ABERHAM MEHRET EWNETU

STATEMENT OF PROFIT OR LOSS

FOR THE YEAR ENDED 07 JULY 2023

Notes 2022
ETB

REVENUE 3 42,253,240
COST OF SALES 4 33,077,268

GROSS PROFIT 9,175,972

Interest income 141,809

EXPENSES
Administration 5 2,182,479
2,182,479

PROFIT BEFORE TAX 7,135,302

Income tax expense 6 (2,429,722)

PROFIT FOR THE YEAR 4,705,579

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ABERHAM MEHRET EWNETU
STATEMENT OF FINANCIAL POSITION
AT 07 JULY 2023
Notes 2022
ETB
ASSETS
NON-CURRENT ASSETS

Property, plant and equipment 8 2,102,532

2,102,532
CURRENT ASSETS

Trade and other receivables 11 3,137,706

Inventory 9 7,946,103
Cash and bank balances 10 1,962,598
13,046,407

TOTAL ASSETS 15,148,939

EQUITY AND LIABILITIES

CAPITAL AND RESERVES
Registered capital 1 3,000,000
Proprietors account
Retained earning 8,115,391
11,115,390

CURRENT LIABILITIES
Trade and other payables 13 1,603,825
Profit tax payable 14 2,429,722
4,033,547

TOTAL EQUITY AND LIABILITIES 15,148,939

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ABERHAM MEHRET EWNETU
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 7 JULY 2023

Registered Total
Capital Retained earning
ETB ETB ETB
At 8 July 2022 1,000,000 767,106 1,767,106

Prior Period adjustments -

Capital increment 2,000,000
Owner withdrawal -
Profit for the year - - -

At 7 July 2023 3,000,000 767,106 1,767,106

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ABERHAM MEHRET EWNETU
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 7 JULY 2023
2023
ETB
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year before taxation 7,135,302
Adjustments for:
Prior Period adjustments -
Depreciation of property, plant and equipment 348,123
Investment -
7,483,425
Movements in working capital
(Increase)/decrease in inventory 7,946,103
(Increase)/decrease in trade and other receivables 3,137,706
Increase in trade and other payables (1,603,825)
Increase in profit tax payables (2,429,722)
(Decrease)/increase in other taxes payable
Cash generated from operations 14,533,686
Profit tax paid -

Net cash generated from operating activities 14,533,686

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment 0
Disposal of property, plant and equipment -
Net cash used in investing activities -
CASH FLOWS FROM FINANCING ACTIVITIES
Capital increment 0
proprietetors account -
Bank loan repayment -
Custom valuation Err:509
Net cash used in financing activities Err:509
Net increase in cash and cash equivalents Err:509
Cash and cash equivalents at 8 July 1,962,598
Cash and cash equivalents at 07 July Err:509
Represented by:
Bank and cash balances 0
0

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ABERHAM MEHRET EWNETU
NOTES TO THE FINANCIAL STATEMENTS
1 ESTABLISHMENT

Kasahun Kefyalew Alaba is a Proprietors’ engaged in the following activities;

General import and export;

Building of complete constructions or parts thereof, civil engineering
Supporting and auxiliary transport activities of transport agencies
Other land transport

The business is located in Addis Ababa

2 ACCOUNTING POLICIES

Statement of compliance
The financial statements have been prepared in accordance with the company reporting framework.

For the purpose of reporting under the Commercial code of Ethiopia, the balance sheet in these
financial statements is represented by the statement of financial position and the profit and loss
account is presented in the statement of profit or loss.

Basis of preparation

The financial statements are prepared under the historical cost basis of accounting . The preparation
of financial statements in conformity with the company reporting framework requires the use of
certain critical accounting estimates. It also requires management to exercise judgment in the process
of applying the company’s accounting policies. Areas involving a higher degree of judgment or
complexity, or areas where assumptions and estimations are significant to the financial statements
are disclosed in note 3.

Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods or
providing service on the ordinary course of the company’s activities. Revenue is shown net of
value-added tax, returns, rebates and discounts.

The company recognizes revenue when the amount of revenue can be reliably measured, it is
probable that future economic benefits will flow to the company and when specific criteria have
been met for each of the company’s activities as described below.

Revenue is recognized as follows:

i. Sale of goods
Sales of goods are recognized in the period in which the company has delivered products and
rendering service to the customer, delivery does not occur until the products have been accepted by
the customer.
ii. Other income
All other income is recognized on the accrual basis on the services provided

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ABERHAM MEHRET EWNETU
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. ACCOUNTING POLICIES (Continued)

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated
impairment losses. Depreciation is charged in accordance with Income Tax Proclamation 286/2002,
on the straight-line basis for buildings and on the written down value for other assets, at the
following rates per annum.
%
Buildings and greenhouses 5
Computer and accessories 25
Other plant and equipment 20

Leasehold land
Leasehold land is presented separately on the face of the balance sheet and is stated at cost less
accumulated amortization. The costs are amortized over the period of the leases.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, cash at bank in current and deposit accounts and
short term, highly liquid investments with maturity periods of three months or less. Cash and cash
equivalents are carried at their nominal values.

Trade and other receivables

Receivables arise in the normal course of business and do not bear interest. At the end of each
reporting period, the carrying amounts of trade and other receivables are reviewed to determine
whether there is any objective evidence that the amounts are not recoverable. If so, an impairment
loss is recognized immediately through profit or loss.

Government Securities

These are fixed interest bonds issued by the Government of the Federal Democratic Republic of
Ethiopia. The bonds are held to maturity and carried at amortized cost.

Trade and other payables

Trade payables are obligations on the basis of normal credit terms and do not bear interest. Trade
payables are carried at their nominal values

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ABERHAM MEHRET EWNETU
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. ACCOUNTING POLICIES (Continued)
Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortized cost using the effective interest method; any differences between
proceeds (net of transaction costs) and the redemption value is recognized in the profit or loss over
the period of the borrowings. Borrowing are classified as current liabilities unless the Company has
an unconditional right to defer settlement of the liability for at least 12 months after the end of the
reporting period.

Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the
average cost formula.

Legal reserve

This is a statutory reserve set by the commercial code of Ethiopia, 1960 where no less than one-
twentieth of the annual net profit of the company shall be transferred to the legal reserve fund until
such fund amounts to one-tenth of the capital of the company. It is utilized up on the decision of the
supervising authority, to cover losses incurred by the company and to expand the activities of the
Company.

Taxation

Current taxation is provided on the basis of the results for the year as shown in the financial
statements adjusted in accordance with the Ethiopian tax legislation. The tax liability is calculated
on the taxable profit at currently enacted tax rates.

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ABERHAM MEHRET EWNETU
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. ACCOUNTING POLICIES (Continued)

Employee benefits

Retirement benefit obligations

The company and all its employees contribute to the National Social Security Fund, which is a
statutory defined contribution scheme.

Provisions

Provisions are recognized when the company has a present legal or constructive obligation as a result
of past events, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation, and a reliable estimate of the amount can be made.

Comparatives

Where necessary, comparative figures have been adjusted to conform to changes in presentation in
the current year.

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ABERHAM MEHRET EWNETU
NOTES TO THE FINANCIAL STATEMENTS (continued)
2022
ETB
3 REVENUE

Sales 42,253,240
42,253,240

4 COST OF SALES

Beginning inventory -
Add; Purchase during the year 41,023,371
41,023,371
Less; Ending inventory (7,946,103)
33,077,268

5 ADMINISTRATION

Wage 871,044
Transportation 178,094
Depreciation 348,123
Rent 178,599
Stationary and printing 63,217
Cleaning and sanitation 38,974
Professional fee 49,950
Bank charge 3,455
License and registration 9,809
Loading unloading 298,043
Utility 17,517
Miscellaneous 125,654
2,182,479

6 TAX EXPENSE COMPUTATION

Profit before taxation 7,135,302

Add: non- allowable expenses

-
Less: Tax exempted income
Interest income 141,809
6,993,493

Tax expense for the year 2,429,722

Advance profit tax -

At 7 July - Payable/(recoverable) 2,429,722

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ABERHAM MEHRET EWNETU
NOTES TO THE FINANCIAL STATEMENTS (continued)

8 PROPERTY, PLANT AND EQUIPMENT

At 7 July
At 8 July 2021 Additions 2022
COST ETB ETB ETB

Office furniture and equipment 769,054 - 769,054

Other asset 1,998,958 1,998,958
Computer and related 97,845 - 97,845
2,865,857 - 2,865,857
DEPRECIATION

Office furniture and equipment 115,358 130,739 246,097

Other asset 299,844 200,423 500,267
Computer and related - 16,961 16,961
415,202 348,123 763,325

NET BOOK VALUE 2,450,655 2,102,532

9 INVENTORY

Stock 7,946,103
7,946,103

10 CASH AND BANK BALANCES

Cash at bank 1,962,598

1,962,598

11 TRADE AND OTHER RECEIVABLES

Trade 1,838,753
Advance 825,965
Deposit and prepayment 396,549
VAT 76,439
3,137,706
13 TRADE AND OTHER PAYABLES

Trade 1,479,946
Sundry 123,879
1,603,825

14 CAPITAL COMMITMENTS

The Proprietor had no significant capital commitments outstanding at 7 July 2022.

15 INCORPORATION
The Proprietor is incorporated in Ethiopia under the Ethiopian Commercial Code and is domiciled in
Ethiopia.
16 EVENTS AFTER THE REPORTING PERIOD

There are no significant events after the reporting period which has been reported in these financial
statements.

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