Stairs AN ALTERNATIVE INVESTMENT STRATEGY

1. StairsAN ALTERNATIVE INVESTMENT STRATEGY

2. Did you know? *Net performance return after all transaction costs but before performance fees. **SPOT refers to the underlying indices in the same proportion as the STAIRS constituents: viz 75% Nifty Futures (NF), 25% Bank Nifty Futures (BNF). ***All returns prior to Jan 2010 are the result of a simulated backtest.

3. Are you grappling with the following issues? • Levels to enter / re-enter the market • What to buy • Equity markets plagued by corporate governance issues • Significant value destruction in many sectors eg. Real estate, infrastructure, capital goods • Time to oversee your portfolio actively • No plan if trade goes wrong / adhering to a plan • Erratic portfolio performance particularly since Jan. 2008

4. The STAIRS strategy intends to… • Provide absolute, real returns annually • The strategy relies on price behaviour (trend following ; a subset of technical analysis) and not on fundamental research and analysis • The strategy does not attempt to predict the market • Diversify your existing equity/debt portfolio • The returns from this strategy are totally un-correlated to the market/underlying • It diversifies your asset base from being “long only” as STAIRS is a long/short strategy • Provide protection to your overall portfolio in periods of stress

5. Managed Futures • Managed Futures are a rapidly growing, globally recognized alternative investment class. • These programs are typically based on mechanical sets of entry and exit rules for trading any number of asset classes eg. equities/ commodities etc.The extent of risk and exposure per trade is controlled through “position sizing”. The client trades in their own brokerage account based on the advisors’ strategy. • Managed Futures asset allocation/diversification is now recommended as an integral part of any diversified, global portfolio. Typically, 10% - 20% allocation to this asset class is recommended as per best global practices.* * See Appendix Growth of Global Managed Futures Assets as of CYQ32008 Global Managed Futures Assets as of CYQ32008

6. The number of winning trades versus the number of losing trades. Contrary to common perception, a large number of successful global traders average only around 45-60% winning trades. The STAIRS strategy has been averaging around 60%*** The average amount gained per winning trade vs given back per losing trade. A successful strategy must generate a significantly larger average gain per winning trade than the amount given back on a losing trade. Typically, this ratio is considered good above 1.5-2X. The STAIRS strategy has been averaging around 2.5X*** Risk management techniques such as position sizing are explained in the Appendix Tenets of successful trading systems Historical Performance Statistics Data for the period NF : 01.01.2001 to 08.10.2010 BNF: 13.06.2005 to 07.10.2010 ***All returns prior to Jan 2010 are the result of a simulated backtest.

7. STAIRS STAIRS, our proprietary strategy, is a discretionary trading system which aims to generate absolute returns regardless of the market direction The STAIRS strategy generates trades based on strict trend following rules. The strategy has been back tested on more than 10 years of historical market data. The STAIRS strategy has been traded with capital since Jan 2010 and the strategy trades the Nifty futures on the NSE. The STAIRS strategy intends to preserve capital by position sizing such that any one trade does not result in a loss bigger than 2% of the capital The strategy generates both long and short trades and capital is invested at all times. However, the STAIRS strategy is not a day trading system. The strategy generates on average 10 to 15 trades a month. STAIRS is not a black-box / algorithm driven system *Net performance return after all transaction costs but before performance fees. **SPOT refers to the underlying indices in the same proportion as the STAIRS constituents: viz 75% Nifty Futures (NF), 25% Bank Nifty Futures (BNF). ***All returns prior to Jan 2010 are the result of a simulated backtest.

8. STAIRS –Strategy Features Clients trade in their own NSE brokerage accounts. Clients are free to stop/ exit the strategy at their own discretion All gains accrue in clients own brokerage account Live strategy performance is auto-updated at www.rohiniglobal.com. Advisor fees based solely on performance; payable quarterly Strategy advised by investment professionals with more than 30 years of combined market and trading experience.

9. STAIRS - Risks • Risk is integral to trading in futures markets. There is always the risk of loss of capital. Superior returns are a function of this risk. • Risk however, is controllable and manageable in most situations. For instance, the maximum intra-quarterdraw down on capital experienced from any profit point in our strategy till date is about 40%. • Positional risk in systematic trading is much lower than in conventional, directional trading due to position sizing. • Overnight Global event risk is the most significant risk to this strategy in line with any other positional strategy. • Risk of leverage. This is controlled to a large extent by using conservative leveraging of approximately 2X of the capital. • Risk of the “unknown”. Clients are advised to read all risk disclosure documents carefully. Derivatives are inherently risky and there is potential risk of loss of capital.

10. STAIRS – Performance during stress periods % CHANGE The Global experience ***All returns prior to Jan 2010 are the result of a simulated back test.

11. STAIRS – Quarterly Performance *Past performance is no guarantee of future performance. ***All returns prior to Jan 2010 are the result of a simulated back test.

12. STAIRS – Annual Performance ***All returns prior to Jan 2010 are the result of a simulated back test. *Past performance is no guarantee of future performance.

13. Advisory Fee Schedule Performance based advisory fee at 30% of all gains, billed quarterly. Service Taxes are as applicable. A “high watermark” as per international practices is used. (In negative return quarters, no fees will be billed. Fees will only be charged once all previous losses have been recovered). Sample Fee Chart (advisory fee paid quarterly)

14. RohiniGlobal RohiniGlobal group of companies was founded in 1996. The group is committed to creating a program based, mechanical trading platform with the ultimate objective of providing diversification across major global markets and asset classes. Professional advisory services are rendered by Rohini Online Services LLP, New Delhi, India. Mr. Alok Jain is the founder of RohiniGlobal group of companiesHe has diverse trading experience in the Indian and the US equity markets with a majority of his research focused on technical system development and mechanical system modeling. He graduated from IIT Delhi (1991) and obtained the degrees of Master of Finance and an M.B.A. from the University of Maryland(1995). His successful trading career spans well over 15 years.

15. APPENDIX

16. Risk profile- single day returns The above picture shows the cumulative and one day returns of the STAIRS strategy over a 18 month period. The blue dots are the cumulative performance and the black line is the one day return. The figure indicates the nature of the equity curve as it gains ground after each drawdown in a “STAIRS” like formation. This picture also shows the overall performance of the strategy during and after a period of excessive volatility. Clients are advised to read all risk disclosure documents carefully. Derivatives are inherently risky and there is potential risk of loss of capital.

17. Leverage and position sizing The National Stock Exchange determines the minimum margin permissible for each leveraged position/product. Under normal circumstances, the leverage permitted by the exchange, on an index futures product such as the Nifty is 6-9 times. High leverage can be advantageous or extremely risky. A move in price of 15% against your position with 6 times leverage would wipe out your entire capital. To manage risk appropriately, we recommend using approximately 2-2.5 times leverage in the STAIRS strategy. Position Sizing is a money management technique used to determine what size of position to take basis your absolute investment, as also the risk to be assumed per trade. We recommend that on capital of INR 25 lacs, a position size of INR 50 lacs should not be exceeded. It is our endeavor to never generate more than a 5% loss of capital on a single trade. Money Management ensures that even after a string of losses, you have enough capital available to build back your investment with.

18. Portfolio diversification – global context The Chicago Board of Trade's booklet, Managed Futures, Portfolio Diversification Opportunities, shows a portfolio with the greatest risk and least returns comprised of 50% stocks, 50% bonds, and 0% managed futures while a portfolio exhibiting the greatest returns and least risk, comprised 37.5% stocks, 37.5% bonds, and 25% managed futures. *Results obtained by adding managed futures component at an incremental rate of 1% while simultaneously reducing the stock and bond portions by 1% each. Based on monthly data from 1980-2004 on an annualized basis. 1 Stocks: S&P 500 Index (dividends reinvested)2 Bonds: ML Domestic Master Bond index (over 1 year with coupons reinvested)3 Managed Futures : MAR CTA Index ** Past performance is not necessarily indicative of future results.