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

1. Certification of unbilled revenue by customers and acceptance of final bills by customers often takes significant period of time and varies from project to project. At this stage, based on discussions with concerned customers, the management believes that unbilled revenue of `68,924 lakhs (31st March, 2018: Rs. 86,035 lakhs) as on 31st March, 2019 will be billed and realised in due course. The aforesaid amounts have been considered as current based on management’s expectation of realisation of these amounts in normal operating cycle.

Further on this issue, one of the joint auditors is in agreement with the views of the management. This explains the qualification by the other Joint Auditor on this issue in their audit report's on quarterly financial results and year to date results and in their audit report on the financial statements of the Company for the year ended 31st March, 2019.



2. Trade receivables aggregating Rs.15,583 lakhs (31st March, 2018: Rs.43,890 lakhs) and claims recoverable aggregating Rs. 6,909 lakhs (31st March, 2018: Rs. 1,596 lakhs) from customers in respect of various project sites are outstanding for a long period of time. At this stage, based on discussions and correspondences with customers, the management believes the above balances are good and recoverable.

Inventories aggregating Rs. 2,854 lakhs (31st March, 2018: Rs. 2,914 lakhs) as on 31st March, 2019 pertaining to certain completed project sites are readily usable.



Retention monies due from customers are receivable only after clearance of final bill, by customers and after expiry of defect liability period after execution of contracts. In the opinion of the management, such retention amounts aggregating Rs. 5,354 lakhs (31st March, 2018: Rs. 21,540 lakhs) of certain completed contracts as on 31st March, 2019 are good and recoverable.



The aforesaid amounts have been considered as current based on management’s expectation of realisation of these amounts in normal operating cycle.



On this issue, one of the joint auditors is in agreement with the views of the management. The above reasons explain the qualification by the other Joint Auditor on this issue in their audit report's on quarterly financial results and year to date results of the Company and in their audit report on the financial statements of the Company for the year ended 31st March, 2019.



3. Loans and Advances amounting to Rs. 28,548 lakhs have been considered as current and out of which for Rs. 18,148 lakhs, the Company is in active pursuit and confident of recovery/settlement of such advances within a reasonable period of time.

On this issue, one of the joint auditors is in agreement with the views of the management. The above reasons explain the qualification by the other Joint Auditor on this issue in their audit report's on quarterly financial results and year to date results of the Company and in their audit report on the financial statements of the Company for the year ended 31st March, 2019.



4. In respect of classification of certain current assets into non-current assets, the Company provides expected credit loss (ECL) on these current assets. The company considers an average normal operating cycle for its operations though the operating cycle for all the projects are not uniform, the company has classified certain trade receivables, retention monies, unbilled revenue, statutory advances pending assessment by relevant authorities, security deposits and other balances including those subject to arbitrations, amounting to Rs. 11,963 lakhs, Rs. 3,373 lakhs, Rs. 29,405 lakhs, Rs. 24,162 lakhs, Rs. Nil and Rs. 18,586 lakhs respectively (31st March, 2018: Rs. 8,370 lakhs, Rs. Nil, Rs. Nil, Rs. 25,137 lakhs, Rs. 1,885 lakhs and Rs. 17,257 lakhs respectively) as current assets. On this issue, one of the joint auditors is in agreement with the views of the management. The above reasons explain the qualification by the other Joint Auditor on this issue in their audit report's on quarterly financial results and year to date results of the Company and in their audit report on the financial statements of the Company for the year ended 31st March, 2019.



5. Other Comprehensive Income that will be reclassified to profit or loss represents Exchange (loss) / gain on translation of foreign operations.



6. The impact of Ind AS 115 'Revenue from Contracts with Customers' which is effective from 1st April, 2018, does not have material impact on the financial results for the quarter and year ended 31st March, 2019. The impact of adjustments towards impairment of certain contract assets in accordance with Ind AS 115 and Ind AS 109 as at 1st April, 2018 amounting to Rs.20,945 lakhs (net of tax of Rs.11,250 lakhs) has been debited to "Other Equity".



7. The Company is in discussion with its customers on the impact of Goods and Services Tax on the contract terms and conditions for certain contracts and necessary adjustments, which in the opinion of the management will not be significant, would be made upon completion of such discussions.



8. The Company has allotted 36,09,261 convertible equity warrants at a price of Rs. 554.13 each on 15th May, 2018 to its Promoter Group Companies, in accordance with the SEBI Guidelines and Companies Act, 2013, upon receipt of upfront payment of 25% i.e. Rs. 5,000 lakhs of total consideration (of Rs. 20,000 lakhs) as per the terms of preferential issue. On 5th January, 2019, the Company has allotted 6,02,000 equity share on conversion of equity warrants to its Promoter Group Companies, in accordance with the SEBI Guidelines and Companies Act, 2013, upon receipt of upfront payment of 75% i.e. Rs. 2,502 lakhs as per the terms of preferential issue.



9. The above results, after review by the Audit Committee, have been approved and taken on record by the Board of Directors at its meeting held on 30th May, 2019. The Statutory Auditors of the Company have carried out an audit of the results for the quarter and year ended 31st March, 2019 in terms of Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.



10. These results have been prepared in accordance with Ind AS, notified under Section 133 of the Companies Act, 2013 read together with the Companies (Indian Accounting Standard) Rules, 2015 as amended.



11. The figures for the quarter ended 31st March, 2019 and 31st March, 2018 are the balancing figures between audited figures for the full financial year and the unaudited year to date published figures upto the quarter ended 31st December, 2018 and 31st December, 2017 respectively.


13. The Board of Directors have recommended dividend of Rs.0.50 per Equity Share of face value of Rs. 2/- each for the year ended 31st March,2019.