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meeting the obligation under the contract should exceed the economic benefits expected to be received under

it, which doesn’t seem to be the case as far as Arish Ltd. is concerned. Hence, this note shall be eliminated.
6. The demand notice from the tax department that is under litigation is a clear instance of a ‘contingent

liability’. Accordingly, the note should be revised as –
‘Contingent Liability- Demand notice from income tax department pertaining to INR 6 Million, under

contest with CIT (Appeals) as on the reporting date.
7. The Statement to Profit and Loss needs to represent earnings per share, to be compliant with AS 20.

Revised extracts of the financial statements
Balance Sheet

(INR in Million)
Note No. As at 31st March, 2018
EQUITY AND LIABILITIES
Shareholders’ funds
Share capital 1,000
Reserves and surplus 1 1,500
Non-current liabilities

Long-term borrowings 2 5,000
Current liabilities
Trade payables 300
Short-term provisions 750
Other current liabilities 4 705
TOTAL 9,255
ASSETS
Non - current assets
Fixed Assets 5,655
Deferred Tax Assets 3 300
Current assets
Inventories 1,000
Trade receivables 5 1,100
Cash and Cash Equivalents 1,200
TOTAL 9,255

Statement of Profit and Loss
(INR in Million)

Note No. Year ended 31st March, 2018
Revenue from operations 5,500
Expenses
Operating Costs 2,200
Employee Benefit Expense 1,200
Depreciation 999
Total Expenses 4,399

Profit Before Tax 1,101
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