1. Company overview
Fortune International Limited is Govt. of India recognized Start Trading House, engaged in the business of procuring,
trading and exporting a number of product groups including engineering goods commodities to various parts of the
world.
2. Basis of preparation of financial statements
a) Accounting convention
The financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) notified
under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the companies (Indian
Accounting Standards) Amendment Rules, 2016
These financial statements have been prepared in accordance with the accounting policies, set out below and
were consistently applied to all periods presented unless otherwise stated.
Certain comparative figures appearing in these financial statements have been regrouped and/or reclassified
to better reflect the nature of those items.
b) Basis of measurement
The financial statements have been prepared on an accrual basis and in accordance with the historical cost
convention, uness otherwise stated. These financial statements comply in all material aspects with Indian
Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies
(Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. All assets and liabilities
are classified into current and non-current based on the operating cycle of less than twelve months or based
on the criteria of realisation/settlement within twelve months period from the balance sheet date.
c) Key accounting judgement, estimates and assumptions
The preparation of the financial statements required the management to exercise judgment and to make
estimates and assumptions. These estimates and associated assumptions are based on historical experiences
and various other factors that are believed to be reasonable under the circumstances. Actual results may
differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis.
Revision to accounting estimates are recognised in the period in which the estimate is revised, if the revision
affects only that period, or in the period of the revision and future periods if the revision affects both current
and future period.
d) Functional and presentation currency
The functional and presentation currency of the Company is the Indian Rupee.
e) Foreign currency transaction
Foreign currency transactions are translated at the exchange rate that approximates the prevalent exchange
rate on the transaction date. Monetary assets and liabilities in foreign currencies are translated at the year-
end rate. Non-monetary assets and liabilities denominated in a foreign currency and measured at historical
cost are translated at the exchange rate prevalent at the date of transaction.
3. Material Accounting Policies
The Company has applied the following accounting policies to all periods presented in the financial statements.
a) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts
exclusive of excise duty receivable for goods supplied, stated net of discounts, returns and value added taxes.
The company recognises revenue when the amount of revenue can be reliably measured; when it is probable
that future economic benefits will flow to the entity; and when specific criteria have been met for each of the
Company's activities, as described below.
Sale of Goods and services
Sales are recognised when the significant risks and rewards of ownership of the goods are transferred to
the buyer as per terms of contract. Income and fees from services are accounted as per terms of relevant
contractual agreements/arrangements.
Revenue from sale of power is recognised when delivered and measured based on rates as per bilateral
contractual agreements with buyers and at rate arrived at based on the principles laid down under the
relevant Tariff Regulations as notified by the regulatory bodies, as applicable.
Interest & Commission Income
Interest income is recognised on accrual basis as per the terms of relevant contracts or by using the effective
interest method, where applicable
Investment income
Incomes from investments are accounted on an accrual basis.
b) Property, Plant and Equipment
i) Recognition and measurement: Property, plant and equipment are carried at cost of acquisition less
accumulated depreciation and accumulated impairment loss, if any. Subsequent expenditure related to
an item of fixed asset are added to its book value only when it is probable that future economic benefits
associated with the item will flow to the Company and the cost of the item can be measured reliably. The
carrying amount of the replaced part is derecognised. All repairs and maintenance are charged to the
Statement of Profit and Loss during the financial year in which they are incurred.
ii) Depreciation: Depreciation of other items of Property, Plant and Equipment are provided on a straight
line basis over the estimated useful life of the asset or as prescribed in Schedule II to the Companies Act,
2013 or based on technical evaluation of the asset. Estimated useful life of items of property, plant and
equipment are as follows:
The residual values, useful lives and methods of depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted prospectively, if appropriate.
The Company assesses at each balance sheet date whether there is objective evidence that an asset or
a group of assets is impaired. An asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the sale proceeds with the carrying amount
and are recognised within operating profit in the Income statement.
c) Financial Instruments
Financial Assets
The Company classifies its financial assets in the following categories:
i) Financial assets at amortised cost - Assets that are held for collection of contractual cash flows where
those cash flows represent solely payments of principal and interest are measured at amortised cost.
They are presented as current assets, except for those maturing later than 12 months after the reporting
date which are presented as non-current assets. Financial assets are measured initially at fair value
which usually represents cost plus transaction costs and subsequently carried at amortised cost using
the effective interest method, less any impairment loss if any.
Financial assets at amortised cost are represented by trade receivables, security and other deposits, cash
and cash equivalent, employee and other advances.
ii) Equity investments - Investment in subsidiaries/associates are stated at cost. All other equity investments
are measured at fair value, except for certain unquoted equity investments which are carried at cost
where the fair value of these investments cannot be reliably measured.
iii) Financial Assets at Fair Value through Other Comprehensive Income (FVTOCI) - For investments which
are not held for trading purposes and where the company has exercised the option to classify the
investment as at FVTOCI, all fair value changes on the investment are recognized in OCI. The accumulated
gains or losses on such investments are not recycled to the Statement of Profit and Loss even on sale of
such investment.
iv) Financial assets at Fair Value through Profit and loss (FVTPL) - Financial assets other than the equity
investments and investment classified as FVTOCI are measured at FVTPL. These include surplus funds
invested in mutual funds etc.
v) Impairment of financial assets - The Company assesses at each balance sheet date whether there is
objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a
group of financial assets is impaired and impairment losses are incurred only if there is objective evidence
of impairment as a result of one or more events that occurred after the initial recognition of the asset
(a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of the
financial asset or group of financial assets that can be reliably estimated.
Financial liabilities
Initial recognition and measurement
Financial liabilities are measured at amortised cost using effective interest method. For trade and other
payable maturing within one year from the Balance Sheet date, the carrying value approximates fair value
due to short maturity.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is a
legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent
on future events and must be enforceable in the normal course of business and in the event of default,
insolvency or bankruptcy of the company or the counterparty.
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