BANK OF INDIA

STOCK AUDIT REPORT

PART I
BRANCH
Name of Account
Name of CA Firm
Asset Classification
Name of person who inspected the account
Address of the borrower
Nature & Line of Activity
Date of last stock and book debt statement
submitted to bank
Audit based on stock & book debts
statement as on
Period covered
Sanction authority
ZM
A.
Position of Account as on 24.02.11
Nature of facility
Limit
sanctioned
1.

Rs. In Lacs
Drawing
Balance
Power/Limit
Outstanding

Excess
over
drawing limit
99.16

B. Unit Visit
Dates of Visit
Man days spent

1. Premises in which records are kept

2. Name of person contacted at unit
with designation
3. Position of stock & book debts value
as on 24-02-11
Stock
(Rs. In lacs ) Book Debts

(Rs. In Lacs)

Value of Stock
Less Sundry Creditor
Total Paid Stock
Less Margin 25%
Drawing Power

Can not be Total Debtors

ascertained Less Debtors older than 90
days
Less Bill Discounted by Bank
Nil Balance
Less Margin @ 25 %
Drawing Power

Drawing Limit
Nil
4. Details of unpaid stock as on
24.02.2011.
5. Details of obsolete (more than six
months old) stocks and/or Book debts
in the case of credit facilities against
book debts
6. Details of Insurance Policies
a) Amount of Insurance Policy
b) Valid till
c) Risk Covered
d) Bankers Clause
e) Location stated in the policy
7. Age wise & Value wise evaluation of
debtors (receivables)
8. Whether QIS statements are being
submitted by the party as per terms of
sanction
9. Whether charge registered with ROC
within prescribed time
10. Security
Primary
Collateral

Can not be
ascertained

Nil

Drawing Limit
Nil
Can not be ascertained as no books of accounts
were made available to us.
Can not be ascertained as no books of accounts
were made available to us.

Stocks
Rs. 180 lac
18.08.2011
Fire & Burglary
Yes
Can not be ascertained as no books of accounts
were made available to us.
As per banks officials the borrower is not
covered under QIS mechanism.
Not Applicable

Hypothecation of Stock & Book-Debts.

11. Stock Verification report as per

Physical stock verification done on 2402-2011
Sr.
Item
Qty. (in kgs.)
No.
a)

Rate
kg.)

(Rs. per Values (Rs. in

lacs)

b)
*Based on estimate provided by the proprietor as no documentary
evidence relating to capacity of the unit or stock in process was
made available to us.

12 Observation on quality/quantity of stock

14. Overall Comments :

Date :
Place : New Delhi

For
Chartered Accountants

STOCK AUDIT REPORT

EXECUTIVE SUMMARY
Sr.
No.
1

2
3

Parameters of Stock Audit

Shortcoming observed by the Auditors, if any.

Physical verification stock as

shown in the stock statement/
reconciliation
with
stock
register/subsidiary books/ extent
of paid for stocks/obsolete
stocks/credit enjoyed etc.
100% verification of high value
inventory of major inputs
Method and basis of valuation of
stocks
and
receivables.
Comments on actual position vis-vis data submitted to bank, if
overvalued, quantification of the
same

Proper
categorization
and
valuation of stocks/comments on
inventory and receivables norms
accepted at the time of sanction
and the actual position

Comprehensive
details
of
quantity and value of chargeable
stocks as on any particular day Total
during stock audit.

Can not be
ascertained

Scrutiny of records for arriving at

accurate position of sales
achieved
and
receivables
outstanding/verification of at
least 75% of outstanding debts
within acceptable age and 100%
of outstanding debts beyond
acceptable age. Comments on
quality of receivables and there
realisability follow
up of
overdues, credit policy of the
company, average credit allowed
on sales etc. Specific comments
on bad debts and possible losses.

Scrutiny of QIS and fund flow

statements with the books of
accounts to verify of information
provided to vis--vis actuals.

Understatements
of
credit
enjoyed on purchases, if any and
the extent of such understatement
Comments on borrowers internal
procedures regarding physical
verification
of
inventory/frequency
thereof,
procedure for accounting rejected
goods etc.

10
11

Comments
on
inventory
management and control policies
followed by the borrowers.
Comments on arrears of statutory .
dues and obligation, if any.

12

13

14

Comments on notes of auditors

and any other qualifying remarks
contained in the last balance sheet
o f the borrowers. Comments on
change in accounting policies, if
any and its impact on the
profitability/value of security
charged to bank.
Comments on general conditions
of storage, plant condition, plant
lay out, plant maintenance,
testing and inspection, quality
control etc
Comments on adequacy of
insurance for primary as well as a) Amount of
collateral security.
Insurance
Policy (Rs.
In lac)
b) Valid till
c)
Risk
Covered
d) Bankers
Clause
e) Location
stated in the
policy

Stocks

15

Comments on transaction/dealing
with
sister/associates/group
companies.

16

Comments on system for

movement of goods sent for
processing.

17

Comments on movement of
finished goods to various
distribution centers.

18

Comments
on
sales
returns/rejections in respect of
finished goods.

19

Specific comments on diversion

of funds, if any, observed. If no
diversion noticed, it should be
stated specifically.

20

Any other finding during the

course of stock audit, having
adverse impact in the account.

21

Net impact of observations on the

value of security charged on the
drawing power.

Date :

For
Chartered Accountants

Place : New Delhi

Partner