Subex Limited - Outcome of the Board Meeting November 09,2020

Subex

10/11/2020 11:32

RNS Number : 8511E

Subex Limited

10 November 2020

 

November 10, 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 November 09, 2020

 

Please be informed that the agenda items summarized hereunder were discussed and approved at the Board Meeting held on November 09, 2020 at Bengaluru:

 

1.     The Unaudited Standalone and Consolidated Financial Results of the Company for the quarter and half-year ended September 30, 2020.

 

Other Matters:

 

2.     Reduction in Capital of Subex (UK) Limited, a subsidiary of the Company and approval of the same by the Companies House, UK.

 

In furtherance to our intimation dated February 12, 2020, please take note that the Company has given effect to the Scheme of Reduction of Share Capital by reducing the face value per share from Rs. 10/- to Rs. 5/-, pursuant to the approval of the National Company Law Tribunal, Bengaluru Bench, Bengaluru, India, vide its Order dated September 23, 2020. The record date for giving effect to the reduction was October 23, 2020 and the new ISIN for the equity shares of Rs. 5/- each is INE754A01055. The approval for trading in the scrip of the Company has been provided by the Indian Stock Exchanges with effect from November 05, 2020, which was taken note off by the Board, in its meeting held on November 09, 2020.

 

Please find enclosed:

 

a)    The Unaudited Consolidated Financial Results of the Company for the quarter and half year ended September 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 and six months ended September 30, 2020
( ₹ in Lakhs)
Particulars
Quarter ended
Year to date figures for the six months ended
Year ended
September 30, 2020
June 30, 2020
September 30, 2019
September 30, 2020
September 30, 2019
March 31, 2020
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
1
2
Income
Revenuefromoperations
Other income
9,329
100
8,870
96
8,567
140
18,199
196
16,462
176
36,498
563
3
Total income (1+2)
9,429
8,966
8,707
18,395
16,638
37,061
Expenses
Employee benefits expense (Refer note 4)
4,890
4,557
4,437
9,447
8,746
17,454
Finance costs
103
110
121
213
243
477
Depreciation and amortization expense
365
366
378
731
749
1,508
Exchange fluctuation loss/(gain), net
438
(189)
(292)
249
(551)
(887)
Other expenses
1,461
1,542
2,352
3,003
4,448
10,513
4
Total expenses
7,257
6,386
6,996
13,643
13,635
29,065
5
Profit before exceptional items and tax (3-4)
2,172
2,580
1,711
4,752
3,003
7,996
Exceptional items
Gain on termination of lease agreement (Refer note 11) Provision for service tax receivable (Refer note 8) Impairment of goodwill [Refer note 5(i)]
Provision no longer required written back
Provision for claim settlement [Refer note 5(ii)]
554
(267)
-
-
-
-
-
-
-
-
-
-
-
-
-
554
(267)
-
-
-
-
-
-
-
-
-
-
(31,473)
761
(1,054)
6
Total exceptional items
287
-
-
287
-
(31,766)
7
Net profit/ (loss) before tax (5-6)
2,459
2,580
1,711
5,039
3,003
(23,770)
8
Tax expense, net
Current tax charge
Provision for MAT credit [Refer note 6 (i)]
Provision - foreign withholding taxes [Refer note 6 (ii)] Deferred tax charge (Refer note 7)
7
-386
841
1
-346
717
1
-263
817
8
-732
1,558
2
-486
1,357
117
425
754
1,849
Total tax expense
1,234
1,064
1,081
2,298
1,845
3,145
9
Net profit/ (loss) for the period/ year (7-8)
1,225
1,516
630
2,741
1,158
(26,915)
10
Other comprehensive income/ (loss) net of tax expense
Items that will be reclassified subsequently to profit or loss:
Net exchange differences gain/ (loss) on translation of foreign operations
Items that will not be reclassified subsequently to profit or loss:
Re-measurement (loss)/ gain on defined benefits plan
158
(38)
(124)
120
(390)
5
(20)
(4)
(25)
(24)
(35)
(34)
Total other comprehensive income/ (loss)
138
(42)
(149)
96
(425)
(29)
11
Total comprehensive income/ (loss) for the period/ year (9+10)
1,363
1,474
481
2,837
733
(26,944)
12
Paid up equity share capital (Refer note 9)
[face value of ₹ 5 each w.e.f September 29, 2020 and ₹ 10 upto September 28, 2020]
28,100
56,200
56,200
28,100
56,200
56,200
13
Other equity
-
-
-
-
-
(4,661)
14
Earnings/(loss) per share (of ₹ 5/- each w.e.f September 29, 2020 and ₹ 10 upto September 28, 2020) (not annualised in case of the interim periods) (Refer note 9):
- Basic
- Diluted
0.23
0.23
0.28
0.28
0.12
0.12
0.51
0.51
0.21
0.21
(4.94)
(4.94)

 

 

 

SUBEX LIMITED
Registered office: RMZ Ecoworld, Outer Ring Road, Devarabisanahalli, Bangalore - 560 103
Statement of Consolidated Assets and Liabilities
( ₹ in Lakhs)
A
B
Particulars
As at
September 30, 2020
March 31, 2020
Unaudited
Audited
ASSETS
Non-current assets
Property, plant and equipment Right-of-use assets
Goodwill on consolidation
Other intangible assets
Financial assets
Loans
Other balances with banks
Income tax asset (net)
Deferred tax asset
Other non-current assets
Currentassets
Financialasses Loans
Trade receivables
Cashandcashequivalents Otherbalanceswithbanks
Other financial assets
Other current assets
Total Assets
EQUITY AND LIABILITIES
Equity
Equity share capital
Other equity
Total equity
Liabilities
Non-current liabilities
Financial liabilities
Lease Liabilities Provisions
Deferred tax liabilities(net)
Current liabilities
Financial liabilities Borrowings Lease Liabilities Trade payable
- total outstanding dues of micro enterprises and smallenterprises
- total outstanding dues of creditors other than micro enterprises and small enterprises
Other financialliabilities
Other current liabilities
Provisions
Income tax liabilities (net)
Total liabilities
Total equity and liabilities
498
869
34,409
1
64
79
3,225
198
58
434
4,424
34,409
3
533
189
3,305
262
267
39,401
43,826
833
8,630
13,765
246
5,628
658
104
9,206
9,043
67
5,264
588
29,760
24,272
69,161
68,098
28,100
26,359
56,200
(4,661)
54,459
51,539
478
355
5,262
3,458
355
3,774
6,095
7,587
590
469
8
1,038
1,865
3,094
771
772
-
1,409
41
1,605
2,212
2,342
649
714
8,607
8,972
14,702
16,559
69,161
68,098

 

 

 

 

 

 

SUBEX LIMITED
Statement of cash flows for the six months ended September 30, 2020
( ₹ in Lakhs)
(A)
(B)
(C)
(D)
(E)
Particulars
Six months ended
September 30, 2020
September 30, 2019
Unaudited
Unaudited
Operatingactivities Profit before tax
Adjustments to reconcile profit before tax to net cash flows:
Depreciation of property, plant and equipment and right-of-use assets Amortization of intangible assets
Interest income (including fair value changes)
Financecosts(includingfairvaluechanges)
Allowance for expected credit losses Expense on share basedpayment
Gainonterminationofleaseagreement
Provision for service tax receivable
Net foreign exchangedifferences
Operating profit before working capital changes
Working capital adjustments:
(Increase)/ decrease in loans
(Increase)/ decrease in trade receivables (Increase)/ decreaseinotherfinancialasset (Increase)/ decrease in other assets Increase/ (decrease) in tradepayables
Increase/ (decrease) in other financial liabilities Increase/ (decrease) in other current liabilities Increase/ (decrease) in provisions
Income tax paid (including TDS, net of refund)
Net cash flows from operating activities
Investing activities
Purchaseofproperty,plant and equipmet Movementin margin moneydeposit(net) Purchaseoftreasury shares byESOPtrust Interest received
Net cash flows used in investing activities
Financing activities
ProceedsfromexerciseofESOP Proceeds from borrowings Interest paid
Repayment of lease liability
Net cash flows used in financing activities
Net increase in cash and cash equivalents (A+B+C)
Net foreign exchange difference on cash and cash equivalents Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
5,039
729
2
(189)
213
(171)
74
(554)
267
314
3,003
746
3
(64)
243
16
48
-
-
(520)
5,724
(22)
355
(279)
(151)
(697)
(347)
874
89
3,475
(7)
89
586
(219)
(1)
(697)
645
62
5,546
(608)
3,933
(710)
4,938
3,223
(210)
(69)
(22)
121
(288)
131
(378)
25
(180)
(510)
31
600
(201)
(508)
-
- (230)
(425)
(78)
(655)
4,680
2,058
42
9,043
101
3,947
13,765
6,106

 

 

 

 

 

1
Notes:
The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on November 9, 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):
( ₹ in Lakhs)
2
3
Quarter ended
Year to date figures for the six months ended
Year ended
Particulars
September 30, 2020
June 30, 2020
September 30, 2019
September 30, 2020
September 30, 2019
March 31, 2020
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
Total income
1,095
1,332
331
2,427
442
3,170
Net profit/ (loss) before tax
440
900
(262)
1,340
(774)
(20,470)
Net profit/ (loss) for the period/ year
436
900
(262)
1,336
(774)
(20,588)
Total comprehensive income / (loss) for the period/ year
434
899
(263)
1,333
(776)
(20,609)
4
Employee benefits expenses for the quarters ended September 30, 2020, June 30, 2020, and September 30, 2019 are net of reversal of provision no longer required, in respect of employee incentives relating to sales and delivery commissions, amounting to ₹ 62 Lakhs, ₹ 333 Lakhs and ₹ 221 Lakhs, respectively, and that for the six months ended September 30, 2020 and September 30, 2019 amounting to ₹ 333 Lakhs and ₹ 450 Lakhs, respectively and for that year ended March 31, 2020 amounting to ₹ 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 longer opportunity conversion cycle and lower spends towards IT solutions, the management had carried out the annual impairment exercise as at December 31, 2019 in respect of carrying value of goodwill and basis valuation carried out by an external valuation expert, had made an impairment provision of ₹ 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 September 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 ₹ 820 Lakhs (net of ₹ 234 Lakhs recoverable from such ex-employees). Accordingly, the aforesaid litigation is amicably settled.
6
(i) During the previous year ended March 31, 2020, the MAT credit entitlement of ₹ 425 Lakhs has been provided for considering the uncertainty as regards to its utilisation.
(ii) Represents provision in respect of withholding taxes deducted/ deductible by the overseas customers of the Group. During the previous year ended March 31, 2020, the Group has reversed an amount of ₹ 308 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
Deferred tax charge, comprises of liability arising on account of tax benefits from amortisation of intangible assets of Subex Assurance LLP, net of deferred tax 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 year ended March 31, 2020 in respect of tax benefits from amortisation of intangibles is net of provision no longer considered necessary amounting to ₹ 1,014 Lakhs considering the favourable assessment order in respect of AY 2016-17 with respect to foreign tax credit allowance.
8
During the quarter ended September 30, 2020, service tax receivable of ₹ 267 Lakhs has been provided for considering the uncertainty as regards to its realisation.
9
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 Hon'ble NCLT has approved the said Scheme vide its order dated September 23, 2020. Consequently, the Company has filed a certified copy of the Order with Registrar of Companies ('ROC') on September 29, 2020 and has utilized an amount of ₹ 28,100 Lakhs from paid-up share capital of the Company by reducing the face value of the equity shares from ₹ 10/- to ₹ 5/- each and ₹ 10,301 Lakhs from securities premium to write-off its accumulated losses of ₹ 38,401 Lakhs.
10
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.
11
Represents gain arising on termination of the lease agreement of existing office premises in India, accounted in accordance with Ind AS 116 - Leases.
12
The full impact of COVID - 19 still remains uncertain and could be different from the estimates considered while preparing these consolidated financial results. The Group shall continue to closely monitor any material changes to future economic conditions.
Place: Bengaluru
Date: November 9, 2020
For further details on the results, please visit our website: www.subex.com
Vinod Kumar Padmanabhan Managing Director & CEO


 

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