KONDOTEC REPORT（Year Ended March 31, 2019）

:($5(.21'27(&
0HVVDJH

0HVVDJH

&RPSDQ\2YHUYLHZ +LVWRU\ 

9DOXH&UHDWLRQ3URFHVV

7KH.21'27(&*URXSKDVEHHQSURYLGLQJSURGXFWVDQGPHUFKDQGLVHWRFXVWRPHUVLQD
ZLGHUDQJHRIILHOGVDQGDLPLQJWRFRQWULEXWHWR
GHYHORSPHQWRIWKHVRFLDOLQIUDVWUXFWXUHIRUPRUHWKDQKDOIDFHQWXU\VLQFHLWVHVWDEOLVKPHQWLQWRFDUU\RXWLWVUHVSRQVLELOLWLHVDVD
FRUSRUDWLRQEDVHGRQWKHFRUSRUDWHSKLORVRSK\n:HVWULYHWRFRQWULEXWHWRWKHFUHDWLRQRIDQDIIOXHQWVRFLHW\E\QXUWXULQJRXUHPSOR\HHVZKRZRXOGVKDSHWKHIXWXUHDQGE\FRQGXFWLQJFRUSRUDWHDFWLYLWLHVZLWKLQQRYDWLYHDQG
SLRQHHULQJZD\|%XVLQHVV0RGHO 

0DWHULDOLW\ %XVLQHVV5HSRUW

7KLVUHSRUWZDVGHVLJQHGLQRUGHUWRKDYHPRUH
VWDNHKROGHUVJDLQDEHWWHUXQGHUVWDQGLQJRIRXU
*URXS)RUWKDWSXUSRVHZHKDYHPDGHYDULRXVHIIRUWVWRGLVVHPLQDWHRXUEXVLQHVVPRGHOLQDQ
HDV\WRXQGHUVWDQGZD\E\UHIHUHQFLQJWKH
,QWHUQDWLRQDO,QWHJUDWHG5HSRUWLQJ)UDPHZRUNZKLOHDOVRFRQVLGHULQJ6'*V
$VZHVWULYHWRFRQWLQXHVHUYLQJEHKLQGWKH
VFHQHVDFFRPPRGDWLQJGLYHUVHFXVWRPHUQHHGV
DVDJURXSZHZRXOGJUHDWO\DSSUHFLDWH\RXUFRQWLQXHGXQGHUVWDQGLQJDQGVXSSRUW3UHVLGHQWDQG5HSUHVHQWDWLYH'LUHFWRU.DWVXKLNR.RQGR)RUZDUG(YHU VLQFH LWV HVWDEOLVKPHQW WKH .21'27(&*URXS KDV EHHQ FRPPLWWHG WR FDUU\LQJ RXW LWV
EXVLQHVV DFWLYLWLHV LQ OLQH ZLWK WKH WLPHV E\
XSGDWLQJWKHOLQHXSRISURGXFWVDQG
PHUFKDQGLVHKDQGOHGZKLOHFRQVWDQWO\UHVSRQGLQJ WR WKH FKDQJLQJ WLPHV *LYHQ WKLVKLVWRU\ ZH KDYH RQFH DJDLQ RUJDQL]HG WKH
RXWFRPH RI RXU PDQDJHPHQW DQG EXVLQHVVDFWLYLWLHV DQG SXW WRJHWKHU DQG UHOHDVHG WKLV,QWHJUDWHG 5HSRUW DV D WRRO WR KDYH PRUH
VWDNHKROGHUV JDLQ D EHWWHU XQGHUVWDQGLQJ RI WKH.21'27(& *URXS
7KH,QWHJUDWHG5HSRUWZDVSUHSDUHGE\DWHDP
RIIHPDOHSURMHFWPHPEHUVVDPHDVODVWDOO.21'27(& 5(3257

IURPWKH*HQHUDO$IIDLUV'LYLVLRQZKLFKLVDXQLWUHVSRQVLEOHIRU,5DQG&65DQGWKH6DOHV+HDGTXDUWHUV0RUHRYHUWKHUHSRUWRXWOLQHVRXU
HIIRUWVWRJRIRUZDUGZLWKRXUFRQYHQWLRQDO
PDQDJHPHQWDQGEXVLQHVVDFWLYLWLHVLQPLQGZKLOHWDNLQJLQWRDFFRXQWSHUVSHFWLYHVIRUWKUHH
GLUHFWLRQVRI(6*ZKLFKKDYHEHHQDWWUDFWLQJDWWHQWLRQRYHUWKHSDVWIHZ\HDUVSD\LQJ
DWWHQWLRQWR6'*VDQGVWULYLQJWRIXUWKHULQFUHDVHWKHFRUSRUDWHYDOXHRIWKH&RPSDQ\

7RPR\D$QGR6HQLRU([HFXWLYH'LUHFWRUDQG*HQHUDO
0DQDJHU0DQDJHPHQW+HDGTXDUWHUV

7$%/(

2)&217(176
&RPSDQ\2YHUYLHZ+LVWRU\

9DOXH&UHDWLRQ3URFHVV%XVLQHVV0RGHO

0DWHULDOLW\%XVLQHVV5HSRUW:($5(.21'27(&‫ ںی‬$5( .21'27(&

7RS0HVVDJH0HGLXPWHUP0DQDJHPHQW3ODQ*URZWK6WUDWHJ\)LQDQFLDO6WUDWHJLHV.21'27(&



9,6,21.21'27(& 9,6,21



&RQVROLGDWHG)LQDQFLDO+LJKOLJKWV&RQVROLGDWHG)LQDQFLDO3HUIRUPDQFH)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\&, WR(6*%DVLF3ROLF\(6*%DVLF3ROLF\2XWOLQH

(6*



3URYLVLRQRI2SWLPDO3URGXFWV DQG0HUFKDQGLVH
IRU(QYLURQPHQWDO0HDVXUHV%XVLQHVV$FWLYLWLHV3D\LQJ$WWHQWLRQWRWKH
(QYLURQPHQW(19,5210(17(19,5210(173URGXFW/LDELOLW\DQG4XDOLW\$VVXUDQFH



3URFXUHPHQWDQG3URYLVLRQRI+LJK9DOXHDGGHG
3URGXFWV 0HUFKDQGLVHDQG6HUYLFHV&RPPXQLFDWLRQZLWK6KDUHKROGHUVDQG,QYHVWRUV$SSURSULDWH,QIRUPDWLRQ'LVFORVXUHDQG6HFXULW\&RH[LVWHQFHZLWK/RFDO&RPPXQLWLHV



6DIHW\0HDVXUHVDQG:RUN6W\OH5HIRUP+XPDQUHVRXUFHVGHYHORSPHQWDQG'LYHUVLW\*29(51$1&(*29(51$1&(
&RUSRUDWH*RYHUQDQFH

5HPXQHUDWLRQIRU([HFXWLYHPHPEHUV

62&,$/

62&,$/

6833/(0(17

6WRFN,QIRUPDWLRQ2UJDQL]DWLRQ&KDUW

.21'27(&1HWZRUN&RQVROLGDWHG)LQDQFLDO6WDWHPHQWV.21'27(& 5(3257

6833/(0(17.21'27(&,1&,QWHJUDWHG5HSRUW

),1$1&,$/'$7$),1$1&,$/'$7$



:($5(.21'27(&
&RPSDQ\2YHUYLHZ +LVWRU\ 

9DOXH&UHDWLRQ3URFHVVWE AREKONDOTEC

0HVVDJH%XVLQHVV0RGHO 

0DWHULDOLW\ %XVLQHVV5HSRUW

3URILOHRI.21'27(&

.21'27(& 5(3257

7KH.21'27(&*URXSLVDPDQXIDFWXUHUDQG
ZKROHVDOHFRPSDQ\WKDWPDLQWDLQVLQKRXVH
IDFWRULHVDQGKDQGOHVDSSUR[LPDWHO\RU
PRUHSURGXFWVDQGPHUFKDQGLVH
(YHUVLQFHLWVHVWDEOLVKPHQW.21'27(&KDV
EHHQSURYLGLQJDZLGHUDQJHRIEDVLFPDWHULDOV&RPSDQ\QDPH

WKDWVXSSRUWLQIUDVWUXFWXUHVHVVHQWLDOIRUVRFLDODFWLYLWLHVE\UHVSRQGLQJWRWKHQHHGVRIFXVWRPHUVDQGH[SDQGLQJSURGXFWVDQGPHUFKDQGLVHKDQGOHG%\VRGRLQJZHKDYHEHHQVXSSRUWLQJ
WKHHVWDEOLVKPHQWRIDQDIIOXHQWVRFLHW\:($5(.21'27(&&RPSDQ\2YHUYLHZ.21'27(&,1&
6DQZD'HQ]DL&R/WG
9,6,21.21'27(&,17(51$7,21$/ 7+$,/$1' &2/7'
&+82+*,.(1&R/WG

3UHVLGHQWDQG
5HSUHVHQWDWLYH
'LUHFWRU-DQXDU\

.DWVXKLNR.RQGR),1$1&,$/'$7$(VWDEOLVKHG.21'27(&

7(&%8,/'&2/7'6DNDLJDZD1LVKLNX2VDND-DSDQ+HDGRIILFH
7RN\R+HDGTXDUWHUV0LQDPL6XQD.RWRNX7RN\R
1XPEHURI(PSOR\HHV&DSLWDOVWRFNPLOOLRQ\HQ $VRI0DUFK%XVLQHVV DUHDV







0DMRULWHPVKDQGOHG(19,5210(177RN\R6WRFN([FKDQJH )LUVW6HFWLRQ0DQXIDFWXULQJSURFXUHPHQWVDOHDQGUHQWDORILQGXVWULDOPDWHULDOVSULPDULO\LQWKHUHWDLOKDUGZDUHEXVLQHVV
0DQXIDFWXULQJSURFXUHPHQWDQGVDOHRIVWUXFWXUDOVWHHOPDWHULDOVPDLQO\
IRUVWHHOIDEULFDWRUV3URFXUHPHQWDQGVDOHRIHOHFWULFDOHTXLSPHQWIRUHOHFWULFDOZRUNRSHUDWRUVDQGHOHFWULFDODSSOLDQFHVWRUHV

3URGXFWV LQKRXVHPDQXIDFWXUHGSURGXFWV
7XUQEXFNOHVEUDFHVVFDIIROGLQJFKDLQVVFUHZVDQFKRUEROWVFRQVWUXFWLRQPDWHULDOVPDFKLQHU\DQGHTXLSPHQWHWF
0HUFKDQGLVH SURGXFWVSURFXUHGIURPGRPHVWLFDQGIRUHLJQVXSSOLHUV2(0SURGXFWV+DUGZDUHFKDLQVZLUHURSHVVFUHZVFRQVWUXFWLRQPDWHULDOVOLJKWLQJHTXLSPHQWSDQHOERDUGVDLUFRQGLWLRQLQJHTXLSPHQWHFRLWHPVHWF

)DFWRULHVIDFWRULHVLQ-DSDQ

6833/(0(171HWZRUN.21'27(&,1& RSHUDWLQJVLWHV
6DQZD'HQ]DL&R/WGRSHUDWLQJVLWHV.21'27(&,17(51$7,21$/ 7+$,/$1' &2/7'
&+82+*,.(1&R/WG
7(&%8,/'&2/7'RSHUDWLQJVLWHV$VRI0DUFK

*29(51$1&(/LVWHGVWRFN PDUNHW&RQVROLGDWHG $VRI0DUFK

62&,$/*URXSFRPSDQLHV.21'27(& 5(3257



:($5(.21'27(&
0HVVDJH

&RPSDQ\2YHUYLHZ +LVWRU\ 

9DOXH&UHDWLRQ3URFHVV%XVLQHVV0RGHO 

0DWHULDOLW\ %XVLQHVV5HSRUW+LVWRU\

2YHU<HDUVRIWKH&RPSDQ\bV+LVWRU\ &KDOOHQJHIRU9DOXH&UHDWLRQ

7KHFRPSDQ\KDVEHHQVWULYLQJWRPHHWWKHQHHGVRIFXVWRPHUVVLQFHLWVHVWDEOLVKPHQW
.21'27(&KDVEHHQDEOHWRJURZDVDPDQXIDFWXUHUDQGZKROHVDOHFRPSDQ\SUHFLVHO\EHFDXVHWKHFRPSDQ\KDVFRQWLQXHGWRFKDOOHQJHDQGFUHDWHWRPHHWWKHQHHGVRIFXVWRPHUVDQGEHFDXVHRIWKHVXSSRUWIURPVWDNHKROGHUV:HZLOOFRQWLQXHWRFKDOOHQJHDQGFUHDWHIDFLQJYDULRXVLVVXHVLQRUGHUWRFRQWULEXWHWRWKHGHYHORSPHQWRIVRFLHW\
JRLQJIRUZDUG

ْ&RQVROLGDWHGٓ
1HWVDOHV PLOOLRQ\HQ

1HWZRUN
1XPEHURI(PSOR\HHV

 RSHUDWLQJVLWHV PHPEHUV.\XVKX)DFWRU\
7KH2LO6KRFNV






















(VWDEOLVKHGDQG*DLQLQJJURXQGLQ7RN\RnVKLIWLQJIURPVHDWRODQG|.\XVKX)DFWRU\2SHQHG)URPWKHH[SDQVLRQDFURVV-DSDQDQG
FRPSOHWLRQRIWKHKHDGRIILFHEXLOGLQJWRWKHQH[WVWDJH

7KH&RPSDQ\VWDUWHGEXVLQHVVIURPWKHDVKHVRIWKH
ZDUHQWHUHGLQWR7RN\RGHYHORSHGODUJHVFDOHSURGXFWLRQV\VWHPVE\RSHQLQJWKH.\XVKX)DFWRU\
H[SDQVLRQRSHUDWLQJVLWHVDQGWKXVVWUHQJWKHQHGLWV
EXVLQHVVEDVH

7KH&RPSDQ\WDFNOHGTXDOLW\LPSURYHPHQWDWIDFWRULHVZKLOHFRPSOHWLQJWKHKHDGRIILFH
EXLOGLQJDQGH[SDQGLQJPHUFKDQGLVHIURPPHWDOFRQVWUXFWLRQPDWHULDOVWRRYHUDOOLQGXVWULDOPDWHULDOV,WH[SDQGHGFXVWRPHUVZLWKWKH
HVWDEOLVKPHQWRIWKH1HZ%XVLQHVV'LYLVLRQDVDGLUHFWVDOHVGHSDUWPHQW (VWDEOLVKHG.RQGR6KRWHQ &R/WG &KDQJHGWKHFRPSDQ\QDPHWR.21'2
,521:25.6&2/7' %HJDQSURGXFWLRQRIVKDFNOHV %HJDQSURGXFWLRQRIWXUQEXFNOHV %HJDQVDOHRIZLUHURSHV 2SHQHG.\XVKX)DFWRU\ %HJDQSURGXFWLRQRIVFDIIROGLQJFKDLQV %HJDQPDQXIDFWXULQJDQGVDOHRIKDUGZDUHDQGVFUHZVIRUFLYLOHQJLQHHULQJDQGFRQVWUXFWLRQXVH 5HORFDWHGWKHKHDGRIILFHWR6DNDLJDZD1LVKLNX2VDND
 %RG\RIWXUQEXFNOHIRUEXLOGLQJZDVDFFUHGLWHGDV-,61R(VWDEOLVKHGWKH1HZ%XVLQHVV'LYLVLRQFXUUHQWO\6WUXFWXUDO6WHHO6DOHV'LYLVLRQ .\XVKX)DFWRU\





.21'27(& 5(3257

6KDFNOHV

7XUQEXFNOHV:LUHURSHV

6FUHZV6WDUWRIFRQVROLGDWLRQ‫ق‬PLOOLRQ\HQ‫ك‬

‫ك<)ق‬6KLJD)DFWRU\

6DSSRUR)DFWRU\.DQWR)DFWRU\.21'27(&

7KH*OREDO)LQDQFLDO&ULVLV$QHKDbV 7KH)DEULFDWLRQ2I
4XDNH5HVLVWDQFH,QFLGHQW

7KH*UHDW+DQVKLQ$ZDML(DUWKTXDNH5HERUQ.21'27(&GHYHORSHGWKHEDVHWROHDSWRZDUGDVWRFNOLVWLQJ
7KH &RPSDQ\ PDGH D IUHVK VWDUW E\ FKDQJLQJ WKHFRPSDQ\ QDPH LQ SUHSDUDWLRQ IRU WKH +HLVHL HUD)ROORZLQJ WKH GHYHORSPHQW RI WKH SURGXFW VXSSO\V\VWHP E\ HVWDEOLVKLQJ IDFWRULHV LQ ,EDUDNL DQG+RNNDLGR LW FKDQJHG WKH LQWHUQDO V\VWHP IRU WKH
OLVWLQJ 7KH &RPSDQ\ EXVLO\ WDFNOHG HPHUJHQFLHV
FDXVHG E\ WKH *UHDW +DQVKLQ$ZDML (DUWKTXDNH
0HUFKDQGLVH VDZ IXUWKHU LQFUHDVHV LQ UHVSRQGLQJWR WKH QHHGV &KDQJHGWKHFRPSDQ\QDPHWR
.21'27(&,1& 2SHQHG.DQWR)DFWRU\ 2SHQHG6DSSRUR)DFWRU\ /LVWHGRQWKH6HFRQG6HFWLRQRIWKH2VDND
6WRFN([FKDQJH /LVWHGRQWKH6HFRQG6HFWLRQRIWKH7RN\R
6WRFN([FKDQJH
2SHQHG.DQWR/RJLVWLFV&HQWHU
 6WDUWHGRXUZHEVLWH
 6WDUWHG3URGXFW&DWDORJV







3UHVHQW%XVLQHVV([SDQVLRQ(QWHULQJDQHZVWDJHE\0 $ 2SHQHG+RPHFHQWHU 'LYLVLRQ‫ق‬FXUUHQWO\+RPHFHQWHU *URXS‫ك‬ ,PSOHPHQWHG<DQWDL'LVWULEXWLRQ:DUHKRXVHEDVHG
RQDFRQWUDFWFRQFOXGHGZLWKD&KLQHVHORJLVWLFVWUDGLQJFRPSDQ\ (QWHUHGLQWRDQDJHQF\FRQWUDFWZLWKSHZDJ LQ$XVWULD 2SHQHG6KLJD)DFWRU\ $FTXLUHGVKDUHVRI6DQZD'HQ]DL &R/WG‫ق‬WKH
EXVLQHVVRIHOHFWULFDOHTXLSPHQW‫ك‬WRPDNHWKH
FRPSDQ\DFRQVROLGDWHGVXEVLGLDU\ 'HVLJQDWHGDVWKH)LUVW6HFWLRQVWRFNE\WKH7RN\R
6WRFN([FKDQJH 7XUQHG.21'27(&,17(51$7,21$/ 7+$,/$1' &2/7'LQWRDFRQVROLGDWHGVXEVLGLDU\$FTXLUHGVKDUHVRI&+82+*,.(1&R/WG WKH
EXVLQHVVRIGHVLJQDQGPDQXIDFWXUHRIPDFKLQHU\DQG GHYLFHV WRPDNHWKHFRPSDQ\DFRQVROLGDWHG
VXEVLGLDU\,QWURGXFHGWKHVKDUHKROGHULQFHQWLYHSODQ 2IIHULQJULFHFHUWLILFDWHVRQFHD\HDU 2SHQHG(FRPPHUFH*URXS 3XUFKDVHGWKHEXVLQHVVIURP0HFKDWUR (QJLQHHULQJ
&R/WG
$FTXLUHGVKDUHVRI7(&%8,/'&2/7'WRPDNHWKH
FRPSDQ\DFRQVROLGDWHGVXEVLGLDU\&RPSOHWHG6KLJD)DFWRU\ 1R3ODQW.21'27(& 5(3257



62&,$/



*29(51$1&(





6833/(0(17(19,5210(17),1$1&,$/'$7$

7KH%XUVW%XEEOH

9,6,21

7KH*UHDW(DVW-DSDQ(DUWKTXDNH:($5(.21'27(&

1HWVDOHV

:($5(.21'27(&
0HVVDJH

&RPSDQ\2YHUYLHZ +LVWRU\ 

9DOXH&UHDWLRQ3URFHVV%XVLQHVV0RGHO 

0DWHULDOLW\ %XVLQHVV5HSRUW

9DOXH&UHDWLRQ3URFHVV,QSXW)LQDQFLDOFDSLWDO

7RWDOFDVKDQGGHSRVLWVPLOOLRQ\HQ )<

0DQXIDFWXULQJ

1XPEHURIGRPHVWLFSURGXFWLRQIDFWRULHV SODFH,QFUHDVHLQQRQFXUUHQWDVVHWVIRUUHSODFHPHQWRISURGXFWLRQIDFLOLWLHVLQWKHPDQXIDFWXULQJGLYLVLRQPLOOLRQ\HQ,QFUHDVHLQQRQFXUUHQWDVVHWVIRUH[SDQVLRQRIIDFWRU\EXLOGLQJVPLOOLRQ\HQ )<,QWHOOHFWXDO(VWDEOLVKPHQWRI5 ''HSDUWPHQWLQ.\XVKX)DFWRU\SDWHQWV8WLOLW\PRGHOGHVLJQUHJLVWUDWLRQVWUDGHPDUNUHJLVWUDWLRQVDOUHDG\DFTXLUHG+XPDQFDSLWDO(PSOR\HHVSHRSOH FRQVROLGDWHG+ROGHUVRILQWHUQDOFHUWLILHGTXDOLILFDWLRQn/LIWLQJHTXLSPHQWDGYLVRU|SHRSOH㌣3IRUGHWDLOV

6RFLDOFDSLWDO
1DWXUDOFDSLWDO&XVWRPHUVDERXWFRPSDQLHV RQO\IRU.21'27(&,1&6DQZD'HQ]DL &R/WG
6XEVLGLDULHVFRPSDQLHV,WHPVKDQGOHGDERXWLWHPV2SHUDWLQJVLWHVLQ-DSDQDERXWRIILFHVFDSLWDOFDSLWDO&RH[LVWHQFHRI1DWXUHDQG0DQNLQG
2SSRUWXQLWLHVDQG5LVNV

6WUDWHJLHVDQG
$OORFDWLRQRI)XQGV%XVLQHVV㌣3IRUGHWDLOV$FWLYLWLHV

3XUFKDVHRIRSWLPDOPHUFKDQGLVHV,QGXVWULDO
0DWHULDOV6WUXFWXUDO6WHHO
0DWHULDOV(OHFWULFDO(TXLSPHQW

1HHGVRIFXVWRPHUVDQG
VRFLHW\

0DQXIDFWXULQJRIRSWLPDOSURGXFWV

3URYLVLRQRISURGXFWVDQG
PHUFKDQGLVH

2XWORRN(DUQLQJV㌣3IRUGHWDLOV,QLWLDWLYHVIRU(6*:HZLOOFRQWULEXWHWRVRFLHW\WKURXJKWKHGHYHORSPHQWRIWKHHQYLURQPHQWIRUWKHIXWXUH
.21'27(& 5(3257

:($5(.21'27(&

5HDOL]DWLRQRIVDIH
DQGVHFXUHVRFLHW\

9,6,21,PSDFW.21'27(&&RUSRUDWH3KLORVRSK\

2XWFRPH㌣ 3IRUGHWDLOV6WUXFWXUDO6WHHO
0DWHULDOV㌣ 3IRUGHWDLOV(OHFWULFDO(TXLSPHQW㌣ 3IRUGHWDLOV‫س‬:LGHO\SURYLGHVLQIUDVWUXFWXUHUHODWHGPDWHULDOVUHTXLUHGIRU
VRFLDODFWLYLWLHV‫س‬7UDQVDFWLRQVZLWKQRWRQO\
FRQVWUXFWLRQUHODWHGLQGXVWU\EXW
DOVRYDULRXVLQGXVWULHV‫[(س‬SDQVLRQ RIWKH KDQGOLQJRIHQYLURQPHQWUHODWHGPHUFKDQGLVH‫س‬3URYLGHV/('VRODUSRZHU UHODWHG
PHUFKDQGLVH‫س‬2SHUDWLQJ VLWH RSHQLQJSODQDFFRUGLQJWRWKHQHHGVFRPPXQLWLHV

9DOXHV.21'27(&SURYLGHVWRVRFLHW\&RH[LVWHQFHDQG
GHYHORSPHQWZLWKORFDOFRPPXQLWLHV(19,5210(17,QGXVWULDO
0DWHULDOV

3URGXFWV DQG0HUFKDQGLVH
6HUYLFH,QLWLDWLYH

5HFRYHU\UHFRQVWUXFWLRQRIGLVDVWHUVWULFNHQDUHDV&RQWULEXWLRQWRWKHHQYLURQPHQW‫س‬6HOHFWVORFDWLRQVIRURSHUDWLQJVLWH
WRHQDEOHFRH[LVWHQFHZLWKORFDOFRPPXQLWLHV,PSURYHPHQWLQFXVWRPHUVDWLVIDFWLRQ‫س‬,QYHQWRULHVLQZDUHKRXVHVRIHDFKRSHUDWLQJVLWHIRUTXLFNGHOLYHU\RI
QHFHVVDU\PDWHULDOVDWWKHWLPHRIGLVDVWHUV

5HOHYDQW‫ۢڼڹۈ‬62&,$/

2XWSXW
5HOHYDQW
6HFWRU),1$1&,$/'$7$:HVWULYHWRFRQWULEXWHWRWKHFUHDWLRQRIDQDIIOXHQWVRFLHW\E\QXUWXULQJRXUHPSOR\HHVZKRZRXOGVKDSHWKHIXWXUHDQGE\FRQGXFWLQJFRUSRUDWHDFWLYLWLHVZLWKLQQRYDWLYHDQGSLRQHHULQJZD\‫س‬$FTXLVLWLRQRI,62

0DQXIDFWXULQJGLYLVLRQ㌣ 3IRUGHWDLOV*29(51$1&(‫س‬0DQXIDFWXULQJRIKLJKTXDOLW\SURGXFWVE\DXWRPDWHGSURGXFWLRQOLQHVDQGLPDJHSURFHVVLQJWHFKQRORJLHV‫س‬0DQDJHPHQWRIIDFWRU\ZDVWHZDWHU‫س‬$SSURSULDWHVWRUDJHDQGGLVSRVDORI
XVHGRLOLQWKHIDFWRU\‫(س‬IIRUWVWRUHVWUDLQ&2HPLVVLRQVIURPWUDQVSRUWDWLRQ‫س‬0HHWLQJRQFRPSODLQWVLQIRUPDWLRQVKDULQJ‫(س‬QKDQFHPHQWRIFDWDORJXHV

6833/(0(17*URXS&RPSDQ\+HDGTXDUWHUV‫س‬6DIHW\PHDVXUHVIRUHPSOR\HHV.21'27(& 5(3257



:($5(.21'27(&
0HVVDJH

&RPSDQ\2YHUYLHZ +LVWRU\ 

9DOXH&UHDWLRQ3URFHVV%XVLQHVV0RGHO 

0DWHULDOLW\ %XVLQHVV5HSRUW%XVLQHVV0RGHO
6XSSOLHUV&RQVROLGDWHG
,Q
KRXVH
)DFWRU\&RQVWUXFWLRQ FLYLOHQJLQHHULQJUHODWHG
0DQXIDFWXUHUVHWF 

3RLQW⋇٫٫

2YHUVHDVSURFXUHPHQW(OHFWULFDOHTXLSPHQWPDQXIDFWXUHUV

3RLQW⋈٫٫

3RLQW⋇PDQXIDFWXUHUIXQFWLRQLQQHWVDOHV$SSUR[LPDWHO\٫‫پ‬,QKRXVHPDQXIDFWXUHGSURGXFWVDQG
2(0SURGXFWV

3RLQW⋈%XVLQHVV6HJPHQWV RIVDOHVVWUXFWXUHVDOHVFRQWULEXWLRQUDWLR,QGXVWULDO0DWHULDOV٫

6WUXFWXUDO6WHHO0DWHULDOV(OHFWULFDO(TXLSPHQW

٫

٫

2YHUVHDVSURFXUHPHQWLQFOXGHVSURGXFWVPDQXIDFWXUHGLQORFDO2(0IDFWRULHV
3RLQW⋉

1XPEHURIFXVWRPHUVE\
EXVLQHVVVHJPHQWV

7RWDO

$SSUR[LPDWHO\FXVWRPHUV‫كق‬&XVWRPHUV

3RLQW⋉*HQHUDO
FRQVWUXFWLRQFRPSDQLHV
7UDGLQJFRPSDQLHV+RPH
LPSURYHPHQW
FHQWHUHWF

3RLQW⋊(OHFWULFDODSSOLDQFH
VWRUHV

2YHUVHDV+DUGZDUH
VWRUHV:KROHVDOHUV٫,QGXVWULDO
0DWHULDOV٫

6WUXFWXUDO6WHHO
0DWHULDOV٫(OHFWULFDO(TXLSPHQW(QGXVHUV&RQVWUXFWLRQ FLYLOHQJLQHHULQJLQGXVWU\'HPDQGHUV>(QWLUHLQIUDVWUXFWXUH@

6WHHO
IDEULFDWRUV(OHFWULFDOZRUNRSHUDWRUV

3RLQW⋊:HSURYLGHGLUHFWVDOHVRI6WUXFWXUDO6WHHO 0DWHULDOVDQG
(OHFWULFDO(TXLSPHQWWRVRPH
HQGXVHUV

3RLQW⋋
3RLQW⋋'HPDQGIRUSURGXFWVDQG
PHUFKDQGLVH
3XEOLF٫
3ULYDWH ٫.21'27(& 5(3257

(IIHFWV‫ٴ‬0DQ\VXSSOLHUV‫ٴ‬+DQGOLQJQRWRQO\GRPHVWLFJRRGVEXW
DOVRLPSRUWHGRQHV‫(ٴ‬VWDEOLVKPHQWRILQKRXVHIDFWRULHVDWIRXUVLWHVLQ-DSDQ‫'ٴ‬HDOLQJRIVSHFLDORUGHUV‫ٴ‬2ZQLQJRI2(0SURGXFWLRQIDFWRULHVLQ
-DSDQDQGDEURDG‫& س‬DSDEOHRISURYLGLQJSURGXFWVDQGPHUFKDQGLVHDFFRUGLQJWRQHHGVE\KDYLQJQRWRQO\FKHDSLPSRUWHG
PHUFKDQGLVH SURFXUHPHQW EXWDOVRKLJKTXDOLW\DQG
KLJKO\YDOXHDGGHGLQKRXVHPDQXIDFWXUHGSURGXFWV‫& س‬DSDEOHRIVWDEOHVXSSO\GXHWRPDQ\VXSSOLHUVDQGQRW
GHSHQGLQJRQVSHFLILFVXSSOLHUV‫[(ق‬SHFWHGULVNV‫ك‬&RPSOH[LW\RIVXSSOLHUPDQDJHPHQWIRUHLJQH[FKDQJH
ULVNULVNRIKLJKHUUDZPDWHULDOSULFHVGHIHFWOLDELOLW\ULVNSURGXFWOLDELOLW\ULVNVXSSOLHUFRXQWU\GHSHQGHQF\ULVN.21'27(&5HVSRQVHWRWKHULVNV'HULYDWLYHWUDQVDFWLRQVRIIHULQJRIKLJKO\YDOXHDGGHGPHUFKDQGLVH‫ٹ‬6WUHQJWK  6WUHQJWKLQVDOHVPHWKRGV&KDUDFWHULVWLFV(IIHFWV‫'ٴ‬HYHORSPHQWRIWKHTXLFNGHOLYHU\V\VWHPZLWKDOORSHUDWLQJVLWHVIXOO\HTXLSSHGZLWKZDUHKRXVHV‫&ٴ‬DSWXUHRIGHPDQGLQHDFKDUHDRI-DSDQWKURXJKH[SDQVLRQDFURVVWKH
FRXQWU\‫ٴ‬3URSRVDOVRIPHUFKDQGLVHURRWHGLQWKH
DUHDGHDOLQJZLWKDERXWLWHPV‫ٴ‬4XLFNGHOLYHU\RIPDGHWRRUGHUSURGXFWVIURPIRXUIDFWRULHVLQ-DSDQ‫ س‬5HDOL]DWLRQRIWKHTXLFNGHOLYHU\V\VWHPZLWKHDFKRSHUDWLQJVLWHKDYLQJLQYHQWRULHV‫ س‬7KRURXJKVPDOOORWVDOHVURRWHGLQWKHUHJLRQ‫ܒ‬‫[(ق‬SHFWHGULVNV‫ك‬
3RVVLELOLW\RILQGXVWULDODFFLGHQWVIURPZDUHKRXVH
RSHUDWLRQVLQVXIILFLHQWODERUIRUFHIRULQYHQWRU\PDQDJHPHQWSRVVLELOLW\RIHPSOR\HHDFFLGHQWVDWWKHWLPH
RIGHOLYHU\),1$1&,$/'$7$‫ܒ‬

9,6,21&KDUDFWHULVWLFV:($5(.21'27(&‫ٹ‬6WUHQJWK  6WUHQJWKLQSURFXUHPHQW

5HVSRQVHWRWKHULVNV+ROGLQJRIWKH6DIHW\DQG+HDOWK&RPPLWWHH‫ܒ‬36DIHW\GULYLQJLQLWLDWLYH‫ܒ‬3

&KDUDFWHULVWLFV(IIHFWV‫ٴ‬6DOHVWRYDULRXVLQGXVWULHVEXVLQHVVHV‫'ٴ‬LYHUVLILHGVPDOOORWVDOHVPDQ\FRXQWHUSDUWLHV ‫(ٴ‬VWDEOLVKPHQWRIDVDOHVGHVNVSHFLDOL]HGLQWDUJHWV
7RN\RPHWURSROLWDQDUHDUDLOZD\HQYLURQPHQWKRPHLPSURYHPHQW
FHQWHUHFRPPHUFHHWF‫ك‬‫ س‬1RWSURQHWREHDIIHFWHGE\FRQGLWLRQVRISDUWLFXODULQGXVWULHVE\VHOOLQJWRYDULRXVLQGXVWULHV‫ܒ‬(19,5210(176WUHQJWKLQFXVWRPHUV‫[(ق‬SHFWHGULVNV‫ك‬
6WDJQDQWHFRQRPLFDFWLYLWLHVLQWKHFRQVWUXFWLRQLQGXVWU\DQGWKHUHVXOWLQJGHFUHDVHLQGHPDQGPDQDJHPHQWRI
PDQ\FXVWRPHUVLQVXIILFLHQWVWDIIIRUPDUNHWLQJDQG
RSHUDWLRQV

5HVSRQVHWRWKHULVNV,QWURGXFWLRQRIWKHFRUHV\VWHPLPSOHPHQWDWLRQRIWUDLQLQJWRLPSURYHPDUNHWLQJ
DQGRSHUDWLRQDODELOLWLHV‫ܒ‬3
)RXUJURZWKVWUDWHJLHVDQG3HULSKHU\VWUHQJWKHQLQJJURZWK

6833/(0(17*29(51$1&(

7KH.21'27(&JURXSKDVQRWLQFXUUHGDGHILFLWIRURUGLQDU\SURILWVLQFHHVWDEOLVKPHQWWR
WKHSUHVHQW H[FOXGLQJLUUHJXODUSHULRGVIRUILQDQFLDOVHWWOHPHQW ,QRXUPRUHWKDQ\HDUVRIKLVWRU\ZHKDYHUHVSRQGHGWRFKDQJHVLQH[WHUQDOHQYLURQPHQWVHDFKWLPHDQG
FRQWLQXHGFKDQJLQJWKHEXVLQHVVSRUWIROLRDQGH[SDQGLQJWKHPHUFKDQGLVHZHKDQGOH 2XU&RPSDQ\bVKLVWRU\DQGFKDQJHVLQHDUQLQJV‫ۅܒ‬
7KHWKUHHVWUHQJWKVGHVFULEHGRQWKLVSDJHKDYHEHHQQXUWXUHGLQVXFKKLVWRU\RIUHIRUPV:LWKH[WHUQDOHQYLURQPHQWVH[SHFWHGWRFKDQJHHYHQPRUHUDSLGO\JRLQJIRUZDUGZHZLOOFRQWLQXHWREHFRQVFLRXVDERXWZKDWVKRXOGEHFKDQJHGDQGZKDWVKRXOGQRWWRUHIOHFWWKHPLQRXUPDQDJHPHQW
0RUHRYHUKDYLQJGHFLGHGJURZWKVWUDWHJLHVVHSDUDWHO\IRUVXVWDLQDEOHJURZWKJRLQJ
IRUZDUGWKH&RPSDQ\ZLOOVWULYHIRUIXUWKHUGHYHORSPHQW*URZWK VWUDWHJLHV ‫ ܒ‬33 DQG 3 3‫ك‬62&,$/‫ٹ‬6WUHQJWK .21'27(& 5(3257



:($5(.21'27(&
0HVVDJH

&RPSDQ\2YHUYLHZ +LVWRU\ 

9DOXH&UHDWLRQ3URFHVV%XVLQHVV0RGHO 

0DWHULDOLW\ %XVLQHVV5HSRUW

0DWHULDOLW\,QHQJDJLQJLQFRUSRUDWHDFWLYLWLHVZHUHFRJQL]HWKDWPDQDJHPHQWSURPRWLQJUHVSRQVHVWR(6*
HQYLURQPHQWVRFLDODQGJRYHUQDQFH LVVXHVZLOOOHDGWRVXVWDLQDEOHJURZWK$FFRUGLQJO\ZHKDYH
HVWDEOLVKHGWKH(6*%DVLF3ROLF\LQWKHIROORZLQJVHTXHQFHWRLGHQWLI\WKHJRDOVWREHDFKLHYHGLQ
HDFK(6*DUHDLQPDQDJHPHQWDQGUHODWHG
LVVXHVDQGIXOILOVRFLDOUHVSRQVLELOLWLHVLQ
PDQDJHPHQWDFWLYLWLHV0DWHULDOLW\ZDVVRUWHGRXWE\FRQVLGHULQJ6'*V
>VXVWDLQDELOLW\RIJOREDOHQYLURQPHQWVXVWDLQDELOLW\RIKXPDQVRFLHW\DQGHOLPLQDWLRQRISRYHUW\@SXEOLVKHGLQWKH3DULV$JUHHPHQW
DQGWDNLQJLQWRFRQVLGHUDWLRQWKHUHOHYDQFHWR
6'*VJRDOV9HULILFDWLRQRIPDWHULDOLW\DQGWKHSURFHVVRIIRUPXODWLQJWKH(6*%DVLF3ROLF\

STEP 䠍

9HULILFDWLRQRIPDWHULDOLW\DQGWKHSURFHVVRIIRUPXODWLQJWKH(6*%DVLF3ROLF\:HLGHQWLILHGSRWHQWLDOLWHPVIRURXULVVXHVDQGLGHQWLILHG
LVVXHVIRUHDFKVWDNHKROGHUUHIHUULQJWRYDULRXVJXLGHOLQHV
,,5&DQG,62 ,,5&)UDPHZRUNZLWKLQWKH,QWHUQDWLRQDO,QWHJUDWHG5HSRUWLQJ&RXQFLO,62*XLGDQFHRQVRFLDOUHVSRQVLELOLW\RIRUJDQL]DWLRQVSTEP 2-XGJHPHQWRQWKHLPSRUWDQFHRIHDFKLWHP:HHYDOXDWHGWKHLPSRUWDQFHRILVVXHVLGHQWLILHGLQ67(3ZLWKWKHLPSRUWDQFHIRUVWDNHKROGHUV YHUWLFDOD[LV DQG
WKHLPSRUWDQFHIRUWKH&RPSDQ\ KRUL]RQWDOD[LV DQG
VHOHFWHGLWHPVRIKLJKLPSRUWDQFHDVLVVXHVSTEP 3,GHQWLILFDWLRQRIPDWHULDOLW\LQ(6*DQGSROLF\IRUPXODWLRQ$WWKH%RDUGRI'LUHFWRUVZHGLVFXVVHGDJDLQWKHRUGHURISULRULW\IRULPSRUWDQWLWHPVVHOHFWHGLQ67(3DQGEDVHG
RQWKHUHVXOWLGHQWLILHGPDWHULDOLW\DQGGHFLGHGWKH(6*%DVLF3ROLF\:KDWbV6'*V"
6'*VVWDQGVIRU6XVWDLQDEOH'HYHORSPHQW*RDOVZKLFKDUHWKH
JOREDOORQJWHUPJRDOVIURPWRIRUZKLFKLQWHUQDWLRQDODJUHHPHQWZDVDFKLHYHGDWWKH8QLWHG1DWLRQVLQ:LWKJRDOVDQGWDUJHWVWKH\ZHUHDGRSWHGDV
WKHDFWLRQSODQIRUWKHSURVSHULW\RIPDQNLQGDQGWKHHDUWK&RYHULQJDZLGHUDQJHRISUREOHPVIURPKXQJHUDQGSRYHUW\WR
HFRQRPLFGLVSDULW\KXPDQULJKWVDQGHQYLURQPHQWDOPHDVXUHVLWDGYRFDWHVUHDOL]LQJDZRUOGWKDWnOHDYHVEHKLQGQRRQH|
ZKHUHDOOSHRSOHFDQOLYHZLWKGLJQLW\UHJDUGOHVVRIWKHLUVRFLDODQGHFRQRPLFVLWXDWLRQV.21'27(& 5(3257

(QYLURQPHQW
 %XVLQHVVDFWLYLWLHVSD\LQJ
DWWHQWLRQWRWKHHQYLURQPHQW 3URGXFWOLDELOLW\TXDOLW\
DVVXUDQFH

,QLWLDWLYHVIRUHQYLURQPHQWDOSURWHFWLRQDQGHQHUJ\VDYLQJ
0DQDJHPHQWRIHPLVVLRQVPDWHULDOEDODQFH
4XDOLW\FRQWURORISURGXFWVDQGPHUFKDQGLVH
6WDQFHIRUVHFXULW\DQGVDIHW\ 3URFXUHPHQWDQGSURYLVLRQRIKLJKYDOXHDGGHGSURGXFWVPHUFKDQGLVHDQGVHUYLFHV

3URYLVLRQRIEHWWHUSURGXFWVDQG
PHUFKDQGLVHIRUFXVWRPHUV &RPPXQLFDWLRQZLWKVKDUHKROGHUVDQGLQYHVWRUV(QJDJHPHQWZLWKVKDUHKROGHUV $SSURSULDWHLQIRUPDWLRQGLVFORVXUHDQGVHFXULW\
6RFLDO &RH[LVWHQFHZLWKORFDOFRPPXQLWLHV 6DIHW\PHDVXUHVDQG
ZRUNVW\OHUHIRUP.21'27(&

3URGXFWVDQGPHUFKDQGLVH
KDQGOHGE\WKH&RPSDQ\‫ق‬3UHVHQWDWLRQRIHQYLURQPHQWUHODWHGSURGXFWVDQGPHUFKDQGLVH),1$1&,$/'$7$

 3URYLVLRQRIWKHRSWLPDOSURGXFWVDQGPHUFKDQGLVH
IRUHQYLURQPHQWDOPHDVXUHV

5HOHYDQW6'*V
9,6,210DWHULDOLW\(19,5210(17(6*:HZLOOH[SODLQLQGHWDLOLQFKDSWHUVRQSDQG
DIWHUZKDWZHDUHGRLQJDQGWKHFRQWHQWZHZLOOIRFXVRQJRLQJIRUZDUGDFFRUGLQJWRWKH(6*%DVLF3ROLF\

6WDQFHIRULQIRUPDWLRQGLVFORVXUH,QIRUPDWLRQVHFXULW\PHDVXUHV2SHUDWLQJVLWHRSHQLQJSODQ

62&,$/:HGHFLGHGRQPDWHULDOLW\DVIROORZVDIWHUWKH
WKUHHVWHSV:HZLOOUHJDUGWKLVPDWHULDOLW\DVWKH
(6*%DVLF3ROLF\DQGOLQNLWWRVXVWDLQDEOH
FRUSRUDWHJURZWKE\LQFRUSRUDWLQJLWLQWKH
PDQDJHPHQWVWUDWHJ\:($5(.21'27(&'HFLVLRQRQPDWHULDOLW\ NH\LVVXHV DQG(6*%DVLF3ROLF\

5HVSRQVHWRGLVDVWHUVDQG
FRQWULEXWLRQVWRWKHP
5LVNFRQWUROIRUGLVDVWHUVDQG
RWKHUV)RUHPSOR\HHVbKHDOWKVDIHW\DQG
K\JLHQH*29(51$1&(

3ROLF\RQKXPDQUHVRXUFHGHYHORSPHQW
 +XPDQUHVRXUFHGHYHORSPHQW
'LYHUVLW\
DQGGLYHUVLW\*RYHUQDQFH 6WUHQJWKHQLQJRIFRUSRUDWHJRYHUQDQFH&RUSRUDWHJRYHUQDQFH

 7KRURXJKFRPSOLDQFH&RPSOLDQFH%DVLF3ROLF\

6833/(0(17(PSOR\HHEHQHILWV.21'27(& 5(3257



:($5(.21'27(&
0HVVDJH

&RPSDQ\2YHUYLHZ +LVWRU\ 

9DOXH&UHDWLRQ3URFHVV%XVLQHVV0RGHO 

0DWHULDOLW\ %XVLQHVV5HSRUW%XVLQHVV5HSRUW([LVWLQJEXVLQHVVHVt 7KUHHEXVLQHVVVHJPHQWV,QGXVWULDO
0DWHULDOV6WUXFWXUDO6WHHO
0DWHULDOV(OHFWULFDO(TXLSPHQW‫ٹ‬,QGXVWULDO0DWHULDOV:LWKWKHUHWDLOKDUGZDUHEXVLQHVVDWWKHFRUHZHPDQXIDFWXUHSURFXUHVHOODQGUHQWDOFLYLOHQJLQHHULQJDQGFRQVWUXFWLRQPDWHULDOVPDFKLQHU\DQGHTXLSPHQW2IWKHVXEVLGLDULHV.21'27(&,17(51$7,21$/ 7+$,/$1' &2/7'&+82+*,.(1&R/WGDQG7(&%8,/'&2/7' 
DUHLQFOXGHG
6XSSOLHUV0DQXIDFWXUHUVHWFUHODWHGFRQVWUXFWLRQ &LYLOHQJLQHHULQJ)DFWRULHV
2YHUVHDVSURFXUHPHQW.21'27(&,QGXVWULDO0DWHULDOV&XVWRPHUV*HQHUDOFRQVWUXFWLRQFRPSDQLHV7UDGLQJFRPSDQLHV2YHUVHDV+DUGZDUHVWRUHV:KROHVDOHUV+RPHLPSURYHPHQWFHQWHUHWF

(QGXVHUV.21'27(&,1&RSHUDWLQJVLWHV
1XPEHURIRSHUDWLQJVLWHV6XEVLGLDULHV .21'27(&,17(51$7,21$/ 7+$,/$1' &2/7'
&+82+*,.(1&R/WG
7(&%8,/'&2/7' RSHUDWLQJVLWHV

1XPEHURIFXVWRPHUV$SSUR[LPDWHO\FRPSDQLHV

1XPEHURIQHZFXVWRPHUV FXVWRPHUV

1HWVDOHVRIQHZFXVWRPHUV PLOOLRQ\HQ&KDUDFWHULVWLFV‫؞‬:LGHUDQJHRISURGXFWVDQGPHUFKDQGLVHKDQGOHGVWDEOHSHUIRUPDQFH‫(؞‬DUQLQJVGULYHU

7(&%8,/'&2/7'LVLQFOXGHGLQWKHFRQVROLGDWHGUHVXOWVRQO\IRU%6LQ)<DQGIRUERWK%6DQG3/

IURP)<

7KHQXPEHURIQHZFXVWRPHUVDQGRIQHWVDOHVUHSUHVHQWWKHQXPEHUDQGQHWVDOHVRIFXVWRPHUVH[SORLWHGWKLVILVFDO\HDUDQGLQWKHSUHYLRXVILVFDO\HDUDQGIRUZKLFKDFWXDOVDOHVZHUHPDGHWKLVILVFDO\HDU.21'27(& 5(3257



1HWVDOHV
2SHUDWLQJLQFRPHUDWLR



.21'27(&

















SODQ

1HWVDOHV









2SHUDWLQJLQFRPH











2YHUYLHZRIWKH<HDU(QGHG0DUFK
6HJPHQWVDOHVFDPHWR PLOOLRQ\HQ\HDURQ\HDU RQVWURQJVDOHVRIFRQVWUXFWLRQDQGFLYLOHQJLQHHULQJSURGXFWVVXFKDVPHWDOILWWLQJVIRUZRRGIUDPH KRPHVVFDIIROGLQJPDWHULDOVFUHZVZRUNVLWHPDWHULDO
WDUSDXOLQVDQGIOH[LEOHFRQWDLQHUEDJVEDFNHGE\
UREXVWGHPDQGLQWKHGRPHVWLFFRQVWUXFWLRQPDUNHW,QWHUPVRISURILWJURVVSURILWUDWLRGHFUHDVHGGXHWRDFHUWDLQOLPLWWRSDVVLQJRQWKH
LQFUHDVHGSURGXFWLRQFRVWVDQGSURFXUHPHQW,QLWLDWLYHV*RLQJ)RUZDUG
7RFDSWXUHJURZLQJGHPDQGZHZLOOWDNHVWHSVWRDWWUDFWQHZDQGGRUPDQWFXVWRPHUVDQGEXLOGXSRXUSURGXFWVDQGPHUFKDQGLVHOLQHVZLWKFRPSHWLWLYHLWHPVWRLQFUHDVHVDOHVLQ
H[SHFWDWLRQRIUHGHYHORSPHQWFRQVWUXFWLRQZRUNLQXUEDQDUHDVLQFUHDVHLQWKHGHPDQGIRULQIUDVWUXFWXUHPDLQWHQDQFHH[SDQVLRQRIRQOLQH
VDOHVDQGH[SDQVLRQRIWKHGHYHORSPHQWRILQIUDVWUXFWXUHLQWKH$6($1UHJLRQRYHUVHDVDPRQJRWKHUV,QLWLDWLYHVZHPXVWWDNHWRZDUGDFKLHYLQJIXUWKHU
5LVNV



‫'؞‬HSHQGHQFHRQSXEOLFLQYHVWPHQWVDQGSULYDWH
FDSLWDOLQYHVWPHQWV
6LQFHVDOHVDVVRFLDWHGZLWKSXEOLFLQYHVWPHQWVDQG
SULYDWHFDSLWDOLQYHVWPHQWVDFFRXQWIRUDFRQVLGHUDEOH
SHUFHQWDJHRIWKHVHJPHQWbVVDOHVVWDJQDWLRQLQWKH
FRQGLWLRQVRIWKHFRQVWUXFWLRQLQGXVWU\DQGDGHFOLQH
LQGHPDQGFDXVHGE\VXFKFRQGLWLRQVPD\KDYHDQLPSDFWRQWKHRSHUDWLQJSHUIRUPDQFHDQGILQDQFLDOSRVLWLRQRIWKHVHJPHQW‫'؞‬HSHQGHQFHRQLPSRUWHGPHUFKDQGLVHDQG);
IOXFWXDWLRQ:KLOHKDYLQJEHHQLQFUHDVLQJWKHSURFXUHPHQWRILPSRUWHGPHUFKDQGLVHIURPRYHUVHDVVXFKDV&KLQD

FRVWVWRVHOOLQJSULFHVDVWKHFRPSHWLWLRQZLWKRWKHUFRPSDQLHVLQWKHVDPHEXVLQHVVRYHUDFTXLULQJRUGHUVUHPDLQHGVHYHUH,QDGGLWLRQVHOOLQJJHQHUDODQGDGPLQLVWUDWLYHH[SHQVHVLQFUHDVHGLQSDUWLFXODUIUHLJKWDJHH[SHQVHVDQG
SHUVRQQHOH[SHQVHV&RQVHTXHQWO\RSHUDWLQJLQFRPHFDPHWRPLOOLRQ\HQ\HDURQ\HDU JURZWKLQFOXGHH[SDQGLQJVDOHVRIQHZSURGXFWVDQGPHUFKDQGLVHVWUHQJWKHQLQJWKHVDOHVVWUXFWXUHLQWKH7RN\RPHWURSROLWDQDUHDDQGWKH
.\RWR2VDND.REHDUHD LQFUHDVLQJWKHQXPEHU
RILWHPVOLVWHGRQ(&VLWHVDQGGHYHORSLQJIRUHLJQHPSOR\HHV%\WDNLQJWKHVHLQLWLDWLYHVZHDLPWRDFKLHYHRXU
WDUJHWVIRUWKH\HDUHQGLQJ0DUFKZKLFKDUHQHWVDOHVRIPLOOLRQ\HQDQG
RSHUDWLQJLQFRPHRIPLOOLRQ\HQ

IRUWKHSXUSRVHRIVHOOLQJFRPSHWLWLYHPHUFKDQGLVH
WKHVHJPHQWLVFXUUHQWO\SURFXULQJDERXWRI
WKHPIURP&KLQD$FFRUGLQJO\WKHUHLVDSRVVLELOLW\WKDWVHFXULQJPHUFKDQGLVH ZLOOEHFRPHGLIILFXOWEHFDXVHWKHSXUVXLWRIEXVLQHVVE\WKHVXSSOLHUVLV
JUHDWO\LQIOXHQFHGE\86&KLQDWUDGHIULFWLRQFKDQJHVLQVWDWXWRU\UHJXODWLRQVLQ&KLQDDQGRWKHUV,QDGGLWLRQPDMRUYRODWLOLW\LQWKHIRUHLJQH[FKDQJHPDUNHWPD\KDYHDQLPSDFWRQWKHRSHUDWLQJSHUIRUPDQFHDQGILQDQFLDOSRVLWLRQRIWKHVHJPHQW‫ ؞‬3ULFHFRPSHWLWLRQ‫ ؞‬,PSDFWRIIOXFWXDWLRQLQSURGXFWPDUNHWV
3 5LVNV
3 5LVNV.21'27(& 5(3257



),1$1&,$/'$7$



(19,5210(17٫

62&,$/





9,6,21*29(51$1&(

:($5(.21'27(&&KDQJHVLQ1HW6DOHV PLOOLRQ\HQ6833/(0(173HUFHQWDJHRI7RWDO6DOHVSHUEXVLQHVVVHJPHQWPLOOLRQ\HQ

:($5(.21'27(&
0HVVDJH

&RPSDQ\2YHUYLHZ +LVWRU\ 

9DOXH&UHDWLRQ3URFHVV%XVLQHVV0RGHO 

0DWHULDOLW\ %XVLQHVV5HSRUW([LVWLQJEXVLQHVVHVt 7KUHHEXVLQHVVVHJPHQWV,QGXVWULDO
0DWHULDOV6WUXFWXUDO6WHHO
0DWHULDOV(OHFWULFDO(TXLSPHQW‫ٹ‬6WUXFWXUDO6WHHO0DWHULDOV:H PDQXIDFWXUH SURFXUH DQG VHOO FRQVWUXFWLRQUHODWHG PDWHULDOV IRU VWHHO IDEULFDWRUV6XSSOLHUV0DQXIDFWXUHUVHWFUHODWHGFRQVWUXFWLRQ &LYLOHQJLQHHULQJ)DFWRULHV
2YHUVHDVSURFXUHPHQW.21'27(&

6WUXFWXUDO6WHHO0DWHULDOV&XVWRPHUV(QGXVHUV 6WHHOIDEULFDWRUV

1XPEHURIRSHUDWLQJVLWHV.21'27(&,1&RSHUDWLQJVLWHV

1XPEHURIFXVWRPHUV$SSUR[LPDWHO\FRPSDQLHV

1XPEHURIQHZFXVWRPHUVFXVWRPHUV

1HWVDOHVRIQHZFXVWRPHUVPLOOLRQ\HQ‫؞‬2SHUDWLQJSHUIRUPDQFHLQFUHDVHVGHFUHDVHVLQFRQQHFWLRQZLWKWKHGHPDQGIRUVWHHO IUDPHV&KDUDFWHULVWLFV‫؞‬+LJKSHUFHQWDJHRILQKRXVHPDQXIDFWXUHGSURGXFWV‫؞‬+LJKPDUNHWVKDUH

7KHQXPEHURIQHZFXVWRPHUVDQGRIQHWVDOHVUHSUHVHQWWKHQXPEHUDQGQHWVDOHVRIFXVWRPHUVH[SORLWHGWKLVILVFDO\HDUDQGLQWKHSUHYLRXVILVFDO\HDUDQGIRUZKLFKDFWXDOVDOHVZHUHPDGHWKLVILVFDO\HDU.21'27(& 5(3257



1HWVDOHV
2SHUDWLQJLQFRPHUDWLR



٫

.21'27(&




















SODQ

1HWVDOHV







2SHUDWLQJLQFRPH











2YHUYLHZRIWKH<HDU(QGHG0DUFK
6HJPHQWVDOHVFDPHWRPLOOLRQ\HQ\HDURQ\HDU RQILUPVDOHVRIVWHHOIODPHPDWHULDOVVFUHZVEUDFHVVXSSRUWHGE\
UREXVWGHPDQGIURPDFFRPPRGDWLRQIDFLOLWLHVIRU
RYHUVHDVWRXULVWVDQGPHGLXPDQGORZULVH
EXLOGLQJVVXFKDVGLVWULEXWLRQZDUHKRXVHVDQG
IDFWRULHV,QWHUPVRISURILWLQDGGLWLRQWRWKH
LPSURYHPHQWLQJURVVSURILWUDWLRGXHWRWKH

9,6,21

SURJUHVVLQSDVVLQJRQWKHLQFUHDVHLQPDQXIDFWXULQJFRVWVDQGSURFXUHPHQWFRVWVWRVHOOLQJSULFHVDVDUHVXOWRIHIIRUWVWRDEVRUEWKH
LQFUHDVHLQVHOOLQJJHQHUDODQGDGPLQLVWUDWLYH
H[SHQVHVLQSDUWLFXODUIUHLJKWDJHH[SHQVHVDQG
SHUVRQQHOH[SHQVHVE\LQFUHDVHGUHYHQXHRSHUDWLQJLQFRPHFDPHWRPLOOLRQ\HQ\HDURQ\HDU ),1$1&,$/'$7$

:($5(.21'27(&&KDQJHVLQ1HW6DOHV PLOOLRQ\HQ(19,5210(173HUFHQWDJHRI7RWDO6DOHVSHU
EXVLQHVVVHJPHQWPLOOLRQ\HQ

VLWHKLULQJFRQVWUXFWLRQPDQDJLQJHQJLQHHUVVWUHQJWKHQLQJVDOHVWRODUJHVWHHOIDEULFDWRUVDQG
VWUHQJWKHQLQJVDOHVRIPDMRUSURGXFWVFHQWHUHG
RQIDFWRU\SURGXFWV%\WDNLQJWKHVHLQLWLDWLYHVZHDLPWRDFKLHYHQHWVDOHVRIPLOOLRQ\HQIRUWKH\HDUHQGLQJ
0DUFK)RURSHUDWLQJLQFRPHZHSODQ
RQPLOOLRQ\HQPDLQO\GXHWRWKHH[SHFWHG
LQFUHDVHLQYDULRXVFRVWVVXFKDVPDQXIDFWXULQJFRVWVDQGIUHLJKWDJHH[SHQVHV5LVNVPDWHULDOV7KHVHJPHQWPDLQWDLQVUHODWLRQVKLSVZLWKPXOWLSOHVXSSOLHUVWRPLWLJDWHDQGGLVSHUVHULVNVDQGZRUNVWRUHGXFHFRVWVUHODWHGWRSURGXFWLRQWHFKQRORJLHVLQRUGHUWRVWDELOL]HDQGLQFUHDVHSURILWDELOLW\+RZHYHUIOXFWXDWLRQVLQWKHVWHHOPDWHULDOVPDUNHWPD\KDYHDQLPSDFWRQWKH
RSHUDWLQJSHUIRUPDQFHDQGILQDQFLDOSRVLWLRQRIWKH
VHJPHQW

6833/(0(17‫؞‬3ULFHFRPSHWLWLRQ,ISULFHFRPSHWLWLRQZLWKFRPSHWLWRUVFRQWLQXHVWRLQWHQVLI\LQHDFKRIWKHSURGXFWPDUNHWVDQGORFDOPDUNHWVWRZKLFKWKHVHJPHQWEHORQJVDQGLWEHFRPHVGLIILFXOWWRPDLQWDLQIDLUSULFHVWKLVPD\
KDYHDQLPSDFWRQWKHRSHUDWLQJSHUIRUPDQFHDQG
ILQDQFLDOSRVLWLRQRIWKHVHJPHQW‫؞‬,PSDFWRIIOXFWXDWLRQLQSURGXFWPDUNHWV
3URFXUHPHQWSULFHVRIUDZPDWHULDOVIRUWKH
SURGXFWVRIWKHVHJPHQWWHQGWRIOXFWXDWH
GHSHQGLQJRQWKHGHPDQG VXSSO\WUHQGVRIVWHHO‫'؞‬HSHQGHQFHRQSXEOLFLQYHVWPHQWVDQGSULYDWH
FDSLWDOLQYHVWPHQWV
3

5LVNV

.21'27(& 5(3257

*29(51$1&(,QH[SHFWDWLRQRIFDSLWDOLQYHVWPHQWDJDLQVWWKHEDFNJURXQGRIIDYRUDEOHFRUSRUDWHHDUQLQJVVXFKDVUHGHYHORSPHQWFRQVWUXFWLRQZRUNLQXUEDQDUHDVDQGODUJHVFDOHGLVWULEXWLRQZDUHKRXVHV
DVZHOODVWKHOLNHO\FRQWLQXDWLRQRIWKHWUHQGIRU
RXWVRXUFLQJDQFKRULQJFRQVWUXFWLRQZRUNGXHWRODERUVKRUWDJHVZHZLOODWWUDFWQHZDQGGRUPDQWFXVWRPHUVDQGERRVWVDOHVRISURGXFWVLQDQHIIRUWWRH[SDQGQHWVDOHV
.H\LQLWLDWLYHVWRWDNHWRZDUGDFKLHYLQJIXUWKHUJURZWKJRLQJIRUZDUGDUHRSHQLQJQHZRSHUDWLQJ

62&,$/,QLWLDWLYHV*RLQJ)RUZDUG



:($5(.21'27(&
0HVVDJH

&RPSDQ\2YHUYLHZ +LVWRU\ 

9DOXH&UHDWLRQ3URFHVV%XVLQHVV0RGHO 

0DWHULDOLW\ %XVLQHVV5HSRUW([LVWLQJEXVLQHVVHVt 7KUHHEXVLQHVVVHJPHQWV,QGXVWULDO
0DWHULDOV6WUXFWXUDO6WHHO
0DWHULDOV(OHFWULFDO(TXLSPHQW‫(ٹ‬OHFWULFDO(TXLSPHQW:H SURFXUH DQG VHOO HOHFWULFDO HTXLSPHQW WR HOHFWULFDO ZRUN RSHUDWRUV HQJDJHG LQ FRQVWUXFWLRQ RI KRXVHVEXLOGLQJV IDFLOLWLHV IDFWRULHV DQG RWKHU VWUXFWXUHV DQG WR HOHFWULFDO DSSOLDQFH VWRUHV 7KLV EXVLQHVV LVKDQGOHG E\ D FRQVROLGDWHG VXEVLGLDU\ 6DQZD 'HQ]DL &R /WG6XSSOLHUV(OHFWULFDOHTXLSPHQW PDQXIDFWXUHUV.21'27(&(OHFWULFDO(TXLSPHQW(OHFWULFDODSSOLDQFH
VWRUHV&XVWRPHUV(QGXVHUV (OHFWULFDOZRUNRSHUDWRUV

1XPEHURIRSHUDWLQJVLWHV6XEVLGLDU\ 
6DQZD'HQ]DL &R/WGRSHUDWLQJVLWHV

1XPEHURIFXVWRPHUV$SSUR[LPDWHO\FRPSDQLHV

1XPEHURIQHZFXVWRPHUVFXVWRPHUV

1HWVDOHVRIQHZFXVWRPHUVPLOOLRQ\HQ‫؞‬0HUFKDQGLVHKDQGOHGDUHPDLQO\HOHFWULFDOHTXLSPHQW&KDUDFWHULVWLFV‫؞‬6HFXULQJVWDEOHVDOHVYROXPHV‫'؞‬RPLQDQWVWRUHRSHQLQJVPDLQO\LQ$LFKL DQG*LIX
3UHIHFWXUHV

7KHQXPEHURIQHZFXVWRPHUVDQGRIQHWVDOHVUHSUHVHQWWKHQXPEHUDQGQHWVDOHVRIFXVWRPHUVH[SORLWHGWKLVILVFDO\HDUDQGLQWKHSUHYLRXVILVFDO\HDUDQGIRUZKLFKDFWXDOVDOHVZHUHPDGHWKLVILVFDO\HDU.21'27(& 5(3257



1HWVDOHV
2SHUDWLQJLQFRPHUDWLR




















SODQ

1HWVDOHV











2SHUDWLQJLQFRPH











2YHUYLHZRIWKH<HDU(QGHG0DUFK
6HJPHQWVDOHVFDPHWRPLOOLRQ\HQ\HDURQ\HDU RQILUPVDOHVRIDLUFRQGLWLRQHUVGXHWRKLJKWHPSHUDWXUHVDFURVVWKH
FRXQWU\DQGRQDQLQFUHDVHLQRUGHUVUHODWHGWRGHWDFKHGKRXVLQJDQGFRQGRPLQLXPVGHVSLWHIDOOLQJGHPDQGUHODWHGWRVRODUSRZHUJHQHUDWLRQ
GXHWRDGHFOLQHLQIHHGLQWDULII,QWHUPVRISURILWRSHUDWLQJLQFRPHFDPHWRPLOOLRQ\HQ\HDURQ\HDU 7KLVZDVDWWULEXWDEOHLQ

SDUWWRHIIRUWVWRDEVRUEWKHLQFUHDVHLQVHOOLQJ
JHQHUDODQGDGPLQLVWUDWLYHH[SHQVHVFHQWHUHGRQSHUVRQQHOH[SHQVHVE\LQFUHDVHGUHYHQXHLQ
DGGLWLRQWRWKHLPSURYHGJURVVSURILWUDWLRWKURXJKHIIRUWVWRHQJDJHLQPDUNHWLQJ
FRQVFLRXVRISURILWPDUJLQVDQGUHGXFLQJSURFXUHPHQWFRVWZKLOHWKHVHYHUHFRPSHWLWLRQZLWKRWKHUFRPSDQLHVLQWKHVDPHEXVLQHVVRYHUDFTXLULQJRUGHUVFRQWLQXHG,QLWLDWLYHV*RLQJ)RUZDUG
VWUHQJWKHQWKHVWUXFWXUHRIGLYLVLRQVIRUKRXVLQJUHODWHGIDFLOLWLHVDQGV\VWHPVKRXVLQJPDQXIDFWXUHUVDQGFRQVWUXFWLRQPDWHULDOVHQKDQFHPHUFKDQGLVHKDQGOHGDQGZLGHQDUHDVIRUGLVWULEXWLRQ%\WDNLQJWKHVHLQLWLDWLYHVZHDLPWRDFKLHYHRXU
WDUJHWVIRUWKH\HDUHQGLQJ0DUFKZKLFKDUHQHWVDOHVRIPLOOLRQ\HQDQG
RSHUDWLQJLQFRPHRIPLOOLRQ\HQWDNLQJLQWRDFFRXQWDUHDFWLRQDU\IDOOIURPD\HDUHDUOLHUZKHQDLUFRQGLWLRQHUVVROGZHOO

5LVNV
5LVNV
‫'؞‬HSHQGHQFH RQ SXEOLF LQYHVWPHQWV DQG 3
SULYDWH
FDSLWDO LQYHVWPHQWV LQ 7RNDL DUHD

‫؞‬3ULFH FRPSHWLWLRQ

3

5LVNV

6833/(0(17*LYHQWKHSURMHFWLRQWKDWKRXVLQJFRQVWUXFWLRQZLOOGHFOLQHLQWKHORQJWHUPGXHWRDGHFUHDVLQJELUWKUDWHDQGSRSXODWLRQZKLOHIDFWRU\IDFLOLWLHVSURMHFWVDQGUHQRYDWLRQSURMHFWVZHUHH[SHFWHG
WREHVROLGZHZLOOPDNHHIIRUWVWRLQWHJUDWHWKH
PDUNHWLQJIRUKRXVLQJUHODWHGIDFLOLWLHV DQGV\VWHPVKRXVLQJPDQXIDFWXUHUVDQG
FRQVWUXFWLRQPDWHULDOV DVZHOODVDWWUDFWQHZFXVWRPHUVWRHQVXUHEULQJLQJLQRUGHUVDQG
LQFUHDVLQJQHWVDOHV
7RDFKLHYHLQFUHPHQWDOJURZWKZHZLOOLQFUHDVH
KXPDQUHVRXUFHVLQFKDUJHRIIDFWRULHV

),1$1&,$/'$7$



.21'27(&

(19,5210(17

٫

9,6,21

62&,$/

:($5(.21'27(&&KDQJHVLQ1HW6DOHV PLOOLRQ\HQ*29(51$1&(

3HUFHQWDJHRI7RWDO6DOHVSHU
EXVLQHVVVHJPHQWPLOOLRQ\HQ.21'27(& 5(3257



:($5(.21'27(&
0HVVDJH

&RPSDQ\2YHUYLHZ +LVWRU\ 

9DOXH&UHDWLRQ3URFHVV%XVLQHVV0RGHO 

0DWHULDOLW\ %XVLQHVV5HSRUW‫)ٹ‬XQFWLRQVDVDPDQXIDFWXUHU 5ROHVRIIDFWRULHV:LWKDYLHZWRSURPRWLQJDORFDOFRPPXQLW\
RULHQWHGVDOHVVWUXFWXUHWKH&RPSDQ\DVDZKROHVDOHFRPSDQ\ZLWKDPDQXIDFWXULQJGLYLVLRQPDLQWDLQVIRXUIDFWRULHVLQ-DSDQDQGPDNHVDQHIIRUWWRSD\FDUHIXODWWHQWLRQWRFXVWRPHU
IHHGEDFNLQGLVWULEXWLQJSURGXFWV

7KHPDMRULW\RIWKH&RPSDQ\bVSURGXFWVDUH
PDGHWRRUGHUSURGXFWV WKDWUHTXLUHKLJKOHYHOSUHFLVLRQDQGVKRUWWHUPGHOLYHU\7KLVSUHYHQWV
HQFURDFKPHQWIURPRYHUVHDVDQGOHDGVWRDFKLHYLQJDKLJKSURILWDELOLW\

3HUFHQWDJHRIIDFWRU\SURGXFWVWRQHWVDOHV
RI.21'27(&
QRQFRQVROLGDWHG

3HUFHQWDJHRIPDGHWRRUGHUSURGXFWVWRIDFWRU\SURGXFWV



٫

٫

‫ٹ‬/RFDOFRPPXQLW\RULHQWHGVWUXFWXUH
7KH&RPSDQ\PDLQWDLQVIRXUIDFWRULHVLQ
+RNNDLGR,EDUDNL6KLJDDQG)XNXRND$OO
IDFWRULHVPDQXIDFWXUHWXUQEXFNOHEUDFHVDQG
DQFKRUEROWVZKLFKDUHRXUFRUHSURGXFWV%\KDYLQJWKHVHIRXUIDFWRULHVVXSSO\SURGXFWVWRRXUVDOHVQHWZRUNDFURVVWKHFRXQWU\ZHDUH
DEOHWRUHDOL]HTXLFNGHOLYHU\DQGRSHUDWHDORFDOFRPPXQLW\RULHQWHGVDOHVVWUXFWXUH
6HWWLQJRXUILUVWSULRULW\RQUHVSRQGLQJWRFXVWRPHUQHHGVZLWKVSHHGZHKDYHDSURGXFWLRQVWUXFWXUHLQSODFHWKDWPDNHVWKH
EHVWRIRXUFRPSUHKHQVLYHO\FDSDELOLW\WKDWLQWHJUDWHVSURGXFWLRQDQGVDOHV6DSSRUR)DFWRU\+RNNDLGR.\XVKX)DFWRU\)XNXRND
3UHIHFWXUH

6KLJD)DFWRU\
6KLJD
3UHIHFWXUH.DQWR)DFWRU\,EDUDNL
3UHIHFWXUH‫؝ۆ‬:K\GRDOOIDFWRULHVPDQXIDFWXUHWKHVDPHSURGXFWV"‫؝ڶ‬
7XUQEXFNOHEUDFHVDQGDQFKRUEROWVZKLFKDUH
RXUFRUHSURGXFWVDUHKHDY\DQGLQFXUKLJKWUDQVSRUWFRVWV
7KHUHIRUHZHHVWDEOLVKHGIRXUIDFWRULHVLQGLVWDQWORFDWLRQVDFURVVWKHFRXQWU\WRKDYHHDFKIDFWRU\VXSSO\SURGXFWVWRWKHVDOHVORFDWLRQVLQWKHLUUHVSHFWLYHUHJLRQVLQRUGHUWRUHGXFHWKHFRVWVDQGULVNVDVVRFLDWHGZLWKWUDQVSRUWDWLRQ3XUVXLQJWKHVDIHW\RISURGXFWV
7KH&RPSDQ\LVDEUDFHPDQXIDFWXUHUWKDWKDVDFTXLUHG-,6IURPWKHSURGXFWLRQRIWXUQEXFNOH
ERGLHVWRWXUQEXFNOHSURGXFWVZLWKDOORXU
IDFWRULHVKDYLQJDFTXLUHG-,6 -DSDQ,QGXVWULDO
6WDQGDUGV IRUWXUQEXFNOHVHWF.21'27(& 5(3257

0RUHRYHUZHDUHDFWLYHO\DFTXLULQJ,62
,QWHUQDWLRQDO2UJDQL]DWLRQIRU6WDQGDUGL]DWLRQ 
FHUWLILFDWLRQ
3




1HWVDOHVRISURGXFWV
3URGXFWSURILWUDWLR

























SODQ

3URGXFWSURILWUDWLR

٫

٫

٫

٫

٫

٫

٫

٫

1HWVDOHVRISURGXFWV

















‫ٹ‬,QLWLDWLYHWRLPSURYHSURGXFWLYLW\,Q$SULOZHQHZO\VWDUWHGRSHUDWLQJ1R)DFWRU\RQWKHSUHPLVHVRIRXU6KLJD)DFWRU\+LQRFKR*DPRXJXQ6KLJD ),1$1&,$/'$7$

(19,5210(17.21'27(&

9,6,21

:($5(.21'27(&

7UDQVLWLRQRI3URGXFW3URILW5DWLR PLOOLRQ\HQ

7RLPSURYHSURGXFWLYLW\ZHZLOODFWLYHO\LQWURGXFHODERUVDYLQJDQGRSWLPL]HWKH
PDQXIDFWXULQJSURFHVV

,Q$XJXVWZHPDGH&+82+*,.(1&R
/WGDFRQVROLGDWHGVXEVLGLDU\7KHFRPSDQ\
HQJDJHVLQGHVLJQDQGPDQXIDFWXULQJRIYDULRXVW\SHVRIPDFKLQHU\DQGHTXLSPHQWDQGZH
SUHYLRXVO\KDGDEXVLQHVVUHODWLRQVKLSZLWKWKHP
,Q-DQXDU\IXUWKHUPRUHZHQHZO\HVWDEOLVKHGn0HFKDWUR /DERUDWRU\|ZLWKLQRXU
RUJDQL]DWLRQE\SXUFKDVLQJEXVLQHVVIURP0HFKDWUR (QJLQHHULQJ&R/WGZKLFKGHVLJQHG
DQGPDQXIDFWXUHGHTXLSPHQWIRUODERUVDYLQJDQGLPDJHSURFHVVLQJ
:HZLOOVWULYHWRLPSURYHSURGXFWLYLW\RIRXU
SURGXFWVE\XWLOL]LQJWKHNQRZKRZRIWKHVHWZRFRPSDQLHVDQGSURYLGHKLJKO\YDOXHDGGHG
SURGXFWVXVLQJH[FHOOHQWWHFKQRORJLHV
3

3DLGLQFDSLWDO6KDUHKROGHUV%XVLQHVVDUHDV*29(51$1&(&RPSDQ\3URILOHRI&+82+*,.(1&R/WG
/RFDWLRQ,NHGHUD.RUDFKR,QXNDPLJXQ6KLJD
PLOOLRQ\HQE\.21'27(&'HVLJQDQGPDQXIDFWXUHRIYDULRXVPDFKLQHGHYLFHVODERUVDYLQJHTXLSPHQWDQGWUDQVSRUWLQFOXGLQJLQGXVWULDOPDFKLQHU\DQGHOHFWURQLFSDUWVIRUDXWRPRELOHVDQG
KRXVHKROGDSSOLDQFHV

6833/(0(17%XVLQHVVHVSXUFKDVHGIURP0HFKDWUR (QJLQHHULQJ&R/WG
%XVLQHVVDUHDV

62&,$/‫ٹ‬7RZDUGVWKHSURYLVLRQRIKLJKO\YDOXHDGGHGSURGXFWV'HVLJQDQGPDQXIDFWXULQJRIODERUVDYLQJLPDJHSURFHVVLQJHTXLSPHQWYDULRXVLQVSHFWLRQHTXLSPHQWDQGLQVSHFWLRQWRROV.21'27(& 5(3257



.21'27(&9,6,21
7RS0HVVDJH0HGLXPWHUP0DQDJHPHQW3ODQ*URZWK6WUDWHJ\ )LQDQFLDO6WUDWHJLHV

7RS0HVVDJH

ŷƒŃťƈŃŤŃŦƒƐƓƄƑƜŃŷƋƄƗŃŨƙƒƏƙƈƖ
ƌƑŃƗƋƈŃŤƊƈŃƒƉŃŦƋƄƑƊƈ
7KHKLVWRU\RI.21'27(&LVRQHRIUHVSRQGLQJWRWKH
QHHGVRIFXVWRPHUVDQGVRFLHW\:LWKDVSLULWEDVHGRQRXUFRUSRUDWHSKLORVRSK\ZH
ZLOOFRQWLQXHWRPHHWVWDNHKROGHUVbH[SHFWDWLRQV3UHVLGHQWDQG5HSUHVHQWDWLYH'LUHFWRU.DWVXKLNR.RQGR‫ٹ‬7KHVSLULWWKDWKDVEHHQSDVVHGRQ
7KH&RPSDQ\KDGEHHQHQJDJHGLQDVVHPEOLQJDQGSURGXFLQJKDUGZDUHIRUYHVVHOVPDLQO\VKDFNOHVZLUHURSHFOLSVHWFVLQFHLWVIRXQGDWLRQ
DQGLQLQWURGXFHGQHZPDQXIDFWXULQJIDFLOLWLHVWRWDNHWKHILUVWVWHSDVDIXOOIOHGJHG
PDQXIDFWXUHUIURPWKHSUHYLRXVDVVHPEOLQJSURGXFWLRQ6XEVHTXHQWO\DVGHPDQGIRU
FRQVWUXFWLRQLQFUHDVHGZLWKWKHGHYHORSPHQWDQG
FKDQJHRIWKH-DSDQHVHHFRQRP\ZKLFKVKLIWHGPDMRUSURGXFWVDQGPHUFKDQGLVHKDQGOHGIURPVHDWRODQGWKH&RPSDQ\HVWDEOLVKHGRSHUDWLQJVLWHVZLWKLQYHQWRULHVLQPDMRUFLWLHVDFURVV-DSDQ,QVXFKDZD\UHVSRQGLQJWRWKHWLPHVZHKDYH
HVWDEOLVKHGDVDOHVV\VWHPWRGHDOZLWKYDULRXVFXVWRPHUQHHGVDQGUHVSRQGHGWRFXVWRPHU
UHTXHVWVZLWKTXLFNGHOLYHU\VHOOLQJDSSUR[LPDWHO\LWHPVWRGLYHUVHLQGXVWULHV.21'27(&KDVFRQWLQXRXVO\EHHQDEOHWRJURZEHFDXVHZH
KDYHEHHQDEOHWRFKDQJHRXUEXVLQHVVDFFRUGLQJWRFKDQJLQJWLPHV

2XUFRUSRUDWHSKLORVRSK\LQFRUSRUDWHVWKHWKUHHPDMRUWKHPHVRInQXUWXULQJRIRXUHPSOR\HHV|nLQQRYDWLYHDQGSLRQHHULQJZD\|DQGnFRQWULEXWLRQWRWKHFUHDWLRQRIDQDIIOXHQWVRFLHW\||7RUHDOL]HDVDIHDQGVHFXUHVRFLHW\|HDFKRQHRIRXU
HPSOR\HHVKDVEHHQHQJDJHGLQEXVLQHVVDFWLYLWLHVLQDQLQQRYDWLYHDQGSLRQHHULQJZD\DWWKH
&RPSDQ\:HKDYHPRUHWKDQRQHZD\,WLVLPSRUWDQWWRWKLQNZLWKRXWJLYLQJXS:LWKWKLVIHHOLQJLQPLQGZHZLOOGHVLJQRXU
EXVLQHVVPRGHOWRUHPDLQDVDFRPSDQ\WRHYROYH
LQWKHDJHRIFKDQJHZLWKRXWEUHDNLQJDZD\IURPWKHVSLULWRIRXUFRUSRUDWHSKLORVRSK\‫ٹ‬7KH$JHRI&KDQJH
7KH\HDUVDZWKHUHJQDO\HDUFKDQJHGWR
5HLZDKHUDOGLQJDQHZHUD/DVW\HDUZDVRQH
ZLWKPRUHQDWXUDOGLVDVWHUVWKDQXVXDOLQFOXGLQJW\SKRRQVHDUWKTXDNHVDQGVHYHUHUDLQVWRUPV$FFRUGLQJO\WKH&RPSDQ\JURXSGHDOWZLWKWKH
GHPDQGIRUUHFRQVWUXFWLRQDQGGLVDVWHU
SUHYHQWLRQ0RUHRYHUZLWKWKH7RN\R2O\PSLFDQG3DUDO\PSLF
*DPHVRQH\HDUDZD\GHYHORSPHQWRIUHODWHG
IDFLOLWLHVDQGLQIUDVWUXFWXUHLVDWLWVSHDNVKDUSO\
LQFUHDVLQJWKHGHPDQGIRUFRQVWUXFWLRQ,QWKH
.DQVDLUHJLRQIXUWKHUPRUHZLWKWKHGHFLVLRQWRKRVWWKH2VDND([SRLQGHPDQGZKLFKKDG
SUHYLRXVO\GLSSHGVHHPVWREHVN\URFNHWLQJZLWKWKHQHHGIRULQWHJUDWHGUHVRUWIDFLOLWLHVDPRQJRWKHUV7KH&RPSDQ\JURXSZLOOVWULYHWRH[SDQG
WKHH[LVWLQJEXVLQHVVHVZLWKWKHDUULYDORIWKHQHZ
HUDVRWKDWZHFDQFRQWULEXWHWRWKLVSRVLWLYHHQYLURQPHQW2QWKHRWKHUKDQGWKHVKRUWDJHRIPDWHULDOVLVDQ
LVVXHZKLFKKDVPDQLIHVWHGLWVHOILQLQGXVWULHV

.21'27(& 5(3257UHODWHGWRWKH&RPSDQ\JURXSVLQFHDURXQG
0RUHRYHUZHDOVRKDYHDODERUVKRUWDJHLVVXHLQ
WKHFRQVWUXFWLRQLQGXVWU\ZKLFKLVUHJDUGHGDVDPHGLXPWRORQJWHUPULVN7DNLQJWKHVHLQWRDFFRXQWZHZLOOQHHGWRFKDQJHDQGHYROYHRXU
EXVLQHVVPRGHOPRUHWKDQEHIRUH*RLQJIRUZDUG
WKHUHDUHH[SHFWHGWREHPDQ\ILHOGVt LQFOXGLQJGLVDVWHUSUHYHQWLRQLQIUDVWUXFWXUHGHYHORSPHQWQHZFRQVWUXFWLRQSURMHFWVDQGODERUVDYLQJIDFLOLWLHVt IRUZKLFKWKHƕƄƌƖƒƑŃƇŊȌƗƕƈŃRIWKH
&RPSDQ\ZLOOEHVKRZFDVHG5HJDUGLQJWKHVH
HOHPHQWVDVQHZRSSRUWXQLWLHVZHZLOOHQJDJHLQJURZWKVWUDWHJLHVDQGILQDQFLDOVWUDWHJLHV1HWVDOHV‫ق‬PLOOLRQ\HQ‫ك‬

2UJDQLFJURZWKVWUDWHJLHV‫)؞‬RXUJURZWK VWUDWHJLHV‫[(؞‬SDQVLRQRIRSHUDWLQJVLWHV‫؞‬5HVSRQVHWRQDWXUDOGLVDVWHUV
HWF

3HULSKHU\VWUHQJWKHQLQJJURZWKVWUDWHJLHV

9,6,21.21'27(&),1$1&,$/'$7$‫؞‬,QFUHDVLQJSUHVHQFH
LQIRUHLJQPDUNHWV‫(؞‬QWHULQJLQWRQHLJKERULQJLQGXVWULHV‫[(؞‬SDQGLQJRQOLQHEXVLQHVVHVHWF
*29(51$1&(

 ELOOLRQ\HQ

7RZDUGDFFHOHUDWLQJWKHJURZWK‫ ڀ‬0 $VWUDWHJ\

62&,$/

(19,5210(17.21'27(&KDVWZRVLGHVDPDQXIDFWXUHUDQGDZKROHVDOHFRPSDQ\)XVLQJWKHVHWZRKDVEHHQ
JHQHUDWLQJQRWVLPSO\WZRDVDUHVXOWRIRQHSOXVRQHEXWLQILQLWHH[SDQVLRQOHDGLQJWRWKHUHDOL]DWLRQRIVXVWDLQDEOHJURZWK7KUHHVHJPHQWV$VDPDQXIDFWXUHU&XUUHQWO\WKH&RPSDQ\JURXSKDVWKUHH
:HZLOOIRFXVRQLPSURYLQJTXDOLW\DQGGHYHORSLQJVHJPHQWV7KHILUVWRQHLVLQGXVWULDOPDWHULDOVQHZSURGXFWVFRQVLGHULQJWKDWGHPDQGIRUZKLFKVHOOVLQGXVWULDOPDWHULDOVVXFKDVSURGXFWVVWDQGDUGL]HGSURGXFWVZLOOVKLIWRQOLQHLQWKH
DQGPHUFKDQGLVHWRYDULRXVLQGXVWULHVLQFOXGLQJPLGVWRIDIXUWKHULQFUHDVHLQRQOLQHSHQHWUDWLRQFRQVWUXFWLRQDQGGLVWULEXWLRQUHODWHGFXOWLYDWLRQ)RUH[DPSOHWRODXQFKKLJKYDOXHDGGHGSURGXFWVDQGILVKHU\PDWHULDOVDQGDJULFXOWXUDOPDWHULDOVLQWKHPDUNHWZHSXUVXHG0 $IRU&+82+*,.(1
7KHVHFRQGRQHLVVWUXFWXUDOVWHHOPDWHULDOVZKLFK&R/WGZKLFKGHVLJQVDQGPDQXIDFWXUHVODERUVXSSOLHVPDWHULDOVWRVWHHOIDEULFDWRUVSURFHVVLQJVDYLQJHTXLSPHQWDQGPDQXIDFWXULQJPDFKLQHV
FRQVWUXFWLRQIUDPHZRUNVVXFKDVGLVWULEXWLRQDPRQJRWKHUVLQDQGSXUFKDVHGWKHZDUHKRXVHVDQGIDFWRULHV7KHWKLUGRQHLV
EXVLQHVVZLWKH[FHOOHQWWHFKQRORJLHVVXFKDV
HOHFWULFDOHTXLSPHQWZKLFKGHOLYHUVVRODUSRZHU
LPDJHLQVSHFWLRQWHFKQRORJ\IURP0HFKDWUR
DQG/('OLJKWVDLUFRQGLWLRQHUVHOHFWULFZLUHV(QJLQHHULQJ&R/WGLQ,QDGGLWLRQWKH
VZLWFKHVHWFWRHOHFWULFDOZRUNRSHUDWRUV:H
&RPSDQ\QHZO\HVWDEOLVKHGWKH4XDOLW\ZLOOZRUNRXWVSHFLILFVWUDWHJLHVWDNLQJLQWR$VVXUDQFH'HSDUWPHQWWRIXUWKHULPSURYHDFFRXQWWKHHQYLURQPHQWRIWKHVHLQGLYLGXDOFRQILGHQFHLQWKH&RPSDQ\bVH[LVWLQJSURGXFWVVHJPHQWV*RLQJIRUZDUGIRULQGXVWULDOPDWHULDOVZHZLOO*URZWK VWUDWHJ\
HQJDJHLQH[SDQGLQJVDOHVRIQHZSURGXFWVDQG
7KH&RPSDQ\GLYLGHVWKHJURZWKVWUDWHJLHVLQWRPHUFKDQGLVHDVZHOODVQXUWXUHIRUHLJQHPSOR\HHVWZRRUJDQLFJURZWKVWUDWHJLHVDQGSHULSKHU\
LQUHVSRQVHWRWKHH[WHUQDOHQYLURQPHQWLQFOXGLQJVWUHQJWKHQLQJJURZWKVWUDWHJLHV2UJDQLFJURZWKWKHLQFUHDVHLQGHPDQGIRULQIUDVWUXFWXUHVWUDWHJLHVDUHWKHEXVLQHVVVWUDWHJLHVIRUH[LVWLQJPDLQWHQDQFHH[SDQVLRQRIRQOLQHVDOHVDQGWKH
EXVLQHVVHVEDVHGRQZKLFK.21'27(&KDV
LQFUHDVHLQLQIUDVWUXFWXUHGHYHORSPHQWLQWKH
HVWDEOLVKHGWKHHDUQLQJVEDVHWRGDWH
$6($1UHJLRQRYHUVHDV)RUVWUXFWXUDOVWHHO
2QWKHRWKHUKDQGSHULSKHU\VWUHQJWKHQLQJPDWHULDOVZHZLOORSHQQHZRSHUDWLQJVLWHVDQG
JURZWKVWUDWHJLHVDUHWRVWUHQJWKHQWKRVHRWKHUHPSOR\FRQVWUXFWLRQPDQDJLQJHQJLQHHUVDPRQJWKDQWKHH[LVWLQJEXVLQHVVHVZKLFKLVDGYRFDWHGDVRWKHUVLQUHVSRQVHWRWKHLQFUHDVHLQFRQVWUXFWLRQVWUDWHJLHVIRUDSRVVLEOHQHZHDUQLQJVGULYHUDLPLQJ
RIODUJHSURSHUWLHVVXFKDVGLVWULEXWLRQ
IRUDIXUWKHUOHDSIRUZDUGZDUHKRXVHVWKHFRQWLQXHGWUHQGRIRXWVRXUFLQJ)XUWKHUPRUHWRDFFHOHUDWHJURZWKE\RUJDQLF
DQFKRUFRQVWUXFWLRQHWFGXHWRODERUVKRUWDJHVJURZWKVWUDWHJLHVDQGSHULSKHU\VWUHQJWKHQLQJ
)RUHOHFWULFDOHTXLSPHQWZHZLOOLQFUHDVH
VWUDWHJLHVZHZLOOVWULYHWRH[SDQGEXVLQHVVILHOGVSHUVRQQHOLQFKDUJHRIIDFWRULHVVWUHQJWKHQWKH
DJJUHVVLYHO\WKURXJK0 $VWUDWHJLHVVWUXFWXUHRIGLYLVLRQVIRUKRXVLQJUHODWHGIDFLOLWLHV$VDUHVXOWZHZLOOLQFUHDVHUHYHQXHE\DURXQG
DQGV\VWHPVKRXVLQJPDQXIDFWXUHUVDQG
SHUDQQXPZKLOHFRPSOHWLQJVRPH0 $SURMHFWVFRQVWUXFWLRQPDWHULDOVDPRQJRWKHUVLQUHVSRQVH
DLPLQJIRUQHWVDOHVRIELOOLRQ\HQLQWKHV
WRWKHH[WHUQDOHQYLURQPHQWVXFKDVIDFWRU\IDFLOLW\
SURMHFWVDQGUHQRYDWLRQSURMHFWVZKLFKDUH
H[SHFWHGWRPRYHVROLGO\:($5(.21'27(&‫ٹ‬,QLWLDWLYHVIRU1HW6DOHVRI%LOOLRQ<HQ



6833/(0(17
















.21'27(& 5(3257





.21'27(&9,6,21


0HGLXPWHUP0DQDJHPHQW3ODQ*URZWK6WUDWHJ\ 

KONDOTECVISION

7RS0HVVDJH)LQDQFLDO6WUDWHJLHV*URZWKVWUDWHJ\RI.21'27(&

.21'27(& 5(3257

0HGLXPWHUP0DQDJHPHQW3ODQ

5REXVWSULYDWHFDSLWDOLQYHVWPHQW‫؞‬,QFUHDVHLQLQERXQGGHPDQGUHODWHG
FDSLWDOLQYHVWPHQW‫؞‬,QFUHDVHLQXUEDQUHGHYHORSPHQW
SURMHFWV

6WDJQDQWGRPHVWLFPDUNHWV&KDQJHVLQGHPDQGDUHDIRUFDSLWDO
LQYHVWPHQW‫؞‬6KULQNDJHRIGRPHVWLFPDUNHWVGXH
WRSRSXODWLRQGHFOLQH‫؞‬,QFUHDVHRILQYHVWPHQWLQ$6($1
FRXQWULHV$JLQJRIVRFLDOLQIUDVWUXFWXUH&KDQJHVLQVRFLDO LQIUDVWUXFWXUH
LQYHVWPHQW‫'؞‬HFUHDVHLQQHZSXEOLFLQYHVWPHQW
GXH WRILVFDOFRQVWUDLQW‫؞‬,QFUHDVHLQPDLQWHQDQFHUHSDLU
FRQVWUXFWLRQ ZRUN

$GHFOLQLQJELUWKUDWH
DQGDQDJLQJSRSXODWLRQODERUVKRUWDJHV:RUNLQJHQYLURQPHQWSURGXFWLRQIRUP‫؞‬,QFUHDVHLQFDSLWDOLQYHVWPHQWIRU
ODERUVDYLQJ

6ROLGVRFLDOLQIUDVWUXFWXUHLQYHVWPHQW
‫؞‬3UHYHQWLRQPLWLJDWLRQPHDVXUHVIRUQDWXUDOGLVDVWHUV‫&؞‬RQVWUXFWLRQZRUNUHODWHGWRWKH/LQHDU&KXR6KLQNDQVHQ DQGSURMHFWHG
6KLQNDQVHQOLQHV:RUNLQJHQYLURQPHQWSURGXFWLRQIRUP‫؞‬/DERULQWHQVLYHW\SH

9,6,215REXVWFRQVWUXFWLRQLQYHVWPHQWGHPDQG)XWXUH'HFUHDVHLQFRQVWUXFWLRQLQYHVWPHQWGHPDQG
DQGLQFUHDVHLQPDLQWHQDQFHUHSDLUGHPDQG.21'27(&

3UHVHQW),1$1&,$/'$7$

7KHFRPSDQ\bVEXVLQHVVHQYLURQPHQWLVH[SHFWHGWRUHPDLQIDYRUDEOHLQWKHIRUHVHHDEOHIXWXUHWKDQNVWRVXSSRUWIURPLQERXQGGHPDQGDQGXUEDQUHGHYHORSPHQWSURMHFWV+RZHYHULWDOVRH[SHFWVFKDQJHVVXFKDVDJUDGXDOGHFOLQHLQGHPDQGIURPGRPHVWLFFRQVWUXFWLRQVSHQGLQJ DNH\GULYHURILWVH[LVWLQJ
FRUHEXVLQHVVHV DQGKLJKHUGHPDQGIRUPDLQWHQDQFHDQGUHSDLUV:($5(.21'27(&‫ٹ‬5HFRJQLWLRQRIWKH%XVLQHVV(QYLURQPHQW

7RUHVSRQGWRRSSRUWXQLWLHVDQGULVNVZKLFKFKDQJHDFFRUGLQJWRFKDQJHVLQWKHEXVLQHVVHQYLURQPHQWZHZLOOVWULYHIRUVXVWDLQDEOHJURZWKDQGLPSURYHPHQWLQORQJWHUPFRUSRUDWHYDOXHE\LQYHVWLQJLQDUHDVH[SHFWHGWRJURZ RYHUVHDVPDLQWHQDQFHDQGUHSDLUDQGODERUVDYLQJ LQDGGLWLRQWRHQKDQFLQJRXU
HDUQLQJVFDSDELOLW\IXUWKHUIRUH[LVWLQJFRUHEXVLQHVVHV*URZWKVWUDWHJ\(VWDEOLVKPHQW
RIWDUJHWLQGLFDWRUV$SSURSULDWH
DOORFDWLRQRIIXQGV

5HLQIRUFHPHQWRIPDQDJHPHQWEDVH

7RQHWVDOHVRIELOOLRQ\HQ
GXULQJV‫ ؞‬0DLQWDLQDQGH[SDQGWKHFXUUHQWHDUQLQJVZKLFKKDYHEHHQEUHDNLQJSDVWSURILWUHFRUGVIRUFRQVHFXWLYHSHULRGV‫*؞‬URZWKLQYHVWPHQWZLWKFRQVFLRXVRIFDSLWDOFRVWV

62&,$/‫)ٹ‬LQDQFLDO7DUJHW
ٌ/RQJWHUPWDUJHWٍ'XULQJV(19,5210(17‫ٹ‬%DVLF3ROLF\

1HWVDOHV &RQVROLGDWHG

ELOOLRQ\HQ

ٌ0HGLXPWHUP7DUJHWٍ :HZLOODLPWRDFKLHYHLQFUHDVHLQQHWVDOHVDQGLQFRPHE\ILQDQFLDOWDUJHWEDVHGRQ
WKH([LVWLQJVDOHVVWUXFWXUH$FWXDO


3ODQ


3ODQ


3ODQ

1HWVDOHV







2SHUDWLQJLQFRPH









2UGLQDU\LQFRPH









3URILWDWWULEXWDEOHWR
RZQHUVRISDUHQW









7KH0HGLXPWHUP0DQDJHPHQW3ODQDGRSWVWKHUROOLQJPHWKRGZKLFKUHVSRQGVWRFKDQJHVLQWKH EXVLQHVVHQYLURQPHQWZKLOHYHULI\LQJWKHRXWFRPHDQGLVVXHVHYHU\\HDULQDQHIIRUWWRUHDOL]HWKHPLGWRORQJYLVLRQ.21'27(& 5(3257



*29(51$1&(

PLOOLRQ\HQ6833/(0(17&RQVROLGDWHGWDUJHW

.21'27(&9,6,21
7RS0HVVDJH0HGLXPWHUP0DQDJHPHQW3ODQ*URZWK6WUDWHJ\ )LQDQFLDO6WUDWHJLHV*URZWK6WUDWHJ\%DVLFVWUXFWXUH+ROGLQJH[SDQGHGPDQDJHPHQWPHHWLQJV,PSURYLQJFRUSRUDWHYDOXH&DSLWDO
3ROLF\
3

3

)RXU
JURZWKVWUDWHJLHV
3([SDQGLQJ
RQOLQHEXVLQHVVHV3(QWHULQJLQWRQHLJKERULQJLQGXVWULHV
3

0 $
VWUDWHJ\
3

2UJDQLF

1HLJKERU,QFUHDVLQJ
SUHVHQFHLQ
IRUHLJQPDUNHWV

5HVSRQVHWRQDWXUDOGLVDVWHUV
3
([SDQVLRQRIRSHUDWLQJVLWHV

HWF

HWF

3

([LVWLQJEXVLQHVVVWUDWHJLHV RUJDQLFJURZWKVWUDWHJLHV‫[(ٹ‬SDQVLRQRIRSHUDWLQJVLWHV:HVWULYHIRUH[SDQVLRQRIRSHUDWLQJVLWHVZKLFKPDLQWDLQHGDORFDOFRPPXQLW\RULHQWHGVDOHVVWUXFWXUHLQRUGHUWRUHVSRQGTXLFNO\WRFXVWRPHUQHHGV
5HFHQWO\ZHRSHQHGWKH(FRPPHUFH*URXSLQ-XO\DQGWKH2ND\DPDRIILFHLQ$SULO
:HZLOOFRQWLQXHWRH[HFXWHTXLFNGHOLYHULHVLQDQHIIRUWWRUHDOL]HFXVWRPHUIRFXVHGPDQDJHPHQW

5LVNV
,IWKHLQWHQVLILHGSULFHFRPSHWLWLRQFRQWLQXHVZLWKRWKHUFRPSHWLQJFRPSDQLHVLQWKHORFDOPDUNHWRIHDFKRSHUDWLQJVLWHLWPD\DIIHFWHDUQLQJV5HVSRQVHWRWKHULVNV
3

6WUHQJWKLQVDOHVPHWKRGV

2ND\DPDRIILFH‫ٹ‬5HVSRQVHWRQDWXUDOGLVDVWHUV2XUSURGXFWVDQGPHUFKDQGLVHVXSSRUWUHFRYHU\UHVWRUDWLRQHIIRUWVIURPGLVDVWHUVDQGDUH
LQGHPDQGLQWKHHYHQWRIDEQRUPDOZHDWKHUFRQGLWLRQVVXFKDVH[WUHPHO\KHDY\UDLQIDOOHYHU\ZKHUH
$OORSHUDWLQJVLWHVKDYHLQYHQWRULHVDQGPDLQWDLQDVWUXFWXUHDFURVV-DSDQWKDWHQDEOHVXVWRLPPHGLDWHO\UHVSRQGWRVXFKXUJHQWGHPDQGIRU
SURGXFWVDQGPHUFKDQGLVHDQGFDUU\RXWRXUUHVSRQVLELOLW\WRVXSSO\3

2QHRIPHUFKDQGLVHIRUQDWXUDOGLVDVWHUV
7DUSDXOLQV /HIW)OH[LEOHFRQWDLQHUEDJV 5LJKW

.21'27(& 5(3257

5LVNV:LWKPDQ\DSSOLFDEOHPHUFKDQGLVHEHLQJLPSRUWHG
RQHVVHFXULQJPHUFKDQGLVHPD\EHFRPHGLIILFXOWGXHWRXQH[SHFWHGHYHQWVVXFKDVFKDQJHVLQRYHUVHDVHFRQRPLFVLWXDWLRQVLQFOXGLQJ&KLQD,Q
DGGLWLRQVXEVWDQWLDOFKDQJHVLQIRUHLJQH[FKDQJHPDUNHWVPD\DIIHFWHDUQLQJV5HVSRQVHWRWKHULVNV

3

6WUHQJWKLQSURFXUHPHQW‫)ٹ‬RXUJURZWKVWUDWHJLHV⋈2IIHURIQHZSURGXFWVDQGPHUFKDQGLVH)RUWKHSXUSRVHRIGHYHORSLQJQHZPHUFKDQGLVH
MRLQW1HZ3URGXFWVDQG0HUFKDQGLVH&RPPLWWHH
PHHWLQJVDUHKHOGEHWZHHQWKHVDOHVGLYLVLRQDQG
WKHPDQXIDFWXULQJGLYLVLRQSHULRGLFDOO\WRGLVFXVVUHTXHVWVIURPFXVWRPHUVDQGSURSRVDOVIRU
LPSURYHPHQW
:HKDYHDGRSWHGLPSRUWHGSURGXFWVDQG
PHUFKDQGLVHLQFOXGLQJWKH<HOORZ3RLQWVHULHVIURP<RNH,QGXVWULDO&RUSZKLFKLVDOLIWLQJHTXLSPHQWPDQXIDFWXUHULQ7DLZDQDVZHOODVGHYHORSLQJWKH.7VXVSHQVLRQEDODQFHLQ
0DQXIDFWXULQJE\.\XVKX)DFWRU\RIWKH

1HWVDOHV PLOOLRQ\HQ
1HZFXVWRPHUV&XOWLYDWLQJGRUPDQWFXVWRPHUV





9,6,21 $FWXDO

 $FWXDO

 3ODQ&RPSDQ\ :HZLOOFRQWLQXHWRGHYHORSDQGFXOWLYDWHSURGXFWVDQGPHUFKDQGLVHZLWKHYHQKLJKHUDGGHGYDOXHLQRUGHUWRRIIHUVXFKSURGXFWVDQG
PHUFKDQGLVH

7KH.7VXVSHQVLRQEDODQFH<2.(,QGXVWULDO&RUSbVH\HEROW<HOORZ3RLQW6HULHV.21'27(&.21'27(&DFKLHYHVDPRQWKO\DYHUDJHRIRQH
QHZFXVWRPHUSHUVDOHVUHSUHVHQWDWLYHDQGD\HDUO\DYHUDJHRIQHZFXVWRPHUVDVDFRPSDQ\,QDGGLWLRQZHH[SORLWD\HDUO\DYHUDJHRIGRUPDQWFXVWRPHUVSHUVDOHVUHSUHVHQWDWLYHDQG
WKHVHDFWLYLWLHVIRUPWKHVRXUFHIRUVDOHVFXVWRPHUV
3 6WUHQJWKLQFXVWRPHUV),1$1&,$/'$7$⋇&XOWLYDWLRQRIQHZFXVWRPHUV:($5(.21'27(&.21'27(&LVWDNLQJWKHIROORZLQJIRXULQLWLDWLYHVWRZDUGH[SDQGLQJRUGHUV⋉$GRSWLRQRIIOH[LEOHVDOHVPHWKRGV

5LVNV‫؞‬3ULFHFRPSHWLWLRQ,ISULFHFRPSHWLWLRQZLWKFRPSHWLWRUVFRQWLQXHVWRLQWHQVLI\LQHDFKRIWKHSURGXFWPDUNHWVDQG
ORFDOPDUNHWVWRZKLFKWKH*URXSEHORQJVDQGLWEHFRPHVGLIILFXOWWRPDLQWDLQIDLUSULFHVWKLVPD\
KDYHDQLPSDFWRQWKHRSHUDWLQJSHUIRUPDQFH
DQGILQDQFLDOSRVLWLRQRIWKH.21'27(&*URXS‫&؞‬UHGLWULVNRIFXVWRPHUV(19,5210(171HWVDOHV PLOOLRQ\HQ

62&,$/:HDUHZRUNLQJWRH[SDQGRXUEXVLQHVVLQWRQHZ
VHFWRUVVXFKDV+RPHLPSURYHPHQWFHQWHUVDQG
UDLOURDGFRPSDQLHVLQDGGLWLRQWRWKHH[LVWLQJGLVWULEXWLRQURXWHV:HDOVRHVWDEOLVKHGWKHn(FRPPHUFH*URXS|LQ
-XO\WRH[SORUHVDOHVWKURXJKWKH,QWHUQHW)XUWKHUZHKDYHLQSODFHDVDOHVIRUFHGHGLFDWHG
WRWKH7RN\RPHWURSROLWDQDUHDWRDFFRPPRGDWH
EXONSXUFKDVLQJIURPODUJHWUDGLQJFRPSDQLHVDQGKHDGTXDUWHUVRIJHQHUDOFRQVWUXFWLRQFRPSDQLHVIURPZKLFKRUGHUVKDYHEHHQ
LQFUHDVLQJLQUHFHQW\HDUV&DWDORJRI PDWHULDOVWRSUHYHQWGDPDJHIURPZLOGOLIHDQG
DJULFXOWXUDOHTXLSPHQW&DWDORJRIOLIWLQJHTXLSPHQW+RPHLPSURYHPHQWFHQWHUV5DLOURDGV
7RN\RPHWURSROLWDQDUHD


















 $FWXDO

 $FWXDO

 3ODQ

7KH*URXSVHWVFUHGLWOLPLWVRQFXVWRPHUVEDVHG
RQWKHGHJUHHRIFUHGLELOLW\DVSDUWRILWVHIIRUWVWRSUHYHQWWKHRFFXUUHQFHRIEDGGHEW+RZHYHU
LIEDGGHEWH[SHQVHVDULVHGXHWRWKHEDQNUXSWF\
RIDFXVWRPHUWKLVPD\KDYHDQLPSDFWRQRSHUDWLQJSHUIRUPDQFHDQGILQDQFLDOSRVLWLRQRI
WKH.21'27(&*URXS5HVSRQVHWRWKHULVNV

3 6WUHQJWKLQFXVWRPHUV.21'27(& 5(3257



*29(51$1&(⋊&XOWLYDWLRQRIGLVWULEXWLRQURXWHVGDPDJHIURPZLOGOLIHDQGDJULFXOWXUDOHTXLSPHQWLQDGGLWLRQWRWKHJHQHUDOSURGXFWFDWDORJFRQWDLQLQJSURGXFWVDQGPHUFKDQGLVHZLWKKLJKFXVWRPHUQHHGV

6833/(0(17.21'27(&QRWRQO\VHOOVPHUFKDQGLVHEXWDOVRPDLQWDLQVDVWUXFWXUHWRHQDEOHWKHXQGHUWDNLQJ
RIDQFKRUFRQVWUXFWLRQE\KDYLQJFRQVWUXFWLRQPDQDJLQJHQJLQHHUVDQGDFTXLULQJDFRQVWUXFWLRQ
EXVLQHVVOLFHQVH%\EHFRPLQJLQYROYHGLQWKH
LQLWLDOSKDVHRIDFRQVWUXFWLRQSURMHFWZHDUH
DEOHWRDFTXLUHLQIRUPDWLRQRQQHFHVVDU\FRQVWUXFWLRQPDWHULDOVDKHDGRIRWKHUVDQGPDNH
XVHRIVXFKLQIRUPDWLRQRQVDOHVDFWLYLWLHV)XUWKHUPRUHZHDOVRLVVXHSURGXFWFDWDORJVVSHFLILFWRFHUWDLQVHFWRUVDQGFXVWRPHUVVXFKDVWKRVHRQOLIWLQJHTXLSPHQWPDWHULDOVWRSUHYHQW.21'27(&9,6,21
7RS0HVVDJH0HGLXPWHUP0DQDJHPHQW3ODQ*URZWK6WUDWHJ\ )LQDQFLDO6WUDWHJLHV,QLWLDWLYHVIRUHQKDQFLQJDFWLYLWLHVLQQRQH[LVWLQJEXVLQHVV‫ق‬3HULSKHU\VWUHQJWKHQLQJ‫ك‬‫ٹ‬,QFUHDVLQJSUHVHQFHLQIRUHLJQPDUNHWV%DVHGRQRXUYLHZWKDWLQFUHDVLQJSUHVHQFHLQ
IRUHLJQPDUNHWVZKHUHJURZWKLVH[SHFWHGZLOOFRQWULEXWHWRHQKDQFLQJRXUHDUQLQJVFDSDELOLW\ZHHVWDEOLVKHGDVXEVLGLDU\LQ7KDLODQGLQ
1RYHPEHU:HH[HFXWHGDFDSLWDOLQFUHDVH
LQ$XJXVWDFTXLUHGDOOVKDUHVIURPWKHWZR
MRLQWYHQWXUHFRPSDQLHVDQGVXEVWDQWLDOO\PDGH
WKHFRPSDQ\RXUIXOO\RZQHGVXEVLGLDU\&XUUHQWO\ZHDUHPRYLQJDKHDGZLWKDFWLYLWLHVWRH[SDQGRXUEXVLQHVVLQ$6($1FRXQWULHVZLWK7KDLODQGDVRXUEDVHORFDWLRQ*RLQJIRUZDUGZH
ZLOOIXUWKHUVWUHQJWKHQRXUVDOHV PDUNHWLQJFDSDELOLWLHVE\ZLGHQLQJRXUVDOHVQHWZRUNDQG

UHLQIRUFLQJPDQSRZHUZLWKDYLHZWRLQFUHDVLQJWKHUDWLRRIQHWVDOHVIURPRXURYHUVHDVEXVLQHVV
5LVNV
3UREOHPVLQSXUVXLQJEXVLQHVVGXHWR
XQH[SHFWHGHYHQWVPD\RFFXULQFOXGLQJFKDQJHVLQSROLWLFDORUOHJDOHQYLURQPHQWVDVZHOODV
HFRQRPLFWXUPRLOLQFRXQWULHVVXFKDV&KLQDDQG
7KDLODQG
0RUHRYHUDVXEVWDQWLDOFKDQJHLQIRUHLJQ
H[FKDQJHPDUNHWVPD\DIIHFWHDUQLQJVDQGWKH
ILQDQFLDOSRVLWLRQRIWKH.21'27(&JURXS.21'27(&,1&DQGRYHUVHDVH[SDQVLRQWKHFXUUHQF\FULVLVLQZKHQ$VLDQFXUUHQFLHVVOXPSHGWKHH[SRUWEXVLQHVVEHFDPHGLIILFXOWDQG
ZHVKLIWHGIURPH[SRUWWRLPSRUW6XEVHTXHQWO\ZHHVWDEOLVKHGDGR]HQ2(0SODQWVLQ&KLQDWR
HVWDEOLVKDVWUXFWXUHWKDWLVQRWDIIHFWHGE\WKH
\HQbVDSSUHFLDWLRQDQGUHVXPHGH[SRUWVDURXQG
:KLOHWKHSODQQHGILJXUHIRUQHWVDOHVIURPRYHUVHDVEXVLQHVVLQWKH\HDUHQGLQJ0DUFK
LVPLOOLRQ\HQ WRWDOIRU,QWHUQDWLRQDO
6DOHV'LYLVLRQDQGVXEVLGLDU\LQ7KDLODQG RXU
H[SRUWEXVLQHVVZDVDFWLYHSULRUWRWKH3OD]D$FFRUGLQDQGKDQGOHGH[SRUWVZRUWKDSSUR[LPDWHO\PLOOLRQ\HQ+RZHYHUJLYHQ
3HUFHQWDJHRI1HW
6DOHVE\FRXQWU\
2WKHUFRXQWULHV
1HDUDQG0LGGOH(DVW(DVW$VLD&KLQD


$6($1







6XEVLGLDU\LQ7KDLODQG&RPSDQ\QDPH



7KDLODQG,QGRQHVLD

9LHW1DP
6LQJDSRUH‫كق‬0DOD\VLD.21'27(&,17(51$7,21$/ 7+$,/$1' &2/7'

/RFDWLRQ%DQJNRN7KDLODQG'DWHHVWDEOLVKHG

1RYHPEHU

3DLGLQFDSLWDOPLOOLRQEDKW DSSUR[LPDWHO\PLOOLRQ\HQ%XVLQHVVDUHDV,PSRUWH[SRUWDQGORFDOVDOHRILQGXVWULDOPDWHULDOVVWUXFWXUDOVWHHOPDWHULDOVHOHFWULFDOHTXLSPHQWHWFLQ7KDLODQG
1HWVDOHVRIRYHUVHDVEXVLQHVVPLOOLRQ\HQ.21'27(&,17(51$7,21$/
7+$,/$1'












$FWXDO$FWXDO


3ODQ



/RFDOVXEVLGLDU\LQ7KDLODQG







,QWHUQDWLRQDO
6DOHV'LYLVLRQ







7RWDO







$PRXQWVRILQWHUFRPSDQ\WUDQVDFWLRQVDUHQRWLQFOXGHG

.21'27(& 5(3257

⋇1HLJKERULQJLQGXVWU\
3XUVXH0 $ZLWKFRPSDQLHVDVVRFLDWHG
ZLWKLQGXVWULHVRWKHUWKDQWKHFRQVWUXFWLRQLQGXVWU\DQGSURPRWHEXVLQHVVH[SDQVLRQ$FWXDOFDVH6DQZD'HQ]DL &R/WG

:KROHVDOHEXVLQHVVLQWKH
FRQVWUXFWLRQLQGXVWU\:KROHVDOHRIHOHFWULF
HTXLSPHQW:KROHVDOHRIFRQVWUXFWLRQPDWHULDOV3XUVXH0 $ZLWKPDWHULDOPDQXIDFWXUHUVHWF
$FWXDOFDVH&+82+*,.(1&R/WG
7(&%8,/'&2/7'
⋉([SDQVLRQRIEXVLQHVVDUHD
3XUVXH0 $ZLWKFRPSDQLHVWKDWPDLQWDLQRYHUVHDVVLWHVWRSURPRWHEXVLQHVVDUHD
H[SDQVLRQ⋊$PSOLI\LQJVDOHVSDWWHUQV3XUVXH0 $ZLWKFRPSDQLHVWKDWRSHUDWHV
GLIIHUHQWVDOHVSDWWHUQVIURPWKRVHRI
.21'27(&VXFKDVUHWDLOFDWDORJEDVHGVHOOLQJDQGRQOLQHVDOHV6DQZD'HQ]DL&R/WG

3ODVWLF
FRQVWUXFWLRQPDWHULDOV⋈'HHSHQLQJWKHEXVLQHVV&DWHJRUL]DWLRQRIPHUFKDQGLVH
H[DPSOH:RRGHQFRQVWUXFWLRQPDWHULDOV
0HWDO
FRQVWUXFWLRQPDWHULDOV2WKHU
FRQVWUXFWLRQPDWHULDOV(QHUJ\VDYLQJHTXLSPHQW

6HFXULW\GHYLFHV$LUFRQGLWLRQLQJHTXLSPHQW+RWZDWHUVXSSO\HTXLSPHQW/LJKWLQJDQGKRWZDWHUVXSSO\HTXLSPHQW:HWDUHDHTXLSPHQW

SURGXFWLRQIDFLOLWLHV&+82+*,.(1&R/WG
0HFKDWUR /DERUDWRU\

2WKHU

7(&%8,/'&2/7'.21'27(&,1&

9,6,21)LHOGVRWKHUWKDQFRQVWUXFWLRQ

6KLSEXLOGLQJ7UDQVSRUW/DQGDQGVHDFDUJRKDQGOLQJ)LVKHULHVFXOWLYDWLRQ$JULFXOWXUH0DQXIDFWXULQJ:KROHVDOLQJRISLSHVDQGSOXPELQJPDWHULDOV.21'27(&

5LVNV$VXEVWDQWLDOFKDQJHLQHFRQRPLFFRQGLWLRQVDQG
XQH[SHFWHGHYHQWVPD\DIIHFWHDUQLQJVDQGWKH
ILQDQFLDOSRVLWLRQRIWKH.21'27(&JURXSDOWKRXJKZHH[DPLQHWKHDFTXLVLWLRQRIFRPSDQLHVDQGFDSLWDOEXVLQHVVDOOLDQFHVXVLQJPXOWLSOHLQGLFDWRUVDQGVWDQGDUGVZKLOHFRQVLGHULQJWKHPDUNHWHQYLURQPHQWHWFZH
DUHSODFHGLQ

(19,5210(17)RXUSHUVSHFWLYHVLQSXUVXLQJ0 $LPSURYHPHGLXPWRORQJWHUPFRUSRUDWHYDOXHWDNLQJLQWRDFFRXQW0 $VWUDWHJLHVIRUJURZWKE\
VWUHQJWKHQLQJSHULSKHULHVVXFKDVHQWHULQJLQWRQHLJKERULQJLQGXVWULHVDQGH[SDQGLQJRQOLQH
EXVLQHVVHV

62&,$/:HYLHZWKDWSXUVXLQJFRUSRUDWHDFTXLVLWLRQVDQG
FDSLWDOEXVLQHVVWLHXSVLVDQLPSRUWDQWVWUDWHJ\WRVWUHQJWKHQRXUEXVLQHVVSODWIRUP:HDFWLYHO\UHYLHZSRWHQWLDODFTXLVLWLRQDQGWLHXSRSSRUWXQLWLHVE\DQDO\]LQJDQGGLVFXVVLQJWKH
JURZWKSRWHQWLDORIWKHUHOHYDQWEXVLQHVVZKLOHWDNLQJFDSLWDOFRVWLQWRFRQVLGHUDWLRQ0RUHRYHULQ-DQXDU\ZHSXUFKDVHGODERUVDYLQJDQGLPDJHSURFHVVLQJHTXLSPHQW
EXVLQHVVHVIURP0HFKDWUR (QJLQHHULQJ&R/WG
WRVWUHQJWKHQWKHODERUVDYLQJILHOGDLPLQJWRSURYLGHKLJKYDOXHDGGHGSURGXFWVDQGSXUFKDVHG7(&%8,/'&R/7'LQ)HEUXDU\WRVWUHQJWKHQWKHPDLQWHQDQFHUHSDLUILHOG
*RLQJIRUZDUGZHZLOOFRQWLQXHHQGHDYRULQJWR),1$1&,$/'$7$‫ٹ‬0 $VWUDWHJ\:($5(.21'27(&

7RZDUGDFFHOHUDWLQJWKHJURZWKRIWKHSUHVHQWbV.21'27(& 2UJDQLF DQG
WKHIXWXUHbV.21'27(& 3HULSKHU\VWUHQJWKHQLQJ

13$7&R/WG

1HLJKERULQJLQGXVWU\'HHSHQLQJRIEXVLQHVV*29(51$1&(

6KLSEXLOGLQJWUDQVSRUWODQGDQG
VHDFDUJRKDQGOLQJPDQXIDFWXULQJSURGXFWLRQIDFLOLWLHVILVKHULHVFXOWLYDWLRQDJULFXOWXUHHWF

5HLQIRUFHPHQWRIPDWHULDOVWKDWVXSSRUWEXLOGLQJVDQGVWUXFWXUHV,PSURYLQJSURGXFWLYLW\)RXUSHUVSHFWLYHV)XOOVFDOHGHSOR\PHQWLQ
$6($1FRXQWULHV
HJ7KDLODQG,QGRQHVLD$PSOLI\LQJVDOHVSDWWHUQV

6833/(0(17([SDQVLRQRIEXVLQHVVDUHD([SDQVLRQRIGLVWULEXWLRQFKDQQHOV(QWU\LQWRWKHRQOLQHEXVLQHVV.21'27(& 5(3257



.21'27(&9,6,21
7RS0HVVDJH0HGLXPWHUP0DQDJHPHQW3ODQ*URZWK6WUDWHJ\ )LQDQFLDO6WUDWHJLHV)LQDQFLDO6WUDWHJLHV‫ٹ‬,PSURYLQJFRUSRUDWHYDOXHDQGILQDQFLDOVWUDWHJLHV
7RLPSURYHFRUSRUDWHYDOXHWKH&RPSDQ\
FRQVLGHUVLWQHFHVVDU\WRLPSURYHSURILWDELOLW\LPSURYHFDSLWDOHIILFLHQF\DQGRSWLPL]HILQDQFH ,Q
SDUWLFXODUZHSODFHLPSRUWDQFHRQGLYLGHQGSROLF\
DQGDSSURSULDWHDOORFDWLRQRIIXQGVWRRSWLPL]HILQDQFH
,QWHUPVRIGLYLGHQG SROLF\ZKLOHIXOO\WDNLQJLQWRDFFRXQWERWKFRQVROLGDWHGRSHUDWLQJUHVXOWVDQG
WKHFRQVROLGDWHGGLYLGHQGSD\RXWUDWLRZHKDYH
WKHEDVLFSROLF\RIGLVWULEXWLQJGLYLGHQGVWRVKDUHKROGHUVFRQWLQXRXVO\DQGVWDEO\WDUJHWLQJDGLYLGHQGRQHTXLW\ '2( UDWLRRIRUKLJKHU
7KH&RPSDQ\KDVQHYHUUHGXFHGGLYLGHQGVVLQFH
RXUOLVWLQJ:KLOHZHFRXOGKDYHUHGXFHGGLYLGHQGVDWWKHWLPHRIWKH/HKPDQ6KRFNVLQFH
RXUSURILWZDVVWDEOHZHDGRSWHGWKHSROLF\RIVWDEOHGLYLGHQGVXVLQJ'2(DVWKHLQGLFDWRU

3OHDVHUHIHUWR)LJXUHIRUWKHDOORFDWLRQRIIXQGV:HPDNHJURZWKLQYHVWPHQWVZKLOHEHLQJ
FRQVFLRXVRIFDSLWDOFRVWVDVZHOODVVWDEOH
VKDUHKROGHUUHWXUQVDLPLQJWRPDLQWDLQKLJKO\HIILFLHQWFDSLWDO)RUWKHLPSURYHPHQWRIFDSLWDOHIILFLHQF\WKH
&RPSDQ\SODFHVLPSRUWDQFHRQFDSLWDOFRVWVZKLFKDUHWDUJHWHGDWIRUWKH\HDUHQGLQJ
0DUFK
$VDUHVXOWRIWKHVHLQLWLDWLYHVDQLPSURYHPHQWLQ
52(ZLOOEHUHTXLUHG$FFRUGLQJO\ZHDLPIRUDQ
52(RIRUKLJKHUDVWKHFDSLWDOHIILFLHQF\
WDUJHWDLPLQJWRLPSURYH52(IURPWKHSHUVSHFWLYHRI)LJXUHZKLFKVWUXFWXUDOO\EUHDNVGRZQ52()LJXUH.RQGRWHFbV 3URFHVVRIDOORFDWLRQRIIXQGV2SHUDWLQJ&)PLOOLRQ\HQ)XQGVRQKDQG
PLOOLRQ \HQ,QYHVWPHQWIRUJURZWK

3ODQ$FWXDO ‫ ع‬

,QYHVWPHQWLQSHRSOH

7UDQVIRUPDWLRQRIOXPSVXPUHWLUHPHQWDOORZDQFH
WRGHILQHGEHQHILWFRUSRUDWH
SHQVLRQSODQPLOOLRQ\HQ
PLOOLRQ\HQ&DSLWDOLQYHVWPHQW

5HSODFHPHQWRISURGXFWLRQHTXLSPHQW
5HORFDWLRQUHEXLOGLQJRI
EDVHV


PLOOLRQ\HQ
PLOOLRQ\HQ

6WUDWHJLF
LQYHVWPHQW([HFXWLRQRI0 $
PLOOLRQ\HQ
PLOOLRQ\HQ'LYLGHQGV

6WDEOHDQGFRQWLQXRXVGLYLGHQGV

'2(

RUKLJKHUPLOOLRQ\HQ

6KDUHKROGHUUHWXUQ‫ ك ق‬7HPSRUDU\LQFUHDVHLQFRQWULEXWLRQVGXHWRWKHWUDQVIRUPDWLRQRIOXPSVXPUHWLUHPHQWDOORZDQFHWRGHILQHG
EHQHILWFRUSRUDWHSHQVLRQSODQLVQRWLQFOXGHG

)LJXUH‫ ؟‬,QLWLDWLYHVEDVHGRQVWUXFWXUDOEUHDNLQJGRZQRI52(‫ݐ݂݅݋ݎ݌ݏݏ݋ݎܩ‬ܰ݁‫ݏ݈݁ܽݏݐ‬‫* ق‬URVVSURILWPDUJLQ‫ك‬ܰ݁‫ݏ݈݁ܽݏݐ‬ܶ‫ݏݐ݁ݏݏܽ݈ܽݐ݋‬‫ ق‬7RWDODVVHWWXUQRYHU ‫ك‬ܶ‫ݏݐ݁ݏݏܽ݈ܽݐ݋‬‫݈ܽݐ݅݌ܽܿݕݐ݅ݑݍܧ‬‫) ق‬LQDQFLDOOHYHUDJH ‫ك‬.21'27(& 5(3257

 4XDOLWDWLYHDSSURDFK,PSURYHQHWVDOHVE\UHYLHZLQJVWUDWHJLHV
 4XDQWLWDWLYHDSSURDFK,QFUHDVHQHWVDOHVLPSURYH
SURILWDELOLW\
 5HGXFWLRQRIQHFHVVDU\ZRUNLQJFDSLWDO 5HGXFWLRQRIXQQHFHVVDU\QRQFXUUHQWDVVHWV
&DSLWDOSROLF\FRQVLGHULQJRSWLPDOFDSLWDOVWUXFWXUH‫ق‬%DODQFHEHWZHHQLQWHUHVWEHDULQJGHEWVDQGHTXLW\FDSLWDO‫ك‬*URZWKLQYHVWPHQWVZKLOHEHLQJ
FRQVFLRXVRIFDSLWDOFRVWV
5HGXFWLRQRIXQQHFHVVDU\QRQFXUUHQW
DVVHWV:($5(.21'27(&‫ٹ‬0HVVDJHIURP&KLHI)LQDQFLDO2IILFHU *HQHUDO0DQDJHURI0DQDJHPHQW+HDGTXDUWHUV
7RPR\D$QGR
6HQLRU([HFXWLYH'LUHFWRU*HQHUDO0DQDJHURI0DQDJHPHQW+HDGTXDUWHUVDQG0DQDJHURI*HQHUDO$IIDLUV'LYLVLRQRIWKH&RPSDQ\

0 $:HEHOLHYHZHQHHG0 $DVDPHDQVWRDFFHOHUDWHWKHJURZWKRIWKH&RPSDQ\:KLOHZH

.21'27(& 5(3257

.21'27(&),1$1&,$/'$7$
62&,$/(19,5210(175HFUXLWPHQW)RUWKHVXVWDLQDEOHJURZWKRIWKH&RPSDQ\ZH
QHHGUHIRUPZKLFKFRUUHVSRQGVWRFKDQJLQJWLPHV$OWKRXJKLWLVQRWVWUDLJKWIRUZDUGWRFKDQJHWKHFRUSRUDWHV\VWHPULJKWDZD\D
FRPSDQ\ZLOOFKDQJHLIHPSOR\HHVWKHUHFKDQJH
5HFUXLWPHQWLVLPSRUWDQWIRUWKDWSXUSRVH:H
EHOLHYHWKDWLIDFRPSDQ\UHFUXLWVJRRGSHUVRQQHOZKRZLOOOHDGIXWXUHJURZWKZLWKWKHJURZWKRIVXFKSHUVRQQHOWKHFRPSDQ\ZLOODOVRJURZDQG
FKDQJHLQRU\HDUV,QUHFUXLWPHQWDFWLYLWLHV,DOZD\VSDUWLFLSDWHLQFRPSDQ\LQIRUPDWLRQVHVVLRQVH[SODLQWKHJURZWKVWUDWHJ\RIWKH&RPSDQ\E\P\VHOIDQGORRNDW
WKHnIDFH|RIHDFKSHUVRQ7KH&RPSDQ\KDVEHHQ
FRQGXFWLQJ\HDUURXQGUHFUXLWPHQWIRUVHYHUDO\HDUVZLWKRXWOLPLWLQJLWVHOIWRQHZJUDGXDWHV$VDUHVXOWZHVHHPDQ\SHUVRQQHOZLWKYDULRXVFDUHHUVDQGH[SHULHQFHVMRLQLQJWKH&RPSDQ\
0RUHRYHUWKH&RPSDQ\KDVEHHQLQFUHDVLQJO\UHFUXLWLQJEURWKHUVVLVWHUVRUDFTXDLQWDQFHVRI
HPSOR\HHVLQUHFHQW\HDUV7KLVLVJHQHUDOO\FDOOHGUHIHUUDOUHFUXLWPHQWDPHWKRGRIOHWWLQJHPSOR\HHVPDNHUHIHUUDOVIRUSHUVRQQHODOWKRXJKZHDUHQRWDGRSWLQJUHIHUUDOUHFUXLWPHQW
LQWHQWLRQDOO\RUSURDFWLYHO\6HHLQJRXUHPSOR\HHV
OLYLQJHQWKXVLDVWLFDQGKDSS\OLYHVSHRSOHDURXQG
WKHPVHHPWREHFRPHLQWHUHVWHGLQWKH&RPSDQ\DQGFRPHWRLWVLQIRUPDWLRQVHVVLRQV1HHGOHVVWR
VD\ZHLQWHUYLHZWKHPIDLUO\ZLWKRXWUHFUXLWLQJWKHPRQO\EHFDXVHWKH\DUHDFTXDLQWDQFHVRI
HPSOR\HHV:KLOHLWKDVEHFRPHGLIILFXOWWRUHFUXLWGXHWRODERUVKRUWDJHV,GRQRWWKLQNZHFDQUHFUXLWPDQ\JRRGVWXGHQWVE\LPSURYLQJHPSOR\PHQWFRQGLWLRQV VDODULHVDQGEHQHILWV RUHQKDQFHWKH
DELOLW\WRUHFUXLW$OOFXUUHQWVWXGHQWVKDYHWKHLURZQXQLTXHVHQVHV0\WKHRU\LVWKDWZHZLOOKDYH
PDQ\DSSOLFDQWVDVDPDWWHURIFRXUVHLIZHDUH
WKHn&RPSDQ\ZKLFKVKRZVJURZWKSURVSHFWVIRU
WKHIXWXUH|DQGWKHn&RPSDQ\ZKHUHHPSOR\HHV
DUHZRUNLQJHQWKXVLDVWLFDOO\|,QRWKHUZRUGV,
EHOLHYHWKHPRWLYDWLRQRIHPSOR\HHVVXSSRUWVWKH
JURZWKRIDFRPSDQ\*29(51$1&(,5,5LVHVVHQWLDOWRLPSURYHFRUSRUDWHYDOXH7KH
&RPSDQ\UDQNVUGLQSURILWDPRQJOLVWHGFRPSDQLHV,IWKHUDQNLQJLQSURILWLVWKHPHDVXUH
LQGLFDWLQJFRUSRUDWHYDOXH PDUNHWFDSLWDOL]DWLRQ 
WKHPDUNHWFDSLWDOL]DWLRQIRUWKHUGUDQNVKRXOGEHPLOOLRQ\HQZLWKDVWRFNSULFHRI\HQ%XWZHKDYHQRWDFKLHYHGDVWKH
&RPSDQ\bVPDUNHWFDSLWDOL]DWLRQLVPLOOLRQ\HQDQGWKHVWRFNSULFHLV\HQ DVRI0DUFK *RLQJIRUZDUGZHZLOOFRQWLQXH
GLVVHPLQDWLQJWKHDWWUDFWLRQVRIWKH&RPSDQ\WKURXJK,5DLPLQJWRDFKLHYHWKHSURSHUO\HYDOXDWHGFRUSRUDWHYDOXH
7KHULVHLQWKHVWRFNSULFHKDVWKHDVSHFWRIDFWLQJ
DVDQLQFHQWLYHIRUHPSOR\HHV7KHSDUWLFLSDWLRQ
UDWHIRURXUHPSOR\HHVVKDUHKROGHUVDVVRFLDWLRQLVDERXWZKLFKLVRXWVWDQGLQJO\KLJKFRPSDUHG
WRWKHDYHUDJHRIIRUOLVWHGFRPSDQLHV
0RUHRYHULQDGGLWLRQWRSDUWLFLSDWLRQLQWKH
HPSOR\HHVVKDUHKROGHUVDVVRFLDWLRQZHKDYH
LQWURGXFHGWKH%RDUG%HQHILW7UXVW %%7 DQGWKH
(PSOR\HH6WRFN2ZQHUVKLS3ODQWUXVWWRSURYLGHVWRFNZLWKWKHREMHFWLYHRILQFUHDVLQJWKH
PRWLYDWLRQRIHPSOR\HHVWRLPSURYHHDUQLQJVDQG
RIIHULQJGLUHFWRUVDQGHPSOR\HHVRSSRUWXQLWLHVWR
RZQRXUFRPSDQ\VWRFN3UHFLVHO\EHFDXVHHDFKRQHRIRXUHPSOR\HHVLVVWULYLQJWRLPSURYH
HDUQLQJVZKLOHEHLQJFRQVFLRXVRIWKHVWRFNSULFH
ZHDLPWRWDFNOH,5VLQFHUHO\)RU,5WKH&RPSDQ\SDUWLFLSDWHVLQ,5HYHQWVIRU
LQGLYLGXDOLQYHVWRUVHYHU\\HDUZLWKPDLQO\\RXQJHPSOR\HHVZKRDUHWKHIXWXUHRIWKH&RPSDQ\
SURDFWLYHO\H[SODLQLQJDERXWWKH&RPSDQ\)RULQVWLWXWLRQDOLQYHVWRUVLQDGGLWLRQWREULHILQJVZHYLVLWWKHPLQGLYLGXDOO\KRZHYHUZHIHHOZHDUH
QRWYLVLWLQJHQRXJKRIWKHPFRPSDUHGWRRWKHUOLVWHGFRPSDQLHV,IDQ\LQVWLWXWLRQDOLQYHVWRUVKDYHVRPHLQWHUHVWLQWKH&RPSDQ\DIWHUVHHLQJWKLVLQWHJUDWHGUHSRUWSOHDVHGRQRWKHVLWDWHWRFRQWDFWXVOLVWIRXUSHUVSHFWLYHVDVWKH0 $VWUDWHJ\ZHFDQ
LQFUHDVHSURILWDELOLW\LIWKH0 $WDUJHWLVDPDQXIDFWXUHUIRUEXVLQHVVVXFFHVVLRQDQGZH
FDQGHYHORSQHZVDOHVFKDQQHOVLILWLVDFRPSDQ\ZLWKRYHUVHDVEDVHV VHHSDJHIRUGHWDLOV 
6LQFH0 $LVDVWUDWHJLFLQYHVWPHQWIRUVXVWDLQDEOHJURZWKZHVKRXOGEHFDUHIXODERXWLWV
H[HFXWLRQQRQHWKHOHVVLWLVHVVHQWLDOORRNLQJDWWKHIXWXUHRIWKH&RPSDQ\:HZLOOFRQWLQXH
FRQVLGHULQJ0 $JRLQJIRUZDUG

6833/(0(177KUHHHOHPHQWVHVVHQWLDOIRUVXVWDLQDEOH
JURZWK,WKDVEHHQ\HDUVVLQFH,DVVXPHGWKHSRVWRI
*HQHUDO0DQDJHURI0DQDJHPHQW+HDGTXDUWHUV,
EHOLHYHWKHUHDUHWKUHHFUHDWLYHDUHDVIRU
0DQDJHPHQW+HDGTXDUWHUVQDPHO\,50 $DQG
UHFUXLWPHQW(DFKRQHRIWKHPLVDQHVVHQWLDO
HOHPHQWIRUWKHVXVWDLQDEOHJURZWKRIWKH
&RPSDQ\9,6,21$IWHUVHUYLQJDV0DQDJHURI1DNDQRVKLPD%UDQFKRI08)*%DQN/WGKHEHFDPH
0DQDJHURI*HQHUDO$IIDLUV'LYLVLRQRI.21'27(&LQ$WWKH%DQNKHVSHQWDERXWWHQ\HDUVUHVSHFWLYHO\LQEDQNLQJRSHUDWLRQVLQJHQHUDO FRXQWHUPDUNHWLQJORDQVHWF 
VHFXULWLHVRSHUDWLRQVLQJHQHUDO SULPDU\VXSSRUWIRUVWRFNRIIHULQJFURVVVKDUHKROGLQJSRUWIROLRPDQDJHPHQWVHFXULWLHVVXEVLGLDU\PDQDJHPHQWHWF‫ك‬DQGPDQDJHPHQWLQ
JHQHUDO VHUYLQJDVEUDQFKPDQDJHUDWILYHEUDQFKHVRIWKUHHEDQNVLQWKUHHDUHDVRI
7RN\R1DJR\DDQG2VDND $IWHUMRLQLQJWKH&RPSDQ\KHVHUYHGDV([HFXWLYH'LUHFWRU*HQHUDO0DQDJHURI
0DQDJHPHQW+HDGTXDUWHUVDQG0DQDJHURI*HQHUDO$IIDLUV'LYLVLRQRIWKH&RPSDQ\EHIRUH
DVVXPLQJKLVFXUUHQWSRVLWLRQ
+HLVFRQFXUUHQWO\VHUYLQJDV3DUWWLPH'LUHFWRURI6XEVLGLDULHV

.21'27(&9,6,21
7RS0HVVDJH0HGLXPWHUP0DQDJHPHQW3ODQ*URZWK6WUDWHJ\ )LQDQFLDO6WUDWHJLHV,PSURYLQJFRUSRUDWHYDOXH‫&ٹ‬DSLWDOSROLF\
2XUFDSLWDOSROLF\VWDQGVRQWZRNH\FRPSRQHQWVFDSLWDOHIILFLHQF\WDUJHWDQG
VKDUHKROGHUUHWXUQWDUJHW:HVHWWKHFDSLWDO
HIILFLHQF\WDUJHWE\XVLQJ52(DQLQGH[WKDWUHIOHFWVWKHHIILFLHQF\RIFDSLWDOLQYHVWPHQWLQSXUVXLWRIEXVLQHVVH[SDQVLRQLQDQHIIRUWWR
SURPRWHFUHDWLRQRIFRUSRUDWHYDOXH 0RUHRYHUFDSLWDOFRVWEDVHGRQDFWXDOILJXUHVLQWKHILVFDO$FWXDO52(‫ق‬٫‫ك‬
7DUJHW

\HDUHQGHG0DUFKLVVHWDWZHDUHDOVRSD\LQJDWWHQWLRQWRH[FHHGWKLVFDSLWDO
FRVW 0HDQZKLOHWKHVKDUHKROGHUUHWXUQWDUJHWLV
VHWWRGHWHUPLQHGLYLGHQGVE\PHDQVRI'2(DQ
LQGH[WKDWWDNHVLQWRDFFRXQWERWKFRQVROLGDWHG
RSHUDWLQJUHVXOWVDQGWKHGLYLGHQGSD\RXWUDWLRZLWKWKHDLPRIGLVWULEXWLQJGLYLGHQGVWRVKDUHKROGHUVFRQWLQXRXVO\DQGVWDEO\$FWXDO'2(‫ق‬٫‫ك‬

٫ RUKLJKHU

7DUJHW٫ RUKLJKHU






























7KHWDUJHW52(RIRUKLJKHUFDQEHDFKLHYHGLISURILWLQFUHDVHVHYHU\\HDU
0RUHRYHUWKHWDUJHW'2(RIRUKLJKHUFDQ
EHDFKLHYHGLISURILWDQGGLYLGHQGVLQFUHDVH&DSLWDOFRVW %DVHGRQDFWXDOILJXUHVLQ





















HYHU\\HDU (TXLW\FDSLWDOLVDVVXPHGWREH
LQFUHDVHGE\WKHDPRXQWRISURILWLQWKHSUHYLRXV\HDU ٫

7UDQVLWLRQRIVWRFNSULFH‫<ق‬HQ‫ك‬

.21'27(&VWRFNSULFHDIWHUVWRFNVSOLW OHIWD[LV

1LNNHLDYHUDJHVWRFNSULFH ULJKWD[LV










           


.21'27(& 5(3257

\HQ

6LQFHWKHLQLWLDOOLVWLQJ1RGHFUHDVHLQGLYLGHQGV
3ODQWRLQFUHDVHGLYLGHQGVIRUWKHWK FRQVHFXWLYHSHULRG

3ODQ:($5(.21'27(&

7UDQVLWLRQLQGLYLGHQGV\HQ,QFUHDVHLQRUGLQDU\GLYLGHQGV&RPPHPRUDWLYHGLYLGHQG.21'27(&2UGLQDU\GLYLGHQG

9,6,21

\HQ
\HQ
\HQ
\HQ

\HQ\HQ\HQ),1$1&,$/'$7$

\HQ
\HQ
\HQ





(19,5210(17

\HQ



‫ٹ‬$FTXLVLWLRQDQG&DQFHOODWLRQRI7UHDVXU\6WRFNV
7KH&RPSDQ\DFTXLUHVWUHDVXU\VWRFNVWR
LPSOHPHQWIOH[LEOHFDSLWDOPHDVXUHVLQUHVSRQVHWRFKDQJHVLQWKHPDQDJHPHQWHQYLURQPHQWDQGFRQVLGHUVWKHFDQFHOODWLRQRIWUHDVXU\VWRFNVDVQHFHVVDU\WRLQFUHDVH
VKDUHKROGHUVbSURILW‫'ٹ‬LYLGHQG\LHOG$FTXLVLWLRQRIVKDUHVRIWUHDVXU\VWRFNV&DQFHOODWLRQVRIVKDUHVRIWUHDVXU\VWRFNV٫‫ع‬٫

1XPEHURIVKDUHVKHOG

6KDUHKROGHU
LQFHQWLYHVRUPRUHVKDUHVNJULFHFHUWLILFDWH

IHZHUWKDQVKDUHVHTXLYDOHQWWR\HQRUPRUHVKDUHVNJULFHFHUWLILFDWH

IHZHUWKDQVKDUHVHTXLYDOHQWWR\HQRUPRUHVKDUHVNJULFHFHUWLILFDWHHTXLYDOHQWWR\HQ

NJULFHFHUWLILFDWHLVZRUWK\HQ.21'27(& 5(3257

6833/(0(17'LYLGHQG\LHOGLQFOXGLQJVKDUHKROGHU
LQFHQWLYHV‫ٹ‬6KDUHKROGHULQFHQWLYHSODQ&ORVLQJSULFHRQ0DUFK \HQ'LYLGHQG\LHOG/DWHVWDFWLRQV

62&,$/

\HQ*29(51$1&(

\HQ



),1$1&,$/'$7$

FINANCIALDATA&RQVROLGDWHG)LQDQFLDO+LJKOLJKWV&RQVROLGDWHG)LQDQFLDO3HUIRUPDQFH)LQDQFLDO,QIRUPDWLRQ.21'27(& 5(3257









‫ٹ‬5HVXOWVRI2SHUDWLRQV PLOOLRQ\HQDQG7KRXVDQG86GROODUV
1HWVDOHV2UGLQDU\LQFRPH
3URILWDWWULEXWDEOHWRRZQHUVRI
SDUHQW&DSLWDOLQYHVWPHQW'HSUHFLDWLRQ‫( پ‬%,7'$

?

?

?

?

?































































‫)ٹ‬LQDQFLDO3RVLWLRQ PLOOLRQ\HQDQG7KRXVDQG86GROODUV
7RWDODVVHWV?

?

?

?

?



1HWDVVHWV























?

?

?

?

,QWHUHVWEHDULQJGHEW

9,6,21

.21'27(&:($5(.21'27(&&RQVROLGDWHG)LQDQFLDO+LJKOLJKWV&DVKIORZVIURPRSHUDWLQJDFWLYLWLHV?

&DVKIORZVIURPLQYHVWLQJDFWLYLWLHV













&DVKIORZVIURPILQDQFLQJDFWLYLWLHV&DVKDQGFDVKHTXLYDOHQWVHQGRI
\HDU



























),1$1&,$/'$7$‫&ٹ‬DVK)ORZV PLOOLRQ\HQDQG7KRXVDQG86GROODUV

3URILWDWWULEXWDEOHWRRZQHUVRI
SDUHQWSHUVKDUH
1HWDVVHWVSHUVKDUH?

?

?

?

?











'LYLGHQGSHUVKDUH

































2UGLQDU\LQFRPHPDUJLQ 
3URILWDWWULEXWDEOHWRRZQHUVRI
SDUHQWPDUJLQ ‫ پ‬7RWDO DVVHWWXUQRYHU 





















‫پ‬

)LQDQFLDO OHYHUDJH 7LPHV











‫پ‬

52( 











‫پ‬

52$ 











‫پ‬

(TXLW\UDWLR 











'2( 





















‫پ‬

&XUUHQWUDWLR ‫پ‬'(UDWLR 











‫پ‬

)L[HGUDWLR 











5DWLRRIUHWDLQHGHDUQLQJVWRWRWDO
DVVHWV 











6WRFNFORVLQJSULFH <HQ

?

?

?

?

?

3ULFHHDUQLQJV UDWLR 7LPHV











*29(51$1&(*URVVSURILWPDUJLQ 

62&,$/‫)ٹ‬LQDQFLDO,QGLFDWRUV‫ٹ‬6WRFN3ULFH,QGH[‫( پ‬TXLW\UDWLR ٙ 1HWDVVHWVٕ 6XEVFULSWLRQULJKWVWRVKDUHVٕ
1RQFRQWUROOLQJLQWHUHVWV 7RWDODVVHWV‫& پ‬XUUHQWUDWLR &XUUHQWDVVHWV&XUUHQWOLDELOLWLHV‫(' پ‬UDWLR ,QWHUHVWEHDULQJGHEW 1HWDVVHWVٕ 6XEVFULSWLRQULJKWVWRVKDUHVٕ 1RQFRQWUROOLQJLQWHUHVWV‫) پ‬L[HGUDWLR 1RQFXUUHQWDVVHWV 1HWDVVHWVٕ 6XEVFULSWLRQULJKWVWRVKDUHVٕ 1RQFRQWUROOLQJLQWHUHVWV.21'27(& 5(3257

6833/(0(17‫( پ‬%,7'$ ,QFRPHEHIRUHLQFRPHWD[HV,QWHUHVWH[SHQVHV 'HSUHFLDWLRQ‫ پ‬7RWDODVVHWWXUQRYHUٙ 1HWVDOHV 7RWDODVVHWVRIDYHUDJHWZR\HDUV‫) پ‬LQDQFLDOOHYHUDJHٙ 7RWDODVVHWV 1HWDVVHWVٕ 6XEVFULSWLRQULJKWVWRVKDUHV ٕ 1RQFRQWUROOLQJLQWHUHVWV‫ پ‬52( 3URILWDWWULEXWDEOHWRRZQHUVRISDUHQW 1HWDVVHWVt
6XEVFULSWLRQULJKWVWRVKDUHVٕ 1RQFRQWUROOLQJ LQWHUHVWV‫ پ‬52$ٙ 3URILWDWWULEXWDEOHWRRZQHUVRISDUHQW7RWDODVVHWV RI
DYHUDJHWZR\HDUV(19,5210(17‫ٹ‬3HU6KDUH,QIRUPDWLRQ <HQDQG86GROODUV),1$1&,$/'$7$&RQVROLGDWHG)LQDQFLDO+LJKOLJKWV&RQVROLGDWHG)LQDQFLDO3HUIRUPDQFH&RQVROLGDWHG)LQDQFLDO3HUIRUPDQFH‫ٹ‬1HWVDOHV PLOOLRQ\HQ‫ٹ‬2UGLQDU\LQFRPH PLOOLRQ\HQPLOOLRQ\HQPLOOLRQ\HQ٫ 83٫ 83

















‫ٹ‬3URILWDWWULEXWDEOHWRRZQHUVRISDUHQWPLOOLRQ\HQ٫ 83SRLQW

‫ٹ‬5HWXUQRQ(TXLW\ 52(  ٫





PLOOLRQ\HQ



















.21'27(& 5(3257









PLOOLRQ\HQPLOOLRQ\HQ٫ 83٫ 83








),1$1&,$/'$7$







.21'27(&



:($5(.21'27(&‫ٹ‬1HWDVVHWV PLOOLRQ\HQ

9,6,21‫ٹ‬7RWDODVVHWV PLOOLRQ\HQ





‫'ٹ‬LYLGHQGSHUVKDUH <HQ







(19,5210(17‫'ٹ‬LYLGHQGRQ(TXLW\UDWLR '2(  ٫\HQ 83 SRLQW
62&,$/

 \HQ























.21'27(& 5(3257





6833/(0(17*29(51$1&((6*(6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&(E

nvironment

ocial

S G

overnance)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ .21'27(& 5(3257(QYLURQPHQW6RFLDO*RYHUQDQFHࢥࣥࢻ࣮ࢸࢵࢡࡢᡂ㛗ᡓ␎)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\

7KLVVKDSHRISODFLQJWKHIRRWILUPO\RQWKHJURXQGDQGDLPLQJ
IRUIXUWKHUDVFHQGDQFHH[SUHVVHVRXUVWDQFHRIVWULYLQJWRGHYHORSQHZWHFKQRORJLHVWRHVWDEOLVKRXURZQEUDQGEDVHGRQ
WKHDFFXPXODWHGWHFKQRORJLHVDQGNQRZKRZ+DUPRQ\RISHRSOHDQG
WHFKQRORJLHV

7KLVH[SUHVVHVDFRPSDQ\WKDWLVIRUPHGIURPWKHEDODQFHDQG
KDUPRQ\EHWZHHQSHRSOHDQGWHFKQRORJLHV,WDOVRH[SUHVVHVWKHKDUPRQ\DQGWUXVWDPRQJHPSOR\HHVEHWZHHQFRPSDQLHVDQGZLWKVXUURXQGLQJORFDOFRPPXQLWLHV([FHOOHQWKXPDQUHVRXUFHV
DQGSURJUHVVLQWRWKHIXWXUH

7KHXSULVLQJYHFWRUH[SUHVVHVH[FHOOHQWKXPDQUHVRXUFHVZKR
PDNHSURJUHVVDQGJURZFRQWLQXRXVO\LQWRWKHIXWXUH,W
H[SUHVVHVWKHPRYHPHQWRIWKHLUVWURQJDVSLUDWLRQZRUNLQJRQSURDFWLYHGHYHORSPHQWRIQHZWHFKQRORJLHVDQGOHDGLQJWRIXUWKHUGHYHORSPHQW
(19,5210(173URDFWLYHGHYHORSPHQWRI
QHZWHFKQRORJLHV.21'27(&

7KLVORJRXVHVWKHILUVWOHWWHURI.21'27(&n.|DVWKHPRWLILPSO\LQJWKHIROORZLQJPHDQLQJH[SUHVVHG
LQWKHFRUSRUDWHSKLORVRSK\),1$1&,$/'$7$‫ٹ‬/RJR

9,6,21:($5(.21'27(&.21'2,521:25.6&R/WGZKLFKVWDUWHGDVDSULYDWH
FRQFHUQFKDQJHGLWVFRPSDQ\QDPHLQDOPRVW\HDUVDJR:KLOHLWZDVDWLPHZKHQWKHFRQFHSWRI(6*KDV\HWWREH
ERUQRXUFRUSRUDWHLGHQWLW\ZDVHVWDEOLVKHGZLWKWKHZLVKWR
n%HDFRPSDQ\ZKLFKFRQWLQXHVWRGHYHORSUHJDUGOHVVRIKRZ
VRFLHW\DQGWKHHFRQRP\FKDQJHDQGZKLFKLVLQGLVSHQVDEOHIRU
VRFLHW\|7KHVSULWUHPDLQVWKHVDPHWRGD\DQGLVLQKHULWHGLQ
WKH(6*%DVLF3ROLF\‫&ٹ‬RUSRUDWH&RORU >'HHSJUHHQ@([DPSOHRI&,XVHG PDLOHGLWHPVVHDOV.21'21HZV‫&؞‬,VSHFLDOLVVXH
H[WUDHGLWLRQ

6833/(0(17*29(51$1&(

62&,$/*UHHQWUHHVWKHFRORURIZKRVHOHDYHVLQKLOOVDQGILHOGVNHHSGHHSJUHHQZLWKRXWFKDQJHWKURXJKIRXUVHDVRQV
DQGWKXVKDVEHHQUHJDUGHGDVDnKDSS\FRORU|VLQFH
DQFLHQWWLPHV7KHLUOHDYHVRIGHHSJUHHQFUHDWHR[\JHQWKURXJKSKRWRV\QWKHVLVEHQHILWLQJWKHZKROHZRUOG7KH
&RPSDQ\KDVVHOHFWHGnGHHSJUHHQ|DVLWVFRUSRUDWHFRORUEHFDXVHZHDOVRVWURQJO\ZLVKWREHDFRPSDQ\
WKDWFRQWLQXHVWRGHYHORSUHJDUGOHVVRIKRZVRFLHW\DQG
WKHHFRQRP\FKDQJHDQGZKLFKLVLQGLVSHQVDEOHIRU
VRFLHW\&RPSDQ\EDGJHZRUQ.21'27(& 5(3257



(6*
)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ (6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&((6*%DVLF3ROLF\2XWOLQH‫كڭق‬

7KHILJXUHVKRZVWKHWDUJHWVWREHDFKLHYHGDQGWKHLULVVXHVLQHDFK(6*DUHD
,QLGHQWLI\LQJWKHPDWHULDOLW\RIWKH&RPSDQ\ZHFRQVLGHUHGWKHUHODWLRQVKLSZLWK6'*VJRDOVWRVRUWRXWPDWHULDOLW\
0DWHULDOLW\ 3URYLVLRQRIRSWLPDOSURGXFWVDQG
PHUFKDQGLVHIRUHQYLURQPHQWDOPHDVXUHV(QYLURQPHQW  %XVLQHVVDFWLYLWLHVSD\LQJDWWHQWLRQWRWKH
HQYLURQPHQW

3URGXFWVDQGPHUFKDQGLVHKDQGOHGE\
WKH&RPSDQ\‫ق‬3UHVHQWDWLRQRIHQYLURQPHQWUHODWHG
SURGXFWVDQGPHUFKDQGLVH‫ك‬,QLWLDWLYHVIRUHQYLURQPHQWDOSURWHFWLRQ
DQGHQHUJ\VDYLQJLQLWLDWLYHV

0DQDJHPHQWRIHPLVVLRQV PDWHULDOEDODQFH

 3URGXFWOLDELOLW\DQGTXDOLW\DVVXUDQFH

4XDOLW\FRQWURORISURGXFWVDQG
PHUFKDQGLVH

6RFLDO
6WDQFHIRUVHFXULW\DQGVDIHW\

 3URFXUHPHQWDQGSURYLVLRQRIKLJKYDOXHDGGHG
SURGXFWVPHUFKDQGLVHDQGVHUYLFHV
3URYLVLRQRIEHWWHUSURGXFWVDQG
PHUFKDQGLVHIRUFXVWRPHUV

.21'27(& 5(3257

5HOHYDQW6'*ۢᚑᴗဨ䛸䛸䜒䛻

$FTXLVLWLRQRI,62
0DQXIDFWXULQJRISURGXFWVZLWKIXUWKHUGXHFRQVLGHUDWLRQWRWKHHQYLURQPHQW,PSOHPHQWDWLRQRIHQHUJ\VDYLQJPHDVXUHVVZLWFKWR/('OLJKWLQJDFKLHYLQJFXWLQSRZHUXVDJH,QVWDOODWLRQRIVRODUSRZHUJHQHUDWLRQIDFLOLWLHV

3URPRWLRQRIOLJKWLQJHTXLSPHQWVZLWFKZRUNVDWRSHUDWLQJVLWHVZKLFKKDYHQRWVZLWFKHGWR/('OLJKWLQJ3XUFKDVHRIHQYLURQPHQWIULHQGO\SURGXFWVIRURIILFHVXSSOLHV%XGJHWLQJRIH[SHQVHVIRUHQYLURQPHQWDO
PHDVXUHV

5HGXFHWUDQVSRUWDWLRQFRVWVE\GHSOR\LQJIDFWRULHV
6XFFHHGHGLQUHGXFLQJWUDQVSRUWDWLRQFRVWVDQGUHDOL]LQJTXLFNGHOLYHULHVZLWKHDFKRSHUDWLQJVLWHKDYLQJLQYHQWRULHV3DUWLFLSDWLRQLQHQYLURQPHQWDOFRQVHUYDWLRQDFWLYLWLHV‫ق‬,PSOHPHQWDWLRQRIFRROZDUP
EL],PSOHPHQWDWLRQRIIRUHVWSUHVHUYDWLRQDFWLYLWLHVDQGFOHDQLQJDFWLYLWLHV
,PSOHPHQWDWLRQRISODVWLFERWWOHFDSVFROOHFWLRQDFWLYLWLHV3DUWLFLSDWLRQLQn)XQWR
6KDUH|DQGXVHRISODQWLQNIRUEXVLQHVVUHSRUWV VKDUHKROGHUOHWWHUV‫كك‬
6XEPLVVLRQRIWKHUHJXODUUHSRUWWRWKH0LQLVWU\RIWKH(QYLURQPHQWHYHU\\HDU,62DFTXLVLWLRQFRPSOLDQFHZLWK-,6DQGRWKHULQGXVWU\VWDQGDUGV(VWDEOLVKPHQWRIWKH4XDOLW\$VVXUDQFH'HSDUWPHQWWRKDYHWKHDXGLWIXQFWLRQIRU
TXDOLW\DVVXUDQFHRILQKRXVHPDQXIDFWXUHGSURGXFWVLQFOXGLQJVWDQGDUGL]HGSURGXFWVDQGRWKHUV,PSOHPHQWDWLRQRITXDOLW\LQVSHFWLRQE\YDULRXVLQVSHFWLRQRUJDQL]DWLRQV(VWDEOLVKPHQWRIWKH4XDOLW\0DQDJHPHQW6HFWLRQLQRXUIDFWRULHV
6DOHRIKLJKO\VDIHSURGXFWVDQGPHUFKDQGLVH,PSURYHPHQWRISURGXFWLRQFDSDFLW\DQGSURGXFWGHYHORSPHQWWHFKQRORJLHVE\V\QHUJLHVZLWK&+82+*,.(1&R/WGDQG0HFKDWUR/DERUDWRU\
0HHWLQJRQFRPSODLQWVLQIRUPDWLRQVKDULQJ

5HSODFHPHQWRIHTXLSPHQWPHDVXUHVDJDLQVWGHWHULRUDWLRQDQG
GHFD\(19,5210(175HSODFHPHQWRIWKHWUDQVIRUPHUDWWKH.\XVKX)DFWRU\ZLWKDKLJKO\HIILFLHQWWUDQVIRUPHU‫ڀ‬$QHVWLPDWHVKRZVDUHGXFWLRQRIN:K(VWDEOLVKPHQWRIVSHFLILFUHGXFWLRQ
SODQRI&2HPLVVLRQV HQYLURQPHQWDOYLVLRQ,QWURGXFWLRQRI(06&RQWLQXRXVSURYLVLRQRISURGXFWV DQGPHUFKDQGLVHZLWKKLJKPDUNHWYDOXH,QFUHDVHDQGVHFXULQJRISHUVRQQHOZKRFDQGRPDUNHWLQJRIWHFKQRORJLHVEDVHG
RQDFFXUDWHNQRZOHGJH

62&,$/

0DQDJHPHQWRIIDFWRU\ZDVWHZDWHU,QVSHFWDQGUHYLHZWKHRLOVHSDUDWLRQWXEDVQHFHVVDU\IRUDSSURSULDWHVWRUDJHDQG
GLVSRVDORIXVHGRLOLQWKHIDFWRU\,PSOHPHQWHGVHOILQVSHFWLRQRQZDWHUGLVWULEXWLRQDQGODQGRLOE\DVSHFLDOL]HG
RUJDQL]DWLRQLQ
&RQILUPHGWKHILJXUHVZKLFKPHWWKHFULWHULD),1$1&,$/'$7$([SDQVLRQRIWKHKDQGOLQJRIHQYLURQPHQWUHODWHGPHUFKDQGLVH
6DOHRI/('VRODUSRZHUUHODWHGPHUFKDQGLVH

9,6,21)XWXUHLVVXHV.21'27(&&XUUHQWVSHFLILFLQLWLDWLYHV:($5(.21'27(&

:HZLOOVROYHWKHLVVXHVRIHDFKPDWHULDOLW\LQPDQDJHPHQWJRLQJIRUZDUGWRUHDOL]HDVXVWDLQDEOHVRFLHW\,QFUHDVHLQLQLWLDWLYHVIRUODERUVDYLQJ
DQGIOH[LEOHPDQSRZHUOLQH,PSOHPHQWDWLRQRIVWXG\JURXSVIRUFXVWRPHUVHGXFDWLRQRISHUVRQQHOZKRFDQKDQGOH
SURGXFWVEDVHGRQDFFXUDWHNQRZOHGJHUHJDUGOHVVRILQVLGHRURXWVLGHRIWKH&RPSDQ\'HYHORSPHQWRIV\VWHPVWRHQVXUHTXDOLW\DVZHOO

6833/(0(17,QWURGXFWLRQRILQWHUQDOWUDLQLQJDQGWKHOLIWLQJHTXLSPHQWDGYLVRUV\VWHP
3URYLVLRQRIDZLGHUDJHRILQIUDVWUXFWXUHPDWHULDOVIRUVRFLDODFWLYLWLHV KDQGOLQJ
LWHPV
3URYLVLRQRISURGXFWVDQG PHUFKDQGLVHWRGLYHUVHLQGXVWULHVUHVSRQGLQJWRWKHWLPHVDQG
QHHGVRIFXVWRPHUV'HYHORSPHQWRIQHZPHUFKDQGLVH DQGPHUFKDQGLVHWREHLPSRUWHGE\WKH1HZ
0HUFKDQGLVH&RPPLWWHH&XOWLYDWLRQRIVXSSOLHUVZKLFKRIIHUORZHUSULFHV LQFOXGLQJ2(0DQGLPSRUWV VFDOHPHULWVE\SXUFKDVLQJWRJHWKHUE\DXQLWRIFRQWDLQHUV3URGXFWLRQLQQRYDWLRQWKURXJKFDSLWDOLQYHVWPHQWLQIDFWRULHV

*29(51$1&(&OHDUGHVFULSWLRQLQFDWDORJXHVRIXVDJHPHWKRGVSRLQWVWRQRWHDQGGLVSRVDOVWDQGDUGV.21'27(& 5(3257



(6*
)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ (6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&((6*%DVLF3ROLF\2XWOLQH‫كڮق‬
0DWHULDOLW\

 &RPPXQLFDWLRQZLWKVKDUHKROGHUVDQGLQYHVWRUV(QJDJHPHQWZLWKVKDUHKROGHUV‫(ق‬QJDJHPHQWZLWKVKDUHKROGHUV‫ك‬ $SSURSULDWHLQIRUPDWLRQGLVFORVXUHDQGVHFXULW\
6WDQFHIRULQIRUPDWLRQGLVFORVXUH,QIRUPDWLRQVHFXULW\PHDVXUHV
 &RH[LVWHQFHZLWKORFDOFRPPXQLWLHV2SHUDWLQJVLWHRSHQLQJSODQ
5HVSRQVHWRGLVDVWHUVDQGFRQWULEXWLRQVWR
WKHP
5LVNFRQWUROIRUGLVDVWHUVDQGRWKHUV

6RFLDO 6DIHW\PHDVXUHVDQGZRUNVW\OHUHIRUP)RUHPSOR\HHVbKHDOWKVDIHW\DQG K\JLHQH

3ROLF\RQKXPDQUHVRXUFHGHYHORSPHQW

 +XPDQUHVRXUFHGHYHORSPHQWDQGGLYHUVLW\'LYHUVLW\(PSOR\HHEHQHILWV 6WUHQJWKHQLQJRIFRUSRUDWHJRYHUQDQFH&RUSRUDWHJRYHUQDQFH

 7KRURXJKFRPSOLDQFH&RPSOLDQFH%DVLF3ROLF\*RYHUQDQFH.21'27(& 5(3257

5HOHYDQW6'*ۢ

'LVFORVXUHLQ&*UHSRUW

0DQDJHPHQWRIFXVWRPHUVKDUHKROGHULQIRUPDWLRQ
0DQDJHPHQWRIHPSOR\HHVbSHUVRQDOLQIRUPDWLRQ
6HOHFWLRQRISRVVLEOHDUHDVWRFDSWXUHGHPDQG
6HOHFWLRQRIWKHVLWHIRURSHQLQJRSHUDWLQJVLWHSD\LQJGXHFRQVLGHUDWLRQWRWKHQXLVDQFH
IRUQHLJKERUV
3RVVLEOHWRSURYLGHSURGXFWVDQG PHUFKDQGLVHLPPHGLDWHO\HYHQDWWKHWLPHRIORFDOGLVDVWHUVE\KDYLQJLQYHQWRULHVDWRSHUDWLQJVLWHVDFURVV-DSDQ,QWURGXFWLRQRIWKHULVNFRQWUROPDQXDO
7UDQVIHURIWKHFRUHV\VWHPWRWKHGDWDFHQWHU,QWURGXFWLRQRIGXDOKHDGRIILFHVV\VWHP
6DIHGULYLQJWUDLQLQJIRUQHZHPSOR\HHV,QWURGXFWLRQRIWHOHPDWLFV
1RDFFLGHQWFDPSDLJQ
6KDULQJRIDFFLGHQWUHSRUWVZDUQLQJIRUWKHZKROHFRPSDQ\&RQILUPDWLRQRIWKHOLFHQVHE\PRQWKO\YHKLFOHUHSRUWV%ULQJLQJWKHn7UDIILFDFFLGHQWKDQGOLQJFDUG|ZKHQGULYLQJFRPSDQ\FDUV'HFLVLRQRQSROLF\WRDGRSWVDIHW\GHYLFHVIRUFRPSDQ\FDUVVXFKDVDXWRPDWHGEUDNHV,QWURGXFWLRQRIWKHGULYHUHFRUGHUIRUFRPSDQ\FDUV:RUNVW\OHUHIRUP
5HGXFWLRQRIFROOHFWLRQE\VDOHVVWDIISURPRWLRQRIWUDQVIHUWR'HQVDL
5HGXFWLRQRILQWHUQDOGRFXPHQWVDQGUHYLHZRIDSSURYDODXWKRULW\'LJLWDOL]DWLRQRIVDODU\VWDWHPHQW,PSOHPHQWDWLRQRIUHJXODUKHDOWKFKHFNXSVDQGVWUHVVFKHFNV,QVWDOODWLRQRIWRLOHWVIRUZRPHQ,PSOHPHQWDWLRQRIFRXQWHUPHDVXUHVIRUKHDWVWURNHDWIDFWRULHV
0RQWKO\UHJXODUVDIHW\SDWUROV+ROGLQJRI6DIHW\DQG+HDOWK&RPPLWWHH,PSOHPHQWDWLRQRIUHJXODUDQQXDOWUDLQLQJ$ZDUG UHZDUG V\VWHPIRURSHUDWLQJVLWHVDQGLQGLYLGXDOVDFFRUGLQJWRVDOHVUHVXOWV
DQG3UHVLGHQWbV$ZDUG HWF
2QOLQHHGXFDWLRQIUHHO\DYDLODEOHWRDOOHPSOR\HHVDQGDVVLVWDQFHIRUH[SHQVHVWRDFTXLUHTXDOLILFDWLRQV
1RQGLVFULPLQDWRU\KLULQJSROLF\
0DWHUQLW\OHDYHFKLOGFDUHOHDYHVXSSRUWIRUUHWXUQLQJWRZRUNUHFUXLWPHQWRIIRUHLJQVWXGHQWVVWXG\LQJLQ-DSDQDQGFUHDWLRQRIWUDFN ILHOGFOXE(PSOR\HHVKDUHKROGHUVDVVRFLDWLRQV\VWHP,QWURGXFWLRQRIWKH(PSOR\HH6WRFN2ZQHUVKLS3ODQ (623 DQGWKHSHUIRUPDQFHEDVHGVWRFNRSWLRQ(YDOXDWLRQRIWKHHIIHFWLYHQHVVRIWKH%RDUGRI'LUHFWRUV
3UHYHQWLRQRIWKHPDQLIHVWDWLRQRISRWHQWLDOFRVWVE\WKHGHYHORSPHQWRIJRYHUQDQFH
V\VWHP&RPSOLDQFHDFWLRQJXLGHOLQH
7KRURXJKFKHFNVRQDQWLVRFLDOIRUFHVEHIRUHWUDQVDFWLRQ)RUPXODWLRQRIDFRPSOLDQFHPDQXDODQGLPSOHPHQWDWLRQRIHPSOR\HHHGXFDWLRQ,QIRUPDWLRQH[FKDQJHDQGGHYHORSPHQWRIFRPPXQLFDWLRQV\VWHPEHWZHHQSROLFHDQGWKH
FRPSDQLHV
0HPEHUVKLSLQ&ULPH3UHYHQWLRQ$VVRFLDWLRQ([DPLQDWLRQRIWKHHIIHFWLYHQHVVRIWKH
ULVNFRQWUROPDQXDO)XUWKHULQFUHDVLQJWKHFRQVFLRXVQHVVDERXWVDIHGULYLQJ'HFUHDVHLQWKHQXPEHURIWUDIILF
DFFLGHQWV,PSURYHPHQWLQWKHXVDJHUDWHRISDLG
OHDYHDQGUHLQIRUFHPHQWRIWKH
PDQDJHPHQWV\VWHPIRUHPSOR\HHVb
ZRUNLQJKRXUV6HFXULQJRIPDQSRZHU'HFUHDVHLQLQGXVWULDODFFLGHQWVDWIDFWRULHVDQGLQRSHUDWLQJVLWHV,QWURGXFWLRQRIPRUHDSSURSULDWHSHUVRQQHOHYDOXDWLRQDQGVSUHDGRI
WKHVHOIGHFODUDWLRQV\VWHPIRUWUDQVIHU
UHTXHVWHWF
,QFUHDVHLQIHPDOHPDQDJHUVDQG
UHFUXLWPHQWRIKDQGLFDSSHGSHUVRQV$FTXLVLWLRQRI.XUXPLQ QH[WJHQHUDWLRQVXSSRUWFHUWLILFDWLRQ HVWDEOLVKPHQWRID
GD\FDUHFHQWHUDQGLPSURYHPHQWLQWKHUDWLRRIWDNLQJPDWHUQLW\OHDYHFKLOGFDUH
OHDYHDQGUHWXUQLQJWRZRUN'HYHORSPHQWRIWKHDZDUHQHVVDERXWVWRFNSULFHRIWKH&RPSDQ\WKURXJKWKH
LPSOHPHQWDWLRQRILQWHUQDO,5

9,6,21.21'27(&

8SORDGRIGLVFORVXUHGRFXPHQWVRQWKH&RPSDQ\ZHEVLWH),1$1&,$/'$7$

8VHRIXQLYHUVDOGHVLJQIRQWIRUGHOLYHULHVWRVKDUHKROGHUVIRUHDV\UHDGLQJE\HYHU\RQH(QKDQFHPHQWRI,5GRFXPHQWVLQ(QJOLVK'HYHORSPHQWRISHUVRQQHOZKRDUH
IOXHQWLQ(QJOLVK
3UHSDUDWLRQLQ(QJOLVKRIWKHQRWLFHRIFRQYRFDWLRQDQGEXVLQHVVUHSRUWIRU
IRUHLJQLQYHVWRUV&RQVLGHUDWLRQRIIDFLOLWDWLQJILQDQFLDOVHWWOHPHQWRSHUDWLRQV 'LVFORVXUHZLWKLQGD\VRIWKHFORVLQJGDWH(VWDEOLVKPHQWRIDQRPLQDWLQJFRPPLWWHHWUDQVLWLRQWRD&RPSDQ\ZLWK$XGLWDQG6XSHUYLVRU\&RPPLWWHH,QFUHDVHLQWKHUDWLRRI2XWVLGH'LUHFWRUV
DQG$XGLW 6XSHUYLVRU\%RDUG0HPEHUVDQGLPSURYHPHQWLQWKHHIIHFWLYHQHVVRI
LQWHUQDODXGLW,PSOHPHQWDWLRQRIVSHFLILFPHDVXUHVDJDLQVWF\EHUDWWDFNV)RUPXODWLRQDQGSURPRWLRQRIRSHUDWLQJ
VLWHRSHQLQJSODQDFFRUGLQJWRWKHQHHGVRIFRPPXQLWLHV2SHQLQJRIRSHUDWLQJVLWHVLQSUHIHFWXUHVZKHUHWKHUHLVQREDVH(19,5210(173UHSDUDWLRQRIWKHLQWHJUDWLRQUHSRUWLQ(QJOLVK,PSOHPHQWDWLRQRI,5PHHWLQJVZLWKRYHUVHDVLQYHVWRUV

62&,$/,PSOHPHQWDWLRQRIVKDUHEX\EDFN,PSOHPHQWDWLRQRI,5PHHWLQJVZLWKLQVWLWXWLRQDOLQYHVWRUV+ROGLQJRIEULHILQJVIRULQVWLWXWLRQDOLQYHVWRUV*29(51$1&(

3DUWLFLSDWLRQLQ,5HYHQWVIRULQGLYLGXDOLQYHVWRUV)XWXUHLVVXHV&RQVLGHUDWLRQRIH[SRVXUHWRYDULRXVPHGLDVXFKDVQHZVSDSHUVDQG
FRPPHUFLDOVWRLPSURYHQDPHUHFRJQLWLRQ

5HLQIRUFHPHQWEDVHGRQLPSURYHPHQWSURSRVDOV6HFXULQJRIPDQSRZHUVLPSOLILFDWLRQRIRSHUDWLRQVDQGFODULILFDWLRQRIDQQXDOUXOHV.21'27(& 5(3257



6833/(0(17&XUUHQWVSHFLILFLQLWLDWLYHV:($5(.21'27(&ᚑᴗဨ䛸䛸䜒䛻

(6*)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ ((6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&(

19,5210(17੫঵৶୛दँॊ௹ऊऩ঺ভतऎॉप๾൴घॊञीपम‫ؚ‬੗஘इथःऎऒधऋ੎ਏधઅइथउॉऽघ‫؛‬जभञीप‫ॲؚ‬ॖং‫ش‬ऩংॵॡॢছक़থॻ॑੅ढञ঺৩ऋ‫ؚ‬૚যभચৡ॑ਈপ଒৅ม

३ॸॕधড‫ش‬ॡছॖইংছথ५भ௓ਤप਄ॉੌा‫ؚ‬ःऌःऌध

खथ‫ृؚ‬ॉऋः॑ुढथ௮ऎऒधभলਟॊेअप૙ৃ୭୆॑ତ

௮ऐॊ੫঵௯ଅभᅿਛप਄ॉੌ॒दःऌऽघ‫؛‬(QYLURQPHQWDO3ROLF\

6LQFHLWVIRXQGDWLRQLQ.21'27(&KDVFUHDWHGDQGFRH[LVWHGZLWKIXWXUHHQYLURQPHQWDOYDOXHDQG
HQJDJHGLQEXVLQHVVDFWLYLWLHVSD\LQJGXHFRQVLGHUDWLRQWRWKHHQYLURQPHQWIRUWKHUHDOL]DWLRQRIDVXVWDLQDEOHVRFLHW\ZKLOHFRQWULEXWLQJWRWKHFUHDWLRQRIDQDIIOXHQWVRFLHW\WKURXJKWKHHQKDQFHPHQWRI
VRFLDOLQIUDVWUXFWXUHE\SURYLGLQJSURGXFWVDQGPHUFKDQGLVHWRYDULRXVLQGXVWULHVRYHUDKDOIFHQWXU\‫؝ڭ‬:HZLOOFRPSO\ZLWKOHJDOUHJXODWLRQVDQGPDWWHUVDJUHHGRQE\WKH&RPSDQ\IRUWKHHQYLURQPHQWUHJDUGLQJEXVLQHVVDFWLYLWLHVSURGXFWVDQGVHUYLFHV‫؝ڮ‬:HZLOOHQGHDYRUWRUHGXFHHQYLURQPHQWDOEXUGHQVUHGXFHHQYLURQPHQWDOSROOXWLRQULVNVDQG
SURWHFWELRORJLFDOGLYHUVLW\DQGHFRORJLFDOV\VWHPVE\VDYLQJHQHUJ\DQGUHVRXUFHVSURPRWLQJUHF\FOLQJUHGXFLQJZDVWHUHGXFLQJWKHFRQVXPSWLRQRIFKHPLFDOVXEVWDQFHVDQGHQJDJLQJLQ
JUHHQSURFXUHPHQW‫؝گ‬:HZLOOFRQWLQXHWRLPSURYHRXUDFWLYLWLHVE\XWLOL]LQJWKHHQYLURQPHQWDOPDQDJHPHQWV\VWHP
VHWWLQJHQYLURQPHQWDOWDUJHWVWRDFKLHYHWKH(QYLURQPHQWDO3ROLF\FRQGXFWLQJHYDOXDWLRQVRQHQYLURQPHQWDOSHUIRUPDQFHDQGUHYLHZLQJWKHPUHJXODUO\‫؝ڰ‬:HZLOOWKRURXJKO\LQIRUPDOOHPSOR\HHVRIWKH(QYLURQPHQWDO3ROLF\DQGHQGHDYRUWRFRQGXFWQHFHVVDU\HGXFDWLRQDQGHQOLJKWHQPHQWDFWLYLWLHVWRHQJDJHLQHQYLURQPHQWFRQVHUYDWLRQDFWLYLWLHV3URYLVLRQRI2SWLPDO3URGXFWVDQG0HUFKDQGLVHIRU(QYLURQPHQWDO0HDVXUHV‫[(ٹ‬SDQVLRQRIWKHKDQGOLQJRIHQYLURQPHQWUHODWHGPHUFKDQGLVH
3UHVHQWDWLRQRISURGXFWVDQGPHUFKDQGLVH
2LOKXQWHU

2LOJDWRU

7KLVLVDQHFRPDUNFHUWLILHGRLODEVRUSWLRQPDWXVLQJUHF\FOHGPDWHULDOV,WLVXVHGIRUWKHGLVSRVLQJRIRLODWWKHWLPHRIPDULQHSROOXWLRQ
FDXVHGE\RLOVSLOOVDQGDWIDFWRULHVZKLFKXVHRLO

7KLVLVDSRZGHURLODEVRUEHQWXVLQJQDWXUDOFHOOXORVH:LWKWKHDGGLWLRQRIPLFUREHVFDSDEOHRIGLVVROYLQJPLQHUDORLODQGQXWULWLRQDOVXSSOHPHQWVLWFDQZRUNDVDPDWHULDOIRU
LPSURYLQJVRLO%LRGHJUDGDEOHKLJKSHUIRUPDQFHDONDOLQHFOHDQHU+DQGVRDS(FRSUR*UHHQVZHHSHU

7KLVLVDELRGHJUDGDEOHKLJKSHUIRUPDQFHFOHDQHUZDWHUVROXEOHDQGSKRVSKDWHIUHHVDWLVI\LQJ
HYHU\WKLQJIURPFOHDQLQJSRZHUHQYLURQPHQWWR
FRVW,WGRHVQRWKDYHDQHJDWLYHHIIHFWRQPHWDOVUXEEHUVDQGSODVWLFVHLWKHU

.21'27(& 5(3257

:LWKWKHKHLJKWHQHGPRYHPHQWVHVSHFLDOO\LQ
WKH86DQG(XURSHWRHOLPLQDWHPLFUREHDGVSODVWLFSDUWLFOHVLQIDFLDOFOHDQVHUVHWF WKLVLV
FRQVWLWXWHGRIKLJKO\ELRGHJUDGDEOHDQG
HQYLURQPHQWIULHQGO\QDWXUDOVFUXEVRULJLQDWLQJIURPZRRG%XVLQHVV$FWLYLWLHV3D\LQJ$WWHQWLRQWRWKH(QYLURQPHQW:($5(.21'27(&‫ٹ‬,QLWLDWLYHVIRU(QYLURQPHQWDOSURWHFWLRQ DQG(QHUJ\VDYLQJLQLWLDWLYHV(QHUJ\VDYLQJLQLWLDWLYHV‫ق‬/('LQVWDOODWLRQV$FKLHYLQJFXWLQSRZHUXVDJH‫ك‬,QZHFRPSOHWHGLQVWDOOLQJ/('OLJKWLQJLQIDFWRULHVDQGDUHFXUUHQWO\LQWKHSURFHVVRI
LQVWDOOLQJ/('OLJKWLQJLQRXURSHUDWLQJVLWHV:H
SODQRQFRPSOHWLQJ/('LQVWDOODWLRQVLQDOORIWKH
SURSHUWLHVZHRZQE\

/(' LPSOHPHQWHGVLWH/('WREHLPSOHPHQWHGVLWH/HDVHGVLWH

9,6,217KHVH/('LQVWDOODWLRQVDUHEHLQJFDUULHGRXWLQ
FRRSHUDWLRQZLWK6DQZD'HQ]DL&R/WGRXU
VXEVLGLDU\DQGZKROHVDOHURIHOHFWULFHTXLSPHQW

7UDQVLWLRQRIDQQXDOWKRXVDQGN:K

SRZHU

6KLJD)DFWRU\












),1$1&,$/'$7$

2XUWZRIDFWRULHVDQG6DQZD'HQ]DL&R/WG
RSHUDWHWKHVRODUSRZHUJHQHUDWLRQV\VWHPDV
WKHLQVWDOODWLRQPRGHOLQRXUSRZHUVDOHVEXVLQHVV
2XUVXEVLGLDU\6DQZD'HQ]DL&R/WGDQGRXU
6WUXFWXUDO6WHHO6DOHV'LYLVLRQKDQGOHSDUWVRIVRODUSRZHUJHQHUDWLRQV\VWHPVDQGIUDPHVUHVSHFWLYHO\DQGZHSXUVXHVDOHVE\OHYHUDJLQJV\QHUJLVWLFHIIHFWVJHQHUDWLRQ.DQWR)DFWRU\


(19,5210(17,QVWDOOLQJ6RODUSRZHUJHQHUDWLRQ.21'27(&:HSURPRWHWUDQVSDUHQF\RISRZHUXVDJHE\PDNLQJWKHPRQWKO\SRZHUXVDJHLQIRUPDWLRQ
RSHQWRDOORSHUDWLQJVLWHVDQGFRQGXFWLQJDQDO\VHVDQGFRPSDULVRQVRIGDWD:HKDYH
EHHQXSGDWLQJHQHUJ\VDYLQJGDLO\ZLWKDYLHZWRUHGXFLQJSRZHUXVDJHLQRXURSHUDWLQJVLWHVE\
\HDURQ\HDU

3DUWLFLSDWLRQLQHQYLURQPHQWDOFRQVHUYDWLRQDFWLYLWLHV

62&,$/:HFOHDQQHLJKERULQJDUHDVDQGSURYLGHVQHZ
UHFUXLWVDVYROXQWHHUVIRUIRUHVWSUHVHUYDWLRQDVSDUWRIHQYLURQPHQWFRQVHUYDWLRQ DFWLYLWLHVDQG
KDVLQWURGXFHGFRROEL]DQGZDUPEL]DVSDUWRIHQHUJ\VDYLQJPHDVXUHVWRUHDOL]HDORZFDUERQ
VRFLHW\*RLQJIRUZDUGZHZLOODOVRWDNHLQLWLDWLYHVWRLQFUHDVHLQWHUHVWLQHQYLURQPHQWDOPHDVXUHVZKLOHFRQWLQXLQJEXVLQHVVDFWLYLWLHV)RUSURGXFWVDQGPHUFKDQGLVHZKLFKFDQEHVWRUHGDVLQYHQWRULHVLQDGGLWLRQWRLQYHQWRULHVDWORJLVWLFVFHQWHUVZHNHHSDFHUWDLQDPRXQWDWZDUHKRXVHVHVWDEOLVKHGDWLQGLYLGXDORSHUDWLQJVLWHVVRWKDWZHFDQUHVSRQGWRDEUXSWGHPDQGZKLOHUHDOL]LQJ
HQYLURQPHQWDOEXUGHQVDQGFRVWUHGXFWLRQDQGTXLFNGHOLYHU\6833/(0(17:HKDYHHVWDEOLVKHGIDFWRULHVDWIRXUORFDWLRQV
LQ-DSDQ +RNNDLGR,EDUDNL6KLJDDQG
)XNXRND ZLWKSURGXFWVRUGHUHGVXFKDV
EUDFHVDQGDQFKRUEROWVSURGXFHGDWDQG
VKLSSHGIURPWKHQHDUHVWIDFWRU\WRWKH
FXVWRPHU8VLQJWKHIRXUIDFWRU\VWUXFWXUHZHUHGXFHHQYLURQPHQWDOEXUGHQVDQG
WUDQVSRUWDWLRQFRVWVDVZHOODVGHOLYHUSURGXFWVTXLFNO\*29(51$1&(

4XLFNGHOLYHU\E\IRXUIDFWRU\VWUXFWXUHDQGLQYHQWRULHVDWHDFKRSHUDWLQJVLWH

.21'27(& 5(3257



(6*
)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ (6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&(‫ٹ‬0DQDJHPHQWRIHPLVVLRQV‫ق‬0DWHULDOEDODQFH‫ك‬(QHUJ\FRQVXPSWLRQFRPSDULVRQ
7KHWDEOHSUHVHQWVD\HDURQ\HDUFRPSDULVRQRIXQLWRIHQHUJ\FRQVXPSWLRQZKLFKLVUHSRUWHGWRWKH
.DQVDL%XUHDXRI(FRQRP\7UDGHDQG,QGXVWU\HDFK\HDU .21'27(&QRQFRQVROLGDWHG<HDURQ<HDUFKDQJH 











&KDQJHLQ\HDUDYHUDJH FRQVXPSWLRQ
UDWH













0DWHULDOEDODQFH
7KHIROORZLQJLOOXVWUDWHVWKHRYHUDOOLQSXWRXWSXWEDODQFHDQGH[SHQGLWXUHVDQGUHYHQXHVGXULQJWKHFRXUVHIURPUHVHDUFKDQGGHYHORSPHQWWRPDQXIDFWXULQJZLWKLQWKHEXVLQHVVDFWLYLWLHVRI.21'27(&$FWXDOUHVXOWVRIIRXUIDFWRULHVDUHXVHG

‫ۉۊۅۃھ‬5DZ PDWHULDOV,UULJDWLRQZDWHUۣ

&RDWLQJPDWHULDOP(OHFWULFLW\0:K

1DWXUDO JDVPҩ1RU3-

/3*

ۣ

'LHVHO IXHO⒞.HURVHQH

⒞+HDY\ RLO

⒞

:DWHU

3URGXFWLRQ,URQ VWHHOSURGXFWVۣ

$LU HPLVVLRQ&2ۣ

5HF\FOHGYROXPHۣ$PRXQWRIRXWVRXUFHGGLVSRVDOۣ

:DWHU

P%XVLQHVVDFWLYLWLHV(QHUJ\,URQ DQGVWHHO‫ۉۊۅۉۊۄ‬P,QGXVWULDOZDVWHE\SURGXFW'UDLQDJH)<ٛ ([SHQGLWXUH UHODWLQJ WR HQYLURQPHQWDO SURWHFWLRQ ٜ.\XV\X )DFWRU\‫؟‬5HSODFHPHQW RI 1R  )DFWRU\ 5HFHLYLQJ 3ODQW DQG 1R  7UDQVIRUPHU 6XEVWDWLRQV WKRXVDQG \HQ.DQWR )DFWRU\‫)؟‬LOWHUW\SH GXVW FROOHFWRU  WKRXVDQG \HQ  VZLWFK WR /(' OLJKWLQJ  WKRXVDQG \HQ
6KLJD )DFWRU\‫'؟‬XVW FROOHFWRU IRU FROOHFWLQJ ZHOG IXPHV  WKRXVDQG \HQ  H[DPLQDWLRQ H[SHQVH IRUDFTXLULQJ ,62 FHUWLILFDWLRQ VWQG  WKRXVDQG \HQ,62 ,QWHUQDO DXGLW VWDII GHYHORSPHQW VHPLQDU  WKRXVDQG \HQ
ٛ5HYHQXHVUHODWLQJWRHQYLURQPHQWDOSURWHFWLRQٜ
5HYHQXHVLQEXVLQHVVIRUUHF\FOLQJZDVWH HJVWHHOVFUDSV JHQHUDWHGIURPPDMRUEXVLQHVVDFWLYLWLHVRU
UHF\FOLQJXVHGSURGXFWVHWF WKRXVDQG\HQ

.21'27(& 5(3257

:($5(.21'27(&

2XUZHEVLWHKDVEHHQUHQHZHGVXEVWDQWLDOO\

9,6,21,Q 0DUFK  ZH FKDQJHG WKH ZHE GHVLJQ DQG VLWH VWUXFWXUH ZKLOH DGGLQJ QHZ FRQWHQW WR PDNH WKH&RPSDQ\ ZHEVLWH nHDVLHU WR VHH XVH DQG XQGHUVWDQG|0DLQ UHQHZDOV DQG 85/ DIWHU WKH UHQHZDO DUH DV IROORZV$OOSDJHVDUHUHVSRQVLYHGHVLJQ.21'27(&:LWKWKHVSUHDGRIVPDUWSKRQHVHWFZHPDGHDOOSDJHVUHVSRQVLYHGHVLJQ$VDUHVXOWWKH\FDQEHVHHQIURPVPDUWSKRQHVWDEOHWVSHUVRQDOFRPSXWHUVDQGDOORWKHUWHUPLQDOV)XUWKHUHQKDQFHPHQWRISURGXFWVDQGPHUFKDQGLVH
LQIRUPDWLRQ
),1$1&,$/'$7$:HHQKDQFHGWKHSRVWHGFRQWHQWVE\DGGLQJSDJHVIRUDERXWLWHPVVRWKDW\RXZLOOIXUWKHUNQRZLQIRUPDWLRQRQSURGXFWVDQGPHUFKDQGLVHZHGHDOZLWK

1HZFRQWHQWn7HFKQLFDO,QIRUPDWLRQ|DGGHG

‫ ٽ‬1HZ FRQWHQW n7HFKQLFDO ,QIRUPDWLRQ|*29(51$1&(

62&,$/‫ ٽ‬723 SDJH DIWHU UHQHZDO(19,5210(177REHDSDUWQHUWKDWFDQVROYHFXVWRPHUVbn3UREOHPV|ZHSRVWHGLQIRUPDWLRQRQKDQJLQJZRUNDQGRWKHUZRUNZKLFKDUHLQGLVSHQVDEOHDWFRQVWUXFWLRQVLWHVLQDGGLWLRQWRLQIRUPDWLRQRQSURGXFWVZKLFKDUHJHQHUDWHGE\WHFKQRORJLHVRIXV㌣,QIRUPDWLRQ RI
SURGXFWV DQG PHUFKDQGLVH

6833/(0(17URL ㌣ https://www.kondotec.co.jp.21'27(& 5(3257



(6*
)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ (6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&(

6ଲୗ੟ிભ‫؞‬ષସ৳઒

2&,$/

3URGXFW/LDELOLW\DQG4XDOLW\$VVXUDQFH$VDZKROHVDOHFRPSDQ\ZLWKDPDQXIDFWXULQJIXQFWLRQZHVWULYHWRSURYLGHVHFXULW\DQGVDIHW\WRFXVWRPHUVWKURXJKWKHPDLQWHQDQFHRIWKHTXDOLW\RISURGXFWVDQGPHUFKDQGLVHZHKDQGOHDVZHOODVWKHGHYHORSPHQWDQGLPSURYHPHQWRISURGXFWV
7KLVVHFWLRQSUHVHQWVRXUTXDOLW\FRQWUROV\VWHPDQGWKHHGXFDWLRQFRQGXFWHGIRURXUHPSOR\HHVRQWKH
NQRZOHGJHRISURGXFWVDQGPHUFKDQGLVHUHJDUGLQJVDIHW\‫ٹ‬4XDOLW\&RQWURORISURGXFWVDQGPHUFKDQGLVH)URPWKHSHUVSHFWLYHRISURYLGLQJVDIHTXDOLW\SURGXFWVDOORIRXUIDFWRULHVKDYHDFKLHYHG
,62,QDGGLWLRQWRIXUWKHUHQKDQFHWKH
TXDOLW\RISURGXFWVZHKDQGOHWKH4XDOLW\&RQWURO6HFWLRQKDVEHHQHVWDEOLVKHGLQRXU
IDFWRU\DQGWKHVHFWLRQSHUIRUPVVWUHQJWKWHVWLQJ
DQGLQVSHFWLRQVRQDGD\WRGD\EDVLVLQDQHIIRUWWRLQFUHDVHVDIHW\RI SURGXFWV)XUWKHUPRUHLQ$SULOWKHn4XDOLW\$VVXUDQFH'HSDUWPHQW|ZDVQHZO\HVWDEOLVKHGXQGHU0DQXIDFWXULQJ+HDGTXDUWHUVWREHDUWKH
DXGLWIXQFWLRQIRUTXDOLW\DVVXUDQFH

*RLQJIRUZDUGZHZLOODLPWRDFKLHYH,62
LQDOOIRXUIDFWRULHVZKLFKLVDQLQWHUQDWLRQDO
VWDQGDUGUHODWHGWRWKHHQYLURQPHQW

,62FHUWLILFDWLRQ$FTXLVLWLRQRIFHUWLILFDWLRQRI-,6DQGLQGXVWU\JURXS
5HJDUGLQJH[WHUQDOVWDQGDUGVIRUSURGXFWVPDQXIDFWXUHGLQKRXVHZHDUHSURGXFLQJSURGXFWVLQFRPSOLDQFHZLWKWKHVWDQGDUGVRI
YDULRXVLQGXVWULHVLQFOXGLQJWKHDFTXLVLWLRQRIWKH
-DSDQHVH,QGXVWULDO6WDQGDUG -,6 FHUWLILFDWLRQ
VHHWDEOHRQWKHULJKW 6FDIIROGLQJFKDLQVZDVDZDUGHGWKHILUVWFHUWLILFDWLRQIURPWKH
6FDIIROGLQJDQG&RQVWUXFWLRQ(TXLSPHQW$VVRFLDWLRQRI-DSDQ5HJDUGLQJSURGXFWVRWKHUWKDQWKRVHIURPRXUGLUHFWO\RSHUDWHGIDFWRULHV 2(0SURGXFWV RXU
WHFKQRORJ\VHUYLFHVWDIIRUSURFXUHPHQWVHFWLRQVWDIIYLVLWV2(0FRQWUDFWRUVLQ-DSDQDQGDEURDGWRJLYHWHFKQLFDOLQVWUXFWLRQ0RUHRYHURXU'LUHFWRUVVHUYHDVFRPPLWWHH
PHPEHUVRILQGXVWU\JURXSVVXFKDVWKH
&RQVWUXFWLRQ7XUQ%XFNOH&RXQFLORI-DSDQDQG
$QFKRU%ROW0DQXIDFWXUHU$VVRFLDWLRQHWF
LQGLFDWLQJWKHLUUHVSRQVLELOLW\WRFRPSO\ZLWKSURGXFWVWDQGDUGVE\SDUWLFLSDWLQJDVFRPPLWWHH
PHPEHUV5HVSRQVHWRFRPSODLQWV,QWKHHYHQWWKDWDFRPSODLQWLVUDLVHGZHILUVWKDVWKHVDOHVUHSUHVHQWDWLYHPHHWZLWKWKH
FXVWRPHUDQGSUHSDUHDUHSRUW:KHQWKHUHLVD
QHHGWRLQYHVWLJDWHWKHFDXVHLIWKHFDVHSHUWDLQVWRDSURGXFWPDQXIDFWXUHGLQKRXVHWKH
4XDOLW\&RQWURO6HFWLRQLQRXUIDFWRU\WDNHVWKH
QHFHVVDU\VWHSVZKLOHLIWKHFDVHSHUWDLQVWRSURFXUHGPHUFKDQGLVHZHWDNHVWHSVMRLQWO\.21'27(& 5(3257%UHDNWHVWLQJPDFKLQH
LQ0DQXIDFWXULQJ+HDGTXDUWHUV

6WDQGDUGFHUWLILFDWLRQOLVWIRUSURGXFWVPDQXIDFWXUHGLQKRXVH-,6QR

3URGXFWQDPH-,6 $ 7XUQEXFNOHIRUEXLOGLQJ-,6$ %RG\RIWXUQEXFNOHIRUEXLOGLQJ-,6% 6HWRIDQFKRUEROWIRUVWUXFWXUHV-,6% 

:LUHURSHV*ULSVIRUURSHRUZLUHVWUDQG

6WDQGDUGL]DWLRQ
ERG\QDPH

3URGXFWQDPH

6FDIIROGLQJDQG
&RQVWUXFWLRQ(TXLSPHQW$VVRFLDWLRQRI-DSDQ

6XVSHQVLRQFKDLQ

6FDIIROGLQJDQG
&RQVWUXFWLRQ(TXLSPHQW$VVRFLDWLRQRI-DSDQ

6XVSHQVLRQFKDLQFODPS

6FDIIROGLQJDQG
&RQVWUXFWLRQ(TXLSPHQW$VVRFLDWLRQRI-DSDQ

6XVSHQVLRQ FKDLQDGMXVWHU-DSDQ&URVV/DPLQDWHG7LPEHU$VVRFLDWLRQ&RPSRXQGVFUHZEROWQXW0

ZLWKWKHVXSSOLHU:HKDYHDPHFKDQLVPWRVKDUHFRPSODLQWVZKHUHE\KROGLQJDPHHWLQJRQFRPSODLQWV LUUHJXODUO\KHOG DQGFDVHVWKDWVKRXOGEHVKDUHGRQDFRUSRUDWHZLGHEDVLVDUH
DGGUHVVHGWRWKHHQWLUHRUJDQL]DWLRQE\LVVXLQJDVDOHVUHSRUWRUJXLGDQFHWRGUDZDWWHQWLRQLQRUGHUWRVKDUHLQIRUPDWLRQ7HFKQLFDOVWUHQJWKWKURXJKFRFUHDWLRQZLWKJURXSFRPSDQLHV

0HFKDWUR /DERUDWRU\IRUPHU 0HFKDWUR(QJLQHHULQJ&R/WG

7KLVFRPSDQ\KDVVWUHQJWKVLQGHVLJQDQG
PDQXIDFWXULQJRIYDULRXVPDFKLQHGHYLFHVODERUVDYLQJHTXLSPHQWDQGWUDQVSRUWGHYLFHVHWFUHDOL]LQJODERUVDYLQJIRUWKH&RPSDQ\bVIDFWRULHV

7KLVFRPSDQ\KDVVWUHQJWKVLQGHVLJQDQG
PDQXIDFWXULQJRIODERUVDYLQJLPDJHSURFHVVLQJHTXLSPHQWYDULRXVLQVSHFWLRQHTXLSPHQWDQG
LQVSHFWLRQWRROVDPRQJRWKHUV,WLVH[SHFWHGWRLPSURYHWKHFRQILUPDWLRQTXDOLW\RIIDFWRU\SURGXFWVXWLOL]LQJH[FHOOHQWFDSDELOLWLHVIRULPDJHLQVSHFWLRQWHFKQRORJLHV FRORUGLVFULPLQDWLRQLQVSHFWLRQDQGDSSHDUDQFHLQVSHFWLRQ &+82+*,.(1&R/WG

3URYLGH
KLJKYDOXHDGGHG
SURGXFWVGHVLJQDQGPDQXIDFWXULQJRIYDULRXVPDFKLQHGHYLFHVODERUVDYLQJHTXLSPHQWDQGWUDQVSRUWGHYLFHV.21'27(&&+82+*,.(1&R/WG

3HZDJFKDLQVOLQJ),1$1&,$/'$7$&KDLQFXWWHU

9,6,21:($5(.21'27(&

0HFKDWUR/DERUDWRU\ IRUPHU0HFKDWUR(QJLQHHULQJ&R/WG FDPHXQGHU.21'27(&,1&E\WUDQVIHUULQJRIEXVLQHVVLQ-DQXDU\
:HHQJDJHLQSURGXFWGHYHORSPHQWDQG
GHYHORSPHQWRIODERUVDYLQJOLQHVE\DGGLQJWKH
WHFKQRORJLFDOVWUHQJWKVRI0HFKDWUR/DERUDWRU\
WR&+82+*,.(1&R/WGZKLFKLVRXUJURXSFRPSDQ\7KXVIDU&+82+*,.(1&R/WGKDV
GHYHORSHGEUDFHPDQXIDFWXULQJOLQHVLQWKH
IDFWRU\DQGDXWRPDWHGFKDLQFXWWHUVIRUFKDLQVOLQJV:HZLOOFRQWLQXHVWULYLQJWRLPSURYHWKH
SURGXFWLRQFDSDFLW\IRUWKH&RPSDQ\bVSURGXFWVXVLQJV\QHUJLHVZLWKJURXSFRPSDQLHV&ROODERUDWLRQ(19,5210(170HFKDWUR/DERUDWRU\

GHVLJQDQGPDQXIDFWXULQJRIODERUVDYLQJ
LPDJHSURFHVVLQJHTXLSPHQW'HPRQVWUDWLRQRIDVVHPEO\DW
WKHWHPSRUDU\FRQVWUXFWLRQPDWHULDOVWUDLQLQJ:HOGLQJSUDFWLFHDWVWHHOPDWHULDOWUDLQLQJ*29(51$1&(‫[(ڂ‬DPSOHVRISDJHVRQXVDJHPHWKRGGHVFULEHGLQWKHn/LIWLQJHTXLSPHQW FDWDORJXH|LVVXHGE\WKH&RPSDQ\

6WXG\JURXSE\VXSSOLHUV

6833/(0(17:HEHOLHYHWKDWE\SURYLGLQJNQRZOHGJHDERXWKDQGOLQJZKHQZHSURYLGHSURGXFWVDQG
PHUFKDQGLVHWRFXVWRPHUVWKH\FDQXVHWKHP
PRUHVHFXUHO\DQGVDIHO\)RUWKDWSXUSRVHZH
SUHVFULEHWKHKDQGOLQJPHWKRGVLQWKHFRPSUHKHQVLYHFDWDORJXHDQGSDPSKOHWVHWFLVVXHGE\WKH&RPSDQ\DQGFOHDUO\GHVFULEHWKH
PDWWHUVWRQRWHDQGWKHVWDQGDUGVIRUGLVSRVDO
0RUHRYHUIRURXUHPSOR\HHVWRREWDLQWKHFRUUHFWNQRZOHGJHDERXWSURGXFWVDQGPHUFKDQGLVHZH
RIIHUPDQ\RSSRUWXQLWLHVWROHDUQE\FRQGXFWLQJWUDLQLQJRQRXUFRUHSURGXFWVRIOLIWLQJHTXLSPHQW
DQGWHPSRUDU\FRQVWUXFWLRQPDWHULDOVVWHHOUHODWHGPDWHULDOVDQGSURGXFWVPDQXIDFWXUHGLQ
KRXVHDQGE\KROGLQJVWXG\JURXSVIRUQHZ
SURGXFWVE\LQYLWLQJVXSSOLHUV PDQXIDFWXUHUV 
HWFDPRQJRWKHUV

62&,$/‫ٹ‬6WDQFHIRU6HFXULW\DQG6DIHW\

6LWHYLVLWGXULQJ.\XVKXIDFWRU\WUDLQLQJ.21'27(& 5(3257



(6*
)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ (6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&(,PSOHPHQWLQJVWXG\JURXSVIRUFXVWRPHUV,QRUGHUIRUSURGXFWVDQGPHUFKDQGLVHRIWKH
&RPSDQ\WREHXVHGVDIHO\ZHKRVWVWXG\JURXSVDFURVV-DSDQUHVSRQGLQJWRUHTXHVWVIURPYDULRXVLQGXVWU\JURXSVLQFOXGLQJFXVWRPHUV7HFKQLFDOVHUYLFHVWDIIRIWKH&RPSDQ\EHORQJLQJWR7RN\R2VDNDKHDGRIILFHV EHFRPHOHFWXUHUVWRSURYLGHLQIRUPDWLRQDERXWVDIHOLIWLQJRSHUDWLRQVDWVWXG\JURXSV:HZRXOGOLNHWRFRQWULEXWHWRRXUFXVWRPHUVbHIIRUWVWRFUHDWH
VDIHHQYLURQPHQWVE\OHWWLQJDVPDQ\SHRSOHDVSRVVLEOHXQGHUVWDQGDERXWVDIHW\

9ROXQWDU\TXDOLW\FRQWURODFWLYLWLHV 4&DFWLYLWLHV:HHQJDJHLQTXDOLW\FRQWURODFWLYLWLHV 4&
DFWLYLWLHV DWHYHU\PDQXIDFWXULQJGLYLVLRQRIIDFWRULHVIRUWKHSXUSRVHRILPSURYLQJTXDOLW\FRQWUROV\VWHPV:HVWULYHWRGHYHORSDQXQGHUVWDQGLQJDERXWTXDOLW\FRQWUROWKURXJKRXWWKHZKROHIDFWRU\E\KRVWLQJSUHVHQWDWLRQVRIDFWLYLW\UHVXOWVDQQXDOO\WRDZDUGGLYLVLRQVZKLFKPDNHH[FHOOHQWSUHVHQWDWLRQVDQGVKDUHSURSRVDOVIRULPSURYHPHQWWKURXJKSUHVHQWDWLRQVDPRQJRWKHUV3UHVHQWDWLRQVRI4&DFWLYLWLHVLQ.\XVKX)DFWRU\,QWHUQDOO\FHUWLILHGTXDOLILFDWLRQn/LIWLQJHTXLSPHQWDGYLVRU|)RUWKHSXUSRVHRISXEOLFUHODWLRQVIRURXU
FRUSRUDWHLPDJHDVDOLIWLQJHTXLSPHQWPDQXIDFWXUHUDQGLPSURYHPHQWLQHPSOR\HHNQRZOHGJHRISURGXFWVDQGPHUFKDQGLVHDQG
DELOLWLHVWRSURSRVHDQGVHOOZHLQWURGXFHGWKH
n/LIWLQJHTXLSPHQWDGYLVRU|V\VWHPDVDQ
LQWHUQDOO\FHUWLILHGTXDOLILFDWLRQLQ
(PSOR\HHVFDQEHTXDOLILHGDVDn/LIWLQJHTXLSPHQWDGYLVRU|DIWHUH[WHUQDOVDIHW\K\JLHQH
HGXFDWLRQREWDLQLQJSXEOLFTXDOLILFDWLRQVSDUWLFLSDWLQJLQLQWHUQDOWKUHHGD\VHPLQDUVDQG
SDVVLQJWKHZULWWHQH[DPLQDWLRQ%\WKHHQGRI0DUFKHPSOR\HHVKDG
EHFRPHTXDOLILHGDVOLIWLQJHTXLSPHQWDGYLVRUVDQGHQJDJHLQQRWRQO\VXSSO\LQJOLIWLQJHTXLSPHQWEXWDOVRSURYLGLQJWKHLUNQRZOHGJHDWRSHUDWLQJVLWHVDFURVV-DSDQ
0RUHRYHUZKLOH7HFKQLFDOVHUYLFHVWDIIDW
2VDND7RN\RKHDGRIILFHVKDYHEHHQLQFKDUJHRIVHPLQDUVRQOLIWLQJHTXLSPHQWIRUSHRSOHRXWVLGH
WKH&RPSDQ\ZLWKOLIWLQJHTXLSPHQWDGYLVRUVFRPLQJLQWRH[LVWHQFHVWXG\JURXSVRQOLIWLQJHTXLSPHQWFDQQRZEHKHOGDOORYHU-DSDQ/LIWLQJHTXLSPHQWDGYLVRU 6HPLQDUVFKHGXOH!
,QWHUQDOVHPLQDU‫؞‬/HFWXUHVSUDFWLFHVDQGH[DPLQDWLRQ
DW.\XVKXIDFWRU\ WKUHHGD\V([WHUQDOVHPLQDU‫؞‬6OLQJLQJVNLOOVHPLQDU WKUHHGD\V‫؞‬6OLQJLQJRSHUDWRUVDIHW\K\JLHQHHGXFDWLRQRQHGD\‫؞‬:LUHURSHVDIHW\LQVSHFWLRQVWDQGDUGVVHPLQDU
RQHGD\

.21'27(& 5(3257/HFWXUHDW.\XVKXIDFWRU\'HPRQVWUDWLRQRIDFWXDOOLIWLQJRSHUDWLRQ/LIWLQJHTXLSPHQWDGYLVRU 3DVVUDWH٫,QFOXGLQJWKRVHZKRSDVVHGDIWHUUHWDNLQJWKHWHVW‫ك‬$VDPDQXIDFWXUHUDQGZKROHVDOHFRPSDQ\WKH&RPSDQ\GHYHORSVDQGVHOOVSURGXFWVDQGPHUFKDQGLVHZKLFKVDWLVI\FXVWRPHUV7KLVVHFWLRQLQWURGXFHVLQLWLDWLYHVRIWKH&RPSDQ\WRSURFXUHDQGSURYLGH
SURGXFWVPHUFKDQGLVHDQGVHUYLFHV.21'27(&),1$1&,$/'$7$

n%R[:DOOn)ORRGSURWHFWLRQV\VWHPIRUVHYHUHORFDOUDLQVWRUPV‫&ٹ‬XOWLYDWLRQRI6XSSOLHUVDQG(IILFLHQW3XUFKDVH0DQDJHPHQWDQG'HOLYHU\
7RPDNHEXONSXUFKDVHVRIPHUFKDQGLVHIURPVXSSOLHUVWKH&RPSDQ\KDVORJLVWLFVFHQWHUDWWZREDVHVLQ-DSDQ 2VDNDDQG,EDUDNL DVZHOODVRQHEDVHLQ&KLQD:HDUHUHGXFLQJWKHFRVWRISXUFKDVHE\GHOLYHULQJLQGHPDQGPHUFKDQGLVHWRRSHUDWLQJVLWHVXVLQJLQKRXVH
GHOLYHU\V\VWHPVDIWHUSXUFKDVLQJWKHPLQEXON
IURPPDQXIDFWXUHUVLQ-DSDQDQGDEURDGDQG
VWRULQJLQORJLVWLFVFHQWHU
0RUHRYHUZHDOZD\VWDNHDVWDQFHRIUHYLHZLQJFRVWVE\KDYLQJHVWDEOLVKHGWKH'HOLYHU\'LYLVLRQWRFRQVWDQWO\ILQGEHWWHUVXSSOLHUVDVZHOODV
FRQFOXGLQJ2(0SURGXFWLRQFRQWUDFWVZLWKPDQXIDFWXUHUV)XUWKHUPRUHZHFDQVHDUFKRQRXURZQV\VWHP
IRUWKHVWDWXVRILQYHQWRULHVDWGLVWULEXWLRQZDUHKRXVHVRULQGLYLGXDORSHUDWLQJVLWHV$VDUHVXOWE\JUDVSLQJWKHVWDWXVRILQYHQWRULHVDW
RXURZQVLWHVLQUHDOWLPHZHFDQPHDVXUHWKH
WLPLQJIRURXURZQVLWHVWRSXUFKDVHLQYHQWRULHV
DVZHOODVLPPHGLDWHO\UHSO\WRLQTXLULHVIURPFXVWRPHUV)RUGHOLYHULHVZHKDYHDV\VWHPWRGHOLYHUWRFXVWRPHUVVDIHO\DQGTXLFNO\E\HPSOR\HHVRI
WKH&RPSDQ\RUFRRSHUDWLQJFRPSDQLHV(19,5210(17:LUHURSHVHOHFWLRQVRIWZDUH ,QSXWUHVXOW

62&,$/,QDGGLWLRQWRSURYLGLQJQHFHVVDU\PDWHULDOVIRU
WKHFRQVWUXFWLRQRIKDUGLQIUDVWUXFWXUHWKH
&RPSDQ\GHDOVZLWKPDWHULDOVIRU
UHFRYHU\UHFRQVWUXFWLRQXVHGDWWKHWLPHRIGLVDVWHUVDQGDQ\RWKHULWHPVQHHGHGDWFRQVWUXFWLRQVLWHV$IWHULWVIRXQGDWLRQWKH&RPSDQ\VROGKDUGZDUHIRUYHVVHOVDQGVXEVHTXHQWO\VWDUWHGGHDOLQJZLWKFRQVWUXFWLRQPDWHULDOVGXULQJWKHKLJKJURZWKSHULRGZHFXUUHQWO\SURYLGHPRUHWKDQSURGXFWVDQGPHUFKDQGLVH$WWKH1HZ
0HUFKDQGLVH&RPPLWWHHKHOGHYHU\RWKHUPRQWKVDOHVVWDIISURSRVHWRGHDOZLWKQHZSURGXFWVDQGPHUFKDQGLVHEDVHGRQWKHQHHGVRIFXVWRPHUVJHQHUDWLQJQXPHURXVKRWVHOOLQJSURGXFWVDQGPHUFKDQGLVHIURPWKHDGRSWHG
SURSRVDOV0RUHRYHUZHQRWRQO\VHOOSURGXFWVDQG
PHUFKDQGLVHEXWDOVRSURDFWLYHO\GLVFORVH
LQIRUPDWLRQDQGSURYLGHVHUYLFHVRQWKH
&RPSDQ\ZHEVLWH%HVLGHVZHEFDWDORJXHVDQG
WHFKQLFDOLQIRUPDWLRQZHZLOOFRQWLQXHWRQRWRQO\VHOOSURGXFWVDQGPHUFKDQGLVHEXWWRDOVRSURYLGHKLJKYDOXHDGGHGVHUYLFHVVXFKDV
GLVFORVLQJVRIWZDUHWRVXSSRUWWKHVHOHFWLRQRIZLUHURSHVDFFRUGLQJWRWKHZHLJKWRIOLIWHGORDGV

9,6,21‫ٹ‬3URYLVLRQRI3URGXFWV0HUFKDQGLVHDQG6HUYLFHVUHVSRQGLQJWR&KDQJHVLQWKH7LPHVDQG1HHGVRI&XVWRPHUV:($5(.21'27(&

3URFXUHPHQWDQG3URYLVLRQRI+LJK9DOXHDGGHG3URGXFWV0HUFKDQGLVHDQG6HUYLFHVRIDERXWELOOLRQ\HQIRUWKHUHSODFHPHQWRISURGXFWLRQHTXLSPHQWDQGUHORFDWLRQUHEXLOGLQJ
RIEDVHV6KLJD )DFWRU\ 1R3ODQW$GGUHVV2WDQL +LQRFKR*DPRJXQ
6KLJD

7RWDOIORRUDUHD$ERXWP,QYHVWPHQW$ERXWPLOOLRQ\HQ

2SHUDWLRQVWDUWGDWH$SULO

.21'27(& 5(3257

6833/(0(17:HLQYHVWLQSURGXFWLRQIDFLOLWLHVEDVHGRQWKH
DQQXDOSODQWRLPSURYHTXDOLW\DQGSURGXFWLYLW\DWIDFWRULHV,Q)<ZHQHZO\HVWDEOLVKHGD
SODQWRQWKHSUHPLVHVRI6KLJD)DFWRU\ZKLFKUHDOL]HGODERUVDYLQJWKURXJKWKHLQWURGXFWLRQRIURERWVDLPLQJWRSURPRWHZRUNVW\OHUHIRUPDQG
VROYHODERUVKRUWDJHV$WWKHQHZSODQWZHZLOOLPSURYHSURGXFWLYLW\E\FKDQJLQJWKHSURFHVVHVXQGHUWDNHQE\ZRUNHUVPDQXDOO\HUHQRZWRZHOGLQJWUDQVSRUWDWLRQDQG
DVVHPEO\E\URERWV,ISURGXFWLYLW\LVLPSURYHG
ZHSODQWRH[SDQGWKHV\VWHPKRUL]RQWDOO\WRRWKHUSODQWV
7KH&RPSDQ\bV0HGLXPWHUP0DQDJHPHQW3ODQXSWR)<SODQVWRPDNHFDSLWDOLQYHVWPHQWV

*29(51$1&(‫ٹ‬3URGXFWLRQ,QQRYDWLRQWKURXJK&DSLWDO,QYHVWPHQWLQ)DFWRULHV



(6*
)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ (6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&(&RPPXQLFDWLRQZLWK6KDUHKROGHUVDQG,QYHVWRUV:HRIIHUIDLUDFFXUDWHDQGVSHHG\LQIRUPDWLRQGLVFORVXUHLQDQHIIRUWWRKDYHDOOVWDNHKROGHUVGHHSHQWKHLUXQGHUVWDQGLQJRIWKH.21'27(&*URXS:HUHFRJQL]HWKHLPSRUWDQFHRIKDYLQJVKDUHKROGHUVDQGLQYHVWRUVJDLQDQXQGHUVWDQGLQJ
RIWKH.21'27(&*URXS)RUWKLVUHDVRQZH
EHDULQPLQGWKHQHHGWRRIIHUFDUHIXO
H[SODQDWLRQVWRVKDUHKROGHUVDQGLQYHVWRUVDVZHOODVWRHQVXUHIDLUDFFXUDWHDQGVSHHG\
LQIRUPDWLRQGLVFORVXUH)XUWKHULQRUGHUWRFRQWULEXWHWRLPSURYHPHQWWKHFRUSRUDWHYDOXHRIWKH.21'27(&*URXSZH
ZRUNWRVWUHQJWKHQRXUILQDQFLDOSRVLWLRQDQGWDNHRWKHUVWHSVWRHQKDQFHRXUHDUQLQJVFDSDELOLW\ZKLOHSXUVXLQJVWUDWHJLFLQYHVWPHQWE\0 $DQG
RWKHUPHDQVDVZHOODVDFWLYHO\H[SDQGLQJ
EXVLQHVVLQYHVWPHQWDLPHGDWJURZWK$WWKH
VDPHWLPHZHWDNHLQLWLDWLYHVWRLPSURYHFDSLWDO
HIILFLHQF\‫ٹ‬,5 SROLF\
%DVLFSROLF\.21'27(&ZLOOPDNHHIIRUWVWRKDYHDOOVWDNHKROGHUVLQFOXGLQJVKDUHKROGHUVDQG
LQYHVWRUVJDLQDEHWWHUXQGHUVWDQGLQJDERXWRXU
&RPSDQ\DQGZLOOGLVFORVHLPSRUWDQWLQIRUPDWLRQRQWKH&RPSDQ\E\FRQVLGHULQJIDLUQHVVDFFXUDF\DQGWLPHOLQHVVLQRUGHUWRVXSSRUWVWDNHKROGHUVPDNHDSSURSULDWHDVVHVVPHQWV,QIRUPDWLRQGLVFORVXUHVWDQGDUGV.21'27(&ZLOOFRQGXFWLQIRUPDWLRQGLVFORVXUHLQDFFRUGDQFHZLWKWKH)LQDQFLDO,QVWUXPHQWVDQG
([FKDQJH$FWDQGRWKHUUHOHYDQWODZVDQGDOVRZLWKWKHWLPHO\GLVFORVXUHUXOHVVHWIRUWKE\WKHVWRFNH[FKDQJHRQZKLFKWKHVWRFNRIWKH
&RPSDQ\LVOLVWHG.21'27(&ZLOODOVRDFWLYHO\GLVFORVHLQIRUPDWLRQQRWUHTXLUHGWREHGLVFORVHG
XQGHUODZVUHJXODWLRQVDQGUXOHVLIVXFKLQIRUPDWLRQLVMXGJHGWREHXVHIXOIRUVKDUHKROGHUVDQGLQYHVWRUV)XWXUHSURMHFWLRQV)XWXUHRSHUDWLQJSHUIRUPDQFHSURMHFWLRQVWKDW
WKH&RPSDQ\UHOHDVHVDUHEDVHGRQGDWDDYDLODEOHDWWKHWLPHRIPDNLQJWKHUHOHDVH
$FWXDOUHVXOWVPD\GLIIHUFRQVLGHUDEO\IURPSURMHFWLRQVGXHWRYDULRXVIDFWRUVDQGFKDQJHV
,5TXLHWSHULRG,QRUGHUWRSUHYHQWOHDNDJHRIILQDQFLDOUHVXOWVLQIRUPDWLRQDQGHQVXUHIDLUQHVV.21'27(&REVHUYHVDTXLHWSHULRGZKLFKUXQVIRUDIHZ
ZHHNVXSWRWKHUHOHDVHRIILQDQFLDOUHVXOWV'XULQJWKLVTXLHWSHULRGZHZLOOUHIUDLQIURPUHVSRQGLQJWRFRPPHQWVTXHVWLRQVHWFUHJDUGLQJILQDQFLDOUHVXOWV,IKRZHYHUZH
EHFRPHDZDUHRIWKHSRVVLELOLW\GXULQJWKHTXLHWSHULRGWKDWRSHUDWLQJSHUIRUPDQFHILJXUHVZLOOGHYLDWHVLJQLILFDQWO\IURPWKH&RPSDQ\bV
IRUHFDVWVZHZLOOGLVFORVHLQIRUPDWLRQDVQHHGHG

,QIRUPDWLRQGLVFORVXUHPHWKRGV.21'27(&ZLOOGLVFORVHLQIRUPDWLRQYLDWKH
7LPHO\'LVFORVXUH1HWZRUN 7'QHW SURYLGHGE\WKHVWRFNH[FKDQJHDVZHOODVDFWLYHO\PDNHXVH
RIWKH&RPSDQ\bVZHEVLWHLQDQHIIRUWWRFRQGXFWIDLUDQGVSHHG\LQIRUPDWLRQGLVFORVXUH‫ٹ‬,QYLJRUDWLRQRIWKH*HQHUDO0HHWLQJRI6KDUHKROGHUV:HUHJDUGWKH*HQHUDO0HHWLQJRI6KDUHKROGHUV
DVDQLPSRUWDQWRSSRUWXQLW\WRFRPPXQLFDWHZLWKVKDUHKROGHUVDQGLQRUGHUWRLQYLJRUDWHWKH
*HQHUDO0HHWLQJRI6KDUHKROGHUVZHVWULYHWR

KDYHDVPDQ\VKDUHKROGHUVDVSRVVLEOHSDUWLFLSDWH
XQGHUVWDQGWKH&RPSDQ\DQGVHFXUHDVXIILFLHQWSHULRGIRUH[DPLQLQJSURSRVDOVIRUWKH0HHWLQJ6HWWLQJRIWKH*HQHUDO0HHWLQJRI
6KDUHKROGHUVE\DYRLGLQJFRQFHQWUDWHGGDWHV

7KHGDWHRI*HQHUDO0HHWLQJRI6KDUHKROGHUVLVVHWWRDYRLGWKHFRQFHQWUDWHGGDWHVIRUPDQ\RWKHUJHQHUDOPHHWLQJVRIVKDUHKROGHUV(DUOLHUGLVSDWFKRIFRQYRFDWLRQQRWLFH

1RWLFHLVGLVSDWFKHGGD\VEHIRUHWKH0HHWLQJ'LVFORVXUHRIFRQYRFDWLRQQRWLFHEHIRUHGLVSDWFK'LVFORVHGRQWKH.21'27(&ZHEVLWHGD\VEHIRUHWKH
0HHWLQJ

2WKHU)RUWKH&RPSDQ\WREHIXOO\XQGHUVWRRGZHYLVXDOL]HWKHUHSRUWLQJLWHPVRQSRZHUSRLQWVLQWKHH[SODQDWLRQ

.21'27(& 5(3257

%HDULQJLQPLQGWKHQHHGWRRIIHULQIRUPDWLRQGLVFORVXUHWKDWWDNHVLQWRDFFRXQWIDLUQHVVDFFXUDF\DQGWLPHOLQHVV.21'27(&RUJDQL]HVEULHILQJVIRULQVWLWXWLRQDOLQYHVWRUVE\WKH

3UHVLGHQWDQGLQGLYLGXDOPHHWLQJVSDUWLFLSDWHVDFWLYHO\LQ,5HYHQWVIRULQGLYLGXDOLQYHVWRUVDQG
GLVFORVHV,5PDWHULDOVYLDWKH&RPSDQ\bVZHEVLWH

7UDFNUHFRUGVRIGLDORJXHZLWKLQVWLWXWLRQDOLQYHVWRUV(YHQW:($5(.21'27(&‫ٹ‬,5 DFWLYLWLHV)UHTXHQF\$FFHSWDQFHRILQWHUYLHZVE\WHOHSKRQH

&RPSDQ\EULHILQJVIRUDQDO\VWV 7RN\R&RPSDQ\EULHILQJVIRUVHFXULWLHVFRPSDQLHV 2VDND



9,6,21

 WRWDO.21'27(&,QGLYLGXDOPHHWLQJV)<

$FWXDOFRYHUDJH,ZDL&RVPR6HFXULWLHV

5DWLQJ ‫؟‬$

6HSWHPEHU

1DPH

9LVLWRUVWRRXUERRWK

1LNNHL,5,QYHVWPHQW)DLU KHOGLQ$XJXVWয5DGLRSURJUDP
IRULQGLYLGXDOLQYHVWRUV$SSHDUDQFHE\3UHVLGHQW
WREHDLUHGLQ'HFHPEHU

),1$1&,$/'$7$$FWXDOSDUWLFLSDWLRQLQ,5HYHQWVIRULQGLYLGXDOLQYHVWRUV(19,5210(17)<

62&,$/

1LNNHL,5,QYHVWPHQW)DLU

723,&6:HDLPWRSUHVHQW,5LQIRUPDWLRQDERXWWKH&RPSDQ\LQDQHDV\WRXQGHUVWDQGZD\

5HIHU3

7KHFRPSDQ\bVZHEVLWHZDVVHOHFWHGE\*29(51$1&(‫ٲ‬1LNNR,5DVWKHH[FHOOHQWVLWH
DQGE\‫*ٲ‬20(=,5DVDQH[FHOOHQWFRPSDQ\IRUWKUHH FRQVHFXWLYH
LQWKH,5ZHEVLWHUDQNLQJV

6833/(0(17:HZLOOFRQWLQXHWRIXUWKHUHQKDQFHRXUZHEVLWH
DQGFRQGXFWWLPHO\DQGIDLULQIRUPDWLRQGLVFORVXUHWRDOOVWDNHKROGHUVLQFOXGLQJVKDUHKROGHUV

.21'27(& 5(3257



(6*
)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ (6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&($SSURSULDWH,QIRUPDWLRQ'LVFORVXUHDQG6HFXULW\‫ٹ‬,QIRUPDWLRQ'LVFORVXUH%DVLFSROLF\RQLQIRUPDWLRQGLVFORVXUH:HKDYHHVWDEOLVKHGWKHn,QWHUQDO,QIRUPDWLRQ0DQDJHPHQW5HJXODWLRQV|IRUDSSURSULDWHGLVFORVXUHRIFRPSDQ\LQIRUPDWLRQDQG
HQGHDYRUVWRGLVFORVHLQIRUPDWLRQTXLFNO\DQG
IDLUO\LQDFFRUGDQFHZLWKWKH&RPSDQLHV$FW
)LQDQFLDO,QVWUXPHQWVDQG([FKDQJH$FWDQG
RWKHUODZVDQGUHJXODWLRQVHWFVWLSXODWHGE\VWRFNH[FKDQJHV KHUHLQDIWHUUHIHUUHGWRDVWKH

n7LPHO\'LVFORVXUH5XOHV| 
0RUHRYHUHYHQIRULQIRUPDWLRQQRWIDOOLQJXQGHUYDULRXVODZVDQGUHJXODWLRQVDQG7LPHO\'LVFORVXUH5XOHVZHGLVFORVHLQIRUPDWLRQTXLFNO\DQGIDLUO\LILQIRUPDWLRQLVGHHPHGWRZLGHO\DIIHFWWKHMXGJHPHQWRISHRSOHLQVRFLHW\LQFOXGLQJVWDNHKROGHUV

0HWKRGRIWLPHO\GLVFORVXUH‫كق‬:HZLOOGLVFORVHWKHLQIRUPDWLRQIDOOLQJXQGHU7LPHO\'LVFORVXUH5XOHVE\7'QHW SURYLGHGE\
WKH7RN\R6WRFN([FKDQJHDVZHOODVGLVFORVHWRQHZVRUJDQL]DWLRQVVXFKDVUHOHYDQWSUHVVFOXEV‫(كق‬YHQIRULQIRUPDWLRQQRWIDOOLQJXQGHU7LPHO\'LVFORVXUH5XOHVLILQIRUPDWLRQLVGHHPHGWRZLGHO\DIIHFWWKHMXGJHPHQWRISHRSOHLQVRFLHW\LQFOXGLQJVWDNHKROGHUVZHZLOOGLVFORVHLWE\
7'QHWSURYLGHGE\WKH7RN\R6WRFN([FKDQJHDVZHOODVGLVFORVHWRQHZVRUJDQL]DWLRQVVXFKDV
UHOHYDQWSUHVVFOXEV2UJDQL]DWLRQDOFKDUW%RDUGRI'LUHFWRUV6XEPLVVLRQ
5HSRUWLQJ
3UHVLGHQW‫كق‬:HZLOOXSORDGWKHGLVFORVHGLQIRUPDWLRQRQRXUZHEVLWHZLWKRXWGHOD\'HFLVLRQ'HFLVLRQ

5HSRUWLQJ

6HQLRU([HFXWLYH'LUHFWRU
*HQHUDO0DQDJHU0DQDJHPHQW+HDGTXDUWHUV UHVSRQVLEOHIRU
LQIRUPDWLRQPDQDJHPHQW

5HSRUWLQJ,QVWUXFWLRQIRUGLVFORVXUH

0DQDJHU*HQHUDO$IIDLUV'LYLVLRQ 6HFWLRQUHVSRQVLEOH
IRUGLVFORVXUH *HQHUDO$IIDLUV'LYLVLRQ,QIRUPDWLRQGLVFORVXUH

5HSRUWLQJ,QGLYLGXDOVHFWLRQV‫ٹ‬,5,QIRUPDWLRQ'LVFORVXUHRQWKH&RPSDQ\:HEVLWH%HVLGHVWLPHO\GLVFORVXUHPDWHULDOVWKH&RPSDQ\
SRVWVWKHODWHVW,5PDWHULDOVRQWKH&RPSDQ\ZHEVLWHLQDGGLWLRQWRILQDQFLDODQGHDUQLQJV
GDWDVWRFNLQIRUPDWLRQDQGLQIRUPDWLRQRQ,5

HYHQWSDUWLFLSDWLRQ:LWKWKHDLPRIRXUZHEVLWHEHLQJXVHGE\PRUHSHRSOHZHZLOOSURYLGHWLPHO\LQIRUPDWLRQZKLOHIXUWKHUHQKDQFLQJWKHFRQWHQWVKONDOTEC‫ٹ‬,QIRUPDWLRQ6HFXULW\0HDVXUHV:HKDYH&RPSXWHU6\VWHP6HFWLRQLQWKH
FRPSDQ\WKDWPDQDJHVWKHVHFXULW\VLWXDWLRQDQG
WKHVWDWXVHWFRIV\VWHPRSHUDWLRQVIRU
EXVLQHVVRQDGDLO\EDVLVDQGUHSRUWVWRWKH
*HQHUDO0DQDJHU0DQDJHPHQW+HDGTXDUWHUVRYHUVHHLQJWKH*HQHUDO$IIDLUV'LYLVLRQ.21'27(& 5(3257

0RUHRYHUZHKDYHGHFLGHGRQWKHLQWHUQDOUHJXODWLRQn,QIRUPDWLRQ6\VWHP5LVN
0DQDJHPHQW0DQXDO|RUJDQL]LQJLQIRUPDWLRQV\VWHPRSHUDWLRQVDQGUHYLHZLWZKHQDSSURSULDWH

7RN\R
6WRFN
([FKDQJH

&RH[LVWHQFHZLWK/RFDO&RPPXQLWLHV([DPSOHVRIGLVDVWHUUHODWHGPHUFKDQGLVH>)OH[LEOH&RQWDLQHUEDJ@>7DUSDXOLQVDQGEDJHWF@>1HWVKHHW@DQGRWKHUV





),1$1&,$/'$7$





([DPSOHVIRUXVHRIFRQWDLQHUEDJ,WLVXVHGLQYDULRXVVFHQHVXFKDVWUDQVSRUWDWLRQDQGVWRUDJHRIIHHGIHUWLOL]HUUHVLQSHOOHWVLQGXVWULDOZDVWHHWFDQGDVDODUJHVL]HVDQGEDJIRUUXEEOHFOHDULQJ
GHFRQWDPLQDWLRQDQGUHFRYHU\ZRUNDIWHUGLVDVWHUV5HODWHGPHUFKDQGLVH)OH[LEOH&RQWDLQHUEDJ 
        

7DUSDXOLQ

1HWVKHHWHWF

ْ 723,;5HVSRQVHWRn1HZ6WDJH|3XEOLVKHGE\0LQLVWU\RI/DQG,QIUDVWUXFWXUH7UDQVSRUWDQG7RXULVP-XO\KHDY\UDLQLQQRUWKHUQ.\XVKX+HDY\UDLQIDOOFHQWHUHGRQ QRUWKHUQ.\XVKX$XJXVWKHDY\UDLQ+HDY\UDLQIDOO LQDZLGHUDQJHRIDUHDVIURPZHVWWRHDVW-DSDQ/DQGVOLGHGLVDVWHURFFXUUHGLQ+LURVKLPD3UHIHFWXUH-XO\KHDY\UDLQ

5HFRUGEUHDNLQJKHDY\UDLQIDOO LQD
ZLGHUDQJHRIDUHDVDFURVV-DSDQFHQWHUHGRQZHVW-DSDQ*29(51$1&(([WUDRUGLQDU\FOLPDWHLQUHFHQW\HDUV+HDY\UDLQVZLWKKRXUO\UDLQIDOOH[FHHGLQJPPKDYHLQFUHDVHGDFURVV-DSDQUDLQLQJORFDOO\LQWHQVLYHO\DQGVHYHUHO\‫ڀ‬5HFRJQL]HG
DVDn1HZ6WDJH|([DPSOHVRIZHDWKHUFRQGLWLRQVEULQJLQJGLVDVWHUV6833/(0(177KH0LQLVWU\RI/DQG,QIUDVWUXFWXUH
7UDQVSRUWDQG7RXULVPUHFRJQL]HVWKHDSSDUHQWFKDQJHLQWKHZD\LWUDLQVDVDn1HZ6WDJH|DQGUHFRPPHQGVWDNLQJGLVDVWHU
SUHYHQWLRQPLWLJDWLRQPHDVXUHVZLWKDVHQVH
RIFULVLV
7RUHVSRQGWRWKHn1HZ
6WDJH|ZHZLOODOVRIRFXVRQDGYDQFH
SUHSDUDWLRQVWRPLQLPL]HGDPDJH

.21'27(&

1HWVDOHVRIGLVDVWHUUHODWHGPDWHULDOV‫ق‬PLOOLRQ\HQ‫ك‬:LWKWKHLQYHQWRULHVRIQHFHVVDU\PDWHULDOVDW
WKHWLPHRIGLVDVWHUVDWRSHUDWLQJVLWHVDFURVV-DSDQZHKDYHHVWDEOLVKHGDV\VWHPWRGHOLYHU
QHFHVVDU\PDWHULDOVLPPHGLDWHO\HYHQLIWKH
GLVDVWHULVMXVWORFDOWKHUHE\FRQWULEXWLQJWRWKH
VHFXULW\DQGVDIHW\RIORFDOFRPPXQLWLHV

(19,5210(17‫ٹ‬5HVSRQVHDQGFRQWULEXWLRQWRGLVDVWHUV

9,6,21%HFDXVHZHPDNHGHOLYHULHVDVIRUWKHORFDWLRQRIRSHUDWLQJVLWHVZHVHOHFWSODFHVQHDUH[SUHVVZD\,&VRULQGXVWULDOSDUNVWKDWDUH
XQOLNHO\WRDIIHFWQHLJKERULQJUHVLGHQWVLQWHUPVRIQRLVHDQGWUDIILF
$VIRUSHUVRQQHOZKLOHVHYHUDOHPSOR\HHVIURPEUDQFKRSHUDWLQJVLWHVDUHWUDQVIHUUHGDWWKH
WLPHRIDQHZRSHUDWLQJVLWHRSHQLQJZHUHFUXLWVHYHUDOORFDOSHRSOHWRKHOSFUHDWHHPSOR\PHQWLQWKHFRPPXQLW\

62&,$/&XUUHQWO\ZHKDYHRSHUDWLQJVLWHV$PRQJVDOHVDFWLYLWLHVDUHDVDSUHFRQGLWLRQIRUVHOHFWLQJDUHDVIRURSHUDWLQJVLWHRSHQLQJVLVWKDWWKHDUHDVKRXOGEHIDUDZD\DQGKDYHSURVSHFWVIRU
LQFUHDVHGVDOHV:HKDYHH[SDQGHGDUHDVIRU
RSHUDWLQJVLWHRSHQLQJVE\ZD\RIEUDQFKLQJRXW
IURPUHODWLYHO\ODUJHVFDOHRSHUDWLQJVLWHV
EUDQFKFODVV .21'27(&PDNHVVXUHWRHVWDEOLVKZDUHKRXVHVWRVWRUHLQYHQWRU\DWRSHUDWLQJVLWHV:($5(.21'27(&‫ٹ‬2SHUDWLQJVLWH2SHQLQJ3ODQ

7RUHVSRQGWRWKHn1HZ6WDJH|ZHQHHGWRPLWLJDWHGDPDJHWRLQIUDVWUXFWXUHVDVPXFKDVSRVVLEOH DQGPDNHDGYDQFH
SUHSDUDWLRQVIRUHDUO\UHFRYHU\.21'27(& 5(3257



(6*
)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ (6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&(

6DIHW\0HDVXUHVDQG:RUN6W\OH5HIRUP‫ٹ‬5LVN&RQWUROIRU'LVDVWHUVDQG2WKHUV:HDUHWDNLQJWKHIROORZLQJLQLWLDWLYHVWRHQVXUH
WKHVDIHW\RIHPSOR\HHVDQGRWKHUUHOHYDQWSHUVRQQHOSUHYHQWWKHGLVUXSWLRQRILPSRUWDQWRSHUDWLRQVRIWKH&RPSDQ\DQGUHFRYHUDVTXLFNO\
DVSRVVLEOHDIWHUGLVUXSWLRQVZKHQDQXQH[SHFWHG
HYHQWVXFKDVDQDWXUDOGLVDVWHURFFXUV)RU HPSOR\HHV(VWDEOLVKPHQWDQGGLVVHPLQDWLRQRId5XOHVRIDFWLRQVIRULQLWLDOUHVSRQVHWRDODUJHHDUWKTXDNH
HWFb

)RUDFFRPSOLVKPHQWRILPSRUWDQWRSHUDWLRQV

7UDQVIHURIWKHFRUHV\VWHPWRWKHGDWDFHQWHU,QWURGXFWLRQRIGXDOKHDGRIILFHVV\VWHPDW2VDND
DQG7RN\R‫)ٹ‬RU(PSOR\HHVb+HDOWK6DIHW\DQG+\JLHQH:HDUHWDNLQJWKHIROORZLQJLQLWLDWLYHVWRSURWHFWWKHVDIHW\DQGKHDOWKRIHPSOR\HHV
5HSUHVHQWDWLYHPDWWHUVLQQHHGRIVDIHW\
PHDVXUHVLQFRQGXFWLQJEXVLQHVVDFWLYLWLHVLQFOXGH&DWHJRU\

UHFHLYLQJDQGVKLSSLQJRSHUDWLRQVLQZDUHKRXVHVPDUNHWLQJDFWLYLWLHVGHOLYHU\RISURGXFWVDQG
PHUFKDQGLVHDQGSURGXFWLRQDFWLYLWLHVLQIDFWRULHV'HWDLO,PSOHPHQWDWLRQRIVDIHW\GULYLQJWUDLQLQJ

8SRQWKHLQFUHDVHLQWUDIILFDFFLGHQWVLQYROYLQJQHZ
HPSOR\HHVZKRZHUHQRWDFFXVWRPHGWRGULYLQJFRPSDQ\FDUVZHLPSOHPHQWHGVDIHW\GULYLQJWUDLQLQJDWWKHWLPHRIQHZHPSOR\HHWUDLQLQJUHGXFLQJDFFLGHQWVLQYROYLQJ\RXQJHPSOR\HHV

0DUNHWLQJ
GHOLYHU\,PSOHPHQWDWLRQRIQRDFFLGHQWFDPSDLJQ

6HQGLQJZDUQLQJQRWLFHWRDOORSHUDWLQJVLWHVZKHQDQDFFLGHQWRFFXUVDWRWKHUVLWHV
1RWLI\LQJPRQWKO\WKHFXPXODWLYHQXPEHURIDFFLGHQWV DWDOORSHUDWLQJVLWHVLQWKHSDVW\HDUHYHQLIWKHUHZDVQRDFFLGHQW)RUWKHVLWHZKLFKKDGDQDFFLGHQWLQVWDOOLQJWKH
VDIHW\GULYLQJVXSSRUWGHYLFHWRDOOFRPSDQ\FDUV

0DUNHWLQJ
GHOLYHU\,QWURGXFWLRQRIVDIHW\GULYLQJGHYLFH 7HOHPDWLFV,QVWDOODWLRQRIWKHGULYHUHFRUGHU:KHQGDQJHURXVGULYLQJ VXGGHQEUDNLQJ VSHHGLQJ
HWF LVGHWHFWHGE\*6HQVRU*36LPPHGLDWHO\JLYHDZDUQLQJQRWLFHE\YRLFHJXLGDQFHWRWKHGULYHUHDFKWLPHZKLOHVHQGLQJDQRWLI\LQJHPDLORIGDQJHURXVGULYLQJWRWKHKHDGRIILFH)DFWRU\ZDUHKRXVH,PSOHPHQWDWLRQRI6DIHW\DQG
+HDOWK&RPPLWWHH,PSOHPHQWDWLRQRIVDIHW\SDWURO+ROGLQJ D6DIHW\ DQG+HDOWK&RPPLWWHHDWKHDG RIILFH
DQGIDFWRULHVPRQWKO\,PSOHPHQWLQJVDIHW\SDWUROVE\HPSOR\HHVWRSUHYHQWLQGXVWULDODFFLGHQWV0DUNHWLQJ
GHOLYHU\:RUN6W\OH5HIRUPDQG:RUN/LIH%DODQFH:HDLPWRFUHDWHDFRUSRUDWHFXOWXUHZKHUH
HPSOR\HHVFDQKDYHnDIXOILOOLQJLQGLYLGXDOOLIH
DQGLQYROYHPHQWLQVRFLHW\|ZKLOHSURPRWLQJZRUNVW\OHUHIRUPWRHQDEOHWKHPWRGRnZRUWKZKLOHDQGKLJKTXDOLW\ZRUN|HIILFLHQWO\,QZHFRQGXFWHGWUDLQLQJIRUDOOVXSHUYLVRUVDLPLQJIRUPRUHHIILFLHQWRSHUDWLRQVDQGOHVVRYHUWLPHZRUNDQGKDYHEHHQ
SURPRWLQJZRUNVW\OHUHIRUPVLQFHWKHQRQWKH
FRQGLWLRQRILPSURYHGHDUQLQJV6LQFHOHG
E\KHDGRIILFHZHKDYHEHHQHQJDJHGLQUHIRUP
IRUHIILFLHQWRSHUDWLRQVE\UHYLHZLQJYDULRXVRSHUDWLRQDOUXOHVGHFUHDVLQJFROOHFWLRQVE\VDOHVVWDIIUHGXFLQJLQWHUQDOGRFXPHQWVDQG
UHYLHZLQJDSSURYLQJDXWKRULW\$VDQLQGLFDWRUWRUHDOL]HDSSURSULDWHZRUNOLIH
EDODQFHZHKDYHHVWDEOLVKHGDSDLGYDFDWLRQDFTXLVLWLRQWDUJHWIRUWKHFRPSDQ\DQGLQWHUQDOO\SXEOLVKWKHILJXUHVIRUHDFKVHFWLRQWRSURPRWH
WKHDFTXLVLWLRQ.21'27(& 5(3257

3DLGYDFDWLRQDFTXLVLWLRQWDUJHWIRUWKHFRPSDQ\$SULOt 0DUFK
ْ7DUJHWٓQRWVHW

ْ$FWXDOٓ$SULOt 0DUFK
ْ7DUJHWٓ$FTXLVLWLRQUDWHRI٫ RUKLJKHU

ْ$FWXDOٓ$SULOt 0DUFK
ْ7DUJHWٓ$FTXLVLWLRQUDWHRI٫ RUKLJKHU

ْ$FWXDOٓ$SULOt 0DUFK
ْ7DUJHWٓ$FTXLVLWLRQUDWHRI٫ RUKLJKHUٕ$SULOt 0DUFK
ْ7DUJHWٓ$FTXLVLWLRQUDWHRI٫ RUKLJKHUٕ+XPDQUHVRXUFHVGHYHORSPHQWDQG'LYHUVLW\(QKDQFHPHQWRIUHPXQHUDWLRQDQGEHQHILWVSURJUDPV‫ ق‬9DULRXVDZDUGV\VWHP‫ك‬%HVLGHVERQXVHVSDLGELDQQXDOO\ZHKDYH
LQWURGXFHGWKHDZDUG UHZDUG V\VWHPE\VLWHDQG
LQGLYLGXDODFFRUGLQJWRWKHFRQWULEXWLRQWRVDOHVSHUIRUPDQFHDQGSULRULW\LVVXHVWRLQFUHDVH
PRWLYDWLRQVDQGVSUHDGSULRULW\LVVXHVRIWKHZKROHFRPSDQ\9,6,21

0HDQZKLOHIRUPLGPDQDJHPHQWOHYHOHPSOR\HHV
DQGQH[WJHQHUDWLRQVHQLRUPDQDJHUVZHSURYLGHHGXFDWLRQWRUHLQIRUFHPDQDJHPHQWVNLOOVDQGKROGVHQLRUPDQDJHUFDQGLGDWHGHYHORSPHQWWUDLQLQJSURJUDPVDFFRUGLQJWRWKHQXPEHURI\HDUVRI
HPSOR\PHQWLQRUGHUWRGHYHORSKXPDQUHVRXUFHVZKRJURZZLWKWKHFRPSDQ\)XUWKHUPRUHZH
HVWDEOLVKHGDQLQWHUQDOO\DXWKRUL]HGnOLIWLQJHTXLSPHQWDGYLVRU|TXDOLILFDWLRQZKLFKOHDGVWRHQKDQFLQJHPSOR\HHVbNQRZOHGJHRQSURGXFWVDQG
PHUFKDQGLVH

.21'27(&:HFDUU\RXWHGXFDWLRQDOSURJUDPVIRUGHYHORSLQJKXPDQUHVRXUFHVWKDWVKDSHWKHIXWXUHLQDFFRUGDQFHZLWKWKH&RPSDQ\bVFRUSRUDWH
SKLORVRSK\:HRIIHUQHZHPSOR\HHWUDLQLQJSURJUDPVIRU\RXQJHUHPSOR\HHVDQGIROORZXSRQQHZHPSOR\HHVE\GHVLJQDWLQJDPRUHH[SHULHQFHGHPSOR\HHRIDVLPLODUDJHDWWKHDVVLJQHG
GHSDUWPHQWWRVHUYHDVDRQHWRRQHVXSHUYLVRU
IRUQHZHPSOR\HHV:HWKHQRIIHUWUDLQLQJIRUQHZ
HPSOR\HHVVL[PRQWKVDIWHUWKH\HQWHUWKH
FRPSDQ\DQGDJDLQWKUHH\HDUVODWHU

:($5(.21'27(&‫ٹ‬3ROLF\RQKXPDQUHVRXUFHVGHYHORSPHQW&RYHURIWKHRQOLQHHGXFDWLRQERRNOHW‫'ٹ‬LYHUVLW\ %DVLFSULQFLSOH:HUHFRJQL]HWKHLPSRUWDQFHRIHVWDEOLVKLQJDZRUNLQJHQYLURQPHQWLQZKLFKHPSOR\HHVZLWKGLYHUVHEDFNJURXQGVIXOO\GHPRQVWUDWHWKHLU
UHVSHFWLYHDELOLWLHVDQGDUHPRWLYDWHGWRZRUNLQRUGHUWRFRQWULEXWHWRFUHDWLQJDQDIIOXHQWVRFLHW\

DVVWDWHGLQRXUFRUSRUDWHSKLORVRSK\)RUWKLVUHDVRQZHWDNHLQLWLDWLYHVWRSURPRWHGLYHUVLW\DQGDJRRGZRUNOLIHEDODQFHDQGPDNHHIIRUWVWRQXUWXUHDFRUSRUDWHFOLPDWHZKHUHHPSOR\HHVFDQ
ZRUNZLWKOLYHO\(19,5210(17:HDVVLVWWKHVHOIGHYHORSPHQWRIDELOLWLHVE\
HVWDEOLVKLQJDQRQOLQHHGXFDWLRQV\VWHPLQZKLFKDQ\HPSOR\HHFDQIUHHO\WDNHFRXUVHV0RUHRYHU
ZHHQGHDYRUWRGHYHORSSHUVRQQHOZLWKTXDOLILFDWLRQVE\DVVLVWLQJWXLWLRQDQG
H[DPLQDWLRQIHHVWRSURPRWHWKHDFTXLVLWLRQRISXEOLFTXDOLILFDWLRQV)RUQHZHPSOR\HHVZH
KHOSWKHPWRZRUNVDIHO\E\OHWWLQJWKHPWDNH
WKHVOLQJLQJZRUNVNLOOVWUDLQLQJFRXUVHDQGFUDQH
GULYLQJVSHFLDOHGXFDWLRQDQGEHDVVLJQHGWRRSHUDWLQJVLWHVZLWKERWKTXDOLILFDWLRQV

),1$1&,$/'$7$(QKDQFHPHQWRIRQOLQHHGXFDWLRQV\VWHPDQG
DVVLVWDQFHIRUDFTXLVLWLRQRITXDOLILFDWLRQV$SSRLQWPHQWRIKXPDQUHVRXUFHV(VWDEOLVKPHQWRIZRUNLQJHQYLURQPHQWVWUXFWXUH

62&,$/

7RFUHDWHDSODWIRUPRQZKLFKGLYHUVHKXPDQUHVRXUFHVFDQWDNHOHDGLQJUROHV

6NLOOVGHYHORSPHQW,QRUGHUIRUHPSOR\HHVDQGVSRXVHVWRJLYHELUWKDQGUDLVHFKLOGUHQZLWKSHDFHRIPLQGZHKDYH
SUHSDUHGDKDQGERRNFRPSLOLQJFKLOGUDLVLQJUHODWHGODZVDQGYDULRXVLQWHUQDOV\VWHPVVRWKDWHPSOR\HHVFDQIUHHO\YLHZDQGREWDLQLWIURPWKH
LQWHUQDOSRUWDOVLWH )XUWKHUPRUHZHSUHVHQWYDULRXVV\VWHPVLQFOXGLQJDVKRUWHQHGZRUNLQJ
WLPHSURJUDPZKLFKFDQEHWDNHQXQWLODFKLOGUHDFKHVKLVKHUUG\HDULQSULPDU\VFKRROZKLFKLVORQJHUWKDQZKDWLVOHJDOO\PDQGDWHGDQG
FODULI\WKHFRQWDFWSRLQWIRUFRQVXOWDWLRQDQGWKXVHQGHDYRUWRKDYHHPSOR\HHVHQJDJHLQFKLOGELUWKDQGFKLOGUDLVLQJZLWKSHDFHRIPLQG

6833/(0(17,QKLULQJHPSOR\HHVZHUHVSHFWVWKHGLYHUVHFKDUDFWHULVWLFVRILQGLYLGXDOVLQFOXGLQJDJH
JHQGHUDQGQDWLRQDOLW\:HDOVRRIIHUVXSSRUWWR
DWKOHWHVDVZHOODVDSSRLQWKLJKO\PRWLYDWHG
FRQWUDFWZRUNHUVDVUHJXODUHPSOR\HHVZHDSSRLQWHGRQHIHPDOH'LUHFWRULQ-XQHDQG
DSSRLQWHGRQHIHPDOH$XGLW 6XSHUYLVRU\%RDUG
0HPEHULQ-XQHZKRZLGHQIHPDOHDSSHDO

*29(51$1&(

1RQGLVFULPLQDWRU\KLULQJSROLF\DQG6XSSRUWIRUGLYHUVLILFDWLRQRIHPSOR\PHQWIRUPDWV.21'27(& 5(3257



(6*
)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ (6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&(‫' ٹ‬LYHUVLW\1RQGLVFULPLQDWRU\KLULQJSROLF\DQG6XSSRUWIRUGLYHUVLILFDWLRQRIHPSOR\PHQWIRUPDWV
0DOHIHPDOHUDWLRRIQHZHPSOR\HHVZLWK PDLQFDUHHUWUDFNLQWKHODVWVL[\HDUVDQGKRPHFRXQWULHVRILQWHUQDWLRQDOVWXGHQWV<HDURIHPSOR\PHQW$SULO
$SULO0DOH)HPDOH SHUVRQVSHUVRQVSHUVRQVSHUVRQV$SULO

 SHUVRQV$SULO

SHUVRQV$SULO
$SULO

3HUVRQV SHUVRQV SHUVRQVSHUVRQV SHUVRQVSHUVRQV

7RWDO

1DWLRQDOLW\RILQWHUQDWLRQDOVWXGHQWVRWKHUWKDQ-DSDQ%UD]LOSHUVRQV.RUHD

SHUVRQV

3HUVRQVSHUVRQV

7KDLODQG9LHWQDPSHUVRQV&KLQD

SHUVRQV$SSRLQWPHQWRIDIHPDOHH[HFXWLYHPHPEHUV RXWRI

1XPEHURIHPSOR\HHVWDNLQJFKLOGFDUHOHDYH
7KRVHZKRQHZO\WRRNFKLOGFDUHOHDYHGXULQJWKHSHULRG

7KRVHZKRWRRNFKLOGFDUHOHDYHGXULQJWKHSHULRG

7KRVHZKRUHWXUQHG
WRZRUNGXULQJWKH
SHULRG

5HPDUNV‫ ع‬SUHVHQWSHUVRQSHUVRQVSHUVRQV$W0D\

‫ ع‬

SHUVRQVSHUVRQVSHUVRQV‫ ع‬

SHUVRQVSHUVRQVSHUVRQ‫ ع‬

SHUVRQVSHUVRQVSHUVRQ‫ع‬SHUVRQSHUVRQVSHUVRQV(QKDQFHPHQWRIUHPXQHUDWLRQDQGEHQHILWVSURJUDPV(PSOR\HHVWRFNRZQHUVKLSSODQ (623  WUXVWW\SH(623 (6KLS
,Q2FWREHUZHLQWURGXFHGDQ(623ZKLFKRIIHUVVKDUHVWRHPSOR\HHVZKRKDYHEHHQ
SURPRWHGRUDVVXPHGDSRVLWLRQ%\LVVXLQJVKDUHVDVDQLQFHQWLYHWRHPSOR\HHVRIWKH&RPSDQ\ZHHQFRXUDJHHPSOR\HHVWRKHLJKWHQWKHLUPRWLYDWLRQDQGPRUDOHWRZDUGHQKDQFLQJSHUIRUPDQFHDVSDUWRIRXUHIIRUWWRLPSURYHFRUSRUDWHYDOXHRIWKH&RPSDQ\LQWKH
PHGLXPDQGORQJWHUP

,QZHLQWURGXFHG(6KLSZKLFKLVWKH
WUXVWV\VWHPXWLOL]LQJHPSOR\HHVbVWRFNRZQHUVKLSDVVRFLDWLRQVDQGZHDUHWK FRPSDQ\
LQ-DSDQ,WZDVUHSRUWHGLQWKH1LKRQNHL]DL
6KLPEXQQHZVSDSHUDVSODQQLQJWRGLVWULEXWH
DERXW\HQSHUSHUVRQRQDVLPSOHDYHUDJHLQDWWKHHQGRIWKHILUVWSHULRG,QFHQWLYHV JLYHQ WR GDWH
1XPEHURIVKDUHVJUDQWHG'DWH
1XPEHURIVKDUHV(OLJLEOHSHUVRQV.21'27(& 5(3257

)<

)<

)<

)<

)<

)<











VKDUHVVKDUHVVKDUHVVKDUHVVKDUHVVKDUHV













SHUVRQVSHUVRQVSHUVRQVSHUVRQVSHUVRQVSHUVRQV.21'27(&7UDFN )LHOG&OXE

:($5(.21'27(&+XUUDK:HKDYHEHHQVXSSRUWLQJLWVHPSOR\HHVLQFRPSHWLWLYHVSRUWVDQGFXUUHQWO\WZRHPSOR\HHVDUHWUDLQLQJGDLO\ZLWKWKHDLPRISDUWLFLSDWLQJLQWKH7RN\R2O\PSLFJDPHV‫&ٹ‬RPSHWLWLRQFDWHJRU\-DYHOLQ‫ٹ‬$OPDPDWHU

8QLYHUVLW\RI
7VXNXED‫ٹ‬3HUVRQDOEHVW

P

-RLQHG WKH &RPSDQ\LQ $SULO :RUNLQJ IRU,QWHUQDWLRQDO 6DOHV 'LYLVLRQ‫&ٹ‬RPSHWLWLRQFDWHJRU\'LVFXV‫ٹ‬$OPDPDWHU&KXN\R
8QLYHUVLW\‫ٹ‬3HUVRQDOEHVW

P

5HVXOWWKWK

5HFRUGۜۜ

5HVXOWWK

5HFRUG
ۜ

UG

ۜ

VW

ۜ

WK
WK
VW
WK

ۜ
ۜ
ۜ
ۜ

SHUIRUPDQFH'DWH&RPSHWLWLRQQDPH
5HVXOW
5HFRUG
0D\UG.DQVDL,QGXVWULDO7HDPV&KDPSLRQVKLSV
VW
ۜ
0D\0LWR,QYLWDWLRQDO0HHW
WK
ۜ
$SU+\RJR5HOD\&DUQLYDO
VW
ۜ
$SU+\RJR5HFRUG0HHW
VW
ۜ
1DUD5HFRUG0HHW
VW
ۜ
0DU2VDND8QLYHUVLW\RI+HDOWKDQG6SRUW6FLHQFHV
VW
ۜ
5HFRUG0HHW
0DU.\RWR5HFRUG0HHW
VW
ۜ
SHUIRUPDQFH'DWH&RPSHWLWLRQQDPH
5HVXOW
5HFRUG
2FWWK&KXEX,QGXVWULDO7HDPV&KDPSLRQVKLSV
VW
ۜ
0D\ QG.DQVDL,QGXVWULDO7HDPV&KDPSLRQVKLSV
QG
ۜ
1DUD&KDPSLRQVKLSV
VW
ۜ
0D\
WK+\RJR5HOD\&DUQLYDO
QG
ۜ
SHUIRUPDQFH'DWH&RPSHWLWLRQQDPH
5HVXOW
5HFRUG
2FWWK&KXEX,QGXVWULDO7HDPV&KDPSLRQVKLSV
VW
ۜ
-XOWK,QGXVWULDOYV8QLYHUVLW\
WK
ۜ
-XQ VW-DSDQ1DWLRQDO&KDPSLRQVKLSV
3DUWLFLSDWLRQ
0D\VW.DQVDL,QGXVWULDO7HDPV&KDPSLRQVKLSV
QG
ۜ

62&,$/

0LND <DPDPRWR

5HFRUGۜۜ.21'27(&-RLQHG WKH &RPSDQ\LQ $SULO :RUNLQJIRU
*HQHUDO$IIDLUV'LYLVLRQ

5HVXOW
QG
WK),1$1&,$/'$7$.LKR .X]HSHUIRUPDQFH'DWH&RPSHWLWLRQQDPH
0D\ 0LFKLWDND.LQDPL0HPRULDO0HHW$SU 2GD0HPRULDO0HHW
SHUIRUPDQFH'DWH&RPSHWLWLRQQDPH
2FW UG1DWLRQDO*DPHV$SU QG2GD0HPRULDO0HHW
SHUIRUPDQFH'DWH&RPSHWLWLRQQDPH
2FW QG1DWLRQDO*DPHVWK-DSDQ1DWLRQDO,QGXVWULDO7HDPV
6HS
&KDPSLRQVKLSV0RNSR,QWHUQDWLRQDO$WKOHWLF7KURZLQJ
6HS
0HHWLQJ-XO WK,QGXVWULDOYV8QLYHUVLW\-XQ VW-DSDQ1DWLRQDO&KDPSLRQVKLSV
0D\ VW.DQVDL,QGXVWULDO7HDPV&KDPSLRQVKLSV$SU VW2GD0HPRULDO0HHW&RPPHQWVIURP$WKOHWHV 7HDPbVJRDO ,QGLYLGXDOJRDO(19,5210(17FHUWLILHGDWKOHWH IRUWKH
2O\PSLFJDPHV

9,6,21,QWURGXFWLRQRIDWKOHWHHPSOR\HHVDVSLULQJWRSDUWLFLSDWH
LQWKH7RN\R2O\PSLF*DPHV.X]H ,DPDLPLQJWREHFRPH1RLQ-DSDQDQGSDUWLFLSDWHLQWKH7RN\R
2O\PSLF*DPHV 7REHFRPHDQDWKOHWHZKRFDQFRPSHWHJOREDOO\WRVD\QRWKLQJRISDUWLFLSDWLRQLQWKH7RN\R2O\PSLF*DPHV,DVNIRU\RXUVXSSRUW
*29(51$1&(<DPDPRWR
 ,DPDLPLQJWREHFRPH1RLQ-DSDQZLWK.X]HDQGSDUWLFLSDWHLQWKH
7RN\R2O\PSLF*DPHV ,ZLOOGRP\EHVWDLPLQJWREUHDNWKH-DSDQHVHUHFRUGDQGFRPSHWHLQD
ZD\WKDWZLOOH[FLWHWKHSHRSOHVXSSRUWLQJPH,DVNIRU\RXUVXSSRUW

6833/(0(172QWKH.21'27(&,1&ZHEVLWHZHUHJXODUO\UHSRUWWKHWUDFN ILHOGFOXEbVDFWLYLWLHVDQGUHFHQWHYHQWV,QDGGLWLRQWRWKHVFKHGXOHVRIFRPSHWLWLRQVLQZKLFKWKH\ZLOOSDUWLFLSDWHDQGWKHUHSRUWVRQWKHLUUHFRUGVZHDOVR
KDYHEORJVE\DWKOHWHV:HWKHDWKOHWHVDQGWKH&RPSDQ\WRJHWKHUZLOOVWULYHWRSDUWLFLSDWHLQWKH7RN\R2O\PSLF*DPHV<RXUVXSSRUWZRXOGEHJUHDWO\DSSUHFLDWHG

.21'27(& 5(3257



(6*
)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ (6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&(*29(51$1&(%DVLFFRQFHSWWR&RUSRUDWH*RYHUQDQFH.21'27(&UHFRJQL]HVWKDWVWUHQJWKHQLQJDQG
HQKDQFLQJFRUSRUDWHJRYHUQDQFHWKURXJKLQFUHDVLQJVRXQGQHVVWUDQVSDUHQF\DQG
HIILFLHQF\RIPDQDJHPHQWDQGPD[LPL]LQJ
FRUSRUDWHYDOXHLVRQHRIWKHPRVWLPSRUWDQWPDQDJHPHQWREMHFWLYHV7RUHDOL]HWKLVREMHFWLYH
RXUEDVLFFRQFHSWRIFRUSRUDWHJRYHUQDQFHFDOOVIRUUHLQIRUFLQJRXUFRPSOLDQFHDQGLQWHUQDODXGLWV\VWHPVFRQGXFWLQJWLPHO\GLVFORVXUHRIPDQDJHPHQWLQIRUPDWLRQRSHUDWLQJUHVXOWVDQG
RWKHUSLHFHVRILQIRUPDWLRQYLDRXUZHEVLWHDQG
RWKHUPHDQVDQGVWUHQJWKHQLQJIXQFWLRQVIRU
VSHHG\GHFLVLRQPDNLQJDQGPDQDJHPHQWVXSHUYLVLRQ&RUSRUDWH*RYHUQDQFH‫&ٹ‬RUSRUDWHJRYHUQDQFHVWUXFWXUHVXPPDU\WDEOH
7\SHRIRUJDQL]DWLRQDOGHVLJQ&RPSDQ\ZLWKDQ$XGLW 6XSHUYLVRU\%RDUG

1XPEHURIGLUHFWRUVLQFOXGLQJWKHQXPEHURIRXWVLGHGLUHFWRUV‫كق‬1XPEHURIDXGLW VXSHUYLVRU\ERDUGPHPEHUVLQFOXGLQJWKHQXPEHURIRXWVLGHDXGLW VXSHUYLVRU\ERDUGPHPEHUV‫كق‬

7HUPRIRIILFHRIGLUHFWRUV\HDU$GRSWLRQRIH[HFXWLYHRIILFHUV\VWHP<HV,QFHQWLYHUHPXQHUDWLRQ

3HUIRUPDQFHEDVHGVWRFNFRPSHQVDWLRQSODQ‫ق‬%%7‫ق‬ٙ%RDUG %HQHILW 7UXVW‫كك‬$FFRXQWLQJ$XGLWRU'HORLWWH7RXFKH7RKPDWVX//&‫ٹ‬5HDVRQVIRUDGRSWLQJWKHFXUUHQWFRUSRUDWHJRYHUQDQFHV\VWHP.21'27(&EHOLHYHVWKDWSXWWLQJLQSODFHDQ$XGLW 6XSHUYLVRU\%RDUGDQGKDYLQJDQDXGLWV\VWHPZKHUH$XGLW 6XSHUYLVRU\%RDUG
0HPEHUVVXSHUYLVHPDQDJHPHQWLVHIIHFWLYHDQG
KHQFHRSHUDWHVDVDFRPSDQ\ZLWKDQ$XGLW 
6XSHUYLVRU\%RDUGV\VWHP
7KH$XGLW 6XSHUYLVRU\%RDUGFRPSULVHVWKUHH
$XGLW 6XSHUYLVRU\%RDUG0HPEHUVLQFOXGLQJ
RQHIXOOWLPH$XGLW 6XSHUYLVRU\%RDUG0HPEHU
DQGWZRSDUWWLPH$XGLW 6XSHUYLVRU\%RDUG
0HPEHUV 2XWVLGH$XGLW 6XSHUYLVRU\%RDUG



.21'27(& 5(3257

0HPEHU ZLWKVSHFLDOLVWNQRZOHGJHRQILQDQFHDFFRXQWLQJDQGODZVDQGFDUULHVRXWVXSHUYLVLRQIURPDQREMHFWLYHDQGIDLUSRLQWRIYLHZ
7KH%RDUGRI'LUHFWRUVKROGVDUHJXODUPRQWKO\PHHWLQJDVZHOODVDQH[WUDRUGLQDU\PHHWLQJZKHQHYHUQHFHVVDU\SURPRWHVHIILFLHQF\RIGHFLVLRQPDNLQJIRUWKHH[HFXWLRQRILPSRUWDQW
EXVLQHVVDFWLYLWLHVDQGUHLQIRUFHPHQWRIWKH
VXSHUYLVLRQIXQFWLRQDQGHOHFWVWZR2XWVLGH
'LUHFWRUVIRUVXSHUYLVLQJWKHVWDWXVRIHIILFLHQF\DQGODZIXOQHVVIURPDQLQGHSHQGHQWSHUVSHFWLYH

:($5(.21'27(&‫&ٹ‬RUSRUDWHJRYHUQDQFHV\VWHP.21'27(&

9,6,21.21'27(&bVFRUSRUDWHJRYHUQDQFHV\VWHPLVVKRZQLQWKHGLDJUDPEHORZ

*HQHUDOPHHWLQJRIVKDUHKROGHUV

'LUHFWRUV

5HSRUW$XGLW 6XSHUYLVRU\%RDUG$XGLW&RRSHUDWLRQ 2XWVLGH([HFXWLYH PHPEHUVb&RXQFLO$SSRLQWPHQW6XSHUYLVLRQ

5HSUHVHQWDWLYH'LUHFWRU&RPSOLDQFH 5LVN
0DQDJHPHQW&RPPLWWHH

$XGLW 6XSHUYLVRU\%RDUG0HPEHUV,QFOXGLQJ2XWVLGH$XGLW 
6XSHUYLVRU\%RDUG0HPEHUV,QFOXGLQJ2XWVLGH'LUHFWRUV,QFOXGLQJ2XWVLGH'LUHFWRUV&RRSHUDWLRQ&RRSHUDWLRQ'LVPLVVDO&RRSHUDWLRQ,QWHUQDO$XGLW'HSDUWPHQW'HWHUPLQDWLRQRISURSRVDOV$FFRXQWLQJ$XGLWRU$SSRLQWPHQW
'LVPLVVDO
(19,5210(17%RDUGRI'LUHFWRUV$FFRXQWLQJDXGLW,QWHUQDODXGLW

62&,$/%XVLQHVVGLYLVLRQ*29(51$1&(

 'LUHFWRUV$GYLFH

6833/(0(17&RPSHQVDWLRQ&RPPLWWHH$SSRLQWPHQW'LVPLVVDO),1$1&,$/'$7$$SSRLQWPHQW'LVPLVVDO.21'27(& 5(3257



(6*
)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ (6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&(‫ٹ‬.21'27(&bVPDQDJLQJRUJDQ%RDUGRI'LUHFWRUV.21'27(&KROGVDPHHWLQJRIWKH%RDUGRI
'LUHFWRUVDWOHDVWRQFHDPRQWKDQGFRPSOLHVZLWKWKHSROLF\RIDGGUHVVLQJDOOPDWWHUVSURYLGHGLQWKH
%RDUGRI'LUHFWRUVb5HJXODWLRQVDQGWKRVHFRUUHVSRQGLQJWRDJHQGDLWHPVWRWKH%RDUGRI
'LUHFWRUVLQPDNLQJGHFLVLRQVRQLPSRUWDQW
PDWWHUV,QDGGLWLRQWKH%RDUGRI'LUHFWRUVUHFHLYHVUHSRUWVRQWKHVWDWXVRIEXVLQHVVH[HFXWLRQRI.21'27(&
DQGLWVVXEVLGLDULHVIURPHDFKRIWKHUHVSHFWLYH
GLUHFWRUVRQDSHULRGLFEDVLVDQGFDUULHVRXWVXSHUYLVLRQHWFRQWKHUHDVRQDEOHQHVVDQG
HIILFLHQF\RIEXVLQHVVH[HFXWLRQ
.21'27(&FRQGXFWVWKH%RDUGRI'LUHFWRUV
DVVHVVPHQWTXHVWLRQQDLUHEDVHGRQVHOIDVVHVVPHQWVPDGHE\DOO'LUHFWRUVDQG$XGLW 
6XSHUYLVRU\%RDUG0HPEHUVRQFHD\HDU7KH
%RDUGRI'LUHFWRUVGHOLEHUDWHVRQDQGFRQVLGHUVWKHUHVXOWVRIWKHTXHVWLRQQDLUHDQGPDNHV
QHFHVVDU\LPSURYHPHQWVWRVHFXUHHIIHFWLYHQHVVDQGLQFUHDVHWKHTXDOLW\RIWKH%RDUGRI'LUHFWRUV
DVDZKROH
.21'27(&DGRSWVDQH[HFXWLYHRIILFHUV\VWHP
DQG([HFXWLYH2IILFHUVDQG'LUHFWRUVLQFKDUJHRI
EXVLQHVVRSHUDWLRQVSURPRWHVSHHG\EXVLQHVV
H[HFXWLRQ
2XWVLGH'LUHFWRUV.21'27(&DSSRLQWVWZR2XWVLGH'LUHFWRUV RQHODZ\HUDQGRQHODZVFKRROSURIHVVRU ZKRVXSHUYLVHPDQDJHPHQWDQGRIIHUDGYLFHIURPDQ
REMHFWLYHSRLQWRIYLHZLQFRQVLGHUDWLRQRIWKH
FRUSRUDWHEXVLQHVVFRPPXQLW\RQWKHZKROHLQFOXGLQJODZVDQGUHJXODWLRQVLQDQHIIRUWWRLQFUHDVHWUDQVSDUHQF\RIWKH%RDUGRI'LUHFWRUVDQGUHLQIRUFHWKHVXSHUYLVLRQIXQFWLRQ$XGLW 6XSHUYLVRU\%RDUG2XWVLGH$XGLW 
6XSHUYLVRU\%RDUG0HPEHUV.21'27(&DGRSWVWKH$XGLW 6XSHUYLVRU\%RDUG
V\VWHP7ZRRIWKHWKUHH$XGLW 6XSHUYLVRU\%RDUG0HPEHUVDUH2XWVLGH$XGLW 6XSHUYLVRU\%RDUG0HPEHUV RQHODZ\HUDQGRQH&3$ ZKR
H[FKDQJHRSLQLRQVRQDXGLWPHWKRGVDQGDXGLWVWDQGDUGVIURPWKHLUSURIHVVLRQDOSRLQWVRIYLHZDWWKHPHHWLQJRIWKH$XGLW 6XSHUYLVRU\%RDUGZKLFKLVKHOGDWOHDVWRQFHDPRQWKLQRUGHUWRLPSURYHWKHDSSURSULDWHQHVVDQGHIILFLHQF\RIWKH
DXGLW,QWKLVZD\ZHVWULYHWRHQKDQFHDQG
UHLQIRUFHRXUDXGLWV\VWHP)XUWKHUPRUHWKH0HPEHUVUHFHLYHDUHSRUWRQWKHUHVXOWVRIWKHDFFRXQWLQJDXGLWIURPWKH
$FFRXQWLQJ$XGLWRUDWHDFKILQDQFLDOFORVLQJ,I
QHHGHG$XGLW 6XSHUYLVRU\%RDUG0HPEHUVDFFRPSDQ\WKH$FFRXQWLQJ$XGLWRULQWKHDXGLWRI
DQRIILFHH[FKDQJHLQIRUPDWLRQDQGRSLQLRQV
0RUHRYHU$XGLW 6XSHUYLVRU\0HPEHUVUHFHLYHUHSRUWVRQILQDQFLDOUHVXOWVIRUHYHU\TXDUWHUIURPLQWHUQDOFRQWUROVHFWLRQVDVZHOODVUHSRUWVRQRWKHUPDWWHUVUHODWHGWRLQWHUQDOFRQWURODVQHFHVVDU\,QWHUQDO$XGLW'HSDUWPHQW
2XU,QWHUQDO$XGLW'HSDUWPHQWLVSODFHGDVDXQLWGLUHFWO\XQGHUWKH3UHVLGHQW7KHUHDUHWZRIXOOWLPHVWDIIPHPEHUV7KHVHLQWHUQDODXGLWRUVDXGLWWKHVWDWXVRIFRPSOLDQFHZLWKODZVUHJXODWLRQV.21'27(& 5(3257

DQGLQWHUQDOUXOHVDQGWKHDSSURSULDWHQHVVDQG
HIILFLHQF\RIEXVLQHVVSURFHVVHVHWFRIHDFKGLYLVLRQSURYLGHJXLGDQFHIRULPSURYHPHQWDQG
SHUIRUPIROORZXSV
,QDGGLWLRQWKH\FRQGXFWDXGLWVWRFRQWLQXRXVO\YHULI\ZKHWKHUWKHV\VWHPWRHQVXUHWKHUHOLDELOLW\RIILQDQFLDOUHSRUWLQJIXQFWLRQVDSSURSULDWHO\DQG
PDNHVFRUUHFWLRQVZKHUHQHFHVVDU\
2XU,QWHUQDO$XGLW'HSDUWPHQWZKLFKLVDQ
LQWHUQDODXGLWVHFWLRQKROGVUHSRUWLQJPHHWLQJVRQWKHUHVXOWVRILQWHUQDODXGLWVFRQGXFWHGZLWK$XGLW6XSHUYLVRU\0HPEHUVDQGLQWHUQDOFRQWUROVHFWLRQVLQDWWHQGDQFH
0RUHRYHUWKH$FFRXQWLQJ$XGLWRUUHYLHZUHSRUWVRQWKHUHVXOWVRILQWHUQDODXGLWVFRQGXFWHGE\WKH
,QWHUQDO$XGLW'HSDUWPHQW$FFRXQWLQJ$XGLWRU
DQGLQWHUQDODXGLWVHFWLRQVH[FKDQJHLQIRUPDWLRQ
DQGRSLQLRQVDVQHFHVVDU\VWULYLQJWRLPSURYHWKH
DSSURSULDWHQHVVDQGHIILFLHQF\RIDXGLWVWKURXJKFORVHFRRSHUDWLRQ$FFRXQWLQJ$XGLWRU.21'27(&KDVDSSRLQWHG'HORLWWH7RXFKH7RKPDWVX//&DVWKH$FFRXQWLQJ$XGLWRUDQG
HVWDEOLVKHVDQHQYLURQPHQWLQZKLFKWKH
$FFRXQWLQJ$XGLWRULVDEOHWRSHUIRUPDXGLWVIURPDIDLUDQGXQELDVHGSHUVSHFWLYHE\SURYLGLQJWKH
DXGLWRUDFFXUDWHPDQDJHPHQWLQIRUPDWLRQLQDWLPHO\PDQQHU&RPSOLDQFH 5LVN0DQDJHPHQW&RPPLWWHH
7KH&RPSOLDQFH 5LVN0DQDJHPHQW&RPPLWWHH
OHGE\WKH3UHVLGHQWDVWKHFRPPLWWHHFKDLUPDQLV
LQSODFH
7KH&RPSOLDQFH 5LVN0DQDJHPHQW&RPPLWWHH
SURPRWHVWKHGLVVHPLQDWLRQRIDZDUHQHVVWRFRPSO\ZLWKUHOHYDQWODZVUHJXODWLRQVFRUSRUDWH
HWKLFDOVWDQGDUGVDQGLQWHUQDOUHJXODWLRQVDPRQJ
DOOHPSOR\HHVDQGFUHDWHVDVWUXFWXUHWRSUHYHQW
VFDQGDOVDQGRWKHUSUREOHPVE\GHYHORSLQJSODQVDQGPHDVXUHVRQFRPSOLDQFHLQFOXGLQJHGXFDWLRQDQGJXLGDQFHIRUSUDFWLFLQJFRPSOLDQFH7KH
&RPPLWWHHDOVRFROOHFWVLQIRUPDWLRQRQYDULRXVULVNVVXUURXQGLQJ.21'27(&DQGLWVVXEVLGLDULHVDQGDQDO\]HVWKHLQIRUPDWLRQWRGHYHORSVSHFLILF
SUHYHQWLYHPHDVXUHV,WDOVRSXWVLQSODFHDVWUXFWXUHWRPLQLPL]HWKHLPSDFWRIULVNVVKRXOGDQ\VXFKULVNEHFRPHVDSSDUHQWLQDQHIIRUWWRUHLQIRUFHWKHFRUSRUDWHSODWIRUP
&RPSHQVDWLRQ&RPPLWWHH
7KH&RPSDQ\KDVHVWDEOLVKHGWKH&RPSHQVDWLRQ&RPPLWWHHDVDYROXQWDU\DGYLVRU\RUJDQL]DWLRQFRPSRVHGRI,QGHSHQGHQW2XWVLGH'LUHFWRUVWKH
3UHVLGHQW 5HSUHVHQWDWLYH'LUHFWRUDQG*HQHUDO
0DQDJHURI0DQDJHPHQW+HDGTXDUWHUVWRVWUHQJWKHQWKHWUDQVSDUHQF\DQGREMHFWLYHQHVVRI
WKHGHFLVLRQPDNLQJSURFHVVIRUUHPXQHUDWLRQRI
'LUHFWRUV2XWVLGH([HFXWLYHPHPEHUVb&RXQFLO
7KH2XWVLGH([HFXWLYHPHPEHUVb&RXQFLOFRPSULVLQJ2XWVLGH'LUHFWRUVDQG2XWVLGH$XGLW 
6XSHUYLVRU\0HPEHUVKDVEHHQHVWDEOLVKHG7KH
&RXQFLOPHHWVSHULRGLFDOO\WRSURPRWHWKH
H[FKDQJHRIRSLQLRQVDPRQJRXWVLGH([HFXWLYH
PHPEHUV‫[(ٹ‬HFXWLYHPHPEHUV$VRI-XQH
1XPEHURIVKDUHV
KHOG

7LWOH

1DPH

$UHDRIUHVSRQVLELOLW\DQGLPSRUWDQWFRQFXUUHQWSRVLWLRQV

3UHVLGHQWDQG
5HSUHVHQWDWLYH
'LUHFWRU.DWVXKLNR
.RQGR

5HSUHVHQWDWLYH'LUHFWRURI7RZD.RVDQ&RUS
5HSUHVHQWDWLYH'LUHFWRURI7RWR.RVDQ,1&

6HQLRU([HFXWLYH
'LUHFWRU

7RPR\D$QGR*HQHUDO0DQDJHU0DQDJHPHQW+HDGTXDUWHUVDQG0DQDJHU*HQHUDO$IIDLUV'LYLVLRQ'LUHFWRU6DQZD'HQ]DL&R/WG
'LUHFWRU&+82+*,.(1&R/WG
'LUHFWRU7(&%8,/'&2/7'

'LUHFWRU+LUR\XNL<DGD*HQHUDO0DQDJHU6DOHV+HDGTXDUWHUV
0DQDJHU:HVWHUQ-DSDQ6DOHV'LYLVLRQ DQG0DQDJHU%XVLQHVV6WUDWHJ\'HSDUWPHQW'LUHFWRU<RLFKL+\DNXGD*HQHUDO0DQDJHU0DQXIDFWXULQJ+HDGTXDUWHUVDQG0DQDJHU.\XV\X)DFWRU\ٕ'LUHFWRU

0DVDKLNR
<DQR

0DQDJHU'HYHORSPHQW6DOHV'LYLVLRQ
0DQDJHU+RPHFHQWHU*URXSDQG0DQDJHU(FRPPHUFH*URXS'LUHFWRU<DVXKLUR
7RNL

0DQDJHU'HOLYHU\'LYLVLRQ'LUHFWRU

7RPR\XNL(MLUL

0DQDJHU,QWHUQDWLRQDO6DOHV'LYLVLRQ'LUHFWRU.D]X\XNL$VDNDZD

0DQDJHU(DVWHUQ-DSDQ6DOHV'LYLVLRQ DQG0DQDJHU7RN\R%UDQFK

2XWVLGH'LUHFWRU

0LFKLNR.DQDL$WWRUQH\DWODZ‫ق‬2K(EDVKL/3& 3DUWQHUVSDUWQHU‫ك‬
2XWVLGH$XGLW 6XSHUYLVRU\%RDUG0HPEHU
6DQN\R6HLNR&R/WG
2XWVLGH'LUHFWRU,'(&&25325$7,21

‫س‬



2XWVLGH'LUHFWRU

0DVDVKL<DPDWR

3URIHVVRUDW*UDGXDWH6FKRRORI/DZ.DQVDL8QLYHUVLW\

‫س‬



)XOOWLPH$XGLW6XSHUYLVRU\%RDUG0HPEHU

1RULR
1LVKLGD$XGLW 6XSHUYLVRU\%RDUG0HPEHU6DQZD
'HQ]DL&R/WG
$XGLW 6XSHUYLVRU\%RDUG0HPEHU&+82+
*,.(1&R/WG
$XGLW 6XSHUYLVRU\%RDUG0HPEHU
7(&%8,/'&2/7'

2XWVLGH$XGLW6XSHUYLVRU\%RDUG0HPEHU<RVKLQREX0XUDWVXML‫س‬&HUWLILHG3XEOLF$FFRXQWDQW7D[$FFRXQWDQW‫<ق‬DVXGD$FFRXQWLQJ)LUP5HSUHVHQWDWLYH‫ك‬
2XWVLGH$XGLW 6XSHUYLVRU\%RDUG0HPEHU
6+,132&R/7'
2XWVLGH$XGLW 6XSHUYLVRU\%RDUG0HPEHU
68*,+2/',1*6&R/WG
2XWVLGH'LUHFWRU*(2+2/',1*6
&25325$7,21
2XWVLGH'LUHFWRU&+82635,1*&2/7'

‫س‬



62&,$/(19,5210(17),1$1&,$/'$7$.21'27(&

9,6,21$WWRUQH\DWODZ‫ق‬:HOOEULJKW/DZ2IILFH SDUWQHU‫ك‬*29(51$1&(.DQD<DVXGD

6833/(0(172XWVLGH$XGLW6XSHUYLVRU\%RDUG0HPEHU

7KRXVDQGVKDUHV:($5(.21'27(&,QGHSHQ
GHQWPHPEHU.21'27(& 5(3257



(6*
)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ (6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&(‫'ٹ‬LUHFWRUVDQG$XGLW 6XSHUYLVRU\%RDUG0HPEHUV
7HUPVRI([HFXWLYHPHPEHUV.21'27(&DSSRLQWVFDQGLGDWHVIRU'LUHFWRUVE\
FRQVLGHULQJLQGLYLGXDOVZKRIXOILOOUHVSHFWLYHVWDWXWRU\UHTXLUHPHQWVZKRDUHH[FHOOHQWERWKLQWHUPVRISHUVRQDOLW\DQGLQVLJKWZKRFDQ
FDUU\RXWWKHLUSURIHVVLRQDOUHVSRQVLELOLWLHVDQG
ZKRDUHFDSDEOHRIPDNLQJDFFXUDWHDQGWLPHO\
GHFLVLRQVDQGRIFRRSHUDWLQJDQGZRUNLQJZLWKDQGFRYHULQJHDFKIXQFWLRQDQGGLYLVLRQRIWKH
&RPSDQ\6XFKLQGLYLGXDOVDUHUHFRPPHQGHGE\
WKH3UHVLGHQWRUWKH%RDUGRI'LUHFWRUVDQG
DSSURYHGIRUWKHSRVLWLRQDWWKHJHQHUDOPHHWLQJRIVKDUHKROGHUV
.21'27(&DSSRLQWVFDQGLGDWHVIRU$XGLW 
6XSHUYLVRU\%RDUG0HPEHUVE\FRQVLGHULQJLQGLYLGXDOVZKRKDYHH[SHUWLVHLQOHJDOILQDQFLDODQGDFFRXQWLQJPDWWHUVZKRKROGNQRZOHGJHRQ
WKHEXVLQHVVDFWLYLWLHVRIWKH&RPSDQ\DQGZKRPDLQWDLQGLYHUVHSHUVSHFWLYHVFRQFHUQLQJFRUSRUDWHPDQDJHPHQWLQDFRPSUHKHQVLYH
PDQQHU6XFKLQGLYLGXDOVDUHUHFRPPHQGHGE\
WKH3UHVLGHQWRUWKH%RDUGRI'LUHFWRUVDQGDUH
DSSURYHGIRUWKHSRVLWLRQDWWKHJHQHUDOPHHWLQJRIVKDUHKROGHUV)XUWKHUEDVHGRQWKHUHFRJQLWLRQWKDWGLYHUVHYDOXHVDQGSRLQWVRIYLHZDUHHVVHQWLDOLQ
EXVLQHVVPDQDJHPHQWJRLQJIRUZDUG
.21'27(&DSSRLQWVDIHPDOHGLUHFWRUDQGDXGLWVXSHUYLVRU\ERDUGPHPEHUV

6WDQGDUGVIRU,QGHSHQGHQFHRI2XWVLGH
'LUHFWRUV2XWVLGH$XGLW 6XSHUYLVRU\%RDUG
0HPEHUV.21'27(&DSSRLQWV2XWVLGH'LUHFWRUVDQG
2XWVLGH$XGLW 6XSHUYLVRU\%RDUG0HPEHUVE\
FRQVLGHULQJLQGLYLGXDOVZKRIXOILOOWKH
UHTXLUHPHQWVXQGHUWKH&RPSDQLHV$FWDQGWKH
LQGHSHQGHQFHVWDQGDUGVVHWIRUWKE\WKH7RN\R
6WRFN([FKDQJH7KH&RPSDQ\HOHFWVLQGLYLGXDOVZKRDUHFDSDEOHRIFDUU\LQJRXWVXSHUYLVLRQDQG
JLYLQJDGYLFHEDVHGRQDEXQGDQWH[SHULHQFHDQG
LQVLJKWVDV2XWVLGH'LUHFWRUVDQGHOHFWVLQGLYLGXDOVZKRFDQFRQGXFWIDLUDXGLWVRIWKH
PDQDJHPHQWVWDWXVDV2XWVLGH$XGLW 
6XSHUYLVRU\%RDUG0HPEHUV
.21'27(&UHJLVWHUVDOOIRXU2XWVLGH'LUHFWRUV
DQG2XWVLGH$XGLW 6XSHUYLVRU\%RDUG0HPEHUV
DVLQGHSHQGHQW([HFXWLYHPHPEHUVEDVHGRQWKH
UXOHVRIWKH7RN\R6WRFN([FKDQJHZLWKWKHVDLG
H[FKDQJH

6WDWXVRIDWWHQGDQFHE\2XWVLGH'LUHFWRUV2XWVLGH$XGLW 6XSHUYLVRU\%RDUG0HPEHUVWK WHUP $SULO   WR 0DUFK  
1DPH

%RDUGRI'LUHFWRUVERDUGPHHWLQJV$XGLW 6XSHUYLVRU\%RDUG
ERDUGPHHWLQJV0LFKLNR.DQDL$WWHQGHGPHHWLQJV


‫ص‬

0DVDVKL<DPDWR$WWHQGHGPHHWLQJV


‫ص‬

<RVKLQREX0XUDWVXML$WWHQGHGPHHWLQJV$WWHQGHGPHHWLQJV0DVDKDUX1DNDJDZD$WWHQGHGPHHWLQJV$WWHQGHGPHHWLQJV

3RVLWLRQ2XWVLGH'LUHFWRUV2XWVLGH$XGLW 
6XSHUYLVRU\%RDUG
0HPEHUV.21'27(& 5(3257

3ROLF\FRQFHUQLQJFURVVKHOGVKDUHV:($5(.21'27(&
6833/(0(17*29(51$1&(‫؝ڭ‬3ROLF\RQFURVVVKDUHKROGLQJ.21'27(&PDLQWDLQVFURVVKHOGVKDUHVIRU
WKHSXUSRVHRIFRQWULEXWLQJWRWKH
LPSURYHPHQWRIFRUSRUDWHYDOXHLQWKH
PHGLXPWRORQJWHUPE\PDLQWDLQLQJDQG
UHLQIRUFLQJUHODWLRQVKLSVZLWKLPSRUWDQW‫؝ڭ‬3HULRG$SULOWR0D\
EXVLQHVVSDUWQHUV‫؝ڮ‬0HWKRG$QRQ\PRXVVHOIDVVHVVPHQWE\DOO‫؝ڮ‬9HULILFDWLRQRQFURVVKHOGVKDUHV'LUHFWRUVDQG$XGLW 6XSHUYLVRU\%RDUG(DFK\HDU.21'27(&bV%RDUGRI'LUHFWRUV
0HPEHUV LQFOXGLQJRXWVLGH([HFXWLYH
YHULILHVWKHUHDVRQDEOHQHVVDQGQHFHVVLW\RI
PHPEHUVFURVVKHOGVKDUHVLQFRQVLGHUDWLRQRIWKH‫؝گ‬$VVHVVPHQWLWHPV6WUXFWXUHDQGRSHUDWLRQRIUHWXUQDQGULVNDVVRFLDWHGZLWKVKDUHKROGLQJ
WKH%RDUGRI'LUHFWRUVGHOLEHUDWLRQ
IURPWKHPHGLXPWRORQJWHUPSHUVSHFWLYHJRYHUQDQFHV\VWHPJHQHUDODVVHVVPHQWRIWKH$VRI0DUFKZHKHOGLVVXHVRI%RDUGRI'LUHFWRUVFURVVKHOGVKDUHVZRUWKPLOOLRQ\HQLQ ‫؝‬6XPPDU\RIUHVXOWVERRNYDOXHDQGPLOOLRQ\HQLQPDUNHW:KLOHDOOH[HFXWLYHPHPEHUVHYDOXDWHGWKDWWKH
YDOXHHTXLYDOHQWWRDQG
HIIHFWLYHQHVVRIWKH%RDUGRI'LUHFWRUVZDVUHVSHFWLYHO\RIWRWDODVVHWVRIPLOOLRQVHFXUHGDVDZKROHWKHUHZHUHVRPHRSLQLRQV\HQ
WKDWWKH%RDUGRI'LUHFWRUVVKRXOGDSSURSULDWHO\‫[(؝گ‬HUFLVHRIYRWLQJULJKWVRQFURVVKHOGVKDUHVGLVFXVVDQGDXGLWWKHSODQIRUVXFFHVVLRQRI
.21'27(&UHVSHFWVWKHPDQDJHPHQWSROLF\UHSUHVHQWDWLYHGLUHFWRUDQGWKDWUHPXQHUDWLRQVVWUDWHJLHVHWFRILQYHVWHHFRPSDQLHVPDNHVIRUPDQDJHPHQWVKRXOGEHIXUWKHUGLVFXVVHGFRPSUHKHQVLYHMXGJPHQWRQZKHWKHUWKH
:HZRXOGOLNHWRFRQWLQXHWRPDNHVKDUHKROGLQJFRQWULEXWHVWRVXVWDLQDEOH
LPSURYHPHQWVEDVHGRQWKHVHRSLQLRQVJURZWKDQGPHGLXPWRORQJFRUSRUDWHYDOXHDQGH[HUFLVHVYRWLQJULJKWV

9,6,21.21'27(&RIIHUVRSSRUWXQLWLHVIRU'LUHFWRUVDQG
$XGLW 6XSHUYLVRU\%RDUG0HPEHUVWRSDUWLFLSDWHLQYDULRXVWUDLQLQJSURJUDPVLQFOXGLQJWUDLQLQJVHVVLRQVDQGOHFWXUHVE\
LQWHUQDODQGH[WHUQDOLQVWUXFWRUVH[WHUQDOVHPLQDUVDQGZHEEDVHGVHPLQDUVLQDQHIIRUWWRKDYH([HFXWLYHPHPEHUVJDLQQHFHVVDU\NQRZOHGJHDQGXQGHUVWDQGSURPRWHGXWLHVDQG
UHVSRQVLELOLWLHV

.21'27(&.21'27(&PDNHVGHFLVLRQVRQLPSRUWDQW
PDWWHUVDWWKHUHJXODUPHHWLQJRIWKH%RDUGRI
'LUHFWRUVKHOGHYHU\PRQWKEDVHGRQGLVFXVVLRQVE\DWWHQGHHVLQFOXGLQJ2XWVLGH'LUHFWRUVDQG
2XWVLGH$XGLW 6XSHUYLVRU\%RDUG0HPEHUVZKRVWDWHWKHLURSLQLRQV,QWKLVZD\ZHPDNHDQHIIRUWWRKHLJKWHQWKHHIIHFWLYHQHVVRIWKH%RDUG
RI'LUHFWRUV
2QFHD\HDUZHFRQGXFWDQDQDO\VLVDQG
DVVHVVPHQWRIWKHHIIHFWLYHQHVVRIWKH%RDUGRI
'LUHFWRUVDVDZKROH
,Q$SULOZHPDGHDQDVVHVVPHQWRIWKH
HIIHFWLYHQHVVRIWKH%RDUGRI'LUHFWRUV:H
GLVFXVVHGDQGPDGHFRQVLGHUDWLRQVRQWKHUHVXOWVRIWKHDVVHVVPHQWDWWKHPHHWLQJRIWKH%RDUGRI
'LUHFWRUVLQ0D\

),1$1&,$/'$7$

7UDLQLQJSROLF\IRU'LUHFWRUVDQG$XGLW 
6XSHUYLVRU\%RDUG0HPEHUV(19,5210(17$QDO\VLVDQGDVVHVVPHQWRIHIIHFWLYHQHVVRI
WKH%RDUGRI'LUHFWRUVDVDZKROH

62&,$/‫'ٹ‬HVFULSWLRQVEDVHGRQWKH&RUSRUDWH*RYHUQDQFH&RGH.21'27(& 5(3257



(6*
)URPWKH(VWDEOLVKPHQWRI&RUSRUDWH,GHQWLW\ &, WR(6*%DVLF3ROLF\ (6* %DVLF3ROLF\2XWOLQH (19,5210(17

62&,$/ *29(51$1&(%DVLF SROLF\ FRQFHUQLQJ FRQVWUXFWLYH GLDORJXHV ZLWK VKDUHKROGHUV.21'27(&SURPRWHVFRQVWUXFWLYHGLDORJXHVZLWKVKDUHKROGHUVWKURXJKKROGLQJEULHILQJVIRU
LQGLYLGXDOLQYHVWRUVDQGILQDQFLDOUHVXOWVEULHILQJVLQDGGLWLRQWRWKHJHQHUDOPHHWLQJRIVKDUHKROGHUVDQGSDUWLFLSDWLQJLQ,5IDLUV:HDOVRDSSRLQWWKH'LUHFWRUZKRPDQDJHVWKH
*HQHUDO$IIDLUV'LYLVLRQUHVSRQVLEOHIRU,5DVWKH
'LUHFWRULQFKDUJHRI,5DQGVKDUHLQIRUPDWLRQZLWKRWKHUGHSDUWPHQWVWRVWUHQJWKHQFRRSHUDWLRQ,QRUGHUWRUHIOHFWWKHRSLQLRQVRIVKDUHKROGHUVRQPDQDJHPHQWZKHQLPSRUWDQWIHHGEDFNJLYHQIURPDQREMHFWLYHYLHZSRLQWDULVHVZH
PDNHDQHIIRUWWRUHSRUWWKHPDWWHUWRWKH%RDUG
RI'LUHFWRUVDVQHHGHG
,QDGGLWLRQ.21'27(&KDVSXWLQSODFHLWV,5
3ROLF\ZKLFKGHILQHVWKHTXLHWSHULRGDQGRWKHUPDWWHUVDQG,QWHUQDO,QIRUPDWLRQ0DQDJHPHQW5HJXODWLRQVZKLFKVHWIRUWKUXOHVRQFRPPXQLFDWLQJLPSRUWDQWIDFWVDQGLQWHUQDO
LQIRUPDWLRQDQGSHUIRUPVDFFRUGLQJO\LQ
PDQDJLQJLQIRUPDWLRQ‫ٹ‬:KLVWOHEORZLQJV\VWHP.21'27(&KDVIRUPXODWHGLQWHUQDOUHJXODWLRQVRQZKLVWOHEORZLQJDQGSXWLQSODFHWZRSRLQWVRI
FRQWDFWIRUZKLVWOHEORZLQJLQVLGHDQGRXWVLGH
WKHFRPSDQ\7KH&RPSDQ\bVZKLVWOHEORZLQJV\VWHPLVVXFKWKDWZKHQZKLVWOHEORZLQJRFFXUVWKH0DQDJHURI*HQHUDO$IIDLUV'LYLVLRQZKLFKLV
WKHLQWHUQDOSRLQWRIFRQWDFWIRUZKLVWOHEORZLQJUHSRUWVWKHPDWWHUWRWKH3UHVLGHQW*HQHUDO
0DQDJHURI0DQDJHPHQW+HDGTXDUWHUV2XWVLGH
'LUHFWRUVDQG2XWVLGH$XGLW 6XSHUYLVRU\%RDUG
0HPEHUVUHTXHVWVWKDWWKHUHVSRQVLEOH
GHSDUWPHQWLQYHVWLJDWHVWKHPDWWHUDQG
SURSRVHVDQGQRWLILHVWKHPHDVXUHIRUUHVSRQVH
7KHVWDWXVRIRSHUDWLRQIRUZKLVWOHEORZLQJLVUHSRUWHGDWWKH&RPSOLDQFH 5LVN0DQDJHPHQW&RPPLWWHHDQGWKH%RDUGRI'LUHFWRUVRQFHD\HDUDQGWKH%RDUGRI'LUHFWRUVVXSHUYLVHVWKH
VWDWXVRIRSHUDWLRQ:HDOVRPDLQWDLQLQWHUQDOUHJXODWLRQVDQGDV\VWHPWRHQVXUHWKDWZKLVWOHEORZHUVDUHQRWWUHDWHGXQIDLUO\
7KHQXPEHUUHSRUWHGZDVWZRFDVHVLQ)<
5HJDUGLQJWKHILOHGFDVHVZHGHDOWZLWKWKHPDSSURSULDWHO\E\FRQGXFWLQJLQWHUQDOLQYHVWLJDWLRQVZKLOHSD\LQJGXHFRQVLGHUDWLRQWRSULYDF\:KLVWOHEORZLQJV\VWHPIORZ
2FFXUUHQFHRILQWHUQDOZKLVWOHEORZLQJPDWWHU
5HSRUW&RQVXOW0DQDJHURI*HQHUDO$IIDLUV'LYLVLRQ

5HSRUW

2XWVLGHVSHFLDOLVW

5HSRUW
5HTXHVW

5HSRUWWRWKH3UHVLGHQW*HQHUDO0DQDJHURI0DQDJHPHQW+HDGTXDUWHUV2XWVLGH'LUHFWRUVDQG$XGLW 6XSHUYLVRU\%RDUG0HPEHUV+ROGFRPPLWWHHPHHWLQJDVQHHGHG
5HTXHVW,QWHUYLHZLQYHVWLJDWLRQRIUHVSRQVLEOHGHSDUWPHQW&RQVLGHUUHVSRQVHPHDVXUHVDQGQRWLI\WKHUHOHYDQWGHSDUWPHQW)URP0DQDJHURI*HQHUDO$IIDLUV'LYLVLRQ

5HSRUWRQFHD\HDURUDVQHFHVVDU\GHSHQGLQJ
RQWKHGHJUHHRIXUJHQF\DQGLPSRUWDQFH

5HSRUW WR&RPSOLDQFH 5LVN0DQDJHPHQW&RPPLWWHH
DQGWKH%RDUGRI'LUHFWRUV)HHGEDFNWRWKHSHUVRQFRQFHUQHG

.21'27(& 5(3257

5HPXQHUDWLRQIRU([HFXWLYHPHPEHUV SHUVRQV$XGLW 6XSHUYLVRU\%RDUG0HPEHUV SHUVRQV

7RWDO

 SHUVRQV‫ق‬1RWHV‫؝ڭ ك‬7KHSD\PHQWWR'LUHFWRUVDQG$XGLW 6XSHUYLVRU\%RDUG0HPEHUVLQFOXGHVWKRXVDQG\HQSDLGWR2XWVLGH([HFXWLYHPHPEHUV WZR2XWVLGH'LUHFWRUVDQGWZR2XWVLGH$XGLW 6XSHUYLVRU\%RDUG0HPEHUV ‫؝ڮ‬7KHQXPEHURI$XGLW 6XSHUYLVRU\%RDUG0HPEHUVWRZKRPSD\PHQWLVPDGHLQFOXGHV$XGLW6XSHUYLVRU\%RDUG0HPEHUZKRUHWLUHGIURPRIILFHDVRIWKHFRQFOXVLRQRIWKHWKRUGLQDU\JHQHUDOPHHWLQJRIVKDUHKROGHUVKHOGRQ-XQH
‫؝گ‬7KHSD\PHQWWR'LUHFWRUVLQFOXGHVWKRXVDQG\HQIRUWKHH[SHQVHVRIWKHSHUIRUPDQFHEDVHGVWRFNFRPSHQVDWLRQSODQ%RDUG%HQHILW7UXVW %%7 LQWKHFXUUHQWILVFDO\HDU‫ٹ‬3ROLF\IRUGHWHUPLQLQJWKHDPRXQWRIUHPXQHUDWLRQHWFIRU([HFXWLYHPHPEHUV*29(51$1&(

62&,$/RUGLQDU\JHQHUDOPHHWLQJRIVKDUHKROGHUVKHOGRQ-XQHIRUWKHSXUSRVHRILQFUHDVLQJ
LQFHQWLYHVIRU'LUHFWRUV H[FOXGLQJ2XWVLGH
'LUHFWRUV DQG([HFXWLYH2IILFHUVRIWKH&RPSDQ\
WRFRQWULEXWHWRWKHLPSURYHPHQWRIPHGLXPWR
ORQJWHUPHDUQLQJVDQGFRUSRUDWHYDOXH
0RUHRYHUUHPXQHUDWLRQIRU$XGLW 6XSHUYLVRU\%RDUG0HPEHUVLVWREHGHFLGHGE\WKH$XGLW 
6XSHUYLVRU\%RDUGZLWKLQWKHOLPLWRQWKHDPRXQWRIUHPXQHUDWLRQIRU$XGLW 6XSHUYLVRU\%RDUG
0HPEHUVDSSURYHGE\WKH*HQHUDO0HHWLQJRI
6KDUHKROGHUV

6833/(0(175HPXQHUDWLRQIRU'LUHFWRULVWREHGHFLGHGE\WKH
%RDUGRI'LUHFWRUVEDVHGRQUHSRUWIURPWKH
&RPSHQVDWLRQ&RPPLWWHHZLWKLQWKHOLPLWRQWKH
DPRXQWRIUHPXQHUDWLRQIRU'LUHFWRUVDSSURYHG
E\WKH*HQHUDO0HHWLQJRI6KDUHKROGHUV7KH
&RPSHQVDWLRQ&RPPLWWHHLVDYROXQWDU\DGYLVRU\RUJDQL]DWLRQWKDWZDVHVWDEOLVKHGLQ-XQH
DQGPDLQO\FRPSRVHGRILQGHSHQGHQWRXWVLGH
GLUHFWRUV)XUWKHUPRUHDSHUIRUPDQFHEDVHGVWRFNFRPSHQVDWLRQSODQn%RDUG%HQHILW7UXVW %%7 |ZDVLQWURGXFHGEDVHGRQDUHVROXWLRQDWWKHWK

9,6,21'LUHFWRUV.21'27(&$PRXQWRISD\PHQW
7KRXVDQG\HQ),1$1&,$/'$7$

1XPEHURISHUVRQVSDLG(19,5210(173RVLWLRQ:($5(.21'27(&‫ٹ‬5HPXQHUDWLRQIRU'LUHFWRUVDQG$XGLW 6XSHUYLVRU\%RDUG0HPEHUV $SULOWR0DUFK

.21'27(& 5(3257



6833/(0(17SUPPLEMENT

6WRFN,QIRUPDWLRQ .21'27(& 5(3257

2UJDQL]DWLRQ&KDUW .21'27(&1HWZRUN &RQVROLGDWHG)LQDQFLDO6WDWHPHQWV

6XSSRUWLQJ0DWHULDOVৱમ6WRFN,QIRUPDWLRQ$VRI0DUFK

7RWDOQXPEHURIVKDUHVDXWKRUL]HG VKDUHV

7RWDOQXPEHURIVKDUHVLVVXHG

 VKDUHV

6KDUHVSHUXQLW:($5(.21'27(&‫&ٹ‬RPSDQ\bVVWRFN VKDUHV





%%+)25),'(/,7</2:ٕ35,&('672&.)81'
35,1&,3$/$//6(&72568%3257)2/,2





.21'27(&HPSOR\HHVVKDUHKROGHUVDVVRFLDWLRQ





2VDND6PDOODQG0HGLXP%XVLQHVV,QYHVWPHQW &RQVXOWDWLRQ
&R/WG





)SODQQLQJ,1&





-DSDQ7UXVWHH6HUYLFHV%DQN/WG WUXVWDFFRXQW





7KH0DVWHU7UXVW%DQNRI-DSDQ/WG WUXVWDFFRXQW





08)*%DQN/WG





-XPPL .RQGR





7RWR.RVDQ,1&





WKRXVDQGVKDUHVRIWUHDVXU\VWRFN H[FOXGLQJWKRXVDQGVKDUHVLQWKH(623WUXVWDFFRXQWDQGWKRXVDQGVKDUHVLQWKH%%7WUXVWDFFRXQW DUHQRWLQFOXGHGLQWKHDERYHn0DMRUVKDUHKROGHUV|3HUFHQWDJHLVFDOFXODWHGZLWKWUHDVXU\VKDUHVH[FOXGHG

.21'27(&

7RZD.RVDQ&RUS

),1$1&,$/'$7$

3HUFHQWDJH(19,5210(171XPEHURIVKDUHVKHOG
7KRXVDQGVKDUHV

1DPHRIVKDUHKROGHU

9,6,21‫ٹ‬0DMRUVKDUHKROGHUV‫ٹ‬6WRFNGLVWULEXWLRQE\VKDUHKROGHUFDWHJRU\

7UHDVXU\VWRFN)LQDQFLDOLQVWLWXWLRQV

 WKRXVDQGVKDUHV
1XPEHURIVKDUHKROGHU

6HFXULWLHVWKRXVDQGVKDUHV
1XPEHURIVKDUHKROGHUV*29(51$1&()RUHLJQFRPSDQLHVHWF

1XPEHURIVKDUHKROGHUVWKRXVDQGVKDUHVFRPSDQLHV
1XPEHURIVKDUHKROGHUV2WKHU FRPSDQLHV

WKRXVDQGVKDUHV
1XPEHURIVKDUHKROGHUV6833/(0(17,QGLYLGXDOVRWKHUWKRXVDQGVKDUHV
1XPEHURIVKDUHKROGHUV

62&,$/

WKRXVDQGVKDUHV
1XPEHURIVKDUHKROGHUV

.21'27(& 5(3257



6833/(0(176WRFN,QIRUPDWLRQ 

2UJDQL]DWLRQ&KDUW .21'27(&1HWZRUN &RQVROLGDWHG)LQDQFLDO6WDWHPHQWV

2UJDQL]DWLRQ&KDUW$VRI$SULO%XVLQHVV6WUDWHJ\'HSDUWPHQW,QWHUQDO$XGLW'HSDUWPHQW,QWHUQDO$XGLW6HFWLRQ
6DOHV3URPRWLRQ6HFWLRQ$QFKRU&RQVWUXFWLRQ6HFWLRQ
6DSSRUR%UDQFK
6HQGDL%UDQFK$RPRUL2IILFH$NLWD2IILFH
0RULRND2IILFH.RUL\DPD2IILFH(DVWHUQ-DSDQ6DOHV'LYLVLRQ

7RN\R%UDQFK<XNL2IILFH&KLED2IILFH<RNRKDPD%UDQFK
1LLJDWD%UDQFK
6DLWDPD2IILFH+DFKLRML2IILFH
6KL]XRND2IILFH
1DJR\D%UDQFK
0DWVXPRWR2IILFH.DQD]DZD2IILFH
2VDND%UDQFK.\RWR2IILFH:HVWHUQ-DSDQ6DOHV'LYLVLRQ.REH2IILFH
7DNDPDWVX2IILFH+LURVKLPD%UDQFK)XNXRND%UDQFK
1DJDVDNL2IILFH.XPDPRWR2IILFH*HQHUDO‫ۂ‬HHWLQJRI,QWHUQDWLRQDO6DOHV'LYLVLRQ‫ۈ‬KDUHKROGHUV.DJRVKLPD2IILFH$XGLW 6XSHUYLVRU\+RPHFHQWHU*URXS%RDUG$XGLW 6XSHUYLVRU\'HYHORSPHQW6DOHV'LYLVLRQ%RDUG0HPEHUV

5DLOURDG (QYLURQPHQW*URXS%RDUGRI'LUHFWRUV(FRPPHUFH*URXS
7RKRNX2IILFH

3UHVLGHQW 5HSUHVHQWDWLYH'LUHFWRU)XNXVKLPD2IILFH

6DOHV+HDGTXDUWHUV.LWDNDQWR%UDQFK.DQWR2IILFH+LJDVKLNDQWR2IILFH.DQDJDZD2IILFH
1DJDQR2IILFH
6WUXFWXUDO6WHHO6DOHV'LYLVLRQ

7RNDL2IILFH+DPDPDWVX2IILFH&KXN\R%UDQFK.HLML2IILFH.DQVDL%UDQFK+\RJR2IILFH
2ND\DPD2IILFH
6DQ\R2IILFH.LWDN\XVKX2IILFH.\XVKX2IILFH*HQHUDO$IIDLUV6HFWLRQ'HOLYHU\6HFWLRQ'HOLYHU\'LYLVLRQ/RJLVWLFV6HFWLRQ.DQWR/RJLVWLFV&HQWHU'HOLYHU\6HFWLRQ

6DSSRUR)DFWRU\

0DQXIDFWXULQJ6HFWLRQ'HOLYHU\6HFWLRQ.DQWR)DFWRU\

4XDOLW\&RQWURO6HFWLRQ
0DQXIDFWXULQJ6HFWLRQ

0DQXIDFWXULQJ'HOLYHU\6HFWLRQ+HDGTXDUWHUV

6KLJD)DFWRU\

0DQXIDFWXULQJ6HFWLRQ
0HFKDWUR/DERUDWRU\
5HVHDUFK 'HYHORSPHQW'HSDUWPHQW

5HVHDUFK 'HYHORSPHQW6HFWLRQ

4XDOLW\&RQWURO6HFWLRQ.\XVKX)DFWRU\

0DQXIDFWXULQJ7HFKQRORJ\6HFWLRQ
7XUQEXFNOH0DQXIDFWXULQJ6HFWLRQ
0DQXIDFWXULQJ'HSDUWPHQW%UDFH0DQXIDFWXULQJ6HFWLRQ&KDLQ0DQXIDFWXULQJ6HFWLRQ
3DUWV0DQXIDFWXULQJ6HFWLRQ

4XDOLW\$VVXUDQFH'HSDUWPHQW'HOLYHU\'HSDUWPHQW'HOLYHU\6HFWLRQ*HQHUDO$IIDLUV6HFWLRQ*HQHUDO$IIDLUV6HFWLRQ

0DQDJHPHQW+HDGTXDUWHUV*HQHUDO$IIDLUV'LYLVLRQ+XPDQ5HVRXUFHV6HFWLRQ&RPSXWHU6\VWHP6HFWLRQ
3ODQQLQJ6HFWLRQ$FFRXQWLQJ'LYLVLRQ.21'27(& 5(3257$FFRXQWLQJ6HFWLRQ
6FUHHQLQJ6HFWLRQ

$VRI-XO\

(19,5210(17),1$1&,$/'$7$.21'27(&

9,6,21:($5(.21'27(&.21'27(&1HWZRUN.21'27(&,17(51$7,21$/‫ق‬7+$,/$1'‫&ك‬R/WG +HDGRIILFH%DQJNRN7KDLODQG&+82+*,.(1&R/WG‫ق‬+HDGRIILFH,QXNDPLJXQ6KLJD‫ك‬RIILFHV*29(51$1&(7(&%8,/'&2/7'‫ق‬+HDGRIILFH6KLQDJDZDNX7RN\R‫ ك‬RIILFHV

62&,$/

6DQZD'HQ]DL &R/WG‫ق‬+HDGRIILFH 1LVKLNX1DJR\DVKL‫ ك‬RIILFHV

6833/(0(17*URXS&RPSDQLHV.21'27(& 5(3257



6833/(0(176WRFN,QIRUPDWLRQ 

2UJDQL]DWLRQ&KDUW .21'27(&1HWZRUN &RQVROLGDWHG)LQDQFLDO6WDWHPHQWV&RQVROLGDWHG)LQDQFLDO6WDWHPHQWV‫&ٹ‬RQVROLGDWHG%DODQFH6KHHW

7KRXVDQG\HQ

7KRXVDQG86GROODUV





$VVHWV&XUUHQWDVVHWV&DVKDQGGHSRVLWV





1RWHVDQGDFFRXQWVUHFHLYDEOH  WUDGH

















:RUNLQSURFHVV



5DZPDWHULDOVDQGVXSSOLHV





2WKHU





$OORZDQFHIRUGRXEWIXODFFRXQWV





























(OHFWURQLFDOO\UHFRUGHGPRQHWDU\FODLPVRSHUDWLQJ
0HUFKDQGLVHDQGILQLVKHGJRRGV

7RWDOFXUUHQWDVVHWV
1RQFXUUHQWDVVHWV
3URSHUW\SODQWDQGHTXLSPHQW%XLOGLQJVDQGVWUXFWXUHV QHW
0DFKLQHU\HTXLSPHQWDQGYHKLFOHV QHW /DQG
2WKHU QHW
7RWDOSURSHUW\SODQWDQGHTXLSPHQW,QWDQJLEOHDVVHWVٕ

2WKHU





7RWDOLQWDQJLEOHDVVHWV



,QYHVWPHQWVHFXULWLHV



'HIHUUHGWD[DVVHWV





2WKHU







$OORZDQFHIRUGRXEWIXODFFRXQWV

7RWDOLQYHVWPHQWVDQGRWKHUDVVHWV















*RRGZLOO,QYHVWPHQWVDQGRWKHUDVVHWV

7RWDOQRQFXUUHQWDVVHWV
7RWDODVVHWV

$OOILQDQFLDOLQIRUPDWLRQSUHVHQWHGLQ-DSDQHVH\HQKDVEHHQURXQGHGGRZQWRWKHQHDUHVWPLOOLRQ
7KHWUDQVODWLRQVRI-DSDQHVH\HQDPRXQWVLQWR86GROODUDPRXQWVDUHLQFOXGHGVROHO\IRUWKHFRQYHQLHQFH
RIUHDGHUVRXWVLGH-DSDQDQGKDYHEHHQPDGHDWWKHUDWHRIH[FKDQJHDW0DUFK86GROODUDPRXQWVDUHURXQGHGGRZQWRWKHQHDUHVWWKRXVDQG

.21'27(& 5(3257



/LDELOLWLHV&XUUHQWOLDELOLWLHV
1RWHVDQGDFFRXQWVSD\DEOH WUDGH





(OHFWURQLFDOO\UHFRUGHGREOLJDWLRQVt RSHUDWLQJ









ٕ,QFRPHWD[HVSD\DEOH



3URYLVLRQIRUERQXVHV





2WKHU













ٕ







ٕ



























&DSLWDO VWRFN



&DSLWDOVXUSOXV





5HWDLQHGHDUQLQJV





7UHDVXU\VWRFN









9DOXDWLRQGLIIHUHQFHRQDYDLODEOHIRUVDOH
VHFXULWLHV



'HIHUUHGJDLQVRUORVVHVRQKHGJHV







)RUHLJQFXUUHQF\WUDQVODWLRQDGMXVWPHQW







5HPHDVXUHPHQWVRIGHILQHGEHQHILWSODQV

































6KRUWWHUPORDQVSD\DEOH&XUUHQWSRUWLRQRIORQJWHUPERUURZLQJV

7RWDOFXUUHQWOLDELOLWLHV:($5(.21'27(&



9,6,217KRXVDQG86GROODUV.21'27(&

7KRXVDQG\HQ

3URYLVLRQIRUVWRFNVSD\PHQW
1HW GHILQHGEHQHILWOLDELOLW\
2WKHU
7RWDOQRQFXUUHQWOLDELOLWLHV
7RWDOOLDELOLWLHV
1HWDVVHWV
6KDUHKROGHUVbHTXLW\

7RWDOVKDUHKROGHUVbHTXLW\

5HYDOXDWLRQUHVHUYHIRUODQG

7RWDODFFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH
6XEVFULSWLRQULJKWVWRVKDUHV
1RQFRQWUROOLQJLQWHUHVWV
7RWDOQHWDVVHWV
7RWDOOLDELOLWLHVDQGQHWDVVHWV

6833/(0(17$FFXPXODWHGRWKHUFRPSUHKHQVLYH LQFRPH(19,5210(173URYLVLRQIRUUHWLUHPHQWEHQHILWVIRUGLUHFWRUV

62&,$/'HIHUUHGWD[OLDELOLWLHVIRUODQGUHYDOXDWLRQ*29(51$1&(/RQJWHUPERUURZLQJV),1$1&,$/'$7$

1RQFXUUHQWOLDELOLWLHV.21'27(& 5(3257



6833/(0(176WRFN,QIRUPDWLRQ 

2UJDQL]DWLRQ&KDUW .21'27(&1HWZRUN &RQVROLGDWHG)LQDQFLDO6WDWHPHQWV‫&ٹ‬RQVROLGDWHG,QFRPH6WDWHPHQW

7KRXVDQG\HQ

7KRXVDQG86GROODUV







1HWVDOHV





&RVWRIVDOHV





*URVVSURILW





6HOOLQJJHQHUDODQGDGPLQLVWUDWLYHH[SHQVHV





2SHUDWLQJLQFRPH





,QWHUHVWLQFRPH







'LYLGHQGVLQFRPH







3XUFKDVHGLVFRXQWV





0LVFHOODQHRXVLQFRPH





7RWDOQRQRSHUDWLQJLQFRPH







,QWHUHVWH[SHQVHV







0LVFHOODQHRXVORVV



7RWDOQRQRSHUDWLQJH[SHQVHV









*DLQRQVDOHVRIQRQFXUUHQWDVVHWV







7RWDOH[WUDRUGLQDU\LQFRPH







/RVVRQVDOHVRIQRQFXUUHQWDVVHWV







/RVVRQGLVSRVDORIQRQFXUUHQWDVVHWV







ٕ





1RQRSHUDWLQJLQFRPH

1RQRSHUDWLQJH[SHQVHV
6DOHVGLVFRXQWV

2UGLQDU\LQFRPH([WUDRUGLQDU\LQFRPH([WUDRUGLQDU\ORVV/RVVRQYDOXDWLRQRILQYHVWPHQWVHFXULWLHV
7RWDOH[WUDRUGLQDU\ORVV







,QFRPHEHIRUHLQFRPHWD[HV



,QFRPHWD[HV FXUUHQW



,QFRPHWD[HV GHIHUUHG

7RWDOLQFRPHWD[HVSD\DEOH







3URILW











3URILW ORVV DWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV
3URILWDWWULEXWDEOHWRRZQHUVRISDUHQW

.21'27(& 5(3257















2WKHUFRPSUHKHQVLYHLQFRPH
9DOXDWLRQGLIIHUHQFHRQDYDLODEOHIRUVDOH
VHFXULWLHV'HIHUUHGJDLQVRUORVVHVRQKHGJHV

)RUHLJQFXUUHQF\WUDQVODWLRQ DGMXVWPHQW





5HPHDVXUHPHQWVRIGHILQHGEHQHILWSODQV

7RWDORWKHUFRPSUHKHQVLYHLQFRPH

















&RPSUHKHQVLYHLQFRPH%UHDNGRZQ&RPSUHKHQVLYHLQFRPHDWWULEXWDEOHWRRZQHUVRI
SDUHQW&RPSUHKHQVLYHLQFRPHDWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV

6833/(0(17*29(51$1&(

62&,$/(19,5210(17),1$1&,$/'$7$

$OOILQDQFLDOLQIRUPDWLRQSUHVHQWHGLQ-DSDQHVH\HQKDVEHHQURXQGHGGRZQWRWKHQHDUHVWPLOOLRQ
7KHWUDQVODWLRQVRI-DSDQHVH\HQDPRXQWVLQWR86GROODUDPRXQWVDUHLQFOXGHGVROHO\IRUWKHFRQYHQLHQFH
RIUHDGHUVRXWVLGH-DSDQDQGKDYHEHHQPDGHDWWKHUDWHRIH[FKDQJHDW0DUFK86GROODUDPRXQWVDUHURXQGHGGRZQWRWKHQHDUHVWWKRXVDQG

:($5(.21'27(&

3URILW

7KRXVDQG86GROODUV

9,6,21

7KRXVDQG\HQ.21'27(&‫&ٹ‬RQVROLGDWHG6WDWHPHQWRI&RPSUHKHQVLYH,QFRPH.21'27(& 5(3257



6833/(0(176WRFN,QIRUPDWLRQ 

2UJDQL]DWLRQ&KDUW .21'27(&1HWZRUN &RQVROLGDWHG)LQDQFLDO6WDWHPHQWV‫&ٹ‬RQVROLGDWHG6WDWHPHQWRI&KDQJHVLQ6KDUHKROGHUVb(TXLW\

7KRXVDQG\HQ$FFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH
9DOXDWLRQGLIIHUHQFH
7RWDOVKDUHKROGHUVb
'HIHUUHGJDLQVRU
RQDYDLODEOHIRUVDOHHTXLW\
ORVVHVRQKHGJHVVHFXULWLHV

6KDUHKROGHUVbHTXLW\&DSLWDO VWRFN%DODQFHDWEHJLQQLQJRIWKHSHULRG&DSLWDOVXUSOXV



5HWDLQHGHDUQLQJV

7UHDVXU\VWRFN











&KDQJHVRILWHPVGXULQJWKHSHULRG&DVKGLYLGHQGV3URILWDWWULEXWDEOHWRRZQHUVRI
SDUHQW

3XUFKDVHRIWUHDVXU\VWRFN'LVSRVDORIWUHDVXU\VWRFN










&DQFHOODWLRQ RIWUHDVXU\VWRFNٕ1HWFKDQJHVRILWHPVRWKHUWKDQVKDUHKROGHUVbHTXLW\
7RWDOFKDQJHVRILWHPVGXULQJWKH
SHULRG%DODQFHDWWKHHQGRIWKHSHULRGٕ





















$FFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH
5HYDOXDWLRQUHVHUYHIRUODQG%DODQFHDWEHJLQQLQJRIWKHSHULRG



)RUHLJQFXUUHQF\
7RWDODFFXPXODWHG 6XEVFULSWLRQULJKWV
5HPHDVXUHPHQWVRIWRVKDUHVWUDQVODWLRQRWKHUFRPSUHKHQVLYH
GHILQHGEHQHILWSODQVDGMXVWPHQW
LQFRPH



1RQFRQWUROOLQJLQWHUHVWV

7RWDOQHWDVVHWV&KDQJHVRILWHPVGXULQJWKHSHULRG&DVKGLYLGHQGV3URILWDWWULEXWDEOHWRRZQHUVRI
SDUHQW

3XUFKDVHRIWUHDVXU\VWRFN'LVSRVDORIWUHDVXU\VWRFN

&DQFHOODWLRQ RIWUHDVXU\VWRFNٕ1HWFKDQJHVRILWHPVRWKHUWKDQVKDUHKROGHUVbHTXLW\ٕ

7RWDOFKDQJHVRILWHPVGXULQJWKH
SHULRG%DODQFHDWWKHHQGRIWKHSHULRG









ٕ



















7KRXVDQG\HQ$FFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH
9DOXDWLRQGLIIHUHQFH
7RWDOVKDUHKROGHUVb
'HIHUUHGJDLQVRU
RQDYDLODEOHIRUVDOHHTXLW\
ORVVHVRQKHGJHVVHFXULWLHV

6KDUHKROGHUVbHTXLW\&DSLWDO VWRFN%DODQFHDWEHJLQQLQJRIWKHSHULRG&DSLWDOVXUSOXV



5HWDLQHGHDUQLQJV

7UHDVXU\VWRFN











&KDQJHVRILWHPVGXULQJWKHSHULRG&DVKGLYLGHQGV



3URILWDWWULEXWDEOHWRRZQHUVRI
SDUHQW



3XUFKDVHRIWUHDVXU\VWRFN'LVSRVDORIWUHDVXU\VWRFN&DQFHOODWLRQ RIWUHDVXU\VWRFN















ٕ

1HWFKDQJHVRILWHPVRWKHUWKDQVKDUHKROGHUVbHTXLW\
7RWDOFKDQJHVRILWHPVGXULQJWKH
SHULRG%DODQFHDWWKHHQGRIWKHSHULRGٕ





















$FFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH
5HYDOXDWLRQUHVHUYHIRUODQG%DODQFHDWEHJLQQLQJRIWKHSHULRG



)RUHLJQFXUUHQF\
7RWDODFFXPXODWHG 6XEVFULSWLRQULJKWV
5HPHDVXUHPHQWVRIWRVKDUHVWUDQVODWLRQRWKHUFRPSUHKHQVLYH
GHILQHGEHQHILWSODQVDGMXVWPHQW
LQFRPH







1RQFRQWUROOLQJLQWHUHVWV

7RWDOQHWDVVHWV

&KDQJHVRILWHPVGXULQJWKHSHULRG&DVKGLYLGHQGV

3URILWDWWULEXWDEOHWRRZQHUVRI
SDUHQW

3XUFKDVHRIWUHDVXU\VWRFN'LVSRVDORIWUHDVXU\VWRFN

&DQFHOODWLRQ RIWUHDVXU\VWRFN
1HWFKDQJHVRILWHPVRWKHUWKDQVKDUHKROGHUVbHTXLW\
7RWDOFKDQJHVRILWHPVGXULQJWKH
SHULRG%DODQFHDWWKHHQGRIWKHSHULRG

.21'27(& 5(3257

ٕ
ٕ









ٕ





















7KRXVDQG86GROODUV$FFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH
9DOXDWLRQGLIIHUHQFH
7RWDOVKDUHKROGHUVb
'HIHUUHGJDLQVRU
RQDYDLODEOHIRUVDOHHTXLW\
ORVVHVRQKHGJHVVHFXULWLHV

6KDUHKROGHUVbHTXLW\
5HWDLQHGHDUQLQJV



7UHDVXU\VWRFN









&KDQJHVRILWHPVGXULQJWKHSHULRG


3URILWDWWULEXWDEOHWRRZQHUVRI
SDUHQW

3XUFKDVHRIWUHDVXU\VWRFN'LVSRVDORIWUHDVXU\VWRFN&DQFHOODWLRQ RIWUHDVXU\VWRFN



















ٕ

9,6,21&DVKGLYLGHQGV

1HWFKDQJHVRILWHPVRWKHUWKDQVKDUHKROGHUVbHTXLW\%DODQFHDWWKHHQGRIWKHSHULRGٕ











$FFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH
5HYDOXDWLRQUHVHUYHIRUODQG%DODQFHDWEHJLQQLQJRIWKHSHULRG



)RUHLJQFXUUHQF\
7RWDODFFXPXODWHG 6XEVFULSWLRQULJKWV
5HPHDVXUHPHQWVRIWRVKDUHVWUDQVODWLRQRWKHUFRPSUHKHQVLYH
GHILQHGEHQHILWSODQVDGMXVWPHQW
LQFRPH

1RQFRQWUROOLQJLQWHUHVWV

7RWDOQHWDVVHWV

&KDQJHVRILWHPVGXULQJWKHSHULRG&DVKGLYLGHQGV

3URILWDWWULEXWDEOHWRRZQHUVRI
SDUHQW

3XUFKDVHRIWUHDVXU\VWRFN'LVSRVDORIWUHDVXU\VWRFN&DQFHOODWLRQ RIWUHDVXU\VWRFN
1HWFKDQJHVRILWHPVRWKHUWKDQVKDUHKROGHUVbHTXLW\
7RWDOFKDQJHVRILWHPVGXULQJWKH
SHULRG%DODQFHDWWKHHQGRIWKHSHULRG

ٕ
ٕ













ٕ



















6833/(0(17*29(51$1&(

62&,$/

$OOILQDQFLDOLQIRUPDWLRQSUHVHQWHGLQ-DSDQHVH\HQKDVEHHQURXQGHGGRZQWRWKHQHDUHVWPLOOLRQ
7KHWUDQVODWLRQVRI-DSDQHVH\HQDPRXQWVLQWR86GROODUDPRXQWVDUHLQFOXGHGVROHO\IRUWKHFRQYHQLHQFH
RIUHDGHUVRXWVLGH-DSDQDQGKDYHEHHQPDGHDWWKHUDWHRIH[FKDQJHDW0DUFK86GROODUDPRXQWVDUHURXQGHGGRZQWRWKHQHDUHVWWKRXVDQG

(19,5210(177RWDOFKDQJHVRILWHPVGXULQJWKH
SHULRG.21'27(&&DSLWDOVXUSOXV

),1$1&,$/'$7$&DSLWDO VWRFN%DODQFHDWEHJLQQLQJRIWKHSHULRG:($5(.21'27(&

.21'27(& 5(3257



6833/(0(176WRFN,QIRUPDWLRQ 

2UJDQL]DWLRQ&KDUW .21'27(&1HWZRUN &RQVROLGDWHG)LQDQFLDO6WDWHPHQWV‫&ٹ‬RQVROLGDWHG6WDWHPHQWRI&DVK)ORZV&DVKIORZVIURPRSHUDWLQJDFWLYLWLHV,QFRPH EHIRUHLQFRPHWD[HV





7KRXVDQG\HQ

7KRXVDQG86GROODUV



'HSUHFLDWLRQ





6KDUHEDVHGFRPSHQVDWLRQH[SHQVHV,QFUHDVH GHFUHDVH LQDOORZDQFHIRU GRXEWIXODFFRXQWV,QFUHDVH GHFUHDVH LQSURYLVLRQIRUERQXVHV,QFUHDVH GHFUHDVH LQSURYLVLRQIRUVWRFNV
SD\PHQW,QFUHDVH GHFUHDVH LQQHWGHILQHGEHQHILWOLDELOLW\



 











 ,QWHUHVWDQGGLYLGHQGVLQFRPH





 







,QWHUHVWH[SHQVHV/RVVRQYDOXDWLRQRILQYHVWPHQWVHFXULWLHV

ٕ





/RVV JDLQ RQVDOHVRIQRQFXUUHQWDVVHWV





 

/RVVRQGLVSRVDORIQRQFXUUHQWDVVHWV'HFUHDVH LQFUHDVH LQQRWHVDQGDFFRXQWVUHFHLYDEOHt WUDGH'HFUHDVH LQFUHDVH LQLQYHQWRULHV,QFUHDVH GHFUHDVH LQQRWHVDQGDFFRXQWVSD\DEOHt WUDGH,QFUHDVH GHFUHDVH LQDFFUXHGFRQVXPSWLRQ
WD[HV
2WKHU











 



 















,QWHUHVWDQGGLYLGHQGVLQFRPHUHFHLYHG







,QWHUHVWH[SHQVHVSDLG





 

,QFRPHWD[HVSDLG





 &DVKIORZVIURPRSHUDWLQJDFWLYLWLHV





3XUFKDVHRISURSHUW\SODQWDQGHTXLSPHQW



 3XUFKDVHRI LQYHVWPHQW VHFXULWLHV
3XUFKDVHRIVKDUHVRIVXEVLGLDULHVUHVXOWLQJLQFKDQJHLQVFRSHRIFRQVROLGDWLRQ
2WKHU

ٕٕٕ

 



&DVKIORZVIURPLQYHVWLQJDFWLYLWLHV



 ٕ

 ٕ



ٕ



 

 





 





 





 







6XEWRWDO&DVKIORZVIURPLQYHVWLQJDFWLYLWLHV&DVKIORZVIURPILQDQFLQJDFWLYLWLHV
1HWLQFUHDVH GHFUHDVH LQVKRUWWHUPORDQV
SD\DEOH
3URFHHGVIURPORQJWHUPERUURZLQJV
5HSD\PHQWVRIORQJWHUPERUURZLQJV3XUFKDVHRIWUHDVXU\VWRFN
3URFHHGVIURPVDOHVRIWUHDVXU\VWRFN&DVKGLYLGHQGVSDLG
2WKHU&DVKIORZVIURPILQDQFLQJDFWLYLWLHV(IIHFWRIH[FKDQJHUDWHFKDQJHRQFDVKDQG FDVKHTXLYDOHQWV
1HWLQFUHDVH GHFUHDVH LQFDVKDQGFDVKHTXLYDOHQWV&DVKDQGFDVKHTXLYDOHQWVEHJLQQLQJRI\HDU





&DVKDQGFDVKHTXLYDOHQWVHQGRI\HDU





$OOILQDQFLDOLQIRUPDWLRQSUHVHQWHGLQ-DSDQHVH\HQKDVEHHQURXQGHGGRZQWRWKHQHDUHVWPLOOLRQ
7KHWUDQVODWLRQVRI-DSDQHVH\HQDPRXQWVLQWR86GROODUDPRXQWVDUHLQFOXGHGVROHO\IRUWKHFRQYHQLHQFHRIUHDGHUVRXWVLGH-DSDQDQGKDYHEHHQPDGHDWWKHUDWHRIH[FKDQJHDW0DUFK86GROODUDPRXQWVDUHURXQGHGGRZQWRWKHQHDUHVWWKRXVDQG
.21'27(& 5(3257

9,6,21.21'27(&

7KDQN\RXYHU\PXFKIRUUHDGLQJWKHn.21'27(&5(3257 ,QWHJUDWHG5HSRUW |WRWKHODVW
7KHVHGD\VZHDUHLQFUHDVLQJO\KHDULQJWKHH[SUHVVLRQ6'*V 6XVWDLQDEOH'HYHORSPHQW*RDOV 3UHVXPDEO\WKLVLV
EHFDXVHVRFLHW\DVDZKROHKDVVWDUWHGKDYLQJDVHQVHRIFULVLVDERXWDVXVWDLQDEOHIXWXUH2XU&RPSDQ\LVQRH[FHSWLRQDQGZHUHJDUG6'*VDVDQHVVHQWLDOHOHPHQWIRUVXVWDLQDEOHJURZWK7DNLQJLQWRDFFRXQWWKHUHOHYDQFH
EHWZHHQWKH&RPSDQ\bVEXVLQHVVDQG6'*VWKH5(3257GLVFXVVHGZKDWLVWKHPRVWLQIOXHQWLDOLVVXH PDWHULDOLW\ 
UHVWUXFWXUHGLWDQGFKDQJHGWKHGHVFULSWLRQRIWKHYDOXH FUHDWLRQSURFHVVVRWKDWWKH&RPSDQ\bVEXVLQHVVPRGHOZLOO
EHPRUHUHDGLO\XQGHUVWRRG:KLOHWKH5(3257JRHVWKURXJKDWULDODQGHUURUSURFHVVHYHU\\HDULWVWLOOKDVURRPIRUIXUWKHULPSURYHPHQWIURPWKHSHUVSHFWLYHRI6'*V0RUHRYHUWKH5(3257ZDVSUHSDUHGE\DWHDPRIIHPDOHSURMHFWPHPEHUVDOOIURPWKH
*HQHUDO$IIDLUV'LYLVLRQ +56HFWLRQ3ODQQLQJ6HFWLRQDQG*HQHUDO$IIDLUV6HFWLRQ ZKLFKLVDXQLWUHVSRQVLEOHIRU,5
DQG&65DQGWKH6DOHV+HDGTXDUWHUVUHVSRQVLEOHIRUPDUNHWLQJPHDVXUHV)XUWKHUPRUHWKHPHPEHUVKDYHGLYHUVH
FDUHHUEDFNJURXQGVDQGNQRZOHGJHLQFOXGLQJKDYLQJWDNHQFKLOGFDUHOHDYHDQGH[SHULHQFHGMREURWDWLRQV7KHQH[W\HDUZLOOVHHDUHVWDUWDVWZRSURMHFWPHPEHUVIURPWKHILUVW\HDURIWKH,QWHJUDWHG5HSRUWbVSXEOLFDWLRQZLOOWDNHFKLOGFDUHOHDYH,ZLOOWDNHWKLVDVDQRSSRUWXQLW\WRHYROYHWKH,QWHJUDWHG5HSRUWIURPWKHSHUVSHFWLYHRIGLYHUVLW\DVZHOO
:HZLOOFRQWLQXHWRZRUNRQLPSURYLQJ.21'27(&5HSRUWZKLOHUHPDLQLQJFRQVFLRXVDERXWHQKDQFLQJRXUGLDORJXHZLWKVWDNHKROGHUVLQRXUVLQFHUHKRSHWKDWWKH.21'27(&*URXSZLOOJURZWRFRQWULEXWHWRWKHGHYHORSPHQWRIDVXVWDLQDEOHVRFLHW\:($5(.21'27(&(GLWRUbV1RWH

6HQLRU([HFXWLYH'LUHFWRUDQG*HQHUDO0DQDJHU
0DQDJHPHQW+HDGTXDUWHUV

62&,$/(19,5210(17),1$1&,$/'$7$

7RPR\D $QGR

3 52-(&7 0(0%(5‫ٲ‬6DOHV+HDGTXDUWHUV
3URPRWLRQWRROVHWF‫ٲ‬-RLQWHG
LQ

‫*ٲ‬HQHUDO$IIDLUV6HFWLRQ(TXLWLHVHWF‫ٲ‬-RLQWHG
LQ

*29(51$1&(‫ٲ‬3ODQQLQJ
6HFWLRQ,5HWF‫ٲ‬-RLQWHGLQ

6833/(0(17‫ٲ‬+56HFWLRQUHFUXLWPHQWWUDLQLQJ
HWF‫ٲ‬-RLQWHGLQ

.21'27(& 5(3257

Notes on forward-looking statements

This document contains forward-looking statements including operating forecasts and businessplans.
Future operating performance projections that the Company releases are based on data available atthe time of making the release. Actual results may differ considerably from projections due tovarious factors and changes.

Detailed information on financial results

For details of financial results for the year ended March 31, 2019, please refer to the Annual
Securities Report.
URL : https://www.kondotec.co.jp/ir/library/asset_securities.html

Reporting coverage period◆Reporting period
April 1, 2018 through March 31, 2019
(Activities in April 2019 and thereafter are included in part.)◆Reporting organization
KONDOTEC INC. and its group companies◆Accounting standard
Japanese GAAP

2-2-90 Sakaigawa, Nishi-ku, Osaka
550-0024 Japan
Telephone : +81-6-6582-8441
Website : https://www.kondotec.co.jp