IVARMER CONSTRUCTION LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021
IVARMER CONSTRUCTION LIMITED
Annual report and financial statements
For the year ended 31 December 2021

CONTENTS
PAGE

Company Information 1

Report of the Directors 2

Statement of directors responsibilities 3

Report of the independent auditors 4

Financial statements:

Profit and loss account 5

Balance sheet 6

Statement of changes in equity 7

Statement of cash flows 8

Notes 9 - 12

Supplementary information:

Schedule of operating expenditure Appendix I

IVARMER CONSTRUCTION LIMITED
company information
For the year ended 31 December 2021

Board of directors 1 MERCY CHELANGAT NGENO Director

Registered office Akshar Plaza

Kericho Kisii Road
P.O BOX 304-20406
Sotik,
Kenya.

Independent auditor EVANS WASIKE & COMPANY

Certified Public Accountants
P.O. Box 75326-00200
Nairobi,
Kenya.
Nairobi,
Kenya.

Principal bankers KCB BANK

Bomet Branch
P.O Box 550-20400
BOMET

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IVARMER CONSTRUCTION LIMITED
Report of the oversight directors members
For the year ended 31 December 2021

The directors submit their report together with the audited financial statements for the year ended 31 December 2021,
which disclose the state of affairs of the company.

Principal activity

The principal activity of the company is carrying a business of general supplies.

Reserves

The movement in the company's reserves are given in page 7.

Compliance

The company is in compliance with the statutory requirement, policies and

regulations.

Board

The directors who served during the year are set out in page 1.

Results

The results for the year are shown on page 5.

Auditor

During the year, EVANS WASIKE & COMPANY was appointed as the company's auditor and has expressed its
willingness to continue in office in accordance with the Section 159 (2) of the Kenya Companies Act Cap 486.

By order of the board

…………………………………..
MERCY CHELANGAT NGENO
Director

Date …………..…………………... 2022

2
IVARMER CONSTRUCTION LIMITED
Statement of directors' responsibilities
For the year ended 31 December 2021

It is the requirement of the board to prepare financial statements for each financial year that give a true and fair view
of the state of affairs of the company as at the end of the financial year and of its profit or loss for that year. It also
requires the members to ensure that the company maintains proper accounting records that disclose, with reasonable
accuracy, the financial position of the company. The board are also responsible for safeguarding the assets of the
company.

The board accept responsibility for the preparation and fair presentation of financial statements that are free from
material misstatements whether due to fraud or error. They also accept responsibility for:
i) Designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the
financial statements;
ii) Selecting and applying appropriate accounting policies; and
iii) Making accounting estimates and judgements that are reasonable in the circumstances.

The board are of the opinion that the financial statements give a true and fair view of the state of the financial affairs
of the company as at 31 December 2021 and of its profit/loss and cash flows for the year then ended in accordance
with the International Financial Reporting Standard for Small and Medium-sized Entities.

Nothing has come to the attention of the Board members to indicate that the company will not remain a going concern
for at least twelve months from the date of this statement.

Approved by the board on ………………………………….. 2022

……………………………………
MERCY CHELANGAT NGENO
Director

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IVARMER CONSTRUCTION LIMITED
Report of the independent auditor to the director's of IVARMER CONSTRUCTION LIMITED
For the year ended 31 December 2021

Report on the financial statements

We have audited the accompanying financial statements of IVARMER CONSTRUCTION LIMITED, set out on
pages 5 to 11 which comprise the balance sheet as at 31 December 2021, the profit and loss account, statement of
changes in equity, and statement of cash flows for the year then ended, and a summary of significant accounting
policies and other explanatory notes.

Directors' responsibility for the financial statements

The directors are responsible for the preparation and fair presentation of these financial statements in accordance
with the International Financial Reporting Standard for Small and Medium-sized Entities. This responsibility
includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error; selecting and
applying appropriate accounting policies; and making accounting estimates that are reasonable in the
circumstances.
Auditor's responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are
free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal controls relevant to the company's preparation and fair presentation of
the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
the committee, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.

Opinion

In our opinion the accompanying financial statements give a true and fair view of the state of financial affairs of the
company as at 31 December 2022 and of its financial performance and cash flows for the year then ended in
accordance with the International Financial Reporting Standard for Small and Medium-sized Entities.

EVANS WASIKE & COMPANY

Certified Public Accountants
P.O. Box 75326-00200
Nairobi,

Dated ………………………………Day of………………….2022

4
IVARMER CONSTRUCTION LIMITED
Financial statements
For the year ended 31 December 2021

SURPLUS AND DEFICIT ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2021

2021 2020
Note Shs Shs

Turnover 3 36,352,622 28,927,289

Cost of sales 4 (20,292,822) (16,057,439)

Administrative expenses 1 (4,384,850) (5,061,585)

Establishment expenses 2 (2,963,576) (2,536,069)

Operating surplus for the year 8,711,374 5,272,196

Losses Brought Forward - -

Chargeable income 8,711,374 5,272,196
Tax 871,137 1,581,659

To retained earnings 7,840,237 3,690,537

5
IVARMER CONSTRUCTION LIMITED
Financial statements
For the year ended 31 December 2021

BALANCE SHEET AT 31 DECEMBER 2021

2021 2020
Note Shs Shs
EQUITY
Share Capital 11 100,000 100,000
Revenue reserves 6 13,873,771 19,951,637
Loan 12 10,424,374 3,424,374
Owed to directors 12,600,000 7,200,000
36,998,145 30,676,011

REPRESENTED BY

Non-current assets
Property, plant and equipment 10. 10,753,870 10,228,870

Current assets
Cash at bank and in hand 7 11,118,251 11,118,251
Debtors and prepayments 8 39,212,070 28,736,440
Tax account 13 - -

50,330,321 39,854,691

Current liabilities

Creditors and accruals 9 3,782,440 558,244

Tax Account 13 2,360,064 1,965,279
6,142,504 2,523,523

Net current assets 44,187,817 37,331,168

54,941,687 47,560,038

The financial statements on pages 5 to 11 were approved for issue by the directors on …………………... 2022 and
were signed on their behalf by:

……………………………………
MERCY CHELANGAT NGENO
Director

6
IVARMER CONSTRUCTION LIMITED
Financial statements
For the year ended 31 December 2021

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2021

Share Total
Revaluation reserves Capital
Kshs Khs Khs

At 1st January 2020 4,989,083 100,000 5,089,083

Surplus for the year 5,272,196 5,272,196

At 31st December 2020 10,261,279 100,000 10,361,279

At 1st January 2021 10,261,279 100,000 10,361,279

Surplus for the year 8,711,374 - 8,711,374

At 31 December 2021 18,972,653 100,000 19,072,653

7
IVARMER CONSTRUCTION LIMITED
Financial statements
For the year ended 31 December 2021

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2021

2021 2020
Note Shs Shs
Cash flows from operating activities
Profit for the year 8,711,374 5,272,196
Adjustments for:
Depreciation of property, plant and equipment 9 1,006,153 902,289
Interest received - -
Interest expense - 930,182
Changes in operating assets and liabilities - -
(Increase) in trade and other receivables 8 (10,475,630) 3,196,134
Increase in payables 9 3,224,196 (1,994,740)
Cash generated from operations 2,466,093 8,306,061

Interest expense - (930,182)

Income tax paid 13 (476,352) (482,566)

Net cash from operating activities 1,989,741 6,893,313

Cash flows from investing activities

Purchase of assets - (1,540,000)
Net cash used in investing activities - (1,540,000)

Cash flows from financing activities

Amount owed to directors - 3,000,000
Share Capital - -
Increase/Decrease in borrowings 12 7,000,000 (2,288,268)

Net cash used in financing activities 7,000,000 711,732

Net increase in cash and cash equivalents 8,989,742 6,065,045

Cash and cash equivalents at start of year 7,058,265 993,220

Cash and cash equivalents at end of year 7 16,048,005 7,058,265

8
IVARMER CONSTRUCTION LIMITED
Financial statements
For the year ended 31 December 2021

NOTES

1. General Information

IVARMER CONSTRUCTION LIMITED is registered by the registrar of companies, and is domiciled in Kenya.
The address of its registered office and principal place of business is Nairobi County.

2. Basis of preparation and summary of significant accounting policies

These financial statements have been prepared on a going concern basis in compliance with the International
Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) issued by the International
Accounting Standards Board. The measurement basis used is the historical cost basis except where otherwise
stated in the accounting policies below. They are presented in Kenya Shillings (Shs).

Income recognition

Income earned is recognised in the financial statement when earned and represents sale of general supplies.
Through accrual method is generally adopted, expenses have been recognised and recorded when paid out to the
recipients. Balance of unutililized has been carried forward under reserves as covered by banks balances.
Receipts represent the fair value of income received.

Taxation

Current tax is provided on the basis of results for the year adjusted in accordance with the fiscal laws of kenya

Property, plant and equipment

Items of property, plant and equipment, are measured at cost less accumulated depreciation and any accumulated
impairment losses.

Depreciation is charged so as to allocate the cost of assets less their residual values over their estimated useful
life, using the reducing balance method. The following annual rates are used for the depreciation of property,
plant and equipment:
Motor vehicles 25.00%
computer,copiers & faxes 30.00%
Furniture & fittings 12.5%,
Office Equiptment 12.5%,
Buildings 5.00%,
If there is an indication that there has been a significant change in depreciation rate, useful life or residual value of
an asset, the depreciation of that asset is revised prospectively to reflect the new expectations.

On disposal, the difference between the net disposal proceeds and the carrying amount of the item sold is
recognised in profit or loss.

Financial liabilities

Financial liabilities are initially recognised at the transaction price (including transaction costs). Trade payables
are obligations on the basis of normal credit terms and do not bear interest. Interest bearing liabilities are
subsequently measured at amortised cost using the effective interest method.

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IVARMER CONSTRUCTION LIMITED
Financial statements
For the year ended 31 December 2021

NOTES (CONTINUED)

3 Income 2021 2020

Shs Shs
Turnover 36,352,622 28,927,289

Total turnover 36,352,622 28,927,289

4 Cost of Sales

Purchases 20,292,822 16,057,439

Total Purchases 20,292,822 16,057,439

5 Operating profit / (loss)

The following items have been charged in arriving at

operating profit / (loss):

Depreciation 1,006,153 902,289

Auditors' remuneration 200,000 200,000
1,206,153 1,102,289

6 Profit and loss account

Balance brought forward 6,033,534 2,342,997

Surplus for the year 8,711,374 5,272,196
Taxation (871,137) (1,581,659)
13,873,771 6,033,534

7 Cash and cash equivalents

Cash at bank and in hand 11,118,251 11,276,560

Bank overdraft - -
11,118,251 11,276,560

8 Debtors and prepayments

Trade debtors 39,212,070 28,736,440

39,212,070 28,736,440

9 Creditors and accruals

Accruals 200,000 200,000
Trade creditors 3,582,440 3,670,895

3,782,440 3,870,896

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IVARMER CONSTRUCTION LIMITED
Financial statements
For the year ended 31 December 2021

NOTES (CONTINUED)

10. Property, plant and equipment

Land& Furnitures &

Motor vehicle Total
buildings fittings Office Computer &
equipments printers
Kshs Kshs Kshs Kshs Kshs
1st January 2020
Cost or valuation 7,700,000 3,600,000 396,000 467,000 - 12,163,000
Accumulated depreciation - 900,000 82,313 58,375 - 1,040,688

Net carrying value 7,700,000 2,700,000 313,687 408,625 - 11,122,312

Year ended 31 December 2020

Opening carrying value 7,700,000 2,700,000 313,687 408,625 11,122,312
Additions 1,300,000 - - - 240,000 1,540,000
Disposals - - - - - -
Depreciation charge 65,000 675,000 39,211 51,078 72,000 902,289

Closing carrying value 8,935,000 2,025,000 274,476 357,547 168,000 11,760,023

At 31 December 2020
Cost or valuation 9,000,000 3,600,000 396,000 467,000 240,000 13,703,000
Accumulated depreciation 65,000 1,575,000 121,524 109,453 72,000 1,942,977

Net carrying value 8,935,000 2,025,000 274,476 357,547 168,000 11,760,023

Year ended 31 December 2020

Opening carrying value 8,935,000 2,025,000 274,476 357,547 168,000 11,760,023
Additions and Revaluation - - - - - -
Disposals - - - - - -
Depreciation charge 370,500 506,250 34,310 44,693 50,400 1,006,153

31st December 2021 8,564,500 1,518,750 240,167 312,854 117,600 10,753,870

As at 31st December 2021

Cost or valuation 9,000,000 3,600,000 396,000 467,000 240,000 13,463,000
Accumulated depreciation 435,500 2,081,250 155,833 154,146 122,400 2,826,730

Net carrying value 8,564,500 1,518,750 240,167 312,854 117,600 10,753,870

11
IVARMER CONSTRUCTION LIMITED
Financial statements
For the year ended 31 December 2021

NOTES (CONTINUED)

2021 2020
Shs Shs
11 Share capital
No. of ordinary Issue and paid
shares paid up
Shs
At 1st January 2021 1,000 100,000

At 31st December 2021 1,000 100,000

Issue for cash 100 100,000

At 31st December 2021

100 100,000

The total number of authorized ordinary shares is 1000 with a par value of Shs. 100 each.

12 Borrowings

Loan from bank 10,424,374 6,002,851

10,424,374 6,002,851

Amount owed to directors - -

13 Tax Account

Balance brought forward 1,965,279 866,186

Tax paid (476,352) (482,566)
Current year tax 871,137 1,581,659

Balance brought down 2,360,064 1,965,279

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IVARMER CONSTRUCTION LIMITED
Supplementary information
For the year ended 31 December 2021
SCHEDULE OF OPERATING EXPENDITURE

1. ADMINISTRATIVE EXPENSES 2021 2020

Shs Shs
Staff Costs
Salaries and wages 1,209,282 1,163,152
Staff welfare 36,017 33,045
Directors remunerations 1,800,000 1,800,000
Total employment costs 3,045,299 2,996,197

Administrative expenses:

Telephone & postage 128,411 103,530

Tenders 72,500 68,000
Internet 146,894 122,400
Security expense 53,200 48,384
Office rent 283,800 258,000
Printing & stationery 137,281 83,697
Audit fees
- Current year 200,000 200,000
Bank charges 263,459 198,647
Interest on loan 0 930,182
Cleaning expenses 54,006 52,548
1,339,551 2,065,388

Total administrative expenses 4,384,850 5,061,585

2. ESTABLISHMENT EXPENSES
Insurance and licenses 607,220 528,017
Repairs and maintenance 68,416 39,234
Legal fee 150,000 72,320
Water and electricity 137,074 122,385
Sales promotion 30,492 27,720
Motor vehicle expenses 634,053 517,205
Travelling Expenses 330,168 326,899
Depreciation on property, plant and equipment 1,006,153 902,289
Total establishment expenses 2,963,576 2,536,069

Appendix I