12 May 2020 07:31
May 12, 2020
To
The London Stock Exchange
10 Paternoster Square
London
EC4M 7LS
Dear Sir/Madam,
Sub: Subex Limited "The Company"-Outcome of the Board Meeting held on May 11, 2020
Please be informed that the agenda items summarized hereunder were discussed and approved at the Board Meeting held today at Bengaluru:
1. Approval of the Audited consolidated Financial Results of the Company for the quarter and year ended March 31, 2020.
2. Approval of the Audited consolidated Financial Statements of the Company for the year ended March 31, 2020.
3. Re-Appointment of Mr. Anil Singhvi as Non-Executive, Non-Independent Director of the Company with effect from June 18, 2020, subject to the approval of the members at the ensuing Annual General Meeting.
4. Re-appointment of S.R. Batliboi & Associates, LLP, Chartered Accountants, (FRN 101049W/E300004) as Statutory Auditors of the Company for a period of 5 years from the conclusion of the ensuing 26th Annual General Meeting until the conclusion of the 31st Annual General Meeting, subject to the approval of the members at the ensuing Annual General Meeting.
5. Appointment of RSM Astute Consulting Pvt. Ltd as Internal Auditors of the Company for period ending March 31, 2021.
6. Extension of date of change in RTA from May 31, 2020 to July 31, 2020.
7. Conference Call Invite: In terms of Regulation 30 of the SEBI (LODR) Regulations, 2015, the Management will host a conference call on Tuesday, May 12, 2020 at 4.00 PM (IST)
Please find enclosed:
a) The Audited consolidated Financial Results and Statements of the Company for the quarter and year ended March 31, 2020.
We request you to take the aforesaid notification on record.
Thanking you
Yours truly,
For Subex Limited
Vinod Kumar Padmanabhan
Managing Director & CEO
DIN: 06563872
SUBEX LIMITED
Registered office: RMZ Ecoworld, Outer Ring Road, Devarabisanahalli, Bangalore - 560 103Statement of Audited Consolidated Financial Results for the quarter and year ended March 31, 2020
(`in lakhs)
|
| Quarter ended | Year ended | |||
| Particulars | March 31, 2020 | December 31, 2019 | March 31, 2019 | March 31, 2020 | March 31, 2019 |
|
| Audited | Unaudited | Audited | Audited | Audited |
|
| (Refer note 14) |
| (Refer note 14) |
|
|
| Income |
|
|
|
|
|
1 | Revenue from operations | 10,427 | 9,609 | 10,187 | 36,498 | 34,812 |
2 | Other income | 335 | 52 | 40 | 563 | 101 |
3 | Total income (1+2) | 10,762 | 9,661 | 10,227 | 37,061 | 34,913 |
| Expenses Employee benefits expense (Refer note 4) | 4,152 | 4,556 | 4,875 | 17,454 | 19,105 |
| Finance costs | 139 | 133 | 54 | 564 | 216 |
| Depreciation and amortisation expense | 392 | 367 | 138 | 1,508 | 483 |
| Exchange fluctuation (gain)/ loss, net | (848) | 512 | 512 | (887) | (171) |
| Other expenses | 3,277 | 2,750 | 2,618 | 10,426 | 10,572 |
4 | Total expenses | 7,112 | 8,318 | 8,197 | 29,065 | 30,205 |
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|
|
|
|
|
5 | Profit before exceptional items and tax expense (3-4) | 3,650 | 1,343 | 2,030 | 7,996 | 4,708 |
| Exceptional items |
|
|
|
|
|
| Impairment of goodwill [Refer note 5(i)] | - | (31,473) | - | (31,473) | - |
| Provision no longer required written back | - | 761 | - | 761 | - |
| Provision for claim settlement [Refer note 5(ii)] | - | (1,054) | - | (1,054) | - |
6 | Total exceptional items | - | (31,766) | - | (31,766) | - |
|
|
|
|
|
|
|
7 | Net profit/ (loss) before tax expense (5-6) | 3,650 | (30,423) | 2,030 | (23,770) | 4,708 |
8 | Tax expense, net |
|
|
|
|
|
| Current tax charge | 35 | 80 | 98 | 117 | 274 |
| Provision for MAT credit [Refer note 6 (i)] | 425 | - | - | 425 | - |
| Provision - foreign withholding taxes [Refer note 6 (ii)] | 105 | 163 | 240 | 754 | 885 |
| Deferred tax (credit)/ charge (Refer note 7) | (114) | 606 | 402 | 1,849 | 1,027 |
| Total tax expense | 451 | 849 | 740 | 3,145 | 2,186 |
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|
|
|
|
|
9 | Net profit/ (loss) for the period/ year (7-8) | 3,199 | (31,272) | 1,290 | (26,915) | 2,522 |
10 | Other comprehensive income, net of tax expense |
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|
|
|
|
| Items that will be reclassified subsequently to profit or loss: |
|
|
|
|
|
| Net exchange differences (loss)/ gain on translation of foreign operations | (200) | 595 | 118 | 5 | (390) |
| Items that will not be reclassified subsequently to profit or loss: |
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|
|
|
|
| Re-measurement gain/ (loss) on defined benefits plan | 21 | (20) | 6 | (34) | (38) |
| Total other comprehensive income | (179) | 575 | 124 | (29) | (428) |
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|
|
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11 | Total comprehensive income for the period/ year (9+10) | 3,020 | (30,697) | 1,414 | (26,944) | 2,094 |
12 | Paid up equity share capital [face value of X 10 (March 31, 2019: X 10)] | 56,200 | 56,200 | 56,200 | 56,200 | 56,200 |
13 | Other equity | - | - | - | (4,661) | 23,210 |
14 | Earnings/ (loss) per share (of X 10/- each) (not annualised in case of the interim periods) |
|
|
|
|
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| - Basic | 0.59 | (5.77) | 0.23 | (4.94) | 0.45 |
| - Diluted | 0.59 | (5.77) | 0.23 | (4.94) | 0.45 |
|
SUBEX LIMITED
Registered office: RMZ Ecoworld, Outer Ring Road, Devarabisanahalli, Bangalore - 560 103Statement of Consolidated Assets and Liabilities
(`in lakhs)
|
| As at | |
| Particulars | March 31, 2020 | March 31, 2019 |
|
| Audited | Audited |
A | ASSETS |
|
|
| Non-current assets |
|
|
| Property, plant and equipment | 434 | 540 |
| Right-of-use assets | 4,424 | - |
| Goodwill on consolidation | 34,409 | 65,882 |
| Other intangible assets Financial assets | 3 | 7 |
| Loans | 533 | 503 |
| Other balances with banks | 189 | 420 |
| Other financial assets | - | 234 |
| Income tax asset (net) | 3,305 | 3,039 |
| Deferred tax asset (including MAT credit entitlement) | 262 | 624 |
| Other non-current assets | 267 | 478 |
|
| 43,826 | 71,727 |
| Current assets |
|
|
| Financial assets |
|
|
| Loans | 104 | 121 |
| Trade receivables | 9,206 | 8,539 |
| Cash and cash equivalents | 9,043 | 3,947 |
| Other balances with banks | 67 | 252 |
| Other financial assets | 5,264 | 4,537 |
| Other current assets | 588 | 526 |
|
| 24,272 | 17,922 |
|
|
|
|
| Total Assets | 68,098 | 89,649 |
B | EQUITY AND LIABILITIES |
|
|
| Equity |
|
|
| Equity share capital | 56,200 | 56,200 |
| Other equity | (4,661) | 23,210 |
| Total equity | 51,539 | 79,410 |
| Liabilities |
|
|
| Non-current liabilities |
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|
| Financial liabilities |
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| Lease Liabilities | 3,458 | - |
| Provisions | 355 | 305 |
| Deferred tax liabilities(net) | 3,774 | 1,928 |
|
| 7,587 | 2,233 |
| Current liabilities |
|
|
| Financial liabilities |
|
|
| Lease Liabilities Trade payable | 1,409 | - |
| - total outstanding dues of micro enterprises and small enterprises | 41 | 7 |
| - total outstanding dues of creditors other than micro enterprises and small enterprises | 1,605 | 827 |
| Other financial liabilities | 2,212 | 2,961 |
| Other current liabilities | 2,342 | 2,452 |
| Provisions | 649 | 729 |
| Income tax liabilities (net) | 714 | 1,030 |
|
| 8,972 | 8,006 |
|
|
|
|
| Total liabilities | 16,559 | 10,239 |
|
|
|
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| Total equity and liabilities | 68,098 | 89,649 |
|
SUBEX LIMITED
Statement of cash flows for the year ended March 31, 2020
(`in lakhs)
|
| Year ended | |
| Particulars | March 31, 2020 | March 31, 2019 |
|
| Audited | Audited |
(A) | Operating activities |
|
|
| Profit/ (loss) before tax expense Adjustments to reconcile profit/ (loss) before tax expense to net cash flows: | (23,770) | 4,708 |
| Depreciation of property, plant and equipment and right-of-use assets | 1,503 | 427 |
| Amortization of intangible assets | 5 | 56 |
| Gain on disposal of property, plant and equipment (net) | - | (3) |
| Interest income (including fair value changes) | (156) | (75) |
| Finance costs (including fair value changes) | 564 | 216 |
| Allowance for expected credit losses | 289 | 459 |
| Expense on share based payment | 101 | 16 |
| Amortized cost of deposits | - | 59 |
| Write-off of deposits Gain on modification of leases | (6) | 7 |
| Provision no longer required written back | (761) | - |
| Advance recoverable written-off | 234 | - |
| Impairment of goodwill | 31,473 | - |
| Net foreign exchange differences | (744) | (328) |
| Operating profit before working capital changes | 8,732 | 5,542 |
| Working capital adjustments: |
|
|
| (Increase)/ decrease in loans | 52 | (10) |
| (Increase)/ decrease in trade receivables | (181) | 554 |
| (Increase)/ decrease in other financial assets | (718) | 391 |
| (Increase)/ decrease in other assets | (2) | 27 |
| Increase/ (decrease) in trade payables | 643 | (489) |
| Increase/ (decrease) in other financial liabilities | (669) | 1,358 |
| Increase/ (decrease) in other current liabilities | 328 | (844) |
| Increase/ (decrease) in provisions | (17) | (27) |
|
| 8,168 | 6,502 |
| Income tax paid (including TDS, net of refund) | (1,457) | (1,044) |
| Net cash flows from operating activities | 6,711 | 5,458 |
(B) | Investing activities Purchase of property, plant and equipment | (353) | (235) |
| Proceeds from sale of property, plant and equipment | - | 11 |
| Movement in margin money deposit (net) | 426 | (296) |
| Purchase of treasury shares by ESOP trust | (611) | (645) |
| Interest received | 108 | 25 |
| Net cash flows used in investing activities | (430) | (1,140) |
(C) | Financing activities |
|
|
| Proceeds from exercise of ESOP Repayment in working capital loans (net) | 25 | (3,215) |
| Interest paid | (539) | (191) |
| Repayment of lease liability | (907) | - |
| Net cash flows used in financing activities | (1,421) | (3,406) |
|
|
|
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(D) | Net increase in cash and cash equivalents (A+B+C) | 4,860 | 912 |
| Net foreign exchange difference on cash and cash equivalents | 236 | 28 |
| Cash and cash equivalents at the beginning of the year | 3,947 | 3,007 |
(E) | Cash and cash equivalents at the end of the year | 9,043 | 3,947 |
|
Notes:
The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on May 11, 2020.
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.
Particulars | Quarter ended | Year ended | |||
March 31, 2020 | December 31, 2019 | March 31, 2019 | March 31, 2020 | March 31, 2019 | |
Audited | Unaudited | Audited | Audited | Audited | |
| (Refer note 14) |
| (Refer note 14) |
|
|
Total income | 2,727 | 289 | 611 | 3,170 | 1,926 |
Net profit/ (loss) before tax expense | 2,217 | (21,913) | (148) | (20,470) | (2,455) |
Net profit/ (loss) for the period/ year | 2,099 | (21,913) | (145) | (20,588) | (2,453) |
Total comprehensive income for the period/ year | 2,082 | (21,915) | (141) | (20,609) | (2,456) |
The financial results of Subex Limited (Standalone information): (`in lakhs) |
Employee benefits expenses for the quarters ended March31, 2020, December 31, 2019, and March 31, 2019 are net of reversal of provision no longer required, in respect of employee incentives relating to sales and delivery commissions, amounting to ` 678 Lakhs , ` 149 Lakhs and ` 24 Lakhs, respectively, and that for the year ended March 31, 2020 and March 31, 2019 amounting to `692 Lakhs and ` 77 Lakhs, respectively.
(i) During the previous quarter ended December 31, 2019, considering the challenges and significant investment requirements of telecom operators which has resulted in longer opportunity conversion cycle and lower spends towards IT solutions, the management had carried out the annual impairment exercise in respect of carrying value of goodwill and basis valuation carried out by an external valuation expert, had made an impairment provision of ` 31,473 Lakhs towards carrying value of goodwill as at December 31, 2019. In view of the COVID -19 pandemic, the management has reassessed its projections and assumptions and has concluded that, the carrying value of goodwill of ` 34,409 Lakhs as at March 31, 2020 is appropriate.
(ii) On January 23, 2020, the Company had entered into settlement agreement with former MD & CEO and former COO of the company in respect of long drawn litigation wherein certain claims were made against the Company. In terms of the settlement agreement, the Company has paid an amount of ` 820 lakhs (net of ` 234 Lakhs recoverable from such ex-employees). Accordingly, the aforesaid litigation is amicably settled.
(i) During the quarter ended March 31, 2020, the MAT credit entitlement of ` 425 Lakhs has been provided for considering the uncertainity as regards to its utilisation.
(ii) Represents provision in respect of withholding taxes deducted/ deductible by the overseas customers of the Group, which is net of reversal of ` 308 Lakhs considered no longer necessary on account of favourable assessment order received during the quarter allowing foreign tax credit in respect of AY 2016-17.
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. The liability for the quarter ended March 31, 2020 in respect of tax benefits from amortisation of intangibles is net of provision no longer considered necessary amounting to `1,014 Lakhs considering the favourable assessment order in respect of AY 2016-17 with respect to foreign tax credit allowance.
The Board of Directors in its meeting held on February 07, 2020, has approved a scheme of Capital Reduction in accordance with Section 52 of the Companies Act, 2013 and Section 66 of the Companies Act, 2013 read with National Company Law Tribunal ('NCLT') (Procedure for reduction of share capital of Company) Rules, 2016 and other applicable provisions of the Companies Act, 2013. Subject to the consent of the Shareholders and the approval from NCLT and other statutory authorities as and where applicable, the Accumulated Losses of ` 38,401 Lakhs as at December 31, 2019 shall be written off against the paid-up share capital of the Company for an amount of ` 28,100 Lakhs by reducing the face value of the equity shares from `10/- to `5/- each and Securities Premium Account balance for an amount of ` 10,301 Lakhs.
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.
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.
On February 13, 2020, Subex Assurance LLP, a subsidiary of Subex Limited, has set up a new entity in Bangladesh viz. Subex Bangladesh Private Limited. The said subsidiary holds 100% of the shares of Subex Bangladesh Private Limited.
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.
The Group has considered internal and certain external sources of information including economic forecasts, budgets required to meet performance obligations and likely delays on contractual commitments, upto the date of approval of these consolidated financial results, in determining the possible impact from the COVID-19 pandemic. The Group has used the principles of prudence in applying judgements, estimates and assumptions and based on the current estimates, the Group expects to fully recover the carrying amount of it's assets. The impact of the global health pandemic may be different from that estimated as at the date of approval of these consolidated financial results and the Group will continue to closely monitor any material changes to its assessment of economic impact of COVID- 19 pandemic.
14. The figures of last quarter of current year and previous year are the balancing figures between the audited figures in respect of the full financial year and the published unaudited year to date figures for the nine months of the respective year.
Vinod Kumar Padmanabhan Managing Director & CEO
For further details on the results, please visit our website: www.subex.com