You were exposed in Chapter 13 to details of Contingent Liabilities Not Provided For by Liberty Shoes Ltd. during the year 2001–02 as per their annual report. The following additional information is being made available to you for the same year: n Number of equity shares o/s...50,70,000. n PAT ₹620.36 lakhs n Contingent liability on account of sales tax exemption has been existing for long.
Now-attempt the following requirements.

1. Sales Tax Exemption: Is the disclosure enough to enable you to estimate the extent of likelihood of the contingency maturing and assess the resultant impact on the reported profit? Opine.

2. Bills discounted against Letter of Credit (Exports) and Bank Guarantees issued on behalf of the company: What is the likelihood of these contingencies maturing? Opine.

3. Opine what are the chances of contingency towards excise matter maturing? Assuming the liability could mature, how will it affect the EPS for the year 2001–02? Tax Rate for A/Y 2002–03 ... 35.70%.