SEPC Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2019

1. The Standalone results for the quarter and year ended March 31, 2019 were reviewed and recommended by the Audit Committee and approved by the Board of Directors at their respective meetings held on May 27, 2019 and have been subjected to audit by the Statutory Auditor of the Company. The audited standalone financial results are prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Companies Act, 2013.

2. Financial Assets Loans (Non Current) and Other Trade Receivables under "Other Non Current Financial Assets" include Rs. 4,134.15 Lakhs (March 31 2018: Rs. 3,984.49 Lakhs), due from Leitwind Shriram Manufacturing Pvt Limited (LSML) (a related party). LSML is in the process of restructuring their operations and the dues are expected to be recovered earlier than the original repayment plan. Considering the developments the management is confident of realising the dues. The auditors have qualified this matter in their report for the quarter and year ended March 31, 2019.

3. The Company entered into a contract to construct Ammonia plant for Bharath Coal and Chemicals Limited (BCCL) (related party). The project is stalled due to delay in statutory approvals. The total exposure in this project recorded under Unbilled Revenue and Contract Work In Progress is Rs. 7,383.60 Lakhs (March 31, 2018: Rs. 7,106.46 Lakhs). Considering BCCL's continued efforts in identifying alternate options to complete the project, the management is of the view that BCCL will be in a position to complete the Ammonia Plant project and thereby the Company will be able to realize the dues.

4. Exceptional Items

4(a) During the year, advances receivable from an associate company and its subsidiary amounting to Rs. 29,702.65 Lakhs has been sold to the Company's Investing party for a total consideration of Rs. 25,000 Lakhs along with rights attached to it. Pursuant to this transaction the Company has recorded an amount of Rs. 4,702.65 Lakhs as loss which has been disclosed as exceptional item. Consequently, the unexpired provision for expected credit loss on the above, as at March 31, 2019 amounting to Rs. 48,311.30 lakhs is charged off and disclosed as an exceptional item in the Statement of Profit and Loss.

4(b) During the year, the Company had entered into settlement agreement with M/s ACRE (an Asset Reconstruction Company) who had bought company's exposure to DBS bank aggregating to Rs 17,374.11 lakhs as on May 31, 2018, at Rs 18,000 Lakhs. The dues are to be settled over a period of seven years ending 2025 on deferred payment basis without interest. The Present value of the amount payable to ACRE as on the date of agreement is Rs. 10,725.08 Lakhs and the resultant gain of Rs. 6,649.03 Lakhs has been disclosed as an exceptional item in the Statement of Profit and Loss.

4(c) During the year, the company has settled the vendor claim of Rs.3,836 lakhs by way of deferred settlement agreement over a period of three years ending 2021 without interest for a sum of Rs. 2,765 Lakh. This sum has been charged off net of discounting for Rs. 2,406 Lakhs which is been disclosed as exceptional item.

5. Against the carried forward loss of 1,71,133 lakhs, the company has recognised deferred tax asset on a carry forward loss of Rs. 1,21,133 lakhs which results in DTA of Rs 41,013 lakhs. Based on the business plan and estimated future taxable profits of the company, in the opinion of the Management the Deferred tax asset is realisable.

6. Revenue for the quarter ended March 31, 2019 includes Rs. 19,549.70 lakhs being share of revenue relating to the Basra project billed from Mokul Shriram EPC JV (MSJV).

7. There is no provision for tax in view of the brought forward losses/unabsorbed depreciation relating to earlier years available for set off While computing income both under the provisions of 115 JB and those other than Sections 115 JB of the Income Tax Act 1961.

8. The Government of India introduced the Goods & Service Tax (GST) with effect from July 01, 2017. Accordingly in compliance with Indian Accounting Standard (Ind AS) 18 - ‘Revenue’, Revenue from operations for the quarter ended March 31, 2018 is presented Net of GST. Revenue from Operations for the year ended March 31, 2018 includes Excise Duty.

9. The Company is engaged in the sole activity of carrying on the business of "Engineering and Procurement Contracts" (EPC) and therefore, has only one reportable segment in accordance with Ind AS 108 "Operating Segments", Hence no separate segment reporting is applicable to the Company.

10. Ind AS - 115 Revenue from Contracts with Customers, has been recently introduced effective April 01, 2018 and its application did not have any significant impact on recognition and measurement of revenue and related items in the financial results including the retained earnings as at April 01, 2018.

11. Figures for the quarter ended March 31, 2019 and March 31, 2018 are the balancing figures between the audited figures in respect of the full financial year ended March 31, 2019 and March 31, 2018 respectively and the published year to date figures for nine months ended December 31, 2018 and December 31, 2017 respectively, as regrouped.

12. Previous period figures have been regrouped / reclassified to be in conformity with current period's classification/disclosure, wherever necessary.