2nd quarter results

SUBEX LTD

Registered office: Adarsh Tech Park, Outer Ring Road, Devarabisanahalli, Bangalore - 560 037

Unaudited Financial Results for the Quarter ended September 30, 2011 - CONSOLIDATED

(Rs. In Millions except per share data)

Quarter Ended

Half Year Ended

For the year Ended

30th September

30th September

31st March

2011

2010

2011

2010

2011

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Sales - Product & Product related

1,170.30

1,067.18

2,159.29

2,081.55

4,181.18

- Services

111.28

167.88

225.04

340.99

646.32

Net Sales

1,281.58

1,235.06

2,384.33

2,422.54

4,827.50

Other Operating Income (Refer Note 3)

7.35

12.55

74.11

51.31

98.42

Income from Operations

1,288.93

1,247.61

2,458.44

2,473.85

4,925.92

Expenditure

- Cost of Hardware, Software & Services

29.74

19.05

45.89

39.74

79.66

- Personnel Cost

688.39

674.11

1,347.45

1,356.16

2,615.24

- Other Expenditure

198.07

213.91

420.42

411.60

819.85

- Total

916.20

907.07

1,813.76

1,807.50

3,514.75

Profit / (Loss) before Interest, Taxes, Depreciation & amortisation and Exceptional items

372.73

340.54

644.68

666.35

1,411.17

- Depreciation and amortisation

20.92

27.51

41.88

53.93

104.50

Profit / (Loss) from Operations before Other Income, Interest, Taxes and Exceptional items

351.81

313.03

602.80

612.42

1,306.67

- Interest (Net)

106.59

103.66

209.73

219.85

424.21

Profit / (Loss) after Interest before Exceptional items & Tax

245.22

209.37

393.07

392.57

882.46

 Exceptional Items (Net)

 (378.20)

111.17

 (387.53)

 (33.96)

 (50.48)

Profit / (Loss) Before Tax

 (132.98)

320.54

5.54

358.61

831.98

Taxes

 (3.45)

13.34

2.80

26.19

44.19

Net Profit / (Loss) for the Period/Year

 (129.53)

307.20

2.74

332.42

787.79

Paid up Share Capital

693.11

651.82

693.11

651.82

693.10

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

Earnings per share - Basic - (Rs. Per share)

 (1.87)

4.92

0.04

5.52

12.47

Earnings per share - Diluted - (Rs. Per share)

 (1.87)

1.92

0.04

3.94

8.62

Aggregate of Public shareholding:*

Number of shares

52,074,405

47,888,210

52,074,405

47,888,210

52,016,189

Percentage of holding (to total shareholding)

75.13%

73.47%

75.13%

73.47%

75.05%

Promoters and promoter group

Shareholding

a) Pledged/Encumbered

- Number of shares

6,601,801

6,601,801

6,601,801

6,601,801

6,601,801

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

81.49%

81.49%

81.49%

81.49%

81.49%

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

9.52%

10.13%

9.52%

10.13%

9.53%

 b) Non-encumbered

- Number of Shares

1,500,000

1,500,000

1,500,000

1,500,000

1,500,000

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

18.51%

18.51%

18.51%

18.51%

18.51%

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

2.16%

2.30%

2.16%

2.30%

2.16%

* Total public shareholding as defined under clause 40A of the listing agreement (excludes shares held by founders and GDR holders)

SEGMENTAL REPORTING:

Consolidated

Quarter Ended

Half Year Ended

For the year Ended

30th September

30th September

31st March

2011

2010

2011

2010

2011

Unaudited

Unaudited

Unaudited

Unaudited

Audited

1. Segmental Revenue:

a. Products & Product related

1,170.30

1,067.18

2,159.29

2,081.55

4,181.18

b. Services

111.28

167.88

225.04

340.99

646.32

1,281.58

1,235.06

2,384.33

2,422.54

4,827.50

2. Segmental Profit/(Loss) before tax, interest & exceptional Items

a. Products & Product related

360.91

317.60

626.12

618.19

1,296.29

b. Services

 (9.10)

 (4.57)

 (23.32)

 (5.77)

10.38

351.81

313.03

602.80

612.42

1,306.67

Less: Interest (Net)

106.59

103.66

209.73

219.85

424.21

Add / (Less) : Other Unallocable Income/(Expenditure)& Exceptional items [Net]

 (378.20)

111.17

 (387.53)

 (33.96)

 (50.48)

Profit Before Taxation

 (132.98)

320.54

5.54

358.61

831.98

3. Details of Capital Employed

a. Products & Product related

Segment Assets

10,329.15

11,851.45

10,329.15

11,851.45

10,353.30

Segment Liabilities

1,578.43

1,859.52

1,578.43

1,859.52

1,779.80

b. Services

Segment Assets

130.32

325.55

130.32

325.55

155.51

Segment Liabilities

23.64

41.60

23.64

41.60

36.22

STATEMENT OF ASSETS AND LIABILITIES

Particulars

As at 30th September

As at 31st March

2011

2010

2011

Unaudited

Unaudited

Audited

SHAREHOLDERS FUND:

1,496.19

3,430.42

2,094.20

(a) Capital

693.11

651.82

693.10

(b) Employee Stock Option Outstanding

61.42

60.27

63.17

(c) Reserves and Surplus

741.66

2,718.33

1,337.93

LOAN FUNDS

5,842.87

5,933.40

5,457.12

DEFERRED TAX LIABILITY

-

0.93

0.89

TOTAL

7,339.06

9,364.75

7,552.21

FIXED ASSETS

98.54

164.19

130.38

GOODWILL

8,656.89

10,366.36

8,656.89

DEFERRED TAX ASSET

12.86

12.21

12.18

CURRENT ASSETS, LOANS AND ADVANCES

1,955.03

1,855.44

1,941.24

(a) Sundry Debtors

503.25

569.39

605.42

(b) Cash and Bank balances

59.11

51.06

41.07

(c) Other current assets

837.56

697.50

817.16

(d) Loans and Advances

555.11

537.49

477.59

Less: Current Liabilities and Provisions

3,384.26

3,033.45

3,188.48

(a) Liabilities

1,295.93

1,288.80

1,344.58

(b) Provisions

2,088.33

1,744.65

1,843.90

MISCELLANEOUS EXPENDITURE (NOT WRITTEN OFF OR ADJUSTED)

-

-

PROFIT AND LOSS ACCOUNT

-

-

TOTAL

7,339.06

9,364.75

7,552.21

Notes :

1. The above results were taken on record and approved by the Board of Directors in their meeting held on 31st October 2011.

2. The corresponding previous quarter/period figures have been re-grouped and/or re-arranged to conform with the current quarter/period.

3. Other Operating Income includes USD 0.7 Million (Rs. 32.79 Million), accrued and received during the previous quarter towards settlement of claims from an insurance company relating to matters under litigation with a customer.

4. Exceptional items comprise (a) Exchange differences arising on restatement of Foreign Currency Convertible Bonds (b) Exchange differences arising on restatement/settlement of intra group foreign currency loans and advances (c) Gain on Sale of Assets pertaining to Activation business during the quarter net of resultant ancillary costs (Refer Note 11 below) and (d) Managerial Remuneration of earlier years charged off during the year ended March 31, 2011 on approval from the Central Government.

5. During the Quarter ended September 30, 2011, the company has granted 162,500 options under its ESOP 2005 scheme.

6. Information on Investor complaints pursuant to Clause 41 of the Listing Agreement for the Quarter ended September 30, 2011 :

Opening Balance - Nil, Received - 1, Attended - 1, Closing Balance - Nil

7. Summary of Key Standalone Financial results is as follows -

Particulars

Quarter Ended

Half Year Ended

Year Ended

30th September

30th September

31st March

2011

2010

2011

2010

2011

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Turnover

785.43

734.08

1,550.21

1,612.89

3,135.53

Profit Before Tax

 (295.36)

254.18

 (235.14)

401.21

725.71

Profit After Tax

 (295.36)

252.19

 (246.14)

399.22

715.09

8. The Company has outstanding foreign currency convertible bonds (FCCBs) face value of USD 93.8 Million (Rs. 4,593.86 Million) that are redeemable in March 2012 along with premium, if not converted earlier. The Company is pursuing various options not limiting to fund raising in the form of debt or equity, or a mix of both, and negotiations with the current lenders, to meet any potential FCCB debt obligations that arise in March 2012. The Company firmly believes that, with a combination of its internal cash accruals in the current financial year and on achieving successful closure on these options in the coming months, it would be able to meet all repayment obligations.

9. As permitted under the Proposal approved by the Hon'ble High court of Karnataka, the company during the year ended March 31, 2011, transferred certain amounts standing to the credit of Securities Premium and Capital Reserve to the Business Restructuring Reserve and utilised the same for permitted utilisations to the extent of Rs. 1,830.37 Million. Had the Proposal not provided for the above accounting treatment:- Other Expenditure and the loss under Exceptional Items for the year ended March 31, 2011 would have been higher by Rs. 100 Million and Rs 1,730.37 Million respectively;

- Net Profit for the year ended March 31, 2011 would have been lower by Rs. 1,830.37 Million; and

- Basic and Diluted (Loss) per share for the year ended March 31, 2011 would have been Rs. (16.50).

10. 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.subexworld.com.

11. During the Quarter, the company had entered into an Asset purchase agreement for sale of assets and liabilities pertaining to its Activation business, which resulted in a net profit of USD 0.12 Million (Rs. 5.62 Million) after considering resultant ancillary costs. In the half year ended September 30, 2011, the revenue from this business was not significant and had negative margins from its operations.

Certain statements in this release concerning our performance may be forward looking statements which involve risks and uncertainties that could cause actual results to vary materially from those in such statements. These risks and uncertainties include, and are not limited to, fluctuations in earnings, intense competition and success of investments.

By Order of the Board

Bangalore

 Subash Menon

31st October, 2011

Founder Chairman, Managing Director & CEO

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