Bank Of Baroda Ltd. - Moneycontrol

Page 1

Bank Of Baroda Ltd.

RESULT UPDATE

29th May, 2018

India Equity Institutional Research II

Result Update – Q4FY18

II 29th May, 2018

Bank Of Baroda Ltd

Page 2

Stress recognition nearly complete; lower slippages ahead

CMP

Target

Potential Upside

Market Cap (INR Mn)

INR 145

INR 168

16%

384,658

Recommendation BUY

Sector

BFSI

Result highlights Advances at INR 4274 bn grew by 12% yoy/7% qoq. Domestic credit book registered 18% growth yoy, largely led by retail book growth of 42.4%. Home loans segment posted a growth of 48.2%. NII at INR 40 bn grew by 12% yoy / -9% qoq, impacted by interest income reversals on account of continued high slippages. Yield on advances at 7.2% was down ~50 bps sequentially while calc. NIMs at 2.4% were down ~30 bps qoq. Stock of GNPAs at INR 565 bn grew by 16% qoq, forming 12.3% of the total advances (+95 bps qoq) while NNPAs were 5.5% (+52 bps qoq). Of the total slippages, INR 42.7 bn came from the RSA on account of RBI’s Feb 2018 circular. NNPA + watch list of INR 100.4 bn makes up for total stress of INR 335.2 bn (7.8% of net advances). For the quarter, the bank reported a loss of INR -30 bn on account of high provisioning which at INR 66.7 bn was up 154% yoy / 95% qoq. Credit costs for the quarter were 620 bps; PCR w/o TWO stood at 58%. Going forward, the bank is guiding for lower credit costs (of 10%. Quality corporate credit growth and capital optimization would be key priorities for FY19. MARKET DATA

KEY FINANCIALS

Shares outs (Mn)

2645

Particulars (INR Mn)

Equity Cap (INR Mn)

5291

NII

FY16

FY17

FY18E

FY19E

FY20E

1,27,398.5

1,35,134.1

1,55,217.7

1,74,153.6

1,98,894.9

Mkt Cap (INR Mn)

384658

PPOP

88,155.8

1,09,750.7

1,20,055.5

1,34,942.3

1,54,153.6

52 Wk H/L (INR)

207/126

PAT

Volume Avg (3m K)

16595

Face Value (INR)

2

Bloomberg Code

BOB IN

SHARE PRICE PERFORMANCE

-53,955.4

13,831.4

-24,318.1

27,515.4

50,457.7

EPS (₹)

-23.4

6.0

-9.2

10.4

19.1

BVPS (₹)

174.5

174.9

164.0

172.9

189.1

ABVPS (₹)

90.2

96.5

75.3

93.1

111.8

P/ABV (x)

1.6

1.8

1.9

1.6

1.3

Source: Company, KRChoksey Research

150

Stress recognition nears completion; guiding for lower slippages ahead

90

During the quarter, the bank saw slippages of INR 125.7 bn, translating into a slippage ratio of 12.4% (vs. 5.2% as of Q3FY18 and 3.06% for FY17). For FY18, slippage was 5.8%. Of the total NPA formation, INR 42.7 bn was from the RSA on account of RBI Feb 2018 circular concerning guidelines on stressed assets (INR 20.3 bn of SDR and INR 9.7 bn of S4A). Power (INR 21.5 bn), telecom (INR 16.8 bn) and textile (INR 7.9 bn) formed majority of the slippages. Total corporate slippages of INR 75 bn formed >90% of the total.

60

GNPAs stood at 12.27%, +95 bps qoq / NNPAs at 5.49%, +52 bps qoq. Segment wise, corporate NPA deteriorated by 270 bps to 18.7% qoq while rest of the segments improved – retail NPAs were 2.4%, down 100 bps qoq, MSME NPAs were 16.2%, down 180 bps qoq and agri NPAs were 14.9%, down 130 bps qoq. Corporate slippage was 5.1% (annualized).

May-18

Nov-17

May-17

Nov-16

May-16

May-15

Nov-15

120

Sensex

The bank’s exposure to NCLT list 1 is INR 71.6 bn with provisions of 55.2% while exposure to NCLT list 2 is INR 38.3 bn with provisions of 55.2%. Total exposure to NCLT is Rs. 109.9 bn with another INR 5.2 bn to be provided for (by June 2018). The bank is expecting resolutions in most accounts of NCLT list 1 in first half of FY19 and for NCLT list 2 by the end of FY19 which should lead to lower NPAs and better margins going forward.

SENSEX

35165

NIFTY

10689

Credit costs for the quarter stood at 6.6%, +350 bps yoy / +280 bps qoq, resulting in losses of INR 30 bn. PCR incl TWO stands at 67.2% and excl. TWO stands at 58.4%. For FY19, the bank has guided for much lower credit costs of 10%.

Bank of Baroda Ltd

MARKET INFO

The watch list stands at INR 100.4 bn which includes all of SMA2 and stressed SMA1. SHARE HOLDING PATTERN (%)

Particulars

Mar-18

Promoters FIIs DIIs Others Total

Dec-17

Sep-17

64.03

58.7

59.24

13.94

15.06

12.89

14.03

17.9

18.71

8

8.35

9.18

100

100

100

ANALYST Raghav Garg, [email protected], +91-22-6696 5584 Anushka Chhajed, [email protected], +91-22-6696 5620

13%

13% Advances CAGR FY18-20E KRChoksey Research is also available on Bloomberg KRCS Thomson Reuters, Factset and Capital IQ

NII CAGR FY18-20E +91-22-6696 5555 / +91-22-6691 9576 www.krchoksey.com



II 29th May, 2018

Page 3

Bank Of Baroda Ltd Steady growth in advances; targeting 15% growth ahead The bank registered steady credit growth of 12% yoy / 7% qoq during the quarter. Domestic credit book grew by 18% yoy led by retail growth of 42.4% (retail now forms 23% of the total domestic book, +300 bps yoy). Out of retail loans, home loans continued to grow at superior rate of 48.2% yoy, forming 54% of the total retail loan book. The bank continues to target sustainable growth in retail loans through expanding the distribution channels, digitizing the loan processing and approvals and undertaking several other measures. Corporate book stands at INR 1647.8 bn, up 16.81% yoy. RWA/corporate exposure has declined to 49% of FY18 against 62% as of FY17. Overall, exposures rated ‘A and above’ now form about 52.4% of the total corporate book against 39.3% as of FY17 and 50.4% as of Q3FY18. One of the key priorities for FY19 will be quality corporate credit growth and capital optimization in the corporate book. As part of this strategy, the bank has outlined a number of select performing sectors where it would like to grow its exposure, such as cement, auto, FMCG, pharma. Valuation/view: On account of stress recognition nearing completion coupled with improved outlook on slippages and moderate credit costs going forward, we expect bank’s profitability to improve sharply. Resolution of NCLT cases (list 1 + 2) over the next 12 months should help bring down the stock of stressed assets and aid margin improvement. Aggressive focus on retail credit along with quality corporate should yield better asset quality and risk-adjusted returns going forward. Strong PCR of >65% alleviates any concerns of P&L pressure henceforth. We maintain BUY with a target price of INR 168 per share, valuing the bank at 1.5x FY20E ABVPS.


KRChoksey Research is also available on Bloomberg KRCS Thomson Reuters, Factset and Capital IQ

+91-22-6696 5555 / +91-22-6691 9576 www.krchoksey.com



II 29th May, 2018

Page 4

Bank Of Baroda Ltd Particulars (INR Mn) Income Statement

Q4FY18

Q4FY17

Q3FY18

Y-o-Y

Q-o-Q

Interest income

1,10,393

1,08,752

1,13,032

1.5%

-2.3%

Interest expense

70,370

72,933

69,092

-3.5%

1.8%

Net interest income

40,023

35,819

43,940

11.7%

-8.9%

Noninterest income

16,959

19,773

16,730

-14.2%

1.4%

Total income

56,982

55,591

60,671

2.5%

-6.1%

- Employee costs

12,685

12,222

11,104

3.8%

14.2%

- Other operating expenses

17,642

13,167

17,642

34.0%

0.0%

Operating expenses

30,327

25,390

28,746

19.4%

5.5%

Pre-provision profit

26,655

30,202

31,925

-11.7%

-16.5%

Provisions

66,720

26,230

34,265

154.4%

94.7%

Profit before tax

-40,065

3,972

-2,340

-1108.7%

1611.9%

Tax expense

-10,020

2,425

1,118

-513.2%

-996.1%

Net profit

-30,045

1,547

-3,459

-2041.9%

768.7%

Balance Sheet items

Q4FY18

Q4FY17

Q3FY18

Y-o-Y

Q-o-Q

Deposits

59,13,148

60,16,752

57,32,652

-1.7%

3.1%

Borrowings

6,25,720

3,06,114

4,52,917

104.4%

38.2%

Investments

16,31,845

12,96,305

16,35,670

25.9%

-0.2%

Advances

42,74,318

38,32,592

39,93,808

11.5%

7.0%

Total Assets

71,99,998

69,48,754

68,28,243

3.6%

5.4%

12.13%

12.24%

11.55%

-11 bps

58 bps

Q4FY18

Q4FY17

Q3FY18

Y-o-Y

Q-o-Q

Yield on avg advances (%)

7.0%

7.1%

7.5%

-10 bps

-57 bps

Yield on avg interest earning assets (%)

6.5%

6.6%

7.0%

-10 bps

-49 bps

Cost of funds (%)

4.3%

4.6%

4.5%

-31 bps

-16 bps

Capital adequacy ratio (%) Spread Analysis

NIM (%)

2.34%

2.2%

2.70%

18 bps

-36 bps

Asset quality

Q4FY18

Q4FY17

Q3FY18

Y-o-Y

Q-o-Q

Gross NPA

5,64,814

4,27,194

4,84,814

32.2%

16.5%

Net NPA

2,34,830

1,80,802

1,98,520

29.9%

18.3%

GNPA (%)

12.26%

10.46%

11.31%

180 bps

95 bps

NNPA (%)

5.49%

4.72%

4.97%

77 bps

52 bps

58%

58%

59%

75 bps

-63 bps

Provision coverage (%) Credit cost (%)

4.5%

2.0%

2.4%

247 bps

208 bps

Q4FY18

Q4FY17

Q3FY18

Y-o-Y

Q-o-Q

53.2%

45.7%

47.4%

755 bps

584 bps

C/D ratio (%)

72%

64%

70%

859 bps

262 bps

RoA (%)

-1.7%

0.1%

-0.2%

-176 bps

-147 bps

Leverage (x)

16.6

17.2

16.8

-27.7%

1.5%

-3.4%

-2923 bps

-2429 bps

Key ratios Cost to income ratio (%)

RoE (%) Source: Company, KRChoksey Research






II 29th May, 2018

Page 5

Bank Of Baroda Ltd Credit book (INR Bn)

Q2FY17

Q3FY17

Q4FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

Total advances

3,541.5

3,499.6

3,832.6

3,776.1

3,873.0

3,993.8

4,274.3

Domestic book

2,661.3

2,692.1

2,977.6

2,896.4

3,025.0

3,149.8

3,512.7

Large and Medium / Wholesale

1,219.2

1,279.4

1,410.7

666.2

1,387.6

1,454.8

1,647.8

% of total

34.4%

36.6%

36.8%

17.6%

35.8%

36.4%

38.6%

MSME

480.6

467.1

485.5

579.3

502.0

520.3

517.3

% of total

13.6%

13.3%

12.7%

15.3%

13.0%

13.0%

12.1%

Retail

512.5

513.2

579.9

608.2

643.2

684.5

826.0

% of total

14.5%

14.7%

15.1%

16.1%

16.6%

17.1%

19.3%

Agriculture

423.9

416.0

473.0

463.4

458.9

466.5

495.8

% of total

12.0%

11.9%

12.3%

12.3%

11.8%

11.7%

11.6%

Misc. including trade

25.1

16.5

28.5

579.3

33.4

23.7

25.7

% of total

0.7%

0.5%

0.7%

15.3%

0.9%

0.6%

0.6%


Retail book (INR Bn)

Q2FY17

Q3FY17

Q4FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

Home loans

263.3

265.5

301.7

329.4

353.1

383.2

447.1

% of Retail Loans

51.4%

51.7%

52.0%

54.2%

54.9%

56.0%

54.1%

yoy growth

11.6%

9.1%

20.8%

27.2%

34.1%

44.3%

48.2%

qoq growth

1.7%

0.8%

13.6%

9.2%

7.2%

8.5%

16.7%

Vehicle

41.5

42.0

43.9

45.1

48.0

52.2

57.3

% of Retail Loans

8.1%

8.2%

7.6%

7.4%

7.5%

7.6%

6.9%

yoy growth

-2.3%

-6.7%

-0.8%

6.6%

15.7%

24.2%

30.3%

qoq growth

-1.9%

1.3%

4.6%

2.7%

6.4%

8.7%

9.8%

Education

21.2

20.6

20.5

20.5

20.9

20.9

20.4

% of Retail Loans

4.1%

4.0%

3.5%

3.4%

3.2%

3.1%

2.5%

yoy growth

-1.4%

-4.8%

-3.2%

-2.7%

-1.6%

1.5%

-0.5%

qoq growth

0.6%

-2.8%

-0.4%

0.0%

1.7%

0.3%

-2.4%

Others

186.6

185.1

213.8

213.2

221.2

228.2

301.2

% of Retail Loans

36.4%

36.1%

36.9%

35.1%

34.4%

33.3%

36.5%

yoy growth

-15.9%

-10.7%

10.6%

14.2%

18.6%

23.3%

40.9%

qoq growth

-0.1%

-0.8%

15.5%

-0.3%

3.8%

3.1%

32.0%

Total retail book

512.5

513.2

579.9

608.3

643.2

684.5

826.0

Q2FY17

Q3FY17

Q4FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

327.7

404.2

425.2

406.8

417.2

425.4

460.6


Deposit base (INR Bn) CA CA (%)

5.8%

6.9%

7.1%

7.1%

7.2%

7.4%

7.8%

1,239.9

1,558.2

1,509.8

1,476.1

1,532.1

1,559.5

1,657.2

SA (%)

21.8%

26.4%

25.1%

25.9%

26.3%

27.2%

28.0%

CASA

1,567.6

1,962.4

1,935.0

1,882.8

1,949.4

1,984.9

2,117.8

27.6%

33.3%

32.2%

33.0%

33.4%

34.6%

35.8%

5,675.3

5,898.6

6,016.8

5,706.1

5,832.1

5,732.7

5,913.1

SA

CASA (%) Total deposits Source: Company, KRChoksey Research






II 29th May, 2018

Page 6

Bank Of Baroda Ltd Spread analysis (calc.)

Q2FY17

Q3FY17

Q4FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

Yield on avg advances (annualized)

7.6%

7.7%

7.4%

7.3%

7.5%

7.7%

7.2%

Yield on avg investments

7.5%

6.9%

7.4%

7.3%

6.9%

6.9%

6.8%

Yield on interest earning assets

6.7%

6.5%

6.6%

6.5%

6.7%

7.0%

6.6%

Cost of funds

4.7%

4.8%

4.7%

4.6%

4.6%

4.5%

4.4%

NIM

2.2%

2.0%

2.2%

2.1%

2.3%

2.7%

2.4%

Q2FY17

Q3FY17

Q4FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

Gross NPAs (INR Bn)

429.5

426.4

427.2

461.7

463.1

484.8

564.8

Net NPAs (INR Bn)

193.4

190.1

180.8

195.2

195.7

198.5

234.8

Gross NPA (%)

11.4%

11.4%

10.5%

11.4%

11.2%

11.3%

12.3%

Net NPA (%)

5.5%

5.4%

4.7%

5.2%

5.1%

5.0%

5.5%

Gross slippage (%)

3.3%

4.9%

4.9%

5.7%

3.9%

6.1%

13.2%

Net slippage (%)

0.0%

-0.1%

0.0%

0.9%

0.0%

0.6%

2.1%

Q2FY17

Q3FY17

Q4FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

A & Above

29.3%

31.4%

39.3%

40.2%

42.9%

50.4%

52.4%

BBB

14.4%

14.8%

15.8%

15.8%

15.2%

13.5%

14.9%

Below BBB

16.3%

18.3%

21.8%

19.3%

22.9%

22.8%

19.7%

Unrated

40.0%

35.5%

23.2%

24.7%

19.0%

13.3%

13.0%


Asset quality


Rating profile







II 29th May, 2018

Page 7

Bank Of Baroda Ltd Industry wise NPA (INR Bn) Commercial RE Trade Chemicals Food Products All Engineering Petroleum & petrochem Textile Metals (mainly iron/steel) Other infra Roads & ports Telecom Power 0 Q3FY18

10

20

30 Q4FY17

40

50

60 Q4FY18

70

80


Sector wise NPA (%) 20%

18.7% 16.0%

16.2% 14.9%

14.4%

15%

13.6%

10%

5%

3.4%

2.4%

0% Large and Medium / Wholesale

MSME

Retail

Q3FY18

Agriculture

Q4FY18





90



II 29th May, 2018

Page 8

Bank Of Baroda Ltd FINANCIALS (INR Mn) PROFIT & LOSS ACCOUNT (INR Mn)

FY15

FY16

FY17

FY18

FY19E

FY20E

Interest income

4,29,636

4,40,613

4,21,999

4,36,485

4,89,922

5,46,008

Interest expense

2,97,763

3,13,214

2,86,865

2,81,268

3,15,768

3,47,113

Net interest income

1,31,872

1,27,399

1,35,134

1,55,218

1,74,154

1,98,895

Non interest income

44,020

49,989

67,581

66,572

71,196

78,859

Total income

1,75,892

1,77,387

2,02,715

2,21,789

2,45,350

2,77,754

Operating expenses

76,741

89,231

92,964

1,01,734

1,10,407

1,23,601

Employee costs

42,613

49,780

46,378

46,069

49,670

59,604

Other operating expenses

34,128

39,451

46,586

55,665

60,737

63,997

Pre-provision profit

99,151

88,156

1,09,751

1,20,056

1,34,942

1,54,154

Provisions

44,945

1,55,137

85,024

1,47,963

99,666

86,877

Profit before tax

54,206

-66,981

24,727

-27,907

35,276

67,277

Tax expense

20,222

-13,025

10,896

-3,589

7,761

16,819

Net profit

33,984

-53,955

13,831

-24,318

27,515

50,458

FY15

FY16

FY17

FY18

FY19E

FY20E

4,436

4,621

4,621

5,291

5,291

5,291

Reserves & surplus

3,93,918

3,97,369

3,98,412

4,28,644

4,52,032

4,94,921

Shareholders' funds

3,98,353

4,01,990

4,03,033

4,33,935

4,57,323

5,00,212

Borrowings

3,52,643

3,34,717

3,06,114

6,25,720

7,00,806

8,40,967

Deposits

61,75,595

57,40,379

60,16,752

59,13,148

64,45,332

70,25,411

Other liabilities & provisions

2,23,294

2,36,679

2,22,856

2,27,182

3,28,173

4,62,099

TOTAL LIABILITIES & EQUITY

71,49,885

67,13,765

69,48,754

71,99,998

79,31,634

88,28,690

Cash and cash equivalent

14,83,532

13,39,003

15,04,699

9,28,974

11,42,314

12,45,122

Investments

12,23,197

12,04,505

12,96,305

16,31,845

16,11,333

17,56,353

Advances

42,80,651

38,37,702

38,32,592

42,74,318

47,87,236

54,09,577

Fixed & other assets

1,62,505

3,32,554

3,15,157

3,64,860

3,90,751

4,17,638

TOTAL ASSETS

71,49,885

67,13,765

69,48,754

71,99,998

79,31,634

88,28,690


BALANCE SHEET (INR Mn) SOURCES OF FUNDS Share capital

USES OF FUNDS







II 29th May, 2018

Page 9

Bank Of Baroda Ltd KEY RATIOS

FY15

FY16

FY17

FY18

FY19E

FY20E

Advances (%)

7.8%

-10.3%

-0.1%

11.5%

12.0%

13.0%

Deposits (%)

8.6%

-7.0%

4.8%

-1.7%

9.0%

9.0%

Total assets (%)

8.4%

-6.1%

3.5%

3.6%

10.2%

11.3%

NII (%)

10.2%

-3.4%

6.1%

14.9%

12.2%

14.2%

Pre-provisioning profit (%)

6.7%

-11.1%

24.5%

9.4%

12.4%

14.2%

-25.2%

-258.8%

-125.6%

-275.8%

-213.1%

83.4%

Credit/Deposit (%)

69.3%

66.9%

63.7%

72.3%

74.3%

77.0%

CASA (%)

26.4%

26.4%

32.2%

35.8%

35.9%

36.3%

Advances/Total assets (%)

59.9%

57.2%

55.2%

59.4%

60.4%

61.3%

Leverage (x)

17.9

16.7

17.2

16.6

17.3

17.6

CAR (%)

12.7%

13.2%

12.2%

12.1%

11.5%

11.1%

CAR - Tier I (%)

9.9%

10.8%

9.9%

10.5%

10.0%

9.8%

43.6%

50.3%

45.9%

45.9%

45.0%

44.5%

Opex/total assets (%)

1.1%

1.3%

1.3%

1.4%

1.4%

1.4%

Opex/total interest earning assets (%)

1.1%

1.3%

1.4%

1.5%

1.5%

1.5%

NIM (%)

2.0%

1.9%

2.1%

2.3%

2.4%

2.5%

RoA (%)

0.5%

-0.8%

0.2%

-0.3%

0.4%

0.6%

RoE (%)

9.0%

-13.5%

3.4%

-5.8%

6.2%

10.5%

Gross NPA (%)

3.7%

10.0%

10.5%

12.3%

10.3%

8.9%

Net NPA (%)

1.9%

5.1%

4.7%

5.5%

4.4%

3.8%

50.4%

52.1%

57.7%

58.4%

60.0%

60.0%

Slippage (%)

2.2%

6.8%

3.9%

7.1%

2.5%

1.5%

Credit cost (%)

0.9%

3.5%

2.1%

3.5%

2.0%

1.5%

EPS (INR)

15.4

-23.4

6.0

-9.2

10.4

19.1

BV (INR)

180.1

174.5

174.9

164.0

172.9

189.1

ABV (INR)

143.6

90.2

96.5

75.3

93.1

111.8

P/E (x)

10.6

-6.3

28.8

-15.7

13.9

7.6

P/BV (x)

0.9

0.8

1.0

0.9

0.8

0.8

P/ABV (x)

1.1

1.6

1.8

1.9

1.6

1.3

Growth rates

PAT (%) Balance sheet ratios

Operating efficiency Cost/income (%)

Profitability

Asset quality

PCR (%)

Per share data / Valuation







II 29th May, 2018

Page 10

Bank Of Baroda Ltd Rating Legend

Bank Of Baroda Ltd Date

CMP (INR)

TP (INR)

Recommendation

29-May-18 2-Feb-18 17-Nov-17 14-Aug-17 13-Feb-17 14-Nov-16 12-Aug-16 16-May-16 15-Feb-16 07-Non-15 12-May-15 3-Feb-15 3-Feb-15 7-Jan-15 31-Jul-14 9-Jul-14 14-May-14 9-Apr-14

145 169 185 142.7 188 161 146 144 114 169 158 188 188 212 177 165 175.6 151.2

168 226 190 190 205 180 173 173 140 194 200 215 215 220 208 212.8 208 159.4

BUY BUY BUY BUY ACCUMULATE ACCUMULATE ACCUMULATE ACCUMULATE BUY ACCUMULATE BUY ACCUMULATE ACCUMULATE HOLD BUY BUY BUY ACCUMULATE

Our Rating

Upside

Buy

More than 15%

Accumulate

5% - 15%

Hold

0 – 5%

Reduce

-5% – 0

Sell

Less than -5%

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It is confirmed that, Raghav Garg (B.Com, M.Com (Applied Finance)), research analyst and Anushka Chhajed (B.com & CA), research associate, author of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Compensation of our Research Analysts is not based on any specific brokerage service transactions. KRCSSPL or its associates (Group Companies) collectively or its research analyst do not hold any financial interest/beneficial ownership of more than 1% (at the end of the month immediately preceding the date of publication of the research report) in the company covered by Analyst, and has not been engaged in market making activity of the company covered by research analyst. It is confirmed that, Raghav Garg (B.Com, M.Com (Applied Finance)), research analyst and Anushka Chhajed (B.com & CA), research associate, do not serve as an officer, director or employee of the companies mentioned in the report. 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