Accounting Policies of Sharp Industries Ltd. Company

Jun 30, 2013

A) Method of Accounting:

The Accounts are prepared on the basis of going concern and on accrual basis. Accounting policies, not specifically referred to, are consistent with generally accepted accounting principles.

b) Fixed Assets:

i) Fixed Assets purchased are capitalised at acquisition cost including directly attributable cost of bringing the assets to their working condition for intended use and also including an appropriate share of incidental expenditure during construction and its installation.

ii) Capital Work in Progress: All the expenses, incurred for acquiring, erecting and commissioning of fixed assets including interest, financial charges and hire charges and other incidental expenditure relating to fixed assets not put to use, as determined and taken by the management, are shown under Capital Work-in- Progress.

c) Depreciation:

Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 except on Building, Plant & Machinery of the Unit at B-10/3, M.I.D.C, Waluj, Dist. Aurangabad, and Building and Plant & Machinery of the Unit at Plot No. 6, Survey No. 70. Village Waliv, Vasai (E), Dist.Thane, Maharashtra, where depreciation has been provided on Written Down Method at the rates and the manner prescribed in Schedule XIV to the Companies Act, 1956.

d) Inventories:

Items of inventories including non moveable items are valued at lower of the cost or net realisable value.

e) Foreign Currency Transactions:

Transactions in foreign currency are recorded at the rate of exchange at the time of transactions were effected.

f) Sales:

Net sales include value of goods sold, amount of inter-departmental sales and are net off excise duty, sales tax, VAT and other recoverable expenses, if any.

g) Investments:

Current investments are stated at lower of cost and fair value and Long Term Investments are stated at cost. Provision is made where there is a decline, other than temporary, in the value of long term investment.

h) Revenue & Expenses Recognition:

Revenue and expenses in respect of dividend income, other claims and expenses are recognised only when it is reasonably certain that the ultimate collection/payment will be made. Provision for disputed liability is made as and when liability is finally accepted.

i) Lease Rent:

Lease Rent received / paid in advance is allocated over the term of lease.

j) Miscellaneous Expenditures:

i) Preliminary and Pre-operative Expenses are written off over a period of five years.

ii) Deferred Revenue Expenditures represent all developmental and other costs including lease rent, interest and financial charges incurred prior to commencement of commercial productions in respect of new projects/ assets/expansion of projects and not capitalised. Such expenditures are written off over a period of five years.

k) Borrowing Cost:

Borrowing cost that is attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying assets is one that necessarily takes substantial period of time to get ready for intended use.

All other borrowing costs are charged to revenue.

---

Sep 30, 2011

A) Method of Accounting: The Accounts are prepared on the basis of going concern and on accrual basis. Accounting policies, not specifically referred to, are consistent with generally accepted accounting principles.

b) Fixed Assets:

i) Fixed Assets purchased are capitalised at acquisition cost including directly attributable cost of bringing the assets to their working condition for intended use and also including an appropriate share of incidental expenditure during construction and its installation.

ii) Capital Work-in-Progress: All the expenses, incurred for acquiring, erecting and commissioning of fixed assets including interest, financial charges and hire charges and other incidental expenditure relating to fixed assets not put to use, and the advances given for acquiring capital goods, as determined and taken by the management, are shown under Capital Work-in-Progress.

c) Depreciation: Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 except on Building, Plant & Machinery of the Unit at B-10/ 3, M.I.D.C, Waluj, Dist. Aurangabad, and Building and Plant & Machinery of the Unit at Plot No. 6, Survey No. 70. Village Waliv, Vasai (E), Dist. Thane, Maharashtra, where depreciation has been provided on Written Down Method at the rates and the manner prescribed in Schedule XIV to the Companies Act, 1956.

d) Inventories: Items of inventories including non moveable items are valued at lower of the cost or net realisable value.

f) Sales: Sales include value of goods sold, amount of inter-departmental sales and are net off excise duty, sales tax, VAT and other recoverable expenses, if any.

g) Investments: Current investments are stated at lower of cost and fair value and Long Term Investments are stated at cost. Provision is made where there is a decline, other than temporary, in the value of long term investment.

h) Revenue & Expenses Recognition: Revenue and expenses in respect of dividend income, other claims and expenses are recognised only when it is reasonably certain that the ultimate collection/payment will be made. Provision for disputed liability is made as and when liability is finally accepted.

i) Lease Rent: Lease Rent received / paid in advance is allocated over the term of lease.

j) Miscellaneous Expenditures:

i) Preliminary and Pre-operative Expenses are written off over a period of five years.

ii) Deferred Revenue Expenditures represent all developmental and other costs including lease rent, interest and financial charges incurred prior to commencement of commercial productions in respect of new projects/ assets/expansion of projects and not capitalised. Such expenditures are written off over a period of five years.

k) Borrowing Cost: Borrowing cost that is attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use.

All other borrowing costs are charged to revenue.

l) Contingent Liabilities: Contingent Liabilities are determined on the basis of available information and are disclosed by way of notes to accounts.

---

Sep 30, 2010

A) Method of Accounting:

The Accounts are prepared on the basis of going concern and on accrual basis. Accounting policies, not specifically referred to, are consistent with generally accepted accounting principles.

b) Fixed Assets:

i) Fixed assets purchased are capitalised at acquisition cost including directly attributable cost of bringing the assets to their working condition for intended use and also including an appropriate share of incidental expenditure during construction and its installation.

ii) Capital Work in progress: All the expenses, incurred for acquiring, erecting and commissioning of fixed assets i including interest, financial charges and hire charges and other incidental expenditure relating to fixed assets not ; put to use, and the advances given for acquiring capital goods, as determined and taken by the management are i shown under capital work-in-progress.

c) Depreciation:

Depreciation on fixed assets is provided on Straight Line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 except on Building, Plant & Machinery of Unit at B-10/3, M.I.D.C, Waluj, Dist. Aurangabad, ; and Building and Plant & Machinery of Plot No. 6, Survey No. 70. Village Waliv, Vasai (E), Dist.Thane, Maharashtra, where i depreciation has been provided on Written Down Method at the rates and the manner prescribed in Schedule XIV to the Companies Act, 1956.

d) Inventories:

Items of inventories including non moveable items are valued at lower of the cost or net realisable value.

e) Foreign Currency Transactions:

Transactions in foreign currency are recorded at the rate of exchange at the time of transactions were effected.

f) Sales:

Sales include value of goods sold, amount of inter-departmental sales and are net off excise duty, sales tax, VAT and other recoverable expenses, if any.

g) Investments:

Current investments are stated at lower of cost and fair value and Long Term Investments are stated at cost. Provision is | made where there is a decline, other than temporary, in the value of long term investment.

h) Revenue & Expenses Recognition:

Revenue and expenses in respect of dividend income, other claims and expenses are recognised only when it is reasonably i certain that the ultimate collection/payment will be made. Provision for disputed liability is made as and when liability I is finally accepted.

i) Lease Rent:

Lease Rent received / paid in advance is allocated over the term of lease.

j) Miscellaneous Expenditures:

a) Preliminary and pre-operative expenses are written off over a period of five years.

b) Deferred Revenue Expenditures represents all developmental and other costs including lease rent, interest and financial charges incurred prior to commencement of commercial productions in respect of new projects/assets/ expansion of projects and not capitalised. Such expenditures are written off over a period of five years.

SCHEDULE -19 (Contd.]

k] Borrowing Cost:

Borrowing cost that is attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying assets is one that necessarily takes substantial period of time to get ready for intended ; use. All other borrowing costs are charged to revenue.

---

Sep 30, 2009

A) Method of Accounting:

The Accounts are prepared on the basis of going concern and on accrual basis except for the Scrap income which is accounted for on its sales basis. Accounting policies, not specifically referred to, are consistent with generally accepted accounting principles.

b) Fixed Assets:

i) Fixed assets purchased are capitalised at acquisition cost including directly attributable cost of bringing the assets to their working condition for intended use and also including an appropriate share of incidental expenditure during construction and its installation. Fixed assets manufactured and capitalised are accounted on the basis of estimation.

ii) Capital Work in progress : All the expenses, incurred for acquiring, erecting and commissioning of fixed assets including interest, financial charges and hire charges and other incidental expenditure relating to fixed assets not put to use, and the advances given for acquiring capital goods, as determined and taken by the management are shown under capital work-in-progress..

c) Depreciation:

Depreciation on fixed assets is provided on Straight Line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 except on Building, Plant & Machinery of Unit at B-10/3, M.I.D.C, Waluj, Dist. Aurangabad, and Building some of the Plant & Machinery of Plot No. 6, Survey No. 70. Village Waliv, Vasai (E), Dist.Thane, Maharashtra, where depreciation has been provided on Written Down Method at the rates and the manner prescribed in Schedule XIV to the Companies Act, 1956.

d) Inventories:

Items of inventories including non moveable items are valued at lower of cost or net realisable value.

e) Treatment of Retirement Benefits:

Retirement benefits are provided as estimated by the management.

f) Foreign Currency Transactions:

Transactions in foreign currency are recorded at the rate of exchange at the time of transactions were effected. The value of assets acquired through specific foreign currency loan, is adjusted for the change in liability in respect of die loan due to fluctuation in currency rate as on the annual closing day.

g) Sales:

It includes sales value of goods, amount of inter-departmental sales and net off excise duty, sales tax and other recoverable expenses, if any.

h) Investments:

Investments are stated at cost. Provision for diminution in the value of investments is made only if such decline is other than temporary in the opinion of management. Interest on deferred loan for the acquisition of investments are accounted on the payment basis and added to the cost of investment.

I) Revenue Recognition:

Revenue and expenses in respect of dividend income, other claims and expenses is recognised only when it is reasonably certain that the ultimate collection/payment will be made. Provision for disputed liability is made as and when liability is finally accepted.

j) Lease Rent

Lease Rent is allocated over the term of lease.

k) Miscellaneous Expenditures:

a) Preliminary and pre-operative expenses are written off over a period of ten years.

b) Deferred Revenue Expenditures represents all developmental and other costs including Lease Rents, Interest and Financial charges incurred prior to commencement of Commercial productions in respect of new projects/assets/ expansion of projects. Such expenditures is written off over a period of six years.