Lesson No. 31 – QIS II & III Statements

QIS Statements

 

DK and SR were ready with Coffee Muggs as they sat in a conference cubical anxiously waiting for Shri Nagpal to focus more light on the aspects of QIS forms.Shri Nagpal continued : -
Let us discuss the forms QIS part II
1)It gives the Performance of the Unit for the Last quarter.
2) It is to be submitted within 6 weeks from the close of the Quarter (Say this is the month of Jan, the,actuals for the Quarter ending Dec be submitted before Feb).
3) Following Data is given.

(a) The estimates for Current year (as in CMA)
1 Production 2 Gross Sales 3 Net Sales
(b)Actual Production & Sales during the quarter and Cumulative Position
During Q. | Cumulative posn.
Prod. Sales | Prod. Sales
Q1 280. 300
Q2. 300 350. 580. 650
Q3
Q4
--------------------------------------------------------
(c) Data relating to the Latest Qrt.
Estimated. | Actual
(As given in QIS I). |
i.Production 290. 300
ii.Gross Sales. 330. 315
iii) Net sales. 310. 295
--------++--------+--------------------------------
Estimates QIS-I | Actuals
d) CA 510. 525
e) CL. 265. 250
-------------------------------------------------------
Not only the broad items of CA & CL are given but details of each eg
1RM Stock
Imported = months of Consumpt.
Domestic = ---- ,, ---------
2 SIP 3 FG 4 Consumables 5 Receivables. (all in months)
6 Advance pay for RM
7 OCL (bank ,cash etc)
TOTAL CURRENT ASSETS

CL
1 ST Bank borrowing (+BP +BD)
2 Credit purchases in no of months.
3 Adv from customer
4 Accured exp
5 Statutary dues taxes/PF/It......
6 OCL

TOTAL LIABILITIES
Thus based on this statement a banker gets information which way the business of customer is going It can ring the Bells and corrective action can be taken.
It computes the PBF and revel excess borrowing.
Suppose the PBF is Rs.245 CR.& actuals are Rs.288/-.The excess borrowing is 12% and hence penal interest can be charged since deviation is more than (+/-) 10%.(or as per sanction terms).

(Pl note all figures are arbitrary and taken for understanding the concept).

QIS - III
It consists of two parts.
a. Operating Statement
b. Funds Flow Statement

a. Operating statement- It is to be submitted within 2 months of close of Half year.The statement gives valuable information whether Sales Production, Expenses and Profitability has been achieved or not as projected earlier. The deviations if any ;monitor and take corrective steps.
b. Funds Flow - To study whether the borrower has generated funds from operations and brought the funds and spent ie invested as projected.
In nut shell to observe
- whether there is diversion of STS to LTU
- whether NWC was maintained.
- Current ratio is at acceptable level
- whether Capital expenses were as per estimates given.

Generally a copy of the statements along with Comments is to be submitted to next higher or sanctioning authorities say RO/ZO/HO for control purposes.

If there is default in submission of the Statements penal interest is charged as per Bank Policy.
Both DK and SR remained silent for few minutes thinking and grasping the whole nuances of QIS system.
Their eyes sparked with full understanding of this Very Useful and Important tool of Monitoring.They assured Shri Nagpal with great enthusiasm that they will apply this treasure of knowledge and gave a smile of satisfaction.
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I desire every reader should come out with Rating of Last 3 episodes.
A - Understood fully and Excellent
B. - Partly Understood and Good
C - Not so clear.
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I pen off with this.

Waman Gokhale
7350901500
waman.gokhale@gmail.com

 
 

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