Stock Pointer. Bharati Shipyard Ltd. CMP: Rs. 711 P/E 19.6x FY08e BUY. Key Investment Highlights

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1 Stock Pointer Bharati Shipyard Ltd. CMP: Rs. 711 P/E 19.6x FY08e BUY PRICE TARGET Rs. 1,000 /- (15 Months) Index Details Sensex 19,079 Nifty 5,742 BSE MIDCAP 9,094 Ship Building & Industry Repair Scrip Details Mkt Cap (Rs in crores) Book Value (Rs) 76.4 Eq Shares O/s (Cr) 3.2 Avg Vol 34, Week H/L 759 / 309 Dividend Yield (%) 0.4 Face Value (Rs) 10 BSE Code NSE Code BHARTISHIP Shareholding Pattern (September 07) Shareholders % Holding Promoters 42.1 Indian Institutions 34.7 FII s 15.1 Non Promoter Corporate 2.1 Public 6.0 Total BSL Vs Sensex Bharati Shipyard Ltd. (BSL) is a leading private Indian shipbuilding company engaged in design and construction of various types of sea going, coastal, harbour, inland crafts and vessels. Over the years, the company's product range has been upgraded from the simple inland cargo barges, through deep-sea trawlers and dredgers, to maneuverable and power packed ocean going, Tractor Tugs, Cargo Ships, Tankers and Offshore Vessels. Key Investment Highlights Robust Order Book Provides Earnings Visibility BSL has an unexecuted order book of Rs 3,600 crore, which provides a cover of 5.4x the FY08E sales. Currently, BSL has 47 ships (including a jack- up Rig) on order to be delivered in the next two to three years. Green Field Expansion at Mangalore to fuel growth BSL has embarked upon a Rs 450 crore greenfield expansion plan at Mangalore with a capacity to build six vessels up to 60,000 DWT. The yard is expected to generate revenues to the tune of Rs crore at full utilization in FY10. Increase in E & P spending, leading to high demand for OSVs Expenditure on E&P is growing at about per cent per annum, causing a significant demand for offshore vessels. India is the most attractive destination for OSVs since the focus of most large shipyards (in China, South Korea, and Japan) remains large conventional vessels. Moreover, large shipyards make it unfeasible to produce OSVs giving India a strategic advantage. Valuation & Recommendation On the back of a robust order book, the on-going expansion plans and a promising industry outlook, we expect the company s revenues & profits to grow at a CAGR of 64% and 50% respectively, over the next 2 years. At the CMP of Rs. 711, the stock is currently trading at 19.6x the FY08e earnings. We initiate BUY coverage on the stock and recommend the investors to BUY at current levels with a price target of Rs.1,000 for a period of 15 months an upside of 40% from current levels. Key Financials: Y/E March Rs. in Cr FY06 FY07 FY08E FY09E Total Income EBIDTA PAT FD EPS (Rs.) EPS Growth (%) ROCE RONW P/E (x) EV/EBIDTA Wednesday, December 19, 2007

2 Company Overview BSL is a private Indian shipbuilding company engaged in design and construction of various vessels. BSL is a private Indian shipbuilding company engaged in design and construction of various types of sea going, coastal, harbour, inland crafts and vessels. Over the years, the company's product range has been upgraded from the simple inland cargo barges, through deep-sea trawlers and dredgers, to maneuverable and power packed ocean going, Tractor Tugs, Cargo Ships, Tankers and Offshore Vessels. The company caters to demand from both domestic and foreign customers. The domestic customers include port trusts, inland water transport operators and leading corporate groups like Reliance Industries Limited, Great Offshore and Shipping Corporation of India. On the export front, the company has supplied a wide range of vessels to Norway, Germany, France, Middle East, Singapore etc. Bharati operates from four fully functional shipyards at Ratnagiri, Ghodbunder, Goa, Kolkatta and a Greenfield yard coming up at Mangalore. BSL operates from four fully functional shipyards and a Greenfield yard coming up at Mangalore. Shipyards Ratnagiri Ghodbunder Goa Description Builds Container Vessels, Cargo Ships, Tankers, OSVs, AHTs, MSVs, PSVs etc upto 15,000 DWT Fabrication work upto the Hull construction, this yard acts as a feeder to the Ratnagiri Yard. 4 Slipways can carry upto 100m Cranes -125tons Blasting Painting and Steel Fabrication. This yard can build vessels upto 120m in length Kokatta Builds ships upto 120 m in Length and 22m in Width Mangalore Will have the capacity to build vessels upto 60,000 DWT. Expects to build Tankers, Bulk Carriers, Container Ships, Chemical Carriers, Product Carriers and many other vessels Revenue Mix BSL is a focused player in the Offshore and Containers segment, each of which has almost and equal share in the current order book. Out of the total order book about 50% will be executed at the Mangalore Shipyard (including the Rig) and the rest at the other yards. The revenue recognition is usually on a 15x6 format wherein 15% of the revenue is booked every quarter for 6 quarters. The composition of turnover by vessel type is as under: Revenue in Rs Crore Offshore Containers Others Source: Company Wednesday, December 19, 2007

3 Robust Order Book Position to Propel Growth BSL has an unexecuted order book of Rs 3,600 crore, which provides a cover of 5.4x the FY08E sales. BSL has an unexecuted order book of Rs 3,600 crore, which provides a cover of 5.4x the FY08E sales. The execution period is spread over 3 years from FY08 to FY10 and a few ships in FY11. Currently, BSL has 47 ships, including a jack- up Rig on order to be delivered in the next two to three years. The Rig is expected to be delivered to Great Offshore in December Source: Company CLIENT Type of Vessel Nos. (In Rs crore) Contract Price Al-Jaber Shipping Agency 5250 DWT Product Tanker cum ro-ro Vessel Halul Offshore Services AHTS Bourbon Supply Investments 60 Mtr. Multi Purpose PSV Sea Cargo Skips-Norway Pallet/Container Vessel Nor ships As- Norway Pallet/Container Vessel M.K. Shipping BV Multi Purpose Carriers Great Offshore Ocean going Multi Purpose Supply Vessel Bourbon Supply Investments 60 Mtr. Multi Purpose PSV Kolkata Port Trust Twin pilot cum survey vessel Bourbon Supply Investments 120 tons AHTS Reliance Industries Pilot Boat Reliance Industries Diving Support Vessel Reliance Industries 54 tons Bollard Pull Tug Great Offshore Jack UP Drill Clipper Group dwt bulk carrier UP Offshore PSV Man Forrestaal PSV Norwegian Offshore Shipping 150 tons AHTS Sea Cargo Skips-Norway Ro-Ro/Pallet/Container Shipping Corporation of India AHTSV TOTAL Wednesday, December 19, 2007

4 Geared Up to Ride the Shipbuilding Boom BSL is setting up a new shipyard at Mangalore, which has an SEZ status. Mangalore yard will have a capacity to build six vessels up to 60,000 DWT Green Field Expansion at Mangalore To take advantage of the growing demand and increasing share of Indian shipbuilding industry in the global market, BSL has embarked upon a Rs 450 crore greenfield expansion plan at Mangalore. This facility will be able to produce cargo ships and will also house the rigs building unit. The shipyard will also have a dedicated ship repair facility, which is expected to contribute about 5% - 7% of the revenues from Mangalore. Since the Mangalore shipyard has attained an SEZ status, it enjoys a tax holiday for the first five years and about 50% tax discount for the next five years. In addition to this all the inputs for the shipyard are tax free. This will compensate for the subsidy in case of the Mangalore yard. At full capacity, the Mangalore yard will be capable to build six vessels up to 60,000 DWT with a maximum length of 270 meters. The yard is expected to be part operational (30%- 40%) by December 2008, however full utilization will be achieved only in FY2010, when it is expected to generate revenues to the tune of Rs crore. Revenue Estimates from Mangalore Shipyard (In Rs Crore) Year Revenues FY FY FY FY Source: Company Expansion and Upgradation of existing yards Along with the Greenfield expansion at Mangalore, BSL has also upgraded the other shipyards at Ratnagiri, Kolkatta and Goa. Post the expansion, the Ratnagiri yard, which was manufacturing vessels up to 9,000 DWT, is now capable of handling vessels of 15,000 DWT. The Ratnagiri and Ghodbunder yards are currently running at full capacity and are expected to generate revenues to the tune of Rs 300 crore in FY08. The Goa and Kolkatta yards would be expanded at a capex of Rs 20 crore. This would yield revenue of Rs 45 crore and Rs 70 crore respectively. The present yards are expected to clock a turnover of Rs 415 crore in FY08. Shipyards Revenue Estimates for FY08 (In Rs Crore) Shipyard Revenues Ratnagiri & Ghodbunder 300 Kolkatta 70 Goa 45 Mangalore 250 Total 665 Source: Company Wednesday, December 19, 2007

5 Swan Hunter Acquisition Recently acquired the plant and machinery of Swan Hunter Shipyard, a UK based ship builder. BSL has recently acquired the plant and machinery of Swan Hunter Shipyard, a UK based ship builder. Swan Hunter shipyard is an internationally renowned shipbuilding yard engaged in shipbuilding, ship conversion and construction of offshore structures. It had a capacity to build vessels upto 1, 00,000 DWT. During its 130 years of existence, Swan Hunter built over 1,600 ships of various types including more than 400 naval vessels. Through this acquisition BSL has acquired fully automated lines, plate bending rolls, gantry cranes, overhead cranes, plasma burning equipment etc. It has also acquired its 20,000-ton lift capacity floating dock. These equipments as well as the dry dock would be dismantled and shipped to Mangalore. The acquisition, dismantling, transport and reinstalling cost would be around Rs 250 crore. Most of the machinery and equipment acquired, had lead times of at least months if ordered for in the market. Most of the machinery and equipment acquired, had lead times of at least months if ordered for in the market. While the equipment bought can build up to 1, 00,000 DWT vessels, the same will not increase the capacity of the Mangalore yard beyond 60,000 DWT due to constraints on the dept of the draft. Future Plans Planning a 50:50 joint venture with Apeejay Shipping to set up a modern shipyard along the East Coast. BSL plans to foray into Tankers and Semi Submersible Rigs. BSL along with Apeejay Shipping Ltd is planning to invest Rs 2,000 crore in an equal joint venture to set up a modern shipbuilding yard along India's eastern coast. The proposed shipyard is expected to start operations in FY2011 and would build superior ships of high tonnage and also cater to the ship repairing segment. By FY2011, BSL plans to foray into manufacturing ships other than OSVs and Containers. It plans to build tankers, for carrying chemicals and Semi submersible Rigs, which will be more sophisticated than the Jack up rigs that BSL is building for Great Offshore Limited. This will diversify and de- risk BSL s portfolio going forward Wednesday, December 19, 2007

6 Shipbuilding Industry Global Scenario Global shipbuilding is a US $ 20 billion industry, mainly dominated by South Korea, Japan and China with a combined market share of around 77%. Global shipbuilding is a US $ 20 billion industry. In the post World War II era, the shipbuilding industry had gradually shifted from European countries and USA to the Asian countries due to cost advantages. Currently, the shipbuilding industry is dominated by South Korea, Japan and China with a combined market share of around 77%. India has less than 1% market share, which is expected to grow in the coming years by leveraging on cost competitiveness. Geographic Distribution South Korea 33% Japan 22% Europe 15% Others 1% Other Asia 6% P.R. China 23% Source: Company The world order book stands at 297 million DWT as on October Replacement demand is driving the growth for the shipping segment (tankers, containerships, dry bulk ships), whereas replacement demand coupled with increasing demand for offshore vessels on the back of increasing E&P is driving the growth in the offshore segment (Anchor Handling Tug Supply, Platform supply vessels, Pollution control vessels, Oil Rigs etc). Asian Shipbuilding Order Book 12 0 V alue in $ bn Source: Company Wednesday, December 19, 2007

7 The Indian shipbuilding industry is estimated to be about $ billion in size and is expected to grow at per cent per annum to $22 billion by the year Indian Scenario The Indian shipbuilding industry is estimated to be about $ billion in size and is expected to grow at per cent per annum to $22 billion by the year The order book of Indian shipyards has grown from Rs 15 billion in 2002 to Rs 137 billion in September Availability of technical know-how and skilled low wage labour will further aid this growth. Value in Billion $ E 2017E % of Global Order Book Source: Ministry Of Shipping, Road Transport & Highways Due to the surging demand of vessels, the order book at the existing shipyards is full and has pushed the current lead-time for new vessels to about 4 years. Significant investments along with along with government support are envisaged in the sector over a period of next 5 years. The Gujarat Maritime Board has already chalked out a plan for the next five years to set up 100 shipyards under 10 industrial clusters, which will be called Marine Ship Building Parks. Further, the government of India wants to create two large shipbuilding facilities, one each on the west coast and east coast of India having an initial capacity of 1,75,000 DWT. According to Shipyards Association of India, shipbuilding will entail a total investment of around Rs 370 billion by 2012 and Rs 2.2 trillion by Going forward we believe that other coastal states will also introduce shipbuilder friendly policies to encourage investments in this flourishing sector. Below is a summary of investment made by Indian Shipbuilders: (Rs in crore) Investments By Shipbuilders Investments Location Greenfield ABG Shipyard 450 Dahej Bharati Shipyard 450 Mangalore Temba Shipyard 135 Malpe Larsen and Toubro 120 Hazira Expansions Alcock Ashdown 35 Chanch Bharati Shipyard 65 Ratnagiri Chowgule Shipyard 80 Goa Hindustan Shipyard 100 Vizag Other Investments Cochin Shipyard 300 Pipava Shipyard Wednesday, December 19, 2007

8 New Players on the Block L&T Proposed to create defense and para - military cum port facility in TamilNadu. Also propsed to build cargo vessels and Jack Up rigs. Garware Offshore Tata Group SCI Planning a 50:50 joint venture with Norway based ship manufacturer Havyard Leirvik AS for constructing offshore support vesels Planning to build a shipyard near Shivrajpur, Gujarat to create operational synergies for the group given its joint venture with NYK line for setting up a shipping company SCI also plans to invest in setting up a shipbuilding yard that will build vessels upto 3,20,000 DWT capacity. JSW Steel Dolphin Offshore JSW Steel is planning to enter the shipbuilding business to meet their requirements of ships for steel transportation. Recently announced Rs 400 crore project for a shipyard at Jafrabad, Gujarat and is also in talks for acquisition of 2 existing yards on the west coast. The Indian Advantage India has surpassed Norway in terms of order book for OSVs since the focus of large shipyards remains large conventional vessels and it is unfeasible for them to produce OSVs. Though India is an insignificant player in the global shipbuilding business, it has gained a strong foothold in the niche offshore segment. Led by private shipyards, ABG and Bharati, India has surpassed Norway in terms of order book for OSVs (Offshore Supply Vessels). OSVs typically require higher degree of technological skill-set than conventional vessels like tankers, bulk carriers and container vessels. Though the cost of labour in China is lower than India, the focus of Chinese shipyards remains large conventional vessels. Moreover, large shipyards (in China, South Korea, and Japan) make it unfeasible to produce OSVs. Segment wise Indian Shipbuilding Order Book Others Barges Port Service Crafts Passenger Heavy Lift Naval / CG Ships Offshore Service Vessels Offshore Logistics Containers Cargo Ships Small & Medium No. Of Ships Source :Ministry Of Shipping, Road Transport & Highways Wednesday, December 19, 2007

9 Increase in E & P spending, leading to high demand for Offshore Vessels augurs well for Indian Shipyards The expenditure on E&P is growing at about per cent per annum, thus creating a significant demand for the support vessels. The key demand drivers for the offshore supply vessels (OSV) include strong exploration and production (E&P) spending, high crude oil prices, increasing requirements of vessels per rig and an ageing fleet. Generally, offshore exploration of oil is considered to be very expensive due to transportation, technology and costly manpower. However, in a rising oil price scenario, it becomes viable for the companies to go offshore to deploy resources. This also requires deploying different kinds of offshore supply and anchor handling tug supply vessels to support exploration activities. The expenditure on E&P is growing at about per cent per annum, thus creating a significant demand for the support vessels. Strong Replacement Demand About 73 % of the AHTs and 62 %of the PSVs is over 20 years old. OSVs typically have a life span of about 20 years. As per industry estimates, about 73 per cent of the anchor handling tug supply vessel (AHTS) fleet and 62 per cent of the platform supply vessels (PSV) is over 20 years old, thereby offering strong potential for replacement demand, which is very low, as current order book is just about 8-10 per cent of the existing fleet. Competitive labour advantage in terms of cost and technical expertise The Indian labour cost is estimated to be $1,192 per year, which is just 11% of the labour cost of Korea and 6% of Singapore. The success of the Indian shipbuilding industry has been due to availability of skilled labour at a lower cost. As can be seen in the table below, Indian shipyards have a competitive labour advantage in terms of cost and technical expertise making it one of the fastest growing sourcing bases. The Indian labour cost is estimated to be $1,192 per year, which is just 11 per cent of the labour cost of Korea (the biggest shipbuilding country) and 6 per cent of Singapore. Due to this advantage, the order book of Indian shipbuilding companies has grown nine-fold in the last four years. Country Labour cost per worker (US$ per annum) China 729 Indonesia 1,008 India 1,192 Philippines 2,450 Thailand 2,705 Malaysia 3,429 Korea 10,743 Singapore 21,317 Source: Equity Master Wednesday, December 19, 2007

10 Shipbuilding Subsidy The shipbuilding subsidy is a scheme, under which shipbuilders get 30% extra on every ship they build of a certain size for the local market and all ships for exports. The shipbuilding subsidy is a scheme, under which shipbuilders get 30% extra on every ship they build of a certain size for the local market and all ships for exports. The subsidy enabled shipbuilders constructing a ship that would cost, say, Rs100 crore at market rates, to offer it for Rs70 crore to the buyer, effectively competing with international shipyards. The subsidy is also required to provide an even playing field to shipbuilders to compensate for the various taxes levied on them whereas global shipyards enjoy zero tax and many other government subsidies since shipbuilding is a capital and labour-intensive business. This subsidy is given to public sector yards in installments during the construction of the ship while private firms such as ABG & Bharati Shipyard receive it after the ship is built and delivered to the buyer. The five-year period of the subsidy scheme from August 2002 lapsed on 14 th august 2007 and the government is considering reintroducing it. If the government support is not continued, the prices that Indian yards can quote for building ships will have a cost disadvantage ranging from 35% to 55% over Chinese, Korean and Japanese yards affecting the industry adversely. Peer Comparison Parameters Bharati Shipyard ABG Shipyard Net Revenues TTM Net Profit TTM OPM (%) (incl Subsidy) NPM (%) (incl Subsidy) CMP (18/12/07) Market Capitalization Market Capitalization / Sales EPS TTM PE TTM ROE (%) ROCE (%) Though ABG Shipyard is a bigger player than BSL, we believe that valuations are compelling as far as BSL is concerned. BSL is available at a 50% discount as compared to ABG Shipyard. Though there are a number of shipyards in the country, we have included only ABG Shipyard in our comparison, since it is the only private sector shipyard with a capacity comparable to BSL s. Public sector yards operate in a different format from that of the private shipbuilders hence the comparison, if done, will be unreasonable. Though ABG Shipyard has a greater shipbuilding capacity and is a larger player than BSL in terms of revenues, we believe that valuations are compelling as far as BSL is concerned. At the current levels, BSL is available at a 50% discount as compared to ABG Shipyard in terms of valuations, thereby offering a wider scope for appreciation Wednesday, December 19, 2007

11 Financial Outlook We expect BSL s revenues & profits to grow at a CAGR of 64% and 50% respectively, over the next 2 years. In FY07, BSL s sales increased from Rs 260 crore to Rs 361 crore, an upside of 38.47% from the previous year. This increase is mainly due to utilization of the expanded capacity of the Ratnagiri and Ghodbunder Yards. During the year, the Goa yard owned by BSL s subsidiary Pinky Shipyard Ltd. has also become fully operational and has contributed to the increase in turnover. We expect the company to post a net sales of Rs 665 crore in FY08 on the back of increased capacities at the existing yards and the new facility set up at Mangalore Net Sales Subsidy Net Sales Subsidy 0 FY06 FY07 FY08e FY09e 0 Last year, BSL booked a subsidy of Rs 61.7 crore as compared to Rs 33.2 crore the year before. The increase in subsidy was seen on account of various vessels nearing completion in FY07. In FY08 we expect BSL to book subsidy worth Rs 65 crore. Risks and Concerns Discontinuation of Shipping Subsidy The Shipping Subsidy scheme expired in August 2007 and there is still no clarity on either extension or termination of the scheme. According to industry sources the scheme may be extended by another few years, though the quantum of subsidy may be reduced from the current 30%. However for BSL, almost the entire order book is currently eligible for subsidy, as almost all the contracts were signed before the expiry of the scheme in August Delay in realizing Subsidy amount Though the private shipyards are eligible to book subsidy once the ship is delivered to the customer, they have still not received any subsidy amount from the Ministry of Shipping, Road Transport and Highways. Delay in realizing the subsidy may reflect negatively on the cash flows of the company. Operational Risks BSL is expanding its existing facilities and adding new facilities to execute more orders and manufacture complex and advanced vessels. Orders for new facilities have already been taken; hence any delay in expansion of facilities would lead to delays in delivery. In order to safeguard this BSL needs to sternly finish the expansion on time Wednesday, December 19, 2007

12 Declining Oil Prices Decline in oil prices may impinge the E&P activities and in turn reduce the demand for Offshore Vessels, which will adversely affect the shipbuilding industry. However, in the current scenario this kind of a price decline is unlikely. Rise in Input Prices The major inputs in shipbuilding are machineries, steel and labour. If the prices of these inputs rise sharply then it can have a serious impact on the industry. BSL enters into back-to-back contracts with suppliers of machineries for most of their requirements and store sufficient steel in their inventory. Labour price escalation is also factored while negotiating price of the vessels. Equity Dilution BSL in December 2005 issued FCCBs in two Tranches, worth USD 20 million and USD 80 million respectively for Tranche 1 and Tranche 2 of Face Value US$ 100,000 each. The FCCBs issued in Tranche - 1 have an exercise period upto December 08 with a conversion price of Rs 421 and for Tranche 2; the period of conversion is December 10 at a price of Rs 497. Till date about 15% of the FCCB has been converted into shares. Since the conversion price is significantly lower than the CMP, we expect the balance to be converted in FY08. Post conversion the equity will increase from Rs 22.5 crore to Rs 32.0 crore. Valuation & Recommendation On the back of a robust order book, the on-going expansion plans and a promising industry outlook, we expect the company s revenues & profits to grow at a CAGR of 64% and 50% respectively, over the next 2 years. At the CMP of Rs. 711, the stock is currently trading at 19.6x the FY08e earnings. We initiate BUY coverage on the stock and recommend the investors to BUY at current levels with a price target of Rs.1,000 for a period of 15 months an upside of 40% from current levels Wednesday, December 19, 2007

13 Exhibit 01: Financials and Projections Profit & Loss Statement Y/E March, Fig in Rs. Cr FY2007 FY2008e FY2009e Net Sales % Chg Total Income Total Expenditure % Chg EBDITA EBDITA Margin % Other Income PBDIT Depreciation Interest PBT Tax Provisions Reported PAT PAT Margin (%) Balance Sheet Y/E March, Fig in Rs. Cr FY2007 FY2008e FY2009e Equity Capital Reserves & Surplus Total Loans Deferred Tax Liability Total Liabilities Gross Block Less: Acc. Depreciation Net Block Capital Work in Progress Investments Net Current Assets Misc. Expd not w/o Total Assets Key Ratios Y/E March, Fig in Rs. Cr FY2007 FY2008e FY2009e Per Share Data (Rs) EPS Cash EPS DPS Book Value Capital, Liquidity, Returns Ratio Debt / Equity (x) Current Ratio (x) ROE (%) ROCE (%) Dividend Yield (%) Valuation Ratio (x) P/E P/BV EV/Sales EV/EBIDTA Cash Flow Statement Y/E March, Fig in Rs. Cr FY2007 FY2008e FY2009e Profit After Tax Depreciation & W/o Working Capital Changes Others Operating Cash Flow Capital Expenditure Change in Investment Cash Flow from Investing Proceeds from equity issue Inc/(Dec) in Debt Dividend Paid Cash Flow from Financing Net Change in Cash Opening Cash Balance Closing Cash Balance Ventura Securities Limited Corporate Office: 11 th Floor, Nariman Bhavan, Vinay K. Shah Marg, Nariman Point, Mumbai ; This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in their articles. Neither Ventura Securities Limited nor any of the contributors accepts any liability arising out of the above information/articles. Reproduction in whole or in part without written permission is prohibited. This report is for private circulation Wednesday, December 19, 2007