SUBX.L Regulatory News (SUBX)

September 14, 2016

To

The London Stock Exchange

10 Paternoster Square

London

EC4M 7LS

Dear Sirs,

Sub: Outcome of the Board Meeting held on September 12, 2016

Please be informed that the agenda item stated hereunder was discussed and approved at the Board Meeting held on September 12, 2016 at Bangalore:

· Unaudited standalone and consolidated Financial Results of the Company for the quarter ended June 30, 2016.

The Agenda item relating to the consideration of the issue of equity shares on Preferential Basis by the Company has been deferred.

Please find enclosed:

Ø The unaudited consolidated Financial Results of the Company for the quarter ended June 30, 2016.

We request you to take the aforesaid notification on record.

For and on behalf of Subex Limited

Ganesh K V

Chief Financial Officer, Global Head -Legal and Company Secretary

 Subex Limited

Registered office: RMZ Ecoworld, Outer Ring Road, Devarabisanahalli, Bangalore - 560 037

Statement of Consolidated Unaudited Results for the quarter ended June 30, 2016

13 Earnings/(loss) per share (of Rs. 10/- each) (not annualised in case of the interim periods):

Notes:

1 The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on September 12, 2016.

2 The financial results of Subex Limited (Standalone Information):

3 The financial results have been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standards ("Ind AS") 34 on Interim Financial Reporting 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 and SEBI Circular No. CIR/CFD/FAC/62/2016 dated July 5, 2016.

The Company has opted to avail relaxation provided by SEBI vide the aforesaid circular dated July 5, 2016 in respect of disclosure requirements for corresponding figures of earlier periods. Accordingly, the figures for the quarter and year ended March 31, 2016 have not been presented. The reserves (excluding revaluation reserve), as per the balance sheet of the previous accounting year not being mandatory, have not been presented.

The Results for the quarter ended June 30, 2015 have not been subjected to limited review or audit. However, the management has exercised necessary diligence to ensure that the financial results for the quarter ended June 30, 2015 provide a true and fair view of the Company's affairs.

4 Consequent to transition from the Previous GAAP to Ind AS, the reconciliation of loss after tax is provided below for the corresponding 3 months ended June 30, 2015.

( Rs.  in Lakhs)

5 (a) The Board in its meeting held on May 14, 2015, approved the reset of conversion price of the FCCBs III, which are convertible into equity shares of the Company, from Rs. 22.79 to Rs. 13.00 per equity share. Subsequently, the reset of the conversion price have been approved by the shareholders in the annual general meeting held on June 19, 2015 and the bondholders in their meeting held on August 5, 2015. The Board in its meeting held on August 26, 2015, approved August 26, 2015 as the effective date of reset of conversion price of Rs. 13.00 per share.

(b) As at March 31, 2015, the Company had outstanding FCCBs III with face value of US$ 81.53 Million, out of which FCCBs III with face value of US$ 77.43 Million have been converted till the quarter ended June 30, 2016 as detailed below:

(c) The face value and fair value of FCCBs outstanding as at June 30, 2016 is as follows:

As a result of reset in conversion price of FCCBs III, the said bonds with outstanding face value of US$ 4.10 Million as at June 30, 2016 would potentially be converted into 17,678,727 equity shares at an exchange rate of Rs. 56.0545/US$ with a conversion price of Rs. 13.00 per equity share.

Subsequent to June 30, 2016, conversion requests from the bondholders of FCCBs III with face value amounting to US$ 0.50 Million have been approved by the Board of Directors in the Board meeting dated July 4, 2016, and these FCCBs have been converted into 2,155,942 equity shares at an exchange rate of Rs. 56.0545/US$ with a conversion price of Rs. 13.00 per equity share.

(d) The FCCB holders in their respective meetings have approved the deferral of aggregate interest of US$ 0.83 Million (fair value of US$ 0.79 Million), i.e. Rs. 561 Lakhs (fair value of Rs. 536 Lakhs) in respect of outstanding FCCBs III with face value of US$ 4.10 Million for the period July 6, 2012 to January 5, 2016 till redemption date of the bonds, being July 07, 2017.

6 The Company had remitted the withholding taxes in respect of FCCBs III in accordance with the provisions of the Income Tax Act, 1961 amounting to Rs. 1,023 Lakhs upto June 30, 2016. Pursuant to the conversion of FCCBs III into equity shares of the Company, the interest accrued but not due is considered no longer payable. The management basis expert advice, is of the view that the withholding taxes paid by the Company in respect of the aforesaid interest, are recoverable from income tax department and/or are adjustable against its other withholding taxes obligations. Accordingly, withholding taxes of Rs. 205 Lakhs as at March 31, 2016 on salary, professional services and others have not been paid and such liability has been adjusted during the quarter, against the write back of withholding taxes on interest on FCCBs paid earlier, on completion of revision of withholding taxes returns for the earlier periods and is included in other income.

7 During the year ended March 31, 2016, the Company assessed the carrying value of goodwill relating to its investment in the subsidiary viz. Subex Americas Inc., amounting to Rs. 18,606 Lakhs. Based on future operational plan, projected cash flows and valuation carried out by an external valuer, the Company made an impairment provision of Rs. 8,870 Lakhs during the year ended March 31, 2016 towards the carrying value of goodwill relating to its investment in the said subsidiary. There is no change in the management's assessment as regards aforementioned carrying value of goodwill as at June 30, 2016 and in view of the management, no further provision for diminution is considered necessary as at June 30, 2016.

8 During the year ended March 31, 2016, the Company assessed the carrying value of goodwill relating to its investment in the subsidiary viz. Subex (UK) Limited, amounting to Rs. 67,036 Lakhs. Based on the future operational plan, projected cash flows and the valuation carried out by an external valuer, the management was of the view that, the aforesaid carrying value of goodwill as at March 31, 2016 relating to its investment in the said subsidiary was appropriate. There is no change in the management's assessment as regards aforementioned carrying value of goodwill as at June 30, 2016.

9 Cost of hardware, software and support charges for the quarter ended June 30, 2016 and June 30, 2015 is net of reversal of provision no longer required, amounting to ` Nil and Rs. 173 Lakhs, respectively.

10 Pursuant to the approval of the Board of Directors, the Company has discontinued the operations of two of its subsidiaries with effect from April 01, 2013. The details of unaudited results of the discontinued businesses consolidated in the above results are as follows:

11 The Company is engaged in the business of software products and related services. These, in the context of Ind-AS 108 on Operating Segments Reporting are considered to constitute one segment and hence the Company has not made any additional segment disclosures.

12 Previous period figures have been regrouped/ reclassified, wherever necessary to confirm to current period's classification.

13 Pursuant to Regulation 33 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company has opted to publish the consolidated financial results. The standalone financial results, however, are being made available to the Stock Exchanges where the securities of the Company are listed and are also being posted on the Company's website www.subex.com.

For further details on the results, please visit our website: www.subex.com