SHARP INDUSTRIES LIMITED 24th ANNUAL REPORT · 3 SHARP INDUSTRIES LIMITED DIRECTORS' REPORT Dear...

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SHARP INDUSTRIES LIMITED


24th ANNUAL REPORT

Board of Directors : Mr. Rajesh T. Sheth ChairmanMr. Ashwin T. Sheth Managing DirectorMr. Prajesh Shah DirectorMr. Ritesh Khetan DirectorMr. Rajesh Merchant Director

Auditors : R. R. Mandali & Co.Chartered Accountants

Registered Office : Plot No. 6, Survey No. 70Village Waliv, Vasai (E)Dist. Thane 401 208.

Registrars & Share Transfer Agents : M/s. Sharepro Services13, AB, Samhita Warehousing ComplexB/H, Sakinaka Telephone ExchangeKurla Andheri Road, SakinakaMumbai 400 072.Ph. No. 67720300 / 67720400

C O N T E N T SNotice 2

Directors’ Report 3-4

Management Discussion and Analysis 5-8

Corporate Governance Report 9-14

Auditors’ Report 15-17

Balance Sheet 18

Profit & Loss Account 19

Notes 20-27

Cash Flow Statement 28

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NOTICE

Notice is hereby given that the Twenty Fourth Annual General Meeting of the Members of Sharp Industries Limited will beheld on Monday, the 30th December 2013, at 9.30 a.m. at Hotel Express Inn, Thane – Ahmedabad Highway Junction, NearGhodbunder Bridge, Next to Hotel Fountain, Post Mira, Dist. Thane, Maharashtra to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the Balance Sheet as at 30th June, 2013, the Profit and Loss account for the periodended on that date together with the Auditors’ and Directors’ Reports thereon.

2. To appoint a Director in place of Mr. Ritesh Khetan who retires by rotation and is eligible for re-appointment.

3. To appoint a Director in place of Mr. Prajesh Shah who retires by rotation and is eligible for re-appointment.

4. To appoint Auditors of the Company to hold office from the conclusion of this Annual General Meeting until theconclusion of the next Annual General Meeting and to fix their remuneration.

Registered Office: By order of the BoardPlot No. 6, Survey No. 70 For SHARP INDUSTRIES LIMITEDVillage Waliv, Vasai [East]Dist. Thane - 401 208.

Place : Mumbai RAJESH T. SHETHDate : 22nd November, 2013 CHAIRMAN

Notes:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTEINSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXY FORMS IN ORDER TO BEEFFECTIVE MUST BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THECOMMENCEMENT OF THE MEETING.

2. The Register of Members and Share Transfer Books of the Company will remain closed from 23rd December 2013 to 30th

December 2013 (both days are inclusive).

3. Members seeking any information/ explanation are requested to write to the Company at its Registered Office at least7 days in advance so as to enable the Company to keep the information/ explanation ready.

4. Members are requested to inform immediately about the change of address and/or consolidation of folios, if any, andare requested to bring their copies of Annual Reports and the Attendance Slips with them at the Annual GeneralMeeting.


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DIRECTORS' REPORTDear Members,

Your Directors have pleasure in presenting the 24th Annual Report with the Audited Statements of Accounts of the Companyfor the period of nine months ended on 30th June, 2013.

FINANCIAL RESULTS(` In Lac)

Period ended Year ended9 Months 12 Months

30.06.2013 30.09.2012

Net Sales 22169.22 22107.13Profit Before Interest, Depreciation and Tax 2637.97 2919.28Interest & Financial Charges 694.38 695.17

Profit Before Depreciation & Tax 1943.59 2224.11Less: Depreciation 461.38 623.18

Profit Before Tax 1482.21 1600.93

Provision for Taxation 296.43 79.97

Profit After Tax 1185.78 1520.96

Add / (Less): Prior Period Adjustment 0.00 0.00

Net Profit carried to Balance Sheet 1185.78 1520.96

OPERATIONAL PERFORMANCE

The net sales from operation for the period of 9 months under review increased to Rs. 22169.22 Lac from Rs.22107.13 Lacin the previous year, a rise of 33.71% on annualized basis. Though the turnover increased on annualized basis in the periodunder review, profitability was under pressure due to rise in raw material cost, increased financial cost resulting from higherborrowings for working capital and higher tax provisions during the period compared to previous 12 months ended 30.09.2012.

DIVIDEND

Your Directors do not recommend any dividend for the 9 months period ended 30.06.2013 with a view to conserve resourcesfor the expanding activities of the Company.

FIXED DEPOSITS

During the period under review, the Company has not accepted any deposit under Section 58A of the Companies Act, 1956read with the Companies (Acceptance of Deposits) Rules, 1975.

DIRECTORATE

Under the provisions of the Companies Act, 1956 and the Articles of Association of the Company Mr. Ritesh Khetan and Mr.Prajesh Shah retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

There was no change in the Board of Directors of the Company during the period under report.

CORPORATE GOVERNANCE REPORT & MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Pursuant to Clause 49 of the Listing Agreement with Bombay Stock Exchange, separate sections on Corporate Governanceand Management Discussion & Analysis together with a Certificate from the Company’s Auditors on compliance have beenincluded in this Annual Report.

AUDITORS

M/s. R.R. Mandali & Co., Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing Annual GeneralMeeting and being eligible offer themselves for reappointment.

COMMENT ON AUDITORS’ REPORT

There is no adverse comment mentioned in the Audit Report which requires any clarification or explanation as requiredunder the provisions of Section 217(3) of the Companies Act, 1956.


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PARTICULARS OF EMPLOYEES AND OTHERS

The Company does not have any employee receiving remuneration of Rs. 5,00,000/- & more per month i.e.Rs. 60,00,000/- & more per annum and therefore no particulars are required to be furnished under Section 217 (2A) of theCompanies Act, 1956.

INFORMATION ON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

Energy conservation measures are taken on a continuing basis on various fields, which have yielded positive results inreducing energy consumption.

The Company is not covered under the list specified in Form ‘A’ of the Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules, 1988.

FOREIGN EXCHANGE EARNINGS AND OUTGO (` in Lacs)

a Expenditure incurred in Foreign Currency Nil

b Earnings in Foreign Currency (FOB Value) Nil

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm having:

i) followed in preparation of the Annual Accounts, the applicable accounting standards with proper explanation relatingto material departures, if any;

ii) selected such accounting policies and applied them consistently and made judgments and estimates that are reasonableand prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year andof the profit of the Company for that year;

iii) taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities;

iv) prepared the Annual Accounts on a going concern basis.

STATUTORY DISCLOSURES

None of the Directors is disqualified under the provisions of Section 274(1)(g) of the Companies Act, 1956. The Directorshave made the requisite disclosures as required under the provisions of the Companies Act, 1956 and Clause 49 of theListing Agreement.

APPRECIATION

Your Directors place on record their deep appreciation for the continued valuable contribution and the spirit of dedicationof the employees at all levels. Your Directors also express their deep gratitude for the cooperation and support extended bythe financial institutions, banks, Government authorities / agencies and other stakeholders.

For & On Behalf of the Board

Place : Mumbai. RAJESH SHETHDate : 22.11.2013 CHAIRMAN


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MANAGEMENT DISCUSSION AND ANALYSISOVERVIEW

Since the failure of many a banking and financial institutions from October 2008, the developed economies the world overhave continued to face economic problems. We were lucky that the Indian economy did not suffer recession, though itsGDP growth rate slowed down since then and of late experiencing over all slowdown in economy. Still GDP for the currentfinancial year is expected at ~ 4.5%.

BUSINESS SEGMENT

Flexible Packaging Industry

Packaging is the science, art and technology of protecting products from the overt and inherent adverse effects of theenvironment.

Flexible packaging not only protects the products, it has several advantages over the traditional packaging materials likeglass, metal, paper, etc. It is light weight, easy to handle, needs less storage space, cost effective and better aesthetic andappealing value.

The World Packaging Organization’s (WPO) slogan, “Better Quality of Life Through Better Packaging”, sumps up theimportant place that flexible packaging occupies in a modern economy.

Global Flexible Packaging market is expected to grow at about 5% annually and reach $90 billion in 2016. Asia’s share is42% and is growing at higher rate of about 7%. Within Asia, the fastest growing region is Southeast Asia and Oceaniadriven by high demand in India with 15-20% annual growth rate.

A number of factors contribute to such robust growth.

Flexible packaging has helped FMCG companies to penetrate the untapped/under tapped huge rural markets with small-serve packs. High economic growth, growing income level, growing urbanization & organized Retail Industry, increasinghealth consciousness, changing food habits amongst Indians are the other important contributors to the spectaculargrowth of the flexible packaging industry.

Market researcher Nielsen estimates that the country’s rural FMCG retail landscape will grow from $12 billion in 2011 to$100 billion by 2025, as per its CONSUMER 360 REPORT of November, 2011. It further states the rural mindset is open toconsumption of newer, more contemporary food categories and as a result, drives consistent growth.

The research firm has identified four key trends that it says will drive consumption: premuimisation, consumer switchingfrom commodity to brands, from indulgence to regular consumption and acceptability. While small sized packages arevital for entry in to the market, as purchasing power increases, rural consumers are increasingly buying larger pack sizes toshare with family and friends.

The marker researcher added that Indian shoppers will increase spends on fast moving consumer goods (FMCG) at modernretail stores from $1.8 billion to $5.0 billion by 2015. The Indian consumer is clearly enjoying the modern trade shoppingexperience and is increasingly shopping there.

Further recent move of the Government to allow 51% FDI in multi-brand retail and to increase the FDI limit to 100% insingle brand retail will boost the organized retailing.

Because of all the above factors and since per capita consumption of flexible packaging in India is among the lowest inthe world, and also with introduction of innovative new products, it is expected that Indian flexible packaging industrywill continue to grow at 15-20%CAGR.

OUR BUSINESS

The main business of the Company is flexible packaging laminates which contains multi-layered laminated sheets / rolls ofsingle or combination of substrates like Polyester (PET), BOPP, POLY, CPP, BONN, Metalized and Hologram films andothers, either supplied in roll from or pouch form of various formats (zipper, standby, retort, etc.) involving manufacturingof rotogravure cylinders for various types of rotogravure printing, shims for Holographic embossing, manufacturing ofsealant layer films like 3-Layer Polyethylene film, Cast Poly Propylene film, 5-Layer Nylon Polyethylene film. This business


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is very customized business as per the needs of the customer. The Company provides complete solution under one roof forthe packaging needs of the customers and has a very impressive marquee clientele. The Company is one of the major playersin flexible packaging laminates in India and enjoys a dominant position in certain market / product segments.

The Company has developed several new packaging solutions for various applications suitable for Food Industry & PersonalCare, thus achieving World-Star accolades and recognition for its valuable contribution to the products success in themarket. The Company’s strategy for constant product innovation, with thrust on cost effectiveness and quality enhancementwith improving services, has led to a promising growth in its sales volumes and a preferred supplier’s position with itsmarquee clients.

Keeping its tradition of product innovation to suit a specific product and simultaneously keeping in mind legal andenvironmental aspects, the Company has developed new types of Laminated Multi-colour Printed Laminates based onAluminum Foil & Specialty Paper based Laminates to seize this additional business opportunity, the Company has expandedits capacity from 10000MT to 14000MT in the previous year; the benefits of which are available from the year under reviewonward.

The Company has in-house cylinder manufacturing capabilities for captive consumption. Printing cylinder is at the core ofthe Rotogravure Flexible printing and the Company has capabilities to provide complete solution starting from Artwork/Mock up stage to producing final printing cylinders. The Company has world class and state-of-art total expertise andfacilities integrated with best software to produce good quality cylinders.

Holograms produced by the Company are of world class quality being accepted widely in domestic markets. The Companyis benefitting in terms of volume growth with the help of Holographic solutions, as this will make the business difficultfor spurious manufactures, thereby increasing the business of the Company’s clientele and help the Company to registerfurther growth. Also the Company has an edge over many a competitors as it offers one stop holographic solutions mainlydue to its integrated production facilities.

The Company also produces a new form of laminate containing extruded laminated polyethylene that accelerates the shelflife, package body and appeal and exclusive barrier properties to retain products freshness of snacks industry.

FINANCIAL ANALYSIS

A snap shot of the Income Statement for the last two accounting periods is given below:

(` in Crore)

Financial Year ended on

Particulars 30.06.2013(9 Months) 30.09.2012(12 Months)

Sales & Other Income 222.17 100.00% 221.12 100.00%

Manufacturing Expenses(Adjusted for change in stock) 194.35 87.48% 189.94 85.90%

Administrative & Selling Expenses 1.44 0.65% 1.99 0.90%

EBITDA 26.38 11.87% 29.19 13.20%

Interest & Finance Charges 6.94 3.12% 6.95 3.14%

Depreciation 4.62 2.08% 6.23 2.82%

Income Before Tax (Pre-Exceptional Items) 14.82 6.67% 16.01 7.24%

Prior Period Adjustments 0.00 0.00% 0.00 0.00%

Provision for Income Tax 2.96 1.33% 0.80 0.36%

Net Profit 11.86 5.34% 15.21 6.88%

The net sales from operation for the period of 9 Months under review increased to Rs. 221.17 Crore from Rs.221.07 Crore inthe previous year, an annualized rise of 33.71%. Though the turnover increased in the year under review, profitability wasunder pressure due to rise in raw material cost, increased financial cost resulting from higher borrowings for workingcapital and higher tax provisions during the 9months period ended 30.06.2013 compared to 12 months period ended30.09.2012.


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OPPORTUNITIES & THREATS

Opportunities:

Flexible packaging has been one of the fastest growing sectors of the packaging market over the past decade. Annualgrowth rate of 15-20% shows very broad perspective of Indian flexible packaging industry and the opportunities it offers.

Flexible packaging that is a very versatile packaging form that can cater to any needs of the customers and can becustomized to specific requirements of the end application. The inherent property of barrier protection of packagingsubstrates like PE, PET, PP, PA, etc., offers fearless protection against environmental threats like moisture, heat andchemical reaction. The convenience factor of handling and cost benefits are a few of added advantages.

Factors driving growth of flexible packaging:

· Materials like metals are volatile, glass is becoming increasingly expensive, wood is not eco-friendly, therefore posingexcellent growth prospect for flexible packaging.

· Flexible Packaging vies for conversion opportunities from rigid packaging and already controls the foodservice area.In general, flexible packaging continues to provide solid market penetration vs. aseptic and hot-fill rigid packaging,a trend most industry pundits believe will continue.

· Flexible packaging also has a strong outlook for barrier packaging, including stand-up pouches, non-retort stand-uppouches.

· A growing middle class population of over 400 million with high income.

· Changing Consumer habits in 1,2 & 3 Tier cities with working style of fast economies like developed countriesglobally, therefore making life on a fast track. Thus impetus given on easy, fast, convenient and flexible products,which is the prime deliverance of Flexible Packaging.

· Rapid growth in globalization in FMCG segment.

· Emergence of organized retail and technological strides in food manufacturing and processing is further fuelling thenext growth trajectory for the food industry in India.

Due to its constant efforts for excellent product quality, low cost manufacturing acumen, broad gamut of product offerings,one stop solution format, complete integration of conversion capabilities, hands on style management, motivated &skilled professional taskforce, top marquee of clients, aggressive marketing strategies, etc. the Company is poised forbecoming a major and important player in the industry.

The Company’s established design development and cylinder operation with world class softwares like Esko Artpro 10,Sonic speed engravers, automatics proofing and mock-up machines has given the Company an added advantage over itscompetitors as in-process flaws can be eradicated at the initial level of digital proof providing to the clients.

Threats:

The industry is very dynamic but very fragmented at the same time. Unorganized sector is still a very large part of themarket. However, growing awareness for hygiene and growing health consciousness and also rapidly expanding organizedretail sector help the flexible packaging companies in the organized sector to grow.

It is generalized as plastic industry globally and therefore perceived to be a non-eco-unfriendly industry experiencing stiffopposition. However with technological advances, flexible packaging has become safer for food products and now wellaccepted the world over.

The Company faces competition from other domestic manufacturers. However, since the market is growing at a high rateand because of the Company’s inherent strength this factor is not worrisome.


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FUTURE OUTLOOK

The Indian economy is growing at around 4.5%. Usages of flexible packaging are growing at much faster rate due to itsvarious advantages and other growth factors discussed herein above. The Company has successfully turned around becauseof strenuous efforts put in by the management of the Company. The Directors are therefore optimistic of brighter future ofthe Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an adequate system of internal control related to all its functions considering the size and nature ofoperations.

HUMAN RESOURCE DEVELOPMENT/INDUSTRIAL RELATIONS

The management of the Company puts greater value to its Human Resources. The Company has been taking on a continuousbasis necessary steps for strengthening organizational competency through involvement and development of employees aswell as installing effective systems for improving the productivity, quality and accountability at functional levels throughupgradeation of the skill and knowledge level and providing appropriate leadership at all levels, motivating them,inculcating the attitude for speed of action and taking responsibilities as well as face challenges successfully. The relationswith its Human Assets at all levels remained harmonious throughout the year.

CAUTIONARY STATEMENT

Statement in this Management Discussion and Analysis describing the Company’s objectives, projections, estimates,expectations or predictions may be “forward-looking statements” within the meaning of applicable securities lawsand regulations. Actual results could differ materially from those expressed or implied. Important factors that couldmake a difference to the Company’s operations include raw material availability and prices, cyclical demand andpricing in the Company’s principal markets, changes in Government regulations, tax regimes, economic developmentswithin India and the countries in which the Company conducts business and other incidental factors. The Companyassumes no responsibilities to publicly amend, modify or revise any forward looking statements on the basis of anysubsequent developments, Information or events.


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COMPLIANCE REPORT ON CORPORATE GOVERNANCE(Pursuant to Clause 49 of the Listing Agreement)

1. Company’s Philosophy On Code Of Governance:The Company is committed to good corporate governance and is implementing corporate governance norms as prescribedby SEBI. The Company respects the rights of its shareholders to information on its performance and considers itself atrustee of its shareholders.

2. Board Of Directors:- Composition and category of the Directors for a Accounting Period of Nine Months ended on 30th June, 2013:

Category No. of Directors %

Founder Directors 2 40Non-executive, Independent Directors 3 60

Total 5 100

3. Attendance of each Director at the Board Meetings and the last AGM

Directors No. of Board No. of Board Last AGM attendanceMeetings held; Meetings attended; (Yes/No)

Mr. Ritesh Khetan 3 3 YesMr. Prajesh Shah 3 3 YesMr. Rajesh Merchant 3 3 YesMr. Ashwin T. Sheth 3 3 YesMr. Rajesh T. Sheth 3 3 Yes

- Number of Board of Directors meetings held, dates on which heldThree Board meetings were held during the Accounting period. The dates on which the meetings were held are asfollows:28th November, 2012, 14th February, 2013 and 14th May, 2013

- None of the non-executive directors of the Company have any pecuniary relationships or transactions with theCompany.

- There is no compensation package for non-executive directors.- The Company has an Executive Chairman.

4. Audit Committee:The Company has formed Audit Committee comprising of the Chairman and Independent Directors. The audit committeemeetings are held prior to the meeting of Board of Directors approving the provisional / un-audited results of theCompany and audited results.The composition of the Audit Committee is as shown below:Mr. Prajesh Shah ChairmanMr. Rajesh T. Sheth MemberMr. Ritesh Khetan Member

Brief description of terms of reference:The Audit Committee is looking at effective supervision of the financial reporting process and ensuring financial andaccounting controls. The committee periodically interacts with the statutory auditors and Head of Accounts &Finance to discuss internal control and financial reporting issues. The committee provides the overall direction on therisk management policies, including the focus of management audit. The committee has full access to financial dataand to members of the Company’s staff. The committee reviews the annual and quarterly financial statements beforethey are submitted to the Board. The committee also monitors changes in accounting policies, reviews internal auditfunctions and discusses the accounting implications of major transactions.The Audit Committee met 3 times during the year on 28th November, 2012, 14th February, 2013 and 14th May, 2013and the attendance of members at the meeting was as follows:

Name of the Member Status No. of Meetings attended

Mr. Prajesh Shah Chairman 3Mr. Ritesh Khetan Member 3Mr. Rajesh Sheth Member 3


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5. Remuneration Committee: The Company has not formed any remuneration committee.

6. Investors’ Grievance Committee:The Company has formed Investor Grievance Committee, which (The committee) oversees the share transfers as well astakes care of investor grievances.The Committee met on 14th February, 2013 and 14th May, 2013 and the attendance of members at the meetingwas as follows:Name of the Member Status No. of Meetings attendedMr. Prajesh Shah Chairman 2Mr. Ashwin T. Sheth Member 2Mr. Rajesh T. Sheth Member 2

7. Number of Shareholders Complaints Received, Solved And Pending:A. Nature of Complaints Received Solved Pending

Non-receipt of Share Certificates/ 8 8 0Refund / DematStock Exchange 5 5 0SEBI 3 3 0

The Company attended to the most of the investors’ grievances / correspondence with in a period of 10 days from thedate of the receipt of the same.

8. Change In Directorship:

There was no change in directorship of the Company during the Accounting period under review.

9. General Body Meetings:

Details of location, date and time of holding the last three Annual General Meetings.

Financial Year Ended Location Date and Time

30.09.10 Hotel Express Inn, Thane-Ahmedabad Highway Junction, December 30, 2010Nr. Ghodbunder Bridge, Next to Hotel Mira, Dist: Thane, Maharashtra. at 9.30 a.m.



10. Disclosures:

None of the transactions with any of the related parties were in conflict with the interest of the Company.

11. Means of Communication:a. Quarterly results are generally published in Free Press Journal and Navshakti, Mumbai.b. Management Discussion and Analysis forms part of the Annual Report, which is posted to the shareholders

of the Company.

12. General Shareholder Information1) Annual General Meeting Day ,Date, Time and Monday, 30th December, 2013 at Hotel Express Inn,

Venue Thane-Ahmedabad Highway Junction, Nr. Ghodbunder Bridge,Post Mira, Dist. Thane at 9:30 a.m.

2) Financial Calendar 01.10.2012 to 30.06.20133) Date of Book Closure Monday 23rd December 2013 to Monday 30th December, 2013

(both days inclusive)

4) Listing on Stock Exchanges The Bombay Stock Exchange Limited.Annual Listing fees for the year 2013-14 has been paid to BSE

5) Stock Code BSE: 523359


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6) Share transfers in physical form as well as Address of Registrar and Transfer Agentelectronic mode and other communication M/s. Sharepro Servicesregarding share certificates, dividends, and 13 AB, Samhita Warehousing Complex,change of address, etc. should be addressed B/h. Sakinaka Telephone Exchange,to the Registrar and Transfer Agent i.e M/s. Kurla Andheri Road, Sakinaka, Mumbai – 400 072.Sharepro Services (India ) Private Limited Telephone : (022) 67720300, 62077400

Fax : 28508927Email : [email protected]

You can also address your queries to thee- mail id: [email protected]

Share Transfer System

Physical Shares sent for transfer are registered and returned within a period of 20 days from the date of receipt, if thedocuments are clear in all respects. The Company has formed Share Transfer Committee. The Composition of ShareTransfer Committee is mentioned below:

Name of the Member Status

Mr. Rajesh Merchant ChairmanMr. Ashwin Sheth MemberMr. Rajesh Sheth Member

The Share Transfer Committee of the Company meets as and when required. In respect of Shares held in Electronicmode, the transfer takes place between transferor, transferee and Depository Participants through electronicdebit / credit of accounts involved.

Stock Market Data (In ` /per share) – The Bombay Stock Exchange (BSE)

High - Low during each Month in last financial year is as under:

Month High Low

October, 2012 16.45 13.00November, 2012 14.70 11.57December, 2012 15.00 07.60January, 2013 13.40 09.66February, 2013 11.97 09.28March, 2013 10.49 08.12April, 2013 09.60 07.06May, 2013 08.60 06.92June, 2013 07.89 06.05

Shares under Lock-in

NIL

Investors’ correspondence may be addressed to:

Sharp Industries LimitedPlot No.6, Survey No. 70Village Waliv, Vasai (East)Dist. Thane 401 208.

Tel.: (0250) 6585472, 6585473


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* DISTRIBUTION OF SHAREHOLDING

No. of Shares No. of No. of No. of No. of Total No. Total No. %Holders Shares Holders Shares of Holders of Shares(Demat) (Physical)

1-5000 5349 1275547 7057 80999 12406 1356546 6.80

5001-10000 56 402233 NIL NIL 56 402233 2.01

10001-20000 42 612486 NIL NIL 42 612486 3.07

20001-30000 8 201368 NIL NIL 8 201368 1.01

30001-40000 9 318667 NIL NIL 9 318667 1.60

40001-50000 5 222139 NIL NIL 5 222139 1.11

50001-100000 8 492553 1 90000 9 582553 2.92

100001 and above 24 13946827 3 2310000 27 16256827 81.48

Total 5501 17471820 7061 2480999 12562 19952819 100.00

* SHAREHOLDING PATTERN

Sr. No. Category No. of Shares Held % of Shareholding

1 Promoters 5788692 29.01

2 Mutual Funds / HUF & AOPs 625 0.00

3 Banks, Financial Institutions, Insurance Companies 2400020 12.02

4 Foreign Institutional Investors 70236 0.35

5 Private Bodies Corporate 5915419 29.65

6 Indian Public 5641962 28.28

7 NRIs / OCBs 135865 0.69

8 GDR / ADR NIL NIL

GRAND TOTAL 19952819 100.00

12. Plant Location

VASAIPlot No.6, Survey No. 70Village Waliv, Vasai (East)Dist. Thane 401 208.

AURANGABAD

B-10/3 M.I.D.C. Ind. EstateWaluj, Auranagabad.

* Distribution Schedule and Shareholding Pattern are mentioned as per the latest available records with the Company.


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Certification from CEO of the CompanyToThe Board of DirectorsSharp Industries LimitedMumbai

CERTIFICATE

I have reviewed the financial results and the cash flow statement of Sharp Industries Limited for the 9 month accountingperiod ended 30th June, 2013 and certify that:

(a) These results and statements, to the best of my knowledge and belief:

(i) do not contain any materially untrue statement or omit any material fact or contain statements that might bemisleading;

(ii) present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards,applicable laws and regulations.

(b) To the best of my knowledge and belief, there are no transactions entered into by the Company during the year, whichare fraudulent, illegal or violative of the Company’s Code of Conduct.

(c) I accept responsibility for establishing and maintaining internal controls and have evaluated the effectiveness of theinternal control systems of the Company and have disclosed to the Auditors and the Audit Committee, deficiencies inthe design or operation of internal controls of which I am aware, and the steps taken and proposed to be taken torectify these deficiencies.

(d) I have also indicated to the Auditors and the Audit committee:

(i) Significant changes in the internal controls with respect to financial reporting during the year;

(ii) Significant changes in accounting policies during the year and that the same have been disclosed in the notes tothe financial statements; and

(iii) To the best of my knowledge and belief, there are no instances of fraud involving either the Management oremployees having a significant Role in the Company’s internal control systems with respect to financial reporting.

Mumbai, Ashwin T. Sheth22nd November, 2013 Managing Director & CEO

CODE OF CONDUCT

The Board has laid down a code of conduct for all the Board Members and Senior Management of the Company. All theBoard Members and Senior Management Personnel have affirmed compliance with the Code on an annual basis.


DECLARATION

As provided under Clause 49 of the Listing Agreement signed with the Stock Exchanges, the Board Members and the SeniorManagement personnel have confirmed compliance with the code of conduct for the 9 month accounting period ended30th June, 2013.



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AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE

ToThe Members ofSharp Industries Limited

1. We have examined the compliance of conditions of Corporate Governance by Sharp Industries Ltd. for the 9 monthaccounting period ended 30th June, 2013, as stipulated in Clause 49 of the Listing Agreement of the said Companywith Bombay Stock Exchange.

2. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination waslimited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of theconditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statementsof the Company.

3. In our opinion and to the best of our information and according to the explanations given to us and based on therepresentations made by the Directors and the Management, we certify that the Company has complied with theconditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.

4. We state that investor grievances received during the year ended 30th June, 2013 no investor grievances are pendingagainst the Company for a period exceeding one month as per the records maintained by the Company and presentedto the Shareholders / Investor Grievances Committee.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of theefficiency or effectiveness with which the Management has conducted the affairs of the Company.

For R.R. MANDALI & CO.Chartered Accountants

(Firm Regn. No. 114223W)

R. R. MANDALIPlace : Mumbai (PROPRIETOR)Date : 22nd November, 2013 M. NO. 033118


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AUDITORS' REPORT

To,The Member ofSHARP INDUSTRIES LIMITED

We have audited the attached Balance Sheet of SHARP INDUSTRIES LIMITED as on 30th June, 2013, the Statement of Profitand Loss Account and the Cash Flow Statement for the 9 months period ended on that date, both annexed thereto. Thesefinancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion onthese financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statements presentation. We believe that our audit provides areasonable basis for our opinion.

1. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of theSection 227(4A) of the Companies Act, 1956, on the basis of books and records examined by us in the normal courseof Audit and on the basis of such test checks as we considered appropriate and according to the information andexplanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of thesaid order.

2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that:

(a) We have obtained all the information and explanation which to the best of our knowledge and belief were necessaryfor the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company, so far as appears fromour examination of those books.

(c) The Balance Sheet, the Profit & Loss Account and the Cash Flow Statement dealt with this report are in agreementwith the books of accounts.

(d) In our opinion, the Balance Sheet, the Profit & Loss Account and the Cash Flow Statement, read with significantaccounting policy and notes on accounts, comply with the Accounting Standards referred to in Section 211(3C) ofthe Companies Act, 1956, to the extent applicable.

(e) On the basis of written representations received from the Directors as on 30th June, 2013 and taken on record bythe Board of Directors, we report that none of the Directors is, prima facie, disqualified under section 274(1) (g)of the Companies Act, 1956 as on 30th June, 2013 from being appointed as director of the Company.

i) In our opinion and to the best of our information and according to the explanations given to us, the saidaccounts, read with other notes and accounting policies thereon, give the information required by the CompaniesAct, 1956 in the manner so required and present a true and fair view:

(i) in the case of Balance Sheet, of the state of affairs of the Company as at 30th June, 2013;

(ii) in the case of Profit & Loss Account of the profit of the Company for the 9 months period on that date; and

(iii) in case of Cash Flow Statement, of the cash flows for the 9 months period ended on that date.



R. R. MANDALIPlace : Mumbai (Proprietor)Date : 22.11.2013 M. NO. 033118


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ANNEXURE TO THE AUDITORS’ REPORT

Annexure referred to in paragraph ‘1’ of the Auditor’s Report to the Members of SHARP INDUSTRIES LIMITED on the accountsfor the 9 months period ended 30th June, 2013.

(i) (a) As per the information and explanations given to us, the Company has maintained proper records showing fullparticulars, including quantitative details and situation of fixed assets.

(b) As explained to us, these fixed assets have been physically verified by the management at reasonable intervals.We have been informed that no material discrepancies were noticed on such verification.

(ii) (a) As explained to us, during the year the inventories have been physically verified by the management. In ouropinion, the frequency of such verification is reasonable.

(b) In our opinion, the procedure of physical verification of inventories followed by the management is reasonableand adequate in relation to the size of the Company and nature of its business.

(c) On the basis of our examination of the record of inventories, we are of the opinion that, the Company ismaintaining proper records of inventories. The discrepancies noticed on physical verification of inventories ascompared to book records were not material and have been properly dealt with in the books of account.

(iii) (a) As informed to us, the Company has not taken unsecured loans from any party covered in the register maintainedunder section 301 of the Companies Act, 1956.

(b) As informed to us, the Company has not granted unsecured loans to parties covered in the register maintainedunder section 301 of the Companies Act, 1956.

(iv) In our opinion, there are generally adequate internal control procedures commensurate with the size of the Companyand the nature of its business with regard to purchase of inventories, fixed assets, sale of goods and services. Duringthe course of our audit, we have not observed any continuing failure to correct major weakness in internal controls.

(v) (a) As informed to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act,1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made inpursuance of such contracts or arrangements have been made at prices which appear reasonable having regard tothe prevailing market prices at the relevant time aggregating during the financial year exceeding the value ofRs.5Lac in respect of each party except where comparable quotations are not available having regard to thespecialized nature of the materials purchased by the Company.

(vi) As informed to us, during the year, the Company has not accepted deposits from the public to which the directivesissued by the Reserve Bank and the provisions of Section 58-A and 58AA of the Companies Act, 1956 or any otherprovisions of the Act and the rules framed there under apply.

(vii) Company has internal audit system to commensurate with the size and nature of its business.

(viii) As informed to us, the Central Government has not prescribed maintenance of cost records under section 209 (1) (d)of the Companies Act, 1956 for any of the products of the Company.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues includingProvident Fund, Employees State Insurance, Income-tax, Professional Tax and Income-tax deducted at source,though there is a slight delay in payment.

(b) As per information and explanations given to us, there is no any undisputed amount payable in respect ofProvident Fund, Income-tax, Professional Tax and Income-tax deducted at source for the 9 months periodwhich was in arrears as at 30th June, 2013 of more than six moths from the date they become payable.

(x) The Company has not incurred cash losses in the immediately preceding financial year as well as in this financial year.

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of theopinion that the long term dues to financial institutions and banks have been repaid.

(xii) As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debenturesand other securities, the provisions of paragraph 4 Clause (xii) of the Order are not applicable.


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(xiii) The Company is not a chit fund/nidhi/mutual benefit funds/society to which the provisions of special statuterelating to chit fund are applicable and therefore the provisions of paragraph 4 Clause (xiii) of the Order are notapplicable.

(xiv) As the Company is not dealing or trading in shares, securities, debentures and other investments, provisions ofparagraph 4 clauses (xiv) of the Order are not applicable.

(xv) As informed to us, during the year under review, the Company has not given any guarantee for loans taken by othersfrom banks; provisions of paragraph 4 clause (xv) of the Order are not applicable.

(xvi) According to the information and explanations given to us, the Company has utilized the term loans for the purposefor which they were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of theCompany, we report that no funds raised on short-term basis have been used for long- term investment by theCompany.

(xviii) As the Company has not made preferential allotment of shares to parties and companies covered in the registermaintained under section 301 of the Act, provisions of paragraph 4 clauses (xviii) of the Order are not applicable.

(xix) As the Company has not issued any debentures, provisions of paragraph 4 clause (xix) of the Order are not applicable.

(xx) Since the Company has not raised money during the year by way of public issue, provisions of paragraph 4 clause (xx)of the Order are not applicable.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud onor by the Company has been noticed or reported during the course of the 9 months period under audit.



R. R. MANDALIPlace : Mumbai (Proprietor)Date : 22.11.2013 M. NO. 033118


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BALANCE SHEET AS AT 30TH JUNE, 2013As At As At

NOTE 30-06-2013 30-09-2012No. ` in Lacs ` in Lacs

EQUITY AND LIABILITIES

1. Shareholders’ Funds

a) Share Capital 1 1,995.28 1,995.28

b) Reserves & Surplus 2 9,310.41 8,124.63

11,305.69 10,119.91

2. Non-current Liabilities

a) Long Term Borrowings 3 1,644.85 992.09

3. Current Liabilitiesa) Short Term Borrowings 4 7,480.26 5,729.47b) Trade Payables 5 1,007.52 143.73c) Other Current Liabilities 6 207.30 202.93d) Short Term Provisions 7 296.43 79.97

8,991.51 6,156.10

TOTAL 21,942.05 17,268.10

ASSETS

4. Non-current Assets

(A) Fixed Assets(i) Tangible Assets 8 4,237.96 4,035.46(ii) Intangible Assets - -(iii) Capital Work in Progress 990.74 510.00

5,228.70 4,545.46

(B) Non-current Investments 9 28.13 28.13

(C) Long-Term Loans & Advances 10 223.15 220.69

5. Current Assetsa) Inventories 11 7,247.42 5,263.99b) Trade Receivables 12 8,479.18 6,630.64c) Cash & Bank Balances 13 99.86 96.69d) Short-Term Loans & Advances 14 635.61 482.50

16,462.07 12,473.82

TOTAL 21,942.05 17,268.10

See accompanying Notes to the Financial Statements 1 to 36

As per our attached Audit Report of even date

FOR R. R. MANDALI & CO.Chartered Accountants(Firm Reg. No. 114223W)

R. R. MANDALIProprietorM. NO. 033118

Place : MumbaiDate : 22/11/2013

FOR AND ON BEHALF OF BOARD

Rajesh T. Sheth Chairman

Ashwin T. Sheth Managing Director



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STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 30TH JUNE, 2013YEAR ENDED YEAR ENDED

SCH. 30-06-2013 30-09-20129 Months 12 Months` in Lacs ` in Lacs

I. INCOME

(i) Revenue From Operations 15 24,450.44 24,289.66

Less : Exccise Duty 2,281.22 2,182.53

22,169.22 22,107.13

(ii) Other Income 16 47.34 4.94

TOTAL (1) 22,216.56 22,112.07

2. EXPENDITURES

Cost of Materials Consumed 17 19,110.36 18,403.27

Changes in Inventories of Finished Goods &Work-In-Process 18 (599.03) (534.44)

Employee Benefits Expense 19 397.64 473.33

Manufacturing & Other Expenses 20 669.62 850.63

Finance Costs 21 694.38 695.17

Depreciation on Tangible Assets 8 461.38 623.18

TOTAL (2) 20,734.35 20,511.14

3. Profit Before Exceptional &Extra-Ordinary Items and Tax (1-2) 1482.21 1600.93

4. Exceptioanl Items 25 - -

5. Profit Before Extra-Ordinary Items and Tax (3+4) 1482.21 1600.93

6. Extraordinary Items - -

7. Profit Before Tax (5+6) 1482.21 1600.93

8. Tax Expenses - Current Year 296.43 79.97

9. Profit After Tax (7-8) 1,185.78 1,520.96

See accompanying Notes to the Financial Statements 1 to 36










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NOTES ON FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH JUNE, 2013As At As At

30-06-2013 30-09-2012` in lacs ` in lacs

NOTE : 1 : SHARE CAPITALAUTHORISED2,00,00,000 Equity Shares of Rs. 10/- each 2,000.00 2,000.00(Previous Year 2,00,00,000 Equity Shares of Rs.10/- each)

ISSUED, SUBSCRIBED & PAID-UP1,99,52,819 Equity Shares of Rs.10/- each fully paid up(Previous year 1,99,52,819 Equity Shares of Rs.10/- each fully paid up) 1,995.28 1,995.28Notei) 540819 Equity Shares of Rs 10 each ( Arising out of 10816382 of Rs. 10/- each reduced by 95% as per the Scheme)ii) Allotment of 1,94,12,000 of Rs. 10/- each pursuant to the scheme of arrangement

TOTAL 1,995.28 1,995.28

Notes :a. Reconciliation of the Number of Shares at the Beginning and at the end

Equity Shares As At 30/06/2013 As At 30/09/2012

Nos. Rs. Nos. Rs.

Opening Number of Outstanding Shares 19,952,819 199,528,190 19,952,819 199,528,190Add : Issued During the Period - - - -

Closing Number of Outstanding Shares 19,952,819 199,528,190 19,952,819 199,528,190

b. Details of Shareholders holding more than 5 percent shares in the Company

Name of Shareholders As At 30/06/2013 As At 30/09/2012

Nos. % of Shares Nos. % of Shares

Dhumil Sheth 1,812,248 9.08% 2,457,957 12.32%Vishal Sheth 940,474 4.71% 1,165,474 5.84%Industrial Investment Bank of India 1,440,000 7.22% 1,440,000 7.22%Vision Agencies Pvt. Ltd. 1,350,763 6.77% 885,763 4.44%Swastik Bio-Agro Tech Pvt. Ltd. 1,440,568 5.72% 470,000 2.36%

c. Terms/Rights attached to Equity SharesThe Company has only one class of issued and paid up Shares, i.e. Equity Shares having a par value of Rs. 10/- per share.Each holder of equity shares is entitled to one vote per-share. In the event of liquidation of the Company, the holdersof equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferentialamounts. The distribution will be in proportion to number of equity shares held by the Shareholders.

NOTE : 2 : RESERVES AND SURPLUS(i) RESERVES

General ReserveBalance as per last Balance Sheet 1,253.13 1,253.13Add : Addition during the year 0.00 1,253.13 0.00 1,253.13Security Premium ReserveBalance as per last Balance Sheet 2,072.97 2,072.97

(ii) SURPLUSSurplus in Statement of Profit and Loss A/c.As per last Balance Sheet 4,798.53 3,277.57Add : Profit for the Period 1,185.78 5,984.31 1,520.96 4,798.53

TOTAL 9,310.41 8,124.63


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As At As At30-06-2013 30-09-2012

` in lacs ` in lacs

NOTE : 3 : LONG TERM BORROWINGS(i) SECURED

a) Term Loan From Banks 784.40 31.51(ii) UNSECURED

a) Sales-tax Deferred Credit Loan 160.58 160.58b) Inter-Corporate Deposits 699.87 800.00

TOTAL 1,644.85 992.09Security offered for Term Loan from BankTerm Loan From Banks are secured by way of hypothecation of vehicles & specific machinery.

NOTE : 4 : SHORT TERM BORROWINGS(i) SECURED

a) Term Loans From Banks-Repayable within a period of 12 Months 249.52 8.38b) Working Capital Loan From Banks 6,570.61 4,989.72

(ii) UNSECUREDa) Inter-Corporate Deposits 660.13 731.37

TOTAL 7,480.26 5,729.47Security offered for Working Capital Loans from BanksSecured Loans from Banks for working capital are secured by first pari-passu charge by way of hypothecation of all thecurrent assets of the Company including inventory, receivables and other current assets. They are collaterally secured byfirst pari-passu charge on the fixed assets of the Company.

NOTE : 5 : TRADE PAYABLESSundry Creditors for Trade 1,007.52 143.73

TOTAL 1,007.52 143.73

NOTE : 6 : OTHER CURRENT LIABILITIESInterest Accrued & Due on Borrowings 0.00 0.44Statutory Liabilities, Provision for Expenses & Advances Received 207.30 202.49

TOTAL 207.30 202.93

NOTE : 7 : SHORT TERM PROVISIONSProvision For Income-Tax 296.43 79.97

TOTAL 296.43 79.97

NOTE : 8 : FIXED ASSETS : TANGIBLE ASSETS` in Lacs

GROSS BLOCK DEPRECIATION NET BLOCKDESCRIPTION As on Addi- Deduc- As on As on For the On Ded- Total as As on As on

1/10/12 tions tions 30/6/13 1/10/12 Year uctions on 30/6/13 30/6/13 30/9/12

Free Hold Land 14.33 0.00 0.00 14.33 0.00 0.00 0.00 0.00 14.33 14.33Lease Hold Land 4.79 0.00 0.00 4.79 0.00 0.00 0.00 0.00 4.79 4.79Factory Buildings 293.26 4.28 0.00 297.54 245.95 3.57 0.00 249.52 48.02 47.31Office Premises 78.65 0.00 0.00 78.65 49.77 1.08 0.00 50.85 27.80 28.88Building (Others) 72.23 0.00 0.00 72.23 41.53 1.15 0.00 42.68 29.55 30.70Residential Premises 24.76 0.00 0.00 24.76 15.80 0.34 0.00 16.14 8.62 8.96Plant & Machinery 10119.90 657.89 0.00 10777.79 6329.33 433.22 0.00 6762.55 4015.24 3790.57Office Equipments & 136.60 1.49 0.00 138.09 100.74 10.82 0.00 111.56 26.53 35.86ComputersFurniture & Fixtures 72.10 0.22 0.00 72.32 51.06 3.25 0.00 54.31 18.01 21.04Vehicles 111.72 0.00 0.00 111.72 58.70 7.95 0.00 66.65 45.07 53.02TOTAL 10928.34 663.88 0.00 11592.22 6892.88 461.38 0.00 7354.26 4237.96 4035.46

PREVIOUS YEAR 10786.13 142.21 0.00 10928.34 6269.70 623.18 0.00 6892.88 4035.46 4516.43


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As At As At30-06-2013 30-09-2012

` in lacs ` in lacs

NOTE : 9 : NON-CURRENT INVESTMENTSLONG TERM INVESTMENTS (UNQUOTED)AT COST1,500 (Previous year 1,500) Equity Shares of Diapers India Ltd. 1.50 1.50of Rs. 100/- each fully paid up18,550 (Previous year 18,550) Equity Shares of Angel Plastics 18.64 18.64Limited of Rs. 100/- each fully paid up49,900 (Previous year Nil) Bassein Catholic Co-op. Bank Ltd. 4.99 4.99of Rs. 10/- each fully paid up3,000 (Previous year Nil) The Cosmos Co-op. Bank Ltd. 3.00 3.00of Rs. 100/- each fully paid up

TOTAL 28.13 28.13

NOTE : 10 : LONG TERM LOANS AND ADVANCES(Unsecured and considered Good)Capital Advances for Machineries - 94.60Fixed Deposits with Bank (Given as Collateral Security against Borrowings) 122.00 22.00(More than 12 Months)Sundry Deposits 101.15 104.09

223.15 220.69

NOTE : 11 : INVENTORIESRaw Materials 3,148.15 2,171.21Work-In-Process 1,101.90 799.18Finished Goods 1,094.74 798.43Stores, Spares, Other Consumables & Cylinders 1,902.63 1,495.17

TOTAL 7,247.42 5,263.99

NOTE : 12 : TRADE RECEIVABLES(Unsecured and considered Good)(Unsecured,considered good unless otherwise stated.)Exceeding six months 0.00 0.00Others 8,479.18 6,630.64

TOTAL 8,479.18 6,630.64

NOTE : 13 : CASH AND BANK BALANCESCash and Cash EquivalentsCash on hand 15.13 7.64Balance with Banks in :- Current Account 3.75 3.03Other Bank Balances- Fixed Deposits as Margin Money (Maturing Within 12 Months) 80.98 86.02

TOTAL 99.86 96.69

NOTE : 14 : SHORT TERM LOANS AND ADVANCES(Unsecured, considered good, unless otherwise stated)Short Term Loans & Advances to Others 456.87 398.58Advance Income-Tax & TDS 72.56 72.27Balance with Central Excise 106.18 11.65

TOTAL 635.61 482.50


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FOR PERIOD ENDED FOR YEAR ENDED30-06-2013 30-09-2012

9 Months 12 Months` in Lacs ` in Lacs

NOTE : 15 : REVENUE FROM OPERATIONSale of ProductsSales of Products 24,450.44 24,289.66Less : Excise Duty 2,281.22 2,182.53

22,169.22 22,107.13

NOTE : 16 : OTHER INCOMEInterest Income 14.26 4.29Dividend Income 0.00 0.65Excise Duty Recovered From Export 33.08 0.00

47.34 4.94

NOTE : 17 : COST OF MATERIALS CONSUMEDOpening Stock 2,171.21 1,906.25Add : Purchases 20,087.30 18,668.23

Total 22258.51 20574.48Less : Closing Stock 3,148.15 2171.21

Total : Material Cost 19,110.36 18,403.27

NOTE : 18 : CHANGES IN INVENTORIES OF FINISHED GOODS AND WORK IN PROGRESSInventories at the end of the periodFinished Goods 1,094.74 798.43Work-In-Process 1,101.90 2,196.64 799.18 1,597.61

Inventories at the beginning of the periodFinished Goods 798.43 476.56Work-In-Process 799.18 1,597.61 586.61 1,063.17

Net (increase) / decrease (599.03) (534.44)

NOTE : 19 : EMPLOYEE BENEFITS EXPENSESalaries, Wages, Bonus, Gratuity & Allowances 372.52 434.73Employer’s contributions to Provident Fund and Other Funds 11.77 15.57Staff Welfare Expenses 13.35 23.03

TOTAL 397.64 473.33


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FOR PERIOD ENDED FOR YEAR ENDED30-06-2013 30-09-2012

9 Months 12 Months` in Lacs ` in Lacs

NOTE : 20 : MANUFACTURING & OTHER EXPENSESManufacturing ExpensesStores Spares & Consumables & Packing Materials 168.89 227.58Freight & Octroi 16.87 20.19Power, Fuel & Electricity 220.79 291.68Insurance 21.07 7.91Rent, Rates & Taxes and Service Charges 11.52 15.43Repairs & Maintenance - Building 0.42 6.00

- Plant & Machinery 78.47 64.86Factory Expenses 7.85 525.88 17.94 651.59

Administrative & Selling ExpensesTravelling & Conveyance 12.78 18.32Telephone,Telex, Fax & Mobile Charges 2.63 9.28Printing & Stationery 2.24 11.14Legal & Professional Expenses 15.22 44.15Remuneration to Auditors 1.31 1.75Remuneration to Directors 18.00 24.00Office Expenses 19.67 21.71Vehicle Running & Maintenance Expenses 23.47 28.20Advertisement & Sales Promotion Expenses 2.86 3.12Sales & Distribution Expenses 45.56 143.74 37.37 199.04

TOTAL 669.62 850.63

NOTE: 21 : FINANCE COSTSInterest on Term Loans 3.88 4.66Interest on Working Capital Borrowings 642.14 658.06Bank Commission & Charges 48.36 32.45

TOTAL 694.38 695.17


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NOTES ON FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH JUNE, 2013

22 ACCOUNTING POLICIES

a) Method of Accounting:

The Accounts are prepared on the basis of going concern and on accrual basis. Accounting policies, not specificallyreferred 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 theassets to their working condition for intended use and also including an appropriate share of incidentalexpenditure during construction and its installation.

ii) Capital Work in Progress: All the expenses, incurred for acquiring, erecting and commissioning of fixedassets including interest, financial charges and hire charges and other incidental expenditure relating tofixed 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 inSchedule 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. VillageWaliv, Vasai (E), Dist.Thane, Maharashtra, where depreciation has been provided on Written Down Method at therates 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 isreasonably certain that the ultimate collection/payment will be made. Provision for disputed liability is made asand 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 andfinancial 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 partof the cost of such assets. A qualifying assets is one that necessarily takes substantial period of time to get readyfor intended use.

All other borrowing costs are charged to revenue.


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l) Contingent Liabilities:

Contingent Liabilities are determined on the basis of available information and are disclosed by way of notes toaccounts.

23 The Company has not provided for gratuity and other retirement benefits as required by the Accounting Standard 15issued by the Institute of the Chartered Accountants of India. However, they are accounted on crystalisation of thespecific liability.

24 In the opinion of the Board, the Current Assets, Loans & Advances have been stated at the realisable value in theordinary course of business.

25 Balances due to and due from the parties are subject to confirmation.

26 Related parties disclosures:

a) Particulars of Associates:

Name of the Related Parties

Not Applicable

b) Key Management Personal:

Name of the Related Parties Nature of Relationship

Mr. Rajesh T. Sheth Chairman

Mr. Ashwin T. Sheth Managing Director

c) Transactions with Associates

Not Applicable

d) Details of Transactions relating to persons referred to in item (b) above

30.06.2013 30.09.2012(`/Lac) (`/Lac)

Remuneration 18.00 24.00

Outstanding balance included in Current Assets / Current Liabilities 0.00 0.00

27 Earning per Share 30.06.2013 30.09.2012

1 Profit After Tax (`/Lac) 1,185.78 1,520.96

2 Weighted average No. of Equity share of ` 10/- each 19,952,819 19,952,819

3 Earning per Share (`) 5.94 7.62

28 The Company has not provided for Deferred Tax Liability in view of brought forward loss under the Income Tax Act,1961.

29 The Company is mainly engaged in the manufacturing of Flexible Packaging Materials and all other acitivities revolvearound it and hence there is no segment reporting in terms of the Accounting Standard - 17 “Segment Reporting”issued by the Institute of Chartered Accountants of India.

30 In the absence of adequate documents/ information, amount due to Small and Ancillary Undertakings included underSundry Creditors and interest on delayed payment to Small Scale and Ancillary Undertaking Act, 1993 could not beidentified and separately disclosed.

31 a) Material cost is reduced by Excise Duty, CENVAT and Sales Tax Set-off.

b) Amount of Sales Tax Deferred Credit of Rs.160.58Lac is subject to assessment by Sales Tax Authorities.

32 The Company is in process of filling up the vacancy of the Company Secretary.


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30.06.2013 30.09.2012(`/Lac) (`/Lac)

33 Directors’ Remuneration Includes:

i) Salary & Allowances 18.00 12.00

ii) Perquisites 0.00 0.00

iii) Sitting Fees 0.00 0.00

TOTAL 18.00 12.00

34 Auditors’ Remuneration Towards:

i) Audit Fee 1.31 1.75

1.31 1.75

35 C.I.F. Value of Imports, Expenditure & Earnings in Foreign Exchange

I) C.I.F. value of Imports

Raw Materials 0.00 0.00

Capital Goods 0.00 0.00

Stores & Spares 0.00 0.00

II) Expenditure incurred in Foreign Currency Travelling 0.00 10.75

III) Earning in Foreign Currency F.O.B. 0.00 0.00

36 Figures of previous period have been regrouped, recasted, rearranged and re-classified wherever necessary.

As per our attached Audit Report of even dateFOR R. R. MANDALI & CO.Chartered Accountants(Firm Reg. No. 114223W)R. R. MANDALIProprietorM. NO. 033118Place : MumbaiDate : 22/11/2013






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CASH FLOW STATEMENT FOR THE PERIOD ENDED 30TH JUNE 2013(` in Lacs)

30/6/2013 30/9/2012

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit/(Loss) Before Tax and Extra-ordinary Items 1,482.21 1,600.93

Adjusted for

Depreciation & Miscellaneous Write offs 461.38 623.18

Interest/Dividend (Net) 694.38 695.17

Operating Profit before Working Capital Changes Adjusted for:

(Increase)/Decrease in Trade and other Receivables (1,848.54) (983.49)

(Increase)/Decrease in Inventories (1,983.43) (814.70)

(Increase)/Decrease in Long-Term & Short-Term Loans and Advances (155.57) (374.36)

Increase/(Decrease) in Trade Payables 863.79 (1,037.02)

Increase/(Decrease) in Other Current Liabilities 4.37 67.50

Cash Generated from Operations (481.41) (222.79)

Interest Paid (694.38) (695.17)

Direct Taxes Paid (Net off Advances) (79.97) 0.00

NET CASH FROM OPERATING ACTIVITIES (A) (1,255.76) (917.96)

B. CASH FLOW FROM INVESTING ACTIVITIES

(Increase)/Decrease of Fixed Assets (1,144.62) (652.21)

NET CASH USED IN INVESTMENT ACTIVITIES (B) (1,144.62) (652.21)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Long Term and Short Term Borrowings 2,403.55 1,612.19

NET CASH USED FROM FINANCING ACTIVITIES (C) 2,403.55 1,612.19

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) 3.17 42.02

CASH AND CASH EQUIVALENTS AT THE BEGINING OF THE YEAR 96.69 54.67

CASH AND CASH EQUIVALENTS AT THE CLOSE OF THE YEAR 99.86 96.69










SHARP INDUSTRIES LIMITEDREGISTERED OFFICE: Plot No. 6, Survey No. 70, Village Waliv, Vasai [East], Dist. Thane - 401 208.

ATTENDANCE SLIP

(Please complete this Attendance Slip and hand it over at the entrance of the meeting hall.)

I, hereby record my presence at the 24th Annual General Meeting of Sharp Industries Limited to be held on 30th December,2013 at Hotel Express Inn, Thane-Ahmedabad Highway Junction, Nr. Ghodbunder Bridge, Post Meera, Dist. Thane at 9.30A.M.

Signature: ________________________

Folio No.: / Client ID ________________________ Name of the Shareholder: ________________________

SHARP INDUSTRIES LIMITEDREGISTERED OFFICE: Plot No. 6, Survey No. 70, Village Waliv, Vasai [East], Dist. Thane - 401 208.

PROXY FORM

Ledger Folio No./Client ID _____________________

I/We _________________________________________________ of _________________________________________

in the district of _____________________________________ being a member/members of SHARP INDUSTRIES LIMITED

hereby appoint ______________________________________________________________________________________

of ________________________________________ in the district of ______________________________________

or failing him _________________________ of ______________________ in the district of _______________________

as my/our proxy to vote for me/us on my/our behalf at the 24th Annual General Meeting of the Company to be held on 30th

December, 2013 at 9.30 A.M. and at any adjournment thereof.

Signed this ________________________ day of December, 2013.

Folio No./ Client ID ________________________

No. of shares held ________________________

Note:The form duly completed should be deposited at the Registered Office of the Company at Plot No. 6, Survey No. 70, VillageWaliv, Vasai (E), Dist. Thane-401 208, not later than 48 hours before the time of the meeting.

AffixRevenueStampRs.1.00

Tear

Her

e


SHARP INDUSTRIES LIMITEDOFFICE: 30, New Satguru Nanik Industrial Estate,

Western Express Highway, Goregaon (E), Mumbai - 400 063.

If, undelivered, please return to :

Book-Post

To,


AnnualReport

2012-2013



SHARP INDUSTRIES LIMITED 24th ANNUAL REPORT · 3 SHARP INDUSTRIES LIMITED DIRECTORS' REPORT Dear...

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