Subex Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2018
Auditor and Management Disclosures and Notes for the annual results dated 31 Mar 2018
1. The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on May 4, 2018.
2. 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 and SFBI Circular No. C1R/CFD/FAC/62/2016 dated July 5, 2016.
3. The Company, vide agreement dated June 7, 2017, purchased Intellectual Property Rights ("IPR"), pertaining to its Network Analytics portfolio from its subsidiary Subex Americas Inc., for a purchase consideration of US$ 9.4 Million (7 6,078 Lakhs) based on valuation carried out by an external valuer. The aforesaid acquisition would enable the Company to consolidate the Intellectual Property Rights embedded in various software products, which would enhance the product offering portfolio of the Company.
4. The Board of Directors of the Company in its meeting held on August 21, 2017 approved the restructuring of the Company's business by way of transfer of its Revenue Maximization Solutions and related businesses ("RMS business") and the Subex Secure and Analytics solutions and related businesses ("Digital business") to its subsidiaries, Subex Assurance LLP and Subex Digital LLP (together referred to as "LLPs"), respectively, hereinafter referred to as the "Restructuring", subject to shareholders and other requisite approvals, to achieve amongst other aspects, segregation of the Company's business into separate verticals to facilitate greater focus on each business vertical, higher operational efficiencies, and to enhance the Company's ability to enter into business specific partnerships and attract strategic investors at respective business levels, with an overall objective of enhancing shareholder value.
The shareholders of the Company approved the Restructuring by way of special resolution passed through postal ballot on September 23, 2017 and subsequently, the Board of directors of the Company in its meeting held on October 4, 2017 approved November 1, 2017 to be the effective date of Restructuring.
Accordingly, effective November 1, 2017, the Company's RMS business and the Digital business have been transferred on a going concern basis for a consideration of Rs. 61,564 Lakhs and Rs. 1,869 Lakhs, respectively, in the form of Company's capital contribution in the aforesaid LLPs. Post such Restructuring, the Company continues to directly hold 99.99% share in the capital of, and in the profits and losses of, each of these LLPs and the entire economic interest as well as control and ownership of the RMS Business and Digital Business remains with the Company post such Restructuring.
5. Share of profit/(loss), net, from Limited Liability Partnerships includes the following profit/(loss) from LLPs. Also refer note 4 above.
6. Other income for the quarters ended March 31. 2018. December 31, 2017, and March 31, 2017, includes write back of withholding taxes paid earlier in respect of interest on FCCBs, which is no longer payable on account of conversion of FCCBs into equity shares of the Company, amounting to Rs. Nil, Rs. Nil and ? 205 Lakhs, respectively, that for the year ended March 31, 2018 and March 31, 2017 amounting to Rs. 30 Lakhs and Rs. 1,037 Lakhs, respectively. Such, write back of withholding taxes has been adjusted with other withholding taxes liabilities of the Company.
7. As at March 31, 2018, the Company assessed the carrying value of it's investments in its subsidiaries, basis the valuation carried out by an external valuer. Considering the aforesaid valuation, the management is of the view that, the carrying value of its investment in subsidiaries as at March 31, 2018 is appropriate.
8. Represents provision in respect of withholding taxes deducted/ deductible by the overseas customers of the Company.
9. The Company 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 Company has not made any additional segment disclosures.
10. 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 dale figures for the nine months of the respective year.
11. Previous period figures have been regrouped/ reclassified, wherever necessary to confirm to current period's classification. Further, considering the Restructuring as detailed in note 4 above, the figures of the current quarter, previous quarter and year ended March 31, 2018iare not comparable to figures of the previous periods presented in these financial results.