D4 - Trade Debts 2018

Completed by Reviewed by Reviewed by Schedule
BDO Ebrahim & Co. Qasim Blti (Partner)

Chartered Accountants
CLIENT : Dewan Drilling Limited

PERIOD : 31-Dec-16 Date : Date : Date:
F. S. A. : TRADE DEBTS 21-Feb-17
INITIAL CONCLUSION
PROCEDURE
PROCEDURE
SELECTED
NUMBER
REVIEW S= Satisfactory
BY STAFF
ASSERTION AUDIT PROCEDURE N=Non-satisfactory SCHEDULE COMMENTS
INITIAL
S or FWQ
Dt:
N REFERENCE
C E A V
A SUBSTANTIVE ANALYTICAL PROCEDURE
P P P P 1. Compare the aged listing of trade debts with those

of prior periods and note unchanged balances and S QB
investigate any other significant or the absence of
expected changes.
2. Explain movements and investigate any

unexpected or unusual relationships between
current year, prior year and budgeted amounts for: S QB
P P P a. trade debts;
P P P b. trade debts by type of sale ;
P P P c. allowance for doubtful debts as percentage of
trade debts and sales;
P P P d. bad debt expense.
P P P P 3. Compare the current periods receivable as a

percentage of net sales with prior period percentage
and consider the reasonableness of the current S QB
periods percentage in relation to current economic
conditions, credit policies etc.
P P P P 4. Compare the current periods number of days sales

in trade debts with prior amounts, and consider the
reasonableness of the current periods amount in
relation to current economics condition, credit
policies, industry average etc.
P P P P 5. Compare collections subsequent to year-end with S QB

year-end trade debts.
Ebrahim
Ebrahim&&Co.
Co.
6. Chartered Explain
CharteredAccountantsmovements and investigate any
Accountants
unexpected or unusual relationships between
current year, prior year and budgeted amounts for:
S QB
P P P a. receipts from customers;
P P P b. receipts from customers in relation to the level
and trend in sales.
7. Compare trade debts for each month after the year-

end with year-end for:
P P P a. number of days sales;
P P P b. changes in major customers, major customers S QB
balances in overdue accounts, proportion of
credit balances.
P P P 8. Compare the current period's provision for un-

issued credit notes at year-end as a percentage of
total credits issued and trade debts with prior
periods' percentages.
765871615.xlsx-Audit program Page 1 of 13 Trade debts

B OTHER SUBSTANTIVE PROCEDURE
P P P P 1. Trace opening balance of debts from last year lead S QB

schedules.
2. Obtain trade debts listing / trial balance and

distinguish between secured or unsecured, and
considered good or considered doubtful;
P a. Check arithmetic accuracy. S QB
P P b. trace amount to source;
P P c. Investigate large or unusual items.
P d. Investigate credit balances.
P e. Test translation of foreign currencies;
P P f. Agree debts listing with control account and
obtain reconciliation for differences, if any.
P P g. Check overall subsequent clearance.
3. Select sample of trade debts from debts listing/ trial

balance, and
P P P a. Prepare break-up of closing balance.;
P P Circularise direct confirmation;
P b. Check subsequent clearance of closing balance;
S QB
P c. Check adjustments with relevant support;
P P d. Agree closing balance with direct confirmation;
P e. test translation of foreign currencies;
P f. Investigate large or unusual transactions.
4. For debts circulized:

P P a. Obtain reconciliation for differences between
confirmation and debts account. S QB
P P b. Summarized position of reply from debts and
analyze the result of reply.
P P P 5. Review collection made subsequent to balance

sheet date and agree to supporting documentation S QB
to check that any receivable which existed at year
end has been included in financial the statements.
6. Perform cut-off test to ensure sales are recorded in

correct period of the following:
P P a. Goods dispatch advice
P P b. Sales invoices S QB
P P c. Outward gate passes
P P d. Returned inward note
P P e. Debit/credit notes
7. Obtain detail of provision for doubtful debts; and

S QB
P a. Check arithmetic accuracy.
P b. Agree total to general ledger.

P c. Discuss with management basis of arriving at
provision.
d. for sample check reasonableness of provision by
reference to:
P i. aged listing;
P ii. payment history;
P iii. post balance sheet receipts;
P iv. customer correspondence.
8. For trade debts balance remained unchanged from

past three year and / or past due payment date,
check:
P a. if included in provision for doubtful debts;
b. whether provision required by reference to:
P i. payment history;
P ii. post balance sheet receipts;
P iii. customer correspondence;
P iv. credit rating.
9. For a sample of debts, agree balance to:

P P a. cash received after year-end and agree cash
received with cash receipts records and
remittance advices; and
P P b. for items not yet paid to evidence of goods being
supplied or services rendered.
10. For sample of receipts from listing of receipts;

P a. agree to deposit slip and bank statement; S QB
P b. agree to customer remittance advice;
P c. agree posting to customer account.
GENERAL ASSURANCE BOX
DESCRIPTION C E A V
GR GRADE
GC GRADE
RISK PROFILE
Assurance from:
TOC's
RFSA
SAP
OSP
Assurance sufficient:

Pre. By MH Schedule
Date 22-Feb-19
Rew. By
Date
Client name Dewan Drilling Limited

Period end 31-Dec-18
Account head Trade debts
Subject Lead sheet
Conlcusion
Trade debts are free from material mistatement.
Sr# Description Ref. Current period Ref. Prior period Variance Annot
Rs. Rs. Rs. %age
Trade debts 112,650,057 121,317,122 (8,667,065) -7% {a}
112,650,057 121,317,122 (8,667,065)

Pre. By MH Schedule
Date 22-Feb-19
Rew. By
Date

Subject Sublead sheet
Purpose
To test that trade debt have been completely & accurately recorded and disclosed in FS.
Procedure
Trace the opening balance from prior period accounts.
Compare balance and investigate any unexpected or unusual relationships between current year and prior year. with previous year and investigate reasons for
significant variation in trade debts, allowance for doubtful debts as percentage of trade debts and sales and bad debt expense.
Conclusion
Trade debts have been completely & accurately recorded and disclosed in the financial statements.
Sr# Description Ref. Current period Ref. Prior period Variance Annot
Rs. Rs. Rs. %age
Unsecured - Considered good

Holding company
Dewan Petroleum (Private) Limited (DPL) 92,318,330 93,129,082 (810,752) -1%
Related party -
Safed Koh Joint Operations (Dewan Petroleum (Pvt) Ltd Operator - 506,949 (506,949) -100%
Others - -
Tianjin China Petroleum Drilling Company Limited - 16,367,139 (16,367,139) -100%
Sirius Gemstone - 1,644,702 (1,644,702) -100%
Schulamberger Pakistan - 9,669,250 (9,669,250) -100%
Hilong Oil Services & Engineering Pakistan (Pvt) Ltd. 303,447 - 303,447 0%
Hilong Oil Services Limited (Pakistan Branch) 3,308,442 - 3,308,442 0%
Pakistan Petroelum Limited 16,691,573 - 16,691,573 0%
Lyallpur Oil Tool (Private) Limited 28,265 - 28,265 0%
112,650,057 121,317,122 (8,667,065) -7%
Considered doubtful - - -
- - - 0%
Less: Provision for doubtful receivables - - -
112,650,057 121,317,122
Pre. By MH Schedule
Date 22-Feb-19
Rew. By
Date

Subject Movement
Purpose
To test that Trade debts have been completely & accurately recorded in FS & reclassify the negitive balances as payables (if any)
Procedure
Obtain partywise list of additions & deletions during the year.
Trace and compare additions and deletions from the general ledger.
Explain movements and investigate any unexpected or unusual relationships between current year, prior year and budgeted amounts for receipts from customers & receipts from customers in
relation to the level and trend in sales.
Recalculate the closing balance and ensure it matches with the balance in FS and distinguish between secured or unsecured, and considered good or considered doubtful;
Check that trade debts are secured / unsecured and obtain supporting documents.
Investigate the unrecovered amount from correspondence and other records to check adjustment if any.
Conclusion
Other receivables have been completely & accurately recorded and disclosed in the financial statements.
Trade Debts - Unsecured
Sr# Description Nature Ref. Opening Ref. Additions Ref. Deletions Ref. Closing Annot
Rs. Rs. Rs. Rs.
Holding Company
1 Dewan Petroleum (Private) Limited (DPL) Receivable 96,123,616 - 96,123,616

Payable (2,994,534) (880,118) 69,366 (3,805,286)
93,129,082 (880,118) 69,366 92,318,330
Related parties
1 Safed Koh Joint Operations - Dewan Petroleum Receivable 506,949 1,798,700 2,305,649 -
506,949 1,798,700 2,305,649 -
Others
1 Tianjin China Petroleum Drilling Company Limited Receivable 16,367,139 4,242,724 20,609,863 -
2 Sirius Gemstone Receivable 1,644,702 - 1,644,702 -
3 Schulamberger Pakistan Receivable 9,669,250 3,598,329 13,267,579 -
4 Hilong Oil Services & Engineering Pakistan (Pvt) Ltd. Receivable - 6,267,672 5,964,225 303,447
5 Hilong Oil Services Limited (Pakistan Branch) Receivable - 5,880,508 2,572,066 3,308,442
6 Pakistan Petroelum Limited Receivable - 16,691,573 - 16,691,573
7 Lyallpur Oil Tool (Private) Limited Receivable - 28,265 - 28,265
-
27,681,091 36,709,071 44,058,435 20,331,727
Total 121,317,122 38,507,771 46,364,084 112,650,057
Annotations
{a} Amount outstanding relates to the services rendered to the holding company in previous years .
{b} Amount outstanding relates to the expenses apportioned by the holding company,as Dewan Drilling is in the premises of holding company.
{c}
Pre. By MH Schedule
Date 22-Feb-19
Rew. By
Date

Account head Payable to DPL
Subject Additions
Month Ref Amount Debit note

Rs Tracing
Jan 41,085 P
Feb 40,826 P
Mar 39,418 P
Apr 42,033 P
May 42,429 P
Jun 395,285 P
Jul 44,940 P
Aug 46,432 P
Sep 45,161 P
Oct 44,704 P
Nov 45,705 P
Dec 52,100 P
880,118
Work done
1 Traced the balances from the debit notes issued by the holding company at the end of each
month.
2 Matched the balances with expenses.
Pre. By MH Schedule
Date 22-Feb-19
Rew. By
Date

Subject Deletions
Purpose
Ensure that trade debts are completely recorded.
Procedure
Obtain list of trade debts' deletion during the year and check that the deletions meet the following criteria:
- the rights to the cash flows from the assets have been expired. (IFRS 9.3.2.3 (a))
- the entity transferred substantially all risks and rewards. (IFRS 9.3.2.6 (a & b))
- the entity does not retained control of the asset. (IFRS 9.3.2.6 (c))
Trace cash received from the bank statement.
Conclusion
Trade debts are free from material misstatement.
Sr# Voucher Party name Description Payment Amount Review Authorisation Supporting Annot
Date No. Through Rs.

Dewan Being an amount received against recievables P P O
1 31-Dec-18 JVA-18 -0542 Ch# 00135841 2,305,649
Petrolium from Dewan Petrolium parent company of DDL.
Tianjin China Being an amount received against recievables Ch# 24 P P P
2 27-Jan-18 JVA-18 -0020 8,418,987
Pet Ltd from Tiajin China Pvt. Ltd. 06667073
3 27-Jan-18 JVA-18 -0020 941,861
4 27-Jan-18 JVA-18 -0020 216,711
5 7-Feb-18 JVA-18 -0078 4,301,218
6 7-Feb-18 JVA-18 -0078 112,847
7 7-Feb-18 JVA-18 -0078 490,452
Tianjin China Being an amount received against recievables P P P
8 27-Mar-18 JVA-18 -0123 CH# 11293465 2,190,326
Pet Ltd from Tiajin China Pvt. Ltd.
9 27-Mar-18 JVA-18 -0123 CH# 11293465 242,697
10 27-Mar-18 JVA-18 -0123 CH# 11293465 55,842
11 12-Jul-18 JVA-18 -0297 CH# 14039888 445,469
12 12-Jul-18 JVA-18 -0297 CH# 14039888 50,795
13 12-Jul-18 JVA-18 -0297 CH# 14039888 11,687
14 17-Aug-18 JVA-18 -0339 CH# 10008106 460,318
15 17-Aug-18 JVA-18 -0339 CH# 10008106 52,488
16 17-Aug-18 JVA-18 -0339 CH# 10008106 12,077
17 27-Sep-18 JVA-18 -0379 CH# 10008141 385,774
18 27-Sep-18 JVA-18 -0379 CH# 10008141 9,009
19 27-Sep-18 JVA-18 -0379 CH# 10008141 39,153
Sirius Being an amount received against recievables P P P
20 16-Jan-18 JVA-18 -0019 CH# 103719952 1,489,152
Gemstones from Sirius Gemstones.
Sirius Being an amount received against recievables CH# P P P
21 16-Jan-18 JVA-18 -0019 155,550
Gemstones from Sirius Gemstones. 103719952
Schulamberger Being an amount received against recievables P P P
22 17-Aug-18 JVA-18 -0338 CH# 5537297 11,900,901
Pakistan from Schulamberger Pakistan.
23 17-Aug-18 JVA-18 -0338 CH# 5537297 138,057
24 17-Aug-18 JVA-18 -0338 CH# 5537297 305,272
25 17-Aug-18 JVA-18 -0338 CH# 5537297 923,349
Amount vouched 93% 35,655,641

Amount not vouched 7% 2,852,130
Total 100% 38,507,771
Pre. By MH Schedule
Date 22-Feb-19
Rew. By
Date

Subject Sales to debtor reconciliation
Purpose
Ensure that sales and debtors existed and have been completely recorded.
Procedure
Compare the sales revenue during the year with additions to trade debtors. Include effect of cash
sales, if any.
Normally, the two should be equal. Reconcile any differences arising through analytical
procedures and inquiry from management.
Conclusion
Sales and trade debts are not materially misstated.
Sr# Description Ref. Amount Annot

Rs.
1 Sales - net 31,471,916
2 Additions to debtors 38,507,771
Difference (7,035,855)
in percentage -18%
Reconciliation
1 Sales tax charge during the year
2 Reimbursement of expenes 1,830,157
3 WHT-Sindh 5,205,698
4 Cash sales
7,035,855
Net difference -
in percentage 0%
Pre. By MH Schedule
Date 22-Feb-19
Rew. By
Date

Subject Aging analysis
Purpose
Ensure that trade debts existed and the company had the rights and obligations.
Procedure
Obtain partywise, aged list of trade debts and assess reasonableness of the aging provided.
On a sample basis, vouch the aging of the balances to ensure that these are correct. Identify long outstanding balances and inquire about the nature of these balances along with obtaining corroborative evidence.
Obtain detail of provision for doubtful debts; and check arithmetic accuracy and agree total to general ledger.
Discuss with management basis of arriving at provision.
for sample check reasonableness of provision by reference to:
aged listing;
payment history;
post balance sheet receipts;
customer correspondence.
For trade debts balance remained unchanged from past three year and / or past due payment date, check:
if included in provision for doubtful debts;
whether provision required by reference to:
payment history;
post balance sheet receipts;
customer correspondence;
credit rating.
Conclusion
Sr# Party name Ref. Closing Current Over 1 year Over 2 years Over 3 years Total Considered Annot
Rs. Rs. Rs. Rs. Rs. Rs. Good Bad Doubtful
1 Dewan Petroleum (Private) Limited (DPL) 92,318,330 - - - 92,318,330 92,318,330 - 92,318,330 {a}
2 Hilong Oil Services & Engineering Pakistan (Pvt) Ltd. 303,447 303,447 - - - 303,447
3 Hilong Oil Services Limited (Pakistan Branch) 3,308,442 3,308,442 - - - 3,308,442
4 Pakistan Petroelum Limited 16,691,573 16,691,573 - - - 16,691,573
5 Lyallpur Oil Tool (Private) Limited 28,265 28,265 - - - 28,265
Total 112,650,057 20,331,727 - - 92,318,330 112,650,057 - - 92,318,330
Rate of provision 0% 25% 50% 100%

Closing provision - - - 92,318,330 92,318,330
Less opening provision -
Provision for bad debts for the year 92,318,330

Provision already charged to P/L -
Difference (to be charged to P/L) 92,318,330
Annotations
{a}
{b}
{c}
Pre. By MH Schedule
Date 22-Feb-19
Rew. By
Date

Subject Subsequent
Purpose
Ensure that trade debts exists and the client has rights and obligations to these.
Procedure
Obtain subsequent ledgers for the client and check that closing balances as per the financial statement existed at the year end by tracing receipts from the bank and ensuring that amount has
been received from the correct party.
Review collection made subsequent to balance sheet date and agree to supporting documentation to check that any receivable which existed at year end has been included in financial the
statements.
For a sample of debts, agree balance to:
cash received after year-end and agree cash received with cash receipts records and remittance advices; and
for items not yet paid to evidence of goods being supplied or services rendered.
Conclusion
Sr# Ref. Party Name Closing Voucher Description Receipt Amount Annot
Rs. Date No. Through Rs.
1 Dewan Petroleum (Private) Limited (DPL) 92,318,330
2 Hilong Oil Services & Engineering Pakistan (Pvt) Ltd. 303,447
3 Hilong Oil Services Limited (Pakistan Branch) 3,308,442
4 Pakistan Petroelum Limited 16,691,573
5 Lyallpur Oil Tool (Private) Limited 28,265
112,650,057 -
Pre. By MH Schedule
Date 22-Feb-19
Rew. By
Date

Subject Confirmation
Purpose
Ensure that trade debts exists, are valued correctly and the client has rights and obligations to these.
Procedure
Circularise confirmations to trade debts on a sample basis.
Attach a signed copy of the letter send until confirmations have not been received.
Match the amount mentioned in the confirmation with the value in GL.
Consider the following factors when selecting parties to circulise confirmations:

- long outstanding balances
- nil balances
- significant balances
- unusual balances
Conclusion
Sr# Party name Sent on Ref. Ledger Ref. Confirmation Variance Annot
Date Rs. Rs. Rs.
1 Dewan Petroleum (Private) Limited (DPL) 1-Mar-19 92,318,330 - 92,318,330
2 Pakistan Petroelum Limited 1-Mar-19 16,691,573 16,691,573
3 Hilong Oil Services Limited (Pakistan Branch) 1-Mar-19 3,308,442 3,308,442
4 Hilong Oil Services & Engineering Pakistan (Pvt) Ltd. 1-Mar-19 303,447 - 303,447
5 Lyallpur Oil Tool (Private) Limited 1-Mar-19 28,265 - 28,265
112,650,057 112,650,057

D4 - Trade Debts 2018

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D4 - Trade Debts 2018

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Completed by Reviewed by Reviewed by Schedule

BDO Ebrahim & Co. Qasim Blti (Partner)

CLIENT : Dewan Drilling Limited

P P P P 1. Compare the aged listing of trade debts with those

2. Explain movements and investigate any

P P P P 3. Compare the current periods receivable as a

P P P P 4. Compare the current periods number of days sales

P P P P 5. Compare collections subsequent to year-end with S QB

7. Compare trade debts for each month after the year-

P P P 8. Compare the current period's provision for un-

765871615.xlsx-Audit program Page 1 of 13 Trade debts

P P P P 1. Trace opening balance of debts from last year lead S QB

2. Obtain trade debts listing / trial balance and

3. Select sample of trade debts from debts listing/ trial

4. For debts circulized:

P P P 5. Review collection made subsequent to balance

6. Perform cut-off test to ensure sales are recorded in

7. Obtain detail of provision for doubtful debts; and

765871615.xlsx-Audit program Page 2 of 13 Trade debts

8. For trade debts balance remained unchanged from

9. For a sample of debts, agree balance to:

10. For sample of receipts from listing of receipts;

GENERAL ASSURANCE BOX

765871615.xlsx-Audit program Page 3 of 13 Trade debts

Client name Dewan Drilling Limited

Rs. Rs. Rs. %age

Trade debts 112,650,057 121,317,122 (8,667,065) -7% {a}

112,650,057 121,317,122 (8,667,065)

Client name Dewan Drilling Limited

Rs. Rs. Rs. %age

Unsecured - Considered good

112,650,057 121,317,122 (8,667,065) -7%

Client name Dewan Drilling Limited

Trade Debts - Unsecured

1 Dewan Petroleum (Private) Limited (DPL) Receivable 96,123,616 - 96,123,616

93,129,082 (880,118) 69,366 92,318,330

506,949 1,798,700 2,305,649 -

Total 121,317,122 38,507,771 46,364,084 112,650,057

Client name Dewan Drilling Limited

Month Ref Amount Debit note

Client name Dewan Drilling Limited

Date No. Through Rs.

Amount vouched 93% 35,655,641

Client name Dewan Drilling Limited

Sr# Description Ref. Amount Annot

Client name Dewan Drilling Limited

Total 112,650,057 20,331,727 - - 92,318,330 112,650,057 - - 92,318,330

Rate of provision 0% 25% 50% 100%

Less opening provision -

Provision for bad debts for the year 92,318,330

Client name Dewan Drilling Limited

Client name Dewan Drilling Limited

Consider the following factors when selecting parties to circulise confirmations:

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