Notes to Accounts of Fortune International Ltd.

Mar 31, 2024

19 Fair Value measurement

Financial Instrument by category and hierarchy

The fair value of financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

The carrying amount of trade receivable, trade payable, capital creditors, loans, cash and cash equivalents and other bank balances as at 31st March, 2024 and 31st March, 2023 are considered to be the same as their fair values, due to their short term nature. Difference between carrying amounts and fair values of other financial assets, other financial liabilities and short term borrowings subsequently measured at amortised cost is not significant in each of the year presented.

Financial Instruments with fixed and variable interest rates are evaluated by the company based on parameters such as interest rate and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

Fair value hierarchy

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of following:

Level 1 - category includes financial assets and liabilities, that are measured in whole or in significant part by reference to published quotes in an active market.

Level 2 - category includes financial assets and liabilities measured using a valuation technique based on assumptions that are supported by prices from observable current market transactions. These include assets and liabilities for which pricing is obtained via pricing services, but where prices have not been determined in an active market, financial assets with fair values based on broker quotes and assets that are valued using the Company''s own valuation models whereby the material assumptions are market observable. The majority of Company''s over-the counter derivatives and several other instruments not traded in active markets fall within this category.

Level 3 - category includes financial assets and liabilities measured using valuation techniques based on non market observable inputs. This means that fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. However, the fair value measurement objective remains the same, that is, to estimate an exit price from the perspective of the Company. The main asset classes in this category are unlisted equity investments as well as unlisted funds.

20 Financial Risk Management

Financial risk management objectives and policies

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s primary focus is to foresee the unpredictability of financial markets and seek to minimise potential adverse effects on its financial performance.

The Company''s financial liabilities comprise of borrowings, trade payable and other liabilities to manage its operation and financial assets includes trade receivables, security deposits, loans and advances, etc. arises from its operation.

The Company has constituted a Risk Management Committee consisting of majority of directors and senior managerial personnel. The Company has instituted Business Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance Company''s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risk trend, exposure and potential impact analysis at a Company level.

The Audit Committee of the Board reviews the risk management framework at periodic intervals.

Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices. The Company''s size and operations result in it being exposed to the following market risks that arise from its use of financial instruments:

a) Currency Risk

b) Price Risk

c) Interest Rate Risk

The above risks may affect the Company''s income and expenses, or the value of its financial instruments. The Company''s exposure to and management of these risks are explained below.

a) Currency Risk

The Company operates internationally and a major portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk to the extent that there is mismatch between the currencies in which its sales and services and purchases from overseas suppliers in various foreign currencies. The Company also holds derivative financial instruments such as foreign exchange forward and currency option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The exchange rate between the Indian Rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future.

b) Price Risk

The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet either at fair value through OCI or at fair value through profit and loss. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company .

c) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

According to the Company, interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

Credit risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition.

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized as income in the statement of profit and loss.

The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.

Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows.

21 Capital Risk Management Risk Management

The Company aim to manages its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders.

The capital structure of the Company is based on management''s judgement of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

27 Other Statutory Information

i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

ii) The Company do not have any transactions with companies struck off.

iii) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

iv) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

v) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

vi) The Company have no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

vii) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

viii) The Company has not been declared as a Wilful Defaulter by any bank or financial institution or government or any government authority.

28 Figures of previous year are regrouped, rearranged and reclassified wherever necessary to correspond to figures of the current year

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Mar 31, 2014

Not Available.

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Mar 31, 2013

1. Contingent Liabilities

CONTINGENT LIABILITIES CURRENTYEAR PREVIOUSYEAR

In respect of Bank Guarantees Nil Nil

2. Quantitative & Value information: Not Applicable since there is no opening & closing stock.

3. Consumption of imported and indigenous materials and percentage thereof to total consumption, Raw Materials, Sub-assemblies and Components Consumed. - NIL

4. In Compliance of Accounting Standard -18 on related party disclosures issued by the Institute of Chartered Accountants of India, the required information is given as under.

1. List of Related Parties

a) Directors and Key Managerial Persons

1. Mrs. Rekha Shrivastava

2. Mr. Nivedan Bharadwaj

3. Mr. Madanlal Jain

b) Relatives of Directors

1. Ruchika Shrivastava - Bharadwaj

2. Anu Malhotra

3. Pritika Shrivastava

4. Radhika Shrivastava

c) The entities and the associations in which Directors are interested

1. M/s. Dr. R.D. Shrivastava Family Trust

2. M/s. Ganga Agencies

3. M/s. Krishna Family Trust

4. Fortune Polymer Industries Pvt. Ltd.

5. Fortune Stones Ltd

6. ISS International Ltd

5. Deferred tax assets have not been recognized and carried forward as there is no certainty of any furthertaxable income.

6. Provision for Income tax has not been made in the absence of taxable income.

7. Superannuation Payable to employee is Rs 11, 26,109.The amount payable is on Account of withdrawal of the names of the member from the pension group scheme of LIC. The amount will be reimbursed to the employees/member covered under the scheme within a reasonable time.

8. Misc Income of Rs. 25 Lac is towards waiver of unsecured loan by Krishna Family Trust.

9. Exceptional item shown in the Profit & Loss Account is the amount paid to BSE as one time charges as Re-lnstatementfees.

10. Previous Year figures have been regrouped and re-arranged wherever Necessary.

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Mar 31, 2012

* 10% amount of invoice value which is payable by Ministry of Food, Government of Bangladesh after inspection of the goods and other formalities has not yet received inspite of serious efforts made by the company, amounting to Rs.2,14,47,920/- is outstanding since last 10 years and seems doubtful of recovery.

* Balance of Trade Receivables are subject to confirmation.

1. Contingent Liabilities

CONTINGENT LIABILITIES CURRENT YEAR PREVIOUS YEAR

In respect of Bank Guarantees Nil Nil

2. Quantitative & Value information: Not Applicable since there is no opening & closing stock.

3. Consumption of imported and indigenous materials and percentage thereof to total consumption, Raw Materials, Sub-assemblies and Components Consumed. - NIL

4. In Compliance of Accounting Standard -18 on related party disclosures issued by the institute of Chartered Accountants of India, the required information if given as under.

1. List of Related Parties

a) Directors and Key Managerial Person

1. Mrs. Rekha Shrivastava

2. Mr. Nivedan Bharadwaj

3. Mr. Madanlal Jain

b) Relatives of Directors

1. Ruchika Shrivastava - Bharadwaj

2. Anu Malhotra

3. Pritika Shrivastava

4. Meenu Shrivastava

5. Radhika Shrivastava

c) The entities and the associations in which Directors are interested

1. Wisdom Properties Private Limited

2. M/s. Dr. R.D. Shrivastava Family Trust

3. M/s. Ganga Agencies

4. M/s. Krishna Family Trust

5. Eastern Leather Products P. Ltd

6. Abhinav Engineers Pvt. Ltd.

7. Fortune Polymers Industries Pvt. Ltd.

8. Ramdayal associates Ltd.

5. Deferred tax assets have not been recognized and carried forward as there is no certainty of any further taxable income.

6. Previous Year figures have been regrouped and re-arranged wherever Necessary.

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Mar 31, 2011

1. CONTINGENT LIABILITIES CURRENT YEAR PREVIOUS YEAR

a) In respect of Bank Guarantees Nil Nil

2. Quantitative & Value information: Not Applicable since there is no opening & closing stock.

3. Consumption of imported and indigenous materials and percentage thereof to total consumption, Raw Materials, Sub-assemblies and Components Consumed. - NIL 4. Shares of M/s.Rathi Alloys and Steel Ltd. have been received back from Central Bank of India, Parliament Street, New Delhi. These shares have been sold during the current financial year to M/ s.Ramdayal Associates Ltd. However these shares are not quoted/traded on any stock exchanges & hence Directors have disposed off the above investments, at cost value to reduce the burden of loans.

5. ICICI bank had filed a suit against the company before DRT for claim of penal interest etc. amounting to Rs.98,91,308 + Interest and being defended by the company.

6. Balances of sundry Debtors and Loans & Advances are subject to confirmation.

7. 10% amount of invoice value which is payable by Ministry of Food, Government of Bangladesh after inspection of the goods and other formalities has not yet received in-spite of serious efforts made by the company, amounting to Rs.3,60,45,593/- is outstanding since last 10 years and seems doubtful of recovery. Out of above Rs.1, 45,97,673/- is being written off as Bad-debts during the year, as per Boards approval.

8. Amount due from New World Enterprises Rs.8,30,52,720/- had been written off during the year as bad debts after complying with necessary formalities & Board approval, as there is no scope of recovery.

9. Amount due from Mondial Granites US$ 22,052.85 against exports made in August-2000; goods not accepted by the importer and original documents received back. The goods had since been auc- tioned by the Custom-Authorities & in-spite of best efforts no details could be found. Board has decided to write-off the above as bad debts during the current financial year, as there is no scope of any recovery.

10. Amount due from M/s. Fortune Foods(Pty)Ltd, South Africa amounting to Rs.56,69,142/-, outstand- ing more than 11 years & the buyer being declared bankrupt as informed to our banker’s had been written off as bad debts after complying with necessary formalities, as there is no scope of any recovery.

11. Commercial Building owned by the company at Naraina Vihar, New Delhi had been sold on 4th Feb- ruary, 2011 at the approved circle rate to reduce the heavy liabilities on the Company after completing the necessary formalities and as per Board resolution dated 24.01.2011.

12. Demand Draft in hand amounting to Rs.54,749/- issued by State Bank of India, Nhava Sheva Branch, Mumbai favouring ICICI Bank Ltd A/c Fortune International Ltd had been revalidated and deposited in bank on 05/05/2011.

13. No Provision has been made for accounting liability up-to 31.3.2011 for gratuity to employees. Gra- tuity payable will be accounted as and when payments are made and as such the liability as at 31.03.2011 has not been ascertained.

14. In Compliance of Accounting Standard -18 on related party disclosures issued by the Institute of Chartered Accountants of India, the required information is given as under.

1. List of Related Parties

a) Directors and Key Managerial Person

1. Mrs. Rekha Shrivastava

2. Mr. Nivedan Bharadwaj

3. Mr. Madan Lal Jain

b) Relatives of Directors

1. Mrs. Ruchika Bharadwaj

2. Mrs. Anu Malhotra

3. Mrs. Pritika Shrivastava

4. Mrs. Meenu Shrivastava

5. Mrs. Radhika Shrivastava

6. Mr. Manish Kheterpal

c) The entities and the associations in which Directors are interested

1. M/s. Wisdom Properties Private Limited

2. M/s. ISS International Limited

3. M/s. Dr. R.D. Shrivastava Family Trust

4. M/s. Ganga Agencies

5. M/s. Krishna Family Trust

6. M/s. Gajendra Properties Pvt. Ltd.

7. M/s. Eastern Leather Products Pvt. Ltd

8. M/s. Abhinav Engineers Pvt. Ltd.

9. M/s. Fortune Polymers Industries Pvt. Ltd.

10. M/s. Ramdayal associates Ltd.

15. Deferred tax assets have not been recognized and carried forward as there is no certainty of any further taxable income.

16. Previous Year figures have been regrouped and re-arranged wherever necessary.

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Mar 31, 2010

1. CONTINGENT LIABILITIES C URRENT PREIOD PREVIOUS YEAR

a) In respect of Bank Guarantees Nil Nil

2. Quantitative & Value information: Not Applicable since there is no opening & closing stock.

3. Consumption of imported and indigenous materials and percentage thereof to total consumption, Raw Materials, Sub assemblies and Components Consumed. - NIL

4. During the financial year 2008-09, the company has made OTS settlement with Central Bank of India, Parliament Street branch, New Delhi in respect of suit filed by bank before DRT, New Delhi vide approval reference N.o.BR:REC-.2008-09 dated 23.4.2008 at agreed amount of Rs.19 crores as One Time Settlement(OTS). During the yearthe company has fuliy paid the OTS alongwith the interest. The difference between the outstanding balance of loan in books and the total amount paid has been debited to interest account. In previous years no provision for interest has been made in the absence of details of interest charged by the bank, hence the total amount of interest has been claimed during this year and debited to Profit & Loss Account.

5. Share of M/s.Rathi Alloys and Steel Ltd. have been pledged with Central Bank of India, Parliament Street Branch, New Delhi. Presently these are not quoted / traded on the Stock-Exchanges, hence present market value is not ascertainable and loss on diminution on value of shares not provided for.

6. ICICI bank had filed a suit against the company before DRT for claim of penal interest etc. amounting to Rs.98,91,308 & being defended by the company.

7. Balances of Creditors/Loans & Advances and Debtors are subject to confirmation.

8. 10% amount of invoice value which is payable by Ministry of Food, Government of Bangladesh after inspection of the goods and other formalities has not yet received in-spite of serious efforts made by the company, amounting to Rs.3,60,45,593/- is outstanding since last 10 years and seems doubtful of recovery

9. Amount due from New World Enterprises Rs.8,30,52,720 is doubtful of recovery; in-spite of serious efforts being made to receive the amount.

10. Amount due from Mondial Granites US$ 22,052.85 against exports made in August-2000 goods not accepted by the importer and had been auctioned by the Custom-Authorities. Necessary details are being called for, and seems to be doubtful of recovery.

11. Demand Draft in hand of Rs.54,749 issued by Stahate Bank of India, Nhava Sheva Branch, Mumbai favouring Fortune International Ltd A/c with ICICI Bank d not been deposited due to litigation with ICICI Bank & necessary efforts are being made to get it revalidated.

12. Following suits filed against the company and not acknowledged as debts; being subjudice matters.

a) Ekta Trade-Links (P) Ltd, Ahmedabad Before Civil Court, Ahmedabad

b) Vijay Anand Associates

c) Euro-Asia, Singapore

13. No Provision has been made for accounting liability up-to 31.3.2010 for gratuity to employees. Gratuity payable will be accounted as and when payments are made and as such the liability as at 31.03.2010 has not been ascertained.

14. Company has received a refund of Rs. 15,59,686 from LIC superannuation Fund & the same has been shown as miscellaneous income as claims of eligible employees were settled earlier at the time of leaving jobs and all contributions were paid by the company

15. Deferred tax assets have not been recognized and carried forward as there is no certainty of any further taxable income.

16. Previous Year figures have been regrouped and re-arranged wherever Necessary.