SUBX.L Regulatory News (SUBX)

February 03, 2017

To

The London Stock Exchange

10 Paternoster Square

London

EC4M 7LS

Dear Sirs,

Sub: Outcome of the Board Meeting held on February 03, 2017

Please be informed that the agenda item stated hereunder was discussed and approved at the Board Meeting held on February 03, 2017 at Mumbai:

· Unaudited standalone and consolidated Financial Results of the Company for the quarter and nine months ended December 31, 2016.

Please find enclosed:

Ø The consolidated Financial Results of the Company for the quarter and nine months ended December 31, 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

Subex Limited

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, 2016

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 03, 2017.

2 The financial results of Subex Limited (Standalone Information):

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 has 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.

4 Consequent to transition from the Previous GAAP to Ind AS, the reconciliation of profit/loss after tax is provided below for the corresponding 3 months ended December 31, 2015 and year to date figures ('YTD') for the nine months ended December 31, 2015:

The FCCB holders in their respective meetings have approved the deferral of aggregate interest of US$ 0.73 Million i.e. Rs 495 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. During the previous quarter, the interest waiver has been 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 on interest on FCCBs III in accordance with the provisions of the Income Tax Act, 1961 amounting to Rs 1,025 Lakhs pertaining to FCCBs III which have been converted into equity shares of the Company. Pursuant to such conversion, the interest accrued but not due is considered no longer payable and 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 of Rs 377 Lakhs during the quarter ended December 31, 2016 ( quarter ended September 30, 2016 and December 31, 2015 amounting to Rs 250 Lakhs and Rs Nil, respectively and that for the nine months ended December 31, 2016 and December 31, 2015 amounting to Rs 832 Lakhs and Rs Nil, respectively.) 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 of Rs 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 December 31, 2016 and in view of the management, no further provision for diminution is considered necessary as at December 31, 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 December 31, 2016.

10 Employee benefits expenses for the quarters ended December 31, 2016, September 30, 2016 and December 31, 2015 is net of reversal of provision no longer required, in respect of employee incentives, amounting to Rs Nil, Rs Nil and Rs 420 Lakhs, respectively and that for the nine months ended December 31, 2016 and December 31, 2015 amounting to Rs Nil and Rs 873 Lakhs, respectively.

11 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.

12 Previous period figures have been regrouped/ reclassified, wherever necessary to confirm to current period's classification.

13 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.