƐƚŽĨƚŚĞĐŽŶƐƵŵĞƌĐŽŵƉĂŶŝĞƐƐĞĞŵƚŽďĞǁŝƚŶĞƐƐŝŶŐƉŽŽƌƌƵƌĂůĚĞŵĂŶĚLJĞƚ











ŵŽƐƚDŝĐƌŽĨŝŶĂŶĐĞĐŽŵƉĂŶŝĞƐĂƌĞƌĞƉŽƌƚŝŶŐŐŽŽĚĐŽůůĞĐƚŝŽŶĞĨĨŝĐŝĞŶĐŝĞƐĂŶĚĞdžƉĞĐƚŝŶŐ ϭϰϬ







ŐŽŽĚŐƌŽǁƚŚ͖ϮͿtŚĂƚŝƐƚŚĞĐůŝĞŶƚůĞǀĞƌĂŐĞƉŽƐŝƚŝŽŶŝŶŐĞŶĞƌĂůĨŽƌ/ŶĚƵƐƚƌLJĂŶĚƚŚĞ ϭϬϱ EŝĨƚLJ E<

ůŝŬĞůLJŝŵƉĂĐƚŽĨŝŶĨůĂƚŝŽŶŽŶĐƌĞĚŝƚĐŽƐƚŐŽŝŶŐĂŚĞĂĚ͖ĂŶĚϯͿĂŶLJĞĂƌůLJƐŝŐŶƐŽĨĐƌĂĐŬƐŝŶ ϳϬ
ƉĞƌƐŽŶĂůͬD^DƐƐĞŐŵĞŶƚůĞŶĚŝŶŐďƵƐŝŶĞƐƐ͘ ϯϱ

ƒ ƐƉĞƌŚŝŵ͕ƚŚĞLJŚĂǀĞŶŽƚĨĂĐĞĚƐŽŵƵĐŚŽĨĂĚŝĨĨŝĐƵůƚLJŽƌƐŽŵƵĐŚŽĨĂĨĞĞĚďĂĐŬ
DĂƌͲϭϴ DĂƌͲϭϵ DĂƌͲϮϬ DĂƌͲϮϭ DĂƌͲϮϮ DĂƌͲϮϯ

ĨƌŽŵƚŚĞŝƌŽƉĞƌĂƚŝŽŶƐŽƌĨŝĞůĚƐƚŚĂƚƉĞŽƉůĞĂƌĞĨĂĐŝŶŐĂŶLJůĂƌŐĞͲƐĐĂůĞĚŝĨĨŝĐƵůƚŝĞƐ ^ŽƵƌĐĞ͗ůŽŽŵďĞƌŐ

ĂƐĨĂƌĂƐĞĐŽŶŽŵŝĐƐĂƌĞĐŽŶĐĞƌŶĞĚŽƌǁĞĂŬƌƵƌĂůĚĞŵĂŶĚŽƌƐŝŵŝůĂƌƚƌĞŶĚƐĂƌĞ
ĐŽŶĐĞƌŶĞĚ͘
ƒ ,Ğ ĂůƐŽ ƉŽŝŶƚĞĚ ŽƵƚ ƚŚĂƚ ŝŶ ƚŚĞ ƉĂƐƚ ĂƐ ǁĞůů ƚŚĞLJ ŚĂǀĞ ǁŝƚŶĞƐƐĞĚ ƐƵĐŚ ƚƌĞŶĚƐ
ǁŚĞƌĞ ĐŽŶƐƵŵĞƌ ĨĂĐŝŶŐ ƉƌŽĚƵĐƚƐ ;ŝŶĐůƵĚŝŶŐ ĐŽŶƐƵŵĞƌ ĚƵƌĂďůĞ ůŽĂŶƐͿ ĨĂĐŝŶŐ Ă
ƐůŽǁĚŽǁŶĂŶĚŶŽƚŝŵƉĂĐƚŝŶŐƚŚĞƉĞƌĨŽƌŵĂŶĐĞŽĨD&/ŝŶĚƵƐƚƌLJƚŽĂƐŝŵŝůĂƌĞdžƚĞŶƚ͘
ƒ ,ŽǁĞǀĞƌ͕ƚŚĞƐůŽǁĚŽǁŶĨĂĐĞĚďLJƚŚĞĐŽŶƐƵŵĞƌĐŽŵƉĂŶŝĞƐŵĂLJďĞŝƐƚŚĞůĞĂĚ
ŝŶĚŝĐĂƚŽƌĂŶĚƚŚĞLJĂƌĞďĞŝŶŐǀĞƌLJǀŝŐŝůĂŶƚŽĨƚŚĞƐĂŵĞĂŶĚĞŶƐƵƌŝŶŐƚŚĂƚŝƚĚŽĞƐ
ŶŽƚƉĞƌĐŽůĂƚĞŝŶƚŽŚŝŐŚĞƌĐƌĞĚŝƚĐŽƐƚƐŐŽŝŶŐĂŚĞĂĚ͘
ƒ ŽŵƉĂŶLJŚĂƐǁŝƚŶĞƐƐĞĚ͕ƐŝŶĐĞƚŚĞD&/ƌĞŐƵůĂƚŝŽŶƐŚĂƐďĞĞŶĂŵĞŶĚĞĚůĂƐƚLJĞĂƌ͕
ŵŽƌĞŝŶĚŝǀŝĚƵĂůďĂƐĞĚƉƌŽĚƵĐƚƐŐĞƚƚŝŶŐŝŶƚƌŽĚƵĐĞĚŝŶŵĂƌŬĞƚƐŝŶƐƚĞĂĚŽĨŐƌŽƵƉ
ůŽĂŶƐ͘
ƒ EŽƚĂďůLJ͕ ƚŚĞ ĐŽŵƉĂŶLJ ŚĂƐ ǁŝƚŶĞƐƐĞĚ ŝŶĐƌĞĂƐĞ ŝŶ ƌĞũĞĐƚŝŽŶ ƌĂƚĞƐ ;ĐƵƌƌĞŶƚůLJ Ăƚ
нϱϬйǀƐ͘ƚŚĞƉƌĞŽǀŝĚͲϭϵƌĞũĞĐƚŝŽŶƌĂƚĞƐĂƚΕϯϱйͿůĂƌŐĞůLJŽŶƚŚĞďĂƐŝƐŽĨĐƌĞĚŝƚ
ďƵƌĞĂƵĚĂƚĂ;ϭϱͲϮϬйͿ͘
ƒ tŝƚŚ&K/ZŝŶƉůĂĐĞĐůŝĞŶƚůĞǀĞƌĂŐĞƉŽƐŝƚŝŽŶŝƐƚĂŬĞŶĐĂƌĞŽĨĨĂŶĚĞǀĞŶƚŚŽƵŐŚƚŚĞ
ƌĞĐĞŶƚŝŶƚĞƌĞƐƚƌĂƚĞƐŚŝŬĞƐŚĂǀĞŝŵƉĂĐƚĞĚƚŚĞĐĂƐŚĨůŽǁƐŽĨĐůŝĞŶƚƐƚŚĞLJĂƌĞŶŽƚ
ǁŝƚŶĞƐƐŝŶŐĂŶLJĐƌĂĐŬƐŝŶƵŶƐĞĐƵƌĞĚůŽĂŶƉŽƌƚĨŽůŝŽ͘
ƒ Ɛ ƉĞƌ Śŝŵ ƚŚĞƌĞ ŝƐ ĚŝƐƉĂƌŝƚLJ ;ŵĂLJ ďĞ ŚƵŐĞͿ ŝŶ ƚŚĞ ŝŶĚƵƐƚƌLJ ǁŝƚŚ ƌĞƐƉĞĐƚ ƚŽ
ĂƐƐĞƐƐŝŶŐ ĐƵƐƚŽŵĞƌ ŝŶĐŽŵĞ ŐŝǀĞŶ ƚŚĞ ĐƵƐƚŽŵĞƌ ƉƌŽĨŝůĞ ĂŶĚ ƚŚĞŝƌ ƉƌĞƐĞŶĐĞ ŝŶ
ŝŶĨŽƌŵĂůƐĞŐŵĞŶƚ͘ƵƐƚŽŵĞƌƐĂƌĞǀĞƌLJƐĞŶƐŝƚŝǀĞǁŝƚŚƌĞƐƉĞĐƚƚŽƚŝĐŬĞƚƐŝnjĞƐƌĂƚŚĞƌ
ƚŚĂŶŝŶƚĞƌĞƐƚƌĂƚĞƐ͘
ƒ ,ŽǁĞǀĞƌ͕ ƚŚĞ ŽǀĞƌĂůů ĚĂƚĂďĂƐĞͬŵĞƚŚŽĚŽůŽŐLJ ŝƐ ďĞŝŶŐ ĐŽůůĞĐƚĞĚ ďLJ Z/ ǁŝƚŚ
ƌĞƐƉĞĐƚ ƚŽ ĂƐƐĞƐƐŵĞŶƚ ŽĨ ŝŶĐŽŵĞ ŽĨ ĐƵƐƚŽŵĞƌ ďLJ ŝŶĚƵƐƚƌLJ ƉůĂLJĞƌƐ ƚŽ ĂƐĐĞƌƚĂŝŶ
ŽƵƚůŝĞƌ ƉůĂLJĞƌƐ ǁŚŽ ĂƌĞ ĐŽŶƐŝƐƚĞŶƚůLJ ĞǀĂůƵĂƚŝŶŐ ƚŚĞ ĐƵƐƚŽŵĞƌƐ ŚŝŐŚĞƌ ƚŚĂŶ
ĞǀĞƌLJďŽĚLJĞůƐĞŝŶƚŚĞŝŶĚƵƐƚƌLJ͘
ƒ ƐƚƵĚLJǁĂƐĚŽŶĞďLJŽŶƐŽƌƚŝƵŵŽĨ/ŶĚŝĂŶƐƐŽĐŝĂƚŝŽŶƐǁŚŝĐŚƉŽŝŶƚĞĚŽƵƚƚŚĂƚ
ΕϳϱйŽĨD^DƐĂƌĞƐĞĞŝŶŐƚŚĞŝƌďƵƐŝŶĞƐƐƌĞŵĂŝŶŝŶŐĞŝƚŚĞƌƐƚĂŐŶĂŶƚ͕ĚĞĐƌĞĂƐĞĚ
ŽƌǁŽƵŶĚƵƉŝŶƚŚĞƉĂƐƚĨŝǀĞLJĞĂƌƐ͘,ŽǁĞǀĞƌ͕ƌŵĂŶ͛ƐĞdžƉĞƌŝĞŶĐĞŚĂƐďĞĞŶŐŽŽĚ
;ƋƵŝƚĞŽƉƉŽƐŝƚĞƚŽƚŚĞƐƚƵĚLJͿĂŶĚŐŝǀĞŶƚŚĞŝƌƐŵĂůůĞdžƉŽƐƵƌĞĂŶĚƚŝĐŬĞƚƐŝnjĞŽĨ
ůŽĂŶƐƚŚĞLJŚĂǀĞŶŽƚǁŝƚŶĞƐƐĞĚĂŶLJƐƚƌĞƐƐŝŶƚŚŝƐƉĂƌƚŽĨďƵƐŝŶĞƐƐ͘
ƒ dǁŽǁŚĞĞůĞƌƐĞŐŵĞŶƚŚĂƐŶŽƚƉŝĐŬĞĚƵƉĨŽƌƚŚĞŵĂƐŽĨŶŽǁĨŽƌƚŚĞĐŽŵƉĂŶLJ͘
dŚĞ ƉĞƌĨŽƌŵĂŶĐĞ ŚĂƐ ďĞĞŶ ƋƵŝƚĞ ĞƌƌĂƚŝĐ ǁŝƚŚ ŵŽŶƚŚůLJ ƐƉƵƌƚƐ ĨŽůůŽǁĞĚ ďLJ
ƐůŽǁĚŽǁŶƐ͘

ƒ tŝƚŚƌĞƐƉĞĐƚƚŽĐƌĂĐŬƐŝŶƵŶƐĞĐƵƌĞĚůŽĂŶƉŽƌƚĨŽůŝŽ͕ĂƐƉĞƌƚŚĞĐŽŵƉĂŶLJDĂĚŚLJĂ
WƌĂĚĞƐŚĂŶĚDĂŚĂƌĂƐŚƚƌĂŚĂƐǁŝƚŶĞƐƐĞĚƐůŽǁĞƌƌĞĐŽǀĞƌLJĂƐĐŽŵƉĂƌĞĚƚŽŽƚŚĞƌ
ƉĂƌƚƐŽĨƚŚĞĐŽƵŶƚƌLJ͘
&^/

ƒ ,ĞŝƐĞdžƉĞĐƚŝŶŐƚŚĞĐŽŵƉĂŶLJƚŽŵĂŝŶƚĂŝŶƚŚĞŚŝƐƚŽƌŝĐĂů'ZƌƵŶƌĂƚĞ;ΕϰϬйͲ
ĐŽŶƚƌŝďƵƚĞĚ ďLJ Ϯϱй ŝŶĐƌĞĂƐĞ ŝŶ ůŽĂŶ ĂĐĐŽƵŶƚƐ ĂŶĚ ϭϱй ŝŶĐƌĞĂƐĞ ŝŶ ůŽĂŶ ƚŝĐŬĞƚ
ƐŝnjĞƐ͕ ǁŚŝĐŚ ĂƌĞ ďƌŽĂĚůLJ ŝŶ ůŝŶĞ ǁŝƚŚ ŝŶĨůĂƚŝŽŶͿ ĂŶĚ ĂƐ ƉĞƌ Śŝŵ ƚŚĞ ŝŶĚƵƐƚƌLJ ŝƐ ^ŚĂŝůĞƐŚ<ĂŶĂŶŝ
ĞdžƉĞĐƚĞĚƚŽŐƌŽǁŝŶϮϱͲϯϬйƌĂŶŐĞŽǀĞƌŵĞĚŝƵŵƚĞƌŵǁŚŝĐŚǁŽƵůĚƉƌŽďĂďůLJďĞ ZĞƐĞĂƌĐŚŶĂůLJƐƚ͕&^/
нϵϭͲϬϮϮͲϰϮϭϱϵϬϬϭ
ŽŶƚŚĞďĂĐŬŽĨĞŶƚĞƌŝŶŐŶĞǁĞƌŐĞŽŐƌĂƉŚŝĞƐ͘
ƐŚĂůŝĞƐŚ͘ŬĂŶĂŶŝΛĐĞŶƚƌƵŵ͘ĐŽ͘ŝŶ


WůĞĂƐĞƐĞĞƉƉĞŶĚŝdžĨŽƌĂŶĂůLJƐƚĐĞƌƚŝĨŝĐĂƚŝŽŶƐĂŶĚĂůůŽƚŚĞƌŝŵƉŽƌƚĂŶƚĚŝƐĐůŽƐƵƌĞƐ͘ϭϲ
 ZƵƌĂůWƵůƐĞϮϬϮϯhƉĚĂƚĞ

/ŶƐƚŝƚƵƚŝŽŶĂůZĞƐĞĂƌĐŚ

/ŶĚŝĂ/ĂŶŬƐ

ϮϵDĂƌĐŚϮϬϮϯ

ZƵƌĂůWƵůƐĞ͗Őƌŝ͘ƌĞĚŝƚdžƉĞƌƚ 
E/&dzϱϬ͗ϭϳ͕Ϭϴϭ


ĂŶŬƐďĞƚƚĞƌƉůĂĐĞĚŝŶĐĂƐĞŽĨůEŝŶŽ 
^^ĞŶƐĞdž͗ϱϳ͕ϵϲϬ

ƚ ŽƵƌ ZƵƌĂů WƵůƐĞ ĐŽŶĨĞƌĞŶĐĞ͕ ǁĞ ŚŽƐƚĞĚ Dƌ͘ Z͘ ŵĂůŽƌƉĂǀĂŶĂƚŚĂŶ͕ ĞdžͲD Ăƚ  
EŝĨƚLJϱϬǀƐĂŶŬEŝĨƚLJ

EZ͘,ĞŝƐĐƵƌƌĞŶƚůLJŽŶƚŚĞŽĂƌĚŽĨEĂƚŝŽŶĂůŽŵŵŽĚŝƚLJĞƌŝǀĂƚŝǀĞdžĐŚĂŶŐĞ ϮϭϬ
E/&dzϱϬ
;EyͿ͕^DĂŶŬ;/ŶĚŝĂͿ>ƚĚ͕͘&ŝŶďůĞŶĚĞǀĞůŽƉŵĞŶƚŽŶƐƵůƚĂŶƚƐWƌŝǀĂƚĞ>ŝŵŝƚĞĚ͘ ϭϳϱ
,Ğ ŝƐ ĂůƐŽ ĂŶ džƉĞƌƚ DĞŵďĞƌ ŽĨ͕ ŽŵŵŽĚŝƚLJ ĞƌŝǀĂƚŝǀĞ ĚǀŝƐŽƌLJ ŽŵŵŝƚƚĞĞ͕
ϭϰϬ
^ĞĐƵƌŝƚŝĞƐdžĐŚĂŶŐĞŽĂƌĚŽĨ/ŶĚŝĂ;^/Ϳ͘
ϭϬϱ EŝĨƚLJ E<
&ŽůůŽǁŝŶŐĂƌĞƚŚĞŬĞLJƚĂŬĞĂǁĂLJƐ͗Ͳ
ϳϬ
ĂŶŬƐ ĨŽĐƵƐƐĞĚ ŽŶ ĐƌŽƉ ůŽĂŶƐ ǀƐ ŝŶǀĞƐƚŵĞŶƚ ůŽĂŶƐ͗ Őƌŝ ĐƌĞĚŝƚ ĐŽŵƉƌŝƐĞƐ ŽĨ ůŽĂŶƐ
ƚŽǁĂƌĚƐĐƌŽƉƉŝŶŐ͕>ŝǀĞƐƚŽĐŬ͕&ŽƌĞƐƚƌLJΘ&ŝƐŚĞƌŝĞƐ͘WĞŶĞƚƌĂƚŝŽŶŽĨƌƵƌĂůĐƌĞĚŝƚŝƐĂƚϳϰй͘ ϯϱ
DĂƌͲϭϴ DĂƌͲϭϵ DĂƌͲϮϬ DĂƌͲϮϭ DĂƌͲϮϮ DĂƌͲϮϯ
ϳϱйŽĨƚŚŝƐ ŝƐƚŽǁĂƌĚƐĐƌŽƉůŽĂŶƐƉƌŽǀŝĚĞĚďLJŵĂŝŶͲƐƚƌĞĂŵ ďĂŶŬƐǁŚŝůĞƚŚĞƐŚĂƌĞŽĨ 
^ŽƵƌĐĞ͗ůŽŽŵďĞƌŐ
ŝŶǀĞƐƚŵĞŶƚůŽĂŶƐŚĂƐŐŽŶĞĚŽǁŶƚŽϮϱйĨƌŽŵϱϬйĞĂƌůŝĞƌ͘ ĂŶŬƐĂƌĞƉƌŽǀŝĚŝŶŐƌŽƉ
ůŽĂŶƐƚŚƌŽƵŐŚ<ŝƐĂŶƌĞĚŝƚĂƌĚƐ;<Ϳ͘/ŶƚĞƌĞƐƚƌĂƚĞŽŶĐƌŽƉůŽĂŶƐŚĂƐďĞĞŶĨŝdžĞĚĂƚϵй 
ƐŝŶĐĞ ϮϬϬϳ͘ ĂŶŬƐ ĂƌĞ ŵŽƌĞ ĨŽĐƵƐƐĞĚ ŽŶ ƚŚŝƐ ƐĞŐŵĞŶƚ ĂƐ ƚŚĞLJ ĂƌĞ ŝŶĐĞŶƚŝǀŝƐĞĚ ;Ϯй
ƌĞŝŵďƵƌƐĞĚͿďLJŐŽǀĞƌŶŵĞŶƚ͘/ŶĐĂƐĞŽĨƉƌŽŵƉƚƌĞƉĂLJŵĞŶƚƐ͕ĂŶŽƚŚĞƌϯйƐƵďǀĞŶƚŝŽŶŝƐ
ƉƌŽǀŝĚĞĚƌĞƐƵůƚŝŶŐŝŶĞĨĨĞĐƚŝǀĞŝŶƚĞƌĞƐƚƌĂƚĞŽĨϰй͘ĂŶŬƐĂƌĞƉƌŽǀŝĚŝŶŐĐƌŽƉůŽĂŶƐŵŽƐƚůLJ
ƚŚƌŽƵŐŚ<ŝƐĂŶƌĞĚŝƚĂƌĚƐǁŚŝĐŚĂƌĞŝŶƐƵƌĞĚ͘/ŶĐĂƐĞŽĨĐƌŽƉůŽƐƐĞƐ͕ƚŚĞďĂŶŬĨŝƌƐƚƐĞƚƚůĞƐ
ŝƚƐĚƵĞƐĂŐĂŝŶƐƚƚŚĞŝŶƐƵƌĂŶĐĞĐůĂŝŵĂŶĚƚŚĞďĂůĂŶĐĞĂŵŽƵŶƚŝƐƉĂƐƐĞĚŽŶƚŽƚŚĞĨĂƌŵĞƌ͘
/ŶĐĂƐĞƚŚĞŝŶƐƵƌĂŶĐĞŽŶůLJĐŽǀĞƌƐϳϬйŽĨƚŚĞůŽĂŶ͕ƚŚĞƌĞŵĂŝŶŝŶŐϯϬйŝƐĐŽŶǀĞƌƚĞĚŝŶƚŽ
ϱLJĞĂƌƚĞƌŵůŽĂŶ͘dŚĞŝŶƐƵƌĂŶĐĞĐŽǀĞƌŝƐůŽƐƚŵŽƐƚůLJŝŶĐĂƐĞŽĨƉƌŽĐĞĚƵƌĂů ĚĞůĂLJƐďLJ
ďĂŶŬƐ͘/ŶĐƌŽƉůŽĂŶƐ;ŶŽŶͲ<Ϳ͕ŝŶƐƵƌĂŶĐĞŝƐŝŶƚŚĞƌĂŶŐĞŽĨϮйƚŽϴй͘dŚĞƌĞĐŽƵůĚďĞ
ƵŶĚĞƌǁƌŝƚŝŶŐůĂƉƐĞƐŝŶĐƌŽƉůŽĂŶƐǁŚĞŶƚŚĞŝŶƐƵƌĂŶĐĞŝƐŶŽƚƚĂŬĞŶďLJĨĂƌŵĞƌĂŶĚŐŽĞƐ
ƵŶǀĞƌŝĨŝĞĚ͘ < ĐĂŶŶŽƚ ďĞ ŝƐƐƵĞĚ ďLJ E&Ɛ͕ ƌĞƐƵůƚŝŶŐ ŝŶ ĂƐƐĞƚ ƋƵĂůŝƚLJ ŝƐƐƵĞƐ ĚƵƌŝŶŐ
ĚƌŽƵŐŚƚƐͬĐLJĐůŽŶĞƐ͘,ŽǁĞǀĞƌ͕E&͛ƐĂŶĚD&/͛ƐǁĞƌĞŝŶĐůƵĚĞĚŝŶŐŽǀĞƌŶŵĞŶƚƐƵďƐŝĚLJ
ĚŝƐƉĞŶƐĂƚŝŽŶŝŶϮϬϭϱǁŚŝĐŚǁĂƐĞĂƌůŝĞƌůŝŵŝƚĞĚƚŽďĂŶŬƐ͘
E&Ɛ͕^&ƐΘZZƐďĞƚƚĞƌƉůĂĐĞĚƚŽƵŶĚĞƌƐƚĂŶĚĂŐƌŝͲĐƌĞĚŝƚ
>ĂƌŐĞƌďĂŶŬŝŶŐŝŶƐƚŝƚƵƚŝŽŶƐĨŽƵŶĚŝƚĚŝĨĨŝĐƵůƚƚŽĞƐƚĂďůŝƐŚĨŽŽƚŚŽůĚŝŶƌƵƌĂůĂƌĞĂƐĚƵĞƚŽ
ĞŵƉůŽLJĞĞƚƌĂŶƐĨĞƌƐĂŶĚŝŶĂďŝůŝƚLJƚŽƵŶĚĞƌƐƚĂŶĚůŽĐĂůŚŽƵƐĞŚŽůĚĐĂƐŚĨůŽǁƐ͘DĂŶLJďĂŶŬƐ
ƌĞƉŽƌƚĞĚ ůŽƐƐĞƐ ŝŶ ƌƵƌĂů ĨŝŶĂŶĐŝŶŐ ƐĞŐŵĞŶƚ ĂŶĚ ŚĞŶĐĞ ǁĞƌĞ ĂůůŽǁĞĚ ƚŽ ĐůŽƐĞ ƚŚĞŝƌ
ďƌĂŶĐŚĞƐĂŶĚĚŽďƵƐŝŶĞƐƐƚŚƌŽƵŐŚƵƐŝŶĞƐƐŽƌƌĞƐƉŽŶĚĞŶƚƐ͘E&Ɛ͕^&ƐĂŶĚZZƐĂƌĞ
ďĞƚƚĞƌ ƉůĂĐĞĚ ŝŶ ƵŶĚĞƌƐƚĂŶĚŝŶŐ ƌƵƌĂů ĐƵůƚƵƌĂů ĞƚŚŽƐ ĂŶĚ ďĞƚƚĞƌ ƉƌĞĚŝĐƚ ŚŽƵƐĞŚŽůĚ
ĐĂƐŚĨůŽǁƐ͘^ŝŶĐĞ͕ďĂŶŬƐǁĞƌĞƵŶĂďůĞƚŽŵĞĞƚĂŐƌŝͲĐƌĞĚŝƚĚĞŵĂŶĚ͕E'KƐǁĞƌĞƐƚĂƌƚĞĚ
ŝŶ ƌƵƌĂů ĂƌĞĂƐ͕ ǁŚŝĐŚ ůĂƚĞƌ ĐŽŶǀĞƌƚĞĚ ŝŶƚŽ E&Ɛ͕ ^&Ɛ ĂŶĚ ZZƐ͘ dŚĞƐĞ ŝŶƐƚŝƚƵƚŝŽŶƐ
ƉƌŽǀŝĚĞ ĐŽŶǀĞŶŝĞŶĐĞ ŝŶ ƚĞƌŵƐ ĂĐĐĞƐƐŝďŝůŝƚLJ ĂŶĚ ĨĂƐƚĞƌ dd͘ E&Ɛ ĂƌĞ ŶŽǁ ŵŽƌĞ
ĨŽĐƵƐƐĞĚŽŶŝŶĚƵƐƚƌŝĂůĐƌĞĚŝƚůŝŬĞϮtůŽĂŶƐ͕ƚƌĂĐƚŽƌůŽĂŶƐĂŶĚĐĂƌůŽĂŶƐ͘
KƚŚĞƌŬĞLJƉŽŝŶƚƐ
ϭͿ WƌŝŽƌŝƚLJ ƐĞĐƚŽƌ ůĞŶĚŝŶŐ ƌĞƋƵŝƌĞŵĞŶƚƐ Ɛƚŝůů ƵŶĨƵůĨŝůůĞĚ ďLJ ƉƌŝǀĂƚĞ ƐĞĐƚŽƌƐ ďĂŶŬ͘ ŐƌŝͲ
ĐƌĞĚŝƚĂĐĐŽƵƚƐĨŽƌϭϲйŽĨŽǀĞƌĂůůďĂŶŬĐƌĞĚŝƚĂŐĂŝŶƐƚĂƚĂƌŐĞƚŽĨϭϴй͖ϮͿ&ŝŶƚĞĐŚƐŝŶĂŐƌŝͲ
ĐƌĞĚŝƚ ĂƌĞ ůĂƌŐĞůLJ ƐĞƌǀŝĐŝŶŐ ƌĞƋƵŝƌĞŵĞŶƚƐ ŽĨ ďĂŶŬ EW ĐƵƐƚŽŵĞƌƐ͘ ,ŽǁĞǀĞƌ͕ ƌĂƚĞ ŽĨ
ŝŶƚĞƌĞƐƚǀĂƌLJŝŶƚŚĞƌĂŶŐĞŽĨϮϰйƚŽϯϲй
ŐƌŝĐƌĞĚŝƚʹŚĂůůĞŶŐĞƐĂŶĚŶĂďůĞƌƐ
ŚĂůůĞŶŐĞƐʹϭͿŐƌŝƚƌĂĚĞƐĞĐƚŽƌŝƐƌĞŐƵůĂƚĞĚƌŝŐŚƚĨƌŽŵƐĞĞĚ͕ĨĞƌƚŝůŝƐĞƌ͕ĐƌĞĚŝƚƚŽƐƚŽƌĂŐĞ͘
&ĂƌŵĞƌWƌŽĚƵĐĞƌKƌŐĂŶŝƐĂƚŝŽŶƐĨŽůůŽǁϮϳƚLJƉĞƐŽĨƌĞŐƵůĂƚŝŽŶĂŶĚĂƌĞǁŽƌŬŝŶŐŝŶƐŝůŽƐ͖
ϮͿ>ĞƐƐŚŝƌŝŶŐŽĨĂŐƌŝŐƌĂĚƵĂƚĞƐǁŚŽĐĂŶƵŶĚĞƌƐƚĂŶĚƚŚĞĐƌŽƉƉĂƚƚĞƌŶƐďĞƚƚĞƌ͖ϯͿ^/
ĂŶĚZ/ŶŽƚƌĞŐƵůĂƚŝŶŐĐŽůůĞĐƚŝǀĞůLJŽŶŵĂŶLJŽĐĐĂƐŝŽŶƐ
ŶĂďůĞƌƐ ʹ ϭͿ ^ŵŽŽƚŚ ĂĐĐĞƐƐ ŶĞĞĚĞĚ ĨŽƌ ĚĞǀĞůŽƉŵĞŶƚ ŽĨ ůĂŶĚ ůĞĂƐĞ ŵĂƌŬĞƚ͖ ϮͿ
/ŶĨŽƌŵĂƚŝŽŶŝŶƚĞŐƌĂƚŝŽŶĂŶĚŶŽƚŝĨŝĐĂƚŝŽŶƐŚŽƵůĚďĞĂǀĂŝůĂďůĞŝŶƐŚŽƌƚƚŝŵĞĨŽƌĨĂƌŵĞƌƐƚŽ
ŵĂŬĞďĞƚƚĞƌĚĞĐŝƐŝŽŶƐ͘
&^/

^ŽŶĂů'ĂŶĚŚŝ
ZĞƐĞĂƌĐŚŶĂůLJƐƚ͕&^/
нϵϭͲϮϮͲϰϮϭϱϵϵϯϳ
ƐŽŶĂů͘ŐĂŶĚŚŝΛĐĞŶƚƌƵŵ͘ĐŽ͘ŝŶ

WůĞĂƐĞƐĞĞŝƐĐůĂŝŵĞƌĨŽƌĂŶĂůLJƐƚĐĞƌƚŝĨŝĐĂƚŝŽŶƐĂŶĚĂůůŽƚŚĞƌŝŵƉŽƌƚĂŶƚĚŝƐĐůŽƐƵƌĞƐ͘ϭϳ
 

ZƵƌĂůWƵůƐĞϮϬϮϯhƉĚĂƚĞ 
ŝƐĐůĂŝŵĞƌ
ĞŶƚƌƵŵ ƌŽŬŝŶŐ >ŝŵŝƚĞĚ ;͞ĞŶƚƌƵŵ͟Ϳ ŝƐ Ă ĨƵůůƐĞƌǀŝĐĞ͕ ^ƚŽĐŬ ƌŽŬŝŶŐ ŽŵƉĂŶLJ ĂŶĚ Ă ŵĞŵďĞƌ ŽĨ dŚĞ ^ƚŽĐŬ džĐŚĂŶŐĞ͕ DƵŵďĂŝ ;^Ϳ ĂŶĚ EĂƚŝŽŶĂů ^ƚŽĐŬ
džĐŚĂŶŐĞŽĨ/ŶĚŝĂ>ƚĚ͘;E^Ϳ͘KƵƌŚŽůĚŝŶŐĐŽŵƉĂŶLJ͕ĞŶƚƌƵŵĂƉŝƚĂů>ƚĚ͕ŝƐĂŶŝŶǀĞƐƚŵĞŶƚďĂŶŬĞƌĂŶĚĂŶƵŶĚĞƌǁƌŝƚĞƌŽĨƐĞĐƵƌŝƚŝĞƐ͘ƐĂŐƌŽƵƉĞŶƚƌƵŵŚĂƐ
/ŶǀĞƐƚŵĞŶƚĂŶŬŝŶŐ͕ĚǀŝƐŽƌLJĂŶĚŽƚŚĞƌďƵƐŝŶĞƐƐƌĞůĂƚŝŽŶƐŚŝƉƐǁŝƚŚĂƐŝŐŶŝĨŝĐĂŶƚƉĞƌĐĞŶƚĂŐĞŽĨƚŚĞĐŽŵƉĂŶŝĞƐĐŽǀĞƌĞĚďLJŽƵƌZĞƐĞĂƌĐŚ'ƌŽƵƉ͘KƵƌƌĞƐĞĂƌĐŚ
ƉƌŽĨĞƐƐŝŽŶĂůƐƉƌŽǀŝĚĞŝŵƉŽƌƚĂŶƚŝŶƉƵƚƐŝŶƚŽƚŚĞ'ƌŽƵƉΖƐ/ŶǀĞƐƚŵĞŶƚĂŶŬŝŶŐĂŶĚŽƚŚĞƌďƵƐŝŶĞƐƐƐĞůĞĐƚŝŽŶƉƌŽĐĞƐƐĞƐ͘
ZĞĐŝƉŝĞŶƚƐŽĨƚŚŝƐƌĞƉŽƌƚƐŚŽƵůĚĂƐƐƵŵĞƚŚĂƚŽƵƌ'ƌŽƵƉŝƐƐĞĞŬŝŶŐŽƌŵĂLJƐĞĞŬŽƌǁŝůůƐĞĞŬ/ŶǀĞƐƚŵĞŶƚĂŶŬŝŶŐ͕ĂĚǀŝƐŽƌLJ͕ƉƌŽũĞĐƚĨŝŶĂŶĐĞŽƌŽƚŚĞƌďƵƐŝŶĞƐƐĞƐ
ĂŶĚ ŵĂLJ ƌĞĐĞŝǀĞ ĐŽŵŵŝƐƐŝŽŶ͕ ďƌŽŬĞƌĂŐĞ͕ ĨĞĞƐ Žƌ ŽƚŚĞƌ ĐŽŵƉĞŶƐĂƚŝŽŶ ĨƌŽŵ ƚŚĞ ĐŽŵƉĂŶLJ Žƌ ĐŽŵƉĂŶŝĞƐ ƚŚĂƚ ĂƌĞ ƚŚĞ ƐƵďũĞĐƚ ŽĨ ƚŚŝƐ ŵĂƚĞƌŝĂůͬƌĞƉŽƌƚ͘  KƵƌ
ŽŵƉĂŶLJĂŶĚ'ƌŽƵƉĐŽŵƉĂŶŝĞƐĂŶĚƚŚĞŝƌŽĨĨŝĐĞƌƐ͕ĚŝƌĞĐƚŽƌƐĂŶĚĞŵƉůŽLJĞĞƐ͕ŝŶĐůƵĚŝŶŐƚŚĞĂŶĂůLJƐƚƐĂŶĚŽƚŚĞƌƐŝŶǀŽůǀĞĚŝŶƚŚĞƉƌĞƉĂƌĂƚŝŽŶŽƌŝƐƐƵĂŶĐĞŽĨƚŚŝƐ
ŵĂƚĞƌŝĂůĂŶĚƚŚĞŝƌĚĞƉĞŶĚĂŶƚƐ͕ŵĂLJŽŶƚŚĞĚĂƚĞŽĨƚŚŝƐƌĞƉŽƌƚŽƌĨƌŽŵ͕ƚŝŵĞƚŽƚŝŵĞŚĂǀĞΗůŽŶŐΗŽƌΗƐŚŽƌƚΗƉŽƐŝƚŝŽŶƐŝŶ͕ĂĐƚĂƐƉƌŝŶĐŝƉĂůŝŶ͕ĂŶĚďƵLJŽƌƐĞůůƚŚĞ
ƐĞĐƵƌŝƚŝĞƐŽƌĚĞƌŝǀĂƚŝǀĞƐƚŚĞƌĞŽĨŽĨĐŽŵƉĂŶŝĞƐŵĞŶƚŝŽŶĞĚŚĞƌĞŝŶ͘ĞŶƚƌƵŵŽƌŝƚƐĂĨĨŝůŝĂƚĞƐĚŽŶŽƚŽǁŶϭйŽƌŵŽƌĞŝŶƚŚĞĞƋƵŝƚLJŽĨƚŚŝƐĐŽŵƉĂŶLJKƵƌƐĂůĞƐ
ƉĞŽƉůĞ͕ĚĞĂůĞƌƐ͕ƚƌĂĚĞƌƐĂŶĚŽƚŚĞƌƉƌŽĨĞƐƐŝŽŶĂůƐŵĂLJƉƌŽǀŝĚĞŽƌĂůŽƌǁƌŝƚƚĞŶŵĂƌŬĞƚĐŽŵŵĞŶƚĂƌLJŽƌƚƌĂĚŝŶŐƐƚƌĂƚĞŐŝĞƐƚŽŽƵƌĐůŝĞŶƚƐƚŚĂƚƌĞĨůĞĐƚŽƉŝŶŝŽŶƐƚŚĂƚ
ĂƌĞĐŽŶƚƌĂƌLJƚŽƚŚĞŽƉŝŶŝŽŶƐĞdžƉƌĞƐƐĞĚŚĞƌĞŝŶ͕ĂŶĚŽƵƌƉƌŽƉƌŝĞƚĂƌLJƚƌĂĚŝŶŐĂŶĚŝŶǀĞƐƚŝŶŐďƵƐŝŶĞƐƐĞƐŵĂLJŵĂŬĞŝŶǀĞƐƚŵĞŶƚĚĞĐŝƐŝŽŶƐƚŚĂƚĂƌĞŝŶĐŽŶƐŝƐƚĞŶƚǁŝƚŚ
ƚŚĞƌĞĐŽŵŵĞŶĚĂƚŝŽŶƐĞdžƉƌĞƐƐĞĚŚĞƌĞŝŶ͘tĞŵĂLJŚĂǀĞĞĂƌůŝĞƌŝƐƐƵĞĚŽƌŵĂLJŝƐƐƵĞŝŶĨƵƚƵƌĞƌĞƉŽƌƚƐŽŶƚŚĞĐŽŵƉĂŶŝĞƐĐŽǀĞƌĞĚŚĞƌĞŝŶǁŝƚŚƌĞĐŽŵŵĞŶĚĂƚŝŽŶƐͬ
ŝŶĨŽƌŵĂƚŝŽŶŝŶĐŽŶƐŝƐƚĞŶƚŽƌĚŝĨĨĞƌĞŶƚƚŚŽƐĞŵĂĚĞŝŶƚŚŝƐƌĞƉŽƌƚ͘/ŶƌĞǀŝĞǁŝŶŐƚŚŝƐĚŽĐƵŵĞŶƚ͕LJŽƵƐŚŽƵůĚďĞĂǁĂƌĞƚŚĂƚĂŶLJŽƌĂůůŽĨƚŚĞĨŽƌĞŐŽŝŶŐ͕ĂŵŽŶŐ
ŽƚŚĞƌƚŚŝŶŐƐ͕ŵĂLJŐŝǀĞƌŝƐĞƚŽŽƌƉŽƚĞŶƚŝĂůĐŽŶĨůŝĐƚƐŽĨŝŶƚĞƌĞƐƚ͘tĞĂŶĚŽƵƌ'ƌŽƵƉŵĂLJƌĞůLJŽŶŝŶĨŽƌŵĂƚŝŽŶďĂƌƌŝĞƌƐ͕ƐƵĐŚĂƐΗŚŝŶĞƐĞtĂůůƐΗƚŽĐŽŶƚƌŽůƚŚĞĨůŽǁ
ŽĨŝŶĨŽƌŵĂƚŝŽŶĐŽŶƚĂŝŶĞĚŝŶŽŶĞŽƌŵŽƌĞĂƌĞĂƐǁŝƚŚŝŶƵƐ͕ŽƌŽƚŚĞƌĂƌĞĂƐ͕ƵŶŝƚƐ͕ŐƌŽƵƉƐŽƌĂĨĨŝůŝĂƚĞƐŽĨĞŶƚƌƵŵ͘ĞŶƚƌƵŵŽƌŝƚƐĂĨĨŝůŝĂƚĞƐĚŽŶŽƚŵĂŬĞĂŵĂƌŬĞƚ
ŝŶƚŚĞƐĞĐƵƌŝƚLJŽĨƚŚĞĐŽŵƉĂŶLJĨŽƌǁŚŝĐŚƚŚŝƐƌĞƉŽƌƚŽƌĂŶLJƌĞƉŽƌƚǁĂƐǁƌŝƚƚĞŶ͘&ƵƌƚŚĞƌ͕ĞŶƚƌƵŵŽƌŝƚƐĂĨĨŝůŝĂƚĞƐĚŝĚŶŽƚŵĂŬĞĂŵĂƌŬĞƚŝŶƚŚĞƐƵďũĞĐƚĐŽŵƉĂŶLJ͛Ɛ
ƐĞĐƵƌŝƚŝĞƐĂƚƚŚĞƚŝŵĞƚŚĂƚƚŚĞƌĞƐĞĂƌĐŚƌĞƉŽƌƚǁĂƐƉƵďůŝƐŚĞĚ͘
dŚŝƐƌĞƉŽƌƚŝƐĨŽƌŝŶĨŽƌŵĂƚŝŽŶƉƵƌƉŽƐĞƐŽŶůLJĂŶĚƚŚŝƐĚŽĐƵŵĞŶƚͬŵĂƚĞƌŝĂůƐŚŽƵůĚŶŽƚďĞĐŽŶƐƚƌƵĞĚĂƐĂŶŽĨĨĞƌƚŽƐĞůůŽƌƚŚĞƐŽůŝĐŝƚĂƚŝŽŶŽĨĂŶŽĨĨĞƌƚŽďƵLJ͕
ƉƵƌĐŚĂƐĞŽƌƐƵďƐĐƌŝďĞƚŽĂŶLJƐĞĐƵƌŝƚŝĞƐ͕ĂŶĚŶĞŝƚŚĞƌƚŚŝƐĚŽĐƵŵĞŶƚŶŽƌĂŶLJƚŚŝŶŐĐŽŶƚĂŝŶĞĚŚĞƌĞŝŶƐŚĂůůĨŽƌŵƚŚĞďĂƐŝƐŽĨŽƌďĞƌĞůŝĞĚƵƉŽŶŝŶĐŽŶŶĞĐƚŝŽŶǁŝƚŚ
ĂŶLJĐŽŶƚƌĂĐƚŽƌĐŽŵŵŝƚŵĞŶƚǁŚĂƚƐŽĞǀĞƌ͘dŚŝƐĚŽĐƵŵĞŶƚĚŽĞƐŶŽƚƐŽůŝĐŝƚĂŶLJĂĐƚŝŽŶďĂƐĞĚŽŶƚŚĞŵĂƚĞƌŝĂůĐŽŶƚĂŝŶĞĚŚĞƌĞŝŶ͘/ƚŝƐĨŽƌƚŚĞŐĞŶĞƌĂůŝŶĨŽƌŵĂƚŝŽŶ
ŽĨƚŚĞĐůŝĞŶƚƐŽĨĞŶƚƌƵŵ͘dŚŽƵŐŚĚŝƐƐĞŵŝŶĂƚĞĚƚŽĐůŝĞŶƚƐƐŝŵƵůƚĂŶĞŽƵƐůLJ͕ŶŽƚĂůůĐůŝĞŶƚƐŵĂLJƌĞĐĞŝǀĞƚŚŝƐƌĞƉŽƌƚĂƚƚŚĞƐĂŵĞƚŝŵĞ͘ĞŶƚƌƵŵǁŝůůŶŽƚƚƌĞĂƚ
ƌĞĐŝƉŝĞŶƚƐĂƐĐůŝĞŶƚƐďLJǀŝƌƚƵĞŽĨƚŚĞŝƌƌĞĐĞŝǀŝŶŐƚŚŝƐƌĞƉŽƌƚ͘/ƚĚŽĞƐŶŽƚĐŽŶƐƚŝƚƵƚĞĂƉĞƌƐŽŶĂůƌĞĐŽŵŵĞŶĚĂƚŝŽŶŽƌƚĂŬĞŝŶƚŽĂĐĐŽƵŶƚƚŚĞƉĂƌƚŝĐƵůĂƌŝŶǀĞƐƚŵĞŶƚ
ŽďũĞĐƚŝǀĞƐ͕ĨŝŶĂŶĐŝĂůƐŝƚƵĂƚŝŽŶƐ͕ŽƌŶĞĞĚƐŽĨŝŶĚŝǀŝĚƵĂůĐůŝĞŶƚƐ͘^ŝŵŝůĂƌůLJ͕ƚŚŝƐĚŽĐƵŵĞŶƚĚŽĞƐŶŽƚŚĂǀĞƌĞŐĂƌĚƚŽƚŚĞƐƉĞĐŝĨŝĐŝŶǀĞƐƚŵĞŶƚŽďũĞĐƚŝǀĞƐ͕ĨŝŶĂŶĐŝĂů
ƐŝƚƵĂƚŝŽŶͬĐŝƌĐƵŵƐƚĂŶĐĞƐĂŶĚƚŚĞƉĂƌƚŝĐƵůĂƌŶĞĞĚƐŽĨĂŶLJƐƉĞĐŝĨŝĐƉĞƌƐŽŶǁŚŽŵĂLJƌĞĐĞŝǀĞƚŚŝƐĚŽĐƵŵĞŶƚ͘dŚĞƐĞĐƵƌŝƚŝĞƐĚŝƐĐƵƐƐĞĚŝŶƚŚŝƐƌĞƉŽƌƚŵĂLJŶŽƚďĞ
ƐƵŝƚĂďůĞĨŽƌĂůůŝŶǀĞƐƚŽƌƐ͘dŚĞƐĞĐƵƌŝƚŝĞƐĚĞƐĐƌŝďĞĚŚĞƌĞŝŶŵĂLJŶŽƚďĞĞůŝŐŝďůĞĨŽƌƐĂůĞŝŶĂůůũƵƌŝƐĚŝĐƚŝŽŶƐŽƌƚŽĂůůĐĂƚĞŐŽƌŝĞƐŽĨŝŶǀĞƐƚŽƌƐ͘dŚĞĐŽƵŶƚƌŝĞƐŝŶǁŚŝĐŚ
ƚŚĞ ĐŽŵƉĂŶŝĞƐ ŵĞŶƚŝŽŶĞĚ ŝŶ ƚŚŝƐ ƌĞƉŽƌƚ ĂƌĞ ŽƌŐĂŶŝnjĞĚ ŵĂLJ ŚĂǀĞ ƌĞƐƚƌŝĐƚŝŽŶƐ ŽŶ ŝŶǀĞƐƚŵĞŶƚƐ͕ ǀŽƚŝŶŐ ƌŝŐŚƚƐ Žƌ ĚĞĂůŝŶŐƐ ŝŶ ƐĞĐƵƌŝƚŝĞƐ ďLJ ŶĂƚŝŽŶĂůƐ ŽĨ ŽƚŚĞƌ
ĐŽƵŶƚƌŝĞƐ͘dŚĞĂƉƉƌŽƉƌŝĂƚĞŶĞƐƐŽĨĂƉĂƌƚŝĐƵůĂƌŝŶǀĞƐƚŵĞŶƚŽƌƐƚƌĂƚĞŐLJǁŝůůĚĞƉĞŶĚŽŶĂŶŝŶǀĞƐƚŽƌΖƐŝŶĚŝǀŝĚƵĂůĐŝƌĐƵŵƐƚĂŶĐĞƐĂŶĚŽďũĞĐƚŝǀĞƐ͘WĞƌƐŽŶƐǁŚŽŵĂLJ
ƌĞĐĞŝǀĞƚŚŝƐĚŽĐƵŵĞŶƚƐŚŽƵůĚĐŽŶƐŝĚĞƌĂŶĚŝŶĚĞƉĞŶĚĞŶƚůLJĞǀĂůƵĂƚĞǁŚĞƚŚĞƌŝƚŝƐƐƵŝƚĂďůĞĨŽƌŚŝƐͬŚĞƌͬƚŚĞŝƌƉĂƌƚŝĐƵůĂƌĐŝƌĐƵŵƐƚĂŶĐĞƐĂŶĚ͕ŝĨŶĞĐĞƐƐĂƌLJ͕ƐĞĞŬ
ƉƌŽĨĞƐƐŝŽŶĂůͬĨŝŶĂŶĐŝĂůĂĚǀŝĐĞ͘ŶLJƐƵĐŚƉĞƌƐŽŶƐŚĂůůďĞƌĞƐƉŽŶƐŝďůĞĨŽƌĐŽŶĚƵĐƚŝŶŐŚŝƐͬŚĞƌͬƚŚĞŝƌŽǁŶŝŶǀĞƐƚŝŐĂƚŝŽŶĂŶĚĂŶĂůLJƐŝƐŽĨƚŚĞŝŶĨŽƌŵĂƚŝŽŶĐŽŶƚĂŝŶĞĚ
ŽƌƌĞĨĞƌƌĞĚƚŽŝŶƚŚŝƐĚŽĐƵŵĞŶƚĂŶĚŽĨĞǀĂůƵĂƚŝŶŐƚŚĞŵĞƌŝƚƐĂŶĚƌŝƐŬƐŝŶǀŽůǀĞĚŝŶƚŚĞƐĞĐƵƌŝƚŝĞƐĨŽƌŵŝŶŐƚŚĞƐƵďũĞĐƚŵĂƚƚĞƌŽĨƚŚŝƐĚŽĐƵŵĞŶƚ͘
dŚĞƉƌŽũĞĐƚŝŽŶƐĂŶĚĨŽƌĞĐĂƐƚƐĚĞƐĐƌŝďĞĚŝŶƚŚŝƐƌĞƉŽƌƚǁĞƌĞďĂƐĞĚƵƉŽŶĂŶƵŵďĞƌŽĨĞƐƚŝŵĂƚĞƐĂŶĚĂƐƐƵŵƉƚŝŽŶƐĂŶĚĂƌĞŝŶŚĞƌĞŶƚůLJƐƵďũĞĐƚƚŽƐŝŐŶŝĨŝĐĂŶƚ
ƵŶĐĞƌƚĂŝŶƚŝĞƐĂŶĚĐŽŶƚŝŶŐĞŶĐŝĞƐ͘WƌŽũĞĐƚŝŽŶƐĂŶĚĨŽƌĞĐĂƐƚƐĂƌĞŶĞĐĞƐƐĂƌŝůLJƐƉĞĐƵůĂƚŝǀĞŝŶŶĂƚƵƌĞ͕ĂŶĚŝƚĐĂŶďĞĞdžƉĞĐƚĞĚƚŚĂƚŽŶĞŽƌŵŽƌĞŽĨƚŚĞĞƐƚŝŵĂƚĞƐŽŶ
ǁŚŝĐŚƚŚĞƉƌŽũĞĐƚŝŽŶƐĂŶĚĨŽƌĞĐĂƐƚƐǁĞƌĞďĂƐĞĚǁŝůůŶŽƚŵĂƚĞƌŝĂůŝnjĞŽƌǁŝůůǀĂƌLJƐŝŐŶŝĨŝĐĂŶƚůLJĨƌŽŵĂĐƚƵĂůƌĞƐƵůƚƐ͕ĂŶĚƐƵĐŚǀĂƌŝĂŶĐĞƐǁŝůůůŝŬĞůLJŝŶĐƌĞĂƐĞŽǀĞƌ
ƚŝŵĞ͘ůůƉƌŽũĞĐƚŝŽŶƐĂŶĚĨŽƌĞĐĂƐƚƐĚĞƐĐƌŝďĞĚŝŶƚŚŝƐƌĞƉŽƌƚŚĂǀĞďĞĞŶƉƌĞƉĂƌĞĚƐŽůĞůLJďLJƚŚĞĂƵƚŚŽƌƐŽĨƚŚŝƐƌĞƉŽƌƚŝŶĚĞƉĞŶĚĞŶƚůLJŽĨƚŚĞŽŵƉĂŶLJ͘dŚĞƐĞ
ƉƌŽũĞĐƚŝŽŶƐ ĂŶĚ ĨŽƌĞĐĂƐƚƐ ǁĞƌĞ ŶŽƚ ƉƌĞƉĂƌĞĚ ǁŝƚŚ Ă ǀŝĞǁ ƚŽǁĂƌĚ ĐŽŵƉůŝĂŶĐĞ ǁŝƚŚ ƉƵďůŝƐŚĞĚ ŐƵŝĚĞůŝŶĞƐ Žƌ ŐĞŶĞƌĂůůLJ ĂĐĐĞƉƚĞĚ ĂĐĐŽƵŶƚŝŶŐ ƉƌŝŶĐŝƉůĞƐ͘ EŽ
ŝŶĚĞƉĞŶĚĞŶƚĂĐĐŽƵŶƚĂŶƚƐŚĂǀĞĞdžƉƌĞƐƐĞĚĂŶŽƉŝŶŝŽŶŽƌĂŶLJŽƚŚĞƌĨŽƌŵŽĨĂƐƐƵƌĂŶĐĞŽŶƚŚĞƐĞƉƌŽũĞĐƚŝŽŶƐŽƌĨŽƌĞĐĂƐƚƐ͘zŽƵƐŚŽƵůĚŶŽƚƌĞŐĂƌĚƚŚĞŝŶĐůƵƐŝŽŶŽĨ
ƚŚĞƉƌŽũĞĐƚŝŽŶƐĂŶĚĨŽƌĞĐĂƐƚƐĚĞƐĐƌŝďĞĚŚĞƌĞŝŶĂƐĂƌĞƉƌĞƐĞŶƚĂƚŝŽŶŽƌǁĂƌƌĂŶƚLJďLJŽƌŽŶďĞŚĂůĨŽĨƚŚĞŽŵƉĂŶLJ͕ĞŶƚƌƵŵ͕ƚŚĞĂƵƚŚŽƌƐŽĨƚŚŝƐƌĞƉŽƌƚŽƌĂŶLJ
ŽƚŚĞƌƉĞƌƐŽŶƚŚĂƚƚŚĞƐĞƉƌŽũĞĐƚŝŽŶƐŽƌĨŽƌĞĐĂƐƚƐŽƌƚŚĞŝƌƵŶĚĞƌůLJŝŶŐĂƐƐƵŵƉƚŝŽŶƐǁŝůůďĞĂĐŚŝĞǀĞĚ͘&ŽƌƚŚĞƐĞƌĞĂƐŽŶƐ͕LJŽƵƐŚŽƵůĚŽŶůLJĐŽŶƐŝĚĞƌƚŚĞƉƌŽũĞĐƚŝŽŶƐ
ĂŶĚĨŽƌĞĐĂƐƚƐĚĞƐĐƌŝďĞĚŝŶƚŚŝƐƌĞƉŽƌƚĂĨƚĞƌĐĂƌĞĨƵůůLJĞǀĂůƵĂƚŝŶŐĂůůŽĨƚŚĞŝŶĨŽƌŵĂƚŝŽŶŝŶƚŚŝƐƌĞƉŽƌƚ͕ŝŶĐůƵĚŝŶŐƚŚĞĂƐƐƵŵƉƚŝŽŶƐƵŶĚĞƌůLJŝŶŐƐƵĐŚƉƌŽũĞĐƚŝŽŶƐĂŶĚ
ĨŽƌĞĐĂƐƚƐ͘
dŚĞƉƌŝĐĞĂŶĚǀĂůƵĞŽĨƚŚĞŝŶǀĞƐƚŵĞŶƚƐƌĞĨĞƌƌĞĚƚŽŝŶƚŚŝƐĚŽĐƵŵĞŶƚͬŵĂƚĞƌŝĂůĂŶĚƚŚĞŝŶĐŽŵĞĨƌŽŵƚŚĞŵŵĂLJŐŽĚŽǁŶĂƐǁĞůůĂƐƵƉ͕ĂŶĚŝŶǀĞƐƚŽƌƐŵĂLJƌĞĂůŝnjĞ
ůŽƐƐĞƐŽŶĂŶLJŝŶǀĞƐƚŵĞŶƚƐ͘WĂƐƚƉĞƌĨŽƌŵĂŶĐĞŝƐŶŽƚĂŐƵŝĚĞĨŽƌĨƵƚƵƌĞƉĞƌĨŽƌŵĂŶĐĞ͘&ƵƚƵƌĞƌĞƚƵƌŶƐĂƌĞŶŽƚŐƵĂƌĂŶƚĞĞĚĂŶĚĂůŽƐƐŽĨŽƌŝŐŝŶĂůĐĂƉŝƚĂůŵĂLJŽĐĐƵƌ͘
ĐƚƵĂůƌĞƐƵůƚƐŵĂLJĚŝĨĨĞƌŵĂƚĞƌŝĂůůLJĨƌŽŵƚŚŽƐĞƐĞƚĨŽƌƚŚŝŶƉƌŽũĞĐƚŝŽŶƐ͘&ŽƌǁĂƌĚůŽŽŬŝŶŐƐƚĂƚĞŵĞŶƚƐĂƌĞŶŽƚƉƌĞĚŝĐƚŝŽŶƐĂŶĚŵĂLJďĞƐƵďũĞĐƚƚŽĐŚĂŶŐĞǁŝƚŚŽƵƚ
ŶŽƚŝĐĞ͘ĞŶƚƌƵŵĚŽĞƐŶŽƚƉƌŽǀŝĚĞƚĂdžĂĚǀŝĐĞƚŽŝƚƐĐůŝĞŶƚƐ͕ĂŶĚĂůůŝŶǀĞƐƚŽƌƐĂƌĞƐƚƌŽŶŐůLJĂĚǀŝƐĞĚƚŽĐŽŶƐƵůƚƌĞŐĂƌĚŝŶŐĂŶLJƉŽƚĞŶƚŝĂůŝŶǀĞƐƚŵĞŶƚ͘ĞŶƚƌƵŵĂŶĚ
ŝƚƐĂĨĨŝůŝĂƚĞƐĂĐĐĞƉƚŶŽůŝĂďŝůŝƚŝĞƐĨŽƌĂŶLJůŽƐƐŽƌĚĂŵĂŐĞŽĨĂŶLJŬŝŶĚĂƌŝƐŝŶŐŽƵƚŽĨƚŚĞƵƐĞŽĨƚŚŝƐƌĞƉŽƌƚ͘&ŽƌĞŝŐŶĐƵƌƌĞŶĐŝĞƐĚĞŶŽŵŝŶĂƚĞĚƐĞĐƵƌŝƚŝĞƐĂƌĞƐƵďũĞĐƚ
ƚŽĨůƵĐƚƵĂƚŝŽŶƐŝŶĞdžĐŚĂŶŐĞƌĂƚĞƐƚŚĂƚĐŽƵůĚŚĂǀĞĂŶĂĚǀĞƌƐĞĞĨĨĞĐƚŽŶƚŚĞǀĂůƵĞŽƌƉƌŝĐĞŽĨŽƌŝŶĐŽŵĞĚĞƌŝǀĞĚĨƌŽŵƚŚĞŝŶǀĞƐƚŵĞŶƚ͘/ŶĂĚĚŝƚŝŽŶ͕ŝŶǀĞƐƚŽƌƐŝŶ
ƐĞĐƵƌŝƚŝĞƐƐƵĐŚĂƐZƐ͕ƚŚĞǀĂůƵĞŽĨǁŚŝĐŚĂƌĞŝŶĨůƵĞŶĐĞĚďLJĨŽƌĞŝŐŶĐƵƌƌĞŶĐŝĞƐĞĨĨĞĐƚŝǀĞůLJĂƐƐƵŵĞĐƵƌƌĞŶĐLJƌŝƐŬ͘ĞƌƚĂŝŶƚƌĂŶƐĂĐƚŝŽŶƐŝŶĐůƵĚŝŶŐƚŚŽƐĞŝŶǀŽůǀŝŶŐ
ĨƵƚƵƌĞƐ͕ŽƉƚŝŽŶƐ͕ĂŶĚŽƚŚĞƌĚĞƌŝǀĂƚŝǀĞƐĂƐǁĞůůĂƐŶŽŶŝŶǀĞƐƚŵĞŶƚŐƌĂĚĞƐĞĐƵƌŝƚŝĞƐŐŝǀĞƌŝƐĞƚŽƐƵďƐƚĂŶƚŝĂůƌŝƐŬĂŶĚĂƌĞŶŽƚƐƵŝƚĂďůĞĨŽƌĂůůŝŶǀĞƐƚŽƌƐ͘WůĞĂƐĞĞŶƐƵƌĞ
ƚŚĂƚLJŽƵŚĂǀĞƌĞĂĚĂŶĚƵŶĚĞƌƐƚŽŽĚƚŚĞĐƵƌƌĞŶƚƌŝƐŬĚŝƐĐůŽƐƵƌĞĚŽĐƵŵĞŶƚƐďĞĨŽƌĞĞŶƚĞƌŝŶŐŝŶƚŽĂŶLJĚĞƌŝǀĂƚŝǀĞƚƌĂŶƐĂĐƚŝŽŶƐ͘
dŚŝƐƌĞƉŽƌƚͬĚŽĐƵŵĞŶƚŚĂƐďĞĞŶƉƌĞƉĂƌĞĚďLJĞŶƚƌƵŵ͕ďĂƐĞĚƵƉŽŶŝŶĨŽƌŵĂƚŝŽŶĂǀĂŝůĂďůĞƚŽƚŚĞƉƵďůŝĐĂŶĚƐŽƵƌĐĞƐ͕ďĞůŝĞǀĞĚƚŽďĞƌĞůŝĂďůĞ͘EŽƌĞƉƌĞƐĞŶƚĂƚŝŽŶ
ŽƌǁĂƌƌĂŶƚLJ͕ĞdžƉƌĞƐƐŽƌŝŵƉůŝĞĚŝƐŵĂĚĞƚŚĂƚŝƚŝƐĂĐĐƵƌĂƚĞŽƌĐŽŵƉůĞƚĞ͘ĞŶƚƌƵŵŚĂƐƌĞǀŝĞǁĞĚƚŚĞƌĞƉŽƌƚĂŶĚ͕ŝŶƐŽĨĂƌĂƐŝƚŝŶĐůƵĚĞƐĐƵƌƌĞŶƚŽƌŚŝƐƚŽƌŝĐĂů
ŝŶĨŽƌŵĂƚŝŽŶ͕ŝƚŝƐďĞůŝĞǀĞĚƚŽďĞƌĞůŝĂďůĞ͕ĂůƚŚŽƵŐŚŝƚƐĂĐĐƵƌĂĐLJĂŶĚĐŽŵƉůĞƚĞŶĞƐƐĐĂŶŶŽƚďĞŐƵĂƌĂŶƚĞĞĚ͘dŚĞŽƉŝŶŝŽŶƐĞdžƉƌĞƐƐĞĚŝŶƚŚŝƐĚŽĐƵŵĞŶƚͬŵĂƚĞƌŝĂů
ĂƌĞƐƵďũĞĐƚƚŽĐŚĂŶŐĞǁŝƚŚŽƵƚŶŽƚŝĐĞĂŶĚŚĂǀĞŶŽŽďůŝŐĂƚŝŽŶƚŽƚĞůůLJŽƵǁŚĞŶŽƉŝŶŝŽŶƐŽƌŝŶĨŽƌŵĂƚŝŽŶŝŶƚŚŝƐƌĞƉŽƌƚĐŚĂŶŐĞ͘
dŚŝƐƌĞƉŽƌƚŽƌƌĞĐŽŵŵĞŶĚĂƚŝŽŶƐŽƌŝŶĨŽƌŵĂƚŝŽŶĐŽŶƚĂŝŶĞĚŚĞƌĞŝŶĚŽͬĚŽĞƐŶŽƚĐŽŶƐƚŝƚƵƚĞŽƌƉƵƌƉŽƌƚƚŽĐŽŶƐƚŝƚƵƚĞŝŶǀĞƐƚŵĞŶƚĂĚǀŝĐĞŝŶƉƵďůŝĐůLJĂĐĐĞƐƐŝďůĞ
ŵĞĚŝĂ ĂŶĚ ƐŚŽƵůĚ ŶŽƚ ďĞ ƌĞƉƌŽĚƵĐĞĚ͕ ƚƌĂŶƐŵŝƚƚĞĚ Žƌ ƉƵďůŝƐŚĞĚ ďLJ ƚŚĞ ƌĞĐŝƉŝĞŶƚ͘ dŚĞ ƌĞƉŽƌƚ ŝƐ ĨŽƌ ƚŚĞ ƵƐĞ ĂŶĚ ĐŽŶƐƵŵƉƚŝŽŶ ŽĨ ƚŚĞ ƌĞĐŝƉŝĞŶƚ ŽŶůLJ͘ dŚŝƐ
ƉƵďůŝĐĂƚŝŽŶŵĂLJŶŽƚďĞĚŝƐƚƌŝďƵƚĞĚƚŽƚŚĞƉƵďůŝĐƵƐĞĚďLJƚŚĞƉƵďůŝĐŵĞĚŝĂǁŝƚŚŽƵƚƚŚĞĞdžƉƌĞƐƐǁƌŝƚƚĞŶĐŽŶƐĞŶƚŽĨĞŶƚƌƵŵ͘dŚŝƐƌĞƉŽƌƚŽƌĂŶLJƉŽƌƚŝŽŶŚĞƌĞŽĨ
ŵĂLJŶŽƚďĞƉƌŝŶƚĞĚ͕ƐŽůĚŽƌĚŝƐƚƌŝďƵƚĞĚǁŝƚŚŽƵƚƚŚĞǁƌŝƚƚĞŶĐŽŶƐĞŶƚŽĨĞŶƚƌƵŵ͘
dŚĞĚŝƐƚƌŝďƵƚŝŽŶŽĨƚŚŝƐĚŽĐƵŵĞŶƚŝŶŽƚŚĞƌũƵƌŝƐĚŝĐƚŝŽŶƐŵĂLJďĞƌĞƐƚƌŝĐƚĞĚďLJůĂǁ͕ĂŶĚƉĞƌƐŽŶƐŝŶƚŽǁŚŽƐĞƉŽƐƐĞƐƐŝŽŶƚŚŝƐĚŽĐƵŵĞŶƚĐŽŵĞƐƐŚŽƵůĚŝŶĨŽƌŵ
ƚŚĞŵƐĞůǀĞƐĂďŽƵƚ͕ĂŶĚŽďƐĞƌǀĞ͕ĂŶLJƐƵĐŚƌĞƐƚƌŝĐƚŝŽŶƐ͘EĞŝƚŚĞƌĞŶƚƌƵŵŶŽƌŝƚƐĚŝƌĞĐƚŽƌƐ͕ĞŵƉůŽLJĞĞƐ͕ĂŐĞŶƚƐŽƌƌĞƉƌĞƐĞŶƚĂƚŝǀĞƐƐŚĂůůďĞůŝĂďůĞĨŽƌĂŶLJĚĂŵĂŐĞƐ
ǁŚĞƚŚĞƌĚŝƌĞĐƚŽƌŝŶĚŝƌĞĐƚ͕ŝŶĐŝĚĞŶƚĂů͕ƐƉĞĐŝĂůŽƌĐŽŶƐĞƋƵĞŶƚŝĂůŝŶĐůƵĚŝŶŐůŽƐƚƌĞǀĞŶƵĞŽƌůŽƐƚƉƌŽĨŝƚƐƚŚĂƚŵĂLJĂƌŝƐĞĨƌŽŵŽƌŝŶĐŽŶŶĞĐƚŝŽŶǁŝƚŚƚŚĞƵƐĞŽĨƚŚĞ
ŝŶĨŽƌŵĂƚŝŽŶ͘
dŚŝƐĚŽĐƵŵĞŶƚĚŽĞƐŶŽƚĐŽŶƐƚŝƚƵƚĞĂŶŽĨĨĞƌŽƌŝŶǀŝƚĂƚŝŽŶƚŽƐƵďƐĐƌŝďĞĨŽƌŽƌƉƵƌĐŚĂƐĞŽƌĚĞĂůŝŶĂŶLJƐĞĐƵƌŝƚŝĞƐĂŶĚŶĞŝƚŚĞƌƚŚŝƐĚŽĐƵŵĞŶƚŶŽƌĂŶLJƚŚŝŶŐĐŽŶƚĂŝŶĞĚ
ŚĞƌĞŝŶƐŚĂůůĨŽƌŵƚŚĞďĂƐŝƐŽĨĂŶLJĐŽŶƚƌĂĐƚŽƌĐŽŵŵŝƚŵĞŶƚǁŚĂƚƐŽĞǀĞƌ͘dŚŝƐĚŽĐƵŵĞŶƚŝƐƐƚƌŝĐƚůLJĐŽŶĨŝĚĞŶƚŝĂůĂŶĚŝƐďĞŝŶŐĨƵƌŶŝƐŚĞĚƚŽLJŽƵƐŽůĞůLJĨŽƌLJŽƵƌ
ŝŶĨŽƌŵĂƚŝŽŶ͕ŵĂLJŶŽƚďĞĚŝƐƚƌŝďƵƚĞĚƚŽƚŚĞƉƌĞƐƐŽƌŽƚŚĞƌŵĞĚŝĂĂŶĚŵĂLJŶŽƚďĞƌĞƉƌŽĚƵĐĞĚŽƌƌĞĚŝƐƚƌŝďƵƚĞĚƚŽĂŶLJŽƚŚĞƌƉĞƌƐŽŶ͘dŚĞĚŝƐƚƌŝďƵƚŝŽŶŽĨƚŚŝƐ
ƌĞƉŽƌƚŝŶŽƚŚĞƌũƵƌŝƐĚŝĐƚŝŽŶƐŵĂLJďĞƌĞƐƚƌŝĐƚĞĚďLJůĂǁĂŶĚƉĞƌƐŽŶƐŝŶƚŽǁŚŽƐĞƉŽƐƐĞƐƐŝŽŶƚŚŝƐƌĞƉŽƌƚĐŽŵĞƐƐŚŽƵůĚŝŶĨŽƌŵƚŚĞŵƐĞůǀĞƐĂďŽƵƚ͕ĂŶĚŽďƐĞƌǀĞĂŶLJ
ƐƵĐŚƌĞƐƚƌŝĐƚŝŽŶƐ͘LJĂĐĐĞƉƚŝŶŐƚŚŝƐƌĞƉŽƌƚ͕LJŽƵĂŐƌĞĞƚŽďĞďŽƵŶĚďLJƚŚĞĨŽƌĞŐŽŝŶŐůŝŵŝƚĂƚŝŽŶƐ͘EŽƌĞƉƌĞƐĞŶƚĂƚŝŽŶŝƐŵĂĚĞƚŚĂƚƚŚŝƐƌĞƉŽƌƚŝƐĂĐĐƵƌĂƚĞŽƌ
ĐŽŵƉůĞƚĞ͘
dŚĞŽƉŝŶŝŽŶƐĂŶĚƉƌŽũĞĐƚŝŽŶƐĞdžƉƌĞƐƐĞĚŚĞƌĞŝŶĂƌĞĞŶƚŝƌĞůLJƚŚŽƐĞŽĨƚŚĞĂƵƚŚŽƌĂŶĚĂƌĞŐŝǀĞŶĂƐƉĂƌƚŽĨƚŚĞŶŽƌŵĂůƌĞƐĞĂƌĐŚĂĐƚŝǀŝƚLJŽĨĞŶƚƌƵŵƌŽŬŝŶŐĂŶĚ
ĂƌĞŐŝǀĞŶĂƐŽĨƚŚŝƐĚĂƚĞĂŶĚĂƌĞƐƵďũĞĐƚƚŽĐŚĂŶŐĞǁŝƚŚŽƵƚŶŽƚŝĐĞ͘ŶLJŽƉŝŶŝŽŶĞƐƚŝŵĂƚĞŽƌƉƌŽũĞĐƚŝŽŶŚĞƌĞŝŶĐŽŶƐƚŝƚƵƚĞƐĂǀŝĞǁĂƐŽĨƚŚĞĚĂƚĞŽĨƚŚŝƐƌĞƉŽƌƚ
ĂŶĚƚŚĞƌĞĐĂŶďĞŶŽĂƐƐƵƌĂŶĐĞƚŚĂƚĨƵƚƵƌĞƌĞƐƵůƚƐŽƌĞǀĞŶƚƐǁŝůůďĞĐŽŶƐŝƐƚĞŶƚǁŝƚŚĂŶLJƐƵĐŚŽƉŝŶŝŽŶƐ͕ĞƐƚŝŵĂƚĞŽƌƉƌŽũĞĐƚŝŽŶ͘


ĞŶƚƌƵŵ/ŶƐƚŝƚƵƚŝŽŶĂůZĞƐĞĂƌĐŚ 18

 

ZƵƌĂůWƵůƐĞϮϬϮϯhƉĚĂƚĞ 
dŚŝƐĚŽĐƵŵĞŶƚŚĂƐŶŽƚďĞĞŶƉƌĞƉĂƌĞĚďLJŽƌŝŶĐŽŶũƵŶĐƚŝŽŶǁŝƚŚŽƌŽŶďĞŚĂůĨŽĨŽƌĂƚƚŚĞŝŶƐƚŝŐĂƚŝŽŶŽĨ͕ŽƌďLJĂƌƌĂŶŐĞŵĞŶƚǁŝƚŚƚŚĞĐŽŵƉĂŶLJŽƌĂŶLJŽĨŝƚƐ
ĚŝƌĞĐƚŽƌƐŽƌĂŶLJŽƚŚĞƌƉĞƌƐŽŶ͘/ŶĨŽƌŵĂƚŝŽŶŝŶƚŚŝƐĚŽĐƵŵĞŶƚŵƵƐƚŶŽƚďĞƌĞůŝĞĚƵƉŽŶĂƐŚĂǀŝŶŐďĞĞŶĂƵƚŚŽƌŝnjĞĚŽƌĂƉƉƌŽǀĞĚďLJƚŚĞĐŽŵƉĂŶLJŽƌŝƚƐĚŝƌĞĐƚŽƌƐ
ŽƌĂŶLJŽƚŚĞƌƉĞƌƐŽŶ͘ŶLJŽƉŝŶŝŽŶƐĂŶĚƉƌŽũĞĐƚŝŽŶƐĐŽŶƚĂŝŶĞĚŚĞƌĞŝŶĂƌĞĞŶƚŝƌĞůLJƚŚŽƐĞŽĨƚŚĞĂƵƚŚŽƌƐ͘EŽŶĞŽĨƚŚĞĐŽŵƉĂŶLJŽƌŝƚƐĚŝƌĞĐƚŽƌƐŽƌĂŶLJŽƚŚĞƌƉĞƌƐŽŶ
ĂĐĐĞƉƚƐĂŶLJůŝĂďŝůŝƚLJǁŚĂƚƐŽĞǀĞƌĨŽƌĂŶLJůŽƐƐĂƌŝƐŝŶŐĨƌŽŵĂŶLJƵƐĞŽĨƚŚŝƐĚŽĐƵŵĞŶƚŽƌŝƚƐĐŽŶƚĞŶƚƐŽƌŽƚŚĞƌǁŝƐĞĂƌŝƐŝŶŐŝŶĐŽŶŶĞĐƚŝŽŶƚŚĞƌĞǁŝƚŚ͘
ĞŶƚƌƵŵĂŶĚŝƚƐĂĨĨŝůŝĂƚĞƐŚĂǀĞŶŽƚŵĂŶĂŐĞĚŽƌĐŽŵĂŶĂŐĞĚĂƉƵďůŝĐŽĨĨĞƌŝŶŐĨŽƌƚŚĞƐƵďũĞĐƚĐŽŵƉĂŶLJŝŶƚŚĞƉƌĞĐĞĚŝŶŐƚǁĞůǀĞŵŽŶƚŚƐ͘ĞŶƚƌƵŵĂŶĚĂĨĨŝůŝĂƚĞƐ
ŚĂǀĞŶŽƚƌĞĐĞŝǀĞĚĐŽŵƉĞŶƐĂƚŝŽŶĨƌŽŵƚŚĞĐŽŵƉĂŶŝĞƐŵĞŶƚŝŽŶĞĚŝŶƚŚĞƌĞƉŽƌƚĚƵƌŝŶŐƚŚĞƉĞƌŝŽĚƉƌĞĐĞĚŝŶŐƚǁĞůǀĞŵŽŶƚŚƐĨƌŽŵƚŚĞĚĂƚĞŽĨƚŚŝƐƌĞƉŽƌƚĨŽƌ
ƐĞƌǀŝĐĞŝŶƌĞƐƉĞĐƚŽĨƉƵďůŝĐŽĨĨĞƌŝŶŐƐ͕ĐŽƌƉŽƌĂƚĞĨŝŶĂŶĐĞ͕ĚĞďƚƌĞƐƚƌƵĐƚƵƌŝŶŐ͕ŝŶǀĞƐƚŵĞŶƚďĂŶŬŝŶŐŽƌŽƚŚĞƌĂĚǀŝƐŽƌLJƐĞƌǀŝĐĞƐŝŶĂŵĞƌŐĞƌͬĂĐƋƵŝƐŝƚŝŽŶŽƌƐŽŵĞ
ŽƚŚĞƌƐŽƌƚŽĨƐƉĞĐŝĨŝĐƚƌĂŶƐĂĐƚŝŽŶ͘
ƐƉĞƌƚŚĞĚĞĐůĂƌĂƚŝŽŶƐŐŝǀĞŶďLJƚŚĞŵ͕ĞŶƚƌƵŵZĞƐĞĂƌĐŚdĞĂŵĂŶĚĂŶĚͬŽƌĂŶLJ ŽĨƚŚĞŝƌĨĂŵŝůLJŵĞŵďĞƌƐĚŽ ŶŽƚƐĞƌǀĞĂƐĂŶŽĨĨŝĐĞƌ͕ĚŝƌĞĐƚŽƌŽƌĂŶLJǁĂLJ
ĐŽŶŶĞĐƚĞĚ ƚŽ ƚŚĞ ĐŽŵƉĂŶLJͬĐŽŵƉĂŶŝĞƐ ŵĞŶƚŝŽŶĞĚ ŝŶ ƚŚŝƐ ƌĞƉŽƌƚ͘ &ƵƌƚŚĞƌ͕ ĂƐ ĚĞĐůĂƌĞĚ ďLJ ƚŚĞŵ͕ ƚŚĞLJ ĂƌĞ ŶŽƚ ƌĞĐĞŝǀĞĚ ĂŶLJ ĐŽŵƉĞŶƐĂƚŝŽŶ ĨƌŽŵ ƚŚĞ ĂďŽǀĞ
ĐŽŵƉĂŶŝĞƐŝŶƚŚĞƉƌĞĐĞĚŝŶŐƚǁĞůǀĞŵŽŶƚŚƐ͘dŚĞLJĚŽŶŽƚŚŽůĚĂŶLJƐŚĂƌĞƐďLJƚŚĞŵŽƌƚŚƌŽƵŐŚƚŚĞŝƌƌĞůĂƚŝǀĞƐŽƌŝŶĐĂƐĞŝĨŚŽůĚƐƚŚĞƐŚĂƌĞƐƚŚĞŶǁŝůůŶŽƚƚŽĚŽ
ĂŶLJƚƌĂŶƐĂĐƚŝŽŶƐŝŶƚŚĞƐĂŝĚƐĐƌŝƉĨŽƌϯϬĚĂLJƐĨƌŽŵƚŚĞĚĂƚĞŽĨƌĞůĞĂƐĞƐƵĐŚƌĞƉŽƌƚ͘KƵƌĞŶƚŝƌĞƌĞƐĞĂƌĐŚƉƌŽĨĞƐƐŝŽŶĂůƐĂƌĞŽƵƌĞŵƉůŽLJĞĞƐĂŶĚĂƌĞƉĂŝĚĂƐĂůĂƌLJ͘
dŚĞLJĚŽŶŽƚŚĂǀĞĂŶLJŽƚŚĞƌŵĂƚĞƌŝĂůĐŽŶĨůŝĐƚŽĨŝŶƚĞƌĞƐƚŽĨƚŚĞƌĞƐĞĂƌĐŚĂŶĂůLJƐƚŽƌŵĞŵďĞƌŽĨǁŚŝĐŚƚŚĞƌĞƐĞĂƌĐŚĂŶĂůLJƐƚŬŶŽǁƐŽĨŚĂƐƌĞĂƐŽŶƚŽŬŶŽǁĂƚƚŚĞ
ƚŝŵĞŽĨƉƵďůŝĐĂƚŝŽŶŽĨƚŚĞƌĞƐĞĂƌĐŚƌĞƉŽƌƚŽƌĂƚƚŚĞƚŝŵĞŽĨƚŚĞƉƵďůŝĐĂƉƉĞĂƌĂŶĐĞ͘
tŚŝůĞǁĞǁŽƵůĚĞŶĚĞĂǀŽƵƌƚŽƵƉĚĂƚĞƚŚĞŝŶĨŽƌŵĂƚŝŽŶŚĞƌĞŝŶŽŶĂƌĞĂƐŽŶĂďůĞďĂƐŝƐ͕ĞŶƚƌƵŵ͕ŝƚƐĂƐƐŽĐŝĂƚĞĚĐŽŵƉĂŶŝĞƐ͕ƚŚĞŝƌĚŝƌĞĐƚŽƌƐĂŶĚĞŵƉůŽLJĞĞƐĂƌĞ
ƵŶĚĞƌŶŽŽďůŝŐĂƚŝŽŶƚŽƵƉĚĂƚĞŽƌŬĞĞƉƚŚĞŝŶĨŽƌŵĂƚŝŽŶĐƵƌƌĞŶƚ͘ůƐŽ͕ƚŚĞƌĞŵĂLJďĞƌĞŐƵůĂƚŽƌLJ͕ĐŽŵƉůŝĂŶĐĞŽƌŽƚŚĞƌƌĞĂƐŽŶƐƚŚĂƚŵĂLJƉƌĞǀĞŶƚĞŶƚƌƵŵĨƌŽŵ
ĚŽŝŶŐƐŽ͘
EŽŶƌĂƚĞĚ ƐĞĐƵƌŝƚŝĞƐ ŝŶĚŝĐĂƚĞ ƚŚĂƚ ƌĂƚŝŶŐ ŽŶ Ă ƉĂƌƚŝĐƵůĂƌ ƐĞĐƵƌŝƚLJ ŚĂƐ ďĞĞŶ ƐƵƐƉĞŶĚĞĚ ƚĞŵƉŽƌĂƌŝůLJ ĂŶĚ ƐƵĐŚ ƐƵƐƉĞŶƐŝŽŶ ŝƐ ŝŶ ĐŽŵƉůŝĂŶĐĞ ǁŝƚŚ ĂƉƉůŝĐĂďůĞ
ƌĞŐƵůĂƚŝŽŶƐĂŶĚͬŽƌĞŶƚƌƵŵƉŽůŝĐŝĞƐ͕ŝŶĐŝƌĐƵŵƐƚĂŶĐĞƐǁŚĞƌĞĞŶƚƌƵŵŝƐĂĐƚŝŶŐŝŶĂŶĂĚǀŝƐŽƌLJĐĂƉĂĐŝƚLJƚŽƚŚŝƐĐŽŵƉĂŶLJ͕ŽƌĂŶLJĐĞƌƚĂŝŶŽƚŚĞƌĐŝƌĐƵŵƐƚĂŶĐĞƐ͘
dŚŝƐƌĞƉŽƌƚŝƐŶŽƚĚŝƌĞĐƚĞĚƚŽ͕ŽƌŝŶƚĞŶĚĞĚĨŽƌĚŝƐƚƌŝďƵƚŝŽŶƚŽŽƌƵƐĞďLJ͕ĂŶLJƉĞƌƐŽŶŽƌĞŶƚŝƚLJǁŚŽŝƐĂĐŝƚŝnjĞŶŽƌƌĞƐŝĚĞŶƚŽĨŽƌůŽĐĂƚĞĚŝŶĂŶLJůŽĐĂůŝƚLJ͕ƐƚĂƚĞ͕
ĐŽƵŶƚƌLJŽƌŽƚŚĞƌũƵƌŝƐĚŝĐƚŝŽŶǁŚĞƌĞƐƵĐŚĚŝƐƚƌŝďƵƚŝŽŶ͕ƉƵďůŝĐĂƚŝŽŶ͕ĂǀĂŝůĂďŝůŝƚLJŽƌƵƐĞǁŽƵůĚďĞĐŽŶƚƌĂƌLJƚŽůĂǁŽƌƌĞŐƵůĂƚŝŽŶŽƌǁŚŝĐŚǁŽƵůĚƐƵďũĞĐƚĞŶƚƌƵŵ
ƌŽŬŝŶŐ>ŝŵŝƚĞĚŽƌŝƚƐŐƌŽƵƉĐŽŵƉĂŶŝĞƐƚŽĂŶLJƌĞŐŝƐƚƌĂƚŝŽŶŽƌůŝĐĞŶƐŝŶŐƌĞƋƵŝƌĞŵĞŶƚǁŝƚŚŝŶƐƵĐŚũƵƌŝƐĚŝĐƚŝŽŶ͘^ƉĞĐŝĨŝĐĂůůLJ͕ƚŚŝƐĚŽĐƵŵĞŶƚĚŽĞƐŶŽƚĐŽŶƐƚŝƚƵƚĞ
ĂŶŽĨĨĞƌƚŽŽƌƐŽůŝĐŝƚĂƚŝŽŶƚŽĂŶLJh͘^͘ƉĞƌƐŽŶĨŽƌƚŚĞƉƵƌĐŚĂƐĞŽƌƐĂůĞŽĨĂŶLJĨŝŶĂŶĐŝĂůŝŶƐƚƌƵŵĞŶƚŽƌĂƐĂŶŽĨĨŝĐŝĂůĐŽŶĨŝƌŵĂƚŝŽŶŽĨĂŶLJƚƌĂŶƐĂĐƚŝŽŶƚŽĂŶLJh͘^͘
ƉĞƌƐŽŶƵŶůĞƐƐŽƚŚĞƌǁŝƐĞƐƚĂƚĞĚ͕ƚŚŝƐŵĞƐƐĂŐĞƐŚŽƵůĚŶŽƚďĞĐŽŶƐƚƌƵĞĚĂƐŽĨĨŝĐŝĂůĐŽŶĨŝƌŵĂƚŝŽŶŽĨĂŶLJƚƌĂŶƐĂĐƚŝŽŶ͘EŽƉĂƌƚŽĨƚŚŝƐĚŽĐƵŵĞŶƚŵĂLJďĞĚŝƐƚƌŝďƵƚĞĚ
ŝŶĂŶĂĚĂŽƌƵƐĞĚďLJƉƌŝǀĂƚĞĐƵƐƚŽŵĞƌƐŝŶhŶŝƚĞĚ<ŝŶŐĚŽŵ͘dŚĞŝŶĨŽƌŵĂƚŝŽŶĐŽŶƚĂŝŶĞĚŚĞƌĞŝŶŝƐŶŽƚŝŶƚĞŶĚĞĚĨŽƌƉƵďůŝĐĂƚŝŽŶŽƌĚŝƐƚƌŝďƵƚŝŽŶŽƌĐŝƌĐƵůĂƚŝŽŶŝŶ
ĂŶLJŵĂŶŶĞƌǁŚĂƚƐŽĞǀĞƌĂŶĚĂŶLJƵŶĂƵƚŚŽƌŝnjĞĚƌĞĂĚŝŶŐ͕ĚŝƐƐĞŵŝŶĂƚŝŽŶ͕ĚŝƐƚƌŝďƵƚŝŽŶŽƌĐŽƉLJŝŶŐŽĨƚŚŝƐĐŽŵŵƵŶŝĐĂƚŝŽŶŝƐƉƌŽŚŝďŝƚĞĚƵŶůĞƐƐŽƚŚĞƌǁŝƐĞĞdžƉƌĞƐƐůLJ
ĂƵƚŚŽƌŝnjĞĚ͘ WůĞĂƐĞ ĞŶƐƵƌĞ ƚŚĂƚ LJŽƵ ŚĂǀĞ ƌĞĂĚ ͞ZŝƐŬ ŝƐĐůŽƐƵƌĞ ŽĐƵŵĞŶƚ ĨŽƌ ĂƉŝƚĂů DĂƌŬĞƚ ĂŶĚ ĞƌŝǀĂƚŝǀĞƐ ^ĞŐŵĞŶƚƐ͟ ĂƐ ƉƌĞƐĐƌŝďĞĚ ďLJ ^ĞĐƵƌŝƚŝĞƐ ĂŶĚ
džĐŚĂŶŐĞŽĂƌĚŽĨ/ŶĚŝĂďĞĨŽƌĞŝŶǀĞƐƚŝŶŐŝŶ/ŶĚŝĂŶ^ĞĐƵƌŝƚŝĞƐDĂƌŬĞƚ͘

ZĂƚŝŶŐƐĚĞĨŝŶŝƚŝŽŶƐ
KƵƌƌĂƚŝŶŐƐĚĞŶŽƚĞƚŚĞĨŽůůŽǁŝŶŐϭϮŵŽŶƚŚĨŽƌĞĐĂƐƚƌĞƚƵƌŶƐ͗
ƵLJʹdŚĞƐƚŽĐŬŝƐĞdžƉĞĐƚĞĚƚŽƌĞƚƵƌŶĂďŽǀĞϭϱй͘
ĚĚʹdŚĞƐƚŽĐŬŝƐĞdžƉĞĐƚĞĚƚŽƌĞƚƵƌŶϱϭϱй͘
ZĞĚƵĐĞʹdŚĞƐƚŽĐŬŝƐĞdžƉĞĐƚĞĚƚŽĚĞůŝǀĞƌϱнϱйƌĞƚƵƌŶƐ͘
^ĞůůʹdŚĞƐƚŽĐŬŝƐĞdžƉĞĐƚĞĚƚŽĚĞůŝǀĞƌфϱйƌĞƚƵƌŶƐ͘



ĞŶƚƌƵŵ/ŶƐƚŝƚƵƚŝŽŶĂůZĞƐĞĂƌĐŚ 19

 

ZƵƌĂůWƵůƐĞϮϬϮϯhƉĚĂƚĞ 


ŝƐĐůŽƐƵƌĞŽĨ/ŶƚĞƌĞƐƚ^ƚĂƚĞŵĞŶƚ

ϭ ƵƐŝŶĞƐƐ ĂĐƚŝǀŝƚŝĞƐ ŽĨ ĞŶƚƌƵŵ ƌŽŬŝŶŐ ĞŶƚƌƵŵ ƌŽŬŝŶŐ >ŝŵŝƚĞĚ ;ŚĞƌĞŝŶĂĨƚĞƌ ƌĞĨĞƌƌĞĚ ƚŽ ĂƐ ͞>͟Ϳ ŝƐ Ă ƌĞŐŝƐƚĞƌĞĚ ŵĞŵďĞƌ ŽĨ E^ ;ĂƐŚ͕ &ΘK ĂŶĚ ƵƌƌĞŶĐLJ ĞƌŝǀĂƚŝǀĞƐ
>ŝŵŝƚĞĚ;>Ϳ ^ĞŐŵĞŶƚƐͿ͕Dy^y;ƵƌƌĞŶĐLJĞƌŝǀĂƚŝǀĞƐ^ĞŐŵĞŶƚͿĂŶĚ^;ĂƐŚƐĞŐŵĞŶƚͿ͕ĞƉŽƐŝƚŽƌLJWĂƌƚŝĐŝƉĂŶƚŽĨ^>ĂŶĚĂ^/ƌĞŐŝƐƚĞƌĞĚ
WŽƌƚĨŽůŝŽDĂŶĂŐĞƌ͘
Ϯ ĞƚĂŝůƐŽĨŝƐĐŝƉůŝŶĂƌLJ,ŝƐƚŽƌLJŽĨ> >ŚĂƐŶŽƚďĞĞŶĚĞďĂƌƌĞĚͬƐƵƐƉĞŶĚĞĚďLJ^/ŽƌĂŶLJŽƚŚĞƌƌĞŐƵůĂƚŽƌLJĂƵƚŚŽƌŝƚLJĨƌŽŵĂĐĐĞƐƐŝŶŐͬĚĞĂůŝŶŐŝŶƐĞĐƵƌŝƚŝĞƐŵĂƌŬĞƚ͘

ϯ ZĞŐŝƐƚƌĂƚŝŽŶƐƚĂƚƵƐŽĨ>͗ >ŝƐƌĞŐŝƐƚĞƌĞĚǁŝƚŚ^/ĂƐĂZĞƐĞĂƌĐŚŶĂůLJƐƚ;^/ZĞŐŝƐƚƌĂƚŝŽŶEŽ͘/E,ϬϬϬϬϬϭϰϲϵͿ

DĞŵďĞƌ;E^ĂŶĚ^Ϳ͘DĞŵďĞƌD^/;/ŶĂĐƚŝǀĞͿ

^ŝŶŐůĞ^/ZĞŐŶEŽ͗͘/EϬϬϬϮϬϱϯϯϭ

ĞƉŽƐŝƚŽƌLJWĂƌƚŝĐŝƉĂŶƚ;WͿ
^>W/͗ϭϮϬʹϭϮϮϬϬ
^ŝŶŐůĞ^/ZĞŐŶ͘EŽ͗͘/EͲWͲϱϯϳͲϮϬϮϬ

WKZd&K>/KDE'Z

^/Z'EEK͗͘/EWϬϬϬϬϬϰϯϴϯ

ZĞƐĞĂƌĐŚŶĂůLJƐƚ
^/ZĞŐŝƐƚƌĂƚŝŽŶEŽ͘/E,ϬϬϬϬϬϭϰϲϵ

DƵƚƵĂů&ƵŶĚŝƐƚƌŝďƵƚŽƌ
D&/Z'EEŽ͘ZEϭϰϳϱϲϵ

tĞďƐŝƚĞ͗ǁǁǁ͘ĐĞŶƚƌƵŵďƌŽŬŝŶŐ͘ĐŽŵ
/ŶǀĞƐƚŽƌ'ƌŝĞǀĂŶĐĞŵĂŝů/͗ŝŶǀĞƐƚŽƌ͘ŐƌŝĞǀĂŶĐĞƐΛĐĞŶƚƌƵŵ͘ĐŽ͘ŝŶ

ŽŵƉůŝĂŶĐĞKĨĨŝĐĞƌĞƚĂŝůƐ͗
ũĂLJ^ĞŶĚŬŚĂůĞ
;ϬϮϮͿϰϮϭϱϵϬϬϬͬϵϬϮϯ͖ŵĂŝů/͗ĐŽŵƉůŝĂŶĐĞΛĐĞŶƚƌƵŵ͘ĐŽ͘ŝŶ


ĞŶƚƌƵŵƌŽŬŝŶŐ>ƚĚ͘;/E͗hϲϳϭϮϬD,ϭϵϵϰW>ϬϳϴϭϮϱͿ
ZĞŐŝƐƚĞƌĞĚĂŶĚŽƌƉŽƌĂƚĞKĨĨŝĐĞ͗
>ĞǀĞůͲϵ͕ĞŶƚƌƵŵ,ŽƵƐĞ͕͘^͘d͘ZŽĂĚ͕
sŝĚLJĂŶĂŐĂƌŝDĂƌŐ͕<ĂůŝŶĂ͕
^ĂŶƚĂĐƌƵnj;ĂƐƚͿDƵŵďĂŝʹϰϬϬϬϵϴ
dĞů͗͘ͲнϵϭϮϮϰϮϭϱϵϬϬϬ
















ĞŶƚƌƵŵ/ŶƐƚŝƚƵƚŝŽŶĂůZĞƐĞĂƌĐŚ 20