Application Forms for Financial Assistance from Banks
Application forms for assistance from
banks have not been standardised except for
priority sector advances. Banks have prescribed their own forms which are
obtainable from any branch of a bank and the application for credit facilities
from the bank is required to be made on the prescribed form of the concerned
bank. Besides, application forms, all banks generally require additional
information on the borrowing unit and its partners/directors etc. and this
matter needs to be discussed with the branch manager of the bank where the
application is proposed to be submitted for consideration. The following papers
will generally be required by a bank for consideration of the request of a
customer for credit facilities.
Copies of Documents Relating to the Constitution of the Applicant
These documents are required by the bank to determine the constitution of the applicant and its legal effect on the proposed loans. Whether the applicant has necessary borrowing powers for the purpose or which credit facilities have been requested for is also to be examined on the basis of these documents. The documents under this category may include:
§
Copy
of partnership deed in case of a partnership firm.
§ Copies of Articles and Memorandum of Association and certificates of incorporation and commencement of business in case of Ltd Companies.
§
Certified
copies of bye‑laws and registration certificate etc. in case of
Societies.
§
Certified
copy of Trust Deed etc. in case of trusts.
Status of the Concern
Small scale and anciallary units,
export oriented units etc. command a priority allocation of bank's lendable
funds. The units with a proven track record may get a little preferential
treatment. A concern which is establishing a new connection with some bank may
be required to give full details of its past performance etc. The documents
required to be submitted under this category may include:
§
Brief
history of the concern which may cover the period since inception, the line of
activity, past record and also throw some light on the future prospects. The
details of other associate concerns m ay also be given.
§
Copies
of certificates of registration as SSI unit etc.
§
Exporter/importer
code number.
About the Promoter
It is the 'person' behind any project who is most important for the successful
running of any venture. A great deal of emphasis is, therefore, placed by the
banks to assess the credit worthiness of the promoter, his managerial and
entrepreneurial capacities and his financial status. Confidential investigation
from the market and/or existing bankers may also be carried by tile bank in
this regard. The applicant may be required to give complete information on the
promoter(s) and the documents to be submitted to the bank may include:
·
A
brief resume on the promoter(s) highlighting his technical qualification,
business experience and enterprise.
·
The
details of other projects promoted by him and the status of those projects.
·
The
statement of assets and liabilities of the promoter.
·
Copies
of income‑tax, wealth‑tax assessment orders/returns for the last
three years.
About the Borrowing Unit
· The financial position of the unit is another important factor which is critically analysed by the banks. The financial data submitted about the concern helps to determine the liquidity position of a firm and is also used to assets the working capital requirements. Financial data is generally required for a number of years with projections for future. The documents/information required to be submitted under this category may include:
·
Balance‑sheet
and P & L a/c of the concern for the last three years. The provisional
figures for a current period may be necessary if the last financial statement
is more than 6 months old. The balance sheet must include complete schedules of
fixed assets, sundry debtors and creditors etc. along with audit report.
·
Estimated
figures for the current year and projected figures for next operating year. If
the projections for the next year are significantly different than the current
year figures, cogent reasons for its divergence must he simultaneously given.
Higher projections need to be justified by giving necessary facts and figures
to support these projections.
·
Any
additions proposed to be made in the capital structure of the concern need to
be highlighted.
·
Details
of' any additional capital expenditure proposed to be made during the year
should be given with elaboration of benefits that are likely to accrue with
such investment on the working of the unit.
About the Credit Facilities
As has been stated earlier the present
approach of banks is to grant need oriented credit facilities only. The concern
may require different types of facilities including non‑fund based
facilities for its smooth operations. A detailed study of these requirements
should, therefore, be necessary before a formal application for sanctioning of
credit limits is submitted for the consideration of the bank.
All the hanks almost have a set pattern for assessment of working capital needs and the applicant has to justify his request to fit in that pattern. A few documents/additional information may be required to be submitted to the bank depending upon the nature of facilities and quantum of assistance required.
·
For Term Loans
(i)
Complete Project Report. The assessment by the bank is
carried almost in the same manner as it
done by other term lending institutions. The banks may be financing a
very large number of smaller projects not only of industries but of other
sectors as well. The basic appraisal approach will nevertheless be the same and
the project has to stand scrutiny on its technical, commercial and financial
viability. The project report should, therefore elaborate on these important
aspects.
(ii) Funds
Flow Statement: The statement may be required to cover the
entire period of repayment of the loan. The importance of a funds flow
statement has already been discussed and repayment period is fixed on the basis
of this statement.
·
For Working Capital
Facilities
For all requests of working capital
in excess of Rs. 10 lacs additional data in CMA Data forms as prescribed by
Reserve Bank of India is also required to be submitted.
Even at the cost of repetition it
may be added here that a complete application, after carefully assessing all
types of credit limits required by the applicant, must be submitted in the
first instance. The assessment shall require a great deal of farsightedness and
the limits requested for should meet the requirements of the business during
the ensuing year under normal circumstances. Any request for adhoc enhancements
in limits is not viewed favourably by the banks and there may be a considerable
delay in its sanction which may sometimes create financial difficulties for the
unit.
Working capital limits are subject
to review and renewal by the banks every year. A detailed renewal proposal
would, therefore, be necessary and fresh limits will be fixed by the bank
depending upon the past performance and future projections. All the financial
papers as discussed earlier will have to be submitted every year to the bank
for renewal of facilities already sanctioned. Any enhancement in credit limits,
if required, must be sought at this juncture.,
Certification of Accounts of Non‑Corporate borrowers by Chartered Accountants
All non‑corporate borrowers
enjoying aggregate working capital (fund based) limits of Rs. 10.00 lacs or
more from the entire banking system are required to submit their statement of
accounts prepared and audited on the formats prescribed by Reserve Bank. Such
borrowers should, therefore, ensure that their application for credit
facilities from banks is accompanied with audited balance sheet and other
statements in the prescribed formats. Such statements are also required to be
submitted to the bank even by the existing non‑corporate borrowers within
6 months from the date of balance sheet. A brief description of the prescribed
formats is given below:
1. Proforma of Audit Report (Appendix 13.I). This form is similar to form No.
3 CB prescribed under the Income‑Tax Rules, 1962 for audit of accounts of
assessees carrying on business with turnover of over Rs. 40 lacs and of
professionals with income‑receipts of over Rs. 10 lacs.
2. Proforma of Balance Sheet and Profit
& Loss A/c for Trading Entities. (Appendix 13.II & III)
3. Proforma of Balance Sheet and Profit
& Loss A/c for Manufacturing Entities (Appendix 13.IV & V)
4. Proforma
of funds flow statement (Appendix 13.VI).
In the case of some borrowers, the concerned
bank may require regular and close monitoring. Such borrowers have to submit a
special audit report as given in Appendix 13.VII.
The Institute of Chartered
Accountants of India has suggested that certain matters should be included in
the audit reports of all entities. An illustration of unqualified report is
given in the Annexure 13.VIII.
APPENDIX 13.I
Audit Report for Non‑Corporate Borrowers
1.
I/We
have examined the Balance Sheet of
as at
..and the Profit and Loss
Account and the funds flow statement for die year ended on that date which are
in agreement with the books of account maintained at the head office at
...and Branches at
..
i) I/We have obtained all the information and
explanations which to the best of my/our knowledge and belief were necessary
for the purpose of my/our audit.
ii) In my/our opinion, proper books of account
have been kept by the head office and the branches of the entity so far as
appears from my/our examination of such books, subject to the comments given
below: ,
iii) In my/our opinion and to the best of my/our
information and according to the explanations given to me/us, the said accounts
and the funds flow statement give a true and fair view:
a) in
the case of the balance sheet, of the state of affairs of the entity as at
.
and
b) in the case of the Profit and Loss Account of
the profit or loss of the entity for the account year ending on
.........................
.
c) In
so far as it relates to the funds flow statement of the movement of funds
during the year ending on that date.
2. The Auditor's Report on the accounts of the entities shall be accompanied by a statement in respect of the following matters viz.
A. In the case
of Manufacturing, Mining or Processing entity:
1. Whether the entity is maintaining proper
records to, show full particulars, including quantitative details and situation
of fixed assets, whether these fixed assets have been physically verified by
the management and if any serious discrepancies were noticed on such
verification, whether the same have been properly dealt with in the books of
account.
2. In a case where the fixed assets have been
revalued during the year the basis of revaluation should be indicated.
3. Has
physical verification been conducted by the management at reasonable periods in
respect of finished goods, stores, spare parts and raw materials, and if any
significant discrepancies have been noticed on such verification as compared to
book records, whether or not the same have been properly dealt with in the
books of account; whether the auditor is satisfied that the valuation of these
stocks is fair and proper in accordance with the normally accepted accounting
principles and is on the same basis as in the earlier years; if there is any
deviation in the basis of valuation, the effect of such deviation, if material,
is to be reported.
4. If
the entity has taken any loan whether secured or unsecured from firms,
companies or other parties, whether the rate of interest and the terms and
conditions of such loans are prima facie prejudicial to the interest of the
entity.
5. Whether
the parties to whom the loans or advances in the nature of loans have been
given by the entity are repaying the principal amounts as stipulated and are
also regular in payment of the interest and if not, whether reasonable steps
have been taken by the entity for recovery of the principal and interest.
6. Is there an adequate internal control
procedure commensurate with the size of the entity and the nature of its
business, for the purchase of stores, raw materials including components, plant
and machinery, equipment and other
7. Where in stores, raw materials or components
exceeding Rs. 10000/‑ in value for each types thereof are purchased
during the year from the associate firms or other parties in which the
partners/proprietors are/is interested whether the prices paid for such items
are reasonable as compared to the prices of similar items supplied by other
parties.
8. Whether any unserviceable or damaged stores
and raw ‑materials are determined and whether provision for the loss, if
any has been made in the accounts.
9. Is the entity maintaining reasonable records
for the sale and disposal of realisable by‑products and scraps where
applicable and significant.
10. In relation to entities the capital of which
at the commencement of the financial year concerned exceeds Rs. 25.00 lacs
whether the entity has an internal audit system commensurate with its size and
nature of its business.
11. Is the entity regular in depositing provident
fund dues with the appropriate authorities and if not, the extent of arrears of
provident fund dues shall be indicated by the auditor.
B. In the case of service entity:
1. All the matters
specified in clause (A) to the extent to which they are applicable.
2. Whether
the entity has a reasonable system of recording receipts, issues and
consumption of materials and stores commensurate with its size and nature of
its business and whether such system provides for a reasonable allocation of
the materials and man hours consumed to the relative jobs.
3. Whether
there is a reasonable system of authorisation at proper levels with necessary
control on the issue of stores and allocation of stores and labour to jobs and
whether there is any system of internal control commensurate with the size, of
the entity and the nature of its business.
C. In the case of a
Trading Entity
1. All the matters specified
in clause (4) to the extent to which they are applicable.
2. Have
damaged‑goods been determined and if the value of such goods
is significant has provision been made
for the loss.
D. In the case of
Finance, Investment, Chit Fund, Nidhi or Mutual Benefit Entity
1. All the matters specified in clause (A) to
the extent to which they are applicable.
2 Whether adequate document and records are
maintained in a case where the entity has granted loans and advances on the
basis of security by way of pledge of shares, debentures and other similar
securities.
3. Whether the provisions of any special
statute applicable to chit fund, nidhi or mutual benefit society have been duly
complied with.
4. If the entity is dealing or trading in
shares securities, debentures and other investment whether proper records have
been maintained of die transactions and contracts and whether timely entries
have been made therein; also whether the shares, securities, debentures and
other investments have been held by the entity in its own name.
3.
Reasons
to be stated for an unfavourable or qualified answer
Where in the auditors report the
answer to any of the questions referred to as in 2 above is unfavourable or
qualified. The auditor's Report shall also state the reasons for such
unfavourable or qualified answer, as the case may be. Where the auditor is
unable to express any opinion in answer to a particular question, his report
shall indicate such fact together with the reasons why it is not possible for
him to give an answer to such question.
APPENDIX 13.II
Form of Balance Sheet for Non-Corporate Trading Entities
Name of Entity
.
Balance Sheet As At
..
|
1 |
2 |
3 |
4 |
5 |
6 |
|
Figures
for Previous Year |
Capital
and Liabilities |
Figures
for Current year |
Figures
for Previous year |
Properties
and assets |
Figures
for Current Year |
|
|
1. CAPITAL (in
case of partnership, these particulars to be give, separately for each partner
and if possible the fixed capital accounts may be segregated from the current
accounts) as at the beginning of the year. Add/Deduct
net profit/net loss during the year. Interest on capital Drawings. Any
other items (give details) II.RESERVES
(Give details under each head) 1. Capital Reserves (if any). 2. Other
Reserves (Including retained profits to the extent not already added to the
capital give details. 3. Sinking funds (if any). III.LOAN AND BORROWINGS1. Interest
accrued, and due on each category to be shown separately. 2. In case of secured loans the
nature security to be specified. 3. Amounts
due for repayments within one year from the balance sheet date to be shown
separately. 4. Loan
from partners, relatives of the proprietors or partners to be shown
separately. a)
Loans from financial
Institutions. b)Loans and borrowings from banks (specify the name
of the Bank, the relavent amount and nature of the borrowings e.g. cash
credit ,term loans, overdraft, packing
credit etc.(separately) c) Fixed
deposits (from public and others) d)
Others (Give details) IV. CURRENT LIABILITIES AND PROVISIONS (Amounts
due for payment beyond one year from the date of the Balance sheet to be
shown separately) A. CURRENT LIABILITIES 1. Sundry Creditors for goods
supplied. 2. Sundry creditors (others) 3. Advances/Progress
payments from customers/deposits
from dealers selling agents etc. 4. Interest and other charges
accrued but not due for payment. 5. Bills payable. 6. Statutory
liabilities (Overdue amounts to be shown separately) 7. Other current liabilities and
provisions (Major items to be shown separately). B. PROVISIONS 1. For taxation. Less: Advance tax paid. 2. For Provident Fund 3. For Contingencies 4. Other
provisions
(A foot note to the balance
sheet may be added to show
separately). 1.Claims against the entity not
acknowledged as debts. 2.Uncalled liability on shares
partly paid 3.Estimated amount of contracts
remaining to be executed to capital account and not Provide for. 4.Contingent liability for bills
discounted. 5.Other moneys for which the
entity is contingently liable (give details) 6.Aggregate amount of arrears of
depreciation, if any. NOTES ON BALANCE SHEET i) In case of partnership firms,
state whether it is registered with the Registrar of Firms, registration,
number, date of registration and the State in which it is registered. ii)Unless otherwise indicated the
terms used herein have the same meaning as they have in Schedule‑IV to
the Companies Act, 1956. TOTAL
RS. |
|
|
I . FIXED ASSETS 1 Under
each head the original cost the additions thereto the deduction there from
during the year and the total depreciation return off or provided up to the end
of the year to be stated. 2 Where
the assets have been revalued, the revalued figures to be shown. Each
balance sheet for the first five year subsequent to the date of revaluation
to state the amount of revaluation 3 Distinguishing
as far as possible between expenditure upon a)
Goodwill b)
Land c)
Buildins d)
Leaseholds e)
Railway
sidings f)
Plant
and Machinery g)
Furniture
and Fittings h)
Development
of property i)
Patents
trademarks and designs j)
Livestock.
k)
Vehicles
etc. 1. Cost. 2. Less:
Depreciation II.ADVANCES AND DEPOSITS ON CAPITAL ACCOUNT III.INVESTMENTS (attach
details of investments showing in each case nature of investment and mode of
valuation e.g. cost or market value). 1.
Investment
in shares, debentures or bonds.
(Note: Investments in concerns wherein proprietor, partner or their relatives
are interested to be shown separately) 2.
Immovable properties 3. Investments in the capital of partnership firms. 4. Other investments. IV. LOANS 1. The nature, security (if any) and
amount of each type of loan to be specified 2. Amounts due within one year to
be shown separately. 3. Loans to proprietors, partners or associated
concerns (to be shown
separately) Less:
Provision for bad and doubtful loans 4. Loans
considered bad or doubtful to be shown separately. V. CURRENT ASSETS A. INVENTORIES (The mode of valuation to be
shown separately) 1. Stock
in Trade. 2. Supplies
and Sundaries. (If the trading organisation is also involved in any
processing activity/es; other categories of inventories e.g. raw‑material
and working progress should be separately disclosed. B. RECEIVABLES 1.Debts due and outstanding for a
period exceeding six months (to be shown separately) 2. Instalments of deferred
receivables due within one year to be shown separately. 3. Debts considered bad or
doubtful to be shown separately. 4. Amounts due from proprietors,
partners or associated concerns (to be shown separately) i) On account of sales on deferred
payment basis. ii) On account of exports. iii) Others iv) Total receivables v) Less: Provision for bad and
doubtful debts. C. BILLS OF EXCHANGE (Same
information to be given as for 'Receivables) D. ADVANCES ON CURRENT ACCOUNT (Same
information to be given as for loans). 1.Advances to suppliers of raw‑material
and stores/spares/consumables. 2.Advance payment of taxes (in
excess of tax payable) 3. Pre‑paid expenses. 4. Others. E. CASH AND BANK BALANCE 1.Fixed deposit account. 2.Current and savings account. 3.Cash on hand. VI. MISCELLANEOUS EXPENDITURE To the
extent not written off or adjusted (specify the nature and amount of each
item) VII. ACCUMULATED LOSSES: If any i) Before depreciation ii) Depreciation, TOTAL RUPEES |
|
APPENDIX 13.III
Proforma of Profit and Loss Account for Non-Corporate Trading Entities
Name of Entity
.
Profit and Loss Account for the Year Ending
..
|
Particulars |
This Year Rs. |
Last Year Rs. |
|
1. Sales (net of Sales tax) (Income from services may be shown
separately) 2. Cost of goods sold: (a) Opening stock Add: Purchases (less
returns) Less:
Closing Stock (b) Other direct expenses (if any) 3. Gross Profit (1‑2) 4. Sales and administrative expenses 5. Other income/expenses [M1]Net 6. Interest 7. Profit before depreciation and tax (Item 3 minus item 4+5+6) 8. Depreciation 9. Taxation ((for example for registered
firms)[M2] 10. Profit after depreciation and taxation (Item 7
minus item (8+9) |
|
|
APPENDIX 13.IV
Form of Balance Sheet for Non-Corporate Manufacturing Entities
Name of Entity
.
Balance Sheet As At
..
|
1 |
2 |
3 |
4 |
5 |
6 |
|
Figures
for Previous Year |
Capital and Liabilities |
Figures
for Current year |
Figures
for Previous year |
Properties and assets |
Figures for Current Year |
|
|
I. CAPITAL (in case of partnership, these
particulars to be give, separately for each partner and if possible the fixed
capital accounts may be segregated from the current accounts) as at the
beginning of the year. Add/Deduct
net profit/net loss during the year. Interest
on capital Drawings. Any
other items (give details) II.RESERVES
(Give details under each head) 1. Capital Reserves (if any). 2. Other
Reserves (Including retained profits to the extent not already added to the
capital give details. 3.
Sinking funds (if any). |
|
|
I . FIXED ASSETS 1. Under each head
the original cost the additions thereto the deduction there from during the
year and the total depreciation return off or provided up to the end of the
year to be stated. 2. Where the assets have been revalued,
the revalued figures to be shown. Each balance sheet for the first
five year subsequent to the date of revaluation to state the amount of
revaluation 3. Distinguishing
as far as possible between expenditure upon
1.
Cost. Less: Depreciation |
|
APPENDIX 13.V
Proforma of Profit & Loss Account of Non‑Corporate Manufacturing Entities
Name
of Entity
.
Profit
And Loss Account for The Year Ending
.(000's Omitted)
|
Particulars |
Current Year |
Previous Year |
|
1. Sales
(Income from services may be shown separately) 2. Less:
Excise Duty. 3. Net
Sales (Item No.1 minus Item 2) 4. Add/Deduct/Increase/Decrease
in Finished goods:. i)
Closing Stock ii)
Less: Opening Stock 5. Cost of Production a)
Raw
Materials consumption: i)
Opening Stock Add :
Purchases Less : closing stock b)
Stores
& Spare consumption c)
Salaries
& Wages, d) Other
manufacturing expenses excluding depreciation Add:
Opening Stocks‑in‑process & finishing goods Deduct:
Closing stocks‑in‑process & finished goods Cost
of Production GROSS
PROFIT/LOSS (Item 3 minus item 4) 6. Sales & administration Expenses 7. Interest
& other overheads 8. Other income/expenses net (+) 9. Profit/Loss before depreciation & tax (Item 5 minus Item (6+7) 10. Depreciation on other assets 11. Profit after depreciation 12. Taxation 13. Profit after tax GRAND
TOTAL |
|
|
NOTE : 1. Any item of
expenditure which forms a significant proportion, say 5% or more, of the total cost
of production or has special significance otherwise should be shown separately
under appropriate heads for example (i) Salary (ii) Commission (iii)
Perquisites and money value thereof.
2. If audited accounts for the previous year are not available, the
fact should be stated.
APPENDIX 13.VI
Form of Funds Flow Statement for Non‑Corporate Borrowers
Name
of the Entity
................................................................
.
Funds
Flow Statement For The Year Ending
.
(000's omitted)
Particulars Current
Year Previous
Year
SOURCES
Profit before tax. ------------ ---------------
Add : Depreciation ------------ ---------------
Add:‑ Interest on capitals of
partners/ proprietors ------------ ---------------
Add: Salaries, Commission etc.
paid/payable to
partners/proprietors ------------ ----------------
Gross funds generated ------------ ----------------
_______________ __________
------------- -----------------
Less: Taxes paid/payable on the
profits of the firms (retailing to the year) -------------- -----------------
_______________ ___________
(Applicable only to partnership
firms)
Less‑: Withdrawals (including personal taxes paid/
payable on income of the
partners/proprietor out of
the if income of the entity) by the
partners/proprietors.
Less Salaries,
commissions etc. paid to partners/ proprietors _______________ ___________
A. SUB TOTAL
________________ ___________
Increase in capital (only the fresh)
capital introduced by
the partners/proprietor during the
year
..
Increase in term loans/deferred
payment liabilities .
..
Increase in fixed deposits ..
.
..
Increase in loans from partners ..
.
..
Increase in loans from relatives,
friends etc. ..
.
..
Decrease in fixed assets ..
.
..
Decrease in investments in other
partnerships/ business ..
.
..
Decrease in advances and deposits on
capital accounts ..
.
..
______________ ___________
B. SUB TOTAL .. . .
______________ ___________
Increase in short‑term bank
borrowings ..
.
Increase in other current
liabilities .
..
Decrease in inventory .
..
.
Decrease in receivables .
..
.
Decrease in loans to
partners/proprietors/ associated concerns etc
.
Decrease in other loans
..
Decrease in bills of exchange
.
Decrease in advance on current
account
.
Decrease in cash and bank balances
.
_________________ ___________
C. SUB ‑ TOTAL .
_________________ ___________
_________________ ___________
TOTAL FUNDS AVAILABLE (A+B+C)
..
_________________ ___________
_________________ ___________
USES
Decrease in term loans/deferred
payments liabilities
..
Decrease in fixed deposits
.
.
Increase in fixed assets
..
.
Increase in investments of other
partnerships/business etc.
.
Increase in advances and deposits on
capital account
..
.
_________________ ___________
D. SUB TOTAL .
_________________ ___________
Decrease in short‑term bank
borrowings
.
Decrease in other current
liabilities
.
Increase in inventory
.
Increase in receivables
.
.
Increase in loans to
partners/proprietors/associated concerns etc.
..
Increase in other loans
.
.
Increase in bills of exchange
.
.
Increase in advances on current
account
.
.
Increase in cash and bank balances
.
.
_________________ ___________
E. SUB TOTAL . .
_________________ ___________
Loss (See Note 3)
. .
..
Less: Depreciation
.. .
..
Less: Interest on capitals of
partners/ proprietors
.. .
..
_________________ __________
Less: Salaries, commissions etc. paid/payable
to partners/proprietors
.
..
Balance i.e. Gross funds lost (-)
or Gross funds generated (+)
.
..
Add: Taxes
paid/payable on the profits of a
registered firm (relating to the
year)
(applicable only to partnership
firms)
.
..
Add: Withdrawals
(including personal taxes paid/
payable on income of the
partners/proprietors
..
..
Add: Salaries, Commissions etc. paid to
partners/ proprietors
..
..
__________________ ___________
F. SUB TOTAL .. .
__________________ ___________
__________________ ___________
TOTAL FUNDS USED (D+E+F)
.
_________________ ___________
_________________ ___________
SUMMARY
Long term sources
..
..
Less: Long term uses
..
..
Changes in Net Working Capital ( +
)
..
..
Short term sources
..
..
_________________ ___________
Less: Short term uses
.
..
__________________ ___________
__________________ ___________
NOTES:
1. The valuation of current assets or
current liabilities and recording of income and expenses in these forms should
be on the same basis as adopted for the balance sheet submitted to the bank and
should be applied on a consistent
basis.
2. Under the items increase/decrease in
term loan/deferred payments liabilities each of the term loans and deferred
payment liabilities together with the names of the concerned
lending/guaranteeing institutions should be indicated separately.
3. Figures should be filled in here only
when the total effect is net funds lost. In case of loss, if loss, taxes,
withdrawals etc. are more than compensated by depreciation, interest on
capital, etc, the‑ amount of loss should be shown under 'Sources' against
the item 'Profit before tax' with a negative figure.
APPENDIX 13.VII
Special Audit Report
In the case of accounts perceived by
the banks as important for regular and active monitoring the following audit
report may be given.
I/We have examined the information
given below relating to quarter ending at
...In
my/our opinion and to the best of my/our information and according to the
explanations given to me/us.
1. The
important operating data for the quarter is as below :
Actual
Production
..
Actual
Production as a percentage of rated capacity.
..
Sales
Cost
of goods sold
..
Gross
Margin
..
Interest
on bank borrowings
..
Interest
on Others
..
(Actual
fixed costs need not be worked out).
2. The
age wise classification of raw materials inventory and finished goods as at ........................... is as below :
Raw
Material Finished Goods
a)
Above one year
b)
Between six months and one year.
c)
Between three months and six months.
d) Below three months.
3. The
work in process of Rs
as at
represents
..
days production.
4. The raw materials are valued at
The stock-in-trade is valued at
.
(give detailed basis for valuation including the manner of
determination of cost e.g. first in first out etc.)
Accordingly the value of raw
materials and the finished goods is as below:
The said valuation of stock is fair
and proper in accordance with the normal accepted accounting principles, and is
on the same basis as in the earlier quarter.
The discrepancies (if any) between
the value given hem and that shown in the stock statements to the bank and the
reasons thereof are given below :
5. The age‑wise classification of
total bill receivables and receivables outstanding as at
.. is as below.
Domestic Exports
a)
Above
one year.
b)
Between
six months and one year
c)
Between
three months and six months
d)
Below
three months
6. The month and balances of the stocks,
bills receivables and receivables are as below : (Give the balances as at the
end of each month in the quarter for major categories of a stocks, receivables
and bills receivables.)
7. Tax
assessments and payments made during the quarter were as below:-
8. Actual
disbursements for capital expenditures during the quarter were as below:-
9. Outstanding
contracts on capital account as on
are below:-
Name of the party Amount
Rs
1.
2.
3.
10. Contingent liabilities which may or may
not materialise, as on ....................
during the financial year, immediately succeeding the quarter in relation to
which the information pertains.
11. i)
Investments made during the quarter were as below
ii)
Income from investments including profit on sale thereof was as below:
12. Loans
given by the entity during the quarter were as below:
13. Details
of loans raised during the quarter are as below:
a)
from banks (give details)
b)
from others.
14. The purchase and sale transactions of
the entity exceeding Rs 10000/- per annum from to the companies, partnership
firms or other entities in the same group appear to be in the normal course of
business and the transacted prices of such items are/are not reasonable as
compared to the prices of such items in the market (if not give details)
15. The funds from the bank have been
utilised for the purpose for which they were lent. Details of the funds
diverted for purposes other than for those for which they were lent are given
below: ‑
16. The
overdue statutory liabilities as at the end of the quarter are as below: (give
details)
17. As per the annual accounts the cash losses
during the last two years are as below:(State whether the accounts were audited
or not)
18.
At the
end of the quarter, the following were amounts due but not paid:
a)
Loans
from Banks
b)
Other
Loans,
c)
Public
Deposits.
19.
We give
below some important ratios of the entity as per the last audited accounts:
a)
Current Ratio Assets
realisable within a year
Liabilities
due to be paid within a year.
Cash + Bank balance + Marketable.
Securities + debtors due within two months
b)
Acid Test Ratio __________________________________
Liabilities due to be paid within next six months.
c) Raw
Materials Turnover Ratio Raw
materials consumed during the year
__________________________________
Average raw materials
stock
d) Finished
goods turnover ratio Sales
during the year
___________________________
Average finished goods in stock.
e) Receivable
turnover ratio Credit
sales during the year
Average
receivables.
f) Return
on investments Earnings before Interest and tax
___________________________
Net capital employed.
g) Interest
cover ratio Earnings
before Interest and tax
__________________________
Interest charge payable
h) Net
margin ratio Earning
before Interest and tax
________________________
Sales.
i) Capital
turnover ratio Sales
___________________________
Net
capital employed
j) Debt
equity ratio Liabilities
to outsiders
__________________________________
Capital + Reserves ‑Miscellaneous
Expenditure
k) Operating
cash flow (Debit
plus depredation)/Sales
__________________________
Net
of excise
APPENDIX 13.VIII
Specimen of an Unqualified Audit Report
Auditor's Report to the
Members of
(Name of the Company)
We have audited the attached Balance
Sheet of
. (name of the
company), as at 31st March, 2XXX and also the Profit and Loss Account for the
year ended on that date annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance
with auditing standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of to material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating
the overall financial statement presentation.We believe that our audit provides
a reasonable basis for our opinion.
As required by the Manufacturing and
Other Companies (Auditor's Report) Order, 1988[M3] issued by the Central Government of
India in terms of sub‑section (4A) of section 227 of the Companies Act,
1956, we enclose in the Annexure[M4] a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the
Annexure referred to above, we report that :
(i) We have obtained all the information and
explanations, which to the best of our knowledge and belief were necessary for
the purposes of our audit;
(ii) In our opinion, proper books of account
as required by law have been kept by the company so far as appears from our
examination of those books (and proper returns adequate for the purposes of our
audit have been received from the branches not visited by us. The Branch
Auditor's Report(s) have been forwarded to us and have been appropriately dealt
with)[D5];
(iii) The
Balance Sheet and Profit and Loss Account dealt with by this report are in
agreement with the books of account (and with the audited returns from, the
branches)[M6];
(iv) In our opinion, the Balance Sheet and
Profit and Loss Account dealt with by this report comply with the accounting
standards referred to in sub‑section (3C) of section 211 of the Companies
Act, 1956;
(v) On the basis of written representations
received from the directors, as on 31st March, 2XXX, and taken on record by the
Board of Directors, we report that none of the directors is disqualified as on
31st March 2XXX from being appointed as a director in terms of
clause (g) of subsection (1) of section 274 of the Companies Act, 1956.[M7]
(vi)
In our
opinion and to the best of our information and according to the explanations
given to us, the said accounts give the information required by the Companies
Act, 1956, in the manner so required and give a true and fair view[M8]
in conformity with the accounting principles generally accepted in
India:
(a) in
the case of the Balance Sheet, of the state of affairs of the Company as at
31st March, 2XXX; and
(b) in
the case of the Profit and Loss Account, of the profit /loss[M9] for the year ended on that date;
For ABC and Co.
Chartered Accountants
Signature
Name of the Member Signing the Audit
Report
Designation[R10]
.
Address :
Date: