11 Nov 2019 10:17
November 11, 2019
To
The London Stock Exchange
10 Paternoster Square
London
EC4M 7LS
Dear Sir/Madam,
Sub: Outcome of the Board Meeting of Subex Limited "The Company" held on November 08, 2019
Please be informed that the agenda item summarized hereunder was discussed and approved at the Board Meeting of the Company held on November 08, 2019 at Bengaluru:
·; Unaudited consolidated financial results of the Company for the quarter and half-year ended September 30, 2019.
Please find enclosed:
·; The unaudited consolidated financial results of the Company for the quarter and half-year ended September 30, 2019.
We request you to take the aforesaid notification on record.
Thanking you
Yours truly,
For Subex Limited
Anil Singhvi
Chairman & Independent Director
DIN:00239589
SUBEX LIMITED
Registered office: RMZ Ecoworld, Outer Ring Road, Devarabisanahalli, Bangalore - 560 103
Statement of Unaudited Consolidated Financial Results for the quarter and six months ended September 30, 2019
( ` in Lakhs) |
Particulars | Quarter ended | Year to date figures for the six months ended | Year ended | ||||
September 30, 2019 | June 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | March 31, 2019 | ||
Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited | ||
Income | |||||||
1 | Revenue from operations | 8,567 | 7,895 | 8,806 | 16,462 | 16,397 | 34,812 |
2 | Other income | 140 | 36 | 17 | 176 | 34 | 101 |
3 | Total income (1+2) | 8,707 | 7,931 | 8,823 | 16,638 | 16,431 | 34,913 |
4 | Expenses | ||||||
(a) | Employee benefits expense (Refer note 4) | 4,437 | 4,309 | 4,853 | 8,746 | 9,358 | 19,105 |
(b) | Finance costs | 142 | 150 | 46 | 292 | 108 | 216 |
(c) | Depreciation and amortisation expense | 378 | 371 | 122 | 749 | 229 | 483 |
(d) | Exchange fluctuation (gain)/ loss, net | (292) | (259) | (283) | (551) | (811) | (171) |
(e) | Other expenses | 2,331 | 2,068 | 2,717 | 4,399 | 5,355 | 10,572 |
Total expenses | 6,996 | 6,639 | 7,455 | 13,635 | 14,239 | 30,205 | |
5 | Net profit before tax expense (3-4) | 1,711 | 1,292 | 1,368 | 3,003 | 2,192 | 4,708 |
6 | Tax expense, net | ||||||
Current tax charge | 1 | 1 | 38 | 2 | 108 | 274 | |
Provision - foreign withholding taxes (Refer note 6) | 263 | 223 | 208 | 486 | 418 | 885 | |
Deferred tax charge (Refer note 7) | 817 | 540 | 491 | 1,357 | 640 | 1,027 | |
Total tax expense | 1,081 | 764 | 737 | 1,845 | 1,166 | 2,186 | |
7 | Net profit for the period/ year (5-6) | 630 | 528 | 631 | 1,158 | 1,026 | 2,522 |
8 | Other comprehensive income, net of tax expense | ||||||
Items that will be reclassified subsequently to profit or loss: | |||||||
Net exchange differences (loss)/ gain on translation of foreign operations | (124) | (266) | 295 | (390) | (210) | (390) | |
Items that will not be reclassified subsequently to profit or loss: | |||||||
Re-measurement loss on defined benefits plan | (25) | (10) | (14) | (35) | (29) | (38) | |
Total other comprehensive income | (149) | (276) | 281 | (425) | (239) | (428) | |
9 | Total comprehensive income for the period/ year (7+8) | 481 | 252 | 912 | 733 | 787 | 2,094 |
10 | Paid up equity share capital | 56,200 | 56,200 | 56,200 | 56,200 | 56,200 | 56,200 |
[face value of `10 (March 31, 2019: `10)] | |||||||
11 | Other equity | - | - | - | - | - | 23,210 |
12 | Earnings per share (of ` 10/- each) (not annualised in case of the interim periods) | ||||||
(a) | - Basic | 0.12 | 0.10 | 0.11 | 0.21 | 0.18 | 0.45 |
(b) | - Diluted | 0.12 | 0.10 | 0.11 | 0.21 | 0.18 | 0.45 |
SUBEX LIMITED | |||
Registered office: RMZ Ecoworld, Outer Ring Road, Devarabisanahalli, Bangalore - 560 103 | |||
Statement of Consolidated Assets and Liabilities | ( ` in Lakhs) | ||
As at | |||
Particulars | September 30, 2019 | March 31, 2019 | |
Unaudited | Audited | ||
A | ASSETS | ||
Non-current assets | |||
Property, plant and equipment | 543 | 540 | |
Right-of-use assets | 4,489 | - | |
Goodwill on consolidation | 65,882 | 65,882 | |
Other intangible assets Financial assets | 4 | 7 | |
Loans | 530 | 503 | |
Other balances with banks | 419 | 420 | |
Other financial assets | 234 | 234 | |
Income tax asset (net) | 3,081 | 3,039 | |
Deferred tax asset (including MAT credit entitlement) | 642 | 624 | |
Other non-current assets | 267 | 478 | |
76,091 | 71,727 | ||
Current assets | |||
Financial assets | |||
Loans | 133 | 121 | |
Trade receivables | 8,668 | 8,539 | |
Cash and cash equivalents | 6,106 | 3,947 | |
Other balances with banks | 125 | 252 | |
Other financial assets | 3,790 | 4,537 | |
Other current assets | 680 | 526 | |
19,502 | 17,922 | ||
Total Assets | 95,593 | 89,649 | |
B | EQUITY AND LIABILITIES Equity | ||
Equity share capital | 56,200 | 56,200 | |
Other equity | 23,170 | 23,210 | |
Total equity | 79,370 | 79,410 | |
Liabilities Non-current liabilities | |||
Financial liabilities | |||
Lease Liability | 3,531 | - | |
Provisions | 337 | 305 | |
Deferred tax liabilities(net) | 3,244 | 1,928 | |
7,112 | 2,233 | ||
Current liabilities | |||
Financial liabilities | |||
Lease Liabilities Trade payable | 1,299 | - | |
- total outstanding dues of micro enterprises and small enterprises | 28 | 7 | |
- total outstanding dues of creditors other than micro enterprises and small enterprises | 796 | 827 | |
Other financial liabilities | 2,174 | 2,961 | |
Other current liabilities | 3,168 | 2,452 | |
Provisions | 804 | 729 | |
Income tax liabilities (net) | 842 | 1,030 | |
9,111 | 8,006 | ||
Total liabilities | 16,223 | 10,239 | |
Total equity and liabilities | 95,593 | 89,649 | |
SUBEX LIMITED Statement of cash flows for the six months ended September 30, 2019 | |||
( ` in Lakhs) | |||
Six months ended | |||
Particulars | September 30, 2019 | September 30, 2018 | |
Unaudited | Unaudited | ||
(A) | Operating activities Profit before tax expense Adjustments to reconcile profit before tax expense to net cash flows: | 3,003 | 2,192 |
Depreciation of property, plant and equipment and right-of-use assets | 746 | 151 | |
Amortization of intangible assets | 3 | 78 | |
Interest income (including fair value changes) | (64) | (28) | |
Finance costs (including fair value changes) | 243 | 108 | |
Provision for doubtful debts and advances (net of reversal) | 16 | 338 | |
Expense on share based payment Amortized cost of deposits | 48 | 29 | |
Net foreign exchange differences | (520) | (445) | |
Operating profit before working capital changes | 3,475 | 2,423 | |
Working capital adjustments: | |||
(Increase)/ decrease in loans | (7) | (37) | |
(Increase)/ decrease in trade receivables | 89 | (1,484) | |
(Increase)/ decrease in other financial assets | 586 | (84) | |
(Increase)/ decrease in other assets | (219) | (88) | |
Increase/ (decrease) in trade payables | (1) | 432 | |
Increase/ (decrease) in other financial liabilities | (697) | (383) | |
Increase/ (decrease) in other current liabilities | 645 | 598 | |
Increase/ (decrease) in provisions | 62 | 151 | |
3,933 | 1,528 | ||
Income tax paid (including TDS, net of refund) | (710) | (425) | |
Net cash flows from operating activities | 3,223 | 1,103 | |
(B) | Investing activities Purchase of property, plant and equipment | (288) | (194) |
Movement in margin money deposit (net) | 131 | (18) | |
Purchase of treasury shares by ESOP trust | (378) | (32) | |
Interest received | 25 | 5 | |
Net cash flows used in investing activities | (510) | (239) | |
(C) | Financing activities Repayment in working capital loans (net) | (1,027) | |
Interest paid | (230) | (95) | |
Repayment of lease liability | (425) | - | |
Net cash flows used in financing activities | (655) | (1,122) | |
(D) | Net increase/ (decrease) in cash and cash equivalents (A+B+C) | 2,058 | (258) |
Net foreign exchange difference on cash and cash equivalents | 101 | (103) | |
Cash and cash equivalents at the beginning of the period | 3,947 | 3,007 | |
(E) | Cash and cash equivalents at the end of the period | 6,106 | 2,646 |
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 8, 2019.
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):
Particulars | Quarter ended | Year to date figures for the six months ended | Year ended | |||
September 30, 2019 | June 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | March 31, 2019 | |
Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited | |
Total income | 331 | 229 | 481 | 442 | 1,128 | 1,926 |
Net loss before tax expense | (262) | (512) | (533) | (774) | (1,506) | (2,455) |
Net loss for the period/ year | (262) | (512) | (534) | (774) | (1,507) | (2,453) |
Total comprehensive income for the period/ year | (263) | (513) | (538) | (776) | (1512) | (2,456) |
( `in Lakhs) |
4 Employee benefits expenses for the quarters ended September 30, 2019, June 30, 2019, and September 30, 2018 are net of reversal of provision no longer required, in respect of employee incentives relating to sales and delivery commissions, amounting to ` 438 Lakhs, ` 450 Lakhs and ` 35 Lakhs, respectively, that for the six months ended September 30, 2019 and September 30, 2018 amounting to ` 888 Lakhs and ` 35 Lakhs and that for the year ended March 31, 2019 amounting to ` 40 Lakhs.
5 As at March 31, 2019, the Group assessed and concluded the carrying value of it's goodwill along with carrying value of related Cash Generating Units ('CGUs') to be appropriate, basis the valuation carried out by an external valuer. 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, 2019.
6 Represents provision in respect of withholding taxes deducted/ deductible by the overseas customers of the Group.
7 Deferred tax charge/ (credit), comprises of deferred tax 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.
8 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.
9 Subex Employee Welfare and ESOP Benefit Trust (hereinafter referred to as the "ESOP Trust"), registered and authorised to acquire shares of the Company through secondary market for providing share-based payments to its employees, is consolidated in the standalone financial results of the Company and the shares reacquired and held by ESOP Trust are treated as treasury shares and recognised at cost and deducted from other equity. The shares held by the Trust were reduced on a weighted average basis from outstanding number of shares for computation of basic and diluted EPS of the Company.
Effective April 1, 2019, the Group adopted Ind AS 116 "Leases", applied to all lease contracts existing on April 1, 2019 using the modified retrospective method and has taken the cumulative adjustment to retained earnings, on the date of initial application. Accordingly, comparatives for the year ended March 31, 2019 have not been retrospectively adjusted. On transition, the adoption of the new standard resulted in recognition of Right-of-Use asset (ROU) of `4,816 Lakhs and a lease liability of `5,052 Lakhs. The cumulative effect of applying the standard resulted in `442 Lakhs being debited to retained earnings, net of taxes.
Place: Bengaluru
Date: November 8, 2019
Vinod Kumar Padmanabhan Managing Director & CEO