The Small Business Venture Capital Act, (the "Act") under Part 1 requires that all

registered venture capital corporations ("VCCs") invest at least 80% of their equity capital
within 2 fiscal years in "eligible investments". Also, under Part 2 of the Act, a registered
eligible business corporation (“EBC”) must only issue “equity shares” 1 to investors if it
wants to provide them with tax credits.
For an investment to qualify as an "eligible investment"2 for a VCC under the Act, it must
consist of the acquisition of "equity shares" of a small business. For the most part, the
“equity shares” must be issued directly by the small business to the VCC. There are
exceptions to this requirement with respect to the VCC acquisition of prescribed
convertible debt, prescribed units of a limited partnership and the acquisition of “equity
shares” through an affiliate of a small business. These “indirect” investments by a VCC
will discussed under section 3 of this policy statement.
With respect to an EBC all “equity shares” must be issued directly to eligible investors.
The Act defines an "equity share" under section 1(1) to mean:
a. a share or class of shares whether or not the share carries voting rights,
b. any warrants, options or rights entitling their holders to purchase or acquire the
shares referred to under (a), or
c. other prescribed securities.
The prescribed rights and restrictions referred to in this definition are set out in section 3
of the regulations under the Act.
1 The Act requires a small business to satisfy other requirements in order to obtain registration as an EBC
(see also sections 28.2, 28.4, 28.5 and 28.6 of the Act).
2 The Act requires that an investment by a VCC satisfy certain other requirements to qualify as an "eligible
investment" (see also sections 10, 12, 13, 14, and 15 of the Act).
2
G:\@OPS\Equity Capital Program\ECP Policy statments - 2003\Equity_Shares_Poilicy.doc Revised 2/27/2003
This policy statement provides information about equity shares under the Act. All
program users are advised to read this policy statement before issuing shares or making
equity investments in eligible small businesses. Program staff will routinely apply the
principles contained in this policy statement when reviewing applications and filings
under the program.

COMPANY PROFILE

Fortune Financial Services (I) Limited was incorporated in the year 1991 by Mr. J.T.
Poonja, Chairman And Mr. Nimish C Shah, Vice Chairman and Managing Director. Fortune Group which
comprises the holding company Fortune Financial Services (India) Limited and its Wholly-owned
subsidiaries, is engaged in providing a range of financial Services right from Equities and Derivatives
trading, Equity

Research, Commodities Trading, Portfolio Management Service, Distribution of Mutual Fund, IPO &
Insurance products and also Investment banking services.

The main activities of the company are conducted through Fortune financial Services which is also the
holding company & it’s wholly owned subsidiaries. A brief snapshot of all the companies is outlined as
under.

M/s. Fortune Equity Brokers (India) Ltd. M/s. Fortune Financial Services (I) Ltd. is listed on the Bombay
Stock Exchange Ltd and is SEBI Registered Category I Merchant Banker. It has recently got approval from
SEBI to launch its portfolio Management Services (PMS). FFSIL has four business verticals viz. Fortune
Equity Brokers (I) Limited,

Fortune Commodities & Derivatives (I) Ltd., Fortune Credit Capital (I) Ltd. and Insurance Advisory

Services (I) Ltd.

M/s. Fortune Equity Brokers (India) Ltd.

M/s. Fortune Equity Brokers (India) Ltd. is 100% subsidiary company of M/s. Fortune financial Services

(India) Ltd. It offers broking services in the Cash and Future & Option segments of the National Stock

Exchange of India Ltd and Bombay Stock Exchange Limited. It is also a Depository Participant of
Central

Depository Services (India) Ltd.

M/s. Fortune Commodities & Derivatives (India) Ltd.

M/s. Fortune commodities& Derivatives (India) Ltd. is subsidiary company of M/s. Fortune Financial
Services (India) Ltd. and engaged in the business of commodities broking. It is having memberships with
the MCX and NCDEX, two leading Indian Commodities Exchanges.

M/s. Fortune Credit Capital (India) Ltd.

Fortune Credit Capital (India) Ltd. is 100% subsidiary company of M/s. Fortune Financial Services (India)
Ltd. It is formed for the purpose of financing, leading to the client. The Company has applied with RBI
for NBFC license and the same is expected shortly.

M/s. Fortune Insurance Advisory Services (India) Ltd.

M/s. Fortune Insurance Advisory Service (India) Ltd. is 100% subsidiary company of M/s. Fortune
Financial Services (India) Ltd. and formed for the purpose of providing insurance broking and related
products and Services.

HISTOTY & MILESTONE

1991

 Mr. J.T. Poonja and Mr. Nimish C. Shah incorporated Fortune Financial Services (India)
Private Limited
 As a Non – Banking Financial Company (NBFC). Besides core investment banking and
corporate advisory
  Services, Fortune’s also focused on fund based activities such as lease, hire purchase, bill
discounting an Inter-corporate loans 1992Fortune declared dividend @ 10%1993Fortune
became a SEBI registered Category – I Merchant Banker
 Fortune declared dividend @ 12.5 %

1994

 In anticipation of a potential IPO, the name of the Company was changed to Fortune
Financial Services (India) Ltd.

 Opened an office in New Delhi to increase the scope of activities.

 Fortune declared dividend @15%
1995

Authorized Capital of Fortune was increased to RS.600 lacs

 Fortune made an Initial Public Offering (IPO) of 25 lac equity shares of Rs.10/- each at a
premium of Rs.20/- per share aggregating to Rs.750 lacs. The issue was over subscribed by
2.52 times

 Fortune was listed on the Bombay Stock Exchange, Delhi Stock Exchange, and Ahmedabad
Stock Exchange and Madras Stock Exchange

 Fortune opened a branch office in Bangalore

Fortune was associated with 10 issues aggregating to Rs.115 crores as Lead / Co- mangers

 Fortune was involved with underwriting 113 issues for an aggregate amount of Rs.26 crores
*Company received membership of National Stock Exchange (NSE). Fortune Promoted a separate
company called Good Fortune Advisory Services Pvt. Ltd., to operate this activity and invested Rs.10
Lacs towards share capital
 Fortune declared dividend @16%
1996Fortune launched its consumer finance division with a primary focus on car financing Opened
offices in Pune and Mangalore

Fortune handled 9 Investment Banking assignments in its capacity as Lead Managers/ Co-Manager/
 Advisors aggregating to Rs.176 crores. This included the issued of Search Chem Industries
Limited, a group company of United Phosphorus Limited
**Fortune set up its in-house equity research division with a view to provide equity research to corporate

Clients and support its corporate finance and investment banking activities

Fortune Started accepting fixed deposits from public. The fixed deposit schemes of the Company is
rated “FA” by CRISIL
Besides having a fixed deposit center in Mumbai, Fortune opened centers in Madras, Bangalore and
New Delhi
 Fortune declared dividend @20%

1997

In order to broader its base in consumer finance, Fortune took up office equipment finance in addition
to financing

 Fortune extended its focus to External Commercial Borrowings, private placement of Non-
Convertible Debentures and Preference Share for mobilizing funds for its corporate client

 Opened offices at Chennai and Chandigargh to promote consumer finance and corporate
financing activities.

 Fortune declared dividend @22%

1998

Due to a downturn in the market conditions, Fortune’s senior management decided to suspend the
NBFC activities effective from April 1998

The fixed deposit scheme of Fortune was rated “FA” by CRISIL on account of its timely repayment of
interest, repayment of the principal and the safety of the deposits

Fortune stopped accepting / renewing fixed deposits since April1998

 Fortune declared dividend @15%

1999

Fortune Financial became the 1 st India company to go in for a buyback of its share, subsequent to the
guidelines for Buyback of share coming into effect from Jan 1999
**Fortune offered to buyback 25% of its paid-up capital of Rs.549 lacs at an offer price of Rs.1/- each per
share as against the average quoted market price of Rs.5065per share. An amount of Rs.114 lacs was
reduced from the share capital consequent to the buyback
Successfully completed the second buyback and reduced Rs.47 lacs from the share capital.
*888

Fortune prepaid / repaid all its fixed deposit outstanding along with interest
*****888888

2000Acquired corporate Membership of Bombay Stock Exchange Limited (BSE)------In addition to

Investment Banking and Corporate Advisory Service, Fortune launched its stock broking activities
Fortune concluded two major deals involving a FMCG company and a well know media
[[ Company’s
private Placement of equity shar 2001Fortune completed the private placement of equity shares of
popular Entertainment Network limited and clickforcotton.com, India’s first cotton exchange portal --------------------------------------

Managed few IPOS, take over offers and right issue despite adverse market conditions

 Fortune also made a secondary market placement of equity shares for Goldstone
Technologies Ltd., and Mirc Electronics Limited
2002

Fortune commenced its full fledged broking operation by empanelling with leading FIs / MFs / Banks

 Fortune completed a major take over offer of Noble Explochem

 Reserve Bank of India de-registered Fortune as a NBFC

 Fortune’s equity shares are voluntarily de-listed from Madras Stock Exchange
2003

Managed open offers of Gujarat JHM Hotels Ltd., Punjab Chemicals and Pharmaceuticals Ltd.
Fortune’s equity shares are voluntarily de-listed from Ahmedabad Stock Exchange Ltd-------Fortune
empanelled with three institutions for secondary market business 2004

Fortune empanelled with seventeen institutional clients for its secondary market business
 Fortune was appointed as merchant bankers to manage an open offer by Zircon Traders Ltd.
--Successfully completed the FCCB issues for Alok Industries Limited and United Phosphorus Limited
raising approximately US$ 110 million
Opened its branch at Hyderabad to promote stock broking activities

Fortune’s shares are voluntarily de-listed from Delhi Stock Exchange

2006Shareholders of Fortune approved the issuance of bonus shares in the ratio of 1:1

 Allotment of bonus shares was completed on March 31, 2006

 Commenced DP Services

PRODUCTS AND SERVICE PROFILE

The products offered by Sharekhan are as follows 

Online products
 1. Classic Account
2. Speed trade

1. Classic Account:

 This account allows the client to the trade through out website and is suitable for the retail
investors. Our online trading website also comes with the Daily Trade service that enables you to
buy and sell shares by calling their dedicated toll free number. This account for retail investor
who is risk averse and hence prefer to invest in stock selectively or who does not trade
frequently.

The account opening charge for classic account is 750/- in which client will get the DEMAT
account free for one year, after one year client should pay an annual maintenance of rupees 300/-
for demat account..  

2. Speed trade

 SPEEDTRADE is a next-generation online trading product that brings the power of your
broker’s terminal to your PC. It is ideal for active traders who transact frequently during day’s
trading session capitalize on intra-day price movements. SPEEDTRADE is an internet-based
application available on a CD, which provides every-thing a trader needs on one screen, thereby,
reducing the required to execute a trade.

 SPEEDTRADE has all the above-mentioned features with the power to trade in cash and
derivatives from a single screen. For this account opening charge is 1000/-

The brokerage charged for both a/c is 0.1% each sides for intra day [i.e., buys & sell the same
day and 0.5% for delivery [i.e., investment]. the minimum brokerage in trading account is 33%
margin and 100% delivery.

Services Offered by Fortune:- Following services are offered:

     
 1. Trading Facilities:

Fortune as a member of NSE& BSE provides both offline and online trading facilities
nationwide for trading the securities in secondary market to its clients. The company’s wide
network of outlets spread across the country facilities to executive the orders in secondary
market. 

2. Derivatives: (Futures and Options)

The company also facilitates the trading system for trading in secondary market under future and
options segment of NSE and BSE. The equity dealers in the company will be eager to give
insights into the new sets introduction in the Indian Capital Market futures and options.

3. Depository services:

Fortune is a Depository participant of National Securities Depository Limited and Central

Depository and Securities Limited.

Fortune will open De-mat accounts, which will investors to convert physical certificates of
shares into electronic balances in an account maintained. 

4. Margin Financing:

In the present rolling settlement scenario, Fortune understands investor need for additional
capital availability for daily purchaser shares. It offers unique facility avail finance, for
purchasing shares at very competitive interest rates. 

5.  IPO’s and Mutual Funds:

Fortune offers the change of investing in the potentially lucrative IPO market. Fortune is a
distribution house for all mutual funds. This is the news scheme introduced by the company and
it also offers schemes catering to investors with varying risk return profiles.

6. Stock lending and Borrowing

One can place an order of shares with Fortune. It is approved intermediary of the security or
lending scheme. These would be sent out the borrowers, these earnings fees for all investors’ idle
shares. Thus Fortune fulfill the investor need for borrowing and lending of shares
7.  Equity ResearchFortune has a highly rated research using involved in macro economic studies,
industry and company specific equity research. The research team’s inputs will be available as daily
trading calls, quarterly investment picks and long term investment picks, based on the fundamentals of
particular company and the industry as a whole. 

8.    Internet Trading:

 Investors can also trade their securities through this facility by logging into company’s website.
The virtual world that Sharekhan offers online trading services through.

9.    Portfolio Management Services:

Fortune securities are a registered portfolio manager with SEBI to manage portfolios on behalf of
clients with a discretionary and non discretionary right. This service is a provision for those who
may not have the time to manage their stock investments or require the service of company’s
highly specialized profession team

10. Other Services

 Free access to investment advice from Fortune’s research team

 “Sharekhan “Value line” (A monthly publication with review of recommendations stocks
towatchout)
 Daily research reports and market review (high noon and eagle eye)
 Daily trading calls based technical analyses
 Cool trading products (Daring derivatives and market strategy)
 Personalized advice
 Live management information
 Internet- Based online trading

INVESTMENT OPPORTUNITIES IN INDIA

Investment objectives will almost always change for every investor throughout their lives.
Capital appreciation might be more important while you are young; meanwhile entering your
golden years might place a greater emphasis on providing income. Whatever your objective,
knowing what investment options are out there is extremely important.
Here are 8 Investments that we feel every investor should be aware of:

EQUITY

Plain and simple, equity is ownership in part of a company. For every stock you own in a
company you own a small piece of the office furniture, company cars, and even that lunch the
boss paid with the company credit card. More importantly, you are entitled to a portion of the
company’s profits and any voting rights attached to the stock. With some companies the profits
are typically paid out in dividends. The more shares you own, the larger portion of the company
(and profits) you own.

Equity represents ownership in a company and a portion of profits (dividends). Investors also
have voting rights to elect the board members who oversee the major decisions made by
management. In the long term, equity, by means of capital growth, yield higher rewards than
other forms of investment securities. This higher return comes at a cost as equity entails the
most risk. Should a company go bankrupt and liquidate, the common shareholders will not
receive money until the creditors, bondholders, and preferred shareholders are paid.

OBJECTIVES AND RISKS:

Over the long term, there is no investment that provides better returns at a reasonable risk than
equity. History has dictated that equity averages 11-12% per year and outperforms just about
every other type of security including bonds and preferred shares. Stocks provide potential for
capital appreciation, income, and protection again moderate inflation.

Risks associated with stocks can vary widely, and usually depends on the company. Purchasing
equity instruments in a well established and profitable company means there is much less risk
you'll lose your investment whereas by purchasing a penny stock your risks increase
substantially. By using margin stocks also allow you to dramatically increase your leverage in a
stock. This is only recommended for experienced investors.
STRENGTHS:

 Equity is very easy to buy and sell

 Especially with progresses in the Internet it is very easy to find reliable information on
public companies making analysis possible.
 One of the major means if one is looking for capital appreciation.
 These instruments have high liquidity.
 Provides investors high income.

WEAKNESS:

 Your original investment is not guaranteed. There is always risk the stock you invest in
will decline in value and you may lose your entire principal.

Your stock is only as good as the company you invest in, a poor company means poor stock
performance