Client Pioneer Cement Limited Time of Stock Count: 9:00

Period Year Ended June 30, 2006 am

Subject Physical Stock Count-Stores and Spares FRSH Representatives:
1. Gulzar ahmad
2. Syed Ali Hammad
3. Muhammad Faisal Gull
4. Muhammad Al-Zafar

Client Representative:
1. Azhar Chaudhry -Sr.Manager Finance
2. Naveed Ahmad- Senior Deputy Manager Store
3. Muhammad Sher- Store Officer
4. Muhammad Mushtaq: Store Officer
5. Muhammad Saeed: Store Keeper
6. Sultan Muhammad-Accounts Officer

Methodology
 Obtained the list of all store and spares items.
 Marked all items of stores and spares having value equal or greater than
Rs.200, 000.
 Physically verified /observed the marked items of stores and spares.
 Cross-matched the quantities on stock sheet with bin card. In case of
difference prepared reconciliation (items issued or received).
 Selected some items from stock count sheet randomly irrespective of value
to ascertain assurance that all items are appearing in stock count sheet are
physically in existence.
 Selected some items lying in store randomly and cross-matched the
quantity with bin card and stock count sheet.
 Filled ‘Physical Inventory Observation Checklist.
 Compiled the results of physical stock count and drawn conclusion.
Observation
Some of the stores items of very high values were lying in store for long period of time
and has not been issued since 1994 or after .Although these items are maintained in very
good condition provision for slow moving items should be provided in respect of these
items in the financial statements

Client’s Explanation:

Summary of Physical Stock Count-Stores and Spares

Total value of stores and spares Rs.281, 240,682

Physically verified Rs17, 9802,087
%Age verified 63.93%

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Conclusion:
The company has maintained a very sound record of stores and spares and no difference
has been identified during the stock recorded and actual quantities, Proper bin cards are
maintained and inventory is preserved in very good condition.