Hanad General Trading Financial Statements 2023

HANAD GENERAL TRADING AND CONSTRUCTION COMPANY
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2023.

INDEPENDENT ACCOUNTANT’S REPORT
To the Board of Directors Hanad General Trading and Construction Company.
Hanadgeneralco@gmail.com
+252615598074
Market Road, Hantiwadag Section
Johwar, Somalia.
We have reviewed the accompanying statements of financial position of Hanad General Trading and
Construction Company Limited as of December 31st 2023, and the related statements of activities,
functional expenses, and cash flows for the years then ended, in accordance with Statements on Standards
for Accounting and Review Services issued by the Institute of Certified Public Accountants. All
information included in these financial statements is the representation of the management of Hanad
General Trading and Construction Company.
A review consists principally of inquiries of organization personnel and analytical procedures applied to
financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should be made to the
accompanying financial statements in order for them to be in conformity with generally accepted
accounting principles.
Our review was made for the purpose of expressing limited assurance that there are no material
modifications that should be made to the financial statements in order for them to be in conformity with
generally accepted accounting principles. The information included in the accompanying schedules of
unrestricted contributions is presented only for supplementary analysis purposes. Such information has
been subjected to the inquiry and analytical procedures applied in the review of the basic financial
statements, and we are not aware of any material modifications that should be made thereto.

INDEPENDENT AUDITOR'S REPORT
To the Board of Directors Hanad General Trading and Construction Company,
Market Road, Hantiwadag Section
Johwar, Somalia.
We have audited the accompanying statement of financial position of Hanad General Trading and
Construction Company, as of December 31st 2023, and the related statements of activities, functional
expenses, and cash flows for the year then ended. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial statements based on our audit.
The prior year summarized comparative information has been derived from Hanad General Trading and
Construction Company’s 2023 financial statements.
We conducted our audit in accordance with international generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to in the first paragraph present fairly, in all material
respects, the financial position of Hanad General Trading and Construction Company as of December 31 st
2023, and the results of its operations and its cash flows for the year then ended in conformity with
international generally accepted accounting principles.
Antony Kimani

DIRECTORS
Director manager; Ahmed Ali Muse
Finance Director; Mahamed Abukar
CONTACTS
Phone +252615598074/ 615647701
Email; hanadgeneralco@gmail.com
Market Road Hantiwadag Section
Johwar Somalia
BANKERS
Salam Bank
Dahabshil Bank
STATEMENTS OF FINANCIAL POSITION

ASSETS 2022 2023
Cash and cash equivalents 1600 1000
Certificate of deposit 3600 2600
Accounts receivables-trade, net 1355 1500
Accounts receivables-other 124471 75416
Inventory 6400 3234
Long term investments - 1234
Contribution receivable 4000 5437
Deposit on lease and other property 1750 2312
Property equipment 5867 4354
TOTAL CURRENT ASSETS 149043 97089
PROPERTY AND EQUIPMENT NET
LIABILITIES 2022 2023
Accounts payable, trade - 34,056
Compensation 1200 3400
Refundable advances 1000 -
Long term debt 10000 12500
TOTAL LIABILITIES 12200 49956
________________________________________________________________________________
NET ASSETS 2021 2022
Unrestricted - -
Designated for new program development 3990 5000
Undesignated 2100 4000
Temporarily restricted 2600 1400
Permanently restricted 1350 1000
TOTAL NET ASSETS 10040 11400
TOTAL LIABILITIES AND ASSETS 209039 158445
GENERAL AND ADMINSTRATIVE EXPENSES

Operating profit
OTHER INCOME(EXPENSE)
Customer finance charges 3100 2000
Miscellaneous income 7600 6000
Gain on sale of assets 1000 2000
Interest expenses 929 1230
Total other income expenses 12769 11230
NET EARNINGS 109327 59503
_____________________________________________________________________________________
SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Hanad General Trading Company, is a service company that generates most of its revenue through
projects for the public and private sectors in Regions of Federal Republic of Somalia. Because of the
nature of the construction business, the ability to obtain adequate surety credit can have an impact on the
performance of the Company. The length of the Company's contracts varies but is typically less than one
year.
Revenue and Cost Recognition
The Company has elected to prepare financial statements on the accrual method of accounting. Revenues
are recognized on the percentage-of-completion method, measured by the percentage of total costs
incurred to date to estimated total costs for each contract. This method is used because management
considers expended costs to be the best available measure of progress on these contracts.
Contract costs include all direct materials and labor costs and those indirect costs related to contract
performance, such as indirect labor, supplies, tools, repairs and depreciation costs. General and
administrative expenses are expensed as incurred. Provisions for estimated losses on uncompleted
contracts are made in the period in which such losses are determined. Changes in job performance, job
conditions, and estimated profitability may result in revisions to costs and income and are recognized in
the period in which the revisions are determined.
The asset, "Costs and estimated earnings in excess of billings on uncompleted contracts," represents
revenues recognized in excess of amounts billed. The liability, "Billings in excess of costs and estimated
earnings on uncompleted contracts," represents billings in excess of revenues recognized. Substantially all
contract retainage is expected to be collected within one year.
Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments
with a maturity of three months or less to be cash equivalents.
Accounts Receivable
Trade accounts receivable is stated net of an allowance for doubtful accounts as at December 31, 2023.
Hanad General Trading Company estimates the allowance based on its historical experience of the
relationship between actual bad debts and net credit sales and the specific review of significant account
balances that remain outstanding beyond the normal credit terms. Management charges off receivables
when they are contractually past due and it is probable that they will not be collected.
Inventory
Inventories, consisting of parts and materials, are valued at cost based on the first-in, first-out method.
Property and Equipment
Property and equipment are carried at cost and include expenditures for improvements and betterments
which substantially increase the useful lives of existing property and equipment. Maintenance, repairs and
minor renewals are expensed as incurred. When properties are retired or otherwise disposed of, the related
cost and accumulated depreciation are removed from the respective accounts and any profit or loss is
credited or charged to income.
The Company provides for depreciation of property and equipment by methods and at rates designed to
expense the cost of such equipment over their estimated useful lives. Depreciation is computed on the
straight-line method and estimated useful lives range from 5 to 10 years.
Income Taxes
Deferred income taxes are provided to reflect the tax effect of timing differences between financial and
tax reporting of the recognized gross profit on long-term contracts and the excess of accelerated cost
recovery deductions over book depreciation. For tax purposes, the Company uses the completed-contract
method of recognizing revenues on long-term contracts. Accumulated timing differences between book
and tax recognition of income and deductions are calculated and the current statutory rate is applied to
develop the deferred tax account. Current adjustments to deferred taxes are recognized in the current
period tax provision.
Advertising Costs
The Company expenses the cost of advertising as incurred. Total advertising costs expensed in 2022 and
2023 were updated, respectively.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates.
Due to uncertainties in the process of estimating the progress toward completion on uncompleted jobs, it
is at least reasonably possible that gross profit on those jobs will be revised in the near-term, and those
revisions may be material.
Warranties
The Company provides a one-year warranty covering defects specific to its portion of contracts on
construction projects. This warranty historically has not produced material costs; therefore, the Company
does not accrue future estimated expense against current operations.
NOTE B - CONCENTRATION OF CREDIT RISK
The Company maintains its cash deposits in interest bearing accounts at a local bank (Dahabshiil and
Salaam Somali Bank)
SUPLEMENTARY INFORMATION
SCHEDULES OF CONTRACT COST FOR THE YEAR ENDED 31ST DEC 2022.
CONTRACT COSTS
2021 2022
Equipment rentals 43300 50000
Insurance-bonds 32200 20000
License and permits 3000 3000
Materials 7300 8600
85800 81600
OTHER JOB COSTS
Depreciation 6574 5000
Equipment and tool maintenance 3200 1200
Indirect labor 54000 32000
Rents 13400 13400
Repairs and maintenance 3100 2000
Safety equipment 3100 2000
Telephone 789 800
Utilities 1240 1240
Uniforms 1000 1500
Vehicle expense 4300 3500
GENERAL AND ADMINISTRATIVE EXPENSES
2021 2022
Advertising 2900 1000
Bad debts 3200 5000
Bank charges 1200 1000
Depreciation 1500 1500
Dues, fees and subscriptions 2400 2600
Education and training 2000 2000
Insurance 3000 3000
Janitorial service 1700 1700
Legal and professional 1800 1800
Meals and entertainment 1780 1780
Office expense 2300 2300
Salaries – officers 14000 14000
Salaries – office 8000 8000
Salaries – other 7000 7000
Shop supplies 3200 3200
EARNINGS FROM THE CONTRACTS
Earned revenue Cost of earned revenue Gross
profit
Completed contracts $ 75416.00 60 312.00 15044.00
Contracts in progress - - -
Total $75416.00 100000
15044.00
Signed this date
Chairman _____________________________________ Date
Finance manager ________________________________ Date
Director General _________________________________ Date

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HANAD GENERAL TRADING AND CONSTRUCTION COMPANY

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2023.

HANAD GENERAL TRADING AND CONSTRUCTION COMPANY

HANAD GENERAL TRADING AND CONSTRUCTION COMPANY

STATEMENTS OF FINANCIAL POSITION

GENERAL AND ADMINSTRATIVE EXPENSES

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