May 18, 2021
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 May 17, 2021
Please be informed that the agenda items summarized hereunder were discussed and approved at the Board Meeting held on May 17, 2021 at Bengaluru:
Financial Results:
1. Approval of the Audited Standalone and consolidated Financial Results of the Company for the quarter and year ended March 31, 2021
2. Approval of the Audited Standalone and consolidated Financial Statements of the Company for the year ended March 31, 2021.
Dividend and Annual General Meeting:
3. Recommended a final dividend of Rs. 0.25/- (5%) per equity share of par value of Rs.5/- each for the financial year 2020-21, subject to the approval of the members at the ensuing Annual General Meeting. Further, pursuant to Regulation 42 of SEBI (Listing Obligations and Disclosure Requirements), 2015, the Company has fixed July 02, 2021 as Record Date for determining the eligibility of the shareholders for Final Dividend, if approved. The Dividend will be paid within the timelines specified under the Companies Act, 2013.
4. The 27th Annual General Meeting (AGM) of the members of the Company is scheduled to be held on Friday, July 09, 2021, through Video Conference/ Other Audio Visual Means (VC/OAVM). The Register of Members and Share Transfer Books will remain closed from July 03, 2021 to July 09, 2021 (inclusive of both days), for administrative reasons pertaining to the AGM and for the purpose of payment of Final Dividend, if approved by the members at the AGM.
Other Matters:
5. Adoption of Dividend Distribution Policy by the Board of Directors.
Please find enclosed:
The Audited consolidated Financial Results of the Company for the quarter and year ended March 31, 2021.
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: Pritech Park - SEZ, Block-09, 4th Floor, B Wing, Survey No. 51-64/4, Outer ring road, Bellandur Village,Varthur Hobli, Bangalore -560 103 Statement of Audited Consolidated Financial Results for the quarter and year ended March 31, 2021 (Rs. in Lakhs) | ||||||
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| Quarter ended | Year ended | |||
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| Particulars | March 31, 2021 | December 31, 2020 | March 31, 2020 | March 31, 2021 | March 31, 2020 |
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|
| Audited | Unaudited | Audited | Audited | Audited |
|
|
| Refer note 17 |
| Refer note 17 |
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|
| 1 | Revenue from operations (Refer note 16) | 9,616 | 9,388 | 10,427 | 37,203 | 36,498 |
| 2 | Other income | 172 | 106 | 335 | 474 | 563 |
| 3 | Total income (1+2) | 9,788 | 9,494 | 10,762 | 37,677 | 37,061 |
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| Expenses |
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|
|
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| Employee benefits expense (Refer note 4) | 5,017 | 5,256 | 4,152 | 19,720 | 17,454 |
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| Finance costs | 45 | 38 | 119 | 296 | 477 |
|
| Depreciation and amortization expense | 223 | 424 | 392 | 1,378 | 1,508 |
|
| Exchange fluctuation loss/(gain), net | 291 | 449 | (848) | 989 | (887) |
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| Other expenses | 1,993 | 1,648 | 3,297 | 6,644 | 10,513 |
| 4 | Total expenses | 7,569 | 7,815 | 7,112 | 29,027 | 29,065 |
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| 5 | Profit before exceptional items and tax (3-4) | 2,219 | 1,679 | 3,650 | 8,650 | 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)] Provision for service taxreceivable (Refernote 6 Gain on termination of lease agreement (Refer note 7) |
- |
- |
- |
- |
(31,473) |
|
| - | - | - | - | 761 | |
|
| - | - | - | - | (1,054) | |
|
| - | - | - | (267) | - | |
|
| - | - | - | 554 | - | |
| 6 | Total exceptional items | - | - | - | 287 | (31,766) |
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| 7 | Net profit/ (loss) before tax (5+6) | 2,219 | 1,679 | 3,650 | 8,937 | (23,770) |
| 8 | Tax expense, net Current tax charge Provision for MAT credit [Refer note 8 (i)] (Reversal)/provision - foreign withholding taxes [Refer note 8 (ii)] Deferred tax charge/(credit) (Refer note 9) |
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|
| 639 | 49 | 35 | 696 | 117 | |
|
| - | - | 425 | - | 425 | |
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| (541) | 208 | 105 | 399 | 754 | |
|
| 561 | 551 | (114) | 2,670 | 1,849 | |
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| Total tax expense | 659 | 808 | 451 | 3,765 | 3,145 |
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| 9 | Net profit/ (loss) for the period/ year (7-8) | 1,560 | 871 | 3,199 | 5,172 | (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 gain/(loss) on defined benefits plan |
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| 61 | 455 | (200) | 636 | 5 | |
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|
26 |
(14) |
21 |
(12) |
(34) | |
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| Total other comprehensive income/ (loss) | 87 | 441 | (179) | 624 | (29) |
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| 11 | Total comprehensive income/ (loss) for the period/ year (9+10) | 1,647 | 1,312 | 3,020 | 5,796 | (26,944) |
| 12 | Paid up equity share capital (Refer note 10) [face value of Rs. 5 each w.e.f September 29, 2020 and Rs. 10 upto September 28, 2020] | 28,100 | 28,100 | 56,200 | 28,100 | 56,200 |
| 13 | Other equity | - | - | - | 26,755 | (4,661) |
| 14 | Earnings/(loss) per share (of Rs. 5/- each w.e.f September 29, 2020 and Rs. 10 upto September 28, 2020) (not annualised in case of the interim periods) (Refer note 10): |
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| - Basic - Diluted | 0.29 0.28 | 0.16 0.16 | 0.59 0.59 | 0.96 0.94 | (4.94) (4.94) |
| SUBEX LIMITED Registered office: Pritech Park - SEZ, Block-09, 4th Floor, B Wing, Survey No. 51-64/4, Outer ring road, Bellandur Village,Varthur Hobli, Bangalore -560 103 Statement of Consolidated Assets and Liabilities (Rs. in Lakhs) | |||
|
A
B |
| As at | |
| Particulars | March 31, 2021 | March 31, 2020 | |
|
| Audited | Audited | |
| ASSETS |
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| |
| Non-current assets |
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| |
| Property, plant and equipment | 1,177 | 434 | |
| Right-of-use assets | 1,962 | 4,424 | |
| Goodwill on consolidation | 34,409 | 34,409 | |
| Other intangible assets | - | 3 | |
| Financial assets |
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| |
| Loans | 300 | 533 | |
| Other balances with banks | 39 | 189 | |
| Income tax asset (net) | 3,479 | 3,305 | |
| Deferred tax asset | 125 | 262 | |
| Other non-current assets | - | 267 | |
|
| 41,491 | 43,826 | |
| Current assets |
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| |
| Financial assets |
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| |
| Loans | 220 | 104 | |
| Trade receivables | 9,215 | 9,206 | |
| Cash and cash equivalents | 14,294 | 9,043 | |
| Other balances with banks | 379 | 67 | |
| Other financial assets | 6,428 | 5,264 | |
| Other current assets | 639 | 588 | |
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| 31,175 | 24,272 | |
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| |
| Total Assets | 72,666 | 68,098 | |
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EQUITY AND LIABILITIES |
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| |
| Equity |
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| |
| Equity share capital | 28,100 | 56,200 | |
| Other equity | 26,755 | (4,661) | |
| Total equity | 54,855 | 51,539 | |
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Liabilities |
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| |
| Non-current liabilities |
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| |
| Financial liabilities |
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| |
| Lease Liabilities | 1,575 | 3,458 | |
| Provisions | 275 | 355 | |
| Deferred tax liabilities(net) | 6,289 | 3,774 | |
|
| 8,139 | 7,587 | |
| Current liabilities |
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| |
| Financial liabilities |
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| |
| Borrowings (Refer note 15) | 584 | - | |
| Lease Liabilities | 420 | 1,409 | |
| Trade payable |
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| - total outstanding dues of micro enterprises and small enterprises | 66 | 41 | |
| - total outstanding dues of creditors other than micro enterprises and small enterprises | 1,245 | 1,605 | |
| Other financial liabilities | 3,045 | 2,212 | |
| Other current liabilities | 2,935 | 2,342 | |
| Provisions | 791 | 649 | |
| Income tax liabilities (net) | 586 | 714 | |
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| 9,672 | 8,972 | |
| Total liabilities | 17,811 | 16,559 | |
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| |
| Total equity and liabilities | 72,666 | 68,098 | |
| SUBEX LIMITED Consolidated statement of cash flows for the year ended March 31, 2021 |
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(Rs. in Lakhs) | |
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| Year ended | |
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| Particulars | March 31, 2021 | March 31, 2020 |
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| Audited | Audited |
| (A) | Operating activities |
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| Profit/(loss) before tax expense | 8,937 | (23,770) |
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| Adjustments to reconcile profit/(loss) before tax expense to net cash flows: |
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| Depreciation of property, plant and equipment and right-of-use assets | 1,375 | 1,503 |
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| Amortization of intangible assets | 3 | 5 |
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| Gain on disposal of property, plant and equipment (net) | (4) | - |
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| Interest income (including fair value changes) | (374) | (156) |
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| Finance costs (including fair value changes) | 296 | 477 |
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| Allowance for expected credit losses | (153) | 289 |
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| Expense on share-based payment | 148 | 101 |
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| Gain on termination/modification of lease agreement | (554) | (6) |
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| Provision no longer required written back | - | (761) |
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| Advance recoverable written-off | - | 234 |
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| Provision for service tax receivable | 267 | - |
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| Impairment of goodwill | - | 31,473 |
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| Net foreign exchange differences | 720 | (744) |
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| Operating profit before working capital changes | 10,661 | 8,645 |
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| Working capital adjustments: |
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| (Increase)/ decrease in loans | 299 | 52 |
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| (Increase)/ decrease in trade receivables | (63) | (181) |
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| (Increase)/ decrease in other financial assets | (1,010) | (718) |
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| (Increase)/ decrease in other assets | (43) | (2) |
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| Increase/ (decrease) in trade payables | (437) | 643 |
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| Increase/ (decrease) in other financial liabilities | 573 | (669) |
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| Increase/ (decrease) in other current liabilities | 514 | 328 |
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| Increase/ (decrease) in provisions | 5 | (17) |
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| 10,499 | 8,081 |
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| Income tax paid (including TDS, net of refund) | (1,404) | (1,457) |
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| Net cash flows from operating activities | 9,095 | 6,624 |
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(B) |
Investing activities |
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| Purchase of property, plant and equipment | (862) | (353) |
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| Proceeds from sale of property, plant and equipment | 7 | - |
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| Movement in margin money deposit (net) | (154) | 426 |
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| Purchase of treasury shares by ESOP trust | (22) | (611) |
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| Interest received | 309 | 108 |
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| Net cash flows used in investing activities | (722) | (430) |
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(C) |
Financing activities |
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| Proceeds from exercise of ESOP | 141 | 25 |
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| Proceeds from borrowings | 600 | - |
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| Interest paid | (271) | (452) |
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| Repayment of lease liability | (931) | (907) |
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| Payments of dividend | (2,746) | - |
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| Net cash flows used in financing activities | (3,207) | (1,334) |
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| (D) | Net increase in cash and cash equivalents (A+B+C) | 5,166 | 4,860 |
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| Net foreign exchange difference on cash and cash equivalents | 85 | 236 |
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| Cash and cash equivalents at the beginning of the year | 9,043 | 3,947 |
| (E) | Cash and cash equivalents at the end of the year | 14,294 | 9,043 |
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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 May 17, 2021. 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 | Year ended | ||||
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| Particulars | March 31, 2021 | December 31, 2020 | March 31, 2020 | March 31, 2021 | March 31, 2020 | |
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| Audited | Unaudited | Audited | Audited | Audited | |
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| Refer note 17 |
| Refer note 17 |
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| |
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| Total income | 2,573 | 510 | 2,727 | 5,510 | 3,170 | |
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| Net profit/ (loss) before tax expense | 1,186 | 125 | 2,217 | 2,651 | (20,470) | |
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| Net profit/ (loss) for the period/ year | 1,157 | 129 | 2,099 | 2,622 | (20,588) | |
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| Total comprehensive income / (loss) for the period/ year | 1,162 | 127 | 2,082 | 2,622 | (20,609) | |
| 4 | Employee benefits expenses for the quarters ended March 31, 2021, December 31,2020 and March 31, 2020 are net of reversal of provision no longer required, in respect of employee incentives relating to sales and delivery commissions, amounting to Rs. 486 Lakhs, Rs. 43 Lakhs and Rs. 678 Lakhs, respectively, and that for the year ended March 31, 2021 and March 31, 2020 amounting to Rs. 333 Lakhs and Rs. 692 Lakhs respectively. | ||||||
| 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 Rs. 31,473 Lakhs towards carrying value of goodwill. As at March 31, 2021, the management has reassessed its projections and assumptions and has concluded that, the carrying value of it's goodwill is appropriate. (ii) During the previous year ended March 31, 2020, the Company 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 paid an amount of Rs. 820 lakhs (net of Rs. 234 Lakhs recoverable from such ex-employees). Accordingly, the aforesaid litigation was amicably settled. | ||||||
| 6 | During the year ended March 31, 2021, service tax receivable of Rs. 267 lakhs has been provided for considering the uncertainty as regards to its realisation. | ||||||
| 7 | Represents gain arising on termination of the lease agreement of existing office premises in India, accounted in accordance with Ind AS 116 - Leases. | ||||||
| 8 | (i) During the previous year ended March 31, 2020, the MAT credit entitlement of Rs. 425 Lakhs has been provided considering the uncertainty with regards to its utilisation. | ||||||
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| (ii) Represents reversal/provision in respect of foreign withholding taxes deducted/ deductible by the overseas customers of the Group. Considering the expected utilisation of foreign withholding taxes, provision of Rs. 723 Lakhs (including provision of Rs. 279 Lakhs as at April 01, 2020) made during the earlier quarters, has been reversed during the quarter ended March 31, 2021. | ||||||
| 9 | 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 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 | ||||||
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| Company's RMS business and the Digital business was transferred on going concern basis to Subex Assurance LLP and Subex Digital LLP respectively. | ||||||
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| 10 | The Board of Directors in its meeting held on February 07, 2020, 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 approved the said Scheme vide its order dated September 23, 2020. Consequently, the Company filed a certified copy of the Order with Registrar of Companies ('ROC') on September 29, 2020 and utilized an amount of Rs. 28,100 Lakhs from paid-up share capital of the Company by reducing the face value of the equity shares from Rs. 10/- to Rs. 5/- each and Rs. 10,301 Lakhs from securities premium to write-off its accumulated losses of Rs. 38,401 Lakhs. | ||||||
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| 11 | 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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| 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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| 13 | The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Group will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective. | ||||||
| 14 | The Board of Directors at its meeting held on February 01,2021 has declared an interim dividend of Rs. 0.50/- (10 %) per equity share on face value of Rs. 5/- each for the financial year 2020-2021. The Board of Directors has also recommended a final dividend of Rs. 0.25/-(5%) per equity share on face value of Rs. 5/- each for the financial year 2020-2021.This payment is subject to the approval of shareholders in the forthcoming Annual General Meeting of the Company. | ||||||
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| 15 | The US Federal government in the wake of COVID 19 pandemic has provided support to business through Paycheck Protection Program (PPP). Subex Inc. have obtained a benefit under this scheme for Rs. 600 Lakhs during May 2020. This loan is eligible for forgiveness on fulfillment of certain conditions. Subex Ind. has applied for forgiveness and application is pending with Small Business Administration, United States government agency for review and approval (SBA). Pending, approval of the forgiveness application, the benefit is reflected as borrowings and in the event the application is not approved, the benefit needs to be refunded along with interest @ 1% p.a. | ||||||
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| 16 | In the quarter and year ended March 31, 2020, revenue from operations included revenue from sale of hardware amounting to Rs. 993 Lakhs. | ||||||
| 17 | The figures of last quarter of current year and previous year are the balancing figures between the audited figures in respect of the full financial year and the published unaudited year to date figures for the nine months of the respective year. | ||||||
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Place: Bengaluru Date: May 17, 2021 |
For further details on the results, please visit our website: www.subex.com |
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Vinod Kumar Padmanabhan Managing Director & CEO | ||||
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