I write to you at the close of this roller-coaster year. The growth
 rate of the Indian economy saw some headwinds with rising input costs
 and high interest rates. The Indian markets delivered a moderate
 performance in FY11, as compared to the high returns last year.
 Although strong FII inflows boosted the markets, the DIIs remained net
 sellers. Average daily market volumes were Rs. 1.33 lakh crores in
 FY11, up 40% YoY.  However, this was attributable to the
 disproportionate growth in the low-yield options segment of the market,
 while the high-yield cash segment saw year on year decline.  Lack of a
 sustained, directional trend in the markets resulted in muted retail
 participation, which saw some traction only during a few PSU public
 issues. Thus, the growth in overall market volumes did not result in a
 corresponding growth in the overall brokerage revenue pool.
 
 On a consolidated basis, our revenues declined 7% to Rs. 600.4 crores
 in FY11, and reported PAT declined 20% to Rs. 137.1 crores.
 Broking-related revenues fell 5% to Rs. 433.4 crores this year owing to
 the decline in the cash volumes in the market. The strategy of
 diversifying across business segments saw ~30% revenues being
 contributed by non-broking businesses. Fund based income grew 14% to
 Rs. 73.8 crores with an increase in the loan book. Asset management
 fees increased 7% to Rs. 42.7 crores with the launch of the new mutual
 funds, which saw active investor interest.
 
 Investment banking fees saw a 39% decline at Rs. 39.8 crores due to
 revenue booking of some large deals in advanced stage of execution
 getting postponed due to delays in obtaining certain regulatory
 approvals. FY11 EBITDA and Net Profit margins, at 38% and 23%
 respectively, were in line with the long term trend. Our Pan-India
 expansion is on track with total customers increasing to 709,041 and
 retail distribution at 1,644 outlets across 611 cities.
 
 We remain a focused player in the capital markets space and continue to
 invest into building a strong franchise in this space. True to our
 philosophy of Knowledge First, we introduced several innovative
 products during the year, many of which were Indias First. We continue
 to expand our client base and be a financial intermediary of choice for
 our clients. The approach of utilizing capital judiciously and a
 variable cost structure was successful in maintaining a healthy balance
 sheet and consistent profit margins in challenging times. A strong,
 unleveraged balance sheet with a net worth of Rs. 1,060 crores and a
 time tested business model, gives us the headroom to capture all viable
 opportunities in this space.
 
 Our efforts to create a superior, value-driven business were recognized
 through various industry accolades this year:
 
 - Motilal Oswal was adjudged the Best Performing Equity Broker at the
 CNBC TV18 Financial Advisors Awards, 2010.
 
 - We won 4 awards at the ET-Now Starmine Analyst Awards 2010-11,
 placing us amongst the Top 3 award winning brokers
 
 - Motilal Oswal was also ranked No. 2 by AsiaMoney Brokers Poll 2010 in
 the Best Local Brokerage Category
 
 - The M&A transaction of Shree Renuka Sugars (Brazils Equipav SA
 acquisition) advised by our investment banking business won the Asia
 Pacific Cross-Border Deal of the Year award and our CEO won the India
 M&A Investment Banker award at the Asia Pacific M&A Atlas Awards, 2010
 
 - We bagged the QualTech Prize for Improvement 2010 in Services for a
 DMAIC project on reducing account opening turnaround time
 
 - Our M50 ETF, bagged the Most Innovative Fund of the Year award at
 the CNBC TV18 CRISIL Mutual Funds Awards 2011
 
 Indias growth story remains intact and its GDP is expected to reach
 US trillion by 2020. With the consequent growth in discretionary
 income and savings pool, there is a favourable opportunity for the
 financial intermediation space over the medium to long term. Our focus
 remains strong in our value-driven research approach, increasing
 distribution reach across India and growing our related business
 segments, together with maintaining a risk-free balance sheet. Due to
 these factors, we firmly believe that we are favourably poised to tap
 the resultant opportunities.
 
 I would like to express my gratitude to our Board of Directors for
 their support and guidance. I am also grateful to all our stakeholders
 - customers, business associates, employees, vendors and shareholders,
 who have reposed their trust in us and given us constant support.
 
 
 
 With best wishes,
 Sincerely,
 
 Motilal Oswal
 Chairman and Managing Director
 Mumbai, 20 June, 2011