REG - Subex Limited - Outcome of Board Meeting held on November 10 2017 <Origin Href="QuoteRef">SUBX.NS</Origin>

SubexAnnouncement

13/11/2017 10:05

RNS Number : 3085W
Subex Limited
13 November 2017
November 13, 2017
To
TheLondon Stock Exchange
10PaternosterSquare
London
EC4M 7LS 
Dear Sir/Madam,
Sub: Outcome of the Board Meeting of Subex Limited held on November 10, 2017
Please be informed that the agenda items summarized hereunder were discussed and approved at the Board Meeting of Subex Limited (the "Company") held on November 10, 2017 at Bengaluru:
1. Unaudited standalone and consolidated financial results of the Company for the quarter and half year ended September 30, 2017
2. The Board noted that, pursuant to: (i) the in-principle approval accorded by the Board of Directors of the Company ("Board") at its meeting No. 2/ 2017-18 held on May 25, 2017; (ii) the final approval accorded by the Board at its meeting No. 5/ 2017-18 held on August 21, 2017; and (iii) the approval accorded by the members of the Company vide postal ballot on September 23, 2017, pursuant to restructuring of the business of the Company:
(i) Mr. Vinod Kumar Padmanabhan has ceased to be a whole-time director and is now a non-executive non-independent director of the Company. 
(ii) Mr. Ashwin Chalapathy has ceased to be a whole-time director and is now a non-executive non-independent director of the Company. 
Please find enclosed:
 Unaudited consolidated Financial Results of the Company for the quarter and half year ended September 30, 2017
We request you to take the aforesaid notification on record.
Yours faithfully
For and on behalfofSubexLimited
Arjun Makhecha
Acting Company Secretary
SUBEX LIMITED
Registered office: RMZ Ecoworld, Outer Ring Road, Devarabisanahalli, Bangalore - 560 037
Statement of Unaudited Consolidated Financial Results for the quarter and six months ended September 30, 2017
( Rs.in Lakhs)

Particulars
Quarter ended
Year to date figures for the six months ended
Year ended
September 30, 2017
June 30, 2017
September 30, 2016
September 30, 2017
September 30, 2016
March 31, 2017
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
1 2
3
4
(a)
(b)
(c)
(d)
(e)
5
6 7 8
9
10
11
12
13
14
(a)
(b)
Income
Revenue from operations
Other income (Refer note 8)
8,106 16
7,618 59
8,336 268
15,724 75
16,670 497
35,733 1,154
Total income (1+2)
8,122
7,677
8,604
15,799
17,167
36,887
Expenses
Employee benefits expense (Refer note 9)
Finance costs
Depreciation and amortisation expense
Exchange fluctuation loss/ (gain), net Other expenses
4,475 210
129
372 2,519
4,333 225
130
507 2,331
4,175 518
117
(211)
2,733
8,808 435
259
879 4,850
8,242
1,076
229
(1,029)
5,451
15,871
2,040
495
(698)
11,651
Total expenses
7,705
7,526
7,332
15,231
13,969
29,359







Profit before exceptional items and tax (3-4)
417
151
1,272
568
3,198
7,528
Exceptional items, net (Refer note 7)
-
-
-
-
-
(10,890)
Net profit/ (loss) before tax (5+6)
417
151
1,272
568
3,198
(3,362)
Tax expense, net
 Current tax
 MAT charge / (credit)
 Deferred tax charge / (credit)
50
62 1
292
(27)
(13)
298
-
-
342
35
(12)
406
-
-
1,055
(94)
-
Total tax expense
113
252
298
365
406
961







Net profit/ (loss) for the period / year (7-8)
304
(101)
974
203
2,792
(4,323)
Other comprehensive income, net of tax
Items that will be reclassified subsequently to profit or loss:
Net exchange differences on translation of foreign operations
Items that will not be reclassified subsequently to profit or loss: Re-measurement (loss)/ gain on defined benefit plans
291 7
284
(8)
(179) (65)
575
(1)
(1,024) (66)
(1,344) (32)
Total other comprehensive income
298
276
(244)
574
(1,090)
(1,376)







Total comprehensive income for the period/ year (9+10)
602
175
730
777
1,702
(5,699)
Paid up equity share capital
[face value of Rs. 10 (March 31, 2017: Rs. 10)]
Other equity
Earnings/(loss) per share (of Rs.10/- each) (not annualised in case of the interim periods)
- Basic
- Diluted
56,200
-
0.05
0.05
56,200
-
(0.02)
(0.02)
50,691
-
0.19
0.19
56,200
-
0.04
0.04
50,691
-
0.55
0.55
50,691
17,718
(0.85)
(0.85)

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, 2017
March 31, 2017
Unaudited
Audited
A
1
2
B
1
2
3
4
ASSETS
Non-current assets
Property, plant and equipment
Goodwill on consolidation
Other intangible assets
Financial assets
Loans
Other balances with banks
Other financial assets
Income tax asset (net)
Deferred tax asset (MAT credit entitlement) Other non-current assets
Current assets
Financial assets
Loans
Trade receivables
Cash and cash equivalents
Other financial assets
Other current assets
Total assets (1+2)
EQUITY AND LIABILITIES
Equity
Equity share capital
Other equity Total equity
Liabilities
Non-current liabilities
Provisions
Current liabilities
Financial liabilities Borrowings
Trade payables
Other financial liabilities
Other current liabilities
Provisions
Income tax liabilities (net)
Total liabilities (2+3)
Total equity and liabilities (1+4)

773
65,882 112
420
172
234
2,242 455
538
785
65,882 138
399
258
234
1,977 478
564
70,828
70,715
151
12,332 4,531
4,196 873
196
11,851 7,386
4,508
1,013
22,083
24,954


92,911
95,669
56,200
20,695
50,691
17,718
76,895
68,409
309
297
309
297
8,314
1,422
1,310
3,102 719
840
8,590
1,805
11,922
3,085 677
884
15,707
26,963


16,016
27,260


92,911
95,669

Notes:
1
2
3
4
5
6
7
8
9
The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on November 10, 2017.
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.
The financial results of Subex Limited (Standalone information):
( Rs.in Lakhs)
Particulars
Quarter ended
Year to date figures for the six months ended
Year ended
September 30, 2017
June 30, 2017
September 30, 2016
September 30, 2017
September 30, 2016
March 31, 2017
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
Total income
Net profit/(loss) before tax
Net profit/(loss) for the period/ year
Total comprehensive income for the period/ year
 7,794 389
 310
 3 10 
 7,132 434
 324
 316 
 7,766 401
 321
 264 
 14,926
 823
 634
 626 
 15,657 1,047 958
 900 
 33,694
 (429)
 (683)
 (716)
During the three months ended June 30, 2017, the Company made an allotment of 55,094,999 equity shares of the Company on a preferential basis, at an issue price of Rs.14 per equity share (Face value of Rs. 10 per equity share) amounting to Rs. 7,713 Lakhs.
On June 30, 2017, the Company redeemed outstanding FCCBs III amounting to US$ 3.6 Million (Rs. 2,336 Lakhs) and paid accrued interest of US$ 0.1 Million ( Rs.67 Lakhs) on the aforesaid bonds. On July 6, 2017, the deferred interest in respect of aforesaid bonds for the period July 6, 2012 to January 6, 2016 amounting to US$ 0.72 Million ( Rs. 467 Lakhs) has been paid. There are no outstanding FCCBs and related interest liabilities as at September 30, 2017.
During the three months ended June 30, 2017, the subsidiary of the Company viz. Subex Americas Inc., has repaid the term loan of US$ 12 Million (Rs. 7,782 Lakhs) to the respective lenders on May 15, 2017.
Exceptional items:
( Rs. in Lakhs)
Particulars
Quarter ended
Year to date figures for the six months ended
Year ended
September 30, 2017
June 30, 2017
September 30, 2016
September 30, 2017
September 30, 2016
March 31, 2017
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
Loss on impairment of goodwill (note 7[i]&[ii])
-
-
-
-
-
(10,890)
Total
-
-
-
-
-
(10,890)
7[i] 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 Rs. 9,736 Lakhs. Based on future operational plan, projected cash flows and valuation carried out by an external valuer, the Company made an impairment provision of Rs. 6,010 Lakhs towards the carrying value of goodwill relating to its investment in the said subsidiary. The management was of the view that, the carrying value of the goodwill (net of provision) of Rs.3,726 Lakhs as at March 31, 2017 was appropriate. There is no change in the management's assessment as regards the aforementioned carrying value of goodwill as at September 30, 2017.
7[ii] 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 Rs. 67,036 Lakhs. Based on future operational plan, projected cash flows and valuation carried out by an external valuer, the Company made an impairment provision of Rs. 4,880 Lakhs towards the carrying value of goodwill relating to its investment in the said subsidiary. The management was of the view that, the carrying value of goodwill (net of provision) of Rs. 62,156 Lakhs as at March 31, 2017 was appropriate. There is no change in the management's assessment as regards the aforementioned carrying value of goodwill as at September 30, 2017.
Other income for the quarters ended September 30, 2017, June 30, 2017 and September 30, 2016, includes write back of withholding taxes paid earlier in respect of interest on FCCBs, which is no longer payable on account of conversion of FCCBs into equity shares of the Company, amounting to Rs. Nil, Rs. 30 Lakhs and Rs. 250 Lakhs, respectively, that for the six months ended September 30, 2017 and September 30, 2016 amounting to Rs. 30 Lakhs and Rs. 455 Lakhs, respectively and that for the year ended March 31, 2017 amounting to Rs.1,037 Lakhs. Such, write back of withholding taxes has been adjusted with other withholding taxes liability of the Company.
Employee benefits expenses for the quarters ended September 30, 2017, June 30, 2017 and September 30, 2016 are net of reversal of provision no longer required, in respect of employee incentives relating to sales and delivery commissions, amounting to Rs.156 Lakhs, Rs. 146 lakhs and Rs. Nil, respectively, that for the six months ended September 30, 2017 and September 30, 2016 amounting to Rs. 302 Lakhs and Rs. Nil, respectively and that for the year ended March 31, 2017 amounting to Rs.700 Lakhs.
10
11
12
13
The Board of Directors of the Company in its meeting held on August 21, 2017 approved the restructuring of the Company's business by way of transfer of its Revenue Maximization Solutions and related businesses ("RMS business") and the Subex Secure and Analytics solutions and related businesses ("Digital business") to its subsidiaries, Subex Assurance LLP and Subex Digital LLP (together referred to as "LLPs"), respectively, hereinafter referred to as the "Restructuring", subject to shareholders and other requisite approvals, to achieve amongst other aspects, segregation of the Company's business into separate verticals to facilitate greater focus on each business vertical, higher operational efficiencies, and to enhance the Company's ability to enter into business specific partnerships and attract strategic investors at respective business levels, with an overall objective of enhancing shareholder value.
The shareholders of the Company approved the Restructuring by way of a special resolution passed through postal ballot on September 23, 2017 and subsequently, the Board of Directors of the Company in its meeting held on October 4, 2017 approved November 1, 2017 to be the effective date of the Restructuring, subject to the Company obtaining the requisite approvals in this regard.
Accordingly, effective November 1, 2017, the Company's RMS business and the Digital business have been transferred on a going concern basis for a consideration of Rs.64,162 Lakhs and Rs. 1,600 Lakhs, respectively, in the form of
Company's capital contribution in the aforesaid LLPs, subject to prescribed working capital adjustments.
Post such Restructuring, the Company continues to directly hold 99.99% share in the capital of, and in the profits and losses of, each of these LLPs and the entire economic interest as well as control and ownership of the RMS Business and Digital Business remains with the Company post such Restructuring.
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.
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.
Bengaluru Surjeet Singh
Date: November 10, 2017 Managing Director & CEO
For further details on the results, please visit our website: www.subex.com

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