1R

ED 7X PL  G D URV WR NL  G DP H  J RE UH EL V7 YL V  H P] DG H E LD Q





ED7XPL GD URVWRNL GDPHJRE UHELV7YLV HP] DGHELDQ

%DWXPLDQG5RVWRFN SUHSDUHIRUSDUWQHUVKLS

D:DULVDUP7DYURELVVDHU7D6RULVR XU7LHU7RED7DGHSDUWDPHQWLVZDUPR PDGJHQOHELGDED7XPLVPHULUREHUW &[DL=HJHUPDQLLGDQGDEUXQGQHQTDU7X OLGHOHJDFLDTDODTURVWRNLVPHULV URODQGPHWORQJLVPLZYHYL7VDHU7D 6RULVRWXULVWXOJDPRIHQD6L³+$1 6(6$,/´VWXPULVVWDWXVL7LP\R IHERGDYL]LWLVDVJDLPDU7DRUP[ULYL 6H[YHGUHELURVWRNLVSROLWLNXULGD EL]QHVZUHHELV ZDUPRPDGJHQOHE7DQ DVHYHJDGDZ\GDURPXD[ORHVPRPDYDO 6LGDLZ\HEDDTWLXULPRODSDUDNHEHEL ED7XPLVD GD URVWRNLV GDPHJREUH EDVDGD HU7REOLYLSURHTWHELV JDQ [RUFLHOHED]H GDLJHJPD URVWRNLV GHOH JDFLLV YL]LWL D:DUD6L TURV WRNLJHUPDQLLVIHGHUDFLLV&ULORH 7L7PHNOHEHUJNRUSRUPHQLVPLZD]H PGHEDUHREV LJL TYH\QLV XPV[YLOHVL VDSRUWRTDODTLDGDWXUL]PLVHU7ă HU7FHQWUDGL7YOHED

5HSUHVHQWDWLYHV RI ,QWHUQDWLRQDO 5HOD WLRQV'HSDUWPHQWRI$MDUD*RYHUQPHQW $5 DQG 0D\RU RI %DWXPL 5REHUW &KNDLG]HKDYHUHWXUQHGIURP*HUPDQ\ *HRUJLDQ'HOHJDWLRQSDUWLFLSDWHGDWWKH ,QWHUQDWLRQDO 7RXULVP ([KLELWLRQ ³+$16(6$,/´E\WKHLQYLWDWLRQRI WKH0D\RURI5RVWRFN5RODQG0HWKOLQJ 'XULQJWKHYLVLWELODWHUDOPHHWLQJVZLWK UHSUHVHQWDWLYHVRISROLWLFDODQGEXVLQHVV FLUFOHV RI5RVWRFN ZHUHKHOG 'HFLVLRQ ZDV PDGH WR VWDUW DFWLYH QHJRWLDWLRQV FRQFHUQLQJ SDUWQHUVKLS RI %DWXPL DQG 5RVWRFNDQGLPSOHPHQWLQJMRLQWSURMHFWV 9LVLW RI GHOHJDWLRQ IURP 5RVWRFN ZDV SODQQHG 5RVWRFN LV ORFDWHG RQ WKH QRUWKHUQ FRDVWOLQH RI 0HFNOHQEXUJ 9RUSRPPHUQLQ*HUPDQ\,WLVRQHRIWKH ODUJHVWSRUWFLWLHVLQWKHFRXQWU\DQGLV FRQVLGHUHGRQHRIWKHWRXULVPFHQWHUV

ED7XPPD Z\DOăNDQDOL]DFLLV JDQYL7DUHELV7YLV NLGHY  POQ HYUR PLL5R

%DWXPLUHFHLYHVDQHZPLOOLRQ (XURIRUWKHGHYHORSPHQWRI ZDWHUDQGVHZHUDJHV\VWHPV

VDTDU7YHORVILQDQV7DVDPLQLVWURVD GDJHUPDQLLVVD[HOPZLIREDQN³.):´ă V6RULVJDIRUPGD6H7DQ[PHEDURP OLVVDIX=YHO]HFED7XPVZ\DOăNDQD OL]DFLLVVLVWHPHELVUHDELOLWDFLLV 7YLVPRULJLWUDQ6LJDPRH\RPOQ HYURGDQPOQ6H5DYD7LDQLNUHGLWLD [RORPOQJUDQWLDPDYHPL]QHELV 7YLVED7XPLV7YL7PPDU7YHOREDGDPD

$Q DJUHHPHQW EHWZHHQ 0LQLVWU\ RI )LQDQFH RI *HRUJLD DQG *HUPDQ 6WDWH %DQN³.):´ZDVVLJQHGE\ZKLFKDQHZ WUDQFKHZDVDOORFDWHGIRUUHKDELOLWDWLRQ RI%DWXPLZDWHUDQGVHZHUDJHV\VWHPV )URPWKHJLYHQPLOOLRQ(XURPLOOLRQ LVDSUHIHUHQWLDOFUHGLWDQGPLOOLRQLVD JUDQW )RU WKH LPSOHPHQWDWLRQ RI WKH

%DWXPLDQG5RVWRFNSUHSDUHIRU SDUWQHUVKLS ED7XPPD Z\DOăNDQDOL]DFLLV JDQ YL7D UH EL V7YL V NL GH Y  POQ H YUR PLL5R

%DWXPLUHFHLYHVDQHZPLOOLRQ (XUR IRU WKH GHYHORSPHQW RI ZDWHU DQG VHZHUDJH V\VWHPV JDFQREL7L WXUL VDMDUR PR [ H O H 7D 7 YL V  G D E L] Q H V P H Q  7D7YLV

,QWURGXFWRU\WRXUIRUSXEOLFVHU YDQWVDQGEXVLQHVVPHQ VDH U7D6RULVR LQYH VWRU7D D V R FL D F L L V  ZH Y U P D  N RP S D  QLHEPD VRFLDOXUL SURHTWH ELV JDQ[RUFLH OH ED GDLZ\HV

7KHPHPEHUFRPSDQLHVRI,QWHU QDWLRQDO,QYHVWRUV$VVRFLDWLRQLQ VRFLDOSURMHFWV TREXOH76LÄVRI OLV P[DUGD :HULV SURJUDPLV³  6HVUX OHEXOLD

 RI µ¶$JULFXOWXUH 6XSSRUW 3URJUDP´EHLQJFDUULHGRXW DXTFLRQL PGLQDUH  :RUR[LV T YL 6 D [ U H 6 L V V D ED G RV  V DU  JH EORELV OLFH Q]LLV JDFH  PD]H

$XFWLRQ RQ JLYLQJ OLFHQVH RQ XVLQJVDQGDQGJUDYHOOD\HUVRI ULYHU7FKRURNKL VDH U7D6RULVR LQYH VWRU7D DVRFLDFLD JHJPDYV XUH[LV P ]UXQ YH OR ED P RN OH EX O EDY6Y7D VD[OV ILQDQVXUL GD PDWH ULDO XUL GD[P DUHE D JDXZLRV

,QWHUQDWLRQDO,QYHVWRUV$VVRFLD WLRQRI*HRUJLDSODQVWRUHQGHU ILQDQFLDODQGPDWHULDOVXSSRUWWR 8UHNKL&KLOG+RXVH LWDOLXUL \DYLV PR\YDUXO 7D7YLV VDXNH7H VR DGJLOL ÄH VSUH VR ED UL VLQDWUD³

7KHEHVWSODFHIRU,WDOLDQFRIIHH ORYHUVHVSUHVVREDU ³6LQDWUD´

WHEL7PLOLRQHY U R V  G D [ D U M D YV  Ä.):´V GD[PDUH EL7 XPQL6YQHORYD QHV SURJUDPDV YD [RUFLHOHE7TDOD TLV JDQYL7DUHELV 7YLV XNH7HVL LQI UDVWUXTWXUD JY: LUGHEDPDGOREDVYX[GL7JHUPDQLLVP7DYUREDVURP JYH[PDUHELDQ³ ă JDQDF[DGD D:DULV DU P7DYURELV 7DYPMGRPDUHP OHYDQ YDU6DORPL=HP VWXPUHE7DQ 6H[YHGULV6HPGHJ³.):´ăVPRULJLWUDQ6L ZOHE6LED7XPLVXEQHELV7DPDULVGDVD[OHELVERQL JRURGRNLVDGDDHURSRUWLVPLPGHEDUHWHULWRULH ELVZ\OLVDGDNDQDOL]DFLLVVLVWHPHELVUHDELOLWD FLDV PR[PDUGHED ³.):´V SURJUDPD  ZOLGDQ [RUFLHOGHEDPDV6HPGHJ³.):´PPOQHYURJDPR\R TDODTLVXPHWHVQDZLO6L7L7TPLVP7OLDQDG6HLFYD ODZ\OLVDGDNDQDOL]DFLLVPLOHELJDNH7GDUH]HU YXDUHELVD7DYHGDVDILOWULQDJHEREHELSDUDOHOX UDGED7XPLVPHULDD[RUFLHOHEVTX&HELVVDQLD5YUH DU[HEL7GDTVHOYDVDFZOLGDQGDLZ\HED³.):´ VSURJUDPLVPHID]DURPOL7DFED7XPLVPLZLVTYH6D NRPXQLNDFLHELVUHDELOLWDFLDGDVUXOGHEDDPLV7YLV ED7XPLNLGHYPLOLRQHYURVPLL5HEVD5VDQL6QDYLD URPSURJUDPLVIDUJOHE6LZ\OLVDGDNDQDOL]DFLLV VLVWHPHELVUHDELOLWDFLDLJHJPHEDTDODTLVD[ODG6H PRHU7HEXO WHULWRULHE]HF

SURJUDPVHOIJRYHU QLQJ FLW\ RI %DWXPL ZLOOVSHQGDGGLWLRQDO PLOOLRQ(XUR³:LWK WKH KHOS RI ³.):´ ZHDUHLPSOHPHQWLQJ DQ LPSRUWDQW SURJ UDP%HWWHULQIUDVWUXF WXUH LV QHHGHG IRU FLW\ GHYHORSPHQW :H WKDQN *HUPDQ JRYHUQPHQWIRUWKHSURYLGHGDVVLVWDQFH´&KDLUPDQRI$MDUD *RYHUQPHQW/HYDQ9DUVKDORPLG]HZDVTXRWHGDVVD\LQJDIWHU WKHPHHWLQJZLWKWKHJXHVWV7KHDOORFDWHGWUDQFKHE\³.):¶´ IRUWKH\HDUVZLOOEHVSHQGRQUHKDELOLWDWLRQRI ZDWHUDQGVHZHUDJHV\VWHPVRIGLIIHUHQW%DWXPLGLVWULFWVDV 7DPDULVHWWOHPHQW%RQL*RURGRNLDQGVXUURXQGLQJWHUULWRU\ RI%DWXPL$LUSRUW3URJUDPRI³.):´KDVEHLQJLPSOHPHQWHG VLQFH\HDUµ¶.):´KDVDOORFDWHGPLOOLRQ(XURVLQFH WKHQ,QPDMRUSDUWRIWKHFLW\DOPRVWDOOSLSHVRIZDWHUDQG VHZHUDJHV\VWHPVZHUHUHSODFHGZDWHUWDQNVDQGWUHDWPHQW SODQW ZHUH FRQVWUXFWHG %DWXPL &LW\ +DOO VLPXOWDQHRXVO\ FRQGXFWV DUUDQJLQJ VWUHHWV GUDLQDJH FKDQQHOV 7KH IRXUWK SKDVHRI³.):´SURJUDPZLOOVWDUWIURP\HDUE\ZKLFK UHKDELOLWDWLRQRIXQGHUJURXQGFRPPXQLFDWLRQVRI%DWXPLZLOO EHFRPSOHWHG)RUWKHJLYHQSXUSRVH%DWXPLZLOOUHFHLYHDQHZ PLOOLRQ(XUR,WLVZRUWKWRQRWHWKDWZLWKLQWKHERXQGRI WKHSURJUDPUHKDELOLWDWLRQRIZDWHUDQGVHZHUDJHV\VWHPVLV SODQQHGRIWKRVHWHUULWRULHVWKDWKDYHUHFHQWO\MRLQHG%DWXPL

JDFQREL7L WXUL VDMDUR PR[HOH7D7YLV GD EL]QHVPHQ7D7YLV

,QWURGXFWRU\WRXUIRUSXEOLF VHUYDQWVDQGEXVLQHVVPHQ

PLPGLQDUHZOLV DJYLVWRV D:DULV ILQDQV7D GD HNR QRPLNLV VDPLQLV WURV RUJDQL]H EL7EL]QHVPHQHELV D7YLV GD VDMDUR PR[HOHHELVD7YLV PRHZ\RJDFQREL7L WXUL VDUILV VD ED-RJDP6YHESXQTW6LDGOLLVJDIRUPHELVHNRQRPLNXU ]RQDVDGDED7XPLVLXVWLFLLVVD[O6LWXULVPRQD ZLOHHEL PD7 6RULV VDHU7D6RULVR LQYHVWRU7D DVRFLDFLLVZHYULNRPSDQLLVZDUPRPDGJHQOHELJDHFQHQ \YHODLPSURFHGXUDVUDFNHU=RSLUPD7XEL]QHV PHQPDXQGDJDLDURVVDTRQOLVJDIRUPHELVSURFHGX UHEL PQL6YQHORYDQL LQIRUPDFLD TRQHELV UHJLVW UDFLDV7DQELQDGUREDV7DQVDQRWDURGRNXPHQWDFLLV PRTDODTHRELVSDVSRUWLVRUGLQDOXULYL]LVDSRVWL OLVPL5HEDV7DQGDV[YDPQL6YQHORYDQVDNL7[HE7DQ GDNDY6LUHEL77HRULXOLVHPLQDULLJLYH7HPD]HHU7L 7YLV ZLQ &DWDUGDVDED-R GD VDJDGDVD[DGR SURFH GXUHELVVDNX7DUL7YDOL7QD[YDVHPLQDULV6HPGJRPL SUDTWLNXOL HWDSL L\R

2Q $XJXVW  RI WKHFXUUHQW\HDUDQ LQWURGXFWRU\WRXUWR 6DUSL&XVWRPV$G OLD &XVWRPV &OHD UDQFH=RQHDQG%D WXPL-XVWLFH+RXVH IRU EXVLQHVVPHQ DQGSXEOLFVHUYDQWVZDVRUJDQL]HGE\WKH0LQLVWU\RI)LQDQFH DQG(FRQRP\RI$MDUD7RXUSDUWLFLSDQWVLQFOXGLQJWKHPHPEHU FRPSDQLHV¶ UHSUHVHQWDWLYHV RI ,QWHUQDWLRQDO ,QYHVWRUV $VVRFLDWLRQRI*HRUJLDJRWDFTXDLQWHGZLWKWKHSURFHGXUHV ZKLFK SULYDWH SHUVRQ RU EXVLQHVVPDQ PXVW JR WKURXJK FOHDUDQFH SURFHGXUHV IRU JRRGV LPSRUWDQW LQIRUPDWLRQ UHJDUGLQJ WKH UHJLVWUDWLRQ RI HVWDWH KRXVLQJ QRWDULDO GRFXPHQWVFLWL]HQVKLSSDVVSRUWYLVDSDVWLOOHDFTXLVLWLRQ DQGRWKHULPSRUWDQWLVVXHV7KHRUHWLFDOVHPLQDURQWKHVDPH WRSLF ZDV KHOG D PRQWK DJR 6HHLQJ FXVWRPV DQG WD[ SURFHGXUHVZLWKWKHLURZQH\HVZDVWKHIXUWKHUSUDFWLFDOVWDJH



VDHU7D6RULVR LQYHVWRU7D DVRFLDFLLV ZHYUPD NRPSDQLHEPD VRFLDOXUL SURHTWHELV JDQ[RUFLHOHED GDLZ\HV

7KHPHPEHUFRPSDQLHVRI ,QWHUQDWLRQDO,QYHVWRUV$VVRFLDWLRQ LQVRFLDOSURMHFWV

VDHU7D6RULVR LQYHVWRU7D DVRFLDFLLVZHYUPDNRPSDQLHEPD VRFLDOXULSURHTWHELVJDQ[RU FLHOHEDGDLZ\HVNRPSDQLD%70 7(;7,/(PD[HOYD&DXU6LJDQOD JHEXOVDNX7DUVDYD:URTVHO 6LVDTDU7YHORVZL7HOLMYULV VD]RJDGHELV GRQDFLLV \X7L GDGJD\X76L PRJURYLOL IX ODGL VD[VUHEL VRFLDOXUDG GDXFYHOIHQHEVGDHNRORJLX ULNDWDVWURIHELVGURVGD]D UDOHEXOPRVD[OHREDVPR[PDU GHEDNRPSDQLD%707(;7,/(PPLOLRQLGRODULV GDPDWHEL7L LQYHVWLFLHEL DGJLOREULY ED]DU]H PDUNHWLQJLVDGDPD5D]LHELVTVHOLVDVDZ\REDGJDL5R DPHWDS]HµEUHQGLV¶VD[HOL7[HOYD&DXULVHU7LVDYD :URNRPSOHTVL TREXOH76LVDPLGD JRQLR6LHU7L PD5D]LDIXQTFLRQLUHEV7XPFDNRPSDQLD%707(;7,/( LVJHQHUDOXULGLUHTWRULPH7LQLD5OLPPLPGLQDUH NYLULVGDVDZ\LV6LZL7HOL MYULVGRQDFLLV\X7LV 7YLV SLUYHOL 6HPRZLUXORED  ODUL JDL5R GD JDQDF[DGDÄNRPSDQLDVPD5D]LDFURPKTRQGHV\YHOD VDYD:URSXQTW6LZL7HOLMYULVGRQDFLLV\X7VGDY GJDPGL7 VRFLDOXUL SURHTWHELV JDQ[RUFLHOELV PL]QL7 G5HV SLUYHODG GDYLZ\H7 VDHU7D6RULVR RUJDQL]DFLHE7DQ7DQDP6URPOREDGD&YHQYDSLUHE7 DP PLPDU7XOHEL7 PQL6YQHORYDQL QDELMHEL JDGDY GJD7¶¶ZOLGDQG5HPGHWHTVWLOLVPUHZYHORED6L %70 7(;7,/(PD  PLOLRQL GRODULV LQYHVWLFLD JDQD[RUFLHOD [HOYD&DXULV UDLRQ6L JDQODJHEXOL 7DQDPHGURYH VWDQGDUWHELV VDPNHUYDOR IDEULND6L HYURSD6L FQRELOL EUHQGHELV VHULXO ZDUPRHED6L  DGDPLDQLD GDVDTPHEXOL ZDUPRHELV PRFXORED PRLFDYV7YH6LD7DVLFDOLQDZDUPLVGDP]DGHEDV URPOLV 6HGHJDGDF \RYHO7YLXUDG VDTDU7YHORGDQ HTVSRUW]H JDGLV  D7DVL GRODULV SURGXTFLD ZDUZHUL7 ³GDP]DGHEXOLD VDTDU7YHOR6L´

7KHPHPEHUFRP SDQLHVRI,QWHUQD WLRQDO ,QYHVWRUV $VVRFLDWLRQEHJDQ WKH LPSOHPHQWD WLRQRIVRFLDOSUR MHFWV%707H[WLOH SXWWKH5HG&URVV GRQDWLRQER[LQLWV WUDGH QHWZRUN &ROOHFWHG IXQGV ZLOO EH XVHG IRU VRFLDOO\ YXOQHUDEOH OD\HU RI SRSXODWLRQ DQG IRU DIIHFWHG SRSXODWLRQDVWKHUHVXOWVRIHFRORJLFDOGLVDVWHUV7KHFRPSDQ\ %707H[WLOHPDGHWKHDGGLWLRQDOLQYHVWPHQWRIPLOOLRQ 86'IRUPDUNHWLQJDQGVWRUHQHWZRUNRQWKHORFDOPDUNHW$W WKLVVWDJHWKHUHDUHILYHVWRUHVXQGHUWKHQDPH³%UHQGL´±RQH LQ.KHOYDFKDXULWUDGHQHWZRUNWKUHHLQ.REXOHWLDQGRQH VWRUHLQ*RQLR0HWLQ
TREXOH76L ÄVRIOLV P[DUGD:HULV SURJUDPLV³  6HVUXOHEXOLD

RIµ¶$JULFXOWXUH6XSSRUW 3URJUDP´EHLQJFDUULHGRXW

TREXOH7LVPXQLFL SDOL WHW6L³VRIOLVP[DUGD :HULVSURJUDPLV´IDUJ OHE6LPLPGLQDUHVDPX6D RHELGDVDVUXOVXD[O RYGHEDD:DULV P7DYUR ELV DSDUDWLV XIURVL RPDUPHJUHOL=HGDDG PLQLVWUDFLXO RUJDQR HE7DQXU7LHU7RELVGH SDUWDPHQWLV [HOP=5YD QHOLNRED]DTDUDLDPX[DHVWDWH6LDODPEDU6LD:\YLV 7DY6LVNXUDVDGDZ\DYURND6LPLPGLQDUHVDPX6DRHEV JDHFQHQZ\OLVUH]HUYXDULPLQLVWDGLRQLPRVDFGH OHELNOXEHELăHVLPRELHTW7DPFLUH&DPRQD7YDOLD URPHO7DUHDELOLWDFLDGDP6HQHEOREDPRVD[OHRELV JDGDZ\YHWLOHEL7TREXOH7LVVRIHO6LPLPGLQDUH REVURJRUFRPDUPHJUHOL=HPD5QL6QDD:DULVP7DY UREDSURJUDPLVPLPGLQDUHRELVPRQLWRULQJVPXGPL YDG D[RUFLHOHEV VDPX6DRHELV  XNYH 6HVUXOH EXOLDZHOVTREXOH76LSURJUDPLV7YLVPLOLRQ  D7DVL ODULJDPRL\RÄVRIOLVP[DUGD:HULVSURJ UDPD³ XNYH PHVDPH ZHOLD [RUFLHOGHED

2QJRLQJZRUNVZLWKLQ WKHERXQGRIWKHSUR JUDP³$JULFXOWXUH6X SSRUW 3URJUDP´ DUH DERXWWRILQLVKLQ.R EXOHWL PXQLFLSDOLW\ +HDGRI*RYHUQPHQW $GPLQLVWUDWLRQ2PDU 0HJUHOLG]HDQG+HDG RI'HSDUWPHQWRI5H ODWLRQVZLWK$GPLQLVWUDWLYH%RGLHV.RED=DNDUDLDVLJKWHG WKHZRUNLQJDFWLYLWLHVLQ0XNKDHVWDWH$ODPEDUL$FKNYLV WDYL6NXUD DQG7VNDYURNDYL :DWHU WDQN D PLQL VWDGLXP ZDLWLQJIDFLOLWLHVFOXEV,W¶VDVKRUWOLVWRIREMHFWVWKDWDUH XQGHU UHKDELOLWDWLRQ DQG FRQVWUXFWLRQ DFFRUGLQJ WR WKH GHFLVLRQRISRSXODWLRQLQDOOYLOODJHVRI.REXOHWL$V2PDU 0HJUHOLG]HQRWHGWKHSURJUHVVRIWKHSURJUDPLVFRQVWDQWO\ PRQLWRUHG E\$MDUD JRYHUQPHQW  RI ZRUN LV DOUHDG\ LPSOHPHQWHG*(/WKRXVDQGZDVDOORFDWHGIRU.REXOHWL SURJUDP LQ  \HDU ³$JULFXOWXUH 6XSSRUW 3URJUDP´ LV DOUHDG\WKLUG\HDUUXQQLQJ



DXTFLRQL PGLQDUH :RUR[LV TYL6D[UH6LV VDEDGRV VDUJHEORELV OLFHQ]LLV JDFHPD]H

$XFWLRQRQJLYLQJOLFHQVHRQXVLQJ VDQGDQGJUDYHOOD\HUVRIULYHU7FKRURNKL

ZOLVDJYLVWRVD:D ULVDYWRQRPLXULUHVSXEOL NLVILQDQV7DGDHNRQRPLNLV VDPLQLVWUR6L &DWDUHEXO DXTFLRQ]HVDGDFJDPRWDQLOL L\R PG:RUR[LV TYL6D[UH 6LVVDEDGRVXEDQ]HZLD 5L7VDUJHEORELV OLFHQ]L UHELVJDFHPDPRQDZLOHRELV PL5HELV PL]QL7 JDF[DGHED ZDUPRGJHQLOL L\R  SUHWHQGHQWLV PLHU XTFLRQ]H JDPRWDQLOL ZLD5L7 VDUJHEORELV OLFHQ]LHELV VDZ\LVL IDVL MDP6L 6HDGJHQGD  ODUV PRVDSRYHEHOL UHVXUVLV VDHU7R UDRGHQRED   PV YD:URELV 6HGHJDG VDERORRIDVL ODULGDILTVLUGD

2Q WK RI $XJXVW LQWKH0LQLVWU\RI )LQDQFHDQG(FRQRP\ RI$MDUD$5ZDVKHOG DXFWLRQRQJLYLQJOLFHQ VH RQ  VHFWLRQ RI VDQGDQGJUDYHOOD\HUV RIULYHU7FKRURNKLRQ ZKDWZHUHUHSUHVHQWHG VWDWHPHQWVLQRUGHU WRSDUWLFLSDWHRQHYHQW7KHEHJLQQLQJSULFHRIOLFHQVHZDV WRWDOO\*HOWKHWRWDODPRXQWRIUHVRXUFHVZDV P7KHILQDOSULFHDIWHUWUDGHFDPHWR*HO

VDHU7D6RULVR LQYHVWRU7D DVRFLDFLD JHJPDYV XUH[LV P]UXQYHORED PRNOHEXO EDY6Y7D VD[OV ILQDQVXUL GD PDWHULDOXUL GD[PDUHED JDXZLRV

,QWHUQDWLRQDO,QYHVWRUV$VVRFLDWLRQ RI*HRUJLDSODQVWRUHQGHUILQDQFLDO DQGPDWHULDOVXSSRUWWR8UHNKL &KLOG+RXVH

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

LWDOLXUL \DYLV PR\YDUXO7D7YLV VDXNH7HVR DGJLOLÄHVSUHVR EDUL VLQDWUD³

7KHEHVWSODFHIRU,WDOLDQFRIIHH ORYHUVHVSUHVVREDU³6LQDWUD´

=YHOED7XP6LQRH-RUGD QLDV 16L JDL[VQD D[DOL HYURSXOLWL SLV EDUL UR PHOLFJDQVDNX7UHEL7PLP ]LGYHOL XQGD L\RV \DYLV PR\YDUXO7D7YLV DT 6HVD =OHEHOLD QDPGYLOL LWD OLXUL \DYLV/DYD]]DV GD JHPRYQHEDLWDOLXULWHTQR ORJLL7 P]DGGHED \DYLV LVH7LVD[HREHELURJRULFDDHVSUHVRRUPDJLHVSUHVR ODWHNDSX&LQRDPHULNDQRFLYL\DYDEHLOLVL7GDD6 \DYDV7DQ HU7DG ÄHVSUHVR EDUL VLQDWUD³ IUDQJXO EOLQHEVDGDNUXDVDQHEVPDILQHEVDGDV[YDWNELOHX OVDF V7DY]REV VWXPDUV D5VDQL6QDYLD URP \DYLV GDJHPRYQHED6HVD=OHEHOLDDUDPDUWRDGJLO]HDUD PHG7DQZD5HEL7DF

7KHEHVWSODFHIRU,WDOLDQ FRIIHH ORYHUVHVSUHVVR FDIH EDU ³6LQDWUD´ ZDV RSHQHGLQ2OG%DWXPL 1RH =KRUGDQLD 6WUHHW 7KLV (XURSHDQ W\SH RI FDIHEDULVHVSHFLDOO\DWW UDFWLYHIRU FRIIHHORYHUV ,WJLYHVDXQLTXHFKDQFH WR WDVWH D UHDO ,WDOLDQ FRIIHH ³/DYD]]D´ HVSUHVVR GRXEOH HVSUHVVRODWWHFDSSXFFLQR$PHULFDQRDQGFROGFRIIHHZLWK %D\OHVSUHSDUHGZLWK,WDOLDQWHFKQRORJ\%HVLGHVFDIHEDU ³6LQDWUD´RIIHUV)UHQFKFUHSHVDQGFURLVVDQWVPXIILQVDQG RWKHU W\SH RI VZHHWV ,W VKRXOG EH QRWHG WKDW FDIH DOVR SURYLGHVDWDNHDZD\FRIIHH



PFLUH KHVHELV SURHTWLUHED]H LQWHUHV7D JDPR[DWYD JDPRF[DGGD

([SUHVVLRQRI,QWHUHVWRQ0LQRU +\GUR6WDWLRQ3URMHFWV

³VDTDU7YHORV QDY7RELVD GD JD]LV NRUSRUDFLLV³ 6YLORELOPD ³VDTDU7YHORV PZYDQH HQHUJLLV JDQYL 7DUHELVNRPSDQLDP³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³VDTDU7YHORV QDY7RELVD GD JD]LV NRUSRUDFLD6L´

-&6³*HRUJLDQ*UHHQ (QHUJ\ 'HYHORSPHQW &RPSDQ\´ ± VXEVLGL DU\ RI ³*HRUJLDQ 2LO DQG*DV&RUSRUDWLRQ´ DQQRXQFHG SUHTXDOL ILFDWLRQDQGH[SUHVVLRQ RILQWHUHVWVIRUGHWDLOHG VWXG\ RI  0LQRU +\GUR6WDWLRQSURMHFWVRQULYHUV±7VDEOD7XNKXUDDQG.YLUOLD ,QRUGHUWRSURJUHVVWRWKH7HQGHU6WDJHLQWHUHVWHGFRPSDQLHV RUJURXSVRIFRPSDQLHVPXVWSUHVHQWLQIRUPDWLRQDERXWWKHLU H[SHULHQFHDQGDELOLWLHVLQFOXGLQJDXGLWHGILQDQFLDOVWDWHPHQWV RIODVW\HDUVPRGHUQPHWKRGRORJLHVDQGVWDQGDUGVRIK\GUR VWDWLRQ FRQVWUXFWLRQ PRGHUQ (QJLQHHULQJ 6RIWZDUH PHWKRGRORJLHV RI JHRORJLFDO JHRGHVLF DQG K\GURORJLF UHVHDUFKHVSURMHFWSODQVDQGHWF,QWHUHVWHGSDUWLHVPXVWVHQG WKHLUSURSRVDOVWR³*HRUJLDQ2LODQG*DV&RUSRUDWLRQ´YLD PDLORUHPDLOXQWLO6HSWHPEHU

DPHULNLV 6HHU7HEXOL 6WDWHEL NYODY \YHOD]H PD5DOL VDNUHGLWR UHLWLQJLV TYH\DQDD

8QLWHG6WDWHVRI$PHULFD WREHWKHKLJKHVWFUHGLW UDWLQJFRXQWU\

ZDP\YDQPD VDUHLWLQJR VDD JHQWR³IL&PD´DPHULNLVUHL WLQJLVDPL$$$VGRQH]HGDD GDVWXUDUDFLPDVQL6QDYV URP DPHULNLV 6HHU7HEXOL 6WDWHELNYODY\YHOD]HPD 5DOLVDNUHGLWRUHLWLQJLV PTRQHTYH\DQDD6HJD[VHQHE7 DJYLVWRVGDVDZ\LV6LNLGHY HU7PDVDUHLWLQJRVDDJHQWR³VWDQGDUWHQGIXDUVPD´ PVRIOLRV QRPHU SLUYHOL HNRQRPLNLV TYH\DQDV UHLWLQJLLVWRULD6LSLUYHODG6HXPFLUDPVRIOLRV VDP JDYOHQLDQ VDUHLWLQR VDDJHQWRV 6RULV RULV SR]LFLD HU7PDQH7V DU GDHP7[YD ³IL&PD´ NROHJD VDDJHQWRVJDQ JDQV[YDYHEXOLJDGDZ\YHWLOHED PLL5R ăDPHULNLVVDNUHGLWRUHLWLQJLNYODYXPD5OHVGRQH]H GDWRYD SURJQR]L7 VWDELOXUL D[OD \YHOD ³PXGLVLV´ SR]LFLDV HORGHED DP IRQ]H DPHULNLV IDVLDQL TD5DOGHELV NRPLVLD DJU=HOHEV PRNYOHYDV VDNL7[]H L\R 7X DUD ³VWDQGDUW HQG IXDUVLV´ JDGDZ\YHWLOHEDVXELHTWXUL PL]H]HEL7QDNDUQD[HYL

7KH OHDGLQJ UDWLQJ DJHQF\³)LWFK´FRQILUPHG WKHUDWLQJRI86$DWWKUHH $$$OHYHOVZKLFKPHDQV WKDW 8QLWHG 6WDWHV RI $PHULFDLVWKHFRXQWU\RI KLJKHVW FUHGLW UDWLQJ FRXQWU\:HUHPLQG\RX WKDWDWWKHEHJLQQLQJRI $XJXVWDQRWKHUUDWLQJDJHQF\³6WDQGDUG 3RRU¶V´UHGXFHG WKHUDWLQJRIWKHQXPEHURQHHFRQRPLFFRXQWU\IRUWKHILUVW WLPHLQWKHKLVWRU\$PRQJWKHVHWKUHHZRUOGLQIOXHQWLDOUDWLQJ DJHQFLHVWKHSRVLWLRQVRIWZRGLGQ¶WFRLQFLGHZLWKHDFKRWKHU ³3LWFK´PDGHWKHGLIIHUHQWGHFLVLRQ±OHIWWKHFUHGLWUDWLQJRI $PHULFDVWLOODWWKHKLJKHVWOHYHOZLWKWKHIRUHFDVW6WDEOH 1RZ HYHU\RQH LV ZDLWLQJ IRU 0RRG\¶V SRVLWLRQ 7KH866HFXULWLHVDQG([FKDQJH&RPPLVVLRQFRQWLQXHVWKH LQYHVWLJDWLRQRQWKHLVVXHZKHWKHUWKHGHFLVLRQRI³6WDQGDUG 3RRU¶V´ZDVWKHUHVXOWRIVXEMHFWLYHUHDVRQVRUQRW

:DO0DUW 6WRUHV ,QF LV DTFLHELV 5LUHEXOHED L7 JDL]DUGD

:DO0DUW6WRUHV,QF¶VVKDUH SULFHWRLQFUHDVHE\

VDFDORYD:URELVPVR I O LR V  X PV [ YL OH V L NRPSDQLD:DO0DUW6WRUHV ,QFLVPHRUHILQDQVXUL NYDUWDOLVPRJHED L7 DQX  PLOLDUGL GRODUL7[RORDTFL HELV5LUHEXOHED L7JDL]DUGDGD7L7H XOL DTFLLV IDVPD 



7KHVHFRQGILVFDOTXDUWHU SURILW RI ZRUOG¶V ODUJHVW UHWDLOLQJFRPSDQ\³:DO 0DUW6WRUHV,QF´LQFUHD VHGE\PLOOLDUG GROODUV ZKLOH WKH VWRFN SULFHLQFUHDVHGE\ DQG WKH SULFH RI HDFK VKDUH DPRXQWV WR 

GRODUL6HDGJLQD:DO0DUWLV6HPRVDYDOPDLDQL QD[WRPLJDDNH7DGDPLOLDUGGRODULVPD&YHQH EHOL GDDILTVLUD JD\LGYHELV PRFXORED JDQVDNX7 UHEL7PHTVLND6LGLGEULWDQH76LNDQDGD6LEUD]LOLDVD GD &LQH76L JDL]DUGD

86'LQFUHDVHGLQFRPHRI:DOO0DUWDPRXQWVWR

PVRIOLR6L VDNYHE SURGXTWHE]H IDVHEL JDL]DUGD

:RUOGIRRGSULFHV WREHLQFUHDVHG

PVRIOLREDQNLVLQIRU PDFLL7PVRIOLRVLVDN YHESURGXTWHE]HIDVHEL JDL]DUGDPLVLPRQDFH PHELV PL[HGYL7 JDVXO ZHO7DQ 6HGDUHEL7 LY OLV6L IDVHEL L7 JDL]DUGDPVRIOLREDQ NLVDQJDUL6LV7DQD[PDG YHVDNYHESURGXTWHE]H IDVPDZOLVSLNXUPD&YHQHEHOVPLD5ZLDPD7LPD UDJLNL6HPD6IR7HEODGPFLUHDPVRIOLRED]UHE]H IDVHELV]UGLVVXUD7LNLDVH7LDVLPLQG]HIDVPD VD6XDORGL7PRLPDWD6DTDU]HBL7[RUEDO]H NL  L7 6HJD[VHQHE7 VDTDU7YHOR6L LYOLV6L ZLQD7YHHE7DQ6HGDUHEL7IDVHELV6HPFLUHEDD5LQL6 QD 7XPFD ]UGD ILTVLUGHED JDVXOL ZOLV LJLYH 7YHV7DQ 6HGDUHEL7

$FFRUGLQJ WR WKH LQIRU PDWLRQ RI :RUOG %DQN ZRUOG IRRG SULFHV KDYH LQFUHDVHG$FFRUGLQJWRLWV LQIRUPDWLRQWKHSULFHVKDYH LQFUHDVHG E\  FRPSD UHG WR WKH SUHYLRXV \HDU $FFRUGLQJ WR WKH :RUOG %DQNUHSRUWDOVRIRRGSUL FHLQGH[UHDFKHGLWVSHDNLQ WKHVXSSOLHVDUHGLVWXUELQJO\IHZ7KHSLFWXUHRIZRUOG PDUNHWSULFHLQFUHDVHORRNVOLNHWKHIROORZLQJ±FRUQSULFHWR LQFUHDVHE\VXJDUZKHDW3OHDVHQRWHWKDW LQ*HRUJLDSULFHUHGXFWLRQZDVIL[HGLQ-XO\DVFRPSDUHGWR WKH SUHYLRXV PRQWKV  +RZHYHU JURZWK LV REVHUYHG LQ FRPSDULVRQZLWKODVW\HDU¶VVDPHPRQWK

D:DULV ILQDQV7D GD HNRQRQRPLNLV PLQLVWULV 6H[YHGUD

7KHPHHWLQJRI0LQLVWHURI)LQDQFH DQG(FRQRP\RI$MDUD$5

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

7KH0LQLVWHURI)LQDQFH DQG (FRQRP\ RI $MDUD $50U9D]KD%RON YDG]HPHWJHQHUDOGLUHF WRU RI /7' ³2SHQUH YROXWLRQ *HRUJLD´ 0U $ODQ *LOVWUDS 2Q WKH PHHWLQJ ZDV GLVFXVVHG WKH DUHDO LQ $MDUD RI VSUHDGLQJ LQQRYDWLYH VHUYLFH ³0REL3D\´ DOVR WKH PDLQ SULRULWLHV DQG LWV LQIOXHQFH RQ HFRQRPLFGHYHORSPHQWRI$MDUD³2SHQUHYROXWLRQ*HRUJLD´ LVIRXQGHG LQ*HRUJLD EUDQFKRI DPHULFDQ3HQUHYROXWLRQ FRPSDQ\  EXW ZLOO VHUYH DOVR HDVWHUQ (XURSHDQ UXVVLDQ FHQWUDODVLDQDQGPLGGOHHDVWHUQPDUNHWV0RE\3D\LVQHZ IOH[LEOHPHDQRISD\PHQWZKLFKDOORZV\RXWRSD\SXEOLF XWLOLW\WD[HVDOVRSD\LQ\RXUGHVLUHGWUDGLQJREMHFWVILOOLQ PRELOHSKRQHEDODQFHVHQGPRQH\WR\RXUIULHQGVDQGPDNH D QXPEHU RI DQRWKHU RSHUDWLRQV  E\ \RXU PRELOH SKRQH 1RZDGD\V WKHFRPSDQ\ KDV HPSOR\HG DERXW SHRSOHLQ $MDUDUHJLRQEXWWKLVGDWDVZLOOEHLQFUHDVHGZKHQ0REL3D\ ZLOOUHDFK$MDUDUHJLRQVORFDWHG+LJKDWWKHHQGRI\HDU

VDTDU7YHOR ED7XPL  JRJHED6YLOLV T 

*RJHEDVKYLOLVWU%DWXPL*HRUJLD 7HO

PLOOLDUGGROODUVLQWRWDO9ROXPHVRIVDOHVKDYHSDUWLFXODUO\ JURZQLQ0H[LFR*UHDW%ULWDLQ&DQDGD%UD]LODQG&KLQD

WHO           ZZZLLDJH



(PDLOLQIR#LLDJH