7 Dec 2016 07:50
December 07, 2016
To
The London Stock Exchange
10 Paternoster Square
London
EC4M 7LS
Dear Sirs,
Sub: Outcome of the Board Meeting held on December 06, 2016
Please be informed that the agenda item stated hereunder was discussed and approved at the Board Meeting held on December 06, 2016 at Mumbai:
· Unaudited standalone and consolidated Financial Results of the Company for the quarter and half year ended September 30, 2016.
Please find enclosed:
Ø The consolidated Financial Results of the Company for the quarter and half year ended September 30, 2016.
We request you to take the aforesaid notification on record.
Yours faithfully
For and on behalf of Subex Limited
Ganesh K V
Chief Financial Officer, Global Head -Legal and Company Secretary
Statement of Consolidated Unaudited Results for the quarter and six months ended September 30, 2016
(Rs. In lakhs)
Consolidated | ||||||
Particulars | 3 months ended September 30, | Preceding 3 months ended June 30, | Corresponding 3 months ended September 30, | Year to date figures for the six months ended September 30, | ||
2016 | 2016 | 2015 | 2016 | 2015 | ||
Unaudited | Unaudited | Notes 3 & 4 | Unaudited | Notes 3 & 4 | ||
1 | Income from operations Net sales/ income from operations | 8,336 | 8,334 | 7,928 | 16,670 | 15,265 |
Total income from operations (net) | 8,336 | 8,334 | 7,928 | 16,670 | 15,265 | |
2 | Expenses | |||||
(a) | Cost of hardware, software and support charges (refer note 10) | 44 | 252 | 77 | 296 | 96 |
(b) | Employee benefits expense (refer note 11) | 4,175 | 4,067 | 3,895 | 8,242 | 8,034 |
(c) | Other expenditure | 2,689 | 2,466 | 2,293 | 5,155 | 4,460 |
(d) | Depreciation and amortisation expense | 117 | 112 | 105 | 229 | 207 |
(e) | Exchange fluctuation (gain)/loss (net) | (211) | (818) | 372 | (1,029) | 1,895 |
Total expenses | 6,814 | 6,079 | 6,742 | 12,893 | 14,692 | |
3 | Profit from operations before other income and finance costs (1-2) | 1,522 | 2,255 | 1,186 | 3,777 | 573 |
4 | Other income (refer note 7) | 268 | 229 | 31 | 497 | 84 |
5 | Profit from ordinary activities before finance costs (3+4) | 1,790 | 2,484 | 1,217 | 4,274 | 657 |
6 | Finance costs | |||||
(a) | Interest on FCCBs | 128 | 134 | 1,066 | 262 | 2,363 |
(b) | Interest on term loan | 167 | 201 | 244 | 368 | 475 |
(c) | Other finance costs | 223 | 223 | 332 | 446 | 652 |
Total finance costs | 518 | 558 | 1,642 | 1,076 | 3,490 | |
7 | Profit/(loss) from ordinary activities before tax (5-6) | 1,272 | 1,926 | (425) | 3,198 | (2,833) |
8 | Tax expense (net) | 298 | 108 | 637 | 406 | 837 |
9 | Net profit/ (loss) for the period (7-8) | 974 | 1,818 | (1,062) | 2,792 | (3,670) |
10 | Other comprehensive income, net of taxes | (244) | (846) | (869) | (1,090) | (332) |
11 | Total comprehensive income (9+10) | 730 | 972 | (1,931) | 1,702 | (4,002) |
12 | Paid up share capital [face value of Rs. 10 (March 31, 2016: Rs. 10)] | 50,691 | 50,475 | 26,402 | 50,691 | 26,402 |
13 | Earnings/(loss) per share (of Rs. 10/- each) (not annualised in case of the interim periods): | |||||
(a) | - Basic | 0.19 | 0.36 | (0.50) | 0.55 | (1.79) |
(b) | - Diluted | 0.19 | 0.36 | (0.50) | 0.55 | (1.79) |
Subex Limited Registered office: RMZ Ecoworld, Outer Ring Road, Devarabisanahalli, Bangalore - 560 037 Statement of consolidated assets and liabilities |
( Rs. in Lakhs) | |
Particulars | As at September 30, 2016 |
(Unaudited) | |
ASSETS | |
Non-current assets | |
Property, plant and equipment | 565 |
Goodwill | 76,772 |
Other intangible assets | 64 |
Financial assets: | |
Loans and advances | 616 |
Others | 177 |
Other non-current assets | 2,499 |
80,693 | |
Current assets | |
Financial assets: | |
Loans and advances | 522 |
Trade receivables | 10,266 |
Cash and cash equivalents | 9,481 |
Other financial assets | 3,759 |
Other current assets | 1,803 |
25,831 | |
Total assets (A+B) | 106,524 |
EQUITY AND LIABILITIES | |
Equity | |
Equity share capital | 50,691 |
Other equity | 25,120 |
Total equity | 75,811 |
Non-current liabilities | |
Provisions | 312 |
312 | |
Current liabilities | |
Financial liabilities: | |
Borrowings | 9,900 |
Trade payables | 1,750 |
Other current financial liabilities | 14,571 |
Provisions | 1,583 |
Other current liabilities | 2,597 |
30,401 | |
Total liabilities (D+E) | 30,713 |
Total equity and liabilities (C+D+E) | 106,524 |
Notes:
1 The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on December 06, 2016.
2 The financial results of Subex Limited (Standalone Information):
( Rs. in Lakhs) |
Particulars | 3 months ended September 30, | Preceding 3 months ended June 30, | Corresponding 3 months ended September 30, | Year to date figures for the six months ended September 30, | |
2016 | 2016 | 2015 | 2016 | 2015 | |
Unaudited | Unaudited | Notes 3 & 4 | Unaudited | Notes 3 & 4 | |
Net sales/ income from operations | 7,505 | 7,673 | 7,267 | 15,178 | 13,683 |
Profit/(loss) from ordinary activities before tax | 401 | 646 | (1,534) | 1,047 | (3,245) |
Profit/(loss) from ordinary activities after tax | 321 | 637 | (1,832) | 958 | (3,593) |
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 financial results for the year ended March 31, 2016 and balance sheet as at 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 and six months ended September 30, 2015 has not been subjected to limited review or audit. However, the management has exercised necessary diligence to ensure that the financial results for the quarter and six months ended September 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 profit/loss after tax is September 30, 2015 and year to date figures ('YTD') for the six months ended September 30, 2015: | provided below for the corresponding 3 months ended | ||||
( Rs. in Lakhs) | ||||||
Particulars | Corresponding 3 months ended September 30, 2015 | YTD six months ended September 30, 2015 | ||||
Net profit under previous GAAP | 1,560 | 1,085 | ||||
Add/(less): Ind-AS adjustments income/(loss): (i) Measurement of Foreign Currency Convertible Bonds ('FCCBs') at fair value (a) Impact on finance cost due to effective interest rate and transfer of interest no longer payable to retained earnings on conversion of FCCBs into equity shares (b) Impact on foreign exchange due to change in carrying value of FCCBs and related account balances and transfer of exchange gain to retained earnings on conversion of FCCBs into equity shares | (1,989) (599) | (3,761) (946) | ||||
(ii) Deferral of revenue pertaining to free support services (iii) Others (net) | (26) (8) | (40) (8) | ||||
Net loss after tax as per Ind-AS | (1,062) | (3,670) | ||||
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 bythe 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$ 77.93 Million have been converted till the quarter and six months ended September 30, 2016 as detailed below: | ||||||
Financial year/ period | FCCBs converted US$ Million | Conversion rate per US$ | Conversion price | No. of equity shares | ||
2015-16 | 76.98 | Rs.56.0545 | Rs.22.79/ Rs.13.00 | 319,889,071 | ||
2016-17 | ||||||
Quarter ended June 30, 2016 | 0.45 | Rs. 56.0545 | Rs. 13.00 | 1,940,348 | ||
Quarter ended September 30, 2016 | 0.50 | Rs. 56.0545 | Rs. 13.00 | 2,155,942 | ||
(c) The face value and fair value of FCCBs outstanding as at September 30, 2016 are as follows: | ||||||
Face value | Fair value | |||||
Particulars | US$ Million | Rs. in Lakhs | US$ Million | Rs. in Lakhs | ||
FCCBs I FCCBs II FCCBs III | 1.00 1.40 3.60 | 666 933 2,398 | 1.31 1.94 3.46 | 873 1,290 2,302 | ||
Total | 6.00 | 3,997 | 6.71 | 4,465 | ||
As a result of reset in conversion price of FCCBs III, the said bonds with outstanding face value of US$ 3.60 Million as at September 30, 2016 would potentially be converted into 15,522,785 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$ 0.73 Million (fair value of US$ 0.71 Million), i.e. Rs. 486 Lakhs (fair value of Rs. 475 Lakhs) in respect of outstanding FCCBs III with face value of US$ 3.60 Million for the period July 6, 2012 to January 5, 2016 till redemption date of the bonds, being July 07, 2017. | ||||||
6 | During the year ended March 31, 2016, pursuant to the Interest Waiver Letter dated March 26, 2016, the lenders of term loan of US$ 12 Million to Subex Americas Inc. had waived the interest liability upto the date of such letter and interest accruing thereafter upto August 22, 2016. Further, interest rate has been revised from 10.5% per annum to 5% per annum, effective August 22, 2016. Subsequently, the interest waiver has been further extended till March 31, 2017, the effective date for the applicability of revised interest rate of 5% per annum has been extended to April 01, 2017 and the repayment date for US$ 6.5 Million loan out of US$ 12 Million has been extended from August 22, 2016 to March 31, 2017, and remaining balance of US$ 3.5 Million and US$ 2 Million is due for repayment on March 31, 2017 and June 30, 2017 respectively. | |||||
7 | 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. 1,025 Lakhs upto September 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, the Company has revised the returns of withholding taxes and adjusted withholding taxes ofRs. 455 Lakhs during the six months ended September 30, 2016 (quarter ended June 30, 2016 : Rs. 205 Lakhs) on salary, professional services and others, by write back of withholding taxes on interest on FCCBs paid earlier, and such write back is included under other income. | |||||
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 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 ofRs. 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 September 30, 2016 and in view of the management, no further provision for diminution is considered necessary as at September 30, 2016. | |||||
9 | 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 September 30, 2016. | |||||
Cost of hardware, software and support charges for the quarters ended September 30, 2016, June 30, 2016 and September 30, 2015 is net of reversal of provision no longer required, amounting to Rs. Nil, Rs. Nil and Rs. Nil, respectively and that for the six months ended September 30, 2016 and September 30, 2015 amounting to Rs. Nil and Rs. 173 Lakhs, respectively.
Employee benefits expenses and sub-contract charges for the quarters ended September 30, 2016, June 30, 2016 and September 30, 2015 is net of reversal of provision no longer required, in respect of employee incentives, amounting to Rs. Nil, Rs. Nil and Rs. 384 Lakhs, respectively and that for the six months ended September 30, 2016 and September 30, 2015 amounting to Rs. Nil and Rs. 453 Lakhs, respectively.
Pursuant to the approval of the Board of Directors, the Group 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:
( Rs. in Lakhs) |
Particulars | 3 months ended September 30, | Preceding 3 months ended June 30, | Corresponding 3 months ended September 30, | Year to date figures for the six months ended September 30, | |
2016 | 2016 | 2015 | 2016 | 2015 | |
Unaudited | Unaudited | Notes 3 & 4 | Unaudited | Notes 3 & 4 | |
Total income | - | - | - | - | - |
(Loss)/ Profit before tax | (2) | (1) | (1) | (3) | (2) |
Profit/ (Loss) after tax | (1) | 54 | 2 | 53 | 1 |
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.
Previous period figures have been regrouped/ reclassified, wherever necessary to confirm to current period's classification.
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.
Surjeet Singh
Managing Director & CEO
For further details on the results, please visit our website: www.subex.com