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Vishal Retail Limited – Stock Count Vishal Retail Limited – Guidance Sheet for Stock Count at Retail Stores S. N o. Activity Responsibility 1. a. The stock count is to be carried out for 14 divisions, wherein, one division will be covered in one day. b. The stock count is required to be conducted by scanning all stock items in a given division. c. The stock count has to be carried out during the night between 10:00pm – 8:00am to ensure timely and accurate measurement of stock. Physical verification of the stock at stores shall be carried out as per the attached schedule. Refer Annexure 1. Project Team, CA Firms and Store. 2. Key Responsibilities – a. Ensure stock count is carried out as per the prescribed schedule b. Ensure that all items of a given division are counted. c. Ensure that each item is counted only once and that there is no duplication d. Identify the damaged / unsaleable stock and prepare an article wise list of such items. e. Report all deviation from the prescribed process.

Internal Auditors (CA firms) 3. Stores have to follow the guidelines as described in Annexure 2 Store, Internal Auditors (CA firms) 4. Stock count is to be carried out by scanning all items as per the Store, Internal Auditors (CA 2010 Axis Risk Consulting. All rights reserved Vishal Retail Limited – Stock Count S. N o. Activity Responsibility prescribed process given in Annexure 3. firms) 5. The CA firm / internal auditors are required to prepare a report in the prescribed format as given in Refer Annexure 4 and email the same daily at axisconsulating@vrpl. in Internal Auditors (CA firms) © 2010 Axis Risk Consulting. All rights reserved Vishal Retail Limited – Stock Count V ishal Retail Limited – Stock Count at Stores – Project Team Vishal Retail: Mr. Sudhanshu Agarwal Mr. Manshu Tandon Mr. Pius Monteiro Mr. Rahul Ranjan Singh Regional and Area Managers Axis Risk Consulting Services Pvt. Ltd. : Team Axis Contact Details: Email: axisconsulting@vrpl. in internal. audit@vrpl. in © 2010 Axis Risk Consulting. All rights reserved Vishal Retail Limited – Stock Count ANNEXURE © 2010 Axis Risk Consulting. All rights reserved Vishal Retail Limited – Stock Count Annexure 1 Stock Count Schedule: Day No. Date (Tentative) Day Division to be covered Day 1 4-Aug-10 Wednesday Mens – Ethnic Day 2 5-Aug-10 Thursday Lifestyle Day 3 6-Aug-10 Friday Ladies – Western Day 4 9-Aug-10 Monday Kids – Infants Day 5 10-Aug-10 Tuesday Kids – Boys & Footwear Day 6 11-Aug-10 Wednesday Mens Lower Day 7 16-Aug-10 Monday FMCG – Non Food Branded Day 8 17-Aug-10 Tuesday Kids Girls Day 9 18-Aug-10 Wednesday CDIT & Ladies Ethnic Day 10 19-Aug-10 Thursday Home Furnishing Day 11 20-Aug-10 Friday Mens Upper Day 12 21-Aug-10 Saturday Household © 2010 Axis Risk Consulting.

All rights reserved Vishal Retail Limited – Stock Count Annexure 2 Guidelines for Stores: 1. All customer transactions should be stopped and all GRCs pending in the receiving area should be completed; 2. NO requests for Sales / GRC transactions should be entertained during physical verification; . Proper stacking and arrangement of stocks should be ensured before commencing with the stock scanning activity; 4. The bar code label should be kept facing out to make it easier for scanning. 5. The store should identify and segregate the damaged article and it should be scanned separately, the list of damaged articles kept at DC (at store) should be updated for the given divisions before commencement of the stock take activity. 6. The bar code / article details of the stocks not kept in packed condition should be easily identifiable. © 2010 Axis Risk Consulting. All rights reserved Vishal Retail Limited – Stock Count 7. Stock takers shall proceed in an orderly manner to ensure that no item is missed and no item is checked twice.

For this purpose, counting shall be done in a sequence, starting from the location of item. Each Gandola / Rack is to be marked with a damage free sticker (2×2 inch) When the same is completed to avoid duplication. 8. Stocks not present in the store premises i. e. materials sent out to other stores, main DC, etc. should be taken into consideration. Confirmation from the holders of such stock shall be obtained that these items are in their possession; . Ensure that there are no pending manual bills (if any); 10. Collect all items from return counter including dummy(s); 11. Store should plan that there is adequate manpower to support stock take activity. All activity (i. e. scanning) for a particular division should be completed in one night. © 2010 Axis Risk Consulting.

All rights reserved Vishal Retail Limited – Stock Count 12. During the stock count, all items which are unscannable or do not have bar codes need to be segregated out and should be manual entered in the scanning software after completing the scanning for all other items. Represntative of CA firm needs to be notified whenever an item needs to be manually entered in the scanning software. © 2010 Axis Risk Consulting. All rights reserved Vishal Retail Limited – Stock Count Annexure 3 Stock count process to be followed by Store Scanning Process © 2010 Axis Risk Consulting. All rights reserved Vishal Retail Limited – Stock Count Annexure 4 Report format: Please note: •The firm needs to prepare a report for each division (i. e. each Day). •This checklist should be prepared by the firm’s representative responsible for a location or department and should be completed and sent before leaving the store. Name of Company Vishal Retail Limited (VRL) Store Code Store Location Division Scanned Date of Stock Count Start Time, End Time and Total Duration of Stock Count CA Firm Name – Stock count done by CA Firm Representative(s) Store Manager / other client representative present © 2010 Axis Risk Consulting. All rights reserved Vishal Retail Limited – Stock Count (A) Provide your input based on your observation of stock count and discussion with the Stores Manager: General Description of Inventory (indicate those that apply): Available (Yes / No)* Retail Merchandise Damaged Goods Pending for GRC Special Order / Other Categories * Please mention ‘NA’ if not applicable (B) Obtain the details of the following from the Stores Manager: Special categories of Inventory: Please mention Quantity & Value (Rs) * Goods billed / transferred but not dispatched Stock owned by others Goods in transit to other locations / return to DC Goods in transit from vendors * Please mention ‘NA’ if not applicable © 2010 Axis Risk Consulting. All rights reserved Vishal Retail Limited – Stock Count (C) Physical Inventory Procedures: Details Yes / No Remarks 1. Did the Company’s personnel follow the inventory instructions 2. Were inventory items arranged in an orderly manner prior to the inventory to facilitate the counting? 3. Were different types, special categories and special classes of inventory properly segregated to facilitate proper inclusion/exclusion from the physical count? 4. Was the store team familiar with the inventory? 5. Were sales / dispatch and receiving operations suspended during inventory taking? (If not, describe procedures employed by the Company to assure an accurate cut-off. ) 6. Were the items in the dispatch and receiving area(s) properly segregated between items to be included in stock and those not o be included in stock? 7. Were discontinued/ damaged items clearly segregated by the store team? 8. Was a list of updated damaged / Unsalable was available at DC? 9. Did all LOB heads and store manager signoff that all items in the store has been scanned and counted? 10. Were their any items without bar codes or had a bar code but could not be scanned. If yes, please mention the quantity of such items for each division. © 2010 Axis Risk Consulting.

All rights reserved Vishal Retail Limited – Stock Count © 2010 Axis Risk Consulting. All rights reserved Vishal Retail Limited – Stock Count Stock Count details to prepared by the CA Firms POS No. Division covered Start Time End Time Total Time Taken Quantity Scanned No. of Persons involved 1 2 3 4 5 6 Total Cut-off Procedure:** Last MRN / GRN No. Vendor Name Date and Time Has material been included in the Inventory? (Yes / No) Amount of Invoice (Rs) Last Sales Invoice No. Date & Times Amount of Invoice (Rs) ** Guidelines: 1. Describe reference source. © 2010 Axis Risk Consulting. All rights reserved Vishal Retail Limited – Stock Count 2. When pre-numbered receiving document or sales invoices are used, note the last number and any unused prior numbers. When pre-numbered documents are not used, obtain information about several sales and receipts immediately prior to the inventory date. 3. Trucks on premises containing either in-bound stock or out-bound stock should be listed, showing number of truck / vehicle, whether full or empty and whether or not contents are included in inventory. Inventory file / result: Please collect the . exe file i. e. the stock count result file on completion and send it with the report.

Please mail the final report to: Rahul Ranjan: internal. audit@vrpl. in Axis: axisconsulting@vrpl. in 2010 Axis Risk Consulting. All rights reserved Vishal Retail Limited – Stock Count Declaration: The stock was carried out in my presence on ____________ (Date) for ____________ (Division). All stock available at the store of the above mentioned division has been scanned once and there has been no duplication of stock count. There is no other inventory in my possession for which I am accountable except as noted above. Store Representative – Store Manager / ASM (Name, Signature and Date) In presence of: Internal Auditor Representative (s) (Name(s), Signature(s) and Date) © 2010 Axis Risk Consulting. All rights reserved

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