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SMC investments and Advisors believes that your unique aspirations define the way your

precious wealth should be structured.

i. INDUSTRY STRUCTURE AND DEVELOPMENT BUSINESS OVERVIEW

The Indian economy continued its downward slide throughout FY2012-13, recording a lower GDP growth of 5% compared to 6.2% for FY2011-12. The downward trend was also pronounced on a quarterly basis as it could be seen in the charts below :

Growth rate in GDP (% change over corresponding period of the previous year)

After achieving growth rates of 8.6 % in FY2009- subdued. Sustained commitment to reforms 10 and 9.3% in FY2010-11, the inflationary and policy action to reduce external sector risks, pressures started mounting. The RBI started and improvement in the global economy are tightening the monetary policy, resulting in crucial to boosting market sentiments and lower growth rate in last two years. The support capital raising. On the asset price front, moderation in growth is primarily attributable house price inflation remains high.

to weakness in industry. The growth in

Growth slowdown, persistent inflation and the agriculture has been weak in FY2012-13,

twin deficit risks came to the fore during following lower than normal rainfall. All the

FY2012-13 and unnerved the Indian economy three major segments, agriculture, allied

endangering the reversal of its declining growth industry and services, have displayed softening

path. Amidst trade-offs, monetary policy trend, quarter-over-quarter during last two

factored in increased growth risks and shifted its years. Q3 FY2012-13 GDP growth was the

stance to calibrated easing to address the slowest in 15 quarters at 4.7%

growth slow down as headline inflation Policy actions, both domestic and global, gradually moderated. The government also augured well for the Indian financial markets in launched concerted policy action and reforms Q4 of FY 2013. Nonetheless, limited policy space during H2 FY2012-13. These reforms, with fuller and political uncertainties continued to weigh implementation, are expected to arrest the down the markets. The easing trend in G-sec downward spiral and kick in a modest recovery in yields reversed at the end of the year due to the FY2013-14.

same reasons. Primary equity markets remained

INDIAN CAPITAL MARKET Governmental support and regulatory reforms would facilitate larger participation Overview

With the passage of higher FDI in Insurance The BSE Sensex was up 8% for the fiscal FY2013, after _{sector would create new opportunities.} declining 10% in FY2012. It saw positive returns in

each of the first three quarters of FY2013. But a Threats:- decline of 3% in Q4 FY2013 lowered Sensex returns for

Market trends sometimes positions other assets the full year. On a relative basis, the Sensex performed

as more attractive as Investment Avenue. better than the benchmarks of emerging market peers

like China, Brazil, but underperformed developed _{Short term economic slowdown impacting} markets like USA, UK, Germany and Australia. In terms _{investor sentiments}

of the broader market, the BSE Midcap Index was

down 4% for the fiscal year. With macroeconomic Slowdown in global liquidity flows headwinds and policy uncertainties impacting

Increased intensity of competition from local sentiments, domestic retail and institutional investors

and global players shied away from Indian equities. However, following

deferment of GAAR proposals, FIIs pumped in net _{Competitive Strengths} inflows this fiscal. FIIs are now the second biggest

holders of Indian equities after the promoters. We believe the following are our core Inflation, interest rates and currency had an impact on competitive strengths:

profit margins of companies. As mean reversal occurs

Wide range of financial products and in the economic variables, it should help corporate by

services:- fuelling operating cash flows, improving margins,

reducing debt, and eventually lead to an uptick in _{Through a wide-range of products and services,} market performance. _{we cater to corporate, institutional, high net} worth individuals and other retail clients. We With the growth in the economy, India's share within

offer broking and commission generating the global market cap pool is higher than its share

products and services across various asset within global GDP. BSE market cap's share went up

classes such as equity, commodities and from 0.9% to 2.3% between 2003 and 2012. In the

currency, and other services such as depository same period, its GDP share was up from 1.6% to 2.7%.

services, clearing services, insurance broking, Benchmark indices of emerging markets have

and the distribution of third-party financial underperformed compared to those of developed

products. We also offer advisory services to our markets over the last fiscal year

clients through investment banking, research ii. OPPORTUNITIES AND THREATS: and wealth management services.

Opportunities:- We believe we are amongst the leading financial institutions in India in the broking and financial Growing Financial services Industry. _{products distribution segment.}

Long-term economic positive outlook will generate opportunity for capital market services.