S. T. MODI & CO.

Private & Confidential

CHARTERED ACCOUNTANTS

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.

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S. T. MODI & CO. Private & Confidential
CHARTERED ACCOUNTANTS

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

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S. T. MODI & CO. Private & Confidential
CHARTERED ACCOUNTANTS

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

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S. T. MODI & CO. Private & Confidential
CHARTERED ACCOUNTANTS

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 Purchase Residual Existing
Description Year Life 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

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S. T. MODI & CO. Private & Confidential
CHARTERED ACCOUNTANTS

• 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

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S. T. MODI & CO. Private & Confidential
CHARTERED ACCOUNTANTS

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 Annexure H Details of Insurance Policies
• Asset Insurance Policy
• Stock Insurance Policy
• Loss of Profit Insurance Policy
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 / Year Projected Actual
sales achievements found in line with ended sales sales
production. If not, offer comments 2010

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S. T. MODI & CO. Private & Confidential
CHARTERED ACCOUNTANTS

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
• Last tax/duty paid
• Last Return filed
• Last Assessment completed
55 Service Tax
• Last tax/duty paid
• Last Return filed
• Last Assessment completed
56 Income Tax
• Last tax/duty paid
• Last Return filed
• Last Assessment completed
57 Employees Provident Fund
• Last tax/duty paid
• Last Return filed
• Last Assessment completed
58 ESIC
• Last tax/duty paid
• Last Return filed
• Last Assessment completed
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 Sales Register, Purchase Register, Sales Bills, Purchase
regular basis Bills, Inventory Register, Debtors Register, Creditors
Register, Journal Book, Cash book & Bank Book.
OTHER INSPECTION/AUDIT

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S. T. MODI & CO. Private & Confidential
CHARTERED ACCOUNTANTS

PERSISTENT OBSERVATIONS
62 Concurrent Audit
63 Statutory Audit
64 Inspection Audit

For S. T. MODI & CO.

CHARTERED ACCOUNTANTS

FIRM REGN NO: 124055W

CA. SUJIT MODI

PARTNER

MEM NO : 129174

Date:

Place: Mumbai

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S. T. MODI & CO. Private & Confidential
CHARTERED ACCOUNTANTS

--: 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

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S. T. MODI & CO. Private & Confidential
CHARTERED ACCOUNTANTS

ANNEXURE A – PRESENT CREDIT FACILITIES GIVEN TO BORROWER

(Refer Clause No 11)

Facility Limits Sanctioned O/S as on _____ Overdues Security

Rs lakhs Rs lakhs Rs lakhs

Annexure B – Drawing Power Calculation

(Refer Clause No 12)

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

ANNEXURE C – LIST OF SISTER CONCERNS, ASSOCIATES, RELATED

PARTIES, ETC AND LIMITS SANCTIONED
(Refer Clause No 16)

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

Sr No Name of Concern Relation* Limits O/s Balance as IRAC Status
Sanctioned on ________ (as on
(Rs lakhs) (Rs lakhs) 31/03/2010)

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

Sr No Name of Concern Relation

ANNEXURE D – PRODUCTION CYCLE

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S. T. MODI & CO. Private & Confidential
CHARTERED ACCOUNTANTS

(Refer Clause No 29)

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

(Refer Clause No 30)
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 Qty Value Qty Value
Rs lakhs Rs lakhs Rs lakhs
Raw Materials
Work-in-Progress
Finished Goods
Total

Annexure F – PARTICULARS OF DEBTORS

(Refer Clause No 36)
Ageing Analysis of Book Debts as on _____

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S. T. MODI & CO. Private & Confidential
CHARTERED ACCOUNTANTS

Total Sales to top % share of Amount % unrealized Book Debts

Sales 5 customers top 5 realized from from top 5 above 90 days
customers top 5 customers of top 5
customers customers

Book Debts Summary as on ____

Book Debts Below 90 days Above 90 days Total
Sales Book Debts Sales Book Debts Sales Book Debts
Rs lakhs Rs lakhs Rs lakhs Rs lakhs Rs lakhs Rs lakhs
Domestic
Exports
Sister Concerns &
Associates
Provision for
Doubtful Debts/
Bad Debts
Total

ANNEXURE G – BUSINESS PERFORMANCE & ANALYSIS OF FINANCIAL STATEMENTS

(Refer Clause No 60)
Financial Results

Balance Sheet Key figures in Profit & Loss Key figures in Rs

2009 2010 2009 2010
Rs lakhs lakhs
Net Worth Turnover
Secured Loans Increase in Stock
Net Fixed Assets EBDITA

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S. T. MODI & CO. Private & Confidential
CHARTERED ACCOUNTANTS

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 :

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