PORTFOLIO REPORT FOR THE MONTH ENDED 31 ST DECEMBER, 2012

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1 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 SKS VALUE ADVANTAGE Our flagship product has an absolute return objective over the medium to long term. To achieve this we may invest a part of the corpus in short and medium term debt schemes of mutual funds or listed debentures. Our equity picks have a value bias and contrarian approach. Depending upon the market cycle, we actively manage the portfolio and hence the portfolio may have a high churn ratio during certain volatile periods. Given our absolute return focus, we are conscious of capital preservation during downturns. Overall the portfolio strategy is agnostic to sectors, themes or market cap. PORTFOLIO MANAGER - Mr. Amitabh Sonthalia: is also the Founding Director of the company. He started his career as a Research Analyst with the U.S. Federal Reserve Bank after graduating from Davidson College, NC in 1991 with a B.A. in Economics (Magna Cum Laude). In 2006, Amitabh completed his Executive MBA from the University of Chicago s Booth School of Business in Singapore. He has rich experience of over 20 years in the Indian Capital markets across various platforms and asset classes. INVESTMENT STRATEGY: Value based stock selection Bottom up (C-I-E) approach Situation based flexi cap approach Target based active profit booking Capital preservation consciousness Dynamic asset allocation between equity, debt and cash INCEPTION DATE: 1 st November, 2010 BENCHMARK: MINIMUM INVESTMENT: Rs. 50 lacs PORTFOLIO PERFORMANCE : ABSOLUTE PERFORMANCE: 1 ST FEB ST DEC CQGR: 3.96% 3 CQGR 1.29% QUARTERLY PERFORMANCE S & P CNX 25.0% 20.2% 15.0% 14.8% 12.9% 8.0% 5.4% 5.0% 1.2% 5.3% -5.0% -1.1% -1.3% -1.2% % -10.6% -9.6% -15.0% -12.3% 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr FY12 FY % 5.3% 1.3% 1.5% Current Month Current Quarter 17.6% 12.4% Financial YTD 40.4% 28.3% Calendar Year % -22.8% Calendar Year % 7.7% Since Inception 7.8% -3.2% CAGR % PORTFOLIO ANALYTICS CALENDAR YEAR 2012 Ratio Beta Standard Deviation Sharpe Ratio Portfolio Churn 2.30 N.A. *Note: This graph captures the actual performance of a model client s portfolio. Actual Individual client performance may differ depending on factors such as time of entry/exit/additional inflows/outflows. SKS CAPITAL & RESEARCH PVT. LTD. Call: Registration as Portfolio Manager INP pms@sksspl.com; Website:

2 ASSET ALLOCATION, AS ON 31 st DECEMBER, 2012 MARKET CAP ALLOCATION, AS ON 31 st DECEMBER, 2012 Largecap (> Rs 0crs) 34% Megacap (> Rs 20crs) 14% VALUATION COMPARISON * Indicator Smallcap (< Rs 1000crs) 24% Midcap (< Rs 0crs) 28% P/CF P/B EV/Ebitda Div Yld RoE SECTOR ALLOCATION COMPARISON** Indicator Consumer Discretionary Consumer Staples Energy Financials Healthcare Industrials IT Materials Telecom Services Utilities *valuation on ttm basis, **as % of equity exposure PORTFOLIO COMPOSITION, AS ON 31 st DECEMBER, 2012 Weightage ROI* Consumer Discretionary Mahindra & Mahindra Ltd Sun TV Network Ltd Aptech Ltd Balaji Telefilms Ltd Consumer Steeples/FMCG Mcleod Russel India Ltd KRBL Ltd Britannia Industries Ltd Energy HPCL Cairn India Ltd Financial Jammu & Kashmir Bank Ltd MCX India Ltd Reliance Capital Ltd Manappuram Finance Ltd Healthcare Alembic Pharmaceuticals Limited Opto Circuit India Ltd Industrials Praj Industries Ltd Greaves Cotton Ltd Ashok Layland Ltd Gati Ltd Jaypee Infratech Ltd Texmaco Infra & Holding Ltd Information Technology Hexaware Tech Polaris Financial Technology Ltd Infosys Ltd Materials Hindalco Industries Ltd United Phosphorus Ltd OCL India Ltd NMDC Ltd Utilities C E S C Ltd Total Equity Total Debt 9.13 Cash & Equivalent 6.12 Total *represents the absolute stock return since our investment

3 KEY PORTFOLIO CHANGES DURING THE MONTH During the month, we have added positions in Hexaware Technology, HPCL and NMDC. We have exited from Pantaloon Retail, Essar Oil and Hinduja Global Solutions. The entry/exit rationale is as below: BUYS Hexaware Technology: Hexaware Technology is a mid-sized IT services company with revenue of US$308mn in CY11 (Decemberending financial year). The company offers a range of IT services such as application development and maintenance (ADM), enterprise solutions (PeopleSoft, SAP, Oracle), testing, BPO and infrastructure management services. Hexaware Technologies (HTL) stock price has declined by 35% following a challenging global economy, likely subdued 4QCY12 performance and NASSCOM downgrading the information technology (IT) industry s FY13 growth target. We believe the fall provides investors a good buying opportunity in wake of better-than-peer revenue growth, superior margins, 23.3% EPS CAGR over CY11-CY13E, attractive valuation at 7.9x CY13E EPS. Furthermore, the stock offers attractive dividend yield of 6.6%. HPCL: We bought HPCL on account of stronger policy stance by govt. to address the issue of rising under-recovery losses. We expect the OMCs to get 100% compensation this year from Govt. and Upstream companies. HPCL is more sensitive towards the under-recovery loss thus it will derive more benefit than IOCL and BPCL in an event of full compensation. Further, softening of global crude prices also makes a positive case for the refining companies. The company is currently trading ~ 0.8x its book which is at a historical low as well as at a high discount to its peers IOCL and BPCL. NMDC: NMDC is India s largest iron ore producer with a capacity of 32mn tonne and an estimated reserves and resources at 1,434m tonnes. The company operates high grade iron ore mines in Chhattisgarh and Karnataka. We expect NMDC s iron ore volumes to grow at a CAGR of 13% to 39mtpa over FY12-15, with (1) easing logistics bottlenecks, (2) CEC permission for forward sales in Karnataka, and (3) increase in capacity to 47mtpa by the end of FY14. NMDC has been consistently stepping up dividend payout, which will help in improving RoE and total stock returns. NMDC has a strong balance sheet with cash surplus of INR225b and is well positioned to further step up dividend payout, despite INR155b capex for setting up the 3mtpa steel plant at Nagarnar, Chhattisgarh. SELLS Pantaloon Retail, Essar Oil: The stocks achieved our fair value target and gave us strong returns on our investments. We thought it prudent to book profits and look at re-entry post correction. Hinduja Global Solutions: We exited from Hinduja Global Solutions as the company reported disappointing earnings in the latest quarters, contrary to our expectations. Hinduja Global is a play on high dividend yield but if the current trend of earnings deterioration continues then the company may cut its year end payout. This may trigger further correction in the stock.

4 PORTFOLIO VALUATION TABLE * Company Name Consumer Staples CMP (Rs) Mcap (Rs Crs) P/E EV/EBITDA P/BV Div Yld D/E Net Debt/ EBITDA RoE Analyst Coverage FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY12 FY12 FY12 FY12 Buy Sell Hold Price target McLeod Russel 350 3, KRBL Britannia Industries 499 5, Consumer Discretionary Sun TV Network , M & M , Aptech N.A. N.A. 9.6 N.A. N.A N.A. Balaji Telefilms N.A. N.A. N.A. N.A. N.A Financials J & K Bank 1,295 6, N.A. N.A. N.A ,454 MCX 1,473 7, ,481 Reliance Capital , N.A. N.A Manappuram Finance 34 2, N.A. N.A. N.A Health Care Opto Circuits 107 2, Alembic Pharma 73 1, Energy Cairn India , HPCL 291 9,

5 PORTFOLIO VALUATION TABLE * P/E EV/EBITDA P/BV Div Yld D/E Net Debt/ EBITDA RoE Analyst Coverage Company Name CMP (Rs) Mcap (Rs Crs) FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY12 FY12 FY12 FY12 Buy Sell Hold Price target Industrials Praj Industries Ashok Leyland 27 7, Texmaco Infra & Holding N.A. N.A N.A. N.A N.A. Gati Ltd N.A N.A Greaves Cottons 81 1, JP Infratech 51 7, Information Technology Hexaware Technologies # 85 2, Polaris Fin. Technologies 114 1, Infosys 2,319 1,33, ,518 Materials Hindalco Industries , United Phosphorus 130 6, NMDC , Orissa Cement (OCL) Utilities CESC Ltd 318 3, *Price as on 31 st Dec 2012, **FY13E and FY14E valuation based on Bloomberg Consensus Earnings, # Financials as per Calendar Year