DISCLOSURE DOCUMENT NON DISCRETIONARY INVESTMENT ADVISORY SERVICES (As required under Regulation 14 of SEBI (Portfolio Managers) Regulations,

1993)

The Disclosure Document (hereinafter referred to as the Document) has been filed with the Securities and Exchange Board of India (SEBI) along with the certificate in the prescribed format in terms of Regulation 14 of the SEBI (Portfolio Managers) Regulations, 1993. The purpose of the Document is to provide essential information about the Nondiscretionary Portfolio Management Services (PMS) in a manner to assist and enable the investors in making informed decision for engaging a Portfolio Manager. The Document gives the necessary information about the Portfolio Manager required by an investor before investing, and the investor may also be advised to retain the document for future reference. Details of the Principal Officer STUART MILNE Chief Executive Officer The Hongkong and Shanghai Banking Corporation Limited 52/60, Mahatma Gandhi Road, Fort Mumbai 400 001 This Disclosure Document is dated 10th June 2013. Portfolio Management Services The Hongkong and Shanghai Banking Corporation Limited SEBI Registration No: INP000000795

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TABLE OF CONTENTS Sr. No. 1 2 3 4 Contents Disclaimer Definitions Description Page Number 3 3 7

Penalties, pending litigation or 17 proceedings, findings of inspection or investigations for which action may have been taken or initiated by any regulatory authority Services Offered Risk Factors Client Representation The Financial Performance Portfolio Manager Nature of Expenses Taxation Accounting Policies Investor Services of 21 23 27 the 28

5 6 7 8

9 10 11 12

30 32 36 37

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1. Disclaimer This Disclosure Document has been prepared in accordance with the SEBI (Portfolio Managers) Regulations, 1993, as amended from time to time and filed with SEBI. This Document has neither been approved nor disapproved by SEBI, nor has SEBI certified the accuracy or adequacy of the contents of the Document. 2. Definitions Act Chartered Accountant The Securities and Exchange Board of India Act, 1992 (15 of 1992). A chartered accountant as defined in clause (b) of subsection (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act. Anybody corporate, partnership firm, individual, HUF, association of persons, body of individuals, trust, statutory authority, or any other person, who enters into an Investment Services agreement with the Portfolio Manager for provision of services. A Portfolio Manager who exercises or may, under a contract relating to portfolio management, exercise any degree of discretion as to the investments or management of the portfolio of securities or the funds of the client, as the case may be. Means the offering, wherein the Portfolio Manager who, under the Agreement with the client offers investment advisory service and does not exercise any degree of discretion as to the investments or management of portfolio of securities or of the funds of the Client and shall solely act on instructions given by the Client. Means: (a) in relation to securities in physical form, safekeeping of securities of the Client, and (b) in relation to securities to be dematerialized or in a dematerialized form, in addition to any demat services enumerated in a depositary participant agreement entered into by the Client with the Bank, services of takeover and custody of physical security certificates (where relevant), dispatch and follow-up of securities for dematerialization, receipt, settlement and registration of securities purchased or sold, and all incidental services in connection with both (a) and (b), including but not limited to, tracking of corporate actions, namely issue of dividends on shares, issue of bonus shares, split of share certificates, buy back offers, etc. Means the execution and/or settlement of transactions in Investment Products, based on instructions from the Client

Client

Discretionary Portfolio Manager

NonDiscretionary Investment Advisory Service

Custodial Services

Execution Services

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Introduction Facilities/Referral Services

Investment Advisory Services

Portfolio

Profiling Document

Risk-Profiler

Investment Products

Investment Services Agreement

and includes execution of instructions as a Power of Attorney holder, pursuant to the terms of the Power of Attorney, on behalf of the Client. Means the referrals provided by the Bank to a Customer from time to time; providing Introduction or Referral Facilities to the Customer by introducing the Customer to Service Providers; providing the Third Party Services and assisting the Client in contacting such third parties to enable the Client to avail the Third Party Services from the Service Providers. The Client acknowledges that the Bank is merely acting as a facilitator in order to enable the Client to meet the Service Provider and neither has the Bank agreed to provide such services nor shall the Bank be responsible for any action or omission whatsoever on the part of the Service Provider. Means the investment advisory services provided by the Bank to a Client in relation to the Investment Products that the Bank may recommend to the Client and such Investment Products as the Bank reasonably believes to be suitable for the Client and which are in accordance with the Customers investment objectives, as stated in the Profiling Document completed by the client. Means all the assets advised or administered under the Investment Services Agreement signed between the Client and the Bank Means the profiling document comprising of Know Your Customer information, and a Risk Profiler; as may be amended by the Client in writing, from time to time, and which is used by the Bank to generate proposals for Investment Products in respect of the Portfolio. Means the questionnaire forming part of the Profiling Document setting out the Clients investment objectives, investment horizon, attitude towards risk, investment experience and preferences in respect of Investment Products, as may be amended by the Client in writing, from time to time. Means various financial products issued/ offered by incorporated companies, trusts, governments, statutory corporations and other persons, whether incorporated or not, including but not limited to, equity and preference shares, equity and fixed income derivatives, fixed income instruments, mutual funds, government securities, treasury bills and such other products as the Bank and the Client may agree from time to time. Means the Agreement entered into between the Bank and the Client for the services offered, that defines the terms and conditions of the services offered and shall include the PUBLIC - 4

Person directly or indirectly connected Portfolio Manager

Schedules to Investment Services Agreement and any supplemental letters or terms and conditions, appendices and accompanying documents, as from time to time amended. Any person being an associate, subsidiary, inter connected company or a company under the same management, within the meaning of section 370(1B) of the Companies Act, 1956, or in the same group. The Hongkong and Shanghai Banking Corporation Limited, India Branches, who has obtained certificate of registration from SEBI to act as a Portfolio Manager under Securities and Exchange Board of India (Portfolio Managers) Rules and Regulations, 1993, vide Registration no.INP000000795 and providing non-discretionary investment advisory services through its Private Banking division. Means one who is responsible for the activities of portfolio management and has been designated as the Principal Officer by the Portfolio Manager. The Securities and Exchange Board of India (Portfolio Managers) Rules, 1993. The Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993, and as may be amended by SEBI from time to time. The Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992. Securities as per Securities Contracts (Regulation) Act, 1956 include: Shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature, in or of any incorporated company or other body corporate Derivatives (contracts which derive their value from the prices, or index of prices, of underlying securities) Units or any other instrument issued by any collective investment scheme to the investors in such schemes Security receipts, as defined in clause (zg) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 Any certificate or instrument (by whatever name called), issued to an investor by any issuer being a special purpose distinct entity which possesses any

Principal Officer

Rules Regulations

SEBI / Board

Securities

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Certificate

Compliance Officer

Depository Party or Parties RBI Offering

The Hongkong and Shanghai Banking Corporation (or the Bank or HSBC India)

debt or receivable, including mortgage debt, assigned to such entity, and acknowledging beneficial interest of such investor in such debt or receivable, including mortgage debt, as the case may be. Units or any other such instrument issued to the investors under any mutual fund scheme Government securities. Such other instruments as may be declared by the Central Government to be securities. Rights or interests in securities. Means the Certificate of Registration issued to the Portfolio Manager by SEBI to enable the Portfolio Manager to offer the Investment Advisory Service under the Investment Services Agreement. Means the officer of the Portfolio Manager, coordinating with the regulatory authorities like SEBI, GOI, RBI etc., in various matters pertaining to the portfolio management and who ensures that the Portfolio Manager complies with all rules, regulations and guidelines, etc. Means the Depository, as defined in the Depositories Act, 1996 (22 of 1996). Refers to the Client and/or the Portfolio Manager as the case may be, or as the context may require. Means the Reserve Bank of India established under the Reserve Bank of India Act, 1934 (2 of 1934). Means the Investment Advisory Services offered by the Portfolio Manager under the Investment Services Agreement. Means a company incorporated under the Companies Ordinance of the Hong Kong Special Administrative Region (HKSAR), having its registered office at 1, Queens Road Central, Hong Kong and its India corporate office at 52/60 Mahatma Gandhi Road, Fort, Mumbai 400 001, acting through its branch/ office in India (the Bank or HSBC India)

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3. Description 3.1. History, Present Business and Background of the Portfolio Manager: The Hongkong and Shanghai Banking Corporation Limited opened its first branch office in India in 1867. In 1959, the branch network was extended by the predecessors in the title of The Mercantile Bank. The Mercantile Bank Limited, originally established as the Mercantile Bank of Bombay, as early as 1853, had its own distinguished history on Asian Banking. Presently, The Hongkong and Shanghai Banking Corporation Limited, India Branches, offer its customers services in the areas of personal banking, private banking and corporate banking (including cash management, trade treasury, custody and clearing) besides a variety of other services through its associate companies. The Bank in India has presence of 50 branches, covering amongst other Ahmedabad, Bangalore, Chennai, Chandigarh, Coimbatore, Gurgaon, Hyderabad, Jaipur, Kochi, Kolkata, Ludhiana, Mumbai, New Delhi, Noida, Pune, Thane, Trivandrum and Visakhapatnam. The bank also has multi-channel services, including internet and phone banking, and a wide ATM Network. The Bank was granted Certificate of Registration as Portfolio Manager from SEBI with Registration No. INP000000795. The Registration has since been renewed for a period of 3 years i.e. from 1 May 2012 till 30 April 2015. Besides the Portfolio Management Services i.e. non-discretionary investment advisory services offered through the Private Banking division of the Bank, it also offers a wide range of other products and services to various client segments such as: Bank Accounts and Fixed Deposits; Debit and Credit Cards; Fund and non-fund based loans and advances to corporate and individual clients; Wealth Management Services including distribution of mutual funds, sale of insurance products and referral of third party products; Remittance services; Foreign exchange services; Treasury Services; Payments and Cash Management services; Factoring Solutions; Trade Services; Custody and Depository Services; Ancillary services like safe deposit vaults, travelers cheques etc.

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Given below is a brief summary of the financial performance of the Bank for the last 4 years: (Rs. in crores) Net Paid Up Reserves Profit Capital 1,291 4,499 6,715 809 1,527 1,987 4,499 4,499 4,499 7,636 9,188 10,454

Year

Deposits Total Advances 2008- 49,970 27,588 09 2009- 55,747 23,474 10 2010- 54,106 27,400 11 2011- 61,423 35,512 12

Investments Gross Earnings 31,153 9,026 41,289 37,279 40,323 7,301 6,983 8,397

Promoters of the Portfolio Manager, directors and their background 3.1.1. Promoter The Hongkong and Shanghai Banking Corporation Limited, India branches is a branch of the Hongkong and Shanghai Banking Corporation Limited. Established in Hong Kong and Shanghai in 1865, The Hongkong and Shanghai Banking Corporation Limited (HBAP) is the founding member of the HSBC Group one of the worlds largest banking and financial services organisations and its flagship in the Asia-Pacific region. It is the largest bank incorporated in Hong Kong and one of Hong Kongs three noteissuing banks. The Hongkong and Shanghai Banking Corporation Limited is the founding and a principal member of the HSBC Group which serves customers through four global businesses: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking. The HSBC Group's network covers 6,600 offices in 80 countries and territories in six geographical regions: Europe, Hong Kong, Rest of Asia-Pacific, Middle East & North Africa, North America and Latin America. With assets of US$2,681 bn at 31 March 2013, HSBC is one of the worlds largest banking and financial services organisations. The Hongkong and Shanghai Banking Corporation Limited Incorporated in the Hong Kong SAR with limited liability Registered Office and Head Office: HSBC Main Building, 1 Queens Road Central, Hong Kong

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3.1.2. Board of Directors of The Hongkong and Shanghai Banking Corporation Limited (HBAP) As at 22 May 2013 Stuart T Gulliver, Executive Director and Group Chief Executive, HSBC Holdings plc, Chairman Laura Cha May Lung*, GBS, Deputy Chairman (Company Director) Zia Mody*, Deputy Chairman (Partner, AZB & Partners) Peter Wong Tung Shun, Deputy Chairman and Chief Executive Graham John Bradley*, (Company Director) Dr Christopher Cheng Wai Chee*, GBS, OBE (Chairman of Wing Tai Properties Limited) Dr Raymond Ch'ien Kuo Fung*, GBS, CBE (Non-executive Chairman of MTR Corporation Limited and Independent Nonexecutive Chairman of Hang Seng Bank Limited) Naina L Kidwai, (Group General Manager and Country Head, HSBC India) Rose Lee Wai Mun (Vice-Chairman and Chief Executive, Hang Seng Bank Limited) Victor Li Tzar Kuoi* (Managing Director and Deputy Chairman of Cheung Kong (Holdings) Limited) Christopher D Pratt* (Chairman of John Swire & Sons (HK) Limited) Peter James Holland Riley* (Group Finance Director of Jardine Matheson Holdings Limited) Andreas Sohmen-Pao* (Chief Executive Officer of BW Maritime Pte Ltd) Kevin Anthony Westley* (Company Director) Dr Rosanna Wong Yick-Ming*, DBE (Executive Director of The Hong Kong Federation of Youth Groups)

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Marjorie Yang Mun Tak* (Chairman, Esquel Holdings Inc.) Francis Yeoh Sock Ping*, CBE (Managing Director of YTL Corporation Berhad)
* non-executive Director

The Hongkong and Shanghai Banking Corporation Limited (India Branches) 3.1.3. Members of Executive Committee of HSBC India Stuart Milne (Chairman): Chief Executive Officer Stuart Milne joined HSBC Holdings plc in 1981, having graduated with Honours in Modern Arabic Studies from the University of Durham, England. In his 31 years with HSBC, he has worked in a number of businesses and in a variety of geographic locations, including the Arabian Gulf, Hong Kong, Philippines, New York, Paris and Tokyo. Stuart moved to New York in 1996 as head of HSBCs Treasury Credit unit, providing credit support for HSBCs Treasury and Capital Markets business in the United States of America and managing relationships with hedge fund clients. After two years in New York, Stuart moved to Tokyo as Chief Operating Officer for HSBCs business in Japan. He moved to Hong Kong in December 2001 as Head of Institutional Banking, Asia Pacific and was subsequently appointed as Head of Corporate and Institutional Banking, Asia-Pacific in March 2004. In this role, he was responsible for managing HSBCs relationships with large corporate and institutional clients across the Asia Pacific region, based in Hong Kong. In February 2007, he was appointed Country Manager Japan, in which role he serves as President and Chief Executive Officer of The Hongkong and Shanghai Banking Corporation Limited, Japan branches and Chairman of HSBC Securities (Japan) Limited and Chairman of HSBC Global Asset Management (Japan) K.K. Stuart served as Vice Chairman of the International Bankers Association which represents the foreign banking sector in Japan. He was also an active Board member of the British Chamber of Commerce in Japan and the Japan British Society. Stuart was appointed as CEO, HSBC India in March 2012.

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Stephen O'Leary: Chief Risk Officer Stephen is an HSBC International Manager who joined the HSBC Group in Hong Kong in 1988, immediately after growing up and graduating in his native Ireland. As an HSBC International Manager, Stephen has been privileged to work in countries ranging from Hong Kong to Malaysia, UK, USA and Indonesia. His assignments have been largely focused on wholesale banking but he has also enjoyed stints in Branch Banking, Trade, Loan Recovery and Training & Development. In Stephen's most recent roles in Asia Pacific, he had capital management oversight of Large Corporates and Commercial Banking's portfolios which saw unprecedented growth and Return on Equity improvement. Cross sell of the entire franchise to HSBCs customers was a cornerstone of this success, whether linkages with overseas offices or introduction of value add services such as Investment Banking or Private Banking, or a combination of all the above! Stephen is delighted to take up his first Chief Risk Officer position in what is one of our most successful businesses globally. Devesh Mathur: Chief Operating Officer Chief Operating Officer, India, HSBC April 2009 Present Responsible for the Information Technology, Services (Operations), Change Delivery (Business Transformation/Six Sigma), Corporate Real Estate, Procurement, Administration, Fraud Risk, Banking Security and BCM portfolios of HSBC, India . Director and Centre Manager, HSBC Technology and Services - Service Delivery April 2007 April 2009 (2 years 1 month) As a Director for HSBC Electronic Data Processing Enterprises Pvt Ltd, India, he was a part of the senior management of the world's largest banking outsourcing hub, spanning five countries. He was also responsible for the management of the 3000 member BPO/KPO site in Hyderabad, which provided world class services to HSBC Group entities, spanning five global regions. CEO, HSBC Operations and Processing Enterprises Ltd., HSBC April 2003 April 2007 (4 years 1 month) Established and ran as its CEO the company responsible for the domestic processing operations of HSBC, India with centres of excellence spanning Chennai, Mumbai and Kolkatta. Head of Banking Services, HSBC August 1999 March 2003 (3 years 8 months)

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Relationship Manager, Corporate Banking, HSBC February 1992 March 1995 (3 years 2 months) Rating Analyst, CRISIL 1991 1991 (less than a year)

Hitendra Dave: Head - Global Markets Hitendra Dave, Managing Director, Head of Global Markets, India, is responsible for managing the Foreign Exchange, Fixed Income and Derivatives Sales and Trading businesses. He is also responsible for the Debt Capital Markets, Balance Sheet Management and Equities businesses for the Bank in India. Hitendra has more than 20 years of experience in the Indian Financial Markets, spanning Fixed Income, Foreign Exchange, Derivatives and Debt Capital Markets. Abadaan Viccaji: Head - Compliance Abadaan Viccaji joined HSBC in April 1998 and is responsible for Compliance for HSBC India. He has an experience of 14 years in Compliance and has worked in National Stock Exchange Of India (NSE) for 3 years. Amit Moghay- General Counsel Amit Moghay qualified as a lawyer from National Law School of India University and joined the HSBC Group in 2003 in the Legal and Compliance function of HSBC Securities and Capital Markets (India) Private Limited. Amit has handled key M&A and advisory transactions including those for the HSBC Group in India. Amit specializes in banking and commercial law with strong emphasis on corporate law and structured finance. As Deputy General Counsel since 2010, Amit has been instrumental in driving legal policies as well as implementing procedures and processes to manage legal risks in India. During his nine years with the HSBC Group, Amit has been closely associated with most businesses and functions and has been a key resource in strengthening the Legal function in India over the last two years. Shantanu Ambedkar- Head of Private Banking, India Shantanu Ambedkar joined the firm in 1994 on the 'Money Desk' in what used to be called the Treasury Department and thereafter moved to the Institutional Sales function, and took over as the Head in Q3 2006. Before this move as Head of Private Bank, India, he was the Managing Director and Head of Institutional Sales for Global Markets, India. The Institutional Sales segment in India is highly relationship driven and personal contacts and relationships often matter - Shantanu is credited with HSBC retaining top market share in this segment. Shantanu is a Mechanical Engineer and a MBA from the University of Mumbai.

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Ravi Menon: Head - Strategy and Business Development Ravi Menon has been with the HSBC Group since June 1998 and has held various leadership positions across businesses. He currently Heads the Group Strategy function for HSBC India. Ravi is responsible for the articulation and delivery of strategic initiatives to develop the India business and ensure that it is positioned to achieve its strategic and financial objectives, long term growth and market leadership in an efficient and sustainable manner. Ravi is also responsible for setting up new businesses, monitoring all acquisitions as well as large alliance initiatives across the Group entities in India. He was earlier Managing Director & Co-Head of Investment Banking and also the CEO of HSBC Private Equity for Real Estate in India. Richard Collie: Chief Financial Officer Richard joined HSBC India in August 2009 as the Chief Financial Officer. He has been associated with the HSBC Group since 1994 and has held various leadership positions within the Global Finance function, across geographies in Emerging Markets. Richard is a qualified Chartered Accountant from the Institute of Chartered Accountants in England and Wales and has extensive banking and audit experience from Coopers & Lybrand, prior to joining the HSBC Group in London in 1994. Sandeep Uppal: Head - Commercial Banking Sandeep Uppal, is the Managing Director and Head of Commercial Banking for HSBC India, which covers a wide spectrum of businesses, ranging from large international corporate clients, mid corporates and small businesses. He is an International Manager with the HSBC Group. Prior to his move to India in March 2011, Sandeep was the Chief Executive Officer of HSBC in Mauritius. He is a key member of the HSBC India top team and is a member of the Banks Executive Committee in the country. Sandeep has extensive experience in banking and over the last 19 years has worked in India, Philippines, Hong Kong, UK & Mauritius. During this period, he has worked in a variety of areas, which include Personal Banking, Trade Services, Corporate Banking, Strategic Planning, Private Banking and Commercial Banking. He holds an MBA from XLRI, India and is an economics graduate from Delhi University.

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Sunil Sanghai: Head - Global Banking Sunil Sanghai joined HSBC in September 2010 as the Head of Global Banking, India. Prior to joining HSBC, he was Managing Director and Co-Head Investment Banking India at Goldman Sachs. Sunil joined Goldman Sachs in 2006. Prior to that, he spent many years with JM Morgan Stanley (a joint venture between JM Financial and Morgan Stanley), based in Mumbai and with Morgan Stanley in Singapore. Sunil started his investment banking career 1992 and has rich experience in mergers and acquisitions, corporate restructuring, advisory and domestic and global capital markets. He has been involved in many significant and large capital market and M&A transactions in India. His coverage experience includes managing key relationships, including large Indian corporates, large conglomerates, global corporates, banks, financial institutions, financial sponsors, Government agencies and the Regulators. At HSBC, Sunil is responsible for Corporate & Investment Banking, Capital Markets and Project Finance. Tarun Balram: MD and Head - Client Management Tarun joined HSBC in Mumbai in 1990. During his 23 years with the Bank, Tarun has worked in Corporate Banking in the Western, Southern & Northern Regions. In his previous role, Tarun headed Corporate Banking in Northern India. Besides this role, Tarun was also the CEOs Representative for the Northern Region. Tarun moved to Mumbai in January 2010 and is presently Managing Director, Head of Corporate Banking for HSBC in India. Tarun represents HSBC on British Business Group and European Business Group. He also represents HSBC on the Banking & Finance Committee of ASSOCHAM and FICCI.

Vikram Tandon: Head - Human Resources Vikram Tandon is the Head of Human Resources for HSBC in India, and has the responsibility for driving HSBCs People Strategy in India and working towards building a high performance organisation. Mr. Tandon is a Human Resources professional with 20+ years experience in the setting up and rapid scaling up of multiple businesses Life Insurance, General Insurance, Private Equity, Asset Management, Real Estate Development & Investments, Mortgage Guaranty, Consumer Finance, Software Services, Business Process Outsourcing (BPO) and Wealth Management in different Geographies across the Mediterranean, Middle East and South Asia region. Mr. Tandon has experience in leading teams of 150+ H R Professionals and has played a key role in enabling diverse businesses to succeed quickly by acquiring Top Management PUBLIC - 14

talent, leveraging Leadership Development & Training and instituting a strong Performance and Accountability orientation. He also has a thorough exposure to Banking, Grocery Retailing, FMCG distribution and Hospitality sectors. Before taking up his current role in November 2010, Mr. Tandon was the Regional Human Resources Director, Mediterranean, Middle East & South Asia Region for American International Group (AIG).

3.2. 1 2 3 4 5 6 7 8 9 10 11 12 13

Group Companies of the Portfolio Manager in India HSBC Agency (India) Private Limited HSBC Asset Management (India) Private Limited HSBC Electronic Data Processing (India) Private Limited HSBC Global Shared Services (India) Private Limited (formerly known as HSBC Insurance Brokers (India) Private Limited) HSBC Professional Services (India) Pvt Ltd HSBC Securities and Capital Markets (India) Private Limited HSBC Software Development (India) Private Limited HSBC InvestDirect (India) Limited (formerly known as IL&FS Investsmart Limited) (HIDL) HSBC InvestDirect Securities (India) Limited (formerly known as IL & FS Investsmart Securities Limited) (HISL) Investsmart Financial Services Limited HSBC InvestDirect Distribution Services (India) Limited(formerly known as HSBC InvestDirect Commodities (India) Limited) HSBC InvestDirect Academy for Insurance and Finance (India) Limited HSBC InvestDirect Sales & Marketing (India) Limited

3.3.

Details of the services being offered: Discretionary/ Non-discretionary/ Advisory.

Non-Discretionary Investment Advisory Service Non-Discretionary Investment Advisory services relates to the service whereby, the Portfolio Manager will provide the advise on Investment Products to help the client to make investment decisions. The client will handle funds/securities held in their name and take their own decision, and the Portfolio Manager will not have any discretion to make investments decisions (buy or sell or otherwise) on behalf of the client and shall solely act on the instructions given by the Client. The non-discretionary Investment Advisory Services will be in the nature that the Bank may recommend to the Client such Investment Products as the Bank reasonably believes to be suitable for the Customer and which are in accordance with the Customers investment objectives as derived using the Profiling Document completed by the client. The recommendations will be in the form of portfolio discussions, proposals and research reports such that the recommendations will provide the rational for investment decisions (buy or sell or otherwise) of a particular stock, bond or mutual fund or any other security. Moreover, the Portfolio Managers PUBLIC - 15

investment professionals will help the client to reconstruct his/her portfolio as per the clients investment objectives. The following are the characteristics of the service: Investment decision The Client will have total discretion to handle his/her portfolio and make investment decisions pertaining to the securities held in their portfolio. Bank and Demat account The Portfolio Manager will help the client to open a bank account and a demat account in the clients name. The Portfolio Manager will act only on the Clients instructions. Execution services/settlement services Execution Services/Settlement services means the execution and/or settlement of transactions in Investment Products based on instructions from the Client and includes execution of instructions as a Power of Attorney holder pursuant to the terms of the Power of Attorney, on behalf of the Client provided for the purposes of execution or settlement . Custodial Services Custodial services means: (a) in relation to securities in physical form, safekeeping of securities of the Client, and (b) in relation to securities to be dematerialized or in a dematerialized form, in addition to any demat services enumerated in a depositary participant agreement entered into by the Client with the Bank, services of takeover and custody of physical security certificates (where relevant), dispatch and follow-up of securities for dematerialization, receipt, settlement and registration of securities purchased or sold, and all incidental services in connection with both (a) and (b), including but not limited to, tracking of corporate actions namely issue of dividends on shares, issue of bonus shares, split of share certificates, buy back offers, etc. Introduction Facilities/Referral Services Introduction Facilities/Referral Services means the referrals provided by the Bank to a Customer from time to time provide Introduction or Referral Facilities to the Customer by introducing the Customer to Service Providers providing the Third Party Services and assisting the Customer in contacting such third parties to enable the Customer to avail the Third Party Services from the Service Providers. The Customer acknowledges that the Bank is merely acting as a facilitator in order to enable the Customer to meet the Service Provider and neither has the Bank agreed to provide such services directly nor shall the Bank be responsible for any action or omission whatsoever on the part of the Service Provider.

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4. Penalties, pending litigation or proceedings, findings of inspection or investigations for which action may have been taken or initiated by any regulatory authority. 4.1 All cases of penalties imposed by the SEBI or directions issued by SEBI under the Act or Rules or Regulations made there under. The nature of the penalty/direction. Penalties imposed for any economic offence and/ or for violation of any securities laws.

Violations and penalty levied pertained to FX and Derivative transactions executed with clients and documentation requirements pertaining to the same are as follows: i) A penalty of Rs. 10,000/- was levied by the Reserve Bank of India vide order dated 01 July 2010 under section 11(3) of the Foreign Exchange Management Act, 1999; and ii) A penalty of Rs. 500,000/- was levied by the Reserve Bank of India vide order dated 26 April 2011 under section 47A(1)(b) read with section 46(4) of the Banking Regulation Act, 1949. A penalty of INR 10,000/- was paid on 26 September 2012, pursuant to the order received from the Reserve Bank of India w.r.t erroneous renewal of FCNR (B) deposits of The Thattai Hindu Mercantile Community (TTHMC), an erstwhile Overseas Corporate Body (OCB). Enquiries initiated and censures passed by the Reserve Bank of India. Penalties amounting to INR 17,625/- levied by National Securities Depository Limited in the normal course of business during the period 1 January 2006 to 10 May 2012.

There are no penalties imposed on the Portfolio Manager for any economic offence and / or for violation of any securities laws. 4.2 Any pending material litigation / legal proceedings against the Portfolio Manager / key personnel with separate disclosure regarding pending criminal cases, if any. There are local court cases by the Bank/Banks customers in the normal course of banking business. Other disputes that are pending / settled are: 1. The Supreme Court of India, Civil Appeal No. 5281/2004 (Original Suit No. 4644 of 1993, High Court Mumbai) The Hongkong and Shanghai Banking Corp Ltd. Vs. Canbank Financial Services Ltd. & Anr. No change- still pending

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2. Special Court, Mumbai Suit No. 12/2002 (Original Suit No. 3984 of 1995, High Court, Mumbai) The Hongkong and Shanghai Banking Corp Ltd. Vs. Canara Bank and 7 others No change- still pending 3. The High Court, OOCJ Suit No. 885 of 1996 The Hongkong and Shanghai Banking Corp Ltd. Vs. Canbank Financial Services Ltd. No change- still pending 4. The court of Senior Civil Judge, TIS Hazari Delhi , CC. No. 573/04 Dumpy Holdings Limited Vs. The Hongkong and Shanghai Banking Corporation Limited. This dispute is now closed.

5. National Consumer Dispute Redressal Commission, New Delhi CC no.169 of 2011. B. N Addappa & another Vs. The Hongkong and Shanghai Banking Corporation Limited & Ors No Change - still pending

6. The Session Court, Tis Hazari CC no. RCA 6/2013. Dumpy Holdings Limited Vs. The Hongkong and Shanghai Banking Corporation Limited. Addition of new dispute

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Any deficiency in the systems and operations of the Portfolio Manager observed by SEBI or any regulatory agency. There has been no deficiency in the systems and operations of the Portfolio Manager observed by SEBI or any regulatory agency.

4.3 Any enquiry/ adjudication proceedings initiated by SEBI against the Portfolio Manager or its directors, principal officer or employee or any person directly or indirectly connected with the Portfolio Manager or its directors, principal officer or employee, under the Act or Rules or Regulations made thereunder. Enquiries against HSBC Securities and Capital Markets (India) Private Limited SEBI has initiated an enquiry against HSBC Securities and Capital Markets (India) Private Limited (HSCI) and accordingly issued a Show Cause Notice dated 30 July 2008 calling upon HSCI to show cause as to why further action should not be taken against HSCI for the violations alleged to the have been committed by HSCI under Regulations 25 and 38 of the SEBI (Intermediaries) Regulations, 2008. HSCI had filed a detailed response in this regard on 10 September 2008 and had sought a personal hearing in the matter. Accordingly, submissions were made by HSCIs counsel at the hearing held on 6 October 2008. Pursuant to the said hearing, SEBI has vide its letter dated March 4, 2009 informed HSCI of the enquiry officers recommendation i.e. the matter is not a fit case to levy any penalty. An enquiry was held under the SEBI (Procedure for Holding Enquiry by the Enquiry Officer and Imposing Penalty) Regulations, 2002 in the matter of a voluntary open offer by Mr. V.K. Modi, Dr. B.K. Modi, Mod Fashions and Securities Private Limited and Modikem Limited in concert with Witta International Inc. and Sidh International Limited (collectively the Acquirers) to the shareholders of Modi Rubber Limited. Subsequent to the enquiry officers recommendations of a major penalty a show cause notice dated 1 August 2003 was issued requiring HSCI to show cause as to why HSCIs certificate of registration should not be suspended for 6 months. HSCI submitted its reply and sought a personal hearing, wherein submissions were made by HSCIs counsel at the hearing held on 9 October 2003. SEBI vide its order dated 9 December 2003, confirmed that HSCI had not acted negligently warranting imposition of a penalty. Penalties issued against HSBC Securities and Capital Markets (India) Private Limited SEBI had initiated an enquiry against HSBC Securities and Capital Markets (India) Limited (HSCI) under the SEBI (Procedure for Holding Enquiry by the Enquiry Officer and Imposing Penalty) Regulations, 2002 in the matter of the Open Offer made by Global Green Company Limited to the shareholders of Saptarishi Agro Industries Limited in September 2000 under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. Subsequent to the enquiry officers

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recommendations of a minor penalty i.e. HSCI be censured, a show cause notice has been issued by SEBI requiring HSCI to show cause as to why the said penalty should not be imposed. SEBI had subsequently vide its order dated 7th March 2007 imposed a minor penalty of censure on the certificate of registration of HSCI. Thereafter, HSCI had appealed against the said order before the Securities Appellate Tribunal, Mumbai on 23rd April 2007 wherein SAT upheld the Order passed by SEBI. A Show cause Notice was issued to HSCI vide a letter dated 9 June 2000 in the matter of the rights issue of Siemens Limited in which HSCI was acting as the Lead Manager requiring HSCI to show cause as to why action should not be taken against HSCI for non-disclosure in the offer document of certain litigation against Siemens Limited involving ex-employees. Subsequently SEBI vide its letter dated 26 September 2000 advised HSCI to be cautious in future assignments. Show Cause notice and warning against HSBC Asset Management (India) Private Limited : SEBI issued a Show Cause notice dated August 07, 2009 to the Trustees of the Mutual Fund, Mutual Fund, AMC & CEO pertaining to the changes made in the Scheme Information Document of HSBC Gilt Fund via an Addendum. SEBI stated in the said Show Cause notice that the change made to the name, benchmark index and duration of the Scheme would be construed as a change in the fundamental attribute of the Scheme and hence the applicable provisions of the SEBI (Mutual Funds) Regulations, 1996 with respect to the same should have been complied with. Subsequently, the personal hearing took place before the Wholetime Member, SEBI. After considering the submissions made by the AMC, Wholetime Member, SEBI vide its order dated April 23, 2010 disposed off the show cause notice dated August 07, 2009 and warned the Board of Trustees of the Mutual Fund, the Mutual Fund, AMC and its CEO that they should strictly comply with the law governing the conduct and business of mutual fund in securities market. Save as disclosed below and basis the information available on our records, there is no action by SEBI pending against HSBC InvestDirect Securities (India) Limited. On 24-Nov-04, SEBI has sent a notice of Enquiry under Regulation 6 of SEBI (Procedure of Holding Enquiry and Imposing Penalty) Regulations, 2003 to IL&FS Investsmart Limited (IIL). Further on 31-Jul-09, HSBC InvestDirect Securities (India) Limited (HISL) [successor-in-title post transfer of broking business by IIL in 2006] received a Show Cause Notice (SCN) enclosing a copy of the enquiry officer report dated 09-Feb-09. The report alleged violation of provisions of - Regulation 4 (a), (b), (c) and (d) of the SEBI (PFUTP) Regulations, 1995 - Regulation 7 read with Clauses A (1), (2), (3) & (4) and (5) of the Code of Conduct for Stock Brokers, specified in Schedule II of the Stock Broker Regulations The matter pertains to transactions undertaken for certain clients (alleged KP entities) between December 2000 and February 2001 in the scrip Adani Exports Ltd. by Investsmart India Limited (IIL).

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Comprehensive response was filed with SEBI on 29-Sep-09 submitting that there was no violation committed on the aspects brought out in the SCN. It was submitted that - the transactions under question were only delivery based sale transactions and could not have resulted in the upward price movement contended in the said notice - the sale transactions were executed only on 3 days in December 2000, during which time, the price of the security had risen by only 3.69% (INR 22) - Basis media reports, IIL had stopped all further dealings for the said clients effective 07-Mar-01, much before the investigations into the alleged price manipulation. HISL received SEBI letter dated 28-Jun-11 advising a hearing before the Wholetime Member (WTM) but sought adjournments to the same as it was proposed to settle the matter under consent proceedings. On 28-Sep-11, HISL voluntarily filed consent application with SEBI on a 'no-fault' basis and thereafter vide letter dated 15-Feb-12 filed revised consent/ settlement term of INR 25 Lakhs. SEBI vide letter dated 18Sep-12 has rejected the said consent application. HISL awaits further communication in this regard from SEBI."

5. Services Offered The Portfolio Manager offers the following service: Non-Discretionary Investment Advisory Service The present investment objectives and policies are concisely stated in the document below for easy understanding of the potential investor. Investment Objectives The Investment Objectives are based on the clients Risk Tolerance, as generated by the client completing the Risk Profiler. There are five levels of risk tolerance defined, depending on the level of risk that the client is willing to take. The five levels of risk tolerance from the lower to the higher degree of risk tolerance for the client are: a) Risk Averse, b) Conservative, c) Balanced, d) Growth and e) Aggressive. a) Risk Averse Objective is primarily preserving the original principal over the investment time horizon with low volatility of principal value and a low level of capital risk. You are willing to accept lower (on a historical basis relative to more traditional debt/equity investments) returns in exchange for high liquidity/lower risk. b) Conservative Objective is to obtain a continuing income stream from reliable debt and equity investments, and other sources. You are willing to forego capital appreciation and to utilise principal (potentially at a loss), if necessary, to fund the desired level of sustained current income.

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c) Balanced Objective is to strike a balance between current income and the desire for modest growth of principal. The client may experience some principal loss given market and other risks. d) Growth Objective is to accumulate wealth over time, rather than current income. You are willing to accept upside and downside volatility in the pursuit of growth including the risk of substantial principal loss. Some growth holdings may have lower liquidity and/or reduced transparency. e) Aggressive Objective is to achieve higher than average growth over the longer term market cycle with little need for current income or liquidity. You are willing to take on significant risk including high upside and downside volatility and the potential of substantial or entire loss of principal. Some holdings may be highly illiquid or have decreased level of transparency compared to traditional investment products. The investment objective, as noted above, is recommendatory in nature and the acceptance of the same is not obligatory on the client. The client has to judge the same, based on various other factors, which includes but are not limited to risks, returns (not guaranteed), personal objectives etc. on which the Portfolio Manager has no discretion or control and indeed, the client may make investment decisions on their own accord, which may be outside of the investment philosophy or investment objective applicable to the client.

Investment Pattern and Type of Securities Based on the investment objective defined by the client, and subject to Regulations, including any overseas regulations, that may apply to non-resident clients, the Portfolio Manager will recommend the client to make investment decisions (buy or sell or otherwise) in any of the Securities, as defined hereinabove. The recommendations made by the Portfolio Manager will be in the nature that the Portfolio Manager may recommend to the Client such Investment Products as the Portfolio Manager reasonably believes to be suitable for the Customer and which are in accordance with the Customers investment objectives, as stated in the Profiling Document completed by the client. The recommendations will be in the form of portfolio discussions, proposals and research reports, such that the recommendations will provide the rational for investment decisions (buy or sell or otherwise) of a particular stock, bond or mutual fund or any other security. Moreover, the Portfolio Managers investment professionals will help the client to reconstruct his/her portfolio as per his/her investment objectives. The Securities could be listed, unlisted, privately placed, secured, unsecured, rated or unrated and of any maturity. The Securities may be acquired through Initial Public Offerings (IPOs), secondary market operations, private placement, rights offers or negotiated deals and invest in derivatives, including transactions for the purpose of hedging and portfolio rebalancing, through a recognized stock exchange.

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6. Risk factors General Risk Factors Investments in Securities are subject to market risks and the Portfolio Manager does not, in any manner whatsoever, assure or guarantee that the objectives of the Services will be achieved. The Portfolio Manager is neither responsible nor liable for any losses resulting from the operations of the Portfolios by the Client, or any investment advise provided to the client. The Portfolio may be affected by the changes in the interest rates prevailing for fixed income securities and volumes of trading. The Portfolio may be affected by settlement periods and transfer procedures. The liquidity of the investments is inherently restricted by trading volumes in the Securities of companies in which the Services are offered. Clients under the Services are not being offered any guaranteed/assured returns. The Non-Discretionary Investment Advisory Service is subject to risk arising from the investment objective, investment strategy and asset allocation selected by the client. The Non-Discretionary Investment Advisory Service is subject to risk arising out of non-diversification when the Portfolio is not sufficiently diversified by investing in a wide variety of instruments so as to spread the individual risk of the investment across a basket of investments in the portfolio. Past investment performance of the Portfolio Manager with respect to NonDiscretionary Investment Advisory Service does not indicate its future performance. Securities investments are subject to market and other risks and there can be no guarantee against loss resulting from investing in the Portfolio(s) of the Client. The various factors which may impact the value of the Portfolios' investments include, but are not limited to, fluctuations in the equity and bond markets, fluctuations in interest rates, prevailing political and economic environment, changes in government policy, factors specific to the issuer of the securities, tax laws, liquidity of the underlying instruments, settlement periods, trading volumes etc. Investment advise provided by the Portfolio Manager to the Client may not always be profitable.

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The tax benefits described in this Disclosure Document are as available under the present taxation laws and are available subject to conditions. The information given is included for general purpose only and is based on advice received by the Portfolio Manager regarding the law and practice in force in India and the Clients should be aware that the relevant fiscal rules or their interpretation may change and will not be applicable to the customers not resident in India. As is the case with any investment, there can be no guarantee that the tax position or the proposed tax position prevailing at the time of an investment in the Portfolio will endure indefinitely. In view of the individual nature of tax consequences, each investor is advised to consult his/ her own professional tax advisor. Prospective investors should review / study this Disclosure Document carefully and in its entirety and shall not construe the contents hereof or regard the summaries contained herein as advice relating to legal, taxation, or financial / investment matters and are advised to consult their own professional advisor(s) as to the legal, tax, financial or any other requirements or restrictions relating to the subscription, gifting, acquisition, holding, disposal (sale or conversion into money) of Portfolio and to the treatment of income (if any), apitalization, capital gains, any distribution, and other tax consequences relevant to their portfolio, acquisition, holding, apitalization, disposal (sale, transfer or conversion into money) of portfolio within their jurisdiction of nationality, residence, incorporation, domicile etc. or under the laws of any jurisdiction to which they or any managed funds to be used to purchase/gift portfolio of securities are subject, and also to determine possible legal, tax, financial or other consequences of subscribing / gifting, purchasing or holding portfolio of securities before making an investment. Investments are subject to certain risks viz. limited liquidity in the market, settlement risk, impeding readjustment of portfolio composition, highly volatile stock markets in India, etc. Such loss could arise due to factors which, by way of illustration, include, default or non-performance of a third party, companys refusal to register a security due to legal stay or otherwise, or disputes raised by third parties. Mis-judgment by the Portfolio Manager or his incapacitation due to any reason, however remote is also a risk. Thus the investment in Indian capital markets involves an above average risk for investors, compared with other types of investment opportunities. Investments will be of a longer duration compared to trading in securities. There is a possibility of the value of investment and the income there from falling as well as rising, depending upon the market situation. There is also a risk of total loss of value of a Security and possibilities of recovery of loss in investments only through legal process. The investments made are subject to external risks such as War, natural calamities, policy changes of Local / International Markets, which affects stock markets. Any policy change / technology change / obsolescence of technology would affect the investments made in a particular industry. PUBLIC - 24

The Client has perused and understood the disclosures made by the Portfolio Manager in the Disclosure Document before entering into the Investment Services Agreement. The value of the Portfolio may increase or decrease depending upon various market forces affecting the capital markets, such as de-listing of Securities, market closureor a relatively small number of scripts accounting for a large proportion of trading volume. The Client stands a risk of loss due to lack of adequate external systems for transferring, pricing, accounting and safekeeping or record keeping of securities. Transfer risk may arise due to the process involved in registering the shares in physical and demat, while price risk may arise on account of availability of share price from stock exchanges during the day and at the close of the day. Equity instruments carry both company specific and market risks and hence no assurance of returns can be made for these investments. Macro-economic risks: Overall economic slowdown, unanticipated corporate performance, environmental or political problems, changes to government policies and regulations with regard to industry and exports may have direct or indirect impact on the investments, and consequently the growth of the investments held in the Portfolio of the client. Liquidity Risks: Liquidity of investments in equity related securities are often restricted by factors such as trading volumes, settlement periods and transfer procedures. If a particular Security does not have a market at the time of sale, then the Investment portfolio of the client may have to bear an impact depending on its exposure to that particular security. While Securities that are listed on a stock exchange generally carry a lower liquidity risk, the ability to sell these investments is limited by overall trading volume on the stock exchange. Money market Securities, while fairly liquid, lack a well-developed secondary market, which may restrict the selling ability of such Securities, thereby resulting in a loss to the Investment Portfolio of the client, until such Securities are finally sold. Credit Risk: Debt Securities are subject to the risk of the issuers inability to meet the principal and interest payment on the obligations and may also be subject to the price volatility due to such factors as interest sensitivity, market perception, or the credit worthiness of the issuer and general market risk. Interest Rate Risk: Clients intending to invest in securities linked to interest are aware that such securities are associated with movements in interest rate, which depend on various factors such as government borrowing, inflation, economic performance etc. The value of investment will appreciate/depreciate if the interest rates fall/rise. Fixed income investments are subject to the risk of interest rate fluctuations, which may accordingly increase or decrease the rate of return thereon. Acts of state, or sovereign action, acts of nature, acts of war, civil disturbance etc. may also cause the Interest rate to fluctuate and accordingly impact the market value of fixed income investments. PUBLIC - 25

Legal Risk: The Client stands the risk of total loss of value of an asset, which forms part of the Portfolio. The Client also bears the risk of its recover through legal process, which could be expensive. Some of the risks by way of illustration include default or non performance of a third party, companys refusal to register a Security due to legal stay or otherwise or disputes raised by third parties. Derivative risks: The derivatives will entail a counter party risk to the extent of amount that can become due from the party. The cost of the hedge can be higher than adverse impact of market movements. An exposure to derivatives can also limit the profits from a genuine investment transaction. Efficiency of a derivatives market depends on the developments of a liquid and efficient market for underlying securities and also on the suitable and acceptable benchmarks. Mutual Fund Risk: This risk arises from investing in units of mutual funds. Risk factors inherent to equities and debt securities are also applicable to investments in mutual fund units. In addition, events like change in name of the Fund Manager of the Scheme, take over and mergers of mutual funds, foreclosure of Schemes or plans, change in government policies could affect performance of the investment in mutual fund units. Price/Volatility Risk: Equity Markets can show large fluctuations in prices, even in short periods of time. Investors should be aware of this and only invest in equity or equity related products if their investment horizon is long enough to support these important price movements.

General Risk Factors Disclaimer: The investment pattern as advised by the Portfolio manager should not be construed as an offer or recommendation or solicitation of any offer to buy or sell or hold any security or other financial instruments. The material/information contained herein is not to be construed as tax, investment professional or legal advice. In the event that a client seeks to incest its funds on the basis of the advice of the Portfolio Manager, the client must do so at its sole risk and must consult with his/her own legal, business, professional and tax advisors to determine the appropriateness and the consequences of such an investment and arrive at an independent evaluation of the same. HSBC. Shall not, in any manner, be liable for the consequences arising out of such investment made by the client. The Client assumes the entire risk of any use made of the statement/material/information enclosed/provided herein. HSBC And its Employees/Agents are no in any way representing as to having any interest therein and to the truth, and/or completeness, and/or accuracy of any information contained herein/attached here with and the same us subject to change without notice or intimation and is intended only for the person or entity to which it is addressed to and may contain confidential and/or privileged material and is not for any type of circulation. It may not (directly or indirectly) be reproduced, further distributed to any person or published, in whole or in part, for any purpose whatsoever. The investment patterns as advised may not be suitable for all investors. Clients/Investors churning their portfolio based on this Portfolio Manager advice shall be doing so entirely at his/her risk and HSBC and its Employees/Agents shall not be liable for the same.

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7. 7.1

Client Representation

Category of clients

No. of Clients

Assets Under Discretionary/ Non Management Discretionary (if (Rs. Cr) available)

Associates / Group companies As at 31 March 1 2013 As at 30 September 1 2012 As at 31 March 1 2012 As at 31 March 1 2011 As at 31 March 1 2010

INR 111 CR

INR 73 CR

INR 40 CR

INR 252 CR.

INR 79 CR.

Non discretionary Investment advisory services Non discretionary Investment advisory services Non discretionary Investment advisory services Non discretionary Investment advisory services Non discretionary Investment advisory services

Others As at 31 March 1240 2013 As at 30 September 1222 2012 As at 31 March 1248 2012 As at 31 March 1379 2011 As at 31 March 1343 2010

INR 13793 CR

INR 9065 CR

INR 8600 CR

INR 6026 CR.

INR 4916 CR.

Non discretionary Investment advisory services Non discretionary Investment advisory services Non discretionary Investment advisory services Non discretionary Investment advisory services Non discretionary Investment advisory services

7.2. Complete disclosure in respect of transactions with related parties as per the standards specified by the Institute of Chartered Accountants of India. Please refer Annexure I PUBLIC - 27

8.

The Financial Performance of the Portfolio Manager (based on audited financial statements)

Balance Sheet

(Currency: Indian rupees in thousands)

2011-12 A) CAPITAL AND LIABILITIES Capital 44,991,660 Reserves and surplus 104,545,247 Deposits 614,233,213 Borrowings 104,774,729 Other liabilities and 223,697,929 provisions TOTAL B) ASSETS Cash and balances with Reserve Bank of India Balances with banks and money at call and short notice Investments Advances Fixed assets Other assets TOTAL Contingent liabilities Bills for collection 1,092,242,778

2010-11

2009-10

44,991,660 91,883,062 541,067,115 50,263,098 183,279,813

44,991,660 76,360,692 557,478,247 59,208,139 166,297,148

911,484,748

904,335,886

39,295,649 76,178,823

48,578,316 33,543,694

39,716,165 41,823,856

403,238,487 355,122,822 8,420,477 209,986,520 1,092,242,778

372,790,845 274,006,211 8,744,309 173,821,373 911,484,748

412,890,656 234,747,670 8,928,756 166,228,783 904,335,886 8,509,535,228 89,817,220

10,096,856,027 9,911,193,025 1,28,621,115 93,972,841

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Profit and Loss (Currency: Indian rupees in thousands) 2011-12 2010-11 2009-10 INCOME Interest earned Other income TOTAL EXPENDITURE Interest expended Operating expenses Provisions and contingencies TOTAL Net profit for the year Profit brought forward TOTAL APPROPRIATIONS Transfer to statutory reserve Transfer to (from) investment reserve Transfer to specific reserve Transfer to Remittable Surplus retained in India for Capital to Risk-weighted Assets Ratio (CRAR) requirements Profit Remitted to Head Office Transfer to Capital Reserve Surplus on sale of immovable properties 61,962,603 22,007,660 83,970,263 51,949,586 17,886,488 69,836,074 51,658,815 21,354,836 73,013,651

24,505,025 24,182,963 15,405,573 64,093,561 19,876,702 18,616,495 38,493,197

18,591,228 21,909,495 14,059,416 54,560,139 15,275,935 15,468,006 30,743,941

19,146,572 19,501,215 26,266,735 64,914,522 8,099,129 9,264,515 17,363,644

4,969,176 704,987 237,204 3,790,834

3,818,984 297,636 213,348 7,797,478

2,024,782 (335,667) 206,523 -

7,670,528 236,150

Balance carried over to balance 20,884,318 sheet TOTAL 38,493,197

18,616,495

15,468,006

30,743,941

17,363,644

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9. Nature of expenses

The following are the general costs and expenses to be borne by the client availing the services of the Portfolio Manager. Portfolio Advisory Charges Fixed Fee, payable quarterly (based on the overall relationship with Portfolio Manager) or as a % based fee, charged on the average quarterly Direct Equity Portfolio Value, payable quarterly, subject to a maximum of 1.50%, plus any applicable governmental taxes and levies. Fixed Fee, payable quarterly (based on the overall relationship with Portfolio Manager) or as a % based fee, charged on the average Direct Equity Portfolio Value, payable quarterly, subject to a maximum of 1.50% ,plus any applicable governmental taxes and levies.

Portfolio Administration Charges

Direct Equity Transaction Charges for purchases/sales

Settlement Transaction Charges: Subject to a maximum of 1.4% of the value of the transaction, plus any applicable governmental taxes and levies. Fixed Fee, (based on the overall relationship with Portfolio Manager) or as a % based fee, charged on the average monthly Equity and Equity oriented mutual fund schemes Portfolio Value, payable monthly, subject to a maximum of 1.50%, plus any applicable governmental taxes and levies.

Mutual Fund Service Fee

Minimum Service Charge for availment of Fixed fee-upto a maximum of INR 30,000 Private Banking Services per month, plus any applicable governmental taxes and levies. Mutual Fund Transaction Charges Transaction Charges: Subject to a maximum of 2% of the value of the transaction, plus any applicable governmental taxes and levies chargeable on the transaction value of the Equity and Equity Oriented mutual funds.

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Advisory fees on Bond transactions

% based fee, charged on the Bond transaction value, subject to a maximum of 1% ,plus any applicable governmental taxes and levies. Total Portfolio fee levied based on the daily average Total Investment Portfolio Value with HSBC. Total Investment Portfolio Value with HSBC includes All Mutual Funds (Equity, Debt, Hybrid etc.), Stocks and Bonds covered under Advisory Module. It does not include Equity-Linked Debentures and PMS (Portfolio Management Services) with third-party providers. It is subject to a maximum of 0.50%, plus any applicable governmental taxes and levies. Actuals. As levied by the Depository. Flat fee, subject to maximum of INR 600, plus applicable governmental taxes and levies payable annually

Total Portfolio Fee

Stamp duty and service charges Demat Charges Demat Charges Demat Account Maintenance Charges

RBI Approvals for Non Resident Flat fee, subject to maximum of INR 500, Individuals (For the purpose of investing plus applicable governmental taxes and in stocks and debentures in the Indian levies payable annually Stock Markets through the Portfolio Investment Scheme. It is charged as a flat one-time fee per approval) Other costs which shall be debited to the Clients account include, but are not restricted to: Transfer Stamp Charges Custodian Fees Clearing Fee, Stock Exchange Fee & SEBI Turnover Fee Legal Fees (including CA Certification charges) Long Distance courier and call charges, if any, specifically made on behalf of the Client Out of pocket expenses incurred directly in respect of Clients business by the Custodian or the Portfolio Manager.

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10. Taxation Implications and Benefits for Clients-Discloses the implications of investments in securities and the tax provisions on Income/ Loss or Tax Deduction at Source on various investors. It may be noted that the information given hereinafter is only for general information purposes and is based on the advice received by the Portfolio Manager regarding the law and practice currently in force in India and the Investors should be aware that the relevant fiscal rules or their interpretation may change or it may not be acceptable to the tax authorities. As is the case with any interpretation of any law, there can be no assurance that the tax position or the proposed tax position prevailing at the time of an investment in the Scheme/option will be accepted by the tax authorities or will continue to be accepted by them indefinitely. Further statements with regard to tax benefits mentioned herein below are mere expressions of opinion and are not representations of the Portfolio Manager to induce any investor to invest, whether directly from the Portfolio Manager or indirectly from any other persons, by the secondary market operations. In view of the above, and since the individual nature of tax consequence may differ in each case on its merit and facts, each Investor is advised to consult his/her or its own professional tax advisor with respect to the specific tax implications arising out of its particular Portfolio or Investment transactions made, as an investor. In view of the above, it is advised that the investors appropriately consult their investment/tax advisors in this regard i. General

In view of the individual nature of tax consequences, each client is advised to consult his or her tax advisor with respect to the specific consequences to him/her for the Investment transactions or Portfolio. The following provisions are as per the existing Income Tax Act, 1961 (the Act). The Portfolio Manager shall not be responsible for assisting in or completing the fulfillment of the clients tax obligations. Tax deduction at source If any tax is required to be withheld on account of any present or future legislation, the Portfolio Manager will be obliged to act in accordance with the regulatory requirement in this regard. Advance tax installment obligations It will be the responsibility of the Client to meet the advance tax obligation installments payable on the due dates under the Income tax Act, 1961.

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ii.

Interest on Securities

Income by way of interest on securities taxed at the slab rates applicable to the assessee under the head Income from other sources iii. Dividend

Dividends declared, distributed or paid on or after April 1, 2003, by domestic companies will be exempt in the hands of the shareholder recipient, but a tax on distributed profits of 15 percent (as increased by surcharge @ 5 per cent) will be payable by the domestic company. Income distributed on or after April 1, 2003, by a mutual fund specified u/s 10(23D) of the Act will be exempt in the hands of the unitholders, but a tax on distributed income will be paid as under:

In case of distribution by a money market mutual fund or a liquid fund: 25 per cent (as increased by surcharge @10 per cent#) when income is distributed to any person being individual or Hindu Undivided Family and NRI; and 30% (plus surcharge @ 10 per cent#) when income is distributed to Domestic Company In case of distribution by a Debt fund other than money market and liquid fund: 12.5* per cent (plus surcharge @ 10 per cent#) in case of distribution to an individual or Hindu Undivided Family and NRI; and 30 per cent (plus surcharge @10 per cent#) when income is distributed to Domestic Company. In case of distribution by a IDF fund: 25 per cent (plus surcharge @ 10 per cent#) in case of distribution to an individual or Hindu Undivided Family; and 30 per cent (plus surcharge @10 per cent#) when income is distributed to Domestic Company. 5** per cent (plus surcharge @ 10 per cent#) in case of distribution to NRI and However, no tax on such distributed income is payable by an equity oriented mutual fund. Further, the tax and surcharge on distribution as stated above will be increased by the Education Cess @ 2% and Secondary and Higher Education Cess @ 1%. # increase in surcharge @10% as per finance Act 2013 effective from 01 April 2013. * 25 % as proposed by Finance Act 2013 effective from 01 June 2013 ** 5 % as proposed by Finance Act 2013 effective from 01 June 2013

iv.

Capital Gains Tax

Profit on sale of investments, (being shares in a company or any other securities listed on a recognised stock exchange in India or units of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963) or units of a Mutual Fund specified under

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Section 10(23D)) held for a period of more than 12 months (36 months in case of any other investments) immediately preceding the date of transfer, will be treated as long term capital gains; in all other cases, it would be treated as short-term capital gains. The taxability of long-term and short-term capital gains is discussed below: A. Transactions in securities on recognized stock exchange and in units of an equity oriented fund: Long term Capital Gain Long term capital gains on sale of listed securities and on units of an equity oriented fund are exempt from tax when the transactions for sale take place on recognized stock exchanges and are subject to the securities transaction tax (STT). However, such long
Term Capital Gains arising to a company shall be taken into account in computing the book profit and income tax payable u/s 115JB of the Act

Short term Capital Gain Short term capital gains on sale of listed securities and units of an equity oriented fund are taxable at the rate of 15 percent (plus surcharge and education cess wherever applicable) ,when the transactions for sale take place on recognized stock exchanges and are subject to the STT B. Transactions in Other securities or transactions not on recognized stock exchanges Long term Capital Gain On long-term capital gains (other than long-term capital gains exempted by Sec 10(38) of the Act discussed elsewhere in this document) in respect of: security listed in any recognized stock exchange in India; or unit of Mutual Fund (whether listed in a recognized stock exchange or not); or unlisted securities (means other than listed securities)

For Domestic Companies:

Long-term Capital Gains will be chargeable under Section 112 of the Income-tax Act, 1961, @20 percent^ with indexation or 10 percent^ without indexation.
For Resident Individuals and HUFs :

Long-term Capital Gains will be chargeable under Section 112 of the Income-tax Act, 1961, @ 20 percent^ with indexation or 10 percent ^without indexation. Where the taxable income as reduced by long term capital gains is below the exemption limit, the long term capital gains will be reduced to the extent of the shortfall and only the balance long term capital gains will be charged at the flat rate of 20 percent^.

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For NRIs:

Long-term capital gains on sale of unlisted securities will be taxed at the rate of 10 percent^. However, no benefit of Cost Inflation Index is available and the requirement of computation of gains in foreign exchange will not apply. However, Long Term Capital Gains (other than unlisted securities) are taxable @ 20 percent^ with indexation or 10 percent^ without indexation. These are the tax rates applicable to capital gains, in case the rate of tax is lower than 20% and if the NRI does not have a Permanent Account Number, then for the purpose of TDS, the withholding tax rate would be 20%
The tax rates are subject to DTAA benefits available to NRIs.
^ Plus applicable surcharge, if any and education cess at 3 percent on tax and surcharge, if any. A surcharge of 10% will be applicable to the capital gains tax rate in case the total income of the Individual / HUF and NRI exceeds INR 1 Crore In case of a domestic company, surcharge of 5% will be levied if the total income exceeds Rs. INR 1 Crore, and 10 % if the total income exceeds INR 10 Crore

v.

Securities Transaction Tax

STT is levied on the value of taxable securities transactions as follows:

Sr. No. 1 Taxable securities transaction Rate (per cent) Payable by Upto 31 from 01 June May 2013 2013 0.1 Nil Purchaser

Purchase of an equity share in a company or a unit of an equity oriented fund, where (a) the transaction of such purchase is entered into in a recognized stock exchange; and (b) the contract for the purchase of such share or unit is settled by the actual delivery or transfer of such share or unit Sale of an equity share in a company or a unit of an equity oriented fund, where (a) the transaction of such sale is entered into in a recognized stock exchange; and (b) the contract for the sale of such share or unit is settled by the actual delivery or transfer of such share or unit Sale of an equity share in a company or a unit of an equity oriented fund, where (a) the transaction of such sale is entered into in a

0.1

0.001

Seller

0.025

0.025

Seller

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5 6

recognized stock exchange; and (b) the contract for the sale of such share or unit is settled otherwise than by the actual delivery or transfer of such share or unit (a) Sale of an option in securities (b) Sale of an option in securities, where option is exercised (c) Sale of a futures in securities Sale of a unit of an equity oriented fund to the Mutual Fund Sale of unlisted equity shares under an offer for sale as part of an initial public offer and shares of the company are subsequently listed on the stock exchange

0.017 0.125 0.017 0.25 0.2

0.017 0.125 0.01 0.001 0.2

Seller Purchaser Seller Seller Seller

Commodity Transaction Tax (CTT) CTT is proposed to be levied (effective from a date to be notified) on the value of taxable commodities transactions as follows: Transaction Sale of commodity derivative (other than agricultural commodities) entered in a recognised association Rate 0.1% Payable by Seller

Disclaimer: The above is only a summary; the Client should take proper advice on the above matters through a qualified Chartered Accountant/Tax Practitioner.

11. Accounting Policies The offering envisages Non-Discretionary Investment Advisory Service and hence, the portfolio transaction per se will not be reflected in the books of the portfolio manager. However, the fee-based income of the portfolio manager will be accounted based on the guidelines issued from time to time by Reserve Bank of India/Securities Exchange Board of India/Institute of Chartered Accountants of India.

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12. Investor Services 12.1 Name, address and telephone number of the investor relation officer who shall attend to the investor queries and complaints. Name of the Investor Relations Officer Prashanti Nagarkatti Chief Nodal Officer The Hongkong and Shanghai Banking Corporation Limited Shiv, CTS No. 139-140B. Sahar Road Vile Parle East Mumbai 400 057
Email: pnohsbcbank@hsbc.co.in>

You may also contact the Nodal Officer Team between 09:30 AM to 06:00 PM, Monday to Friday on contact number: +91 44 - 3911 1217, fax number : +91-044-30134046 Grievance Redressal and dispute settlement mechanism The Portfolio Manager has constituted a Non-Discretionary Investment Advisory Service Grievance Redressal Cell (NDIASGRC). All correspondence in this regard shall be addressed to: NDIAS Grievance Redressal Cell: The Hongkong and Shanghai Banking Corporation Limited. Private Banking department, 1st Floor, 52/60, Mahatma Gandhi Road, Fort, Mumbai : 400 001 Mechanism The Portfolio Manager shall attend to and address any client query or concern as soon as possible to mutual satisfaction. The clients shall send a written complaint addressed to the NDIASGRC or Nodal Officer. On receipt of the complaint, the NDIASGRC or Nodal Officer/team on a best effort basis shall resolve the complaint within 10 days. In the event the complaint is not resolved within 10 days, the client and the Portfolio Manager and any person designated by the Portfolio Manager shall endeavor to resolve the complaint by mutual dialogue and the dispute shall be attempted to be settled amicably by prompt negotiations between parties, failing which it shall be resolved in terms of the agreement. As per the terms of Investment service agreement any dispute, controversy or claims arising out of, or relating to, agreement or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the provisions of the Indian Arbitration and Conciliation Act, 1996. The arbitral tribunal shall comprise of a sole arbitrator appointed by the Bank. The place of arbitration shall be Mumbai and any award whether interim or final, shall be made, and shall be deemed for all purposes between the Parties to be made, in Mumbai. The arbitral procedure shall be conducted in the English language and any award or awards shall be rendered in English. The procedural law of the arbitration shall be Indian law.

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Annexure I Related parties Transactions 1. The related parties of the Bank are broadly classified as follows: 1.1. Parent: The Hongkong and Shanghai Banking Corporation Limited, Hong Kong is the Head office of the Bank and HSBC Holdings plc is the ultimate holding company of the bank. 1.2 Branch Offices Branch offices comprise all branches of The Hongkong and Shanghai Banking Corporation Limited outside India. 1.3 Fellow subsidiaries Fellow subsidiaries comprise companies, which have a common ultimate holding company, HSBC Holdings plc, i.e. HSBC Bank plc, Hang Seng Bank Limited, HSBC Bank Brasil S.A Banco Multiplo, HSBC Global Resourcing (UK) Limited, HSBC Securities and Capital Markets (India) Private Limited, HSBC Asset Management (India) Private Limited, HSBC Professional Services (India) Private Limited, HSBC Electronic Data Processing India Private Limited, HSBC Operations and Processing Enterprise (India) Private Limited, HSBC Private Equity Management (Mauritius) Limited (Liaison office), HSBC Software Development (India) Private Limited, HSBC Global Shared services (India) Private Limited, HSBC Bank of Middle East, HSBC Bank Canada, HSBC Private Banking Holdings (Suisse) SA, HSBC Republic Bank (UK) Ltd., HSBC Bank Malaysia Berhad, HSBC Trinkaus and Burkhardt AG, British Arab Commercial Bank Limited, HSBC Bank Mauritius Limited, HSBC Bank Australia Ltd, HSBC Bank Argentina S.A., HSBC Bank Egypt S.A.E., SB HSBC Bank Kazakhistan JSC, HSBC Bank International Limited, HSBC France, HSBC InvestDirect (India) Limited, HSBC InvestDirect Securities (India) Ltd, Investsmart Financial Services Ltd, HSBC InvestDirect Distribution Services (India) Limited, IL&FS Investsmart Asia Pacific Private Limited, HSBC InvestDirect Academy for Insurance and Finance (India) Ltd, Investsmart Insurance Agency Private Limited, HSBC Bank USA, N.A

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1.4

Key management personnel and subsidiaries The Chief Executive Officer (CEO) is considered the Key Management Personnel of the Bank. HSBC Agency (India) Private Limited is the only subsidiary of the Bank.

2 The transactions of the Bank with related parties are detailed below except where there is only one related party (i.e. key management personnel and subsidiary): (Rs 000) Parent Fellow Subsidiaries
31 March 2012 31 March 2011 31 March 2012 31 March 2011

Interest Paid Interest Received Rendering of Services Receiving of Services

1,842,955

1,377,973 (Rs 000)

748,834 5,449 382,382 1,890,294

442,618 10,255 394,897 1,809,665

Branch offices 31 March 2012 31 March 2011 Interest Paid 180,653 113,723 Interest Received 5,215 50,303 Rendering of Services 37,599 10,503 189,745 Receiving of Services 2,749,890

3 Balances with related parties are as follows: (Rs 000)

As at 31 March 2012 Maximum during the year 2012
1

Parent

As at 31 March 2011

Maximum during the year 2011

Borrowings Deposit Placement of deposits Advances Nostro balances Other liabilities Non Funded Commitments

1,842,955 -

1,842,955 -

1,377,973 -

1,377,973 -

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(Rs 000)
As at 31 March 2012 Maximum during the year 2012
1

Branch offices

As at 31 March 2011

Maximum during the year 2011

Borrowings Deposit Placement of deposits Advances Nostro balances Positive MTMs Negative MTMs Derivative notionals Non Funded Commitments

46,126,837 1,186,026 29,075 34,026 8,825,815 11,108,441 398,889,141 2,227,240

69,404,789 2,506,422 15,962,680 260,060 15,032,393 12,794,601 410,301,121 2,275,380

127,499 10,297 127,054 10,466,810 8,995,679 332,189,104 3,795,559

27,647,297 1,669,235 31,009,021 261,375 12,583,014 13,647,496 390,704,703 3,910,248

(Rs 000)
Fellow Subsidiaries As at 31 March 2012 Maximum during the year 2012
1

As at 31 March 2011

Maximum during the year 2011

Borrowings Deposit Placement of deposits Advances Nostro balances Positive MTMs Negative MTMs Derivative notionals Investments Non Funded Commitments
1

7,631,521 21,473,723 25,496,972 11,728,795 31,183,415 26,999,498 955,278,877 100 1,221,426

19,392,059 52,104,197 25,745,980 12,155,550 42,951,638 32,617,848 1,091,001,952 100 1,443,626

8,932,523 21,811,159 12,212,785 757,327 31,526,403 18,497,702 882,039,878 100 9,554,940

17,887,122 25,263,476 17,844,435 5,930,433 36,392,860 26,911,321 958,861,262 200 10,849,149

Maximum balances are determined based on comparison of the total outstanding balances at each quarter end during the financial year.

Material related party transactions A related party transaction is disclosed as a material related party transaction wherever it exceeds 10% of all related party transactions in that category. Following are such related party transactions. All amounts are Indian Rupees in thousands.

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Interest received: Interest received from The Hongkong and Shanghai Banking Corporation Limited, Hongkong Branch Rs. 4,002 (previous year:Rs. 18,742), The Hongkong and Shanghai Banking Corporation Limited, Singapore branch Rs. 1,213 (previous year: Rs. 31,515) and Hang Seng Bank Limited Rs. 3,825 (previous year: Rs. 46) HSBC Bank plc Rs. 1,390 (previous year: Rs. 9,979). Interest paid: Payment of interest to The Hongkong and Shanghai Banking Corporation Limited, Hongkong Branch Rs. 180,438 (previous year: Rs. 113,259), HSBC Software Development (India) Private Limited Rs. 261,552 (previous year: 38,177) and HSBC Electronic Data Processing India Private Limited Rs. 354,364 (previous year: 256,059). Rendering of services: Income from HSBC InvestDirect Securities (India) Limited Rs. 42,399 (previous year: Rs.32,325), HSBC Electronic Data Processing India Private Limited Rs. 118,919 (previous year: Rs. 160,924), HSBC Securities and Capital Markets (India) Private Limited Rs. 77,540 (previous year: Rs. 47,919) and HSBC Asset Management (India) Private Limited Rs. 51,106 (previous year: Rs. 35,301). Receiving of services: Expenses for receiving of services from The Hongkong and Shanghai Banking Corporation, Hongkong Branch Rs. 2,674,227 (previous year: Rs. 186,635), HSBC Electronic Data Processing India Private Limited Rs. 1,351,093 (previous year: Rs. 1,385,751) and The Hongkong and Shanghai Banking Corporation Limited, Hongkong (Head Office) Rs. 1,842,955 (previous year: Rs. 1,377,973). Borrowings: The Hongkong and Shanghai Banking Corporation, Hong Kong branch Rs. 46,126,837 (previous year: Nil) and HSBC Private Banking Holdings (Suisse) SA, Rs. 7,631,250 (previous year: Nil). Placement of deposits : Hang Seng Bank Limited Rs. 25,437,500 (previous year: Rs. 12,122,850). Nostros: Fellow subsidiaries-HSBC Bank, USA, N.A- Rs. 11,653,590 (previous year: Nil). Deposits: HSBC Software Development Rs. 9,130,943 (previous year: Rs. 5,525,721) and HSBC Electronic Data Processing (India) Private Limited Rs. 7,467,494 (previous year: Rs. 7,257,689).

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Non Funded Commitments: HSBC Securities and Capital Markets (India) Private Limited Rs. 809,750 (previous year: Rs. 933,000) and The Hongkong and Shanghai Banking Corporation, Singapore Rs. 2,046,193 (previous year: Rs. 1,567,136). Notionals: The Hongkong and Shanghai Banking Corporation Limited, Hongkong Branch Rs. 303,857,094 (previous year: Rs. 263,215,243) Hong Kong Branch of HBAP Rs. 94,532,674 (previous year: Rs. 68,873,862) HSBC Bank plc Rs. 663,669,360 (previous year: Rs. 630,751,778) HSBC Bank USA, N.A Rs.193,269,857 (previous year: Rs. 178,439,928). Positive MTM: The Hongkong and Shanghai Banking Corporation Limited, Hongkong Branch Rs. 8,172,782 (previous year: Rs. 9,175,981) Hong Kong Branch of HBAP Rs. 652,890 (previous year: Rs. 1,290,539) HSBC Bank plc Rs. 25,557,772 (previous year: Rs. 28,315,776) HSBC Bank USA, N.A Rs. 2,846,152 (previous year: Rs. 1,736,165). Negative MTM: The Hongkong and Shanghai Banking Corporation Limited, Hongkong Branch Rs. 9,565,113 (previous year: Rs. 7,971,864) Hong Kong Branch of HBAP Rs. 1,542,623 (previous year: Rs. 1,023,815) HSBC Bank plc Rs. 18,444,358 (previous year: Rs. 13,554,277) HSBC Bank USA, N.A Rs. 7,690,020 (previous year: Rs. 4,211,439).

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FORM C Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993 (Regulation 14)

The Hongkong and Shanghai Banking Corporation Limited, India branches 52/60 Mahatma Gandhi Road, Fort, MUMBAI 400001 Telephone No. : (022) 2268 1180 Fax No. : (022) 2268 5577 E-mail : privatebanking@hsbc.co.in

We confirm that: i) the Disclosure Document forwarded to SEBI is in accordance with the SEBI (PortfolioManagers) Regulations, 1993 and the guidelines and directives issued by SEBI from time to time; ii) the disclosures made in the document are true, fair and adequate to enable the investors to make a well informed decision regarding entrusting the management of the portfolio to us / Investment in the Portfolio Management Services; iii) the Disclosure Document has been duly certified on June 10, 2013 by Mr Vinay D. Balse ,Partner, M/s N. M Raiji & Co, Universal Insurance Building, Pherozshah Mehta Road, Mumbai 400 001, Tel No. 2287 0068, bearing registration no. 39434 (enclosed is a copy of the chartered accountants' certificate to the effect that the disclosures made in the document are true, fair and adequate to enable the investors to make a well informed decision). Date: 10 June 2013 SD/____________________________ Stuart Milne Principal Officer Place: Mumbai Name and address of the Principal Officer: Name: Stuart Milne The Hongkong and Shanghai Banking Corporation Limited 52/60, M.G.Road, Fort Mumbai 400 001
NOTE: Form C and copy of chartered accountants certificate to that effect as stated above were submitted to SEBI on June 12, 2013.

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