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<img src='content_image/449859.jpg'>

*Stock write offs represent the stock value in the system but not physically available and stock write-backs represent the stock value not in the system but physically available. 

In response management stated that they were looking to institute an audit on the causes of the variance and recommendations from the exercise would be implemented. A consultant would be appointed by the end of December 2018. 

## 3.4 Deposits Payable 

As at 31 March 2018, BR had deposits payable to customers amounting to P13.42 million dating back to the year 2004 which were still recorded as a payable. Refundable deposits should be paid back to customers or written to the income statement, if not refundable. 

In response management stated that out of the P13.42 million, an amount of P12.5 million relating to Government grant had been corrected and classified as grant while the remaining transactions were being investigated. Once determined as refundable, management would locate the respective customers and refund them accordingly, otherwise the amounts would be cleared to miscellaneous income. 

## 3.5 Insurance of Assets 

BR used to have a General Fund account set aside for purposes of insurance of its assets which it had since depleted. It was observed that BR had an asset base worth P4.4 billion, and only P20 million for motor vehicles is insured, the rest was uninsured. For a business that deals in transportation of goods and services, the cost to repair its assets considering the increase in train accidents in the past few years, is likely to be high. 

In response management stated that they once floated a tender for the insurance of the BR assets. However, the quotations received were too high and therefore expensive. Management was considering other options of insuring its assets such as opening a general insurance reserve for self-insurance. 

