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) | |||||
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| Quarter ended | Year ended | ||
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| Particulars | June 30, 2020 | March 31, 2020 | June 30, 2019 | March 31, 2020 |
| Unaudited | Audited | Unaudited | Audited | ||
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| (Refer note 12) | |||
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| Income |
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| 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 |
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Expenses |
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| Employee benefits expense (Refer note 4) | 4,557 | 4,152 | 4,309 | 17,454 |
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| Finance costs | 110 | 119 | 122 | 477 |
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| Depreciation and amortisation expense | 366 | 392 | 371 | 1,508 |
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| Exchange fluctuation gain, net | (189) | (848) | (259) | (887) |
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| Other expenses | 1,542 | 3,297 | 2,096 | 10,513 |
| 4 | Total expenses | 6,386 | 7,112 | 6,639 | 29,065 |
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| 5 | Profit before exceptional items and tax expense (3-4) | 2,580 | 3,650 | 1,292 | 7,996 |
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| 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) |
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| - | - | - | 761 | |
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| - | - | - | (1,054) | |
| 6 | Total exceptional items | - | - | - | (31,766) |
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| 7 | Net profit/ (loss) before tax expense (5-6) | 2,580 | 3,650 | 1,292 | (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/ (credit) (Refer note 7) |
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| 1 | 35 | 1 | 117 | |
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| - | 425 | - | 425 | |
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| 346 | 105 | 223 | 754 | |
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| 717 | (114) | 540 | 1,849 | |
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| Total tax expense | 1,064 | 451 | 764 | 3,145 |
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| 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 |
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| (38) | (200) | (266) | 5 | |
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|
(4) |
21 |
(10) |
(34) | |
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| Total other comprehensive income/(loss) | (42) | (179) | (276) | (29) |
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| 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 |
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| [face value of Rs 10 (March 31, 2020: Rs 10)] |
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| 13 | Other equity | - | - | - | (4,661) |
| 14 | Earnings/ (loss) per share (of Rs 10/- each) (not annualised in case of the interim periods) |
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| (Refer note 10): |
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| - Basic | 0.28 | 0.59 | 0.10 | (4.94) |
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| - Diluted | 0.28 | 0.59 | 0.10 | (4.94) |
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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 | |||||
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3 | |||||
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| Quarter ended |
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| Particulars | June 30, 2020 | March 31, 2020 | June 30, 2019 | March 31, 2020 |
| Unaudited | Audited | Unaudited | Audited | ||
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| (Refer note 12) | |||
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| Total income | 1,332 | 2,727 | 516 | 3,170 |
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| Net profit/ (loss) before tax expense | 900 | 2,217 | (512) | (20,470) |
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| Net profit/ (loss) for the period/ year | 900 | 2,099 | (512) | (20,588) |
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| Total comprehensive income for the period/ year | 899 | 2,082 | (513) | (20,609) |
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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 | ||||
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| employee incentives relating to sales and delivery commissions, amounting to Rs 333 Lakhs, Rs 678 Lakhs and Rs 450 Lakhs, respectively, and that for the year ended | ||||
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| 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 | ||||
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| 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 | ||||
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| 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 | ||||
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| 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 | ||||
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| value of it's goodwill as at June 30, 2020 is appropriate. | ||||
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| (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 | ||||
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| 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 | ||||
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| 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 credit entitlement of Rs 425 Lakhs has been provided for considering the uncertainty as | ||||
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| regards to its utilisation. | ||||
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| (ii) Represents provision in respect of withholding taxes deducted/ deductible by the overseas customers of the Group. During the previous quarter and year ended | ||||
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| March 31, 2020, the Group has reversed an amount of Rs 308 Lakhs considering it is no longer necessary on account of favourable assessment order received allowing | ||||
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| foreign tax credit in respect of AY 2016-17. | ||||
| 7 | Deferred tax charge/ (credit), comprises of liability arising on account of tax benefits from amortisation of intangible assets of Subex Assurance LLP, net of deferred tax | ||||
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| assets arising on account of carry forward losses and other taxable temporary differences, which arose mainly on account of business restructuring effected from | ||||
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| 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 | ||||
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| 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 | ||||
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| 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, | ||||
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| 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, | ||||
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| 2016 and other applicable provisions of the Companies Act, 2013. The abovementioned scheme has also been approved by Shareholders with requisite majority via | ||||
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| 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 | ||||
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| 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. | ||||
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| 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, | ||||
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| 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 | ||||
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| 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 | ||||
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| secondary market for providing share-based payments to its employees, is consolidated in the standalone financial results of the Company and the shares reacquired and | ||||
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| 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 | ||||
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| 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 | ||||
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| likely delays on contractual commitments, upto the date of approval of these consolidated financial results, in determining the possible impact from the COVID-19 | ||||
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| 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 | ||||
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| 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 | ||||
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| 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 | ||||
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| 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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