Note to Financial Statements for 20X1

The following is Note 5 to Delta Company’s financial statements:

On 15 November 20Xl, the Board of Directors announced a plan to dispose of Company’s Clothing Division, which is also a separate segment as per AS 17, Segment Reporting. The disposal is consistent with the Company’s long-term strategy to focus its activities in the areas of food and beverage manufacture and distribution, and to divest unrelated activities. The Company is actively seeking a buyer for the Clothing Division and hopes to complete the sale by the end of 20X2. At 31 December 20Xl, the carrying amount of the assets of the Clothing Division was Rs. 85 lakhs (previous year Rs. 120 lakhs) and its liabilities were Rs. 15 lakhs (previous year Rs. 20 lakhs). The following statement shows the revenue and expenses of continuing and discontinuing operations:

 

	Continuing Operations (Food and Beverage Divisions)		Discontinuing Operation (Clothing Division)		Total
	20X1	20X0	20X1	20X0	20X1	20X0
Turnover	90	80	50	70	140	150
Operating Expenses	(65))	(60)	(27))	(45)	(92)	(105)
Impairment Loss —- —- (20) (—) (20) (—)	……	……	(20)	(—)	(20)	(—)
Pre-tax profit from operating activities	25	20	3	25	28	45
Interest expense	(10)	(8)	(5))	(12)	(15)	(20)
Profit (loss) before tax	15	12	(2)	13	13	25
Income tax expense (7) (6) 1 (7) (6) (13)	(7)	(6)	(1)	(7)	(6)	( (13)
Profit (loss) from operating activities after tax	8	6	(1)	6	7	12