SUBX.L Regulatory News (SUBX)

May 25, 2016

To

The London Stock Exchange

10 Paternoster Square

London

EC4M 7LS

Dear Sirs,

Sub: Subex Limited 'The Company'-Outcome of the Board Meeting held on May 24, 2016

Please be informed that the agenda item summarized hereunder was discussed and approved at the Board Meeting held on May 24, 2016

Ø Approval of the audited standalone and consolidated Financial Results of the Company for the year ended March 31, 2016.

 Please find hereto enclosed consolidated Financial Results of the Company.

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 Audited Results for the quarter and year ended March 31, 2016

Statement of consolidated assets and liabilities

3 (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. 56.0545/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 was 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.

(b) The Board in its meeting held on May 14, 2015 has approved the reset of conversion price of the FCCBs III, which are convertible into equity shares of the Company, from Rs. 22.79 to Rs. 13.00 per equity share. Subsequently, the reset of the conversion price has been approved by the shareholders in the annual general meeting held on June 19, 2015 and the bondholders in their meeting held on August 5, 2015. The Board in its meeting held on August 26, 2015 has approved August 26, 2015 as the effective date of reset of conversion price of Rs. 13 per share.

As a result of the aforesaid reset of conversion price, the said bonds with outstanding face value of US$ 4.55 Million as at March 31, 2016 would potentially be converted into 19,619,075 equity shares at an exchange rate of Rs. 56.0545/US$ with a conversion price of Rs. 13 per equity share. Subsequent to balance sheet date, conversion requests from the bondholders of FCCBs III amounting to US$ 0.45 Million have been received by the Company, which have been approved by the Board of Directors in the Board meeting dated April 28, 2016, and allotted 1,940,348 equity shares at an exchange rate of Rs. 56.0545/US$ with a conversion price of Rs. 13 per equity share.

(c) (i) Of the outstanding FCCBs III of US$ 91.40 Million as of July 2012, US$ 86.85 Million have been converted till the quarter and year ended March 31, 2016 as detailed below:

(d) The FCCB bond holders in their respective meetings have approved the deferral of aggregate interest of US$ 0.92 Million ( Rs. 610.48 Lakhs) in respect of outstanding FCCBs III of USD 4.55 Million for the period July 6, 2012 to January 5, 2016 till redemption date of the bonds, being July 07, 2017. Accordingly, interest on FCCBs III included under finance costs in the above results to the extent of above deferrals is due for payment on July 07, 2017.

(i)(a) Interest accrued but not due pertaining to FCCBs III converted during the current year has been written back as the same is considered no longer payable due to the conversion of FCCBs III into equity shares of the Company.

(i)(b) FCCBs III have been converted into equity shares at an exchange rate of Rs. 56.0545/US$ as per the FCCBs trust deed, as against the closing rate on the date of conversion (in the range of Rs. 60 - Rs. 66) resulting in foreign exchange gain on conversion. Further, the Foreign Currency Monetary Item Translation Difference Account ('FCMITD') balance pertaining to FCCBs III converted into equity shares, has been charged off in the statement of profit and loss for the quarter and year ended March 31, 2016 on the date of conversion.

(ii) During the quarter ended March 31, 2016, certain lenders of term loans have waived interest liability outstanding till March 26, 2016 and interest liability accruing thereafter upto August 22, 2016, pursuant to the interest waiver agreement dated March 26, 2016 subject to the fulfilment of certain conditions. Consequent to fulfilment of such conditions, the accrued interest of US$ 2.9 Million ( Rs. 1,970 Lakhs) on outstanding term loan balance of US$ 12 Million ( Rs. 7,951 Lakhs) as at March 31, 2016 has been written back, as the same is no longer payable. Further, pursuant to the aforesaid agreeement, the interest rate has been revised from the existing interest rate of 10.5% per annum to 5% per annum, effective August 22, 2016.

(iii) As at March 31, 2016, the Company has 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 has made an impairment provision of Rs. 8,870 Lakhs towards the carrying value of goodwill relating to its investment in the said subsidiary.

5 As at March 31, 2016, the Company has 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 is of the view that, the aforesaid carrying value of goodwill as at March 31, 2016 relating to its investment in the said subsidiary is appropriate.

6 Cost of hardware, software and support charges for the quarter ended March 31, 2016, December 31, 2015 and March 31, 2015 is net of reversal of provision no longer required, amounting to Rs. 213 Lakhs, Rs. Nil and Rs. Nil, respectively and that for the year ended March 31, 2016 and March 31, 2015 amounting to Rs. 386 Lakhs and Rs. Nil, respectively.

7 Employee benefits expense and sub-contract charges for the quarters ended March 31, 2016, December 31, 2015 and March 31, 2015 are net of reversal of provision no longer required, in respect of employee incentives, amounting to Rs. 192 Lakhs, Rs. 420 Lakhs, and Rs. 904 Lakhs, respectively and that for the year ended March 31, 2016 and ended March 31, 2015 amounting to Rs. 1,065 Lakhs and Rs. 1,191 Lakhs, respectively.

8 Other expenditure for the quarter ended March 31, 2016, December 31, 2015 and March 31, 2015 is net of reversal of provision no longer required, in respect of commission on sales, amounting to Rs. 68 Lakhs, Rs. 146 Lakhs and Rs. Nil, respectively and that for the year ended March 31, 2016 and March 31, 2015 amounting to Rs. 214 Lakhs, and Rs. Nil, respectively.

9 Pursuant to the approval of the Board of Directors, the Group has discontinued the operations of two of its subsidiaries with effect from April 01, 2013. The details of unaudited/audited results of the discontinued businesses consolidated in the above results are as follows:

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

11 The figures of last quarter of current and previous years are the balancing figures between the audited figures in respect of the full financial years and the published unaudited year to date figures for nine months of respective years.

12 The figures for the previous period/ year up to March 31, 2015 were audited/ reviewed by a firm of Chartered Accountants other than S.R. Batliboi & Associates LLP. Previous period/year figures have been regrouped/ reclassified, wherever necessary to confirm to current period's/ year'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.