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) | |||||||
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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 | ||
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| 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 |
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| Depreciation and amortization expense | 365 | 366 | 378 | 731 | 749 | 1,508 |
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| Exchange fluctuation loss/(gain), net | 438 | (189) | (292) | 249 | (551) | (887) |
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| 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 |
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| 5 | Profit before exceptional items and tax (3-4) | 2,172 | 2,580 | 1,711 | 4,752 | 3,003 | 7,996 |
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| 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) |
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| 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) |
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| 7 - 386 841 | 1 - 346 717 | 1 - 263 817 | 8 - 732 1,558 | 2 - 486 1,357 | 117 425 754 1,849 | |
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| Total tax expense | 1,234 | 1,064 | 1,081 | 2,298 | 1,845 | 3,145 |
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| 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 |
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| 158 | (38) | (124) | 120 | (390) | 5 | |
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(20) |
(4) |
(25) |
(24) |
(35) |
(34) | |
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| Total other comprehensive income/ (loss) | 138 | (42) | (149) | 96 | (425) | (29) |
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| 11 | Total comprehensive income/ (loss) for the period/ year (9+10) | 1,363 | 1,474 | 481 | 2,837 | 733 | (26,944) |
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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): |
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| - 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
Current assets 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 small enterprises - total outstanding dues of creditors other than micro enterprises and small enterprises Other financial liabilities 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 based payment Gainonterminationofleaseagreement Provision for service tax receivable Net foreign exchange differences
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 trade payables 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) | ||
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| 4,680 | 2,058 | ||
| 42 9,043 | 101 3,947 | ||
| 13,765 | 6,106 | ||
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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 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 | ||||||||
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| Quarter ended | Year to date figures for the six months ended | Year ended | ||||
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| Particulars | September 30, 2020 | June 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | March 31, 2020 | |
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| Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited | |
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| Total income | 1,095 | 1,332 | 331 | 2,427 | 442 | 3,170 | |
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| Net profit/ (loss) before tax | 440 | 900 | (262) | 1,340 | (774) | (20,470) | |
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| Net profit/ (loss) for the period/ year | 436 | 900 | (262) | 1,336 | (774) | (20,588) | |
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| Total comprehensive income / (loss) for the period/ year | 434 | 899 | (263) | 1,333 | (776) | (20,609) | |
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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. | |||||||
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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 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. | |||||||
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| 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. | |||||||
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| (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. | |||||||
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| 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. | |||||||
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| 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. | |||||||
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| 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. | |||||||
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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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