Subex Limited - Outcome of Board Meeting on August 10, 2020

Subex

11/08/2020 14:34

RNS Number : 8252V

Subex Limited

11 August 2020

 

 

August 11, 2020

 

To

The London Stock Exchange

10 Paternoster Square

London

EC4M 7LS

 

Dear Sir/Madam,

 

Sub: Subex Limited "The Company"-Outcome of the Board Meeting held on August 10, 2020

 

Please be informed that the agenda item summarized hereunder was discussed and approved at the Board Meeting held on August 10, 2020 at Bengaluru:

 

1.   Approval of the Unaudited Consolidated Financial Results of the Company for the quarter ended June 30, 2020.

 

 

Please find enclosed:

 

a)   The Unaudited Consolidated Financial Results of the Company for the quarter ended June 30, 2020.

 

 

We request you to take the aforesaid notification on record.

 

Yours truly,

For Subex Limited

           

 

                                                           

Vinod Kumar Padmanabhan

Managing Director & CEO

DIN:06563872

 

 

SUBEX LIMITED
Registered office: RMZ Ecoworld, Outer Ring Road, Devarabisanahalli, Bangalore - 560 103
Statement of Unaudited Consolidated Financial Results for the quarter ended June 30, 2020)
(Rs. in Lakhs)
Quarter ended
Year ended
Particulars
June 30, 2020
March 31, 2020
June 30, 2019
March 31, 2020
Unaudited
Audited
Unaudited
Audited
(Refer note 12)
Income
1
Revenue from operations
8,870
10,427
7,895
36,498
2
Other income
96
335
36
563
3
Total income (1+2)
8,966
10,762
7,931
37,061
Expenses
Employee benefits expense (Refer note 4)
4,557
4,152
4,309
17,454
Finance costs
110
119
122
477
Depreciation and amortisation expense
366
392
371
1,508
Exchange fluctuation gain, net
(189)
(848)
(259)
(887)
Other expenses
1,542
3,297
2,096
10,513
4
Total expenses
6,386
7,112
6,639
29,065
5
Profit before exceptional items and tax expense (3-4)
2,580
3,650
1,292
7,996
Exceptional items
Impairment of goodwill [Refer note 5(i)]
Provision no longer required written back Provision for claim settlement [Refer note 5(ii)]
-
-
-
(31,473)
-
-
-
761
-
-
-
(1,054)
6
Total exceptional items
-
-
-
(31,766)
7
Net profit/ (loss) before tax expense (5-6)
2,580
3,650
1,292
(23,770)
8
Tax expense, net
Current tax charge
ProvisionforMATcredit[Refernote6(i)]
Provision-foreignwithholdingtaxes[Refernote6(ii)] Deferred tax charge/ (credit) (Refer note7)
1
35
1
117
-
425
-
425
346
105
223
754
717
(114)
540
1,849
Total tax expense
1,064
451
764
3,145
9
Net profit/ (loss) for the period/ year (7-8)
1,516
3,199
528
(26,915)
10
Other comprehensive income/(loss) net of tax expense
Items that will be reclassified subsequently to profit or loss:
Net exchange differences (loss)/ gain on translation of foreign operations
Items that will not be reclassified subsequently to profit or loss:
Re-measurement (loss)/ gain on defined benefits plan
(38)
(200)
(266)
5
(4)
21
(10)
(34)
Total other comprehensive income/(loss)
(42)
(179)
(276)
(29)
11
Total comprehensive income/(loss) for the period/ year (9+10)
1,474
3,020
252
(26,944)
12
Paid up equity share capital
56,200
56,200
56,200
56,200
[face value of Rs 10 (March 31, 2020: Rs 10)]
13
Other equity
-
-
-
(4,661)
14
Earnings/ (loss) per share (of Rs 10/- each) (not annualised in case of the interim periods)
(Refer note 10):
- Basic
0.28
0.59
0.10
(4.94)
- Diluted
0.28
0.59
0.10
(4.94)

 

 

 

1
Notes:
The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on August 10, 2020.
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, as amended.
The financial results of Subex Limited (Standalone information): (Rs in Lakhs)
2
3
Quarter ended
Particulars
June 30, 2020
March 31, 2020
June 30, 2019
March 31, 2020
Unaudited
Audited
Unaudited
Audited
(Refer note 12)
Total income
1,332
2,727
516
3,170
Net profit/ (loss) before tax expense
900
2,217
(512)
(20,470)
Net profit/ (loss) for the period/ year
900
2,099
(512)
(20,588)
Total comprehensive income for the period/ year
899
2,082
(513)
(20,609)
4
Employee benefits expenses for the quarters ended June 30, 2020, March 31, 2020, and June 30, 2019 are net of reversal of provision no longer required, in respect of
employee incentives relating to sales and delivery commissions, amounting to Rs333 Lakhs, Rs 678 Lakhs and  Rs  450 Lakhs, respectively, and that for the year ended
March 31, 2020 amounting to Rs 692 Lakhs.
5
(i) During the previous year ended March 31, 2020, considering the challenges and significant investment requirements of telecom operators which has resulted in
longeropportunityconversioncycleandlowerspendstowardsITsolutions,themanagementhadcarriedouttheannualimpairmentexerciseasatDecember31,2019in
respect of carrying value of goodwill and basis valuation carried out by an external valuation expert, had made an impairment provision of  Rs  31,473 Lakhs towards
carrying value of goodwill. In view of the COVID -19 pandemic, the management has reassessed its projections and assumptions and has concluded that, the carrying
value of it's goodwill as at June 30, 2020 is appropriate.
(ii) During the previous year ended March 31, 2020, the Company had entered into settlement agreement with former MD & CEO and former COO of the company in
respect of long drawn litigation wherein certain claims were made against the Company. In terms of the settlement agreement, the Company has paid an amount of  Rs
820 lakhs (net of Rs 234 Lakhs recoverable from such ex-employees). Accordingly, the aforesaid litigation is amicably settled.
6
(i) During the previous quarter and year ended March 31, 2020, the MAT creditentitlementof Rs425 Lakhs has been provided for considering the uncertaintyas
regards to its utilisation.
(ii) Represents provision in respect of withholding taxes deducted/ deductible by the overseas customers of the Group. During the previous quarter and year ended
March 31, 2020, the Group has reversed an amount of Rs308 Lakhs considering it is no longer necessary on account of favourable assessment order received allowing
foreign tax credit in respect of AY 2016-17.
7
Deferredtaxcharge/(credit),comprisesofliabilityarisingonaccountoftaxbenefitsfromamortisationofintangibleassetsofSubexAssuranceLLP,netofdeferredtax
assets arising on account of carry forward losses and other taxable temporary differences, which arose mainly on account of business restructuring effected from
November 1, 2017, wherein, the Company's RMS business and the Digital business was transferred on going concern basis to Subex Assurance LLP and Subex Digital
LLP respectively. The liability for the quarter and year ended March 31, 2020 in respect of tax benefits from amortisation of intangibles is net of provision no longer
considered necessary amounting to Rs 1,014 Lakhs considering the favourable assessment order in respect of AY 2016-17 with respect to foreign tax credit allowance.
8
The Board of Directors in its meeting held on February 07, 2020, has approved a scheme of Capital Reduction in accordance with Section 52 of the Companies Act,
2013 and Section 66 of the Companies Act, 2013 read with National Company Law Tribunal ('NCLT') (Procedure for reduction of share capital of Company) Rules,
2016 and other applicable provisions of the Companies Act, 2013. The abovementioned scheme has also been approved by Shareholders with requisite majority via
postal ballot on June 25, 2020. Subject to the approval from NCLT and other statutory authorities as and where applicable, the Accumulated Losses of Rs 38,401 Lakhs
as at December 31, 2019 shall be written off against the paid-up share capital of the Company for an amount of Rs 28,100 Lakhs by reducing the face value of the equity shares from Rs 10/- to Rs 5/- each and Securities Premium Account balance for an amount of Rs 10,301 Lakhs.
9
The Group is engaged in the business of software products and related services, which are monitored as a single segment by the Chief Operating Decision Maker,
accordingly, 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.
10
Subex Employee Welfare and ESOP Benefit Trust (hereinafter referred to as the "ESOP Trust"), registered and authorised to acquire shares of the Company through
secondarymarketforprovidingshare-basedpaymentstoitsemployees,is consolidatedinthestandalonefinancialresultsoftheCompanyandthesharesreacquiredand
held by ESOP Trust are treated as treasury shares and recognised at cost and deducted from other equity. The shares held by the Trust were reduced on a weighted
average basis from outstanding number of shares for computation of basic and diluted EPS of the Company.
11
The Group has considered internal and certain external sources of information including economic forecasts, budgets required to meet performance obligations and
likely delays on contractual commitments, upto the date of approval of these consolidated financial results, in determining the possible impact from the COVID-19
pandemic. The Group has used the principles of prudence in applying judgements, estimates and assumptions and based on the current estimates, the Group expects to
fully recover the carrying amount of it's assets. The impact of the global health pandemic may be different from that estimated as at the date of approval of these
consolidated financial results and the Group will continue to closely monitor any material changes to its assessment of economic impact of COVID- 19 pandemic.
12
The figures of last quarter of previous year is the balancing figures between the audited figures in respect of the full financial year ended March 31, 2020 and the
published unaudited year to date figures for the nine months ended December 31, 2019.
Place: Bengaluru Vinod Kumar Padmanabhan
Date: August 10, 2020 Managing Director & CEO
For further details on the results, please visit our website: www.subex.com

 

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