SUBX.L Regulatory News (SUBX)

SUBEX LTD

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

Statement of Consolidated Unaudited Results for the Quarter and Nine months Ended December 31, 2012

PART - I (Rs. In Lakhs except per share data)

Particulars

3 Months ended

Preceding 3

months ended

Corresponding

3 months ended

For the Nine

Months ended

For the Nine

Months ended

Previous year

ended

31/12/2012

30/09/2012

31/12/2011

31/12/2012

31/12/2011

31/03/2012

1

(a)

2

(a)

(b)

(c)

(d)

(e)

3

4

5

6

7

8

9

10

11

Income From Operations

Net Sales/ Income From Operations Product & Product related

Services

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

8,720

340

6,969

835

11,728

1,414

22,775

2,287

33,321

3,664

42,949

4,834

Total Income From Operations (Net)

9,060

7,804

13,142

25,062

36,985

47,783

Expenses

Cost of Hardware, Software & Services

Employee Benefits Expense and Sub-contract charges Other Expenditure

Depreciation and Amortisation Expense Exchange Fluctuation (Gain)/Loss-Net

194

4,910

1,934

97

(352)

273

5,231

1,752

117

1,149

167

6,420

2,261

190

(123)

620

16,483

5,412

340

214

626

19,895

6,465

609

(508)

870

25,358

8,588

780

(398)

Total Expenses

6,783

8,522

8,915

23,069

27,087

35,198

Profit / (Loss) From Operations before Other Income, Finance costs and Exceptional items (1-2)

2,277

(718)

4,227

1,993

9,898

12,585

Other Income

47

50

22

77

378

698

Profit / (Loss) From Ordinary activities before Finance costs and Exceptional items (3+4)

2,324

(668)

4,249

2,070

10,276

13,283

Finance Costs

1,445

1,314

1,104

3,568

3,201

4,285

Profit / (Loss) From Ordinary activities after Finance costs but before Exceptional items (5+6)

879

(1,982)

3,145

(1,498)

7,075

8,998

Exceptional Items (Net Expense) (Refer Note 2)

-

3,997

1,217

3,997

5,091

5,479

Profit / (Loss) From Ordinary activities before Tax (7+8)

879

(5,979)

1,928

(5,495)

1,984

3,519

Tax Expense (Net)

111

117

291

343

319

335

Net Profit / (Loss) From Ordinary activities after Tax (9+10)

(Refer Note 4 and 8 )

768

(6,096)

1,637

(5,838)

1,665

3,184

12

13

14

Paid up Share Capital

- Equity (Face value of Rs.10/-)

Reserve excluding Revaluation Reserves as per balance sheet of previous accounting year

Earnings per share (before extraordinary items) (of Rs 10/- each) (not annualised in case of the interim periods):

Basic Diluted

15,938

0.48

0.45

15,865

(4.04)

(4.04)

6,931

2.36

2.33

15,938

(4.57)

(4.57)

6,931

2.40

2.37

6,931

7,529

4.59

4.59

PART - II

A

1

2

PARTICULARS OF SHAREHOLDING

Aggregate of Public shareholding:*

Number of shares

Percentage of holding (to total shareholding)

Promoters and promoter group

Shareholding

a) Pledged/Encumbered

- Number of shares

- Percentage of shares (as a % of the total shareholding of promoter and promoter group)

- Percentage of shares (as a% of the total share capital of the

company)

b) Non-encumbered

- Number of Shares

- Percentage of shares (as a% of the total shareholding of promoter and promoter group)

- Percentage of shares (as a % of the total share capital of the company)

143,920,673

90.30%

8,474,044

100.00%

5.32%

- 0.00%

0.00%

143,182,791

90.25%

8,474,044

100.00%

5.34%

- 0.00%

0.00%

54,200,225

78.20%

7,601,801

93.83%

10.97%

500,000

6.17%

0.72%

143,920,673

90.30%

8,474,044

100.00%

5.32%

- 0.00%

0.00%

54,200,225

78.20%

7,601,801

93.83%

10.97%

500,000

6.17%

0.72%

54,200,225

78.20%

7,601,801

93.83%

10.97%

500,000

6.17%

0.72%

* Total public shareholding as defined under clause 40A of the listing agreement (excludes underlying shares for GDRs)

Global Depository Reciepts

3 Months ended

31/12/2012

Preceeding 3

months ended 30/09/2012

Corresponding

3 months ended 31/12/2011

For the Nine

Months ended 31/12/2012

For the Nine

Months ended 31/12/2011

Previous year

ended 31/03/2012

- Number of underlying Equity Shares

- Percentage of Share Holding

6,989,399

4.38%

6,989,399

4.41%

7,008,746

10.11%

6,989,399

4.38%

7,008,746

10.11%

7,008,746

10.11%

B

Particulars

3 Months ended

31/12/2012

INVESTOR COMPLAINTS

Pending at the beginning of the quarter Received during the quarter

Disposed of during the quarter

Remaining unresolved at the end of the quarter

Nil Nil Nil Nil

Notes :

1

The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on February 7,2013. In accordance with Clause 41 of the

Listing Agreement the Statutory Auditors have carried out a 'Limited Review' of the consolidated results for the quarter and nine months ended December 31, 2012

2

Exceptional items comprise - Rs. In Lakhs

3

Particulars

3 Months ended 31/12/2012

Preceeding 3 months ended 30/09/2012

Corresponding 3 months ended 31/12/2011

For Nine Months ended 31/12/2012

For the Nine Months ended 31/12/2011

Previous year ended 31/03/2012

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Exchange Loss/(Gain) arising on restatement of Foreign Currency Convertible Bonds

-

-

1,025

-

4,955

5,343

Reversal of stock compensation expenses recorded earlier pursuant to voluntary surrender of options by employees

-

-

(404)

-

(404)

(404)

Gain on Sale of Assets pertaining to Activation business during the quarter ended September 30, 2011 net of Redundancy costs

-

-

-

-

(56)

(56)

Other Redundancy costs

-

-

596

-

596

596

Goodwill Impariment*

-

927

-

927

-

-

Exceptional Provision for Doubtful trade and other receivables**

-

3,070

-

3,070

-

-

TOTAL

-

3,997

1,217

3,997

5,091

5,479

\* The company had impaired goodwill outstanding in books pertaining to its services business during the period ended December 31, 2012. As impairment in goodwill is not considered to be regular adjustment in the results, the same has been categorised as an exceptional item.

**During the nine month period ended December 31, 2012, the Company carried out an assessment of its receivables and an amount of Rs. 3,070 lakhs has been provided during that period towards doubtful receivables. Considering that the amount of provision towards doubtful receivables is significant and relevant in understanding the financial performance, it is disclosed separately under exceptional item.

Summary of Key Standalone Financial results is as follows - Rs. In Lakhs

4

Particulars

3 Months ended

31/12/2012

Preceeding 3

months ended 30/09/2012

Corresponding

3 months ended 31/12/2011

For Nine

Months ended 31/12/2012

For the Nine

Months ended 31/12/2011

Previous year

ended 31/03/2012

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Net Sales/ Income from Operations

7,737

6,160

9,267

19,614

24,769

32,901

Profit / (Loss) from ordinary activities before tax

843

(2,801)

1,597

(2,821)

(755)

204

Profit / (Loss) from ordinary activities after tax

843

(2,801)

1,597

(2,821)

(865)

240

As permitted under the Proposal approved by the Hon'ble High Court of Karnataka, which was given effect in the year ending March 31, 2011, the Company transferred certain amounts standing to the credit of Capital Reserve to the Business Restructuring Reserve (BRR) and utilised the same for permitted utilisations as under. Had the Proposal not provided for the above accounting treatment :

(Rs. In Lakhs except per share data)

5

Particulars

3 Months ended

Preceeding 3

Corresponding

For Nine

For the Nine

Previous year

31/12/2012

months ended

3 months

Months ended

Months ended

ended

30/09/2012

ended 31/12/2011

31/12/2012

31/12/2011

31/03/2012

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Revenue would have been lower by

-

959

-

959

-

(225)

Expenses termed as Exceptional Items would have been higher /(lower) by

-

359

359

Net (loss)/profit would have been (lower)/higher by

-

1,318

-

1,318

-

(225)

Earnings / ( Loss) Per Share would have been

-Basic

- Diluted

0.48

0.45

(4.91)

(4.91)

2.36

2.33

(5.61)

(5.61)

2.40

2.37

4.92

4.91

In view of the losses incurred by the Company during the nine months ended December 31, 2012, the excess of the managerial remuneration paid to the directors over the limits prescribed under Schedule XIII of the Companies Act, 1956 has been treated as monies due from the directors, being held by them in trust for the Company, and is included under "Short- term loans and advances‟ amounting to Rs. 103.43 lakhs, towards managerial remuneration in excess of the limits laid down under Schedule XIII of the Companies Act, 1956 and not

paid as at December 31, 2012. The Company intends to make an application to the Central Government seeking approval for the excess remuneration and accounting therefor will be determined on receipt of the approval from the Central Government.

Pursuant to the approval of the holders of "US$ 180 Million 2% convertible unsecured bonds", [of which US$ 39 Million was outstanding ("FCCBs I")] and "US$ 98.7 Million 5% convertible unsecured bonds", [of which US$ 54.8 million was outstanding ("FCCBs II")], at their respective meetings held on July 5, 2012 and exchange offers received under the exchange offer memorandum dated June 13, 2012, holders of US$ 38 Million out of FCCBs I and US$ 53.4 Million out of FCCBs II offered their bonds for exchange. Consequently, new secured bonds of US$ 127.721 million ("FCCBs III") were issued with maturity date of July 7, 2017, having a conversion price of Rs.22.79 per equity share and coupon of 5.70% p.a. payable semi-annually on the outstanding bonds. In accordance with the terms of FCCBs III, principal amount of US$ 36.321 Million were mandatorily converted into equity shares at the aforesaid conversion price in July 2012 retaining a balance of US$ 91.4 million. Further, the maturity period of the un-exchanged portion of FCCBs I of US$ 1 Million and FCCBs II of US$ 1.4 Million stands extended to March 9, 2017, with its other terms and conditions remaining unchanged.

The Company has obtained a legal opinion that the said transaction of restructuring is a tax exempt transfer and is in the process of obtaining a legal opinion on the tax incidence, if any, consequent to the above restructuring on the redemption premium. This is a subject matter of Auditors Qualification

The Company has issued 737,882 equity shares upon conversion of FCCBs of principal amount of US$ 300,000 by the holder(s) of Company's US$ 91.4 million 5.70% Convertible Secured Bonds. Post the conversion, FCCBs aggregating to US$ 91.10 million are outstanding under the said Bonds.

During the nine month period ended December 31, 2012, the Company has received a demand of service tax of Rs. 3607.60 lakhs and equivalent amount of penalties under the provisions of the Finance Act, 1994 along with the consequential interest, for the period from April, 2006 to July, 2009 towards service tax payable on import of certain services.  The Company has filed an appeal contesting the demand along with a stay application seeking a stay of the entire demand before the Central Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore and it is of the view that the demand is not sustainable. Further, the Company contends that in the event of the demand being upheld by the Appellate Authority, the Company is eligible to avail the service tax as input credit upon payment of the same.

Pursuant to the notification dated December 29, 2011 issued by the Ministry of Corporate affairs, during the quarter ended December 31, 2011, the Company opted to adopt the transitional provisions under paragraph 46A of Accounting Standard 11 (AS 11) "The Effects of Changes in Foreign Exchange rates‟ with effect from April 1, 2011. Accordingly, exchange differences arising on restatement of all long term monetary foreign currency assets and liabilities at rates different from those at which they were initially recorded or reported in previous financial statements (whichever is later) are accumulated in the Foreign Currency Monetary Item Translation Difference Account and are amortised over the balance period of such long term asset / liability. The cumulative impact of adopting the above policy upto the nine months ended December 31, 2011 was given effect to in the quarter ended December 31, 2011. The losses for the quarter ended Decemeber 31, 2011 would have been higher by Rs. 2,536 lakhs had the above policy been followed during quarter and period ended September 30, 2011.

During the Quarter ended December 31, 2012, the Company has granted  39,300 options under its ESOP 2005 scheme.

6

7

8

9

10

1

(a) (b)

SEGMENT REPORTING:

(Rs. In Lakhs)

Segment Revenue: Products & Product related Services

Consolidated

3 Months ended

Preceeding 3 months ended

Corresponding

3 months

ended

For the Nine Months ended

For the Nine Months ended

Previous year ended

31/12/2012

30/09/2012

31/12/2011

31/12/2012

31/12/2011

31/03/2012

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

8,720 340

6,969 835

11,728 1,414

22,775 2,287

33,321 3,664

42,949 4,834

9,060

7,804

1 3,142

25,062

36,985

47,783

2

(a) (b)

Segment Profit/(Loss) before tax, interest & exceptional Items

Products & Product related

Services

Less: Interest (Net)

Less : Other Unallocable (Income)/Expenditure & Exceptional items [Net]

1,096 1,228

(511) (157)

4,210 39

1,038 1,032

10,470

(194)

13,187 96

2,324 1,445

(668) 1,314 3,997

4,249 1,104

(1,217)

2,070 3,568 3,997

10,276 3,201

(5,091)

13,283 4,285 5,479

Profit Before Taxation

879

(5,979)

1,928

(5,495)

1,984

3,519

3

(a)

Details of Capital Employed

Products & Product related

Capital Employed (Products & Product related)

93,784

92,180

90,480

93,784

90,480

90,885

(b)

Services

Capital Employed (Services)

(250)

(41)

1,118

(250)

1,118

1,119

(c)

Unallocated

Capital Employed (Unallocated)

(69,360)

(68,067)

(82,844)

(69,360)

(82,844)

(77,544)

11

12

Previous period / year figures have been re-grouped and/or re-arranged to conform with the current period.

Pursuant to clause 41 of the Listing Agreement, 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.

Certain statements in this release concerning our performance may be forward looking statements which involve risks and uncertainties that could cause actual results to vary materially from those in such statements. These risks and uncertainties include, and are not limited to, fluctuations in earnings, intense competition and success of investments.

By Order of the Board

Bangalore February 7, 2013

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

Surjeet Singh Managing Director & CEO

10

1

(a) (b)

2

(a) (b)

3

(a)

(b)

(c)

11

12