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Client : Hadidco Co.W.L.L. K Prepared by : M .Rashid

Subject : Finance Expenses Date : 8/4/07

Period : 31/12/2006 Reviewed by :

Objective : To ensure that Finance Expenses are not over stated

Voucher No.

Entry

Type Date Amount in KD Appr. Posting Dou. Description

776 J V 3/30/2006 3,774.747 A B C Interest for over draft








Total Samples 26,587.837Total account amount 50,012.423

% of Samples 53.16%

{A} Ensure that the expense amount approved from the responsible person.

{B} posted the amount in correct account.

{C} Ensure that the support documents attached.

Conclusion:-

As per the above test , Finance Expenses are stated fairly.

HORWATH AL-MUHANNA & CO

1

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Voucher No.

Entry

Type Date Amount in KD Appr. Posting Dou. Description

1,516.057

1,063.437

1,523.643

4,199.459

4,856.233

1,095.001

1,135.620

1,640.3111,867.670

2,852.986

1,674.169

3,774.747

4,613.777

1,349.620

1,312.783

1,979.608

2,149.275

4,461.449

6,946.578

50,012.423

60003.874

9,991.451

2

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4

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Client : Hadidco Co.W.L.L. Prepared by :

Period : 31/12/2006 Date :

Subject : Group Companies balances Reviewed by :

Describtion Ref. Balance 2006 Balance 2005 RemarkesK.D K.D

Credit balances

Abul whab el-kattamy sons Co. 1,538.574 4,698.815

Closing Balance 1,538.574 4,698.815

Discribtion Ref. Balance 2006 Balance 2005 Remarkes

K.D K.D

Debit balances

Fassial Naser EL-kattamy sons Co. 38,952.560 40,908.580

Closing Balance 38 952 560 40 908 580


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M. Rashid

2/22/2007

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Client : Hadidco Co.W.L.L Prepared by : M. Rashid

Period : 31 December 2006. Date : 2/22/2007

Subject : Indmnity and leave Test Review by :

Name

Salaries 270.000 KD

5

5

Leave 14 30

Indiminty 15 30

26 26

With salaries Without salaries

68 2005

38.180 2006

106.180.000 0 0.000

0 0 0

31 12 2006

12 2006

1 4 2000

========= ======= ======== ========

30 8 6

8 6

0 0 0

========= ======= ======== ========

30 8 6

Leave taken

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Client : Prepared by :

Period : 31 December 2006 Date :

Subject : Indmnity and leave Test Review by :

Name

Salaries 150 KD

Description

5

5

Leave 14 21

Indiminty 15 26

26 26

With salaries Without salaries

2004

2005

0

0.000 0 0.000

0 0 0

31 12 2006

12 2006

1 8 2006

========= ======= ======== ======== 30 4 0

4 0

0 0 0

========= ======= ======== ========

30 4 0

Leave taken

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HORWATH AL-MUHANNA & Co.

Prepared by: M.Rashid

Client : Hadidco Co.W.L.L Date : 3/20/2007

Period : 31 December 2006 Reviewed by:

Subject : Cash at Banks at 31/12/2006

Discribtion Ref. Book balance Bank balance Diffrences Reconciliation Remarksat 31/12/06 at 31/12/06

K.D K.D K.D K.D K.D

Gulf Bank 7000032 + 487.868 489.868 (2.000) Variane between B.S. & B.C.

Gulf Bank 04850609- $ + 410.580 402.460 8.120 Rate Diff. & Bank Charge

Burgan Bank 2060288637 + 31,589.550 31,589.550 0.000Commercial Bank 2101025474 + 620.978 620.978 0.000

TOTAL 33,108.976 33,102.856 6.120

+ Dr Balance = 33,108.976

- Cr Balance=

33,108.976

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Client : Hadidco Co.W.L.L Prepared by: M.Rashid

Subject : Cash and cash equivalents at 31/12/2006 Date : 3/20/2007

Reviewed by:

Discribtion Ref. Book balance Book balance Diffrences Remarks

at 31/12/06 at 31/12/05

K.D K.D K.D

Cash on hand 19,721.560 14,395.820 5,325.740 conformation

Petty Cash - - 0.000

19,721.560 14,395.820

Cash at Banks 33,108.976 28,483.830 4,625.146

TOTAL 52,830.536 42,879.650 9,950.886

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HORWATH AL-MUHANNA & CO Prepared by: M.Rashid


Subject : Due to Banks at 31/12/2006 Reviewed by:

Discribtion Ref. Book balance Book balance Diffrences Remarks

at 31/12/06 at 31/12/05

K.D K.D K.D

Over Draft 414,478.655 604,777.000 (190,298.345)

TOTAL 414,478.655 604,777.000


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Period : 31 December 2006 Reviewed by:

Subject : Due to Banks at 31/12/2006

Discribtion Ref. Book balance Bank balance Diffrences Reconciliation Remarks

at 31/12/06 at 31/12/06

K.D K.D K.D K.D

Gulf Bank 7025936 OD 1,994.450 (1,650.555) 3,645.005

N B K- 0152790220101 OD 137,808.275 144,747.175 (6,938.900)

AL-AHLI BANK-060007141201 OD 256,427.608 257,127.608 (700.000)

Bkme - 11547796 OD 18,248.322 16,294.322 1,954.000

TOTAL 414,478.655 416,518.550 (2,039.895)

OD Over Draft = 414,478.655

PN P. Notes=

414,478.655

There is reconciliation

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WATH AL-MUHANNA & Co.

Client : Hadidco Co.W.L.L Prepared by: M.RashidPeriod : 31 December 2006 Date: #######

Subject :Sales test Reviewed by:

Objective:

To ensure that Sales are not understated

n ry

no. Date amount posting app. Dou. Client Remarkes9 1/17/2006 14,367.200 cash R

10 1/14/2006 74,977.070 / W

11 1/21/2006 10,300.820 cash R

65 2/14/2006 16,287.150 cash R

107 3/4/2006 20,051.100 cash R

202 4/5/2006 39,170.100 cash R

369 6/18/2006 47,630.350 cash R

453 7/16/2006 54,175.210

/

W460 7/22/2006 32,901.650 / W

485 7/25/2006 35,907.340 / W

775 ######## 48,281.400 / W

789 12/6/2006 27,589.260 / W

802 ######## 29,562.610 / W

814 ######## 60,661.500 / W

823 ######## 32.184.805 / W

833 ######## 38.443.47 / W

Total sampel checked 511,863

total sales 4,204,802

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Period : 31 December 2006 Date: 3/20/2007

Subject : purchase . Reviewed by:

Objective:

To ensure that purchases are not overstated

Voucher

No. Ref. Date

Amount

in

K.D

Posting Supp.

Doc.

Approval Suppliers

name Remarkes

546 PAV 2/12/2006 14,687.000 Cash

594 J V 9/10/2006 88,751.947 68180

594 J V 9/10/2006 17,295.153 777085

594 J V 9/10/2006 35,118.451 69005

594 J V 9/10/2006 21,106.860 777565

594 J V 9/10/2006 67,119.621 782613

594 J V 9/10/2006 27,807.582 2110600351

594 J V 9/10/2006 155,793.064 2110600408

594 J V 9/10/2006 35,638.445 2110600453

594 J V 9/10/2006 74,820.595 2110600463

594 J V 9/10/2006 48,970.597

69663

594 J V 9/10/2006 34,191.077 2110600701

594 J V 9/10/2006 18,154.997 793341

594 J V 9/10/2006 24,163.568 70184

594 J V 9/10/2006 52,539.662 2110600921

594 J V 9/10/2006 19,329.895 795212

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VoucherNo. Ref. Date

Amount

inK.D

Posting Supp.Doc.

Approval Suppliersname Remarkes

807 J V 12/18/2006 30,222.983 2110601255

807 J V 12/18/2006 16,546.792 803324

807 J V 12/18/2006 16,301.756 70757

807 J V 12/18/2006 83,074.138 2110601393

807 J V 12/18/2006 26,323.185 2110601422

807 J V 12/18/2006 48,624.547

806163Total sampel checked 1,397,517.549

total purchases for 2006 3369339.191

% 41.48%

Audit procedures

A} We vouching Supp. Doc.( Invoices, )

B} We checked goods receipt voucher

C} We ensured Approval

D} We checked posting to proper account

E} We checked payment for suppliers

Conclusion:

As per the above test we observe that purchase appear to be not over stated.

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Subject : Review additions to Property, plant and equipment Reviewed by:

Objective:

To ensure that the additions to Property, plant and equipment are stated correctly.

Work-Done

We reviewed additions and ensure that property,plant equipments are exist and owned by the company

and used in its operations.

DescriptionEntry

type

Entry

NO.Date

Amount

in K.D

Supp.

Doc.Approved

In the

name of

company

Posting

and Rec.Notes

Machines& tools

p v 541 2/8/2006 11,000

11,000 100% Total addtions to Decoration& Furniture

Vehicles

p v 538 2/7/2006 2,965 2005

p v 538 2/7/2006 4,240 2006

7,205 100% Total addtions to Vehicles

Conclusion:

as per the above test that Additions to Property, plant and equipment are stated correctly.

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Client : Hadidco Co.W.L.L Prepared byPeriod : 31 December 2006 Date

Subject : Property, plant and equipment Reviewed by

Belding Furniture, equipment Vehicles Total

KD KD KD KD

Cost at 1.1.2006 492,295 12,993 9,225 37,450 551,963

Additions - 1,565 11,000 7,205 19,770

Disposal - - - (2,899) (2,899)

Cost at 31.12.2006 492,295 14,558 20,225 41,756 568,834

Accumulated

depreciation at 1.1.2006 (492,294) (8,875) (9,117) (27,745) (538,031)

Depreciation for the year - (2,122) (2,339) (7,184) (11,645)

Disposal - - - 2,898 2,898

Accumulated

depreciation 31.12.2006 (492,294) (10,997) (11,456) (32,031) (546,778)

Net book value

31.12.2006 1 3,561 8,769 9,725 22,056

31.12.2005 1 4,118 108 9,705 13,932

* Depreciation is calculated at rates mentioned below:

Rate of depreciation

Years %

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: M.Rashid: 20-03-2007

:

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Client : Hadidco Co.W.L.L Prepared by : A. Ramadan

Period : 31 December 2006 Date : 5 Aprel 2007

Subject : Disposals movement Reviewed by :

As Per Company's Calculation

Machines & Equ.

Asset Cost at Acc. Dep. At Dep. Charge Acc. Dep. At NBV at Proceed Gain / (Loss)

name 1-Jan-06 desposal date for the year 31-Dec-06 31-Dec-06 from sales Gain Loss

0.000 0.000

Toyota Echo 2,899.000 (2,898.000) 0.000 (2,898.000) 1.000 500.000 499.000

0.000 0.000

2,899.000 (2,898.000) 0.000 (2,898.000) 1.000 500.000 499.000 0.000

Net Gain (Loss) 499.000

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Horwath Al Muhanna & Co.

Client :Hadidco Co.W.L.L Prepared by : M .Rashid

Period : 31 Desember 2006 Date : 3/28/2007

Account Name : Payroll. Review by :

Objective:

TO ensure that the payroll cost is stated fairly

Monthly analysis of salary cost .

Month amount Notes

Jan. 5695

Feb. 6155

Mar. 5755Apr. 5598.1

May 5895

June 5500

July 4070.62

Aug. 5575

Sep. 6045

Oct. 5948.5

Nov. 5774.23

Dec. 5669.23Total 67,680.680

transfered 15% from genral manger salary to leased expenses as follows:

1200 (monthly salary) 12 (month) 15% = 2160 kd

all the payroll of monthly paid cash.

Work done:1 - We checked that salaries are correctly posted to the system (expenses ledger - accrued salaries account)

and verified that these amounts ate according to salary statement signed by the GM

2 -Checked sample of payment of salaries . To ensure that these payments are controlled and supported

by authorized documents.

Conclusion:

As per the above test The payroll cost is stated fairly.

We vouche the payroll payment for this month which paid cash.



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Period : 31 December 2006 Date : 5/2/2007Subject : general and administrative expenses Reviewed by:

Objective:

To ensure that general and administrative expenses are not overstated

Work performed:

Selected a sample of expenses and vouched to supporting documents, and ensured that these

expenses are recorded in the proper account.

Entry

Type

Entry

No.Date

Amount

in K.DAdvertising rent transportation maintenance

bank

chargePosting

Supp.

Doc.Approval Remarkes

P.V 935 7/5/2006 720.000 720.000

P.V 1430 12/16/2006 547.800 547.800

P.V 1436 12/19/2006 566.000 566.000

P.V 1286 10/28/2006 540.000 540.000

P.V 1378 11/27/2006 175.000 175.000

J.V 805 12/1/2006 2,482.865 2,482.865 not attached document

P.V 1444 12/21/2006 260.000 260

P.V 1456 12/25/2006 750.000 750.000

J.V 129 2/28/2006 2,000.000 2,000.000 facilitates charge

J.V 305 5/23/2006 2,500.000 2,500.000 facilitates charge

J.V 572 9/1/2006 25.000 25.000

J.V 847 12/30/2006 234.000 234.000

J.V 847 12/30/2006 2,000.000 2,000.000 x facilitates charge

P.V 561 6/12/2006 4,250.000 4,250.000

P.V 461 1/3/2006 404.250 404.250 not attached document


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Entry

Type

Entry

No.Date

Amount

in K.DAdvertising rent transportation maintenance

bank

chargePosting

Supp.

Doc.Approval Remarkes




4,207.865 4,250.000 1,715.150 1,833.800 6,759.000

5,968.865 35,058.438 28,706.880 3,530.550 9,991.451

70.50% 12.12% 5.97% 51.94% 67.65%

Conclusion:

As per the above test we observe that general and administrative appear to be not overstated

total expenses

%

Total sampel checked

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Period : 31 December 2006 Date : 5/4/2007

Subject : general and administrative expenses Reviewed by:

Description Ref. 12/31/2006 12/31/2005Difference

Difference

%

Salaries & wages 65,521 74,703 -9,182 -14.0%

Rental expenses 35058.44 43,963 -8,905 -25.4%

Advertisement 5,969 7,280 -1,311 -22.0%

Maintenance & petrol 5,358 7,709 -2,351 -43.9%

Misc & Other expenses 11,874 11,117 757 6.4%

subscription & Insurance 6,606 7,040 -435 -6.6%

Printing & Stationery expenses 796 796 100.0%

Vehicle expenses 2,407 2,407 100.0%

Tel.& Electricity & water 2,540 1,510 1,030 40.6%

entertainment 1,197 1,197 100.0%

Audit Fees 1,750 1,750 100.0%

Bank charges 9,991 9,991 100.0%

Transportation &Marketing 28,707 30,612 -1,905 -6.6%

Commission 13,880 18,647 -4,767 -34.3%

Indemnity & Leave Exp. 17,375 17,375 100.0%

general service 4,497 3,921 576 12.8%

Depreciation 11,645 9,986 1,659 14.2%

Fiance Cost 50,012

Management fees 202,929

TOTAL 478 113 216 488

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Client : Hadidco Co.W.L.L Prepared by M.Rashid

Period : 31 December 2006 Date 3/20/2007

Subject : Sales, cost of sales and GP analysis Reviewed by :

1. Summary of sales, cost of sales and gross profit for the year ended 31/12/2006

Particulars Ref. 31.12.2006 31.12.2005

Sales 4,175,172 4,028,943

Cost of sales (3,090,017) (3,121,467)

Gross profit 1,085,156 907,476

Gross profit % 25.99% 22.52%

2. sales:

Particulars 31.12.2006 31.12.2005

Sales 4,175,172 4,028,943

Increase in sales 146,229 (703,986)

Increase / (Decrease)percentage 4% -84%

3. Cost of sales :

Particulars 31.12.2006 31.12.2005

Cost of sales 3,090,017 3,121,467

Increase in cost of sales (31,450) 78,583

Increase / (Decrease)percentage -1% 10%

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Subject : Sales, COS & other revenue Reviewed by :

Description Ref. 12/31/2006 12/31/2005 Difference Difference %

sales 4,175,172.280 4,028,943.000 146,229.280 4%

Cost of Sales (3,090,016.680) (3,121,467.000) 31,450.320 -1%

1,085,155.600 907,476.000

other revenue

Revenue from investments.(Divid.) T. B 71,550.000 190,100.000 (118,550.000) -166%

Revenue from mezzan Below-> 1,495.000 1,979.000 (484.000) -32%

Revenue from rents Below-> 91,075.940 72,132.000 18,943.940 21%

Revenue from cut T. B 250.000 415.000 (165.000) -66%

profit from sale of p.p.&equip. T. B 499.000 0.000 499.000 100%

Mis. income T. B 145.800 0.000 145.800 100%

TOTAL 2,335,326.940 2,079,578.000

Revenue Cost Net profit

Revenue from mezzan 1,630.000 (135.000) 1,495.000

Revenue from rents 118,675.000 (27,599.060) 91,075.940

T. B T. B above

4.Conclusion:

Sales and other revenue are found to be satisfactory.

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Subject : Cost of Sales Reviewed by :


Cost of Sales 3,090,016.680 3,121,467.000 (31,450.320) -1%

other Exp.

mezzan Exp. - 0.000 #DIV/0!

rent Exp.(Leasd) - 0.000 #DIV/0!

TOTAL 3,090,016.680 3,121,467.000

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Subject : Management fees Reviewed by :

Management fees for the year ended 31/12/2006

Objective : : To ensure that the Management fees amount calculated correctely.


sales 4,175,172.280 4,028,943.000 146,229.280 4%

Cost of Sales (3,090,016.680) (3,121,467.000) 31,450.320 -1%

1,085,155.600 907,476.000 177,679.600 16%

general and administrative expenses (225,171.621) (216,488.000) (8,683.621) 4%

Finance Cost (50,012.423) (31,125.000) (18,887.423) 38%

mezzan Exp. (135.000) - (135.000) 100%

other income

Revenue from mezzan 1,630.000 1,979.000 (349.000) -21%Revenue from cut 250.000 415.000 (165.000) -66%

Net profit for sales , mezzan and cut 811,716.556 662,257.000 149,459.556 18%

percentage of fees as per contract 25% 25%

Management fees 202,929.139 165,564.250 37,364.889 18%

Conclusion:

as per the above Management fees apper to be stated fairly

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Period : 31 December 2006 Date: 3/20/2007Subject : Inventory Reviewed by:

Inventory

Des. Ref. 1 2 /3 1/ 20 06 1 2/3 1/2 00 5 Difference Difference %

2,760,972 2,481,649 279,323 10%

Total Inventory 2,760,972 2,481,649

J

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Client Prepared by :M.Rashid

Period : 31 Desember 2006 Date : 20-03-2007

Subject : Account Payables & other credit balance Review by :

Ref. 12/31/2006 12/31/2005Difference

Difference

%

Tr ade Payables

Trade creditors Below-> 7,888.217 7,584.000 304 4%

Other creditors (individuals) 0

Net account receivables 7,888.217 7,584.000 304

Other credit Bal ance

Employee Payables 202,197.090 169,539.000 32,658 16%

advance payment for debtors 12,518.076 2,525.000 9,993 80%

Provision for leave 4,571.210 2,372.000 2,199 48%

Accrued expenses Below-> 40,110.625 700.000 39,411 98%Note payable 0

Total 259,397.001 175,136.000 84,261

Total Acc. Receivables 267,285.218 182,720.000 84,565

Trade creditors

De. Cr. Net balance

3132.77 7888.217 4755.447

above ,

Accrued expenses

De. Cr. Net balance

Rents 27,075.000 27,075.000

Description

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Client : Hadidco Co.W.L.L Prepared by : M.Rashid

Period : 31 Desember 2006 Date : 20-03-2007

Subject : Account receivables & other debit balance Review by :

Ref. 12/31/2006 12/31/2005Difference

Difference

%

Trade Receivables

Trade debtors Below-> 749,452.806 844,391.000 (94,938) -13%

Other debtors / Bad Debtors T.B 47,921.120 - 47,921 100%

Total 797,373.926 844,391.000

Provision for doubtfu l debts (150,000.000) (150,000.000) 0 0%

Net account receivables 647,373.926 694,391.000

Other debit Balance

Accrued reveue - 22,000.000 (22,000) #DIV/0!

Employee Receivables Below-> 18,486.000 21,020.000 (2,534) -14%

advance payment for creditors 3,132.770 656.000 2,477 79%

repaid Exp. T.B 850.000 12,787.000 (11,937) -1404%

Refundable Deposits T.B 100.000 100.000 0 0%

L C 11,358.930 169,431.000 (158,072) -1392%

checkes- ministry of defense T.B 1,208.150 1,208.000 0 0%

Total 35,135.850 227,202.000 (192,066)

Total Acc. Receivables 682,509.776 921,593.000 (239,083)

Tr ade debtors

De. Cr. Net balance

Companies 699 504 156 12 243 836 687 260 320 T B

Description

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Subject : Share capital Reviewed by:

The capital of the company amounted to K.D1, 500,000

consisting of 1,500 shares of K.D 1,000

share capital distributed between the partners as following:-

No of Value No of Value

shares K.D. shares K.D.

2006 2006 2005 2005

El-badry Holding Co. 675 675,000 675 675,000

Bahtco Holding Co. 750 750,000 750 750,000

Saker ab-wahab EL-kattamy 75 75,000 75 75,0001500 * 1,500,000 1500 1,500,000

20052006

Name of the partners

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Client : Hadidco Co.W.L.L Date: 3/20/2007

Subject : Indmnity and leave pay at 31/12/ 2006 Reviewed by:

Discribtion Ref. Indemnity Leave pay Total Remarkes

K.D K.D K.D

Discribtion Ref. Indemnity Leave pay

K.D K.D

Opening balance 52,355.690 2,371.690

Charged to income statement 8,942.320 8,432.620

(Paid during the year)

(6,233.100)

Balance 61,298.010 4,571.210


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1 1,431,000 1.100 1,574,100.000 1,574,100.000

2 #DIV/0! 179,461.000 179,461.000

3

371 - - 38.9504 7,490 - - 771.470

- - - - 1,753,561.000 1,754,371.420 -

1.180 1431000 1,68

11

2006/12/312006/01/01

REF/

2006/01/01

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Client : Hadidco Co.W.L.L Prepared by : M.Rashid

Subject : Investments at 31/12/2006 Date : 18/2/2007

Discribtion Ref. Balance 2005 Additions Disposales Changes in Balance at 2006 Remarks

K.D K.D K.D fair value K.D K.D

B) Inv. Available for sale:

Listed Securities 0.000

Un listed Securities 2,102,271.168 (33,333.000) (506,676.840) 1,562,261.328

TOTAL 2,102,271.168 0.000 -33,333.000 -506,676.840 1,562,261.328

Total Listed and Un listed #REF! #REF!

Total Investments #REF! #REF!

HORWATH AL-MUHANNA & CO O 100

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