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 Six months ended September 30 2014

PART - I

(Rs in Lakhs except per share data)

CONSOLIDATED

Particulars

Three months ended

Preceding 3months ended

Corresponding3 months ended

For the half year ended

For the half year ended

Previous year ended

30/09/2014

30/06/2014

30/09/2013

30/09/2014

30/09/2013

31/03/2014

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

1

Income From Operations

Net Sales/ Income From Operations

9,050

6,518

8,544

15,568

16,320

34,005

Total Income From Operations (Net)

9,050

6,518

8,544

15,568

16,320

34,005

2

Expenses

(a)

Cost of Hardware, Software & Services

494

131

285

625

468

956

(b)

Employee Benefits Expense and Sub-contract charges

4,279

4206

4,576

8,485

8,968

17,929

(c)

Other Expenditure

1,927

1772

1,595

3,699

3,278

6,893

(d)

Depreciation and Amortisation Expense (Refer Note 9)

101

122

60

223

126

248

(e)

Exchange Fluctuation (Gain)/Loss-Net

(343)

733

305

390

(786)

1,677

Total Expenses

6,458

6,964

6,821

13,422

12,054

27,703

3

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

2,592

(446)

1,723

2,146

4,266

6,302

4

Other Income

1

11

40

12

47

450

5

Profit / (Loss) From Ordinary Activities before Finance Costs and Exceptional Items (3+4)

2,593

(435)

1,763

2,158

4,313

6,752

6

Finance Costs

(a)

Interest on FCCB ( Refer Note 5c)

850

846

863

1,696

1,640

3,422

(b)

Interest on Term Loan ( Refer Note 8)

214

197

215

411

405

840

(c)

Other Borrowing Cost

473

515

593

988

1,278

2,486

7

Profit / (Loss) From Ordinary Activities after Finance Costs but before Exceptional Items (5+6)

1,056

(1,993)

92

(937)

990

4

8

Exceptional Items (Net Expense) (Refer Note 2)

-

-

-

-

-

220

9

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

1,056

(1,993)

92

(937)

990

(216)

10

Tax Expense (Net)

94

67

(64)

161

93

945

11

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

962

(2,060)

156

(1,098)

897

(1,161)

12

Paid up Share Capital

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

16,910

16,910

16,664

16,910

16,664

16,664

13

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

-

-

-

-

-

698

14

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

Basic

0.57

(1.22)

0.09

(0.65)

0.54

(0.70)

Diluted

0.57

(1.22)

0.09

(0.65)

0.54

(0.70)

PART - II

A

PARTICULARS OF SHAREHOLDING

1

Aggregate of Public shareholding:*

Number of shares (Refer note 5(b))

163,882,320

162,382,320

153,182,840

163,882,320

153,182,840

158,366,608

Percentage of holding (to total shareholding)

96.92%

96.03%

91.92%

96.92%

91.92%

95.04%

2

Promoters and promoter group (Refer Note 10)

Shareholding

a) Pledged/Encumbered

- Number of shares

4,974,044

4,974,044

6,474,044

4,974,044

6,474,044

6,474,044

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

100.00%

76.83%

100.00%

100.00%

100.00%

100.00%

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

2.94%

2.94%

3.89%

2.94%

3.89%

3.89%

 b) Non-encumbered

- Number of shares

-

1,500,000

-

-

-

-

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

0.00%

23.17%

0.00%

0.00%

0.00%

0.00%

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

0.00%

0.89%

0.00%

0.00%

0.00%

0.00%

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

Global Depository Reciepts

Three months ended 30/09/2014

Preceding 3months ended 30/06/2014

Corresponding3 months ended 30/09/2013

For the half year ended 30/09/2014

For the half year ended 30/09/2013

Previous year ended 31/03/2014

- Number of underlying Equity Shares

243,207

243,207

6,983,078

243,207

6,983,078

1,799,310

- Percentage of Share Holding

0.14%

0.14%

4.19%

0.14%

4.19%

1.08%

Particulars

Three months ended 30/09/2014

B

INVESTOR COMPLAINTS

Pending at the beginning of the quarter

Nil

Received during the quarter

Nil

Disposed off during the quarter

Nil

Remaining unresolved at the end of the quarter

Nil

STATEMENT OF ASSETS AND LIABILITIES

(Rs. in Lakhs)

Particulars

As At

As At

30/09/2014

31/03/2014

Unaudited

Audited

A

EQUITY AND LIABILITIES

1

Shareholders' Funds

(a)

Share Capital

16,910

16,664

(b)

Reserves and Surplus

(1,624)

698

Sub-total - Shareholders' funds

15,286

17,362

2

Non-current Liabilities

(a)

Long-term Borrowings

59,311

60,245

(b)

Deferred Tax Liabilities(net)

-

-

(c)

Other Long-term Liabilities

8,268

5,546

(d)

Long-term Provisions

672

602

Sub-total - Non-current liabilities

68,251

66,393

3

Current Liabilities

(a)

Short-term Borrowings

17,441

16,016

(b)

Trade Payables - Other than Acceptances

5,771

5,253

(c)

Other Current Liabilities

3,378

4,061

(d)

Short-term Provisions

392

349

Sub-total - Current liabilities

26,982

25,679

TOTAL - EQUITY AND LIABILITIES (1+2+3)

110,519

109,434

B

ASSETS

1

Non-current Assets

(a)

Fixed Assets

702

598

(b)

Goodwill on Consolidation

85,642

85,642

(c)

Deferred Tax Assets (Net)

-

-

(d)

Long-term Loans & Advances

2,455

2,412

(e)

Other Non-current Assets

734

1,425

Sub-total - Non-current assets

89,533

90,077

2

Current Assets

(a)

Trade Receivables

12,711

10,058

(b)

Cash and Bank Balances

2,954

4,793

(c)

Short-term Loans & Advances

1,236

949

(d)

Other Current Assets

4,085

3,557

Sub-total - Current assets

20,986

19,357

TOTAL - ASSETS (1+2)

110,519

109,434

Notes :

1

The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on November 12, 2014. The Statutory Auditors have carried out a 'Limited Review' of the same.

2

Exceptional items comprise - Rs. in Lakhs)

Particulars

Three months ended 30/09/2014

Preceding 3months ended 30/06/2014

Corresponding3 months ended 30/09/2013

For the half year ended 30/09/2014

For the half year ended 30/09/2013

Previous year ended 31/03/2014

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Exceptional Provision for Doubtful trade and other receivables#

-

-

-

-

-

220

TOTAL

-

-

-

-

-

220

#Represents provisions relating to Services Segment discontinued with effect from 01.04.2013

3

Summary of key standalone financial results is as follows:

 (Rs in Lakhs)

Particulars

Three months ended 30/09/2014

Preceding 3months ended 30/06/2014

Corresponding3 months ended 30/09/2013

For the half year ended 30/09/2014

For the half year ended 30/09/2013

Previous year ended 31/03/2014

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Net Sales/ Income from Operations

7,754

5,442

7,246

13,196

13,824

29,367

Profit / (Loss) from ordinary activities before tax

(492)

(2,020)

(442)

(2,512)

179

(2,806)

Profit / (Loss) from ordinary activities after tax

(521)

(2,029)

(14)

(2,550)

527

(2,953)

4

As permitted under the Proposal approved by the Hon'ble High Court of Karnataka, which was given effect in the year ended March 31, 2010, 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)

Particulars

Three months ended 30/09/2014

Preceding 3months ended 30/06/2014

Corresponding3 months ended 30/09/2013

For the half year ended 30/09/2014

For the half year ended 30/09/2013

Previous year ended 31/03/2014

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Other Expenditure would have been higher by

-

-

81

-

81

81

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

-

-

(81)

-

(81)

(81)

Earnings / ( Loss) per share would have been

 -Basic

0.57

(1.22)

0.05

(0.65)

0.49

(0.75)

 - Diluted

0.57

(1.22)

0.05

(0.65)

0.49

(0.75)

5(a)

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 05, 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, secured bonds with a face value of US$ 127.721 Million ("FCCBs III") were issued with maturity date of July 07, 2017, having an interest rate of 5.70% p.a. payable semi- annually, an exchange rate for conversion of Rs. 56.06/US$ and an equity conversion price of Rs. 22.79 per equity share. 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 on July 07, 2012. Further, pursuant to the approval of the Reserve Bank of India dated April 27, 2012 and requisite approvals of the bond holders, 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 09, 2017, with its other terms and conditions remaining unchanged.

5(b)

During 2012-13 and the quarter ended June 30, 2014, FCCB's III with a face value of US$ 3.25 Million and US$ 1 Million, respectively, were converted into 79,93,931 and 24,59,609 equity shares, respectively. The conversion recorded during the prior quarter, has been intimated and updated by the Registrar on July 08, 2014.The face value of FCCB's outstanding as on September 30, 2014 are as follows :

Particulars

US$ Million

Rs. in Lakhs

FCCB I

1.00

617

FCCB II

1.40

865

FCCB III

87.15

53,815

Total

89.55

55,297

5(c)

At the bond holders meetings held on January 04, 2013 , January 03, 2014 and July 04, 2014 , gross interest on FCCB III for the periods from July 2012- June 2013 , July 2013- December 2013, January 2014- June 2014 and July 2014 -January 2015 amounting to US$ 5.60 Million , US$ 2.85 Million $ 2.82 Million and $2.83 Million respectively, aggregating to US $ 11.27 Million (Rs. 6,959 Lakhs) was deferred till redemption date of the said bonds, being July 07, 2017. Accordingly, interest on FCCBs III included under finance costs in the above results and as furnished here under is due for payment on July 07, 2017.

(Rs. in Lakhs)

Particulars

Three Months ended

Preceding 3months ended

Corresponding3 months ended

For the half year ended

For the half year ended

Previous Year ended

30/09/2014

30/06/2014

30/09/2013

30/09/2014

30/09/2013

31/03/2014

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Interest on FCCBs III

831

833

763

1,664

1,611

3,006

6

During the year ended March 31, 2014 , the Company had assessed the carrying value of goodwill arising from its investment in its subsidiary viz. Subex Americas Inc., amounting to Rs.18,606 Lakhs. Based on the management's assessment, there was no impairment of such goodwill taking into account the future operational plans and cash flows as prepared by the management and accordingly, no impairment loss was required to be recognized. The Company anticipates achieving its projections by March 31, 2015, and accordingly no provision is considered necessary as at Sep 30, 2014. This is a 'matter of emphasis' in the Limited Review Report

7

The Company has only single business segment with respect to software products and related services and hence has not made any additional segment disclosures.

8

Interest on term loan includes the below interest which is due to be paid in August/September 2016:

 (Rs in Lakhs)

Particulars

Three months ended

Preceding 3months ended

Corresponding3 months ended

For the half year ended

For the half year ended

Previous year ended

30/09/2014

30/06/2014

30/09/2013

30/09/2014

30/09/2013

31/03/2014

Interest on Term Loan

67

163

112

230

218

408

9

Consequent to the applicability of the relevant provisions of the Companies Act, 2013, the Company has reassessed the useful lives of all the assets. This has resulted in change in the useful life of Computers and related equipment compared to the previous estimates. On account of the above, the depreciation for the half year and quarter ended September 30, 2014 is higher by Rs.92 Lakhs and Rs. 41 Lakhs respectively. As per provision of Part C of Schedule II of the Companies Act, 2013 an amount of Rs. 9 Lakhs has been debited to the opening balance of the retained earnings as at April 01, 2014 towards the carrying amount of assets, where the remaining useful life of these assets is Nil.

10

Detail of Promoters and promoter group shareholding is as per reports furnished by the Registrar and Transfer Agents of the Company.

11

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

12

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.

By Order of the Board

Mumbai

Date: 12th November, 2014

Surjeet Singh

Managing Director & CEO

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