ROYAL FISHING CORP.

Date: To: Cc: October 24, 2012 Boss Josephine Pangilinan Boss Marietta Pangilinan Sir Larry Tongco Subject: Warehouse / Inventory Policy Implement FIFO (first in first out) system. All flammable items such as paint, epoxy reducer, rust converter should be secured at one location or have separate rack away from other stock to prevent fire. All items for compra like rice, groceries. Etc. should be in a separate and clean area, away from any poisonous materials or chemicals that can cause contamination. All mechanical and electrical equipment which is pulled out from each vessel and intended for safekeeping should be forwarded to machine shop/electrical shop for initial checking/reconditioning to ensure that the item to be stored are in good condition before endorse to warehouse. All mechanical and electrical equipment which are subject for replacement must have the item to be replaced, with corresponding return slip and should be forwarded to machine shop/electrical shop for initial checking/reconditioning. And recommend to purchase if needed. Every month end, warehouse department will conduct a monthly inventory to ensure the accuracy of records and to avoid discrepancy in inventory reports. All receiving copy (warehouse issue slip and direct to vessel) must have a printed name indicated, date receive, time receive and signature of the end-user for traceability purposes. One day lead time of dispatching, for those purchased item/material which properly endorsed to warehouse. Prepare a summary report of issuance for the item/material which is received by the end-user within the day (day to day basis).

Determine if inventory quantities are sufficient for needs, ordering more material when needed.

Proper labelling of all purchased item which intended for safe keeping must indicate the following (vessel name, department and purchase order) and place in separate location/rack to identify if the item is stock or non-stock.