Analysis of Financial Reports of Nishat Mills Limited

IN THE NAME OF ALLAH

THE MOST BENEFICIENT

THE MOST BENEVOLENT

1 | P a g e

IAS-12 Income Taxes

“Analysis of Financial Reports of Nishat Mills Limited”

Submitted to

Prof. Azfar Ali

By

Hassan Abbas (L3f08bcom2312)

Hafiz Islam Aslam (L3f08bcom2325)

Muhammad Saad (L3f09bcom2599)

Muhammad Suleman (L3f08bcom2324)

Adil Bin Naeem (L3f08bcom2314)

Fall, 2011

Faculty of Commerce

University of Central Punjab

Lahore, Pakistan

2 | P a g e

Preface

This report is based on the International Accounting Standard no. 12 “Income Taxes”. The

objective of this report is to gives detailed view and explanation for the Standard and the

necessary disclosures required by this standard. The report will covers all the aspects related to

Income Taxes under IAS-12 from historical perspective to the adjustments and treatments in the

financial statements of the companies. As the reference to make this standard more clear and

understandable for the readers the financial reports of “Nishat Mills Limited”, Pakistan have

been used to review how they follows the IAS 12 and how this standard is actually used by other

organization in accounting and disclosure of their financial statements. We hope this reports will

helpful for the readers to better understand this standard and application of this standard on the

actual financial statements of the organizations.

3 | P a g e

Acknowledgements

We are thankful to Almighty Allah for the countless blessing and help, which enabled us to give

our presentation and to complete this report work.

We wish to extend our sincere appreciation to our course instructor Prof. Azfar Ali, we are

thankful to her for her extremely valuable advises and help.

Hassan Abbas

Muhammad Saad

Hafiz Islam Aslam

Muhammad Suleman

Adil Bin Naeem

4 | P a g e

Table of Contents

1.0- Introduction to IFRS Foundation and the IASB……………………………….7

1.1- Standard-settings…………………………………………………………....7

1.1.1- The IASB (International Accounting Standards Board)……………...7

1.1.2- The IFRS Interpretations Committee………………………………..….7

1.2- Structure of IFRSs………………………………………………………….8

1.3- List of Standard……………………………………………………………..8

1.3.1- International Financial Reporting Standards………………………….8

1.3.2- International Accounting Standards…………………………………….9

2.0- History of International Accounting Standard 12…………………………….11

3.0- Introduction to IAS-12 “Income Taxes”……………………………………….11

3.1- Objective of IAS 12……………………………………………………….11

3.2- Scope of IAS 12…………………………………………………………...11

3.3- Key Concepts of IAS 12…………………………………………………..11

4.0- Measurement of Deferred Tax Assets and Liabilities………………………...14

4.1- Tax Consequences of Dividends………………………………………….14

5.0- Guidelines for Recognition……………………………………………………...14

5.1- Recognition of Deferred Tax Assets………………………………………14

5.2- Recognition of Deferred Tax Liabilities…………………………………..15

5.3- Recognition of Current tax liabilities and Current Tax Assets……………15

5.4- Recognition of Tax Expense or Income…………………………………..15

6.0- Disclosure Requirements………………………………………………………..16

6.1- Major Disclosure………………………………………………………….16

6.2- Other Disclosure…………………………………………………………..16

5 | P a g e

7.0- Presentation Requirements……………………………………………………..17

8.0- Review of Financial Statements (Nishat Mills Limited)………………………18

Balance sheet as on June 30 2011………………………………………………...18

Profit and Loss Account………………………………………………………….20

Statement of Comprehensive Income…………………………………………….20

Cash Flow Statement……………………………………………………………..21

Significant Accounting Policies (Related to IAS 12)…………………………….22

Notes to the Account (Related to IAS 12)………………………………………..23

6 | P a g e

1.0- Introduction to IFRS Foundation and the IASB:

The IFRS Foundation is an independent, not-for-profit private sector organization

working in the public interest. Its principal objectives are:

To develop a single set of high quality, understandable, enforceable and globally

accepted international financial reporting standards (IFRSs) through its standard-

setting body, the IASB;

To promote the use and rigorous application of those standards;

To take account of the financial reporting needs of emerging economies and small

and medium-sized entities (SMEs); and

To bring about convergence of national accounting standards and IFRSs to high

quality solutions.

1.1- Standard-settings:

Standard Setting Involves following two bodies.

1.1.1- The IASB (International Accounting Standards Board) :

The IASB is the independent standard-setting body of the IFRS Foundation.

Its members are responsible for the development and publication of IFRSs, including

the IFRS for SMEs and for approving Interpretations of IFRSs as developed by the

IFRS Interpretations Committee (formerly called the IFRIC). The IASB engages

closely with stakeholders around the world, including investors, analysts, regulators,

business leaders, accounting standard-setters and the accountancy profession.

1.1.2- The IFRS Interpretations Committee 

The IFRS Interpretations Committee (formerly called the IFRIC) is the

interpretative body of the IASB. The mandate of the Interpretations Committee is to

review on a timely basis widespread accounting issues that have arisen within the

context of current IFRSs and to provide authoritative guidance (IFRICs) on those

issues.  In developing interpretations, the Interpretations Committee works closely

with similar national committees and follows a transparent, thorough and open due

process.

7 | P a g e

1.2- Structure of IFRSs

1.3- List of Standard

1.3.1- International Financial Reporting Standards:

IFRS 1 First-time Adoption of International Financial Reporting

Standards

IFRS 2 Share-based Payment

IFRS 3 Business Combinations

IFRS 4 Insurance Contracts

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

IFRS 6 Exploration for and Evaluation of Mineral Assets

IFRS 7 Financial Instruments: Disclosures

IFRS 8 Operating Segments

IFRS 9 Financial Instruments

IFRS 10 Consolidated Financial Statements

IFRS 11 Joint Arrangements

8 | P a g e

IFRS 12 Disclosure of Interests in Other Entities

IFRS 13 Fair Value Measurement

1.3.2- International Accounting Standards:

IAS 1 Presentation of Financial Statements

IAS 2 Inventories

IAS 3 Consolidated Financial Statements – Originally issued 1976,

effective 1 Jan 1977. Superseded in 1989 by IAS 27 and IAS 28

IAS 4 Depreciation Accounting – Withdrawn in 1999, replaced by IAS

16, 22, and 38, all of which were issued or revised in 1998

IAS 5 Information to Be Disclosed in Financial Statements – Originally

issued October 1976, effective 1 January 1997. Superseded by IAS 1 in

1997

IAS 6 Accounting Responses to Changing Prices – Superseded by IAS 15,

which was withdrawn December 2003

IAS 7 Statement of Cash Flows

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

IAS 9 Accounting for Research and Development Activities – Superseded

by IAS 38 effective 1.7.99

IAS 10 Events after the Reporting Period

IAS 11 Construction Contracts

IAS 12 Income Taxes

IAS 13 Presentation of Current Assets and Current Liabilities –

Superseded by IAS 1

IAS 14 Segment Reporting

IAS 15 Information Reflecting the Effects of Changing Prices –

Withdrawn December, 2003

IAS 16 Property, Plant and Equipment

IAS 17 Leases

IAS 18 Revenue

IAS 19 Employee Benefits

9 | P a g e

IAS 20 Accounting for Government Grants and Disclosure of Government

Assistance

IAS 21 The Effects of Changes in Foreign Exchange Rates

IAS 22 Business Combinations – Superseded by IFRS 3 effective 31

March 2004

IAS 23 Borrowing Costs

IAS 24 Related Party Disclosures

IAS 25 Accounting for Investments – Superseded by IAS 39 and IAS 40

effective 2001

IAS 26 Accounting and Reporting by Retirement Benefit Plans

IAS 27 Consolidated and Separate Financial Statements – Superseded by

IFRS 10, IFRS 12 and IAS 27 (rev. 2011) effective 2013

IAS 28 Investments in Associates – Superseded by IAS 28 (rev. 2011) and

IFRS 12 effective 2013

IAS 29 Financial Reporting in Hyperinflationary Economies

IAS 30 Disclosures in the Financial Statements of Banks and Similar

Financial Institutions – Superseded by IFRS 7 effective 2007

IAS 31 Interests in Joint Ventures – Superseded by IFRS 11 and IFRS 12

effective 2013

IAS 32 Financial Instruments: Presentation – Disclosure provisions

superseded by IFRS 7 effective 2007

IAS 33 Earnings Per Share

IAS 34 Interim Financial Reporting

IAS 35 Discontinuing Operations – Superseded by IFRS 5 effective 2005

IAS 36 Impairment of Assets

IAS 37 Provisions, Contingent Liabilities and Contingent Assets

IAS 38 Intangible Assets

IAS 39 Financial Instruments: Recognition and Measurement –

Superseded by IFRS 9 effective 2013

IAS 40 Investment Property

IAS 41 Agriculture

10 | P a g e

2.0- History of International Accounting Standard 12:

The roots of IAS 12 move back to 1978 when its first draft was made and in 1979 the

IAS 12 “Accounting for Taxes on Income” was implemented. After that some changes were

made in IAS 12 in 1989 and it was reformatted in 1994. In October, 1996 IAS 12 “Income

Taxes” was proposed and the effective date of IAS 12 was I January, 1998. After that limited

revisions were made in the standard in 2000, 2009 and 2010. In 2010 IAS was amended in

“Deferred Tax: Recovery of Underlying Assets”, these amendments are in effect from 1 January,

2012.

3.0- Introduction to IAS-12 “Income Taxes”:

The IAS 12 deals with each and every aspect of accounting treatment, adjustments and

disclosure requirements related to the income tax calculations and presentation in the financial

statements.

3.1- Objective of IAS 12:

The objective of this standard is to prescribe the accounting treatment of income

taxes and how this treatment effects the financial statement and their presentation.

3.2- Scope of IAS 12:

This standard is applicable for the accounting for income taxes which includes all

domestic and foreign taxes that are applied on the taxable profits of the companies. It also

provides guidelines for the calculation of taxable income, and how calculation of taxable

income of organization differs from that of income calculated by tax department.

3.3- Key Concepts of IAS 12:

Following are some key concepts used in the IAS 12:

1. Current Year Tax

2. Prior Year Tax

3. Temporary Differences

4. Taxable Temporary Differences

11 | P a g e

5. Deductable Temporary Differences

6. Deferred Tax Asset

7. Deferred Tax Liability

8. Current Tax Asset

9. Current Tax Liability

Temporary Difference:

It is the difference between the carrying amount of an asset or liability and its

tax base. Examples,

Interest revenue received in arrears and is included in accounting profit

on a time apportionment basis but is included in taxable profit on a

cash basis

Revenue from sales is included in accounting profit at delivery and in

tax profit when cash is received.

Depreciation of an asset is accelerated for tax purposes

Development cost is amortized for accounting purposes but deducted

in the year of payment for tax purposes

Taxable Temporary Difference:

A temporary difference that will result in taxable amounts in the future when

the carrying amount of the asset is recovered or the liability is settled.

Deductible Temporary Difference:

A temporary difference that will result in amounts that are tax deductible in

the future when the carrying amount of the asset is recovered or the liability is

settled.

Deferred Tax Asset:

A deferred tax asset is created by overpaying taxes during a given time

period. This usually occurs as a result of timing differences based on how the

company depreciates its assets. This deferred tax asset reduces the company's tax

liability in the future.

12 | P a g e

Deferred Tax Liability:

An account on a company's balance sheet that is a result of temporary

differences between the company's accounting and tax carrying values, the

anticipated and enacted income tax rate, and estimated taxes payable for the current

year. This liability may or may not be realized during any given year, which makes

the deferred status appropriate.

Current Tax Liability:

The total amount of tax that an entity is legally obligated to pay to a Taxation

authority as the result of the occurrence of a taxable event.

Tax Base of Asset:

It is the amount that will be deductible for tax purposes against any taxable

economic benefits that will flow to any enterprise when it recovers the carrying

amount of the asset. If those economic benefits will not be taxable, the tax base of

the asset is equal to its carrying amount.

Tax Base of Liability:

It is the carrying amount, less any amount that will be deductible for tax

purposes in respect of that liability in future periods. In case of revenue which is

received in advance the tax base of the resulting liability is its carrying amount, less

any amount of the revenue that will not be taxable in future periods.

13 | P a g e

4.0- Measurement of Deferred Tax Assets and Liabilities:

Current tax liabilities for the current and prior periods should be measured at the amount

expected to be paid to the taxation authorities, using the tax rates that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax assets and liabilities should be measured at the tax rates that are expected to

apply to the period when the asset is realized or the liability is settled, based on tax rates that

have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets and liabilities should not be discounted.

4.1- Tax Consequences of Dividends:

In some jurisdictions, income taxes are payable at a higher or lower rate if part or

all of the net profit or retained earnings is paid out as a dividend. In other jurisdictions,

income taxes may be refundable if part or all of the net profit or retained earnings is paid

out as a dividend. Possible future dividend distributions or tax refunds should not be

anticipated in measuring deferred tax assets and liabilities.

5.0- Guidelines for Recognition:

IAS 12 describes different rules and guidelines for the recognition of different types of

taxes, different guidelines for recognition are as follows:

5.1- Recognition of Deferred Tax Assets:

A deferred tax asset should be recognized for deductible temporary differences,

unused tax losses and unused tax credits to the extent that it is probable that taxable profit

will be available against which the deductible temporary differences can be utilized,

unless the deferred tax asset arises from:

The initial recognition of an asset or liability in a transaction which is not

a business transaction and at the time of the transaction, affects neither

accounting profit nor taxable profit.

Deferred tax assets for deductible temporary differences arising from investments

in subsidiaries, associates, branches and joint ventures should be recognized to the extent

14 | P a g e

that it is probable that the temporary difference will reverse in the foreseeable future and

that taxable profit will be available against which the temporary difference will be

utilized.

The carrying amount of deferred tax assets should be reviewed at the end of each

reporting period and reduced to the extent that it is no longer probable that sufficient

taxable profit will be available to allow the benefit of part or the entire deferred tax asset

to be utilized.

5.2- Recognition of Deferred Tax Liabilities:

The general principle in IAS 12 is that deferred tax liabilities should be

recognized for all taxable temporary differences. There are three exceptions to the

requirement to recognize a deferred tax liability, as follows:

liabilities arising from initial recognition of goodwill for which

amortization is not deductible for tax purposes;

The initial recognition of an asset or liability in a transaction which is not

a business transaction and at the time of the transaction, affects neither

accounting profit nor taxable profit.

5.3- Recognition of Current tax liabilities and Current Tax Assets:

Current tax for the current and prior periods should be recognized as a liability to

the extent that it has not yet been settled, and as an asset to the extent that the amounts

already paid exceed the amount due. Current tax assets and liabilities should be measured

at the amount expected to be paid to (recovered from) taxation authorities, using the

rates/laws that have been enacted or substantively enacted by the balance sheet date.

5.4- Recognition of Tax Expense or Income:

Current and deferred tax should be recognized as income or expense and included

in profit or loss for the period, except to the extent that the tax arises from:

A transaction or event that is recognized directly in equity; or

A business combination accounted for as an acquisition.

15 | P a g e

If the tax relates to items that are credited or charged directly to equity, the tax

should also be charged or credited directly to equity.

6.0- Disclosure Requirements:

IAS 12 requires disclosure of tax expense (tax income) relating to ordinary activities on

the face of the statement of comprehensive income.

IAS 12 requires that if an entity presents a statement of income, in addition to a statement

of comprehensive income, tax expense (income) from ordinary activities should be presented in

the statement of income.

6.1- Major Disclosure:

IAS 12 requires that tax expense and income should be disclosed separately. The

major components of tax expense and income are:

Current tax expense (income)

Any adjustments of taxes of prior periods

Amount of deferred tax expense (income) relating to the origination and

reversal of temporary differences

Amount of deferred tax expense (income) relating to changes in tax rates

or the imposition of new taxes

Amount of the benefit arising from a previously unrecognized tax loss, tax

credit or temporary difference of a prior period

Write down, or reversal of a previous write down, of a deferred tax asset

Amount of tax expense (income) relating to changes in accounting policies

and corrections of errors

6.2- Other Disclosure:

Aggregate current and deferred tax relating to items reported directly in

equity

Tax relating to each component of other comprehensive income

Explanation of the relationship between tax expense (income) and the tax

that would be expected by applying the current tax rate to accounting

16 | P a g e

profit or loss (this can be presented as a reconciliation of amounts of tax or

a reconciliation of the rate of tax)

Changes in tax rates

Amounts and other details of deductible temporary differences, unused tax

losses, and unused tax credits

Temporary differences associated with investments in subsidiaries,

associates, branches, and joint ventures

For each type of temporary difference and unused tax loss and credit, the

amount of deferred tax assets or liabilities recognized in the statement of

financial position and the amount of deferred tax income or expense

recognized in the income statement

Tax relating to discontinued operations

Details of deferred tax assets

7.0- Presentation Requirements:

Current tax assets and current tax liabilities should be offset on the balance sheet only if

the entity has the legal right and the intention to settle on a net basis.

Deferred tax assets and deferred tax liabilities should be offset on the balance sheet only

if the entity has the legal right to settle on a net basis and they are levied by the same taxing

authority on the same entity or different entities that intend to realize the asset and settle the

liability at the same time.

17 | P a g e

8.0- Review of Financial Statements (Nishat Mills Limited):

Financial Statements of “Nishat Mills Limited” have been selected for review purpose

that how they have followed the IAS 12 and at what places IAS 12 has been used and mentioned.

Encircled are the points where IAS 12 is used:

Balance sheet as on June 30 2011

2011 2010

Note (Rupees in Thousands)

Equity and Liabilities

Share Capital and RESERVES

Authorized share capital

1,100,000,000 (2010: 1,100,000,000) ordinaryShares of Rupees 10 each 11,000,000 11,000,000

Issued, subscribed and paid-up share capital 3 3,515,999 3,515,999Reserves 4 31,877,960 27,860,314

Total equity 35,393,959 31,376,313

LiabilitiesNon-Current Liabilities

Long term financing 5 2, 6592,328 2,980,694Liabilities against assets subject to finance lease 6 202,628 -Deferred income tax 7 510,640 1,256,892

3,372,596 4,237,586

Current Liabilities

Trade and other payables 8 2,577,020 2,139,321Accrued mark-up 9 358,454 232,247Short term borrowings 10 10,471,685 6,649,447Current portion of non-current liabilities 11 1,283,865 1,128,632Provision for taxation 631,325 418,768

15,322,349 10,568,415

Total Liabilities 18,694,945 14,806,001Contingencies and Commitments 12Total Equity and Liabilities 54,088,904 46,182,314

18 | P a g e

2011 2010Note (Rupees in Thousands)

AssetsNon-Current assets

Property, plant and equipment 13 13,303,514 11,841,667Investment properties 14 126,834 132,550Long term investments 15 21,337,889 21,959,543Long term loans 16 849,206 498,803Long term deposits and prepayments 17 29,502 16,823

35,646,945 34,449,386

Current assets

Stores, spare parts and loose tools 18 955,136 688,832Stock in trade 19 9,846,680 6,060,441Trade debts 20 2,481,259 2,041,256Loans and advances 21 756,351 504,046Short term deposits and prepayments 22 47,211 31,912Other receivables 23 1,406,890 724,407Accrued interest 24 34,260 16,906Short term investments 25 1,781,471 1,554,543Cash and bank balances 26 1,132,701 110,585

18,441,959 11,732,928

19 | P a g e

Profit and Loss AccountFor the end year 30 June 2011

2011 2010Note (Rupees in Thousands)

Sales 27 48,565,144 31,535,647Cost of sales 28 (40,718,697) (25,555,462)

Gross profit 7,846,447 5,980,185Distribution cost 29 (2,190,496) (1,714,598)Administrative expenses 30 (656,756) (545,166)Other operating expenses 3 (431,220) (289,080)

(3,278,472) (2,548,844)

4,567,975 3,431,341Other operating income 32 2,444,985 981,650

Profit from operations 7,012,960 4,412,991Finance cost 33 (1,601,048) (1,126,922)

Profit before taxation 5,411,912 3,286,069Provision for taxation 34 (568,000) (370,608)

Profit after taxation 4,843,912 2,915,461

Earnings per Share- Basic andDiluted (Rupees) 35 13.78 10.50

Statement of Comprehensive IncomeFor the year ended 30 June 2012

2011 2010(Rupees in Thousands)

Profit after Taxation 4,843,912 2,915,461

Other Comprehensive income

Surplus/ (deficit) arising on re-measurement of availableFor sale investments to fair value (584,488) 6,314,129Reclassification adjustments for gains included in profit or loss (109,030) (52,118)Deferred income tax relating to surplus on availableFor sale investments 746,252 (1,011,649)Other comprehensive income for the year - net of tax 52,734 5,250,362

Total Comprehensive income for the year 4,896,646 8,165,823

20 | P a g e

Cash Flow StatementFor the year ended 30 June 2012

2011 2010Note (Rupees in Thousands)

Cash flows from operating activitiesCash generated from operations 36 1,614,622 2,386,569Finance cost paid (1,474,841) (1,096,389)Income tax paid (561,819) (343,036)Exchange gain on forward exchange contract received 706,160 64,725Net increase in long term loans to employees (9,690) (19,570)Net increase in long term deposits and prepayments (13,909) (4,106)

Net cash generated from operating activities 260,523 988,193

Cash flows from investing activities

Capital expenditure on property, plant and equipment (2,848,115) (1,955,542)Proceeds from sale of property, plant and equipment 275,447 145,490Investments made (710,655) (4,249,397)Proceeds from sale of investment 301,282 430,000Long term loan to subsidiary company (345,335) (472,885)Interest received on loan to subsidiary company 106,200 22,331Dividends received 998,675 559,134

Net cash used in investing activities (2,222,501) (5,520,869)

Cash flows from financing activities\

Proceeds from long term financing 1,152,150 1,937,415Repayment of long term financing (1,078,628) (595,813)Repayment of assets subject to finance lease (37,027) -Proceeds from issue of right shares - 4,364,688Short term borrowings - net 3,822,238 (693,153)Dividend paid (874,639) (481,370)

Net cash from financing activities 2,984,094 4,531,767

Net increase / (decrease) in cash and cash equivalents 1,022,116 (909)Cash and cash equivalents at the beginning of the year 110,585 111,494

Cash and cash equivalents at the end of the year 1,132,701 110,585

21 | P a g e

22 | P a g e

Significant Accounting Policies (Related to IAS 12)

Taxation (Page no. 47 of Annual Report 2011)

In making the estimates for income tax currently payable by the Company, the

management takes into account the current income tax law and the decisions of appellate

authorities on certain issues in the past.

2.3 Taxation (Page no. 50 of Annual Report 2011)

Current

Provision for current tax is based on the taxable income for the year determined in

accordance with the prevailing law for taxation of income. The charge for current tax is

calculated using prevailing tax rates or tax rates expected to apply to the profit for the

year if enacted. The charge for current tax also includes adjustments, where considered

necessary, to provision for tax made in previous years arising from assessments framed

during the year for such years.

Deferred

Deferred tax is accounted for using the balance sheet liability method in respect of

all temporary differences arising from differences between the carrying amount of assets

and liabilities in the financial statements and the corresponding tax bases used in the

computation of the taxable profit. Deferred tax liabilities are generally recognized for all

taxable temporary differences and deferred tax assets to the extent that it is probable that

taxable profits will be available against which the deductible temporary differences,

unused tax losses and tax credits can be utilized.

Deferred tax is calculated at the rates that are expected to apply to the period

when the differences reverse based on tax rates that have been enacted or substantively

enacted by the balance sheet date. Deferred tax is charged or credited in the profit and

loss account, except to the extent that it relates to items recognized in other

comprehensive income or directly in equity. In this case the tax is also recognized in

other comprehensive income or directly in equity, respectively.

23 | P a g e

Notes to the Account (Related to IAS 12)

Note no. 7-Deferred Income Tax:

This represents deferred income tax liability on surplus on revaluation of unquoted equity

investments available for sale. Provision for deferred tax on other temporary differences was not

considered necessary as the Company is chargeable to tax under section 169 of the Income Tax

Ordinance, 2001.

Note no. 34-Provision for Taxation:

Current (Note 34.1) 568,000 400,608

Prior year adjustment - (30,000)

568,000 370,608

34.1 The Company falls under the ambit of presumptive tax regime under section 169 of

the Income Tax Ordinance, 2001. Provision for income tax is made accordingly.

34.2 Provision for deferred tax is not required as the Company is chargeable to tax under

section 169 of the Income Tax Ordinance, 2001 and no temporary differences are expected to

arise in the foreseeable future except for deferred tax liability as explained in note 7.

34.3 Reconciliation of tax expense and product of accounting profit multiplied by the

applicable tax rate is not required in view of presumptive taxation.

24 | P a g e