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Sapphire Corp responds to SGX RegCo queries on full-year financial results
SAPPHIRE Corporation on Tuesday maintained that its methodologies used to determine the value of the impairment of its trade receivables in its full-year financial results are "reasonable" as they were reviewed by external auditors.
The integrated provider of railway infrastructure and mining specialist services was responding to queries from the Singapore Exchange (SGX) on its full-year financial results after trading hours.
The company said that the higher impairment losses on doubtful receivables and contract assets were due to the receipt of termination letters for the group's two projects in Sri Lanka after the year ended Dec 31, 2018 and the adoption of SFRS(I) 9, where the group recorded a forward-looking expected credit loss on all trade and other receivables and contract assets.
In addition, it said that the reversal of revenue due to the modification of a build-and-transfer project referred to a contract that was completed in previous years.
"The work performed had been recorded as contract assets pending for final audit and certification by the customer before receipt of payment. The reversal was due to a lower amount being certified by the customer and the amount reversed was based on final audit and certification," Sapphire said.
As for the reason for the unwinding of discount for long-term receivables, the company said that the amount was due from a former subsidiary company which had been discounted for the time value of money as the receivable was not expected to be received within the next 12 months in FY2017.
The group recorded a loss on discount on long-term receivables in FY2017 and recorded the unwinding of discount for long-term receivables in FY2018.