Description Carrying value Tax base Deductible/(Taxable) temporary dif

provision against stock 61,474,887 - 61,474,887

provision against debtors 9,375,890 - 9,375,890
provision against DTRE 1,666,263 - 1,666,263
Provision against sales tax refund 1,602,810 - 1,602,810
Deferred tax asset

Property plant & equipment 24,196,410 9,766,772 (14,429,638)

Net deferred tax asset

Work done
provisions created in the books of accounts have been reconciled with the audit working papers, calculated the s
1 check the accuracy and completeness.
2 Basis for assumption of provisions were discuss with the management to evaulate the reasonableness of the assum
3 Figures were reconciled with GL and tax returns
4 Carrying amounts of property plant and equipment were verified and reconciled with the audit working papers
5 Tax bases of property plant and equipment were verified from the tax returns
6 Corporate tax rate was verified

CONCLUSION:
Since the company is facing going concern issues and accumulated deficit of the company aggregate to 400 millio
June 30, 2018 and it is not probable that taxable profit will not be availabe against which deductable temporary dif
(defered tax asset) can be utilized. Hence defered tax asset has not been recognised.
 Tax rate DTA/(DTL)

29% 17,827,717
29% 2,719,008
29% 483,216
29% 464,815
21,494,757

29% (4,184,595)

17,310,161

king papers, calculated the same to

easonableness of the assumptions

e audit working papers

mpany aggregate to 400 million as at

ich deductable temporary difference
Pak Leather Crafts Pvt Ltd. Pak Leather Crafts Pvt Ltd.
Computation for Alternate Corporate Tax Computation of Annual Corporate Tax
For the year ended June 30, 2018 For the year ended June 30, 2018

Export Normal Total Export Normal Total

Sales/other income 38,094,015 20,310,372 58,404,387 Sales/other income 38,094,015 20,310,372 58,404,387

COS 32,490,346 17,322,696 49,813,042 COS 32,490,346 17,322,696 49,813,042

Operating cost 8,299,227 4,424,853 12,724,080 Operating cost 8,299,227 4,424,853 12,724,080
Finance 417,431 222,560 639,991 Finance 417,431 222,560 639,991

Net loss (3,112,990) (1,659,736) (4,772,726) Accounting Loss (3,112,990) (1,659,736) (4,772,726)

ACT @ of 17% of Normal income 0 A/c depreciation 1,009,513 538,237 1,547,750

Tax depreciation 2,205,227 1,175,749 3,380,976

Taxable profit / (loss) (4,308,704) (2,297,248) (6,605,952)

ACT @ of 17% of Normal income 0

Corporate tax:

Normal tax on taxable income - A 0

Minimum tax on turnover other than exports - B (1.250%) 169,921

Final taxes - C 380,940
Total (Mini plus final) - D 550,862

Higher of A or D 550,862

Provision accounted for in FS 516,877

Difference 33,985

WORK DONE:
1 sales were checked in the GL and reconciled with audit working papers.
2 Cost of sales were reconciled with the individual ledgers and audit working papers.
3 Finance cost was verified from the GL and bank statements.
4 Tax depreciation was checked against the tax return
5 Accounting depreciation was checked in the fixed assets register and was recalculated.
6 Tax rate was verified from income tax ordinance