CHEVRON LUBRICANTS LANKA PLC (LLUB)

Transcription

1 Rs. Kenanga Investment Corporation Ltd Research Report as at 1 th January 213 Prepared by Dananjaya Wijesekara & Rasheed Sheriff CHEVRON LUBRICANTS LANKA PLC (LLUB) Sri Lankan Lubricant market Overview Lubricants became a private monopoly in the mid 199s after Ceylon Petroleum Corporation privatized its Lubricants to Caltex, which is now part of the Chevron Petroleum Group. South Asia consumes an estimated 1,7 kilo tonnes of lubricants per year. India is the leading lubricant-consuming country in the subcontinent by far, accounting for an estimated 75% of the volume consumed, followed by Pakistan and Sri Lanka At Present the Public Utilities Commission of Sri Lanka (PUSL) is acting as the shadow regulator for the lubricant sector by way of advising and assisting the ministry of Petroleum Industries on policy and regulatory matters. As at the end of year 211, there were fourteen entities authorized to import, export, sell, supply and distribute lubricants. The local lube market is currently estimated at about LKR 6 Billion in terms of Revenue. The two authorised parties to blend and produce lubricants in Sri Lanka are LLUB and Lanka IOC PLC. During the year 211, around 64% (33,44 KL) of the lubricant requirement was produced (Blended) locally. Around 87% of the blending was carried out at the lube blending plant of LLUB while the balance 13% was produced by the lube blending plant belonging to IOC. Local blending is mainly carried out in order to gain the advantage from the prevailing import tariff differential between raw materials and finished lubricants. LKR. Mn The lubricant market had a 7% YOY growth in terms of quantity produced from 21 to 211. For the Purpose of local blending requirements base oils worth LKR 4,753 Mn and additives worth LKR. 1,244 Mn were imported by LLUB and LIOC in 211. While a total of 22,6 KL of finished lubricants and greases worth LKR. 3,78Mn were imported during the year of which 66% were automotive lubricants. During 211, 5,18 KL of lubricants were exported to regional markets recording a 63% growth from 21.This sector has contributed with LKR 52 Mn to government revenue last year, up from LKR 46 Mn in 21. Quantity in Kilo Litres (KL) Combined Sales in ,775 58,554 Combined Sales in 21 14,35 54, Source: PUSL LLUB 1 Market Price: LKR 212 Recommendation: Long Term Buy Price Target: LKR 245 Company Market share % Chevron Ceylon Limited 56.9 Indian Oil Corporation Limited 8.4 Ceylon Petroleum Corporation 8.4 ExxonMobil Asia Pacific Pte. Ltd 6.9 Laughs Holdings Limited 4.5 Lubricant Company Sinopec 3. Corporation Bharat Petroleum Corporation Limited 3. BP France S.A. 2. Shell Trading (Middle East)Private 1.7 Limited Ashland Inc. 1.1 Toyota Tsusho Corporation.9 Total Lubricants India Limited.2 Motul France S.A.. Gulf Oil International Limited (not renewed license for the year) Total 1 Source: PUSL Lubricant Market Sector Percentage (%) Automotive 7% Industrial 16% Marine 6% Greases 4% Other 4% Source: PUSL Lubricant Sales Revenue ( LKR') by Company Lanka Indian Oil Corporation Limited Ceylon Petroleum Corporation Exxon Mobil Asia Pacific Pte. Ltd Laugfs Holdings Limited

2 Volume (KL) Share Volume Rs. 8.% 7.% 6.% 5.% 4.% 3.% 2.% 1.%.% Company Overview Chevron Lubricants Lanka PLC engages in blending, manufacturing, exporting Distributing, and marketing lubricant oils, greases, break fluids, and specialty products in Sri Lanka. The company offers its products for industrial, commercial, and consumer applications. Chevron Lubricants Lanka PLC markets its products under Chevron and Caltex brands. The company was incorporated in 1992 and is based in Colombo, Sri Lanka. Caltex is the 5 th most powerful brand in Sri Lanka, and its brand value is amongst the top 11 in Sri Lanka. LLUB has 12 Mn ordinary shares outstanding as at 1 th January 213. LLUB is considered a high dividend paying company However; KICL foresee a fall in the dividend payout rate due to its movement from current blending plant in Kollonnawa to Sapugaskanda at a cost of $ 15 Mn. This plant movement will be funded internally through its retained profits rather than looking at external financing. However from 214 onwards KICL have predicted that the dividend payout rate will be sustained at 9% level (85% to 9%). LLUB recorded a LKR 2 Billion Profit after tax (PAT) in 211 compared to 21 in which it earned a PAT of LKR1.5 Billion. It s a 33% PAT growth, with revenue growing at 17%. LLUB has further recorded a growth rate of 19.2% on its PAT, and a top line growth of 1.2% for 1-3Q However, LLUB recorded a fall in top line by 2.8% QoQ for Q And fall in bottom line by 13.5% QoQ for Q As highlighted by CEO Mr. Kishu Gomes, this fall in both top line and bottom line is attributable to macro economic conditions faced by Sri Lanka such as an increase in duty on vehicle imports to minimise currency drain out of the country. Export Market LLUB exports 5% of its lubricants mainly to Maldives and Bangladesh. LLUB has seen a fall in growth in its Bangladesh sales whereas it has experienced the opposite in Maldives. LLUB entered Maldives in 23 and has been identified as a key player in the lubricant market industry as one of the major exporters and currently enjoys a 1% market share with expectation of a 5% growth in the near future. It has also announced its commitment to the Damas Company in Maldives by signing an agreement spanning 5 years to distribute Chevron s product range. With this new agreement Caltex will further penetrate into the Maldivian lubricant market by focusing on marine transportation and power generation, going one step further from supplying lubricants to the transport and fisheries sector. Sri Lankan economy recorded a steady export growth of 4% in the past 1 to 12 years but saw a decrease of 2% last year when compared to exports,despite the prevailed general economic conditions, to Maldives which has grown from1 % to 12% in its lubricant exports. 73.% 56.9% LLUB Market Share Ceylon Petroleum Corporation Market Share Source: PUSL LLUB Financials Reuters Code Bloomberg Code CSE Code Chevron Shareholding Structure as of Dec % 51% Chevron Ceylon Limited LLUB Lubricant Sales Volume Performance Vs. Competition Total Lubricant Production LLUB Prodcution LIOC Production Ceylon Petroleum Corporation Exxon Mobil Asia Pacific Source: PUSL 2 LLUB.Cm LLUB.SL LLUB.N Share Price Rs. 212 Market Capitalization All Time High Rs Mn Rs.233 All Time Low Rs wk range Rs Chairman CEO/ MD Beta Values / ASI Beta Values/ MPI 35, 3, 25, 2, 15, 1, 5, - Farrukh Saeed Kishu Gomes Public Holding Source: LLUB Annual Report 211 LLUB.N Movement Volume Closing Price** Source: CSE 5 A fall in volume of 1,935 KL for LLUB, while Total Market volume increased by 4,184 KL in

3 BDT MVR Revenue Rs.Mn Percetange Vehicle Units Revenue Rs. Mn 3 Company Financial Performance Top line Growth LLUB has 3 main revenue generating sources: Automotive, Industrial and Exports which contribute approximately 62%, 33%, and 5 % respectively to the total group revenue. The automotive sector -The transport and communication sector of Sri Lanka grew by 11% in 211 in comparison to 11.9% growth in 21. Considerable growth was posted by transport sector accounting to 1.3%. The Growth of the transport sub sector could be directly Industrials 33% Total Revenue Exports 5% Automotive 62% attributable to the increase in new motor registration by 46.3% in 211. As automotive sector is LLUB s largest revenue generating segment Sri Lanka s Transport sector growth directly affects LLUB s main stream of revenue Fall in new vehicle registration by 64,682 vehicles in Vehicle Population Forecasted LLUB Sales Segementational Revenue of LLUB 16,. 14,. 12,. 1,. 8,. 6,. 4,. 2, Industrial Export Automative Revenue growth % A 157% increase of new vehicle registatrions from 29 to Fall in import duty in 21 increased SL vehicle population (+17% in 21 Source: LLUB Annual Report 211 & KICL Research Source: LLUB Annual Report 211 & KICL Research Bangladesh (BDT) and Maladivian (MVR) against LKR movement BDT MVR Source: Forex report & KICL Research The automotive Sector consists of the retail industry; the main factor that influences automotive revenue is the number of vehicle population in Sri Lanka. And KICL is expecting LKR Mn revenue from this sector in 213. The industrial sector will see a 1% growth considering the current economic development of the country. Reflecting the continued expansion of the domestic and external demand, the industry sector recorded a 1.3 % growth in 211, the highest since 22. And KICL is expecting LKR Mn revenue from this sector in 213. The export sector consists of LLUB lubricant exports to Maldives and Bangladesh and revenue is forecasted to grow by 25% year each from this sector. However currency volatility and increased competition in the respective countries will play a huge part in revenue growth from this sector. From this sector KICL is expecting LKR 1725 Mn revenue in 213. Overall Total Revenue of LLUB has increased from LKR 8,654 in 27 to LKR 11,4 Mn in 211 and forecasted total revenue of LKR Mn in 213. LLUB increased the prices of all ranges of products in order to keep prices par with the increase in raw material prices in the world market. Other Factors that have contributed to the growth in LLUB revenue are the change of product mix and product portfolio strategy, export growth, global synergies, enhanced operational efficiencies and the stable parity rate. Further the growing awareness witnessed in the recent years of vehicle emissions as a source of air pollution is driving environment regulation, which has forced commercial fleet across the region to modernize. This in turn has created a small but growing demand for higher performance engine oils. This enabled chevron to increase the revenue contribution from its premium brands. KICL believe that with rapid growth in sectors such as power and energy, agriculture, fisheries, ports and infrastructure will contribute to top line growth of LLUB.

4 LKR MN LKR Million Percentage LKR Million US $ Per Barrell 4 Bottom Line Growth LLUB enjoys a 9% tariff benefit from blending their products locally, an advantage they share with their competitor Lanka IOC who currently has an 8.4% percent market share of the Sri Lankan Lubricant Market. 12, 1, 8, 6, 4, 2, FORECASTED The main driver of LLUB cost of sales are the base oil prices, where base oil is the main ingredient in lubricants, and has a strong correlation with crude oil prices with a lag of a few months. LLUB Cost of Sales was LKR 6,368 Mn in 27 and increased to LKR 7,565 Mn in 211( a growth of 19%), with slight volatility in the years in-between attributable to the volatility experienced of the crude oil prices from US $ per barrel in 27 to US$ in 211. We forecast LLUB Cost of sales to further increase to LKR 9719 Mn in 215. Cost of Sales 6 5 Fall in base Oil Prices Average Yearly Cost of Crude Oil per Barrel Source: Oil Report& KICL Research 4.% Stable GP margin at 33.33% 35.% 3.% 25.% 2.% 15.% 1.% 5.% Gross profit margins could come under (E) 213(E) 214(E) 215(E) pressure if base oil prices rise which could lower LLUB s gross profit margin in the future. Gross Profit Gross profit margins on revenue Source: LLUB Annual Report 211 & KICL Research However base oil prices and crude oil prices have a strong correlation, with a lag of only a few months. Chevron s global sourcing capabilities give rise to LLUB to benefit from pricing opportunities that arise as a result of this lag. However according to KICL forecast we believe that Crude oil prices will be stable around US $ 9 levels from 213 to 215, which will stabilise LLUB s gross profit margins at 33.33% during the period from 213 to 215. Since any changes in crude oil prices that affect LLUB cost of sales will be partially passed on as price increases to its customers..% LLUB recorded a Gross profit of LKR 3,475 Mn in 211 an increase of 14% compared to LKR 3,45 Mn recorded in 21.However gross profit margin has fallen from 32.15% in 21 to 31.48% in 211,an approximate fall of 4.14% fall in gross profit margin when compared with 29. This is mainly due to the rise in crude oil prices from US $ in 29 to US $ in With regard to LLUB Earnings before interest and taxation (EBIT), the company has done well to manage its EBIT margins despite the increase in its distribution networks. The company recorded an EBIT margin of 24.68% in 211 compared to 23.94% in 21. The company has managed ito maintain its SG&A at low levels, resulting in its EBIT margins remaining healthy % 19.98% -3.6% -8.58% 15.44% 6.2% 5.86% 5.9% (E) 213(E) 214(E) 215(E) Operating Profit(EBIT) Distribution and Administration Cost Growth YoY % Gross Profit EBIT Margins Source: LLUB Annual Report 211 & KICL Research

5 Rs. Mn Rs. 5 Overall EBIT grew by 24.68% YoY to LKR 2,725 Mn in 211. KICL forecast an EBIT of LKR 3,83 Mn in 215. KICL further foresee an EBIT margin of 26.27% in 215.Positive Volume growth coupled with price increases are expected to drive EBIT margins. 35% 33% LLUB s healthy cash position paid off with a finance income of LKR 52.5Mn in 27 to a high of LKR 99 Mn in 29 and thereby a sudden fall to LKR 43 Mn in 211, attributable to a fall in interest income from LKR 79 Mn in 21 to LKR 35 Mn in 211. The company achieved a net profit of LKR 2,1 Mn in 211, which was the highest net profit recorded during LLUB s presence in the SL lubricant market. This is partially attributable to the reduction in the corporate tax from 35% in 21 to 28% in 211. In line with our forecasts we foresee net profits of LLUB to increase to LKR 2,48Mn in 212, LKR 2,553Mn in 213, LKR 2, 73Mn in 214 and LKR 2,862 Mn in % 25% 2% 15% 1% 5% % 26% 12% 2% (E) Gross profit margins on revenue Net Profit Margins Source: LLUB Annual Report 211 & KICL Research LLUB net profit margins increased from % in 27 to 18.13% in 211. We foresee net profit margins of LLUB to be stable around the level of 19% for the year 212 and going into % 1% Fall in Dividend payment and rise in Retention rate due to the movement of the Lubricant Blending Plant % 6% 4% 2% % Retention ration Dividend payout Source: LLUB Annual Report 211 & KICL Research Fall in dividend payout rate EPS DPS Book value per share (E) 213(E) 214(E) 215(E) (LKR ' Mn) (LKR ' Mn) (LKR ' Mn) (LKR ' Mn) (LKR ' Mn) (LKR ' Mn) (LKR ' Mn) (LKR ' Mn) (LKR ' Mn) Turnover Rs , , ,4.9 13, ,578.6 Net Profit Rs YoY % % 57.7%.4% 34.25% 19.52% 6.2% 5.86% 5.9% EPS Rs YoY % % 57.7%.4% 34.25% 19.52% 6.2% 5.86% 5.9% PER at LKR 212 /= PEG DPS (X) (X) Rs. Dividend yield at LKR % 212/= ROE % Book value per share PBV Profitability ratios Rs. (X) Gross Margin % 26.41% 23.53% 35.62% 32.15% 31.48% 33.33% 33.33% 33.33% 33.33% EBIT Margins % 18.55% 15.56% 25.83% 23.94% 24.81% 26.27% 26.27% 26.27% 26.27% EBT Margins % 19.16% 16.66% 26.97% 24.64% 25.2% 27.27% 27.27% 27.27% 27.27% Net Profit Margins % 12.46% 1.65% 17.2% 15.85% 18.25% 19.64% 19.64% 19.64% 19.64% Source: LLUB Annual Report 211 & KICL Research

6 Millions 6 Chevron Lubricants Lanka Financial Performance for the Year 212 Quarter 1 Quarter 3. LLUB Quarterly Financial Performance 212 3QFY12 3QFY11 Change % 1-3QFY12 1-3QFY11 Change % Revenue 2,995,884. 3,84, ,892,26. 8,65, Cost of Sales -2,66,55. -2,66, ,982, ,5, Gross profit 929,829. 1,17, ,99,633. 2,565, Distribution costs -129, , , , Administrative expenses -127, , , , Other income 2, , , , Operating profit 675, , ,256,188. 1,979, Finance income 46, , ,36. 22, Finance costs , , Profit before Income tax 721, , ,373,287. 1,991, Income tax expense -199, , , , Profit for the period 521, , ,716,262. 1,439, Total comprehensive income for the period 521, , ,716,262. 1,439, Basic earnings per share Top line reduced by 2.87 % LLUB revenue fell by 2.87% from 3QFY11 (LKR.3, 184 Mn) to 3QFY12 (LKR 2, 995 Mn). The reduction in the top line was primarily due to high competition faced in the lubricant market as well as due to macro economic factors that affected the market. Vehicle purchases are comparatively lower than other economies due to high taxation policies introduced by the government. Limited access to fuel station has also had an impact on revenue. This has directly affected their top line. However we foresee that LLUB will increase its revenue stream in the last quarter in 212 due to increase in tourism and also seasonal effects where people tend to travel more during the last quarter of the year which will have a positive impact on the top line. Gross profit reduced by 8.66% due to high cost of sales Source: LLUB Quarterly Report 212 & KICL Research Revenue Performance Sharp duty increases on vehicles, and price increases to recover cost escalations -2.87% QoQ 1.25% QoQ 3QFY11 3QFY12 1-3QFY11 1-3QFY12 Source: LLUB Quarter 3 report & KICL Research Even though LLUB s top line has decreased by 2.87% the cost of sales remain at almost same levels (Q3212).LLUB was unable to reduce their heavy cost of sales due to high fixed cost and running cost in order to maintain their blending plant situated at Kolonnawa (Which is producing 5 MT capacity).further LLUB has increased inventory by 2% (as at Sep 3 th 212) compared to last year. This is a clear indicator that their stocks are not moving as swiftly as during periods when they were operating as a monopoly. Due to high cost of sales LLUB was unable to maintain profit margins. By looking at past trends LLUB has always been able to pass on the increase in cost of the inputs to their customers in terms of higher prices. But in 3QFY212 LLUB might have not been able to pass these above mentioned costs due to high competition in the Sri Lankan market which created high amount of stagnant inventory.

7 Rs. Millions 7 High Distribution and Administrative expenses LLUB was unable to reduce the cost structure along with drop in revenue due to high cost of sales. The operational cost is high due to higher volume handling cost as well as high distribution cost which were unable to pass on to the customers which resulted in low revenue in 3QFY212. Operating Profit has reduced by 17.6% compared to 2.87% reduction in revenue. Despite the economic situation in the country LLUB was unable to increase operating profit margins in 3QFY212 compared to 3QFY211 period. But considering the 1-3QFY212 LLUB has managed to increase profit margins by 13.96%.Contribution from the 3QFY212 to the 212 operating margin accounted only for 3% compared to 41% contribution in the previous year during the same quarter. This clearly indicates that LLUB has a challenge in retaining their customers and to maintain market share % -2% -19% 5% -23% 17% Q1 212 Q2 212 Q3 212 Revenue Gross Profit Net Profit Source: LLUB Quarter 3 report & KICL Research Finance income grew by 2%. LLUB was able to increase finance income by a considerable percentage due to upward movement of the current interest rates in Sri Lanka during the 3 rd quarter of 212 Considering the current movement in Sri Lanka interest rates we can expect an upward trend of the interest rates in the short term which will have a positive impact on LLUB s finance income. Profit for the period and net profit margins has reduced. Due to negative impact created in the market share and macro economic factors, LLUB was unable to achieve expected profit target in 3QFY212. Considering the cumulative performance in 212, LLUB has managed to increase their net profit by 19.25% which is a positive outlook for the company s performance in LLUB Share Price Movement : Quartely Q1 Q2 Q3 Highest Price 212 Highest Pric 211 Source: LLUB Quarter 3 report & KICL Research

8 8 LLUB: Risk Management Loss of market share due to the competition In the recent past LLUB has lost their conventional distributional channel which was refuelling stations which was one of significant channels that gave LLUB the ability to increase their volumes. However, currently LLUB is trying to increase their distribution network through their own automobile service stations which will give an opportunity to other competitors to increase their market share by looking at locations where LLUB has not entered yet such as some parts of the North and East provinces. Meanwhile the local government has opened up doors to foreign and local lubricant providers which will have a direct impact on LLUB s market share due to low switching costs. Customers can always switch to another lubricant product without any cost. Regional Outlets Sales Outlets Unlicensed operators Even though there are only 14 legal players in the market there are number of other sellers who sell lubricant products without obtaining a license. This is a common issue faced by the industry as a whole. Still there is no effective regulatory framework in order to stop these illegal operations. Operational activities are outsourced LLUB has outsourced most of their important operational activities such as warehousing, distribution as well as drum fabrication in order to reduce administrative hassle as well as to obtain cost effective methods from economies of scale obtained by outsourced party. However, there is always risk element attached with outsourced activities. Improper service by one outsourced party will have a huge impact on the whole production process which will result in a negative impact on LLUB s performance in the long term. Smooth production processes are always expected in order to face the strong competition. Therefore LLUB should maintain their strong and healthy relationship with outsourced parties and also their contingent plans should be accurate and up to date in order to facilitate any emergency. Exchange Rate Risk Most of the raw materials for the production are imported and any exchange rate movements will directly impact to the cost of production. Any depreciation of rupee would lead to increase cost of production which will ultimately result reduction in bottom line. Therefore LLUB might require moving into hedging instrument in order to mitigate exchange rate fluctuation risks.

9 Vehicle Units Rs. Mn 9 LLUB: Future Direction Currently LLUB owns 65% to 6% of the market share and still remains as market leader in the lubricant industry. KICL assume that LLUB is focusing more on their profit margins rather than focusing on market share due to high competition created in the local market. KICL believe LLUB will maintain their market position in the near term due to high level of satisfaction of the customers and quality of the products. With the expected increase in vehicle population, potential industrial growth as well as expected export growth, KICL assume that revenue will grow by 7% YOY up to 215. There are significant opportunities in the industrial business segment due to high expected foreign investments as well as future industrial expansion projects done by government Furthermore, with the economic crisis faced in developed countries KICL expect crude oil prices to dip in the world market which will directly impact to LLUB s main raw material which is base oil. Due to high correlation with base oil and crude oil KICL expect a positive impact on LLUB cost structure in the near future. However, KICL don t expect any dramatic change on LLUB administrative and distribution activities in near future. As a good dividend payer KICL does not expect any drastic change in the dividend policy in near future. Due to the movement of the manufacturing plant KICL expect reduction in the dividend payout ratio in order to facilitate investment requirements. KICL expect LLUB will maintain 9% levels retention ratio after 214. Vehicle Population Fall in Automotive revenue due to loss of marketshare Automotive Revenue Source: KICL Research & ministry of Finance Valuation KICL valuation is based on the Dividend Discount Model (DDM). We considered DDM model due to the high dividend payout ratio of LLUB. KICL expect that LLUB will continue to maintain the current dividend payout ratio because it is a one of the reasons why investors are attracted to this stock. KICL has improved our forecast for year 212(E), revenue to be LKR 12,265 Mn and to improve further to LKR 13,4Mn in 213(E). KICL has anticipated that crude oil prices will remain at the same level or even dip in the world economy resulting in a favourable outcome for the lubricant market which will ultimately impact LLUB s bottom line. In our valuation model we have assumed that the company will have 5% long term growth considering LLUB retention ratio and return on equity. We have used 12.89% as cost of equity in order to discount the dividends. We have calculated 12.89% of cost of equity considering risk free rate, beta and market risk premium. Risk free rate -1.74% (5 year Treasury bond rate) Beta -.43 (based on ASPI and LLUB stock prices) Market risk premium - 5% Based on forecasted values net profit of LKR Mn for FY12E amounts to a PE of 1.56 X at the current price of LKR 212.Based on 213E and 214E expected earning we expect a PE of 9.96X and PE 9.41 X respectively. The sector PE stands at 1.3X.Based on sector market capitalization almost 22% of the total sector market capitalization is contributed by LLUB which is the best contributor to the sector. This is a clear indicator that LLUB s performance has had a direct impact to the Manufacturing sector index performance. Based on KICL forecasted figures LLUB s stock has a target value of LKR 245/=.Based on valuation KICL have concluded that LLUB counter is undervalued. Considering the macro economic factors as well as qualitative and quantitative factors KICL is likely to provide Long term buy recommendation.

10 1 Annexure 1 Shareholder Information 2 Largest Shareholders as at 3 th September 212 Name of Shareholder Number of % Shares Chevron Ceylon Limited 61,2, 51. HSBC International Nominees Ltd-BPSS Lux -Aberdeen Global Asia Smaller 1,629, Comp HSBC International Nominees Ltd-BPSS Lux -Aberdeen Global- EME 4,563,7 3.8 HSBC International Nominees Ltd-BP2S London -Aberdeen Asia Smaller Comp 3,58, Caceis Bank Luxembourg S/A Barca Global Master Fund LP 3,414, Employees Provident Fund 3,31, Cargo Boat Development Company Limited 2,, 1.67 Renuka Hotels Limited 1,4, 1.17 National Savings Bank 1,155, Bank of Ceylon No 1 Account 1,144,8.95 Crescent Launderers & Dry Cleaners (Pvt) Ltd 1,,.83 HSBC INTL NOM LTD-BP2S LUXEMBOURG-ABERDEEN GLOBAL FRONT 953, Danske Invest- Global emerging markets small cap 874,.73 Mellon Bank N.A.- Florida Retirement system 77,.64 Danske Bank A/S 65,.54 DFCC Bank- Account No 1 69,4.51 AVIVA NDB Insurance PLC A/C No 7 594,8.5 Northern Trust CO S/A National Westminister Bank PLC as trustee of Jupiter 5,.42 India Mr. Udabage 476,5.4 Bartleet Finance Plc 4,.33 99,227, Source: LLUB Annual Report 211 DISCLAIMER: This document is a research report prepared by Kenanga Investment Corp Ltd based on the information contained in the document the report has been compiled from sources that we believe to be reliable: however we do not hold ourselves responsible for its completeness or accuracy. All opinions and estimates included in this report constitute of our judgment to this date and are subject to change without notice. Information contained in this document is not and should not be construed as an offer, or a solicitation of an offer, to buy or sell any security or other financial instruments. Kenanga Investment Corporation Ltd, or its affiliates and/ or its directors, officers and employees shall not be in any way be responsible or liable for loss or damage which any person or party may sustain or incur by relying on the content of this document.