You are auditing Fortunate Limited for the financial year ended 31st March 2025. Fortunate Limited prepares its financial statements on Companies…

You are auditing Fortunate Limited for the financial year ended 31st March 2025. Fortunate Limited prepares its financial statements on Companies (Indian Accounting Standards) Rules, 2015 (Ind AS). The following information is made available to you: (i) On 1st April 2024, Fortunate Limited had issued a 2 year mandatorily convertible (single) bond of 20,00,000. There are no transaction costs. The terms require Fortunate Limited to make interest payment of 1,00,000 each at the end of the financial year 2024-2025 and 2025-2026. The bond will mandatorily convert into 10,000 ordinary shares on 31st March 2026. (ii) On 1st October 2024, Fortunate Limited had issued 5 years, 9% per annum Optionally Convertible Debentures (OCD) for 4,00,00,000. The OCDs are convertible into ordinary shares of Fortunate Limited, at the option of the holder, at the end of the tenure of 5 years in the ratio of 1:1 i.e. each OCD will be converted to one ordinary share. Interest is paid annually on 30th September, each year. The market rate for issuance of OCDs without a conversion option is 12% per annum. (iii) Fortunate Limited had issued - 2,00,000, 5% per annum loan bonds on 1st April 2023. The issue cost amounted to 8,000. These bonds are redeemable at a premium. Hence, the effective rate of interest is 8% per annum on bonds. On the basis of information provided above, you are required to choose the most appropriate answer to the below mentioned questions 1 to 3 in line with relevant Ind AS: