S. T. MODI & CO.

CHARTERED ACCOUNTANTS

Private & Confidential

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.

STOCK AUDIT REPORT - [[BORROWER NAME]]

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S. T. MODI & CO.

CHARTERED ACCOUNTANTS

Private & Confidential

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 :For [[BANK NAME]] [[BRANCH NAME]] BRANCH BRANCH CODE :-

Confirmed by me :For S. T. MODI & CO. CHARTERED ACCOUNTANTS FIRM REGN NO :- 124055W

SHRI ______ BRANCH MANAGER Date : Place : Mumbai

CA. SUJIT MODI PARTNER Date : Place : Mumbai

STOCK AUDIT REPORT - [[BORROWER NAME]]

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S. T. MODI & CO.

CHARTERED ACCOUNTANTS

Private & Confidential

STOCK AUDIT REPORT

Name of the Stock Auditor : S. T. MODI & CO. CHARTERED ACCOUNTANTS CA. SUJIT MODI (PARTNER), Name & designation of Attendant : Day/s & Date/s of Audit Site Inspection Date/s BRANCH 1 2 3 4 Branch Name & Number Branch Address Telephone Nos Email ID BORROWER 5 6 7 8 9 Name of the Borrower Constitution Date of establishment Name of Partners & Profit Sharing Ratio Business Activity [[BORROWER NAME]] : :

10 Registered Address & Corporate Office Owned / Rented 11 Present Credit facilities with our Bank. 12 Drawing Power as on 31/08/2010 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 17 Information on financial transactions of Borrower with Sister Concerns, Associates, Related Parties, etc MANUFACTURING UNITS & GODOWNS 18 Factory Unit/s & Godowns Address STOCK AUDIT REPORT - [[BORROWER NAME]] Page 3 of 13 Annexure C Credit Facilities enjoyed by Sister Concerns Annexure A Borrower Present Credit Facilities Annexure B Drawing Power Calculation

S. T. MODI & CO.

CHARTERED ACCOUNTANTS 19 Owned / Rented 20 Particulars of Factory Premise/s, Godowns, etc Total Plot, Constructed & Occupied Area Structure Condition Renewal formalities o o o Leave & License Agreement Factory Licenses Shop & Establishment

Private & Confidential

Regularity of Payments o o o o o o o Rent Muncipal Taxes & Dues Society Dues & Maintenance Electricity Charges Water Charges Loan Installments Others

21 Monthly capacity details Installed Capacity Capacity Utilized Efficiency % Machinery Description Purchase Year Residual Life Existing Condition

22 Particulars of machinery

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.

CHARTERED ACCOUNTANTS Date of expiry No of sand buckets Smoke detectors Watch and ward arrangement CCTV & surveillance cameras

Private & Confidential

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 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 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 Annexure F Particulars of Book Debts Annexure E Particulars of Inventories

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S. T. MODI & CO.

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 Asset Insurance Policy Stock Insurance Policy Loss of Profit Insurance Policy

Private & Confidential

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 2010 Projected sales Actual sales

STOCK AUDIT REPORT - [[BORROWER NAME]]

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S. T. MODI & CO.

CHARTERED ACCOUNTANTS 2009 2008 52 Banks name board whether displayed / painted / affixed / engraved 53 VAT (Maharashtra State) Last tax/duty paid Last Return filed Last Assessment completed

Private & Confidential

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 61 Books of Accounts & records maintained on regular basis Annexure G Key Figures from ABS Sales Register, Purchase Register, Sales Bills, Purchase Bills, Inventory Register, Debtors Register, Creditors Register, Journal Book, Cash book & Bank Book. OTHER INSPECTION/AUDIT STOCK AUDIT REPORT - [[BORROWER NAME]] Page 7 of 13

S. T. MODI & CO.

CHARTERED ACCOUNTANTS PERSISTENT OBSERVATIONS 62 Concurrent Audit 63 Statutory Audit 64 Inspection Audit

Private & Confidential

For S. T. MODI & CO. CHARTERED ACCOUNTANTS FIRM REGN NO: 124055W

CA. SUJIT MODI PARTNER MEM NO : 129174

Date: Place: Mumbai

STOCK AUDIT REPORT - [[BORROWER NAME]]

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S. T. MODI & CO.

CHARTERED ACCOUNTANTS

Private & Confidential

--: INDEX :-Sr No 1 2 3 4 5 6 7 8 Annexure A B C D E F G H Clause 12 13 17 30 31 37 61 Particulars Present Credit Facilities given to the Borrower Drawing Power Calculation List of Sister Concerns & Associate Companies & limits sanctioned Production Cycle Particulars of Inventories Particulars of Book Debts Business Performance & Analysis of Financial Statements Any other points

STOCK AUDIT REPORT - [[BORROWER NAME]]

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S. T. MODI & CO.

CHARTERED ACCOUNTANTS

Private & Confidential

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 (Refer Clause No 12) Particulars 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 ) Amount Rs lakhs

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 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 STOCK AUDIT REPORT - [[BORROWER NAME]] Page 10 of 13

S. T. MODI & CO.

CHARTERED ACCOUNTANTS (Refer Clause No 29) Production Cycle Process No of days

Private & Confidential

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 Qty Value Rs lakhs Raw Materials Work-in-Progress Finished Goods Total Above 90 days Qty Value Rs lakhs Qty Total Value Rs lakhs

Annexure F PARTICULARS OF DEBTORS (Refer Clause No 36) Ageing Analysis of Book Debts as on _____

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S. T. MODI & CO.

CHARTERED ACCOUNTANTS Total Sales Sales to top 5 customers % share of top 5 customers Amount realized from top 5 customers

Private & Confidential

% unrealized from top 5 customers

Book Debts above 90 days of top 5 customers

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

ANNEXURE G BUSINESS PERFORMANCE & ANALYSIS OF FINANCIAL STATEMENTS (Refer Clause No 60) Financial Results

Balance Sheet Key figures in Rs lakhs Net Worth Secured Loans Net Fixed Assets

2009

2010

Profit & Loss Key figures in Rs lakhs Turnover Increase in Stock EBDITA

2009

2010

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S. T. MODI & CO.

CHARTERED ACCOUNTANTS Investments Current Assets Current Liabilities Net Current Assets (excluding effect of Deferred Tax Asset / Liability) PAT Growth % Depreciation PAT Turnover Growth %

Private & Confidential

Note:-

Financial Analysis Certain useful ratios; Ratios EBITDA % PAT% Current Asset Ratio TOL / TONW Ratio Current Asset Turnover Ratio Inventory Turnover Ratio Debtors Turnover Ratio 2009 2010

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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