QIS & MSODSujit Kumar Jena (P301414CMG471)Manish Kumar (P301414CMG439)Apoorva Sharma (P301414CMG422)Adarsh Chhajed (P301414CMG411)Shashi Prabha (P301414CMG461)

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Agenda

Quarterly Information System

Scrutiny of QIS

Monthly Select Operational Data

MSOD Procedure

Conclusion & Takeaway

Introduction

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Introduction QIS(Quarterly Information System) Report needs

to besubmitted by a company, firm or any business entity to thebank from which it has borrowed money (Term Loan, Working Capital, Cash Credit, etc.)

This report has to be submitted to the bank in the formatprescribed/provided by them to keep them informed about the performance & position of the business entity.

The due date or periodicity will be communicated by the concerned bank to the borrower.

Most of the Banks have made QIS and MSOD mandatory for Working Capital limits of Rs.1 crore and above  

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Quarterly Information System The whole picture about the quarterly and half

yearly performance of the firm is presented in three forms.

All the items included in these forms are taken from the budgeted statements, profit and loss account and balance sheet.  

QIS

Form I Form II Form III

Quarterly Information System(Contd.)1. Q.I.S FORM I: It includes the estimated (budgeted) amount of

related figures and is submitted to the bank at the beginning of every quarter.

1. Q.I.S FORM II: This form is to be submitted at the end of every

quarter, which involves the comparisons between the estimated amounts with the actual targets achieved. deviation of up to 10% is OK, Any thing beyond this requires detailed scrutiny

1. Q.I.S FORM III: It involves the comparison between the actual &

the estimated figures as well as bird’s eye view about the level of rise/fall in the various items covered in Q.I.S FORM I & II. It is half yearly operating/fund flow statement.5

Submission of QIS FormFormat Contents Schedule of

SubmissionQIS I Estimate for the

ensuring quarter within projected level of production, sales, current assets &current liabilities including bank borrowings

To be submitted in the week preceding the commencement of the quarter to which the statement relates.

QIS II Performance during quarter vis-à-vis the estimate as given in the form I

Within 6 weeks from the close of the quarter to which the statement relates

QIS III Half yearly operation and fund flow statements

Within a month from the close of the half year.

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Scrutiny for QIS QIS I1. Quantity and value of percentage of annual

projection , seasonality of activity.2. Capacity utilization, BEP and Margin of Safety.3. CMA Projections and mismatch.

QIS II1. Classification of current assets and liabilities as

per date.2. Stock statement.

QIS III1. End use of funds.2. Management of working capital 3. Quality of liquidity management.

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Introduction - MSOD Prescribed by RBI in 1979

For the borrower enjoying working capital limit of INR 50 lakhs and above

MSOD gives key performance figures of a unit on monthly basis.

MSOD includes sales, stock, receivable, short term bank borrowing and gross profit.

Useful tool of credit monitoring for the banker.

Monthly Select Operational Data All the firms on monthly basis prepare monthly

select operational data.

Main purpose of preparing MSOD is to show company’s performance and progress to the banks.

It is basically a monitoring tool for the bank for analyzing the performance of the firms and the utilization of the bank borrowings.

MSOD (Monthly Select Operational Data) gives details of monthly Production (Quantity), Sales (Quantity and Value), Receivables (Domestic and Export), Sundry Creditors, Short Term Borrowings from Banks and others and details of Stock (component wise) as at the beginning and end of the month.9

Purpose To know performance of units in area like

production, sales, purchase, and gross profit in particular month against target/projections.

To know position of short term bank borrowing as against current assets built up and to know the extent of unpaid stock.

To assess the end term use of short term funds and shenanigans.

To do trade analysis on the performance of business unit.

For close monitoring and to frame suitable monitoring action plan if required.

How to read MSOD MSOD return has six parts alphabetically

numbered from A to G

Part A It is regarding projection of borrower in

current accounting year. It provides the estimated gross sale, net sale

and production of the unit

Part B It is regarding sales The credit summation in the account of

customer with bank should be compare with gross sales figures to check for variations.

How to read MSOD (cond…) Part C

It is regarding receivables Comparing the receivable figures with sales

figures for any variation in receivable.

Part D It is regarding sundry creditors on purchase Here comparison is with purchase of RM and it

should get tally with two months purchase.

How to read MSOD (cond…) Part E

It is regarding short term bank borrowing i.e WC.

Examine the paid stock position with the stock statement fig submitted for same month.

Part F It is regarding Stock. Production should tally with stock IN and sales

should with stock out.

Bankers take away MSOD is to be submitted by borrower along with

monthly stock /book debt statement.

Stock of RM, spare should be appx tally to the purchase of the month which could correlate with drawls in the account.

Study of MSOD statements help bankers to know whether really activity has taken place in the unit during the month.

Receivable outstanding against sales shows the level of credit extended by borrower to its buyer.

Level of Paid stock can be verified

Conclusion Scrutiny of QIS & MSOD data is essential for

effective credit administration.

Helps in assessment of WC credit limits.

Effective monitoring of advance by evaluating the performance of borrowing party.

Prevent siphoning of funds.

For banker it is the quick informative sensitizing data return.

Help in checking the diversion of working capital funds.

Maintain healthy credit culture.15

THANK YOU

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