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Directors Report of Fortune Financial Services (India) Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Twenty Fourth Annual Report and Audited Accounts for the year ended 31st March, 2015.

Financial Results 2014-2015 2013-2014 Stand-alone

Total Income 518.82 828.65

Profit / (Loss) before depreciation and tax 16.76 (1.48)

Depreciation 6.73 2.99

Profit/ (Loss) before tax 10.03 (4.47)

Provision for tax

- Current tax -- --

- Current tax relating to prior years (Net) 0.75 0.13

- Deferred tax 7.56 19.46

Profit/ (Loss) after tax but before minority interest 1.72 (24.06)

Minority Interest --— ---

Profit / (loss) for the year 1.72 (24.06)

Add: Balance as per last financial statements 2,188.17 2,212.23

Profit available for appropriations 2,189.89 2,188.17

Transfer to statutory reserve --- ---

Balance carried forward to balance sheet 2,189.89 2,188.17

Weighted average number of equity shares

- Basic 2,83,45,990 1,28,79,290

- Diluted 2,79,22,245 1,30,32,715

Nominal value per share (in rupees) 10.00 10.00

Basic and diluted earnings per share

- Basic (in rupees) 0.01 (0.19)

- Diluted (in rupees) 0.01 (0.18)

(Rs. in lakhs) 2014-2015 2013-2014 Consolidated

Total Income 15,918.24 6,101.48

Profit / (Loss) before depreciation and tax 1,292.24 288.97

Depreciation 910.64 305.94

Profit/ (Loss) before tax 381.50 (16.97)

Provision for tax

- Current tax 261.50 34.80

- Current tax relating to prior years (Net) (9.10) 1.80

- Deferred tax (71.25) 70.64

Profit/ (Loss) after tax but before minority interest 200.35 (124.21)

Minority Interest 52.08 --—

Profit / (loss) for the year 148.27 (124.21)

Add: Balance as per last financial statements 1,977.58 2,122.06

Profit available for appropriations 2,125.85 1,997.85

Transfer to statutory reserve 39.33 20.27

Balance carried forward to balance sheet 2,086.52 1,977.58

Weighted average number of equity shares

- Basic 2,83,45,990 1,28,79,290

- Diluted 2,79,22,245 1,30,32,715

Nominal value per share (in rupees) 10.00 10.00

Basic and diluted earnings per share

- Basic (in rupees) 0.53 (0.96)

- Diluted (in rupees) 0.53 (0.95)

The state of Company's affairs Standalone

The total income during the year 2014-15 stood at Rs. 518.82 lakhs as against Rs. 828.65 lakhs during the previous year, showing a decrease of 37 % compared to the previous year. The Company has earned a profit before tax Rs. 10.03 lakhs as compared to a loss of Rs. 4.47 lakhs in the previous year. The profit after tax stood at Rs. 1.72 lakhs as against a loss of Rs. 24.06 lakhs in the previous year.

Consolidated

The consolidated income during the year 2014-15 stood at Rs.15,918.24 lakhs as against Rs. 6,101.48 lakhs during the previous year. The consolidated income has been increased substantially as compared to the previous year. During the year under review the Company has on consolidated basis earned a profit of Rs.148.27 lakhs after tax as against a loss of Rs 124.21 lakhs in the previous year.

Consolidated Financial Statements

The Board of Directors of your Company at its meeting held on 12th May, 2015 approved the consolidated financial statements for the financial year 2014-15 in accordance with the Accounting Standard (AS-21) and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India as well as Clause 32 of the listing agreement, which includes financial information of all its subsidiaries.

Dividend

In view of the marginal profit earned by the Company, the Board of Directors do not recommend any dividend for the financial year 2014-15. Transfer to General Reserves

The Board of Directors do not propose to transfer any amount to General Reserve for the financial year 2014-2015.

Fixed Deposits

The Company has not accepted any deposit from the public during the year under review, within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under.

Share Capital

During the year under review, the Company has not issued any equity shares with differential rights or sweat equity shares or stock options and has not made any provision of money for purchase of its own shares by employees or by trustees for the benefit of employees

Investment for acquisition of a Company

During the year under review, the Company has acquired 47,68,022 equity shares of Rs. 10/- each fully paid up of Inga Capital Private Limited representing 68.19% of the paid up capital of the investee Company, whereby it became a subsidiary of the Company effective from 26th February, 2015. Inga Capital Private Limited is engaged in the business of Investment Banking and is a Category I Merchant Banker registered with SEBI.

Accounts of subsidiary companies

In terms of proviso to section 136 of the Companies Act, 2013 the Company has not attached the accounts of its subsidiaries with the accounts of the Company. However, the audited annual accounts of the subsidiary companies will be made available for inspection by the members of the holding and subsidiary companies at the registered office of the Company and will also be uploaded on the website of the Company. The audited annual accounts of the subsidiary companies will be made available to members of the companies and its subsidiary Company, seeking such information at any point of time.

Details of Subsidiaries and step down subsidiaries

Statement containing salient features of the financial statements of subsidiary companies in form AOC 1 is attached and marked as Annexure I. The details of subsidiaries and step down subsidiaries are provided on Form MGT 9 attached to this report and marked as Annexure II Material changes and commitments affecting financial statements between financial year end and date of report - Not applicable Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future - Not applicable

Adequacy of internal financial controls with reference to the Financial Statements.

The Company has in place adequate systems of internal control that are commensurate with its size and nature of the business and documented procedures covering all financial and operating functions. The Company being in service industry, it has in place clear processes and well-defined roles and responsibilities for its staff at various levels. The Management has a defined reporting system, which facilitates monitoring and adherence to the process and systems in place.

Number of meetings of the Board

During the year under review five meetings of the Board of Directors were held on 28th May, 2014, 11th August, 2014, 18th August, 2014, 28th October, 2014 and 29th January, 2015.

The details of the meetings held and the attendance thereto are given in the Corporate Governance Report of the Company for the financial year 2014-15, the same forms part of the annual report of the Company.

In addition to the above a separate meeting of the Independent Directors was held on 16th March, 2015

Directors

During the year under review, Mr. Nimish C. Shah has resigned as a Managing Director and from the Board of the Company with effect from 10th April, 2014.

Mr. Manoj Patel resigned as a Director of the Company with effect from 31st March, 2015,

The Board of Directors wishes to take on record the valuable contributions given by the Directors during their tenure as Directors of the Company. Mr. Chintan Valia, Director of the Company retires by rotation and being eligible offers himself for re-appointment.

Mrs. Khyati Valia has been appointed as an Additional Director of the Company effective from 25th March, 2015. Mrs. Khyati Valia holds office up to the date of this annual general meeting The Company has received requisite deposit from a member of the Company proposing the candidature of Mrs. Khyati Valia as a Director of the Company

In terms of the applicable provisions of the Companies Act, 2013 which have been made effective from 1st April, 2014 shareholders' approval is obtained in the last Annual General meeting held on 22nd September, 2014 for appointment of Mr. Pankaj Bhuta and Mr. Nishit Dhruva as Independent Directors of the Company.

Brief profiles of the Directors to be appointed/re-appointed in the ensuing annual general meeting of the members of the Company have been provided as an annexure to the notice.

A statement on declaration given by independent directors

The Independent Director of the Company has submitted the declaration of independence, as required under section 149 (7) of the Companies Act, 2013 confirming that they all meet the criteria of independence as required in sub section 6 of section 149 of the Companies Act, 2013.

Committees

The Company has five committees of the Board of Directors. These committees are - Audit Committee, Nomination & Remuneration Committee, Stakeholder Relationship Committee, Risk Management Committee and Internal Finance Committee.

The terms of reference, composition and the details of the meetings held during the year under review are provided in corporate governance report.

Corporate Governance

A report on the corporate governance along with a certificate from the auditors of the Company regarding the compliance of conditions of the corporate governance as stipulated under Clause 49 of the listing agreement is included and forms part of this annual report.

All Board members and senior management personnel of the Company have affirmed compliance with code of conduct for the year 2014-2015. A declaration to this effect certified by the Director of the Company is also attached in the annual report.

The Director and the Chief Financial Officer (CFO) of the Company have certified to the Board with regard to the financial statements and other matters as required under clause 49 of the listing agreement and the said certificate is attached in the annual report.

Management Discussion and Analysis

A detailed review of operations, performance and future outlook of your Company and its businesses is given in the Management Discussion and Analysis, which forms part of this annual report.

Corporate Social Responsibility

The provisions relating to the Corporate Social Responsibility are not applicable to the Company.

Extract of the Annual Return

Extract of the Annual Return as required under section 92 (3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 in the prescribed Form MGT 9 is annexed and marked as Annexure " II " and forms part of the annual report.

Statutory Auditors

At the annual general meeting held on 22nd September, 2014, M/s S. H. Bathiya & Associates, Chartered Accountants, were appointed as statutory auditors of the Company for the term of five years to hold the office up the conclusion of 28th annual general meeting to be held in the calendar year 2019. As required under first proviso of section 139 of the Companies Act, 2013, the appointment of auditors shall be placed for ratification at every annual general meeting of the members of the Company. Accordingly, appointment of M/s S. H. Bathiya & Associates LLP Chartered Accountants as statutory auditors of the Company is placed for ratification by the members of the Company. The Company has received a certificate from the auditors confirming that if they are appointed, their appointment will be in accordance with section 141 of the Companies Act, 2013.

Auditors' Report

Your Directors refer to the observations made by the Auditors in their report and wish to state that the notes forming part of accounts are self explanatory and hence do not require any further comments.

Explanation on observations by auditors & secretary

There are no qualifications and/or adverse remarks in the Auditors Report and the Secretarial Audit Report.

Secretarial Audit Report

As required under section 204 of the Companies Act, 2013, a Secretarial Audit Report dated 2nd May, 2015 issued by Dinesh Kumar Deora, a practicing Company Secretary is attached herewith and marked as Annexure III.

Company's policy on directors appointment, remuneration etc. section 178 (3) and disclosure of details as provided in Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014

Sr. Particulars Remarks No.

1 Ratio of the remuneration of each Not applicable - as the Director to the median remuneration of Company has no executive the employees of the Company for Director on the Board. the financial year

2 The percentage increase in remuneration of each director, CFO, CEO, CS or Directors - Not applicable manager if nay, in the financial year CFO - Rs. 11,03,477/-

CEO - Not applicable CS - 8%

3 The percentage increase in the median remuneration of the employees of 10% the Company for the financial year

4 The number of permanent employees on the rolls of the Company 8 (eight)

5 The explanation on the relationship between average increase in During the year the Company remuneration and Company performance has faired well as compared to the previous year

6 Comparision of remuneration of the KMP against the performance of the Remuneration to KMP Rs. Company 22,59,018/- Performance of the Company for the year 2014-2015 Rs. 1.72 lakhs

7 Variations in the market capitalization of the Company, as at the date of closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparision to the rate at which the Company came out with the last public offer in case of listed companies price earning ratio and in case of unlisted companies, the variations in the net worth of the Company as at the close of the current financial year and previous year

Market capitalization BSE

as on 31/03/2015 (RTinlakhs) 67 576 84

as on 31/03/2014 (Rs in lakhs) 9,530.67

price earnings ratio

as on 31/03/2015 449.81

as on 31/03/2014 7400.00

Market quotation of the Company's shares

as on 31/03/2015 Rs. 238.40

as on 31/03/2014 Rs. 74.00

8 Average percentile increase The Company has not paid any already made in the salaries remuneration to any Directors of employees other than managerial of the Company. personnel in the last financial year and its comparision with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptiona l circumstances for increase in the managerial remuneration

9 Comparision of the each of as against the performance the remuneration of the KMP of the Company

Name of the KMP, Performance of the Designation & Amount Company of Remuneration paid (Rs. in lakhs)

Mr. Yashpal Madan Manager Rs. 3,86,460/ (01/01/2015 - 31/03/2015

Mr. Muthukumar Ganesan 1.72 CFO Rs. 11,03,477/

Mr. Haroon Mansuri Company Secretary Rs. 7,69,081/

10 The key parameters for any The Company has not paid any variable component of the variable component to remuneration availed by the any Director and/or KMPs. directors

11 The ratio of the remuneration Not Applicable of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year and

12 Affirmation that the remuneration The Remuneration paid to the is as per the remuneration policy KMPs is as per remuneration of the Company policy of the Company.

Particulars of loans, guarantees and investments

Guarantees given during the year :

Date of Name of the Amount of transaction Transactions person/entity (Rs. in lakhs) to whom guarantee is made

02/05/2014 Axis Bank Limited 500.00

11/08/2014 HDFC Bank Limited 5,000.00

20/10/2014 Axis Bank Limited 1,500.00

15/09/2014 Kotak Mahindra Bank Limited 15,750.00

29/01/2015 Yes Bank Limited 13,000.00

Period for Date of Board which the resolution guarantee is given

One year 04/02/2014

One year 11/08/2014

One year 28/10/2014

One year 18/08/2014

One year 29/01/2015

Investments made during the year :

Date of Name of the Company Transactions

06/06/2014 Fortune Credit Capital Limited

10/07/2014 Fortune Integrated Assets Finance Limited

19/08/2014 Rajesh Estates & Nirman Private Limited

27/08/2014 Antique Stock Broking Limited

29/09/2014 Fortune Integrated Assets Finance Limited

26/02/2015 Inga Capital Private Limited

05/03/2015 Inga Capital Private Limited

05/03/2015 Inga Capital Private Limited

Nature of Investments Quantity Amount (Nos.) (Rs. in lakhs)

Equity shares 70,00,000 2,100.00

Premium on equity shares earlier issued -— 2,475.00

Secured Non- Convertible Debentures 60 3,000.00

Equity shares 83,33,334 2,500.00

Equity shares 15,00,000 1,387.50

Equity shares 46,84,512 673.59

Equity shares 83,510 12.04

Optionally Convertible Debentures 5,00,000 50.00

Particulars of contracts or arrangements with related parties

The Company has entered in to transactions with related parties during the financial year 2014-2015. All such transactions are on arm's length basis and in the ordinary course of business and that the provisions of section 188 of the Companies Act, 2013 are not attracted. Related Party Transactions with the Directors and Key Managerial Personnel have been entered in the normal course of business and that also to the extent of payment of remuneration to the executive directors and KMPs. The disclosure in form AOC - 2 is not required to be given. All related party transactions are placed before the Audit Committee and Board meetings on quarterly basis for review and approval.

Conservation of Energy, Technology Absorption

The information required under section 134 (3) (m) of the Companies Act, 2013 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 2014 with respect to the matters specified therein are not applicable to your company.

Foreign Exchange earnings and outgo - Nil

Transfer of unclaimed dividend to the Investor Education & Protection Fund (IEPF)

As required under section 125 of the Companies Act, 1956 the Company has transferred Rs. 1,71,169/- to the Investor Education and Protection Fund (IEPF) during the year under review towards unclaimed dividend.

Directors' Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act, 2013 read with rule 8 of the Companies (Accounts) Rules, 2014 to the best of their knowledge and belief confirm that:

* in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

* the Directors had selected such accounting policies and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

* the Directors had proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

* the Directors had prepared annual accounts on a going concern basis.

* the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

* The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgement

Your Directors are pleased to place on record their deep appreciation towards the sincere services and co-operation extended by employees of the organization at all levels. They also wish to place on record their gratitude for the confidence placed in them by the banks & financial institutions they are associated with. Further, your Directors wish to thank the various regulatory authorities, business associates and clients for their valued co-operation.

On behalf of the Board

Chintan V. Valia Khyati C. Valia Director Director (DIN:05333936) (DIN:03445571)

Mumbai, 12th May, 2015

Fortune Financial Services (India) Limited

Registered Office:

Naman Midtown "A"Wing 21st Floor, Unit No. 2103, Senapati Bapat Marg Elphinstone Raod, Mumbai 400 013 CIN: L65910MH1991PLC062067 Email:cosecretary@ffsil.com Website: www.fortune.co.in


Mar 31, 2014

Dear Shareholders

The Directors have pleasure in presenting the Twenty Third Annual Report and Audited Accounts for the year ended 31st March, 2014.

Financial Results

(Rupees in lakhs) Stand-alone Consolidated 2013-14 2012-13 2013-14 2012-13

Total Income 828.65 24776 6,101.48 6,289.02

Profit/(Loss) before depreciation and tax (1.48) (412.58) 288.97 (1,152.01)

Depreciation 2.99 6.91 305.94 172.83

Profit/(Loss) before tax (4.47) (419.49) (16.97) (1,324.84)

Provision for tax

- Current tax - - 34.80 25.08

- Current tax relating to prior years (Net) 0.13 5.16 1.80 (2.11)

- Deferred tax 19.46 (21.52) 70.64 (85.94)

Profit/(Loss) after tax (24.06) (403.12) (124.21) (1,261.87)

Balance brought forward from the previous year 2,212.23 2,615.35 2,122.06 3,390.21

Balance available for appropriations 2,188.17 2,212.23 1,997.85 2,128.34

Transfer to statutory reserve - - 20.27 6.28

Balance carried to balance sheet 2,188.17 2,212.23 1,977.58 2,122.06

Weighted average number of equity shares

- Basic 1,28,79,290 1,28,79,290 1,28,79,290 1,28,79,290

- Diluted 1,30,32,715 1,28,79,290 1,30,32,715 1,28,79,290

Nominal value per share (in rupees) 10.00 10.00 10.00 10.00

Basic and diluted earnings per share

- Basic (in rupees) (0.19) (3.13) (0.96) (9.80)

- Diluted (in rupees) (0.18) (3.13) (0.95) (9.80)

Working Results

Standalone

The total income during the year 2013-14 stood at Rs. 828.65 lakhs as against Rs. 247.76 lakhs during the previous year. The company has incurred a loss of Rs. 4.47 lakhs as compared to a loss of Rs. 419.49 lakhs in the previous year. The loss after tax stood at Rs. 24.06 lakhs as against a loss of Rs. 403.12 lakhs in the previous year. During the year the total income increased considerably and also the losses have been reduced to a substantial extent as against those in the previous year.

Consolidated

The consolidated income during the year 2013-14 stood at Rs.6,101.48 lakhs as against Rs.6,289.02 lakhs during the previous year. The consolidated income has been marginally reduced as compared to that of the previous year. During the year under review, the company has on consolidated basis incurred a loss of Rs. 124.21 lakhs after tax as against a loss of Rs 1,261.87 lakhs in the previous year. The consolidated loss after tax has been substantially reduced as compared to that of the previous year.

Dividend

In view of the loss incurred by the company, the Directors do not recommend any dividend for the financial year 2013-14.

Consolidated Financial Statements

The Board of Directors of your company at its meeting held on May 28, 2014 approved the consolidated financial statements for the financial year 2013-14 in accordance with the Accounting Standard (AS-21) and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India as well as Clause 32 of the listing agreement, which includes financial information of all its subsidiaries.

The Companies Act, 2013

The MCA vide its circular dated 4th April, 2014 has clarified that the financial statements, Notes forming part of accounts, Directors report, Auditors'' Report and other documents annexed thereto for the financial year commencing prior to 1st April, 2014 shall be governed by the applicable provisions of the Companies Act, 1956.

Surrender of Merchant Banking & Portfolio Management Services (PMS) Registration Certificates During the year under review, the company has surrendered the Merchant Banking and Portfolio Management Services Registration Certificates to SEBI for cancellation. The company has received confirmation for cancellation of Portfolio Management Services Registration Certificate and a confirmation for Merchant Banking Registration Certificates is awaited from SEBI.

Investment for acquisition of a company

During the year under review, the company has acquired 100% equity shares of Antique Stock Broking Limited, whereby it became a subsidiary of the company effective from 31st March, 2014.

Agreement for acquisition of a company

On 2nd May, 2014 the company has entered in to share purchase agreement for acquisition of 100% stake of Inga Capital Private Limited, subject to applicable regulatory approvals. Inga Capital Private Limited is engaged in the business of Investment Banking and is a Merchant Banker registered with SEBI.

Change in control

During the year, the then existing promoters have entered in to Share Purchase Agreements with Sharyans Resources Limited, Fine Estates Private Limited, Neostar Developers LLP and Aditya InfoTech Private Limited to dispose of their shares held in the company. Acquisition of the existing promoters'' shares by the Acquirers and persons acting in concert with them triggered the mandatory requirements for Open Offer under the provisions of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011. The Acquirers along with the persons acting in concert with them have made the Open Offer to the public for acquisition of equity shares of the company. The entire process of Open Offer completed on 10th April, 2014, when payment was dispatched to those public shareholders of the company who tendered their shares in the open offer and from that date onwards, the existing promoters ceased to be the promoters of the company and the Acquirers along with persons acting in concert acquired control over the company and also became its new promoters.

Corporate Governance

A report on the corporate governance along with a certificate from the auditors of the company regarding the compliance of conditions of the corporate governance as stipulated under Clause 49 of the listing agreement is included and forms part of this annual report.

All Board members and senior management personnel of the company have affirmed compliance with code of conduct for the year 2013-14. A declaration to this effect certified by the Director of the company is also attached in the annual report.

The Director and the Chief Financial Officer (CFO) of the company have certified to the Board with regard to the financial statements and other matters as required under clause 49 of the listing agreement and the said certificate is attached in the annual report.

Management Discussion and Analysis

A detailed review of operations, performance and future outlook of your company and its businesses is given in the Management Discussion and Analysis, which forms part of this annual report.

Accounts of subsidiary companies

In terms of Circular No. 51/12/2007-CL III dated 8th February, 2011 issued by the Ministry of Corporate Affairs, a general exemption has been granted under section 212(8) of the Companies Act, 1956 to companies for attaching the accounts of subsidiaries in the annual report subject to the conditions prescribed. In view of the above referred circular, the Board of Directors of the company has in its meeting held on 28th May, 2014 passed the required resolution for not attaching the annual accounts and other reports of the subsidiary companies with the annual report of the holding company for the financial year ended 31st March, 2014.

However, the audited annual accounts of the subsidiary companies will be made available for inspection by the members of the holding and subsidiary companies at the registered office of the company and will also be uploaded on the website of the company. The audited annual accounts of the subsidiary companies will be made available to members of the company and subsidiary companies, seeking such information at any point of time.

The following information in aggregate for each of the subsidiary companies are disclosed in annual report as stipulated in the circular issued by the Ministry of Corporate Affairs, New Delhi:

(a) capital (b) reserves (c) total assets (d) total liabilities (e) investments (f) turnover/total income (g) profit before taxation (h) provision for taxation (i) profit after taxation and (j) proposed dividend.

Statement pursuant to Section 212 (3) of the Companies Act, 1956 relating to the subsidiary companies is annexed as Annexure I and forms part of the annual report.

Fixed Deposits

The company has not accepted any deposit from the public during the year under review, within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under.

Committees

The company has four committees of the Board of Directors. These committees are – Audit Committee, Remuneration/ Compensation Committee, Shareholders Grievances Committee and Internal Finance Committee.

The terms of reference, composition and the details of the meetings held during the year under review are provided in corporate governance report.

The Remuneration/Compensation Committee has been renamed as Nomination and Remuneration Committee.

The Shareholders Grievances Committee has been renamed as Stakeholders Relationship Committee.

Internal Control Systems & their adequacy

The company has in place adequate systems of internal control that are commensurate with its size and nature of the business and documented procedures covering all financial and operating functions. The company being in service industry, it has in place clear processes and well-defined roles and responsibilities for its staff at various levels. The Management has a defined reporting system, which facilitates monitoring and adherence to the process and systems in place.

Auditors

M/s. Nipun Sudhir & Associates Chartered Accountants (Firm Registration No.: 0126168W), Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting have expressed their unwillingness for re-appointment as Statutory Auditors of the company at the ensuing Annual General Meeting. Your directors recommend the appointment of M/s. S. H. Bathiya & Associates Chartered Accountants (Firm Registration No.: 101046W) as Statutory Auditors of the Company, subject to approval of the members at the ensuing Annual General Meeting. The Company has received letter from M/s. S. H. Bathiya & Associates, Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under section 141 of the Companies Act, 2013 and that they are not disqualified for such appointment. The necessary resolution seeking your approval for appointment of Statutory Auditors has been incorporated in the Notice convening the Annual General Meeting.

Auditors'' Report

Your Directors refer to the observations made by the Auditors in their report and wish to state that the notes forming part of accounts are self explanatory and hence do not require any further comments.

Directors

During the year under review, Mr. H. R. Prasad, Mr. Ramesh Venkat, Mr. Sohan Mehta and Mr. J. T. Poonja have resigned as Directors of the company with effect from 30th May, 2013, 9th July, 2013, 15th July, 2013 and 7th October, 2013 respectively.

The Board of Directors wishes to take on record the valuable contributions given by the Directors during their tenure as Directors of the company.

Mr. Manoj Patel, Director of the company retires by rotation and being eligible offers himself for re-appointment.

In terms of the applicable provisions of the Companies Act, 2013 which have been made effective from 1st April, 2014 shareholders approval is required for appointment of all Independent Directors of the company viz. Mr. Pankaj Bhuta and Mr. Nishit Dhruva.

Brief profiles of the Directors to be appointed/re-appointed in the ensuing annual general meeting of the members of the company have been provided as an annexure to the notice.

The company has received declarations from all the independent directors of the company confirming that they meet with the criteria of independence as prescribed under section 149 (6) of the Companies Act, 2013 and Clause 49 of the listing agreement.

Appointment of Manager

The Board of Directors at their meeting held on 4th February, 2014 has subject to the approval of the members in the ensuing annual general meeting, appointed Mr. Yashpal Madan as a Manager under the Companies Act for a period of three years commencing from 4th February, 2014 on the terms and conditions has mutually agreed.

Preferential issue of equity shares

During the year under review the company has issued a Postal Ballot Notice to the members of the company for obtaining their approval for issue and allotment of 1,54,66,700 equity shares of Rs. 10 each on a preferential basis to Fine Estates Private Limited, Aditya Infotech Private Limited and Neostar Developers LLP along with the other resolutions.

The results of the Postal Ballot were declared on 30th December, 2013 at the registered office of the company and accordingly the company has on 11th April, 2014 issued 1,54,66,700 equity shares of Rs.10 each fully paid at the premium of Rs. 65 per share. On issue of these equity shares, the paid up capital of the company increased to Rs.2,834.60 lakhs divided in to 2,83,45,990 equity shares of Rs.10 each fully paid.

During the year under review the authorised capital of the company has been increased from Rs. 15 crores divided in to 1,50,00,000 equity shares of Rs.10 each to Rs.40 crores divided in to 4,00,00,000 equity shares of Rs. 10 each.

Conservation of Energy, Technology Absorption

The information required under section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to the matters specified therein are not applicable to your company.

Particulars of employees

Statement under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules, 1975, as amended is annexed as Annexure II and forms part of the Annual Report.

Transfer of unclaimed dividend to the Investor Education & Protection Fund (IEPF)

As required under section 205A (5) of the Companies Act, 1956 the company has transferred Rs. 96,826 & Rs.1,68,629 to the Investor Education and Protection Fund (IEPF) during the year under review on 24th October , 2013 and 18th March, 2014 respectively towards unclaimed dividend.

Directors'' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, to the best of their knowledge and belief confirm that:

- in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

- appropriate accounting policies had been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for that period;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

.The annual accounts have been prepared on a going concern basis.

Acknowledgement

Your Directors are pleased to place on record their deep appreciation towards the sincere services and co-operation extended by employees of the organization at all levels. They also wish to place on record their gratitude for the confidence placed in them by the banks & financial institutions they are associated with. Further, your Directors wish to thank the various regulatory authorities, business associates and clients for their valued co-operation.

On behalf of the Board

Chintan V. Valia Pankaj R. Bhuta Director Independent Director

Mumbai, 18th August, 2014


Mar 31, 2013

Dear Shareholders

The Directors have pleasure in presenting the Twenty Second Annual Report and Audited Accounts for the year ended 31st March, 2013.

Financial Results

(Rupees in lakhs)

2012-13 2011-12 2012-13 2011-12 Stand-alone Consolidated

Total Income 247.761 57936 6,289.02 8,034.77

Profit / (loss) before depreciation and tax (412.57) 72.35 (1,152.01) 124.59

Depreciation and amortization 6.91 11.46 172.83 243.49

Profit/(Loss) before tax (419.48) 60.89 (1,324.84) (118.90)

Provision for tax

- Current tax 11.80 25.08 147.15

- Current tax relating to prior years (Net) 5.16 4.10 (2.11) 20.51

- Deferred tax 421.52) (3.10) (85.94) (65.41)

Profit/(loss) after tax (403.12) 48.09 (1,261.87) (221.15)

Balance brought forward from the previous year 2,615.35 2,639.47 3,390.21 3,720.75

Balance available for appropriations 2,212.23 2,687.56 2,128.34 3,499.60

Transfer to statutory reserve 6.28 34.50

Dividend 64.40 64.40

Tax on dividend 7.81 10.49

Balance carried to balance sheet 2,212.23 2,615.35 2,122.06 3,390.21

Weighted average number of equity shares

- Basic 1,28,79,290 12,683,674 79,290 12,683,674

- Diluted 1,28,79,290 12,683,674 1,28,79,290 674

Nominal value per share (in rupees) 10.00 10.00 10.00 10.00

Basic and diluted earnings per share

- Basic (in rupees) (3.13) 0.38 (9.80) (1.74)

- Diluted (in rupees) (3.13) 0.38 (9.80) (1.74)

Working Results

Standalone

The income during the year 2012-13 stood at Rs. 247.76 lakhs as against Rs. 579.36 lakhs during the previous year. The company has incurred a loss of Rs. 419.48 lakhs as compared to a profit of Rs. 60.89 lakhs in the previous year. The loss after tax stood at Rs. 403.12 lakhs as against a profit of Rs. 48.09 lakhs in the previous year.

Consolidated

The consolidated income during the year 2012-13 stood at Rs. 6,289.02 lakhs as against Rs. 8,034.77 lakhs during the previous year. During the year under review the company has on consolidated basis incurred a loss of Rs. 1,261.87 lakhs after tax as against a loss of Rs. 221.15 lakhs in the previous year.

Dividend

In view of the loss incurred by the company, the Board of Directors do not recommend any dividend for the financial year 2012-2013.

Consolidated Financial Statements

The Board of Directors of your company at its meeting held on May 29, 2013 approved the consolidated financial statements for the financial year 2012-13 in accordance with the Accounting Standard (AS-21) and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India as well as Clause 32 of the listing agreement, which includes financial information of all its subsidiaries.

Corporate Governance

A report on the corporate governance along with a certificate from the auditors of the company regarding the compliance of conditions of the corporate governance as stipulated under Clause 49 of the listing agreement forms part of this annual report.

All Board members and senior management personnel have affirmed compliance with code of conduct for the year 2012-2013. A declaration to this effect certified by the Chairman of the company is also attached in the annual report.

The Executive Chairman and the Chief Financial Officer (CFO) of the company have certified to the Board with regard to the financial statements and other matters as required under Clause 49 of the listing agreement and the said certificate is attached in the annual report.

Management Discussion and Analysis

A detailed review of operations, performance and future outlook of your company and its businesses is given in the Management Discussion and Analysis, which forms part of this annual report.

Issue of equity shares on exercise of ESOP options

Details of equity shares issued under ESOP, as also the disclosures in compliance with Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure - I to this report.

The company has received a certificate from the Auditors of the company certifying that the FFSIL ESOP Schemes 2006 & 2007 have been implemented in accordance with the SEBI Guidelines and the resolution passed at the annual general meeting held on September 23, 2006. The Certificate would be placed at the annual general meeting for inspection by members.

Subsidiary Companies

During the year under review, the company has formed two more subsidiary companies, viz. Fortune Integrated Home Finance Limited and Fortune Integrated Assets Finance Limited.

As per general circular issued by the Ministry of Corporate Affairs, the balance sheet, statement of profit & loss and other documents of the subsidiary companies for the year ended March 31, 2013 are not attached with the accounts of the holding company. However, the annual accounts of the subsidiary companies will be made available to investors of the holding and subsidiary companies for inspection at the registered office of the company and will also be uploaded on the website of the company seeking such information at any point of time.

The following information in aggregate for each of the subsidiary companies are disclosed in annual report as stipulated in the circular issued by the Ministry of Corporate Affairs, New Delhi:

(a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investments (f) turnover/income (g) profit before tax (h) provision for tax (i) profit after tax and proposed dividend.

Statement pursuant to Section 212 (3) of the Companies Act, 1956 relating to the subsidiary companies is annexed as Annexure II and forms part of the annual report.

Fixed Deposits

The company does not hold any public deposit and has not accepted any deposit from the public during the year under review, within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under.

Committees

The company has four committees of the Board of Directors. These commktees are - Audit Committee, Remuneration / Compensation Committee, Shareholders Grievances Committee and Internal Finance Committee.

The terms of reference, composition and the details of the meetings held during the year under review are provided in corporate governance report.

Internal Control Systems & their adequacy

The company has in place adequate systems of internal control that are commensurate with its size and nature of the business and documented procedures covering all financial and operating functions. The company being in service industry, it has in place clear processes and well-defined roles and responsibilities for its staff at various levels. The Management has a defined reporting system, which facilitates monitoring and adherence to the process and systems in place.

Auditors

M/s. Nipun Sudhir & Associates, Chartered Accountants, Mumbai, Statutory Auditors of the company hold office up to the conclusion of this annual general meeting and are recommended for re-appointment. The company has received a certificate under section 224 (1B) of the Companies Act, 1956 stating that the appointment, if made, will be within the limits as specified in that section.

Auditors'' Report

Your Directors refer to the observations made by the Auditors in their report and wish to state that the notes forming part of accounts are self explanatory and hence do not require any further comments.

Directors

The Board of Directors at their meeting held on 29th May, 2013 has subject to the approval of the members in the ensuing annual general meeting, re-appointed Mr. Nimish C Shah as a Managing Director of the company for a period of three years commencing from 1st July, 2013.

During the year under review, Mr. Shailesh Haribhakti has resigned as an Alternate Director of the company effective from 6th August, 2012.

Further during the year under review, Mrs. Sangeeta Poonja, Mr. Sanjay Kothari and Mr. C R. Mehta have resigned as Directors of the company with effect from 31st July, 2012, 5th February, 2013 and 7th February, 2013 respectively.

The Board of Directors wishes to take on record the valuable contribution given by them during their tenure as Directors of the company.

The Board of Directors through circular resolution on 25th March, 2013, appointed Mr. Chintan Valia as an Additional Director of the Company. Mr. Chintan Valia holds the office of Directorship till the ensuing annual general meeting. The company has received deposit from the member of .the company proposing the candidature of Mr. Chintan Valia as a Director of the company.

Effective from 1st April, 2013, Mr. J. T Poonja has given up Executive position in the Company. However, he continues to be the non-executive Chairman of the company.

Mr. Ramesh Venkat Director of the company retires by rotation and being eligible offers himself for re-appointment.

Conservation of Energy, Technology Absorption

The information required under section 217 (1)
Foreign Exchange earnings and outgo

(Rupees in Lakhs)

Particulars 2012 - 2013 2011 - 2012

Earnings:

Investment banking income 55.95 62.32

Outgo;

Travelling & business promotion 2.46 2.01

Miscellaneous expenses 2.04

Dividend 86.68

Particulars of employees

Statement under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules 1975, as amended is annexed as Annexure III and forms part of the Annual Report.

Investor Education & Protection Fund

During the year under review, the company has transferred of Rs. 68,180 & Rs. 85,075 being unclaimed dividends for the year ended 31st March, 2005 & 31st March, 2006 respectively to the Investor Education & Protection Fund (IE&PF) as required under the applicable provisions of the Companies Act, 1956.

Directors'' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, to the best of their knowledge and belief confirm that:

- in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

- appropriate accounting policies had been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for that period;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

- The annual accounts have been prepared on a going concern basis.

Acknowledgement

Your Directors are pleased to place on record their deep appreciation towards the sincere services and co-operation extended by employees of the organization at all levels. They also wish to place on record their gratitude for the confidence placed in them by the banks & financial institutions they are associated with. Further, your Directors wish to thank the various regulatory authorities, business associates and clients for their valued co-operation.

On behalf of the Board

J. T. Poonja

Chairman

Mumbai, May29, 2013


Mar 31, 2012

The Directors have pleasure in presenting the Twenty-First Annual Report and Audited Accounts for the year ended 31st March, 2012.

Financial Results (Rupees in Lacs)

2011-12 2010-11 2011-12 2010-11

Stand-alone Consolidated

Total Income 579.36 1,548.96 8,034.77 9,140.02

Profit before depreciation and tax 72.35 821.99 124.59 2,079.31

Depreciation 11.46 21.92 243.49 285.47

Profit before tax 60.89 800.07 (118.90) 1,793.84 Provision for tax

- Current tax 11.80 189.20 1 47.15 672.80

- Current tax relating to prior years (Net) 4.10 (1-93) 20.51 34.02

- Deferred tax (3.10) (2.46) (65.41) (49.80)

Profit after tax 48.09 615.26 (221.15) 1,136.82

Balance brought forward from the previous year 2,639.47 2,332.93 3,720.75 3,117.85

Balance available for appropriations 2,687.56 2,948.19 3,499.60 4,254.67

Transfer to statutory reserve - - 34.50 102.50

Transfer to general reserve - 61.33 - 142.10

Dividend 64.40 247.39 64.40 247.39

Tax on dividend 7.81 - 10.49 41.93

Balance carried to balance sheet 2,615.35 2,639.47 3,390.21 3,720.75 Weighted average number of equity shares

- Basic 12,683,674 122,24,953 12,683,674 122,24,953

- Diluted 12,683,674 124,29,474 12,683,674 124,29,474 Nominal value per share (in rupees) 10.00 10.00 10.00 10.00 Basic and diluted earnings per share

- Basic (in rupees) 0.38 5.03 (1.74) 9.30

- Diluted (in rupees) 0.38 4.95 (1.74) 9.15

Working Results Standalone

The income during the year 2011-12 stood at Rs.579.36 lacs as against Rs.1,548.96 lacs during the previous year.

The profit before tax for the year was at Rs. 60.89 lacs as against Rs.800.07 lacs in the previous year. The profit after tax stood at Rs.48.09 lacs as against Rs.615.26 lacs in the previous year.

Consolidated

The consolidated income during the year 2011-12 stood at Rs.8,034.77 lacs as against Rs.9,140.02 lacs during the previous year.

During the year under review the company has on consolidated basis incurred a loss of Rs. 221.15 after tax as against a profit of Rs.1,136.82 lacs in the previous year.

Dividend

Your Directors have recommended dividend of Rs.0.50 per share (5%) on 128,79,290 equity shares of Rs.10 each fully paid for the financial year 2011-12, subject to the approval of the shareholders at the ensuing annual general meeting. The total outflow on account of equity dividend will be Rs.64.40 lacs.

Consolidated Financial Statements

The Board of Directors of your company at its meeting held on May 30, 2012 approved the consolidated financial statements for the financial year 2011-12 in accordance with the Accounting Standard (AS-21) and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India as well as Clause 32 of the Listing Agreement, which includes financial information of all its subsidiaries.

Corporate Governance

A report on the corporate governance along with a certificate from the auditors of the company regarding the compliance of conditions of the corporate governance as stipulated under Clause 49 of the listing agreement is included and forms part of this annual report.

All Board members and senior management personnel have affirmed compliance with code of conduct for the year 2011-12. A declaration to this effect certified by the Executive Chairman of the company is also attached in the annual report.

The Executive Chairman and the Chief Financial Officer of the Company have certified to the Board with regard to the financial statements and other matters as required under clause 49 of the listing agreement and the said certificate is attached in the annual report.

Management Discussion and Analysis

A detailed review of operations, performance and future outlook of your company and its businesses is given in the Management Discussion and Analysis, which forms part of this annual report.

Issue of equity shares on exercise of ESOP options

Details of equity shares issued under ESOP, as also the disclosures in compliance with clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure - I to this report.

The company has received a certificate from the Auditors of the company certifying that the FFSIL ESOP Schemes 2006 & 2007 have been implemented in accordance with the SEBI Guidelines and the resolution passed at the annual general meeting held on September 23, 2006. The Certificate would be placed at the annual general meeting for inspection by members.

During the year under review, the company has granted 45,000 options to employees of the subsidiary companies.

Capital

During the year under review the company has issued 6,00,000 equity shares of Rs.10 each fully paid at a premium of Rs.70 per equity share on conversion of 6,00,000 equity warrants of Rs.10/- each which were issued on February 5, 2010. On issue of these shares, the paid up capital of the company increased from Rs.1,227.93 lacs to Rs.1,287.93 lacs.

Issue of equity warrants

In nineteenth annual general meeting, held on August 28, 2010, the company had obtained members' approval for issue of 4,00,000 equity warrants of Rs.10 each at a premium of Rs.170 per warrant aggregating to Rs.720.00 lacs on preferential basis to the promoters, relatives of promoters and to a company in which relatives of a promoter are interested. The Internal Finance Committee of the Board of Directors of the company on September 13, 2010 allotted 4,00,000 equity warrants of Rs.10 each which are convertible into one equity share of Rs.10 per equity warrant within a period of eighteen months from the date of allotment of the equity warrants on exercise of the option by the allotters. These equity warrants were due for conversion latest by March 12, 2012. None of the subscribers have exercised their options for conversion of equity warrants in to equity shares of the company. The initial amount of Rs.180.00 lacs received from the subscribers have been forfeited and credited to the capital reserve account of the company.

Subsidiary Companies

As per general circular issued by the Ministry of Corporate Affairs, the balance sheet, statements of profit & loss and other documents of the subsidiary companies for the year ended March 31, 2012 are not attached with the accounts of the holding company. However, the annual accounts of the subsidiary companies will be made available to investors of the holding and subsidiary companies for inspection by the members at the registered office of the company and will also be uploaded on the website of the company.

The following information in aggregate for each of the subsidiary companies are disclosed in annual report as stipulated in the circular issued by the Ministry of Corporate Affairs, New Delhi:

(a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investments (f) turnover/income (g) profit before tax (h) provision for tax (i) profit after tax and (j) proposed dividend.

Statement pursuant to Section 212 (3) of the Companies Act, 1956 relating to the subsidiary companies is annexed as Annexure II and forms part of the annual report.

Fixed Deposits

The company has not accepted any deposit from the public during the year under review, within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under.

Committees

The company has four committees of the Board of Directors. These committees are - Audit Committee, Remuneration / Compensation Committee, Shareholders Grievances Committee and Internal Finance Committee.

The terms of reference, composition and the details of the meetings held during the year under review are provided in corporate governance report.

Internal Control Systems & their adequacy

The company has in place adequate systems of internal control that are commensurate with its size and nature of the business and documented procedures covering all financial and operating functions. The company being in service industry, it has in place clear processes and well-defined roles and responsibilities for its staff at various levels. The Management has a defined reporting system, which facilitates monitoring and adherence to the process and systems in place.

Auditors

M/s. Nipun Sudhir & Associates, Chartered Accountants, Mumbai, Statutory Auditors of the company hold office up to the conclusion of this annual general meeting and are recommended for re-appointment. The company has received a certificate under section 224 (1B) of the Companies Act, 1956 stating that the appointment, if made, will be within the limits as specified in that section.

Auditors' Report

Your Directors refer to the observations made by the Auditors in their report and wish to state that the notes forming part of accounts are self explanatory and hence do not require any further comments.

Directors

Mr. C. R. Mehta & Mr. Sohan C. Mehta Directors of the company, retire by rotation and being eligible offer themselves for re- appointment.

Conservation of Energy, Technology Absorption

The information required under section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to the matters specified therein are not applicable to your company.

Foreign Exchange earnings and outgo

(Rupees in Lacs)

Particulars 2011-2012 2010-2011

Earnings:

Investment banking income 62.32 55.52

Outgo :

Travelling & business promotion 2.01 4.09

Miscellaneous expenses 2.04 -

Dividend 86.68 108.35

Particulars of employees

Statement under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules 1975, as amended by the Companies Amendment Act, 1988 is annexed as Annexure III and forms part of the Annual Report.

Investor Education & Protection Fund

During the year under review, an amount of Rs.82,240/- lying in unclaimed dividend for the year 2005 was transferred to the Investor Education & Protection Fund.

Directors' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, to the best of their knowledge and belief confirm that:

- in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

- appropriate accounting policies had been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

- the annual accounts have been prepared on a going concern basis.

Acknowledgement

Your Directors are pleased to place on record their deep appreciation towards the sincere services and co-operation extended by employees of the organization at all levels. They also wish to place on record their gratitude for the confidence placed in them by the banks & financial institutions they are associated with. Further, your Directors wish to thank the various regulatory authorities, business associates and clients for their valued co-operation.

On behalf of the Board

J. T. Poonja

Executive Chairman

Mumbai, May 30, 2012


Mar 31, 2010

The Directors are pleased to present their Nineteenth Annual Report together with the audited accounts on the business and operations of the Company for the year ended March 31 2010. The summarized financial results of the Company are given below:

Financial Highlights :

(Rupees in Lacs)

2009-10 2008-09

Total Income 1,443.66 766.02

Profit before depreciation and tax 1,011.21 321.77

Depreciation & Amortisation 19.91 21.24

Profit before tax 991.30 300.53

Provision for taxes - Current tax 221.86 63.00

- Deferred tax (1.5.71) 1.85

- Fringe benefits tax - 3.35 Profit after tax 785.15 232.33 Balance brought forward from previous year 1,946.39 1,859.80 Tax in respect of earlier years (Net) 17.19 0.41 Balance available for appropriations 2,714.35 2,091.72

Transfer to General Reserve 78.51 23.23 Dividend 302.91 122.10

Balance carried to Balance Sheet 2,332.93 1,946.39 Weighted average number of equity shares

-Basic 11,248,799 10,816,712

-Diluted 11, 470,992 11,050,110

Nominal value per share (in rupees) 10.00 10.00

Basic and diluted earnings per share (in rupees)

- Basic 6.98 2.15

-Diluted 6.84 2.10

Performance Review :

The efforts of the Company to expand its diversified product offerings, geographical presence, new empanelment of customers is driving the growth as projected. The Company continued to see profitable growth during the year under review across its all business operations.

For the year ended March 31 2010, the Company on standalone basis earned a total income of Rs. 1443.66 lacs, an increase of 88% over previous years Rs. 766.02 lacs.

The net profit of the Company for the year increased to Rs. 785.15 lacs (54% of the total income) as compared to Rs.232.33 lacs (30% of total income) in the previous year.

Fortune did well in achieving business growth across all its product offerings while continued to improve its operational profitability by conserving costs and creating efficiencies. Fortune continues to focus on acquiring new customers while increasing its level of operations with existing customers, post high growth in all spheres it operates. The broad range of services enables Fortune to provide end-to-end services to its clients and able to provide comprehensive and high value adding services to its clientele.

Consolidated Results :

As required under Accounting Standard 21 (AS 21) on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India (ICAI), the audited Consolidated Financial Statements for the year ended March 31 2010 together with Auditors Report thereon are provided in the Annual Report.

As per the Consolidated Accounts, the Company has earned the total income of Rs. 7,226.43 lacs, an increase of 71% over previous years Rs. 4,208.31 lacs.

The Consolidated net profit for the year stood at Rs. 1,606.34 lacs (22% of the total income) as compared to the net loss of Rs.65.06 lacs in the previous year.

Dividend :

The Directors recommend a dividend of Rs. 2.50 per equity share of Rs. 10/- each for the financial year ended March 31 2010 on 12,116,400 equity shares of Rs. 10/- each of the Company. The dividend if declared at the ensuing Annual General Meeting, will involve a payout of Rs. 302.91 lacs and will be payable to those members whose names appear in the Register of Members as on date of the Annual General Meeting.

Future Prospects :

After the annus horribilis of FY09, the financial markets staged a remarkable turnaround in FY10 on account of the ongoing stabilization of the global financial and economic systems and consequent pick-up in risk appetite across the various financial market participants. The Indian securities markets were a significant beneficiary of the global trend of bull run in financial markets.

There was significant activity in capital raising activity in the domestic markets. In 11 months from April 2009 to February 2010, there were 117 issues raising Rs. 83,240 crore from primary market compared to Rs. 14,268 crore raised through 44 issues during April 2008 to February 2009. Amount raised through QIP during 11 months were significantly higher at Rs.41,133 crore compared to meager Rs.189 crore done during previous financial year. Thus there was a substantial increase in risk appetite of institutional players.

There were 38 public issues during April-February 2010 raising Rs.37,125 crore compared to 21 public issues raising Rs.2,082 crore during the previous year. There were total 21 Rights issue collecting Rs. 4,982 crore compared to collecting of Rs. 11,997 crore through 21 Rights issues in the previous year. Thus investors were welcoming new business ideas and did prefer to support existing businesses.

Increased activity in the secondary market improved the flow of funds into mutual fund investments also. Equity oriented mutual funds have seen inflow of Rs.182,811 crore in 11 months April-February 2010 compared to Rs.38,210 crore recorded in previous year. Many of the corporate projects that had been deferred due to slowdown in demand last year have witnessed resumption.

Most market participants expect that the current rally will continue in the near-term. The continued growth of the markets will be dependent on the aggregate global macro-environment (especially the acceleration of growth momentum in face of the ongoing normalization of fiscal and monetary policies in the developed world) and governments initiative to divest stake in various PSUs and invest in infrastructure and urbanization projects.

Share Capital :

a) Preferential allotment :

Pursuant to the consent granted by the members through Postal Ballot, the results of which were declared on January 11 2010, the Internal Finance Committee in its meeting held on February 5 2010 allotted 10,00,000 equity shares of Rs. 10/- each at a premium of Rs. 70/- per share aggregating to Rs. 800.00 lacs to the strategic investors and 6,00,000 equity warrants of Rs. 10/- each at a premium of Rs. 70/- per warrant convertible in to one equity share of Rs. 10/- each at a premium of Rs. 70/- per share, aggregating to Rs. 480.00 lacs on preferential basis to the promoters, relatives of promoters and a Company in which the relatives of promoter are interested.

The 10,00,000 fresh equity shares rank pari-passu with the existing equity shares of the Company with respect to the voting rights and dividend entitlement. The preferential allotment of equity shares and equity warrants has not resulted in to any change in the composition of Board of Directors, management or control of the Company.

The holders of equity warrants have an option to apply for and obtain one equity share of Rs. 10/- each at a premium of Rs. 70/- per share for each equity warrant allotted to them. The option is exercisable with in a period of 18 months from the date of allotment of equity warrants.

The Board of Directors take this opportunity to thank the strategic investors who have shown confidence in the Management of the Company by investing in capital of the Company.

In July 2008, the Company had allotted 4,00,000 equity warrants of Rs. 10/-each at a premium of Rs. 210/-per warrant convertible in to one equity share of Rs. 10/-each at a premium of Rs. 210/- per share, aggregating to Rs. 880.00 lacs on preferential basis to the promoters, relatives of promoters and a Company in which the relatives of promoter are interested. Such equity warrants were due for conversion in January 2010. The holders of these equity warrants did not exercise their options to convert their holding in to the equity shares of the Company, hence the amount of Rs. 88.00 lacs received by the Company on allotment of the equity warrants has been forfeited and credited to Capital Reserve.

b) Employees Stock Option Scheme (ESOP) :

The Company had introduced stock options plan for employees. The statement as required under Clause 12 of the SEBI (ESOP and ESPS) Guidelines, 1999 is annexed as Annexure I and forms part of the Annual Report.

The Company has received a certificate from the Auditors that the FFSIL ESOP Scheme 2006 has been implemented in accordance with the SEBI Guidelines and the resolution passed at the Annual General Meeting held on September 23 2006. The Certificate would be placed at the Annual General Meeting for inspection by Members.

During the year under review, the Company has allotted 16,400 equity shares of Rs. 10/- each under the FFSIL ESOP Scheme.

Consequent to the preferential allotment of equity shares on preferential basis and allotment of equity shares under the FFSIL ESOP Scheme 2006, the paid up equity capital of the Company has been increased to Rs. 1,211.64 lacs divided into 1,21,16,400 equity shares of Rs. 10/- each fully paid up.

Subsidiary Companies :

Your Company has received an exemption from the Ministry of Corporate Affairs, New Delhi, exempting the Company for compliance of Section 212 (1) of the Companies Act, 1956 for the year ended March 31 2010. Accordingly, the accounts of the subsidiary companies are not attached with the annual report of the Company. However, the annual accounts of the subsidiary companies will be made available to the investors of the holding and subsidiary companies and be kept for inspection by the members at the Registered Office of the Company and will also be uploaded on the website of the Company.

The information in aggregate for each of the subsidiary companies is disclosed in annual report as stipulated in the letter issued by the Ministry of Corporate Affairs, New Delhi.

Statement pursuant to Section 212 (3) of the Companies Act, 1956 relating to the subsidiary companies is annexed as Annexure II and forms part of the Annual Report.

During the year under review, the Company has invested a sum of Rs. 862.00 lacs in subsidiary companies detailed as under.

a) 5,15,000 equity shares of Rs.10/- each fully paid at a premium of Rs.70/- per share in Fortune Equity Brokers (India) Limited aggregating to Rs.412.00 lacs;

b) 15,00,000 equity shares of Rs.10/- each fully paid at a premium of Rs.20/- per share in Fortune Credit Capital Limited aggregating to Rs.450.00 lacs.

Fixed Deposits :

The Company has not accepted any deposit from the public during the year under review, to which the provisions of Section 58A of the Companies Act, 1956 and the rules made there under would apply.

Corporate Governance :

A report on the Corporate Governance along with a certificate from the Auditors of the Company regarding the compliance of conditions of the Corporate Governance and also the Management Discussion and Analysis as stipulated under Clause 49 of the Listing Agreement are forming part of the Annual Report.

All Board members and senior management personnel have affirmed compliance with code of conduct for the year 2009-2010. A declaration to this effect certified by the Executive Chairman of the Company is also attached in the Annual Report.

The Executive Chairman and the Chief Financial Officer (CFO) have certified to the Board with regard to the financial statements and other matters as required under Clause 49 of the Listing Agreement and the said certificate is given in the Annual Report.

Committees :

The Company has four committees of the Board of Directors. These committees are - Audit Committee, Remuneration/ Compensation Committee, Shareholders Grievances Committee and Internal Finance Committee.

The terms of reference, composition and the details of the meetings held during the year under review are provided in Corporate Governance Report.

Internal Control Systems & their adequacy :

The Company has in place adequate systems of internal control that are commensurate with its size and nature of the business and documented procedures covering all financial and operating functions. The Company being a service industry, it has in place clear processes and well-defined roles and responsibilities for its staff at various levels. The management has a defined reporting system, which facilitates monitoring and adherence to the process and systems in place.

Auditors :

M/s. Nipun Sudhir & Associates, Chartered Accountants, Mumbai, Statutory Auditors of the Company hold office up to the conclusion of this Annual General Meeting and are recommended for reappointment. The Company has received a certificate under Section 224 (1B) of the Companies Act, 1956 stating that the appointment, if made, will be within the limits as specified in that section.

Directors :

The Board of Directors appointed Mr. Sanjay Kothari as an Additional Director on September 25 2009. Mr. Kothari holds the office of Directorship till the ensuing Annual General Meeting. The Company has received deposit from the member of the company proposing the candidature of Mr. Kothari as a Director of the Company.

Mr. Gaurang A. Patel has resigned as a Director of the Company effective from November 1 2009. The Board wishes to place on record its appreciation for the valuable contribution made by Mr. Patel during his tenure as a Director of the Company.

Mr. Ramesh Venkat and Mrs. Sangeeta J. Poonja, Directors of the Company, retire by rotation and being eligible offer themselves for re-appointment.

Conservation of Energy, Technology Absorption :

The provision of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to your Company since your company is not covered under the scheduled industry pursuant to the said rules.

Foreign Exchange earnings and outgo :

(Rupees in Lacs)

Particulars 2009-2010 2008-2009

Earnings :

Subscription for issue of shares 800.08 2,436.75

Investment & Merchant Banking income 230.73 85.82

Outgo :

Foreign Travelling / Business Promotion 2.32 6.66

Subscription - 4.45

Dividend 36.67 49.15

Particulars of employees :

Statement under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules 1975, as amended by the Companies Amendment Act, 1988 is annexed as Annexure III and forms part of the Annual Report.

Investor Education & Protection Fund :

During the year under review, no amount of unclaimed dividend was due for transfer to the Investor Education & Protection Fund. Directors Responsibility Statement : Pursuant to Section 217 (2AA) of the Companies Act, 1956 the Directors to the best of their knowledge and belief confirm that.

- in the preparation of the annual accounts, the applicable accounting standards had been followed alongwith proper explanation relating to material departures.

- appropriate accounting policies had been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

- proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and - the annual accounts had been prepared on a going concern basis.

Acknowledgement :

The Management of your Company is grateful to customers, regulatory authorities, vendors, shareholders, business associates, companys bankers, Financial Institutions, Government authorities, etc. for their continued support and co-operation. The Directors appreciate and value the contributions made by every member of Fortune family towards growth of the Company.

On behalf of the Board

J. T. Poonja

Mumbai, May 20 2010 Executive Chairman

 
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