REG - Subex Limited - Subex Limited 3rd Quarter Results <Origin Href="QuoteRef">SUBX.NS</Origin>

SubexAnnouncement

03/02/2017 10:50

RNS Number : 9916V
Subex Limited
03 February 2017
February 03, 2017
To
TheLondon Stock Exchange
10PaternosterSquare
London
EC4M 7LS 
DearSirs,
Sub: Outcome of the Board Meeting held on February 03, 2017
Please be informed that the agenda item stated hereunder was discussed and approved at the Board Meeting held on February 03, 2017 at Mumbai:
 Unaudited standalone and consolidated Financial Results of the Company for the quarter and nine months ended December 31, 2016. 
Please find enclosed:
 The consolidated Financial Results of the Company for the quarter and nine months ended December 31, 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
Subex Limited
Registered office: RMZ Ecoworld, Outer Ring Road, Devarabisanahalli, Bangalore - 560 037
Statement of Consolidated Unaudited Results for the quarter and nine months ended December 31, 2016







(Rs in Lakhs)





Consolidated





3 months ended
Preceding 3
Corresponding 3
Year to date figures for the nine



months ended
months ended


Particulars
December 31,
months ended December 31,


September 30,
December 31,
















2016
2016
2015
2016
2015



Unaudited
Unaudited
Unaudited
Unaudited
Unaudited



(refer note 4)
(refer note 4)







1
Income from operations







Net sales/ income from operations
9,578
8,336
8,055
26,248
23,320










Total income from operations (net)
9,578
8,336
8,055
26,248
23,320

2
Expenses






(a)
Cost of hardware, software and support charges
194
44
84
490
180

(b)
Employee benefits expense (refer note 10)
4,047
4,175
3,738
12,289
11,772

(c)
Other expenditure
2,891
2,689
2,403
8,046
6,863

(d)
Depreciation and amortisation expense
127
117
110
356
317

(e)
Exchange fluctuation (gain)/loss (net)
(316)
(211)
(409)
(1,345)
1,486










Total expenses
6,943
6,814
5,926
19,836
20,618

3







Profit from operations before other income and
2,635
1,522
2,129
6,412
2,702


finance costs (1-2)






4
Other income (refer note 7)
394
268
28
891
112

5







Profit from ordinary activities before finance costs
3,029
1,790
2,157
7,303
2,814


(3+4)






6
Finance costs






(a)
Interest on FCCBs
126
128
905
388
3,268

(b)
Interest on term loan
96
167
245
464
720

(c)
Other finance costs
234
223
383
680
1,035










Total finance costs
456
518
1,533
1,532
5,023

7







Profit/(loss) from ordinary activities before tax (5-6)
2,573
1,272
624
5,771
(2,209)

8
Tax expense (net)
318
298
254
724
1,091

9







Net profit/ (loss) for the period (7-8)
2,255
974
370
5,047
(3,300)

10
Other comprehensive income, net of taxes
(561)
(244)
(544)
(1,651)
(876)

11







Total comprehensive income (9+10)
1,694
730
(174)
3,396
(4,176)

12
Paid up share capital (face value of Rs 10)
50,691
50,691
42,175
50,691
42,175

13
Earnings/(loss) per share (of Rs 10/- each) (not annualised







in case of the interim periods):






(a)
- Basic
0.44
0.19
0.11
1.00
(1.34)

(b)
- Diluted
0.44
0.19
0.11
1.00
(1.34)









Notes:
1 The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on February 03, 2017.
2 The financial results of Subex Limited (Standalone Information):





(Rs in Lakhs)

3 months ended
Preceding 3
Corresponding 3
Year to date figures for the nine

months ended
months ended
Particulars
December 31,
months ended December 31,
September 30,
December 31,





2016
2016
2015
2016
2015

Unaudited
Unaudited
Unaudited
Unaudited
Unaudited

(refer note 4)
(refer note 4)




Net sales/ income from operations
8,690
7,505
7,618
23,868
21,301
Profit/(loss) from ordinary activities before tax
1,763
401
459
2,810
(2,786)
Profit/(loss) from ordinary activities after tax
1,712
321
290
2,670
(3,303)
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 has 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.
4 Consequent to transition from the Previous GAAP to Ind AS, the reconciliation of profit/loss after tax is provided below for the corresponding 3 months ended December 31, 2015 and year to date figures ('YTD') for the nine months ended December 31, 2015:






(Rs in Lakhs)





Corresponding 3
YTD nine months





months ended

Particulars


ended December



December 31,





31, 2015





2015







Net profit under previous GAAP


5,938
7,023

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
(5,165)
(8,926)

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
(482)
(1,428)

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




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


68
28

(iii) Others (net)


11
3

Net profit/(loss) after tax as per Ind-AS


370
(3,300)
5 The face value and fair value of FCCBs outstanding as at December 31, 2016 are as follows:












Face value
Fair value

Particulars

US$ Million
Rs in Lakhs
US$ Million
Rs in Lakhs

FCCBs I

1.00
679
1.35
917

FCCBs II

1.40
951
1.99
1,352

FCCBs III

3.60
2,445
3.43
2,330

Total

6.00
4,075
6.77
4,599
The FCCB holders in their respective meetings have approved the deferral of aggregate interest of US$ 0.73 Million i.e. Rs 495 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. During the previous quarter, the interest waiver has been 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 on interest on FCCBs III in accordance with the provisions of the Income Tax Act, 1961 amounting to Rs 1,025 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 Rs 377 Lakhs during the quarter ended December 31, 2016 ( quarter ended September 30, 2016 and December 31, 2015 amounting to Rs 250 Lakhs and Rs Nil, respectively and that for the nine months ended December 31, 2016 and December 31, 2015 amounting to Rs 832 Lakhs and Rs 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.
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 of Rs 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 December 31, 2016 and in view of the management, no further provision for diminution is considered necessary as at December 31, 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 December 31, 2016.
10 Employee benefits expenses for the quarters ended December 31, 2016, September 30, 2016 and December 31, 2015 is net of reversal of provision no longer required, in respect of employee incentives, amounting to Rs Nil, Rs Nil and Rs 420 Lakhs, respectively and that for the nine months ended December 31, 2016 and December 31, 2015 amounting to Rs Nil and Rs 873 Lakhs, respectively.
11 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.
12 Previous period figures have been regrouped/ reclassified, wherever necessary to confirm to current period'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.
Mumbai
Surjeet Singh
Date: February 03, 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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