3rd Quarter Results

SUBEX LTD

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 2014

PART - I

(Rs in Lakhs except as per share data)

CONSOLIDATED

Particulars

3 months ended

Preceding 3months ended

Corresponding3 months ended

For the nine months ended

For the nine months ended

Previous Year ended

31/12/2014

30/09/2014

31/12/2013

31/12/2014

31/12/2013

31/03/2014

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

1

Income From Operations

Net Sales/ Income From Operations

9,199

9,050

9,144

24,767

25,464

34,005

Total Income From Operations (Net)

9,199

9,050

9,144

24,767

25,464

34,005

2

Expenses

(a)

Cost of Hardware, Software & Services

231

494

202

856

670

956

(b)

Employee Benefits Expense and Sub-contract Charges

4,452

4279

4,544

12,937

13,512

17,929

(c)

Other Expenditure

1,987

1927

1,753

5,686

5,031

6,893

(d)

Depreciation and Amortisation Expense

86

101

60

309

186

248

(e)

Exchange Fluctuation (Gain)/Loss-Net

48

(343)

1,379

438

593

1,677

Total Expenses

6,804

6,458

7,938

20,226

19,992

27,703

3

Profit From Operations before Other Income, Finance Costs and Exceptional Items (1-2)

2,395

2,592

1,206

4,541

5,472

6,302

4

Other Income

25

1

3

37

50

450

5

Profit From Ordinary Activities before Finance Costs and Exceptional Items (3+4)

2,420

2,593

1,209

4,578

5,522

6,752

6

Finance Costs

(a)

Interest on FCCB (Refer Note 5c)

818

850

896

2,514

2,536

3,422

(b)

Interest on Term Loan (Refer Note 8)

220

214

215

631

620

840

(c)

Other Borrowing Cost

478

473

651

1,466

1,928

2,486

7

Profit / (Loss) From Ordinary Activities after Finance Costs but before Exceptional Items (5+6)

904

1,056

(553)

(33)

438

4

8

Exceptional Items (Net Expense) (Refer Note 2)

-

-

-

-

-

220

9

Profit / (Loss) From Ordinary activities before Tax (7+8)

904

1,056

(553)

(33)

438

(216)

10

Tax Expense (Net)

230

94

291

391

384

945

11

 Net Profit / (Loss) From Ordinary Activities after Tax (9+10) 

674

962

(844)

(424)

54

(1,161)

Particulars

3 months ended

Preceding 3months ended

Corresponding3 months ended

For the nine months ended

For the nine months ended

Previous Year ended

31/12/2014

30/09/2014

31/12/2013

31/12/2014

31/12/2013

31/03/2014

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

12

Paid up Share Capital

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

17,476

16,910

16,664

17,476

16,664

16,664

13

Reserve excluding Revaluation Reserves as per balance sheet of previous accounting year

698

14

Earnings/(Loss) per share (of Rs. 10/- each) (not annualised in case of the interim periods):

Basic

0.40

0.57

(0.51)

(0.25)

0.03

(0.70)

Diluted

0.40

0.57

(0.51)

(0.25)

0.03

(0.70)

PART - II

A

PARTICULARS OF SHAREHOLDING

1

Aggregate of Public shareholding:*

Number of shares (Refer note 5(b))

169,481,066

163,882,320

158,366,608

169,481,066

158,366,608

158,366,608

Percentage of holding (to total shareholding)

99.29%

96.92%

95.04%

99.29%

95.04%

95.04%

2

Promoters and promoter group (Refer Note 10)

Shareholding

a) Pledged/Encumbered

- Number of shares

974,044

4,974,044

6,474,044

974,044

6,474,044

6,474,044

- Percentage of shares (as a % of the total shareholding of

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

 promoter and promoter group)

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

0.56%

2.94%

3.89%

0.56%

3.89%

3.89%

 company)

 b) Non-encumbered

- Number of Shares

-

-

-

-

-

-

- Percentage of shares (as a% of the total shareholding of

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

promoter and promoter group)

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

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

company)

* Total public shareholding as defined under clause 40A of the listing agreement (excludes underlying shares for GDRs)

Global Depository Reciepts

3 months ended 31/12/2014

Preceding 3months ended 30/09/2014

Corresponding3 months ended 31/12/2013

For the nine months ended 31/12/2014

For the nine months ended 31/12/2013

Previous Year ended 31/03/2014

- Number of underlying Equity Shares

243,207

243,207

1,799,310

243,207

1,799,310

1,799,310

- Percentage of Share Holding

0.14%

0.14%

1.08%

0.14%

1.08%

1.08%

Particulars

3 months ended 31/12/2014

B

INVESTOR COMPLAINTS

Pending at the beginning of the quarter

Nil

Received during the quarter

Nil

Disposed off during the quarter

Nil

Remaining unresolved at the end of the quarter

Nil

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 3, 2015. The Statutory Auditors have carried out a 'Limited Review' of the same.

2

Exceptional items comprise -

(Rs. in Lakhs)

Particulars

3 months ended 31/12/2014

Preceding 3months ended 30/09/2014

Corresponding3 months ended 31/12/2013

For the nine months ended 31/12/2014

For the nine months ended 31/12/2013

Previous Year ended 31/03/2014

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Exceptional Provision for Doubtful trade and other receivables#

-

-

-

-

-

220

TOTAL

-

-

-

-

-

220

#Represents provisions relating to Services Segment discontinued with effect from 01.04.2013

3

Summary of key standalone financial results is as follows:

(Rs. in Lakhs)

Particulars

3 months ended 31/12/2014

Preceding 3months ended 30/09/2014

Corresponding3 months ended 31/12/2013

For the nine months ended 31/12/2014

For the nine months ended 31/12/2013

Previous Year ended 31/03/2014

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Net Sales/ Income from Operations

7,845

7,754

8,203

21,041

22,027

29,367

Loss from ordinary activities before tax

(445)

(492)

(671)

(2,956)

(492)

(2,806)

Loss from ordinary activities after tax

(512)

(521)

(799)

(3,061)

(272)

(2,953)

4

As permitted under the Proposal approved by the Hon'ble High Court of Karnataka, which was given effect in the year ended March 31, 2010, the Company transferred certain amounts standing to the credit of Capital Reserve to the Business Restructuring Reserve (BRR) and utilised the same for permitted utilisations as under. Had the Proposal not provided for the above accounting treatment :

(Rs. in Lakhs except as per share data)

Particulars

3 months ended 31/12/2014

Preceding 3months ended 30/09/2014

Corresponding3 months ended 31/12/2013

For the nine months ended 31/12/2014

For the nine months ended 31/12/2013

Previous Year ended 31/03/2014

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Other Expenditure would have been higher by

-

-

-

-

81

81

Net (loss) / profit would have been (higher) / lower by

-

-

-

-

(81)

(81)

Earnings / ( Loss) per share would have been

 -Basic

0.40

0.57

(0.51)

(0.25)

(0.02)

(0.75)

 - Diluted

0.40

0.57

(0.51)

(0.25)

(0.02)

(0.75)

5(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. 56.06/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 were 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.

5(b)

The face value of FCCB's outstanding as on December 31, 2014 are as follows :

Particulars

US$ Million

Rs. in Lakhs

FCCB I

1.00

630

FCCB II

1.40

883

FCCB III

84.85

53,485

Total

87.25

54,998

Of the outstanding FCCB's III of US$ 91.4 Million, during the year 2012-13, the quarter ended June 30, 2014 and the quarter ended December 31,2014, FCCB's III with a face value of US$ 3.25 Million, US$ 1 Million and US$ 2.3 Million respectively, were converted resulting in issuance of 79,93,931, 24,59,609 and 5,657,101 equity shares, respectively.The conversion of the outstanding FCCB III of the face value of US$ 84.85 Million would result in issuance of 208,697,824 number of shares. Subsequent to the period ended December 31, 2014 the company has received an intimation for the conversion of FCCB's III of US$ 2.67 Million, which would result in issuance of 6,567,156 shares, leaving an outstanding FCCB III bond face value of USD 82.18 Million as of date.

5(c)

At the bond holders meetings held on January 04, 2013 , January 03, 2014 and July 04, 2014 , gross interest on FCCB's III for the periods from July 2012- June 2013 , July 2013- December 2013, January 2014- June 2014 and July 2014 -January 2015 amounting to US$ 5.60 Million , US$ 2.85 Million, $ 2.82 Million and $2.83 Million respectively, aggregating to US $ 11.27 Million (Rs. 7,856 Lakhs) was deferred till redemption date of the said bonds, being July 07, 2017. Accordingly, interest on FCCBs III included under finance costs in the above results and as furnished here under is due for payment on July 07, 2017.

(Rs. In Lakhs)

Particulars

3 Months ended

Preceding 3months ended

Corresponding3 months ended

For the nine months ended

For the nine months ended

Previous Year ended

31/12/2014

30/09/2014

31/12/2013

31/12/2014

31/12/2013

31/03/2014

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Interest on FCCBs III

812

831

843

2,481

2,525

3,006

6

During the year ended March 31, 2014 , the Company had assessed the carrying value of goodwill arising from its investment in its subsidiary viz. Subex Americas Inc., amounting to Rs.18,606 Lakhs. Based on the management's assessment, there was no impairment of such goodwill taking into account the future operational plans and cash flows as prepared by the management and accordingly, no impairment loss was required to be recognized. The Company anticipates achieving its projections by March 31, 2015, and accordingly no provision is considered necessary as at Dec 31, 2014. This is a 'matter of emphasis' in the Limited Review Report of the Statutory Auditors on the Unaudited Consolidated Results.

7

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

8

Interest on term loan includes the below interest which is due to be paid in August 21,2016:

(Rs. In Lakhs)

Particulars

3 months ended

Preceding 3months ended

Corresponding3 months ended

For the nine months ended

For the nine months ended

Previous Year ended

31/12/2014

30/09/2014

31/12/2013

31/12/2014

31/12/2013

31/03/2014

Interest on Term Loan

124

67

108

354

317

408

9

Consequent to the applicability of the relevant provisions of the Companies Act, 2013, the Company has reassessed the useful lives of all the assets. This has resulted in change in the useful life of Computers and related equipment compared to the previous estimates. On account of the above, the depreciation for the nine months and quarter ended December 31, 2014 is higher by Rs.108 Lakhs and Rs. 16 Lakhs respectively. As per provision of Part C of Schedule II of the Companies Act, 2013 an amount of Rs. 9 Lakhs has been debited to the opening balance of the retained earnings as at April 01, 2014 towards the carrying amount of assets, where the remaining useful life of these assets is Nil.

10

Details of Promoters and promoter group shareholding is as per reports furnished by the Registrar and Transfer Agents of the Company.

11

Previous period / year figures have been re-grouped and/or re-arranged to confirm with the current period.

12

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.subex.com.

By Order of the Board

Mumbai

Date: 3rd February, 2015

Surjeet Singh

Managing Director & CEO

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