REG - Subex Limited - Outcome of Board Meeting held on December 06 2016 <Origin Href="QuoteRef">SUBX.NS</Origin>

SubexAnnouncement

07/12/2016 11:25

RNS Number : 1724R
Subex Limited
07 December 2016
December 07, 2016
To
TheLondon Stock Exchange
10PaternosterSquare
London
EC4M 7LS 
DearSirs,
Sub: Outcome of the Board Meeting held on December 06, 2016
Please be informed that the agenda item stated hereunder was discussed and approved at the Board Meeting held on December 06, 2016 at Mumbai:
 Unaudited standalone and consolidated Financial Results of the Company for the quarter and half year ended September 30, 2016. 
Please find enclosed:
 The consolidated Financial Results of the Company for the quarter and half year ended September 30, 2016.
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

Statement of Consolidated Unaudited Results for the quarter and six months ended September 30, 2016
(Rs. In lakhs)


Consolidated

Particulars
3 months ended September 30,
Preceding 3 months ended June 30,
Corresponding 3 months ended September 30,
Year to date figures for the six months ended September 30,


2016
2016
2015
2016
2015


Unaudited
Unaudited
Notes 3 & 4
Unaudited
Notes 3 & 4
1
Income from operations
Net sales/ income from operations
8,336
8,334
7,928
16,670
15,265

Total income from operations (net)
8,336
8,334
7,928
16,670
15,265
2
Expenses





(a)
Cost of hardware, software and support charges (refer note 10)
44
252
77
296
96
(b)
Employee benefits expense (refer note 11)
4,175
4,067
3,895
8,242
8,034
(c)
Other expenditure
2,689
2,466
2,293
5,155
4,460
(d)
Depreciation and amortisation expense
117
112
105
229
207
(e)
Exchange fluctuation (gain)/loss (net)
(211)
(818)
372
(1,029)
1,895

Total expenses
6,814
6,079
6,742
12,893
14,692







3
Profit from operations before other income and finance costs (1-2)
1,522
2,255
1,186
3,777
573
4
Other income (refer note 7)
268
229
31
497
84
5
Profit from ordinary activities before finance costs (3+4)
1,790
2,484
1,217
4,274
657
6
Finance costs





(a)
Interest on FCCBs
128
134
1,066
262
2,363
(b)
Interest on term loan
167
201
244
368
475
(c)
Other finance costs
223
223
332
446
652

Total finance costs
518
558
1,642
1,076
3,490







7
Profit/(loss) from ordinary activities before tax (5-6)
1,272
1,926
(425)
3,198
(2,833)
8
Tax expense (net)
298
108
637
406
837
9
Net profit/ (loss) for the period (7-8)
974
1,818
(1,062)
2,792
(3,670)
10
Other comprehensive income, net of taxes
(244)
(846)
(869)
(1,090)
(332)
11
Total comprehensive income (9+10)
730
972
(1,931)
1,702
(4,002)
12
Paid up share capital [face value of Rs. 10 (March 31, 2016: Rs. 10)]
50,691
50,475
26,402
50,691
26,402
13
Earnings/(loss) per share (of Rs. 10/- each) (not annualised in case of the interim periods):





(a)
- Basic
0.19
0.36
(0.50)
0.55
(1.79)
(b)
- Diluted
0.19
0.36
(0.50)
0.55
(1.79)

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 September 30, 2016

(Unaudited)
ASSETS

Non-current assets

Property, plant and equipment
565
Goodwill
76,772
Other intangible assets
64
Financial assets:

Loans and advances
616
Others
177
Other non-current assets
2,499

80,693
Current assets

Financial assets:

Loans and advances
522
Trade receivables
10,266
Cash and cash equivalents
9,481
Other financial assets
3,759
Other current assets
1,803

25,831
Total assets (A+B)
106,524
EQUITY AND LIABILITIES

Equity

Equity share capital
50,691
Other equity
25,120
Total equity
75,811
Non-current liabilities

Provisions
312

312
Current liabilities

Financial liabilities:

Borrowings
9,900
Trade payables
1,750
Other current financial liabilities
14,571
Provisions
1,583
Other current liabilities
2,597

30,401
Total liabilities (D+E)
30,713
Total equity and liabilities (C+D+E)
106,524

Notes:
1 The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on December 06, 2016.
2 The financial results of Subex Limited (Standalone Information):
( Rs. in Lakhs)

Particulars
3 months ended September 30,
Preceding 3 months ended June 30,
Corresponding 3 months ended September 30,
Year to date figures for the six months ended September 30,
2016
2016
2015
2016
2015

Unaudited
Unaudited
Notes 3 & 4
Unaudited
Notes 3 & 4
Net sales/ income from operations
7,505
7,673
7,267
15,178
13,683
Profit/(loss) from ordinary activities before tax
401
646
(1,534)
1,047
(3,245)
Profit/(loss) from ordinary activities after tax
321
637
(1,832)
958
(3,593)

3 The financial results have been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standards ("Ind AS") 34 on Interim Financial Reporting 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.
The Company has opted to avail relaxation provided by SEBI vide the aforesaid circular dated July 5, 2016 in respect of disclosure requirements for corresponding figures of earlier periods. Accordingly, the financial results for the year ended March 31, 2016 and balance sheet as at March 31, 2016 have not been presented. The reserves (excluding revaluation reserve), as per the balance sheet of the previous accounting year not being mandatory, have not been presented.
The Results for the quarter and six months ended September 30, 2015 has not been subjected to limited review or audit. However, the management has exercised necessary diligence to ensure that the financial results for the quarter and six months ended September 30, 2015 provide a true and fair view of the Company's affairs.

4
Consequent to transition from the Previous GAAP to Ind AS, the reconciliation of profit/loss after tax is September 30, 2015 and year to date figures ('YTD') for the six months ended September 30, 2015:
provided below for the corresponding 3 months ended






( Rs. in Lakhs)

Particulars
Corresponding
3 months ended September 30, 2015
YTD six
months ended September 30, 2015

Net profit under previous GAAP



1,560
1,085

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 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 exchange gain to retained earnings on conversion of FCCBs into equity shares
(1,989)
(599)
(3,761)
(946)

(ii) Deferral of revenue pertaining to free support services
(iii) Others (net)



(26)
(8)
(40)
(8)

Net loss after tax as per Ind-AS



(1,062)
(3,670)
5
(a) The Board in its meeting held on May 14, 2015, approved the reset of conversion price of the FCCBs III, which are convertible into equity shares of the Company, from Rs. 22.79 to Rs. 13.00 per equity share. Subsequently, the reset of the conversion price have been approved bythe shareholders in the annual general meeting held on June 19, 2015 and the bondholders in their meeting held on August 5, 2015. The Board in its meeting held on August 26, 2015, approved August 26, 2015 as the effective date of reset of conversion price of Rs. 13.00 per share.

(b) As at March 31, 2015, the Company had outstanding FCCBs III with face value of US$ 81.53 Million, out of which FCCBs III with face value of US$ 77.93 Million have been converted till the quarter and six months ended September 30, 2016 as detailed below:

Financial year/ period
FCCBs converted
US$ Million
Conversion rate per US$
Conversion price
No. of equity shares


2015-16
76.98
Rs.56.0545
Rs.22.79/ Rs.13.00
319,889,071


2016-17






Quarter ended June 30, 2016
0.45
Rs. 56.0545
Rs. 13.00
1,940,348


Quarter ended September 30, 2016
0.50
Rs. 56.0545
Rs. 13.00
2,155,942


(c) The face value and fair value of FCCBs outstanding as at September 30, 2016 are as follows:





Face value
Fair value


Particulars
US$ Million
Rs. in Lakhs
US$ Million
Rs. in Lakhs


FCCBs I
FCCBs II
FCCBs III
1.00
1.40
3.60
666
933
2,398
1.31
1.94
3.46
873
1,290
2,302


Total
6.00
3,997
6.71
4,465


As a result of reset in conversion price of FCCBs III, the said bonds with outstanding face value of US$ 3.60 Million as at September 30, 2016 would potentially be converted into 15,522,785 equity shares at an exchange rate of Rs. 56.0545/US$ with a conversion price of Rs. 13.00 per equity share.

(d) The FCCB holders in their respective meetings have approved the deferral of aggregate interest of US$ 0.73 Million (fair value of US$ 0.71 Million), i.e. Rs. 486 Lakhs (fair value of Rs. 475 Lakhs) in respect of outstanding FCCBs III with face value of US$ 3.60 Million for the period July 6, 2012 to January 5, 2016 till redemption date of the bonds, being July 07, 2017.
6
During the year ended March 31, 2016, pursuant to the 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. Subsequently, the interest waiver has been further extended till March 31, 2017, the effective date for the applicability of revised interest rate of 5% per annum has been extended to April 01, 2017 and the repayment date for US$ 6.5 Million loan out of US$ 12 Million has been extended from August 22, 2016 to March 31, 2017, and remaining balance of US$ 3.5 Million and US$ 2 Million is due for repayment on March 31, 2017 and June 30, 2017 respectively.
7
The Company had remitted the withholding taxes in respect of FCCBs III in accordance with the provisions of the Income Tax Act, 1961 amounting to Rs. 1,025 Lakhs upto September 30, 2016. Pursuant to the conversion of FCCBs III into equity shares of the Company, the interest accrued but not due is considered no longer payable. 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 ofRs. 455 Lakhs during the six months ended September 30, 2016 (quarter ended June 30, 2016 : Rs. 205 Lakhs) 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.
8
During the year ended March 31, 2016, the Company assessed the carrying value of goodwill relating to its investment in the subsidiary viz. Subex Americas Inc., amounting to Rs. 18,606 Lakhs. Based on future operational plan, projected cash flows and valuation carried out by an external valuer, the Company made an impairment provision ofRs. 8,870 Lakhs during the year ended March 31, 2016 towards the carrying value of goodwill relating to its investment in the said subsidiary. There is no change in the management's assessment as regards aforementioned carrying value of goodwill as at September 30, 2016 and in view of the management, no further provision for diminution is considered necessary as at September 30, 2016.
9
During the year ended March 31, 2016, the Company assessed the carrying value of goodwill relating to its investment in the subsidiary viz. Subex (UK) Limited, amounting to Rs. 67,036 Lakhs. Based on the future operational plan, projected cash flows and the valuation carried out by an external valuer, the management was of the view that, the aforesaid carrying value of goodwill as at March 31, 2016 relating to its investment in the said subsidiary was appropriate. There is no change in the management's assessment as regards aforementioned carrying value of goodwill as at September 30, 2016.


Cost of hardware, software and support charges for the quarters ended September 30, 2016, June 30, 2016 and September 30, 2015 is net of reversal of provision no longer required, amounting to Rs. Nil, Rs. Nil and Rs. Nil, respectively and that for the six months ended September 30, 2016 and September 30, 2015 amounting to Rs. Nil and Rs. 173 Lakhs, respectively.
Employee benefits expenses and sub-contract charges for the quarters ended September 30, 2016, June 30, 2016 and September 30, 2015 is net of reversal of provision no longer required, in respect of employee incentives, amounting to Rs. Nil, Rs. Nil and Rs. 384 Lakhs, respectively and that for the six months ended September 30, 2016 and September 30, 2015 amounting to Rs. Nil and Rs. 453 Lakhs, respectively.
Pursuant to the approval of the Board of Directors, the Group has discontinued the operations of two of its subsidiaries with effect from April 01, 2013. The details of unaudited results of the discontinued businesses consolidated in the above results are as follows:
( Rs. in Lakhs)

Particulars
3 months ended September 30,
Preceding 3 months ended June 30,
Corresponding 3 months ended September 30,
Year to date figures for the six months ended September 30,
2016
2016
2015
2016
2015
Unaudited
Unaudited
Notes 3 & 4
Unaudited
Notes 3 & 4
Total income
-
-
-
-
-
(Loss)/ Profit before tax
(2)
(1)
(1)
(3)
(2)
Profit/ (Loss) after tax
(1)
54
2
53
1

The Company 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 Company has not made any additional segment disclosures.
Previous period figures have been regrouped/ reclassified, wherever necessary to confirm to current period's classification.
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.
Surjeet Singh
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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