SUBX.L Regulatory News (SUBX)

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 Financial Results for quarter and year ended March 31, 2022

( ₹ in Lakhs)

Quarter ended

Year Ended

Particulars

March 31, 2022

December 31, 2021

March 31, 2021

March 31, 2022

March 31, 2021

Audited

Unaudited

Audited

Audited

Audited

1

Revenue from operations

7,880

8,774

9,616

33,344

37,203

2

Other income

200

69

172

1,037

474

3

Total income (1+2)

8,080

8,843

9,788

34,381

37,677

Expenses

Employee benefits expense (Refer note 4)

5,412

5,488

5,017

21,449

19,720

Finance costs

32

88

45

194

296

Depreciation and amortization expense

248

252

223

988

1,378

Other expenses

2,367

2,483

2,284

8,381

7,633

4

Total expenses

8,059

8,311

7,569

31,012

29,027

5

Profit before exceptional items and tax (3-4)

21

532

2,219

3,369

8,650

Exceptional items

Provision for service tax receivable

Gain on termination of lease agreement

-

-

-

-

(267)

-

-

-

-

554

6

Total exceptional items

-

-

-

-

287

7

Net profit before tax (5+6)

21

532

2,219

3,369

8,937

8

Tax expense, net

Current tax (reversal)/ charge

Provision/ (reversal) - foreign withholding taxes (Refer note 5)

Deferred tax charge/ (credit) (including MAT credit entitlement) (Refer note 6)

(165)

160

639

251

696

85

281

(541)

593

399

40

(117)

561

426

2,670

Total tax expense

(40)

324

659

1,270

3,765

9

Net profit for the period/ year (7-8)

61

208

1,560

2,099

5,172

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 benefit plan

204

(54)

61

267

636

41

(35)

26

(64)

(12)

Total other comprehensive income/ (loss)

245

(89)

87

203

624

11

Total comprehensive income for the period/ year (9+10)

306

119

1,647

2,302

5,796

12

Paid up equity share capital

28,100

28,100

28,100

28,100

28,100

[face value of ₹ 5 (March 31, 2021: ₹ 5)]

13

Other equity

-

-

-

28,267

26,755

14

Earnings per share (of ₹ 5/- each) (not annualised in case of the interim periods)

- Basic

0.01

0.04

0.29

0.38

0.96

- Diluted

0.01

0.04

0.28

0.38

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

March 31, 2022

March 31, 2021

Audited

Audited

ASSETS

Non-current assets

Property, plant and equipment

959

1,177

Right-of-use assets

1,386

1,962

Goodwill on consolidation

34,409

34,409

Other intangible assets

14

-

Financial assets

Other financial assets

447

302

Income tax asset (net)

4,947

3,479

Deferred tax asset (including MAT credit entitlement)

148

125

Other non-current assets

42

-

42,352

41,454

Current assets

Financial assets

Loans

161

220

Investments

1,165

-

Trade receivables

9,681

9,956

Cash and cash equivalents

8,539

14,294

Other balances with banks

2,328

207

Other financial assets

7,003

5,896

Other current assets

779

639

29,656

31,212

Total Assets

72,008

72,666

EQUITY AND LIABILITIES

Equity

Equity share capital

28,100

28,100

Other equity

28,267

26,755

Total equity

56,367

54,855

Liabilities

Non-current liabilities

Financial liabilities

Lease Liabilities

998

1,575

Provisions

304

275

Deferred tax liabilities(net)

6,742

6,289

8,044

8,139

Current liabilities

Financial liabilities

Borrowings

-

584

Lease Liabilities

470

420

Trade payable

- total outstanding dues of micro enterprises and small enterprises

276

66

- total outstanding dues of creditors other than micro enterprises and small enterprises

1,396

1,245

Other financial liabilities

1,491

3,045

Other current liabilities

2,506

2,935

Provisions

830

791

Income tax liabilities (net)

628

586

7,597

9,672

Total liabilities

15,641

17,811

Total equity and liabilities

72,008

72,666

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

Consolidated statement of cash flows for the year ended March 31, 2022

(  in Lakhs)

Year ended

Particulars

March 31, 2022

March 31, 2021

Audited

Audited

(A)

Operating activities

Profit before tax expense

3,369

8,937

Adjustments to reconcile profit/(loss) before tax expense to net cash flows:

Depreciation of property, plant and equipment and right-of-use assets

987

1,375

Amortization of intangible assets

1

3

Gain on disposal of property, plant and equipment (net)

-

(4)

Interest income (including fair value changes)

(266)

(374)

Fair value gain on mutual fund at fair value through profit or loss

(7)

-

Net gain on sale of investments

(15)

-

Finance costs (including fair value changes)

194

296

Allowance for expected credit losses

536

(153)

Expense on share based payment

137

148

Gain on termination/modification of lease agreement

(12)

(554)

Provision for service tax receivable

-

267

Waiver of borrowings (PPP Loan and interest)

(584)

-

Net foreign (gain)/ loss

(165)

720

Operating profit before working capital changes

4,175

10,661

Working capital adjustments:

(Increase)/ decrease in loans

76

299

(Increase)/ decrease in trade receivables

(27)

(63)

(Increase)/ decrease in other financial assets

(1,006)

(1,010)

(Increase)/ decrease in other assets

(185)

(43)

Increase/ (decrease) in trade payables

329

(437)

Increase/ (decrease) in other financial liabilities

(1,375)

573

Increase/ (decrease) in other current liabilities

(551)

514

Increase/ (decrease) in provisions

(34)

5

1,402

10,499

Income tax paid (including TDS, net of refund)

(2,278)

(1,404)

Net cash flows (used in) / from operating activities

(876)

9,095

(B)

Investing activities

Purchase of property, plant and equipment

(540)

(862)

Proceeds from sale of property, plant and equipment

-

7

Purchase of Investments

(9,672)

-

Sales of investments

8,529

-

Movement in margin money deposit (net)

(2,111)

(154)

Purchase of treasury shares by ESOP trust

-

(22)

Interest received

260

309

Net cash flows used in investing activities

(3,534)

(722)

(C)

Financing activities

Proceeds from exercise of ESOP

440

141

Proceeds from borrowings

-

600

Interest paid

(178)

(271)

Repayment of lease liability

(389)

(931)

Payment of dividends

(1,339)

(2,746)

Net cash flows used in financing activities

(1,466)

(3,207)

(D)

Net (decrease)/ increase in cash and cash equivalents (A+B+C)

(5,876)

5,166

Net foreign exchange difference on cash and cash equivalents

121

85

Cash and cash equivalents at the beginning of the year

14,294

9,043

(E)

Cash and cash equivalents at the end of the year

8,539

14,294

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 30, 2022.

2

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.

3

The financial results of Subex Limited (Standalone information):

Quarter ended

Year Ended

Particulars

March 31, 2022

December 31, 2021

March 31, 2021

March 31, 2022

March 31, 2021

Audited

Unaudited

Audited

Audited

Audited

Total income

Net (loss)/ profit before tax

Net (loss)/ profit for the period/ year

Total comprehensive (loss)/ income for the period/ year

1,632

(675)

(675)

(653)

2,080

(91)

(91)

(99)

2,573

1,186

1,157

1,162

6,842

(448)

(448)

(451)

5,510

2,651

2,622

2,622

4

Employee benefits expenses for the quarter ended March 31, 2022, December 31, 2021 and March 31, 2021 are net of reversal of provision no longer required, in respect of employee incentives, amounting to ₹ 161 Lakhs, ₹ 184 Lakhs and ₹ 486 Lakhs, respectively, and that for the year ended March 31, 2022 and March 31, 2021 amounting to ₹ 786 Lakhs and ₹ 333 Lakhs, respectively.

5

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 made during the earlier quarters, has been reversed during the year ended March 31, 2021.

6

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. Effective April 1, 2021 considering the favourable order received, no additional liability is created in respect of aforesaid tax benefits.

7

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.

8

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 nine months period ended December 31, 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.

9

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. On February 23, 2022, the shareholder of the Company approved the aforesaid restructuring through postal ballot. The aforesaid restructuring is likely to be completed over next few months.

10

On December 6, 2021, the Group experienced a cybersecurity incident related to ransomware. The Group could contain the incident in a timely basis and has also ensured that all traces of the infection are completely cleared from the network. All affected systems were restored and brought back to normalcy in the order of priority. The management has assessed the impact of the incident on the control environment and the financial statement process and conclude there was no material impact on the financial results. Since then, the Group has also been focused on implementing significant improvements to its cyber and data security systems to safeguard from such risks in the future.

Place: Bengaluru

Date: May 30, 2022

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

Vinod Kumar Padmanabhan Managing Director & CEO