Management Discussion and Analysis

Indian Economy

Financial Year 2014-15 began on a positive note with clear mandate for political stability led to an improvement in market sentiments. Economic growth improved, inflation moderated, the current account deficit reduced and interest rate came down during the year. The government has taken several steps to improve the operation environment and also announced several reforms. India's economy growth rate in the FY 2014-15 was 7.3% an improvement to the brvious year (6.9% in FY 2013-14), mainly due to recent policy initiatives, pick up in investments and lower oil prices. Growth rate is expected to increase in future which would mean that India will outpace China in successive years to become the fastest growing emerging economy. This is achieved mainly because of restoring macroeconomic stability achieved on account of fiscal consolidation; control over inflation and support from fall in the global commodity prices.

In FY 2014-15, Government's fiscal deficit has fallen to 4.1% of GDP as compared to 4.5% of GDP in FY 2013-14, this fall is aimed to be achieved through the government's stake sale in state owned entities and rationalization of fuel subsidy and decline in oil prices.

Inflation measured by the Consumer Price Index (CPI), moderately sharply during fiscal 2015 partly supported by the drop in international crude oil prices. In FY2014-15, the CPI based average inflation fell to 6.0% from an average level of 10.0% over a period of six years between FY 2008-09 till FY 2013-14. Monetary policy has responded to the improving inflation trajectory with the Reserve Bank of India cutting repo rate by a cumulative of 50 bps in Q4 FY 2014-15.

Business Overview

With the formation of stable government at the centre, Indian equity market witnessed a sudden surge due to renewed investor confidence and new policy initiative. As a result, Indian market emerged as one of the better performing markets in the world. The BSE Sensex has risen by 25% over the last one year period ended March 31,2015. With buoyancy in equity markets, trading volumes have shown an uptrend in the F.Y. 2014-15. The average daily turnover in the equities segment was Rs. 71 billion in F.Y. 2014-15 compared with Rs. 56.3 billion in the brvious year. Flls also showed faith in the Indian capital market during the F.Y. 2014-15 as compared to brvious year.

Your Company's performance purely depends on the participation of retail clients. Your Company too has grown from strength to strength. Your Company's profit after tax for FY 2014-15 was Rs. 2.42 crore indicating the growth of the Company. With the stable government at the centre and other factors, Equity market will give robust returns to retail investors over the long term. Your Company has also registered as a Category 1 Merchant Banker with SEBI and started the Portfolio Management Services which will help to increase Company's performance.

Strategy and Outlook

With the Modi government completing a year in office and factors such as falling inflation, supportive crude oil prices, the Indian equity markets, rebrsented by SftP BSE Sensex have risen 25% over the last one year period ended March 31, 2015. We believe that reduction in interest rates will continue and the business environment will show signs of improvement. The economy will start gathering pace and the direct impact will be reflected in Indian markets. Equity as an asset class will continue to give robust returns to retail investors over the long term.

With strengthening of the economy and stable economic and political environment, the Indian Capital market is expected to perform well. Our strategy will continue to be deepening our portfolio of financial services, client centric focus effective risk management and build a business model that is well diversified across financial market activities. Focus will be on delivering client centric solutions, investing in human capital and strong risk management will remain our basis for growth of the Company.

The clear mandate in the General elections of May 2014 built optimism in the Equity Markets. Retail investors gradually restarted nibbling towards Equity as an asset class. Your Company will be focusing on activation of inactive accounts along with acquiring fresh clients into the capital markets. Your Company expects a great revival of IPO/FPO market which is expected to bring retail investors in the market. Your Company is planning to provide wide range of financial services to brsent and prospective clients under one roof.

Risk Management Policies

We, at Swastika have an adequate risk management policy appropriate to the size and nature of the business. The objective of our risk management policy is to protect the Company from risks associated with the business while simultaneously creating an environment conducive for its growth. Timely and effective risk management is of prime importance to our continued success. We have put in place robust systems and processes, along with appropriate review mechanism to actively monitor, manage and mitigate the risks. Strategies, policies and limits are designed to ensure that risks are properly diversified. Report of top risks and risk event updates is periodically placed before the Board of Directors. The Board of Directors reviews this reports and the course of action taken or to be taken to manage and mitigate the risks. Our strong brand image, wide and ever expanding distribution network, diversified suite of services, fair and transparent business practices enables us to manage and mitigate the risks.

Human Resource Management

At Swastika, people are our most valuable asset and we believe that the ultimate identity and success of our company lie in the excellent quality of our people and their dedicated commitment towards attaining our Organization's vision. The human resource strategy of Swastika is focused on creating a performance-driven environment in the Company, where innovation is encouraged, performance is recognized and employees are motivated to realize their potential.

Promoting internal mobility, recruiting and retaining best talent, encouraging sustained employee development, offering competitive compensation and engaging work environment are all factors that make Swastika an attractive employer.

Financial and Operational Performance

Financial and Operational Performance forms part of the annual report and is brsented elsewhere in this report.

Cautionary Statement

Statements in the Management Discussion and Analysis relating to the Company's objectives, brdictions, and outlook may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results may vary significantly from the forward looking statements contained in this document due to various risks and uncertainties.

These risks and uncertainties include the effect of economic and political conditions in India, volatility in interest rates and in the security market, new regulations and Government policies that may impact the Company's business as well as its ability to implement the strategy. The Company does not undertake to update these statements.