Kernex Microsystems (India) Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018

Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018

1. The above Financial Results were reviewed and recommended by the Audit Committee and taken on record by the Board of Directors in their meeting held on 27th January’ 2019. The Statutory Auditor of the Company has carried out a Limited Review of the above results in terms of Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as modified by Circular No.CIR/CFD/FAC/62/2016 dated 05th Jul 16.

2. Number of Investor complaints left unresolved at the beginning of the quarter Nil, received during the quarter Nil disposed off during the quarter Nil and pending Nil.

3. The Company operates in one reportable segment i.e. Safety systems for Railways and hence segment reporting as per Ind AS-108 is not applicable.

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

5. As per Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the company has opted to publish quarterly unaudited standalone results and to publish consolidated results at the year end.

6. An amount of Rs 15.08 crores receivable from Konkan Railway Corporation Limited (KRCL) is under arbitration. The company has not made any provision in the books of accounts which may dilute the chances of recovery of these receivables. Provision in the books of accounts will be provided at the time of finalization of matters.

Further the Company has failed in the conciliation proceedings against KRCL for an amount of Rs 5.18 cores and a provision is made during the current quarter.

7. As approved by the Board, obsolete stock amounting to Rs. 5.82 Crores has been written off in the books of accounts. Further a provision amounting to Rs 3.57 crores has been made towards slow/non moving stocks during the current quarter.

8. Exceptional items represents profit on sale of land during the quarter ended 31st December, 2018 and compensation paid to the party in connection with cancellation of agreement for sale of land during the quarter ended 30 September 2018.

9. Current Tax of Rs.29.197 lakhs pertaining to previous year taxes

10. Post the applicability of Goods and Service Tax (GST) with effect from 01st July 2017, Revenue from Operations is disclosed net of GST. Accordingly, the revenue from operations for 9 months ended 31st December 2018 and year ended 31st March 2018 are not comparable with those of the previous periods presented in the results.

11. Ind AS, 115 Revenue from Contracts with Customers, mandatory for reporting periods beginning on or after 1 April 2018, replaces existing revenue recognition requirements. The application of Ind AS 115 did not have any material impact on recognition and measurement of revenue and related items in the financial results of the Company.

12. Figures for the previous periods have been regrouped/rearranged, wherever considered necessary.