Stock Audit Report Format Draft

S. T. MODI & CO. Private & Confidential

CHARTERED ACCOUNTANTS

STOCK AUDIT REPORT - [[BORROWER NAME]] of 13

STOCK AUDIT REPORT

FOR

[[BANK NAME]]

ACCOUNT

[[BORROWER NAME]]

BY

S. T. MODI & CO. CHARTERED ACCOUNTANTS

SEPTEMBER 2010

Disclaimer - The information in this document is private and confidential and is only intended for use by the Mumbai Regional Office, [[BANK NAME]] and access to this document by anyone else is unauthorized. Any unauthorized disclosure, reproduction, distribution, copying, use or

dissemination either in whole or in part is strictly prohibited. Readers are advised to prior consult with Partner-in-Charge before making any

interpretation & inferences.




CERTIFICATE

“TO WHOMSOEVER IT MAY CONCERN”

This is to state that M/s S. T. MODI & CO. CHARTERED ACCOUNTANTS had carried out the Stock Audit of

M/S [[BORROWER NAME]], account of [[BRANCH NAME]] BRANCH of [[BANK NAME]] in consonance

of the authority and within the Scope of Audit prescribed in the appointment letter Ref No _____ dated ______

issued by the Mumbai Regional Office, [[BANK NAME]];

and

Certify that audit observations reported in the Stock Audit Report were previously discussed by CA. Sujit Modi,

Partner of the firm with SHRI _______ the Branch Manager of [[BRANCH NAME]] Branch ( ) of [[BANK

NAME]] on ______.

Confirmed by me :- Confirmed by me :-

For [[BANK NAME]] For S. T. MODI & CO.

[[BRANCH NAME]] BRANCH CHARTERED ACCOUNTANTS

BRANCH CODE :- FIRM REGN NO :- 124055W

SHRI ______ CA. SUJIT MODI

BRANCH MANAGER PARTNER

Date : Date :

Place : Mumbai Place : Mumbai




STOCK AUDIT REPORT

Name of the Stock Auditor : S. T. MODI & CO. CHARTERED ACCOUNTANTS

Name & designation of Attendant : CA. SUJIT MODI (PARTNER),

Day/s & Date/s of Audit :

Site Inspection Date/s :

BRANCH

1 Branch Name & Number

2 Branch Address

3 Telephone Nos

4 Email ID

BORROWER

5 Name of the Borrower [[BORROWER NAME]]

6 Constitution

7 Date of establishment

8 Name of Partners & Profit Sharing Ratio

9 Business Activity

10 Registered Address & Corporate Office

Owned / Rented

11 Present Credit facilities with our Bank. Annexure A Borrower Present Credit Facilities

12 Drawing Power as on 31/08/2010 Annexure B Drawing Power Calculation

13 Date & sanctioning authority of last sanction/

renewal

14 Banking arrangement

sole/multiple/consortium

SISTER CONCERNS, ASSSOCIATES,

RELATED PARTIES, ETC

15 Names of Sister Concerns, Associates,

Related Parties, etc if any

16 Credit facilities enjoyed by ___ above Annexure C Credit Facilities enjoyed by Sister Concerns

17 Information on financial transactions of

Borrower with Sister Concerns, Associates,

Related Parties, etc

MANUFACTURING UNITS &

GODOWNS

18 Factory Unit/s & Godowns Address




19 Owned / Rented

20 Particulars of Factory Premise/s, Godowns,

etc

• Total Plot, Constructed & Occupied Area

• Structure Condition

• Renewal formalities

o Leave & License Agreement

o Factory Licenses

o Shop & Establishment

• Regularity of Payments

o Rent

o Muncipal Taxes & Dues

o Society Dues & Maintenance

o Electricity Charges

o Water Charges

o Loan Installments

o Others

21 Monthly capacity details

• Installed Capacity

• Capacity Utilized

• Efficiency %

22 Particulars of machinery

Machinery

Description

Purchase

Year

Residual

Life

Existing

Condition

23 No of employees

• Skilled

• Unskilled

• Office staff

24 Information about shifts

• No of shifts

• Working hours

• No of workers in each shift

25 Fire Fighting measures arranged at plant

• No of fire extinguishers




• Date of expiry

• No of sand buckets

• Smoke detectors

• Watch and ward arrangement

• CCTV & surveillance cameras

26 Instances of breakdown of plant & machinery

& frequency of such occurrences in last 6

months

27 Details of Charges, Mortgages, Pledge, Lien,

Encumbrances, on Plant & Machinery, if any

28 Whether godown-keeper / godown chowkidar

is appointed?

INVENTORIES

29 Brief note on Production Cycle Annexure D Composition of Raw Materials &

Production Cycle

30 Particulars of Inventories Annexure E Particulars of Inventories

31 Records evidencing for goods in transit or sent

to outsiders for processing or lying with sales

depots, branches, etc

32 Discrepancies noticed on physical verification

of Inventories appearing in Inventories

statement submitted to the bank, Inventories

Register & Excise Records

33 Is turnover in Inventories satisfactory?

34 Regularity of reconciliation of inventory

records & verification of inventories

35 Whether the branch receives Inventories

statements certified by borrower on or before

due date?

BOOK DEBTS

36 Particulars of Book Debts Annexure F Particulars of Book Debts

37 Whether Book – Debts of Sister Concerns,

Associates, Related Parties, etc are included in

Book Debts statement?

38 Whether sales bills are accompanied by copy




of lorry receipt / receipt challans?

39 Whether bills discounted are included in

book-debts statement?

40 Reasons for delay in collections & Book

Debts outstanding above 60 days

41 Whether the outstanding book – debts are

arisen out of normal business transaction,

which Bank has financed and are arising out

of genuine trade transactions?

42 Normal time limit taken for realisation of

book – debts vis – a – vis past trend or the

industry trend

43 Whether party wise book – debt accounts /

registers are maintained properly and kept up

– to – date?

44 Whether accommodation bills are observed?

INSURANCE

45 Effective Insurance Policies

• Asset Insurance Policy

• Stock Insurance Policy

• Loss of Profit Insurance Policy

Annexure H Details of Insurance Policies

46 Whether goods-in-transit are insured?

47 Whether outsiders goods kept with own goods

are separately insured

48 Whether goods sent outside units for

processing are separately insured?

49 Whether Bank Clause is included in Insurance

Policies?

OTHER ISSUES

50 Are there any cases of diversion of funds for

other than business needs?

51 Business Performance: - Whether production /

sales achievements found in line with

production. If not, offer comments

Year

ended

Projected

sales

Actual

sales

2010




2009

2008

52 Bank’s name board whether displayed /

painted / affixed / engraved

53 VAT (Maharashtra State)

• Last tax/duty paid

• Last Return filed

• Last Assessment completed

54 Excise Duty




55 Service Tax




56 Income Tax




57 Employees Provident Fund




58 ESIC




59 Others (Gratuity, Profession Tax, etc)

BUSINESS PERFORMANCE & RATIOS

60 Financial Analysis Annexure G Key Figures from ABS

61 Books of Accounts & records maintained on

regular basis

Sales Register, Purchase Register, Sales Bills, Purchase

Bills, Inventory Register, Debtors Register, Creditors

Register, Journal Book, Cash book & Bank Book.

OTHER INSPECTION/AUDIT




PERSISTENT OBSERVATIONS

62 Concurrent Audit

63 Statutory Audit

64 Inspection Audit

For S. T. MODI & CO.


FIRM REGN NO: 124055W

CA. SUJIT MODI

PARTNER

MEM NO : 129174

Date:

Place: Mumbai




--: INDEX :--

Sr No Annexure Clause Particulars

1 A 12 Present Credit Facilities given to the Borrower

2 B 13 Drawing Power Calculation

3 C 17 List of Sister Concerns & Associate Companies & limits sanctioned

4 D 30 Production Cycle

5 E 31 Particulars of Inventories

6 F 37 Particulars of Book Debts

7 G 61 Business Performance & Analysis of Financial Statements

8 H Any other points




ANNEXURE A – PRESENT CREDIT FACILITIES GIVEN TO BORROWER

(Refer Clause No 11)

Facility Limits Sanctioned

Rs lakhs

O/S as on _____

Rs lakhs

Overdues

Rs lakhs

Security

Annexure B – Drawing Power Calculation


ANNEXURE C – LIST OF SISTER CONCERNS, ASSOCIATES, RELATED

PARTIES, ETC AND LIMITS SANCTIONED


Table A – Entities enjoying facilities from [[BANK NAME]]

Sr No Name of Concern Relation* Limits

Sanctioned

(Rs lakhs)

O/s Balance as

on ________

(Rs lakhs)

IRAC Status

(as on

31/03/2010)

Table B – Entities not having any facilities from [[BANK NAME]]

Sr No Name of Concern Relation

ANNEXURE D – PRODUCTION CYCLE

Particulars Amount Rs lakhs

Value of Inventories / hypothecated

Value of book – debts / hypothecated

(Less Than 90 days.)

Total

Less : Creditors

Working Capital Gap

Less :Margin 25%

Drawing Power

Outstanding (As on )

Excess over drawing power, if any





Production Cycle

Process No of days

Composition of Raw Materials in Finished Goods

Raw Material Qty % share Cost

Total 100%

Annexure E - Particulars of Inventories


Particulars of inventories as on ______

Sr No Inventory Nature Location Product Life Valuation Method

Inventory Summary as on _____

Inventory Below 90 days Above 90 days Total

Qty Value

Rs lakhs

Qty Value

Rs lakhs

Qty Value

Rs lakhs

Raw Materials

Work-in-Progress

Finished Goods

Total

Annexure F – PARTICULARS OF DEBTORS


Ageing Analysis of Book Debts as on _____




Total

Sales

Sales to top

5 customers

% share of

top 5

customers

Amount

realized from

top 5

customers

% unrealized

from top 5

customers

Book Debts

above 90 days

of top 5

customers

Book Debts Summary as on ____

Book Debts Below 90 days Above 90 days Total

Sales

Rs lakhs

Book Debts

Rs lakhs

Sales

Rs lakhs

Book Debts

Rs lakhs

Sales

Rs lakhs

Book Debts

Rs lakhs

Domestic

Exports

Sister Concerns &

Associates

Provision for

Doubtful Debts/

Bad Debts

Total

ANNEXURE G – BUSINESS PERFORMANCE & ANALYSIS OF FINANCIAL STATEMENTS


Financial Results

Balance Sheet Key figures in

Rs lakhs 2009 2010

Profit & Loss Key figures in Rs

lakhs 2009 2010

Net Worth Turnover

Secured Loans Increase in Stock

Net Fixed Assets EBDITA




Investments Depreciation

Current Assets PAT

Current Liabilities Turnover Growth %

Net Current Assets (excluding

effect of

Deferred Tax Asset / Liability) PAT Growth %

Note:-

Financial Analysis

Certain useful ratios;

Ratios 2009 2010

EBITDA %

PAT%

Current Asset Ratio

TOL / TONW Ratio

Current Asset Turnover Ratio

Inventory Turnover Ratio

Debtors Turnover Ratio

Annexure H Details of Insurance Policies

A) Details of Asset Insurance Policy

Policy issued by :

Policy Period :

Policy No :

Risk Covered :

Bank Clause included :

Sum Insured :

Stock Audit Report Format Draft

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