Hubbell Policies

PHYSICAL INVENTORY POLICY

English

Owner : Vice President, Controller

Last Review: 2014.08.10

FIN – 34

Department: Finance

POLICY This policy requires that all locations where Hubbell holds title to inventory must perform an annual physical inventory observation during the fiscal year. The annual physical inventory observation must be performed in accordance with the established procedures in the Physical Inventory Count Procedure.

Results of the physical inventory count must be approved by the location’s operations manager, finance manager, and platform controller by completing a Physical Inventory Observation Results Form.

Also, each business unit is responsible for ensuring proper physical inventory reserves are recorded in the general ledger and are established in accordance with the Reserve for Physical Inventory Procedure.

SCOPE

The policy applies to all business units and inventory that is not “cycle count certified” or “in - transit” at the time of the inventory observation.

PURPOSE To ensure that all general ledger inventories that are not part of a “cycle count program” or are “in - transit” at the time of the physical inventory observation are verified for existence, completeness and accuracy at least once annually.

PROCEDURE

This procedure is intended to detail the basic principles for use at each plant or warehouse for conducting the annual physical inventory count. All locations are required to perform an annual physical inventory observation per the Physical Inventory Policy unless they have been granted an exception to utilize a formal cycle count procedure. This exception must be granted by Internal Audit once they have audited and approved the locations cycle count process. (See the separate procedure on Cycle Counting). A physical inventory count of all Productive Material owned by the Company must be taken once a year. For business units considered “in - scope” for purpose of the annual US GAAP integrated audit performed by PwC, the physical inventory count must be performed in the 4 th Quarter unless special permission is granted by the VP Corporate Controller. For all other business units, the physical inventory count may be taken at any point during the year.

Responsibility:

The Business Unit Controller that has responsibility for each location performing the physical inventory count is responsible for:

• The accuracy of inventory values of all productive material recorded in the ledgers. • Ordering and Printing tags.

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