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Fortune Financial Services
BSE: 530023|ISIN: INE924D01017|SECTOR: Finance - General
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Fortune Financial Services is not listed on NSE
Mar 12
Accounting Policy Year : Mar '13
1.1 Basis of preparation of financial statements
 
 The accompanying financial statements have been prepared under the
 historical cost convention on an accrual basis. The financial
 statements have been prepared in accordance with the generally accepted
 accounting principles to comply in all material aspects with the
 Accounting Standards (AS) prescribed in the Companies (Accounting
 Standards) Rules 2006 and the provisions of the Companies Act, 1956
 (The Act) issued by the Central Government, in consultation with the
 National Advisory Committee on Accounting Standards, to the extent
 applicable.
 
 1.2 Useof estimates
 
 The preparation of financial statements in conformity with the
 generally accepted accounting principles requires Management to make
 estimates and assumptions that affect the reported amount of assets and
 liabilities on the date of the financial statements and the reported
 amount of revenues and expense during the reporting period.  Although
 these estimates are based upon Management''s best knowledge of current
 events and actions, actual results could differ from these estimates.
 Difference between the actual result and estimates are recognised in
 the period in which the results are known / materialised.
 
 1.3 Revenue recognition
 
 Revenue is recognised to the extent it is probable that the economic
 benefits will flow to the Company and the revenue can be reliably
 measured.
 
 a.  Issue Management fee is accounted on the basis of the terms of
 agreement with the clients.
 
 b Placement fees, professional fees and other service charges are
 accounted when there is reasonable certainty of its ultimate
 realisation / collection.
 
 c Income from distribution is accounted when there is reasonable
 certainty of its ultimate realisation/collection.
 
 d.  Interest income is recognised on an accrual (time proportion)
 basis.
 
 e.  Dividend income is recognised when the right to receive dividend is
 established.
 
 f Profit / loss on sale of investment is determined at the time of
 actual sale/ redemption.
 
 1.4 Employee benefits
 
 a) Short term employee benefits
 
 Employee benefits such as salaries, allowances short term compensated
 absences, estimated cost of bonus, ex-gratia and employee benefits
 under defined contribution plans such as provident fund and other funds
 which fall due within twelve months of rendering the service are
 classified as short term employee benefits and charged as expense to
 the Statement of Profit and Loss account in the period in which the
 service is rendered
 
 b) Long term employee benefits
 
 Employee benefit under defined benefits plans like gratuity which fall
 due for payment after a period of twelve months from rendering of
 service or after completion of employment are determined based on
 actuarial valuation using the projected unit credit method.
 
 The Company''s obligations recognised in the Balance Sheet represents
 the present value of obligations as reduced by the fair value of plan
 of assets, where applicable.
 
 1.5 Employee stock option scheme.
 
 The stock options granted by the Company are accounted for as per the
 accounting treatment prescribed by SEBI (Employee Stock Option Scheme
 and Employee Stock Purchase Scheme) and the Guidance Note on Accounting
 for
 
 Stock Options issued by The Institute of Chartered Accountants of
 India, whereby the intrinsic value of the options are recognised as
 deferred employee compensation. The deferred employee compensation, if
 any, is charged to the
 
 Statement of Profit and Loss on a straight line basis over the vesting
 period of the options. The Employee Stock Option outstanding account,
 net of unamortised deferred employee compensation, if any is shown
 separately as part of reserves.
 
 1.6 Tangiblefixed assets
 
 Tangible fixed assets are stated at cost of acquisition net of tax /
 duty credits less accumulated depreciation and impairment losses, if
 any. Cost of acquisition includes all expenses incurred to bring the
 assets to their location and working conditions up to the date the
 assets are put to use.
 
 1.7 Intangible fixed assets
 
 Intangible Assets are stated at cost of acquisition, net of tax / duty
 credits availed less amortisation and impairment
 
 losses, if any. An asset is recognised when it is probable that the
 future economic benefits attributable to the assets will flow to the
 enterprise and where it''s cost can be reliably measured.
 
 1.8 Depreciation and amortisation
 
 The Company provides for depreciation and amortisation as under:
 
 a.  On written down value basis, in accordance with the rates
 prescribed in Schedule XIV to the Act.
 
 b.  On intangible assets, over a period of three years from the date of
 acquisition.
 
 c On a pro-rata basis on assets purchased / sold during the year.
 
 d.  On assets costing less than Rs.5,000, at hundred percent of the
 cost of the asset in the year of purchase.
 
 e.  On leasehold improvements, over the primary period of the lease.
 
 1.9 Impairment
 
 An asset is treated as impaired when the carrying cost of the asset
 exceeds its recoverable value. An impairment loss is charged to the
 Statement of Profit and Loss account in the year in which an asset is
 identified as impaired.  The impairment loss recognised in a prior
 accounting period is reversed if there is a change in the estimate of
 the recoverable amount.
 
 1.10 Taxation
 
 Provision for tax comprises current tax and deferred tax charge or
 benefit.
 
 Current taxes are measured on the basis of the taxes expected to be
 paid on the taxable income determined in accordance with the prevailing
 tax rates and laws.
 
 Deferred tax is the tax effect of the timing differences between the
 accounting income and taxable income and are capable of reversal in one
 or more subsequent periods. Deferred tax charge or benefit and the
 corresponding deferred tax liabilities and assets are recognised using
 the rates that have been enacted or substantially enacted as at the
 balance sheet date.
 
 Deferred tax assets are recognised only to the extent there is a
 reasonable certainty that there will be sufficient taxable income
 against which it can be realised; however, where there is unabsorbed
 depreciation or carried forward loss under taxation laws, deferred tax
 assets are recognised only if there is virtual certainty of realisation
 of assets.  Deferred tax assets, if any, are re-assessed periodically.
 
 1.11 Investments
 
 All Investments are stated at cost. Investments are classified as
 current or long term in accordance with Accounting Standard 13 on
 Accounting for Investments. Provision for diminution in vale of
 current investments is made if the fair value of investments is less
 than its cost. Provision for diminution in the value of long-term
 investment is made only if such a decline is other than temporary.
 Provision for diminution in value of investments made during the year
 is charged to the Statement of Profit and Loss.
 
 1.12 Derivative instruments
 
 Daily mark-to-market margins on the derivative trades are accounted
 separately as against the initial margin payments under Current Assets.
 The profit/loss on the final settlement of the derivative contracts,
 calculated as the difference between the final settlement price and the
 contract price of all the contracts in the series, is recognised on the
 expiry/square-up of the series of equity index/stock futures by
 transfer from the mark-to-market margin account.
 
 As on the date of the Balance Sheet, provision for anticipated loss is
 made for the debit balance if any, in the mark- to-market margin
 account (maintained scrip wise /index wise) on open futures contracts,
 credit balances if any, in the account attributable to anticipated
 income being ignored keeping in view the consideration of prudence.
 
 1.13 Earnings per share
 
 The basic earnings per share is computed and disclosed by dividing the
 net profit after tax attributable.to equity shareholders for the year
 by the weighted average number of equity shares outstanding during the
 year.
 
 Diluted earnings per share is computed and disclosed using the weighted
 average number of equity shares outstanding during the year, adjusted
 for the effects of all dilutive potential equity shares, if any.
 
 1.14 Miscellaneous expenditure
 
 Preliminary expenditure and expenditure in connection with the raising
 of capital is amortised over a period of ten years from the year of
 commencement of business operations or from the year of raising of
 capital.
 
 1.15 Provisions, contingent liabilities and contingent assets
 
 A provision is recognised when there is a present obligation as a
 result of past events for which a probable outflow of resources is
 expected to settle the obligation and the amount of the obligation can
 be reliably estimated.
 
 Contingent liabilities are not recognised but are disclosed in the
 notes in case of:
 
 a) a present obligation arising from a past event, when it is not
 probable that an outflow of resources will be required to settle the
 obligation,
 
 b) a possible obligation, unless the probability of outflow of
 resources is remote.  Contingent Assets are neither recognised, nor
 disclosed.
 
 Provisions, contingent liabilities and contingent assets are reviewed
 at each balance sheet date.
 
 1.16 Leases
 
 Operating lease where the lessor effectively retains substantially all
 the risks and benefits of ownership of the leased item are classified
 as operating leases. Lease payments for assets taken under operating
 leases are charged off to the statement of Profit and Loss over the
 lease term.
 
 1.17 Cash and cash equivalents
 
 Cash and cash equivalents comprise of cash on hand and deposits with
 bank. The Company considers all highly liquid investments/ bank
 deposits with a remaining maturity on the date of purchase of three
 months or less and that are readily convertible to known amounts of
 cash to be cash equivalents.
 
 1.18 Cash flow statement
 
 The Cash Flow Statement is prepared using the indirect method set out
 in Accounting Standard 3 on Cash flow Statement and presents the cash
 flow by operating, investing and financing activities of the Company.
 
 1.19 Foreign currency transactions
 
 Foreign currency transactions are recorded at the exchange rate
 prevailing on the date of transaction. Realised gains and losses on
 foreign currency transactions during the year are recognised in the
 Statement of Profit and Loss.  Monetary items denominated in foreign
 currency are restated using the closing exchange rate of the date of
 the balance sheet and the resulting net exchange difference is
 recognised in the Statement of Profit and Loss.
Source : Dion Global Solutions Limited
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