REG - Subex Limited - Final Results <Origin Href="QuoteRef">SUBX.NS</Origin>

SubexAnnouncement

26/05/2017 07:05

RNS Number : 3260G
Subex Limited
26 May 2017
May 26, 2017
To
TheLondon Stock Exchange
10PaternosterSquare
London
EC4M 7LS 
DearSirs,
Sub: Outcome of the Board Meeting held on May 25, 2017
Please be informed that the agenda items stated hereunder were discussed and approved at the Board Meeting held on May 25, 2017 at Bangalore:
 Approval of the audited standalone and consolidated Financial Results of the Company for the quarter and year ended March 31, 2017. 
 Approval of the audited standalone and consolidated Financial Statements of the Company for the year ended March 31, 2017. 
 Appointment of Mr. Anil Singhvi as Chairman of the Company with effect from 25th May, 2017.
 Appointment of Mr. Vinod Kumar Padmanabhan and Mr. Ashwin Chalapathy as Whole-Time Directors (WTD) of the Company with effect from 25th May, 2017.
Please find enclosed:
 The consolidated Financial Results of the Company for the year ended March 31, 2017.
We request you to take the aforesaid notification on record. 
Yours faithfully
For and on behalfofSubexLimited
Ganesh K V
Chief Financial Officer, Global Head -Legal and CompanySecretary
SUBEX LIMITED
Registered office: RMZ Ecoworld, Outer Ring Road, Devarabisanahalli, Bangalore - 560 037
Statement of Audited Consolidated Financial Results for the quarter and year ended March 31, 2017







( Rs. in Lakhs)






Consolidated





Particulars

Quarter ended

Year ended



March 31, 2017
December 31, 2016
March 31, 2016
March 31, 2017
March 31, 2016








Audited (note 11)
Unaudited
Audited (note 11)
Audited
Audited

1

Income from operations








Net sales/ revenue from operations
9,485
9,578
8,926
35,733
32,246



Other income (note 8)
245
377
58
1,091
116












Total income from operations (net)
9,730
9,955
8,984
36,824
32,362

2

Expenses






(a)
Cost of hardware, software and support charges
204
194
(138)
694
42

(b)
Employee benefits expense (note 9)
3,582
4,047
4,262
15,871
16,034

(c)
Other expenditure
2,911
2,891
2,078
10,957
8,945

(d)
Depreciation and amortisation expense
139
127
110
495
427

(e)
Exchange fluctuation (gain)/loss (net)
647
(316)
(971)
(698)
515



Total expenses
7,483
6,943
5,341
27,319
25,963

3









Profit from operations before finance income, finance
2,247
3,012
3,643
9,505
6,399



costs and exceptional items (1-2)






4

Finance income
18
17
12
63
66

5

Profit from ordinary activities before finance costs and
2,265
3,029
3,655
9,568
6,465



exceptional items (3+4)






6

Finance costs






(a)
Interest on FCCBs (net)
106
126
486
494
3,754

(b)
Interest on term loan
-
96
254
464
974

(c)
Other finance costs
402
234
389
1,082
1,424



Total finance costs
508
456
1,129
2,040
6,152

7









Profit from ordinary activities before exceptional items
1,757
2,573
2,526
7,528
313



and tax (5-6)






8

Exceptional items (net) (note 5)
(10,890)
-
(6,469)
(10,890)
(6,469)

9

Net (loss) / profit from ordinary activities before tax(7+8)
(9,133)
2,573
(3,943)
(3,362)
(6,156)










10

Tax expense (net)
237
318
186
961
1,273

11









Net (loss)/ profit for the period / year (9-10)
(9,370)
2,255
(4,129)
(4,323)
(7,429)

12 Other comprehensive income, net of taxes
275
(561)
(957)
(1,376)
(1,833)

13









Total comprehensive income (11+12)
(9,095)
1,694
(5,086)
(5,699)
(9,262)

14

Paid up equity share capital (face value of ` 10 (March 31,
50,691
50,691
50,281
50,691
50,281



2016: ` 10)






15

Other equity
-
-
-
17,718
23,102

16 Earnings/(loss) per share (of ` 10/- each) (not annualised in case of the interim periods): 
(a)
- Basic
(1.85)
0.44
(0.97)
(0.85)
(2.56)
(b)
- Diluted
(1.85)
0.44
(0.97)
(0.85)
(2.56)

SUBEX LIMITED
Registered office: RMZ Ecoworld, Outer Ring Road, Devarabisanahalli, Bangalore - 560 037
Statement of Consolidated Assets and Liabilities



( Rs. in Lakhs)


Particulars
As at


March 31, 2017
March 31, 2016

A

Audited
Audited

ASSETS




Non-current assets




Property, plant and equipment
785
648


Goodwill on consolidation
65,882
76,772


Other intangible assets
138
82


Financial assets




Loans
399
365


Other balances with banks
258
238


Other financial assets
234
235


Income tax asset (net)
1,977
1,665


Deferred tax asset (MAT credit entitlement)
478
384


Other non-current assets
564
617


Current assets
70,715
81,006






Financial assets




Loans
196
199


Trade receivables
11,851
11,148


Cash and cash equivalents
7,386
8,600


Other financial assets
4,508
2,551


Other current assets
1,013
707



24,954
23,205


Total Assets




95,669
104,211

B
EQUITY AND LIABILITIES







Equity




Equity share capital
50,691
50,281


Other equity
17,718
23,102


Total equity
68,409
73,383


Liabilities








Non-current liabilities




Financial liabilities




Borrowings
-
4,057


Other financial liabilities
-
571


Provisions
297
295


Current liabilities
297
4,923






Financial liabilities




Borrowings
8,590
10,396


Trade payable
1,805
1,676


Other financial liabilities
11,922
9,967


Other current liabilities
3,085
2,435


Provisions
677
653


Income tax liabilities (net)
884
778



26,963
25,905


Total liabilities




27,260
30,828


Total equity and liabilities








95,669
104,211


Notes:
1 The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on May 25, 2017. 
2 The financial results of Subex Limited (Standalone information): 





( Rs. in Lakhs)



Quarter ended

Year ended


March 31, 2017
December 31, 2016
March 31, 2016
March 31, 2017
March 31, 2016

Particulars






Audited (note 11)
Unaudited
Audited (note 11)
Audited
Audited










Total income from operations (net)
8,779
9,067
8,282
33,479
29,624

Profit/(loss) from ordinary activities before tax
(3,239)
1,763
(17,678)
(429)
(20,464)

Profit/(loss) from ordinary activities after tax
(3,353)
1,712
(17,695)
(683)
(20,998)

3 The financial results have been prepared in accordance with the recognition and measurement principles laid down in the applicable Indian Accounting Standards ("Ind AS") prescribed under section 133 of the Companies Act, 2013, read with relevant rules thereunder and in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI Circular No. CIR/CFD/FAC/62/2016 dated July 5, 2016. 
4 Reconciliation between previous GAAP and Ind AS 
Consequent to transition from the previous GAAP to Ind AS, the reconciliation of profit/loss after tax for the corresponding three months and year ended March 31, 2016 and reconciliation of equity as on March 31, 2016 is provided below: 
(a)
Financial results reconciliation:

( Rs. in Lakhs)







Quarter ended
Year ended March


Particulars
March 31, 2016
31, 2016







Net (loss) /profit under previous GAAP
(1,151)
5,872


Add/(less): Ind AS adjustments income/(loss):




(i) Measurement of Foreign Currency Convertible Bonds ('FCCBs') at fair value




(a) Impact on finance cost due to effective interest rate and transfer of interest no longer payable to retained earnings on
(2,965)
(11,891)


conversion of FCCBs into equity shares




(b) Impact on foreign exchange due to change in carrying value of FCCBs and related account balances and transfer of
(418)
(1,846)


exchange gain to retained earnings on conversion of FCCBs into equity shares




(ii) Impact of deferral of revenue pertaining to free support services
(61)
(33)


(iii) Impact on measurement of other long term borrowings at fair value
431
431


(iv) Others (net)
35
38


Net loss after tax as per Ind AS




(4,129)
(7,429)

(b)
Equity reconciliation:

( Rs. in Lakhs)






Particulars

As on



March 31, 2016






Equity as reported under previous GAAP

72,700


Effect of transition to Ind AS




(i) Impact on measurement of long term borrowings at fair value:




(a) Foreign Currency Convertible Bonds

387


(b) Other term loans

466


(ii) Impact of deferral of revenue pertaining to free support services

(233)


(iii) Others (net)

63


Equity as per Ind AS





73,383


5 Exceptional items:




( Rs. in Lakhs)











Quarter ended

Year ended


Particulars
March 31, 2017
December 31, 2016
March 31, 2016
March 31, 2017
March 31, 2016










Audited (note 11)
Unaudited
Audited (note 11)
Audited
Audited










i. Loss on impairment of goodwill (note 5[i](a) & (b))
(10,890)
-
(8,870)
(10,890)
(8,870)


ii. Reversal of interest accrued but not due pertaining to term
-
-
2,401
-
2,401


loans (note 5[ii])















Total
(10,890)
-
(6,469)
(10,890)
(6,469)

5[i][a] As at March 31, 2017, the Company assessed the carrying value of goodwill relating to its investment in the subsidiary viz. Subex Americas Inc., amounting to ` 9,736 Lakhs (March 31, 2016: ` 18,606 Lakhs). Based on future operational plan, projected cash flows and valuation carried out by an external valuer, the Company has made an impairment provision of ` 6,010 Lakhs (March 31, 2016: ` 8,870 Lakhs) towards the carrying value of goodwill relating to its investment in the said subsidiary. The management is of the view that, the carrying value of goodwill relating to its investment in the said subsidiary of ` 3,726 Lakhs as at March 31, 2017 is appropriate.
5[i][b] As at March 31, 2017, the Company assessed the carrying value of goodwill relating to its investment in the subsidiary viz. Subex (UK) Limited amounting to ` 67,036 Lakhs (March 31, 2016: ` 67,036 Lakhs). Based on future operational plan, projected cash flows and valuation carried out by an external valuer, the Company has made an impairment provision of ` 4,880 Lakhs (March 31, 2016: ` Nil) towards the carrying value of goodwill relating to its investment in the said subsidiary. The management is of the view that, the carrying value of goodwill relating to its investment in the said subsidiary of ` 62,156 Lakhs as at March 31, 2017 is appropriate.
5[ii] During the year ended March 31, 2016, pursuant to the QVT Interest Waiver Letter dated March 26, 2016, the lenders of term loan of US$ 12 Million to Subex Americas Inc. had waived the interest liability upto the date of such letter and interest accruing thereafter upto August 22, 2016. Further, interest rate has been revised from 10.5% per annum to 5% per annum, effective August 22, 2016. Consequently, accrued outstanding interest of US$ 2.9 Million ( ` 1,970 Lakhs) has been written back and impact on measurement of such long term borrowings at fair value resulted in reduction in carrying value by ` 431 Lakhs as at March 31, 2016. During the current year ended March 31, 2017, such interest waiver has been extended till June 30, 2017 and subsequent to the year end, the entire loan of US$ 12 Million has been repaid as on May 15, 2017.
6 Subsequent to balance sheet date, the Company has made an allotment of 55,094,999 equity shares of the Company on a preferential basis, at an issue price of ` 14 per equity share (Face value of ` 10 per equity share) amounting to ` 7,713 Lakhs. 
7 (a) As at March 31, 2017, the Company has outstanding FCCBs III of USD 3.60 Million ( ` 2,335 Lakhs) which are carried at fair value of USD 3.51 Million ( ` 2,277 Lakhs) in the books of accounts, which are due for redemption on July 07, 2017. 
(b) The FCCB holders in their respective meetings have approved the deferral of aggregate interest of US$ 0.73 Million ( ` 473 Lakhs) in respect of outstanding FCCBs III with face value of US$ 3.60 Million ( ` 2,335 Lakhs) for the period July 6, 2012 to January 5, 2016 till redemption date of the bonds, being July 07, 2017. 
8 The Company had remitted the withholding taxes on interest on FCCBs III in accordance with the provisions of the Income Tax Act, 1961 amounting to ` 1,052 Lakhs pertaining to FCCBs III which have been converted into equity shares of the Company. Pursuant to such conversion, the interest accrued but not due is considered no longer payable and the management basis expert advice, is of the view that the withholding taxes paid by the Company in respect of the aforesaid interest, are recoverable from income tax department and/or are adjustable against its other withholding taxes obligations. Accordingly, the Company has revised the returns of withholding taxes and adjusted withholding taxes of ` 205 Lakhs during the quarter ended March 31, 2017 (quarter ended December 31, 2016 and March 31, 2016 amounting to ` 377 Lakhs and ` Nil, respectively and that for the year ended March 31, 2017 and March 31, 2016 amounting to ` 1,037 Lakhs and ` Nil, respectively) on salary, professional services and others by write back of withholding taxes on interest on FCCBs paid earlier, and such write back is included under other income. 
9 Employee benefits expenses for the quarters ended March 31, 2017, December 31, 2016 and March 31, 2016 are net of reversal of provision no longer required, in respect of employee incentives relating to sales and delivery commissions, amounting to ` 700 Lakhs, ` Nil and ` 192 Lakhs, respectively and that for the year ended March 31, 2017 and March 31, 2016 amounting to ` 700 Lakhs and ` 1,065 Lakhs, respectively. 
10 The Group is engaged in the business of software products and related services. These, in the context of Ind AS 108 on Operating Segments Reporting are considered to constitute one segment and hence the Group has not made any additional segment disclosures. 
11 The figures of last quarter of current and previous year are the balancing figures between the audited figures in respect of the full financial year and the published unaudited year to date figures of nine months of respective year. 
12 Previous period figures have been regrouped/ reclassified, wherever necessary to confirm to current period's/ year's classification. 
13 Pursuant to Regulation 33 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company has opted to publish the consolidated financial results. The standalone financial results, however, are being made available to the Stock Exchanges where the securities of the Company are listed and are also being posted on the Company's website www.subex.com. 
Bengaluru
Surjeet Singh
Date: May 25, 2017
Managing Director & CEO

For further details on the results, please visit our website: www.subex.com

This information is provided by RNS
The company news service from the London Stock Exchange
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