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Outcome of Board Meeting held on October 28, 2021

Published: 29/10/2021, 08:37

RNS Number : 7106Q

Subex Limited

29 October 2021

October 29, 2021

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 October 28, 2021

Please be informed that the agenda items summarized hereunder were discussed and approved at the Board Meeting held on October 28, 2021 at Bengaluru:

1. Approval of the Unaudited Standalone and Consolidated Financial Results of the Company for the quarter and half year ended September 30, 2021.

2. Approval of transfer of Revenue Maximization Solution business from Subex Assurance LLP, material wholly owned subsidiary of the Company, to the Company.

3. Change in the Key Managerial Personnel

Mr. Venkatraman G S, Chief Financial Officer and Key Managerial Personnel of the Company, has tendered his resignation and the Board approved his resignation with effect from December 10, 2021.

Please find enclosed:

· The Unaudited Consolidated Financial Results of the Company for the quarter and half year ended September 30, 2021.

We request you to take on record the aforesaid information.

Thanking you

Yours truly,

For Subex Limited

Sd/-

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 Unaudited Consolidated Financial Results for the quarter and six months ended September 30, 2021 ( ₹ in Lakhs)
		Quarter ended			Year to date figures for the six months ended		Year ended
	Particulars	September 30, 2021	June 30, 2021	September 30, 2020	September 30, 2021	September 30, 2020	March 31, 2021
		Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
1	Revenue from operations	8,630	8,060	9,329	16,690	18,199	37,203
2	Other income	97	671	100	768	196	474
3	Total income (1+2)	8,727	8,731	9,429	17,458	18,395	37,677
	Expenses
	Employee benefits expense (Refer note 4)	5,442	5,107	4,890	10,549	9,447	19,720
	Finance costs	33	41	103	74	213	296
	Depreciation and amortization expense	246	242	365	488	731	1,378
	Other expenses	2,198	1,333	1,899	3,531	3,252	7,633
4	Total expenses	7,919	6,723	7,257	14,642	13,643	29,027

5	Profit before exceptional items and tax (3-4)	808	2,008	2,172	2,816	4,752	8,650
	Exceptional items Provision for service tax receivable (Refer note 6) Gain on termination of lease agreement (Refer note 7)	-	-	(267)	-	(267)	(267)
		-	-	554	-	554	554
6	Total exceptional items	-	-	287	-	287	287

7	Net profit before tax (5+6)	808	2,008	2,459	2,816	5,039	8,937
8	Tax expense, net Current tax charge Provision - foreign withholding taxes (Refer note 8) Deferred tax charge (including MAT credit entitlement) (Refer note 9)
		164	92	7	256	8	696
		162	65	386	227	732	399
		-	503	841	503	1,558	2,670
	Total tax expense	326	660	1,234	986	2,298	3,765

9	Net profit for the period/ year (7-8)	482	1,348	1,225	1,830	2,741	5,172
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 on defined benefit plan
		(33)	150	158	117	120	636
		(67)	(3)	(20)	(70)	(24)	(12)
	Total other comprehensive (loss)/ income	(100)	147	138	47	96	624

11	Total comprehensive income for the period/ year (9+10)	382	1,495	1,363	1,877	2,837	5,796
12	Paid up equity share capital	28,100	28,100	28,100	28,100	28,100	28,100
	[face value of ₹ 5 (March 31, 2021: ₹ 5)]
13	Other equity	-	-	-	-	-	26,755
14	Earnings per share (of ₹ 5/- each) (not annualised in case of the interim periods)
	- Basic	0.09	0.25	0.23	0.34	0.51	0.96
	- Diluted	0.09	0.24	0.23	0.33	0.51	0.94

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 (₹ in Lakhs)
A B		As at
	Particulars	September 30, 2021	March 31, 2021
		Unaudited	Audited
	ASSETS
	Non-current assets
	Property, plant and equipment	1,216	1,177
	Right-of-use assets	1,608	1,962
	Goodwill on consolidation	34,409	34,409
	Financial assets
	Other balances with banks	104	39
	Other financial assets	305	300
	Income tax asset (net)	4,048	3,479
	Deferred tax asset (Including MAT credit entitlement)	51	125
		41,741	41,491
	Current assets
	Financial assets
	Loans	165	220
	Investment	754	-
	Trade receivables	7,312	9,215
	Cash and cash equivalents	12,864	14,294
	Other balances with banks	336	379
	Other financial assets	7,535	6,428
	Other current assets	875	639
		29,841	31,175
	Total Assets	71,582	72,666
	EQUITY AND LIABILITIES
	Equity
	Equity share capital	28,100	28,100
	Other equity	27,583	26,755
	Total equity	55,683	54,855
	Liabilities
	Non-current liabilities
	Financial liabilities
	Lease Liabilities	1,167	1,575
	Provisions	364	275
	Deferred tax liabilities(net)	6,718	6,289
		8,249	8,139
	Current liabilities
	Financial liabilities
	Borrowings	-	584
	Lease Liabilities	494	420
	Trade payable
	- total outstanding dues of micro enterprises and small enterprises	89	66
	- total outstanding dues of creditors other than micro enterprises and small enterprises	1,266	1,245
	Other financial liabilities	1,520	3,045
	Other current liabilities	2,760	2,935
	Provisions	906	791
	Income tax liabilities (net)	615	586
		7,650	9,672
	Total liabilities	15,899	17,811
	Total equity and liabilities	71,582	72,666

SUBEX LIMITED Consolidated Statement of cash flows for the six months ended September 30, 2021			( ₹ in Lakhs)
		Six months ended
	Particulars	September 30, 2021	September 30, 2020
		Unaudited	Unaudited
(A)	Operating activities
	Profit before tax	2,816	5,039
	Adjustments to reconcile profit before tax to net cash flows:
	Depreciation of property, plant and equipment and right-of-use assets	488	729
	Amortization of intangible assets	-	2
	Interest income (including fair value changes)	(154)	(189)
	Profit on sale of investments	(4)	-
	Fair value gain on financial instruments at fair value through profit or loss	(2)	-
	Finance costs (including fair value changes)	74	213
	Allowance/ (reversal) for expected credit losses	336	(171)
	Share based payment expenses	60	74
	Gain on termination/modification of lease	(12)	(554)
	Provision for service tax receivable	-	267
	Waiver of borrowings	(584)	-
	Net foreign exchange (gain)/ loss	(50)	314
	Operating profit before working capital changes	2,968	5,724
	Working capital adjustments:
	(Increase)/ decrease in loans	67	(731)
	(Increase)/ decrease in trade receivables	1,721	355
	(Increase)/ decrease in other financial assets	(999)	430
	(Increase)/ decrease in other assets	(238)	(151)
	Increase/ (decrease) in trade payables	32	(697)
	Increase/ (decrease) in other financial liabilities	(1,501)	(347)
	Increase/ (decrease) in other current liabilities	(227)	874
	Increase/ (decrease) in provisions	116	89
		1,939	5,546
	Income tax paid (including TDS, net of refund)	(1,025)	(608)
	Net cash flows from operating activities	914	4,938
(B)	Investing activities
	Purchase of property, plant and equipment	(351)	(210)
	Investments in Mutual Funds (net)	(748)	-
	Movement in margin money deposit (net)	(19)	(69)
	Purchase of treasury shares by ESOP trust	-	(22)
	Interest received	143	121
	Net cash flows used in investing activities	(975)	(180)
(C)	Financing activities
	Proceeds from exercise of ESOP	257	31
	Proceeds from borrowings	-	600
	Interest paid	(66)	(201)
	Repayment of lease liability	(191)	(508)
	Payment of dividends	(1,346)	-
	Net cash flows used in financing activities	(1,346)	(78)

(D)	Net (decrease)/ increase in cash and cash equivalents (A+B+C)	(1,407)	4,680
	Net foreign exchange difference on cash and cash equivalents	(23)	42
	Cash and cash equivalents at the beginning of the period	14,294	9,043
(E)	Cash and cash equivalents at the end of the period	12,864	13,765

1	Notes: The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on October 28, 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): ( in Lakhs)
2
3
			Quarter ended			Year to date figures for the six months ended		Year ended
	Particulars		September 30, 2021	June 30, 2021	September 30, 2020	September 30, 2021	September 30, 2020	March 31, 2021
			Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
	Total income		1,559	1,700	1,095	3,146	2,427	5,510
	Net profit before tax		49	269	440	318	1,340	2,651
	Net profit for the period/ year		49	269	436	318	1,336	2,622
	Total comprehensive income for the period/ year		32	269	434	301	1,333	2,622
4	Employee benefits expenses for the quarters ended September 30, 2021, June 30, 2021, and September 30, 2020 are net of reversal of provision no longer required, in respect of employee incentives relating to sales and delivery
	commissions, amounting to ₹ 327 Lakhs, ₹ 786 Lakhs and ₹ 62 Lakhs, respectively, and for the six months ended September 30, 2021 and September 30, 2020 amounting to ₹ 786 Lakhs and ₹ 333 Lakhs, respectively and for
	the year ended March 31, 2021 amounting to ₹ 333 lakhs.
5	As at March 31, 2021, the Company assessed and concluded the carrying value of it's goodwill along with carrying value of related Cash Generating Units ('CGUs') is appropriate. There is no change in the management's
	assessment as regards the aforementioned carrying value of it's goodwill along with carrying value of related CGU as at September 30, 2021.
6	During the previous year ended March 31, 2021, service tax receivable of ₹ 267 lakhs had 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	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 ₹ 723 Lakhs
	(including provision of 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 Company's RMS business and the Digital business was transferred on going concern basis to
	Subex Assurance LLP and Subex Digital LLP respectively.
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	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.
12	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.
13	The Board of Directors had recommended a final dividend of ₹ 0.25/-(5%) per equity share on face value of ₹ 5/- each for the financial year 2020-2021. The same was approved by the shareholders in the Annual General Meeting
	of the Company held on July 9, 2021 and was paid on July 20, 2021.
14	The US Federal government in the wake of COVID 19 pandemic provided support to business through Paycheck Protection Program (PPP). Subex Inc. obtained a benefit under this scheme for ₹600 Lakhs during May 2020.
	During the previous quarter ended June 30, 2021, Subex Inc. obtained complete waiver of the loan amount from Small Business Administration, United States government agency and accordingly the loan and interest accrued
	thereon was recognised as other income.
15	The Board of Directors of the Company in its meeting held on October 28, 2021 has approved the restructuring of the business, subject to all requisite approvals, wherein the business carried out by Subex Assurance LLP will be
	transferred to Subex Limited on a 'going concern' basis excluding Developed Technology and Investment in subsidiaries. The aforesaid restructuring is being carried out to achieve higher operational efficiencies upon
	integration and consolidation of business in the listed entity.
16	The comparative figures have been regrouped / reclassified, wherever necessary, to make them comparable with the current period.
Place: Bengaluru Date: October 28, 2021		For further details on the results, please visit our website: www.subex.com					Vinod Kumar Padmanabhan Managing Director & CEO

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Outcome of Board Meeting held on October 28, 2021