General Body Meeting 09.22.11

1. General Body Meeting 09.22.11

2. Agenda • Announcements • News Updates • Macro Update • European Renewables • UBS Rogue Trading • Tata Motors Pitch

3. News Updates

4. Operation Twist • FOMC decides to “extend the average maturity of its holdings of securities” • “…purchase $400 billion of Treasury securities…” with proceeds from sale of short term securities • Fed out of short term tools; aims at lowering long term rates, flattening yield curve • Citation of dual mandate; inflation not a current concern

5. Obama’s “Buffet Tax Proposal” • New tax rate for individuals making more than $1 million per year • Obama hasn’t specified a rate or how much revenue will be generated by the plan—is leaving it to Congress to calculate • Many investors pay no more than 15% of income—capital gains, dividends, “carried interest” • Sharpening contrast between Dems/Reps heading into 2012

6. Renewables - Government LegislationOVERVIEW • Grid Parity Pressure – LCOE* ($/MW) • Conventional Coal – $ 65.3 • Wind – $ 83.9 • Wind Offshore– $209.3 • Solar PV – $194.6 • Solar Thermal– $259.4 • Government Legislation & Subsidies • FiT • RPS • ITC / ITC Cash Grant / PTC • DOE Loan Guarantee Program *Source: Energy Information Administration, Annual Energy Outlook 2011, December 2010, DOE/EIA-0383(2010)

7. Renewables - Government LegislationEUROPEAN & NORTH AMERICAN UPDATES • U.S. • ITC Cash Grant – 12/2011; DOE Loan Guarantee – 9/2011 • ITC – 12/2016 • RPS Standards boosting renewable energy activity • Brazil • Reverse Auction Mechanism – Tariffs 42% lower than PROINFA • Germany • Retroactive FiT cuts + caps; Expecting further cuts 01/2012 • Accelerated nuclear fears – Shuts 7 of 17 nuclear power plants • Italy • Budget issues along with lack of transparency; retroactive FiT cuts • Spain • Most days of sun in Europe; generous FiT; retroactive cuts; installation caps

8. UBS Rogue Trader • $2.3 billion loss • 3 Years in the making • UBS Market Cap down 4.4 billion • UBS internal controls questioned

9. Tata Motors (NYSE: TTM) Miles Moen John Yoshida

10. Overview • Thesis • Macro Overview • Industry Overview • Business Overview • Analysis • QuanTeam • Proposal

11. Main Thesis Points • Current short-term risks outweighing long-term potential • Current price level makes investment extremely attractive • Short term play for correction • Geographic and risk diversification for portfolio

12. Macro Overview

13. India’s Current Economic Condition • GDP: 1,537 billion dollars • Inflation Rate: 9.22% • Interest Rate: 7.25% • Exchange Rate: 48.98 Rupees: 1 Dollar • Unemployment Rate: 9.4% • Sustained long run growth is expected

14. Macro take on Auto Industry • Leading export destinations: • UK • EU • South Africa • Need for further infrastructure investment • Impact of oil prices • Indian Automotive Mission Plan • Allow 100% FDI

15. India’s Middle Class Consumer & Demographics • Average Income in 2011 • *TATA Nano = 100,000 INR 280,000 INR • Middle class size projected in 2025 • *From 50 million in ‘10 583 million • Percentage Poverty decline in 5 yrs. • *(37.2% in ’04 to 32% in ‘09) -5.2% Rapid growth of middle class + Greater demand for individual mobility (i.e. luxury goods) = Rising Demand for Automobiles Over the next 20 years, we expect to see spending on cars growing by 12 percent per year (McKinsey & Co.)

16. Industry Overview

17. Auto Manufacturing Overview • Increasingly competitive space • Race to the bottom for lower end cars • Demand factors • Fuel prices • Access to capital • Road infrastructure • Stricter emission standards

18. Competition • Auto manufacturers are increasingly diversifying • Lots of cars for any given space • Increasing reliance on brands • Sourcing raw materials increasingly important to price

19. Fuel Prices • Increasing cost of diesel and gasoline • Leads to less demand from trucking companies due to smaller margins • Improving technologies help increase fuel efficiency • Consumers also weary of purchasing gas guzzling cars

20. Access to Capital • Many purchasers use credit to afford a vehicle • Higher interest rates leads to less purchases • India has been raising rates to combat inflation • Customers also worried about another credit crunch

21. Road Infrastructure • Improved roads and infrastructure leads to higher demand • Trucking goods becomes a viable alternative • Especially prevalent in developing nations • People need roads to drive on, otherwise no point to owning a car

22. Road Infrastructure • $105 billion US to be spent over next 5 years to improve roads

23. Emissions • Countries are implementing tougher emission standards • Requires expensive redesigns of cars and new technology • Will require company’s to change over their fleets of trucks

24. Business Overview

25. Tata Motors • India’s largest automobile company • 3rd largest bus manufacturer in the world • 4th largest truck manufacturer in the world • Market leader in commercial vehicles • 3rd largest manufacturer in passenger cars

26. Subsidiaries • Many subsidiaries and affiliates • Allows world-wide reach • Vertical integration throughout process

27. India Business • Large industry growth in both commercial and passenger vehicles • 60% market share in commercial vehicles • Continue to expand product offering • Focus on low cost and reliability • Expanding and innovating to maximize growth

28. Commercial Vehicles • Dominance in market share in all commercial vehicle markets

29. Small Vehicle Growth • Strong predicted growth in small commercial vehicles • Tata dominates with Ace brand

30. Exports • Exports of Tata branded cars grew 70% • Mainly to Asian countries • Building facilities in other areas to improve reach • South Africa just opened

31. Expansion • Significant capacity to expand production to meet increased demand • As macro conditions improve, large uptick in demand expected

32. Jaguar Land Rover • Acquired in 2008 to complement business • Brings strong brand presence and luxury line • Cutting edge design and manufacturing techniques • Focus on low emissions and clean technology • Bring to BRICs and developing nations • 43% growth in China and Russia • Fleet refresh will lower average model age to 2.5 years

33. Luxury Growth • Untapped potential in lower luxury • Vertical integration could help undercut competitors

34. Luxury Growth • Significant expected growth in luxury segment • Lead especially through China

35. Land Rover Evoque • New Land Rover model looks to be major hit • Already 20,000 pre-ordered, will help volume

36. Analysis

37. Summary Financials

38. Balance Sheet Analysis • Cash and Cash Equivalents: $2.0Bn • YoY Change: +$600MM • Has increased cash position while maintaining debt levels • Current Ratio: 0.80

39. Stock Price Analysis (1-Year)

40. Stock Price Analysis (5-Year)

41. Comparables

42. DCF Summary • EV/EBITDA Multiple Range: 7x – 8x • WACC: 9% $19.16 – 21.18 • Current Share Px: 16.26 (18% -30% Upside) • As of 9/21/2011

43. QuanTeam

44. Tata Motors • Bollinger Bands • Volatility bands placed 2 standard deviations above and below an EMA

45. Tata Motors • Relative Strength Index (RSI) • Compares the magnitude of recent gains to recent losses

46. Tata Motors • Williams (WLPR) • Compares a stock's close to the high-low range over a14 days

47. Tata Motors • Moving Average Convergence Divergence (MACD) • Difference between 26 day EMA and 12 day EMA • Signal Line – 9 day EMA

48. Tata Motors • Technical Analysis • Thesis • MACD- Shows a significant movement back towards middle ground; upside limited to 5% before resistance • RSI-Middle of the road; neither hints at upside or downside • BOLL-Middle of the road; neither hints at upside or downside • WLPR- Indicates strong upwards momentum over past week; not a favorable entry point • Summary • Not the best entry point after the recent market movement, but upside remains, and chasing a bottom is unneccessary

49. Proposal

50. Proposal • Build $3,000 position • Currently less than 10% of portfolio in EM • Short-term Outlook < 1 Year • Revisit after 20% share price appreciation Questions?