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 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