Ferrero India Pvt Ltd.

Process Note CFA Review

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Objective of the training – understanding management expectation
 A clearing and forwarding agent undertakes the following activities:

• Receiving the goods from the factories or premises of the Ferrero;

• Warehousing these goods;
• Receiving dispatch orders from the company;
• Arranging dispatch of goods as per the directions of the Ferrero by engaging transport on his own or through the authorized
transporters as per the directions;
• Maintaining records of the receipt and dispatch of goods and the stock available at the warehouse;

 The above factors makes the CFA operation critical to the company it is essential to conduct timely and comprehensive audit to
provide assurance on operations and product safety

Thus our presentation will revolve around following few areas:

 Understand the scope of our work

 Key areas of audit and their significance

 Understanding of risk associated with above areas

 Output of the audit

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Ferrero Products

1. Kinder Joy (MPR Rs. 40/ 42/ 45)

2. Tic tac (MPR Rs. 5/ 10/ 15/20)

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Ferrero Products

3. kinder schoko bons crispy (MRP Rs. 10 / 40)

4. Nutella (MRP Rs. 200 / 320 / 750)

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Ferrero Products

5. Ferrero Rocher (MPR Rs. 125 / 140 / 499 / 799)

6. Crocako (MRP Rs. 10/ 35)

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Key things to remember and expected methodology
 Be on time: Reach Audit location on time. Preferable time to reach at CFA location is 10.00 a.m. Auditor should be dressed in professional
formals only

 EY representative: Make sure, associates / person visiting the unit know that they are representative of EY

 Auditor shall post a selfie as he reaches the location on the internal WhatsApp group created.

 He should also post a selfie as he completes the work and leaves the premises, this practise is very important your, day will not be counted if
selfie is not posted in the group.

Selfie : Auditor reached the location Selfie : Auditor getting off from the location Internal WhatsApp Groups

 Prior homework: Before, making a visit, refer checklist, also in case of any Issue you may contact the below persons.
S.NO Name Contact no Email `ID Designation
1Rohit Gupta [email protected] Senior Partner GMA
2Yaquta Saleem [email protected] Employee GMA
3Anisha Barani [email protected] PMO – Ferrero

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Key things to remember and expected methodology
 Data integrity: Generate stock report from DMS (Book keeping system at CFA - provided by Ferrero). Do not conduct PV on the basis of any
other printouts given by CFA.

 Boundary less approach: Don’t restrict oneself to the checklist. In case you have any point / thoughts, visit the area and clear the query

 Be assured: Be assure, that process are streamlined or else reported by you before we leave the unit

 Report immediately: In case, there are any non-compliance, immediately post the Issue on the WhatsApp group with some supporting's/
Images.

 Observations: All exceptions, deviation should be agreed and corrected on real time basis and confirmation for the same to be collected
before we leave the unit. (Short / Excess / any non compliances.)

 Data collection: Collect MS excel sheet for the respective stock statement before start of PV on the date of visit, necessary supporting (if
required), etc. via mail and also share the same with the Id’s mentioned above.

 Confidentiality: Do not share any confidential documents to CFA including checklist or any other details provided by us.

 Accuracy: Ensure accuracy in PV activity w.r.t batch, material and quantity.

 Sign off: Ensure that all the documents (PV sheet – including deviation and necessary supporting should have proper sign off of both (auditor
and auditee) with name, designation and date.– NO COMPROMISE ALLOWED IN THIS

 Deliverables: All the final deliverable should be self checked and reviewed by responsible co partners. There should not be any ambiguity or
open items in final checklist and observations, final checklist should be shared with in 24 hrs. from the review completed.
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Distributor Audit Guidelines
Pre-Audit Guidelines

1. Please make sure that you carry a laptop to the audit palace.

2. Please make sure that you have the updated distributor checklist with you before you visit the audit place.

3. Also you have details of person in charge and proper location address

Updated
checklistto
be inserted.

(Location)_CFA_Checklist_May-20

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PHYSICAL VERIFICATION
During the visit

1. PHYSICAL VERIFICATION

• After Reaching to the location Auditor Should first start with the Physical Verification of the Stock.
• For that he is required to take Current stock statement which will be the report extracted from the DMS software the same will be
provided to him by distributor team at the location Auditor need to ask the distributor owner or the person in charge to give a printout
of the same. Also auditor should take the stock statement in excel and share the same immediately to the following below Id’s
1. [email protected]
2. [email protected]
3. [email protected]
• 100% Physical Verification of the stock is to be conducted Batch wise/Lot wise.- No report will be accepted if stock is not counted
batch wise – if auditor finds any difficulty regarding the stock count he should immediately report the same on the WhatsApp
group with some images regarding the Issue.
• Physical Verification should be conducted on the stock statement sheet provided by CFA owner and auditor needs to mention the count
found at the location Infront of the System count merely making a  will not work.
• After performing the stock count Auditor needs to take a signoff with stamp from the distributor owner and Sales officer (SO if
present) on the that sheet. This is quite important without signed and stamped sheet will not be accepted.
• After performing the stock count Auditor should immediately share the signed sheet on the internal WhatsApp group.(you may refer
the attached Pdf for detailed understanding.

Signed Stock Statement

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PHYSICAL VERIFICATION
1.1 PHYSICAL VERIFICATION

 Reporting Format for Physical Verification

 Auditor needs to Prepare Annexure 4 In the checklist he needs to incorporate all the items of stock sheet in the given format (not only
Difference part).Before leaving the premises it would be better if he can take signoff on the printout of this annexure.

 Refer next slide for Images

Annexure 4
Sr. No. Item Description Brand Batch System Qty. Physical Qty. Difference Rate Difference in Amount Remarks
1 FR111 FR T16(T16X5X4) MRP 499/- FR L249MI 410.00 416.80 6.80 9980 67,864.00 Batch Interchange
2 FR111 FR T16(T16X5X4) MRP 499/- FR L256MI 18.15 10.35 (7.80) 9980 (77,844.00) Batch Interchange
3 85116 KJ 3 IN 1 JOY T48 GIRL CSD KJ L010XI 36.00 45.00 9.00 5760 51,840.00 Batch Interchange
4 KD470 K JOY T1X8X18 PC UNI AN BIR IN KJ L041MI - 6.00 6.00 5760 34,560.00 Batch Interchange
5 NT073 NU G290X15 B IND 19 MRP-320 NU L319MI 0.27 - (0.27) 4800 (1,296.00) Batch Interchange
6 NT077 NU G290X15 PLA B IND20 MRP-339 NU L034XI 520.00 226.00 (294.00) 5085 (1,494,990.00) Batch Interchange
7 NT077 NU G290X15 B IND 19 MRP-320 NU L267MI - 0.27 0.27 4800 1,296.00 Batch Interchange
8 NT077 NU G290X15 PLA B IND20 MRP-339 NU L034XI - 294.00 294.00 5085 1,494,990.00 Batch Interchange
9 TT373 TT COKE T16X12X60 T16 I&O I Tic Tac L029XI 53.00 50.00 (3.00) 7200 (21,600.00) Batch Interchange, Differenceof Qty 0.48 Box
10 TT373 TT COKE T16X12X60 T16 I&O I Tic Tac L030XI 3.00 5.00 2.00 7200 14,400.00 Batch Interchange, Differenceof Qty 0.48 Box
11 TT353 TT OR T16X12X60 T16 S & W IND Tic Tac L171MI 0.45 - (0.45) 7200 (3,240.00) Batch Interchange, Differenceof Qty 0.48 Box
12 TT353 TT OR T16X12X60 T16 S & W IND Tic Tac L175MI 0.54 - (0.54) 7200 (3,920.00) Batch Interchange, Differenceof Qty 0.48 Box
13 TT379 TT OR T16X12X60 T16 NO HERMEI Tic Tac L336MI 2.00 - (2.00) 7200 (14,400.00) Batch Interchange, Differenceof Qty 0.48 Box
14 TT379 TT OR T16X12X60 T16 NO HERMEI Tic Tac L172MI - 0.43 0.43 7200 3,096.00 Batch Interchange,Differenceof Qty 0.48 Box

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PHYSICAL VERIFICATION
 Sealed signed stock statement

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PHYSICAL VERIFICATION
1.2 PHYSICAL VERIFICATION

 Reporting Format for Physical Verification

 Apart from Physical Verification Details of Last 5 STN & GRN are also to be Reported in the Annexure 8 you may find the samples as
Below.
Last 5 GRNs Last 5 Sale/ Stock Transfer Invoices
Sr. No. Invoice No. Date Gate Inward Done Sr. No. Invoice No. Date Gate Outward Done
1 2027CW1001590 11.02.2020 11.02.2020 1 62010902465 15.02.2020 15.02.2020
2 2027CW1001609 15.02.2020 15.02.2020 2 62010902466 15.02.2020 15.02.2020
3 2027CW1001571 08.02.2020 08.02.2020 3 62010902464 15.02.2020 15.02.2020
4 2027CW1001550 04.02.2020 04.02.2020 4 62010902463 15.02.2020 15.02.2020
5 2027CW1001523 31.01.2020 31.01.2020 5 62010902462 14.02.2020 14.02.2020

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MATERIAL STORAGE
2. Stacking Norms

 Test to be performed - Are stacking norms as per company defined guidelines and storage conditions complied with ::

 Review the storage conditions –Dust free, clean, dry, odor free ,Compare the stacking recommended stacking height printed on the
carton and maximum height stored for that category of item. Mention your observation in the Annexure.

 Take Sufficient Pictures if the stacking norms are not followed and paste the same in the Annexure.

Stacking norms not complied

Sr. No. Item Type No. of Boxes Recommended Height Actual Maximum Height Difference

1 Kinder Mix T8 23 Ctns 4'' FT 6'' FT 2'' FT

2 Kinder Mix T16 4 Ctns 4'' FT 7'' FT 3'' FT
3 Kinder Mix T24 6 Ctns 4'' FT 8'' FT 4'' FT
4 Kinder Joy T48 6 Ctns 5'' FT 6'' FT 1'' FT

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MATERIAL STORAGE
2.1 Stacking Norms Not Followed.

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MATERIAL STORAGE
2.2 Stacking Norms Followed.

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MATERIAL STORAGE
3. Other Company Product.

 Test to be performed ::

 Are there other company / brand items stored in the warehouse

 Make sure to click the picture and share the same immediately on the WhatsApp group also highlighted the same in
the checklist .

Other Company / Brand product.

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TEMPERATURE MONITORING
4. Temperature Monitoring (Storage rooms).

 Test to be performed - Are temperature monitors available in the warehouse ::

 Check if temperature monitoring devices placed in the warehouse.

 Make sure that you click the pictures for the temperature monitoring devices and storage rooms.

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FIRE SAFETY
5. Fire Safety.

 Test to be performed - Is fire extinguisher (valid and not expired) available in the warehouse ::

 Check all the fire extinguishers in the warehouse and note the expiry date mentioned on them..

 Make sure that you click the pictures for the temperature monitoring devices and storage rooms.

Fire Extinguishers Expiry Date

1 29-Aug-20
2 29-Aug-20
3 12-Aug-20
4 12-Aug-20

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UPS & GENERATOR
6. Power Backup Devices.

 Test to be performed ::

 Is UPS available for the computer systems - Check if UPS available

 Is generator back up available to ensure continuous cooling - Check if generator available

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FERRERO NAME BOARD
7. Display – Ferrero Name boards, contacts display etc..

 Test to be performed ::

 Is the Ferrero board displayed outside the warehouse

 Are emergency contact details displayed in the warehouse

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MATERIAL STORAGE
8. Material Storage Condition.

 Test to be performed – Whether Material stored in leakage free area.

 Please make sure that the material is stored in leakage free area and if it is not then take pictures of the water
leakages and Immediately share the same in the Internal WhatsApp group and paste the picture in Annexure 3

Instances may be like below Images.

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PHYSICAL VERRIFICATION – POSM MATERIAL
9. POSM Material.

POSM are stands and racks used for display of material

 Test to be performed :–

 Is POSM tracker with aging of material available :: Check if POSM available with the CFA. If not mention “NA”. If yes, check if tracker
maintained. If not mention “No”- Attach photo of the tracker if available.

 Is POSM material stored appropriately - Check if POSM stored in cartons only.

 Should be Stored in dry condition

 Should Not be stored outside in open

 Should be stored in Dust free Area

 Is aging of POSM material less than 6 months :: Check if aging of POSM available. Highlight if any material aging for more than 6 months
Obtain reasons why it is not utilized / sent to DB. Also take pictures of such items and attach in the Annexure.

 Does physical POSM material matches with tracker :: Count physical sample POSM material and check if it matches with the tracker.
Mention the count and difference. Also take the sign off on the sheet and paste the same in the Annexure.

 Is POSM physical verification done by CFA - Check if POSM physical verification records available
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PHYSICAL VERRIFICATION – POSM MATERIAL
 If there any white goods (gifts for distributors stored in warehouse), does the CFA maintain a tracking for the same ::

 Check if any goods such as TV, fridge, microwave as gift to be given stored at the warehouse. Make a list of such items and receipt date.
POSM - PHYSICAL VERIFICATION

Location Code Location Description Item No. Item Description Inventory Date of Received Rate System Qty Physical Quantity Difference

VJW001 Ferrero India Vijayawada PTT030 TT Thermofoam for Consumer pro 1000 08-02-2020 24.00 1000 1000 -

VJW001 Ferrero India Vijayawada PTT112 MIXED HANGSELL Rs. 10 & Rs. 20 820 16-12-2019 18.50 820 820 -

VJW001 Ferrero India Vijayawada PTT120 TT Seeds Jar crowner 6570 07-11-2019 7.00 3570 3570 -

VJW001 Ferrero India Vijayawada PTT121 TT Seeds metal CTU single jar 1314 07-11-2019 80.00 1273 1273 -

VJW001 Ferrero India Vijayawada PTT122 TT Seeds chemist tray 964 07-11-2019 85.00 684 684 -

VJW001 Ferrero India Vijayawada PTT124 TT Double jar CTU metal 1121 07-11-2019 105.00 545 545 -

VJW001 Ferrero India Vijayawada PTT128 TT Coca Cola T32 Hangsell 4079 15-02-2020 16.00 2878 2878 -

VJW001 Ferrero India Vijayawada PTT130 TT Coca Cola Combined parasite 650 08-02-2020 69.00 571 571 -

These details are taken from the last GRN they received This Quantity is as on the Date of Verification
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PHYSICAL VERRIFICATION – POSM MATERIAL
 POSM Ageing – for calculating Ageing simply deduct date of goods received from Review date.

POSM Ageing
Location Code Location Description Item No. Item Description Inventory Date of Received Date of Review Ageing
GGN001 Ferrero India Gurgaon PFR062 Mega Display 5 06-08-19 17-02-20 195

GGN001 Ferrero India Gurgaon PFR063 Mega Display 6X6 6 26-02-19 17-02-20 356

GGN001 Ferrero India Gurgaon PFR074 Paper Poster (Quality) 12 24-10-18 17-02-20 481

GGN001 Ferrero India Gurgaon PKJ165 Toy Box FL&SM 10 16-06-17 17-02-20 976

GGN001 Ferrero India Gurgaon PKJ173 Big FSU 9 01-11-18 17-02-20 473

GGN001 Ferrero India Gurgaon PKJ291 Big FSU HW&B 11 19-06-19 17-02-20 243

GGN001 Ferrero India Gurgaon PKJ293 Sales Detailr HW & B 238 05-11-18 17-02-20 469

GGN001 Ferrero India Gurgaon PKSBC073 KSBC TT FSU 135 09-07-19 17-02-20 223

GGN001 Ferrero India Gurgaon PTM014 Trade Marketing Collaterals 11 08-08-17 17-02-20 923

GGN001 Ferrero India Gurgaon PTT023 TT Paper Poster for Red Apple 69 20-04-18 17-02-20 668

GGN001 Ferrero India Gurgaon PTT080 Tic Tac DM3 Clipstrips 7440 01-11-18 17-02-20 473

GGN001 Ferrero India Gurgaon PTT095 TT Re 1 Paper poster 294 24-04-18 17-02-20 664

GGN001 Ferrero India Gurgaon PTT098 LLp 10 sticker leaf 447 16-06-17 17-02-20 976

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PHYSICAL VERRIFICATION – POSM MATERIAL
 POSM Material

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PHYSICAL VERRIFICATION – POSM MATERIAL
 POSM Tracker

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MATERIAL STORAGE
10. Expired Stock

 Test to be performed :: Is expired stock storage stored separately and not along with normal stock.

 Attach photo if expired stock stored along with good stock

 Is physical verification conducted by CFA - Check if physical verification records of CFA available.

 Attach photo of physical verification record

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PHYSICAL VERIFICATION
 Sealed signed Expired stock statement
 Make sure that it is signed by the ASM or SO and CFA both

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DO’S & DON’TS FOR CFA REVIEW

 Reach on time i.e.10 AM Sharpe.

 Post selfie after reaching the audit palace and before leaving.
 Carry a laptop to the audit palace.
 Refer checklist before going for review.
 Consider stock statement generated in front of you.
DO’S  Be assured that checklist has been completed in all respect.
 Raise your concern on the WhatsApp group immediately relating to any issue.
 Report all your observations with the required supporting's in the checklist.
 Collect Stock statement in MS Excel- this will help you in stock punching in the annexure.
 Ensure accuracy in PV activity.
 Take signoff on all the PV documents and other observation noted.
 Share deliverables in the required time period i.e. within 24 hrs. from the visit.

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DO’S & DON’TS FOR CFA REVIEW

 Leave the audit palace before calling GMA Team.

 Share the checklist with the client only discuss the observations and take remarks
regarding any non compliance.
DON’TS  Suggest any thing to the CFA Owner / Staff regarding any non compliance.

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THANK YOU