PHYSICAL INVENTORY REPORT

TO: 28-FEB/2013

1. OBJECTIVE
Determine the physical existence of raw materials, supplies, products in process
and merchandise for sale that are stored in the Main Warehouse, Point of Sale and
Cutting Area owned by the company Integral Services Solutions S.A.S. -
INSSOL S.A.S.

2. SCOPE
To compare the accounting records of the system with the inventory stocks, as well
as their valuation.

3. DEVELOPMENT OF THE OBJECTIVE

a.) The general inventory of the company Integral Services Solutions S.A.S.-
INSSOL S.A.S., was carried out on February 28, 2013, with a good
participation of the company's employees.

COUNT 1
Date/ Start Date/ Time
Area Line Officials
Time End
Andres Vargas 28-Feb/ 28-Feb/
Footwear
Huber Fierro 08:00 a.m. 11:45 a.m.
Winery

Carlos Cedeño 28-Feb/ 28-Feb/

Confection
Arcelia Serrato 08:00 a.m. 02:30 p.m.
Victor A. Ortiz 28-Feb/ 28-Feb/
Security
Leidy Peña 08:00 a.m. 04:10 a.m.
M.P. and Dayanis Mejia
28-Feb/ 28-Feb/
Cut Prod. Rubiela Bonilla
08:00 a.m. 11:30 a.m.
Processes
Carlos Cedeño 28-Feb/ 28-Feb/
Footwear
Point of Sale

Huber Fierro 05:30 p.m. 06:30 p.m.

Alicia Robayo 28-Feb/ 28-Feb/
Confection
Leidy Peña 05:30 p.m. 06:30 p.m.
Victor A. Ortiz 28-Feb/ 28-Feb/
Security
Juan Carlos Gutierrez 05:30 p.m. 07:00 p.m.
For the second count, those products that showed differences in the initial count
were taken into account:

COUNT 2
Date/ Start Date/ Time
Area Line Officials
Time End
Andres Vargas 28-Feb/ 28-Feb/
Confection
Huber Fierro 03:00 p.m. 04:30 p.m.
Winery
Andres Vargas 01-Mar/ 01-Mar/
Security
Carlos Cedeño 05:00 p.m. 06:40 p.m.
Point of Juan Carlos Gutierrez 04-Mar/ 04-Mar/
Security
Sale Andres Vargas 05:30 p.m. 06:00 p.m.

In this process, the following nonconformities were found:

 The warehouse is not properly organized for the rapid execution of the
inventory.
 Some products are not properly identified, especially in the clothing line.
 In the clothing line, products such as oxford shirts are not properly stored
because they are not packaged to prevent deterioration.
 In the footwear line, some products are deteriorated and are available for
sale.

b.) Once the respective counts were made, this information was compared with
that of the SIIGO system, finding the following non-conformities:

 Merchandise is not transferred in a timely manner from the garment makers'

warehouse to the main warehouse.
 When embroideries, prints or patches are made, the respective document is
not being made by taking the garments out of the main warehouse to the
service provider's warehouse.
 When goods are transferred to the sample warehouse for customers and
returned to the main warehouse, the entry document is not being prepared.
 Some products physically left the main warehouse, but were not registered
in the SIIGO system.
 Some vendor invoices were submitted after the inventory was taken.

c.) After comparing the information and making the respective accounting
adjustments, the following inventory shortages and surpluses were found.
(See. Annex)
4. RECOMMENDATIONS
 Establish the functions of those responsible for the inventory, in order to
establish roles and, at the same time, give the pertinent permissions of the
system for its management and control.
 Establish a date for receipt of vendor invoices so that this does not hinder the
execution of the inventory.
 Establish as company policy that all company merchandise leaving the
company must leave with a remittance or transfer document.
 Require that at the time of payment, manufacturers must present a copy of the
entry of the merchandise to the main warehouse.